Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
I doubt that economic necessity will ever suffice to dial down fantasies of Imperial Domination.  That will require political leadership and re-education of the US population as to what their defense dollars really have been buying.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Sep 24th, 2008 at 03:29:04 PM EST
[ Parent ]
... people overseas to want to hold US dollars.

A polity rebelling against the fact that it cannot afford the external account spending that it wishes to engage in gets to see its exchange rates plunge as long as it keeps up the fight.

And a country that has its exchange rates plunge rapidly enough is heading for hyperinflation, if it is structurally dependent on imports, as the US has become over the last three decades.

When people are faced with the hard choice between handing over hard currency (by hypothesis, not US$) to get oil, or to fund an overseas base network, I'm expecting the Military Industrial Complex to go up against the Highway Suburban Complex and come out second.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Sep 24th, 2008 at 04:09:00 PM EST
[ Parent ]
As the external account deficit is the problem, that creates a national security argument for switching transportation energy over to renewables.  Add that to an  easily salable "neo-mercantilist" popular argument and you have even more ammunition for rebuilding the energy and transportation sectors around renewables.  It is not like we don't have any oil.  But we may have trouble financing reconstruction of energy and transportation while simultaneously playing global hegemon.  Perhaps we can engineer a "twofer" here.  End of Empire and Dawn of Self Sufficiency on Energy.

Without a vibrant economy that can generate money and goods we cannot long maintain effective military power.  Played intelligently, we can maintain enough power to matter.  Played stupidly we could become irrelevant. That should be the outline of the national security discussion.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Sep 24th, 2008 at 08:36:40 PM EST
[ Parent ]
... process ... pursuit of Energy Independence leading the rise of a hot growth industry without a stake in the Military-Industrial-Complex and acting a core part of the opposing coalition that is necessary to wind back from Imperial Overstretch.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Wed Sep 24th, 2008 at 09:13:57 PM EST
[ Parent ]
China doesn't want USD. The government already has quite enough junk T-bills.

South China Morning Post
China banks told to halt lending to US banks
by Alan Wheatley and Langi Chiang
Sep 24, 2008 9:52pm EDT

BEIJING, Sept 25 (Reuters) - Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.

The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.

"The decree appears to be Beijing's first attempt to erect defences against the deepening U.S. financial meltdown after the mainland's major lenders reported billions of U.S. dollars in exposure to the credit crisis," the SCMP said.

A spokesman for the CBRC had no immediate comment.

The only resolution to this political quandry is of course to seize all assets of Chineses nationals and banks held by US bank branches. That'll show 'em, the terrists.

Diversity is the key to economic and political evolution.

by Cat on Thu Sep 25th, 2008 at 06:12:31 AM EST
[ Parent ]
... "freezing assets" tool an awful lot it seems ... another reason why a lot of countries would be happier with the Euro as the international reserve currency. If their central banks have reserve accounts in Euros, they get to choose which Eurozone country to hold it in, and if one gets stroppy, they can move it to another.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Thu Sep 25th, 2008 at 06:58:16 AM EST
[ Parent ]
MT, any sense of what kind of tsunami would be unleashed should China decide to sell even 0.1% of its supply of US paper?  How about 1?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Sep 25th, 2008 at 10:02:07 AM EST
[ Parent ]
LOL. No. I'm more interested in how Congress can support the US labor force with greenbacks no matter their banana value.

Diversity is the key to economic and political evolution.
by Cat on Thu Sep 25th, 2008 at 11:46:35 AM EST
[ Parent ]

Display:

Occasional Series