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."

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.