Bush Has Set Up China To Declare Economic War on America
by Angie Pratt
OpEdNews.Com
In yesterday's Daily People's Online, Jiang Ruiping, director of the Department of International Economic under China Foreign Affairs University, spelled out the case for China to stop financing America 's spending spree.
In essence, Jiang Ruiping explains that the risk of a collapse in the American dollar is great enough to warrant China no longer accepting dollars. He lists the following points as primary justifications for China 's moves:
1) The worsening fiscal deficit is putting great pressure on the stability of the US dollar. "
2) The deteriorating current account deficit of the United States is menacing the future fate of the dollar. "
3) Foreign direct investment (FDI) in the United States is decreasing
4) Oil Producing countries are beginning to switch toward the Euro-dollar.
Is Jiang Ruiping simply a Chinese academic-type writing an opinion piece for a narrow group of Chinese scholars? Or was this something much more sinister? This could well have been a shot across our bow. It could well be the first arrow thrown in an economic war against the United States .
The reason is that The Bush administration has put America in its weakest position in decades. Our ability to respond to any foreign threat, militarily or economically, is hamstrung.
The military situation goes without saying. We are pre-occupied with Iraq and Afghanistan . We are already gnashing teeth as we strain to cope with North Korea and Iran .
From an economic perspective, the points that makes Jiang Ruiping's statement true simultaneously explain that the United States is an impotent tiger. The fact of the matter is that the only thing keeping the dollar afloat right now is American credibility.
The awful truth is that George Bush has done more single-handedly than any other person to diminish the world's faith in the United States . Our moral high ground has been trashed. Our financial future highjacked by tax cuts to the wealthy and uncontrolled spending.
The problem is that Jiang Ruiping's suggested course of action is a self-fulfilling prophecy. The moment China stops taking American dollars is the instant that the American dollar will collapse.
Now why would China take such steps. As Jiang Ruiping suggests, China might take these steps to attempt to reduce the impact of a dollar collapse on China . Jiang Ruiping masterfully explains the risk what a collapse in the dollar poses to China . It literally would cost them 100's of billions.
Another more nefarious reason goes back to the fact that China and the United States are competitors. When do you hit a competitor? Do you hit him when he's strong and competent? Or do you hit him when he's weak and has limited options? Make no mistakes; China does not wish us well.
So what? Who cares whether or not the dollar collapses? Is it a big deal?
You bet your bottom dollar it's a big deal. If the dollar were to collapse there are two things that would auto-magically domino:
1) Foreigners would stop buying using bonds and thus stop financing our deficit. This would immediately drive up interest rates whether the Greenspan wanted them to or not. He would be helpless.
2) Goods and services imported into the United States would immediate skyrocket. Inflation would jump.
This is not a laughing matter. It is not something to shrug off. The potential for damage to the America is so great that fiduciary responsibility demands that the United States take this threat to our national economic health seriously.
How do we do that? We stop the ruinous policies of the Bush administration now!
Jiang Ruiping's article entitled "Crisis looms due to weak dollar" can be found at http://english.people.com.cn/200409/28/eng20040928_158593.html
Written by Angie Pratt ( http://www.politicalposts.com). Please run as a Letter to the Editor, guest editorial or PoliticalPosts column.
