Re: What to do about milspace/govspace

The basic fact is that the Chinese are strongly in surplus and the US
is in deficit. If the various holdings of dollars around the world
stay put, the world economy will be stable. Should one country decide
to download dollars in significant quantities the price of the dollar
will decline.

A billion would make a round sum. The US position is based on
confidence. As soon as the dollar started to decline all countries
would put their reserves into Euros. As we know from the sub prime
market a relatively small amount of actual cash can destroy
confidence. A billion would send a message without precipitating a
collapse.

The US is in a position where it is being held up by China. OK the
Chinese do not want to see an abrupt collapse in confidence. They want
a adjustment of the US trade deficit but not an abrupt one. The basic
reason why the US can run this deficit is because the dollar is a
reserve currency. Dollars can be printed which go into reserves round
the world.

Confidence is a fragile thing. While there is confidence in the US
everything is fine and dandy. As soon as confidence ebbs there will be
a crash. A crash is a self sustaining event, the world markets are in
a state of instability.

Given that both sides have an interest in stability, does it really
make sense to talk about having a war?

You are right in that the tax cuts preceeded Iraq. However it would
have been more honest for bush to have cancelled the tax cuts when war
broke out. That would have been the honest thing to do.

China wants stability and does not want a war. Does the US? If the CIA
were able to carry out a real conspiracy, prove somehow that the
Chinese were behind 9/11 (how I don't know) the public might have some
appetite for a war despite the costs. If the CIA cannot smear them
adaquately, then people are going to blame the government for the
collapse in their pension provisions. Unlikely they could. The CIA
have been found out every single time.

This is the hard truth that none of the candidates will tell you.


- Ian Parker

.

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