the trillion dollar prize

THE TRILLION DOLLAR PRIZE
If you look at Uncle Sam, a trillion bucks doesn't buy diddly. It doesn't buy off the derivatives meltdown. Or a investment bank or two. It doesn't stop the real estate bubble from popping. It won't be more than a down payment on health care reform ( I don't doubt we'll spend the trillion, but it won't accomplish anything other than starting another futile financial bubble and will be money down the hole ). Pretty soon it won't even pay off one years interest on the national debt ( while your average citizen could care less about inflation as long as he can eat a bucket of KFC in front of the Super Bowl on a big screen, the central bank knows exactly what they have wrought and will push up the governments interest payments to match pace with the purchasing power lose ). The Chinese, however, know the value of a trillion bucks.
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The Chinese are not superior. They are not any less greedy. They have their number of idiots in charge. But the difference between them and us is that we are soft and gooey and they are lean and hungry. So they won't make as many mistakes and they will be willing to sacrifice a lot more to climb to the top. America is on the top, and thinks it is divine providence. Why put much effort into it if Baby Jesus himself is on our side? Think of countries as car companies. We are GM. We borrow all the retirement funds to stay in business and make all the profits from financing and none from the cars themselves. China is Toyota. They have to do a better job. They need to put out a better product at a cheaper price and do it year after year. One day, after decades of this, GM is bankrupt and Toyota is the world's biggest car company ( forget about the current meltdown and Peak Oil which will take them all down, at least for this analogy ).
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What did China get for her trillion? Our treasury bonds. Yes, she will be paid back in worthless dollars, but as a bonus we will have to destroy our currency to do that. I think Japan still has a little bit more than China in our debt, but as we still occupy her she will not truly go against our wishes. Nor will she go against Chinese wishes, because as soon as we pull out of Japan she is at their mercy. Japan is between a rock and a hard place. Unless we leave some nukes there, China will control or occupy there soon. China doesn't have to do much to destroy us. The fiction depicting her sending over converter oil tankers full of troops to invade us are stupid. Thinking we will fight her with conventional forces is stupid. China will let us destroy ourselves and a trillion is chump change for that.
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China knows we are on the way out. But we have nuclear weapons. So she bides her time, appearing to leave us alone. She can leave Taiwan in peace for now. Since the demise of the Soviet Union, she hasn't been overtly militant. She won't give up gains made prior to that, but we act all concerned and leave it at that. At worst, a few flunkies have to put up with Clinton visiting and acting all bitchy. Dollars to donuts, those are the politicians being punished for something ( they have to be wondering if a firing squad would be better ). You can bet China has a pretty realistic view on the oil situation. She has secured supplies from Africa and South America. Africa has much better future prospects anyway, not having been pumped for the last forty years like Saudi Arabia. And as America slowly loses control through economic contraction, China will step into the breech. China won't be putting military bases in every country it can like we did. It can control economically.
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I don't think China will suddenly step in and take global control as we lose it. China will suffer as her over abundance on manufacturing becomes a liability. But she can emerge from the troubles as we are overwhelmed by them. China thinks nothing of her population suffering terribly. She can pay the price, then emerge stronger. It won't be like the US taking over policing the globe from England. The interim will be full of violence and anarchy. Plus, China is probably more concerned with the threat of Russia than from us. She bought her insurance against us. If the bond threat doesn't work as planned, there is always all that hacker activity that has compromised our electric grid, waiting if needed. Actually, she could have saved her money, our bankers will kill us for her. But it never hurts to have multiple weapons. China may never rule the world, but soon she will control the oil left in a lot of places. That will be good enough as the world heads toward the new Dark Ages.
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