British Prime Minister Gordon Brown said on Tuesday there was substantial support among the Group of 20 nations for creating a new framework to tackle global economic imbalances … Analysts said the United States’ drive to agree a roadmap for a more balanced global economy could meet resistance from China which is unlikely to agree reforms that would threaten its growth … A document outlining the US position ahead of the September 24-25 summit said big exporters, which include China, Germany and Japan, should consume more, while debtors like the United States ought to boost savings … The euro hit a one-year high against a sliding dollar ahead of a federal reserve meeting and the G20 talks on rebalancing, a process which is likely to require a weaker dollar.
Like Quicktake has pointed out in earlier posts, the US has alternated between an overvalued currency to gain ownership over large sections of world economy – and now with a devalued dollar, it seeks to gain an upper hand in merchandise exports. The three main points that one needs to understand are: -
One – It reduces the real value of US debt. The Chinese, the Rest of BRICS and the Others need to be paid a lot less in the future. (as pointed out earlier in various posts linked here.) Two – It makes US exports artificially competitive. (as pointed out earlier in linked posts). Three – The US competitiveness will be anchored to assets purchased with over-valued dollars.
What the US is proposing is that the Chinese Yuan must become ‘stronger’ – and the dollar must become weaker. This will mean a real reduction in US debt – and a subsidy for US exports. Of course, a devaluation has never helped any regime in the long run – but in the short run it reduces imports and increases exports. But is a ‘fix’ that the patient begins to row dependant on!
Is that the US is wanting to do to itself?
Citing a congressional study released on Friday, the Times said the United States was involved in 68.4 percent of the global sales of arms.
U.S. weapons sales jumped nearly 50 percent in 2008 despite the global economic recession to $37.8 billion from $25.4 billion the year before.
The jump defied worldwide trends as global arms sales fell 7.6 percent to $55.2 billion in 2008, the report said. Global weapons agreements were at their lowest level since 2005. (via U.S. Leads World In Foreign Weapons Sales – Report – NYTimes.com).
US in the Post WW2 world
In South East Asia from 1950-1975, Israel from the 1960 onwards and now in Iraq, Afghanistan, the US has been the in the middle of most expensive conflicts (measured in terms of lives lost) in post WW2 world.
This model of international relations is something that needs to change. The poor in this world has not become much safer, seen more democratic or significantly more richer. What justification does this policy have – apart from “I have muscles and can you stop me from flexing them” logic?
Gold – a non-military solution
As I see it, there are two simple solutions. One – everyone who disagrees with (or even if you are worried about the economic consequences of) the US foreign policy should go out and buy gold. This will surely trigger a collapse of the US dollar. Just a 100,000 people buying a 100gm of of gold in the next 1 year will trigger the dollar collapse.
Drill for oil
The second solution will need more time and will need co-operation foron the BRIC Governments. The BRIC Governments must go out and drill oil wells all over the developing world. The collapse in oil prices will remove the petro-dollar funding of the US and simultaneously eliminate /reduce the trade deficit of the developing world.
In the last few months, we’ve witnessed elections in Zimbabwe, Iran, and now Afghanistan, and in each case the heavy-handedness on display has been staggering. Can’t these people at least show a little finesse when they’re practicing ballot-box fraud? (via The Unbearable Stupidity of Authoritarianism – Erik Tarloff).
Zimbabwe et al are known cases
Western media, Erik has done enough to ‘showcase’ Zimbabwe – amongst others, which you highlight, with so much relish, in your post (linked above). Though, I wonder why you don’t, in the same breadth, compare the continuing frauds in your home country. Is it that election fraud in the US is more ‘intelligent.’
How about the US
The disenfranchisement laws in the US are, if any comparison is required, more unfair, have been running longer and engender greater injustice. How about a ‘fair’ comparison!
The disenfranchisement laws came into effect by the 1890’s – that continue till today. This ensured that a disproportionate number of African-Americans could not vote. After some 60,000 African American Voters were disenfranchised, George Bush technically, won by less than 1000 votes (most of the disenfranchised voters were expected to vote against George Bush). And George Bush became the President of the USA for the second time. Or would you like to talk about the hoods and goons in the ‘Brooks Brothers Riots’ – employed by the Republican Party!
If this post, fills your need to feel superior, find better targets. At least, your equals! Why pick on poor Zimbabwe!
If your quarrel is ‘finesse’, I wont join in the debate.
As President-elect Barack Obama prepares to take office this month, he has avoided the fawning praise of India that has become fashionable in some Washington circles. But experts on the region say that India-US ties now have a momentum of their own. Industries in each country now have a vested interest in deepening ties with their counterparts.
“In 20 years, I expect the Indo-US relationship to resemble the Israel-US relationship, and for many of the same reasons,” said Shashi Tharoor, an Indian writer and former undersecretary general of the United Nations. (via Will the love-fest stoked by Singh, Bush bear fruit? – Economy and Politics – livemint.com).
Why is the Israeli model a bad idea
The first disqualification against accepting the Israeli State model is the fact it is heavily dependent on America, for fiscal and military aid – which “since 1974 totals roughly $80 billion”.
Do I sense envy when an article from Daily Times Of Pakistan says “The United States has poured $140 billion into Israel since its formation”. That is about a US$56,000 for every Israeli family.
Is this what you learnt at the UN Tharoor Saar …
First, did it ever occur to Tharoor Saar to check where is the guarantee that the US will be in a any position to underwrite India’s long term requirements?
After satisfying himself, did Tharoor Saar ever ask, “Why would the US underwrite India?” In case of Israel, the US had good reasons. After all, (as NYT says)
America has vital long-term strategic interests in the Middle East. The gulf has well over 60 percent of the world’s proven conventional oil reserves and nearly 40 percent of its natural gas.
To some it may look like a boon, but is surely the kiss of death.
American policymakers began regarding Israeli strength as an American asset in the Cold War, they supported significant aid as a matter of strategy, not charity. … American aid continues to flow to Israel. … critics on the opposite end of the political spectrum argue that while aid to Israel may be tied to the best of intentions, it does more harm than good to the Jewish State by propping up a big and inefficient government and making Israel dependent upon the U.S.
For how long can any country, society, individual survive on foreign largesse? Note how during the 1973, Arab Israeli War, the tide of battle finally turned when the massive US airlift of weapons, tanks, spares happened! Which itself, is self-serving – “American assistance, emerging as a disjointed policy that urges a peaceful resolution to the conflict while boosting military aid to Israel.”
Another client state of US, Pakistan enviously records, that
“Israel is the only country that receives all of its U.S. aid in a single package, while others only receive it in quarterly installments.” It continues, “Most recipients of military aid are obliged to spend it in the US but Israel is permitted to spend 25 percent of what it receives to subsidize its own defence industry,”…
Doubtful motives, suspect intentions
Three aspects of the Israeli behaviour makes Israeli intentions doubtful.
One - Israel surely knows that US support cannot continue ad infinitum. What will be the Israeli response after they stop getting US support?
Two - After consistent and constant efforts to make enemies, over the last 50 years, how does Israel plan to continue living in a hostile neighbourhood – without American aid?
Three - With a population of little over 50 lakhs (5 million) in Israel and a world Jewish population of less than 1.3 crores (13 million), how does the Jewish population stop itself from going extinct?
Is there a pattern …
Tharoor Saar’s statement needs to be read in light of two other incidents. For starters, read Manmohan Singh’s speech at Oxford, praising the Raj, while receiving his honorary doctrate. Continue with Chidambaram’s decision to end “abject poverty” in India that he seems to “have known for 5,000 years.” And now add Tharoor Saar’s stated objective to make India into a US-client state in another 20 years. Are these three incidents stray and unrelated? Do they form a pattern?
Any which, Tharoor Saar’s thinking is a cause for concern.