19 September 2010

The Pope, the Nazis and Atheism

Following the Pope's tour of the UK I am somewhat mystified by his statements linking the Nazi movement and Atheism. He seems to impute to Atheists the responsibility for wars and atrocities and refers to "aggressive Atheism". Really? Who started WWI, but a gaggle of Christian nations? Then, there were the Civil War in the US, the Crusades, all the European conflicts of the past 1500 years. Of all those leading nations into war and committing atrocities the only miscreant I can think of as an out and out Atheist was Stalin, a former seminary student.

Regarding the Nazis, and Hitler in particular, the Nazi party, unlike the Soviets was not ideologically atheist, although there may well have been atheists in the party. Even Hitler was ambivalent about religion and certainly never persecuted the Church, as did Stalin. 

As for Atheism being "aggressive", again I am unclear what he means by this. Atheism surely does not conduct missionary efforts around the world trying to convert people to Atheism as do Christians, Mormons, and Muslims for their faith. True, books are written arguing the cause of Atheism but nothing like the tonnes of print extolling the virtues of organised religions, so what are Atheists doing that is so aggressive? 

16 September 2010

Beware the Angry Dragon

China is under fire once again from an American administration desperate to find a scapegoat for the economic malaise in the US.  It is no coincidence that Timothy Geithner’s comments are being made now, a mere six weeks before mid-term congressional elections. Hoping to deflect criticism and dissatisfaction by the electorate, loss of seats in congress and mollify US labour unions, he is raising the spectre of the dreaded Yellow Peril.

Another example of clay-footed US foreign policy.  Making public statements such as these does not help resolve differences; instead it serves only to exacerbate friction with China.

One can argue that China holds $843 billion of US debt (as of today), and that its economy depends on holding and continuing to purchase US debt to prop up its primary export market.  To that equation should be added the $1.60 trillion in US dollar currency reserves China has on its books.  That is a tidy sum to be held by a creditor and one would think the debtor would be grateful and be more interested in staying on good terms with said creditor. But no, the US seemingly wants to tempt fate by twisting the dragon’s tail.

As stated, China, at this point in economic development is still very much hostage to the US market but, as its domestic economy grows and, as other South East Asian and Latin American markets buy more from China, that dependence is due to change. And, threats related to revaluing the Yuan could prompt a potentially disastrous financial crisis for the US.

An article of 13 September on the Bloomberg site deals with precisely this issue: “Evidence of strengthening domestic spending in China undermined the case for Premier Wen Jiabao’s government to resist a faster pace of currency appreciation days before U.S. lawmakers meet to address the issue.:”


It also underscores an argument I have often made, namely that contrary to the views of many pundits, if push came to shove, and US levied punishing tariffs on Chinese imports, the Chinese could retaliate by dumping US treasuries.

I quote again from the Bloomberg article:

“If signed by Obama, the legislation could spark retaliation including the sale of U.S. Treasuries by China, Stephen Roach, Morgan Stanley Asia chairman, said last week. China is the biggest foreign holder of U.S. government debt, at $843.7 billion in June.”

As for US currency, China is cutting back on bond purchases after scrapping its currency peg in June, giving it less reason to buy dollars and invest them in Treasuries. China is also turning more to Europe and Japan, purchasing bonds of both nations. In the meanwhile Barack Obama increases U.S. debt to record levels, counting on overseas investors to buy, as he borrows to sustain the U.S. economic expansion.  And if they, especially China, do not buy………?

We are already seeing moves by China to distance itself from US assets:
To quote Hu Xiaolian, a vice governor with the People's Bank of China:
"Once a reserve currency's value becomes unstable, there will be quite large depreciation risks for assets," she wrote in an article that appeared in the latest issue of China Finance, a central bank magazine.
"The outbreak and spread of the global financial crisis has highlighted the inherent deficiencies and systemic risks in the current international currency system," she said.
"A diversified international currency system will be more conducive to international economic and financial stability," she added, calling for greater cross-border use of the Yuan.

So, China would seen to be sending strong signals that it would not hesitate to withdraw support for the US economy, particularly if the US were unwise enough to challenge the dragon in its den.

11 September 2010

Prescience in Hindsight

 One of the best, and most objective assessments of America's rush to war in Iraq and Afghanistan is a column in the Washington Post today. It is particularly interesting in that it is written by one of the early and staunchest supporters of the war, Ted Koppel, a journalist embedded with the US troops during their march to Baghdad in 2003. 


http://www.washingtonpost.com/wp-dyn/content/article/2010/09/09/AR2010090904735.html?hpid%3Dtopnews&sub=AR


If I have a criticism, it is the same one I have mentioned before, namely the assumption that the local governments will permit the continued presence of US troops in their country. Koppel, like many others in the West, still speaks of the necessity for US troops in Iraq and Afghanistan for many years to come as if it is the decision of the US alone, not that of whatever government is in place. My question remains as always: what if the  local government refuses? As Koppel points out the US does not have the resources to conduct a multi front war in  what would be the hostile environments of Iraq, Afghanistan and Pakistan. If India were to enter the fray to counter Pakistan, we would be faced with a regional nuclear conflict.

The solution, in my view, is simple - withdrawal and containment.

Mexico, a Failed State?

In geopolitical terms, Mexico, in my opinion, now qualifies for the accolade, "A Failed State", the parameters for which are:

  • loss of physical control of its territory, or of the monopoly on the legitimate use of physical force therein,
  • erosion of legitimate authority to make collective decisions,
  • an inability to provide reasonable public services, and
  • an inability to interact with other states as a full member of the international community. (Still some semblance of this)
As a consequence of that and Obama's immigration policies the US are going to experience an upsurge in illegal immigration. The prospect of a failed state on the US border could be as dangerous as a Jihadist one. Mexico is inherently and historically an unstable country, and there is every indication the situation will only deteriorate. The US may well have to shift its priorities (and troops) from Afghanistan and place a heavy military  presence on its southern borders.