Wednesday, July 27, 2005

Predictions: China War and World's 97-lb. Weakling

Excerpts from full post at Molten Eagle

America's submarines were so effective in WWII, that after the war when their full effects became known many experts believed Japan may have eventually surrendered due to severed supply lines alone.

Later on, the Cold War depended heavily upon America's submarines. The stealth, chess game was deliberately costly and helped undo the soviet union. The Cold War was won economically.

In an era of China's economic ascendancy, LA Times guest columnist, Max "Untersee" Boot, suggests in China's stealth war on the U.S. that we are already at war with China (although, I think economic competition better describes what is being waged). Says Boot, China's spending has been increasing rapidly, and it is investing in the kind of systems — especially missiles and submarines — needed to challenge U.S. naval power in the Pacific. Boot, a senior fellow at the Council on Foreign Relations is concerned with how we respond to what may or may not be indirect aggression by a major trading partner (Beijiing). Worth the very short read, but to understand the full competitive game America faces, I highly recommend CAN AMERICANS COMPETE? Is America the World's 97-lb. Weakling? by FORTUNE's Geoffrey Colvin.

Colvin's article is captivating. Huge upsets are probably in store for individual workers, and likewise new opportunities. You will need to read it for yourself. To my knowledge, no one has made the following associations or predictions previously.

Prediction 1- Economists differ over the impact of Thursday's yuan revaluation on the United States and China. When China's currency is allowed to float fully against the US dollar, China will encounter the tough decision between military and domestic spending (guns or rice). Domestic spending will be the big winner, in my opinion. Score one for the U.S.


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