Nouriel Roubini has an interesting op-ed in the NYT today that’s actually got very little to do with the financial crisis or the banks or the prospects for a recovery some time in the next year.
It’s about the process that’s already in place for China’s Renmimbi to supplant the US dollar.
First, the conditions definitely seem in place for the Dollar’s status to erode. We’ve got a stunning level of debt, and it’s clear that the rest of the world is growing uneasy about financing it all. We’ve also got deep political problems, notably a Congress that’s been thoroughly captured by special interests, and thus lacks the political will to take real action on anything
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Arraya: One of my Army buddies has remained in the Army and is now with NATO in Brussels. He says most of the Pentagon’s long-term forecasting has nothing to do with Low Intensity Conflicts (like Iraq and Afghanistan), but is focused on the Chinese threat, militarily and geo-politically. The reason the US formed the African Command is to ensure US control over African resources, specifically oil and to keep an eye on Chinese “incursions” into Africa and the Near East.
He also mentioned that the US is very interested in China’s internal issues, specifically things like AIDS and SARS, along with student discontent arising from unemployment and the fact that there is a 200,000 man strong contingent of disaffected former People’s Army officers who are unhappy about lack of benefits, pensions, etc.
