the US/China/Japan menage à trois...

Tom Engelhardt's journalistic blog, TomDispatch, has a very good article on Chalmers Johnson's analysis of the economic ramifications of US/Asia trade relations. Introducing Johnson's piece, Tom says:

Seldom do you find a piece that tries to put East Asia together, laying out for us, in particular, the explosive nature of the U.S./Japan/China triangular relationship, which in various combinations has in the past plunged us into bloody war .

I found the following comment by Johnson to be particularly elucidating and sobering:

Refusing to pay for its profligate consumption patterns and military expenditures through taxes on its own citizens, the United States is financing these outlays by going into debt to Japan, China, Taiwan, South Korea, Hong Kong, and India.

This situation has become increasingly unstable as the U.S. requires capital imports of at least $2 billion per day to pay for its governmental expenditures. Any decision by East Asian central banks to move significant parts of their foreign exchange reserves out of the dollar and into the euro or other currencies in order to protect themselves from dollar depreciation would produce the mother of all financial crises.

Read the whole article >>>

(Article found by DS.)