Wake Up!

If You Read Nothing Else - Read This Article ASAP - Pass It Around
by Chalmers Johnson, In These Times, March 31, 2005

Wake Up!
Washington’s alarming foreign policy

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"In 2004, the United States imported a record $617.7 billion more than it exported, a 24.4 percent increase over 2003.  The annual deficit with China was $162 billion, the largest trade imbalance ever recorded by the United States with a single country.  Equally important, as of March 9, 2005, the public debt of the United States was just over $7.7 trillion and climbing, making us easily the world’s largest net debtor nation.  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 United States requires capital imports of at least $2 billion per day to pay for its governmental expenditures.  Any decision by 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 will likely produce a meltdown of the American economy.  On February 21, 2005, the Korean central bank, which has some $200 billion in reserves, quietly announced that it intended to “diversify the currencies in which it invests.”  The dollar fell sharply and the U.S. stock market (although subsequently recovering) recorded its largest one-day fall in almost two years.  This small incident is evidence of the knife-edge on which we are poised."