Welcome to Chinatown. Please remove wallet.

Here's another one of those tidbits buried in a news article that you blow right past... but then it reaches out and sort of grabs your eyeballs, like in a Tex Avery cartoon, and your head snaps back up the page: "Whaaaaa??" In this case, it's a comment by "an economist at the Center for European Reform" (but I doubt it has anything to do with Martin Luther). He points out that "few countries other than the United States and Britain have taken any responsibility for the [economic] crisis. China, for example, insists the roots of the current crisis lie in the West. 'They believe they played no role at all in precipitating the crisis,' said Whyte [the economist]. But he noted China has played a big role in creating global macroeconomic imbalances through its huge purchases of U.S. government debt."

So... now it's all China's fault for purchasing our debt? Well, whose idea was it to create all that debt in the first place, and then sell it to China? I mean, did China send shock troops into the Treasury Department and force them to grind out a trillion dollars in T-bills, and then ship them back to Beijing? It's sort of like blaming the pusher for the heroin addiction of the junkie, which is... actually perfectly reasonable, in a way. You have something someone wants, that they will pay any price for, you wave it in front of their face, they take the bait, and they come to a bad end... and their last words are "It's all your fault." So as the American system, and much of the world economy on its coattails, goes down the drain, we croak, with our dying breath, "It's all China's fault." And you know, doggone it, we might have a point -- not that it does us any good now. But what if you're China, let's say, in the post-Soviet era. You've rediscovered capitalism. You have a population that's totally cowed, and that thinks any standard of living above grubbing for roots and eating the bark off trees is the high life. And guess what, you've got cash, and lots of it. At the same time, you've got international ambitions... projects... ideas... schemes... maybe even an empire to build. And who are your main competitors? Well, Russia is in the picture, but they've got a few internal problems of their own to straighten out. India might be a factor in a few decades... but really, there's only one guy to beat on the way to the title belt, and that's the U.S.A. But then you notice that Americans are living far above their means, and not only that, but they have come to expect that standard of living as their due. (This is the point at which the pusher spots the junkie staggering down the street.) So the U.S., while it appears to have military dominance, and a certain amount of remaining -- although severely eroded -- political influence, and even commercial and financial dominance, is rotting from within -- economically, politically, and socially (they wouldn't consider "morally" to be a problem). They have become a debtor nation, and there is no chance of reversing that trend as long as they continue to pursue foreign intervention follies and, on the domestic front, wildly extravagant entitlement and subsidy programs. So they are (think about the junkie again) ripe for the picking.

So the conversation goes on in the depths of the Forbidden City: "But how do we put them in their place? Military action? Not a good idea. Nuclear war? Good enough for Chairman Mao, but maybe no longer sellable to the less idealistic moderns. Bleed them dry by supporting their enemies (real and alleged) overseas? Done it... doing it... will keep doing it. But too slow. Well then, how about simply loaning them money by buying up their 'debt'? That will put us in a position, sooner or later, of being able to, basically, dictate terms on things like Taiwan, and tell them to get off our case about Tibet and about all of our 'foreign aid' [knowing smiles all around] projects... and mainly, it will enable us to dethrone them as The Economic Power and put ourselves in their place."

"Now, of course, there is a down side, which is that in order to crash their economy we have to take heavy losses ourselves. But in the long run it will be a good investment. For one thing, we don't have to just hold cash -- we can also buy up property [think: Long Beach]. And once their currency starts to inflate (at above the usual rate) we can insist on other forms of compensation -- property, trade privileges, political influence, who knows? What counts is that they will be at our mercy. Now of course we'll have to maintain a proper air and attitude of indignation, and engage in a lot of scolding... but the situation will play right into our hands nonetheless."

So has this Whyte guy (not to be confused with Lula da Silva's "white people with blue eyes") "outed" China? Has he exposed some sort of gigantic scam... some ingenious piece of international finance/political strategy? "Creative destruction" that costs them a lot less than Mao's nuclear war would have? He might very well have... but the implications will be totally ignored by Obama and Co., and by everyone else, because it's just too scary. Scary not because China is poised to take over the lead role in the world economy -- I mean, somebody's gotta be in charge -- but because it means they're smarter than anybody in the U.S. government, or than anybody in the American financial system -- except for their collaborators, of course. And Hillary.

Hmmm... do you suppose they're thinking of making her Dowager Empress once this is all over with? I've already written about that possibility. (And here I thought it was just fiction!)