London — Bicycles are looking more and more like a sensible option.
From the NY Times — the Bolivian version of WWF:
Sam and I discussed the possible repercussions of the Yuan being cut free from the dollar. Actually I was asking him questions most of the time. Much of the now enormous U.S. debt is held by the Chinese in U.S. Treasury bonds or something, so they sure don’t want the dollar to sink too low. But they may look for other secure places with decent interest rates to place their cash. U.S. importers will face price hikes, as will those who outsource the manufacture of computer chips and most of the rest of the stuff that comes into the U.S.
I expect these will all lead to slow but seismic changes, changes the Bush administration has neither prepared for or thought about. This may be the end of the Iraq war right here. At 60 billion a month the U.S. will simply not be able to afford to continue it without that Chinese money flowing in — though some other excuse will no doubt be found. The Bush cronies will have gotten their slices, and will have made off with chunks of loot, but the future long term energy security and possibility of oil control will be a thing of the past. (My opinion, not Sam’s.)
