So, the G20 summit is in full swing in South Korea - Obama has wandered up from his recent trip to Indonesia where he promised monetary and political support to the terrorists responsible for mass killings in the early 90s, in the name of fighting terrorism...but hey, he was happy to be in his old “stomping ground.”
Back to South Korea, where the other 18 countries pretty much just sit around a table drinking purified water, doodling and looking smaller and smaller behind their gilden penned name tags.
Economic warfare can be far more dangerous than the bang-bang, flag waving kind. If you didn't know it already, China owns us. According to the Federal Reserve in 2005: "At the end of 2005, China, with $820 billion in such assets, was the second-largest holder of U.S. debt after Japan, which held about $10 billion more." The thing is that Japan isn't growing by steroided leaps and bounds like China is. Their economy isn't just booming, it's explosive, which makes us very nervous.
At the summit, the US has already staged a complaint regarding the Chinese currency, the yuan, being kept at horrendously low rates, giving them more than just a leg up on exports and international trade. At the same time, China accuses us of further fucking with the global market with our Fed's recent promise of $600 billion gift to our struggling economy.
So, as per usual, we're holding a loaded gun demanding the other person put theirs down. But China doesn't really want to and who can blame them? Not only that, who the fuck would take economic advice from us? Many nations fear that their rapid rise to economic greatness will come with just as sharp of a downturn, spiraling us and the global economy into a black hole of monetary mayhem.
To fill out the background, essentially what China is doing is manipulating their currency so as to keep it as low as possible, attracting the attention of international buyers looking for imports from other countries. Say, for example, it's between us and them. If our little toy costs 50¢ to make and theirs costs 10¢, they're gonna pocket some extra cash and go with them, leaving our poor abandoned toys to rot in warehouses while their makers watch their houses get auctioned off...or some equally depressing story.
So, in order to fight back, we go to the summit, show some muscle and do exactly what they're doing back home. The sudden influx of $600 billion will weaken the currency to the point that trade competition with China will be much more viable, making them more pissed off and other countries more inclined to ask for some whisky instead of that purified water bullshit.
Time will tell how this pissing contest will play out, but I'd wager that since it's our nuts in a Chinese salad shooter, we'll have not much to say about whatever they want to do with their currency. China is already surpassing us on every front, from green energy to economy to education. Meanwhile we just wave our flag, put our fingers in our ears and shout "USA, USA, USA!"