The Borrower is Servant to the Lender

The Bush years have seen an explosion not just of government debt -- currently more than nine trillion dollars -- but also of trade and balance-of-payments deficits. The results of the evolving global geo-economy include a much-weakened dollar and increased reliance by both the U.S. government and U.S. business on foreign creditors.

Among these creditors are state-controlled agencies -- notably those of China, Russia, and oil-exporting Gulf states – which are not enthralled, to say the least, with [the vision of an unipolar America].

If, for commercial or political reasons, any of these creditors decided to dump their hundreds of billions of dollars of dollar-denominated assets -- or in the case of key energy exporters, for example, to price their commodities in a currency other than the dollar -- the economic impact would be "grave", according to Charles Freeman, retired U.S Ambassador to Saudi Arabia.

The possibility that some combination of those creditors, whose own commercial ties have been growing at an accelerating rate, could decide to act in concert in order to constrain Washington’s freedom of action -- in Central Asia or Iran, for example -- is the emerging nightmare of U.S. policy- makers.

[Inter Press Services]