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The Bows, the Dragon and the Dollar

November 17, 2009

President Barack Obama has done it again – behaved like a school boy, out to get the approval of his minders. This is his third faux pas – if one may call it that. The first one was before his trip to Britain when he pointedly mentioned that he was looking forward to meeting the Queen. The American president was relegated to the back row while Lula de Silva and Prime Minister Gordon Brown had the honor of standing by the side of the Queen. His obvious eagerness at meeting the Queen was construed as his weakness and Barack found himself standing at the back row for the photo op.

Obama's botched bow

The second was when he met King Abdullah of Saudi Arabia and gave a deep bow to the man clasping his hand with both of his (photo below). The third was when he again bowed deeply to the Emperor of Japan (photo above). The boy in Barack refuses to grow up. It seems he is looking for approval all the time. It also shows the innate goodness of the man and his simplicity. He is trying hard, as is his family to behave ‘presidential’ but such slips and obvious acquiescence give the game away. I hope Barack Obama realizes that HE and no one else is the emperor of the world. It is America that calls the shots. It is America that is the hyper-power and no other nation. And that he is the leader of the most powerful nation of the world. That it is President Barack Hussein Obama that should be bowed to, feted and indulged by the heads of other nations, including such titular heads as the ‘Emperor of Japan’ and the ‘King of Saudi Arabia’. The boy in him is unable to realize this simple fact.

Saudi disgrace

His recent visit to China has gone on expected lines. Except for some kind of broad agreement on climate change, it appears from the sound bites emanating from Beijing that not much has been achieved. President Hu Jintao in his address pointed out that the US should treat China as an equal partner. He also expectedly harped on the One China policy. The Chinese have taken a hawkish stand vis-à-vis the United States and this should surprise no one. President Obama’s declaration that Tibet was a part of China maybe an endorsement of the stand taken by earlier regimes but it is not clear as to what he has gotten in return for mouthing such conciliatory tone for a nation that has given little. The Taiwanese question was also soft pedaled by President Obama. Nations of the west and even those in the vicinity of China do not realize that one needs to be hard as nails to be able to get ones way with the Chinese. These are one of the most consummate bargainers in the world and have a history and culture that is time immemorial. It is not clear as to what concessions the Chinese have given the Americans. They have refused to rectify the unnatural under-valuation of the yuan. The balance of payment is heavily in China’s favor and that is worrying Washington. The Dragon is breathing fire. That is when the Chinese depend so heavily on the demand from the west for their factories and their economy to remain afloat. They know that the west cannot get a better deal than what they get in China and there is no nation that can compete with them when it comes to manufacturing. They are talking from a position of strength, as they always have.

The Chinese ambitions are sky high. They have sent a cosmonaut in space and that is as high as they want to go. Their ambitions are soaring as are their expectations. It was not a warm meeting, the meeting of friends. There was frostiness in the air when the two leaders spoke. The Chinese ambitions can be gauged from the fact that the Chinese want to replace the American dollar as the world reserve currency. It is true that the Chinese have the largest foreign currency reserves in the world amounting to almost two trillion dollars. The Japanese foreign currency reserves are the second largest. The Chinese have also supported the American spending by purchasing American Treasury Bonds worth more than a trillion dollars. These facts are no doubt very impressive. But does that mean that the American economy is in doldrums and that the American Dream is over?

One glance at the Fortune 500 list tells anyone with commonsense that the American behemoth is chugging along nicely and is only growing in strength. The one company Apple is going to touch a trillion dollars in sales in the foreseeable future. The world’s largest companies in terms of turnover and assets are all American. Exxon-Mobil is the largest company in the world in terms of sales and General Electric is the largest company in the world in terms of profits. There are hundreds of American companies that have a turnover of billions of dollars and many are such companies that most of us who are outside of the US have never heard of. They cater mostly to the domestic market including Canada and have such high sales that they do not need to look beyond their borders. The Americans do not ‘specialize’ in any one field. A glance at their list of top companies is enough for anyone to realize that they are present in every conceivable field, from oil and gas, pharmaceuticals, chemicals and fertilizers, retail, defense and motors and machinery to just about anything under the sun. Then there are such investment banks as Goldman Sachs, JP Morgan, Berkshire Hathaway and others that have interests in companies around the world including European, Japanese and Indian companies. American corporate presence is much more than the oft mentioned two colas – Coca Cola and Pepsi Cola. The American monolith is way too big for anyone to fully decipher.  For the Chinese to even contemplate a replacement of the dollar with any other currency or floatation of an international currency to replace the dollar is ambitious at best and downright hideous at worst.  It shows the Chinese cheekiness, their cockiness and absolute disregard for any international norms. They are being way too ambitious for their own good without acknowledging the ground realities.

The economic strength of the US is its back bone. The military strength is the other facet of American might. The American technology in the field of arms and ammunitions is by far the best in the world. They have the most powerful army in the world with a capacity to strike the remotest corners of the world at any given time with the most lethal weapons that humans can think of. They also have a presence in all the continents of the globe in the form of military bases that they nurture to their strategic advantage. Many of these military bases are in friendly countries that pay the Americans for their presence and for their ‘security umbrella’. It is said that the United States has more than a thousand military bases across the globe from advanced countries like Australia and Germany to such unlikely of places as Khazakastan (the actual number and location is a well guarded secret). In short, the American presence is just about everywhere. The other fact is that this hyper-power is only increasing in steam with every passing day. I know these are bad times and unemployment in the US is touching almost ten percent but this is just a passing phase. Good times are just around the corner and pundits are forecasting a boom like one that the world has never experienced before.

The Americans have invested heavily in science and technology. The best universities and research facilities are in the US and Europe. The most number of patents that are being applied for come mostly from the US and the western world. These are intellectual property rights that give a steady income to those who own them. The west is sitting pretty in this critical field too.

The American secret service is such that they have made and broken many a political careers around the globe. The head of the CIA is perhaps the second most powerful man on earth. They are undoubtedly one of the most feared secret services in the world! They may be answerable to the American Senate but even that is under strict secrecy.  And they all are at the beck and call of the President of the United States.

And then the Americans have a president who shows a childlike eagerness to meet the Queen of Britain and bows down to an Emperor who will be without clothes were the Americans to withdraw their forces from the island nation of Japan. He also does an elaborate bow to a Middle Eastern Sheikh turned King who would be overthrown the minute the Americans withdraw their pleasure from His Highnesses high office. President Barack Hussein Obama needs a reality check – of a different kind. Will somebody please tell him who he really is and which nation he represents? Long live the Emperor of Emperors Barack Hussein Obama!!!

Update 19.11.2009: ‘China has launched the serial production of J-10, J-11 and FC-1 fighter jets, which are rip-offs of Russia’s Su-27/30 and MiG-29 aircraft. The nation intends to build and sell not less than 1,200 planes at the prices which will be much lower than those of the Russian planes.

F-16 fighter jet

F-16  Fighter jet

The report is not the news for the Russian defense industry. In 2003, China refused to prolong the license for the production of Su-27CK planes and started working on the construction of its own jet – a copy of the Russian analogue. China will put competitive pressure on Russia on the market of spare parts too.

Beijing plans to challenge Russia on its traditional defense industry markets and become the maker of inexpensive and efficient air materiel. Malaysian military officials have already expressed their readiness to cooperate with China at this point. A senior official of Malaysia’s Air Force said that his nation was going to purchase a batch of spare parts to Russian fighter jets from China.’ Source: Pravda, Moscow.

Sample this:

‘The USA refused to sell 66 multi-purpose F-16C/D fighters to Taiwan because of the concerns of the Chinese administration, The Taipei Times wrote. Indeed, why would such a small country as Taiwan need such a large batch of fighter jets?

China has changed the balance of forces to its own advantage during the recent 15 years in the region. China’s Air Force presumably consists of Russian-made Su-27 and Su-30 aircraft. The country also uses its own fourth-generation F-10 aircraft. This fighter is a combination of the technologies used in Russia’s Su-27 and USA’s F-18.

Source: Pravda, Moscow

I just hope the west realizes who they are dealing with. There was a photo that I saw of a Rolls Royce that was a replica of the original and which was made in China. The manufacturers were horrified but the Chinese saw nothing wrong with this. China has the dubious distinction of being the nation that has the highest number of users of pirated software. Companies like Microsoft lose billions of dollars every year to this menace. Russians have refused to sell China the Su 33 fighter jet, fearing that the Chinese will make a copy of that too!

I may add that the J-10 fighters (replicas of Su 27) are now being sold to Pakistan in a billion dollar deal, disregarding the fact that the design and technology is copied. For Obama to wilt under pressure and deny Lockheed Martin a multi billion dollar deal was not a smart move. It sends a wrong signal to the world, besides the news is that the French have no such hangups and are selling Taiwan Mirage 2000 -V fighters. American loss is French gain. Bad politics, bad economics President Obama!!!

Obama administration has done the unthinkable. The Sino-US Joint Declaration after the meeting between the two sides mentioned China’s ‘monitoring’ role in South Asia, especially with regards to the Indo-Pak relationship. This is not a concession to China, this is a ridiculous approach to the regional geo-politics. The State Department is going to town ‘clarifying’ that the bilateral relations between India and the US are not dependant on the US relations with any third nation, but the damage has been done. New Delhi has stated very clearly that there will be no ‘third party’ mediation in its relations with Islamabad. Indians are flummoxed by the new American administration approach. This has undone what all had been achieved during the Bush regime. This is surely not the best start to the upcoming Prime Minister Manmohan Singh’s US visit.  A nation of copycats is at best a paper tiger, or in this case, a paper dragon. For any nation big or small not to see this through says a lot about that nation and its leadership.

Update 20.11.2009: Riyaz Wani reports that: ‘Hurriyat chairman Mirwaiz Umar Farooq — engaged in “quiet” diplomacy with New Delhi — is going to China after his travel to Pakistan later this year on Islamabad’s invitation. “Yes, I will visit China soon,” Mirwaiz told The Indian Express. He said he had been invited by the Han Foundation, a Chinese “NGO” to talk about “Muslim” issues. “It is basically a Muslim NGO,” Mirwaiz said.

Mirwaiz, sources said, is likely to meet the meet diplomats and administrators in Beijing to give them his “perspective” on the situation in Kashmir. This comes at a time when the US-China statement on India-Pakistan relations prompted the MEA yesterday to say that there was no third-party role in bilateral relations with Pakistan.’

This is a new development for the Kashmir dispute. India cannot but scoff at such moves. However, in a way, this completes the circle. As the Kashmir dispute is really a tripartite issue any way. The Chinese I am sure will be asked by the Mirwaiz as to by when they are going to vacate the Shaksgam Tract that has been given to them illegally by Pakistan. India will keep a close watch at the developments. Thank you Washington for this latest gift. And we thought that we were standing up for the free world!!!

Update 18.11.2009: In the latest Forbes list of powerful persons in the world the US president Barack Obama has been named as the most powerful person and has been given the top billing.

Update 23.11.2009: The Prime Minister of India, Manmohan Singh has said that there is no substitute for the dollar as the world reserve currency. He remarked that the present downturn is a temporary phase and this will pass. He further said that similar conjectures were being made in the sixties but the dollar prevailed. The Prime Minister is on an official visit to the United States.

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