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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (16588)	11/22/2004 6:43:30 PM
From: RealMuLan	Respond to of 116555

Walker's World: Bush knows Asia matters more By Martin Walker UPI Editor Published November 22, 2004 WASHINGTON -- The next inauguration ceremony of President Bush is still two months away, but the second term really began over the weekend with the bilateral meetings the newly re-elected president held with China's Hu Jintao, Russia's Vladimir Putin, and Japan's Junichiro Koizumi. Put it another way. Bush chose to hold the highly symbolic first meetings abroad of his new term with the leaders of the world's second and third biggest economies, Japan and China, who also happen to be America's biggest creditors these days, and with the leader of Russia, the only other country that can claim strategic nuclear parity. The Russian nuclear arsenal may be a pale shadow of the old Soviet Union's vast stocks of ICBMs, Backfire bombers, Akula submarines and tank armies. But just a month ago, Russia tested its new SS-N-30 submarine-launched ballistic missile, the first in the world designed to defeat America's not-yet-installed anti-missile defenses. The new Russian missile spins in its launch phase, which means that no laser can concentrate on one spot long enough to burn through. And after it reaches its apogee in flight, in the descent phase a tiny motor kicks in so that the missile can change course repeatedly, while still focusing on its eventual target. This means that the current U.S. anti-missile system, which calculates the path of the descending missile and sends up a counter-missile to destroy it, will not be able to predict the course of its target. With even a handful of these missiles, Putin's Russia will have the same strategic parity that Leonid Brezhnev once enjoyed. No wonder Bush wanted to talk to these people. Koizumi is a good ally, who has sent Japanese troops to Iraq. China is the key to resolving the headache of North Korea. And in week that the U.S. Congress formally raised the debt limit to allow the Bush administration to continue running its record deficits, it was useful for Bush to be polite to the foreigners to whom he owes the most money. The Japanese Central Bank is sitting on over $800 billion in U.S. Treasury bonds and other securities, and the Chinese are sitting on over $400 billion. (The South Koreans and Taiwan's Central Bank have another $200 billion each, and even India has $108 billion.) These are serious sums. And while it would not be fair to say that the United States is becoming a partly owned subsidiary of its Asian competitors, it is clear that these are the economies and trade partners that currently matter most to the Bush administration. wpherald.com [the author needs to update his number<g> Now Japan holds close to $950 billion in US debt, and China holds about $350 billion