July 24, 2006
by Russell Cole
For those of us who are often dismayed over the American inability to conduct effective trade negotiations with China - especially in respect to the state controlled evaluation of the Chinese currency - this short explanation as to why this drama of trade negotiations performed by politic officials in the U S government and their not so animate Chinese partners appear to have no worldly consequences after we, as the vulgar masses who spectate this display, disengage from our momentary trances of suspended disbelief.
China, for better or worse, has invested its treasury in U S bonds. Therefore, China is quite concerned with continuing the artificially inflated value of the Dollar. The U S, on the other hand, needs China to remain invested in the Dollar in order to avoid an explosive dynamic of wage stationary inflation that would have catastrophic consequences for the American economy. Therefore, America can not push to hard when conducting these pathetic ritualisms involving denunciations of Chinese trade practices and Chinese centralized manipulation of currency values, or China might just elect to dispense with its Dollar investments.
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However, not so fast, because China cannot extricate itself from the Dollar, because if China appears as though it is dumping its investments in the Dollar, the value of the American currency would plummet and China's investitures would be to a great extent down the drain with the Dollar.
This is certainly a strange dynamic at work. Nevertheless, it is a dynamic that is artificially inflating the American economy as well as the Chinese possession of wealth. How long will these two lovers who hate one another yet cannot resist one another's passionate entanglement last, there is no way to know. However, we can infer from our own experiences that there is a certain element of violence in sex; not in the sense of rape or battery, but in the respect that the boundaries between pleasure and torment often seem to be fused creating a sensation that we long to protract but pain to bring to a resolution.
It is strange how the most bizarre aspects of ourselves are often the most immediate and primordial.
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Russell Cole [send him email] is a contributing author to the Populist Party of America, and is the coordinator for the Populist Party's Midwest Alliance, the Midwest Populist Party. Read more from Russell Cole at the Midwest Populist Party blog.
