This echoed of
the oil embargo of yore. Ernest Preeg of the Manufacturers Alliance was
quoted by the Toronto Star as saying: "China, for example, could
blackmail the United States by threatening to dump its vast holdings of
U.S. dollars, forcing up U.S. interest rates and undermining the U.S.
stock market. Chinese military officials, he claimed, had included this
kind of tactic in their studies of non-conventional defence strategies."
These scenarios are disparaged by analysts who point out that America's
current account deficit is mostly in private hands. Households and
firms should be trusted to act rationally and, in aggregate, repay
their debts. Still, it should not be forgotten that the Asian crisis of
1997-8 was brought on by private profligacy. Firms borrowed
excessively, spent inanely, and invested unwisely. Governments ran
surpluses. As the IMF puts it: "To err is human and this is as true of
private sector investors as anyone else."
Anarchy as an Organizing Principle
By: Dr. Sam Vaknin
Also published by United Press International (UPI)
The recent spate of accounting fraud scandals signals the end of an
era. Disillusionment and disenchantment with American capitalism may
yet lead to a tectonic ideological shift from laissez faire and self
regulation to state intervention and regulation.
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