Tag Archives: Japan

An India-Japan alliance

For most of the last half century, Washington “visioners” have been trying to cement relations between Japan and India. The match seemed natural: Japan’s highly industrialized economy needed markets and raw materials from a still industrializing India. That, it has always been argued, would reinforce a political, and perhaps eventually military alliance, between Asia’s two largest democracies. After the 1949 collapse of China’s Nationalists, such a combination seemed an important contribution to The Cold War effort to halt Communist expansion in Asia. After all, it was reasoned, Japan shared India’s Hindu origins of Buddhism as well as a contemporary dedication to representative democracy.

Washington’s planners even went so far as to include such calculations in the massive economic aid programs to India, South Korea, Taiwan and South Vietnam in the 1950s and 60s. But a special fund set up for regional collaboration – essentially Japan and India — extended year after year, only produced one project. That was a development of an iron ore deposit, a railroad, and a port – originally intended to replace Calcutta as India’s then major commercial center, on the Bay of Bengal.

When Prime Minister Shinzo Abe toured India this month, it appeared that after all Washington’s huffing and puffing, the two countries were on their own settling into the kind of elaborate cooperation Washington geopolitcians hypothesized. The growing specter of Chinese economic as well as military expansion certainly played a role [China is, ironically on of both countries’ largest trading partners.] Leading the new effort is a $15 billion dollar low-interest Japanese loan to finance a favorite project of Prime Minister Narenda Modi, a new fast railway from Bombay, India’s commercial capital, to Ahmnebad, capital of Modi’s native Gujerat state – and eventually to the Indian capital of New Delhi.

Modi, trying to break the mould of a half century of Indian state capitalism, is using Japan to expand the country’s weak infrastructure which most economists see as its greatest barrier to the kind of economic take-off in China in the past three decades. India has the theoretical capacity not only to repeat China’s “miracle” but to go far beyond it with its enormous raw materials resources and one of the youngest – and soon to be largest – populations. Snuggling Japan into the Indian economic picture also could be the wedge needed to defeat the ever present “East India Complex” – the paranoia of India’s enormously powerful “babus”against foreign investment. These bureaucratic clerks whom politicians have relied on in post-British India are one of Modi’s most difficult problems.

Given the long history of Tokyo’s effort to achieve a breakthrough, it is still early to predict its ultimate success. Probably no two international negotiators have larger cultural differences than the Japanese and Indians; the first with their mania for an almost sexual satisfaction from extended negotiation, and the Indian tendency for talk for its own sake.

A shadow, too, hangs over Modi’s political following. He does represent new entrepreneurial tendencies among smaller Indian businessmen – India’s big brandnames often have chosen to go abroad rather than fight through local problems. But his party’s origins in Hindu chauvinism are dangerous at a time when the Islamicists are attempting to infiltrate India’s Muslims. [With 180-million, they are the world’s third largest the world’s third largest Islamic community, much of it mired in poverty and ignorance.] India’s blood links to the political disorder in neighboring Muslim Pakistan, carved too out of British India, make such a threat all the more real.

Still, the new Japan-India ties are a welcome development in an Asia where the Obama Administration’s “pivot” has failed to materialize, and Beijing’s aggressive intent is manifest all around – including India’s disputed Himalayan frontier with Tibet..


Abe-sensei goes to town

The cross currents of history are notorious. And we are experiencing them in spades just now in relation to Japanese leadership, Japan’s role in the world and Japanese-U.S. relations.
Prime Minister Shinzo Abe descends from an historic line of Japanese politicians and industrialists – on his mother’s side. Nobusuke Kishi, one time “unindicted war criminal” as the military’s chief clerk and bottle washer during Japan’s evil days, and a Kyushu industrialist family with a sorry record of using POWs for slave labor. But he is also, obviously, the most popular and effective prime minister in two decades, maybe No. 2 after the iconic Shigeru Yoshida of the American Occupation and the establishment of what has come to be called the 1955 regime that brought stability and phenomenal growth and prosperity to Japan..
Now Abe is attempting an enormous goal. He wants to reestablish Japan – as they have said, alas! with faltering results in Russia – as “a normal country” The American Occupation attempted to reform Japanese society, to drag it back from the dominance of a fanatical military which brought it into World War II after its long “Pacific War” to conquer China.
One part of his mission, and the most dangerous, is to strike a balance between the numbness — and the apologetics on the minuscule far right – that came out of the war. That has to include recognition that Japan has a deep and important heritage that must be preserved for Japan and the rest of the world. Sometimes, that means either glossing over past horrors – or at least explaining them. [Japan’s military came out of a revolutionary background, many if not most, from an expropriated peasantry that paid the price for Japan’s rapid industrialization in pre-WWII. And it was true that part of their ethos was the belief that, having set the pattern for modernization as the only non-European society to make it, they were “crusading” to eliminate European – and American – colonialism in Asia.]
That leaves Abe vulnerable to the clichéd attacks, both by the Japanese left – some of it, ironically, installed by the Occupation including the still Communist-loyal teachers’ unions – and oldtime American Japan-haters with their memory of atrocities in a bitter, painful war. [But do they remember the devastating American firebombings of Japanese cities and, alas!, the perhaps necessary but horrendous two nuclear bombings!] Walking that tightrope is going to be more and more, not less difficult.
For Abe is also pushing for Japan to take its place in the real world, a place consistent with the world’s still second largest economy. That means, for example, amending – or stretching even more – the MacArthur Constitution which forbade military forces altogether, long since breached but certain mutuality in the U.S.-Japan defense alliance which has been only a one-sided nuclear chield protecting Japan.
If all this were not enough, Abe is doing this at a time when Japan is undergoing a demographic catastrophe – with its population like most of the industrial countries [and, interesting enough, Iran and some other “underdeveloped” Arab societies] at a precipitous rate. He also is trying to drag the economy out of two decades of torpor.
His only crutches in all this are his continuing popularity; the Japanese electorate seems ready to have an activitst prime minister. Haviong just completed a low-jey but very successful visit to the U.S., he moves on to the broader world platform now. And he needs the fullfleged cooperation of the U.S. In this, as in so many issues, the Obama Administration isn’t always putting his Foreign Service Officers where its mouth is. It could not be more important at this moment for the U.S. to grab every tool – including the proposed Pacific free trade pact – to further the Japanese prime minister’s objectives.

East Asian worries

Anonymous leaks from Chinese spokesmen along with mistaken translations of Japanese Prime Minister Shinzo Abe’s private remarks at the gathering of our lords and masters at Davos World Economic Forumn are alarming.

Bombastic comments from the Chinese – including the military as well as the controlled government media – are nothing new. And interpreting the Japanese has always been an art form never developed by the West most especially lacking in American media and by most U.S. politicians.

But if you add to these mutterings to the growing lack of influence of a befuddled Obama foreign policy, it is as some would have it, the makings of new and extremely dangerous possibilities in East Asia. It may not be 1914, 1936 or 1941 but with growing antagonism and friction between the two most important players in the region, it is a worrying moment and needs the required defusing of an incipient crisis.

The background, of course, is that the Chinese Communist regime is in deep do-do. The fantastic growth of the last two decades is now behind them. Rapid economic growth with its enormous rewards for the elite has been the Communists’ answer to their abandonment in all but name of Marxist-Leninist-Maoism. The capitalist formula for a truly great leap forward – the introduction of outside capital and accompanying technology and the enormous expansion of the infrastructure – is coming to a close. Despite propaganda by the regime, too often echoed in the world media, China is in another transition with the outcome very much in doubt.

In fact, it’s been success as so often happens, that has been the death warrant for the strategy of the past three decades. Rapid domestic changes in the leading coastal cities, including a diminishing of what has been until now an unlimited pool of cheap rural labor, are ending. It is one of the results of the one-child birth control policies. A sputtering recovery among its main international customers, particularly the U.S., plus competition for exports is squeezing even the modest profit margins. The lower end of their factory to the world is being drained off to other low-wage economies and the galloping increases in productivity brought on by new technology in the West and Japan limit movement to higher profit products. All this will trim the expansion of exports. Growing anxiety over debt, particularly by local governments that have exhausted their use of land sales to finance often overly ambitious projects, is ending resort to the infrastructure gimmick.

So far the Party’s response has been to talk about “reforms”. But except for minor chipping around the edges, the leadership has not been able to dramatically reverse old policies and their results.

Nor is there much hope of further future implementation of these so-called reforms, all of which have been talked up for years, even in the controlled party organs. For one thing omnipresent corruption – both gross and sophisticated – blocks what all agree ought to be done. For example, the switch to a more balanced economy with a growing consumption sector rather than unlimited investment is easier said than done. Recent shifts are now reversing, if those damned statistics cane be believed. [Again we have that problem, for example, of provincial GDP figures not gibing with the national claims.]  Without expanding the accompanying social services to include millions of temporary workers in the large cities who in effect are there illegally, that kind of consumer market can not exist. But to move on the question of the part-time city dwellers would be to abandon the kinds of population controls which have been basic to the system of political repression by the regime.

By “sophisticated” corruption is meant the built-in interest groups that have developed alongside the hell-for-leather economic expansion. For example, ending at least partially the one-child program, which has now been decreed, however corrupted it has become at the lower echelons, is difficult if not impossible because of a powerful bureaucracy which has developed over several decades to enforce it. The problem of pollution of land, water and air, is so gigantic that under the best of circumstances it could not be solved for decades and it will take enormous investment to do so.

The lament among some Western observers that Chinese nationalism is being purposely stimulated by officialdom as a direct response to these growing economic problems is a misinterpretation. The kind of nationalism that almost destroyed European civilization in two World Wars does not now nor did it ever exist in China. That Chinese world of more than 1.3 billion is so vast with so many ethnic, regional and linguistic  competitions and conflicts, that only a few detribalized students pick up a Westernized nationalist flag.

But there is another very real element that is more dangerous. Chinese military expansion is accelerating. It seems likely that however ambitious it may be, it is not as competent as its announcements suggest. [That’s whether losing a balloon over the contested East Sea/Japan Sea rocky shoals difficulties. The further embarrassment was the chief of Chinese ballooning had to be picked up out of the water by the Japanese Coast Guard who made less of it in propaganda than they might have.]

But there is no doubt that a lot of young and ambitious soldiers and sailors have new toys they would like to play with, many the applications of American technology sold or stolen by Beijing. Nor can military anomalies be excluded by a U.S. military often complacent as its more than half century of total world dominance. [One remembers the stories of how the. Japanese Zero fighter was described as being put together with string and paste in the pre-1941 period, only to turn out to be one of the best fighter planes in World War II.]

It’s a slippery slope, as all characterizations of national character are, but there is another element: the Chinese have a sometimes fatal attraction for gambling. [All you have to do is look at the faces at the Las Vegas tables, or the gambling megametropolis of Macao]. By extension, recent Chinese history is replete with enormous political gambles, often failed ones costing millions of lives in Mao’s time. For an important if unnamed spokesman at Davos to be quoted as saying a Chinese strike at the contested rocky shoals in the East China could be effective before a Japanese [or U.S.] response is just that sort of gamble.

Into this mix comes a new Japanese turn, for the first time in several decades a strong Japanese prime minister would like to restore a modicum of national resolve to a population decreasing at a catastrophic rate but still hanging on to one of the world’s largest and most sophisticated economies That is going to mean, incidentally, throwing off some of the vestiges of the U.S. Occupation which tried to remold a more than usually tradition-bound society. Beijing, using the echo chamber of Western media and some U.S. scholars and politicians recalling the horrors of World War II, is trying to inhibit this resurrection of its old rival. Nor does the possibility even surface of comparing notes on Japanese wartime deprivations and the murder of a hundred million Chinese by the Maoist regime to which the current leadership still pays homage. The fact that China still depends to a considerable extent on imitating “the Japanese model” and the importance of Tokyo’s transfers of technology is another evidence of Beijing’s internal unresolved strategic conflicts.

Add to this the wandering strategies of the Obama Administration and the now challenged “traditional” role of the U.S. Navy to keep the seas open around the whole Eurasian land mass and you get some ugly possibilities. The Obama Administration, rather than playing a more substantial public role as an ally of Japan, has taken it on itself to be the part-time mediator between the two East Asian rivals. That not only befuddles Tokyo but obscures the issues, which at this time and place, is the aggressive Chinese demands. Beijing is being led to believe Washington will eventually accede to the expansion in its vast claims to areas which it believes can be restored to old traditions of East Asian suzerainty to the first centrally governed state in the region [and perhaps the world].

The American ambassador, an inexperienced Kennedy scion despite her attribute of a name that does have panache in Japan, is seemingly spending more time worrying about porpoises. The defense secretary refuses to cope with the anomalies of the troubled Tokyo-Seoul relations which is currently the chief obstacle to any regional stand-up to the Chinese. Washington is therefore counted among the missing. Its attention appears hung up somewhere between its Mideast fiascos, its domestic health care muddles, and a much publicized but unsubstantiated “pivot” to concentration on Asia.




The Asia scrum

Rather suddenly there is a welter of developments turning Asia’s dozen-odd countries into a cat’s cradle of conflicting interests – some new — that could lead to war.

Central, of course, is “a rising” China. The Chinese, themselves, have given up the phrase “a peaceful rising”. That was a promise that the new boy on the block would not repeat a united Germany’s late arrival as a strong player in Europe, setting off two world wars. Now almost daily aggressive rhetoric in official Chinese media is matched by extravagant territorial claims against its neighbors in northeast and southeast Asia coupled with a rapid naval buildup. Infringement of the cease fire lines in the Himalayas accompanies temporary military thrusts against Indian forces.

China’s only ally in the region, North Korea – dependent on Beijing aid for its very existence – has turned even more enigmatic. A highly publicized – unusual in such frequent eruptions – purging of its No. 2 leader is inexplicable even to the experts. Its tightly controlled media showed Jang Song Thaek being yanked off to prison. Then the uncle by marriage to the 31-year-old Kim Job-Un, third member of the Kim dynasty, was summarily executed.

One side effect has been both official media in China and North Korea accusing each other of perfidy; Jang was close to Chinese official and business interests. Yet there is no sign that they are not still wedded in their opposition to Japan and the U.S. These events have written a death notice for Washington’s continuing hope that Beijing could and would intervene to halt North Korea’s expanding weapons of mass destruction program. And the Obama Administration, like its predecessors has no answer to the conundrum of the continuing Pyongyang blackmail for additional aid as an incentive to halt its weapons program.

On the other side of the East [or Japan] Sea, most of which Beijing now claims as a restricted area, Japan’s extremely popular Prime Minister Shinzo Abe has defiantly defended Tokyo’s longstanding claim to sovereignty of disputed rocks between its Islands and the Mainland. His attempt to restore Japan’s economy, dawdling for a decade, has been accompanied by a campaign to regain a sense of national purpose. His strategy includes breaking through the virtual monopoly of the leftwing mainstream media not excluding the government radio and the Communist Nikyoso teachers union. Visiting Japan’s shrine to its fallen war dead was part and parcel of that cultural offensive. But because of the enshrinement there of World War II war criminals, it was looked on askance [and for propaganda] by Beijing and South Korea.

Obvious self-interest is being flaunted for political advantage: Beijing threatens to impose economic strictures on Tokyo. Seoul has refused needed Japanese ammunition for its UN Peacekeeping Force under attack in South Sudan. In a period of rapidly declining GDP and attempts at reform, Beijing can ill afford to abandon its heavy reliance on Japan for China assembly for third Japanese markets. Furthermore, Beijing has always looked to Tokyo not only for investment but for technological and management know-how, reflected in Japan being China’s No. 1 supplier in their $334 billion trade [2012]. Seoul’s collaboration with Japan, including such recent joint naval exercises, is essential for any effective counter to China’s power sponsored by the U.S. in Asia.

Abe, anticipating that Beijing despite all the talk of reform will not be able to boost its domestic consumption, long the holy grail of Japanese and Western business, is encouraging Japanese business to look elsewhere. Already Japanese direct investment into China plunged by nearly 37% in the first nine months of 2013, to only $6.5 billion, in part because of the outlook for Chinese markets. Alternatively Japanese investment in Southeast Asia’s four major economies ­— Indonesia, Malaysia, Thailand and the Philippines —­ surged by over 120% to almost $7.9 billion.

Tokyo is moving quickly to exploit the new opening in Burma through its traditional special relationship there, Not least it cultivates opposition leader Suu Kyi, whose father, one of the martyred leaders of the independence struggle, was a Japanese protégé. Tokyo has written off more than $5 billion in debt for the reforming generals, and offered new infrastructure loans. Completing the circle, Tokyo has just announced $3 billion for Burma’s long-suffering minorities in off and revolt against the central government since independence.

Japan’s attempt to move away from China toward South Asia has its geopolitical aspects as well: a recent joint naval exercise with Indian forces off that country’s coast, a first, backs up its attempt to encourage an export led investment in the other Asian giant. It is part of a growing Japanese military, integration with its U.S. ally, and projection of its power and prestige overseas.

Radical shifts are taking place elsewhere in Southeast Asia. Thailand’s feud between an urban Sino-Thai Establishment – including avid supporters of the King and Queen – and rural voters is escalating. Rioting with upcoming elections – which the opposition threatens to boycott – have already dampened continued rapid expansion of tourism which accounts for over 7% of Thailand’s economy. And it could threaten foreign investment which has made region’s leading automobile industry a cog in the growing worldwide car assembly network.

Eighty-six-year-old King Bhumibol Adulyadej is ill and apparently unable, especially given his closest followers’ involvement, to make his usual intervention to calm political waters. And the Thai military, which many hoped had been ruled out of a new democratic, booming society, now have hinted they will lapse back into their old coup habit as they did in 2008 if street violence continues. Meanwhile, no one is paying much attention to a growing insurgency in Thailand’s Malay provinces on its southern border. That augurs badly for the region with Malaysia’s own increasingly Islamicist Malays moving toward conflict with its Chinese and Indian minorities, and more radical politicians arising in the more isolated states on Thailand’s border.

Indonesia, largely ignored despite its fourth largest population in the world nearing 250 million – almost a third under 14 — has temporarily staved off a balance of payments crisis. But its meager 3.6% increase in gross national product in 2013 is not what is required for one of the world’s most resource endowed countries with a generally docile and hardworking population. Highly dependent on a few mineral and agricultural specialty exports, Indonesia has been hard hit by the downturn in the world commodity prices. Despite large oil and gas potential, one of the founders of the Organization of Petroleum Export Countries [OPEC] became a net importer in 2009. Corruption, protectionism and fluctuating economic and fiscal policies have discouraged foreign investment and technological transfer. Despite conventional wisdom that Islam in Indonesia is moderate and catholic, incorporating large elements of its pagan and Hindu past, the world’s largest Muslim nation has always had a virulent jihadist movement. Indonesian authorities have been less than prescient in cracking down on it. In a deteriorating economy, it could become a major factor in the worldwide Islamicist terrorist network.

It was into this rapidly moving miasma that Sec. of State Hillary Clinton just two years ago announced the Obama Administration’s “pivot”, a turn from concentration on the Middle East to focus on Asia. But to continue Clinton’s metaphor, a pivot is a “central point, pin, or shaft on which a mechanism turns or oscillates”. It could well be that in the world of diplomacy – and geopolitical strategy — one does not reveal the fulcrum. The U.S. has every reason to hope and even pretend that the growing aggressive rhetoric and behavior of Communist China is not the central issue in Asia for the foreseeable future. But to ignore that threat publicly is not to make it central to the strategy shift which was so loudly proclaimed.

Yet, particularly in its relations with Japan, since 1950 the keystone of American strategy in Asia, the Obama Administration appears not to have a China policy beyond associating itself rhetorically with China’s neighbors resisting Beijing’s encroachment. It may be just as well that U.S.-Japanese military integration under an expanded Mutual Defense Treaty is moving rapidly ahead on autopilot. For despite Tokyo’s continued public espousal of close relations, the coolness between Abe’s Tokyo and Obama’s Washington are an open secret. The strong – by the exotic standards of formal diplomatese – of Washington denunciation of Abe’s visit to the Yasukuni Shrine [“disappointing”] — was a shock in Tokyo despite an earlier warning. Washington’s refusal to take a direct hand in smoothing relations between its two most important bilateral allies in Asia, Japan and South Korea, has been …disappointing in Tokyo and elsewhere. That is particularly true since U.S.diplomats [and retired Foreign Service Officers] and Secretary of Defense Chuck Hagel have publicly espoused mediation between Japan and China.

The Washington-sponsored Trans Pacific Partnership, an ambitious attempt to create a vast new common market including 40% of U.S. trade, all North America and some hangers-on, is stagnating, in part because of inattention from the Administration’s leaders. And it is no secret that excluding China from the TPP – even if there were not substantial justification given its unfair trading practices – is presumably a part of the pivot.

But shaking off the Middle East, even with repeated attempts at “leading from behind”, is certainly not conclusive. This weekend’s crisis in Iraq and Washington’s promise to intervene short of boots on the ground shows how hard it will be to disentangle the U.S. from primary concentration on the area. Sec. of State John Kerry’s persistent – if unrealistic – devotion of enormous time and energy toward a breakthrough in Israel-Palestinian relations, too, points in another direction

The U.S. President is scheduled for a swing through Asia in April. It remains to be seen whether the Administration will publicly try to tidy up its “pivot’ with new initiatives.

.Until then the “pivot” is flapping in the growing East winds of change.




New heroes in Japan

At a time when the MSM almost exults in expressions of anti-Americanism around the world, virtually neglected is the welcome and appreciation given the large-scale participation of U.S. military and non-military in the Japanese earthquake-tsunami rescue and cleanup operations. One sad if somewhat bitter sweet story is of an American English-language teacher in Miyagi prefecture where the event took its heaviest toll.<a href="http://

Geopolitical Maelstrom

If you were taking a trip to Mars last week, you may not have noticed a record-breaking New York Stock market “bounce”. In microcosm it reflected the growing combination of crises around the world brought on by galloping technology and some of the oldest tribal issues in human society.

When a trader mistakenly pushed off instead of on, it unleashed the pent-up nervousness. For whether they acknowledge it or not, the stock market players know they are sitting on dozens of powder kegs simultaneously. Any one could blow and if and when it did, it would not only ignite predictable disasters but also set up vast unanticipated consequences. Luckily, this time it was only a rehearsal for what could come at any moment.

The possibilities are endless, as they always are in human affairs. But instantaneous communications [or persuading ourselves that we are in full command as with the late financial derivatives catastrophe] leads to super-hubris the world hasn’t known since Alexander. All the computers [and additional financial regulatory legislation] in the world can no more beat back the business cycle than the Viking King Canute could turn back the tides. That is why around the world a series of potential crises have unnerved those who have to deal with financial prospects.

On the Continent, politicians are finding out what was always self-evident: the Greece spendthrifts are not only threatening [along with Spain, Portugal and Ireland in their wake] the Euro but the whole idea of “the European project”. That is, the hope that after two civil wars that almost destroyed their civilization – replete with destruction of one of their cultural artifacts, the Jews – Europeans could construct a single state based on economic integration. Furthermore, a soft pillow rather than a safety net [retirement at 53!], “population control”, and imported cheap labor that refuses to assimilate, is bending traditional values to the breaking point. In Britain, where the European malaise is reflected, hosannas about having stayed out of the Euro won’t be much help with a “hung parliament” after an election without political substance. Whitehall and The City are unlikely to be able in the near future to meet the same challenges facing the southern tier of the EC without a major revolution in thinking. But Thatcherism is ancient history.

In the economic powerhouse which East Asia has been for most of the post-World War II era – first Japan, South Korea and Taiwan, and more recently Mainland China – things are equally rocky. More observers believe the jerry-built Chinese export machine can not carry the ball in a country that has neglected its overwhelming population in rural areas. Beijing may hold unprecedented quantities of American paper debt  – being devalued by the hour – but unless the U.S. consumer society [and the EU and Japan] recovers more quickly than most observers believe possible, China is itself debt-bound and facing disaster. One-party authoritarianism cannot deliver the kind of turnaround needed to meet the growing dissidence over widening income disparities and corruption that has again enshrined that old Chinese slogan, “the emperor’s writ stops at the village gate”.

Tokyo, still running on what remains of “Japan, Inc.” – the world’s most astute bureaucrats who had outlived their time in a globalized world economy – is paralyzed by the worst leadership since Hiroshima. The failure of Western political party structures to take hold – the new democracy was created by bureaucratic fiat, first Gen. Douglas MacArthur and later by Finance Minister bureaucrats playing politician – has foundered. Again, demographics are dictating disaster with a population dwindling faster than elsewhere, with fewer and fewer young people willing to maximize a technological treasure house. Among many problems is what to do about an increasingly menacing China and North Korea with Big Brother Washington tied down with two undecided wars in the Middle East.

But a Chinese implosion would not help. It would, in fact, threaten its neighbors –who have learned to compensate partially for their own failures by shipping high value components to assembly bases in China for reexportation to third markets. A downturn in commodity purchases brought on by any drop in recent Chinese drunken sailor worldwide purchases, already hinted at by the markets, will puncture everyone’s balloon. That’s from Australia, living relatively high on Chinese purchases and investment in its primary industries, to Russia with its high-priced energy deliveries to world markets. [In the instance another learned thesis on socialism by Canberra’s Prime Minister Kevin Rudd won’t help.] A recent public admission by the high command of the Kremlin’s failure to reform its military since the Soviet implosion, in part the result of a demographic catastrophe with lowering male longevity, shows just how much bluff Prime Minister Vladimir Putin’s helter-skelter politics are. Lower energy prices might benefit the American economy, but they will create havoc in the Persian Gulf where more “Dubais” are waiting to happen.

A nervous Wall St.? You can bet your bottom dollar – they are.