I was watching an old clip about the Korean war on You Tube. The US and China were locked in mortal combat in 1951. China lost over a million men as the US pounded badly equipped Chinese troops with massive and superior firepower. The US lost more men in Korea in three years, percentage-wise, than it did in Vietnam in almost ten years.

How far away that seems today.

Today China and the US are locked in a different kind of embrace. China is now America's financial master. Chinese reserves are 2 trillion bucks. America's are a paltry 76 billion.

Together China and America control one tenth of the world's land mass, one fourth of the world's population and are responsible for one half of global economic growth in the last eight years.

China saved and grew as America spent like crazy and got low interest rates.
Now the US is asking China to finance not only its own fisical expansion, but also China's simultaneously.

The biggest global bail-out in world history.

China's economy is slowing down. Political revolution looms. Yet, China has options. The US does not. China can focus on American consumption or on Chinese consumption.

With political chaos looming in China. China can accomodate the US only so much.

Can the US take its tin-cup elsewhere?

The answer is NO.

Japan and the Arabs cannot fill this financial vacuum.

Russia and Europe certainly cannot.

Should China and the US go their seperate ways you can kiss off globalization for good.

We are approaching a hinge moment in global history.

Place your bets!