And the prudent shall survive

By John Browne

Though few may have noticed, the past few weeks may be regarded as a global economic turning point. Evidence is mounting that the United States is entering a recession, with increasing signs that it could morph into a depression. While the George W Bush administration appears resigned to bail out or nationalize large tracts of American commerce, the presidential candidates drift towards Great Society era spending proposals. At the same time, America's principal economic rivals appear to be charting courses that are not in line with US interests.

The Russian invasion of Georgia has revived tensions that have not been seen since the most frigid periods of the Cold War. With the Olympic Games over, China can relax and now exert its muscle without risking any politically motivated boycotts. Between them, these global players hold well over US$1 trillion, or 10%, of US government debt, which they can use as leverage in any strategic, economic or political confrontation with the US