It has becoming a repeating rhetoric pattern of the Bush administration -- pressuring China to revalue RMB and privitize China's national banks.
I am sure we can talk all kinds of reasons behind it; But one thing, one story, we must not forget -- the story behind the Asia economic crisis in late 90s. It's a story of how the Wall street gangsters worked with US government to sabotage Asia economy.
Of course, it's a story that the mainstream American media won't tell. You have to dig deep to find it out. By the way, you know who are the MEDIA MASTERS in US, don't you?
This is a story that every Chinese should know.
Hunting Asian Tigers: Washington and the 1997-98 Asia Shock
By F. William Engdahl
American Cold War dominance of the non-communist world had been based on the perceived global threat of Soviet and potentially Chinese Communist aggressions. Once that threat ended at the end of the 1980's, as Washington well knew, restraints on its major military allies were gone. The allies were potential economic rivals. Japan and East Asia, as well as the European Union, were emerging as major economic challengers to American hegemony. That economic challenge was to be the focus of U.S. geopolitics after 1990.
Armed with the Gospel of free market reform, privatization and dollar democracy, and backed by the powerful Wall Street financial firms, the Clinton Administration began a process of extending the dollar and U.S. influence into domains which had previously been closed to it. The near religious campaign to win those areas to Washington's peculiar brand of market economy, was to include not just former communist economies of Eastern Europe and the Soviet Union. It was to include any and every major part of the world that continued to try to develop its own resources, independent of the mandate of the IMF or the dollar world. The process also involved bringing every major oil region of the world under more or less direct U.S. control, from the Caspian Sea to Iraq to West Africa and Colombia. It was an ambitious undertaking. Critics termed it imperial, the Clinton Administration called it the extension of market economy and human rights. It was definitely not what most of the world were hoping for as the Cold War drew to an end.
The Clinton Administration and its Wall Street allies had brought one region after the other into its direct orbit during the 1990's, with the promise of the free market as the road to wealth and prosperity. The catch word was "globalization", and in reality it was globalization of American power, consolidated through American banking and finance and corporate power.
Few realized it might be part of a well thought-out strategy, until the process was well advanced. Free trade had traditionally been the demand of the superior economic power on its weaker partners. By the time it became clear what the Washington agenda was, America had largely disarmed potential opponents, and built a new ring of military bases around the world to defend its gains, a guarantee that the new converts to free market did not lose the faith, and try to revert to older economic forms.
In the 1950's, under the Cold War, and the Eisenhower Doctrine, the United States declared itself prepared, with armed force if necessary, to assist any Middle Eastern country asking help to resist any incursion backed by international communism. This brush was used repeatedly by Washington during the four decades after 1945, to paint countless nationalist leaders from Mossadegh to Nasser, with a red color. The red taint justified military or other action.
After 1990 Washington faced a significant problem. What bogeyman could it find to justify such acts of foreign policy in the future, now that the danger of Godless communism could no longer be used as a rationale? The answer was to take until the new millennium, more than a decade.
In the meantime, the U.S. establishment had prepared a full plate to dish out to an unsuspecting world, starting in Japan. Washington knew its continued global dominance depended on how it dealt with Eurasia, from Europe to the Pacific. Former Presidential adviser and geostrategist, Zbigniew Brzezinski, put it bluntly, "...in terminology that hearkens back to the more brutal age of empires, the three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to 'keep the barbarians from coming together'." It was an ambitious agenda.
Japan: wounding the lead goose
One of the most pressing challenges to the United States' role in the post-Cold War world, was the enormous new economic power of its Japanese ally, over world trade and banking. Japan had built up its economic power during the postwar period through careful steps, always with an eye to its military protector, Washington.
By the end of the 1980's Japan was regarded as the leading economic and banking power in the world. People spoke about the "Japan that can say no", and the "Japanese economic challenge". American banks were in their deepest crisis since the 1930's, and U.S. industry had become over-indebted and under-competitive. It was a poor basis to build the world's sole remaining superpower, and the Bush Administration knew it.
Prominent Japanese intellectual and political figures like Kinhide Mushakoji, were keenly aware of the special nature of the Japanese model. "Japan has industrialized but not Westernized," he noted. "Its capitalism is quite different from the Western version, and is not based on the formal concepts of the individual. It has accepted selectively only the concepts associated with the state, economic wealth accumulation and technocratic rationalism." In short, the Japanese model, which was tolerated during the Cold War as a counterweight geopolitically to Chinese and Soviet power, was a major problem for Washington once that Cold War was over. Japan was soon to learn how major.
No other country had supported the Reagan era budget deficits and spending excesses during the 1980's more loyally and energetically than Washington's former foe, Japan. Not even Germany had been so supportive of Washington demands. As it appeared to Japanese eyes, Tokyo's loyalty and generous purchases of US Treasury debt, real estate and other assets, were rewarded in the beginning of the 1990's, by one of the most devastating financial debacles in world history. Many Japanese businessmen privately believed it was a deliberate Washington policy, taken to undercut Japanese economic influence in the world. At the end of the 1980's, Harvard economist and later Clinton Treasury Secretary, Lawrence Summers, warned, "an Asian economic bloc with Japan at its apex is in the making raising the possibility that the majority of American people who now feel that Japan is a greater threat to the U.S. than the Soviet Union, are right."
The Plaza Hotel Accord of the G-7 industrial nations in September of 1985 was officially designed to bring an overvalued dollar down to more manageable levels. To accomplish this, the Bank of Japan was pressured by Washington to take measures that would increase the yen's value against the US dollar. Between the Plaza Accord, the Baker-Miyazawa Agreement a month later, and a Louvre Accord in February 1987, Tokyo agreed to "follow monetary and fiscal policies which will help to expand domestic demand and thereby contribute to reducing the external surplus." Baker had set the stage.
As Japan's most important export market was the United States, Washington was able to put Japan under intense pressure. And it did. Under the 1988 Omnibus Trade and Competitiveness Act, Washington listed Japan for "hostile" trade practices and demanded major concessions.
The Bank of Japan cut interest rates to a low of 2.5% by 1987, where they remained until May 1989. The lower interest rates were intended to spark more Japanese purchases of US goods, something which never happened. Instead, the cheap money found its way to quick gains in the rising Tokyo stock market, and soon a colossal bubble was inflating. The domestic Japanese economy was stimulated, but above all, the Nikkei stock market and Tokyo real estate prices were pumped up. In a preview of the later US New Economy bubble, Tokyo stock prices rose 40% or more annually, while real estate prices in and around Tokyo ballooned in some cases by 90% or more, as a new gold rush fever gripped Japan.
Within months after the Plaza Accord, the yen had appreciated dramatically. It rose from 250 to only 149 yen to a dollar. Japanese export companies compensated for the yen's impact on export prices by turning to financial speculation, dubbed "zaitech," to make up for currency losses in export sales. Japan overnight became the world's largest banking center. Under new international capital rules, Japanese banks could count a major share of their long-held stocks in related companies, the keiretsu system, as bank core assets. As the paper value of their stock holdings in other Japanese companies rose, bank capital rose with it.
By 1988, as the stock bubble roared ahead, the ten largest banks in the world all had Japanese names. Japanese capital flowed into US real estate, golf courses, luxury resorts, into US government bonds and even into more risky US stocks. The Japanese obligingly recycled their inflated yen into dollar assets, thereby aiding the Presidential ambitions of George H.W. Bush, who succeeded Ronald Reagan in 1988. Commenting on Japan's success during the 1980's, New York financier, George Soros, remarked, "...the prospect of Japan's emerging as the dominant financial power in the world is very disturbing...".
Japanese euphoria over becoming the world's financial giant, was short-lived. The inflated Japanese financial system, with banks awash with money, led as well to one of the world's greatest stock and real estate bubbles, as stoc
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