In the movie ‘War of the Roses’ debt and finances were one of the central factors and most disruptive of issues in the relationship between the two characters, the ensuing all-out war during their divorce, and inevitably, in their annihilation of each other. Believe it or not, nations act in the same manner toward each other. Often the ensuing fracas is precipitated by a trade, investments, foreign exchange or capital markets dispute. That, in a nutshell, is why financial and economic issues in foreign policy and international relations between nations are so vital – particularly during a period when the global financial crisis threatens increasingly to become a central causus belli in the global balance of power.
And we’re beginning to see evidence of that. Just a few weeks ago, I wrote about one of China’s top military planners suggestion that China should use their reserves of US treasury notes against us as a weapon of mass destruction (WMD). Similarly, the Greece’s sovereign debt crisis has escalated to a nasty exchange between the wealthier and the not-so-wealthy nations, and increasingly strains relations between the European Union (EU) partners.
Make no doubt: economic nationalism is here to stay and will increasingly become a factor in driving how nations relate with one another. That’s why I found the piece below by Antony Adolf of Change.org especially insightful. Enjoy.
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Among the most disruptive forces when it comes to families and marriages is the state of their finances, with close to sixty percent of divorcees claiming money was a primary cause of their breakups. No wonder, then, that divorces tend to rise in times of economic downturns and turmoil.
Is it so surprising, then, that money trouble — and debt in particular — puts nations, even friendly ones, in danger of war?
Ongoing war profiteering is not at issue here. Neither are wars that seek to capture profit-generating natural resources, from sugar in British Imperial times, to oil in American Imperial times. Instead, what the cases of Chinese, Greek and American national debts — more closely tied than most realize — make clear is that national debts are themselves dangers that can lead to civil and/or international wars.
The premise of debt and the danger of war is simple. Imagine four people decide to print one hundred bills and divide them equally. The only way for one person to accumulate more bills than another is to get them from someone else. Now, imagine that one person borrows five from another and the lender asks for seven in return. Where will the other two bills come from? The two other people.
The only way to avoid conflict in this zero-sum game is to print more bills, leading to what we call inflation, which is why we live in a giant bubble called the global economy, waiting to explode just like the debt-based U.S. housing market, until it is fixed once and for all. All the fantastically ingenious fixes economists come up with (or lack thereof) can at best forestall the inevitable and, at worse, intensify its dangers.
To see how this premise can translate into actual conflicts today…
Read more here.
