Political Warfare

     This is not a book about politics or the balance of world power. However, political warfare has been a factor in most wars and will remain so in the future.  As discussed in Chapter 3, most nations can acquire the world's most modern weapons by purchasing them and their related technology. It may be unwise for nations such as the United States and Russia to give away technology that cost billions of dollars to develop, but legal bribery is rampant in both nations.  

     Corrupting foreign leaders through election fraud, bribes, blackmail, and threats of violence were common forms of political warfare during the Cold War. This continues today, but the objective is to control nations that possess large natural resources. Another area of political warfare is the possibility of undermining a nation through the mass counterfeiting of currency, while huge foreign currency reserves amassed by some Asian nations allow them a new form of attack. These are huge topics, each the subject of numerous books. However, this comprehensive book about future warfare would be incomplete without addressing political warfare.

Influence for Sale

     The problems of corruption in Russia are well known, but those in the United States are mostly hidden from public view. Bribery in the United States is defined by law as giving something of value to government officials in exchange for favors. While handing over bags of cash is rare, a method of bribery called "campaign contributions" has become accepted in the United States. Foreign entities are free to give money to American political leaders so long as they have a presence in the United States, which may be a single gas station. Campaign "contributions" cannot be cashed out directly, but that money can be used for meals, travel, entertainment, all related to "campaigning" of course. Children and wives can be hired as consultants with this money, and foreign entities may hire them as well. There are books about this form of foreign bribery, such as "Agents of Influence."

     Another legal money laundering scheme is for a Congressmen to set up a charity, which attracts large sums of money from corporate donors. Then friends and family members are paid nicely to serve as board members or employees, with large expense accounts for travel, meals, transportation, and entertainment.  These legal loopholes are weaknesses that foreigners exploit to undermine the military effectiveness of the United States. For example, the United States wastes billions of dollars to keep unneeded military bases open in places like Britain, Germany, Korea, and Japan. This provides billions of dollars in annual earnings for certain corporations and overseas base worker's unions. Therefore, it is not surprising that they pay lobbyists in Washington DC to pass money along to certain Congressmen to keep "their" bases open. 

     This also explains why Congressmen and the Pentagon now endorse buying foreign military equipment when comparable American made equipment is available. The US Army selected a Brazilian aircraft for its Common Aerial Sensor program. British defense firms now sell more to the United States military than to the British government. Meanwhile, economists fret about the negative effects of America's massive trade deficit and the loss of skilled American jobs.

     One must speculate why major world powers allow secret money havens to operate, like the Isle of Man and the Cayman Islands. While hundreds billions of dollars flow through these tiny nations to evade taxes and launder illegal monies, large nations show no interest in shutting them down. They could threaten invasion, but an economic and travel embargo or just cutting off communication links can solve the "dirty money" problem.  One must wonder what prevents a foreign entity from setting up bank accounts in these secret locations in the names of political leaders and then making a deposit in return for favors? While political leaders speak about the threats from organized crime, drug lords, and terrorists, why don't they shut down their secret banks?  Is it because they use them as well?

     A 2004 US General Accounting Office study found that 59 of the top 100 US government contractors have operations incorporated in odd foreign locations like Bermuda and the Caymans that allow them to avoid paying certain taxes. The list includes all major defense contractors: Boeing, General Dynamics, Honeywell International, L-3 Communications, Goodrich, Northrop Grumman, EDS, Halliburton, ExxonMobil, IBM, and Raytheon. One must wonder why this is allowed, and what prevents any corporation from depositing money in secret bank accounts of political leaders at a bank down the street from their tiny corporate office in one of these tiny secretive nations.

     A new business at international airports in Europe are safe deposit boxes in their terminal. Smuggling cash, gold and jewelry out of nations is simple. The danger is taking it through customs, then through a big city to a bank. Another problem is that banks have proper identification and tax reporting requirements to governments. The solution are safety deposit boxes at international airport terminals, which grew out of the international transit storage businesses. Some air freight arriving at airports is in transit and needs to be held somewhere for a few hours or days until loaded on a connecting flight. These companies spun off highly secure vaults where things are "temporarily" stored indefinitely. Since they are not banks, there are no customer identification or reporting requirements, and incoming goods do not pass through customs. 

     This is perfect for those who need to hide physical wealth. Customers don't even have to formally enter a nation through immigration to use their box, and some are large enough to store artwork. They just line up a connecting flight to drop off or pick up valuable stuff. This is very popular with criminals, corrupt politicians, and tax evaders, but governments ignore this lucrative business. This is great for drug dealers. Mules can drop off pounds of coke in a safe box and then fly back to Colombia with cash and avoid the shake down at customs. Another mule arriving from a secure nation like Ireland can replenish the cash, pick up the coke, and get waived through customs. This is also ideal for international bribes, all untraceable.

Corrupt Generals

     Legal corruption has spread to American Generals and Admirals. It is common for major defense contractors to hire people retiring from the Pentagon. The V-22 program cost tens of billions of dollars and has been in development for 35 years in hopes of producing a safe aircraft. However, it costs more than a modern helicopter of similar size like the CH-53K, yet has one-quarter its payload capacity and has no greater range. Meanwhile, four Marine Corps Generals who served as Chief of Staff for Marine Aviation went to work for V-22 contractors shortly after retirement.  The only legal prohibition is that person cannot lobby anyone in government for one year after leaving. There are dozens of cases where this has been ignored, including direct bribery in a Boeing scandal that sent the US Air Force’s top career civilian acquisition official to prison in 2005. Former Navy fighter ace Congressmen Randall Cunningham plead guilty to accepting $2.4 million in bribes from a defense contractor, which included cash payments.

     One of the more interesting cases of legal influence buying is that of Lieutenant General David K. Heebner, the former the Assistant Vice Chief of Staff of the US Army. In 1999, just one month after General Shinseki announced a new requirement for billions of dollars of ultra-expensive Light Armored Vehicles, (right) General Dynamics announced hiring General Heebner to a newly created vice president position.  The amount of his pay was not disclosed, but it was negotiated while he was on active duty and his hiring was announced before his retirement from the Army. None of this is illegal, yet taxpayers must be concerned when huge corporations negotiate multi-million dollar jobs with top-level people sitting in the Pentagon.

     Many foreign companies hire retired American Generals to assist them. The Defense contractor Loral was a big donor to politicians for many years. To save money, they convinced the right people to allow top secret US government satellites they manufactured to be launched from China.  These were shipped under American guard to China and launched using their cheaper rockets. However, a couple Chinese rockets failed, costing them money, so they began helping China improve their launch systems. Of course this helped China with their ICBM program as well.  This was ended after it was exposed, yet dozens of similar deals probably continue with varied nations with questionable motives.  

     A more brazen example occurred in 2011 when a US Army three-star General accepted a $3000 cash bribe from a Korean businessman. He was demoted and quietly retired. After a FOIA request publicized the story, the Army explained the bribe as a "cash equivalent gift" to a family member. General Joseph F. Fil told investigators that he accepted the gifts in “good conscience,” believing that they were legal because the giver was a longtime personal friend. Investigators cast doubt on that explanation by noting the South Korean did not speak English and that Fil had to communicate with him by “using hand and arm signals.”

     It is doubtful that Fil was the first Army General to accept gifts in Korea over the years and these revelations are probably only a small part of what goes on. A letter at the bottom of that linked article provides a clue:

"...the KCIA and the ROK military have an intelligence office in each Joint/Combined headquarters keeping tabs on all field grade/general officers in that headquarters and their closest Korean associates turn in reports monthly on any and all activities of said American officers which can be used for or against said officers to the benefit of the Korean government and military."

     This helps explain why Army Generals have wasted billions of dollars in South Korea as they consolidate facilities to "save money."

     The most powerful foreign lobby in the United States represents Israel, which ensures that nation receives billions of dollars in American aid each year. This has caused problems as they have broken promises and sold sensitive American military technology to China and India. Saudi Arabia is also a huge donor to political leaders, which explains why that dictatorship was never labeled a terrorist state after the 9-11 terror attacks, even though 15 of 19 hijackers were from Saudi Arabia.

Corrupting Foreign Governments

    One cannot complain about corruption in the United States without recognizing this dishonesty is exported abroad. In 2004, "Confessions of an Economic Hit Man" was published. It became a bestseller in the United States even as it was ignored by the corporate press. This book discusses issues not taught in American universities or reported in the corporate controlled media. It provides first-hand insight into how world banking organizations are used by the US government to control many nations. "Development banks" like the World Bank are funded mostly by the United States. They hire expensive consultants, or "economic hit men" as they call themselves, to bribe and corrupt government officials of target nations to borrow huge sums of money for massive overpriced construction projects.

     Money is paid directly from the development bank to western corporations and the poor nation is expected to repay the loan with interest. This leaves poor nations saddled with a heavy debt burden so leaders must be bribed or threatened to raise taxes or cut social services to pay the bankers. In cases where this fails, the "jackals" are brought in (e.g. CIA and US Special Forces) to fix elections, incite riots, organize coups, or assassinate stubborn leaders, usually with airplane accidents. In rare cases where these steps fail, the US military is sent in for a traditional conquest. The author details how this stealthy form of colonization has lessened the need to use military force. 

     The author had a long career as a private "consultant" and notes this form of warfare was first used to secure Iran in 1951 in order to avoid a military confrontation with the Soviet Union.  He became wealthy yet disillusioned by this process as he saw it immoral and noted it generates worldwide hatred of the United States.  He notes Venezuela is a current target, having been spared a few years as resources were needed to conquer Iraq, whose leader had defaulted on his loans. Saddam Hussein's debt was not lost since the US government repays these loans with money it takes from Iraqi oil exports. Defaulting on loans that bankers made to a ruthless dictator is not an option discussed in America's corporate run media.

     The desire for more powerful political warfare forces was the primary reason for the establishment of the US Special Operations Command in the 1980s. The CIA wanted access to military manpower, skills, and weaponry to support covert ops. However, American Generals and Admirals usually refused to participate in illegal operations and always wanted to okay everything up the chain-of-command. This slowed operations and required permission from senior officers who generally disapproved of illegal operations.

     This problem was greatest during the Reagan years as Ollie North was trying to support Contras in Nicaragua despite a ban by the US Congress. A good overview of these operations was published in the 1988 book: "Secret Warriors: Inside the Covert Military Operations of the Reagan Era" by Stephen Emerson.  Nowadays, the Special Operations Command routinely announces that it has forces in most every nation on Earth, while four-star Generals sometimes complain that SpecOps soldiers operate covertly in their command area without their knowledge, often causing diplomatic and public relations problems. Former Secretary of Defense Bill Gates wrote in his recent book that he was shocked to find that a telephone in Afghanistan was a direct line to the White House/NSC office, indicating frequent direct contact outside the chain of command.

     An excellent source for understanding political warfare is the weekly publication "American Free Press," some of which appears online.  They are truly independent and have stories about ongoing political warfare and annual meetings of bankers who seem to control much of the world, coordinated at the annual Bilderberg meeting. This is not an endorsement as some of their stories are dubious. However, the absence of corporate advertising and their tone shows them to be the largest news organization in the United States that tries to print the truth. Most Americans are shocked when they begin reading real news.  For example, there is considerable evidence of electronic vote fraud in the United States, which the corporate media will not print.  Computerized voting systems have made rigging elections simple. 

     The Soviet Union developed organizations skilled at political warfare, mostly known as the KGB.  Russia still maintains much of that capability.  Britain and France also have effective "intelligence" organizations. Israel's Mossad is well-known for their expertise in political warfare.  Some insight was shed by one of their former agents, Victor Ostrovsky, in his series of books starting with "By Way of Deception."  His books are interesting yet controversial; they are banned in Israel and he fought legal battles to publish them in the United States. British author John Le Carre authored several best-selling fictionalized accounts of intelligence operations after spending several years in the game. His writings provide a realistic look at the difficulties and follies involved, unlike the superhero fantasy books written by Tom Clancy.

     Many people are confused as why evil foreign leaders are not openly assassinated. One reason is that dictators are usually the leader of a small group of people. Killing the head guy is unlikely to change anything as another will take his place.  In addition, the new guy may be more evil or more competent.  A bigger reason is that world leaders abide by the ancient agreement among kings, that wars are fought by little people and the rich and powerful shall not suffer.  World leaders are concerned for their safety and that of their families, so attempting to kill another world leader breaks that tacit agreement, which endangers themselves. This is why the rich and powerful are so alarmed by terrorists, since those commoners may harm them.

The National Security Agency

     The United States spends over $60 billion a year on strategic intelligence gathering, more than the rest of the world combined. Most all of this is devoured by the National Security Agency (NSA), which attempts to monitor all worldwide communications, what is called Signals Intelligence (SIGINT). This agency grew out of the World War II successes of breaking Japanese military codes and the German ULTRA code. An excellent book about the NSA "Body of Secrets" was published in 2002. He revealed that the US military had great intelligence about the Soviet Union because the NSA tapped into the Soviet's undersea military communications cable from Sakhalin island, which was not even encrypted. This capability continues today with the modified attack submarine USS Jimmy Carter. The Soviets had excellent intelligence as well with the help of senior FBI agent Richard Hanson, while US Navy Warrant Officer John Walker Jr. kept them supplied with American code changes.

     These are reasons why it is unwise for any military to spend billions of dollars to field their own "secure" worldwide intranet systems; an "intranet" is an internal system not open to outsiders. It is best to use encryption and send everything over the public Internet. First, this is far cheaper and civilian Internet is available everywhere. Second, intranet lines may be severed during a war, whereas the Internet uses multiple connections so traffic is automatically rerouted if a line is lost. Moreover, foreign intelligence services will eventually tap into any large "secure" intranet. A major problem is that users become frustrated with their intranet system as it often goes down, blocks access to certain outside sites, and records everything. As a result, a few employees tap into the Internet through phone lines or satellite so they have privacy for personal matters, or to browse porn. This may seem harmless but opens a gateway where a hacker or foreign agent can enter their secure intranet system.    

     As a result, it is best to use the Internet and encryption and keep highly classified intranets compartmentalized in local computer networks with no outside access, ideally limited to one building. The problem is that senior people love the convenience of sitting at their desk and browsing around different systems to find what they need, or just because they are curious.  This works fine with 99.999% of the people involved. However, all it takes is one trusted senior official like Robert Hanssen to turn and disaster results. If a trusted senior official needs information outside his normal network, he must be required to physically go to that place, explain what he needs, and have another person help him find it on their network.  He will not be able to copy anything, nor take pictures with a digital camera as the access officer watches nearby. If his visits are frequent or his explanations odd, he will be reported.  This itself will deter turncoats from attempting to obtain sensitive information outside their normal realm.  Keep in mind that there are probably many high-level spies who were never caught, and may be operating today.

     Another problem is "privatization" of support work in secure office spaces, primarily cleaning that allows outside workers widespread access in offices where they handle classified "trash" and can grab folders, laptops, or CDs on desks. Not surprisingly, employees are reluctant to turn themselves in when something is missing, and try to cover-up their honest mistake.  While using contractors is cheaper, it is difficult to monitor low-wage employees who frequently change jobs.  Their background checks are minimal, and hundreds of illegal aliens with false credentials have been discovered working in secure offices in recent years.  One solution used by a few organizations is to require highly paid workers to spend a hour each week cleaning their own office. Most don't mind as they understand the reason and it provides a break in the routine. It also builds esprit when staff see a Colonel vacuuming the floor while a professor empties the trash.

     Another problem that arose in recent years are lost or stolen laptops packed with classified information.  Since laptops are easy to carry, they are easy to lose. It is probably best to prohibit the introduction of classified information on a laptop. If computers are needed somewhere, larger desktops can be carried and hooked up to video displays elsewhere. It is difficult to sneak pass security with a desktop when leaving a building.  When classified computer movement is authorized, that person is unlikely to set it down somewhere and forget about it, as is often the case with a laptop. A thief is very unlikely to grab a desktop and try to run away with it as is common with laptops.


     In the old days, the NSA would simply read all international wire messages, which were dropped off daily by RCA. As international telephone calls became common, those were monitored too as they were few due to very high costs. When the United Nations was formed, the United States offered to host it in New York and pay for construction to simplify spying on diplomats. In the past, the NSA and CIA would usually refrain from spying on American citizens. It was revealed in 2005 that those restrictions no longer apply after the Bush administration announced that laws prohibiting such monitoring no longer had merit.  

     After a series of embarrassing revelations about illegal CIA activities during the 1970s, the intelligence community cut back on human intelligence (e.g. actual spies) to rely more on technology. This led to greater emphasis on satellite imagery and the monitoring of worldwide communications, resulting in tremendous growth at the NSA.  This past decade, the mass data capability possible by fiber optic cables made international phone calls cheap so they grew over a hundred fold.  Internet e-mail and cell phones also appeared, resulting in a massive increase in traffic that easily overwhelmed the NSA. In recent years, technology to allow telephone calls using cable TV lines appeared, as well "voice over Internet" so the Internet can carry telephone calls.  

     The NSA has numerous large computers attempting to sift through all messages looking for key words, but there is so much traffic they can only read through a tiny fraction of tagged messages, and much of it includes obscure languages from poor nations. In addition, terrorists and spies know things are monitored, so are smart enough to use innocent sounding terms.  Moreover, software is available on the Internet to encrypt messages so complex that it would take an NSA computer weeks to solve the puzzle.  Finally, free Internet e-mail accounts make it simple for anonymous users to sign up and use computers at any public library, Internet cafe, or coffee shop to send messages. As a result, even if the NSA is very lucky to intercept something of value, determining the sender is often impossible.

     Our political leaders and corporate media act surprised that the NSA spies on everyone to include allies. The only exception is a post-World War II gentleman's agreement among the major "white" English speaking nations: the USA, UK, Canada, Australia and New Zealand. All of this was detailed two decades ago by James Bamford in his book "Body of Secrets." The 9-11 terror attacks showed the $60 billion a year spent on "intelligence" cannot protect against a group of foreigners who take simple precautions in their communications. 

     The idea of attempting to monitor all worldwide communications has become impractical, making the NSA's multi-billion dollar systems dinosaurs, whose ubiquitous snooping upsets allies as well. While they occasionally find something of interest, the cost is massive; it has become finding a needle in the haystack approach. This past decade, White House officials complained that their staffers with public Internet access produced superior intelligence reports faster than the CIA and NSA with their sophisticated computers and collection methods.  

     A secret military program called "Able Danger" compiled vast information from public sources through the Internet and produced valuable intelligence, including identifying the lead 9-11 terrorist Mohammad Atta as a serious threat who was loose in the United States. When the program was discovered by senior officials, it was quickly disbanded. The official reason was privacy concerns, but massive intelligence agencies like the NSA were embarrassed and afraid that leaders may notice their Cold war era intelligence systems are dinosaurs.  

     In 2011, NSA secrets were exposed by former employee Edward Snowden. This received widespread media coverage and everyone was shocked at the poor security. How did a young contractor located in Hawaii access all the NSA's top secrets? Snowden had widespread access as a database administrator, but a thousand others had such access, since cut to around one hundred. Revelations continue via journalist Glenn Greenwald, who insists these must be gradual to allow ample time for his experts to "vet" the top secret material so that lives are not endangered, and to allow for years of media stories. However, our CIA directed media refuses to cover them anymore. As a result, Greenwald established a website "The Intercept" where anyone can read NSA secrets. A older website Cryptome has been leaking state secrets for years.

     When the NSA states that it is not listening to everyone's phone calls or reading everyone's e-mail, they are honest since that would be impossible. However, it collects and stores everything in a searchable database that has grown so large that another massive facility was opened in Utah. Should any federal investigator or "intelligence" SES show an interest, years of personal communications can be retrieved, including every airline trip, every credit card charge, every phone call, every website visited, every social media and website comment, every book purchased, and every e-mail sent.

     Most Americans are not worried because they are not criminals. But as many recent books note, there are so many vague laws on the books and loose interpretations that most Americans commit several felonies a year. Anyone who may cause trouble with website postings, journalist articles, political speech, protest rallies, alternative political party efforts, or anger any of the thousands of persons with access to this data, their life's secrets may be dug up. This may involve just personal conflicts due to business deals or lovers, as the NSA admits has been a problem. 

     This is why most congressmen and journalists are afraid to criticize the NSA. Imagine what will be available for blackmail when today's college students rise into the nation's power structure in 20 years, and all their collegiate e-mail, texts, tweets, and party photos are dug up, plus whatever immature political ramblings they wrote. A great example of how this power can be misused is the great 1998 movie "Enemy of the State."

     After denying hard evidence presented by US Senate committee staffers, the head of the CIA finally admitted in 2014 that his people spied on Congress. No one was arrested, no one fired, no one resigned, and no one outraged. President Obama said nothing. The leader of the Democrats in the US House of Representatives Nancy Pelosi refused to criticize the CIA because: "In the past I have made my statements about the CIA, and they really come after you," she told a group of reporters, chuckling. "There's a price to pay." Meek reporters did not demand that she explain further. She is a long-time Congressman and Democratic leader and openly admits that she is afraid of the CIA!

     The NSA's traditional effort to monitor all international communications traffic is costly and unproductive.  This should end to free resources for CIA human intelligence activities and to enhance the targeted signal intelligence capabilities of the US military. The SIGINT aircraft and equipment used by the US military is aging and outdated as Generals prefer to spend money on weaponry. For example, the US Navy retired all of its newly-rebuilt carrier-based SIGINT aircraft, the ES-3A Shadow (pictured) in 1999 to save money and has no plans to replace them.  Funding must shift from employing tens of thousands of NSA civilians sifting through e-mail in Maryland to provide SIGINT platforms needed by the US military to target specific areas of interest to provide immediate useful intelligence.  


     As technology progresses rapidly, currency counterfeiting has become a major national security problem.  Numerous stories have appeared about terror groups and North Korea mass producing paper currencies to support their nefarious activities. During wartime, government sponsored counterfeiting of another nation's currency can undermine worldwide value and confidence in that currency. This fake cash is also useful to support espionage, foment political disruptions, and support armed insurgent groups. The United States became alarmed in 2003 when a large shipment of counterfeit US $100 bills was seized in Hong Kong.  They knew it was counterfeit because the bills were new and in sequence. However, that is the only reason they knew as these "super notes" were perfect otherwise.

     This prompted the US government to issue new banknotes with more difficult features, like color and watermarks.  However, experts can duplicate those as well.  As a result, the government of Hong Kong introduced new currency to foil counterfeiters that includes a bar code readable only under fluorescent light, a hologram, and an iridescent image of Hong Kong's bauhinia flower. The most difficult currency to counterfeit is made from a thin, flexible "plastic" polymer called biaxially-oriented polypropylene (BOPP), which greatly enhances durability of the banknotes. Polymer banknotes also incorporate many security features not available to paper banknotes, making counterfeiting nearly impossible.  Such banknotes were developed by the Reserve Bank of Australia and were first issued as currency in Australia in 1988, and have been adopted by several other nations. 

     A better option is a return to coins. In a world of checks, credit cards, and debit cards, cash is no longer necessary except for small transactions. The United States for example, can introduce $1, $5, and $20 coins, and gradually eliminate all paper currency.  Casinos have no problem operating with large sums of money using coins called chips. Coins are much cheaper in the long run since they last forever, while paper bills age quickly and must be replaced after just a few years.  Coins are also much, much  heavier, making theft and illegal transactions very difficult. Imagine a bank robber trying to run away with a bag full of coins weighing 40 lbs. Big-time drug dealers could no longer exchange small suitcases as the buyer needs a large truck and a forklift to off-load several heavy metal boxes full of coins to the seller, who needs a heavy truck to haul away his treasure chests.

     Moreover, counterfeiting complex coins is costly and nearly impossible if they include holograms and alloys that produce different colors.  The need to spend hundreds of millions of dollars each year to chase, prosecute, and jail counterfeiters will end. Smuggling millions of dollars worth of metal coins becomes very difficult. Very heavy luggage or very heavy crates full of coins will be noticed by baggage handlers and dock workers. Handheld metal detectors can find them from a great distance. An all-coin currency system will cause great disruption to organized crime, terrorists, and narcotics traffickers. Even large scale tax evasion becomes more difficult. Moreover, this eliminates a wartime option for an enemy because producing, smuggling, and distributing tons of metal coins is impractical. It seems odd this simple change has not occurred, but remember that powerful political people also engage in cash bribery and money laundering.

Currency Reserves

     This is a complex topic that has major strategic implications. The traditional view of economists is that trade is trade, so imbalances are temporary because a nation with a trade surplus will eventually spend their currency surplus to purchase goods from those nations with trade deficits. However, the Japanese did not follow this logic in the 1980s and began to accumulate hundreds of billions of surplus US dollars, most of which they simply loaned back to the US government. Their reasons are unknown, it may be in gratitude for good treatment after World War II, or just a strategic savings plan.

    As Taiwan and South Korea advanced in the 1990s, they did the same thing, and as China surged forth these past few years, they copied the practice. Normally, the effects of inflation encourage nations to purchase goods with surplus cash so it does not lose value, yet the US government was an eager borrower, so they lent most all of these dollars back to the US government. China/Hong Kong have over one trillion dollars worth of surplus foreign currency reserves, most all in US dollars. Japan has nearly that much, while Taiwan and South Korea have over $250 billion. The US government pays over $100 billion in interest to these nations each year, which loan the money back to Uncle Sam.

     This provides these nations with considerable political clout if conflicts arise. They can use these resources to buy weaponry and stockpiles of food and materials, or they can punish large nations, the United States in particular, by dumping dollars on the world's market to cause the dollar to lose half its value. This would cause inflation in the United States to soar. While this will correct the trade imbalance as foreigners buy cheap American goods, imported items will cost Americans much more and foreign purchasing will drive up the costs of domestic goods.  This is a new form of political warfare that may occur if tensions rise.

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