RED DRAGON RISING - COMMUNIST CHINA AND THE U.S.

The signature of financial success in China’s chart is Jupiter (wealth, prosperity) sextile (the aspect of financial benefit) Venus, the other financial planet.  Though Jupiter is weak in the 12th house in Capricorn, it rules the signs on the 2nd house of wealth and the 11th house of good fortune.  Despite Venus’ weakness in Scorpio (her detriment) and the square from Mars and Pluto in the 7th house (which means that the Chinese are prone to manipulate markets and countries behind the scenes and that they produce cheap, poor quality products), Venus is strong by triplicity, term, elevation and house so the ascendance of China to economic superpower status is quite likely.  An interesting similarity between the birth charts of China and the U.S. is the predominance of planets in the 8th house, which represents other countries’ resources (raw materials and money).  This emphasis means that both of these nations and their economies are now utterly dependent upon a steady supply of investment capital, oil, and other natural resources from foreign countries.

According to the U.S. Treasury Department, China held $801,500,000,000 in U.S. debt securities at the end of May 2009 (the latest data available when this article was written), which amounted to more than 24% of our foreign-held debt, an increase of 58% since May 2008 and a 150% increase from the $321,000,000,000 they held in March 2006, just three years ago!  The other big U.S. debt financer is Japan, which accounted for another 21% of our foreign-held debt (as of August 2009).  The accompanying graph shows the increase over time in U.S. debt held by these two countries.  This may not seem like a big problem, since both China and Japan are heavily invested in the U.S. (in real estate and companies owned by their citizens or their government) so they are unlikely to quit refinancing our debt.  However, as the Chinese and Japanese economies are more deeply affected by the continuing economic crisis and, as investment in the U.S. debt becomes less appealing, they may both choose to decrease their financial support.  [By December 2009, China's financial support of U.S. debt had peaked and the trendline was headed down.  See the accompanying graph.]

Many Americans take pride in the slogan, “America is the greatest country in the world” but that is what the Romans said of their empire (“the greatest empire the world has seen”) and, more recently, what the British said of their empire.  The point is, that every great civilization, or economic power, or military might has, sooner or later, fallen from their pinnacle of power and dominance.  Is America sliding off of that pinnacle, eventually to be replaced by China?  Yes, unless we begin to reduce, instead of adding to, the huge mountain of debt we owe (just the foreign-held part of the U.S. debt was $3,293,100,000,000 in May 2009).  In 2007, the interest payments on our debt amounted to $246,000,000,000 or 9% of the total Federal budget!  If your household was paying 9% of your total monthly budget just making interest payments – NOT paying back ANY of what you OWE – and you continued to borrow from everyone you could convince to loan you more, you would soon slide into bankruptcy.  If you tried to pressure lenders to loan your more, using the argument that, if you go bankrupt, everyone in the community will suffer because you will quit buying, they wouldn’t be persuaded because your buying power is too small.  But this is how the U.S. Treasury and Federal Reserve pressure other countries into continuing to fund the U.S. debt, in addition to printing money to increase the money supply by about 5% each year - doubling it about every 14 years!