Who will own what when the music stops?

["John Gelles" <indexed-savings@xxxxxxxxxxxxx>]

Henry Liu suggests, in his message "Trade Deficit and
GDP" on Feb 21, that wealth is being transferred from
(a) those with dollar liquidity preference to (b) dollar
asset holders: the asset holders seemingly hold equity
interests in businesses and real estate---those with a
liquidity preference hold cash and short term notes and
possibly bonds. The wealth is going from creditors to
to players---says Henry.
        Except that a lot of bubbles burst; a lot of players
        lost their shirts---says I.

Henry says, too, that in the dollar economy capital is
getting the best of labor. Of course that is true in the
non-dollar economies where assets are priced in yen,
euros and other currencies.

Henry sees a a massive global leveraged-buy-out (LBO)
not just of corporations, but of whole economies.
        Does he mean the USA is buying China with junk
        bonds. Or does he mean China and Japan are buying
        the USA by helping to de-industrialize America?

When WE are reduced to producing paper products (to
sell insurance and financial services) and THEY own all
the skills it takes to produce machinery, tools, steel and
satellites, who will own whom?

Mao once said power flows from the barrel of a gun.
Perhaps it flows from larger weapons systems and the
industry that can produce them---together with all it
takes to feed and care for people who do essentail
work and fighting.

Power certainly does not flow for long from
intellectual property rights and business services:
these are money makers only so long as you have the
army and police to enforce arrangements that over
time change from getting organized to getting screwed.

John Gelles