Obama’s World

As President Barack Obama takes the reigns of power in Washington, the world that awaits him and his administration poses significant challenges.

The Obama administration faces the daunting task of tackling the worst global economic crisis since the Great Depression. By borrowing trillions of dollars against America’s future, the current strategy of averting current disaster is an “all-in” move. If it fails, U.S. power will be severely damaged for at least a couple of generations.

In fact, with the diminishing of the U.S.’ economic strength, the balance of power will shift for the first time since the end of the Cold War. China has surpassed Germany to become the world’s third largest economy and is closing in on Japan for second spot behind the U.S. Although China still has far to go in supplanting the U.S. economically, the fact that China owns so much of the U.S. dollar gives them incredible leverage in determining the future of the U.S. economy. If China pulls the plug on the greenback, particularly in response to the dollar’s expected inflationary spike due to the unprecedented printing of extra U.S. currency to pay for the various and continuing bailouts, China could determine the rise of its economic power vis-à-vis the U.S. on its own terms.

Thus, with diminishing economic clout, the Obama administration faces daunting geopolitical concerns. More