China, the Creditor

Last week, I received three issues of Time magazine: the regular issue, then a royal wedding commemorative issue, and finally a special issue on the death of Osama bin Laden.  Buried deep among all the various news stories in the magazines was one article by Sebastian Mallaby, “You are What You Owe: Why power built on debt is no power at all.”  Mr. Mallaby discussed America’s debt and how it affects our standing in the world, our status as a superpower, and what could bring us crashing down without one shot being fired or any terrorist attacks launched against us.

In a word, China.  Right now, China is our largest creditor.  Mr. Mallaby described a scenario, most of which was familiar to me because I’d developed a similar one myself years ago for Perceval, in which China called in what we owed.  Because we owe more than our economy can support, our economy collapses along with the government.  Mr. Mallaby doesn’t go on to speculate what might happen then, but in my scenario, China finally establishes a foothold on the North American continent.  Or would have, if the European Union and Russia hadn’t stepped in to stop China and arrange for talks regarding American debt with them, China and America in Vienna, Austria.

Is this far-fetched?  According to Mr. Mallaby, not at all.  For those who believe China wouldn’t do it because it would devalue China’s holdings, he responds, “China could afford to take a hit to its bond portfolio, whereas the U.S. could ill afford another Lehman-scale crash.  A Chinese threat of financial attack would therefore be credible.”  I had included the devaluation argument in Perceval but had not thought of the response Mallaby presents because I wrote it long before 2008.  China has been our largest creditor for some time, and Japan is our second largest.  What fascinated me was how we could allow a country who is not really an ally have such financial power over us.  And why?  Because of our insatiable appetite for money.

So Perceval and Evan Quinn’s story plays out with a geopolitical backdrop of China having called in what America owes.  In my novel, certain Americans anticipated China’s move and was ready with a countermove, even as Chinese and American diplomats meet in Vienna.  The geopolitical situation affects Evan’s life, his music career, even though Evan doesn’t know what is truly going on between the two countries.  Then he goes on a European tour and begins to learn just how much information the American government withholds from the American population.

I am astounded.  My novel has suddenly become timely in a way I never dreamed.   I’ve spent the last few days mulling over how I can explain the current situation as past history in my novel.  In the backstory of Evan’s life, shortly after he’s born, the New Economic Party begins to win elections and finally consolidates national and state power by the time he’s in school.  The New Economic Party, or NEP, has been created by politicans from both major parties as well as fringe groups, all of whom agree on how America can protect its economic power.  The NEP uses democracy and democratic processes much as Adolf Hitler and his National Socialists did to gain power — the people elect them.

Now I’m thinking about how all this will affect the Perceval rewriteMy first priority is the characters, their development, their relationships, but I want the world in which they live to be a plausible extrapolation from today.  So the broader geopolitical situation is on the news Evan listens to, but he’s not one of the players.  At least, he doesn’t think he is….


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