A Pearl Harbor without War

The dollar crisis has politicians alarmed worldwide. The US currency has lost 24 percent of its value since the introduction of the euro, and now there is even a chance that China could abandon its policy of pegging its currency to the dollar -- a problem the United States should take very seriously.

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The most important country in the world for the United States isn't Great Britain, Germany, Saudi Arabia, Russia or Iraq. China holds that dubious distinction, because it is also the country the US can least do without. Without its willingness to buy an almost unlimited supply of US treasury bonds, there would be no American spending miracle. Without a spending miracle there would be no economic growth. In other words, without China the US superpower would lose a significant share of its economic clout.

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The Chinese are satisfied with buying US treasury bonds, partly to keep their most important customer afloat. The central bank in Beijing already holds currency reserves of $1.4 trillion.

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For the United States, a Chinese decision to abandon the dollar would be tantamount to Pearl Harbor without the war. It would represent a challenge to the world's biggest economy by the world's fastest growing economy. Millions of people would see their standard of living suffer as a result, and American self-confidence, already shaky, would crumble even further. The United States would suffer a serious blow on its very own turf, the economy.

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http://www.spiegel.de/international/world/0,1518,517060,00.html