Recently I read an interesting post on whohijeckedourcountry.blogspot.com which lead me to this very interesting article titled How much oil it'd take to buy the US by Scott Burns of MSN Money. [Part of this post was a response to that post and entry]
He argues that basically the United States is worth 400 Billion barrels of oil or so.. which is approximately the amount of oil that Saudi Arabia and Iran have combined. So basically both of those countries "own" us and he believes that oil has basically become an international currency that is more powerful and telling than Dollars, Euros, or overall buying power.
I, however, still think China "owns" us. First off, they along with foreign nations hold about 44% of US public debt. As of the latest data released (April 2005), China owns 502 Billion Dollars worth of debt, that is 20% of the total debt held by other nations, the 2nd most of any single country (Japan is 1st). So why is it that China is the one I've singled out? Because with so many of the countries on the loooong list of creditors holding US debt, China is the most independent - they don't import very much from the US besides boatloads of cash. Considering we both run a yearly trade deficit of over 60 Billion Dollars (and that number keeps increasing by a few billion every year) and the Chinese Central Bank keeps is aggressively buying US debt, you should be concerned. The more debt that they own the more sway they hold over US policy towards themselves and soon towards others within areas they wish to influence.
What about all those Oil states and the sway they hold with their oil money? Couldn't they organize and influence the US in a far stronger fashion? Nope, because the Gulf states and most other oil producing countries are socio-political messes already under the control/influence of the US, Russia or China.
Furthermore, the two countries picked the Kingdom of Saudi Arabia and Iran can agree on only one thing: they hate each other. So no chance of them two getting ahead.
The big blaring flaw with Mr. Burns' argument about oil currency is that it can only be used one way and only once. Unlike Gold or a precious metal which can be hoarded then sold later once oil is used.. it is gone. So the oil currency is not a zero-sum game.. but a negative-sum game. In addition to natural resources like oil the true "currency" of nations lies in things like geography, human workforce, innovation, and governments. I don't mean to detract from the absolutely enormous value and importance that sweet crude oil has on nations but to think of it as a "currency" is dangerous and economically unsound.
So until something radically changes make out all checks to "People's Republic of China".
Feel free to comment! Just stay respectful.
International Monetary Fund - US Economic Data
Brillig - Debt Clock
Burea of Economic Analysis, US Dept of Commerce - US International Transactions Account Data