As the US economy continues to suffer, the Pentagon is beginning to give more attention to the possibility of economic warfare. Just the other day some of America’s smartest financial scholars and executives got together to discuss the idea, and potential warriors. Check out the following article about the meeting, courtesy of Politico.
The Pentagon sponsors a war game that examines how hostile nations might seek to cripple the U.S. economy.
The Pentagon sponsored a first-of-its-kind war game last month focused not on bullets and bombs — but on how hostile nations might seek to cripple the U.S. economy, a scenario made all the more real by the global financial crisis.
The two-day event near Ft. Meade, Maryland, had all the earmarks of a regular war game. Participants sat along a V-shaped set of desks beneath an enormous wall of video monitors displaying economic data, according to the accounts of three participants.
“It felt a little bit like Dr. Strangelove,” one person who was at the previously undisclosed exercise told POLITICO.
But instead of military brass plotting America’s defense, it was hedge-fund managers, professors and executives from at least one investment bank, UBS – all invited by the Pentagon to play out global scenarios that could shift the balance of power between the world’s leading economies.
Their efforts were carefully observed and recorded by uniformed military officers and members of the U.S. intelligence community.
In the end, there was sobering news for the United States – the savviest economic warrior proved to be China, a growing economic power that strengthened its position the most over the course of the war-game.
The United States remained the world’s largest economy but significantly degraded its standing in a series of financial skirmishes with Russia, participants said.
The war game demonstrated that in post-Sept. 11 world, the Pentagon is thinking about a wide range of threats to America’s position in the world, including some that could come far from the battlefield.
And it’s hardly science fiction. China recently shook the value of the dollar in global currency markets merely by questioning whether the recession put China’s $1 trillion in U.S. government bond holdings at risk – forcing President Barack Obama to issue a hasty defense of the dollar.