Yao Yang on China's $3.2 Trillion Headache. "While the downgrade of Unites States government debt by Standard & Poor's shocked global financial markets, China has more reason to worry than most: the bulk of its $3.2tn in official foreign reserves - more than 60 per cent - is denominated in dollars, including $1.1tn in US Treasury bonds," writes Yao Yang. This is what China is up against. "So long as the US government does not default, whatever losses China may experience from the downgrade will be small. To be sure, the dollar's value will fall, imposing a balance-sheet loss on the Peoples' Bank of China (PBC, the central bank). But a falling dollar would make it cheaper for Chinese consumers and companies to buy US goods." Additionally, "The downgrade could, moreover, force the US Treasury to raise the interest rate on new bonds, in which case China would stand to gain." But the problem with the downgrade for China is timing: if it leads to a double-dip recession, there is increased chance of default. So what might China do? "Diversification away from dollar assets is the advice of the day. But this is no easy task, particularly in the short term." Yang suggests that "the government must rely on longer-term measures to mitigate the problem, including internationalisation of the renminbi. Using the renminbi to settle China's international trade accounts would help China escape the United States' beggar-thy-neighbour policy of allowing the dollar's value to fall dramatically against trade rivals."
Karl Marlante on the Meaning of Medals. "In the military I could exercise the power of being automatically respected because of the medals on my chest, not because I had done anything right at the moment to earn that respect. This is pretty nice. It's also a psychological trap that can stop one's growth and allow one to get away with just plain bad behavior.," writes novelist Karl Marlante, who went to Vietnam at the age of 23. "The best words I've ever heard on the subject of medals come from a fellow lieutenant... he said, 'A lot of people have done a lot more and gotten a lot less, and a lot of people have done a lot less and gotten a lot more.'" In terms of being a hero, what do medals really mean? Writes Marlante: "I got my medals, in part, because I did brave acts, but also, in part, because the kids liked me and they spent time writing better eyewitness accounts than they would have written if they hadn't liked me...Medals are all mixed up with hierarchy, politics and even job descriptions. What is considered normal activity for an infantry grunt, and therefore not worthy of a medal, is likely to be viewed as extraordinary for someone who does the same thing but isn't a grunt, so he gets a medal and maybe an article in Stars and Stripes." Ultimately, "The only people who will ever know the value of the ribbons on their chests are the people wearing them—and even they can fool themselves, in both directions."