Two weeks before the April 2 economic summit of 20 leading capitalist countries in London, the American military held a war game simulating a concerted financial attack on the United States. The two-day event was held March 17-18 near Ft. Meade, Maryland, according to report published Thursday by the web site politico.com.
Three participants discussed the first-ever financial crisis war game with the web site, describing how they sat “along a V-shaped set of desks beneath an enormous wall of video monitors displaying economic data.” One participant described the experience as “a little bit like Dr. Strangelove.”
Those engaged in the exercise included hedge fund managers, economics and business professors and executives from UBS, a major investment bank, invited by the Pentagon to help it role-play a global economic crisis in which five “teams” participated, representing the United States, Russia, China, East Asia and “all others.” Uniformed military officers and US intelligence agents observed the exercise and took notes.
According to the account published by politico.com, “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 exercise was clearly driven by recent economic events. It was held only a few days after the Chinese premier publicly questioned the safety of his country’s vast holdings of dollar-denominated debt, including more than $1 trillion in US government bonds. Shortly after the exercise, a top Chinese central banker raised the possibility of replacing the dollar as the principal world reserve currency.
Professor Paul Bracken of the Yale School of Management told politico.com, “The purpose of the game is not really to predict the future, but to discover the issues you need to be thinking about.” The ongoing world financial crisis “loomed large over what everybody was doing,” he said.
Another participant underscored the political implications of the economic crisis, saying, “Why would the military care about global capital flows at all? Because as the global financial crisis plays out, there could be real world consequences, including failed states. We’ve already seen riots in the United Kingdom and the Balkans.”
Read the full article on World Socialist Website.
THE KEY SENTENCE:
He described the financial crisis in apocalyptic terms, as “the most serious one in decades, if not in centuries,” and cited the possibility that economic turmoil could produce political instability and “high levels of violent extremism,” not only in the Middle East and South Asia, but in Latin America, Africa and the former Soviet Union.
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