Text in which the author defends ideas and reaches conclusions based on his / her interpretation of facts and data

The mysterious Mr Lee

EL PAÍS is still in the forefront, and is now taking an important step: a Brazilian edition

I remember 1986, when I lived in Madrid, reading El PAÍS to understand what Spain was about. Agreeably free of didacticism, lardy rhetoric and otiose word-play, it was Spain's newspaper of record. It still is. I hit its webpage several times a day, in search of reliable information. EL PAÍS is still in the forefront, and is now taking an important step: a Brazilian edition.

Since our world is built of risks, and since the paper is taking a big step into unknown terrain, I will do likewise in a terrain I have never trodden in public: economics.

The economist Burton Malkiel said that "a monkey in a blindfold, tossing darts at the financial pages of a paper, could select a portfolio of shares that would perform as well as one picked by experts." A Nobel-winning economist, Robert J. Shiller, who in 2005 foresaw that the real estate bubble would soon burst (it did in 2008), said that the financial market reflects repetitive, irrational patterns of human behavior. Since in economics as in astrology, predictions are a matter of luck, I am going to make one. Here goes.

As we know, China is the biggest creditor of US debt. If it decided to sell its bonds, the dollar, and the US economy, would keel over. They say the biggest loser would be China. Is this true?

I imagine a day in November 1978, when Deng Xiaoping, newly settled into power, sends thousands of students to Singapore and Thailand to learn about capitalism, beginning the Long March to the China we now know. Many say he is betraying Communism. Deng says nothing, because he has a secret plan: to conquer the world. Deng knows what he is doing. He picks a young man - call him Lee - and explains:

"We shall make a big effort, like the Great Helmsman did before us. It will be hard, and will demand great sacrifices of the people, but little by little we will invest in US bonds. And when we reach a certain figure (only Mr Lee knows the exact figure), we'll sell them all the same day. By then we'll have solid assets everywhere in the world: South America, Africa, Europe and the US. Our surplus will be devaluated, but that of other countries will simply vanish off the face of the earth. And we'll have coal mines, steel plants, high technology, the works." Comrade Deng gives Lee a suitcase like the US presidents carry, with codes to activate the Bomb. In the suitcase is a black box, with a single red button: SELL.

Time passes. China keeps prices artificially low, and begins massive exports to the US. In exchange it buys US Treasury bonds. Years go by and the US deficit with China keeps growing, reaching $295.5 billion in 2011. In 2013 Obama tries to stimulate the balance of payments, but it is practically impossible. And the whole world keeps sustaining the US by buying Treasury bonds. The global economy is now governed by the stability - or not - of these bonds in dollars. And this looks like a guarantee. Until the US Congress freezes the administration for three weeks. And the president of China's central bank, Zhou Xiaochuan, proposes: why not establish a new exchange currency, more stable and independent of ups and downs? No one accepts this. But the seed is planted.

Mr Lee, now in his fifties, works in a small bank branch in Guangdong. The suitcase has long since been replaced by a cellphone with one key: SELL. A few technicians know about its connection with the Central Bank of China. That's all.

Mr Lee calculates. His country now has $1.2 trillion in US debt. He consults his mentor's notes. "No. It's not yet time," he thinks, and puts the cellphone back in his pocket. Until one day, the debt goes over the stipulated figure by one dollar, and Lee pushes the button, and goes off to have tea with his neighbor, while all the countries go bankrupt and the world kowtows to the new single superpower.

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