China may be violating trade agreements, but the savings-poor U.S. lacks the power to do anything about it.

Who has real power over U.S. decision-making?

If you think it is the White House, or even the Congress, think again. There has been a power shift underway for years and, believe it our not, our future and fortune rest in the hands of bureaucrats on the other side of the world. Sorry folks, but our red, white and blue economy is afloat today because of help from members of the Politburo of the Chinese Communist Party.

Yes, the Red Menace that we spent so many years fearing as a military threat now represents a far more serious economic threat. Mao must be turning in his grave with the news that no less than six U.S. Cabinet Ministers are on their way this week to the Middle Kingdom to beseech, beg, lobby and try to persuade the new mandarins not to sell off their vast reservoir of dollars.

There's an old saying that a person can be in trouble when he owes a bank $100. But if he owes $l00 million, the bank could be in trouble. We owe China billions but they realize that collapse of American capitalism -- once their revolutionary goal -- could also trigger a collapse of Chinese "communism." That's how mutually intertwined we have become, and how complicit we are with a government which the Committee to Protect Journalists says now jails more journalists than any other.

The New York Times reports on the big trip later this week that will bring Treasury Secretary and company on their ballyhooed 'excellent adventure' to Beijing. Yet it doesn't look like much will happen.

"As Treasury Secretary Henry M. Paulson Jr. prepares for his passage to China with six Cabinet members and the chairman of the Federal Reserve," reports the New York Times, "pressure is mounting on him to produce results or face a wave of protectionist measures in the new Congress next year.

"Mr. Paulson conferred this week with business leaders urging him to bring about changes in China's economic practices, particularly its regulated economy, manipulation of currency levels to spur exports and its failure to crack down on piracy of software, pharmaceuticals and other items.

At the same time, Mr. Paulson 's aides were also conferring with Chinese representatives preparing for his Dec. 13-15 trip. Both sides cautioned not to expect breakthroughs on the big issues, in part because the Chinese cannot be seen as kowtowing to American pressure."

So we will hear a lot of rhetoric in the days to come about China's failures to honor agreements and violations of trade regimes. They will all be true -- but beside the point. Who has the power to bring China into line? We don't. We are as much of a paper tiger in Beijing as we are in Baghdad.

The Financial Times reports that "Pascal Lamy, director general of the World Trade Organization, said in a recent interview: 'There are constituencies and vested interests. You can't deal with the Chinese by banging on the table, going to the balcony and saying, 'This is what I want.' "

What's really going on? It looks like this could be the opening stages of a new war, a trade war, revolving in part around the shrinking power of the dollar.

And that war could do more damage to the United States than the defeat in Iraq.

Already, as I have reported, the Treasury Department has opened a global crisis management center that sounds very much like an economic war room. It is headed by none other than Jim Wilkinson, the GOP info warrior who ran the Coalition Media Center during the opening days of the Iraq War, when great victories were all we read about in the news.

What we are not reading today is how serious this is. And how our national and consumer debt is at the center of it.

Reports the Economist, "America's growth has been driven by consumer spending. That spending, supported by increased BORROWING, is clearly UNSUSTAINABLE; and the consequent economic and financial imbalances must INVARIABLY UNWIND. As that happens, the country could face a PROLONGED period of slower growth." (Emphasis mine.)

The bill is coming due. The piper will be paid. And all the financial wonks and gnomes and commissars worldwide know it. In many quarters, the Euro looks like a better bet than the dollar. Why? The Economist says productivity growth is going down in the United States and up in Europe. The U.S. structural budget deficit has widened and American savings has disappeared into the negative column.. Their cover story speaks of illusions in Washington. Sound familiar?

A slump in the American economy is likely to be cushioned by banks and investors overseas because it could bring them down too, What this means is that we are DEPENDENT on what others do or fail to do. Washington is actually undermining the dollar in hopes it will make our exports cheaper and thus ease the deficit. It's our way of pressuring the Chinese and try to get them lower the value of their currency.

Clever? Don't be so sure. They are not fools.

If China's wise men decide that propping up the dollar is not in their interest, they can move more money into Euros. And then the real battle begins. Already their Finance Minister said they are "diversifying" their currencies. That's not in "our interest" and yet our monetary manipulations could backfire as Robert Sinche of the Bank of America suggests. Listen to this:

"Let's say China revalues by 10 percent overnight. The prices at Wal-Mart go up ten percent. So we then see worse inflation, the Fed tightens monetary policies and we end up with higher inflation, higher prices and higher interest rates. Remind me again why that's what we want."

Forget the Beijing Olympics. This is the real game in town, a battle fought with calculators and strategy. We are playing Monopoly. They are playing GO, the game created in Asia 4,000 years ago.

So if you didn't trust this Administration on the war, why should you trust them on economics? When you know the war casualty figures have been downplayed, why do you think the jobless figures and "misery index" are not? Would you give your money and your destiny over to con men? Of course not, if you knew what the con is.

Unfortunately, the real news about these manipulations is buried in the labyrinth of business sections where many are afflicted by the economics "MEGO" effect. (MEGO stands for 'My Eyes Glaze Over.)

So that's why its time to pay attention to the dropping dollar, the impending diplomatic China dance, and the domestic housing "train wreck," as experts call it. All feed into a global credit crunch affecting us all. We urgently need our media to track these developments and explain them more clearly with less of a big business bias and more of a "who wins and who loses" framework.

While we watch one war go up in flames, the matches are being lit for another one.

Danny Schechter writes a blog for He is the author of "Embedded: Weapons of Mass Deception: How the Media Failed to Cover the War on Iraq" (Prometheus).