U.S. fate hangs on Obama talks with Hu, Medvedev

WASHINGTON, April 1 (UPI) -- U.S. President Barack Obama came face-to-face with the presidents of Russia and China in London on April Fools' Day Wednesday. How they size him up will decide the destiny of the United States.

Obama will have to reassure President Hu Jintao of China that he is on top of the enormous financial and economic crisis sweeping the United States and the world and that his trillion-dollar bailout plans for the U.S. banking system and the general American economy won't set off hyperinflation and make the dollar worthless.

America's financial destiny is already in the hands of China with its vast reserves of U.S. treasury bonds. Beijing held $681 billion worth of them in November, but Chinese Premier Wen Jiabao and Zhou Xiaochuan, governor of the People's Bank of China, have both issued ominous warnings that they are concerned about Obama's potentially hugely inflationary economic policies and the havoc they could wreak on the value of the dollar. Zhou has floated the idea of a revised International Monetary Fund arrangement that could replace the dollar as the world's main reserve currency.

The stakes are almost as high for Obama's meeting with President Dmitry Medvedev of Russia, which remains, despite its horrendous economic, social, health and demographic problems, the only other huge nuclear-armed superpower in the world. Its strategic missile forces alone have the potential to overwhelm the limited Ground-based Midcourse Interceptor ballistic missile defense system that the previous Bush administration created.

When Obama's hero, President John F. Kennedy, met Soviet Premier Nikita Khrushchev for the first time in Vienna in 1961, the fiery Soviet leader came away convinced JFK was a wimp. So Khrushchev pushed ahead with bold, aggressive policies against the United States.

He put an arsenal of nuclear-armed missiles in Cuba that could have annihilated major American cities in a pre-emptive strike. The world came closer to a full-scale thermonuclear war then than at any other time since the power of the atom was unleashed.

Kennedy was no wimp. He was a 14-year veteran of Congress, a genuine war hero and a former PT boat commander in the U.S. Navy by the time he became president. Obama, with only four years in the U.S. Senate, does not come close to that record of achievement and experience. But he will have to impress upon Medvedev that he is up to the job and can't be taken lightly.

The New York Times reported Wednesday that administration officials said Obama would pitch a new arms-control agreement to Medvedev that would the reduce missile strength of the two countries by about a third.

As we have reported previously at United Press International, Obama, Secretary of State Hillary Clinton and the Democratic foreign policy establishment all still put a new nuclear arms-control agreement to replace the 1991 START-1 treaty at the top of their list of issues with Russia. But Russian sources have told UPI that while Moscow is open to a new START treaty, it is in no hurry to close the deal.

The sources said the Kremlin would prefer a long-drawn-out negotiating process over any START-2, partly because the technical and geopolitical issues involved are so complex. But the Russians said they also want a slow process because they see their nuclear arsenal as the only issue on which they can negotiate with the United States on anything like equal terms, and they don't want to throw away that negotiating leverage in a hurry.

However much Obama and Clinton want to focus on START, it's the global and U.S. economies and China's pivotal role in their future that will take center stage in the London talks.

It is important to note that while the United States is so indebted to Beijing, those loans fund China's export-led development strategy -- rather like Ford or General Motors lending customers the money to buy their cars. If China doesn't like what has happened, it will have to change its basic strategy and encourage greater domestic consumption.

Also, China is being pressed to pony up money for the IMF to enable it to help developing countries that are foundering in the current crisis. If the Chinese contribute, they will want more say in the running of the IMF -- which is probably the point at which their growing global economic power will begin to work changes in the existing post-World War II global economic system that has lasted so long.

An awful lot will ride on Obama's first meetings with Hu and Medvedev. If he doesn't measure up in their eyes, we are likely to see the consequences very soon.