Saturday, September 27, 2014

The Timing of Eric Holder's Resignation

The resignation of United States Attorney General Eric Holder just before Indian Prime Minister Narendra Modi is to be a guest of the White House can be read either as a move to close the chapter on the Khobragade affair – or not, depending on his replacement.

Holder’s departure will go beyond the mere verbal expressions of regret that have emerged from Washington about the incomprehensibly severe and degrading treatment of India’s Deputy Consul General in New York last December: on a charge of exaggerating her maid’s income on an official form she was arrested in front of her child’s school, handcuffed and strip searched.

It could allow a revival of warmer relations.

However, if Holder is replaced by Preet Bharara, the US Attorney in New York who Indians perceive as primarily responsible for what happened, the resignation would take on an entirely different color. (Bharara himself has said in a speech at Harvard that the initiative came from the State Department.)

No matter what the reality, if a Bharara nomination is announced when Modi is in Washington it will be an undeniable insult and the consequences could be long term and disastrous, especially if it pushes India into a joint Russian-Chinese effort to end America’s global dominance by gutting the dollar as the international reserve currency.

A coordinated move in Eurasia to reduce holdings of the US$ -- a move often touted as desirable by people of a particular political color -- will undoubtedly cascade into an economic tsunami that will leave no country untouched.

As such a gargantuan collapse will set off a no-holds-barred global power struggle it would most probably include major terrorist attacks and the uncontrolled spread of ebola; it could be a cataclysm worse than any world war.

Keep your fingers crossed.

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