China ranks No. 3 on the list of countries that Americans fear, according to a recent poll.

I don't understand. China has loaned the U.S. Government $400 billion. What do we have to fear from a country dumb enough to loan us $400 billion?

China never even asked, "How are you going to pay this back?"

What could we have answered? We are looking for part-time work? We can pay you back by borrowing more from those morons in China?

If China ever threatens us, the value of our debt will plummet, and China will lose a fortune. We have China just where we want them.

We are the Bear Stearns of nations. China has to bail us out. We are too big to fail.

I am not afraid of China. I am afraid of Luxembourg, an international financial center, with the world's highest standard of living.

When Lichtenstein threatened their primacy in private banking, Luxembourg unleashed a diabolical six-part scheme to ruin Lichtenstein's economy.

Secretly, Luxembourg:

1. Promoted the theory that market discipline in financial markets should replace the dead hand of government regulation.
2. Successfully lobbied to limit government oversight of financial institutions.
3. Opened a mortgage brokerage office in Lichtenstein and began offering subprime mortgages. This office introduced "NINA loans" (no income, no assets) and "liars loans" (applicant states income and assets without documentation).
4. Bought a bank that began buying the mortgages from the above mortgage broker. The bank sliced and diced the mortgages and resold them as Collateralized Debt Obligations (CDO).
5. Bribed rating agencies to give the CDOs a AAA rating.
6. Reported spectacular profits at both its bank and mortgage broker.

Eyeing these profits, every financial institution in Lichtenstein rushed into the subprime and CDO businesses. Executives pocketed eye-popping bonuses as they bought mortgages and sold CDOs. Government ministers hailed the triumphs of financial deregulation that allowed everyone to buy a home. Editorialists proclaimed the glories of the free market system.

Luxembourg quietly sold its banking and mortgage businesses before the Ponzi scheme collapsed, wrecking Lichtenstein's economy.

Of course, this scheme could never work in the U.S. Our financial institutions are too well regulated, our rating agencies are independent and incorruptible, and our banking executives allow neither short-term profits nor annual bonuses nor herd instincts to cloud their vision.

Nonetheless, Luxembourg is a nation to be feared. They are developing a tulip bulb mania scheme designed to crater the American economy. They believe that any country that falls for dot.com and subprime will be vulnerable to tulip mania.