China CurbingChina is finally being forced to curb her appetite for U.S. government debt, according to the New York Times. China, which last September overtook Japan as the largest international holder of U.S. Treasuries, now holds more than $1 trillion in U.S. government debt. Its willingness to buy IOUs from the U.S. government is the major reason that the Fed's reckless creation of money out of thin air over the past several years has not resulted in hyperinflation at home. Newly printed money, in the form of government debt issues, can always be exported when there are willing purchasers overseas, and the removal of that money from circulation here at home helps buoy up the purchasing power of the dollar.

U.S. Transfers Power to IraqOn January 1, the day after the UN mandate for foreign troops expired and the new Status of Forces security agreement between Iraq and the United States took effect, the U.S. military turned over security control of the Green Zone in central Baghdad to the Iraqi military. The Green Zone is a heavily fortified area of Baghdad containing many Iraqi government and foreign diplomatic structures. Under the new agreement, U.S. troops will withdraw from the streets of Iraqi towns and cities by June 30, and the remaining 150,000 will leave Iraq by December 31, 2011.

gazaIsraeli tanks and troops late Saturday on January 3 entered Gaza, escalating Israel's eight-day-old offensive against the Hamas terrorist organization that controls the narrow, 25-mile-long strip of land along the Mediterranean between southwest Israel and Egypt's Sinai peninsula. On December 27, Israeli F-16 fighters launched a series of airstrikes against targets in Gaza in retaliation for Hamas' rocket attacks against Israel that numbered over 3,000 in 2008.

gaza stripThe ongoing Israeli attacks on the Palestinian-occupied and controlled Gaza Strip have provoked indignation worldwide, as flare-ups in that corner of the globe usually do. The status of the Palestinian people is perhaps the most vexed problem in geopolitics, and has been since the establishment of the state of Israel in 1948.

Bush dodges shoeOnly five weeks away from the end of his presidency, President George Bush made surprise visits on December 14 and 15 to Iraq and Afghanistan. Mr. Bush's first stop in Iraq was the Iraqi presidential palace in Baghdad's heavily fortified Green Zone, where he participated in talks with Iraqi President Jalal Talabani. During the talks, Bush said: "The work hasn't been easy but it's been necessary for American security, Iraqi hope and world peace." Talabani called Bush "a great friend for the Iraqi people, who helped us liberate our country."