Twitter
StumbleUpon
Facebook
Delicious
Digg
Newsvine
Google
Yahoo
TechnoratiThe American Empire Is Bankrupt
This week marks the end of the dollar’s reign as the world’s reserve currency. It marks the start of a terrible period of economic and political decline in the United States. And it signals the last gasp of the American imperium. That’s over. It is not coming back. And what is to come will be very, very painful.
Barack Obama, and the criminal class on Wall Street, aided by a corporate media that continues to peddle fatuous gossip and trash talk as news while we endure the greatest economic crisis in our history, may have fooled us, but the rest of the world knows we are bankrupt. And these nations are damned if they are going to continue to prop up an inflated dollar and sustain the massive federal budget deficits, swollen to over $2 trillion, which fund America’s imperial expansion in Eurasia and our system of casino capitalism. They have us by the throat. They are about to squeeze.
There are meetings being held Monday and Tuesday in Yekaterinburg, Russia, (formerly Sverdlovsk) among Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization. The United States, which asked to attend, was denied admittance. Watch what happens there carefully. The gathering is, in the words of economist Michael Hudson, “the most important meeting of the 21st century so far.”
It is the first formal step by our major trading partners to replace the dollar as the world’s reserve currency. If they succeed, the dollar will dramatically plummet in value, the cost of imports, including oil, will skyrocket, interest rates will climb and jobs will hemorrhage at a rate that will make the last few months look like boom times. State and federal services will be reduced or shut down for lack of funds. The United States will begin to resemble the Weimar Republic or Zimbabwe. Obama, endowed by many with the qualities of a savior, will suddenly look pitiful, inept and weak. And the rage that has kindled a handful of shootings and hate crimes in the past few weeks will engulf vast segments of a disenfranchised and bewildered working and middle class. The people of this class will demand vengeance, radical change, order and moral renewal, which an array of proto-fascists, from the Christian right to the goons who disseminate hate talk on Fox News, will assure the country they will impose.
I called Hudson, who has an article in Monday’s Financial Times called “The Yekaterinburg Turning Point: De-Dollarization and the Ending of America’s Financial-Military Hegemony.” “Yekaterinburg,” Hudson writes, “may become known not only as the death place of the czars but of the American empire as well.” His article is worth reading, along with John Lanchester’s disturbing exposé of the world’s banking system, titled “It’s Finished,” which appeared in the May 28 issue of the London Review of Books.
“This means the end of the dollar,” Hudson told me. “It means China, Russia, India, Pakistan, Iran are forming an official financial and military area to get America out of Eurasia. The balance-of-payments deficit is mainly military in nature. Half of America’s discretionary spending is military. The deficit ends up in the hands of foreign banks, central banks. They don’t have any choice but to recycle the money to buy U.S. government debt. The Asian countries have been financing their own military encirclement. They have been forced to accept dollars that have no chance of being repaid. They are paying for America’s military aggression against them. They want to get rid of this.”
China, as Hudson points out, has already
struck bilateral trade deals with Brazil and Malaysia to denominate
their trade in China’s yuan rather than the dollar, pound or euro.
Russia promises to begin trading in the ruble and local currencies. The
governor of China’s central bank has openly called for the abandonment
of the dollar as reserve currency, suggesting in its place the use of
the International Monetary Fund’s Special Drawing Rights.
What the new system will be remains unclear, but the flight from the
dollar has clearly begun. The goal, in the words of the Russian
president, is to build a “multipolar world order” which will break the
economic and, by extension, military domination by the United States.
China is frantically spending its dollar reserves to buy factories and
property around the globe so it can unload its U.S. currency. This is why
Aluminum Corp. of China made so many major concessions in the failed
attempt to salvage its $19.5 billion alliance with the Rio Tinto mining
concern in Australia. It desperately needs to shed its dollars.
“China is trying to get rid of all the dollars they can in a trash-for-resource deal,” Hudson said. “They will give the dollars to countries willing to sell off their resources since America refuses to sell any of its high-tech industries, even Unocal, to the yellow peril. It realizes these dollars are going to be worthless pretty quickly.”
The architects of this new global exchange realize that if they break the dollar they also break America’s military domination. Our military spending cannot be sustained without this cycle of heavy borrowing. The official U.S. defense budget for fiscal year 2008 is $623 billion, before we add on things like nuclear research. The next closest national military budget is China’s, at $65 billion, according to the Central Intelligence Agency.
There are three categories of the balance-of-payment deficits. America imports more than it exports. This is trade. Wall Street and American corporations buy up foreign companies. This is capital movement. The third and most important balance-of-payment deficit for the past 50 years has been Pentagon spending abroad. It is primarily military spending that has been responsible for the balance-of-payments deficit for the last five decades. Look at table five in the Balance of Payments Report, published in the Survey of Current Business quarterly, and check under military spending. There you can see the deficit.
To fund our permanent war economy, we have been flooding the world with dollars. The foreign recipients turn the dollars over to their central banks for local currency. The central banks then have a problem. If a central bank does not spend the money in the United States then the exchange rate against the dollar will go up. This will penalize exporters. This has allowed America to print money without restraint to buy imports and foreign companies, fund our military expansion and ensure that foreign nations like China continue to buy our treasury bonds. This cycle appears now to be over. Once the dollar cannot flood central banks and no one buys our treasury bonds, our empire collapses. The profligate spending on the military, some $1 trillion when everything is counted, will be unsustainable.
“We will have to finance our own military spending,” Hudson warned, “and the only way to do this will be to sharply cut back wage rates. The class war is back in business. Wall Street understands that. This is why it had Bush and Obama give it $10 trillion in a huge rip-off so it can have enough money to survive.”
The desperate effort to borrow our way out of financial collapse has promoted a level of state intervention unseen since World War II. It has also led us into uncharted territory.
“We have in effect had to declare war to get us out of the hole created by our economic system,” Lanchester wrote in the London Review of Books. “There is no model or precedent for this, and no way to argue that it’s all right really, because under such-and-such a model of capitalism ... there is no such model. It isn’t supposed to work like this, and there is no road-map for what’s happened.”
The cost of daily living, from buying food to getting medical care, will become difficult for all but a few as the dollar plunges. States and cities will see their pension funds drained and finally shut down. The government will be forced to sell off infrastructure, including roads and transport, to private corporations. We will be increasingly charged by privatized utilities—think Enron—for what was once regulated and subsidized. Commercial and private real estate will be worth less than half its current value. The negative equity that already plagues 25 percent of American homes will expand to include nearly all property owners. It will be difficult to borrow and impossible to sell real estate unless we accept massive losses. There will be block after block of empty stores and boarded-up houses. Foreclosures will be epidemic. There will be long lines at soup kitchens and many, many homeless. Our corporate-controlled media, already banal and trivial, will work overtime to anesthetize us with useless gossip, spectacles, sex, gratuitous violence, fear and tawdry junk politics. America will be composed of a large dispossessed underclass and a tiny empowered oligarchy that will run a ruthless and brutal system of neo-feudalism from secure compounds. Those who resist will be silenced, many by force. We will pay a terrible price, and we will pay this price soon, for the gross malfeasance of our power elite.
161 Comments so far
Show AllChris, Are you aware of Fmr. Senator Mike Gravel's truth rants during the early Dem. Presidential debates? We agree about the problem. Now let's talk about a solution. Check out Gravel's direct democracy proposal. From Noam Chomsky to Howard Zinn, he has some great people vetting and endorsing. Will you help inform citizens that they can demand a right to vote on the issues not just the sold out political parties?
http://ni4d.us/
From women's right to vote to clean campaign finance it comes from the People thru the Initiative process. Even with Prop 8 (which would have never been on the ballot under the Gravel proposal since it is a Bill of Rights issue and that can't be legislated away)... even Prop 8 has now brought bigotry and ignorance front and center which is more than we can say for our political leaders (Obama, Clinton et all) that still won't back gay civil rights.
Let's talk solutions. Email me at info@ni4d.us
Lynne
Hope those nano factories will be available soon!
Interesting News Conference regarding the SCO summit from Russian President Medvedev. see http://www.isria.com/pages/17_June_2009_120.htm
He was asked a question about a supranational currency at the press conference. He cracked a joke at first, but went on to give a good assessment of what is going on regarding this subject.
He made the point that Russia or any other country cannot impose a reserve currency. It depends on the prestige of and trust in a particular national economy on whether its currency can be used as a reserve currency. The American economy is on the verge of collapse due massive military spending, deregulation and supply side economics. So these other countries are really just trying to protect themselves. Who can blame them.
Eagles, Long Road out of Eden
"...Down the road to Damascus, the road to Mandalay/
I met the ghost of Caesar on the Appian Way/
He said, 'It's hard to stop this bingeing, once you get a taste/
But the road to Empire is a bloody, stupid waste...' "
I would imagine that something as big and full of holes as a world reserve currency, would prove over time to be the systematic malady that modern science has blocked from our perception... it is the economic rule of "Diseconomy of Scale" when things like organizations get too big to succeed, they are doomed to fail.
I just have a feelin that the faster this does occur and the USA gets out of it's old Empire of the World nightmare, the sooner our planet and it's creatures will find a happier way.
Where the government fails, the people take the wheel... The captain good friend is me and You.
Chris you need to see a doctor for some anti depressants.
Anyone got a cyanide pill I can bite?
But first I'd like to offer a special thanks to the likes of Ronald Reagan, George HW Bush, Bill Clinton, George W Bush and, of course, Barack Obama. This group of Presidents has been unlike no other. Each one has passed the ball and driven it deeper and deeper toward despair.
The single most nefarious being, George W Bush of course, for he, almost single handedly has inflicted the penultimate damage on this country that now guarantees it will collapse. Obama likely couldn't stop it, even if he wanted to, but that is the point, isn't it, he doesn't want to. Taking inspiration from Bush's bail-out swindle, Obama has firehosed money over the financial sector as if it were water. The single greatest thing he had in his grasp, was the power to let the banks fail, and in so doing, free the country of massive, fraudulent debt. Instead, he propped them up, in a vain attempt to maintain the status quo. Ain't gonna happen.
I'm not well enough schooled in this to say whether Chris Hedges is spot on, but it sure feels like we are in a resonance right now that is going to collapse around us, and leave this country vulnerable to attack from within and without. This has been, in my estimation, perhaps the single greatest crime of the Bush era crime spree...destroying the economy of this nation, after savaging the middle east in a reign of terror, and in so doing, exposing this country to the wrath of a righteously vengeful world. These actions have caused a great many people in that area of the world to wish us only harm, and not because they hate us for our freedom...unless of course, we're talking about the freedom to destroy whole countries with the wave of a Presidential signature.
If they do truly hate us, they have been given good reason by the military meat grinder we sent into their world. Literally uncounted hundreds of thousands of innocent people have been chopped to pieces by that meat grinder, and every single one of them has someone or some many, that they've left behind who loved and cared for them. Death has a way of turning otherwise gentle and thoughtful people into things they might not otherwise be, like machines of savagery only seeking vengeance and violence.
We have a very dark future ahead, whether it's as dark as Hedge's vision or not. Too bad that the guilty (those who went out of their way to make this happen) aren't going to be the ones to pay the price for these manifold crimes. Only the innocent will pay for all this...and the time for that payment draws disturbingly closer with each new day.
Sioux Rose
GUN TOT: I echo many of your sentiments. Not that vengeance is a kind thing, but in the long run, everyone pays for what they have done. The thing is, it takes LIFETIMES. For earth to survive, that is to remain viable for human beings, the profligate American lifestyle and its related sense of entitlement must come crashing down. That collapse is one that is necessary. Many can no longer separate superficial desires from actual needs thanks to a media pulsing 24/7 with THE consumer-driven message du jour, or as Dr. Seuss put it, generating "thneeds." The more one can find joy in simplicity, and gratitude in their daily bread, the easier this coming transition... in a sense America is the obese person at 287 who can't get around and at the end of this phase, will be a svelte 140 who looks at the world through a very different prism as a result of losing all that fat.
Ummm according to a Reuters report: http://www.reuters.com/article/marketsNews/idUSLG28133020090616
Medvedev simply suggested the world needs new reserve currencies. It is alarmingly irresponsible for Hedges to jump to conclusions like he has in the first paragraph of this article:
"This week marks the end of the dollar’s reign as the world’s reserve currency. It marks the start of a terrible period of economic and political decline in the United States. And it signals the last gasp of the American imperium. That’s over. It is not coming back. And what is to come will be very, very painful."
Heges is suggesting the USD will no longer be the world's reserve currency after this week! This is simply not the case! It's the beginning of talks between members of the Shanghai Cooperation Organization on how to influence the change of the reserve currency. A change that would take years if not decades to actually implement.
I'm saddened that otherwise salient and intelligent arguments made by Hedges will be ignored due to the hyperbolic nature of articles such as this.
chris hedges is d-bag, i mean he sounds as apocalyptic as an end-times f***-wit. how does he sleep at night?
well, and well done...
My garden is growing nicely and profuse with blooms and small vegies. The June flowers are in bloom and the bees are back along with the yellow jackets, wasps, and humming birds. Animals of every stripe and kind visit my feeding stations. My set-aside supplies of food, water, medicines, and first aid kit is growing. My use of energy and resources is steadily dropping. I am connecting with like minded people. I am preparing for hard times and living increasingly sustainably.
I thank Chris Hedges and others for their timely alerts.
Chris Hedges' Reply to Stone:
Good luck living sustainably with your garden under the non-existent sun of the 25 year nuclear winter that will inevitably commence within the next 10-15 minutes...
Rock On!
Yet another excellent article by our friendly neighborhood pessimist, connecting dots in ways that the MSM likes to ignore. He paints a dour picture, though it's only the tip of the massive iceberg the imperial duopoly has crashed us into headlong. The doors to the lower decks have been locked and the oligarchs are headed for the lifeboats. Meanwhile, the planet burns and the easy oil to power up those lifeboats is running out.
Not to mention erosion, salinization, and the climate change-induced droughts and flooding that are reducing crop yields around the globe. It's going to get very ugly. Thomas Malthus was ahead of his time...
"Who controls the past controls the future. Who controls the present controls the past." - George Orwell
And as Argentina went, America follows. Soon, Argentina will have recovered much of what was lost in its dark ages, as we enter ours.
Hedges is paranoid. The USA keeps the world in business. Almost everything produced across the world is sucked up by the USA's little shop-vac of gluttony. The producers are just as addicted to the exchange as the consumers. They won't rock the boat.
Nobody wants to rock a sinkin boat.
The Dollar was up today. If you really think the elites aof the world are going to trust Russia, a country of drunken male idiots and a tiny cabal of resource-dependent oiligarchs, or China, a dictatorship holding down the lid on a billion plus broiling workers, you keep hope alive. The USA is going through a bad period, and we should pull our military back, and go for alternative energy, and health care reform. I know there are a lot of vested interests to be defeated, but if we do, then things could look OK. Asia's got some problems that noone wants to get near.
That said, there are forces like overpopulation, overproduction and climate change that are prob set to smack us all no matter hw much we reform, but if you really think Russia and China together are gonna rule the world, and that India will go along with those freakshows, not so fast. India's about to run out of water, Pakistan can barely keep the lid on Islam, and China pays us to fight wars that if they got involved in, would start an asian conflagration that will chase away investment at light speeds.
America sucks, but the world is in this with us. Our empire may prolong our agony and do us in, but we have more elections to throw more sell-outs out.
What will probably happen is globalization will be discredited by its transportation costs and destruction to local economies, and people will retrench into sustainability. If America gets bad, the rest of the world will not decouple, and if the US gets bad, there are guns and nukes involved, and it will suck bigtime. Hello Canada.
esolesek: I meet Americans all the time and ask why they are here in Canada. Many say they are fed up, disgusted, ashamed, angry...a lot of them came during Bush era and like it here and intend to stay.
If the dollar's collapse, US's bankruptcy would precipitate our military withdrawal from Central Asia & the ME, our fall can't come soon enough.
And soon it comes-Great article. It's one thing to rob the poor, they are used to it and do not react with violence. But when the idiotrich start eviscerating the middle class, a Revolution will follow quickly.
All is not lost. All you need is food, water and shelter.
The fear is losing your American lifestyle. This has been maintained with imperialism, militarism, materialism, consumerism, greed, egoism, lust for power & control, decadence, sloth, envy, vanity, etc. etc. - all toxic and addictive and its never enough.
Sure, there are some greedy Americans who bury themselves in debt from buying too many cars and TV's. But do you really think it's as simple as "food, water and shelter" for everyone? What about people with expensive health problems? Or simply buying health insurance? What about the expense of owning a car (which most people need in order to work)? What about monthly bills like internet access, phone bills or electricity? What about people with children or other dependents? What about the cost of college? What about people who can only afford to live in dangerous neighborhoods? What about people who eat less healthy food because it's cheaper?
Well, DOPEUP, the government would have to be run by people who think "WE" rather than "ME" and have a universal health care system where no one is left behind. I live in a place like that.
Everyone doesn't have to own a car if you have efficient public transit - like BART, etc., & railways and city busses and other busses & car pooling, etc.
Some "WE" countries - like the Scandinavian countries, provide university access for anyone who is capable and willing to work hard. No one is left behind.
Poverty creates dangerous neighbourhoods. If everyone was entitled to food and shelter and if everyone is provided with the same opportunities as everyone else, (education, decent housing, security, etc. poverty, as we know it, would not exist.)
Less healthy food comes from stores. In my corner of the world, people from rural areas come into the city with fresh, organic, locally grown food and as the years go by, and more and more people are buying, the price goes down. We, who can afford it, should try to support this as much as we can.
Money and paying bills, etc.: With government spending money on more social programs, hospitals, schools, senior homes, community centres, etc. and infrastructure, jobs will be created and so everyone should be able to pay for their utilities. If, for no fault of their own, they cannot, the government should be there to subsidize.
All of the above is a reality in some of the countries I have lived in. I think America needs a major overhaul.
Oh, and what about all the luxuries people lust after (or in poor neighbourhoods steal to get them) bigger tvs, more expensive cars, and stuff, stuff, stuff, - shop, shop, shop) that's for individuals to sort out in their psyche - (i.e. what empty hole are they trying to fill?) But in the meantime, we are plundering the earth, stealing resources (oil to make plastics) wrecking the earth, ruining the environment, polluting the air, water and soil, etc. etc. for more stuff....
okay,I'm starting rant and foam at the mouth now so I better quit....
Glad you agree that people need more than "food, water and shelter."
"okay,I'm starting rant and foam at the mouth now so I better quit...."
Good idea.
imagine you are the only human on the planet...look around you...feel the earth and the growing things between your fingers and toes...listen to the buzzing and chirping and growling and barking and gusting and splashing of the wild all around you...
that is what it is...
now, imagine a woman is with you...(or a man, if you're a woman, of course)...
Such a pessimistic view by Hedges, or is he just being realistic, is there a silver lining somewhere within the gloom?
His quote from Hudson's article seems odd; "This means the end of the dollar. It means China, Russia, India, Pakistan, Iran are forming an official financial and military area to get America out of Eurasia".
I didn't realize there was such a love fest occurring in "Eurasia". Has anyone notified the Indians and Pakistanis?
It looks to me like this meeting in Yekaterinburg is a desperate attempt to figure out what in hell to do. They know they are screwed just as much as the US Empire is. Using an an overused Titanic analogy, it seems that they are like the crew trying desperately to figure out how to bail, and save their own asses, meanwhile they're all going down. I doubt they will escape. Without a consuming North America, there is no Chinese boom, resulting in less demand for oil and gas, which Russia, Iran, etc. depend on.
Dump the dollar, end the American Empire, good riddance. But Hedges dire picture of doom and gloom resulting from that collapse will not be an isolated event in just the US.
Hedges seems to blame the "power elite" for their "gross malfeasance" which created this mess. Wrong, it's greed and self inflicted ignorance of nearly all but a few that created this mess. The power elites don't get away with their theft and control without a hell of a lot of help from willing accomplices too greedy, or too scared and lazy to question the BS being dolled out.
They were deeply impacted by our most recent finance sector deflation, which damaged them over mistakes they didn't make. They may be looking for some kind of insulation against that happening again, and getting out of dollars is one way of doing it. What's scary is the thought that they are doing this not out of malice, but out of good business sense. That would mean that they see the American economy tanking further than it already has. That seems likely as the changes made so far haven't really addressed the issue of large-scale unregulated asset gambling. Instead, the US govt has just insured the worthless 'chips' hatched in the last round of gambling.
"Hedges seems to blame the "power elite" for their "gross malfeasance" which created this mess. Wrong, it's greed and self inflicted ignorance of nearly all but a few that created this mess. The power elites don't get away with their theft and control without a hell of a lot of help from willing accomplices too greedy, or too scared and lazy to question the BS being dolled out."
This fact bears repeating imo.
Thanks Rebel
Did anyone actually try reading 'It's Finished' by John Lanchester? Recommended in the sixth paragraph? If you have insomnia and need something to put you to sleep this is the ticket!
divinemauler:
agree;
also gold,
allows
printing
presses
to roll
ken
once again, hedges paints the real deal. of course, just as with 9/11, there are the deniers. and they will be among the first to go knocking on, or down, doors.
interesting to see thomas more reincarnated into henry8. don't worry, thomas, uh, henry, no one here will ask you a direct question.
"interesting to see thomas more reincarnated into henry8. don't worry, thomas, uh, henry, no one here will ask you a direct question."
uhhhh. i noticed. nice to hear your voice again thomas, ... thomas more. the moniker henry the 8th - darth vader on viagra of his day. hear! hear!
...peace...
Oh, and have a nice day! ;-)
"The governor of China’s central bank has openly called for the abandonment of the dollar as reserve currency, suggesting in its place the use of the International Monetary Fund’s Special Drawing Rights."
I'm confused. Even if Russia and China switched to the SDR, wouldn't it still have the effect (though diminished) of propping up the dollar because it is based on "a basket of currencies, today consisting of the euro, Japanese yen, pound sterling, and U.S. dollar."?
(from the IMF's website)
"The value of the SDR was initially defined as equivalent to 0.888671 grams of fine gold—which, at the time, was also equivalent to one U.S. dollar. After the collapse of the Bretton Woods system in 1973, however, the SDR was redefined as a basket of currencies,today consisting of the euro, Japanese yen, pound sterling, and U.S. dollar. The U.S. dollar-value of the SDR is posted daily on the IMF's website. It is calculated as the sum of specific amounts of the four currencies valued in U.S. dollars, on the basis of exchange rates quoted at noon each day in the London market.
The basket composition is reviewed every five years to ensure that it reflects the relative importance of currencies in the world's trading and financial systems. In the most recent review in November 2005, the weights of the currencies in the SDR basket were revised based on the value of the exports of goods and services and the amount of reserves denominated in the respective currencies which were held by other members of the IMF. These changes became effective on January 1, 2006. The next review by the Executive Board will take place in late 2010."
http://www.imf.org/external/np/exr/facts/sdr.htm
Bubba Clinton and the greedy Bush Families outsourced our industrial base to China. They both got what they wanted.
Clinton is raking in Millions of dollars from Foreign countries that he sold out our industrial base to. Clinton showed the Red
Chinese how to lift a missle of the ground, the Red Chinese gave the Clintons much money. The Bushees destroyed the working classes as the Republicans have wanted since FDR.
The Bush investments in The Carlyle Group, Halliburton, etc
should be exposed for what it is..
We will not recover from this Depression that we are in until we rebuild our industrial base, and do away with those
ten million illegal immigrants that Obama wants to give
social security to..Wake up America
America is awake... Just too terrified to get out of bed.
I was watching Chinese television with my wife when I saw the story about the meeting in Yekaterinburg. I immediately thought "WOW!" and wondered whether this would send shock waves across the globe. I see that Mr. Hedges had a reasonable reaction and also that, as expected, those running the US corporate media pretended to hardly notice. Huge changes are underway and many corporate elites are undoubtedly scrambling to optimize their positions in anticipation of the fallout and I suspect they will do their best to keep the little people in the dark so the little people do not join the struggle and get a piece of the pie for themselves. If you are not at the table, then you are probably on the menu, and such elites want to make sure the little people remain on the menu.
From the Financial Times
http://www.ft.com/cms/s/0/e9104e82-58f7-11de-80b3-00144feabdc0.html
Overconsumption by US citizens, US buy-outs of foreign companies and dollars the Pentagon spends abroad all end up in foreign central banks. These governments face a hard choice: either recycle the dollars back to America by buying US Treasury bonds or let the “free market” force up their currencies relative to the dollar – thereby pricing their exports out of world markets, creating domestic unemployment and business failures. US-style free markets hook them into a system that forces them to accept unlimited dollars.
That has a name - the Triffin dilemma, or Triffin paradox.
As long as the globe is pegged to the dollar, they will be unwilling accomplices to whatever America does. Triffin first identified the problem back in 1960, 49 years latter, nobody seems to have done anything but complain about it.
Not sure if things will change this week, I doubt it.
The agreement in Yekaterinburg does seem to be a concrete and very serious step in the implementation of policies designed to end dollar hegemony. The Chinese and Russians have been struggling for a solution for some time, though certainly the Chinese have so many dollars and treasury bills that they have no desire for precipitous action that could lead to an immediate collapse of the dollar. Nevertheless, they are quite determined to slowly move away from using the US currency as the de facto international currency as they believe such a policy essential to the continuation of their internal development.
If you are interested, on June 15, 2009, Dr. Michael Hudson posted an article titled, "The End of American's Financial-Military Empire" on Counterpunch.org. He writes about the meeting in Yekaterinburg.
www.counterpunch.org/hudson06152009.html
At least we may now publicly acknowledge that marking up the price of bundled debt securities is not the same as adding value.
I agree that you make money by making goods.
Dude, the truth is we started going bankrupt the year we began importing foreign oil, around 1972. It's been a downhill slide since. A long time coming. The value of the dollar and the credit industry are directly related to the supply of cheap oil and gas. We're finished in that arena.
Correcto mundo, Mr. divinemauler. Looking at the even bigger picture, according to the Oil Drum world oil production peaked in July 2008. It will probably take several more years to confirm that was the true moment of Peak Oil. If it was then things are going to get very interesting, in a very bad way, very soon. Stay tuned, we may indeed be living in interesting times...
from the June 9 Asia Times:
http://www.atimes.com/atimes/China_Business/KF09Cb01.html
Brazil, Russia, India and China may not yet have accepted jobs at other firms, but it certainly appears they're interviewing...seems they're trying to keep us believing they love us, so we keep letting them screw us, while they're checking out who else is available...
Is our entire world position based on Hiroshima and Nagasaki? What drastic measures, and so long ago...
Nature has a way of balancing things out. When one species becomes too dominant, another predator finds a weakness of the dominant species and keeps it in check. Oviously, humans have overpopulated the planet and nature will fight back with all the resources at its disposal including viruses, drought, and starvation. Science and technology have only postponed the day of reckoning. One example is a rust disease of wheat which is currently spreading throughout the world. If one can imagine a world without wheat, then a world without dollars becomes trivial. Even if plant breaders are able to develop resistant wheat in time to avert this disaster, nature will surely use another of its doomsday weapons. If one is willing to look at the big picture, dollar dominance is the least of mother nature's concerns.
Yes excellent comment and money was only ever a symbol of that pre-condition of economic health and social health (grain in the bins after a good summer harvest). Money is used in a system to exchange within that pre-condition of economic and social health. When your social systems are failing, money becomes a symbol of decay only and has no real value, it is pretty simple really. As we inflated that dollar and our social health declined, one was symptomatic of the other. The sad thing about our current leaders is that they are not very healthy individuals so their solution to this problem is to make or borrow more money not for social repair but to just try to make more money.
I'm glad he posted this on a Monday morning. If I read something like this last Friday it would have ruined my whole weekend...
I suspect the Chinese, Russians and their Shanghai organizational friends will have to be careful about bringing down the US economy. Because of the size of it and the way the economies of the world are intertwined they could end up crashing the entire worlds economy if they aren't careful, or creating some nasty fascist governments like happened in Germany after their economy crashed after WWI.
Remember that old "unintended consequences" thing...
Tom
In my view Russia and China are not trying to bring the American dollar down (they have more of them in reserve and we don't have any)....
They just see that as the reserve currency, the USA Debt and war economy will drag them down with it and they would benefit with more competition for a world reserve currency.... Everyone is in the same system boat so in the big picture.... We are searching for a way out of BullShitism. Just last week the FED's Bernake was telling us the other side of the Debt coin and INflation has started and now they will spin it as recovery.
It makes me mad too when I think about it.
I wonder what Tom Jefferson would have done?
"...have to be careful about bringing down the US economy. Because of the size of it and the way the economies of the world are intertwined they could end up crashing the entire worlds economy if they aren't careful..."
You gotta tell that Paulson, Geithner, Greenspan and all the other banksters and their crony bullshititians.
I find a lot of this analysis convincing, and I wish I felt certain that bankruptcy would break what remains of American empire. I'm afraid it will do something very different: break what remains of American democracy.
My worry:
Why shouldn't the US just take the money instead of borrow it? After all, theft IS the basic act of empire, and the US has a long history of it -- ask the Amerinds, the Mexicans, the Filipinos, the Vietnamese, the Pashtuns, and a few billions in between.
However, I'm thinking that when you pay one half of the working class to kill the other, you can't have much of anyone in or around that working class making any decisions about where those funds go. At some point, the drag of pretending democracy to the population may change the balance in decisions between liberty and someone's wealth.
Americans have made some disturbing decisions about these.
"Disturbing" decisions?
How elegant.
War is bad for the human race. Anything which slows down our war making is good for all of us.
"War is bad for the human race. Anything which slows down our war making is good for all of us."
Truer words were never spoken. Thank you!
thank you chris hedges for another insightful essay.
whether it's this week or next week isn't important. about 1/2 a dozen different international scenarios realistically play out w/ the US empire on the short end.
- preemptive israeli strike on iran
- use of nukes in pakistan w/ US troops involved
- out of the blue nuke attack on cleveland or des moines
- oil embargo against US (for atrocities in iraq/afghan/israel)
- any serious escalation of conflict in iraq drawing in iran
- the iranian oil bourse -
(oil traded in yuan/euros instead of dollars)
- the destabilization of the saudi regime - subsequent US response
any of these scenarios (or even a small nuclear bomb exploded in a friendly international harbor w/ US warships ships) could completely destabilize our economy and create instability to such a degree, that a US military response would be an automatic knee jerk innate response - it will just happen.
this is what happens when one nation (1/20th worlds population) decides to manipulate all global activity for it's benefit. it's a challenging task and we've failed miserably.
if we truly upheld the ideals of the enlightenment, we would have created truly democratic global institutions that would have the opportunity to listen to the billions of people who live on this planet - who do not have a voice - and respond accordingly, as compassionate humans.
but that was never our program (our program is rooted w/ the hudson bay co. and the bank of england), our program is empire, acquisition of property, wealth and power for a select few.
we let the world down, when after the 2nd world war the US opted for imperial power, instead of support for emerging regional democratic leaders (arbenz - guatemala, mossadeq - iran, allende - chile) - we assassinated them and dethroned them, replacing them w/ the most despotic creeps the world has known. we let the rest of the world down. we had our opportunity.
and unless we blow the world up in spite (w/ our israeli cousins), it looks like the chinese and indians (who know our western values system very well - from being on the short end of the stick) will become our new masters. as they should, considering 1 out of every 2 people on the planet lives in east/SE asia.
it's time to reform the UN, empowering the general assembly and reexamining the role of the security counsel (victors of ww2). the earth is ready for a world government.
...peace...
I think this link, from another thread, may be of relevance ...
http://www.scribd.com/doc/9442970/Collateral-Damage-US-Covert-Operations-and-the-Terrorist-Attacks-on-...
Some public domain stuff, plus some compelling arguments that begin to put the disaster we are living into context.
You make good points but I believe you come to the wrong conclusions: "this is what happens when one nation (1/20th worlds population) decides to manipulate all global activity for it's benefit."
This happens when one NATION HAS BEEN HIJACKED by a handful of people to manipulate all global activity for the benefit of this handful people.
Here is your One World Goverment:
“Collateral Damage” by E. P Heidner, part I and II.
>>> www.scribd.com/people/documents/2169400-ep-heidner <<<
It's an unfathomable picture.
You forgot that the US is planning yet another invasion of Mexico.
I remember studying Will Durant's "The Story of Civilization" (1935) in the middle of the last century--and thinking that the lessons of history were so clear that only the most foolish political leaders would ignore them. In example after example, Durant points out that empires collapse internally, not externally. Throughout human history, internal corruption and excessive military adventurism drain economies until there is nothing left to support life-sustaining necessities. This is not new stuff. It is as old as the first human civilization.
Today, I wonder if it was foolishness that motivated our own political leaders to lead us down this same tired, predictable path. It seems much too deliberate. Certainly, our political leaders can't be that oblivious to the lessons of history. But what do they gain by creating a future in which a small percentage of the very wealthy live behind fortresses--and all others are storming the gates?
I can only conclude that the powers behind the throne and their political minions are incredibly stupid, or they have no loyalty to our national interests.
Which is it?
It's a little bit like watching a meth addict take one more hit.....they know they are dying but in their mental state of addiction, they seem to have no choice. Greed, like drugs is a psychological phenomenon but unlike drug addictions, monetary addictions are endorsed, applauded and treated like the fountain of youth by the addicts who control our government, and media. Meanwhile not just lives but entire countries are ruined by the power addicted and insanely driven power elites of the world. What we need is some tough love from other world leaders before our leaders representing that cabal of addicts can war for more and destroy every living shred of hope left to our humanity for years to come. Makes us sound so pathetic, but I think that is how it is. Those of us fortunate enough not to be caught up in this terrible and extreme condition of greed can help by understanding what is really going on, and helping as we are able to speak and act truth to addiction.
The deal is this:
YOUR national interests are not the national interests of the US leaders.
They are in charge so you do not count.
[I can only conclude that the powers behind the throne and their political minions are incredibly stupid, or they have no loyalty to our national interests.]
Can't the answer be _both_.
Their loyalty is to the gold which they think they can take with them into the afterlife.
They think their immune from any lesson history has to give, that's if they stayed awake when/if they took any history classes in the first place.
I can only conclude that the powers behind the throne and their political minions are incredibly stupid, or they have no loyalty to our national interests.
Which is it?
For those who decide how and what things will take place, for those who actually own a nation, there is simply never enough. Whether they're from Wall Street or Fort Bragg, there's never enough. Some of them are stupid, some are not. All are cunning, all are aggressive, all are corrupt.
Or . . . this realm called planet Earth is what is popularly thought of as Hell. What a predicament to be in: to experience the miracle of being and consciousness and the wonders of it all in this brutal, stupid shithole of a world.
One of your more astute posts...
Thank you...
I doubt things will be as dire as Hedges describes. China is running a marathon. The US on the other hand runs the same marathon as if it was a series of 100meter dashes (or should I say 4 to 8 year dashes). And China's way out ahead. Why would they risk losing by trying to trip up the US outright and quickly? That'd be foolish.
Plus there are literally millions of Chinese-Americans and native Chinese (students, professors, scientists, etc.) in the US. NOW, if all of a sudden there's a mass departure of Chinese from the US, THEN we should worry.
Sorry but I don't follow your logic. How exactly is Hedges wrong?
My point, probably not made as clearly as I could have, was that I agree with his assessment THAT the US is going down the tubes. I just don't think it'll be as apocalyptic as he describes. That doesn't make sense for the reasons I stated.
The brain drain? Ummm high tech industries/academics are a lagging metric,the basic infrastructure has to exist before they can be developed, and that basic infrastructure is being built at a phenomenal rate, so you will see the outflows stop in the next few years.
As for the ex-pats returning, meh there is more to it than that, many ex-pats fled for political as well as professional reasons.
As I stated elsewhere today, Hedges is an apocalyptic visionary who gets far too caught up in his own pessimistic certainties. While he is obviously very smart, he seems incapable of seeing alternate realities. He is a strange one.
He is only outlining what others have said for quite some time. Similar things were said only a few years ago and now look where we are. I hope you are not sticking your head in the sand and pretend things are OK.
Perhaps it is just a matter of perspective: where you sit things are not that bad. Where I sit, things are very bad indeed and going to get worse before they get better. With all that said, I sincerely hope you are right and I, Hedges, Richard Wolf, Michael Hudson, David Harvey and others are wrong. However I am not willing to bet on it.
I am following the advice I outlined above, you can keep your savings and investments in US dollars and see what happens to its value in the coming years. Don't say we didn't warn you. Just like we were warned before the housing and mortgage bubble burst.
socialist June 15th, 2009 2:47 pm:
"Just like we were warned before the housing and mortgage bubble burst."
So true. There were numerous warnings about the coming housing and financial collapse by diverse authors (both in the U.S. and abroad), but very few people listened and took them seriously, except for, say, Kunstler's readers.
Even though this nation has been hit very severely over the last two years, the sense that it is an exception and cannot fall any further but is instead going to make a comeback soon (by the end of the year, as we keep being reassured by NPR and other such propaganda outfits), has not left most people, it would seem.
Remarkable how thorough and potent the indoctrination about U.S. exceptionalism has been -- I suppose it isn't called brainwashing for nothing.
"There will be block after block of empty stores and boarded-up houses. Foreclosures will be epidemic. There will be long lines at soup kitchens and many, many homeless."
And thus it was; thousands upon thousands lie starving to death, naked in the streets and Global Warming was averted!
At some point I believe there are going to be lots of homeless "squatters" in those millions of foreclosed houses. I, for one, am not going to stay out on the street in the middle of a blizzard when there is nearby a perfectly good, empty, foreclosed building. And neither are a lot of other people. I'm not homeless yet, but the coming hyperinflation is going to end it all for me.
Please don't put the noose around your neck yet, EKATON. Before it's time "to end it all," you might discover there are a quite a number of fine years left to enjoy. Good luck.
We didn't expect the revolution to be easy did we?
The classic by Paul Kennedy: "The Rise and Fall of the Great Powers" should be read or re-read by all in power today. The USA, like all great powers is collapsing from internal corruption, imperial military overstretch and over-consumption. The historcical patterns that Kennedy outlines in the book are a textbook, boilerplate example to the US right now.
This has been coming for a long time now, just a matter of when and not if. Chris Hedges is one of the most informed and intelligent journalists in the English-speaking world. He cites top sources like Dr.Michael Hudson and the Lanchester article from the London Review of Books in addition to a lot of primary evidence that has become common knowledge to those following developments.
It is time to shift any dollar savings (if you have any) or dollar-denominated investments into gold, commodities, value generating capital (like windmills or solar panels) or more stable and value-backed currencies like the euro. Otherwise, as the article says, the fundamentals of forex markets are going to hit us hard and it is going to hurt badly. The only solution we have is to cushion the blow, we cannot avoid the inevitable.
Excellent reminder and advice!
Dedollarization has been in the economic discussion for a while, particularly in certain European publications. It was initially predicted for March of this year.
Sadly, I do not think that Chris fully comprehends what it is exactly that has a strangle hold more powerful and more deadly than anything the Chinese and their economic coalition of the willing can muster. If these willing world partners sense what exactly is wrong in America, I think they will walk very carefully in deciding if they should "betray" America. Yes if the rug is pulled out from under our feet, betrayal is what will be perceived by the beast. The nature of the beast is not logical thought, it is winning the war at all costs. If no one is comprehending this yet......we are in trouble. The thinking patterns which currently drive our political/corporate heads is a form of insanity that has driven humans to Empire and collapse over and over. Once it's grip on social power centers is fully realized, there is no turning back. I sense world war three, not a mere collapse of our economy....and it's ugly potential of nuclear winter. But all of this can be prevented by understanding and self awareness of what the problem is, and the problem is not dollar bills.....no it is a long shot from that simple material matter, ..if only it were so simple. The disease is of the soul, and the solution is of the soul. We all have the disease, and we all have the solution to it. Time to wake up and love again and live in balance again. Impossible, simple.
So while we contemplate such mundane matters as money and it's power in the world, lets remember it's power grew in direct relation to the weakening of the spiritual powers in our country, our pledges to democracy long ago forsaken by leaders who lost their way and a people that forgot about we in the pursuit of me. I am not speaking of something we do not all know in our bones, in our hearts, and that loss of our spiritual strength preceded the loss we are now witnessing of our economic strength. The longer we cannot reunite with our soul, the more we will fight some enemy of our distorted mind.
Great post, Leea!
When I read Hedges words -- "Our corporate-controlled media, already banal and trivial, will work overtime to anesthetize us with useless gossip, spectacles, sex, gratuitous violence, fear and tawdry junk politics." --- I thought to myself that if what he writes about happens, the media will most likely be focusing on falsely promoting the state agenda of WHO to blame for the downfall and HOW and WHY we should retaliate against the "others" for attacking our way of life.
The only thing I differ with about your viewpoint is that I don't think it is "the disease of the soul" but rather the disease of the egoic mind. The soul (spirit, essence, or whatever we choose to call it) IS PERFECT. The egoic mind is not, and IT is the dysfunction, and IT is what pretends to be in control of everything of this world.
"Responding to a radical crisis that threatens our very survival - this is humanity's challenge now. The dysfunction of the egoic human mind, recognized already more than 2,500 years ago by the ancient wisdom teachers and now magnified through science and technology, is for the first time threatening the survival of the planet. Until very recently, the transformation of human consciousness - also pointed to by the ancient teachers - was no more than a possibility, realized by a few rare individuals here and there, irrespective of cultural or religious background. A widespread flowering of human consciousness did not happen because it was not yet imperative.
A significant portion of the earth's population will soon recognize, if they haven't already done so, that humanity is now faced with a stark choice: Evolve or Die. A still relatively small but rapidly growing percentage of humanity is already experiencing within themselves the breakup of the old egoic mind patterns and the emergence of a new dimension of consciousness" --- Eckhart Tolle
Thank you mark for this excellent reply. Yes indeed we must be very careful in our approach to understanding what the problem is.
“The nature of the beast is not logical thought, it is winning the war at all costs…The disease is of the soul, and the solution is of the soul.”
Too right and encouraging to read.
I wish I could be so optimistic. I am struggling to maintain optimism in light (or should I say darkness) of the wide-ranging common apathy and ignorance, which are the true inherent denominators and facilitators of the beast.
The BEAST: “Collateral Damage” by E. P Heidner, part I and II.
>>> www.scribd.com/people/documents/2169400-ep-heidner <<<
Thank you Leea. The second paragraph reminds me of what Sioux Rose wrote about the dangers of allowing money to dictate everything and our giving up our abilities to think spiritually which I sometimes wonder if that's what has been happening to me. War and money can make the strangest of bedfellows. We will probably need to localize our own currency and stop relying on national currency until the American Empire is disciplined.
Your welcome Jennifer, good to see you around again :). Yes Sioux Rose has spoken at length more than once on a very similar line of reasoning.
I do think local currencies could be very relevant. We talk about buying locally, how about local money to go with that?? I very often feel like my government is worlds away and way beyond my reach at this point and time. Worse than a tyranny and not what our founders intended at all what is more symbolic of that than the bills they print at will and with no will of the people. Time to reinvent and get back to real representation based on sound morality and humanity.
I've heard of a few local communities considering the idea of going local even on currency. While I am aware of the geographical limitations, perhaps this would force society to open their hearts and minds to fair trading and would even give them the wisdom and courage to punish their representatives for allowing those brutal "free" trade pacts to pass. Yes, Washington is divorced worlds away. Even my friend told me that her brother who lives in MD 30 miles east of DC feels that government acts like they're worlds away.
P.S.: Yes, I'm glad to be back after recovering. I look forward to reading and communicating with all of you again. I've only started reading Saturday's articles on up but will see what's been going on for about a month here. I'm still awaiting Thomas More and Red Rick. CD would never be the same without them. I've seen some new people here too and some of them look interesting.
Recovering??? Big cyber hug to you!!! Red Rick has not posted lately that I have seen, but I am not terribly regular posting and reading either. I hope he is still around, maybe taking a break from it all?
Again, I think that local is very important and vital for us all to get back to and really appreciate having that idea of local currency stirred up by our comments back and forth.
thanks Jennifer, :)
Leea
A very positive view and I hope too that this world crises will guide us to a higher spirituality and common sense.
Yes Jim I think that when one door closes, the one we needed most to open up will open for us again and we will see the way back to sound living.
leea, great post. Thanks for reminding me
You are welcome guernica and thanks for your insight.