In the year 2000, the U.S. government debt was $3.5 trillion, equal to 35% of the Gross Domestic Product (GDP). By 2022, the debt was $24 trillion, equal to 95% of GDP. The U.S. debt is soaring, hence America’s current debt crisis. Yet both Republicans and Democrats are missing the solution: stopping America’s wars of choice and slashing military outlays.
Suppose the government’s debt had remained at a modest 35% of GDP, as in 2000. Today’s debt would be $9 billion, as opposed to $24 trillion. Why did the U.S. government incur the excess $15 trillion in debt?
The single biggest answer is the U.S. government’s addiction to war and military spending. According to the Watson Institute at Brown University, the cost of U.S. wars from fiscal year 2001 to fiscal year 2022 amounted to a whopping $8 trillion, more than half of the extra $15 trillion in debt. The other $7 trillion arose roughly equally from budget deficits caused by the 2008 financial crisis and the Covid-19 pandemic.
Facing down the military-industrial lobby is the vital first step to putting America’s fiscal house in order.
To surmount the debt crisis, America needs to stop feeding the Military-Industrial Complex (MIC), the most powerful lobby in Washington. As President Dwight D. Eisenhower famously warned on January 17, 1961, “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.” Since 2000, the MIC led the U.S. into disastrous wars of choice in Afghanistan, Iraq, Syria, Libya, and now Ukraine.
The Military-Industrial Complex long ago adopted a winning political strategy by ensuring that the military budget reaches into every Congressional district. The Congressional Research Service recently reminded Congress that, “Defense spending touches every Member of Congress’s district through pay and benefits for military servicemembers and retirees, economic and environmental impact of installations, and procurement of weapons systems and parts from local industry, among other activities.” Only a brave member of Congress would vote against the military-industry lobby, yet bravery is certainly no hallmark of Congress.
America’s annual military spending is now around $900 billion, roughly 40% of the world’s total, and greater than the next 10 countries combined. U.S. military spending in 2022 was triple that of China. According to Congressional Budget Office, the military outlays for 2024-2033 will be a staggering $10.3 trillion on current baseline. A quarter or more of that could be avoided by ending America’s wars of choice, closing down many of America’s 800 or so military bases around the world, and negotiating new arms control agreements with China and Russia.
Yet instead of peace through diplomacy, and fiscal responsibility, the MIC regularly scares the American people with a comic-book style depictions of villains whom the U.S. must stop at all costs. The post-2000 list has included Afghanistan’s Taliban, Iraq’s Saddam Hussein, Syria’s Bashar al-Assad, Libya’s Moammar Qaddafi, Russia’s Vladimir Putin, and recently, China’s Xi Jinping. War, we are repeatedly told, is necessary for America’s survival.
A peace-oriented foreign policy would be opposed strenuously by the military-industrial lobby but not by the public. Significant public pluralities already want less, not more, U.S. involvement in other countries’ affairs, and less, not more, US troop deployments overseas. Regarding Ukraine, Americans overwhelmingly want a “minor role” (52%) rather than a “major role” (26%) in the conflict between Russia and Ukraine. This is why neither Biden nor any recent president has dared to ask Congress for any tax increase to pay for America’s wars. The public’s response would be a resounding “No!”
While America’s wars of choice have been awful for America, they have been far greater disasters for countries that America purports to be saving. As Henry Kissinger famously quipped, “To be an enemy of the United States can be dangerous, but to be a friend is fatal.” Afghanistan was America’s cause from 2001 to 2021, until the U.S. left it broken, bankrupt, and hungry. Ukraine is now in America’s embrace, with the same likely results: ongoing war, death, and destruction.
The military budget could be cut prudently and deeply if the U.S. replaced its wars of choice and arms races with real diplomacy and arms agreements. If presidents and members of congress had only heeded the warnings of top American diplomats such as William Burns, the U.S. Ambassador to Russia in 2008, and now CIA Director, the U.S. would have protected Ukraine’s security through diplomacy, agreeing with Russia that the U.S. would not expand NATO into Ukraine if Russia also kept its military out of Ukraine. Yet relentless NATO expansion is a favorite cause of the MIC; new NATO members are major customers of U.S. armaments.
The U.S. has also unilaterally abandoned key arms control agreements. In 2002, the U.S. unilaterally walked out of the Anti-Ballistic Missile Treaty. And rather than promote nuclear disarmament—as the U.S. and other nuclear powers are required to do under Article VI the Nuclear Non-Proliferation Treaty—the Military-Industrial Complex has sold Congress on plans to spend more than $600 billion by 2030 to “modernize” the U.S. nuclear arsenal.
Now the MIC is talking up the prospect of war with China over Taiwan. The drumbeats of war with China are stoking the military budget, yet war with China is easily avoidable if the U.S. adheres to the One-China policy that properly underpins U.S.-China relations. Such a war should be unthinkable. More than bankrupting the U.S., it could end the world.
Military spending is not the only budget challenge. Aging and rising healthcare costs add to the fiscal woes. According to the Congressional Budget Office, debt will reach 185 percent of GDP by 2052 if current policies remain unchanged. Healthcare costs should be capped while taxes on the rich should be raised. Yet facing down the military-industrial lobby is the vital first step to putting America’s fiscal house in order, needed to save the U.S., and possibly the world, from America’s perverse lobby-driven politics.
The Western mainstream media have never been so blatant in their propaganda for the U.S. empire.
The pretensions are threadbare. As the warmongering U.S. government/regime and its Western/NATO imperialist lackeys are becoming more exposed and desperate to maintain credibility, so too are their media tools. The likes of the New York Times, BBC, CNN – and many more – are a contemptible joke on the public. They are an insult to common intelligence.
Fake news has been around for centuries, but it’s now becoming glaringly obvious and self-destructive. In the same way that the U.S. warmongering empire is becoming glaringly obvious and self-destructive.
The disconnect with reality and degradation of supposed independent journalism is reflected in record levels of distrust among the Western public toward the mainstream, corporate-controlled news media.
In this interview, U.S.-based writers Bruce Gagnon and Daniel Lazare demolish the pretensions of Western media.
The systematic cover-up of the Nord Stream sabotage by the United States and its NATO allies – an act of war and state terrorism – demonstrates the servile function of Western media outlets that claim to be pillars of independent news and freedom of information.
Media outlets like the New York Times, Washington Post, and the British state-owned BBC, among many others, have been exposed as pathetic propaganda tools for the United States and other NATO imperialist regimes.
All Western media outlets have ignored credible investigative reporting by Seymour Hersh (and others) who have very plausibly implicated the sabotage of Nord Stream by the U.S., carried out under the instructions of American President Joe Biden.
Another touchstone subject is the vile persecution of Julian Assange. Western media have again covered up what are a shocking violation of Assange’s rights and principled publishing through the whistleblower organization Wikileaks. Julian Assange’s only “crime” is that he revealed the war crimes committed by the U.S. and its imperialist lackeys.
Assange’s appalling mistreatment, indeed torture – four years in British solitary confinement awaiting extradition to the U.S. over spurious “spying charges” – is a vicious attack on journalism and the public’s right to know. Yet supposed self-declared Western media defenders of “truth” and “fact-based” objective information – have conspired to be silent and permit Assange’s persecution. Western media are shown to be complicit in destroying the very principles of journalism that they claim to uphold.
As Bruce Gagnon and Daniel Lazare point out, it is a crime to tell the truth and Western media stand exposed in their odious dereliction of duty to report independently. They are seen more than ever as out-and-out tools of empire.
A proper understanding of the Nord Stream sabotage and the case of Julian Assange would give the Western public a critical insight into the imperialist nature of their governments – regimes that serve warmongering capitalist interests. Critical mass must be thwarted at all costs by the Empire’s media foot-servants.
From the point of view of U.S.-led Western imperialist power, it is imperative and absolutely vital to cover up the scandals of the Nord Stream attack and Julian Assange, among others. If the public were to become more widely cognizant then the whole edifice of Western governments implodes. This is why the Western media are more blatant than ever to cover up. But the truth will win out.
The war in Ukraine is becoming more evident as a war-racket and imperialist proxy war against Russia. That war is in desperate danger of spiraling into an all-out world war that could unleash a nuclear catastrophe.
The same Western media cover-up is at work with regard to the U.S.-led NATO aggression toward China. Again, the Western media are spinning imperialist propaganda of alleged Chinese menace in order to justify what is an insane warmongering agenda to confront China and prop up American hegemonic ambitions.
A tantalizing positive prospect is that critical, independent media are gradually and relentlessly breaking the monopoly of Western propaganda media. The internet and global communications are seeing to that – albeit against sinister censorship by Western regimes.
Nevertheless, the establishment Western media are increasingly held in distrust and contempt by the Western public and globally.
We are living in an exemplary time of the fabled Emperor With No Clothes. The false image of dominant Western regimes and their lying corporate media has never been so degraded but also never so fragile. The Western lie machine’s days are numbered. It only has itself to blame because of its abject disservice to the public interest.
Western state-complicit media claim to be “free”. Laughably, they are “free” to be slaves of lies and propaganda.
The war industry, a state within a state, disembowels the nation, stumbles from one military fiasco to the next, strips us of civil liberties and pushes us towards suicidal wars with Russia and China.
America is a stratocracy, a form of government dominated by the military. It is axiomatic among the two ruling parties that there must be a constant preparation for war. The war machine’s massive budgets are sacrosanct. Its billions of dollars in waste and fraud are ignored. Its military fiascos in Southeast Asia, Central Asia and the Middle East have disappeared into the vast cavern of historical amnesia. This amnesia, which means there is never accountability, licenses the war machine to economically disembowel the country and drive the Empire into one self-defeating conflict after another. The militarists win every election. They cannot lose. It is impossible to vote against them. The war state is a Götterdämmerung, as Dwight Macdonald writes, “without the gods.”
Since the end of the Second World War, the federal government has spent more than half its tax dollars on past, current and future military operations. It is the largest single sustaining activity of the government. Military systems are sold before they are produced with guarantees that huge cost overruns will be covered. Foreign aid is contingent on buying U.S. weapons. Egypt, which receives some $1.3 billion in foreign military financing, is required to devote it to buying and maintaining U.S. weapons systems. Israel has received $158 billion in bilateral assistance from the U.S. since 1949, almost all of it since 1971 in the form of military aid, with most of it going towards arms purchases from U.S. weapons manufacturers. The American public funds the research, development and building of weapons systems and then buys these same weapons systems on behalf of foreign governments. It is a circular system of corporate welfare.
Between October 2021 and September 2022, the U.S. spent $877 billion on the military, that’s more than the next 10 countries, including China, Russia, Germany, France and the United Kingdom combined. These huge military expenditures, along with the rising costs of a for-profit healthcare system, have driven the U.S. national debt to over $31 trillion, nearly $5 trillion more than the U.S.’s entire Gross Domestic Product (GDP). This imbalance is not sustainable, especially once the dollar is no longer the world’s reserve currency. As of January 2023, the U.S. spent a record $213 billion servicing the interest on its national debt.
The public, bombarded with war propaganda, cheers on their self-immolation. It revels in the despicable beauty of our military prowess. It speaks in the thought-terminating clichés spewed out by mass culture and mass media. It imbibes the illusion of omnipotence and wallows in self-adulation.
The intoxication of war is a plague. It imparts an emotional high that is impervious to logic, reason or fact. No nation is immune. The gravest mistake made by European socialists on the eve of the First World War was the belief that the working classes of France, Germany, Italy, the Austro-Hungarian Empire, Russia and Great Britain would not be divided into antagonistic tribes because of disputes between imperialist governments. They would not, the socialists assured themselves, sign on for the suicidal slaughter of millions of working men in the trenches. Instead, nearly every socialist leader walked away from their anti-war platform to back their nation’s entry into the war. The handful who did not, such as Rosa Luxemburg, were sent to prison.
A society dominated by militarists distorts its social, cultural, economic and political institutions to serve the interests of the war industry. The essence of the military is masked with subterfuges — using the military to carry out humanitarian relief missions, evacuating civilians in danger, as we see in the Sudan, defining military aggression as “humanitarian intervention” or a way to protect democracy and liberty, or lauding the military as carrying out a vital civic function by teaching leadership, responsibility, ethics and skills to young recruits. The true face of the military — industrial slaughter — is hidden.
The mantra of the militarized state is national security. If every discussion begins with a question of national security, every answer includes force or the threat of force. The preoccupation with internal and external threats divides the world into friend and foe, good and evil. Militarized societies are fertile ground for demagogues. Militarists, like demagogues, see other nations and cultures in their own image – threatening and aggressive. They seek only domination.
It was not in our national interest to wage war for two decades across the Middle East. It is not in our national interest to go to war with Russia or China. But militarists need war the way a vampire needs blood.
After the collapse of the Soviet Union, Mikhail Gorbachev and later Vladimir Putin lobbiedto be integrated into western economic and military alliances. An alliance that included Russia would have nullified the calls to expand NATO — which the U.S. had promised it would not do beyond the borders of a unified Germany — and have made it impossible to convince countries in eastern and central Europe to spend billions on U.S. military hardware. Moscow’s requests were rebuffed. Russia was made the enemy, whether it wanted to be or not. None of this made us more secure. Washington’s decision to interfere in Ukraine’s domestic affairs by backing a coup in 2014 triggered a civil war and Russia’s subsequent invasion.
But for those who profit from war, antagonizing Russia, like antagonizing China, is a good business model. Northrop Grumman and Lockheed Martin saw their stock prices increase by 40 percent and 37 percent respectively as a result of the Ukraine conflict.
A war with China, now an industrial giant, would disrupt the global supply chain with devastating effects on the U.S. and global economy. Apple produces 90 percent of its products in China. U.S. trade with China was $690.6 billion last year. In 2004, U.S. manufacturing output was more than twice China’s. China’s output is now nearly double that of the United States. China produces the largest number of ships, steel and smartphones in the world. It dominates the global production of chemicals, metals, heavy industrial equipment and electronics. It is the world’s largest rare earth mineral exporter, its greatest reserve holder and is responsible for 80 percent of its refining worldwide. Rare earth minerals are essential to the manufacture of computer chips, smartphones, television screens, medical equipment, fluorescent light bulbs, cars, wind turbines, smart bombs, fighter jets and satellite communications.
War with China would result in massive shortages of a variety of goods and resources, some vital to the war industry, paralyzing U.S. businesses. Inflation and unemployment would rocket upwards. Rationing would be implemented. The global stock exchanges, at least in the short term, would be shut down. It would trigger a global depression. If the U.S. Navy was able to block oil shipments to China and disrupt its sea lanes, the conflict could potentially become nuclear.
In “NATO 2030: Unified for a New Era,” the military alliance sees the future as a battle for hegemony with rival states, especially China. It calls for the preparation of prolonged global conflict. In October 2022, Air Force General Mike Minihan, head of Air Mobility Command, presented his “Mobility Manifesto” to a packed military conference. During this unhinged fearmongering diatribe, Minihan argued that if the U.S. does not dramatically escalate its preparations for a war with China, America’s children will find themselves “subservient to a rules based order that benefits only one country [China].”
According to the New York Times, the Marine Corps is training units for beach assaults, where the Pentagon believes the first battles with China may occur, across “the first island chain” that includes, “Okinawa and Taiwan down to Malaysia as well as the South China Sea and disputed islands in the Spratlys and the Paracels.”.
Militarists drain funds from social and infrastructure programs. They pour money into research and development of weapons systems and neglect renewable energy technologies. Bridges, roads, electrical grids and levees collapse. Schools decay. Domestic manufacturing declines. The public is impoverished. The harsh forms of control the militarists test and perfect abroad migrate back to the homeland. Militarized Police. Militarized drones. Surveillance. Vast prison complexes. Suspension of basic civil liberties. Censorship.
Those such as Julian Assange, who challenge the stratocracy, who expose its crimes and suicidal folly, are ruthlessly persecuted. But the war state harbors within it the seeds of its own destruction. It will cannibalize the nation until it collapses. Before then, it will lash out, like a blinded cyclops, seeking to restore its diminishing power through indiscriminate violence. The tragedy is not that the U.S. war state will self-destruct. The tragedy is that we will take down so many innocents with us.
Brazil’s Luiz Inacio Lula da Silva has called on BRICS nations to create an alternative to replace the dollar in foreign trade. Other experts suggest President Joe Biden’s policies will destroy America’s middle class for good. The news comes when China and Russia strengthen ties with Brazil and Latin America. Brazil’s leader questioned the institution of the U.S. dollar as the world’s trade currency in the first place and asked why each country could not trade in its currency.
This brings to the forefront the historical moment when the gold standard was abolished in favor of the current system. When President Richard Nixon moved to abolish the gold standard as a commitment mechanism, his administration ushered in decades of relative volatility and made hard currency.
The exchange of gold was severely curtailed through the Bretton Woods international monetary agreement of 1944. When the International Monetary Fund was established, the U.S. Dollar became the most potent currency in the world. Initially, the role of the IMF was only to assist with international transactions, but as we see today, that institution has far overstepped its original purpose. Today, the IMF is a leverage arm for the United States and a few European nations to fund countries/regimes that align with its policy. The U.S., for instance, has an almost 20% share of contributions to the fund.
The primary purpose of remaining off the gold standard is that the government can print money endlessly, with two primary goals. First, a massive defense budget and needless proxy wars would not be possible if the United States were on the gold standard. Secondly, the people who control the central banks cannot extract interest on national debts that are currently out of control. So, the fiat currency supposedly backed by the “full faith and credit” of the government, the dollar, is worth what lying politicians and finance ministers say it is.
One look at the worldwide bond market reveals a disturbing imbalance. The U.S., which now has over $51 trillion in outstanding debt, has borrowed more to finance wars and programs than China, Japan, Germany, Italy, France, the U.K., and Canada combined. The American taxpayer is responsible for almost 40% of all the foreign debt in the world. And the outlook for the short and long-term future could be better.
President Joe Biden wants to borrow even more when his administration conducts a proxy war against Russia in Ukraine. With billions flowing into Europe’s most corrupt country, Americans are on the precipice of an economic catastrophe not seen since the Great Depression.
According to the Bipartisan Policy Center in Washington and the Congressional Budget Office, the government will no longer be able to pay everyone — including bondholders, Social Security recipients, and federal employees — sometime this summer or early this fall. A New York Times report from late March outlines the situation. But the problem is far worse than many experts suggest. No matter which way lawmakers move, the U.S. has almost insurmountable fiscal issues. The ramifications will be dire whether or not they raise the debt limit. And if the BRICS countries go off the dollar as a trade currency… Well.
Many experts predict that American greenbacks won’t be worth the printed paper if the world stops using the U.S. dollar as its world currency reserve. Moreover, if the dollar loses its value significantly, every American who owes a credit card loan or a home mortgage will find it ten times harder to pay off those debts.
To make matters worse, millions of jobs will be sacrificed for the Federal Reserve to get any financial stability. Analysis from RSM International shows that the central banks must “induce” a recession to get America’s economic situation in check. And the dollar being made useless by the larger world community was not a factor in their analysis.
The bottom line is if we were still on the gold standard, this would be fine. The gold standard reduced the risks of such economic crises and recessions. Income levels were higher when we were on the bullion-backed system. More importantly, the gold standard created hard limits on printing money and limiting military spending. For more intuition on this, this Barron’s report reveals how our current failing system came into being. The information also serves as a crystal ball for what will happen.
As confidence in the dollar wanes and U.S. policy overseas gets more aggressive toward BRICS nations and others, the tipping point of the American hegemony draws closer.
That same old American institution called the United States Agency for International Development (USAID) who supports regime change and wars across the world has a board member who wrote an opinion piece for The Hill, a liberal online news organization on the relevance of the rules-based order and how much the world needs it. Harley Lippman, a board member for USAID wrote about how the rules-based order (New World Order) will continue despite the challenges of a multipolar world and the peace dividends it has brought to the table thus far. Lippman’s claims about where the rules-based order stands in this new world of geopolitics is propaganda at its best, so you might already know where this article is going since the liberal media is absolutely pro-establishment and pro-war.
Lippman wrote an opinion piece called ‘The rules-based order will endure, despite ‘shifting sands’ based on Russia and China’s achievements that includes establishing a diplomatic solution between Iran and Saudi Arabia and bringing back Syria into the fold with the rest of the Middle East which is a big deal, but to Lippman, it “rings hollow”, its insincere:
Russia and China recently have attempted to act as chief mediators on the international stage. Russia reportedly facilitated meetings between Saudi Arabia and Syria to restore ties and reopen their respective consular services, and China played peacemaker between Saudi Arabia and Iran. More recently, Saudi Arabia’s Cabinet approved a decision to join the Shanghai Cooperation Organization (SCO) as a dialogue partner. The SCO was created to counter U.S. economic hegemony and includes longtime adversaries and partners of our country. These recent developments have been described by some as evidence of the decline of the U.S.-led rules-based order.
Despite the clamoring of pundits to bemoan America’s decline, Moscow and Beijing’s attempts at diplomatic relevance ring hollow as the U.S. shores up the post-World War II international order by reinvigorating existing strategic alliances that underpin various security architectures
Lippman says that the US-led rules-based order is in decline but at the same time, it is working on replenishing its old alliances as a counterweight to Russia and China even though they were able to forge a peaceful solution among nations who were at odds against each other at one time or another. However, Russia and China are trying to establish real peaceful solutions among nations and that should be welcomed by the international community. Lippman says that “the U.S. values its alliance with Japan and South Korea in the Asia-Pacific to serve as a counterweight to an increasingly belligerent China.” A belligerent China? How many military bases does the US have around the world? In fact, how many of these bases surround China? China’s peace initiatives should be welcomed at all costs. Bringing peace is a good thing while the US and its Western allies (and Israel) has brought endless wars and chaos on almost every continent on the planet, in fact the US war machine has killed more than 20 million people since World War II. In other words, when Lippman says that the US “values” its alliance with Japan and South Korea, he is talking about the continuation of selling them military hardware and keeping the same US bases in place to counter China’s growing influence in the region so that the US war machine can keep antagonizing China in the South Pacific sea at all costs even if it means starting a war.
Lippman also takes aim at Russia, “Correspondingly, America’s role in NATO is pivotal to the West’s efforts to face off an aggressive Russia that threatens the security of Europe and the Balkans.” Seriously? Wasn’t Ukraine’s continuous bombardment of the Eastern Donbass region for more than 8 years killing at least 8,000 Ukrainian people who spoke Russian an aggressive action that was and still is supported by the US-NATO alliance?
The US has used its alliances to counter Russia and China as part of the old rules-based order strategy of divide and conquer in Asia and Eastern Europe. In other words, he wants Washington to keep the same policies of funding and arming one-side against another to advance the US war machine and continue the rules-based order to establish their Great Reset agenda.
Concerning the Middle East, Russia and China also have a wide range of interests with Iran, therefore that arrangement angers the US political establishment and their bosses who are based in Israel, and that’s the other problem for Lippman:
In contrast to America’s values-based approach to allies and partners, engagement with Russia and China offers only a transactional and interest-based relationship that rests on economic ties both countries share equally with such aggressors as Iran and Iran’s proxies
Russia and China’s strategic partnership with Iran, Syria and now Saudi Arabia bypasses US interests in the region so for most of the people in the Middle East, it’s a new development that is welcomed in a region that has only experienced regime change and endless wars that the US and its closest ally, Israel sponsored and at times participated in since the end of World War II:
Riyadh’s decision to restore diplomatic relations with Tehran via China is an attempt to reduce regional tensions with an aggressive neighbor committed to militant Islam and regional hegemony. In the near term, Tehran will likely seek to avoid actions that threaten this new relationship. However, absent an Iranian decision to radically redefine its foreign policy and abolish the Revolutionary Guards, this rapprochement is likely to collapse in the wake of fresh Iranian violence
First, let me start by saying that Iran is not looking to expand into a hegemonic footprint in the Middle East, it is Israel who is looking to expand its territorial ambitions by hoping to destroy all its Arab neighbors’ piece by piece and carry-out Oded Yinon’s plan or what is known as the “Greater Israel” project. Rabbi Fischmann, a member of the Jewish Agency for Palestine testified to the U.N. Special Committee of Enquiry on July 9th, 1947, said that “the Promised Land extends from the River of Egypt up to the Euphrates, it includes parts of Syria and Lebanon.” But Iran is the aggressor? The rules-based order will continue if the U.S. Central Command (CENTCOM) focuses on its security commitments according to Lippman:
America’s security commitment to the region must be paramount. U.S. Central Command (CENTCOM) remains the foundation of the region’s security architecture that protects trade and energy arteries critical to global economic stability. The Biden administration should ensure that CENTCOM remains well-resourced and focused on building regional partnerships. Furthermore, economic ties must be strengthened. American firms view the region with enthusiasm. The Biden administration must be more vocal in its support for trade and expedite approvals for technology sharing on 5G and 6G communications, green energy, and space. Furthermore, increased cabinet-level visits to the region would demonstrate the U.S.’s commitment to the region. While this will not offset the inevitable commercial relationships between the Gulf States and China, it will assert America’s ability to compete in this strategic region
Using the Sunni-Shiite argument is propaganda to further instigate that there is a sectarian divide in the Arab world for thousands of years’, and the threat of a nuclear-armed Iran and because of that, the US security structure under CENTCOM will remain in place since the US and Saudi Arabia has a long-standing relationship. China’s peace deal between Iran and Saudi Arabia is what he calls “cosmetic”, and that China has no place for its peace initiative in the Middle East:
Despite the region’s “shifting sands” of ever-changing relationships, the Sunni-Shiite tensions are over a thousand years old and Iran’s advancement toward nuclear status has every U.S. partner in the Middle East on alert. The traditional security architecture underpinned by U.S.-Saudi strategic ties will remain intact. As a result, future Chinese transactional neutrality is likely to be cosmetic, devoid of any significant strategic substance.
The U.S. and its allies can best sustain the rules-based order established after WWII through robust engagement with allies and partners in which we show that we understand and support their core economic and security interests in the same way that we expect they will do the same for American interests
Tell that to the families of the 20 million people that US and its NATO allies killed since the end of World War II. The old rules-based order has collapsed in the face of a new multipolar world, as for Harley Lippman’s vision for the US and its globalist cabal to continue its hegemonic agenda in this new world of ours, is just wishful thinking.
Since 2014, which marked the first Russian intervention in Ukraine, a new global geopolitical dynamic has amplified under conflicting impulses. The areas of direct, or more often proxy conflicts, have been in many senses contained with some sort of cynical pressure-cooker mechanism. If empires always seek hegemony, sane geopolitics imply balance to avoid slipping into World War scenarios. We have presently reached a Cold War-like balance between two blocks: the West and their satellites on one side, against BRICS nations and their affiliates on the other side. In the best case scenario, this new cold war could give birth to a lasting bipolar world order: curiously enough, following pretty closely Orwell’s cartography of Oceania & Eurasia.
The West is defined by the US empire and its vassals
The two axes of powers must be explained more precisely. On one side “the West” includes US, UK, EU, Canada, Japan, South Korea and Australia. The command headquarters of this imperial structure are of course located in the United States of America. The empire’s military muscle is NATO. As for the junior members such as the UK, European Union and Japan, they are, despite some claims of the contrary the vassals of big Uncle Sam.
One factor could be viewed as a miscalculation by Vladimir Putin. In many ways his decision last year to start a military operation in Ukraine had a paradoxical effect. The intervention was an attempt by Russia to prevent Ukraine from joining NATO & the EU, but this has failed as Western military gears as well as direct assistance have poured in. Just like in Afghanistan in the 1980’s Russia was effectively sucked into a West proxy war. Meanwhile, NATO has found a new raison d’etre with Finland now officially a member and Sweden soon also to become one. The general paranoia used in Western media to depict Putin as the ultimate bogeyman has worked wonders on Europe’s public opinion.
BRICS & affiliates
On the other side it is more complex as China’s dominance is more subdued than that of the US. Besides the BRICS nations of Brazil, Russia, India, China & South-Africa, other nations are gravitating into the same geopolitical orbit: notably Iran, Venezuela and African countries such as Mali and Burkina Faso. While China is clearly the biggest power within BRICS, the other two major players, which are Russia and India, also are heavyweights on an overall geopolitical and economic scale.
Russia holds vast reserves of energy products, such as gas and oil, and since the European sanctions has quickly worked on redirecting its energy production both towards China and India. India, which has become the most populous country on Earth, has just like China a considerable manufacturing power as well as a huge internal market for products and services. In other words, neither China nor India have to rely mainly on exports to sustain their respective economic growth.
Non-alignment is dead
The concept ofnon-alignment in a multipolar world, dear to the likes of Tito and de Gaulle, has unfortunately become a geopolitical faux pas at best, or a risky behavior for a small state wanting to stay independent at worst. Because of a lack of political will and leadership, the European Union has basically capitulated from asserting itself as a third block to become a provincial entity of the US empire. The notion of true non-alignment might have run its course in this new bipolar order.
As matter of fact, one of the Ukraine war’s major side effects has been to speed up the process of obedient realignment of the EU to the US. European leaders with their respective media propaganda divisions (either state or corporate controlled) have managed to convince the bulk of their public opinion that the ogre Vladimir Putin and Russia had to be defeated in Ukraine as if the hordes from a memory of the Red Army were about to invade Europe. The Ukraine war has been sold in Europe as a war of necessity to counter an existential threat that was never really there. Public opinion largely bought it, and the financial rewards are pouring into the coffers of the military-industrial complex, as well as US and Qatari energy businesses of natural gas liquefaction, to replace the well-organized Russian gas supply Europe used to get before the sanctions against Russia.
Ukraine war cannot be won on the battle fields
Despite what most people are lead to believe in the West, a military victory by Ukrainian forces, even with full logistic support from NATO in equipment and training is quasi impossible. After all, a lesson should be learned from Afghanistan where the Taliban managed to defeat the mighty alliance. If the EU and the United States cared for the welfare of Ukrainians, they would come to the realization that only a diplomatic solution can resolve the crisis. A sine qua non condition of diplomacy is that it requires concessions on all sides.
For example, let’s take the case of Crimea. It has a complex history. During the 15th century Crimea was under control of the Ottoman Empire. In 1783, the Russian Empire of Tsarina Catherine the Great annexed Crimea after a conflict with Turkey. Lastly, under the authority of Nikita Khrushchev, the USSR gave Crimea to Ukraine in 1954. Therefore, Crimea was Russian for 171 years while it was Ukrainian for only 60 years. The weight of history, in this case, should tilt the balance in favor of Russia.
Military-industrial complex Uber Alles
Wars have always been capitalism‘s best friend. Ultimately they are seldom about the lofty notions of patriotism but systematically about profits. Ukraine’s Western proxy adventure is no exception. As matter of fact, it has been a gargantuan bonanza for the global military-industrial complex and its stockholder war profiteers. Case in point: since Russia started its military operation in Ukraine in February 2022, the United States has spent $30 billion in military equipment which was shipped to Ukraine. This is according to the US Department of Defense.
For its part the European Union is planning a 74 billion Euros increase in military spending within three years. This trend of huge increase in military spending affects all the EU 27 members, as they are allocating bigger shares of their respective GDPs to this weapons race. In December 2022, the European Defense Agency proudly announced that EU defense spending had surpassed 200 billion Euros for the first time in the union’s history. What an accomplishment!
Needless to say, military-industrial consortium and their unscrupulous stockholders have collected huge dividends from the death and destruction business. Stocks in the so-called aerospace & defense area of the market have been incredibly profitable for investors and are therefore in high demand. On average, most defense-company stocks have seen their values increase by 25 to 30 percent since February 2022.
Naturally, in terms of military spending, the United States represents the lions’ share with a whopping 38 percent of the global military spending. It is an astronomical $800 billion a year or 3.1 percent of the US GDP. Unfortunately other major powers are catching up. In second place comes China with $293 billion or 1.7 percent of its GDP; then India with $76.6 billion; the UK with 68.4 billion; Russia with $65.9 billion or 3.1 percent of GDP; France and Germany with $56 billion each; and Japan with $54 billion. In France, despite a very concerning debt, the Macron administration has announced that 413 billion Euros will be spent on the military between 2024 and 2030.
Taiwan: the Ukraine of the far-east?
With Russia sucked into what can be called a military quagmire in Ukraine, one has to wonder if the Oceania empire, with its Washington nevralgic center, would not indeed want to take advantage or even provoke a Chinese move to take over Taiwan, in accordance to the One-China precept. This could create a Ukrainian-like situation for China in Taiwan. Instead of having the obedient EU to absorb part of the cost in the West, in the Pacific it could be US vassals such as Japan, South-Korea and Australia that could get involved into a proxy war with China, and therefore increase their military spending in US equipment. Trillion of dollars would be wasted in resources to allow the chess masters of geopolitics to keep playing their mindless criminal games. Everywhere, the brutal Russian roulette folly of capitalism, either state or corporate, would thrive while all populations suffer.
Let’s start with the basics. Roughly 5% of the human race currently live in the United States of America. That very small fraction of humanity, until quite recently, enjoyed about a third of the world’s energy resources and manufactured products and about a quarter of its raw materials. This didn’t happen because nobody else wanted these things, or because the US manufactured and sold something so enticing that the rest of the world eagerly handed over its wealth in exchange. It happened because, as the dominant nation, the US imposed unbalanced patterns of exchange on the rest of the world, and these funnelled a disproportionate share of the planet’s wealth to itself.
There’s nothing new about this sort of arrangement. In its day, the British Empire controlled an even larger share of the planet’s wealth, and the Spanish Empire played a comparable role further back. Before then, there were other empires, though limits to transport technologies meant that their reach wasn’t as large. Nor, by the way, was any of this an invention of people with light-coloured skin. Mighty empires flourished in Asia and Africa when the peoples of Europe lived in thatched-roofed mud huts. Empires rise whenever a nation becomes powerful enough to dominate other nations and drain them of wealth. They’ve thrived as far back as records go and they’ll doubtless thrive for as long as human civilisations exist.
America’s empire came into being in the wake of the collapse of the British Empire, during the fratricidal European wars of the early 20th century. Throughout those bitter years, the role of global hegemon was up for grabs, and by 1930 or so it was pretty clear that Germany, the Soviet Union or the US would end up taking the prize. In the usual way, two contenders joined forces to squeeze out the third, and then the victors went at each other, carving out competing spheres of influence until one collapsed. When the Soviet Union imploded in 1991, the US emerged as the last empire standing.
Francis Fukuyama insisted in a 1989 essay that having won the top slot, the US was destined to stay there forever. He was, of course, wrong, but then he was a Hegelian and couldn’t help it. (If a follower of Hegel tells you the sky is blue, go look.) The ascendancy of one empire guarantees that other aspirants for the same status will begin sharpening their knives. They’ll get to use them, too, because empires invariably wreck themselves: over time, the economic and social consequences of empire destroy the conditions that make empire possible. That can happen quickly or slowly, depending on the mechanism that each empire uses to extract wealth from its subject nations.
The mechanism the US used for this latter purpose was ingenious but even more short-term than most. In simple terms, the US imposed a series of arrangements on most other nations that guaranteed the lion’s share of international trade would use US dollars as the medium of exchange, and saw to it that an ever-expanding share of world economic activity required international trade. (That’s what all that gabble about “globalisation” meant in practice.) This allowed the US government to manufacture dollars out of thin air by way of gargantuan budget deficits, so that US interests could use those dollars to buy up vast amounts of the world’s wealth. Since the excess dollars got scooped up by overseas central banks and business firms, which needed them for their own foreign trade, inflation stayed under control while the wealthy classes in the US profited mightily.
The problem with this scheme is the same difficulty faced by all Ponzi schemes, which is that, sooner or later, you run out of suckers to draw in. This happened not long after the turn of the millennium, and along with other factors — notably the peaking of global conventional petroleum production — it led to the financial crisis of 2008-2010. Since 2010 the US has been lurching from one crisis to another. This is not accidental. The wealth pump that kept the US at the top of the global pyramid has been sputtering as a growing number of nations have found ways to keep a larger share of their own wealth by expanding their domestic markets and raising the kind of trade barriers the US used before 1945 to build its own economy. The one question left is how soon the pump will start to fail altogether.
When Russia launched its invasion of Ukraine in February 2022, the US and its allies responded not with military force but with punitive economic sanctions, which were expected to cripple the Russian economy and force Russia to its knees. Apparently, nobody in Washington considered the possibility that other nations with an interest in undercutting the US empire might have something to say about that. Of course, that’s what happened. China, which has the largest economy on Earth in purchasing-power terms, extended a middle finger in the direction of Washington and upped its imports of Russian oil, gas, grain and other products. So did India, currently the third-largest economy on Earth in the same terms; as did more than 100 other countries.
Then there’s Iran, which most Americans are impressively stupid about. Iran is the 17th largest nation in the world, more than twice the size of Texas and even more richly stocked with oil and natural gas. It’s also a booming industrial power. It has a thriving automobile industry, for example, and builds and launches its own orbital satellites. It’s been dealing with severe US sanctions since not long after the Shah fell in 1978, so it’s a safe bet that the Iranian government and industrial sector know every imaginable trick for getting around those sanctions.
Right after the start of the Ukraine war, Russia and Iran suddenly started inking trade deals to Iran’s great benefit. Clearly, one part of the quid pro quo was that the Iranians passed on their hard-earned knowledge about how to dodge sanctions to an attentive audience of Russian officials. With a little help from China, India and most of the rest of humanity, the total failure of the sanctions followed in short order. Today, the sanctions are hurting the US and Europe, not Russia, but the US leadership has wedged itself into a position from which it can’t back down. This may go a long way towards explaining why the Russian campaign in Ukraine has been so leisurely. The Russians have no reason to hurry. They know that time is not on the side of the US.
For many decades now, the threat of being cut out of international trade by US sanctions was the big stick Washington used to threaten unruly nations that weren’t small enough for a US invasion or fragile enough for a CIA-backed regime-change operation. Over the last year, that big stick turned out to be made of balsa wood and snapped off in Joe Biden’s hand. As a result, all over the world, nations that thought they had no choice but to use dollars in their foreign trade are switching over to their own currencies, or to the currencies of rising powers. The US dollar’s day as the global medium of exchange is thus ending.
It’s been interesting to watch economic pundits reacting to this. As you might expect, quite a few of them simply deny that it’s happening — after all, economic statistics from previous years don’t show it yet, Some others have pointed out that no other currency is ready to take on the dollar’s role; this is true, but irrelevant. When the British pound lost a similar role in the early years of the Great Depression, no other currency was ready to take on its role either. It wasn’t until 1970 or so that the US dollar finished settling into place as the currency of global trade. In the interval, international trade lurched along awkwardly using whatever currencies or commodity swaps the trading partners could settle on: that is to say, the same situation that’s taking shape around us in the free-for-all of global trade that will define the post-dollar era.
One of the interesting consequences of the shift now under way is a reversion to the mean of global wealth distribution. Until the era of European global empire, the economic heart of the world was in east and south Asia. India and China were the richest countries on the planet, and a glittering necklace of other wealthy states from Iran to Japan filled in the picture. To this day, most of the human population is found in the same part of the world. The great age of European conquest temporarily diverted much of that wealth to Europe, impoverishing Asia in the process. That condition began to break down with the collapse of European colonial empires in the decade following the Second World War, but some of the same arrangements were propped up by the US thereafter. Now those are coming apart, and Asia is rising. By next year, four of the five largest economies on the planet in terms of purchasing power parity will be Asian. The fifth is the US, and it may not be in that list for much longer.
In short, America is bankrupt. Our governments from the federal level down, our big corporations and a very large number of our well-off citizens have run up gargantuan debts, which can only be serviced given direct or indirect access to the flows of unearned wealth the US extracted from the rest of the planet. Those debts cannot be paid off, and many of them can’t even be serviced for much longer. The only options are defaulting on them or inflating them out of existence, and in either case, arrangements based on familiar levels of expenditure will no longer be possible. Since the arrangements in question include most of what counts as an ordinary lifestyle in today’s US, the impact of their dissolution will be severe.
In effect, the 5% of us in this country are going to have to go back to living the way we did before 1945. If we still had the factories, the trained workforce, the abundant natural resources and the thrifty habits we had back then, that would have been a wrenching transition but not a debacle. The difficulty, of course, is that we don’t have those things anymore. The factories were shut down in the offshoring craze of the Seventies and Eighties, when the imperial economy slammed into overdrive, and the trained workforce was handed over to malign neglect.
We’ve still got some of the natural resources, but nothing like what we once had. The thrifty habits? Those went whistling down the wind a long time ago. In the late stages of an empire, exploiting flows of unearned wealth from abroad is far more profitable than trying to produce wealth at home, and most people direct their efforts accordingly. That’s how you end up with the typical late-imperial economy, with a governing class that flaunts fantastic levels of paper wealth, a parasite class of hangers-on that thrive by catering to the very rich or staffing the baroque bureaucratic systems that permeate public and private life, and the vast majority of the population impoverished, sullen, and unwilling to lift a finger to save their soi-disant betters from the consequences of their own actions.
The good news is that there’s a solution to all this. The bad news is that it’s going to take a couple of decades of serious turmoil to get there. The solution is that the US economy will retool itself to produce earned wealth in the form of real goods and non-financial services. That’ll happen inevitably as the flows of unearned wealth falter, foreign goods become unaffordable to most Americans, and it becomes profitable to produce things here in the US again. The difficulty, of course, is that most of a century of economic and political choices meant to support our former imperial project are going to have to be undone.
The most obvious example? The metastatic bloat of government, corporate and non-profit managerial jobs in American life. That’s a sensible move in an age of empire, as it funnels money into the consumer economy, which provides what jobs exist for the impoverished classes. Public and private offices alike teem with legions of office workers whose labour contributes nothing to national prosperity but whose pay cheques prop up the consumer sector. That bubble is already losing air. It’s indicative that Elon Musk, after his takeover of Twitter, fired some 80% of that company’s staff; other huge internet combines are pruning their workforce in the same way, though not yet to the same degree.
The recent hullaballoo about artificial intelligence is helping to amplify the same trend. Behind the chatbots are programs called large language models (LLMs), which are very good at imitating the more predictable uses of human language. A very large number of office jobs these days spend most of their time producing texts that fall into that category: contracts, legal briefs, press releases, media stories and so on. Those jobs are going away. Computer coding is even more amenable to LLM production, so you can kiss a great many software jobs goodbye as well. Any other form of economic activity that involves assembling predictable sequences of symbols is facing the same crunch. A recent paper by Goldman Sachs estimates that something like 300 million jobs across the industrial world will be wholly or partly replaced by LLMs in the years immediately ahead.
Another technology with similar results is CGI image creation. Levi’s announced not long ago that all its future catalogues and advertising will use CGI images instead of highly-paid models and photographers. Expect the same thing to spread generally. Oh, and Hollywood’s next. We’re not too far from the point at which a program can harvest all the footage of Marilyn Monroe from her films, and use that to generate new Marilyn Monroe movies for a tiny fraction of what it costs to hire living actors, camera crews and the rest. The result will be a drastic decrease in high-paying jobs across a broad swathe of the economy.
The outcome of all this? Well, one lot of pundits will insist at the top of their lungs that nothing will change in any way that matters, and another lot will start shrieking that the apocalypse is upon us. Those are the only two options our collective imagination can process these days. Of course, neither of those things will actually happen.
What will happen instead is that the middle and upper-middle classes in the US, and in many other countries, will face the same kind of slow demolition that swept over the working classes of those same countries in the late 20th century. Layoffs, corporate bankruptcies, declining salaries and benefits, and the latest high-tech version of NO HELP WANTED signs will follow one another at irregular intervals. All the businesses that make money catering to these same classes will lose their incomes as well, a piece at a time. Communities will hollow out the way the factory towns of America’s Rust Belt and the English Midlands did half a century ago, but this time it will be the turn of upscale suburbs and fashionable urban neighbourhoods to collapse as the income streams that supported them disappear.
This is not going to be a fast process. The US dollar is losing its place as the universal medium of foreign trade, but it will still be used by some countries for years to come. The unravelling of the arrangements that direct unearned wealth to the US will go a little faster, but that will still take time. The collapse of the cubicle class and the gutting of the suburbs will unfold over decades. That’s the way changes of this kind play out.
As for what people can do in response this late in the game, I refer to a post I made on The Archdruid Report in 2012 titled “Collapse Now and Avoid the Rush”. In that post I pointed out that the unravelling of the American economy, and the broader project of industrial civilisation, was picking up speed around us, and those who wanted to get ready for it needed to start preparing soon by cutting their expenses, getting out of debt, and picking up the skills needed to produce goods and services for people rather than the corporate machine. I’m glad to say that some people did these things, but a great many others rolled their eyes, or made earnest resolutions to do something as soon as things were more convenient, which they never were.
Over the years that followed I repeated that warning and then moved on to other themes, since there really wasn’t much point to harping on about the approaching mess when the time to act had slipped away. Those who made preparations in time will weather the approaching mess as well as anyone can. Those who didn’t? The rush is here. I’m sorry to say that whatever you try, it’s likely that there’ll be plenty of other frantic people trying to do the same thing. You might still get lucky, but it’s going to be a hard row to hoe.
Mind you, I expect some people to take a different tack. In the months before a prediction of mine comes true, I reliably field a flurry of comments insisting that I’m too rigid and dogmatic in my views about the future, that I need to be more open-minded about alternative possibilities, that wonderful futures are still in reach, and so on. I got that in 2008 just before the real estate bubble started to go bust, as I’d predicted, and I also got it in 2010 just before the price of oil peaked and started to slide, as I’d also predicted, taking the peak oil movement with it. I’ve started to field the same sort of criticism once again.
We are dancing on the brink of a long slippery slope into an unwelcome new reality. I’d encourage readers in America and its close allies to brace themselves for a couple of decades of wrenching economic, social, and political turmoil. Those elsewhere will have an easier time of it, but it’s still going to be a wild ride before the rubble stops bouncing, and new social, economic, and political arrangements get patched together out of the wreckage.
Watching a once great nation commit suicide is not pretty. President Joe Biden does not seem to understand that his role as elected leader of the United States is to take actions that directly or indirectly benefit the folks who voted for him as well as the other Americans who did not do so. That is how a constitutional democracy is supposed to work. Instead, Biden and the gang of introverts and neocon war criminals that the has surrounded himself with have done everything that can to inflict fatal damage on the economy through rash initiatives both overseas and at home. A spending spree to buy support from the bizarre constituencies that make up the Democrat Party base while also fighting an undeclared war in Europe have meant that nearly two trillion dollars has been added to the national debt under Biden’s rule, a debt that was already unsustainable at nearly $30 trillion, larger than the United States’ gross national product. Plans to cancel student loan debts will add hundreds of billions of dollars more to the red ink.
And those actions undertaken overseas, to include continuing to expand the war in Ukraine against Russia, will do immeasurable more damage. Consider how the Democratic Party has long had it in for Russian Federal President Vladimir Putin, dating back to when Putin took power in 2000 and started kicking out the western scallywags who were looting his country. Subsequently, false intelligence and other innuendoes were contrived by Hillary Clinton and her team in 2016 to implicate Donald Trump as a Russian stooge who was secretly working for Putin. When that didn’t work and Trump was elected, the Russians were accused by the media and Democrats of willy-nilly interfering in US elections more generally speaking, a much-exaggerated claim in contrast to the overwhelming silence surrounding the real electoral and policy interference, which has been coming from Israel and its fifth column inside the United States, who, not coincidentally, are the chief proponents of the war against Russia.
Placing a target on Vladimir Putin’s back appears to have an unfortunate consequence which Biden has yet to wake up to, namely the fact that the United States now has what might be described as a Ponzi scheme faux economy which is very vulnerable, particularly as much of the world has become disenchanted with the US style of global leadership. Note for example the recent state visit by French President Emmanuel Macron to Beijing, where he embraced a “global strategic partnership with China” to bring about a “multipolar” world, freed of “blocs” that is not sheltering behind “Cold War mentality.” Macron also criticized the “extraterritoriality of the US dollar.”
And threats made by the Bidens against both China and Russia have accomplished little beyond drawing the two major political and military powers closer together. Beijing and Moscow entered into a trade agreement in their own currencies in 2014 and have openly taken steps to challenge US dominance of international currency exchanges, creating instead a global multipolar trading environment. Europe aside, many nations are now eager to cut the tie that binds, which is the decades long American dominance of international financial mechanisms and also the general use of dollars to pay for oil and other energy supplies. The widespread use of petrodollars enables the buffoonish Janet Yellen at the US Treasury and the Federal Reserve banks to print unlimited unbacked fiat currency, knowing that there will always be a market for it.
Which brings us back to the Ukraine war, pursued “until we win” by Biden and his somnolent Secretary of State Antony Blinken. One of the first moves when Russia intervened in Ukraine was to block and eventually confiscate Russia’s 300 billion dollars-worth of foreign reserves in banks in the US and Europe. That sent a shock wave across currency markets all around the world. Biden and Yellen had weaponized the US’s own national currency, which hitherto had been an untouchable step in international relations for nations that were not actually at war. Countries like China and India with large economies then realized that the US Treasury Department and the dominance of the dollar as an exchange currency had now become a weapon of war and a serious threat to the economies of all other nations.
As a consequence, the US Dollar is right now being rejected by many nations as the world’s reserve currency. Some nations all over the world have agreed to use the Chinese Yuan and Indian Rupee for any-and-all international currency transactions. Saudi Arabia continues to use the petrodollar but does not demand it. Recently, Saudi Crown Prince Mohammed bin Salman and Chinese President Xi Jinping agreed to permit the Saudis to sell oil to China in Yuan. Saudi Arabia, the world’s largest oil exporter, is now allowing multiple currencies to be used to purchase its oil, a major attack on the primacy of the US dollar and it also has accepted Chinese mediation to mend fences with the US and Israel’s arch enemy Iran. And the Saudis have even more recently refused a Biden Administration request that it start pumping more oil to reduce energy costs, signaling that the shift is both political and economic in nature. Japan, a major economy, has also started purchasing oil and gas directly from Russia against the US imposed energy embargo while Brazil, another major economy, has agreed to use the Yuan in its increasing trade with China. As fewer nations utilize the US dollar, America’s ability to export and ignore its burgeoning domestic debt and inflation to other countries is being diminished.
This might have a decisive impact on the US currency as the drive to break with the petrodollar continues to grow and could produce something like a “perfect storm” impacting on the US economy. It threatens to drastically lower the standards of living of nearly all Americans within the next several years as the dollar loses value and purchasing power. As the US economy is heavily interconnected with many European economies, Europe is also likely to be a victim of the coming disaster.
The good news, of course, is that the United States will no longer be able to afford its endless wars and international interventions. Lacking its economic power, it will no longer be able to declare itself “exceptional” and the enforcer of a “rules based international order.” It would mean an ending of the funding of developments like the Ukraine proxy war and the troops will have to come home from places like Syria and Somalia. And it might even mark the ending of sending billions of dollars annually to a wealthy Israel.
Ending dollar supremacy would inevitably have an immediate impact on what passes for US foreign policy, making it more difficult for Washington to initiate and sustain Treasury Department sanctions on countries like Iran and North Korea. It could also create economic turmoil for many countries until the situation resolves itself by producing greater volatility in currency markets worldwide. The Federal Reserve Bank will no doubt respond to the unfolding crisis by acting as it always does by raising interest rates to astronomical levels, thereby hurting most the Americans who can least afford the shock therapy.
And it did not have to turn out this way. It could have been avoided. If the US, which had no horse in the race, had left Ukraine alone Vladimir Putin would not have become a symbol of defiance against the “Rules Based International Order” and he would not have worked with China to establish multipolarity in the way the financial world operates. Instead, we have a situation where Europe is being de-industrialized due to soaring energy prices and Washington’s destruction of the Nord Stream pipelines while the US is potentially confronting economic disaster as the dollar’s relevance to international trade sinks. The ultimate irony is that Russia, and also the US/Israeli arch enemy Iran, are by comparison doing quite well economically as they sell their oil and gas to anyone in any currency. One has to conclude that when US Treasury Secretary Janet Yellen recently made her secret trip to Kiev to promise the despicable Volodymyr Zelensky billions of taxpayer dollars the United States might just have been better served if she had stayed in Washington and made some minimal effort to address the mounting economic problems confronting us here at home.
After the Crash 