China’s call today for a new global reserve currency to replace the dollar spells the beginning of the end of the American Empire. China holds most of the dollar credit in the world, and that of course gave China a powerful incentive to maintain dollar hegemony. That China now views the risks to world trade from the US’ indebtedness, to outweigh the potential loss in value of its own dollar reserves, is the tipping point that spells the inevitable beginning of the end of the US empire.
The reserve currency system has since 1795 allowed empires to be built on the economic output of weaker powers. If you achieve sufficient economic power and control of resources that yours is the currency everyone holds, you can print as much of it for yourself as you like and the devaluation effects are spread around not just your economy, but everyone else who holds your deposits. Being the reserve currency is a license to print money. Both the British and the Americans used this position to build military forces which could dominate both formal and informal empires. Both eventually experienced overreach, with military expenditure pushing deficit finance to the point of implosion. Then you lose reserve currency status.
It happened to the British and now it is happening to the Americans.
The colossal 4.7% a year of its wealth the US throws away on defence and security expenditure (broadly defined) – more than double the European average – is a huge factor in US indebtedness. There is an extraordinary failure to mention this in the mainstream media. It seems to be an Emperor’s New Clothes thing. It is the one area of expenditure the xenophobic hatemongers of the Tea Party want to see increased, and the existence of Empire causes all career politicians to compete in public displays of patriotism. That has been a political fact since the dawn of time. Defence spending is a sacred cow, unmentionable in the United States. They probably have a couple of decades to come fully to terms with the fact that they will no longer be in a position to invade who they will in order to control their mineral and other commodity resources. As with the British empire, the beetle on its back will kick its legs a while yet. It will be painful for them.
I shall enjoy it. I never claimed to be a good person!
Here’s the Ferguson-Kissinger debate on China. I think you have to skip the first 12 minutes of crap. Or, according to your preferences the whole thing:
http://www.c-spanvideo.org/program/Munk
“Then off you go to the correct one – – – >”
Comments are closed over there unfortunately.
The fight that flourished briefly on this thread should be a warning to us all. It is in our human nature to take sides, apportion blame and fight. We’re all stuck on this ball of rock together. We have damaged the climate and we’re running out of the resources we need in order to provide food, water, etc. Things are going to get uncomfortable. Do we also wish to be living in a war zone of our own making? We’ll have a better, happier time of it if we cooperate and share.
MJ: Comments are closed over there unfortunately.
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You could start a thread on JREF 😉 http://forums.randi.org/forumdisplay.php?f=64
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Or another forum of your choice.
There’s been a really ugly trend among European leftists to gloat over the perceived ascendancy of China and the perceived fall of America.
I don’t mind this as simply a matter of describing the phenomenon – I might disagree with you, and wonder if you really know anything about global economics – but fair enough.
What I find disgusting is the gloating and the bragging. It’s as if you are participating in the downfall of America, and you seem to think China is one your team.
Do you have any idea what it has taken China to put itself in this position?
How much do you care about forced abortions? Jailing dissidents? Stripping minority cultural identity?
It wouldn’t seem that you care at all. You simply hate America (and apparently Jews), so you’re willing to continue to give China a pass.
Just disgusting.
Do you have any idea what it has taken China to put itself in this position?
Yugo, you have forgotten or purposefully omitted another fact,
American greed?? spending more than you have?? never having enough and have to have it even if you have to borrow it? spending nearly 5% of GDP on Arms??the list can go on and on and on…
I do not think anyone has any illusion about China, but the mess USA is in today is of USA making alone.
“American greed?? spending more than you have?? never having enough and have to have it even if you have to borrow it?”
Wow! The same could be said, even more validly, about Italy, Greece, France, Ireland, Italy, Germany …
“The fight that flourished briefly on this thread should be a warning to us all. It is in our human nature to take sides, apportion blame and fight.”
This is exactly why you’re perhaps the worst person here, Clark. You speak in such platitudes, and on the next thread, you’ll engage in the same behavior that you deplore.
Angrysoba, regarding Israel, one of the things that I have to constantly guard against in myself is my tendency to react negatively to Israel’s supporters on this blog. Look at YugoStiglitz’s comment to the effect that I “hate Jews”. It could be designed to provoke anger, and it comes from a known sock-puppeteer and abuser of Arabs.
Anybody who has studied history knows that alliances do not last for ever; one day an ally, the next an enemy. The transatlantic alliance has gone on too long to be sustainable either monetarily or in terms of human cost. When I was a boy 2/6 (or ‘half a crown’ as we called it) was known colloquially as ‘half a dollar’. That suggested there were four dollars to £1.
In stating this it does not mean I would like to see the US and UK become enemies, but our fawning allegiance, especially under Blair has taken us into wars in Serbia-Bosnia, Afghanistan, Iraq, and now under Cameron, Libya. Our participation in most of these is illegal under international law, and in helping to do the dirty work of the US we have lost our good name overseas.
Gun-law is enshrined into the minds of many Americans, and the US first course of action is nearly always recourse to weaponry. After WWII and Korea we tried to use diplomacy much of the time (especially when it was apparent that we could not defend our ill-gotten empire). Thatcher changed all that in the eighties with her war over the Falklands; which has cost the British taxpayer trillions. We, in following the US lead, continue to pay for ongoing wars, and the chickens are coming home to roost – for all of us. Eventually the US House of Representatives is going to realise that only by stopping intervention in foreign countries can it concentrate on the urgent problems within its domestic economy. Ron Paul, and not everyone would want him as president, has been saying it for many months. The almighty dollar, (the God in which all Americans trust), is proving at long last to have feet of clay, and many are throwing a shovel and pan over their shoulders and backs and heading for the Klondike instead of Wall Street.
When the US economy stops kicking its upturned legs, and its dried exoskeleton is blown away in the wind, perhaps we can get back to the days when UK citizens were respected abroad, when our currency is not devalued by half against whatever coinage we next have to peg.
“You could start a thread on JREF”
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No need. The removal and sale of the rubble is well-documented. No-one seriously disputes it.
Craig, phrases like “xenophobic hatemongers of the Tea Party” suggest to me that there is a misunderstanding in the UK of what this organization really stands for. As a movement the tea party’s supporters tended to be concerned citizens who represented Main Street not Wall Street, and were troubled that the cost of the huge bank bailouts are being done on the back of the average citizen rather than the wealthy investor community. They are not elitists, but believe in the rights of the little guy; In many resects Tea Party supporters are the opposite of neo-Cons: they back Main Street, not Wall Street; and tend not to support foreign wars such as those in Iraq, etc. More a movement than a Party, the Tea Party is leaderless, though there is little doubt that neo-Cons, despite their very different political philosophies, would like to take it over and may eventually succeed. The tea party is most certainly not the US equivalent of the BNP, who are more in tune with neo-Cons, but rather a mildly conservative/libertarian movement who are fed up with the corruption of elites; elites are scared of them, which is why the MSM smears them so consistently
Yes Yugo, the same can be said about some of these countries you mentioned , does that make it right? have you heard two wrongs….they are all in a mess as well, and who knows where will it all end up, but here today we were talking about China and USA. Greece rating has been downgraded ages ago, the same with some of the others, but again here we are talking about one of USA, remember the so called Super Power???
John Goss: After WWII and Korea we tried to use diplomacy much of the time (especially when it was apparent that we could not defend our ill-gotten empire).
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You mean with the exceptions of, say, The Suez, Malaya, Kenya, Aden etc… or even the much talked about coup against Mossadeq which was a UK idea in favour of the AIOC and initially turned down by the US under Truman.
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Thatcher changed all that in the eighties with her war over the Falklands
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Too bloody right. That’s at least one thing Thatcher did right. You can want to sign away the islands to a then-fascist regime but I suggest the people who lived there should be able to say who they lived under.
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“perhaps we can get back to the days when UK citizens were respected abroad”
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Well, sir. I wonder when you think that was and I wonder what you think it was that earned UK citizens respect. Could you tell us which golden era you are nostalgic for?
Couple of corrections needed I think Craig.
1. “China holds most of the dollar credit in the world” – not exactly true Craig:
Here’s a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:
Hong Kong: $121.9 billion (0.9 percent)
Caribbean banking centers: $148.3 (1 percent)
Taiwan: $153.4 billion (1.1 percent)
Brazil: $211.4 billion (1.5 percent)
Oil exporting countries: $229.8 billion (1.6 percent)
Mutual funds: $300.5 billion (2 percent)
Commercial banks: $301.8 billion (2.1 percent)
State, local and federal retirement funds: $320.9 billion (2.2 percent)
Money market mutual funds: $337.7 billion (2.4 percent)
United Kingdom: $346.5 billion (2.4 percent)
Private pension funds: $504.7 billion (3.5 percent)
State and local governments: $506.1 billion (3.5 percent)
Japan: $912.4 billion (6.4 percent)
U.S. households: $959.4 billion (6.6 percent)
China: $1.16 trillion (8 percent)
The U.S. Treasury: $1.63 trillion (11.3 percent)
Social Security trust fund: $2.67 trillion (19 percent)
So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.
2. “Both the British and the Americans used this position to build military forces which could dominate both formal and informal empires.” is not true either – the British empire was built on debt-free money in the form of tally sticks – see http://dotsub.com/view/0cc9b0c6-8dba-4667-a0a5-3bdf34f0802a
Keep in mind that anyone who calls for a replacement of the US dollar as the global reserve currency usually ends up invaded, dead or with a military coup on their hands. Saddam Hussain began this meme when he decided to sell his oil (via the oil for food program) in euros rather than dollars. When Hugo Chavez held the chairmanship of OPEC – he touted the idea of selling oil in something other than US dollars – within 12 months the US had organised a coup in Venezuela. This only failed when one million mainly working class people took to the streets demanding their president back. Can you imagine anything similar happening here for the likes of the war criminals Blair, Brown or Cameron?
When Libya was touting moving to a gold dinar standard for the whole of Africa, western nations began, under the pretext of humanitarian intervention, to bomb the country with depleted uranium – are you seeing the lessons here? Mess with the petro dollar and you may live to regret it.
The only way the US will even pay off it’s $16 trillion debt is to return to debt-free money. This goes for most nations around the world today. The US could theoretically pay off their entire national debt using quarters – coin is debt free – created rather than borrowed by the government and spent into circulation. Obviously this is not practical – it would take millions of trucks full of quarters to pay the full amount but it could be done with a modern electronic equivalent of a quarter. To prevent inflation, they would need to simultaneously raise reserve requirements to 100% so private banks could no longer create money out of thin air using the magic of fractional reserve banking. This is the only solution that works and yet is the one thing economist, politicians and pundits are not talking about. Ever wondered why?
“Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine
will disappear and they ought to disappear, for this would be a happier and better world to live in.
But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits.” SIR JOSIAH STAMP, (President of the Bank of England in the 1920’s, the second richest man in Britain)
Roderick Russell: The tea party is most certainly not the US equivalent of the BNP, who are more in tune with neo-Cons
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The BNP are not “in tune” with the neo-Cons. Neo-Cons happen to have a certain family resemblance of beliefs that form a loose ideology that is nowhere near as toxic as is often made out. The BNP are fascists.
John Goss, the UK and the USA have never been allies in the sense that either trusted the other. Don’t forget that every 5th of July (and at other times) all Americans celebrate the victories they won over the hated British, and the redcoats whom they killed. Then there was the War of 1812, when the British occupied and burned Washington – an event which prompted the writing of “The Star Spangled Banner” and which, of course, will never be forgotten. During the American Civil War, Britain began by supporting the South and several times came close to declaring war on the Union. With the arrival of the USA as a first-rate naval power at the end of the 19th century, it and Britain were mutually prepared for war at any time. Indeed, when the USA joined in WW1 in 1917 many of its officers and men were surprised to be fighting against the Germans, instead of with them and dagainst the traditional enemy Britain.
The USA joined WW1 because it had lent so much money to Britain and France that it could not afford to let them lose. It then did a great deal to cause WW2, by exating reparations from Germany and refusing to forgive a single cent of Britain and France’s war debts – which caused them to under-arm, thereby encouraging Hitler’s aggression. When WW2 broke out, the USA remained determinedly neutral until Japan actually sank part of its battle fleet at pearl harbor and Hitler personally declared war.
Since WW2, the USA has continued to pursue its own advantage single-mindedly, under a screen of fine words and high moral pretensions. I very much doubt if a single member of the US government, nor more than about 10% of the American people, would care in the least if Britain sank beneath the waves today. Nor should they, you may say. Fine; but let’s not be misled by all the fine words and talk of partnership.
Without a hint of irony, the Tea Party have just unveiled their new slogan “No Repression without Taxation”
Angrysoba, you left out Vietnam. We were there; France too. But the US made it into a predominantly American war with its new deadly weapons (agent orange &c). I don’t condone British or US or French intervention anywhere. Suez is usually regarded as a crisis with the settlement brought about by diplomacy (including US negotiations). The African wars, were, largely a legacy of former imperialism, and it was after Harold MacMillan’s ‘winds of change’ speech that slowly we moved forward.
As an Englishman I have been treated with respect abroad. But I sense since the recent wars (Iraq in particular) we have lost a lot of respect.
Finally, the Falklands war was wrong. It was another imperial acquisition which contiguously belongs to The Argentine. We could have given every Falkland islander £1 million and ask those who wanted to relocate. At the same time we would have saved trillions upon trillions to the British taxpayer, spared the lives of Argentine and British soldiers. General Galtieri was wrong to invade, but the legal entitlement is Argentina’s, and aswer me this, Angrysoba, how has the daily investment of £1 million, benefited you or I.
John Goss: Finally, the Falklands war was wrong.…
General Galtieri was wrong to invade
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Correct.
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It was another imperial acquisition which contiguously belongs to The Argentine.
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I’m afraid this is a pretty daft statement. “Contiguously belongs to” is not a worthwhile principle. You would never support a UK invasion of an Island belonging to “The Argentine” (what a curiously archaic term!) off the coast of the UK so why think that the UK had no right to protect her sovereign territory from fascist invaders?
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“aswer me this, Angrysoba, how has the daily investment of £1 million, benefited you or I [sic].”
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Probably not at all. Why should it benefit you and *me*? Do you think that government expenditure is illegitimate if it doesn’t personally benefit you or *me*?
But the US made it into a predominantly American war with its new deadly weapons (agent orange &c)
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You missed out “Agent Blue”. Agent Blue was worse than Agent Orange because it specifically targetted food supplies and not simply leafy foliage which formed cover for the Viet Cong. Agent Blue was first used by President Kennedy who was assured that it wasn’t a war crime to do it because the British had used the same tactics in Malaya – spraying food supplies that could be used to feed insurgents.
John, interesting – thanks. Though I was too young to appreciate it, I understand from my reading that we weren’t too bothered about the Falklands Islands prior to that war. Our investment in it was low and some islanders had been leaving, presumably in search of a better life/work elsewhere. But Thatcher revitalised interest in the place accidentally, having quickly discovered that a small containable war would massively improve her standing in the domestic polls.
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@YugoStiglitz – you are so blinded by your hatred of anti-Zionism, or liberalism, or whatever, you seriously suggested that Craig doesn’t care about China’s appalling human-rights record. I don’t think you even believe this to be true, but you say it anyway. To what end though, I am not sure. In the meantime, in the event you want a serious discussion, do please try to remain civil. I don’t ever delete comments for their views, unless they are particularly racist, but I sometimes trash yours because you appear to be intending to offend and disrupt.
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@Jaded. et al – there are several mods, so it’s not just me that prunes the odd post. However Craig is keen that all views come through, so as to maintain the free-speech nature of the board (notwithstanding Larry’s theoretical ban).
Angrysoba. Tell me who else has benefited then to make the financial cost to the taxpayer and the cost in human lives worthwhile in Thatcher’s war in the Falklands? Do you think those who lost loved ones on board HMS Sheffield are happy with the investment?
Hi Jon, good to see you here. I trimmed some of Jaded’s stuff. He was just calling people “turds” and “Cointelpro”, nothing that contributed to any kind of debate. And Yugo got one of his BWAHHH etc. blanked.
Tom are you sure about this?
When WW2 broke out, the USA remained determinedly neutral until Japan actually sank part of its battle fleet at pearl harbor and Hitler personally declared war.
The US did all it could to convince its’ population that it needed to enter WWII – arming Japan’s enemies, cutting off fuel and raw materials supplies to Japan was illegal and a deliberative act of war. They knew Pearl Harbour was about to be attacked having been warned by Australia in the days leading up to the raid. They had the foresight to move their expensive carriers out to sea so they didn’t lose any vessel that would have been critical to their desired war effort.
War is a racket and being involved was a huge boost for Wall Street banks’ profits… wasn’t Prescott Bush (George W’s grandfather) found guilty of war-profiteering after selling to the Nazi’s?
Angrysoba. Tell me who else has benefited then to make the financial cost to the taxpayer and the cost in human lives worthwhile in Thatcher’s war in the Falklands? Do you think those who lost loved ones on board HMS Sheffield are happy with the investment?
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It wasn’t “Thatcher’s war”, was it? You’ve already conceded it was Galtieri’s war. And now you have made a sly transition from a question about money to about blood. You asked me if I cared about the million pounds a day spent on the Falklanders and I said no. Now you ask me about whether I care about the people killed on the HMS Sheffield and my answer would be, of course. But whose fault was that? Was it Thatcher’s fault or did Galtieri have a slight hand in that too?
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I would be far less in favour of capitulating to the demands of a fascist like Galtieri who was throwing leftist dissidents out of airplanes into the ocean than of telling Galtieri that the people of the Falklands didn’t want to live under his boot. Should I, for the sake of self-righteous rhetoric, ask you whether the families of the disappeared would have appreciated rolling over for Galtieri?
Tom Welsh, I think that is a fair potted assessment of US/UK relations over the last 250 years. Allies (so-called) can never be trusted in the long-term. Or sometimes even the short-term. It is one of the reasons I’m so opposed to the American Base at Menwith Hill, Harrogate, which is there without parliamentary sanction. It is why I support CAAB (Campaign for the Accountability of American Bases).
Angrysoba, please don’t try and ascribe statements to me which are not mine. Re-read what I said. Galtieri’s invasion was wrong. But the war was Thatcher’s.
Wasn’t “capitulating to the demands of a fascist dictator” exactly what Thatcher bent over backwards to do for her good friend, Pinochet?
Mike Raddle: fascinating stuff, thanks. And I haven’t heard anyone else refer to Gadaffi’s attempt to start getting the African nations to trade outside the dollar shortly before being attacked.
Mike Raddie: interesting stats, thanks.
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“Social Security trust fund: $2.67 trillion (19 percent)”
Oh dear.