|
The American Empire Is Bankrupt
|
View this Thread in Original format
| culorut |
Anyone know about this and what happened at the meeting? If this is true the USA is in for some very dark times in the near future.
The American Empire Is Bankrupt
June 15, 2009
This week marks the end of the dollar’s reign as the world’s reserve currency. It marks the start of a terrible period of economic and political decline in the United States. And it signals the last gasp of the American imperium. That’s over. It is not coming back. And what is to come will be very, very painful.
Barack Obama, and the criminal class on Wall Street, aided by a corporate media that continues to peddle fatuous gossip and trash talk as news while we endure the greatest economic crisis in our history, may have fooled us, but the rest of the world knows we are bankrupt. And these nations are damned if they are going to continue to prop up an inflated dollar and sustain the massive federal budget deficits, swollen to over $2 trillion, which fund America’s imperial expansion in Eurasia and our system of casino capitalism. They have us by the throat. They are about to squeeze.
There are meetings being held Monday and Tuesday in Yekaterinburg, Russia, (formerly Sverdlovsk) among Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization. The United States, which asked to attend, was denied admittance. Watch what happens there carefully. The gathering is, in the words of economist Michael Hudson, “the most important meeting of the 21st century so far.”
It is the first formal step by our major trading partners to replace the dollar as the world’s reserve currency. If they succeed, the dollar will dramatically plummet in value, the cost of imports, including oil, will skyrocket, interest rates will climb and jobs will hemorrhage at a rate that will make the last few months look like boom times. State and federal services will be reduced or shut down for lack of funds. The United States will begin to resemble the Weimar Republic or Zimbabwe. Obama, endowed by many with the qualities of a savior, will suddenly look pitiful, inept and weak. And the rage that has kindled a handful of shootings and hate crimes in the past few weeks will engulf vast segments of a disenfranchised and bewildered working and middle class. The people of this class will demand vengeance, radical change, order and moral renewal, which an array of proto-fascists, from the Christian right to the goons who disseminate hate talk on Fox News, will assure the country they will impose.
I called Hudson, who has an article in Monday’s Financial Times called “The Yekaterinburg Turning Point: De-Dollarization and the Ending of America’s Financial-Military Hegemony.” “Yekaterinburg,” Hudson writes, “may become known not only as the death place of the czars but of the American empire as well.” His article is worth reading, along with John Lanchester’s disturbing exposé of the world’s banking system, titled “It’s Finished,” which appeared in the May 28 issue of the London Review of Books.
“This means the end of the dollar,” Hudson told me. “It means China, Russia, India, Pakistan, Iran are forming an official financial and military area to get America out of Eurasia. The balance-of-payments deficit is mainly military in nature. Half of America’s discretionary spending is military. The deficit ends up in the hands of foreign banks, central banks. They don’t have any choice but to recycle the money to buy U.S. government debt. The Asian countries have been financing their own military encirclement. They have been forced to accept dollars that have no chance of being repaid. They are paying for America’s military aggression against them. They want to get rid of this.”
China, as Hudson points out, has already struck bilateral trade deals with Brazil and Malaysia to denominate their trade in China’s yuan rather than the dollar, pound or euro. Russia promises to begin trading in the ruble and local currencies. The governor of China’s central bank has openly called for the abandonment of the dollar as reserve currency, suggesting in its place the use of the International Monetary Fund’s Special Drawing Rights. What the new system will be remains unclear, but the flight from the dollar has clearly begun. The goal, in the words of the Russian president, is to build a “multipolar world order” which will break the economic and, by extension, military domination by the United States. China is frantically spending its dollar reserves to buy factories and property around the globe so it can unload its U.S. currency. This is why Aluminum Corp. of China made so many major concessions in the failed attempt to salvage its $19.5 billion alliance with the Rio Tinto mining concern in Australia. It desperately needs to shed its dollars.
http://www.greenchange.org/article.php?id=4530 |
|
|
| Zharen |
| We'll see what happens. My only hope that if a huge economic meltdown is triggered and the country is plunged in anarchy, strife and internal wars, that Bush, Cheney and Rumsfeld get theirs as well. |
|
|
| DOOMBOT |
| quote: | | The United States, which asked to attend, was denied admittance. |
I'm not so sure about this statement. I'm almost positive that Kryptone and KFC are going to be there, no? |
|
|
| jerZ07002 |
when the dollar took the position of world's reserve currency that was formerly held by the pound, the UK didn't become Zimbabwe.
how is it in the interest of brazil, china, russia, or india for the US consumerism to come to a dramatic halt? besides the article being ridiculous, it doesn't make sense. the US accounts for about 25% of the world's GDP. Last year, the US imported almost 340 billion from china, which was a little less than 10% of china's GDP (then you have to add the other components of china's gdp that services exports to the US to get a more realistic number). Furthermore, any move away from the dollar would cause huge losses for chinese, who hold 2 trillion in US dollar assets. It is in no countries interest to see the dollar depreciate at such a level. A slow migration from the dollar may very well happen, but it certainly won't be dramatic.
http://www.imf.org/external/pubs/ft...&pr.x=19&pr.y=8
http://www.census.gov/foreign-trade...c5700.html#2009
http://www.nytimes.com/2009/03/24/w...ia/24china.html |
|
|
| Krypton |
| America is not bankrupt. By all accounts, demand for US government debt is still brisk, and they still maintain a AAA rating. If the US was bankrupt, nobody would buy US government bonds and the 10Y t-bill yield would probably be more than 10%. |
|
|
| DOOMBOT |
| quote: | Originally posted by Krypton
America is not bankrupt. By all accounts, demand for US government debt is still brisk, and they still maintain a AAA rating. If the US was bankrupt, nobody would buy US government bonds and the 10Y t-bill yield would probably be more than 10%. |
Didn't sub-prime mortgages hold AAA ratings? |
|
|
| Krypton |
| quote: | Originally posted by DOOMBOT
Didn't sub-prime mortgages hold AAA ratings? |
Yes, but so what? Credit ratings on mortgage backed securities and that of the US government are two completely different things. |
|
|
| DJ Damerchi |
as w ashley once said, the US has a real GDP of -1000 percent. look out nobel prize contenders.
:wtf: |
|
|
| DOOMBOT |
| quote: | Originally posted by Krypton
Yes, but so what? Credit ratings on mortgage backed securities and that of the US government are two completely different things. |
So what? I'd like to post the laughing emoticon but seriously, that is just downright disturbing that you don't believe that means anything right now. What makes you think that agencies wouldn't mislead people in the bond market, just as agencies did with subprime mortgages? Talk about ignorance if I ever saw it! |
|
|
| Krypton |
| quote: | Originally posted by DOOMBOT
So what? I'd like to post the laughing emoticon but seriously, that is just downright disturbing that you don't believe that means anything right now. What makes you think that agencies who mislead people into believing subprime mortgages should be holding AAA ratings wouldn't mislead people in the bond market as well? Talk about ignorance if I ever saw it! |
Cut the arrogant sarcastic bull plz...:rolleyes:
The reason US government bonds are AAA is because the US government is able to raise unlimited amounts of dollars to pay off its debts. Hence, they are "risk-free" assets. The credit ratings of mortgage backed securities grossly underestimated the risk of such assets. Again, two different issues. |
|
|
| DOOMBOT |
| quote: | Originally posted by Krypton
Cut the arrogant sarcastic bull plz...:rolleyes:
The reason US government bonds are AAA is because the US government is able to raise unlimited amounts of dollars to pay off its debts. Hence, they are "risk-free" assets. The credit ratings of mortgage backed securities grossly underestimated the risk of such assets. Again, two different issues. |
So you are saying that the government hasn't underestimated the amount of money that it is borrowing from other countries, in which it has to pay back? The fact that the government is borrowing money with virtually no limitations does not bother you? Do you have any idea as to what this eventually does to the buying power of your federal reserve notes? |
|
|
| Groundhog Boy |
| quote: | Originally posted by DOOMBOT
So what? I'd like to post the laughing emoticon but seriously, that is just downright disturbing that you don't believe that means anything right now. What makes you think that agencies wouldn't mislead people in the bond market, just as agencies did with subprime mortgages? Talk about ignorance if I ever saw it! |
Actually, now you've touched a nerve. Not really because of what you said, but because your comment contains the same stereotypical view of banks & the financial industry that is so populist-chic. I'm not saying you directly, but it's hilarious that the same people who bitch about ethic/racial/religious stereotypes out of one side of their mouths view all components of business structures as homogeneous units to be unilaterally criticized. The hypocrisy is astounding.
Just because someone works for a bank doesn't mean that they ed the whole system. Likewise, because a division of a bank, or in this case, credit rating agency, ed up, doesn't mean the whole company is screwed up. Sub-prime MBS were a new model, one that was proven wrong by the fallout. Correct me if I'm wrong, but while the model may be tweaked, the manner in which the credit rating agencies rate the debt of nations has been pretty standard through a few economic cycles.
Don't get me wrong, I'm pretty pissed at credit rating agencies because of how they ed up the whole MBS structure, but that doesn't mean that everything they do is equally poor, which is pretty much the same view I saw jerz elicit in the Fed thread. You do have to take these ratings into perspective and not see them as the Holy Grail of investment.
At the same time, apparently China's due diligence has determined that the US is still a good investment because they're still buying debt. Or do you think that they just follow S&P's lead because they can't evaluate bond strategies on their own? |
|
|
|
|
