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As long as the U.s citizens enjoy the benefits of extracting real goods and services from its "colonies" in exchange for depreciating paper dollars that the private federal reserve can make unlimited quantities of, it comes out ahead"
What a load of horse manure!
The US citizens have "benefited" with depressed wages and a huge debt load! Tell me again who this benefited?
The US citizens have "benefited" with depressed wages and a huge debt load! Tell me again who this benefited?
World GDP 78 Trillion.
United States GDP 17.4 trillion.
22% of the world's economy
World population 7.3 billion.
United States population 319 million.
4% of the world's population.
Two measures of health are widely used in economic history: life expectancy at birth (or average length of life) and average height, which measures nutritional conditions during the growing years.
In 1850 the life expectancy of an American was 38.3 years.
In 1998, the life expectancy of an American was 76.7 years.
The average height of an American man is up more than 2 inches during that time frame.
Look at the United States living standards in the context of world history and get a grip.
The US citizens have "benefited" with depressed wages and a huge debt load! Tell me again who this benefited?
If you'll notice from your graph, what has happened since 1971? As I discussed earlier, flooding the world with fiat dollars is by DESIGN. The U.s decoupled from gold, and tied itself to oil with its relationship with OPEC. The U.s dollar is the standard in the world that all other currencies float against.
"Viewed from a different angle, an oil price ceiling is a dollar floor. Oil is traded in greater dollar volumes than any other commodity so the oil standard had more liquidity than gold ever did. The value of OPEC's oil production is more than a billion dollars per day. The oil equivalent of Fort Knox was not the Strategic Petroleum Reserve; it was the combined oil reserves of OPEC, three orders of magnitude greater and much larger in value than all the gold mined since the dawn of history.
According to the United States Geological Survey, the total gold ever mined in the world is about 3.4 billion troy ounces. At $42 per barrel for oil and $420 per troy ounce for gold, the value of Opec's reserves is 26 times the value of all gold ever mined."
The US citizens have "benefited" with depressed wages and a huge debt load! Tell me again who this benefited?
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It's accepted wisdom that the United States, despite recent problems, is still the strongest growth locomotive for the world economy, the pillar of the global system. What if we were to discover that, instead of being the pillar, that the United States was, in fact, the heart of a dysfunctional economic system, which is spreading instability, unemployment, and depression globally?
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No other nation on earth comes near to the commanding US military superiority in smart bombs, military IT, or in sheer force capabilities. The US position in the world since 1945, and especially since 1971, has rested on two pillars, however: The superiority of the US military over all, and, the role of the dollar as world reserve currency. That dollar is the Achilles heel of American hegemony today.
In my view, the world has entered a new, highly dangerous phase since the collapse of the US stock market bubble in 2001. I am speaking about the unsustainable basis of the very Dollar System itself. What is that Dollar System?
What soon became clear to US Treasury and Federal Reserve circles after 1971, was that they could exert more global influence via debt, US Treasury debt, than they ever did by running trade surpluses. One man's debt is the other's credit. Because all key commodities, above all, oil, were traded globally in dollars, demand for dollars would continue, even if the US created more dollars than its own economy justified.
The dollar became a political currency—do you have "confidence" in the US as the defender of the Free World? At first Washington did not appreciate what a weapon it had created after it broke from gold. It acted out of necessity, as its gold reserves had got dangerously low. It used its role as the pillar of NATO and free world security to demand allies continue to accept its dollars as before.
Soon, its trade partners held so many dollars that they feared to create a dollar crisis. Instead, they systematically inflated, and actually weakened their own economies to support the Dollar System.
What is little understood, is how the role of US trade deficits and the Dollar System are connected. The United States has followed a deliberate policy of trade deficits and budget deficits for most of the past (five) decades, so-called benign neglect, in effect, to lock the rest of the world into dependence on a US money system. So long as the world accepts US dollars as money value, the US enjoys unique advantage as the sole printer of those dollars. The trick is to get the world to accept. The history of the past (50) years is about how this was done, using WTO, IMF, and World Bank to name a few.
What is perverse about this system is the fact that Washington has succeeded in getting foreign surplus countries to invest their own savings, to be a creditor to the US, buying Treasury bonds.
But debt must be repaid you say? Does it ever? The central banks just keep buying new debt, rolling the old debts over. The debts of the USA are the assets of the rest of the world, the basis of their credit systems!
What has evolved is a mechanism more effective than any the British Empire had with India and its colonies under the Gold Standard. So long as the US is the sole military superpower, the world will continue to accept inflated US dollars as payment for its goods. Developing countries like Argentina or Congo or Zambia are forced to get dollars to get the IMF seal of approval. Industrial trading nations are forced to earn dollars to defend their own currencies. The total effect of US financial and political and trade policy has been to maintain the unique role of the dollar in the world economy.
This is a kind of Dollar Imperialism more slick than anything the British Empire even dreamed of. It is a part of the current America "Empire" debate no one mentions. Instead of the US investing in colonies like England to earn profits on the trade, the money comes from the client states into the US economy. The problem is that Washington has allowed this perverse system to get out of all control to the point today it threatens to bring the entire world to the point of collapse. Had the US instead promoted long-term policy of investing in the economic growth and self-sufficiency of countries like Argentina or Congo, rather than bleeding them in repayment of unpayable dollar debts, the world would look far less unstable today.
The problem is this process of creating debt, domestic and foreign, to keep the US economy going, has gathered so much momentum it risks destroying what remains of the US manufacturing and technology base.
It is caught in its own web: American jobs, hi-tech jobs as well as factory jobs, are vanishing permanently as US factories source to China, India or other cheap areas. If Washington pressures China and others to cut back exports they risk to kill the goose that lays golden dollar eggs.
US economic hegemony in this distorted Dollar System increasingly depends on a rising rate of support from the rest of the world to sustain US debt levels. Like the old Sorcerers' Apprentice. But the point is past where this can be gotten easily. That is the real significance of the US shift to unilateralism and military threats as foreign policy. Europe can no longer be given a piece of the Third World debt pie as in the 1980's. Japan has to cough up even more, as does China now.
Even ordinary Americans have to give up their pension promises. If the Dollar System is to remain hegemonic, it must find major new sources of support. That spells likely destabilization and wars for the rest of the world.
As Henry Kissinger once noted, "Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world."
The US citizens have "benefited" with depressed wages and a huge debt load! Tell me again who this benefited?
The United States needs to run a trade and budget deficit to fill its roll in the current world system. The SDR may solve a lot of the problems for the United States and the world....but good luck getting the United States to give up this tremendous power without a fight....
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The Triffin dilemma or paradox is the conflict of economic interests that arises between short-term domestic and long-term international objectives for countries whose currencies serve as global reserve currencies. This dilemma was first identified in the 1960s by Belgian-American economist Robert Triffin, who pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, thus leading to a trade deficit.
The use of a national currency, such as the U.S. dollar, as global reserve currency leads to tension between its national and global monetary policy. This is reflected in fundamental imbalances in the balance of payments, specifically the current account, as some goals require an outflow of dollars from the United States, while others require an overall inflow.
In the wake of the financial crisis of 2007–2008, the governor of the People's Bank of China explicitly named the Triffin Dilemma as the root cause of the economic disorder, in a speech titled Reform the International Monetary System. Zhou Xiaochuan's speech of 29 March 2009 proposed strengthening existing global currency controls, through the IMF.[SIZE=2][[/SIZE]
On April 13, 2010, the Strategy, Policy and Review Department of the IMF published a comprehensive report examining these aforementioned problems as well as other world reserve currency considerations, recommending that the world adopt a global reserve currency (bancor) and that a global central bank be established to administer such a currency.[SIZE=2][6][/SIZE] In this report, the current issues with having a national global reserve currency are addressed. The merits, difficulties and effectiveness of establishing a multi-currency reserve system are weighed against that of the SDRs, or "basket currency" strategy, and those of establishing this new "global reserve currency". A new multilateral framework and "multi-polar system" for managing capital flows and national debts is also called for, but the IMF cautions that it prefers a gradual shift to this new framework, rather than a sudden change.
You apparently still don't understand what real compensation means.
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What a load of horse manure!
