Ending of America's Financial-Military Empire (Ron Paul, Iran, wages, middle east)

[clue]

De-Dollarization: Dismantling America’s Financial-Military Empire
The Yekaterinburg Turning Point

by Prof. Michael Hudson

The city of Yakaterinburg, Russia’s largest east of the Urals, may become known not only as the death place of the tsars but of American hegemony too – and not only where US U-2 pilot Gary Powers was shot down in 1960, but where the US-centered international financial order was brought to ground.

Challenging America will be the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the BRIC nations (Brazil, Russia, India and China).

.....

What may prove to be the last rites of American hegemony began already in April at the G-20 conference, and became even more explicit at the St. Petersburg International Economic Forum on June 5, when Mr. Medvedev called for China, Russia and India to “build an increasingly multipolar world order.” What this means in plain English is: We have reached our limit in subsidizing the United States’ military encirclement of Eurasia while also allowing the US to appropriate our exports, companies, stocks and real estate in exchange for paper money of questionable worth.

"The artificially maintained unipolar system,” Mr. Medvedev spelled out, is based on “one big centre of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks.”2 At the root of the global financial crisis, he concluded, is that the United States makes too little and spends too much. Especially upsetting is its military spending, such as the stepped-up US military aid to Georgia announced just last week, the NATO missile shield in Eastern Europe and the US buildup in the oil-rich Middle East and Central Asia.

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Foreigners see the IMF, World Bank and World Trade Organization as Washington surrogates in a financial system backed by American military bases and aircraft carriers encircling the globe. But this military domination is a vestige of an American empire no longer able to rule by economic strength. US military power is muscle-bound, based more on atomic weaponry and long-distance air strikes than on ground operations, which have become too politically unpopular to mount on any large scale.

On the economic front there is no foreseeable way in which the United States can work off the $4 trillion it owes foreign governments, their central banks and the sovereign wealth funds set up to dispose of the global dollar glut. America has become a deadbeat – and indeed, a militarily aggressive one as it seeks to hold onto the unique power it once earned by economic means. The problem is how to constrain its behavior. Yu Yongding, a former Chinese central bank advisor now with China’s Academy of Sciences, suggested that US Treasury Secretary Tim Geithner be advised that the United States should “save” first and foremost by cutting back its military budget. “U.S. tax revenue is not likely to increase in the short term because of low economic growth, inflexible expenditures and the cost of ‘fighting two wars.’”

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An era therefore is coming to an end. In the face of continued US overspending, de-dollarization threatens to force countries to return to the kind of dual exchange rates common between World Wars I and II: one exchange rate for commodity trade, another for capital movements and investments, at least from dollar-area economies.

Even without capital controls, the nations meeting at Yekaterinburg are taking steps to avoid being the unwilling recipients of yet more dollars. Seeing that US global hegemony cannot continue without spending power that they themselves supply, governments are attempting to hasten what Chalmers Johnson has called “the sorrows of empire” in his book by that name – the bankruptcy of the US financial-military world order. If China, Russia and their non-aligned allies have their way, the United States will no longer live off the savings of others (in the form of its own recycled dollars) nor have the money for unlimited military expenditures and adventures.

US officials wanted to attend the Yekaterinburg meeting as observers. They were told No. It is a word that Americans will hear much more in the future. Yikes

http://www.counterpunch.org/hudson06152009.html

[mississauga75]

Is there any way you could just take some salient points from this and simplify.....This is way too long to grab the attention of people in here and they'll just give up... I don't know about the American empire ending soon... but if you don't do something about this... this thread will end soon.

[thatguy1]

It's actually a very well written peice. Granted, it was pointing out nothing but the obvious, but eye catching.

[Huckleberry3911948]

sounds like we are running out of money.

[bigskydude]

Originally Posted by Huckleberry3911948

sounds like we are running out of money.

Hell, we've been out of money since 1934

[♠atizar♠]

Yeah, it's pretty sad, we financed our most recent spate of the pushing around of other countries with money we borrowed from people who actually live in those regions, and then we wonder (or simply don't care because hey, we are the USA, and even when we are wrong, we are right - we helped win WWII and that's an endless free pass to be jackasses forever, don'tcha know) why they resent us. I can't believe they didn't cut us off sooner.

Can you imagine the uproar and outrage that would surely ensue if the roles were reversed, and we were financing a superpower who was throwing it's weight around in regions neighboring the US?

[bigskydude]

We're going to have to pay for our own military for starters.

And very possibly return to the gold standard ,, at best, we may return to 1963 wages, where $3.25 an hour was like making $24.00 an hour today, give or take a dollar or a minute or two.

The prices of everything will go down ... way way down ... to meet lower wages.

There will be shortages and some severe, because we've been borrowing for at least 3 generations, there will be no ready cash to purchase either fuel or food. Folks will have first crack at living without entitlement programs like social security, medicare, welfare and other what nots.

All of the money being used for entitlement programs will have to be diverted to maintaining a much smaller military.

Like with GM and Chrysler, the Government will have to decrease their "Brands" in order to make it all work. The Fed may merge the "Marines" brand into the "Navy" brand and so on and so forth.

The world governments will be basically doing to the fed, what the fed has been doing to our banks and car companies

[bigskydude]

Ron Paul provided some very good insight on what's going on now clear back in 2006;

The End of Dollar Hegemony

For the most part the true victims aren’t aware of how they pay the bills. The license to create money out of thin air allows the bills to be paid through price inflation. American citizens, as well as average citizens of Japan, China, and other countries suffer from price inflation, which represents the “tax” that pays the bills for our military adventures. That is until the fraud is discovered, and the foreign producers decide not to take dollars nor hold them very long in payment for their goods. Everything possible is done to prevent the fraud of the monetary system from being exposed to the masses who suffer from it. If oil markets replace dollars with Euros, it would in time curtail our ability to continue to print, without restraint, the world’s reserve currency.

The End of Dollar Hegemony (http://www.house.gov/paul/congrec/congrec2006/cr021506.htm - broken link)

Anyone who might have viewed Ron Paul as a crackpot in the past, may, in the future, view him as a hero.

[PITTSTON2SARASOTA]

It is only our military that is preserving our super power status....our economy is about shot.......and without money for the military, well I believe ancient Rome was in a similar dilema and we all know how that turned out.

[TomDot]

A weak US, financially and militarily is the last thing the world should hope for.
As far as our "empire" goes: I seriously doubt that Puerto Rico, Guam, Samoa, Palau, Midway, and the Virgin Islands have any desire for us to leave their shores.