Archive for November 5th, 2013

by lizard

While Americans remain deep within the domestic spin cycle of health care reform, the rest of the world is in the midst of a global realignment, away from the obvious instability of the US.

The Project for a New American Century was always a rather psychotic fantasy, probably because it was hatched by psychotic neocons. Thanks to a stolen election and 9/11, some very evil people saw a chance to impose their delusional world view, the one that became possible after JFK was assassinated 50 years ago this month.

The 21st century overreach of US multinational imperialism is the result of a national arrogance and greed that utterly poisoned the post-WWII position America grabbed for itself.

Now we are stuck in a death spiral created by these psychopaths who thought they could hollow out the domestic economy under the cloak of globalization while cutting taxes for the rich and waging wars against the inflated boogeyman of terrorism.

It turns out the free market capitalism championed by America’s psychopath class was crony to the core, and now the world knows it. The rest of the world understands the only thing keeping the big banks afloat is a liquidity trap created by the Fed, putting pressure on the hegemonic role of the US dollar. Michael Whitney has a good interview with Paul Craig Roberts today worth reading. Here’s the first question and Roberts’ lengthy response:

Mike Whitney: Is the US dollar at risk of losing its position as reserve currency? How would this loss affect US leadership and other countries?

Paul Craig Roberts: In a way the dollar has already lost its reserve currency status, but this development has not yet been officially realized; nor has it hit the currency markets. Consider that the BRICS (Brazil, Russia, India, China, and South Africa) have announced their intention to abandon the use of the US dollar for the settlement of trade imbalances between themselves, instead settling their accounts in their own currencies. (There is now a website, the BRICSPOST, that reports on the developing relations between the five large countries.) There are also reports that Australia and China and Japan and China are going to settle their trade accounts without recourse to the dollar.

Different explanations are given. The BRICS imply that they are tired of US financial hegemony and have concerns about the dollar’s stability in view of Washington’s excessive issuance of new debt and new money to finance it. China, Australia, and Japan have cited the avoidance of transaction fees associated with exchanging their currencies first into US dollars and then into the other currencies. They say it is a cost-saving step to reduce transaction costs. This may be diplomatic cover for discarding the US dollar.

The October 2013 US government partial shutdown and (exaggerated) debt default threat resulted in the unprecedented currency swap agreements between the Chinese central bank and the European central bank and between the Chinese central bank and the Bank of England. The reason given for these currency swaps was necessary precaution against dollar disruption. In other words, US instability was seen as a threat to the international payments system. The dollar’s role of reserve currency is not compatible with the view that precautions must be taken against the dollar’s possible failure or disruption. China’s call for “a de-Americanized world” is a clear sign of growing impatience with Washington’s irresponsibility.

To summarize, there has been a change in attitudes toward the US dollar and acceptance of US financial hegemony. As the October deficit and debt ceiling crisis has not been resolved, merely moved to January/February, 2014, a repeat of the October impasse would further erode confidence in the dollar.

Regardless, most countries have come to the conclusion that not only has the US abused the reserve currency role, but also the power of Washington to impose its will and to act outside of law stems from its financial hegemony and that this financial power is more difficult to resist than Washington’s military power.

As the world, including US allies, made clear by standing up to Washington and blocking Washington’s military attack on Syria, Washington’s days of unchallenged hegemony are over. From China, Russia, Europe, and South America voices are rising against Washington’s lawlessness and recklessness. This changed attitude toward the US will break up the system of dollar imperialism.

America’s psychopath allies, Saudi Arabia and Israel, are not very happy about the failure of the Obama administration to bomb Assad out of power. In a strange diplomatic move, Saudi Arabia turned down a seat at the UN security council, then continued throwing tantrums. Moon of Alabama takes a good look at Prince Bandar’s hissy fit here.

And how has Israel expressed its dissatisfaction? Bombing shit, of course:

Israel can strike at will and there is very little Syria can do, says the BBC’s Quentin Sommerville

Israeli aircraft have carried out a strike near the Syrian coastal city of Latakia, a US official says.

The official said the strike targeted Russian-made missiles intended for the Lebanese militant group Hezbollah.

Latakia is a stronghold of Syrian President Bashar al-Assad, where his Alawite community is concentrated.

This is believed to be sixth Israeli attack in Syria this year. Israel does not comment on specific operations.

Poor president Obama. Last year he told aides that he’s “really good at killing people” and now Israel is showing him up. Maybe Mossad and Prince Bandar can get together and pull off something even more heinous than the Syrian chemical attack to turn public opinion toward their psychotic objectives.

It will be important to keep a close eye on the psychopaths as US hegemony continues to erode. Those of us who persevere through conspiracy smears know what they are capable of.

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