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!
About that Sharon quote – you dummies are at it again, and you’ll never learn. That was debunked a decade ago. What does it say to you that at least 90% of the people at this blog automatically believe that Sharon said that?
http://www.camera.org/index.asp?x_article=34&x_context=2
The build-up of weapons prior to WW1 was seen as a major cause of the aggression that followed. Germany’s re-armament in the 1930s was seen as massively threatening and a sure sign of aggressive intent.
Surely it’s time to see US massive spending and deployment of weapons of war in the same light? It is a dangerous act of aggression against the whole world — gone rogue, you might say.
China has been whinging about the dollar for a couple of years now and has been quietly trying to divest itself of its vast dollar holdings by buying gold and funding capital investments in dollars when possible. The recent statement differs only in the uncharacteristic bluntness of the language used.
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A major problem for China is that there is no obvious candidate for the new reserve currency. Not long ago the Euro seemed to be grooming itself for this role but not now. Interestingly China is definitely not proposing that its own currency should take the baton. Part of China’s success is due to the fact that the yuan has been set at an artificially low exchange rate. If it became the new reserve currency its value would inevitably rise and China’s economy would suffer accordingly.
Hey Murray, that you don’t understand that China’s new language is a response to many years of well-founded criticism regarding its currency policy further makes me wonder how you ever got your ambassadorship.
I know you’re a hateful person, but you really should big-picture these things.
@Yugostiglitz
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The point is, not that the Chinese are better than the Americans. It’s just that the Americans and perhaps the style of financial control-freakery they stand for may finally be discredited.
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Boehner, the Republican House of Representatives guy who has been arguing with Boehner, said in response to the downgrading:
‘This decision by S&P is the latest consequence of the out-of-control spending that has taken place in Washington for decades. The spending binge has resulted in job-destroying economic uncertainty and now threatens to send destructive ripple effects across our credit markets’.
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This despite the fact that after eight years careful financial work by Clinton, Bush totally squandered the reduced national debt by starting a disastrous war and cutting taxes.
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As Craig says, to the Tea-Party, war is non-negotiable.
sorry, Boehner arguing with Obama!
Assume that Larry is a fully paid up member of CAMERA.
http://www.camera.org/index.asp
Yugostiglitz, you are right; though I am not sure that Craig Murray is a hateful person. Perhaps he does though let his grievances at the loss of his position and the obviously illegitmate way it was achieved cloud his judgement. Also I agree with MJ, China is not going to be the new reserve currency. And there is a word for the knee jerk appropriation of all things anti-Israel. Why are they all so obsessed? I agree, why not focus on China, Russia; its support for Syria at the SC? It this, Mary, for example, because this doesn’t make you feel better about your own self righteous virtue? Go to eastern europe and ask them what they feel about their alliance with with the US via NATO.
Nope; first time I’ve heard of CAMERA. This is how this works; pay attention. I googled that Sharon quote, as it’s obviously ABSURD. So the first link was to that CAMERA page, and the analysis looked good. At least sufficient. Now, Jew-hater, it’s up to you to prove that Sharon actually said that. Ball’s in your court.
Wounded animals are often the most dangerous, I doubt the US will go down gracefully, I expect they will go down fighting, raping and pillaging and laying waste.
Oh, I forgot; the word is adolescent;
“Wounded animals are often the most dangerous, I doubt the US will go down gracefully, I expect they will go down fighting, raping and pillaging and laying waste.”
You people, including the original poster, seem to be living in the 19th century.
Assume that Danj is also a member of CAMERA, or Megaphone, or a follower of The Israel Project etc etc.
http://www.theisraelproject.org/site/c.hsJPK0PIJpH/b.672581/k.12D7/The_Israel_Project__Facts_For_A_Better_Future.htm
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Website similar to CAMERA’s. All these pro Israel sites are predominantly blue in colour presumably to match the colours of the Israeli flag. eg Conservative Friends of Israel. {http://www2.cfoi.co.uk/} Nice photo of Cameron.
“Assume that Danj is also a member of CAMERA, or Megaphone, or a follower of The Israel Project etc etc.”
See, that how it works around here, Danj – if you speak up against this hateful craziness, they automatically believe that you’re an agent of the Jewish cabal.
Heh Mary – why do you believe that Sharon said that? Because you saw it on the Internets?
See that little Chloe Smith of Norwich North fame went over for her indoctrination trip. Arbuthnot took another group previously.
http://www2.cfoi.co.uk/Delegations/RecentDelegations/
What’s your point, Mary? Other MPs meet with people who want to wipe Israel off the map.
What’s your basis for believing that Sharon said that?
For a site that purports to be the Committee for Accuracy in Middle East Reporting, CAMERA’s analysis of Ahmadinejad’s “wipe off the map” mistranslation is woefully inadequate.
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http://blog.camera.org/archives/2007/06/prof_cole_write_the_editor_ahm.html
What’s your basis for believing that Ahmadinejad said that, Larry?
There seems to be a little, scared, wounded animal on this thread and it goes by the name of Lamby. I would suggest some stiff moderation is in order, if I may be so bold, to ‘correct’ his offensive posts. Get on the case please Jon when you next log in. You have done a fine job, so far, of keeping this lunatic upstart on a tight leash so far and long may it continue. Craig’s bog has been a much more wholesome place to visit the last few months.
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!
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Do you really believe that it will all be unicorns and rainbows when the Wicked Witch of the West is dead?
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Wait till you see the Wicked Witch of the East…
Jaded: Craig’s bog
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Freudian slip?
Perhaps not, . Now skedaddle before the big, bad mod comes for you. You have been well warned sonny Jim, so don’t push your luck.
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[Big Bad Mod: No, I came for your offensive remarks, Jaded.]
It would seem that the threat to the USDollar is the real reason for the wartalk against Iran.
Iran’s oil bourse, a new pressure on U.S. dollar
Tehran Times, Thursday 04 August 2011
“It would seem that the threat to the USDollar is the real reason for the wartalk against Iran.”
What war talk?
You people have been saying that the U.S. will attack Iran the next month for at least five years now!
Danji, May dream and hope is that there is more justice in the world, the wealth of the world is more evenly distributed. I know this is unrealistic so let’s talk about more realistic hopes and dream. I hope China will look at the mess USA has created for its own nation as well as the world and will learn a valuable lesson, I hope China will look and see how USA is despised and disliked for its self serving, one sided policies and will learn…
You are telling me USA has done too many good things to mention, I can give you list of more than 60 countries where USA has somehow or another put an end to aspiration of that nation, has stolen their wealth, has invaded their land, killed , raped, plundered… Amongst them Afghanistan, Albania, Iraq, Iran, Algeria, Bolivia, Mongolia, Vietnam..(do you want me to go on???)
Can you tell me why USA find it necessary for all these military and non military interventions with great expenditure, but not to use that expenditure for the homeless (of which the number is increasing daily) of its people?
• You are telling me that USA has done too many good deeds to mention, please can give me name of not 60, not 16, and not even 6 but just 1 country where USA has done any good not because of self interest but for the good of that country???
Yugo, what about starting a thread about Human right abuses of the USA?? At least China is not claiming to be the champion Of Human Rights.. Talk about hypocracy, talk about Abu Gharib,talk about Guantana Bay, Deigo Garcia… •
And nobody hates Israel without reason, Israel is hated by all decent people including many Jews for their policies. Yugo how would you feel being thrown out of your home, your farm, your orchard and not allowed back in?
Not so much America ‘Rob’ – Israel’s right wing sees itself in an end-game and will act irrationally within the next four months to strike Iran. Israel is out of control. Alarmed by the Arab spring and the forthcoming UN vote on Palestinian statehood which it will lose, Israel will roll the dice and attempt to change the landscape as it did with the 1967 war by bombing Iran. Obama is powerless to veto the attack as he is surrounded by what I call the ‘6th column’ sympathetic towards Israel which now includes Leon Panetta an ardent Middle East hawk while the restraining influence of Bob Gates has gone.
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British intelligence are aware that striking Iran will initiate a response by Iran in Lebanon and Iraq and play havoc with oil supplies. Our senior commanders express the view that a strike will cause short and long term disasters. However I believe the inevitable British control of Libya will give Cameron the confidence to back Israel and in that respect a window of opportunity has already been agreed with our own commanders. I hope to get advance warning of this attack, in which Israeli F16’s will likely fly through Iraq air space, from Naval sources preparing to move a British monitoring force into the Persian Gulf towards year-end.
Tehran Times huh? Could there be any doubt?
http://old.tehrantimes.com/index_View.asp?code=163212
http://old.tehrantimes.com/index_View.asp?code=221932
http://old.tehrantimes.com/index_View.asp?code=218719
http://old.tehrantimes.com/index_View.asp?code=153055
Btw even the craziest truthers have distanced himself from Christopher Bollyn. He’s a Holocaust denier who I believe is still on the run for tax evasion.
The one thing I do believe is that it’s Iran top international daily.
I am sorry to disappoint you Mary but I am just a regular guy reading this blog on holiday to pass the time.
I did though once write a detailed, prize winning analysis of the Oslo Accords based on interviews with key diplomats involved that was actually quite sympathetic to the Palestinian case.
Over time though I began to become worried about the vociferous anti Israel character of much of this type of discussion and I now believe that it is important not to fall into the traps of the familiar, and I see it slightly juvenile, anti Israel discourse. That goes for the ‘its all the fault of the Americans’ point of view; I actually quite like the Americans and Israelis that I know. I personally don’t know any Palestinians, but not many make it to my town.
Is jaded suggesting that moderation is the same as deleting criticism? I think that the comments here are entirely reasonable. I suppose deleting criticism would help to maintain the stability of the world view. Isn’t that what they try and do in China?
Craig Murray: KathZ,
Not necessarily. The initial period of the same fall from power of the UK was actually marked by increased egalitarianism and the creation of the welfare state.
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This is bizarre wishful-thinking-cum-analysis.
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Increased egalitarianism/creation of the welfare state actually occured in the US through the time of the so-called Imperial Presidency of the US. FDR, Truman, Eisenhower, LBJ and even Nixon were liberal spenders of tax dollars on civil rights, healthcare and government assistance of the poor. It’s been in retrenchment since the time of Nixon and even with a minor uptick under Clinton and latterly under Obama the US doesn’t have a lot of cash to spend on such projects. But the Tea Party brinkmanship is the thing that has caused this massive clusterfuck so why not write a thank you letter to Boehner and co.
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Now, when we look at the shitty position that Europe is also in we can see quite clearly that the disintegration of the Euro is not going to lead to a new welfare state; there won’t be any pensions for anyone in Europe for a start.
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Presumably in the UK this economic crisis is going to lead to more public spending…er… riiiiiiiiiiight!
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Perhaps in Russia we can see some kind of reasons to be cheerful. No, there too, as you have already pointed out things are dire and there too pensions won’t exist for much longer.
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Interestingly a friend of mine who recently visited me from England was complaining about Niall Ferguson’s recent series – Civilisation – in which the apparent moral of the story is that the West will end up decadent like Opium-era China while China will soar to be the great hegemon soon. My friend complained that Ferguson appeared to be too “anti-Sinic” or “China-bashing” and yet, recently I watched a debate online between Niall Ferguson and Henry Kissinger in which, if I am not much mistaken Ferguson was downright gleeful at the idea that China will not be a mere hegemon but ruler of the twenty-first century before long. It’s quite amusing seeing Craig Murray and Niall Ferguson suddenly becoming bedfellows:
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I can’t seem to find a link to it online but it was quite interesting if you can put up with Ferguson’s posturing.
“Yugo, what about starting a thread about Human right abuses of the USA?? At least China is not claiming to be the champion Of Human Rights.. Talk about hypocracy, talk about Abu Gharib,talk about Guantana Bay, Deigo Garcia… •”
China violates human rights on a massive scale. There’s no effective human rights organization in China; not even allowed to assemble. In the U.S., there’s thousands.
If you want to test your convictions, please fly to Beijing and attempt some form of minor protest.
And thanks for taking my bait.