Empire-USA is Crashing

Empire-USA has been sliding down in economic power since the 1960s and is now dropping faster as nations fear us less, and have less dependence on us. There is less kowtowing and subservience! Recent events that show serious indications of US weakness are; 1) Intervention in Syria (Obama’s retreat on bombing due to lack of international support, especially from England and France), and 2) Activity of the BRICS (Brazil, Russia, India, China, and South Africa) who just had their fifth annual meeting to plan avoiding use of the failing US Dollar (USD). These are on top of our self-imposed damage caused by; 1) Perpetuation of our in our excessive spending and massive debt, paid for by creating new money (which reduces the Dollar’s value; purchasing power), and 2) The ongoing murder, destruction, and hate of the USA caused by our invasion of nations for economic and political reasons even though they have done no threat or harm to us. This includes all of our wars and occupations since our 1776 Revolution, and recently Afghanistan, Iraq, and Libya, with Syria and Iran in our sights! While our presidents have put forth lies to justify these wars, oil and defense of Israel are the main hidden reasons for the recent ones. Defense of the USD was a factor in Iraq and Libya because they were selling oil for gold and other currencies (fake money, like the USD (‘fiat’, no redemption for gold), needs use by buyers to support its value; we call them ‘petrodollars’). Iran has been selling oil in gold and other currencies since 2004 and has its own trading exchange (a ‘bourse’).

Most nations (even our ‘friends’ and ‘puppets’) are tired and angry about our predatory methods and are no doubt pleased to see us decline in economic power, with loss of expensive military might sure to follow. Thus, we can expect more incidents of nations ignoring our demands for control.

Paul Craig Roberts defines our situation well in his strong Sep. 4, 2013 article The High Cost of Saving Face for Obama. The following excerpts are key points (his lower-case for obama and kerry!): 

The loss of Western credibility is a huge price to pay in order to rescue a discredited president whom no one believes, not even his supporters. Essentially obama is a cipher whose term of office is complete. The obama regime epitomizes the degeneration of the American state . . . Instead of voting on whether to allow obama to attack Syria, Congress should be voting to impeach obama and kerry. Their blatant lies, dictatorial claims, and arrogant inhumanity are powerful arguments for removing them from office . . . Foreign policy is the preserve of the Israel Lobby and the neoconservatives, every one of which is tightly tied to Israel. Americans have no voice, and no representation. Whatever America is, the government is not influenced by the voices of the American people . . . With the hubris, arrogance, and insanity of Washington an established fact, Russia and China perceive an enemy that intends their destruction. As neither country is going to accept their demise, Congress’ acquiescence to obama’s lies in order to save “america’s prestige” sets the stage for nuclear war . . . However, if Congress refuses to be committed to a war crime based on a lie, rejects obama’s bribes and intimidation, and vetoes the war criminal’s attack on Syria, it means, the end of the influence of the Israeli Lobby, the bloodthirsty neoconservatives, and war mongers John McCain and Lindsay Graham…

As I write on Sep. 4, there is considerable support in Congress for Obama’s ‘military action’ concerning Syria’s purported ‘chemical weapons’. However, a tragic and preposterous issue is that no one is discussing the real cause of all the trouble in Syria, namely Assad’s opposition (since 2009) to Qatar building a pipeline to carry its gas through Syria and Turkey to supply Europe. This would compete with the near monopoly Assad’s friends at Russia’s Gazprom now have. Hence, those who favor the pipeline are attacking Assad. This includes the U.S. because we want to help Europe and hurt Russia! Michael Snyder’s Sep. 3 article tells the story well.

The Original Rise of Empire-USA 

It is always useful to know the background on a subject. We can better understand the decline of Empire-USA if we know how it started and grew. The USA has a history of aggression and hubris in how it grew in size and world power. Although we don’t occupy other nations as a traditional ‘colony’, we control them with; 1) bribes of their leaders, 2) economic dependency called ‘foreign aid’, and 3) military dependency with treaties and ‘status of forces’ agreements. When we invade and occupy, it is for political and economic goals, not defense.

The land that is now the 50 states of the USA, grew from the original 13 by adding; 1) the ‘Louisiana Purchase’ from Napoleon in 1806 (a swath from New Orleans to Montana), 2) the Northwest Ordinance (now OH, MI, IN, IL, and WI) by mutual agreement in 1787, 3) Florida, which Spain ceded to us in 1821, 4) the Oregon Treaty with Britain in 1846 (now WA, OR, ID), and 5) Alaska, which we bought from Russia in 1867.

The rest of our land was added by invasion and annexation; 1) We used aggression to take the northern half of Mexico in the Mexican-American war from 1846 to 1848 (our settlers there started it by annexing Mexico’s Texana province in 1845) which added our entire Southwest (CA, AZ, NM, TX, NV), 2) On the false claim of bombing the USS Maine, we started the Spanish-American War’ in 1898, and invaded Cuba, Puerto Rico and the Philippines. We kept Puerto Rico, Spain ceded Guam, and we settled for a naval base in the Philippines (after murdering 200,000 ‘rebels’ who were defending their homes), and 3) then we ‘annexed’ (read ‘we now own you’) Hawaii in 1898. The ‘War of 1812’ was an attempt to acquire Canada, but it failed.

Subsequent invasions and ‘deals’ did not involve adding land to the USA, but added to Empire-USA by economic and political control of other nations. Trade and military defense agreements were the preferred methods. According to the Dept. of Defense, we now have over 800 bases in 130 countries (and growing). An empire by any measure! Our latest plan to protect our turf is to surround Russia and China with missiles sites, and use our ‘National Endowment for Democracy’ (NED) to control or de-stabilize their neighbors (Georgia, etc.). The President, his cronies, and Congress fear there may be domestic anti-government riots as people become more desperate for jobs and benefits. When they are short of food there will be robbery of stores and neighbors! To protect themselves; 1) All local police have been equipped with military-style guns, body-armor, trucks, etc., 2) The Dept. of Homeland Security has created a ‘domestic army’ with tanks, trucks and a massive supply of guns and ammo (they bought ammo so much that it’s hard to get in local gun stores!), 3) FEMA has built ‘detention centers’ nationwide for ‘troublemakers’, and 4) Of course NSA has been spying on almost everybody worldwide to find ‘troublemakers’! Maybe Obama will start a war to stir up patriotism and support!

The Decline of US Strength

The USA has been the world’s undisputed economic superpower since 1920, but now China’s GDP is almost as big as ours! We came out of WW1 with the world’s biggest and strongest economy, and the USD was the de facto world’s primary reserve currency. The world always has a primary currency (and one or two lesser ones) used for international transactions (example; when Mexico buys coffee from Brazil they use USD). This means anyone will accept it for payment, and banks used it for their reserves; ‘good as gold’). The British pound and French franc had been reserve currencies but lost it because of excess money creation and inadequate gold ‘backing’ (debasement). The USA is now on the same path! Despite the downturn in the 1930s depression, we were even stronger after WW2, and had been set by the 1944 Bretton Woods Agreement as the official world reserve currency, with a fixed price of gold at $35 per troy ounce. It stated that nations (but not persons) could redeem paper dollars for gold at $35 per ounce. We had more gold by far (29,279 metric tonnes, of the 31,096 world total) than any other nation; followed by the UK with 2,543 tonnes, Switzerland 1,306, France 588, and Germany none!

In the military and political realm, we created NATO to assure a role in managing the politics and economics of Europe, and the United Nations to wield our political power (we had veto power in the Security Council as one of the five permanent members; plus Britain, France, the Soviet Union, and China). Although the USD had by 1950 then lost about 65% of its purchasing power (compared to when the Federal Reserve System started in 1913) we were still the world’s top economic power and the USD accounted for over 80% of international transactions and bank reserves (‘good as gold’). Things looked glorious until Pres. Johnson started his huge welfare-warfare spending on Medicare and Vietnam. We were soon creating new money to pay our bills and other nations worried there was inadequate gold ‘backing’ for redemption. France and England redeemed large amounts and we were running low on gold, which led to Pres. Nixon ending the right to redeem on August 15, 1971. It wasn’t long before all other nations, except Switzerland, ended redemption. Despite the end of gold redemption, the USD remained the primary world reserve currency and thus we could still print new money to pay our bills. Charles De Gaulle called this our ‘exorbitant privilege’! Other nations, then and now, must engage in foreign exchange to get USDs to pay their international bills, so their creation of new money is limited by loss of exchange value. After 1971, our money supply (MO, M1, and M2) zoomed up by billions as we spent the newly created money. The recession of 1980-82, the dot-com crash of NASDAQ in 2000, and the crash of housing prices and business in 2008 can all be traced to excessive money lent on loose terms to flaky borrowers! Then the money supply zoomed up by trillions as Fed Chm. Bernanke started his Quantitative Easing series of ‘stimulus’ funding in 2008. All this creation of new ‘fiat’ money (worth whatever the government declares its’ face value is; backed by legal tender laws) has sped up the decline of USD value (purchasing power) which has dropped by over 95% since the Fed was created in 1913! Our high debt and spending have weakened the USA both economically and militarily. Our friends and opponents know we are now limited in how much we can afford to do,

Conclusion

The current problems with Syria are just part of our history of meddling in the affairs of other nations. We assume the role of judge and enforcer (with an open-ended plan of action), when by law situations like Syrian chemical weapons should be referred to the UN’s World Court in The Hague, Netherlands. We should work on our domestic problems instead. USA governments at all levels (city, county, state, federal) have grown in power since our founding, and are causing great social and economic harm with their regulations, spending, and abuses, most of which is unconstitutional. Our non-defense wars and invasions for empire have cost us trillions plus creation of enemies. The USA is at a tipping point where spending reductions and legal reforms must be made or we will have a more severe economic crash than we have experienced since 2008. A detailed plan is shown in my essay Save the USA by Restoring Government to its proper Role. We can avoid failure if we shut down our empire and non-defense wars, reduce spending, and return to the gold standard for a stable money monetary system that always results in more growth and prosperity. Let’s get started!

David Redick (BS-Eng., MBA-Economics) is an activist for peace and prosperity via better (less) government and free markets. Read more from David Redick Here