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U.S. to be knocked off pedestal
The Second World War turned most of Europe and much of Asia into rubble.
One clear winner—the United States—emerged from that war.
Using the Bretton Woods institutions, the U.S. became the world’s banker. The U.S. rebuilt Western Europe and Japan. But not Russia. Russia rebuilt itself, as did China. The U.S. did other great things, such as putting people in space and on the moon. For several decades, life was just one big party, notwithstanding the threat of nuclear Armageddon.
Where the U.S. let us all down in a big way was, instead of investing the vast wealth at its disposal in developing a sustainable future, it invested in a kleptocracy. Over the past 70 years, more and more wealth has been transferred into the hands of fewer and fewer people. As long as the parasites were few in number and the host was strong, nobody noticed. But as the host got weaker, it became necessary to run ever more extravagant Ponzi schemes simply in order to keep the system running.
Today the U.S. is bankrupt. This can be seen by its huge trade deficit and national debt. The reason the creditors have not foreclosed yet is that the U.S. remains the world’s banker. Dollars are no longer backed by any material goods, so they are nothing more than scrip, but they appear to have value as long as we keep buying into the Ponzi schemes.
Calling in the markers will result in the collapse of the dollar currency. This will wipe out the U.S. economy, of course, but it will also hurt the creditors who are holding the markers. Nevertheless, in the past decade or so, several nations have attempted to set up an alternate currency.
Iraq tried it first and got bombed into rubble. Then Libya tried it and got bombed into rubble.
Enter the Ukraine crisis. Russia sees the crisis in Ukraine as an existential threat. Russia acted to protect its self-interest, and will continue to do so.
The U.S. is not going to go to war with Russia over Ukraine. Russia is heavily armed and extremely dangerous. Instead, the U.S. threatens sanctions. Unfortunately, Putin has more resources available than just military force. He knows the U.S. is just like an old tiger that can only catch rabbits. He knows the U.S. is bankrupt.
So he turns to China and says, “Let’s set up a new world bank.” China is happy to oblige. The U.S. is going to be knocked off its pedestal entirely, and all nations strongly linked to the U.S. are in for a world of hurt.
If this were a poker game, it would be funny. Unfortunately, our lives hang in the balance.