https://www.paulcraigroberts.org/2023/03/29/why-the-dollar-based-international-system-is-breaking-up/
Why the Dollar-based International System Is Breaking Up
The Federal Reserve’s higher interest rates after 12 years of zero interest rates are devaluing the asset side of banks’ balance sheets. This frightens depositors and they withdraw their deposits. Depositors also are withdrawing their money because they can get much higher interest rates on safe US Treasuries. According to some reports, $1 trillion has already been withdrawn from US banks. Bloomberg is reporting rumors that Schwab’s $7 Trillion empire based on low rates is cracking from bond losses. In the face of this vulnerability of the financial system, the Federal Reserve raised interest rates further.
There is also the problem of the currency and interest rate derivatives. No one knows the risk in these instruments. The US dollar itself is declining in use as world reserve currency. Alarmed by Washington’s weaponization of the dollar with sanctions and confiscations, much of the world is arranging to abandon the dollar’s use to settle international trade accounts, but the supply of dollars is not declining. This implies a fall in the dollar’s exchange value. The offshoring of manufacturing and food production has made the US heavily dependent on imports. A loss in the dollar’s exchange value resulting from countries settling their trade balances in other currencies means a sharp rise in US inflation.
The Federal Reserve hasn’t the intelligence to think through the consequences of its higher interest rate policy. The federal government cannot comprehend the consequences of offshoring for the US trade deficit or the consequences of continuing massive US budget deficits for the Treasury market.
Washington is too arrogant to comprehend the new way in which the US is perceived abroad. The world sees the dollar-based reserve currency system as Washington’s punishment device, and the world sees dollar-based debt expanding while demand for dollars declines. The result will be a drop in the foreign exchange value of dollar denominated financial instruments such as stocks and bonds.
The collapse of the Soviet Union gave Washington the opportunity to lead the world on a path of peace and economic development. But the neoconservatives could not resist their attempt for world hegemony and launched twenty-five years of war. Wall Street and corporate executives with eyes on bonuses could not resist deindustrializing the US by locating US manufacturing offshore, thus boosting Chinese economic growth instead of American economic growth. These major failures indicate the total failure of US policymakers.
The repeal of the Glass-Steagall Act in the closing days of the 20th century launched the US into the 21st century on a path of financial instability. Nothing has been done to correct this, and nothing has been done to correct the offshoring mistake or the failure to control the supply of government debt. As countries move away from using the dollar to settle international transactions, a dollar glut will result in US inflation and declining American living standards.
Discussing the seriousness of our country’s situation with Michael Hudson, it is difficult to find hope. To admit that mistakes are being made implies acknowledging that we are on the wrong path and that China, Russia, and those governments aligning with them are on a better course, using their banks for financing industrial wealth instead of acting as brokerage casinos and dealing in financial arbitrage and debt leveraging. No American policymaker will risk being asked “why do you support the policies of Xi and Putin?” That they, and not us, have the right policy is not a permitted thought.
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https://caitlinjohnstone.com/2023/04/07/the-west-has-been-planning-to-crush-china-for-a-very-long-time/
The West Has Been Planning To Crush China For A Very Long Time
“China is preparing to kill Americans and we’ve got to prepare to defend ourselves,” empire propagandist Gordon Chang told Fox Business during an interview on Monday.
Chang, who has famously spent more than two decades incorrectly predicting the imminent collapse of China, bizarrely made these comments while discussing a future attack on Taiwan. Taiwan is of course not the United States and any potential war between Taiwan and the mainland would be an inter-Chinese conflict that needn’t involve a single American, and Chang is most assuredly not part of any “we” who will ever be engaged in combat with the Chinese military under any circumstances.
Chang frames his narrative as though China is menacing Americans in their homes, when in reality only the exact opposite is true: the US has been militarily encircling China for many years, and is rapidly accelerating its efforts to do so.
Just the other day the Philippines announced the locations of four military bases the US will now have access to in its ongoing encirclement operation, most of them in the northern provinces closest to China.
Antiwar’s Dave DeCamp writes:
Three of the Philippine bases will be located in northern Philippine provinces, a move that angers China since they can be used as staging grounds for a fight over Taiwan. The US will be granted access to the Lal-lo Airport and the Naval Base Camilo Osias, which are both located in the northern Cagayan province. In the neighboring Isabela province, the US will gain access to Camp Melchor Dela Cruz.
The US military will also be able to expand to Palawan, an island province in the South China Sea, disputed waters that are a major source of tensions between the US and China. The US will be granted access to Balabac Island, the southernmost island of Palawan.
The new locations are on top of five bases the US currently has access to, bringing the total number of bases the US can rotate forces through in the Philippines to nine. The expansion in the Philippines is a significant step in the US effort to build up its military assets in the region to prepare for a future war with China.
So it’s very clear who the aggressor is here and who is preparing to attack whom. Imperial spinmeisters like Gordon Chang are just lying when they frame China’s militarizing to defend itself against undisguised US encirclement as China militarizing to attack Americans.
Fun fact: US officials used to pretend China was crazy and paranoid for saying this encirclement was happening. In the 1995 book “Killing Hope: U.S. Military and CIA Interventions since World War II,” William Blum wrote the following:
In March 1966, Secretary of State Dean Rusk spoke before a congressional committee about American policy toward China. Mr. Rusk, it seems, was perplexed that “At times the Communist Chinese leaders seem to be obsessed with the notion that they are being threatened and encircled.” He spoke of China’s “imaginary, almost pathological, notion that the United States and other countries around its borders are seeking an opportunity to invade mainland China and destroy the Peiping [Peking] regime”. The Secretary then added:
“How much Peiping’s ‘fear’ of the United States is genuine and how much it is artificially induced for domestic political purposes only the Chinese Communist leaders themselves know. I am convinced, however, that their desire to expel our influence and activity from the western Pacific and Southeast Asia is not motivated by fears that we are threatening them.”
Another fun fact: thanks to a 2021 revelation by Daniel Ellsberg, we now know that the secretary of state’s comments about how crazy and paranoid China was for thinking the US wanted to attack it came just eight years after the US had seriously considered acting on plans it had drawn up to launch a nuclear strike on the Chinese mainland.
Mainstream western imperialists of all stripes have long recognized that a hard conflict with China will be necessary at some point in the future if they’re to continue their domination of the world. In his 2005 book “Superpatriot”, Michael Parenti wrote that the unipolarist neoconservative “PNAC” (Project for the New American Century) ideology that had by that point taken over US foreign policy was ultimately geared toward a future conflict with China:
“The PNAC plan envisions a strategic confrontation with China, and a still greater permanent military presence in every corner of the world. The objective is not just power for its own sake but power to control the world’s natural resources and markets, power to privatize and deregulate the economies of every nation in the world, and power to hoist upon the backs of peoples everywhere — including North America — the blessings of an untrammeled global ‘free market.’ The end goal is to ensure not merely the supremacy of global capitalism as such, but the supremacy of American global capitalism by preventing the emergence of any other potentially competing superpower.”
But you can see the twinkle of this looming conflict in the eyes of western imperialists long before any of this. In a 1902 interview (which was not published until 1966 — a year after Churchill’s death), Churchill candidly voiced his support for partitioning China at some point in the future in order to preserve the dominance of the “Aryan stock” over “barbaric nations”:
The East is interesting, and to no one can it be more valuable and interesting than to anyone who comes from the West.
I think we shall have to take the Chinese in hand and regulate them. I believe that as civilized nations become more powerful they will get more ruthless, and the time will come when the world will impatiently bear the existence of great barbaric nations who may at any time arm themselves and menace civilized nations. I believe in the ultimate partition of China—I mean ultimate. I hope we shall not have to do it in our day. The Aryan stock is bound to triumph.
The word “partition” here means breaking a nation up into smaller nations, i.e. balkanization. To this day we see western imperialists pushing for the partitioning of disobedient nations like Russia and Syria, and we still see this with China in the push to permanently amputate regions like Xinjiang, Hong Kong and Taiwan from Beijing.
China’s sheer size, social cohesion and geostrategic location have long been recognized as a potential problem in the future for western imperialists who wish to ensure their ability to dominate and control, and now we’re seeing that all come to a head. Churchill said of a future confrontation with China “I hope we shall not have to do it in our day” because that confrontation has always been certain to be horrific, and today in the Atomic Age this is far more true than it was in 1902.
And in fact we do not have to do it in our day, either. We don’t have to do it in any day. The only reason we’re being pushed toward a profoundly dangerous conflict with China is because it’s the only way for western imperialists to maintain their hegemonic control of this planet, but their hegemonic control of this planet has brought us to a point of endlessly escalating nuclear brinkmanship and looming ecosystemic collapse. It hasn’t exactly been working out great, is what I am saying.
There’s no reason the west can’t simply accept the existence of other powers and stop trying to dominate everyone on earth. We have long been ruled by tyrants who continually push our world toward suffering and death in the name of securing more power and control, but we don’t need to accept their rule. They do not have a healthy vision for our species, and there are a whole lot more of us than there are of them. Their rule is done as soon as enough of us decide it is.
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https://brownstone.org/articles/the-reopening-racket/
The Reopening Racket
At this time, three years ago, the nation was in shock and shambles, with businesses and churches closed, Main Street boarded up, people huddling in terror in their homes, and everyone dealing with travel restrictions between states.
Parents had left work to care for their children because the child care facilities and schools were shuttered. Commerce had died. Not even the hospital parking lots had cars in them because they had all but shut for anything but Covid and other emergencies. People stayed home out of fear.
It was then that the money began to flow from Washington. Congress voted for a $2.2 trillion spending package that went to states and kept the lockdowns going. The reason was simple: they were getting more money from lockdowns than they were missing in sales tax. The governors chose money from D.C. over the rights of their own citizens.
Trump’s lockdown edict of March 16, 2020 was designed as an emergency measure but the 15 days were then extended to 30 and more. He had been told early on that this virus was likely a bioweapon but not to worry because the military was working with pharmaceutical companies to produce the antidote. All we needed to do was minimize infections via restrictions on mobility and gatherings and then the magic potion would arrive to fix everything.
The script was wrong but dominant. The end goal was implicit eradication, which was always impossible, and getting there required case minimization, which was a massive immunological error. At some point in the following week, something went off in Trump’s head and he began to wonder if he had been played. He wasn’t sure but he began to suspect it.
Two weeks from today, three years ago, the president was getting more frustrated and was ready to bail on the whole plan. Jared Kushner (Breaking History) tells the story.
On April 15, Trump called me to the Oval Office and said that he wanted to end the COVID-19 lockdown and reopen the economy the following day. While he believed that the federal guidance to slow the spread was justified to flatten the curve and build up lifesaving supplies, it was supposed to be temporary, and he believed that the doctors wanted it to go on indefinitely.
As he fielded calls from business leaders, economists, and members of Congress, it was clear that the unemployment rate would soon jump to 30 percent. He told me that he wanted to make an announcement immediately.
I implored him to give me a few more days, explaining that the governors had asked for clear reopening guidelines and that Dr. Birx was in the process of formulating a plan that Trump’s medical and economic teams could support. I cautioned him that if he moved forward before a plan was finalized, his own advisers would distance themselves from the decision and Americans would lose confidence in the federal response.
“If we can have consensus on a plan, it will be much better,” I said.
Trump ultimately agreed to give me twenty-four hours to achieve a consensus on reopening. In a meeting with the president the next day, April 16, Fauci strongly advised against a full reopening. Continued lockdowns would save lives, he argued, and we should keep them as long as possible.
“I’m not going to preside over the funeral of the greatest country in the world,” Trump declared.
“I understand,” said Fauci meekly. “I just do medical advice. I don’t think about things like the economy and the secondary impacts. I’m just an infectious diseases doctor. Your job as president is to take everything else into consideration.”
Fauci was a shrewd politician and smooth communicator. Nobody rises to the top of a bureaucracy like the National Institutes of Health and survives six presidential administrations over three and a half decades without knowing how to self-promote, outmaneuver, and curry favor with the powerful.
The result was a grand reopening plan issued April 20, 2020. It is embedded below.
This plan was a complete ruse. It was designed to go in three stages but just to get to stage one was not an easy task. It should have been called a Keep America Closed Plan. Even before a state could consider reopening, it had to achieve the following:
Downward trajectory of documented cases within a 14-day period, or a downward trajectory of positive tests as a percent of total tests within a 14-day period (flat or increasing volume of tests)
At any point in the 14 days, cases (defined as PCR testing, which may or may not mean sick) could start rising again and the 14 days had to start over again. Remember this was during what seemed to be the lowest wave simply because the virus needed to travel far and wide for population immunity.
Simply put, no state could comply. And even if the phased reopening began, it would need to be rolled back again and started over. If this plan had been fully implemented, it would have meant three years of rolling lockdowns. It had the look and feel of science and expertise but the whole thing was made up out of whole cloth solely for the purpose of keeping the scam going.
Here is the map of “cases” extended over years. Follow the ups and down and imagine yourself locked down in every two week period in which there is not a clear decline. Keep in mind too that this chart does not reflect with precision any existing reality. It is gleaned from official tests run with PCR tests.
In other words, the whole plan was a ruse concocted by Deborah Birx and Anthony Fauci to trick Trump into thinking that there was a plan in place that would save the US economy and his presidency. There wasn’t. It was also useful to bamboozle the public into thinking they only needed to comply a bit longer and then all would be well.
Baked into the opening plan was the idea that lockdowns would actually achieve something such as lower case counts to the point that the virus would vanish. It was a carrot held out for those areas willing to put up with the stick long enough. Thus the only reason the great opening – meaning liberty and rights – would be delayed was due to a recalcitrant failure on the part of people to defy the lockdown plans.
This plan was also structured to encourage governors and other officials to continue to crack down on people so as to keep case counts as low as possible so that compliance would be rewarded with some lessening of restrictions. It was the embodiment of “Beatings will continue until morale improves” or more precisely “We will allow morale to improve only when it becomes clear that the beatings are working.”
The White House’s reopening plan partook of the same bad epidemiology as the lockdowns, the mistaken view that government policy could somehow assert hegemony over the microbial kingdom with executive orders, pronouncements, and cops. Once that policy worked, it could be relaxed but not before.
Even in Phase One, there were domestic capacity restrictions and demands for social distancing and so on, plus the injunction never to touch your face, as if your own body was poison. Employers were told to close common areas. Travel was to be essential only. Movie theaters could only open “under strict physical distancing protocols.” All of this nonsense purported to be “the science” but it was clearly designed to keep up general population alarm and heighten fear levels.
Presuming any state could ever get to Phase Two, which could only happen once there was no “rebound” in the virus,” there were still restrictions: “Social settings of more than 50 people, where appropriate distancing may not be practical, should be avoided unless precautionary measures are observed.” Only in Phase Three were bars allowed to have normal capacity. Such precision in planning would make the crafters of a Soviet Five Year Plan blush.
This was not a reopening plan at all but a trap to keep the country in lockdowns until they could no longer be viably sustained. In addition, some version of this bogus plan was copied in nearly every state, with various decrees of specificity. It was a nation-wide bonanza of fake science designed to make the experts look like they knew what they were doing when in fact they were making things up out of whole cloth to save face.
And sure enough, Georgia was the first to bolt out of this lockdown prison, followed by Florida and Texas later. But in the meantime, countless businesses had been destroyed and untold numbers of lives wrecked under the false belief that laws and edicts could somehow redirect and eradicate a respiratory virus that everyone would get in any case.
The folly of this period of our lives is truly unspeakable. The “reopening” plan was part of the same, a presumptuous use of state power that had no basis in science but rather only served to broadcast the message of who had power and who did not. It was structured to fail, and fail again if it accidentally succeeded. Dressed up in the authority of a grand government plan, it was nothing but a stalking horse for continued lockdowns on a rolling basis until our masters in Washington decided otherwise.
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