De-Americanize This!

OK, the USA will not default now, but reserves itself the right to do so later. Say in three months.

Amusingly, the official Xinhua news agency from the People’s Republic of China is repeating much of what I have been saying for years. About the USA, of course. Before unleashing the hypocrites from Beijing, let me point out a few facts:

Can the USA default? Sure. The USA defaulted in 1789, 100%, and in 1933, 40%. So the USA defaulted when it was convenient. As the Romans used to say: caveat emptor USA (=Let the buyer of USA bonds beware). And you know what? Deep down inside, the USA’s elite does not care.

Here are a few numbers:

53% of the bonds of the USA are held inside the USA. 47% outside (mostly by other central banks).

61% of the world currency reserves are in dollars.

42% of the world transactions are made in dollars.

One dollar out of two is outside the USA.

Around 60% of 3.66 trillion dollars of Chinese reserves are in dollars.

The bonds of the USA were long claimed to be the safest holding in the world. However, in light of constant threats to default, in recent years, at the very least, the reasons for that conclusion have to be changed. One cannot argue with a straight face, that a default of the USA is unimaginable. The threat of default of the USA keeps on re-surfacing ever more urgently. It has obviously become a chronic disease.

Certainly, one cannot argue that it’s a big surprise. One has, instead, to explain why a default of the USA does not matter. The People Republic of China has to explain why, knowing full well that the USA loves to threaten default, it nevertheless kept on pouring up to 1.3 trillion dollars in US bonds.

The naïve reason usually given is that China has to put its money somewhere. However, the more Machiavellian reason is that the plutocrats in Beijing want to please their masters in Washington. And the more they help their masters, the more the masters will be pleased, and co-dependent. Or so the silly Chinese leaders hope.

As I have explained in the case of the Chinese and Spanish empires, there is a co-dependency. Right now it is between Washington/Wall Street and the global plutocracy (including the one in China).

Thus investing in the bonds of the USA is, for China, and not just for China, as if paying for protection money from the Mafia. The plutocratic Mafia.

Consciously or not, the leaders in Washington are playing this BOND RACKET. Like a global violin. That will work, as long as global plutocracy calls the tune.

Before a bit more on this, let me roll out the Chinese government’s melodious hypocrisy (with my comments between brackets):

“Commentary: U.S. fiscal failure warrants a de-Americanized world

BEIJING, Oct. 13 (Xinhua)…it is perhaps a good time for the befuddled world to start considering building a de-Americanized world.

Emerging from the bloodshed of the Second World War as the world’s most powerful nation, the United States has since then been trying to build a global empire by imposing a postwar world order, fueling recovery in Europe, and encouraging regime-change in nations that it deems hardly Washington-friendly. [“Washington” is one thing, plutocracy a much more general one.]

With its seemingly unrivaled economic and military might, the United States has declared that it has vital national interests to protect in nearly every corner of the globe, and been habituated to meddling in the business of other countries and regions far away from its shores.

Meanwhile, the U.S. government has gone to all lengths to appear before the world as the one that claims the moral high ground, yet covertly doing things that are as audacious as torturing prisoners of war, slaying civilians in drone attacks, and spying on world leaders. [If it were covert, it would not be as bad; the worse was trying to officialize torture and assassination without judicial process. Obama seems to start to understand this belatedly, though!]

Under what is known as the Pax-Americana, we fail to see a world where the United States is helping to defuse violence and conflicts, reduce poor and displaced population, and bring about real, lasting peace. [That’s a lie: the USA has done a lot for refugees, for example in Syria. China has done nothing.]

Moreover, instead of honoring its duties as a responsible leading power, a self-serving Washington has abused its superpower status and introduced even more chaos into the world by shifting financial risks overseas, instigating regional tensions amid territorial disputes, and fighting unwarranted wars under the cover of outright lies.

As a result, the world is still crawling its way out of an economic disaster thanks to the voracious Wall Street elites, while bombings and killings have become virtually daily routines in Iraq years after Washington claimed it has liberated its people from tyrannical rule.

Most recently, the cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations’ tremendous dollar assets in jeopardy and the international community highly agonized. [Strange English; poor PRC with its “tremendous $ assets”.]

Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated, and a new world order should be put in place, according to which all nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing.

To that end, several corner stones should be laid to underpin a de-Americanized world.

For starters, all nations need to hew to the basic principles of the international law, including respect for sovereignty, and keeping hands off domestic affairs of others.

Furthermore, the authority of the United Nations in handling global hotspot issues has to be recognized. That means no one has the right to wage any form of military action against others without a UN mandate. [Agreed, yet not every regime is acceptable: Chap VII of the UN.]

Apart from that, the world’s financial system also has to embrace some substantial reforms.

The developing and emerging market economies need to have more say in major international financial institutions including the World Bank and the International Monetary Fund, so that they could better reflect the transformations of the global economic and political landscape.

What may also be included as a key part of an effective reform is the introduction of a new international reserve currency that is to be created to replace the dominant U.S. dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States.

Of course, the purpose of promoting these changes is not to completely toss the United States aside, which is also impossible. Rather, it is to encourage Washington to play a much more constructive role in addressing global affairs.

And among all options, it is suggested that the beltway politicians first begin with ending the pernicious impasse.”

Lots of true statements, yet colossal hypocrisy. Let’s not talk about Tibet, or Xi Quiang. Or even of the plutocrats in power in China. Xi owns about half a billion dollars, the preceding Prime Minister, 2 billions, and the just condemned Bo Xilai had impressive properties all over Europe and a child at Harvard, driving a Ferrari. 

Let’s just talk coal: the People’s Republic of China is the world’s largest consumer of coal, using more coal each year than the United States, the European Union, and Japan combined. More than half of the coal burned in the world is burned in China. Half of China’s power generation capacity to be built between 2012 and 2020 will be coal-fired.

The end result is a guaranteed disaster, rising seas, and that means war.

And who can make war better than the USA?

This explains why the bonds of the USA will always be desired, default or no default. One always want to be bonded to the strong, even if it means bonded by the strong.

***

Patrice Ayme

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23 Responses to “De-Americanize This!”

  1. EugenR Says:

    The US politicians look from distance like very unfunny clowns. Yet I say, “VIVA AMERICA “. Bad performers good performers, they are the only imperial power in the human history, that uses not only brute might of arms, but also the carrot, I mean “Coca Cola, Mac Donald and Hollywood”.

    http://rodeneugen.wordpress.com/2013/10/13/2220/

    • Patrice Ayme Says:

      All empires, even Persia in its worst versions, or the Mongols, had their excellent sides. The Nazis lasted only 12 years and 4 months, because, precisely, they were too stupid to have a nice side.
      But indeed, USA imperialism is ecumenical, and has many a good side…
      PA

  2. Alex Jones Says:

    At the heart of this … fraud… is an IOU on a piece of paper with nothing backing it. For those who see the fraud, wise to find an alternative source of wealth than pieces of currency paper.

    • Patrice Ayme Says:

      Dear Alex: Fraud, indeed, but maybe even more. As I will argue further today, it’s all about a gesture of goodwill to the super-powerful ones: USA, I gave you money, USA, you look at me tenderly now…

      And one can say even more: it’s a sort of institutionalized humiliation… for the rest of world. A country that went into default for 32 minutes, still keeps a AAA credit rating (according to some American credit agencies… Yes, they are all American; Europe has no credit agency of its own…)

      But indeed, Europe ought to draw the conclusion that it ought to keep its pounds and euros at home. To feed its own power, rather than that of Wall Street/Washington.
      PA

      • Alex Jones Says:

        I believe nations need to look at alternatives rather than empty paper currency.

        • Patrice Ayme Says:

          Alex: what do you have in mind? As it is, currency is mostly electronic, and, deep down, just contracts.
          PA

          • Alex Jones Says:

            In my opinion a commodity that is worth something such as food, gold, land, skills and wood. There are no easy solutions, but vapid IOU paper currency is not the answer.

            • Patrice Ayme Says:

              Dear Alex: The value of the commodities you quote can vary. Poisoned, fracked land is not what it used to be, for example. My solution, explained in prior essays, is to found currency on energy, or more exactly, AWE (Absolute Worth Energy).
              AWE would actually make possible the ecological age. Thanks to computer power.
              PA

  3. Patrice Ayme Says:

    We have to think moods, not mobs. Because that’s the mood that makes the mob. Although mobs have moods, those came from somewhere else.
    PA

  4. Patrice Ayme Says:

    De-Americanize This: Some cancer rates were multiplied by 5 in a half century. Only plausible explanation is chemicals, soft plastics. Why? Because that’s only important difference.

    Another important class of chemicals are those in air pollution. The WHO just said that hundreds of thousands of people got lung cancer from air pollution alone, ever year. They call onto governments to do something. another area where Obama did very little so far, except for vague wording similar to what I say…
    PA

  5. Paul Handover Says:

    Another deeply insightful essay, again just read aloud to my Jeannie. I have one of our dogs, Hazel, sleeping alongside me, stretched out from my right hip down almost to my right heel. My right elbow is resting on Hazel’s rear quarters as I stab away on this tablet computer writing this comment. I can feel the warmth of Hazel’s body, hear a quiet rasp in her throat as she breathes in. She is deep in sleep and deep in her bond to me.

    Why do I waffle on in such manner?

    Because, in a world that presently defies any rational understanding to the millions of us common folk, the purity of a dog’s love for its human friends is a golden truth about how we need to love one-another and the only planet we have!

    • Patrice Ayme Says:

      Dear Paul: Insightful comment of yours, in return! Thanks!

      As I have argued, love is the basal emotion and sensation. Probably not as urgent as pain, but much more overwhelming, from the start.

      Your observation about insanity is motivating me to write an answer to this. I would argue that, often, insanity is in the eye of the beholder.
      PA

  6. Patrice Ayme Says:

    Krugman explains why Chinese withdrawal from the USA bond market would be beneficial.
    http://krugman.blogs.nytimes.com/2013/10/18/the-china-debt-syndrome/

    My comment yesterday on Roosevelt was censored (although I did not use the word “coward’, or equivalent insults). But he published that one:
    There is a higher level, more Machiavellian interpretation.

    China has interest to put money in the USA, even if it, and especially because it, looks very risky, and unprofitable.

    Indeed, it makes it clear that Chinese bond purchases are a form of protection money, from Chinese plutocrats, to their godfather in Washington. This way they give the godfather the sort of respect godfathers always feel is primordial in their line of business.

  7. Patrice Ayme Says:

    There is no democracy of emotions. Love is superior, first, foremost, and more basic. Especially for questions involving survival. Sorry, Dark Side!

    • Paul Handover Says:

      And my hope, possibly an extremely naïve hope, is that the growing concern for the only planet we all live on, and can only live on, will evolve into a political power that sweeps aside those instruments of darkness.

      As has been mentioned before, there is huge and increasing anger towards many governments around the world. There is no lifeboat!

      • Patrice Ayme Says:

        Dear Paul: Plutocracy is the rule, democracy the exception. I am preparing an irreverential essay on Revere, following your lead! Hahaha. The Dark Side has its sense of unequalled humor…
        PA

  8. Patrice Ayme Says:

    Patrice,

    Read the short article from Forbes (see
    http://www.forbes.com/sites/eamonnfingleton/2013/09/22/main-gott-what-germany-inc-can-teach-america-about-economics/)

    … which explains why Americans and British, particularly those who think American capitalism is the only “right” kind or “best” kind or whose ideological beliefs cause them to distort the truth until the picture fits their misconceptions, whether about labor markets, anti-trust regulation or other issues, are not well-informed about why the German economy functions as well as it does. In fact, many of these people are simply in denial.

    It is shocking to Europeans to witness a minority in the U.S. Congress deliberately throw 800,000 people out of work in a vain attempt to defeat universal health care. In Germany it was pioneered… …by Bismarck before the first World War.

    Avowed Reagan-worshipers like Newt Gingrich who can be heard nightly on CNN defending the Tea Party’s attacks on Obamacare seem to have conveniently forgotten that Nixon proposed a more generous universal healthcare system than Obama succeeded getting passed only with great difficulty. I don’t expect a smooth rollout for Obamacare, but the alternative – having 50 million Americans without health insurance – is far worse.

    If the Republicans in Congress don’t like Obamacare why don’t they get busy fixing what’s wrong with it instead of shutting down the government and threatening to trigger an economic disaster a downgrade in the U.S.’ debt rating would certainly result in?

    This turns out to be nothing new in American politics. Whether Social Security, Medicare, ending segregation, manufacturing safer autos or equipping them with emissions control devices, there is a reactionary element in American politics that will wrap itself in the flag and resist positive change with all the misinformation and deception they can conjure up. In the end, the Congress itself is to blame for a lack of fiscal discipline, but I believe Obama in this instance was right when he said that some members of Congress cannot impulsively decide not to pay obligations Congress has already agreed to pay and use it as an excuse to shut down the government.

    It failed, but not without taking an additional toll on the economy. Wall Street merely celebrated the outcome because the slower economy means the Fed will be less likely to reduce its QE before the end of the year than before this fiasco.

    Republicans and Democrats who say they are focused on reducing the national debt have a lot of explaining to do as to why they allowed the wars in Afghanistan and Iraq to cost trillions while they passed a prescription drug benefit through Congress without paying for one cent of it with tax increases or spending cuts. People on Wall Street who are often heard to blame the Fed should talk more often about Congress’ role in getting the country in so much debt. Both the Congress and Wall Street have a lot of explaining to do as to why education in the U.S. costs so much, why our workers are not as well trained or productive as Germany’s (to give an example) and so on.

    The fact is, they can’t explain these things because they are clueless, they are taking too much money from interests who want to perpetuate the status quo and most of them care more about getting re-elected than anything else. There are some very exceptional people both on Wall Street and in Congress, but the average fall far below this.

    I’ve seen firsthand the way Germans (and Swiss) work, that better education and training available to them at a modest cost makes them more productive and able to earn higher wages, and that their countries are not merely dominated politically by wealthy plutocrats bent on destroying labor unions while Congress lets private investors help themselves to hefty profits on student loans while graduates enter the workforce with outrageous amounts of debt.

    Jeff

    • Patrice Ayme Says:

      Dear Jeff:
      We agree that Universal health care is a must. However, Obamacare is nothing of the sort. Instead, a parody thereof.
      I call Obamacare Obama wealth Care. One more word, and the world changes. Am I nasty? I wish I were.

      Will Obama Wealth Care will be to Bama what Iraq was to Bush? Stay tuned, but it won’t take long.
      PA

  9. Patrice Ayme Says:

    Somewhat parallel article by Steve Weissman, published two weeks later. Somewhat parallel, but still interesting, and with different elements at the end (USA spying on Great Britain!)
    http://readersupportednews.org/opinion2/277-75/20157-de-americanize-the-world-its-just-a-matter-of-time

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