Sunday 24th of November 2024
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killing the golden goose......

The USA has shot itself in the head with its own wonder weapon. The most powerful weapon in the US arsenal is not F-16 jets, Himar missiles, or any of the other conventional war toys. Real US power resides in the US dollar.

By increasingly weaponizing the dollar and access to the dollar-denominated global trading system, America has taken to the greenback with a blowtorch that will trigger a reckoning for the ages. It is a classic case of imperial overreach.

 

US shoots itself with own super-weapon   By Eugene Doyle

 

This October in Kazan, Russia, a set of counter-measures will be launched by the BRICS countries that will fundamentally change the balance of global power – not overnight, but as surely as night follows day.

“The danger that everything will spin out of control keeps growing, as ever greater financial weapons are developed and deployed. But no one seems to know what to do about it.” – Underground Empire

The $USD is the Golden Goose or – to use another animal analogy – the cash cow of America. The Bretton Woods system established after WWII made the USA the world’s banker; with that came a commitment that the US would act as a neutral party when businesses and governments put money into the dollar. Economists like Richard Wolff, professor emeritus of economics at the University of Massachusetts Amherst, point out that since the end of WWII, at no cost and little risk of inflation, the US has printed or digitally created trillions of dollars and purchased the world’s products and services in return. That’s the privilege that comes with owning the world’s reserve currency. Having been paid in USD these same trading partners then invest much of those dollars back into US Treasuries and other dollar-denominated instruments. It is a unique advantage that should be protected at all costs – Britain had the same in its heyday. Instead, America is destroying its unique competitive advantage with the weaponisation of the dollar and the global trading systems coupled to it. Today a majority of the world economy lives under US sanctions or other coercive measures.

One of the most important books people should get their hands on is Underground Empire – How America Weaponised the World Economy – by Henry Farrell, Professor at John Hopkins and Abraham Newman of Georgetown University. Published in 2023, it provides a history lesson, case studies (Huawei, Iran, the Snowden moment, etc) and a code book for understanding what it all means. Coercive measures explored include embargoes, threats to be kicked out of the international Swift payment system (the primary mechanism for settling international payments), forcing major internet providers and other companies to hand over commercial information to US officials, taking control of choke points in the global internet and finance systems to spy and bully, and using intellectual property and dubious application of law to effectively conduct piracy. All are linked to dollar power.

Putting the squeeze on North Korea to (unsuccessfully) stop its nuclear weapons programme taught the US lessons they refined in their attack on Iran. One of the shocks was how successful they were at driving a middleweight economy like Iran out of the global financial system. Other successes include wrecking Huawei’s business model and seeing it slip from 20% of mobile devices to 4%, and crippling its rise in the 5G market.

So prevalent now are US economic sanctions that most people didn’t even notice that the Moscow stock exchange, MOEX, was forced to cease trading in dollars and euros this month. It barely raised a blip on the western media’s radar.

US sanctions were supposed to cripple Russia, turn Sevastopol into a NATO port, drive Russia out of the ranks of the great powers, and trigger regime change. The opposite has happened; Russia’s economy has boomed and it has now overtaken Germany in parity purchasing power (a tool for inter-country comparison used by OECD, World Bank and other institutions). Putin by any measure, including US research, is more popular than any leader in the West.

This month the G7 announced they will raise $50B in loans for Ukraine and pay bond holders with interest from Russian funds stolen by Western countries as punishment for invading Ukraine. Innovative, it may be, and many are cheering on the move, but the measures also take a wrecking ball to the idea that placing your money in USD or Euro is a safe thing to do. “Trust me, I’m an American banker” isn’t a convincing pitch these days.

Decoupling from the USD is moving at a pace few imagined possible. Twenty years ago nearly 70% of global reserves held by central banks were held in USD. That figure has dropped to around 50% and the downward trend is accelerating.

You may dislike Iran, North Korea, Venezuela or any of the dozens of countries currently under US sanctions. You may fully accept the Western narrative that the war in Ukraine was unprovoked and must be punished, or that China must be stopped from rising – but the reality is that any bank that seizes the assets of someone who banks with them frightens the bejeebers out of anyone else with deposits.

Countries such as Saudi Arabia, Turkey, Malaysia, Venezuela, and much of the Global South – in other words, the bulk of humanity – are cautiously looking for the exit. Moving away from the dollar is increasingly about de-risking. Gold, a basket of other currencies and repatriation are increasingly attractive alternatives.

China, at March 2024, held $767 billion in US Treasuries, about 10% of the U.S. national debt. Already subject to thousands of sanctions, China knows that the US will do almost anything to stop its rise; and so, according to President Xi, it must build a system that is independent of US dominance. There is a real danger of the world sundering into two systems.

This October in Kazan, Russia, we may witness major moves in the creation of an alternative trading mechanism to compete with SWIFT (the global interbank communications system), the creation of institutions to displace the IMF and World Bank – perhaps an expanded BRICS New Development Bank (current capital base $100 billion) – and the induction of many more countries into the BRICS framework which is rapidly dwarfing the G7.

Russian foreign minister Sergei Lavrov: “A process has been set in motion following the most recent summit in Johannesburg. World leaders asked their finance ministers and central banks to make recommendations on alternative payment platforms. Thus, the process is underway, and there is probably no stopping it.”

President Lula of Brazil suggested that CELAC, the Community of Latin American and Caribbean States, would look to the new trading platform to safeguard their trade and economic relationships against abuse by the dollar. Three dozen countries have signalled they wish to join BRICS.

As Farrell and Newman said in Underground Empire, “When you have built the economic equivalent of a nuclear arsenal, you shouldn’t be surprised when others think about striking first or striking back.”

https://johnmenadue.com/us-shoots-itself-with-own-super-weapon/

 

 

chronic......

US budget deficits and soaring debt present a “growing risk” to the global economy and must be urgently addressed, the International Monetary Fund (IMF) warned on Thursday. 

The country's national debt is piling up, approaching $35 trillion, data shows. The US federal budget deficit jumped from $1.4 trillion in fiscal 2022 to $1.7 trillion last year, according to the IMF’s latest figures.

The Congressional Budget Office, the official fiscal watchdog in the US, predicted earlier this month that the deficit was likely to hit $1.9 trillion this year, representing around 7% of GDP.

“Such high deficits and debt create a growing risk to the US and global economy, potentially feeding into higher fiscal financing costs and a growing risk to the smooth rollover of maturing obligations,” the IMF said in a statement on its ‘Article IV’ review of US economic policies.

“These chronic fiscal deficits represent a significant and persistent policy misalignment that needs to be urgently addressed,” it added.

The US exceeded its debt ceiling, which was legally set at $31.4 trillion, in January 2023. After months of warnings regarding an imminent default from the US Treasury, President Joe Biden signed a debt bill in June 2023 that suspended the cap until January 2025. This effectively allowed the government to keep borrowing without limits through next year. Debt spiked to $32 trillion less than two weeks after the bill was approved, and has been ballooning ever since.

The IMF also directed harsh criticism toward Washington’s increasingly aggressive trade policies. In an apparent reference to escalating tensions with China, the watchdog said the country’s “ongoing expansion of trade restrictions and insufficient progress in addressing the vulnerabilities highlighted by the 2023 bank failures” could undermine financial stability around the world.

The IMF statement is just the latest warning on US overspending. On Tuesday, the Organization for Economic Cooperation and Development (OECD) said the US debt-to-GDP ratio was at its highest since World War II. The debt-to-GDP ratio is a metric used to gauge a country’s ability to repay what it owes.

Last year, the nation’s debt surged to 122% of its GDP, according to the OECD.

https://www.rt.com/business/600140-us-national-debt-warning-imf/

 

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high-income category......

Eric Zuesse (blogs at https://theduran.com/author/eric-zuesse/)

On July 1st, the World Bank headlined “World Bank country classifications by income level for 2024-2025”, and reported that, “This year, three countries — Bulgaria, Palau, and Russia — moved from the upper-middle-income to the high-income category.”

Their explanation in the case of Russia (the only large country among the three) was:

Economic activity in Russia was influenced by a large increase in military related activity in 2023, while growth was also boosted by a rebound in trade (+6.8%), the financial sector (+8.7%), and construction (+6.6%). These factors led to increases in both real (3.6%) and nominal (10.9%) GDP, and Russia’s Atlas GNI per capita grew by 11.2%.

The World Bank’s chart showing yearly “GNI per capita, Atlas method (current US$) – Russian Federation” indicates that from the time when Putin began his leadership of Russia on 1 January 2000, till 2013, right before the U.S.-and-allied war against Russia started with Obama’s coupthat in February 2014 overthrew Ukraine’s neutralist democratically elected Government and installed a rabidly anti-Russian one and so started also the civil war within Ukraine, and the break-aways of both Crimea and Donbass, which rejected the new rulers — during that 13-year period — Russia’s “GNI per capita, Atlas method (current US$) – Russian Federation” or Gross National Income per capita, rose from what in today’s U.S. dollars is $1,710,000, to $15,160,000 per person in 2013, but then plunged down to $9,160,000, or minus 40%, by 2017, in order for Russia to deal with the U.S. gang’s war against Russia, including economic sanctions that started being imposed in 2012 (even before the coup). That rise from $1,710,000, to $15,160,000 was an increase of 8.87 times over the span of those 13 years till 2013.

Then, from 2017 to 2023, it rose from $9,160,000 to $14,250,000; so, it still hasn’t reached the $15,160,000 it was in 2013. However, in Purchasing Power Parity terms (which is what the workers and consumers actually experience), it has gone way beyond that, and is the highest ever in Russia:

The World Bank’s “GNI per capita, PPP (constant 2021 international $) – Russian Federation” shows that in real terms, the 2013 peak was $36,631; it declined to $34,371 in 2016, then rose to $39,222 in 2023. So: Russians really are better off now than they had been before Obama lowered the boom on them with his coup in Ukraine and economic sanctions against Russia. Those figures are in 2021 dollars, but up to 2021, the World Bank was calculating in 2017 dollars, and their chart then showed that between 1990 (the end of the Soviet Union) and 1998, Russians’ PPP incomes declined 45% (which was because American economists virtually ran things under Yeltsin and were interested in cutting Americans in on Russian assets), and the economy rose 20% by 2000 when Putin became the leader; and then by 2013 Russians’ incomes rose 79% so as to become 211% of what they had been back in 1998, at the pit of America’s transforming Russia’s economy into a kleptocracy. And so from the standpoint of the Russian public, Putin’s performance over the 24 years he has been in office has been terrific, and is continuing to be terrific, so that his average approve/disaprove rating throughout his 24 years in power has been 75%/15%, and is now 85%/12%. This — Putin — is the national leader whom the U.S. empire (where those numbers are normally around 30%/60%) craves to replace by whatever the U.S. Government will install in his place. The U.S. empire leaders say that theirs is a ‘democracy’ and Putin’s is an ‘autocracy’, but whatever those terms might mean to them, Russians almost universally reject if not despise it. Yet the U.S. empire keeps demanding this “regime change” there. Maybe they are simply jealous. But if so, that might be a jealousy that could end up producing WW3. In any case, it’s looking outward to blame for their own failures. And now in America, both of the major-Party candidates have already demonstrated themselves to be such failures. And yet, only around 15% of Americans currently want anything else than that. How smart is that?

Right now, America’s Gross National Income per capita on a PPP basis is almost exactly twice what Russia’s is; but at the rate things have been changing since Putin came into power, Russia’s will be higher than America’s within a decade or so, because Russia’s are rising at a vastly higher percentage-rate than America’s have been for the past 25 years. It is official U.S. Governmental policy that all other nations are “dispensable”; only America is not — and that any economic competitor must be put down. For Americans to insist upon being the world’s most powerful country in the future as it has been since 1945, is becoming more dangerous and more insane and more unrealistic with every passing year; it is just insane — and voting as-if it weren’t is going to enormously endanger not only Americans but the entire world, unless that insane voting comes to a halt very soon. Only a revolution might save things this late into where we are heading. Coming this late, can it even possibly be a peaceful revolution? America’s Government can’t be live-and-let-live, unless America’s people demand that it be so, and until they no longer vote for the types of candidates they’ve been voting for. Americans need to be MUCH more critical of at least the major-Party candidates, and to demand: NO MORE NEOCONSERVATIVES!!!

—————

Investigative historian Eric Zuesse’s latest book, AMERICA’S EMPIRE OF EVIL: Hitler’s Posthumous Victory, and Why the Social Sciences Need to Change, is about how America took over the world after World War II in order to enslave it to U.S.-and-allied billionaires. Their cartels extract the world’s wealth by control of not only their ‘news’ media but the social ‘sciences’ — duping the public.

https://theduran.com/world-bank-finally-reclassifies-russia-to-top-category-high-income-country/

 

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upgrade.....

https://www.youtube.com/watch?v=9-Jw5D9SR2k

16,000 Sanctions FAILED: World Bank UPGRADES Russia's Economy, Indicates Income Growth

 

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