DE-AMERICANIZED WORLD

20 comments

Posted on 13th October 2013 by Administrator in Economy |Politics |Social Issues

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Do you have faith in the U.S. government? Do you think other countries have faith in the U.S. government? Do you have faith in the Federal Reserve?

Faith is a funny thing. It can dissipate in an instant. Do you think you’ll have a warning?

The collapse of faith in the government and USD will be the driver of the remainder of this Fourth Turning. 

China Has Some Pointedly Hard Words For the US and the Dollar

Surely this is nothing new.  China and the BRICs have been calling for a change in the US dollar reserve currency regime since at least 2009.

The problem with abusing a long standing arrangement is that it takes quite a bit of energy to fray such an arrangement, given its momentum.  And the US has risen to unipolar superpower status over the past twenty years with the fall of the Soviet Union.

A fiat currency exists on a combination of faith and force, with faith being by far the preferable and least expensive aspect.

But full faith and credit in a currency or in any type of relationship is not inexhaustible.  It may stand for quite a time, but once it begins to falter the failure can often come fairly quickly so that many participants are caught by surprise, mouths agape, saying ‘what happened?’

This is the currency war.

“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.”

Xinhua Commentary: U.S. fiscal failure warrants a de-Americanized world By Xinhua Liu Chang

BEIJING, Oct. 13 (Xinhua) — As U.S. politicians of both political parties are still shuffling back and forth between the White House and the Capitol Hill without striking a viable deal to bring normality to the body politic they brag about, 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.

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.

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.

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.

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.

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.

Posted by Jesse
20 Comments
  1. AWD says:

    Great article. The guy could be poster here on TBP.

    What we need is a de-Americanized America.

    13th October 2013 at 6:27 pm

  2. Zarathustra says:

    The disconnect between the American people and the rest of the world has never been greater. Americans still see themselves as the “city on a hill,” the bastion of freedom and generosity. Across the oceans, exactly the opposite. Which side do you think is right?..I know, a dumb question on this site.

    13th October 2013 at 6:45 pm

  3. Stucky says:

    Germany is the most positively viewed nation in the world in this year’s annual Country Ratings Poll for the BBC World Service.

    _67748860_67748859.jpg

    http://www.bbc.co.uk/news/world-europe-22624104

    13th October 2013 at 6:54 pm

  4. Stucky says:

    I pulled the above comment from a website I visit once or twice a week;

    http://www.worldpublicopinion.org/

    Has some very good insights,

    13th October 2013 at 6:56 pm

  5. Stucky says:

    To repeat something I’ve said before … Germans are TOTAL DUMBFUKS when it comes to politics.

    89% of the Cabbage Eaters think Oreo is doing a good job. Fucken pathetic.

    WPO_Germany_Jun09_graph1.jpg

    13th October 2013 at 7:05 pm

  6. T4C says:

    “Global markets are already revolting against the $US. The End Game for the $US is THE BIG ONE for which we aim to help Investors prepare.

    THE BIG ONE was the European Central Bank’s agreement with the People’s Bank of China to establish bilateral Euro-Yuan Currency Swap arrangements, thus freezing the U.S. Dollar out of yet another Bilateral Sovereign Currency Swap Deal.

    This will, sooner rather than later, have catastrophic impact on the International Financial System as John Williams points out.”

    http://www.silverdoctors.com/deepcaster-preparing-for-the-big-one/

    13th October 2013 at 8:17 pm

  7. Sensetti says:

    @T4C You know this all leads to war of which The millennial generation will take the brunt of. I am starting to feel sorry for them tattoos and all. History will remember them as the lost generation. Their futures were borrowed against before they hit the ground and took that first breath of air. Now they will be required to spill their blood to preserve the last vestiges of the empire.

    13th October 2013 at 9:04 pm

  8. juan says:

    dr pangloss said the usa practiced an internal imperialism (without confirming nor denying external imperialism), sucking the best and the brightest back east. this was back in the 70’s when I went to utep, perhaps things have improved by now.

    14th October 2013 at 12:38 am

  9. Makati1 says:

    Did that poll only poll Germans, Stucky? Germany is even more self-centered than Americans. With a GDP to Debt ratio of 83%+, they are only a year or so behind the US. When they are stuck with the bills for Southern Europe’s bailouts, we will see that slip over the 100% mark, I think. With their exports falling, that is not a good sign. But Herr Merkel will save the day! ^_^

    14th October 2013 at 1:41 am

  10. SVarghese says:

    Stucky mentioned “Germans are TOTAL DUMBFUKS when it comes to politics.”

    I personally think that the citizens having a reasonable political knowledge is very critical. Good politics is a result of good moral philosophy. I wonder why Germany with their legacy of great philosophical thought would not take active interest in political philosophy.

    Why would such an advanced nation allow itself to be duped into electing politicians who would destroy them twice in a century?

    I think Germans are very good specialists – Many are great engineers, many great businessmen, many great military men, some great artists and some great philosophers. And a small number of great politicians whom all the other groups listed above trust blindly. Basically it is hard to determine what is dear to the average German. Is it liberty? Is it statism? is it art? Is it coffee or is it just engineering and business? You work hard and become prosperous in a peaceful socieety only to blow it all away by choosing the wrong person(s) to govern you.

    Contrast that with Switzerland where the average Swiss is known for his/her love for liberty and we know how it has panned out for the past 500 years.

    14th October 2013 at 2:19 am

  11. China Calls For New Reserve Currency, And New World Order | Global Clarity says:

    […] De-americanized World (theburningplatform.com) […]

    14th October 2013 at 9:39 am

  12. Stucky says:

    Why would such an advanced nation allow itself to be duped into electing politicians who would destroy them twice in a century? ———- SVarghese

    I will try to give an answer …. based solely on personal experiences … which, of course, makes my observations suspect as to accuracy.

    When of thinks of “Germans” the usual first impressions are efficiency, organization, and cleanliness (WWII Hausfraus sweeping streets immediately after a bombing attack) always applied down to the last detail.

    However, these are BY-PRODUCTS of something much, much more valued; ORDNUNG! Translated, “order”. I don’t think more than two days passed in my upbringing without either my mom or dad demanding to know, “Ist alles in Ordnung?” … “is everything in order?”. “Order” is THE fundamental German value …. like “liberty” is to Americans … and is permeated into all German life. Order is raised to a national idea, from birth, and as such has ramifications in every aspect of both personal and national life.

    The flip side of that coin is “Pflichtbewusstein”, or “duty”. IMHO, the German sense of duty is rivaled only by the Japanese “burden of obligation”. Perhaps that’s one reason they were allies in WWII. Germans are often accused (rightfully so) of a “high-mindedness”. This attitude is reflected throughout culture; operas of Wagner, romantic poets such as Goethe and Schiller, and the rigid authoritarianism (order) of German philosophers and theologians. Sacrificing “for the greater good” is as German as it gets … the subordination of one’s own will to that of the “Gemeinshaft” (community). Nothing is quite as important as Gruppenzugehörigkeit (group belonging) … individual “liberty” be damned. My own parents are a version of the Costanza’s, only on steroids. I often wondered in my ute why they didn’t divorce. It all came down to one word; duty.

    Now, finally, to your question. This slavish dedication to Order&Duty does not come without consequences. When Germans elect a leader they inevitably WILL do whatever that leaders says. Respect for authority … a necessity for Order to prevail … is paramount. A consequence of that consequence is most of the people will follow orders without question … it’s part of the German-DNA …. even if it means herding your neighbor into a cattle-car.

    14th October 2013 at 12:03 pm

  13. AWD says:

    Germans make great cars.

    I find it amusing we have more people on welfare than the entire population of Germany.

    I wonder what Germans would think of this statistic…..

    14th October 2013 at 12:06 pm

  14. AWD says:

    I googled “German welfare state” and this is what came up:

    17195408%252C14436131%252ChighRes%252Cmaxh%252C480%252Cmaxw%252C480%252C4338E2B4.jpg.jpg

    This is how they treat the FSA in Germany:

    french_youth_riot-apha-101021-550×304.jpg

    14th October 2013 at 12:28 pm

  15. Olga says:

    First Putin and the Russians and now the Chinese – and to think – 90% of Americans don’t even know we’ve been bitch-slapped by BOTH of the other super-powers.

    14th October 2013 at 12:35 pm

  16. Stucky says:

    Those are probably Turks …. Germany’s largest minority population, around 4% of total population. From what I hear …. directly from my relatives … they are hated and despised Free Shitters. I hope they don’t mind riding in cattle cars, someday ………

    14th October 2013 at 12:43 pm

  17. TheCynic says:

    Russia isn’t a superpower, it’s a regional power at best.

    China’s status is a direct result of being a export oriented nation which we created, the moment the China can’t peddle it’s crap, the country is done as a power.

    But really, listening to a bunch of Chinese kleptocrats that are even more inhuman and voracious than us is just stupid. Look this is all about China wanting to be the big boy on the bloc and long term probably relocating tens or hundreds of millions Chinese from the polluted hell hole they created in China itself.

    14th October 2013 at 1:04 pm

  18. Peaceout says:

    This article is well written and to the point, this is another example of a changing mindset in the world towards the USA. As the world continues to watch the daily charades of our supposed leaders as they quibble back and forth like a bunch of infantile children over issues that should be dealt with using logic as a bases for determining the right course for the bigger good. How can we expect the world to judge us, we come off as a joke, they are laughing at us, how can they really take us seriously, how can we expect them to come to our aid and support us in international endeavors in the future. It is becoming increasingly obvious that the rest of the world is over our shit, and will be happy to move on when the right system comes into place to do so. The wheels are in motion and our leaders are to stupid and arrogant to figure that out.

    We are a hypocritical nation and a new world order will be shaped, with the US on the outside looking in, wondering what the hell just happened.

    14th October 2013 at 7:23 pm

  19. Thinker says:

    UK Telegraph: The Sun Is Setting On Dollar Supremacy, And With It, American Power
    A serious alternative to the dollar is still a long way off, but the latest shenanigans on Capitol Hill have given the search for them renewed momentum

    All great empires – from the Greek, to the Roman, the Spanish and the British – have at their heart a dominant means of exchange which is very much part of their political and social hegemony. Once upon a time, it was Roman coinage which was the world’s pre-eminent currency. In more recent times it was the British pound. Today, it’s the US dollar to which international investors flock as a safe haven for their money. Highly liquid and apparently reliable – until recently at least – nothing else comes even remotely close to the greenback’s dominant position in the international monetary system.

    That this position – what Giscard d’Estaing referred to as America’s “exorbitant privilege” – could so casually be put at risk by politicians on Capitol Hill is an extraordinary spectacle that may be indicative of a great power already seriously on the wane.

    With the pound, the fall from grace was swift. Britain emerged from the devastation of the First World War an irreparably damaged economic and military power, with crushing debts and a deeply impaired manufacturing sector.

    The dollar was able quickly to usurp the pound’s position. Final defeat for sterling came with Britain’s decision to leave the gold standard in 1931 – an economically sensible decision but a psychological turning point for sterling from which it never recovered.

    Lack of any credible alternative means it won’t happen so quickly with the dollar. For all the progress of the last 30 years, China for now remains a much smaller economy than the US and in any case is nowhere near ready financially to assume such a role. As for the euro, the dollar needn’t trouble itself much about this one-time pretender to the throne.

    Yet rarely before has international dissatisfaction with the dollar’s role as reserve currency to the world been as great as it is now. The most visible anger comes from China, with more than $3 trillion of dollar foreign exchange reserves, $1.3 trillion of them held in US Treasuries. For ordinary Chinese, it has come as a revelation to discover they own so much American debt. That they own it in a country which because of political brinkmanship may actually default has provoked understandable fury.

    “It is perhaps a good time for the befuddled world to start considering building a de-Americanised world”, China’s official government news agency has said.

    A steady erosion of trust which began with the financial crisis five years ago has reached apparent breaking point with the pantomime antics on Capitol Hill. The search for long-term alternatives to the dollar is on as never before. Regrettably, there aren’t any, or not for the time being in any case. Everyone can only look on in horror as the US commits apparent economic suicide.

    Such is the dollar’s dominance that, to begin with at least, investors might simply have to take default on the chin. More than 60pc of global foreign exchange reserves are held in US dollars, which also account for more than 80 per cent of global foreign exchange trading.

    So important is dollar liquidity in global trade that if, for instance, you wanted to sell Singapore dollars and buy South African rand, your forex dealer would first typically buy US dollars with your Singapore dollars and then use them to buy the South African rand. The dollar is the middle currency in the vast bulk of international transactions.

    By the same token, US Treasuries are the very backbone of the global financial system. They are the supposed “risk-free asset” against which everything else is benchmarked, and as such are the collateral of choice in a huge array of financial market transactions. The dollar is also the currency used to price most commodities, from oil to gold.

    The dollar’s hegemony is all pervasive. This has given the greenback a degree of leverage unmatched by any other reserve currency in history. If China starts to sell dollar assets, it will only weaken the dollar, undermining Chinese exports and reducing the value of its remaining portfolio of dollar assets.

    I’d been part of the received wisdom that any act of US default would set off a devastating chain reaction of bankruptcies that would provoke a second global financial crisis. But David Bloom, chief currency strategist at HSBC, has convinced me that dollar hegemony might perversely act in the opposite way, at least initially.

    Unlike a generalised credit event, where all instruments default at the same time, the US would initially engage in a series of little, self contained defaults, or “selective defaults”, whose individual impact would probably not be that great.

    Each bond has a life and coupon of its own. The missed coupon payment might therefore be regarded as not so bad – especially as this is a case of “won’t pay”, rather than “can’t pay”.

    Markets see such defaults differently, with missed payments expected to be made up eventually once a political resolution is found. It’s also very likely that the Federal Reserve would attempt to counter the damage in financial markets with more QE, buying up the Treasuries that investors dumped.

    Furthermore, the financial uncertainty created by default would likely drive investors towards past safe havens of choice – in particular, US dollar assets. Alternative safe havens, such as Japan and Switzerland, have been rendered defunct by central bank money printing. Ironically, emerging markets are likely be more damaged by default than the US itself, with further capital flight.

    Such is the degree of “exorbitant privilege” enjoyed by the dollar that it might therefore be the first currency in history to see an asset price rally on the back of a default. However, if there were repeated selective defaults, a second, less benign phase would eventually set in. Spooked markets would begin to sell off the dollar.

    The consequent stronger euro and pound would have powerfully deflationary consequences for Europe. Internal demand in the US would also collapse as a result of the wrenching fiscal squeeze that would result from federal government attempts to match expenditures with tax revenues.

    Dollar hegemony has long been a destabilising force at the centre of the international monetary system; it’s a major part of the sharp build-up in global current account imbalances and cross border capital flows that have been at the heart of so many of the problems in the world economy. The unprecedented accumulation of dollar foreign exchange reserves has in turn caused new challenges for the US, making it more difficult to maintain fiscal and financial stability within its own borders.

    Policies that may or may not be good for the US are in all probability bad for everyone else. Loose monetary policy in the US since the crisis began has induced unwanted demand and asset bubbles elsewhere in the world.

    Serious alternatives to the dollar, such as a global reserve currency, are still a long way off, but the latest shenanigans on Capitol Hill have given the search for them renewed and added momentum. The US is recklessly throwing away its future.

    15th October 2013 at 10:01 am

  20. SVarghese says:

    Stucky, You have introduced me to some key German traits. Also those words were interesting but the German word – Pflichtbewusstein for duty – looked stupid to me. The efficient Germans should make their words smaller to be more efficient. :-)

    Probably a little more efficiency would have helped them win WWII and then what….thinking…….

    The german and Swiss culture are the ones I always admire but these are poles apart in certain values. One stands for individual liberty and the other for group belonging. The Swiss philoshy is “We wont fight a war but we want to enjoy the spoils of war” and the Germans have proved they will fight wars but won’tto enjoy the benefits of it.

    Strange Indeed!!

    17th October 2013 at 11:29 pm

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