The Dollar, Debt, and World War 3 Part One
The Virgin Islands inhabit an increasingly unpredictable and dangerous world. The policy of the Virgin Islands forging strong links with Asia is a great vision. Asia is the future. Agriculture and fisheries can no longer be an option. Countries in the Caribbean must aim for self- sufficiency.
The West is in decline. The West’s main advantage to the world was its democratic and freedom-loving cultures. However, the rise of populism and fascism has put that notion to rest.
Now, asserting the world may be on the brink of world war is not alarmist. History buffs understand that the past repeats itself, and disturbingly so. The ingredients for war are present today, when an enlightened observer looks back at history.
For a start, debt is blowing up a bubble especially in the USA, which if that bubble bursts, could drive up inflation and even lead to Depression. Depression, currency meltdown, and inflation, in Germany, led to fascism, and the rise of Adolf Hitler. Social and economic depression is a pre-condition for war historically.
Internally and externally, US debt is rising astronomically. The US Dollar, backed by debt, is not true production. Debt drives the USA, not real value. In other words, the western economy is a financial economy. It is service based. It is prone to boom and bust. It is a vast bubble. The Dollar is the backbone of this economy and is a hegemonic currency backed by political and military power mainly.
US consumers hold debt of nearly $18 Trillion and under $1 Trillion in savings. The average US citizen lives paycheck-to-paycheck in spite of the supposed vast wealth of the country. Half of Americans would find it a challenge to pay a sudden $1000 bill. It is the same with the National debt. The USA cannot repay its national debt.
National debt or debt owed by the government and government agencies is over $34 Trillion. Taxpayers to a lesser extent, and the printing of Dollars to the greater, cover interest payments to investors who finance that debt.
Ever increasing debt is self-fulfilling. The world runs on debt. The USA’s Federal Reserve produces that debt. The US does not worry about debt as all the world depends on that debt to function economically. The world sells its goods and services to the USA in exchange for Dollars produced by the USA’s Federal Reserve. The Dollar is currency backed by US debt.
As long as the Dollar remains the world’s reserve currency the US can create debt at will, tamed only by inflation within its borders. The guardrail for increasing national debt is the price of groceries, gas, and rent in the USA for US voters.
The world economy is a highly charged game of poker, with the USA and the Dollar holding all the Aces.
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6 Responses to “The Dollar, Debt, and World War 3 Part One”
The dollar is the world reserved currency which is keeping the dollar flying high and buoyant. Further, in 1974 having taken the dollar off the gold standard, President Nixon signed a petrodollar agreement with Saudi Arabia in 1974, ie, all oil had to be sold in US $$$. This also give some lift to the US dollar.
However, increasingly, there are strong efforts by the BRICS ( Brazil, Russia, India, China, South Africa ) + others which are mounting and rallying an effort to replace the dollar as the world reserve currency. The outcome of that action if successful is still uncertain. Some believe that such an action will dump many dollars back on shore , driving up inflation. Secondly, Saudi Arabia just declined to renew the the Petrodollar agreement. True, the US is facing some sturdy head winds to knock it off its perch. But thus far, it is only slightly twisting in the wind. It is still holding its own. The US will employ its hegemony to fight back. I see the US and the dollar staying strong in the short time. The long term impact is another tory. The political and social division, , polarization , culture wars, disunity, racial issues, etc, are posing a threat and risk to its global dominance. Ruling by fear,,white grievance, jingoism, xenophobia, division, etc, is akin to a bird messing in its own nest. It is messy, uncomfortable, disastrous, etc. Every empire, institution, organization, country, etc., rise and fall, so has the US started the descen????????
LIVE ONCE AND DIE ONCE , TELL THE TRUTH , WHO VEX - VEX , LAVITY WILL GO FOWN AS THE BEST , AND HE DIDN'T LIE OR PLAYED HE HAD SELECTIVE AMNESIA , HE HAD INTEGRITY , WITH ALL THE KNOWLEDGE YOU POSSESS , ( YOU COULD NOT RESIST TO ADD - HYPOCRISY - TO YOUR COLLECTION .