A tolling bell that only the reckless would ignore

The zero-option global economy collapses before our eyes

By using the term "zero-option global economy" I wish to refer to the fact that the states of the world have had little or eventually no recourse but to accept the world economic system as it has been known since the Second World War. I say they had little recourse because making a successful peasant-based revolution and then gaining membership in the Second World was once a possible alternative path to economic development for many Third World countries. This path remained in play, more or less, up to the moment when Mikhail Gorbachev's hands off policy with respect to Poland initiated the dismantling of the Soviet empire in 1989. But a revolution would typically draw Washington's attention and, in some instances, its arms to what supposedly was a local matter. Washington found revolution unacceptable. For its part the non-aligned movement wanted to break with bloc politics altogether. By achieving this break it hoped to create another option for those states belonging to neither the First nor Second Worlds. Unfortunately this movement could never extricate itself from the bloc politics which marked the Cold War and it certainly could not overcome the economic power residing in Washington and New York. In the end, globalization is just a word that refers to the kind of inclusive system integration Washington sought to and did eventually achieve in the world. The unipolar moment that emerged after the Soviet Union collapsed may be considered the apotheosis of this historical path.

As for the current situation, which revolves around the United States and the precarious hold it now has over the global system it fashioned, Michael Hudson reports that:

The city of Yekaterinburg, Russia's largest east of the Urals, may become known not only as the end of the road for the tsars but of American hegemony too; as the place not only where US U-2 pilot Gary Powers was shot down in 1960, but where the US-centered international financial order was brought to ground.

Challenging America is the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the so-called BRIC nations — Brazil, Russia, India and China.

The attendees have assured American diplomats that it is not their aim to dismantle the financial and military empire of the United States. They simply want to discuss mutual aid — but in a way that has no role for the United States, for NATO or for the US dollar as a vehicle for trade. US diplomats may well ask what this really means, if not a move to make US hegemony obsolete. After all, that is what a multipolar world means. For starters, in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned themselves with the former CIS republics belonging to the Collective Security Treaty Organization (CSTO), established in 2002 as a counterweight to NATO.

Is it not ironic that this endgame would commence with some non-European countries forming an anti-American, anti-imperialist, pro-capitalist bloc? In fact, some of these countries (Russia and China) were core states in the Socialist bloc and others were leading members (India and China) of the non-aligned movement!

Hudson continues:

What may prove to be the last rites of American hegemony began already in April at the G-20 conference, and became even more explicit at the St. Petersburg International Economic Forum on June 5, when Mr. Medvedev called for China, Russia and India to "build an increasingly multipolar world order." What this means in plain English is: We have reached our limit in subsidizing the United States' military encirclement of Eurasia while also allowing the US to appropriate our exports, companies, stocks and real estate in exchange for paper money of questionable worth.

Chris Hedges concurs with Hudson's assessment:

This week marks the end of the dollar's reign as the world's reserve currency. It marks the start of a terrible period of economic and political decline in the United States. And it signals the last gasp of the American imperium. That's over. It is not coming back. And what is to come will be very, very painful.

Barack Obama, and the criminal class on Wall Street, aided by a corporate media that continues to peddle fatuous gossip and trash talk as news while we endure the greatest economic crisis in our history, may have fooled us, but the rest of the world knows we are bankrupt. And these nations are damned if they are going to continue to prop up an inflated dollar and sustain the massive federal budget deficits, swollen to over $2 trillion, which fund America's imperial expansion in Eurasia and our system of casino capitalism. They have us by the throat. They are about to squeeze.

Hedges identifies one source of this crisis:

To fund our permanent war economy, we have been flooding the world with dollars. The foreign recipients turn the dollars over to their central banks for local currency. The central banks then have a problem. If a central bank does not spend the money in the United States then the exchange rate against the dollar will go up. This will penalize exporters. This has allowed America to print money without restraint to buy imports and foreign companies, fund our military expansion and ensure that foreign nations like China continue to buy our treasury bonds. This cycle appears now to be over. Once the dollar cannot flood central banks and no one buys our treasury bonds, our empire collapses. The profligate spending on the military, some $1 trillion when everything is counted, will be unsustainable.

History can teach us that no empire lasts forever…. Next stop: America's Weimar:

The cost of daily living, from buying food to getting medical care, will become difficult for all but a few as the dollar plunges. States and cities will see their pension funds drained and finally shut down. The government will be forced to sell off infrastructure, including roads and transport, to private corporations. We will be increasingly charged by privatized utilities — think Enron — for what was once regulated and subsidized. Commercial and private real estate will be worth less than half its current value. The negative equity that already plagues 25 percent of American homes will expand to include nearly all property owners. It will be difficult to borrow and impossible to sell real estate unless we accept massive losses. There will be block after block of empty stores and boarded-up houses. Foreclosures will be epidemic. There will be long lines at soup kitchens and many, many homeless. Our corporate-controlled media, already banal and trivial, will work overtime to anesthetize us with useless gossip, spectacles, sex, gratuitous violence, fear and tawdry junk politics. America will be composed of a large dispossessed underclass and a tiny empowered oligarchy that will run a ruthless and brutal system of neo-feudalism from secure compounds. Those who resist will be silenced, many by force. We will pay a terrible price, and we will pay this price soon, for the gross malfeasance of our power elite.

Soup kitchen America awaits….