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Wednesday, August 8, 2007

Bombs, Bridges, Bankruptcy and the Burning of Rome



The recent bridge collapse in Minneapolis was seen by many as a simple accident or a one off example of poor management but in reality it was a symptom of a profound event that most of the public are blind to, the fall of the American Empire. For many years the U.S. has been burning the candle at both ends, with its endless cycles of spending and debt without ever maintaining the necessities of modern life. The recent collapse is not a one off item or an accident it is a symbol of the systemic rot taking place in U.S. There are estimates claiming that in the U.S. an astounding 73,000 or 12% of all bridges are structurally deficient.
Further 80,000 are functionally obsolete meaning they are not designed for the amount of traffic they currently carry. For years, be it slack highway maintenance or failing to fully fund the corps of engineers, the U.S. government has not been doing its job in maintaining the essential infrastructure of the nation, Minneapolis and New Orleans were just two of the many disasters that the U.S. is destined to suffer for the lack of money and planning.

Added to this infrastructure mismanagement is U.S. spending on the Iraq war and the normally huge military spending, which continues despite the apparent victory in the cold war. To date, the Iraq war is estimated by the congressional budget office is about 450 Billion That of course is the accounted costs, hidden costs for procurements, mercenaries like Black Water and long term costs of supporting military widows and cripples will add significantly to this stated cost. For decades The U.S. has been spending on its military as if they were on a war time footing and yet they never caught on to the concept of guns or butter but rather thought guns and butter with plasma screens and SUVs thrown in was a long term sustainable proposition; Morons the lot of them.









FACING UP TO THE


Nation's Finances






National Debt Clock






Another interesting fact (as show just above this paragraph taking up far too much space) is the growing U.S. debt which as you read this sentence will climb by 100,000 dollars. The total debt at the time of my writing is $8.931 Trillion U.S. dollars, the total unfunded liabilities which include expected payouts of Medicare, government pensions etc is estimated by the GAO to be in the neighborhood of $53 trillion, a staggering figure. For years the U.S. governments have been raiding various trust funds like those for pensions and health coverage, spending the money, not replacing it, and giving the funds IOUs in place of the interest baring vehicles that would make these funds at least partially self funding over time.
The U.S. has a hard choice ahead, renege on promised benefits, or devalue the dollar to the point that they will honour their commitments in word if not in value.

The U.S. has been selling U.S. debt to mostly foreign investors at a rate of over a billion dollars a day for many years. A new twist on this need for daily influxes of cash has been the U.S.’s recent trend of issuing and borrowing money through the Federal Reserve since fewer and fewer foreign suckers in the open market are taking part in treasuries auctions; this is simply printing money and devaluing all existing dollars. This monetization of debt is a sure fire sign of the coming collapse of the U.S. dollar and the ability of the U.S. to maintain it’s pretension of empire for much longer. Recent reports from China hint that they may be willing to use the threat or action of dumpting of U.S. debt on the market as an economic weapon against the U.S. Even such threats could panic bond holders and crash the U.S. dollar in a flash of computer controlled trading.

The U.S. is heading for a long fall, which will likely include bankruptcy, a dollar crisis and certainly a diminishment of the roll of America in world affairs. Not unlike Rome did, the U.S. is fighting wars it cannot win with money it does not have and with citizens who no longer have the zeal, belief in righteousness or simple bloodlust required to be big dog on the street. Rome collapsed by inches as measured by loss of influence, debasement of its money , military setbacks, social decadence, sound like anyone you know?

The U.S. needs to decide that taking care of home trumps outside concerns. I for one don’t expect that they will make this decision until it’s far too late and the Visigoths and Vandals will already be at the gates!

What does this mean to us?

We have an unstable neighbor who will strike out if it needs something it can’t get otherwise

We have a nearly broke trading partner who will drag us down with them unless we diversify our customers.

We have a lot of our money tied up in U.S. dollar valued equities which may vaporize overnight.

We have a neighbor which could fragment or fall into anarchy

Monies we would have liked to have seen diverted to the environment in the U.S. will be used to cling to their delusions of empire.

SPP is surely our destruction.Recommend this Post

3 comments:

Camiseta Personalizada said...
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Eric said...

As the world reserve currency it's doubtfull the dollar will fall as you predict.

Green Assassin Brigade said...

The U.S. dollar has value because it is accepted as having value and it's role as the money most countries and business use to complete transactions and the money the choose to hold as cash reserves. Recent moves by Iran, to refuse dollar sales of oil, Russia is attempting to make the ruble fully convertable so they can also drop dollar transactions, moves by some Gulf states to remove the Pegged value of their local money to the dollar, and the move by many countries to diversify their currency reseves into Euros, other national currencies and gold is a sign that the supremacy of the U.S. dollar is waning.