The end of the American Empire

Question: You also claim that the American empire is falling. What evidence do you have of that?

Answer: I do claim that the American Empire is falling. To begin with, the U.S. Governments borrows $2-billion dollars a day from China just to keep the American economy going. China is basically borrowing worthless U.S. Treasury Bonds that are backed up by nothing more than the promise of the "full faith and credit" of the U.S. Government. Ever since the U.S. went off the gold standard during the Nixon presidency, the dollar is not backed by anything---except the military strength of the nation and its worldwide domination over most foreign currencies. However, those days might well be ending as the Euro takes its place as the dominant currency of the European Union and Europe begins to follow different policy choices and paths from the architects of the American Empire.


The end game for America/China will be delayed as long as possible by China, and by the feeble minds in the US Congress.

But at the rate of $200 billion more a year in trade deficits with China, it won't take too many years for America to be literally owned, lock, stock and barrel by Communist China!

That's right. And guess who calls the shots, the owner or the renters?
A very interesting addendum to the author's comments is that China recently set up its own private "hedge fund" or "private equity" fund. It is capitalized, for starters, with around $250 billion and is intended to be used for non-US treasury note investments in things like global stock markets. This may be providing support to the US markets right now, in fact.

Now, consider that the US trade deficit is at $200+ billion per year, having doubled since 2002. That means that China has an extra $200 billion which could be invested outside of US treasuries. And my best current guesstimate is that China is attempting to diversify into a proper mix of assets: bonds, stocks, etc.

Both stocks and bonds are claims upon future income. In the case of US treasury notes, they are a claim upon future tax revenues. So do not believe that China's hoard of $800 BILLION of US treasury and agency bonds is valueless -- it provides a steady stream of income, of say, 4 -> 5% a year.

So we pay China $40 billion a year in interest, basically forever, even if they don't export another thing to us. And of course, stocks provide dividends and capital appreciation. So by owning stocks, China is acquiring long term ownership of America's MEANS OF PRODUCTION: land, factories, intellectual property, etc.

Stock ownership also provides China with a hedge against the US government's plan to inflate away its own debts. Yes, the treasury notes decrease in value, but the stock owned by China would presumably inflate along with the money supply (especially if the corporations are run more efficiently with fewer worker benefits and rights.)

Revaluation of China's currency, the yuan (or "remindbi") will not materially reduce our trade deficit with China -- half of the deficit is the result of American corporations producing there and shipping here!

Congress ought to stop badgering and blaming the Chinese communist overlords for America's trade deficits and, if they want to point fingers, blame the American corporations that have stopped investing in America and are now building factories and creating jobs in China.

I mean, c'mon. If it weren't for the fact that Congress is bought and paid for by corporate lobbyists, this whole f*cking situation wouldn't have developed in the first place (like NAFTA, for example, which has destroyed jobs in the US and yet still Mexicans are swarming into America because pay rates are so low in Mexico...).

The end game for America/China will be delayed as long as possible by China, and by the feeble minds in the US Congress. But at the rate of $200 billion more a year in trade deficits with China, it won't take too many years for America to be literally owned, lock, stock and barrel by Communist China! That's right. And guess who calls the shots, the owner or the renters?

Zebra