The Decline and Fall of Which Empire?

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Empires die, if they are lucky, with a whimper, not a bang. On October 14, 2017, Memorial Stadium in Lincoln Nebraska let out a huge whimper. On that night, the team representing the University of Nebraska laid down and allowed Ohio State to eviscerate the Husker's defense. Meanwhile, the Ohio State defense smothered the offense, eventually allowing meaningless second half touchdowns, but shutting out the home team throughout the first half while amassing a 35 point total when they were not stopped once. Five possessions, five scoring drives.

 

The whimper was heard in the second quarter. A tradition of Nebraska football is that fans purchase red helium balloons, and release them when the first score happens for the home team. In the middle of the second quarter, the Huskers gained just their second first down of the game. First a trickle, then a flood of balloons started to dance in the strong north wind, signifying the depression that the fans felt due to the humiliation they were witnessing.

 

At half time, the wind picked up considerably. The huge American flag flying over the north stadium snapped loudly in the breeze as it stood straight out as if starched. The noise of the wind muffled the whimper being sounded by the hordes of fans filing down out of the stands, and eventually out of the stadium to face the cold strong wind. I joined the exiting throngs along with my brother's family.

 

As we wound our way back through the campus, we heard the roar of the stadium at our back as the team managed to strike with a lone long touchdown pass. But nothing could disguise the utter demolition of a team with a proud history by one of the few teams with even a prouder history. That pride has shown itself through the 55 years of consecutive sell-outs of the stadium, longest sell-out streak ever in either college or pro sports. If the performance of the team continues to match that of the last two games, even that tattered remnant of empire will fade away, if not this year then certainly next season. But the rise and fall of a college football empire will affect only a small fraction of the population of this country, and does not represent an existential crisis.

 

Empires do have a finite life. Empires fade when the cost of maintaining the empire exceeds the tribute brought in. They may be overthrown from without, or within. But until this year, I never heard of an empire being overthrown by its own government. With its initial effort, the new President withdrew from the Trans Pacific Partnership trade treaty. That treaty, intended to align nations in the Pacific watershed away from the growing maw of China, was a symbol of the American empire of commercial dominance. However, the new administration believes all trade agreements are win/lose propositions, and that the verdict of history is that the US has lost with all of its trade agreements. What this administration does not realize is that the US has used its position as the owner of the global reserve currency to enable this country to run both substantial trade deficits and Federal governmental deficits. The reserve currency is the symbol of the American empire, since it ensures demand for US dollars and US debt instruments. Imagine what the cost of imported goods would be if the US dollar suddenly was not required for international transactions?

 

Yet the current administration ignores these macroeconomic factors, arguing instead that all of our trading partners are taking advantage of us since we do run trade deficits. This administration believes that if we just pull back from international engagements, trans-national agreements, and treaties, we will be able to set our own trade terms and retreat into a world of US sourced products that fulfill all of the nation's needs.

 

The effects of this near-sighted policy is already making itself felt. China is pressing Saudi Arabia to accept yuan as a mode of payment for its oil imports. When that happens, look for other countries to follow suit and then the whole house of cards propping up the US economy will be left teetering in mid-air. Other signs of the US ceding its international role are showing with Europe turning inward as the US President disparages NATO and other treaty obligations. A fundamental misreading of the Iran nuclear treaty shows that this administration does not recognize the treaty as only having jurisdiction over nuclear matters. No, this administration insists that Iran is not adhering to the spirit of the treaty by invoking factors that were never included in the treaty.

 

And then there is the elephant in the room (sorry, Republicans, you didn't make the cut). How do you solve a problem like Kim Jong-un? Apparently, this President believes that intimidation and crude insults trump all other choices, like, maybe diplomacy? After all, intimidation and crude insults helped him triumph over all of the other prospective Republican candidates. Why wouldn't the same tactics work with the still-young heir to the North Korean political dynasty? Everyone fears the US military!  We're invincible (but we must do something about the appalling lack of nuclear weaponry. What have we been doing since the 1970's anyhow?). No, North Korea is not a problem you can bluster your way through.

 

The history of the US empire post WWII took a wrong turn after the end of the cold war. Instead of using the opportunity to begin limited withdrawal of US forces from the excessive number of bases we maintain overseas, we felt the need to expand our footprint. The events of September 2001 enabled the US to go even further to increase our presence throughout the world, and all in the name of the war on terror. We should pursue reductions in bases and overseas presence of our military. It now is viewed as divisive across the world instead of being a soothing presence. But with an administration whose head decries diplomacy, and threatens fire and fury, do not look for this empire to go gently into that dark night.

 

When you have an empire replete with a naked emperor, and simpering sycophants in his party who still fear the tweet of doom, nothing good will happen. I can only wish that the American Empire does not go out with a bang. Yet I fear that, for once, cooler heads will not prevail, and we will find ourselves in a conflict with unimaginable casualties, and unprecedented global consequences.

 

Published initially on my blog https://Evenabrokenclock.blog

Comments

Professor Taboo Added Oct 19, 2017 - 3:20pm
Very well written and spot on EABC. Bravo!
 
Granted that today and for the last 3-decades (or more!) U.S. elections are no longer truly pure democratic processes -- with Citizens United, hyper-challenging voter registration, and mega-funded Congressional lobbying, etc. -- but this President has a clear list of psychological disorders starting first with blatant megalomania. Following suit with several DSM-5 diagnoses, it is sadly no suprise that this man and his administration continue to isolate the U.S. from the rest of the world, particularly those stable, intelligent nations. Yes, if this path continues America will collapse... and other nations will applaud.
Richard Plank Added Oct 19, 2017 - 3:50pm
Well I suppose you have correctly used some history to observe that all empires end eventually and such will be the case with the US dominance in many ways.  This President, in spite of whatever flaws you ascribe to him is  not likely to accelerate it.  This presidency is certainly different, but has not changed the underlying causes in any way. There are other  much bigger issues, and as usual technology will be a big part of it, that will impact not only the stature of the US, but the world make up in general.  I have no idea what the sustainable population is, estimates go from 1.5 billion to 8 billion and they are all merely educated guesses.  My hat is in the ring for 4 billion subject to change when technological advance allows it to grow.  Much of technology has many, usually, unintended consequences, however.  Do we overpopulate and over consume and eventually drive the human race to extinction?   Not as dumb a question as it might first seem and there is a risk, we just can't do anymore than guess at it.  Most of these problems have been described as 'wicked" meaning essentially we are not really able to solve them, at least not yet.   I do believe the human race will continue to not understand the big picture or at least not deal with it in any meaningful way so the risk of extinction is real and again if we use history we see that a lot of species have already gone extinct for one reason or another.  We have a chance to do to  ourselves.  Check back in 300 years.
Even A Broken Clock Added Oct 19, 2017 - 4:06pm
Professor - Thank you for your comments. I try not to psychoanalyze our current President but certainly I can learn by observing.
 
Richard - The main way that the President could accelerate it is with an itchy trigger finger. I agree with you that the human race is fighting a battle with the holding capacity of the planet, and that is why we need more global cooperation instead of pulling into our shell and retreating. I do believe that the unipolar nature of a single superpower is dangerous, but throwing the baby out with the bathwater is not the way to do it, and the current administration is throwing out a lot of babies.
John G Added Oct 19, 2017 - 4:25pm
What this administration does not realize is that the US has used its position as the owner of the global reserve currency to enable this country to run both substantial trade deficits and Federal governmental deficits. The reserve currency is the symbol of the American empire, since it ensures demand for US dollars and US debt instruments. Imagine what the cost of imported goods would be if the US dollar suddenly was not required for international transactions?
Nope. Foreigners accrue US$ by exporting their goods and services to the US market.
They buy Treasuries with those accrued $ because Treasuries pay a higher rate of interest than reserves and they catty no risk whereas a bank deposit means you are a creditor of a private bank.
Whilst the private domestic sector runs a trade and current account deficit with the foreign sector, the Federal government has to run a fiscal deficit. There is no way around it.
This is neither good or bad. It is what it is.
The reserve currency issue is way overblown. Other currency issuers run the same macro dynamics and the haven't sunk into the sea.
A closer look at Japan will disprove most of these doom and gloom theories.
John G Added Oct 19, 2017 - 4:26pm
carry, not catty wtf?
Leroy Added Oct 19, 2017 - 5:11pm
"No, North Korea is not a problem you can bluster your way through."
 
Actually, we can.  Asians are known for blustering.  China does it routinely.  The Rocketman does it routinely.  Trump is a master at blustering.  You might say that he speaks their language.   Trump might just be the first president to solve this problem.  For sure, neither Bush nor Clinton nor O solved the problem.  We need a different approach.  My style, I have to admit, is similar to Trump's.  I make people uncomfortable.  I bring the issues out in the open.  I don't always solve the problem, but they tend to get solved when I am involved.
Richard Plank Added Oct 19, 2017 - 6:07pm
Broken Clock, I agree I just don't see that happening and I certainly agree with you on cooperation that is the main issue we face, but my view is it will eventually happen by the force of the multitudes, not through poorly planned and executed demonstrations but by concerted action by groups which swing the momentum.   John I think the point with currency is ours is convertible and desired and when that changes the party is over.  Will it?  Good question.  And Japan is not a great example overall actually I see them as an example of what happens to expectations when you have a long period of low or no growth; which is what I do think we will have to manage when we finally come to the conclusion that unlimited growth is not going to work and the shareholder model all our institutions live and die for to some extent collapses.  If you do a bibliometric study of both academic and more general literature  you see a high growth in interest in stakeholder and big drop in shareholder.  The next study will try and assess at various points the trend of the intent and content of those areas.   What I think we are going to see is the literature on shareholder become more negative and that of stakeholder become more positive.  I also think we will see a link between stakeholder and sustainability, corporate responsibility, environmental literature.  I think quite a few people have figured it out.
Leroy, I have no idea what might work with Rocketman, I suspect he may be a more complex individual then many people believe.  I don't believe the problem will go away with blustering no more than other approaches, but eventually  other issues will overwhelm it and force it to go away.  
wsucram15 Added Oct 19, 2017 - 6:12pm
ooooo..chills and I thought you were writing about a football game..lol.
Great article...I mean it was great.
 
Leroy..I hope so..
John G Added Oct 19, 2017 - 6:13pm
John I think the point with currency is ours is convertible and desired and when that changes the party is over.
Eh? The $US is a fiat, non-convertible, floating exchange rate currency.
 And Japan is not a great example overall
Japan is the example that debunks all the neoclassical and Austrian School scaremongering and long debunked monetary theories.
John G Added Oct 19, 2017 - 6:14pm
the shareholder model all our institutions live and die for to some extent collapses. 
Does this mean rent seeking?
Even A Broken Clock Added Oct 19, 2017 - 9:33pm
Obviously not too many Nebraska fans here (ha).
Love the discussion - John G, someday I want to understand your monetary philosophy. Is there some reference that you would recommend to help me learn about it, or have you developed it on your own?
 
Richard, I agree that the loss of the primary reserve currency will cause this nation more distress than John believes it will. But that is my opinion. What I don't like is running uncontrolled experiments with the economy.
 
Leroy, I have wondered if the President's bellicosity towards North Korea is a deliberate strategy to give back tit for tat. But for many Occidental cultures, loss of face is a greater threat than loss of life. I just think poking hornets nests with sticks is bad strategy.
Saint George Added Oct 19, 2017 - 9:46pm
 or have you developed it on your own?
 
"Developed" is not the right word. More like, "pulled it out of his arse" describes its origins.
 
Look up the words "monetary crank" and "printing press" if want to understand SkiddlesMcGmark's amusing opinions on finance.
Edgeucation Newmedia Added Oct 19, 2017 - 9:49pm
I agree. Trump may be a billionaire but he's no economist. China will just get bigger and badder with our withdrawl from the TPP. Even though I disagree with some of the clauses in it it creates a tradeblock that helps American Companies compete in Pacific Asia. 
John G Added Oct 19, 2017 - 11:19pm
 John G, someday I want to understand your monetary philosophy.
It is nothing to do with philosophy. It is how the system works in the real world as opposed to the fake world of politics.
Ask yourself how a $ comes into existence.
As to the reserve currency status.
What real world effect on the US economy does foreign entities trading commodities in US$ have?
The answer is that the only benefits accrue to Wall St banks who get interest on the loans they create and commissions on the pass throughs.
Why aren't economies like Australia, Canada, the UK, Japan, New Zealand collapsing if reserve currency status is so important?
They all have similar macro conditions.
Stone-Eater Friedli Added Oct 20, 2017 - 5:57am
EABC
 
Very nice one. Almost stopped to read when it suddenly turned to politics LOL
 
 
George N Romey Added Oct 20, 2017 - 8:22am
The shareholder model is broken in this country because of Wall Street that only cares about the here and now. HFT and private equity have made it worse. Obama like FDR before him had the opportunity to put the Wall Street Jeannie back in the bottle. But he didn’t because they were his friends. Trump won’t either. 
 
Our economic system is cannibalistic. Just ask all of the people with MBAs that have joined their blue collar brothers and sisters in permanent underemployment. Eventually financial gimmicks and wizardry will no longer prop up a failed system. Many people will die as money collapses. It’s happen before and will again. We learned nothing from the 1930s.
Even A Broken Clock Added Oct 20, 2017 - 9:56am
John G. - you ask what real world effects are caused by commodities being traded in US$. My answer is that it ensures a constant demand for US$ and US debt instruments. Without that externally generated demand, the twin deficits this country runs would not be possible. And yes, I understand that given the model we have with the Federal Reserve, money essentially has to be borrowed into existence. For the other countries you reference, they don't have the same reliance upon external demand for their currency in order to prop up their economies. Japan for instance has run internally financed deficits for the larger parts of 3 decades. The effect on them has been extremely low growth rates. But then, that is to be expected with a stagnant population.
 
Perhaps the bigger problem that no one is commenting on is how can exponential growth rates be maintained without destroying the environment? George, your comments ring true as well. I was a corporate survivor, but saw many of my colleagues tossed overboard from my firm through the decades in order to meet unrealistic financial expectations. Then after I retired, the company I worked for my entire post-college career decided to merge with its chief domestic competitor, with the eventual plan of spinning off 3 companies. All of this due to pressure from Wall Street to provide more return .
wsucram15 Added Oct 20, 2017 - 12:01pm
George is right..unemployment and underemployment is very high right now.  I just looked at a chart in dangerous cities.  ITs still very high on both, but the poverty rates are astounding.  SOme at or above 40% of a large metropolitan area. Those are FBI numbers based on crime and census data.   I cant believe that the people in power are going to let 1930 happen again.  IDK why..but to me, its beyond criminal.
 
George N Romey Added Oct 20, 2017 - 12:49pm
Jeanne and Broken Clock I'm working on a FEMA contract and it might lead to an eventual six figure contract for several years (Puerto Rico).  I work alongside so many educated older professionals kicked out of the corporate world.  Corporations want to hire blue dots and since blue dots are all the same they take the young blue dots that are perceived to be cheaper. 
 
That anyone would remotely believe that monthly jobs numbers is astounding.  Its completely bogus, about as real as the Easter Bunny.
 
Jeanne we've been in 1930, just ask anyone in social services. The press does not report on the long lines at food pantries, the never ending lists for shelter and housing assistance, the religious charities overrun from request.  When the hell will people wake up and realize we ARE IN A DEPRESSION.  But this time we have no FDR, just a bunch of lying, thieving, corrupt self serving politicians.  FDR and Henry Wallace must be crying in shame in heaven that this country has committed the same sins again.
Jeffrey Kelly Added Oct 20, 2017 - 2:17pm
Very well said, EABC.
 
As a football fan I loved the beginning....LOL
Hopefully Nebraska gets better, as an Oklahoma fan we went through years in the wilderness before Stoops.  
 
That being said I wish we could stop looking like world beaters in September and then blowing random games at the end of September and October.
 
Well, except for last year.....
Stone-Eater Friedli Added Oct 20, 2017 - 2:51pm
George
 
I'm working on a FEMA contract and it might lead to an eventual six figure contract for several years (Puerto Rico)
 
Glad you found a job, but: I couldn't work anymore for any company that doesn't comply with my views and opinions. I would feel like a traitor. I'd prefer to go back to Cameroon and live from day to day - very basic. Just my opinion.
 
I can't accuse and blame the system and at the same time work for it. Maybe I would if I were 20, don't know. But now, at 60 - nope. Need to look at the mirror, even thought it's not as it was before LOL
Even A Broken Clock Added Oct 20, 2017 - 2:59pm
Jeffrey - don't we get to play you again in a couple of years? I still remember the game of the century back in '71. A year before I went to the university.
 
George, I do believe the economy is a mixed bag. Our church is involved in a food ministry that serves breakfast and lunch every day, and not only is it being used more and more often, but the violence of the street has made its way into the church building. It is a telling thing when you have to have police presence to deter violence at a program like this.
 
But there are those who are surviving and prospering in the economy. What's missing is the opportunities for many who lack the IT skills that are driving the economy.
 
George, if you get the FEMA contract, would be very interested in learning about it. I worked for many years with a Brooklyn ex-pat who migrated back to the island and went through the hurricane. He's back at work but I haven't connected with him yet.
John G Added Oct 20, 2017 - 3:19pm
Foreign demand for dollars for trade has no effect on the ability to run a fiscal deficit.
And as I said a number of other countries have the same conditions.
Running a trade deficit requires a fiscal deficit. Wall St financing external trade has no effect on either.
George N Romey Added Oct 20, 2017 - 3:24pm
I’d say the number of people prospering is minimal and connected to IT. Even that is not safe with insourcing and outsourcing. In the 90s an MBA with some experience were pretty much assured a six figure job. Today it doesn’t even guarantee a living wage.
 
The shift from a value driven to a gimmick economy has caused massive underemployment. We no longer back things of value but have essentially bs businesses like assisted sales. Companies with a business model based upon low wage part time jobs.
 
Unfortunately SEF running away isn’t always possible. My goal is over the next five years save enough move to a small seaside town in the Panhandle of FL and work whatever kind of job to cover the basics. The corporate sector is falling apart and will spit out anyone not of their upper cloth. The White collar world my parents aspired to is going away for the average Joe. It’s becoming nothing more than unstable serfdom in a cubicle. 
 
The world of get a college degree leading to a good job is about outdated as June Cleavers hairdo.
Jeffrey Kelly Added Oct 20, 2017 - 3:45pm
EABC, OU and Oklahoma will play in 2021 (Norman) and 2029 (Norman) and 2030 (Lincoln).  
 
This is, of course, depending on whether or not Trump blows up the world before then.  If that happens I anticipate a delay.
Stone-Eater Friedli Added Oct 21, 2017 - 5:28am
George
 
running away isn’t always possible.
 
I'm not running away. I immigrate and have planned that for years...
Even A Broken Clock Added Oct 21, 2017 - 11:44am
George - even the IT world is not totally safe. My son went to work for the old tech behemoth now proudly heralding Watson with his brand new computer science degree, and I've been astounded by how little training and mentoring he's had in his first year of work. Even the educated drones aren't getting proper grounding in how to interact with customers and teams.
 
Glad I was able to escape from the corporate world before it got too bad.
Even A Broken Clock Added Oct 21, 2017 - 11:50am
John G. - we will have to agree to disagree on the macroeconomic effects of deficit policies. We will probably agree that the proposed tax cuts will have the effect of increasing at least one of the deficits.
 
Thinking back to when the US actually ran a current accounts surplus in the 1990's, a large part of that was due to capital gains taxes from the original tech bubble. I know I paid taxes on one fund that I harvested when it went up 50% in six months. But I'm guessing the federal government is not benefitting as much from the current bull market in stocks, because so much more of the individual market is invested in tax deferred savings. I myself enjoy not having to worry about any sales I make in my own managed retirement account due to taxes. I will only be taxed on the gains after I liquidate the funds in the future. I imagine much more of actively managed funds are in tax advantaged accounts than was the case in the 1990's.
 
John G Added Oct 21, 2017 - 5:31pm
John G. - we will have to agree to disagree on the macroeconomic effects of deficit policies. We will probably agree that the proposed tax cuts will have the effect of increasing at least one of the deficits.
I don't know how that is a 'disagreement'. My statement is an accounting fact. Every deficit has a corresponding surplus and vice versa. You can't have an opinion on the maths.
Thinking back to when the US actually ran a current accounts surplus in the 1990's, a large part of that was due to capital gains taxes from the original tech bubble.
I think you are very, very confused.
Thomas Napers Added Oct 21, 2017 - 9:24pm
On matters related to trade, your article is spot-on with one exception.  Trump isn’t the only prominent politician denouncing international trade.  Furthermore, the majority of the American people believe our trade deals do more harm than good.  So can you blame Trump for feeding this beast and using it for political gain? 
 
On other matters, I’m not sure what you’re trying to say.  Take the Iran deal.  The deal is nothing more than an agreement not to interfere with Iran’s nuclear program and for Iran to continue the charade they don’t have a nuclear program.  Even if Trump certified the deal, it would still eventually end. At which time, Russia will give back Iran’s nuclear material (that is if Iran actually gave it to Russia) and by the time it does, Iran will have perfected the other technologies necessary to build nuclear warheads.  Kudos to Trump for telling the American people the truth…Iran is a threat to world peace, the nuclear deal did nothing to change that fact.  
John G Added Oct 21, 2017 - 10:49pm
Iran doesn't have a nuclear weapons programme, never had a nuclear weapons programme and almost certainly never will have a nuclear weapons programme.
Anyone saying otherwise is ignorant and/or a liar. And probably a warmonger looking to kill lots of Iranians.
John G Added Oct 21, 2017 - 10:51pm
Iran is a threat to world peace, the nuclear deal did nothing to change that fact.
The hypocrisy of an American saying that is simply breathtaking.
The USA is by far the biggest threat to world peace.
Flying Junior Added Oct 22, 2017 - 1:09am
I whole-heartedly agree with your assessment of Trump's flea-like view of world trade.  Every country that runs a trade deficit with the U.S. is accused of treating us unfairly.  Maybe Trump could get together with Mitt Romney and design factories based on the Chinese business model.
 
I remember a Bernie supporter friend of mine trying to explain why the TPP was unjust.  I never had much of a chance to learn what was in it before Trump killed it.
 
I sincerely hope Trump doesn't manage to fuck up NAFTA like everything else that he touches which always turns to dogshit. 
 
How could even a maniac like Trump be foolish to walk away from the Iran nuclear agreement?  I guess he just doesn't really care what happens.  And, of course, he is excited about starting a war somewhere.  He sees his own power only limited by the power of the U.S. military.
 
And O/T to be sure.  I'm scared shitless that the thiefs will pass this tax giveaway to the überwealthy.
John G Added Oct 22, 2017 - 2:01am
A DNC laundry list.
(While they purge progressives from the party.)
Every country that runs a trade deficit with the U.S. is accused of treating us unfairly. 
No its the countries running trade surpluses that they accuse.
Jeffry Gilbert Added Oct 22, 2017 - 2:27am
He sees his own power only limited by the power of the U.S. military.
 
I'm no Trump fan by any measure. Let's be clear about that. 
 
Trump has been wholly taken in/over by the neocon warmongering terrorists who have usurped power in DC for the last several presidents. 
 
You want a better world rid yourselves of the Kaganites. 
 
Even A Broken Clock Added Oct 22, 2017 - 6:07pm
Jeffry - I was not familiar with Kagan. Thanks for bringing him and his philosophy up. Will look at this some more.
John G Added Oct 23, 2017 - 5:20pm
There's a bunch of them (Kagans). One of them is Victoria Nuland who ran point in the coup d'etat in Ukraine for McCain/Biden/Clinton.
Katharine Otto Added Oct 23, 2017 - 10:16pm
Even,
I don't believe in trade deals.  Governments can only trade favors, and the end-line purchaser pays the costs.  
 
I'm fine with the yuan (or yen, or whatever) being the world's reserve currency.  Maybe Americans would learn to get better value for their dollars.  All that surplus cheap plastic junk made by slave labor in China is only adding to our landfill problems.
John G Added Oct 23, 2017 - 11:54pm
The need for a world 'reserve currency' was rendered moot when Bretton Woods collapsed in 1971.
That a lot of external trade is conducted in $US doesn't make much difference to the US real economy.
 
Jeffry Gilbert Added Oct 24, 2017 - 3:58am
Its my understanding that USD transactions wherever they take place must use SWIFT. It would seem that a couple points of every transaction to DUHmerican banksters that own SWIFT is a significant number if GWP is $75 trillion and $60 trillion is done in USD. Even more if processed through visa/mc. 
 
It also gives both big business and government a wealth of information which can be used to tailor trade agreements to benefit DUHmerican based internationals.
 
Not to mention a great way for DUHmerican regulators to frame unwanted players to remove competition. 
John G Added Oct 24, 2017 - 4:31am
I don't include the FIRE sector in the real economy. Finance is an economic overhead.
Wall St would lose out. Boo hoo.
Even A Broken Clock Added Oct 24, 2017 - 9:45am
Jeffry - I agree with your assessment of the importance of the SWIFT system.
 
John - I've always been a manufacturing chauvinist, as I believe true wealth originates in the production or growth or extraction of real things. This would also include intellectual property. That being said, it's possible to make a whole lot of dollars through sectors like finance (at the expense of the productive sectors).
 
To all armchair economists - I think we all will be learning the effects of losing the reserve currency status. Then we will see if there are significant effects. Speaking as a resident and member of the US economy, I hope I'm wrong on the impact and that it is not as bad as I fear.
George N Romey Added Oct 24, 2017 - 1:54pm
In the end we will do better as a collapsed hegemony. Once we can no longer rule the world we might learn how to take care of Americans.
John G Added Oct 24, 2017 - 4:30pm
That being said, it's possible to make a whole lot of dollars through sectors like finance (at the expense of the productive sectors).
In my world there would be no privately owned banks. In any case I would make 95% of what banks do now illegal. 
To all armchair economists - I think we all will be learning the effects of losing the reserve currency status.
But why do you think that? The only benefit accrues to the banks that provide the credit.
Dave Volek Added Oct 25, 2017 - 12:21pm
EABC
 
I'm not interested in US College Football, so I didn't bother reading the article at first. But I broke down: There is a nice analogy.
 
Empires do not last forever; history has lots of good example. And, if one is looking at the signs, the USA is on a downward slide. It is losing its influence in the world.  And we should't blame Mr. Trump for that; he is only following orders from a significant part of the population.
 
The question is: "What is going to be stabilizing influence in the future?"
 
Even A Broken Clock Added Oct 25, 2017 - 1:11pm
John, in your ideal economic system, what mechanisms would exist to create currency? Is it solely government appropriations that increase the money supply? Do you envision a world with no taxation? What mechanism would exist to regulate credit?  I would like to see a post of yours where you discuss those issues.
 
Dave - Fooled you, didn't I. I agree that we are looking at a world without a strong stabilizing force in the future, and with military capabilities expanding both on a macro and micro basis, there will be severe consequences.
John G Added Oct 25, 2017 - 8:03pm
There's no need to overturn the current fiat currency system. There is definitely a need to overturn the way things are run in the political sphere.
Capitalists have captured the system. They need to be contained. 
Edward Miessner Added Oct 29, 2017 - 5:18pm
Even A Broken Clock - You are right. The US Empire is in decline just as the British, French, Spanish, Portuguese, Byzantine and Roman Empires before it. We seem to be taking the trajectory of Rome, which did go out with a whimper. And Caesar Augustus did for the Roman Empire what President Trump has done for the US one: he pulled out of Germania, and decreed that the Roman Empire shall expand no further. (Well, it did, into Dacia and Romania, but those further gains were eventually given up and sooner rather than later.)
 
Well I too hope that we go out with a whimper and not a bang; the latest nuclear winter studies indicate that an all-out nuclear exchange between the US and Russia, which could still happen because we are still threatening Russia, would introduce a new ice age of short duration before global warming resumes. Of course, humanity would not survive the ice age.