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Celebrating the Fall of the American Empire

by BruceMcF Sun Sep 27th, 2009 at 08:48:45 PM EST

Burning the Midnight Oil for the Next American Revolution

And, yes, y'all get off easy in this particular mini-utopia - also, American commentators in particular should feel welcome to raise some of the points below at the Booman Tribune "blogfather", where its been reclisted but not actually discussed.

As people look back to the decade just past, and as we look ahead to the long, hard job ahead of us, many people describe the decade in many different ways - tumultuous, chaotics, catastrophic, liberating, tragic, joyous - but it seems that nothing recycles so easily as a phrase, and so the punditry online seem to have settled on The Roaring Teens.

But consider how it could have all gone so badly wrong, had the American Empire not collapsed. Whether you were thrilled or dismayed by the Roar in the Roaring Teens, consider what might have happened to our revived Republic had history taken a different turn in the aftermath of the Currency Collapse of 2011.

It is this perspective I wish to offer, since I can recall the New Year of 2010 arriving, and I feared much of what did in fact happen in 2011 - and yet because I did not see the possibility of the liberation of our nation from our self-imposed shackles of Empire, I did not for a minute imagine what the decade would bring.



The Currency Crisis

I recall people at the time writing about the risk that China would "unload" US Savings Bonds, as if China had bought the Savings Bonds as an investment. The reality was, of course, that they bought the bonds to keep the US$ expensive and the yuan cheap (well, to keep the renminbi cheap, in those days before full convertability).

The other reality, which was tracked by a different set of people with a different set of interests, was domestic Peak Coal for China. Late in the Do-Nothing Noughties, people heard promises from China that they would reduce carbon emissions and invest in carbon neutral technologies, but did not put two and two together: the speculation regarding peak domestic coal for China was very real, and was coming much faster than outsiders were allowed to understand.

And so, silently, stealthily, China shifted its "currency basket peg" away from the US$ and to the Euro and Yen and Pound Stirling and Swiss Franc and Australian Dollar. It was not entirely off the radar, but since they moved the peg itself to keep the yuan/US$ rate from moving very far, very fast, it was lost in the noise of the countless phony emergencies generated by the typical "news" infotainment of the Do-Nothing Noughties.

And it maybe that they would not have acted quite as they did, but the Federal Reserve controversy of the summer of 2011 broke out, starting as a gambit aiming for some advantage in some long forgotten policy fight over whether to do too little, too late, both, or nothing at all. And they were faced with the choice of whether to keep sliding their peg - and what they knew that would mean for domestic inflation, given their need for dramatically larger coal imports from the United States to tide them over as they kept ramping up their New Energy power sources.

And of course, with the limp US recovery from the recession barely over, compared to the strong European and Japanese recoveries, as far as maintaining their export surge, the Euro and the Yen were where it was at ... the US market didn't seem nearly as important as the possibility of buying cheap coal from Americans desperate to earn foreign exchange. It seemed very much as if the growth opportunities in the American market were behind China, not ahead.

And so, they stopped shifting their peg.

They, of course, had not been so short-sighted that they forgot their southern flank. Indeed, the currency basket peg had been developed by Singapore, and its spreading use across ASEAN in 2010 had seemed to be a technical issue, when it was not described as a "response to US pressure".

And while India was not "in on it", there were Indian officials who were watching their rival and sometime adversary more closely than many others, and had already started arguing the case for the switch. In the face of the dramatic fall of the US$ in the summer of 2011, India adopted a currency basket peg with an unspecified but clearly only token US$ component.

Five years before, the world had been roughly half floating and half pegged, and the pegs were mostly to the US$. By the fall of 2011, the world was half floating and half pegged to hidden baskets that very clearly had very few US$ in them.

As Jon Stewart asked, "Why do they call it floating when all we are doing is sinking?" - leading, lest we forget, to calls for his resignation and return to the Comedy Channel from the ever more strident and ever less relevant conservative movement.


What happened was not inevitable

This is not to refresh anyone's memory - all of this is quite familiar. It is to bring the events to the forefront and ask, what if we had clung to Empire in the face of this crisis?

It seems so obvious today. Our ability to afford what turned out to be over a thousand foreign bases had been eroding for decades. And now, with a dollar trading at €0.34, ¥46, £0.32, 0.40 Swiss Franc, A$0.57 - the costs were exploding.

(Actually, take a moment and reflect on that - ten years ago, most of those would have been quoted as how expansive or cheap they were in US$, not how expensive or cheap the US$ is in the hard currencies of the world.)

And so the wise heads of the two establishment parties put together an austerity budget that would allow the US to continue paying the exploding costs of these establishments - and the consensus cracked.

It started with a filibuster in the Senate by some faction pursuing some narrow partisan advantage, as was normal for the decades just past. And so it was bounced over to the House.

But Congressmen are skittish, and the new Congressmen on both sides of the aisle from the "kick the bums out" wave of 2010 were in no mood for a grim austerity budget. The radicalized right wing of 2010 entered another of their rages on "wasting our money protecting German wealth from the damn Russkies". A bloc of Democrats who had held on by the fingernails in 2010 based on an uptick in "Green Jobs" were not about to cut back on their lifeline.

The so-called "Progressives" of the day, a motley mix of progressives, social liberals, and moderate Wall Street Democrats, fractured in the Great Defense Budget fight (wasn't it LIVE-FREE? In those days, if the name sounded good, that was supposed to replace actual sound legislation). So did the smaller Populists. But the balance from both took up the war cry of the radical right wing fringe.

They hit on covering the budget black hole - under the arcane rules of the day - by withdrawing from Europe by May 8, 2015, the 70th Anniversary of Victory in Europe day. Some clever soul called it the "Seventy Year Itch for a Real Victory Parade", quickly shortened to "The Victory Parade Strategy", and by then the dam had broken.

The administration fought it, the Pentagon Establishment fought it, but first a wave of primaries were won on promises paid for by retreating from this or that piece of foreign soil, and then a wave of general election victories won, on both the right and the left, and there was nothing to do but to accommodate it. The new House would not fund the foreign bases, and there was no way to make them.


Why Did We Ever Fear a Currency Collapse?

What is important to recall, as we look back at this glorious throwing aside of the shackles of Empire, is that it could have all come undone. A disaster, another Lyon Bombing, except in LA, and it might have all come apart.

Instead, the second impact of the great Current Collapse was felt. Fewer foreign students came to the US hoping to win a US green card - but when foreign students compared US Universities to the cost of foreign study at British or German or French or even Australian Universities, they kept coming, and then started coming in larger numbers.

Most of the rest of the world was not seriously affected by the Currency Collapse - it was, indeed, a US Dollar Collapse. The Canadian Dollar and Mexican Peso suffered collateral damage, but most countries were largely unaffected.

And so US machine tool exports boomed - often to unexpected locales and in competition with Chinese rather than European or Japanese producers. Foreign film-makers came to California to film movies set in Berlin and Paris and London and Sydney - to save on production costs. Japanese and German industrial software firms set up offshore branches in Silicon Valley in California and the Information Corridor in Massachusetts.

The US slipped toward into a recession in 2011, but was pulled out again in 2012 by the export surge.

A critical part of the Victory Parade coalition had been from Great Lakes and Midwestern states battered by two decades of import-for-profits "globalization", clinging desperately to the slender reed of hope offered by so-called "Green Jobs". Those policies seemed like more too little, too late on their own. But they met the rising tide of US$ oil prices, the wave of Chinese take-overs of US coal companies aiming at shifting US coal to export markets, the export boom, and US production capacity started growing at headlong rates.

And that relentless growth in investment, of course, was a big part of the Roar in the Roaring Teens.


But It All Might Never Have Happened

But count the number of ways it could have failed to happen. Suppose that the Federal Reserve controversy was successfully hushed up and papered over, as the Great Bank Robbery of the Noughties was first papered over with a flood of liquidity, then turned into an economic crisis, then finally lost sight of in the relentless generation of new mini-emergencies from the adrenaline addicted infotainment media of the era.

Suppose that the Currency Collapse had not happened in the aftermath of a "kick the bums out" election, or suppose that the "kick the bums out" sentiment had not spilled out the way it did to hit Congressmen in both parties.

Suppose that the Progressives or Populists in the House had held together, and held together on the basis of support for the Austerity Budget, which would have thrown the US into a deep recession and, so close to the previous one, quite possibly a "Not Nearly So Great" Depression.

Suppose that the Lyon Bombing had happened in LA, or St. Louis.

And its not like the new media in 2011 played the positive role that it now remembers. The heady days of 2013 and 2014 cast a rosy glow back to 2011 - but in 2011 itself, the new media were "going ballistic", as we used to say. The sky was falling, it was the administrations fault, the Republicans fault, the Democrats fault, an evil plot by the Chinese, an evil plot by the Illuminati using the Chinese as their cover story.

Once the breakthrough was made, the new media played a useful role in the wave election of 2012, and once that election was won, an even more useful role in winning more useful than useless "peace dividends".

Indeed, I have encountered peace activists who blame the early flailing around of the New Media for the "lost opportunity of 2011".

The "Victory Parade", after all, primarily involved Eurasia. We left Japan, but not Australia. We left Europe, but our presence in southern Africa grew. Most Caribbean states would be hard pressed to pin point the fall of the American Empire, since it feels like no such thing in Jamaica or Trinidad. Even today, the Department of the Navy oversees the largest navy on the face of the globe,dominating the Caribbean, west and south Atlantic, the east and south Pacific. The Department of War oversees bases on four continents.

And of course, Climate Chaos presses us ever harder. Certainly, we seem better placed to address it than it ever seemed we would, especially following the nationalization of US coal mines, and the "Two Centuries of Coal" conservation strategy that followed.

But all but the most incurable optimist will now admit that "better placed than before" may well end up being barely good enough for many and simply not good enough at all for many as well.

Still, nearing retirement, I am above all things a Pragmatist with a Capital P. Compared to the total mess that we could have made of things - and the total mess we would have made of things, if we had continued down the course set in the Kamikaze Nineties and the Do-Nothing Noughties - we are in far better shape than we had any right to expect.

And so, reflect on what damage could have been done if, instead of bringing down the Empire - the Empire we could not call be name while it lasted - we had wasted the Teens on a hopeless effort to save it. If not in Depression we would be teetering toward it. If not at war, we would have been lurching toward it. If not in climate hell, we would have been slipping inexorably toward it.

So tonight, let us raise a glass of near-export quality sparkling wine, and give a rousing toast for the Fall of the American Empire.

Midnight Oil: Forgotten Years


Few of the sins of the father, are visited upon the son
Hearts have been hard, our hands have been clenched in a fist too long
Our sons will never be soldiers, our daughters will never need guns
These are the years between
These are the years that were hard fought and won
Contracts torn at the edges, old signatures stained with tears
Seasons of war and peace, these should not be forgotten years
Still it aches like tetanus, it reeks of politics
How many dreams remain? this is a feeling too strong to contain

The hardest years, the darkest years, the roarin years, the fallen years
These should not be forgotten years
The hardest years, the wildest years, the desperate and divided years
We will remember, these should not be forgotten years

Our shoreline was never invaded, our country was never in flames
This is the calm we breathe, this is a feeling too strong to contain
Still it aches like tetanus, it reeks of politics
Signatures stained with tears, who can remember
We've got to remember

The hardest...
Forsaking aching breaking years, the time and tested heartbreak years
These should not be forgotten years
The blinded years, the binded years, the desperate and divided years
These should not be forgotten years, remember

Display:
... elbow room in this part of this continent, after all.


A hundred tanks along the square,
One man stands and stops them never
Some day soon, the tide will turn, and I'll be free
I'll be free, I'll be free, I'll come home to my country,
Some day soon the tide will turn and I'll be free


I'm not expecting to grow flowers in the desert,
But I can live and breathe and see the sun in wintertime ...
And in a big country, dreams stay with you,
Like a lover's voice, fires the mountainside..
Stay alive..


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Sun Sep 27th, 2009 at 08:55:03 PM EST
Nice story, Bruce! There is only one thing I didn't like: the Lyon Bombing...

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Sun Sep 27th, 2009 at 10:53:05 PM EST
Doesn't necessarily say anything much. Industrial societies are kind of a target rich environment when it comes to sabotage, and it just takes one crazy person and a few household chemicals to make stuff go boom. It doesn't even have to be political. (Not that France lacks questionable international entanglements, though. I'm not quite sure what y'all are doing in Tchad, but I'm pretty sure I won't like it if I find out...)

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Sep 27th, 2009 at 11:19:47 PM EST
[ Parent ]
I think Bruce should give you details, so you know when not to be home.
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Sep 28th, 2009 at 01:37:08 AM EST
[ Parent ]
Blame the Paris-Lyon line - for the tale, it could have been any European city about that size, and for some reason Lyon was the one that came to mind.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 08:47:05 AM EST
[ Parent ]
for some reason Lyon was the one that came to mind

That's exactly what I didn't like!

By the way, there have been two cases of bombs on the TGV Sud-Est already: one in 1983 and one in 1986.

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet

by Melanchthon on Mon Sep 28th, 2009 at 11:45:15 AM EST
[ Parent ]
It is, of course, entirely vague in the tale what the "Lyon bombing" consisted of. Bearing in mind that the Republican party finds it politic to pander to craven cowardice whenever possible, it might not even require loss of life to play the role of "zOMG, if the Lyon bombing had occurred in LA!".

So it could have been some public building destroyed in the middle of the night, with the cleaning staff warned in enough time that it was a big dramatic boom with few injuries and no loss of life.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 01:13:33 PM EST
[ Parent ]
I gave a speech at a caucus of our WA Democratic Party Central Committee meeting this past weekend in which I pointed out that the Iraq war/occupation wasted 3 - 5% of U.S. GDP per year for the last six years - all by itself.  That is, I wasn't counting the Pentagon budget, the 'foreign aid', the CIA budget, etc.

I appreciate your Victory Parade rubric and will try to incorporate it in my Party work - which also involves primaries for just the types of 'representatives' that you name.


paul spencer

by paul spencer (spencerinthegorge AT yahoo DOT com) on Mon Sep 28th, 2009 at 12:05:53 AM EST
... system of self-reproducing and mutually reinforcing institutions, as any important part of any establishment always is.

Which is why it is more likely to collapse in a heap after a crack in the system leads people to re-assess long established habits of behavior than in a slow, steady way as the benefit/cost evolves further and further into the red.

It was raised in the Agent Orange version what about Iraq/Afghanistan, but of course among the purposes of those occupations is the need to justify the big NATO airbases. Its only in a crisis that any of the interests primarily supporting the occupation would even consider throwing any NATO base to the wolves in a budget fight - but in crisis, interests under threat themselves aren't always in a position to pick and choose the policy choices available.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 09:05:08 AM EST
[ Parent ]
U.S. dollar seen caught in G20 meeting's crosshairs | Serious Person | 27 Sep 2009

World Bank President Robert Zoellick said the United States should not take the dollar's status as the key global reserve currency for granted because other options are emerging.


Diversity is the key to economic and political evolution.
by Cat on Mon Sep 28th, 2009 at 08:33:22 AM EST
If the USD value us suddenly divided by 4 or 5, then oil will become 4 to 5 times more expensive for USians than it is for the European or Asian countries.

As the US lifestyle is the most oil dependent on the planet, this would certainly have dramatic consequences (as in seismic change), besides boosting US exports or foreign students inflow...

by Bernard on Mon Sep 28th, 2009 at 09:41:23 AM EST
4 to 5 times would turn the US into a failed state. Even with a huge export boost, outgoings would still exceed income by a huge margin. And with the Wall St mobsters in charge, any recovery would not be shared.

The irony would be that the rhetoric about Iraq and Afghanistan was always about 'fighting them over there so as not to fight them here.'

That was always a particularly foetid kind of bullshit. But a dollar collapse would bring war home for many Americans in a very direct and unpleasant way.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Sep 28th, 2009 at 09:56:01 AM EST
[ Parent ]
... a dollar collapse as much as the dollar dropping down to a reasonable trading range assuming that the Chinese stop propping it up.

IOW, despite the reckless acquisition of chickenshit and default-susceptible assets by Bernanke at the Fed, in the scenario the "Fed controversy" turns out to not have been quite as bad as some people {cough} worried that it might turn out to be.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 04:08:50 PM EST
[ Parent ]
... but what the end result would be is highly path dependent. It would mean gasoline at 1.5 to 2 times European prices, as opposed to merely closing much of the current gap, as in fall of 50% in the tale above.

If it were to drive the US toward energy independence, which is of course feasible for the US, oil becoming 4 to 5 times more expensive for Americans than for Europeans would lead to a reversal of the sluggish investment in productive capacity of the last three decades.

And of course it would lead to declining global oil demand so could well stave off global oil price shocks for a while as we enter the downward slide part of Peak Oil.

However, clearly, while a sudden fall by 50% would be a shock, it would be easier to accommodate than a sudden fall by 75% or 80%.

I don't follow the "foreign students or exports" - foreign students are in the story as one example of export earnings.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 10:24:25 AM EST
[ Parent ]
Well, the influx of foreign students or the rise in exports would be a logical consequence of a lower USD: US colleges or US made products would appear cheaper to us, furriners...

My main point was: I'm not sure that oil products becoming suddenly much, much more expensive to a nation where cheap energy is a god given right -- and whose very lifestyle depends on it -- would go down any gracefully, energy independence be damned.

That would be more than a mere "shock" and I'm afraid that the pent-up anger displayed by the tea-baggers during the health care "debates" would look like an afternoon stroll in the park by comparison.

Some major adjustments would be needed too: there are industries (I can name semiconductors and aerospace, but oil does qualify too) where all business around the world is done in USD: a shrinking greenback is a major catastrophe for EU aerospace or microelectronics industries. Something's got to give...

by Bernard on Tue Sep 29th, 2009 at 04:11:02 PM EST
[ Parent ]
Bernard:
Some major adjustments would be needed too: there are industries (I can name semiconductors and aerospace, but oil does qualify too) where all business around the world is done in USD: a shrinking greenback is a major catastrophe for EU aerospace or microelectronics industries. Something's got to give...

Would it be catastrophe because the market is in the US or because of the falling dollar value in itself? In the second case why not raise prices in USD or trade in euro?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Sep 30th, 2009 at 06:03:51 AM EST
[ Parent ]
The US market is only 30% of the WW semiconductors market; the bulk is now in Asia-Pac. Same for civilian aircrafts, BTW.

Asian manufacturers whose home currency is de facto pegged to the USD are all too happy to see their EU based competitors being slaughtered by the falling greenback. Whether you like it or not, major business in this region is in USD. Same for oil.

The real question: what would it take for these businesses (especially for oil) to stop trading in dollars and switch to - what? A basket of currencies?

by Bernard on Wed Sep 30th, 2009 at 09:55:24 AM EST
[ Parent ]
I thought one premise for the scenario was that the asian countries de facto un-pegged from the USD, and that was one reason it was falling vs the euro in the first place?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Wed Sep 30th, 2009 at 10:09:43 AM EST
[ Parent ]
The scenario only assumed an "un-peg" of the exchange rate of local currencies vis a vis the USD.

Changing the trading currency from the USD to XYZ is another step altogether, that may be the next move after the currency un-peg.

by Bernard on Wed Sep 30th, 2009 at 12:52:08 PM EST
[ Parent ]
Now I am officially dense, but would not then the asian manufacturers also get slaughtered if the prices stays fixed in USD and their local currencies increase against it?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Wed Sep 30th, 2009 at 07:12:46 PM EST
[ Parent ]
Yes, which is why the latter would most likely be the unavoidable consequence of the former.
by Bernard on Thu Oct 1st, 2009 at 12:01:19 PM EST
[ Parent ]
... being denominated in a currency and prices being fixed in a currency.

If Asian manufacturers found that they are exposed to more supply price risk in prices fixed in dollars than demand competition, the benefit of a moderately lower dollar might well offset the damage.

A drop in the relative terms of trade faced by the US would both make resources originating from the US (and North America in general) less expensive, as well as reduce competition from the US in markets like international markets for crude oil.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Oct 6th, 2009 at 06:47:06 PM EST
[ Parent ]
^_^

Yes, the point is that the pegged countries stop propping up the US$, so when it comes under serious pressure (the vague "controversy with the Fed"), its subject to falling against currencies across the board.

The premise in China sneaking out of a dollar peg ... which under the Singapore peg they can do, after all, if there is a period of relative stability in foreign exchange markets ... is that they hold the yuan/US$ exchange rate fairly steady, and attention is not focused on the means by which they are doing it.

Of course, blogging about it undermines the premise to a tiny extent, but for the sake of the fiction, I'll just assume that some blog somewhere blathering on about it is lost in the broader din, with a large number of mutually self-contradictory explanations about what is going on.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Sep 30th, 2009 at 04:29:52 PM EST
[ Parent ]
... with contracts priced against some (rather arbitrary) benchmark price, the trading currency is not so critical. It is long term contracts and hedging against a fixed nominal price where the trading currency matters more.

The above scenario would do it, fast on the heels of the abandonment of stable US$ exchange rates among the pegged neo-mercentalists would come a demand for a shift to a currency with a more stable exchange rate to reduce exposure to FX risk.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Sep 30th, 2009 at 04:35:57 PM EST
[ Parent ]
... experienced a 50% drop in a week - I was studying Spanish in Cuernavaca during La Crisás, so the 1/3 of my traveler's cheques that I had saved for the final week brought as many pesos as the first 2/3 had - I have not personally experienced a steeper decline.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 05:49:43 PM EST
[ Parent ]
What has never been clear to me is why, after buddying up to the Middle Eastern oil suppliers, colonizing most of Africa, and buying into the South American marketplace--all three providing a source for immense new resources--and after supplanting almost the entire manufacturing industries of North America and Europe, China would worry about the Euro or the Yen, given that the the Renminbi was for all practical purposes THE reserve currency anyway...

The hints were there, of course:

"Oil companies in China -- the second-biggest buyer of Iranian crude after Japan -- have stepped up investment. China National Petroleum Corp., the flagship state-owned oil company, has signed billion-dollar contracts to develop oil and natural-gas fields, replacing other foreign companies that have backed out. China's biggest oil refiner, state-owned Sinopec Group, has also signed on to develop Iranian oil fields."
http://online.wsj.com/article/SB125408502540944481.html?mod=WSJ_hpp_MIDDLTopStories

"Over the past 50 odd years, China has offered aid to 53 African countries with about 800 projects, constructing over 2,000-kilometer of railroad, 3,000-kilometer of highway, sending medical teams that amounted to 15,000 person times, treating some 240 million patients."
http://www.southerntimesafrica.com/inside.aspx?sectid=10626&cat=10

"You probably recall that the nation put money into Brazil's Petrobras (NYSE: PBR) not long ago. The money -- $10 billion -- will allow the Brazilian state oil company to continue chugging along toward the $175 billion it plans to spend on exploration and production during the next five years. In exchange, China will be guaranteed 200,000 barrels of Brazilian crude daily for the next decade."
http://www.fool.com/investing/international/2009/07/06/china-goes-shopping-in-south-america.aspx

And it was even predicted that the Chinese system would ultimately overwhelm the others...

"It's clear to see that the Chinese yuan will be the world's reserve currency in the future."
http://blogs.wsj.com/deals/2009/03/26/the-chinese-yuan-the-next-world-currency/

by asdf on Mon Sep 28th, 2009 at 10:22:27 AM EST
The US became the world's largest economy sometime around the turn of the century. However, the US$ only became the single de facto reserve currency after WWII.

Being the reserve currency is not an unmixed blessing. As long as China maintains its current neo-mercantalist international economic policy regime, it requires some other current to be the reserve currency, so that it has a currency against which to peg.

The US being shifted from the "primarily export growth market" column to the "primarily raw material supply" column in Chinese economic policy would not in and of itself signal the end of neo-mercantalism, so the de facto global reserve currency would not yet be the yuan by 2020.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 10:30:02 AM EST
[ Parent ]
Is the current Obama regime reassessment of Afghanistan strategy driven primarily by strategic/military factors or by economic/financial ones?

notes from no w here
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Sep 28th, 2009 at 10:48:04 AM EST
You've left out the key concern of all US (or just all?) foreign policy: domestic political calculations. You're committing the rational actor error.
by Colman (colman at eurotrib.com) on Mon Sep 28th, 2009 at 10:49:19 AM EST
[ Parent ]
somewhat 'tongue in cheek'. That's certainly a major factor among the politicians, but for Pentagon and related bureaucrats it's largely summed up in Bruce's diary: the survival and profits of the M-I Complex - plus projections of power.

paul spencer
by paul spencer (spencerinthegorge AT yahoo DOT com) on Mon Sep 28th, 2009 at 11:29:34 AM EST
[ Parent ]
You're right, but domestic political calculations are rational, too. It is not the same rationality, though.

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Mon Sep 28th, 2009 at 11:33:53 AM EST
[ Parent ]
Are you implying that strategic/military or  economic/financial factors are necessarily rational?  What strikes me as remarkable is how little the domestic political unpopularity of the war seems to matter at the moment - that is until the MI or financial establishments decide it should matter...

notes from no w here
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Sep 28th, 2009 at 12:08:45 PM EST
[ Parent ]
... political theatre and strategic/military factors. There will be a political cost of drawing down forces, but it could easily be less than the risk of a widely trumpeted surge that is then later portrayed as a failure.

If some health care system modifications are made that do some marginal good, and a ghost of a cap and auction system is put into place and the sky does not fall in as a result (since the cap and auction has already been effectively neutered, there is nothing there to cause a problem, even under the counter-factual that a genuine cap and auction would) ...

... I wouldn't be surprised if they'd be happy to draw down after that and gamble on a combination of the economy starting to get better in the summer of '10 and conning the Democratic base that they had won legislative victories worthy of the fuss to prevent a Republican victory in the mid-terms.

There was a deliberate choice in the writing of the tale above that even that soon after the collapse of the Base Network Empire, the commentator talks as if Congress was once again the senior branch of government. Not likely, no, but a utopian tale does not need to be a prediction of what is most likely to happen.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 01:24:01 PM EST
[ Parent ]
European Tribune - Celebrating the Fall of the American Empire
As Jon Stewart asked, "Why do they call it floating when all we are doing is sinking?" - leading, lest we forget, to calls for his resignation and return to the Comedy Channel
Resignation from what office?

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Mon Sep 28th, 2009 at 12:08:54 PM EST
I have no idea ... I decided it was better off as a reference to something that the future audience would automatically understand.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 01:25:34 PM EST
[ Parent ]
White House Press Secretary?

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Mon Sep 28th, 2009 at 02:42:28 PM EST
[ Parent ]
«nt» signifie «non texte»

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 04:10:21 PM EST
[ Parent ]
Nice dream, but it ain't gonna happen.

...but first a wave of primaries were won on promises paid for by retreating from this or that piece of foreign soil, and then a wave of general election victories won, on both the right and the left....

We aren't going to get a Congress that isn't owned and operated by MegaCorp until the general populace acts on something other than the shrieking points of the punditocracy for longer than six months.  Good luck.

A disaster, another Lyon Bombing, except in LA, and it might have all come apart.

Far more likely than an independent Congress or a rationally active electorate, unfortunately.

And so US machine tool exports boomed....

How?  Everyone knows what kind of condition our manufacturing infrastructure is in these days, but the real crisis is the condition our skilled labor force has been in for over three decades.  And it isn't like those students you have coming to the US will be filling tool-and-die jobs.

The US slipped toward into a recession in 2011, but was pulled out again in 2012 by the export surge.

Huh?  I'm not following what we're exporting.  We have some minerals, we have timber, we have agricultural commodities (although we're now a net food importer), and we have weapons.  That doesn't make for much of an economic boom.

And its not like the new media in 2011 played the positive role that it now remembers.

Given that no one has yet come up with an on-line business model that allows people to make a living reporting news, I don't see a replacement for infotainment any time soon.  Consequently, I don't see an informed electorate any time soon.  Consequently....

by rifek on Mon Sep 28th, 2009 at 01:13:41 PM EST
... rather than unlikelihood, since the fictional author himself argues that what fictionally happened was, in fiction, unlikely.

We aren't going to get a Congress that isn't owned and operated by MegaCorp until the general populace acts on something other than the shrieking points of the punditocracy for longer than six months.  Good luck.

That's not a premise of the mini-utopia. If it involved a Congress that was not owned and operated by Big Business, it would be a far-more-than-mini-utopia. The premise is, rather, that there is a shift in the interests of Big Business and some faction is prepared to throw some other faction to the wolves to maintain their own position. The mini-utopia is based on the public knowledge of events - its no an insider account.

Since, after all, ownership of the US Federal Government by Big Business is more like a city government that is owned by the mob than like being a wholly owned subsidiary of some particular corporation - unless we are to believe the mega-conspiracy network of Illuminati story as opposed to the normal historical pattern of those in privileged positions using those positions in part to maintain their privilege.

In a falling out among thieves, it may be unlikely that the MIC Complex would end up holding the short straw, but its not impossible.

How?  Everyone knows what kind of condition our manufacturing infrastructure is in these days, but the real crisis is the condition our skilled labor force has been in for over three decades.  And it isn't like those students you have coming to the US will be filling tool-and-die jobs.

No, certainly not. The foreign students in the mini-utopia scenario are coming to the US, living high on the hog, and then going home to get real jobs earning real currency, like the Euro or the Yuan. The decline in the skilled workforce due to the decline in jobs that make use of skilled workers does not imply a lack of capacity to put existing production facilities to work meeting hard currency orders, nor any shorter of workers willing to acquire the skills if there is the promise of a better than bargain basement dead end job at the end of the process.

Huh?  I'm not following what we're exporting.  We have some minerals, we have timber, we have agricultural commodities (although we're now a net food importer), and we have weapons.  That doesn't make for much of an economic boom.

We have the capacity to make other things, even if in pursuing an overvalued exchange rate for the benefit of large corporations using US$ capital markets we don't tap that capacity as much as we should. And of course in the above there is substantial export opportunities - each bushel of maize that is not wasted as cattle feed in feedlots is a bushel of maize that is available for export markets. Very early on in the mini-utopia there is a substantial shift in the balance of benefit between exporting grains and using them to produce a massive oversupply of meat to keep Americans massively overweight.

Given that no one has yet come up with an on-line business model that allows people to make a living reporting news, I don't see a replacement for infotainment any time soon.  Consequently, I don't see an informed electorate any time soon.  Consequently....

If only 30% of the population is at a rational or better level of consciousness with respect to political activity, a media that is acting as a source of information for a hypothetical informed electorate would only be a marginal influence in any event. Evidently, whatever the more positive role the fictitious author new media as playing in 2013, 2014 and 2015, it would have to be something that would also have some positive influence for people engaged in magical, power, and mythic thinking wrt politics as well.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 03:55:12 PM EST
[ Parent ]
One thing I don't grok in this scenario is why the Chinese would change the composition of their basket of currencies gradually, if they also keep shifting the peg to make it look like they haven't materially changed it.

What's the difference between maintaining a peg to the US$ until some point, and then shifting to a basket peg, versus maintaining a shifting basket peg that looks like a US$ peg and then stop shifting it at some point?

Continuity and smoothness in the shifting point?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 28th, 2009 at 01:30:51 PM EST
The difference is in terms of what types of assets they are buying as they maintain the US$ rate - buying Euro-denominated assets to depreciate the yuan against the Euro and maintain roughly steady exchange rate against the dollar implies a different foreign exchange reserve holding than directly pegging against the dollar.

But it is not something that can be pulled off in crisis conditions, since if the peg starts moving in too large increments, it becomes impossible to mask the composition of the currency basket. The hidden basket involves both the peg and the composition hiding behind the noise of exchange rate movements, with it unclear what movements are policy driven and what movements are the natural result of the composition of the basket. That's why the Singapore peg normally involves small incremental moves of the peg.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 03:30:32 PM EST
[ Parent ]
So it's a way to shift the basket of foreign currencies you're holding in your central bank's vault without getting ripped off by hot money speculators?

But if you're propping up the € instead of the US$, doesn't that imply falling US$/€ exchange rates? Shouldn't it be possible to detect this shift when looking at a five- or ten-year time series?

And if I want to take a class that lets me understand the mechanics of how all this works, what kinds of words do I need to look for in the course description?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 28th, 2009 at 03:38:49 PM EST
[ Parent ]
Note that its over the course of a year to a year and a half in the mini-utopia ... they shifted their basket in 2010 and the crisis hit in 2011 ... and, indeed, the story is premised on an inability to keep that kind of move masked in the face of a strong headwind.

So, yes, there would be a trend in US$/€ exchange rates, but there is a whole industry of people employed to come up with stories "explaining" those kinds of moves from one day to the next, and in the scenario it would be perfectly easily rationalized as due to the stronger growth in the EU.

As long as the underlying pressure is not too strong and sudden, it is easy for a lot of information to be hidden in the noise over six months to a year. That's why its a controversy that brings the stability of the US central bank into question that sparks off the need for the Chinese to decide whether to return to directly pegging against the dollar or to stop masking the change in the composition of their peg.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 04:02:35 PM EST
[ Parent ]
Aren't they already shifting their peg?

And is there enough data out there to tell? If they have been shifting their exchange rate, there should be a residual in the US$/€ exchange rate movement after you take out the capital movements from European companies buying up American-owned European assets (the first few years) and then keeping the profits from those assets (the last few years). Can we connect these cash flows to exchange rate movements with sufficient precision to reveal a hypothetical shift in the exchange rate due to a shift in the Chinese peg?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 28th, 2009 at 04:15:27 PM EST
[ Parent ]
Its not clear that they are shifting their peg - when they adopted the Singapore peg, it was broadly speculated that it was with a very large ratio of dollars in the currency basket, but still its not 100%, and so there will be natural fluctuations of the US$ against the Yuan at any given peg as the US$ fluctuates against the other currencies in the basket.

But since they declare neither the composition nor the peg, and do not declare when they have changed the peg, and then since the peg itself is a trading band, and then different relative composition of the non-US currency would imply different fluctuations of the yuan against the dollar as different currencies in the basket move in different directions without the peg moving at all ...

... its simply possible to move the peg and the composition in small steps frequently enough so that there is not enough data to get a good statistical test for composition and pegged rate, simultaneously.

Indeed, when Singapore originally developed it, that was the whole point - you cannot "hide" a hard peg to a single currency, leading to risks of being swamped by speculative finance if speculators come to believe your peg is unsustainably high ...

... but if people do not know the make-up of the basket you are pegging against, telling a natural shift due to changes in the underlying rates apart from a policy shift in the peg against the basket is quite tricky. Especially when the decision makers are deliberately trying to hide the policy changes in the noise.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 05:35:12 PM EST
[ Parent ]
BBC NEWS | Business | China to sell yuan bonds abroad

China has announced its first sale of government bonds in yuan outside the mainland.

The government will sell 6bn yuan ($880m; £534m) of bonds in Hong Kong to "improve the international status of the yuan," the finance ministry said.

The sale is a milestone as China opens up its financial markets and promotes its currency as a world benchmark.

Earlier this year, China's central bank called for a new global reserve currency to replace the US dollar.

It's a small trial balloon rather than a declaration of war. But you don't do something like this without considering the implications for the longer term.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Sep 29th, 2009 at 10:33:13 AM EST
[ Parent ]
... convertibility of the yuan from its current halfway house was in the mini-utopia above, and here is another step along that path.

If I came into money, I'd buy these as well as Ozzie dollar bonds and EU denominated sustainable energy project bonds (if there are any for sale).


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 02:53:41 PM EST
[ Parent ]
Great post.  A few questions though:  What is the dominant policy paradigm of the world or is there one?  Is the turn-of-the-21st-century American discourse of more or less free trade, liberal democracy, and human rights now just relegated to America?  Or has it become so successful as the dominant meta-policy narrative in the world that it can exist now without a political sponsor from a hegemonic power?  Has another power replaced America as the custodian of capitalism, or has the neo-classical (and Tom Friedmanesque) utopia of free exchanges between individuals and non-state organizations become realized, and thus the need for nation-states and empires relegated to history?
by santiago on Mon Sep 28th, 2009 at 02:00:38 PM EST
... would likely be rival power blocs. That's what emerged in the decline of Pax Britania.

In a rival power bloc setting, it seems highly likely that the "free trade" discourse would be less taken for granted and more contested terrain.

Indeed, China would seem likely to rise as the custodian of Eastern Eurasian capitalism, Europe as the custodian of Western Eurasian capitalism, and the US as the custodian of American capitalism. In the mini-utopia, that spills over into a balance of power role in the Southern Atlantic and Pacific, part of the assumption being that a general return from the overseas Eurasian base network would not be part of any general elimination of militaristic tendencies in the US, but rather a reconfiguration of those tendencies.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 03:24:29 PM EST
[ Parent ]
All three custodians you mention are as far as I can see very short of oil and gas.

How do you see the relationship between the three custodians and the "custodians" of oil and gas: ie OPEC plus Russia, and with power to add?

I think that the there is a major hole in everyone's calculus here.....

I see the future as energy capitalism, with a large (and not unrelated) dose of water capitalism.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Sep 28th, 2009 at 04:40:08 PM EST
[ Parent ]
... the US lucking out in getting forced out from the middle of the fight over the oil supplies lying between China and the EU and being forced by circumstance to adopt the energy independent position which it is in a position to do except for the political obstacles posed by the alliance of the MIC and Big Oil ...

... and its also what makes it a mini-utopia rather than a full blown one, since if the shit has not hit the fan in Eurasia by that 2020, it would certainly be coming closer to that point.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 05:39:48 PM EST
[ Parent ]
So, do you suppose that means more war, perhaps with nuclear weapons, as occurred with the decline of Pax Britania and really during the whole era of Westphalian, balance-of-power politics, or less?  
by santiago on Mon Sep 28th, 2009 at 05:09:07 PM EST
[ Parent ]
... a contest to see whether one Hegemon would be replaced by another, there's been war throughout the Atlantic World-System, with 1917-1945 and the Napoleanic World War the ones to occur when the Atlantic World-System had become a major influence over most of the globe.

But if we Re-Orient to the East Asian World-System, does it mean that? Does the existence of nuclear weapons change the threshold for all-out war?

I don't know. I could imagine scenarios, but to a certain extent the answers are technically unknowable, being based in part on critical decisions that have not yet been made.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Sep 28th, 2009 at 05:45:05 PM EST
[ Parent ]
Could somebody expand on why it is that the U.S. is going to collapse but Europe isn't? Personally I see China as the elephant in the room, but the idea that Europe is somehow in better long-term shape than the U.S. seems like wishful thinking to me...

Apologies in advance for being so 'merica-centric...  :-)

by asdf on Tue Sep 29th, 2009 at 03:16:34 AM EST
Smaller MIC, better (thus far) current accounts situation, more heavy industry left, less serious oil addiction. Also a slightly more functioning version of democracy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Sep 29th, 2009 at 04:41:10 AM EST
[ Parent ]
Much of Europe, particularly Germany, France and the Nordics, did not suffer from the property bubble, and their economies therefore do not have an inbuilt monetary Black Hole.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Tue Sep 29th, 2009 at 06:00:56 AM EST
[ Parent ]
France certainly had a property bubble...

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Tue Sep 29th, 2009 at 06:13:38 AM EST
[ Parent ]
Not in the same order of magnitude I suspect.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Tue Sep 29th, 2009 at 06:39:52 AM EST
[ Parent ]
Property prices have doubled in Paris in the last 10 years.

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Tue Sep 29th, 2009 at 06:42:56 AM EST
[ Parent ]
That's not a bubble, that's just credit creation as usual :-)

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Tue Sep 29th, 2009 at 06:46:47 AM EST
[ Parent ]
Doubling in Paris over a decade is not equivalent to doubling in an American state - France is more the size of one of the bigger states - CA / FL / NY. AFAIR, there are specific urban markets in the US where property prices trebled and quadrupled.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 09:21:24 AM EST
[ Parent ]
Actually, property prices have more than double in France overall, and even more than this in places like Paris or the Riviera. Back in 2008, the Economist quoted an IMF study where the French real estate was overvalued by more than 20% (30% for the UK).

The bubble has just barely started to pop.

In contrast, there was no such bubble in Germany.

by Bernard on Tue Sep 29th, 2009 at 04:28:04 PM EST
[ Parent ]
That's very much like the information I was referring to where comparing European national figures to US national figures is highly misleading ... US real estate being overvalued by 12% seems extremely low in the face of the current foreclosure crisis, but if half of that comes from 10% of the market, its 60% over-valued in the worst affected markets.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 05:11:37 PM EST
[ Parent ]
Same goes for Sweden.

I saw "take out a loan on your property value increase" ads, fortunately this was when the US bubble was already breaking which meant that there was not enough time for swedish real estate to get into that loop.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue Sep 29th, 2009 at 06:59:43 AM EST
[ Parent ]
Add the fact that except for the UK and Ireland, private debt (and therefore global debt) is much lower than in the US. Also saving rates are around 15% in the Eurozone.

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Tue Sep 29th, 2009 at 08:15:23 AM EST
[ Parent ]
... of the EU trade balance - savings (domestic private accumulation of financial assets) is investment (domestic creation of private financial assets) plus the government deficit (domestic creation of public financial assets) plus the trade surplus (domestic acquisition of financial assets from abroad).

So if there is investment in productive capacity, and a trade balance, and even modest deficit, that will generate the income in excess of consumer spending to buy the newly generated financial assets, which is saving.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 09:16:51 AM EST
[ Parent ]
... we just had China and the other pegging nations stop propping up our exchange rate.

But a drop of the external value of a currency by 50% is far from an economic collapse.

As to why the US$ should need propping up to trade in the neighborhood of purchasing power parity against the €, that has been covered above - 30 years of doing nothing but pushing the wrong direction in basic economic policy tends to weaken your economy's future prospects.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 09:12:20 AM EST
[ Parent ]
Medium term for the reasons everyone else has listed, long term I think the US is in better shape:

higher arable land to population ratio

we have far more oil internally than Europe does (and while we use far more per capita we'll have more available to keep the minimum energy required to keep urban societies operating)

when things are getting quite bad the world over (when we're steep on the downslope of oil production) I see tribalism making a vengeful return, and for geographic reasons I think that bodes worse for Europe (it will certainly be bad for someone in north and south America, but no one can compete with American power locally, whereas Europe has a number of countries with equal weight to throw around, in my opinion meaning higher risk of social breakdowns, war, and thus damage to infrastructure that will be harder to repair post peak-oil).

Hard to know, though, as now days "little" proximate events like a nuke launch can easily wind up defining the next 10,000 years of human existence.

you are the media you consume.

by MillMan (millguy at gmail) on Tue Sep 29th, 2009 at 03:48:15 PM EST
[ Parent ]
US: Footprint 2.8b ha, 9.4ha/ca, Biocapacity 1.4b ha, 5ha/ca
Germany: Footprint 0.35b ha, 4.2ha/ca; Biocapacity 0.16b ha, 1.9ha/ca
France: Footprint 0.30b ha, 4.9ha/ca; Biocapacity 184.4b ha, 3.0ha/ca
Japan: Footprint 0.62b ha, 4.9ha/ca; Biocapacity 0.08b ha, 0.6ha/ca
China: Footprint 2.8b ha, 2.1ha/ca; Biocapacity 1.1b ha, 0.9ha/ca

So sorting in terms of per capita footprint deficit:

China (-1.1)ha/ca, France: (-1.9)ha/ca, Germany (-2.3)ha/ca, Japan (-4.3)ha/ca, US: (-4.4ha/ca)

But sorting in terms of biocapacity per capita, as an index of domestically sustainable standard of living at current population levels and biocapacity:

US 5ha/ca, France 3ha/ca, Germany 1.9ha/ca, China 0.9ha/ca, Japan 0.6ha/ca


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 05:30:18 PM EST
[ Parent ]
Sweden 10ha/ca, Finland 12ha/ca.

Pity there is no values for the EU, looking at the future that will be more decisive then the values for the membercountries. I would guesstimate to a lower value then for the US and a higher then for Germany.

(Btw, Russia 8ha/ca)

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Sep 30th, 2009 at 06:13:54 AM EST
[ Parent ]
There are EU figures, they just aren't in the nation trends pages. You just have to download the spreadsheet to get them.

Footprint: 4.7ha/ca, biocapacity 2.3ha/ca, surplus (-2.4)ha/ca.

The surplus countries are Estonia, Finland, Latvia, Lithuania, and Sweden, Bulgaria about balanced.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Sep 30th, 2009 at 07:28:30 AM EST
[ Parent ]
My passion was riding stuff.  Cars,motocycles, 4 wheelers, snowmobiles, airplanes and now back to horses.  I guess I like the wind in my hair.

When did we made our multiple mistakes.  Perhaps giving up the railways in favor of cars and then using up all "our" oil making energy expensive.  They killed off our greatest men like JFK,MLK RFK and scores of others and continued with Waco Texas, the Murrah building and finally ending up with Three WTC bildings and the amazing Pentalawn 2000.

Illusion is our only product as even the mailroom clerks in the rest of the world speak three languages at least.  Well,I mean it's like, like that Zombie game, like when all the zombies come out, like so, like cool.

A toast indeed and at least I know.  30 days out now, the War of Drugs and none of them know it's the vaccine and not the disease.

by Lasthorseman on Tue Sep 29th, 2009 at 03:10:45 PM EST
... a prediction? If a prediction, then it can shortly be tested against outcomes.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 03:19:49 PM EST
[ Parent ]


"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Tue Sep 29th, 2009 at 06:32:37 PM EST
[ Parent ]
Anything but that

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 09:44:25 PM EST
[ Parent ]


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