Threats to the American empire, from an engineered bankruptcy?

However, as already stated, with the coming replacement of the dollar as the world's reserve currency, it appears that this cycle will soon come to an end.  And once the dollar no longer floods central banks around the world, and no one buys our treasury bonds, our empire will collapse.  Our profligate spending on the military (some $1 trillion/year when everything is counted) will be unsustainable.  Why?  Because then "we will have to finance our own military spending," Hudson warns, and the only way to do that will be to sharply cut back wage rates, causing the class war to ramp up as never before.

And of course Wall Street and the power elite understand that, which is why they required that Bush and Obama provide them with many trillions of dollars, in the world's greatest rip-off -- so that they, the power elite, can have enough money to get through the coming financial and societal catastrophe in their usual royal comfort.  (For more on this, see Joshua Holland's article, Wall Street Hustlers Built a $100 Trillion House of Cards and Stuck You with the Fallout at http://www.alternet.org/workplace/103830/)

From the Financial Times, one more indication that a theft of unprecedented proportions may well have taken place and continues as we speak:

"The global financial system seems to have a black hole at its centre.  Over the last two decades, US residents have sold a total of about $5,500bn worth of IOUs to foreigners, yet the officially recorded net investment position of the US has deteriorated only by a little more than half of this amount ($2,800bn).  The US capital market seems to have acted like a black hole for investors from the rest of world in which $2,700bn vanished from sight -- or at least from the official statistics.

A closer look at the data ... suggests that both the current account deficit and the net debtor position of the US are even worse than officially reported.  This can only mean that the need for a substantial depreciation of the dollar and/or a period of sub-par growth is even bigger than generally accepted."

http://www.ft.com/cms/s/0/f0eff690-fc0a-11da-b1a1-0000779e2340.html

The size of the theft, as author and economic analyst James Kunstler sees it:

"The current mass delusion that will go down in history as the "green shoots fugue" can't possibly bring the credit freak show back because the credit -- i.e. money borrowed from the American future -- was swindled away.  Something like $14 trillion worth of nominal dollars is being sucked into a cosmic vortex never to be seen again.  It was last seen in the spectral forms of so many collateralized debt obligations, credit default swaps, so-called structured investment vehicles and other now-obvious frauds.  That giant sucking sound we hear means the process is still underway, and the "money" disappearing into yawning oblivion will out-pace any effort orchestrated by the Federal Reserve and the US Treasury to replace it with new "money" (or credit).  Therefore there is no chance between heaven and hell that the pre-2008 suburban homesteading and shopping fiesta can ever come back.  The American polity is simply tapped out, in all sectors, personal, corporate, and public."  http://kunstler.com/blog/2009/06/a-snake-eating-its-own-tail.html

Finally, Chris Hedges predicts the ultimate consequences of all this:

"The cost of daily living, from buying food to getting medical care, will become difficult for all but a few as the dollar plunges.  States and cities will see their pension funds drained and finally shut down.  State and local governments will be forced to accelerate the selling off of infrastructure, including roads and transport, as ever more of our corporations and factories are put on the block as well.  We will be increasingly charged by privatized utilities-think Enron-for what was once regulated and subsidized.  (Some financially strapped cities have already sold off their parking meters, leading to a fourfold increase in the cost of parking!)  As joblessness grows by leaps and bounds, foreclosures will multiply and real estate will soon be worth less than half its current value.  The negative equity that already plagues 25% of American homes will expand to engulf nearly all property owners.  It will be difficult to borrow and impossible to sell real estate unless we accept massive losses.  There will be block after block of empty stores and boarded-up houses.  There will be long lines at soup kitchens and many, many homeless.  Our corporate-controlled media, already banal and trivial, will work overtime to anesthetize us with useless gossip, spectacle, sex, gratuitous violence, fear and tawdry junk politics.  America will be composed of a large dispossessed underclass and a tiny empowered oligarchy that will run a ruthless and brutal system of neo-feudalism (if not complete fascism) from secure compounds.  Those who resist will be silenced, many by force. 

We will pay a terrible price, and we will pay this price soon, for the gross malfeasance of our power elite."

http://www.commondreams.org/view/2009/06/15-0

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