Send a Tweet
Most Popular Choices
Share on Facebook 11 Share on Twitter 1 Printer Friendly Page More Sharing
Exclusive to OpEdNews:
OpEdNews Op Eds    H2'ed 4/12/13

Will the Coming Economic War With China End the American Empire?

By       (Page 3 of 9 pages) Become a premium member to see this article and all articles as one long page.     (# of views)   27 comments
Author 8235
Follow Me on Twitter     Message Richard Clark
Become a Fan
  (109 fans)

 

Up until the early 1970s, America was the world's largest creditor.   But by the early 1980s we had begun to run our first trade deficits.   And since the 1990s our trade deficits have grown to trillions of dollars.   How did this happen?   In order to get the dollars they needed to buy oil, countries flooded the US market with cheap cars, cheap TVs, cheap clothes ...   and we simply flooded the world with cheap (cheap for us) US currency in return.

 

Meanwhile, the OPEC countries were required, per our agreement with them, to invest their profits in US treasury bonds, thereby helping create and sustain worldwide investor demand for those same US treasury bonds.   This allowed the US government to start borrowing with reckless abandon, and created the greatest bull market, for (US treasury) bonds, the world had ever seen.

 

But it wasn't just our government that borrowed.   Consumers borrowed $14 trillion, on top of that.   And now add in $11 trillion in corporate debt, $17 trillion in financial debt, $1 trillion in student loan debt,   and up to $90 trillion in unfunded liabilities like Social Security and Medicare.   It all adds up to more than $140 trillion in total debt -- which is about 10 times greater than the worth of our entire annual domestic production.

 

And the whole house of cards is maintained by this simple petrodollar agreement made in 1973.

So, do you see why it's so important the US maintains the petrodollar arrangement?   Do you see why we're willing to go to war with anyone who challenges that arrangement and that privilege of ours?   And do you see why this is the biggest opportunity that China has, by taking steps that will end this arrangement, to end the golden age of America and usher in the age of Chinese dominance?

 

In 2008 we saw a prime example of what happens when the national credit card is shredded.

From the late 1990s until early 2007, housing prices grew three times faster than median income as the Fed pushed interest rates down to 1% and banks gave mortgages to anyone with a pulse.   But as we saw, this rapid rise in housing prices was unsustainable.   Eventually and inevitably the market ran out of credit-worthy buyers.   And as soon as that became clear to enough investors, the housing bubble had to pop.   And, as derivatives (credit default swaps etc.) losses multiplied, and the insolvency of banks grew, credit froze up and the entire economy came close to collapse!   (Click here for more info on this.)

 

Our government spent trillions on bailouts and stimulus to get the economy moving again because the nation's leaders understood an important and horrifying new truth:   our entire economy could very well collapse.   And this same dynamic, of a bubble leading to possible economic collapse, is happening right now, but on a much, much larger scale -- this time in the bond markets.

 

Explanation:   China is plotting to take away our biggest source for the demand of our most precious commodity.   I refer of course to the seemingly inexhaustible international demand for US Treasury bonds, on which our entire debt-dependent economy is propped up.   However, while Americans are stuck in the past, burdened by the obsolete promises made and entitlements arranged years ago, China is preparing for the future.   As already stated, their goal is an all-out assault on the petrodollar and thereby on American supremacy.

Next Page  1  |  2  |  3  |  4  |  5  |  6  |  7  |  8  |  9

 

Must Read 7   Well Said 5   News 5  
Rate It | View Ratings

Richard Clark Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've (more...)
 

Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Follow Me on Twitter     Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Was Pat Tillman Murdered by an American Sharpshooter to Shut Him up?

New JFK assassination bombshells

Two U.S. presidents implicated by ex-CIA black-ops assassin

The cholesterol - heart disease scam: How the medical-industrial complex is raking in billions at our expense

Four Ticking Time Bombs That Will Soon Ignite a Revolution

The Ultimate Goal of the Bankster-led Political-economic Warfare Being Waged Against Us Is . . . ?