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The Stench of US Economic Decay Grows Stronger

By       Message Paul Craig Roberts       (Page 1 of 1 pages)     Permalink    (# of views)

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On Thanksgiving eve the English language China Daily and People's Daily Online
reported that Russia and China have concluded an agreement to abandon the use of
the US dollar in their bilateral trade and to use their own currencies in its
place. The Russians and Chinese said that they had taken this step in order to
insulate their economies from the risks that have undermined their confidence in
the US dollar as world reserve currency.

This is big news, especially
for the news dead Thanksgiving holiday period, but I did not see it reported on
Bloomberg, CNN, New York Times or anywhere in the US print or TV media. The
ostrich's head remains in the sand.

Previously, China concluded the same
agreement with Brazil.

As China has a large and growing supply of
dollars from trade surpluses with which to conduct trade, China is signaling
that she prefers Russian rubles and Brazilian reals to more US

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The American financial press finds solace in the episodes when
sovereign debt scares in the EU send the dollar up against the euro and UK
pound. But these currency movements are just measures of financial players
shorting troubled EU-denominated debt. They are not a measure of dollar

The dollar's role as world reserve currency is one of the main
instruments of American financial hegemony. We haven't been told how much damage
Wall Street fraud has inflicted on EU financial institutions, but the EU
countries no longer need the US dollar for trade between themselves as they
share a common currency. Once the OPEC countries cease to hold the dollars that
they are paid for oil, dollar hegemony will have faded away.

instrument of American financial hegemony is the IMF. Whenever a country cannot
make good on its debts and pay back the American banks, in steps the IMF with an
austerity package that squeezes the country's population with higher taxes and
cuts in education, medical and income support programs until the bankers get
their money back.

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This is now happening to Ireland and is likely to
spread to Portugal, Spain, and perhaps even to France. After the American-caused
financial crisis, the IMF's role as a tool of US imperialism is less and less
acceptable. The point could come when governments can no longer sell out their
people for the sake of the American banks.

There are other signs that
some countries are tiring of America's irresponsible use of power. Turkey's
civilian governments have long been under the thumb of the American-influenced
Turkish military. However, recently the civilian government moved against two
top generals and an admiral suspected of involvement in planning a coup. The
civilian government further asserted itself when the prime minister announced on
Thanksgiving day that Turkey is prepared to react to any Israeli offensive
against Lebanon. Here is an American NATO ally freeing itself from American
suzerainty exercised through the Turkish military. Who knows, Germany could be

Meanwhile in America the sheeple remain content with, or blind to,
their role as sheep to be slaughtered to feed the rich. The Obama administration
has managed to come up with a Deficit Commission whose members want to pay for
the multi-trillion dollar wars that are enriching the military/security complex
and the multi-trillion-dollar bailouts of the financial system by reducing
annual cost-of-living increases for Social Security, raising the retirement age
to 69, ending the mortgage interest deduction, ending the tax deduction for
employer-provided health insurance, imposing a 6.5% federal sales tax, while
cutting the top tax rate for the rich.

Even the Federal Reserve's low
interest rates are aimed at helping the banksters. The low interest rates
deprive retirees and those living on their savings of interest income. The low
interest rates have also deprived corporate pensions of funding. To fill the gap
corporations are issuing billions of dollars in corporate bonds in order to fund
their pensions. Corporate debt is increasing, but not plants and equipment that
would produce earnings to service the debt. As the economy worsens, servicing
the additional debt will be a problem.

In addition, America's elderly are
finding that fewer and fewer doctors will accept them as patients as a 23% cut
looms in the already low Medicare payments to doctors.

The American
government only has resources for wars of aggression, police state intrusions,
and bailouts of rich banksters. The American citizen has become a mere subject
to be bled for the ruling oligarchies.

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The police-state attitude of the
TSA toward airline travelers is a clear indication that Americans are no longer
citizens with rights, but subjects without rights. Perhaps the day will come
when oppressed Americans will take to the streets like the French, the Greeks,
the Irish, and the British.


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Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His books, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available (more...)

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