Rise And Fall Of The American Empire

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America wants the Chinese Yuan to be stronger- probably at a ratio of 4 to the dollar. But America forgets the lesson of the yen. By debasing the dollar and not viewing the long term problems of America, we shall only ensure the weakening of America.

[Policing Wall Street]

No, this article is not about the decline of the Roman Empire.

I leave that for the historians to discuss over and over again-although many of the hypotheses for the decline of Rome are interesting.

It is about the decline of America.

During my childhood America was at its peak. Europeans wanted to come to America. Instead of Mexicans as illegal aliens; the illegal aliens were from Western Europe-countries that had been destroyed by Germany. Italians were coming from Italy. Yugoslavians –now Croatians, Albanians, and Serbs— were coming from Yugoslavia.

As a child we were taught that America was the most powerful country in the world. The population was expanding. Americans wanted children-before they wanted a Mercedes Benz. Diseases were being eradicated. Dr. Jonas Salk discovered a vaccine to prevent polio.

The Marshall Plan was designed to help rebuild Europe-including Germany, the country which had destroyed Europe and in turn had been devastated like some Wagnerian opera.

China was suffering under the excesses of Mao Zedong and his underlings. America was supporting Chiang Kai Shek, that so-called "brilliant" strategist who cared so much for the Chinese that he breached the dykes of the Yellow River so that his troops could escape the Japanese. What did Chiang Kai Shek care if one million Chinese died? Chiang had to run. And run he did.

The dollar was king. It was the symbol of American might. Everyone wanted the dollar. It was like Rome in the 5th century A.D. The decay had set in. In earlier times the Roman denarius was the coin of the realm- piece of solid silver. Later it became so debased that it consisted of lead.

The dollar was backed by gold in the old days. Later in the 1970s it would merely be backed by promises; promises of a country with declining assets.

What caused this decline in our beloved currency? Greed.

Like Rome, America became too greedy. We desired the soft life. Instead of working for a living, Americans became fixated with wealth. Acquisition for the sake of acquiring. Bigger cars; bigger homes; and, fewer children.

Americans, like Romans, were required to serve in the military. It was compulsory. And it was a unifying factor. But like Rome, America became involved in foreign wars. Disregarding the warnings of George Washington.

And how to pay for these wars and luxuries. We followed the example of Rome—The Empire.

We stopped working and debased the currency. Unlike in my youth, when baseball was king, with the debasement of the currency, sports became king. American citizens paid billions of dollars for sport stadia so that they could enjoy their leisure time.

Just as the noble classes viewed the gladiator combats in the Roman Coliseum from the best seats in the house, the warriors of Wall Street would view football and basketball games from corporate boxes; a tax write-off.

And just as the noble classes dreamed of owning stables of gladiators, the masters of Wall Street wished to own sports teams and to live their lives vicariously via sports.

But from where did the money come?

In the days of Rome it came from the physical looting of other countries. The people were massacred and the Roman tax had to be paid. Who can forget the Biblical story of Mary and Joseph going to Bethlehem so that they could be counted for tax purposes?

America did not physically have to loot countries- we gave them depreciating dollars. In the 1960s many American economists were concerned about the trade deficit, and the beginning of the decline of American industry.

The Japanese began to usurp our dominance in steel manufacturing with better technology. Our cars were marketed for size and not engineered like German and Japanese cars.

Gradually our economy declined. We no longer manufactured goods. There was a time when the Dow Industrial Average stood for industrial goods manufacturing, not some companies, such as Citibank and General Electric that were engaged in financial chicanery.

To pay for our laziness we merely printed dollars. Prescient economists warned that this could not continue. That eventually we must pay off our debts. But other economists and the American public did not care.

Other countries were willing to accept our dollars at face value and then use these dollars to improve their manufacturing facilities while we languished in front of our televisions, hoping for the easy life.

And then the financial turmoil began in the 1970s—Inflation. To defeat inflation we raised interest rates. The dollar became stronger, not because it was inherently strong, but because the interest rates were high.

In 1985 we had the Plaza Accord, when Japan and Germany agreed to appreciate their currencies relative to the dollar at the urging of the U.S. The goal was to weaken the dollar so that America could reduce its trade deficit. And it did.

The Japanese Yen appreciated 50% by 1987. The German Mark also rose. In 1970 there were 4 German Marks to the dollar. Currently there are approximately 0.75 Euros to the dollar. (Use the Euro as a stand-in for the German Mark.) In 1970 there were 380 Yen to the dollar. Now there are less than 100 Yen to the dollar.

Japan and Germany continue to support America’s financial waste by owning hundreds of billions of dollars; so, the trade deficit barely improved.

But now there is a new power on the rise. China. China, which holds over $1 trillion, no longer wishes to be dominated by America, Japan and the West.

China is the new rising power. China remembers its debasement at the hands of the West—the Opium trade; the carving of China into spheres of influence by the Western powers; and the wreckage of its silver based economy by the United States, which raised the price of silver.

China will not want our dollars in the future. In fact, they are now talking about the need for a new international reserve currency. China wants the Chinese Yuan to replace the American dollar. China does not have to worry about leisure. Its foreign policy is dominated by what is good for China-not for minority segments of its population.

America wants the Chinese Yuan to be stronger- probably at a ratio of 4 to the dollar. But America forgets the lesson of the yen. By debasing the dollar and not viewing the long term problems of America, we shall only ensure the weakening of America.

And when we beg with our hat, who will accept our dollars?


 

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"Speaking Truth To Empower."



 

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