Money Trumps Empire

"We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act." On Page 4 of the official Standard & Poor's "Research Update."



Republican obstructionism on behalf of their constituency, the wealthy and selfish (cf. the Selfish Class on this site), has done what the debt-ceiling agreement narrowly averted: brought into question the financial credibility of the US Government.

This is a big deal. Whether S&P used questionable measurements, whether it acted out of its own political agenda, it still did what no one had done since the US dollar became the reserve currency of the world. A credit downgrade from AAA to AA+, unless it is quickly reversed (unlikely), will lead, first of all, to higher borrowing costs for all of us.

Take that, barely whimpering economy!

But the decision will also hasten the day when the dollar will no longer be The reserve currency. That's an even bigger deal. It could mean the beginning of the end of the American Empire, because how can the US pay for its bloated military in 120+ countries, when borrowing costs really begin to rise? It can no longer just continue to borrow and expect the rest of the world to lend to us at rock bottom rates. Of course, the US can continue to borrow, and to inflate the value of the dollar, since it still owns its own printing press (the Treasury), and supposedly controls its own reserve bank (the Fed).

But then the US would be acting like any banana republic, except that US debt far exceeds the debt of any other country, or combination of them. There is no one who could bail us out, and most economies--including the US, of course--would be driven into such a Depression that the 1930's would look like an early rehearsal.

The world economy would have good reason to collapse. If it doesn't do so, then political leaders will have finally come together to save our civilization, but, on the evidence of the last 12 years, cooperation is not a great bet.

America's fall may come a lot faster than Rome's.

Rome had terrible credit and was continually diluting (inflating) its currency. But during Rome's long expansion it was also robbing the wealth of the peoples it conquered; it paid off its debts with the proceeds: gold, other treasures, and most of all, slaves. In the US, the considerable profits of empire are pocketed not by the US government, but by private, effectively stateless, global corporations. Maybe that's why they pay so little in US taxes, even with billions in profits--profits are earned abroad. Corporations avoid declaring profits in those nations, also. It's easy to find an island/city-state with nearly zero taxes.

Come-on to Apocalypse

Today, I got a letter, no heading, from the "President of the Sovereign Society." She has a website: she spells the nation, "Amerika," as in escape from! She sells a how-to to gain dual citizenship and more.

These missives come from a conservative publishing group: I recognize the MO.

Many trot out tired bromides of the right, but this one is revealing. It lays out the dream of would-be capitalists, who scream loudest about Freedom, and: America has been ruined (by that Socialist Obama and that cowboy, W). Astoundingly, Erika is selling "government health programs and FREE prescriptions," while you "live like royalty for less than $390 a week;" the four countries most affordable for retirees; how you can gain business and tax benefits with dual citizenship, and so on.

Other newsletters in the network provide interesting stock analysis and questionable advice, but the MO is telling. It never lays out something for you to read, until after you subscribe. They give a presentation: a rolling script, while a voice hypes the argument. You can't move forward or back; it forces you to hear each agonizing minute if you want to figure out what they're selling. If you try to cancel, it yells at you, in print--or voice over it--that you mustn't give up this chance NOW! Every time I've watched one, it concludes by selling a subscription to another, more specialized newsletter that will: solve all your health problems, or make you rich, instantly, protect you from the coming apocalypse, or, in this case, sell you a newsletter for fleeing the United States. The subscriptions go upwards from the $35 for an extended advertisement for other newsletters, to several thousand for the "elite" stock advice sheets.

Having received one for free and then another for $35 (deductible as an expense), I can see a pattern. First of all, a significant share of the financial advice is either to buy gold, since everything will collapse soon, or oil, the more polluting the better. Some recommendations are interesting, but when I check the buy figures, they're almost always late--buy below $6.50, when it hasn't been below $6.50 for weeks. The newsletters are sparing of real recommendations, but lavish in selling other newsletters.

Their star economic commentator, a Brit, gives scornful analysis of the US economy; he lives in Taiwan.

There is something this audience shares with the left: a conviction that the US is in inevitable decline. However, they are sanguine about it--and eager to exploit it. Then, as reward, there are "over 80 beautiful, get-away countries," where you could establish residency, and maintain "your personal privacy and affluence."

They are wannabe Roman Senators; Roman Senators buried their gold before Rome's "fall." Afterwards, the barbarians tortured them to get it for themselves.