Category Archives: Nixon

Is the US facing the same problems as Third Century Rome?

The world, but particularly the US, is entering a period of great uncertainty, as did Rome in the third century AD. There were external threats and internal instability. Inflation was destroying the internal fabric. The coinage was diluted of its precious metals, silver and gold. People lost faith in its institutions, its army and its emperors. Through such inflation, the people were getting poorer. The longevity of its emperors was very short after the assassination of the Emperor Alexander Severus in 235 AD  The Empire fragmented and was in danger of collapsing. Two external threats were ever present: the Tribes of Northern and Eastern Europe were pressing on the Empire and in the East, there were Persian threats. Three emperors lost wars with Persia, and one, Emperor Valerian, was even captured by the Persians in 260 AD through a ruse.

The 42nd Emperor Claudius Gothicus, (268-270), stabilized the frontiers by defeating the Alemani and the Goths, but unfortunately, died of some kind of infection.  The 51st Emperor Deocletian, (284-305), further strengthened the Empire by reducing inflation, further stabilizing the frontiers, and introducing tetrarchy to government. Tetrarchy is four person rule.  Deoclitian split the administration into a Western Empire centered in Rome, and an Eastern Empire centered in the future city of Constantinople to be founded by Emperor Constantine the Great in 330 AD. When the Western Empire fell in 476 AD, the Eastern Empire or Byzantine Empire lasted for almost one thousand years until Contantinople fell to the Turks in 1453.

Is the US in a similar situation? Possibly?  The US has been in decline since President Nixon defaulted on the gold obligation of 35 dollars for one ounce of gold. Nixon proclaimed it would be temporary, but almost 50 years later is still going. As a result inflation became rampant, Congress became generous and passed the law that allowed Americans to own gold again. President Roosevelt and Congress banned ownership of gold except in jewelry in 1933.

Economic conditions were deteriorating slowly. Inflation in the seventies, Reaganomics in the eighties, Clintonomics in the nineties, subprime mortgages and the tech bubble in the first decade of the new millennium and a severe bust in 2007-09 that nearly collapsed the entire system. Throughout this period, living standards for Americans were going down. The main culprits were debt, public and private, quality job losses, inflation, lack of affordable universal health care, expensive education, and foreign military interventions.

As I mentioned in my previous posts, the three pillars of paper, all based on debt, are keeping this system afloat, but just barely, and they are the dollar, the stock market, and the bond market. The Federal Reserve and the Treasury are keeping the system going by shunting new money into stocks and bonds creating conditions for a financial shock that is becoming inevitable. Zero interest rates and quantitative easing are propping up the system, but not curing it; it cannot be cured.

One could call the US economy a “mirage” because there has been no actual growth since the late 1960’s. The living standards of the people have been going down and down, but the lies and deceptions have been going up. One does not know whom to believe. In socio-economic terms, three economic classes have developed in the US: the owner class of 1%, the overseer class of 4-5%, and the Precariat class of around 95%. The Precariat Class is composed of all ethnic groups, religions, and races, but it is kept divided by the Ownership Class for its own interests. The Precariat is on the whole totally dispossessed, and they live from pay cheque to pay cheque, with the loan sharking firms eating them in between.

The present recovery after the almost system collapse 0f 2007-8, has been nothing but “a mirage”, a statistical “recovery” propped by a series of quantitative easings and zero interest rates. The ownership class and the overseer class are doing extremely well, but the precariat class is barely surviving.

In foreign policy, the US, a hegemonic power, has become a reactionary force in order to maintain its world wide empire based on dollar indebtedness and exploitation of the rest of the world. Through its policy in the Middle East, it has lost Iran and now may lose Turkey, two large countries dominating the key strategic areas of the Afro-Eurasia. It is true, the US has gained  eastern Europe through the European Union and NATO, but Europe itself has become unstable.

In the Middle East, some claim that the US and Israel have created ISIS and Al-Qaeda  to destroy Syria and Iraq in order to get to Iran, and take total control of the Middle East and its natural resources. If Turkey switches to Eurasia, and a compromise is reached between Syria and Turkey, the US will lose the Middle East. The next shoe to drop will be Saudi Arabia because of its disastrous war in Yemen, as well as internal dissension.

Never before in its history has the US faced such complex problems as a dying economy  reflected in dying cities, dilapidated infrastructure, poor but costly education and health care; city violence could be a precursor to a general revolt.

The world is waiting with bated breath the results of the US presidential elections, The precariat class is flocking to Mr. Trump for salvation and the ownership class is in a panic. How the elections will turn out nobody knows, but if there is a financial collapse Trump would win massively. In that case, it is quite likely that martial law would be proclaimed and the elections postponed. Only time will tell.

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Negative Energy Flow

The essence of the Universe is energy. This essence is constant, contracting, or expanding, but nobody knows for sure. The essence of our solar system is the sun, and without  the sun there would be no life on the Earth. They say that the energy of the sun is slowly dissipating, but is still good for about several billion years before it dies. But this is just a hypothesis. In fact nobody knows for sure.

We know that economic systems develop, grow, and then go into a collapsing phase and die, but the remnants of the previous systems become key components of the new system. For instance, the chief components of capitalism are usury and a modern version of slavery which are the chief remnants of two previous systems, slavery and feudalism.

Without the discovery of the New World by Christopher Columbus in 1492, capitalism would most likely have not developed. In my earliest posts, I stated that Christopher Columbus is the Father of Capitalism. The center of capitalism became Western Europe and North America, especially, the United States.

The United States had positive energy flow when the first Dutch and English colonists stepped into North America. The land was abundantly rich and it needed  workers to exploit it. Slavery was introduced and for 250 years, slavery was the main source of wealth extraction and accumulation  for the ruling elite of the new country. The tobacco and cotton plantations needed slaves. The trade in slaves  was very prosperous as well. Many Americans were also involved in opium trade with China, which was the monopoly of the British East India Company. It was the first giant global company, a forerunner of modern American and European corporations. Adam Smith who wrote the capitalist bible,’ The Wealth of Nations’ was an officer of the Company. His view of the ‘Invisible Hand’ that runs the market is more to the fact that the British East India Company methods of conquest and control stayed invisible as to how they got control of all of  India, Pakistan, Bangladesh, Sri Lanka, and Burma. They also wanted to keep opium trade with China and the Afghani Wars for control of opium invisible.

Americans wanted to take part in the opium trade with China, and that is one of the main reasons why the Americans wanted independence from Britain. Forget about: ‘ No taxation without representation’; it was just a façade like ‘ the weapons of mass destruction’ in Iraq. British rule of its North American colonies was rather gentle. British taxes were barely one percent on tea. One third of American colonists moved to the Canadian Provinces of Nova Scotia, New Brunswick, Prince Edward Island, Quebec, and Ontario. They were known as United Empire Loyalists. Benjamin Franklin’s son left for England.

After the Declaration of American Independence of 1776, the Slave Trade of the North Atlantic and Opium Trade with China boomed, even though Europeans were losing interest in slave trade on moral and ethical grounds. Remember, ‘Amazing Grace’ was composed by a former slave trader in 1805, but the abuse of Africa still continues.

After the Civil War and the emancipation of the slaves, the US economy exploded. By 1900,  the US was the number one manufacturing nation in the world, by quantity and not by quality.  Germany was number one in quality and second in quantity. Attempts were made to create a private Central Bank of the United States, but failed until December 23, 1913. Alexander Hamilton, the first US Treasury Secretary wanted a private central bank. In a duel with Aaron Burr, the Vice-president, Hamilton lost his life. President Andrew Jackson, the 7th President, aborted the second attempt at creating a private central bank. Abraham Lincoln, probably the greatest President of the US, stopped the third attempt. He used ‘ Green Backs’ to finance the war rather than borrow from private banks. He paid with his life in 1865. James Garfield, the 20th President paid with his life for stopping the private central bank. Finally, Woodrow Wilson, the 28th President of the US acquiesced on Dec. 23, 1913.

The Central Bank of the US would be called the Federal Reserve Bank of the US. It would be composed of 12 regional or district banks. The first amongst equals would be the Federal Reserve Bank of New York, and it would act as a financial life line to Wall Street. The Federal Reserve was key in pushing the US into the First World War. Germany was winning the War. They sank the Lusitania on May 7th, claiming it was carrying weapons to Britain. True! Britain denied it. Lie! The US kept quiet until 1917. Britain panicked that Germany would win the war and Russia, an ally of Britain and France would conquer Constantinople. Britain then promised  Constantinople to Russia but had no intention of keeping it, hence Churchill’s disastrous Gallipoli Campaign to capture Constantinople.

The World Zionist Movement wanted to create a homeland for the Jews in what would be British occupied Palestine. And if the British agreed, it was agreed that the US would enter the war on the side of Britain and France. They would also eliminate Russia from the war and Constantinople would not fall to Russia. Also, Italy, an ally of Germany, would enter war on the side of Britain and France. The Balfour Declaration of Britain in 1916 allowed unrestricted Jewish settlements  of Palestine. As if by magic, the US enters the war under the cry, ‘Remember the Lusitania’, Trotsky leaves New York with 20 million in gold, Lenin leaves Switzerland in a sealed train for St. Petersburg to start a Bolshevik Revolution. Italy enters the war on the side of the Allies, and bank credits to Germany stop.

In 1917, the US enters the war, and the US tobacco industry wants to help ‘our boys’ fighting in the trenches by supplying them with free cigarettes, and tobacco addiction began. When women won the right to vote in 1920, they were supplied with free cigarettes to celebrate their independence. The boom of 1920 began, and the inventions of Nikola Tesla changed the US;  alternating current, fluorescent lighting, the invention of radio, wireless energy, etc. Marconi did not invent the radio, but sent the first radio signal from Liverpool, England to Gander, Newfoundland based on Tesla’s principles. The boom collapsed in 1929, but the US had positive energy flow. It had the most gold in the world, the strongest currency, positive balance of trade, and could interfere in Latin America with impunity. Hence, it had positive energy flow.

The Second World War enhanced this positive energy, and by 1944, it was able with the help of Great Britain to create the Bretton Woods Convention which crowned the dollar as the official currency of the world. The only opponent was the USSR which had won the war against Nazi Germany.

The US had positive energy flow until a gold run in 1968. The European countries wanted to exchange their trade surpluses for gold. By 1971, the US defaulted on its gold promise. By 1973, President Nixon and Secretary of State Kissinger created the petro dollar. The dollar debt finance of the US and the Third World became the Modus Operandi of the day. IMF and World Bank were loan sharking all over the world, including some Communist countries of Eastern Europe such as Hungary, Poland, Romania, and Yugoslavia.

Consumerism or lack thereof in the Soviet Union led to the dissolution of the Soviet State, even though the basic living standard of the Soviet citizen was higher than that of US citizens. The Soviet citizen enjoyed free education, free health care, public transportation, generous maternity leave and generous holidays. US citizens have none of this in 2016. And the irony is that the Soviet State dissolved and the US still stands. Barely. The people of the US are very angry, and they want change, either by evolution or revolution. The 95 percent of Americans which I call the Precariat Class have barely enough money to survive. The energy flow of the Precariat Class is extremely negative, and never in its entire history has the US faced such a situation.

No wonder Mr. Donald Trump is popular and the Ruling Elite and its overseer class is fearful. The US must restructure its economic system and enable the Precariat Class to have a chance. Change in the US is inevitable either by evolution or by revolution. If it is by revolution, fragmentation of the US is inevitable. Only time will tell.

 

The role of oil in geo-economics

The Indios of Latin America call petroleum [ the oil of rock], the blood of Mother Earth. Oil comes from the innards of the earth and fills numerous huge caverns as it seeps to surface. It is not dead trees and animals. The discovery of oil in Titusville, Pennsylvania in 1859 changed the world. The individuals and countries who controlled the petroleum resource had obtained such a power that is almost unimaginable.

Oil is not only fuel, but also building material. It is the raw material for pharmaceuticals, for cosmetics, for plastics of all kinds, for clothing of all kinds, and many other products. It is also the essence of US power. After the October War of 1973, which Israel was about to lose, a massive US military resupply intervention ordered by President Nixon saved the day. The US was able to convince OPEC to price oil in US dollars. Overnight, the Dollar was not only backed by the full faith and credit of the US Government, an empty promise, but also by the most  valuable commodity for the modern world, OIL. The dollar became the most powerful instrument of US Power and it no longer needed gold. President Nixon was a great President. His reward: Impeachment.

Entering the New Millenium, the World and the US have faced new economic problems. The economic meltdown of 2008 led to a so called “Recovery” from which the world has never recovered and the US economy is still ” recovering…”

The recovery is impossible, because by decreasing the price of oil intentionally to punish the Russians , the world’s liquidity started to decrease. There is a shortage of dollars. Value of the dollar went up. Debt burden of the Developing  World increased and is becoming unbearable. To service the debt, they had to sell their natural resources at any price. The price of the commodities has collapsed. The Third World countries, especially the oil producers have decreasing revenues to buy manufactured goods. Hence, China, South Korea, Japan, and Europe are slowing down, and that further puts pressure on the commodities, especially the Oil. Also the first world economies of Canada and Australia are in collapsing mode.

Ivy League economists are gloating that lower gasoline prices are positive for the economy, but they never ask why consumption of gasoline is decreasing in the US if there really is a recovery. It is not dropping because of electric cars or modern public transportation system, which does not even exist in the US. The consumption of gas is dropping because people have no money. The US has three economic classes: ownership class, 1%, doing exceptionally well; the overseer class,4%, doing well; and the Precariat Class, 95%, doing very poorly and not being able to afford gas.

The world may be entering a new and very severe economic winter or even a new economic ice age because of human evil, which is using oil as an instrument of economic war. Only time will tell.