Decline of The US As The Leading Economic Superpower

For over a year economists have been discussing the fact that China has emerged as the largest global consumer market.

Meanwhile the US has claimed jobs and income growth, which has been demonstrably proven false. It is not possible to have expansion of jobs and income while concurrently having mass layoffs and retail closures. It simply doesn’t work that way.

Some have pointed to the stock market numbers as indications of economic health. I’ve covered many times how the stock market is an inverse indicator of the general economy at worst or completely unrelated at best.

Now new numbers are telling more of an advancing tale of the decline of the US market. Perhaps this will be enough for more people to awaken to the truth.

In the most recent Global Fortune 500 list, the US is headquarters to 121 of the most profitable companies. China is headquarters to 129 of the most profitable companies. 20 years ago, in 1999, China was headquarters to 8.

In the global list of the largest banks, 3 are headquartered in the US. China is headquarters to 4. There are one each in Japan, the UK and France. JP Morgan Chase is the highest on the list of American banks and it comes in at number 6. The Chinese banks occupy spots numbers 1,2,3 and 5. This has remained unchanged for several years, even as US media makes claims that China’s economy is declining and US economy is growing.

In the last few months, cryptocurrency has seen a resurgence with Bitcoin as of this writing valued at $11, 834 and precious metals are increasing in value with gold spot price now $1499 per oz, while bonds have shown an inverted yield curve, with short term bonds having more return value than long term bonds.

At the last meeting of the Federal Reserve board, the interest rate was decreased by 0.25% to between 2% and 2.25%. This is unprecedented, as the only time to interest rate has ever declined has been when the economy was showing signs of recession and the interest rate was decreased to encourage spending to spark growth. If our economy is doing so well, why do we need to decrease the interest rate, which is already extremely low? That leaves virtually no buffer for safety if we enter an officially recognized recession/depression.

Of course, those of us paying attention know the US has remained in a recession since the 2008 crash. Yes, it was a crash. Not a “crisis”, not a small event, a crash.

Yet the China trade war still has major implications.

Last year, China temporarily halted purchases of soy from the US, leading to Trump announcing a bailout of mostly corporate farmers to the tune of $16 billion. As of this week, China responded to increased tariffs on Chinese goods with a complete ban on agricultural purchases from the US.

Trump’s response? Threatening even more tariffs on Chinese goods by as much as an additional 15% on top of the recent 10% tariffs.

Last year, China temporarily stopped buying oil from the US. They began buying oil again in February this year but at much lower amounts, less than 50% of their previous purchases. China is likely to respond to this recent threat with banning all oil purchases from the US for good.

Many alleged economic “experts” say the loss of sales to China is basically no big deal and the US will gain additional revenue by selling to Europe. They do not explain where any “additional” sales are going to magically appear from. I haven’t heard of Europe having a sudden increase in their desire for soybeans.

Many countries are banning the import of many US agricultural products because of concerns regarding GMO’s and glyphosate, declared a likely carcinogen by the World Health Organization. The “experts” too often fail to mention these concerns or the fact that the US State Dept has literally tried to sue other nations to force them to accept sales of our produce in contradiction to the will of their own people, who demanded the bans. Alternative agricultural producing countries have primarily already turned away from GMO’s and glyphosate, meaning they are more likely to buy and sell from each other than from the US at this point. Even a large percentage of Americans have objections to the same things.

As of this past week, Trump announced another bailout of farmers to the tune of $28 billion. Combined with the $16 billion already mentioned, that adds up to $44 billion, which comes to a cost of $130 each for every man, woman and child in this country. Plus he has promised he will bail the farmers out again next year if necessary. Of course, the major recipients of these bailouts are corporate farm owners and investors.

Trade deals, especially with such contentious issues as China is facing with the US at this moment, once China establishes trade agreements with other countries, they will not easily be swayed to change those agreements back to the US. They are in the process of negotiating new trade agreements with other countries right now. Which means future sales may be lost indefinitely.

No matter how we look at it, the US cannot force other countries to buy from us. This is even more true when we try and force our sales onto other nations at the point of a gun, literally or figuratively. We cannot sue other nations into submission. Other nations see the fact that we are threatening all of them. The likely outcome is that they will form alliances in opposition to our government. That risk increases when considering that we have a trade deficit with most of the countries we trade with. It increases more when those countries view our massive national debt which has only increased every year for 18 years now and the suspension of the debt ceiling. All those nations are acutely aware that we do not have the resources to pay off that debt.

The road to where this nation is at this moment began decades before Trump. He did not cause all of it but is definitely making it worse. Of course, Trump was merely a logical progression of what came before him with each successive administration since Reagan, at the very least. The flow of wealth to the top is now about to capsize this country. The Panama Papers. Tax cuts for the rich while our own citizens suffer. Collapsing infrastructure, rising “defense” costs.

In terms of international relations, we have been following the same path for well over 100 years. Trade agreements under threats, regime change, the fiat petrodollar, American “investors” who then try to rule over other countries.

We are now in the precise circumstances where all empires in history have fallen. Only on a larger scale.

Attacking Iran Would Not Be A Small Issue

This past week, Trump first called for a bomb strike on Iran. Then, when that strike was allegedly imminent, he called it off.

I am very happy he called it off. That strike would have, as others have stated, unleashed hell on earth. Iran has a large and experienced military and connections to numerous countries. This would not be another Iraq or Afghanistan.

I’ve pointed out on too many occasions to count the fact that most Americans are willfully ignorant of. That we are currently bombing 7 countries. This is not a new development, we have been bombing the same 7 countries for years. If you doubt me, do a web search of what countries we are bombing. The difference is that the countries we have been bombing for so long started off with military forces and capabilities far below that of Iran. In fact, in multiple cases, most notably Syria, Iran has been helping to combat the US-backed terrorist factions those countries have been contending with.

Many Americans want to claim that we have allies in the Middle East in the form of Israel and Saudi Arabia. There are a few big, big problems with that. Both of those countries buy their weapons from the US. Our weapons manufacturing capacity is at it’s limit. We have run out of bombs to drop on multiple occasions. Both of them gain the funds necessary to buy their weapons from the US. Saudi Arabia by oil sales, which Iran would block the shipment of if they were attacked. Israel is freely handed nearly $4 billion a year by the US. If we had an actual war with an actual opposing military, the US would have to stop handing out all that money. We are already responsible for over 1/3 of the global national debt and that amount keeps rising. So if they cannot buy weapons and/or we cannot produce enough weapons, any conflict with Iran would be over almost before it began. Iran produces weapons and buys weapons from Russia and China. We cannot stop that from happening. Russian and Chinese weapons manufacturing are nowhere near capacity.

For manpower and alliances in the immediate region, as I stated above, Iran has helped a number of countries in the Middle East. As those countries have been beating back terrorist groups, they have more manpower they could offer to help Iran. This is true even without leaving their own countries because US forces are in their countries or would attempt to occupy those countries in the event of conflict with Iran. All they have to do is evict our forces or turn on US forces in their countries. Not even kill anyone, just destroy our equipment and take our forces hostage. Think that can’t happen? Look at a map. Iraq and Afghanistan have been at war for nearly two decades because of American actions. Both countries have a majority that wants us gone. We have no forces in Pakistan and only a token illegal presence in Syria.

US forces are stretched to the point where we have had to send Coast Guard forces to other countries. That’s not the CG’s role. Their role is supposed to be guarding US waters. This, while we have yet to meet a maritime threat since WWII.

Trump has promoted the message that the US is a net oil exporter at this time. Note that precise wording. That we are a net oil exporter. That doesn’t mean we produce all the oil we need and more. Oil is one of our top three exports and top three imports. Now, consider that 2/3 of the world’s oil supply for export goes through the Strait of Hormuz, controlled by Iran. If they block oil transport, they bring most of the planet to a standstill. The US does not produce enough oil to meet our needs and that of other countries on a major scale. This would be even more true if major conflict erupted, meaning the military would requisition the remainder of our oil production.

That would open the door for Russia, the world’s third largest oil producer, to step in. It would also be a gain for Venezuela. Both would see massively increased oil and gas sales to other countries currently trading with Saudi Arabia, UAE and US.

Considering just how much the value of the US dollar is dependent on US and Saudi oil sales, military conflict with Iran would result in a massive decline in the value of the dollar in very short order.

Any conflict with Iran would result in the US even further threatening Russia and China, who trade with Iran. Especially China. It would at the very least offend and possibly anger the other nations that signed onto the JCPOA and have defended Iran’s compliance with that treaty, which the US has violated unilaterally. All these countries are not likely to simply accede to further threats and sanctions.

Even without military actions, US sanctions are actively resulting in loss of human lives in Iran (among other countries). Sanctions are acts of war. Sanctions kill. Sanctions also damage Iran’s trading partners economically. If you don’t understand all this and think sanctions are in any way peaceful, or that other countries go along with US sanctions without objection, do more research because it is something you do not understand.

Yes, Trump is extremely unstable. However, in this case the “Resistance” first criticized him for threatening Iran, while now criticizing him for not attacking Iran, no matter what dangers that action would result in.