Sunday, October 26, 2008

Crash and Burn
(or, the ruinous end of the Empire of Dunces)

Though it is to be expected, the pandering For Profit Media is leaving the American people a thoroughly uninformed and, even worse, a hoodwinked one. This will lead to horrendous results with the present and upcoming Crash of the American Empire.

Even now, as the end of the reign of the American Empire swiftly encroaches, most Americans remain cocooned in their comforting blankets of ignorance. This is easily seen in the espoused world views of such as “Joe the Plumber” as well as the vile howls issued by various attendees of many McCain/Palin rallies. Their videotaped inanities show various degrees of: misinformation, brainwashing, illogic, ignorance, hatred and simple stupidity raised to the nth degree. Though the amateur reporters/videographers sometimes attempt to correct the misinformation espoused by the shrieking Know Nothings, rather than reflect for even one moment on such information, these obviously hateful knuckle draggers simply spew more bile and vitriol.

How does this all connect to the topic of the crash and burn of the American Empire? Most of what these benighted dunces spew are outworn paeans to American “exceptionalism” and reflect their completely distorted view of America's present condition and position in the world. These dunces still see America as the undisputed “leader of the world”, a “beacon unto the world”, an “example to the world”. It is past high time that we, as Americans, come to grips with the fact that we are not now, if we may well have been, any of these.

Since 1971, when Nixon scuttled the Bretton Woods System (which had been specifically crafted to give the U.S. unquestioned financial dominance in the post W.W. II world), by severing the dollar's convertibility to gold, Nixon essentially simultaneously opened the door to turning the dollar into the world's “reserve” currency while turning the dollar itself into a fiat currency. As long as the underlying economy of the U.S. was sound, this was a quite advantageous situation for the country. As long as the U.S.'s real economy was relatively sound, this was a wonderful idea; the dollar's status as reserve currency created a huge demand for dollars essentially acted as a massive subsidy and support for the U.S. economy.

However, over at least the last 30 years, “conservatives” and Republicans (far too often with major support of many “Democrats”) have been busily at work, hacking away at the very essence of America's “real” economy. As they steered America further and further away from a “real” economy and toward a financialized economy, through a wide variety of Randian, “free market” manipulations, more and more of America's real economy, actual manufacturing, has been increasingly offshored to low cost labor markets. What this has meant is that America's productive economy has been hollowed out, those higher paid jobs going offshore, replaced by much lower paying service jobs. In tandem with those losses we have had a shift into “financial” jobs, i.e., non-productive speculation.

With the rise of the financial sector the “Whiz Kids” on Wall Street have created a myriad of “financial innovations”, such as the now evident vaporware such as CDOs, SIVs, etc. In addition to creating these vehicles of their now revealed Ponzi scheme, the Wall Street sharpies went around the world, selling what they knew to be worthless scraps of paper as “solid” investment vehicles. As the underlying bad loans started to sour, the Ponzi scheme was exposed and the entire financial deck of cards began to crumble.

With exposure of the underhanded double dealing of the fat cats and speculators on Wall Street, the U.S. has lost what vestiges of legitimacy it had. The U.S. now stands naked before the world, the world's biggest debtor nation, it's financial markets shown to be all flash and no cash. The situation has become so bad that there is serious talk in international financial markets of abandoning the dollar as the reserve currency and turning the yuan into the new reserve currency. Before you scoff at the idea, it would be good to remember that China now has the largest reserves followed by Japan. Again, it is good to remember that the U.S. is now the world's largest debtor nation. To put it bluntly, we are bankrupt and China and Japan are our biggest creditors.

There is a very good reason why snake oil and patent medicine peddlers were “traveling” operations; you had to peddle your nostrums quickly and be off...before the local yokels either became sickened from the garbage you peddled them or found out that the “medicine” was worthless! Wall Street and the U.S. have peddled their sickness inducing products and now that the world economy has fallen deathly ill from this financial toxic waste, they are looking accusingly at the peddler and are quite irate. The pitchforks and torches are out and the tar and feathers are being brought to the fore.

It will be a quick, inglorious and disastrous fall!

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