by Jeff Thomas, International Man:
On the surface, it would appear that the US is in the catbird seat: Since Bretton Woods in 1944, the US has been able to dictate the economy to its trading partners and, to a lesser extent, the rest of the world. Those countries that got on board the Bretton Woods Choo-Choo would be the world’s leaders in commerce, and the rest would take second shrift.
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This was possible because, at the end of the war, the US had been supplying the allies with most of their armaments and materiel and had insisted on being paid in gold. By 1944, they held the great majority of the world’s gold and had the most productive manufacturing facilities. They were in a position to call all the shots, and the countries that subsequently made up the First World went along for the ride.
But by the 1970s, the US went off the gold standard and was paying for imports with US Treasuries. This was seen to be a boon at the time, as the Treasuries could be created from thin air, and the demands by the US became boundless. The US became the biggest house on the block, but it was, in fact, a house of cards, which was only as good as the currency it was built upon – not true money but debt.
To paraphrase Norm Franz, “Gold is the money of kings… debt is the money of slaves.”
The US was, from 1971 on, in the business of enslaving its partners. Along the way, it became more economical to outsource manufacturing, and, over the ensuing decades, the production of most goods came from countries other than the US.
But a wrinkle occurred in recent decades: some of the overseas suppliers of goods, and in particular, energy were now building up their ability for world trade to the point that the US itself was no longer essential. Indeed, better business could often be created between countries without going through the US, and the US was becoming an obstacle to the economic advancement of other nations.
In recent decades, China and Russia have emerged as the most essential providers of goods and energy, respectively, precisely at the time that the US had planned to establish globalism – dominance over the entire world by the US, with the backup support of the other First World countries, most notably, Europe.
As long as the other First World countries continued to endorse American diktat to the world, US hegemony would not only continue but expand.
But then, Russia threw a rather major wrench into the works: the Nord Steam pipeline already supplied much of the natural gas to Europe, allowing it to heat its homes and run its factories. With the addition of Nord Stream II, a tipping point was reached: the great majority of Europe’s essential energy, which it was unable to produce itself, could be gotten from Russia and at a price that no other supplier could match.
What’s often overlooked in the discussion of the importance of Nord Stream II is that, from the first day that the tap was to be turned on to supply Europe, US hegemony would end. Although the US had succeeded in dominating European policy over the last half-century, that situation had now reversed. In a choice between pleasing the US and pleasing the eastern suppliers of goods and energy, Europe’s default position would now be with Asia, not the US.
In this one seemingly minor change in supply, the hegemony of the US would cease. And, more troublingly, US power had been a house of cards for decades. It was no longer a manufacturing titan; in fact, it now produced little besides debt. It had once used its manufacturing capacity to bully its trading partners, but now this power had become a mere remnant.
In recent decades, the US has been operating on its past laurels and the assumption that it was the big boy on the block and must be obeyed, no matter how unreasonable its demands were.
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