"The Worst Thing Russia Ever Did to America"
by Brian Maher
"In 1991 Russian political scientist Georgi Arbatov sneered to Americans: "We are going to do the worst thing we can do to you." Which was what precisely? "We are going to take your enemy away from you." We fear he was correct. As we have written previously: "A superpower needs an enemy as the policeman needs criminals… as the head shrinker needs madmen… as the bishop needs the devil. Absent an enemy a behemoth flounders - adrift, aimless and rudderless."
Between world wars, berserker Winston Churchill lamented "the bland skies of peace" that stretched above Earth. Those same bland skies of peace overhung Earth following the Cold War's conclusion. The American Colossus bestrode the world itself, pole to pole, horizon to horizon. American capitalism, American democracy represented civilization's apex. Its zenith. Its perfection. It was the very end of history.
Yet history has a ferocious will. And Churchill’s "bland skies of peace" have long since cleared on out. Heavy weather has barreled on through. And today Mr. Putin's squalls are giving the world a lovely soaking.
Some 30 years after high glory, the American Colossus features structural cracking… tarnishing… corroding. Before the pandemic its economy appeared plenty healthy from the overhead view. But if you scratched the surfacing paint and peered within, you would find: Gutted industries, stagnating growth, flat wages and a stock market captive to the central bank.
The entire system, meantime, has rotten through with unpayable debt — over $80 trillion and running. The business is not sustainable. When did the American economy go wrong? And why? Our own Charles Hugh Smith gives his answer: "In broad-brush, the post-World War II era ended around 1970. The legitimate prosperity of 1946–1970 was based on cheap oil controlled by the U.S. and the hegemony of the U.S. dollar. Everything else was merely decoration.
The Original Sin to hard-money advocates was America’s abandonment of the gold standard in 1971, but this was the only way to maintain hegemony. Maintaining the reserve currency is tricky, as the nation issuing the reserve currency has to supply the global economy with enough of the currency to grease commerce and stock central bank reserves around the world. As the global economy expanded, the only way the U.S. could send enough dollars overseas was to run trade deficits, which in a gold standard meant the gold reserves would go to zero as trading partners holding dollars would exchange the currency for gold.
So the choice was: Give up the reserve currency and the hegemony of the U.S. dollar by jacking up the dollar’s value so high that imports would collapse, or accept that hegemony was no longer compatible with the gold standard. It wasn’t a difficult decision: Who would give up global hegemony, and for what?…
The elites have cannibalized the system so thoroughly that there’s nothing left to steal, exploit or cannibalize. The hyper-centralized global money control has run out of rope as the cheap oil is gone, debts have ballooned to the point there is no way they’ll ever be paid down and the only thing staving off collapse is money printing, which holds the seeds of its own demise."
Charles tracks the course of an extended, fatal malaise. Yet we believe there is good, hard sense in it. We believe it is a competent autopsy. "Empires have a logic of their own," Bill Bonner and our own Addison Wiggin wrote in "Empire of Debt," concluding: "That they will end in grief is a foregone conclusion." We fear they are correct. Yet take heart: At least the American empire has its enemy back…
Below, Jeffrey Tucker shows you how several “decades of glory” have ended. Read on for Jeffrey’s own autopsy."
"Decades of Glory Have Ended"
By Jeffrey Tucker
"The new inflation number is out. It’s 8% or so they say. Not even that is believable. It’s already double-digit. Let’s look at the bigger picture. But first, a frightening anecdote that concerns information restriction. It provides a telling symbol of our times.
Russia Today America, with its expansive offices in D.C. and mostly American staff, has been shut down completely. By whom, and the exact circumstances, I still do not know. It was a hugely popular station. Very high quality. You can say, “Oh, it was Putin propaganda,” but I never experienced that. I appeared often, and have for years, on Boom Bust along with some very good reporters and commentators, including my friends Ben Swann and Rachel Blevins.
It was one of the few independent journalistic outlets that offered alternative points of view. I was never censored, not once. Some shows offered extended discussions that allowed me to debate and speak for 20 minutes or more, which is basically unheard of in American media. Boom Bust in particular reported on subjects that others don’t cover, like the crypto industry and the real status of inflation and other subjects.
Did they get government funding? Yes, and so does the BBC, PBS, NPR and the Canadian Broadcasting Corp. Every country has a state-funded media outlet. Oddly, they are often more independent than the ostensibly private media sources. A FOIA request also just revealed that all the major media outlets in the U.S. received billions in funding from the Biden administration to promote government virus propaganda. So there’s that.
Many outstanding U.S. citizens found this station to be a refuge from censorship. They worked hard and strived for accuracy. They tell me that they never experienced censorship either. Now it is gone. With it goes a powerful and valuable alternative source of information. I enjoyed going on the station because it always struck me as a sign of peace between two nations that were at war for so long. It was a symbol of a better, more prosperous and peaceful world.
Now here we are today: The U.S. is in a de facto but undeclared war with Russia. No one calls it that, but when the U.S. provides armaments through intermediaries to the forces that Russia is battling on its border. The dangers right now are intense, on all fronts.
Since the end of the Cold War, the U.S. military-industrial complex has been searching for a reliable enemy that the U.S. population could hate, as a way to distract from the misdeeds of the political elite at home. After decades of cycling through them, it appears that the old enemy was the best enemy. And with a small turn of a dial, vast swaths of high-end opinion are exclusively focussed on the plight of Ukraine. Even Orwell blushes.
Meanwhile, gas prices are at an all-time high. Inflation is now arguably higher than in a century. The U.S. president blames it all on Putin, even though the Biden administration itself has worked since taking office to curb U.S. fossil fuel production. Today, the same administration is blaming the U.S. oil industry for not producing enough! The whole thing is rather mind-blowing.
I promised the big picture. Here it is. The prosperity and relatively low inflation plus economic growth - never as great as it could have been but not entirely shabby - of the last 40 years has come to an end. It seems more obvious in retrospect what happened here, even if it wasn’t entirely visible until now.
Here are the important dates…
1947: The General Agreement on Tariffs and Trade was agreed to as the main structure for bringing about global free trade. It was never fully free, but the long-run trajectory was toward ever lower tariffs and barriers and ever more internationalization. This became a major contributing factor to building prosperity. It was in line with Adam Smith: The more extensive the division of labor, the more gains to efficiency and wealth.
Decade after decade, the system produced fabulous prosperity, even in the midst of the Cold War. The nuclear standoff between the U.S. and Russia, mostly mediated through diplomacy, paradoxically forestalled World War III and assured that most conflicts were regional. The secular trend in the U.S. was toward rising stocks and rising wealth.
1989: Unexpectedly, the Soviet Union completely fell apart. The Berlin Wall fell. Eastern Europe threw off the yoke. New nations were created out of old ones. At the same time, China had made enormous progress in opening up economically. This combination of events introduced billions of people to the world economy, drove up production, stabilized wages and led to a new era of astonishing growth.
1990s: The web browser was invented and the digital age began. The world was connected. New opportunities for entrepreneurship and innovation were everywhere. Competition intensified. Markets for everything exploded. The dollar was the king of the world. The Fed had new opportunities to expand money printing because the markets were everywhere and expanding. We avoided inflation generally. Americans and the world benefited enormously. It felt like there would be no end to the progress.
2018: Donald Trump embarked on his long-promised protectionist campaign, slapping tariffs on everything, pulling out of trade treaties, inveighing against any government with whom the U.S. carried a trade deficit, creating a digital iron curtain with China and generally violating every precept of the postwar consensus. He did a lot of good, to be sure, but his personal and wild fixation on economic nationalism was his undoing. It didn’t work either. It only increased prices for goods and services in the U.S. and goaded no country in the world toward better behavior. It also led to a target being put on his head. This was the beginning of the end.
2020: I don’t need to recount the grisly and grim details of this horror-filled year. It was shocking, with hundreds of thousands of businesses being destroyed. The Federal Reserve accommodated congressional spending like never before, guaranteeing a future of inflation. That should be unbearably obvious now but, truly, it was denied back then that this would be the outcome.
Here we are today in a de facto war with Russia. What poetry! What madness! The progress of 70 years has been fully reversed in a mere four years. The dangers are hugely present all around us today. We don’t really know how the public is going to respond to living amidst the dramatic weakening of the currency and the end of the American empire.
I asked a historian last night how previous empires dealt with decline, speaking in particular of Spain and England. He said that it is never obvious in the generation that most directly experiences the new chapter in history. Everyone pretends that the glory is still there and that nothing has really changed. It can take a century or more before the realization sets in that the empire and the good-old days are fully gone.
We truly did not know how good we had it. The history I just summarized pretty much covers the life of most all Americans alive. The world we are entering now is unlike anything we’ve previously experienced. Maybe two years ago, there was a chance to dig our way out of this pit of hell but that seems ever less likely with each passing day."