International Communism Will Be American

Yes, the irony of History will continue. We have all seen relatively recently that Russia and China, former Behemoths for International Communism, had abandoned their Planned Socialist Economies in the rush for Privatization and Capitalism. But what will surprise us even further is that America will impose on the Globe a totally Planned World Economy. This will happen when the Dollar plunges in value to practically nothing and America uses its Military Might to forestall the usual results of a national bankruptcy.

Actually, it all might have already occurred, last year, if the Banks had been left to fall. But the World jumped in and used their Dollar Reserves to shore up the American Banking System. The Crises which had been brought on by the excessive Debt that the Dollar had been carrying was thwarted by the World eagerly running in to give the Dollar even more Credit… to the tone of several trillions more dollars. It saved the day, but worsened the prospect. The Dollar had been structurally weak enough already.

Why did the World bail out America? Well, most of the World at the time had organized their Economies so that the difference between their success or failure rested upon sales to the American Consumer. Yes, theoretically anyway, they would probably have preferred to extend credit to their own citizens… to give their own people something for nothing… than to give all sorts of undeserved Credit to strange and thoroughly selfish and hateful Americans. But in Europe and Asia the people are shy of debt and feel safe with Savings… so they wouldn’t take a Credit Card if it was given to them… with all kinds of special introductory offers. So if the World needed a Consumer Market to bail it out, then that Consumer Market would have to be American. If the Americans are anything at all, then they are Expert Consumers!

But the International Community must have realized how idiotic it all was, to make their own Populations work like slaves so the American’s could get it all in the end… and not even paying for it, but getting everything On Credit. And who says the American’s would ever pay? The first Crisis was about American’s not paying their Mortgages. What if they decided to default on those Credit Cards!?

Anyway, its been a year. I suppose that the World must be coming to realize that they could just as easily support their own Consumers as American Consumers if only they look into the structural reasons why so many people feel they need to Save instead of Spend. With Social Security Protections, Effective Pension Plans and a Tradition of supporting Senior Retirement in Dignity, then the rest of the World could be as casual in their Spending as any American Consumer.

Also, the International Economies might begin to suspect that dealing with their own Consumers would be better for them than dealing with American Consumers simply because their own Currencies may be more reliable than continuing to accept Dollars that are watered down by so much Debt.

I don’t know what will spark off the next Crisis, precisely. But in trying to figure that out we need to understand what exactly it is that supports the value of the Dollar. There are several important supports for the Dollar. The most important factor is that the OPEC Oil Cartel has informally made the Dollar the exclusive medium of exchange for Oil. As long as OPEC continues to accept ONLY Dollars for Oil, then the Dollar is effectively on the Oil Standard, the same way currency used to be backed by Gold or Silver. Any scarcity of Oil will keep the value of the dollar up in turn. But that all depends upon OPEC. We need to wonder what OPEC gets for their Dollars and whether they will continue to be happy with the deal?

The OPEC Trillionaires don’t need to buy Oil from anybody. To receive any value for their Dollars they must resort to Equities and Properties priced in Dollars. As long as they can buy neat stuff priced in Dollars then they will be happy.

So we find that the Dollar ultimately depends upon the Perceived Value of Dollar priced Assets and Equities – American Real Estate and Stock Prices, Bonds, Military Hardware, Fancy Cars and Such. Hmmmmm. But isn’t all this relative to what can be bought with other World Currencies? What exactly is worth so much in America nowadays that can’t be bought with the Euro, or the Yen? Maybe the best thing going for America is that most Foreign Investors in American Products and Securities aren’t very well traveled in America, and don’t know how really shaky their investments are.

When the International Community finally begins to doubt the Dollar, the slide will occur relatively quickly. We will know the End is Near when OPEC announces a preference for some other International Currency instead of the Dollar.

Oh, and then there is the matter of China fixing their Exchange Rate onto the value of the Dollar – “pegging” their Currency to the Dollar… which America endlessly complains about, claiming that this keeps China’s currency artificially low helping their exports and increasing the Trade Deficit. But China will be able to follow the Dollar’s downward spiral only so far. We will know that the Dollar is close to being finished when China cuts loose from it, and ‘pegs’ its currency instead on Japanese or European Values.

Dollar reserves from around the World will be dumped into the Equity Markets that will not be able to digest them. There will be a hyper-Inflation in dollar based Stock Prices and Real-Estate as dollars are dumped half-heartedly anywhere that some residual value can be found. As Businesses collapse they will sell out to foreign owners and then use their Buyout Receipts to pay off their Banks in cheap Dollars, and then they will close out their accounts, effectively shutting down the Banks. After all, with Dollars being dumped so aggressively, even if every Debt is fully Repaid, there will be no Market left for any future loans. And the next time the Banks fall there will be nobody willing to jump in and shore them up. The World won’t be so taken by surprise next time, and will have another Plan besides extending more Credit to America.

Oh, and this reminds me that the very act of trying to support the Dollar Economy may lead to its collapse. If Foreign Reserves are used to buy up American Properties, Businesses, Real Estate, etc, all in an effort to establish some value in the Dollar, then it might set off a Political Reaction in America. America is after all a Democratic and Democracies cannot always be relied upon to be so fair and square, intelligent and civilized about things. Anyway, Legislation could be introduced and passed in the American Congress insisting upon American Ownership of American Properties and the restricted use of Dollars by Foreign Nationals. Such a law would sound great to many Americans but it would spark a Dollar Dump from every Currency Reserve in the World. People wouldn’t be able to dump out the ‘useless paper’ Dollarssadf fast enough.

A millions dollars would be great, right? But not if it couldn’t buy you a pack of cigarettes.

Well, can we guess what would happen if America were to treat this kind of Economic Catastrophe as simply a purely Economic Event? Confronted by a Collapsed Dollar, America would no longer be able to buy Energy in the International Energy Markets. Indeed, America would not even be able to use its own Domestic Energy Sources, as Private Owners would sell off their stores and stocks in exchange for either super-inflated quantities of Dollars (trying to stay ahead of the Hyper Inflation Curve) or they would sell their wares for International Currencies that are actually worth Money.

With its Energy Markets in total disarray then every other business in America will shut down. Workers will not show up for work if their contractual wages are effectively worthless. Oh, and so much of America depends upon people going to work. Food, Water, Power, and all the things that support the huge sprawling Metropolitan Areas and then reach out to support the Vast American Desert and Wasteland Communities – 98% of Americans live hundreds of miles away from any viable sources of food and water for the population densities being considered. If Truck Drivers and Rail Way Workers do not report to work on Monday Morning, and if the Check-Out Girls do not show up for their shifts at the Super Markets, then people die by Friday night. There is nothing more fragile than the Modern Economy. It keeps 300 Million people eating, drinking, warm and dry. We know what will happen if it grinds to a halt. During the Great Depression, America was still largely Agricultural… most people were farmers. A lot of people were able to fall back on the Land when the Economy collapsed. But the Next Big Catastrophe will hit an America that has become a Huge Concrete Jungle. Any Fall will be rock hard and fatale… for millions of people.

So, anyway, if America simply follows the Economic Rules, when its Economy finally collapses as it surely will, well, it will be devastating beyond words. Oh, and not just with passive starving and such. On the News I heard that for the last several years the American Ammunition Industries have not been able to keep up with the Demand for Rifle and Hand Gun bullets. The Gun Nuts are stocking up. The Gun Nuts suspect something! When they no longer have dollars to spend, we suspect what they will be using to get by. So we can estimate that Small Regional Wars for local resources might kill more than the Starvation and Exposure itself.

But we need to ask ourselves whether America would be willing to face all of this dreadful apocalypse while still retaining the largest and deadliest Military Apparatus in the World. America now has more weapons then the rest of the World put together. Indeed, it is more like TWICE the weapons of the rest of the World put together… if you don’t count Israel. So will the American’s continue to play by the old capitalist rules – Winner Take All, even after they have clearly lost the game? Or will the American Leadership find some pretense for establishing a Planned World Economy, just coincidentally in time to catch themselves before they fall in the Abyss.

If I were to guess, it would be that America will suddenly find the prospects for Global Warming to be totally unacceptable and will decide to implement and All Inclusive Plan for International Fuel Rationing… the Free Markets will be effectively shut down. Once Fuel is rationed, then everything else would need to be rationed in turn. Remember, the Price of everything in today’s world revolves upon Energy Costs. Leave Energy Costs undefined and suddenly nobody knows what anything is worth.

So that would leave us with Rationing. How many People are there and what do they need? Yes there can be a lot of corruption in the details, but in Theory it is not all that difficult. And people do not need to necessarily be Corrupt. And since it is the Computer Age, the quantitative figuring required for coming up with a Rationing Plan really would not be all that difficult. And Computers might prove less Corruptible than People. We do know that Computers drink less Vodka.

Anyway, there were Planned Economies before the Computer Age. And they got by. Now, just hit the Enter button. There is no reason to believe we could not do so much better Today.

Oh… how much would the rest of the World be dragged in? Could the Non-Dollar Economies remain Capitalist even if the Americans were to move in and monopolize the Energy Markets? I don’t think so. America would certainly cut into each Nation’s typical Energy allotments, and if prices were to be allowed their natural movement, they would all skyrocket, hitting the poor and middle classes hard enough that they would complain to see the Rich walk away with everything, however much they had to pay. Getting a lot of Stuff because one has a lot of Money would no longer seem as fair as it does today. And most of these Countries had some history of Socialism in their backgrounds and they all survived. Abandoning Capitalism would break very few hearts around the World.

You know, Karl Marx never supposed there would be some big violent Communist Revolution. Yes, many of his friends believed it and pushed for it (“You have nothing to lose but your chains!”), and after a while Old Karl stopped arguing quite so much with his friends on the issue. To ‘get along’ sometimes one has to just ‘go along ‘, and all of that… living by consensus is sometimes easier than always fight-fight-fighting with everybody all the time, no? But his views as an Intellectual and Historian remained about the same, and that was that Capitalism would end up concentrating almost all of the World’s Wealth into a relatively very few hands, and then there would be Some Problem and then the Government would merely step in and Take Over. Overnight a kind of Absolute Private Ownership of Everything would become a Public Ownership of Everything. The only change would be in Public Responsibility versus Private Responsibility.

Who can be trusted more? Public Magistrates or, well, admittedly selfish entrepreneurs? I know, I know, living under Selfish Entrepreneurs is FREEDOM, and how can we all live without that?

I suppose we will all simply have to do our best.