Life in China is very difficult, particularly in the villages. Communism hasn’t been a success long term anywhere in the world. Similarly I don’t think any country has true capitalism. My main concern is that we are heading towards global dystopia and a surveillance / AI nightmare.
The US has been declining since the 90s but they still have plenty of clout.
When did you go to China?
My Malaysian Chinese friends say the Chinese are getting wealthy very quickly
You need to watch the video to understand why Obama and why dictators are not afraid of the USA any more. The video is the point of this thread.
That’s bullsh*t. Obama did warn Assad against using chemical weapons, setting a “red line,” and Obama tried to get Congressional approval to strike Syria, but it was denied.
While the Assad regime did use chemical weapons after the warning, leading to a complex diplomatic and political situation, a deal was eventually reached to dismantle Syria’s declared stockpile.
What destroyed our standing in the world (IMO) was our military overthrow and occupation of Afghanistan and Iraq, and the gross incompetence displayed in that action as well as the cost incurred, which was several trillions of dollars. The world knows that the U.S. doesn’t have the stomach for any more military interventions and considering the U.S. debt is over $36 trillion, we can’t afford another war.
Granted, I didn’t watch the entire video. I stopped after the anti-Obama spiel made it obvious that this guy isn’t credible.
It seems that any “ ism” only works for a few people…
How could a loss of respect for the US be substantiated? It would be ironic if that were the case, since Trump has been claiming that he demands respect (again) from anyone. Not surprising that he demonstrated that to the world by picking the weakest link and talking someone down in the Oval Office who “doesn’t have the cards” anyway while indeed chickening out on other occasions when he should put his foot down. He seems to be surprised that things are not going according to plan and looks clueless.
End of an empire? What empire? In contrast to Britain, the US never had an empire in the true sense of the word which they were interested in keeping together so as to benefit from it economically. The US had been economically strong due to their resources and the large territory which allowed them to be more self-sufficient. Other countries were looking for military protection when the world was bipolar. In today’s multipolar world the US are still a world power yet not the only one and for the free world they definitely still are the world leader since there is no one else and hardly will be. No one is leaving the “empire” to make it come to an end. It’s the current governments own decision to alter former commitments.
I am surprised you saw it as anti Obama, he was mentioned only in passing and given as part of the reason Putin felt confident invading Ukraine knowing that despite the rhetoric the US would not intervene. It’s a view of the USA viewed from outside.
The details of why there was no intervention (congressional approval) really don’t matter to anybody except the US citizens, the fact is the US didn’t do anything in Syria despite threatening to do so. It gave the green light to every dictator world wide…
America’s influence is on the wane, Trump has further trashed it, China’s influence is on the rise.
I think you are taking the word “empire” far too literally, Perhaps if you replace it with “Influence” it will make more sense to you.
The important part of the discussion is the worrying decline of the US Dollar as a reserve currency (hence ABUSA) and if it does cease to be a major reserve currency will the US be able to service its massive debt? If the US is forced to default it will have an horrendous effect on world trade.
It was on the news last night that overseas investors are fleeing both the US bond market and the US share market. This is not normal.
There’s only so much we could do since Russia is a nuclear power and is run by a lunatic. I don’t think Obama’s mild threat made any difference at all.
Since you watched the entire video, did the guy being interviewed mention the U.S. wars in Afghanistan and Iraq, or the size of the U.S. debt?
It didn’t mention Afghanistan or Iraq probably because that were not US wars but a “coalition of the willing” if you recall. However Vietnam was briefly mentioned - again other nations were involved in that conflict.
Yes, the US debt was a very large part of the the discussion and pointed out as the biggest threat to the US dollar as a reserve currency. From memory 132% of GDP.
You have to remember that to the rest of the world Obama was just another US President like Donald Trump, Richard Nixon or John Kennedy, partisan politics are irrelevant except, as I say, to US citizens.
A lot of the video is speculation. The US dollar hasn’t gone out of fashion yet. The US economy is too resilient to fall apart despite whatever Trump throws at it. The US isn’t pulling back it’s military power from what I’ve seen. If anything they are realigning their military in more strategic locations relative to their business interests. I think there are a lot of people behind the scenes working around Trump’s ever changing decisions, to try to mitigate the problems.
Correct. As I said in the original post, it’s an opinion piece. It’s a discussion about possibilities - food for thought.
You also said it was a bit scary. But perhaps we only had the illusion of safety all along?
Just watched a few minutes and thought he was talking a load of nonsense - the US (and the UK and EU) have a terrible record of replacing legitimate govts and replacing them with puppet govts and dictators. As I said in my original post, the West has fallen - oligarchs and the rich have been abusing nationals for a very long time, sucking the life out of us by essentially treating us all (and our parents and children) as slaves. To repeat:
They actually discussed that too.
It really needs watching from beginning to end to make any sense but obviously 16 minutes is far too long for people’s attention span these days.
Here’s a transcript of the first few minutes, perhaps you can point out the nonsense:so that we can discuss that.
why
does it even matter if America’s status
0:05
as a global superpower is waning like
0:07
what’s the risk here well the first step
0:09
would be to make the point that almost
0:13
everything we think is normal in the
0:14
world is not normal the stability and
0:17
the prosperity that has dominated in the
0:20
world for most of the post-war era post
0:22
World War II era is unusual historically
0:25
unusual so the risk is that without a
0:30
dominant hegeimon that has both the
0:32
power and the will to enforce stability
0:36
and the systems that create that
0:38
stability you end up with an unstable
0:40
world now you might say but we already
0:44
have an unstable world uh which is true
0:47
but the stability had always been
0:49
contained so for example and Trump is
0:51
not the first uh American president to
0:55
start wrecking the system that America
0:57
itself created american strategic
1:00
uh credibility started to slide under
1:04
Barack Obama uh that was when he told uh
1:08
the Syrian president um not to use
1:11
chemical weapons against his people and
1:12
if he did he’d come after him obama did
1:14
nothing uh all the other dictators in
1:17
the world took note and that’s why uh
1:20
shortly thereafter Vladimir Putin
1:22
invaded for the first time uh Crimea and
1:25
other parts of Ukraine and then that’s
1:28
escalated because they could see the US
1:31
had lost its will and its ability to do
1:34
anything about it now that’s accelerated
1:36
and you’ve seen the full scale war now
1:38
that Putin is waging against Ukraine and
1:40
threatens to wage against all of Europe
1:43
so without um a dominant and um able and
1:48
willing American hedgeimon that sort of
1:50
thing you could expect to break out um
1:53
more often more and more widely across
1:56
the world that sounds bad Peter it is
2:00
bad i hate to break it to you Samantha
2:01
but it’s also the systems of prosperity
2:03
so here’s a great example um the World
2:07
Trade Organization was set up by the US
2:09
after World War II to create a uniform
2:11
system of rules um communist countries
2:13
were shut out during the Cold War um
2:16
when 2000 hit Bill Clinton said “Look
2:19
that Cold War stuff is nonsense i like
2:21
China.” U let’s bring the Chinese into
2:24
the system and they did the Americans
2:26
together with the other members of the
2:28
WTO admitted China that was the takeoff
2:32
point for the Chinese economy access to
2:35
essentially um free trade throughout
2:38
that system by admitting China allowed
2:41
China to trade its way the Chinese did
2:44
the hard work but it got access to a
2:45
system it had been shut out of and it’s
2:47
that turbocharged the Chinese economy so
Co incidentally on the news last night was a snippet that the USA now spends more money on servicing its debt than it spends on its military. The last nation that this occurred to was the Habsburg Empire which dissolved in 1918, it is not a good look.
Here’s a readable transcript of the video…
So Peter, let’s start off with a bang. Why does it even matter if America’s status as a global superpower is waning? Like, what’s the risk here?
Well, the first step would be to make the point that almost everything we think is normal in the world is not normal. The stability and the prosperity that has dominated in the world for most of the post-war era, post-World War II era, is unusual, historically unusual. So the risk is that without a dominant hegemon that has both the power and the will to enforce stability and the systems that create that stability, you end up with an unstable world. Now you might say, “But we already have an unstable world,” which is true, but the stability had always been contained. So for example, and Trump is not the first American president to start wrecking the system that America itself created, American strategic credibility started to slide under Barack Obama. That was when he told the Syrian president not to use chemical weapons against his people, and if he did, he’d come after him. Obama did nothing. All the other dictators in the world took note, and that’s why shortly thereafter Vladimir Putin invaded for the first time Crimea and other parts of Ukraine, and then that’s escalated because they could see the US had lost its will and its ability to do anything about it. Now that’s accelerated, and you’ve seen the full-scale war now that Putin is waging against Ukraine and threatens to wage against all of Europe. So without a dominant and um, able and willing American hegemon, that sort of thing you could expect to break out more often, more and more widely across the world.
That sounds bad, Peter.
It is bad, I hate to break it to you Samantha, but it’s also the systems of prosperity. So here’s a great example: the World Trade Organization was set up by the US after World War II to create a uniform system of rules. Communist countries were shut out during the Cold War. When 2000 hit, Bill Clinton said, “Look, that Cold War stuff is nonsense. I like China. Let’s bring the Chinese into the system,” and they did. The Americans, together with the other members of the WTO, admitted China. That was the takeoff point for the Chinese economy: access to essentially free trade throughout that system. By admitting China allowed China to trade its way, the Chinese did the hard work, but it got access to a system it had been shut out of, and it’s that turbocharged the Chinese economy. So it’s another example of a system that only the US was able to create and maintain, and now Trump, of course, is vandalizing it.
Okay, well, let’s let’s turn to recent events then, which, as you’ve written, show that Donald Trump is vandalizing this, that America’s superpower status is on the wane because a main part of it is based in economics. So explain this to us.
Well, the essence of it is that quite apart from the trade madness and erraticism, which has unnerved markets and governments all around the world, we now come up to a different problem, which is that the Americans are borrowing so much money to finance their government deficits that world markets have come to the point where they’re wondering if that debt will ever be repaid, and that’s a big problem. It’s a big problem not just for the Americans, of course, that if they’re forced into a default, that would be nothing new in the world because dozens of countries have, but if you are the center of the global financial system and you default, then we all have a problem. The US Treasury bond is the risk-free asset that the whole global financial system depends on and trades on. If that’s under assault, then you have a global market chaos with unpredictable outcomes, but probably none of them very good. And that’s the point we’re approaching right now with the combination of reckless borrowing by successive presidents now, fermented and accelerated by Trump if he gets his new bill through the US Senate as he’s hoping to do.
Okay, well, we’re going to get into his so-called big beautiful bill. I mean, only Trump could call it that, right? But anyway, we’ll get into that in just a little.
Especially one that’s so ugly.
Yeah, that’s right, that’s right. But first, I wanted you to walk us through two newborn acronyms that you’ve just written about that sort of tell the story, I guess, of what’s happening in America with regards to the economy. So can you can you break it down for us? They sound funny, but they’re not.
Yeah, so these these were born, these acronyms, just in the last month. The first one is it’s called the TACO trade, and that is TACO, an acronym is for “Trump Always Chickens Out,” in reference to not just tariffs but also his confrontations with other countries, threats, bluster. He basically he’s got no credibility anymore, and this TACO captures it. The second one relates to where investors want to put their money in the world when they look at all their options in global markets, and this is ABUSA, ABUSA, which stands for “Anywhere But USA.”
You’ve written that Trump is also on the cusp of surrendering a really unique source of US power, perhaps the single most, and that’s America’s full faith in credit. That is the ability to borrow cheaply, to spend lavishly, and to enjoy the exorbitant privilege of issuing the global reserve currency. Now, for those of us like myself who don’t really know what the global reserve currency means, like what is the significance of America losing that status as the default global reserve currency?
Yeah, well, it’s been really vital to the Americans because they can do any transaction they want in their own currency. So at the moment, they’ve got a huge deficit, 7-8% of GDP, which is just, you know, wildly out of kilter for its annual budget, and that’s under threat of going up even further. And they can finance that readily because they can do it in their own currency. You don’t have the risk that they won’t be able to raise the funds, that their currency will collapse, and they can’t attract enough foreign investment to bulk it up. It’s all done in their own currency. Okay, so it reduces a lot of the risk to them, but it also gives them the benefit that the whole world is transacting in their currency. So if you’re an American company or traveler or whatever you are, it makes everything smooth, easy, and convenient. You don’t have to worry about exchange rates or anything else. It’s all in US dollars. And this has had some benefits for other countries too. The entire commodities trade in the world, all of our iron ore and coal exports and all the rest of it, goes in US dollars. It it lubricates the whole system. So if that’s gone, the the world will suffer, but can adjust.
Okay, America would be the big victim, but why what would happen to America if the, you know, the default currency was no longer the American dollar?
They would have trouble funding their deficit. In fact, it would probably provoke, if they can’t finance their existing levels of consumption, it would provoke at the very least a recession, but quite possibly a more disorderly and deeper economic disruption to that whole country, and the risk is that that would suck much of the world’s economic and financial activity down with it. So it could be, I mean, the the really if we take a step back from all of this Samantha, the really big significance of what we’re talking about here is we are witnessing in the daily news the implosion of an empire. We are witnessing the end of the American empire that has stood like like a colossus across the globe since since World War II. It’s coming to an end. Donald Trump is accelerating it, and day by day these developments we’re talking about are all details in that larger pattern of decline. Like Mark Twain’s death, it’s often been, the death of the American Empire has been exaggerated, often been pronounced in the last 30 years and it’s never never come about, but it’s pretty hard to find anybody who will argue that now.
You did mention the bill that might pass through Senate. It hasn’t yet. So tell us about Trump’s so-called big beautiful bill, and why if it does get passed by the Senate, this would be a case of fiscal vandalism that is either contributing to what we’re talking about or maybe even worsens it? I don’t know, you tell me.
No, it does, it would worsen it. So the domestic politics of it are ugly enough, this big ugly bill, and that is that the poor, the poorest, would have about a trillion dollars cut from their government entitlements over the next 10 years. They are principally food stamps, food stamps are for people who can’t afford to buy food obviously, and the other is Medicaid, which is a program of free health insurance to the poorest, about 80, 85 million Americans, and about 9 million of those would lose their eligibility under this bill. And now combined, all of the cuts to these very basic assistance programs to the poorest of the poor would save the budget a trillion, and then Trump is saying, and the the House of Reps that’s put this bill together has said, “But we want to spend 3 trillion on stuff for things that we actually care about so don’t worry about the poor, don’t worry about our fellow citizens. We want to spend this money principally on extending the tax cuts that Trump put in place in 2017 because they’re about to expire and they are for people with high incomes and corporations.” So that’s pretty ugly that redistribution away from the poor and in favor of the rich, and it might come as a surprise to some of the people who voted for Trump, the the MAGA crowd who thought he was going to look after the the little guy.
So it’s like an anti-Robin Hood scenario?
Yeah, it’s the Sheriff of Nottingham.
Yeah, it’s the Sheriff of Nottingham. Okay, and great. And that’s so that’s their country, their problem. It’s it’s bad, but you know, you know your problem where it affects the rest of us is that it would add somewhere between 3 and 4 trillion, depending on how the shape of the final bill, dollars to the federal debt over the next 10 years, and investors have have started saying, “Well, we think you’ve already got too much debt, 122% of GDP, and you’re going to do all this, and look at all these crazy erratic policies you’re announcing all the time.” Yeah, um, you know, the American dollar and the there’s been a selloff of the US dollar and US bonds going on at a at a fair clip ever since so-called Liberation Day, April 2.
Okay, what does that mean, a selloff of US bonds?
It means that investors, and it happens, you know, you get bonds bought heavily one day and sold heavily the next. The unusual factor is that you’re getting bonds sold off and the dollar sold off at the same time. This is a this is a walking away from America as an investment prospect, hence ABUSA, “Anywhere But USA.” That is unusual and usually pages a crisis.
So tell us what historian Niall Ferguson has said about this, because he has sort of rung the bell of alarm, I guess.
Yeah, he published a paper in February proposing what he calls Ferguson’s Law. And Ferguson’s Law states that if you look back through history, an empire begins to decline when it is spending more money servicing its debts than it is spending on its military. And that last year, 2024, the US crossed that line for the first time in a century, almost a century. So on according to his logic, and he goes back to the Habsburg Empire through to the British Empire, he traces this pattern. You you you can, an empire can cross that line and recover, but if it stays beyond that line, spending more just paying for its debts than it does for its military, his thesis is that an empire is finished.
I believe he also said that, you know, just furthering on what you just said, so it essentially leaves the power increasingly vulnerable to military challenge. So yes, and to internal fragility as well. So essentially what we could see is America become a target for for enemies really for the first time in a very long time. Like, is that the sort of pointy end of what we’re discussing?
Uh yes, and you see it already in cyber attack. You see it in the sort of gray zone warfare of cyber attack but also the cutting of undersea cables that connect the internet around the world and 95% of communications around the world. Chinese and Russian proxies are doing this week in and week out. You see it in the attempts to not only conquer Ukraine but to dismember NATO, which is a US-led, US-based alliance, and you’ll see you see it in the Pacific where our Chinese friends are busy trying to claim, well, are actually successfully claiming maritime territories from the Philippines, which is a US treaty ally, where the while the US does nothing. So you would see that move from the fringes increasingly to the center because the US has its has it still has a very powerful military, it just doesn’t seem any longer to have the willpower or the judgment to use it well or wisely.
Are we seeing this play out in just what happened yesterday when Donald Trump threatened Russian President Vladimir Putin over social media, writing that, you know, Putin was playing with fire by refusing to engage in ceasefire talks with Kiev, and then the Kremlin hit back? Maybe you can just tell us about that and whether this is sort of, I guess, a manifestation of what we’re talking about, which is this is not a strong empire anymore, which is going to keep us safe?
Exactly. This is a an exact manifestation of a country that has no strategic credibility. Vladimir Putin’s laughing up his sleeve. Likewise, Trump announced 145% tariffs on China just a couple of weeks ago, and China said, “Well, here’s our counter-tariff on you.” And five days later, Trump says, “Okay, okay, I you know, you be nice, I’ll be nice,” and retreats, takes it back again, temporarily at least. The Chinese haven’t budged. The Chinese have have called his bluff, and he’s back down. So wherever you look, nobody is taking the US as seriously as it used to. As I said, Trump’s not uniquely responsible for this. Barack Obama started this. I should also add that the Americans haven’t always used their great power very wisely. Some of the most atrocious, unjustifiable, and unjustified wars have been American projects: Vietnam, Iraq, terrible misjudgments with terrible consequences. The difference was then that Samantha, there were predators in the world, there was Russia, there is increasingly China, there is also America. America’s always been a predator, but it’s been our predator, and it’s because we’re its ally. Yes, and that has helped protect our interests. What’s happened now is that there are these predators stalking the globe, and we don’t seem to be able to trust any of them. But beyond that, we’re looking at possibly the end of the American Empire. So that’s.
Well, no great empire dies without death throes, and that’s what you would see. It sort of leaves you jaw-dropping. So thank you so much, Peter. Always a pleasure, Samantha.
China was admitted to the WTO on December 11, 2001 when George W. Bush was president.
Our massive military budget is one of the things that put us so far in debt. The other is tax cuts for the wealthy.
That’s for damn sure, and not because Obama drew a line in the sand but because of George W. Bush’s asinine wars in Afghanistan and Iraq that completely destabilized the Middle East and cost us some eight trillion dollars!
What a load of crap.
Yes, I do and I wondered why the authors didn’t do the same and used “influence”? Because “empire” is a stronger word implying that someone rules and has all the power.
Trump has always been interested in having a weak dollar since it could help parts of the local industry and he wants to see short-term effects. He ignores the negative long-term effects. It remains to be seen if the flight from the Dollar is just temporary for there’s no real alternative for a lot of overseas investors. US bonds cannot simply be replaced by other bonds. And Trump and his cronies might reconsider their attacks on the FED by realising that it’s not the enemy but that its very interest-rate policy keeps the US economy afloat. Trump is likely to back-pedal in this matter as he’s had to elsewhere.
