by Dr. Paul Craig Roberts
November 29, 2010
On Thanksgiving eve the English language China
Daily and People’s Daily Online reported that Russia and China have
concluded an agreement to abandon the use of the US dollar in their
bilateral trade and to use their own currencies in its place.
and Chinese said that they had taken this step in order to insulate their
economies from the risks that have undermined their confidence in the US
dollar as a world reserve currency.
This is big news, especially for the news dead Thanksgiving holiday period,
but I did not see it reported on
Bloomberg, CNN, New York Times or anywhere
in the US print or TV media. The ostrich’s head remains in the sand.
Previously, China concluded the same agreement with Brazil.
As China has a large and growing supply of dollars from trade surpluses with
which to conduct trade, China is signaling that she prefers Russian Rubles
and Brazilian Reals to more US Dollars.
The American financial press finds solace in the episodes when sovereign
debt scares in the EU send the dollar up against the Euro and UK pound. But
these currency movements are just measures of financial players shorting
troubled EU-denominated debt. They are not a measure of dollar strength.
The dollar’s role as world reserve currency is one of the main instruments
of American financial hegemony. We haven’t been told how much damage Wall
Street fraud has inflicted on EU financial institutions, but the EU
countries no longer need the US Dollar for trade between themselves as they
share a common currency.
Once the OPEC countries cease to hold the dollars
that they are paid for oil, dollar hegemony will have faded away.
Another instrument of American financial hegemony is
the IMF. Whenever a
country cannot make good on its debts and pay back the American banks, in
steps the IMF with an austerity package that squeezes the country’s
population with higher taxes and cuts in education, medical and income
support programs until the bankers get their money back.
This is now happening to Ireland and is likely to spread to Portugal, Spain,
and perhaps even to France. After the American-caused financial crisis, the
IMF’s role as a tool of US imperialism is less and less acceptable. The
point could come when governments can no longer sell out their people for
the sake of the American banks.
There are other signs that some countries are tiring of America’s
irresponsible use of power. Turkey’s civilian governments have long been
under the thumb of the American influenced Turkish military. However,
recently the civilian government moved against two top generals and an
admiral suspected of involvement in planning a coup.
The civilian government
further asserted itself when the prime minister announced on Thanksgiving
day that Turkey is prepared to react to any Israeli offensive against
Lebanon. Here is an American NATO ally freeing itself from American
suzerainty exercised through the Turkish military. Who knows, Germany could
Meanwhile in America the sheeple remain content with, or blind to, their
role as sheep to be slaughtered to feed the rich.
has managed to come up with a Deficit Commission whose members want to pay
for the multi-trillion dollar wars that are enriching the military/security
complex and the multi-trillion dollar bailouts of the financial system by
reducing annual cost-of-living increases for Social Security, raising the
retirement age to 69, ending the mortgage interest deduction, ending the tax
deduction for employer-provided health insurance, imposing a 6.5% federal
while cutting the top tax rate for the rich.
the Federal Reserve’s low interest rates are aimed at helping
The low interest rates deprive retirees and those living on their savings of
interest income. The low interest rates have also deprived corporate
pensions of funding. To fill the gap corporations are issuing billions of
dollars in corporate bonds in order to fund their pensions. Corporate debt
is increasing, but not plant and equipment that would produce earnings to
service the debt. As the economy worsens, servicing the additional debt will
be a problem.
In addition, America’s elderly are finding that fewer and fewer doctors will
accept them as patients as a 23% cut looms in the already low Medicare
payments to doctors.
The American government only has resources for
wars of aggression,
police state intrusions, and bailouts of rich banksters.
The American citizen has
become a mere subject to be bled for
the ruling oligarchies.
The police state
attitude of the TSA toward airline travelers is a clear
indication that Americans are no longer citizens with rights but subjects
Perhaps the day will come when oppressed Americans will take
to the streets like the French, the Greeks, the Irish, and the British...