SCO
Anybody who was around through Crashlist, A-List, the exterminism discussions, the pre-crash analyses and reflections about the world system entering a chaotic out-cycle, you probably ran across stuff about the Shanghai Cooperation Organization. My own two cents in all that were The Bear, India Takes the Stage, The End Begins, and a few others. We’ve been hatin’ on economics in the commentary on the preceding post, Warring out of depression. One of the ways economics gets unmasked is by financial historians, if the historian in question has both clarity and good will. Michael Hudson is one of those.
His post today at Counterpunch — which updates us on the SCO as a new strange attractor on the world stage — needs to be read and passed along.
June 15, 2009
Appointment in Yekaterinburg
The Ending of America’s Financial-Military EmpireBy MICHAEL HUDSON
The city of Yekaterinburg, Russia’s largest east of the Urals, may become known not only as the end of the road for the tsars but of American hegemony too; as the place not only where US U-2 pilot Gary Powers was shot down in 1960, but where the US-centered international financial order was brought to ground.
Challenging America is the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the so-called BRIC nations –Brazil, Russia, India and China.
The attendees have assured American diplomats that it is not their aim to dismantle the financial and military empire of the United States. They simply want to discuss mutual aid – but in a way that has no role for the United States, for NATO or for the US dollar as a vehicle for trade. US diplomats may well ask what this really means, if not a move to make US hegemony obsolete. After all, that is what a multipolar world means. For starters, in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned themselves with the former CIS republics belonging to the Collective Security Treaty Organization (CSTO), established in 2002 as a counterweight to NATO.
Yet the Yekaterinburg meeting has elicited only a collective yawn from the US and even European press despite its agenda — nothing less than the replacement of the global dollar standard with a new financial and military defense system. A Council on Foreign Relations spokesman has said he hardly can imagine that Russia and China can overcome their geopolitical rivalry, suggesting that America can use the divide-and-conquer that Britain used so deftly for many centuries in fragmenting foreign opposition to its own empire. But George W. Bush (“I’m a uniter, not a divider”) built on the Clinton administration’s legacy in driving Russia, China and their neighbors to find a common ground when it comes to finding an alternative to the dollar and hence to the US ability to run balance-of-payments deficits ad infinitum.
What may prove to be the last rites of American hegemony began already in April at the G-20 conference, and became even more explicit at the St. Petersburg International Economic Forum on June 5, when Mr. Medvedev called for China, Russia and India to “build an increasingly multipolar world order.” What this means in plain English is: We have…
Sean:
Bueno!
I too read Hudson’s essay earlier today. It makes me wonder if the oil-rich nations of the Middle East will start pricing their oil bourses in the Yuan. Didn’t Venezuela enter into some oil trades and/or promises of future trades with China a few months back?
15 June 2009, 2:32 pmHenry:
http://www.truthdig.com/report/print/20090614_the_american_empire_is_bankrupt/
The American Empire Is Bankrupt
By Chris Hedges
June 15, 2009 “Truthdig” — This week marks the end of the dollar’s reign as the world’s reserve currency. It marks the start of a terrible period of economic and political decline in the United States. And it signals the last gasp of the American imperium. That’s over. It is not coming back. And what is to come will be very, very painful.
Barack Obama, and the criminal class on Wall Street, aided by a corporate media that continues to peddle fatuous gossip and trash talk as news while we endure the greatest economic crisis in our history, may have fooled us, but the rest of the world knows we are bankrupt. And these nations are damned if they are going to continue to prop up an inflated dollar and sustain the massive federal budget deficits, swollen to over $2 trillion, which fund America’s imperial expansion in Eurasia and our system of casino capitalism. They have us by the throat. They are about to squeeze.
15 June 2009, 5:46 pmHenry:
http://www.lrb.co.uk/v31/n10/lanc01_.html
It’s Finished
John Lanchester
“…I get the strong impression, talking to people, that the penny hasn’t fully dropped. As the ultra-bleak condition of our finances becomes more and more apparent people are going to ask increasingly angry questions about how we got into this predicament.”
15 June 2009, 5:49 pmld:
This is the best thing Hudson’s written in a while. For a while there I’d almost given up faith in him. He was increasingly prone to hyperventilation and had ceased to carefully explain the mechanics of and challenges to US financial-political dominance. But now he’s back in fine form, and I’m glad for it.
17 June 2009, 2:05 amHenry:
http://www.huffingtonpost.com/ellen-brown/the-retreat-of-the-shadow_b_216564.html
Ellen Brown
17 June 2009, 7:51 pmThe Retreat of the Shadow Lenders: Why Deflation, not Inflation, Is the Order of the Day
Henry:
http://www.atimes.com/atimes/China_Business/KF18Cb01.html
The world is now changed
By W Joseph Stroupe
This concludes a three-part report.
Part 1: Awakening ahead on bond delusion
Part 2: BRIC group plans own revolution
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http://www.globaleventsmagazine.com/
SPECIAL:BREAKING BONDS WITH THE DOLLAR ($)
It will come as a shock to many to learn that the world’s big foreign lenders, recently very critical of the safety of U.S. Treasuries and of the dollar, are now truly putting their money where their mouth has been. Words are turning into actions as they work to decrease their exposure to the dollar. Don’t be blinded by the outdated conventional wisdom that says China and its partners are “stuck” with their high exposure to the dollar - they most certainly are not stuck. And don’t be fooled by the ostensibly reassuring words from China, Russia and others in the past few days to the effect that they still have confidence in the dollar - they do not. They’re deeply concerned about its stability and are trying to talk the dollar back up from its accelerating decline. The popular media has largely missed the real meaning of an entire set of recent developments that signal a watershed strategic shift as respects foreign confidence in the dollar and in U.S. Treasuries. You must judge this immensely important issue by the actions of the players and not merely by their words. This 8,500 word in-depth analysis will assist you to do just that. It is a must-read for anyone who wants to make coherent sense of the flood of recent developments surrounding the dollar and U.S. Treasuries.
18 June 2009, 3:20 pmHenry:
Another angle on the money:
http://solari.com/blog/?p=3208
The Missing Money
“…I am inspired by the story last week of the Italian seizure of billions in US bonds from two Japanese crossing the border into Switzerland . Max Keiser Comments
Do you think it is impossible for billions, if not trillions, of counterfeit or unrecorded sovereign and agency bonds to be issued and floating around the world?
Think again…”
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The above contains a reference to this:
Why the future doesn’t need us
http://www.informationliberation.com/?id=26087
18 June 2009, 3:26 pmHenry:
http://www.itulip.com/forums/showthread.php?p=104814#post104814
The Cheh-shaped recovery – Part I
Eric Janszen
Forget the boom bust cycle. This economic crisis spells the end of the FIRE Economy. The elongated process of devolution has many components, from the FIRE Economy debt hangover that drives the Debt Deflation Bear Market to Peak Cheap Oil. Going into midterm elections in 2010 with U-3 unemployment over 10%, the political component looms large.
18 June 2009, 6:38 pmHenry:
http://intrepidliberaljournal.blogspot.com/2009/06/living-on-2-day-interview-with.html
Living On $2 A Day: An Interview With Economist Jonathan Morduch
“…How can anyone possibly survive or raise a family with such a meager income? In New York City, two dollars per day won’t even cover my daily Brooklyn/Manhattan round-trip subway commute. Yet billions of low skilled people put food on the table, educate their children, grapple with unexpected emergencies and even save money.
In Portfolios of the Poor: How the World’s Poor Live On $2 a Day, Darryl Collins, Jonathan Morduch, Stuart Rutherford and Orlanda Ruthven, compiled yearlong “financial diaries,” of villagers and slum dwellers in Bangladesh, India and South Africa. The diaries track penny by penny, how specific households manage their money with sophistication and resourcefulness.”
21 June 2009, 11:12 pmHenry:
http://informationclearinghouse.info/article22891.htm
Why American Policy SUCKS
By Jill Richardson
June 23, 2009 “La Vida Locavore” — Out of curiosity I decided to see who was spending the most on lobbying in America. And Oh My Goodness - NO WONDER our policy sucks. No wonder it’s nearly impossible to pass health care reform that provides all Americans with affordable care, a global warming bill that doesn’t suck, and the Employee Free Choice Act. No wonder we’re in these two stupid wars. I know everyone’s aware of the problems lobbying poses to our country, but good lord, if people saw the sheer magnitude of it (and the comparatively paltry amounts spent in the people’s interest) they would be outraged. So here goes. Here’s the list of the top 100 (ranked by amount spent on lobbying in Q109). Enjoy.
23 June 2009, 11:17 pmHenry:
http://video.google.com/videoplay?docid=5064665078176641728
Sir James Goldsmith
Very interesting interview in 1994–clear sight on his part, dull conventionalism on the part of Charlie Rose.
24 June 2009, 8:54 pmHenry:
Forgot to mention the presence of Andrea Tyson–Clinton’s advisor–in the Rose interview; she comes in later. I’ll let you all draw the pretty obvious conclusion.
24 June 2009, 10:07 pmM. D.:
Debt repudiation… Jubilee.
Apologies for slightly off-topic here, but I saw this today: “By the same token, if the American household sector repudiates debt by living in the house without paying a mortgage, until the sheriff shows up and then paying rent once they get kicked out, banks will then do what - shut new credit off to the private sector? Already done. In the meantime, the household sector…” *
I’m thinking this would only work if we had police and sheriff on the side of the people. Refusing to evict people in their own community. So, do we start asking the friendly constable on patrol if he’d go along with it?
It seems to me that the mortgage finance sector could easily recover their (household bankruptcy) losses if they evict everyone and then rent back to us. Then, we have no land base… no food.
Anyone care to comment?
* http://www.lifeaftertheoilcrash.net/Archives2009/DebtRevolt.html
24 August 2009, 6:31 pm