Monday, 14 July 2025

USA frontier mentality confronts the Empire


A friend sent me this video (the Granny as he called it) with the comment that it provided guidance to understanding current events and sentiments in the USA. I thought a full response was needed to explain my disagreement.



Some thoughts. I am not a Granny sympathiser. She reminds me of Q Anon as well as Christian Zionists. I believe she accurately reflects the views of much of "merica" which in itself is interesting chiefly in it's distortion of wider truths. As an example, increasing the USA deficit will not provide the growth envisaged. The latest figures show that each new dollar of debt generates 20c or less of incremental GDP. The Granny is also wrong when saying that adult reskilling will equip the workforce to meet global challenges. Worker reskilling starts at the kindergarten age. It's a 15 - 20 year project. Going further, she misses the fact that America lags most industrialised competitors in both mid-band and high-band 5G, a minimum requirement for any modern manufacturing facility.

A frontier mindset lurks behind many "mericans" understanding of current events. The Granny is no different. If it's not communists, the Chinese, Covid, then it's sharks, measles and Musk that are about cause America's downfall. Now the USA is being stealthily attacked by the Empire, the City of London which powerful, is hardly a threat. Financial AUM for NY, let alone the USA are about 4 times greater than London ($50-60trillion vs $12-15trillion). The UK is not a new adversary. Historically the USA subjected Britain to extremely punitive repayment terms following loans extended during WW2. Onerous interest charges and punitive trade measures such as restricted/no access to USA markets and tariffs were applied. Furthermore the USA helped Germany recover and prosper quickly seeking a buffer against a resurgence of UK imperialism which might threaten the USA. Michael Hudson has written extensively on this. Even though the UK may currently have "Bell Pottinger" type skills (and less than one functioning battleship), bear in mind that Blackrock, Raytheon, Boeing, Lockeed-Martin and MK-Ultra are USA progeny. To me the story of re-emergent British empire is basically the reinvention of an old benign threat. 

The USA as a global power is in rapid decline. Many theories describe the rise and fall of great powers -  Kondratiev waves, Fourth Turnings, complexity, resource limits, Turchin, etc. Debt is another cause. Debt will not make the USA great again. Trump is wrong. The problem is the interest and the treasury  bonds. Not mentioned in the vid. For interest, what is not shared widely is that USA manufacturing activity is still contracting (yes, negative) and labour too, albeit at slower levels of contraction than recently. Most claimed receipts from new tariffs are also nothing more than that, claims of what could be paid in a year. Internationally I can't believe there is any nation that deliberately embraces Trumps erractic behaviour and seeks closer ties. I sense we will see increasing USA insolation instigated by Trump but imposed by others. Tourists are already voting with their feet. Declining USA relevance is here and with it dollar avoidance. 

Some say BRICS is the enemy Trump is targeting. I am not sure because there is little evidence to show that Trump knows what BRICS is or even who is part of it. There are rumours however about a new trade finance mechanism being built at the behest of China (no BRICS dollar beating currency on the horizon). It's very interesting. Gold lies at the heart of this system which explains the race between reserve banks, especially in the East to acquire gold over the past year, thus driving the price higher. Participating nations will hold gold in their reserve banks which will act as trade finance guarantees using blockchain technolgy. Trade deals will see cross border payments by apportioning the share of gold that changes ownership between trading parties (full or fractional value). This completely bypasses SWIFT, western banks, exchanges and currency dealers. Moreover trades in this system are completely invisible to markets in the west. Price discovery becomes impossible. The negative impact on bourses such as the Chicago Mercantile Exchange is already felt, where dealers can't get sight of commodity prices.

Lastly, I don't agree that Trump is as skilled a strategist as some, Krainer included, believe he is. Finding and causally linking unrelated events, is easy. It always tells a good story. Americas withdrawal from flashpoints and proxy wars is as much driven by financial and military weakness (comparatively) as Trumps lack of a masterplan.