“The end of America’s unchallenged global economic dominance has arrived sooner than expected,” wrote US political economist Michael Hudson in a recent cogent essay.
The author, whose earlier book, ‘Super Imperialism’, prefigured much of today’s geopolitical configuration, contends that: “International finance and foreign investment have become the key flash point in global power politics today.”
Central to the historic loss of US global economic dominance is the imminent demise of the dollar as the premier international currency, and thereby its use as a monetary weapon for Washington.
The latest blow-up in international relations involving Venezuela and Washington’s designs for regime change is but the latest in a whole gamut of international developments, tensions and confrontations which ultimately stem from America’s desperate attempt to maintain its global hegemony.
Over the past 12 months, there has been a slew of countries dumping their holdings of dollars and US Treasury bills. Russia, China, Japan, Turkey and others have been offloading the American currency with spades. Meanwhile, Russia and others have been busy stockpiling gold reserves as a more secure strategic asset.
That is surely a sign of systematic “de-dollarization” owing to a general declining confidence in the American currency, as well as a tacit political decision to discreetly disarm Washington’s “monetary imperialism”.
The launch last week by the European Union of a non-dollar payment system for trade with Iran in order to avoid US sanctions is evidence of further international movement away from dependency on the American dollar as the erstwhile international reserve currency. Again, Washington has been overplaying its hand here too.
Threatening to sanction European nations for doing business with Iran under the terms of the 2015 international nuclear accord – which Trump unilaterally abandoned last year – has forced the Europeans to protect their own vital interests, which necessarily entails circumventing the US dollar system.
It seems that in order to avert this collapse of power, the US is amping up the aggression and militarism in a desperate bid to assert itself.
Hence we see the US taking the reckless step of walking away from the Intermediate-range Nuclear Forces (INF) treaty with Russia. Many informed arms control experts around the world, including in the US, are deeply concerned that the Trump administration is gravely damaging global security and “moving the world closer to a nuclear war”.
Behind the US decision to tear up the INF treaty is the calculation in Washington of trying to intimidate Russia and China militarily, whom several recent American planning documents target as “great power rivals”....America’s dramatic escalation of tensions with Venezuela over the past two weeks is another page from the same playbook.
The configuration of chaos and conflict is a very dangerous one. The volatile mix could blow up into a global military confrontation. Washington’s desperation to avert its fate of demise could result in a one reckless aggression too far. A foolhardy invasion of Venezuela could be such a detonator.
Nevertheless, it is crucial to understand the present international precariousness as stemming from inherent American economic problems. That is the key factor that links up all the other seemingly disparate tensions and conflicts. Venezuela is but another demonstration of a wider structural problem centered on American capitalism’s collapse.
Russian, Chinese and other informed planners are presumably well aware of the fraught transition in global politics away from US imperial dominance. Moscow and Beijing hardly want a sudden collapse of American power because that could precipitate a disastrous military reaction. A gradual undermining and weakening of the dollar in a phased withdrawal is probably the safest way to defuse the American time bomb.
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