Peoples Geography — Reclaiming space

Violence can only be concealed by a lie, and the lie can only be maintained by violence.
–Alexander Solzhenitsyn

War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious.
–Marine Corp General Smedley Butler

Dollar hegemony: in part, its the notion that the US imperium is not simply predicated upon oil, but the supremacy of the dollar; in particular, the petrodollar. It goes toward describing how the US in particular requires a steady diet of petrodollars to maintain the massive debt and burgeoning trade deficit that underpins unprecedented levels of consumerism and consumption — the famous “way of life” that George Bush Senior notably declared was “non-negotiable” during his Presidency.

Non-negotiable to the neocons, perhaps, but unsustainable to many in the reality based community, with claims of imminent dollar decline, if not collapse.

People who have written extensively on the topic include (but are not limited to — see suggested Further Reading List to be appended) Mike Whitney, William Clark and Ron Paul.

As Mike Whitney puts it, the dollar is also the Achilles heel of the empire: “When the dollar collapses, the baling-wire of economic coercion that keeps the empire sewn together will quickly unravel.”

Let’s examine that claim further. Here, I review some of their recent writing this week on the US dollar, the Federal Reserve and dollar hegemony, as well some observations on the still under-examined topic of an Iranian oil bourse and the implications of the switch to Euros.

Mike Whitney continues his interesting prognostications on what he sees as the doomed dollar. In Doomsday for the Greenback (ICH, 10 April) he updates his 2005 article by the same name, in which he wrote:

America’s capital is not in Washington DC. In fact, it is not geographic location at all. It is the greenback, the epicenter of the global rule. The dollar is the cornerstone upon which the mighty pillars of empire rest.

At the same time, the greenback is the greatest swindle in human history; a worthless scrap of paper buried beneath a mountain of debt. It is only through the skillful mix of politics, diplomacy, and brute force that the grand deception is maintained. As America’s fortunes grow more tenuous, the probability of attacks on the dollar will increase exponentially. Even now, nations are conspiring to knock the dollar from its towering summit and introduce a more equitable system.

At present, the greenback serves as the world’s reserve currency, the main medium of exchange. This allows the US to pile up enormous debt while avoiding the pitfalls of skyrocketing interest rates or hyper-inflation. The $2 billion of borrowed wealth that props up the faltering empire every day comes primarily from the exporting powerhouses Japan and China. This means that America’s profligate spending is financed by the labor of some of the most poorly paid workers in the world.

Ironically, sweatshop workers in Kwantung Province are now bankrolling the criminal occupation of Iraq by facilitating America’s massive trade deficits. Read the rest of this entry »