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Russian Missile Tech has Made America’s Trillion Dollar Navy Obsolete

by Dmitry Orlov, via Russia Insider, April 21, 2018

Times have changed and America can no longer project its military power like it did in Iraq. Those days are over.

For the past 500 years European nations—Portugal, the Netherlands, Spain, Britain, France and, briefly, Germany—were able to plunder much of the planet by projecting their naval power overseas. Since much of the world’s population lives along the coasts, and much of it trades over water, armed ships that arrived suddenly out of nowhere were able to put local populations at their mercy.

The armadas could plunder, impose tribute, punish the disobedient, and then use that plunder and tribute to build more ships, enlarging the scope of their naval empires. This allowed a small region with few natural resources and few native advantages beyond extreme orneriness and a wealth of communicable diseases to dominate the globe for half a millennium.

111216-N-KQ416-059
A financially crippling military brontosaurus

The ultimate inheritor of this naval imperial project is the United States, which, with the new addition of air power, and with its large aircraft carrier fleet and huge network of military bases throughout the planet, is supposedly able to impose Pax Americana on the entire world. Or, rather, was able to do so—during the brief period between the collapse of the USSR and the emergence of Russia and China as new global powers and their development of new anti-ship and antiaircraft technologies. But now this imperial project is at an end.

Prior to the Soviet collapse, the US military generally did not dare to directly threaten those countries to which the USSR had extended its protection. Nevertheless, by using its naval power to dominate the sea lanes that carried crude oil, and by insisting that oil be traded in US dollars, it was able to live beyond its means by issuing dollar-denominated debt instruments and forcing countries around the world to invest in them. It imported whatever it wanted using borrowed money while exporting inflation, expropriating the savings of people across the world. In the process, the US has accumulated absolutely stunning levels of national debt—beyond anything seen before in either absolute or relative terms. When this debt bomb finally explodes, it will spread economic devastation far beyond US borders. And it will explode, once the petrodollar wealth pump, imposed on the world through American naval and air superiority, stops working.

New missile technology has made a naval empire cheap to defeat. Previously, to fight a naval battle, one had to have ships that outmatched those of the enemy in their speed and artillery power. The Spanish Armada was sunk by the British armada. More recently, this meant that only those countries whose industrial might matched that of the United States could ever dream of opposing it militarily. But this has now changed: Russia’s new missiles can be launched from thousands of kilometers away, are unstoppable, and it takes just one to sink a destroyer and just two to sink an aircraft carrier. The American armada can now be sunk without having an armada of one’s own. The relative sizes of American and Russian economies or defense budgets are irrelevant: the Russians can build more hypersonic missiles much more quickly and cheaply than the Americans would be able to build more aircraft carriers.

Equally significant is the development of new Russian air defense capabilities: the S-300 and S-400 systems, which can essentially seal off a country’s airspace. Wherever these systems are deployed, such as in Syria, US forces are now forced to stay out of their range. With its naval and air superiority rapidly evaporating, all that the US can fall back on militarily is the use of large expeditionary forces—an option that is politically unpalatable and has proven to be ineffective in Iraq and Afghanistan. There is also the nuclear option, and while its nuclear arsenal is not likely to be neutralized any time soon, nuclear weapons are only useful as deterrents. Their special value is in preventing wars from escalating beyond a certain point, but that point lies beyond the elimination of their global naval and air dominance. Nuclear weapons are much worse than useless in augmenting one’s aggressive behavior against a nuclear-armed opponent; invariably, it would be a suicidal move. What the US now faces is essentially a financial problem of unrepayable debt and a failing wealth pump, and it should be a stunningly obvious point that setting off nuclear explosions anywhere in the world would not fix the problems of an empire that is going broke.

Events that signal vast, epochal changes in the world often appear minor when viewed in isolation. Julius Caesar’s crossing of the Rubicon was just one river crossing; Soviet and American troops meeting and fraternizing at the Elbe was, relatively speaking, a minor event—nowhere near the scale of the siege of Leningrad, the battle of Stalingrad or the fall of Berlin. Yet they signaled a tectonic shift in the historical landscape. And perhaps we have just witnessed something similar with the recent pathetically tiny Battle of East Gouta in Syria, where the US used a make-believe chemical weapons incident as a pretense to launch an equally make-believe attack on some airfields and buildings in Syria. The US foreign policy establishment wanted to show that it still matters and has a role to play, but what really happened was that US naval and air power were demonstrated to be almost entirely beside the point.

Of course, all of this is terrible news to the US military and foreign policy establishments, as well as to the many US Congressmen in whose districts military contractors operate or military bases are situated. Obviously, this is also bad news for the defense contractors, for personnel at the military bases, and for many others as well. It is also simply awful news economically, since defense spending is about the only effective means of economic stimulus of which the US government is politically capable. Obama’s “shovel-ready jobs,” if you recall, did nothing to forestall the dramatic slide in the labor participation rate, which is a euphemism for the inverse of the real unemployment rate. There is also the wonderful plan to throw lots of money at Elon Musk’s SpaceX (while continuing to buy vitally important rocket engines from the Russians—who are currently discussing blocking their export to the US in retaliation for more US sanctions). In short, take away the defense stimulus, and the US economy will make a loud popping sound followed by a gradually diminishing hissing noise.

Needless to say, all those involved will do their best to deny or hide for as long as possible the fact that the US foreign policy and defense establishments have now been neutralized. My prediction is that America’s naval and air empire will not fail because it will be defeated militarily, nor will it be dismantled once the news sinks in that it is useless; instead, it will be forced to curtail its operations due to lack of funds. There may still be a few loud bangs before it gives up, but mostly what we will hear is a whole lot of whimpering. That’s how the USSR went; that’s how the USA will go too.

In 2009, The New Yorker dubbed Dmitry Orlov one of the “Dystopians”, theorists who believe that modern society is headed for a jarring and painful crack-up.  He is best known for his 2011 book comparing Soviet and American collapse (he thinks America’s will be worse). He is a prolific author on a wide array of subjects, and you can see his work by searching him online.

75 Comments

  1. Google Talpiot Program says

    LOL most of this “Russian” technology is directly purchased from Israel which Israel stole from the United States for FREE by the use of well-placed sayanim agents.

    Actual Russian made technology is way behind in most military tech groups.

    • milosevic says

      Actual Russian made technology is way behind in most military tech groups.

      zionist shill alert!

      That must be why the antique air defence systems they sold to Syria eliminated 71 out of 103 of the anglo-franco-zionist junk which invaded their airspace a week ago.

      You can keep on saying that, right up until hypersonic cruise missiles descend from the skies and turn US aircraft carriers into burning wrecks, and the shitty F-35 That Ate the Pentagon is blown out of the sky by S-400 missile batteries and Sukhoi-57 jet fighters.

      • Google Talpiot Program says

        How am I a zionist shill?

        I’m the one pointing out that Israel and Russia are doing a lot of deals together (Russia gets “Israeli” drones totally taken from American technology companies) and that they aren’t opposed at all.

        If the F-35s are so bad then why is Israel buying loads of them instead of these Russian made ones? Why is Israel passing China the secrets of the F-35s to China so they can attempt to copy them?

        Why? Because they are the best!

        I understand that since you are Serbian why you would support Russia over the US but it’s important to get the facts straight.

        • Mulga Mumblebrain says

          The F-35 ‘Flying Turkey’ ‘the best’??!! Dream on Bibi Junior. Israel doesn’t ‘buy’ them. The USA slave state hands them over gratis, as Imperial tribute.

      • Google Talpiot Program says

        What exactly is wrong about it?

        This is easily verifiable information.

        • Mulga Mumblebrain says

          I’m sorry-my therapist told me not to have arguments with fools or horses.

    • hmm dude your thinking is lazy is stupid, sorry for the language but where on earth do you see that happening? Russia purchasing Israeli, isn’t the latter the biggest and most favored US ally? Your view doesn’t make sense at all.

  2. Fr0sty says

    Does not change that outside the Russian military the country is a ghetto!

      • milosevic says

        The shill-masters must be getting worried; they’re despatching their flying monkeys to sow discord, in thicker flocks than usual.

      • Mulga Mumblebrain says

        You’d know all about toilet-blocks, your natural habitat.

  3. Pogo 1 says

    Yea, yea, yea. The Joo’s are financing both sides of this ‘dual-false-engineered-dictotmy’. There’s no two sides. At least not the two sides that 99.9999% of the world’s population is led to believe. But there are two sides. It’s the global elite, a handful of crooks, bankers, etc, and the one’s they’ve bought, and everybody else. Those are the only two sides, and always have been.

    • It’s time US stop bulling around Osama Bin Laden Shows that US isn.
      ‘t Untouchable any more..5 ( Terrorist and 3 planes ) finish with this MYTH. ! )

    • Mulga Mumblebrain says

      It is the Zionist elite, not ‘the Jews’. Most Jews are just ‘human shields’ for those utterly Evil elites, who now totally control the Western world, politically, in the indoctrination systems and in the financial Moloch.

      • milosevic says

        Most Jews are just ‘human shields’ for those utterly Evil elites

        Still no word on why they agree to perform this essential service, if they’re not personally benefiting from the imperial rampage of their zionist overlords.

        • Mulga Mumblebrain says

          Yes-bizarre, but explicable. Israel is the second most unequal OECD state, after the USA, of course. However, there are 3500 years of group solidarity and ritual holding Jewish society together. Of all the communities extant at the birth of the Jews, few still persist, having not been taken over by other groups, or even extirpated entirely.
          Of course Israel was once quite proselytising, with groups like the Khazars famously converting en masse. And some Jews ‘married out’ either religiously or socially, or just walked away, particularly from the insanely proscriptive and prescriptive Orthodox and Ultra-Orthodox traditions. However the cultural links often remain strong, and atheist Jews abound, but still tied to family and community. And the horror of the Nazi Judeocide surely must make many Jews feel that abandoning their religion would be like a betrayal of the millions of dead.
          And lastly, opposition to the crimes of Zionism and Israel brings vicious denunciations and abuse as ‘self-hating Jews’, ‘kapos’ or even, bizarrely ‘antisemites’. As victims of this type of hatred, like Norman Finkelstein’s experience, where his mother was villainously slandered in order to pressure Finkelstein, show, the worst of the Zionists are almost unparalleled in the hate-crazed antagonism towards those who ‘ get in our way’, as Jabotinsky put it.

  4. King Kong says

    Some great comments, and I agree the Hegemon will not just fade away in the evening sun. On the other hand China is not Libya and Russia is not Iraq, both must be considered superpowers, one with over 7000 nuclear weapons and an increasing effective military and abundant natural resources. The other is an economical giant, capable of putting out industrial produce at an astonishing rate, has an enormous army, a very sizeable navy although not blue water.
    I cant see these powers pushed around at a whim. And the US is aware of that, it must somehow realize the game is over in the ME, it turning slowly ever more hostile.

      • notheonly1 says

        Now there is a wonderful arms-trade-show video. Superbly done, with smack machismo (no women in the shark crew…), but a simple message beyond the superb technology:

        The days of the Western ‘values’ regimes’ dominance are over. Period. With the West standing no more chance to ‘win’ any exchange and to understand that it will be the continental US and Europe, that will look like Hiroshima and Nagasaki – without getting their own crackers anywhere near their targets, the world may finally be heading towards total global disarmament. Note also, that the Russian and Chinese defense industries are state owned – not some scheming criminal by the string pullers held private corporations.

  5. Old Pepper says

    Citizens of Britain beware! But the danger is not new Russian military technology.
    The UK Government has revealed a truly monstrous danger to its citizens.
    Angry and super professional Russian hackers in the near future through the power supply network will take control of your TVs, refrigerators and washing machines. After that, the TV will only show the RT and Putin, the refrigerator will defrost the food so that you received food poisoning. Washing machines will start chasing after your family members around the house in order to cause them severe injuries.

    • Hugh O says

      Smart bots will switch washing machines on to brain washing cycle! Water supplies will be switched to vodka. The radio will play Russian music and Kate Bush singing “Babushka”. Whats not to like?

      • Old Pepper says

        I really like the UK government’s creative approach to intimidating us with scary Russians, but, actually, it’s already very reminiscent of a madhouse.

        • Hugh O'Neill says

          Who would have thought that the new cold war was actually about controlling fridges? The Iron Curtain was about ironing curtains. I suppose hoovering up data will all be swept under the carpet now…

    • rtj1211 says

      And smart citizens will avoid the internet of things and demand traditional old technology…and if necessary have back up generators to overcome the bot hackers.

      • Brutally Remastered says

        The answer lies in creative digital subversion: clothes that befuddle facial recognition etc etc.
        This is going to be fun.

      • Pogo 1 says

        Smart citizens? Not in the U.S. Maybe only 3-5% of the population have more brauns than condennsed owl shit.

    • Mulga Mumblebrain says

      A few dozen more Exocets and Sheffield and Thatcher were sunk.

  6. Michael McNulty says

    Russian missile technology could change the face of warfare forever if Russia’s leadership is inclined to use it so. As well as targeting missile platforms once war is underway they should aim missiles at political, economic and military targets across the west…the Pentagon, Capitol Building, Wall Street, Houses of Parliament, Whitehall, the Knesset, military bases, docks etc. A few dozen strategic targets at home would end our ability to wage war.

    Start targeting the elite so some of them are amongst the first to die. If Russia takes this war to their front door they won’t be so keen on war thereafter, when it’s no longer us who do all the dying.

    • Pogo 1 says

      Never happen, even though it would be a good thing. But it will nevernhappen because the Rothschild Banking Cartel is financing both sides of the ‘fake-two-sides’. Plus they don’t want to insure their own destruction. Things are going as planned.

  7. notheonly1 says

    Glad You brought that up. For a variety of reasons. The most important one although lies within what is commonly known as ‘The Big Picture‘.

    Before I go there though, allow me to offer You this link that will lead You to the DuckDuckGo search:
    air craft carriers sitting ducks
    https://duckduckgo.com/?q=air+craft+carriers+sitting+ducks&t=ffnt&ia=news

    You will immediately notice that this topic has been around for some time now. However, the back peddling of certain publications is apparent. Reminiscent of the famous dialogue between Casanova Frankenstein and one of the ‘Disco Boys’, Tony P. in the rarely understood cult movie ‘Mystery Men‘. Casanova Frankenstein to Tony P.: “I hear ze people say zat Disco is dead.” Tony P. responds (upset): “Disco is NOT dead! Disco is life!”

    So now, a number of voices say that air craft carriers are dead, because a properly equipped squad can take them out in the blink of an eye. No hyper sonic version necessary. Super sonic will do fine – fired from a few miles off the coast. But that is not the point in question. It goes much deeper than dealing with military fantasies and their repeated bursting through unforeseen developments.

    This shall also encompass all the other topics discussed here recently and ongoing. Here it goes:

    What is Evolution? A process of natural selection in regards to what works and what doesn’t? How long does that take, usually? Speaking about Homo Sapiens, Australopithecus wasn’t really that long ago in terms of planetary evolution of life. For the sake of an argument, I allege that a million years ago, ‘people’ were much different from today. But for ease of discussion, let’s go back just 500 years. 1518 A.D. That was quite some time before the discovery, or better the first theory on evolution. Looking at the images preserved from theses days, one thing strikes as surprising, or obvious – based on point of view. People at the time did not look so much different from people today. And they certainly don’t seem to have much further evolved in shape and form from 1818 to the present day.

    Only our present so called ‘advanced technology’ appears to have evolved, based on the evolution of the Human brain. I give it to anybody noting that also the physical appearance of Homo Sapiens has changed over the last 500 years. The main changes though, the main evolution of Homo Sapiens took place in the alteration of his environment. In other words, the first million years were dedicated to physical changes, in more recent times these changes occurred on an exterior level. That includes these bombastic swimming air fields – evolved from wooden ships no more than a couple of hundred years ago.

    A Human Being today will have a hard time to even point to the most revolutionary changes of the last 50 years. The electronic r/evolution brought computers for everybody and changed everything on the technical side. From transportation, to the household, from the military to the personal electronics – while the milestones of e.g. being able to have a mobile phone connection were lauded as a major breakthrough, we now have ‘smart’ phones that pack enormous computing power into a tiny device that would have required a gym size room 50 years ago. So, while technology has obviously tremendously evolved, Homo Sapiens – not so much.

    But here lies the rub. Homo Sapiens cannot see his own evolution. His life span is too short to observe changes. The changes that can be observed are those limited to society – the way people live together – and to what they are wearing, with the given of recycling fashions and styles perpetually. What one is wearing is not really evolution, but what one is thinking is most definitely.

    Thus, the evolution of Homo Sapiens occurs at the same pace it did over the last 500,000 years – and while for us, living in the 21st century the path traveled seems to be enormous, from an evolutionary stand point it is not. Again, where is evolution now? IS Homo Sapiens done, like a number of religions allege to be the case? Or, are we still marching forward into uncharted territories, with the brain doing most exclusively the evolving?

    Looking at the brain today, a very large portion of humanity will already have heard of, or even have had experiences with what is termed ‘Artificial Intelligence’. From now on, besides evolution taking place in the brain based on human interaction, it is also taking place due to artificial intelligence. The ghosts that we created to overcome the limitations of being a Human Being will now turn the screw regarding evolution. Let’s utilize a microscope for a moment and look at the changes occurring in the collective consciousness based on the changes due to artificial intelligence. The majority can’t keep up with the extend to which the AI is already used to bring about changes that those that I like to call ‘string pullers’ want to come to fruition.

    What we can read in the so called ‘media’ is already partially concocted by AI. All the fake news, all the propaganda, all the talk about the military and its abilities, or the lack thereof, the false flag operations – serving beyond the fear mongering the division of societies the world over. Syria, Afghanistan, Yemen and all the other countries raped by Western values only deepen the rift between those who who care and those who don’t.

    How many actually understand that everything we see, hear and feel is part of Human evolution. Just as much as the folks 500 years ago (with notable exceptions) could have not envisioned how we would live in 2018, that much contemporary folks are unable to see where all the present day wars, authoritarian, totalitarian and omnicidal societies are heading towards.

    Air craft carriers, among so many other superfluous expenditures and their aggressive policies will pass, too.

  8. It’s not just Russian missiles that the the US navy obsolete–missile tech in general makes anyone’s surface navy obsolete. Submarines still have a purpose as missile launching platforms that are much harder to detect, and small, expendable ships as missile launching platforms still have a use, but the large surface ships are expensive to build and cheap to blow up. Any country with decent missile tech such China, Iran, etc. have a huge advantage against the US Navy in terms of bang for the buck.

    • Mulga Mumblebrain says

      US aircraft carriers are just for bombing defenceless countries ‘ back to the Stone Age’, a favourite sport among the ‘Exceptionals’.

  9. DomesticExtremist says

    The military eats the Empire.
    Always has done, always will.
    Basically the cost of garrisoning and subjugating tributary colonies exceeds the returns from tributes and new plunder.
    See Joseph Trainter’s ‘Collapse of Complex Societies’ for chapter and verse.
    Empires are like opium – fun at first, addictive and inevitably fatal in the long term.

    • Mulga Mumblebrain says

      The US Reich these days prefers economic weapons, through sanctions and the like, to subdue its victims.

  10. BigB says

    Debt is essentially a claim on future labour and future resources. Perpetual debt issuance (fiat) is posited on the perpetual increase in labour productivity; perpetual availability of infinitely renewable resources; and the perpetual ability of the global economy to expand at compounding exponential rates. None of which is true, or even possible: which even common sense reasoning can show. Economics is the voodoo pseudo-scientific method of mass hypnosis. It is not possible to have negentropic perpetual growth within a bound finite earth system. It is simply not. ALL debt will eventually become unrepayable: not just the US. Repaying debt destroys currency; even just paying the interest becomes an increasing drag on the economy. As does the increasing cost of resource acquisition due to diminishing quality and quantity of resources (EROI; EROEI). Nothing has to run out for the economy to eventually fail due to accumulated debt. This is not complicated theory; it is simplicity and common sense to understand. Yet out finest minds, thought leaders, and ideologues keep pushing the voodoo witchcraft of Business As Usual for the dominant culture of capitalist valorisational omnicide. This is beyond stupid: pushing a grossly unequal, structurally violent, and inherently exploitational paradigm to breaking point. One can’t help but wonder: why is humanity so completely collectively insane? For the love of paper or for the series of virtual zeros on account balance that means you are worthwhile: a ‘somebody’?

      • bevin says

        The idea that these debts can never be repaid was one of Tom Paine’s insights-it wasn’t new even then though. It is central to William Cobbett’s view of the world too.
        It is quite clear that debt repudiation, which is easily achievable, is central to any realistic programme of socialist reform. The problem is that to moot it publicly is to invite a coup by the rich, therefore necessitating- in rough figures for a country like the UK- a mass movement with about ten million active members before any realistic programme of socialism can be presented.

        • There are other possibilities such as Steve Keen or Michael Hudson’s “Debt Jubilee”. As unlikely as it may seem Davos Man and Woman are shit scared of the pitchfork, populist demagogues like Trump, and financial crisis …judging by some of the Davos presentations I watched for oppo research. Ethical capitalism or green capitalism were the buzzwords: perhaps that will include debt forgiveness if it will save their necks. As Mark Blyth says “We know where you live” in the Hamptons.

          • Mulga Mumblebrain says

            The Israelites had a 50th year (after seven cycles of seven years)debt forgiveness, which they borrowed, I believe, from the Babylonians. Either then, or at some later stage, it became for their own tribe only, and banksterism was born.

    • notheonly1 says

      Perpetual debt issuance (fiat) is posited on the perpetual increase in labour productivity…

      Bulls’ eye. (If this joke is permitted).

      Where it gets really interesting is the rapid development and utilization of 3D-printing abilities. Ten years ago, people would have called me crazy if I would have told them that I have a 3D-printer at home that can print anything up to 200mm x 200mm x 200mm. Additive manufacturing without the need to cut, grind and eventually waste material away.

      The Chinese printed the first commercial airliner components ten years ago. How far they are today – one can only take a good guess, because it might be counterproductive to show people where there labor will go from here. Recently I was in an electronic retail store. The big kind. While I had the idea for a certain item over ten years ago due to the annoyance of ever increasing prices in such stores, I was now able to look at the device I had invented without having pursued its getting patented. Tuff luck. The item is a small digital price label panel, where prices can be changed at once – at night, for the entire store. Having experiences in retail, I know how much manpower is involved in changing the price labels at the shelf in a store of this size.

      Do You remember when people had to climb up a ladder to change the numbers on the price panel at a gas station? At least here, where I am now, there are no more gas stations without automatic number changing panels. The 3-D revolution will hit the labor force like the anvil hit Wiley Coyote. Heads in the sand they seem to be impervious to warnings about the ensuing collapse of ‘labor productivity‘, because there will be productivity without labor.

      Thus, when Dim Son told the American people to “go shopping”, it was alleged that they had the means, or the credit (which results to the same actually – credit card debt needs to be repaid) to follow the advice. When the job market crashes due to automation through 3-D printing processes, there will be less jobs and with it, less tax revenues. Less debt payoff. It’s a box worthy being called Pandora’s.

      As in so many other cases – the devil is in the detail.

      • milosevic says

        Wake me up when 3D printers can produce something other than cheap plastic trinkets, at a rate faster than multiple hours per item.

        • notheonly1 says

          Well, not everybody uses DuckDuckGo obviously. If you would, you, too would be able to wake up to the rapidly progressing 3D-printing abilities that not only increase in scope and size, but also in regards to filaments used. If you are awake, you may look at this link:
          https://3dprinting.com/news/
          BTW, this is not to belittle conventional machining that has indeed evolved equally dramatic. But with ever more materials utilized and printing times reduced, additive manufacturing is the future for a world with decreasing resources.

    • Mulga Mumblebrain says

      Excellent comment. The parasites do have a way out, of course, once their scams hit the brick wall of the Limits to Growth. First, debt repudiation, which is coming soon, probably after the next ‘panic’ as the various asset bubbles burst. Theft of wages, pensions, bank deposits etc are already with us and will spread rapidly, setting the scene for mass revolt, and, consequently, the parasites’ ultimate and Final Solution to the ‘useless eaters’ problem-global genocide.
      They won’t allow nukes to destroy all that lovely property, or force them underground for millennia, so I expect bio-warfare. That the Pentagon spends tens of billions a year on bio-warfare, controls an archipelago of research stations around the world, where it field tests pathogens and vectors for their distribution, and is furiously seeking to collect as many samples of human DNA from different populations, plus blood and tissue, including neoplasms, as possible, pretty much tells you where we are going-soon.

  11. kweladave says

    I agree with the main ‘thrust’ of Dmitri’s article – I’ve always enjoyed his writings, sharp & original, however,

    “…US now faces is essentially a financial problem of unrepayable debt.”,

    unrepayable debt is absolutely not true. The US has an infinite supply of US dollars which can be created with just a few IT keystrokes. The US (like UK, Canada, Australia etc but NOT like Greece) has a fiat financial system ie. its currency is not fixed against gold or fixed against another currency.

    If, for example, the Chinese cashed in their US treasury bills the foreign exchange market would be flooded (big time) with dollars & presumably the international value of the dollar would fall dramatically, making imports to US much more expensive (including cost of maintaining those 800 or so US foreign bases). Very interesting but NOT ‘unrepayable’.

    For more about this area, have a good look at Modern Monetary Theory (macroeconomic reality), especially Professor Bill Mitchel’s site http://bilbo.economicoutlook.net.

    • Government debt is covered by the the full faith and credit of the state: but private debt (including household debt) is not. Remember mortgage backed securities? That’s what precipitated the GFC. The Fed bought the debt (TARPS) but has done zilch to stimulate any real (non-paper) economic recovery. Now they have a $4.5tn balance sheet they say they want to taper: but cannot. Can America go bust? Raise the interest rate by a full percent and watch. Are those debts unrepayable? In theory they could repurchase them and lower interest rates by going negative (NIRP), ending cash (that went well when they trialled it in India) …but the vultures at JP Morgan, Lazard, Goldman Sachs and RIT Capital Partners would just use free money to gut the world economy: precipitating the next GFC. Ditto if China does anything other than a long, slow (read decadal) move away from the dollar. Figure in declining resources: are the debts unrepayable …you bet.

      BTW: Dmitry is wrong about the pop being subsidised DOD spending. Mad Max Keiser, actually it was Stacey, recently showed defence contractors profits have never been better. Nothing to do with defence: but diversification into healthcare and cyber. Watch the nature of war move away from direct nuclear to nuclear confrontation might appear a good thing: but not for the soon to be broke guinea pig population of America?

        • Thomas Prentice says

          This is how Ross Perot made his billions — starting with providing computer services for Medicaid

      • Mulga Mumblebrain says

        Max is correct, I would say, in his frequent observation that all the free money conjured into existence and handed to the parasites is being used to privatise the economy-or at least the profitable parts of it.
        Once the elites own everything of value, the 99% will be left with NOTHING but pollution, scarcity and brutal repression, by killer robots, ubiquitous, inescapable surveillance and ‘Divide and Rule’ tactics. All those heavily armed Rightwing militias can quickly be sworn in as ‘deputies’ when a lynch-mob is needed to keep the ‘varmints’ in line. But I suspect that will only be an interim period, as the ‘mysterious pathogen’ required for a Final Solution is perfected, and the elite get themselves secretly immunised against it.

    • Fushi says

      luckily you are wrong. it IS unrepayable, because 1. global trade, especially oil trade will soon be done in currencies other than the dollar, which will essentially mean that the dollar WILL lose value because its not backed by real commodities. it will decline to the value of the paper it is printed on. 2. fiat currency IS DEBT! everytime you “print” money you take out a loan. IT IS IMPOSSIBLE TO REPAY DEBT WITH MORE DEBT! only if the banks give the loans for free this might be possible but this will not happen. never. 3. in order to create value out of nothing you need to take value away from somewhere else. where? the money value itself… inflating the “money” supply means as the word itself says, INFLATION! you can do it for a time but the wealth of nations and people will just evaporate in front of their eyes. not sustainable at all.

      so all in all luckily you are wrong, god bless you.

    • Baron says

      The MMT, kweladawe, is not unakin to what was preached when the dot.com boom took off, never mind these cos make no money, have sky high P/E ratios, it’s a new paradigm blah, blah … You remember, or are you too young to recall it?

      If the MMT were right why do w have to pay taxes? If the Government could print any money it not only needed but wanted to print why taxes, why price competition, why money itself?

      Without going into detail, if you hold a dollar (or any dollar denominated paper) you have an IOU, a claim on a dollar denominated asset, that’s true now as it has ever been, if it were not so, who on earth would hold dollar bills, and why?

      The US can print whatever quantity of dollars it needs because most of the dollars are expected to never reach the US again, they stays offshore, the oil buyers need each year up to $12 trillion of dollars to get the black gold, that and the fact that the greenback is the preferred d reserve currency allows the American Government to indulge. Nothing however lasts for ever as the cliched saying goes, and the time will come when the dollar will get the same treatment the other reserve currency did e.g. the sterling. You’ll see.

  12. Baron says

    The Americans are bound to catch up (see the new budget for the military) in this costly but totally useless and ultimately ineffective game of leapfrogging that nobody can win because what underpins it all is the nukes both adversaries possess in quantities sufficient to blow the whole planet few times over. If either side were to get close to an annihilation it would simply explode its nukes in situ, the air, water and soil pollution from it will hit the ‘winning’ side as badly as the losing one. Madness this, utter madness.

    • I would posit that the US is in no way behind Russia and that any conflict between the two will result in MAD. The US and it’s allies have only ever used cruise missiles on nations incapable of defending themselves from them. A conflict between these two superpowers would not rely on cruise missiles. Russia’s now not so secret weapons programs may sound impressive but to imagine the US was ignorant of and preparing no counter to them would be folly. Putin had to develop such systems to guarantee the integrity of the Russian state. They were not designed to and are incapable of challenging the US domination. What Russia would need to do to present a challenge to US Empire is to export their new weapons to other states facing threat from the US. This of course presents it’s own insanities and only makes the world ever more dangerous. On the current trajectory, despite the pure theatre of the latest missile attacks, we are still on an inevitable path to nuclear showdown. The old guard of US hegemony who give the orders are now very old psychopaths who just don’t care about the risks. To them MAD is not to be feared but is actually desirable.

      • Mulga Mumblebrain says

        Russia’s new weapons are purely defensive. The US elites have, for more than a decade, been bragging of being able to ‘prevail’ in a nuclear war with Russia and China, but only if the US engages in a sneak first-strike attack, to decapitate their victims, destroy most of their nukes, and mop up any surviving missile with ‘missile defence’ systems, now entrenched around Russia under the LUNATIC lie that they are aimed at IRAN!!?? Now that Russia can survive such a US strategy, MAD is more entrenched than ever, but the USA will NEVER cease striving for its God-given ‘Full Spectrum Dominance’ until the regime collapses, or someone goes really bonkers, and causes a thermo-nuclear war. Probably Israel, if their ceaseless aggression gets them in terminal strife.

  13. Hugh O'Neill says

    Alea iacta est. How I would love for this prediction to be true, because the alternative was fast approaching super-power direct confrontation (WWIII) which would quickly become Armageddon. The danger is far from over because there are many who believe that nuclear war is “winnable” (Why else spend trillions in upgrading them?). The US JCS were lusting for this from the time of the Korean war, and JFK was assassinated because he opposed his hawks (vultures?); the intelligence of US generals does not inspire confidence. JFK said to RFK: “If we took their advice, there would be nobody around to tell them they were wrong”…Sadly, they bumped-off all the smart guys.

    • Paul X says

      Very true. The JCS, Pentagon and CIA pressed for First Nuclear strikes against a number of foes, notably Havana in 1962 but others including Central Africa, Vietnam, Cambodia and even Berlin in 1961. Allan Dulles used to say “the First Strike is the last strike”. It’s the same ‘deep state’ as now pushing its own agenda against Presidents who are not with them, like Kennedy, Carter and Trump. Donald lacks any real backbone, unlike the other two and he appears to be buckling under the pressure. Yet he still managed to resist the siren calls of the Hawks by staging a retaliation that was as false as the claim Assad had released nerve gas. He was liasing more with Putin than the US Intelligence community.

  14. Tom Bola says

    Great piece and very true – although I dont see the Petrodollar collapse taking place imminently, more likely in about 20 years. The Petroyuan is here and operating but the US will create a war that ends all wars before the zionists give up their control of the money issuing.

    • Baron says

      It puzzles why the Americans haven’t clued up to the significance of the petroyuan yet, Tom, it’s by far the most significant challenge to their hegemony for it undermines the funding of it, is also a path to the dollar losing its reserve currency status even if it’s only the oil futures that are priced in it currently. When the Libyan Colonel attempted the same (backed also by gold) he was swiftly got rid of.

      • summitflyer says

        Have to wonder why the Russians and the Chinese are accumulating so much gold. Do we really believe that they are being foolish or do they know something that we don’t .

        • Old Pepper says

          In my opinion, China and Russia simply want to protect their economy from the arbitrariness of the Rothschilds controlling the world financial system and dictating the rules of the game in the financial markets.
          The emergence of derivatives has severed financial markets from the real economy and made them dangerously unpredictable – no one knows what the owners of financial markets will throw out the next day.
          One thing is certain – they react harshly to any threat to their power. Remember Saddam Hussein-the US invasion of Iraq and Hussein’s murder was caused only by the fact that he announced his intention to trade oil for euros. Qaddafi’s murder and Libya’s liquidation are a consequence of his attempt to make the gold Dinar the currency of international settlements in Africa.
          Therefore, buying gold by Russia and China is the desire of these countries to protect themselves from the arbitrariness of the Rothschilds.

      • Michael McNulty says

        I think people who trade on the markets will want to see other dollar-denominated commodities find their price in yuan also, from coffee to steel to gold. Global traders are beholden to money only, not any nationality, so if yuan trade can make them more money they’ll want it. I think this sentiment will be the most difficult one of all for the US to challenge, when war can’t stop it.

    • janntje says

      yes,it will probably be more gradual,but didn’t I recently read that the Iranians want to trade in euros?remember Saddam.

    • Jonny says

      Great points, knowing how fickle and money oriented the major Zionists, such as the Rothschilds are, what are the chances of them giving up on the US? Could they “invest” in China, India and Russia, when the US fails, and then start to influence world affairs from an Eastern direction. Follow the money and join the dots, all leads back to several very wealthy players.

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