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.I called Hudson, who had an article in a recent edition of Global Research called “The Yekaterinburg Turning Point: De-Dollarization and the Ending of America’s Financial-Military Hegemony.” “Yekaterinburg,” Hudson writes, “may become known not only as the death place of the czars but of the American empire as well.”23 His article is worth reading, along with John Lanchester’s disturbing exposé of the world’s banking system, titled “It’s Finished,” which appeared in the May 28, 2009, issue of the London Review of Books.“This means the end of the dollar,” Hudson told me:It means China, Russia, India, Pakistan, Iran are forming an official financial and military area to get America out of Eurasia.The balance-of-payments deficit is mainly military in nature.Half of America’s discretionary spending is military.The deficit ends up in the hands of foreign banks, central banks.They don’t have any choice but to recycle the money to buy U.S.government debt.The Asian countries have been financing their own military encirclement.They have been forced to accept dollars that have no chance of being repaid.They are paying for America’s military aggression against them.They want to get rid of this.China, as Hudson points out, has already struck bilateral trade deals with Brazil and Malaysia to denominate their trade in China’s yuan rather than the dollar, pound, or euro.Russia promises to begin trading in the ruble and local currencies.The governor of China’s central bank has openly called for the abandonment of the dollar as reserve currency, suggesting in its place the use of the International Monetary Fund’s Special Drawing Rights.What the new system will be remains unclear, but the flight from the dollar has clearly begun.The goal, in the words of the Russian president, is to build a “multipolar world order” that will break the economic and, by extension, military domination by the United States.China is frantically spending its dollar reserves to buy factories and property around the globe so it can unload its U.S.currency.This is why Aluminum Corporation of China made so many major concessions in the failed attempt to salvage its $19.5 billion alliance with the Rio Tinto mining concern in Australia.It desperately needs to shed its dollars.“China is trying to get rid of all the dollars they can in a trash-forresource deal,” Hudson said.“They will give the dollars to countries willing to sell off their resources since America refuses to sell any of its high-tech industries, even Unocal, to the yellow peril.It realizes these dollars are going to be worthless pretty quickly.”The architects of this new global exchange realize that if they break the dollar they also break America’s military domination.Our military spending cannot be sustained without this cycle of heavy borrowing.The official U.S.defense budget for fiscal year 2008 is $623 billion, even before we add on things like nuclear research.The next closest national military budget is China’s, at $65 billion, according to the Central Intelligence Agency.There are three categories of the balance-of-payment deficits.America imports more than it exports.This is trade.Wall Street and American corporations buy up foreign companies.This is capital movement.The third and most important balance-of-payment deficit for the past fifty years has been Pentagon spending abroad.It is primarily military spending that has been responsible for the balance-of-payments deficit for the last five decades.Look at table five in the Balance of Payments Report, published in the Survey of Current Business quarterly, and check under military spending.There you can see the deficit.To fund our permanent war economy, we have been flooding the world with dollars.The foreign recipients turn the dollars over to their central banks for local currency.The central banks then have a problem.If a central bank does not spend the money in the United States, the exchange rate against the dollar will go up.This will penalize exporters.This has allowed America to print money without restraint to buy imports and foreign companies, fund our military expansion, and ensure that foreign nations like China continue to buy our Treasury Bonds.This cycle appears now to be over.Once the dollar cannot flood central banks and no one buys our Treasury Bonds, our empire collapses.The profligate spending on the military, some $1 trillion when everything is counted, will be unsustainable.“We will have to finance our own military spending,” Hudson warned, “and the only way to do this will be to sharply cut back wage rates.The class war is back in business.Wall Street understands that.This is why it had Bush and Obama give it $10 trillion in a huge rip-off so it can have enough money to survive.”The desperate effort to borrow our way out of financial collapse has promoted a level of state intervention unseen since World War I.It has also led us into uncharted territory.“We have in effect had to declare war to get us out of the hole created by our economic system,” John Lanchester wrote in the London Review of Books.“There is no model or precedent for this, and no way to argue that it’s all right really, because under such-and-such a model of capitalism.there is no such model.It isn’t supposed to work like this, and there is no road map for what’s happened.”24As the dollar plunges, the cost of daily living, from buying food to getting medical care, will become difficult for all but a few.States and cities will see their pension funds drained and finally shut down.The government will be forced to sell off infrastructure, including roads and transport, to private corporations.We will be increasingly charged by privatized utilities—think Enron—for what was once regulated and subsidized [ Pobierz całość w formacie PDF ]