Monday, August 24, 2015

Decline of Dollar and US Hegemony has Accelerated

Decline of Dollar and US Hegemony has Accelerated  

Stock Slump Continues With Fury: Dow Sheds More Than 1,000 Points Shortly After Opening Bell
AUG 24, 2015 @ 6:35 PM 

Global markets ran red Monday as selling ricocheted from China, through Europe and into the start of U.S. trading.

The Dow Jones Industrial Average shed close to 750 points to open down about 4.5%. Meanwhile the S&P 500 was down about 4.4% at the open and Nasdaq Composite close to 5%. Shortly after the opening bell the slide continued with the Dow down more than 1,000 points for a time before rebounding slightly. The Dow's worst one day point loss ever was 777 0n September 29, 2008.

The Monday morning beating is a continuation of the downturn that began early last week but intensified as the weekend approached. Thursday and Friday were the two worst days of 2015 for U.S. markets with the Dow diving 358 points Thursday and 531 Friday. As of the closing bell Friday the Dow was down 7.7% for the year, the S&P was down 4.3% and the Nasdaq was down 0.6%. Monday is proving to be even worse.

United States

The ultimate medium of trade exchange is Gold only , so had said the 'legendry 'Alan Greenspan, head of US Federal Reserve , a private organisation .Alan should also be blamed for the exhubrance in the US economy ie derivatisation and influx of US$ 3000 billion as stimulus without gold backing .This money without backing and with little or no interest charged  sloshes around the world's stock exchanges .

In 1973 Nixon had gone back on US assurance of giving an ounce of Gold for 35 US dollars on which Dollar as reserve currency was agreed upon after WWII.

US economy after WWII was 50% of world economy .Now it is perhaps 40% of which may be 30% is spurious financial economy .  The 1930s US depression never disappeared .By end 1930s when WWII began , US industry was then turned towards  military production, which it continues to do till now and needs excuses to let the industry-military complex rule .And hence one war after another around the world since end WWII .

Most of so called US inventions have come out of military based research ie internet , created for military communications, civilian Boeing etc aircrafts out of military aircrafts , to name only two examples out of others.

Safe from Nazi attacks during WWII , US produced military hardware and Europe  and others became indebted to US, with UK losing its dominant colonial power role.

So US must lose power and dominance like other colonial powers ie UK, French, Ottoman ,Persian etc did whose currencies had become diluted as dollar has been now vis a vis Gold .

See Charts below ,

China ;

As for China , 50% of its economy is public sector to which banks have given loans , almost as much proportion wise as US 3 trillion stimulus .China has unoccupied buildings and infrastructure .Can a sleek railway line from Beijing to Lhasa return a 10% profit or even 5% .Unlikely . Still China is producing goods which the world needs and its goods can be sold internally .

China has trillions of dollars worth invested in  US securities. So the fate of two economies are tied together as of many others with USA , ie wealthy  Gulf states, Japan and you name it.

The world economy has been transformed into massive Casino , with US its owner setting the rules .But for how long .Perhaps the day of reckoning has come and the whole world will suffer .