Unemployment is close to record lows, available jobs exceed the number of job seekers, the economy is growing at a healthy 2.4 percent annual rate or faster, and measured inflation is coming down. Yet consumer confidence fell this month to its lowest level in four months, and the share of Americans describing their current family financial condition as “bad” rose. Pew Research pollsters report that 65 percent of Americans feel exhausted when thinking about politics, 55 percent feel anger and 60 percent have an unfavorable view of both parties. More than 70 percent of Americans believe the country is on the wrong track.
Reasons For The Winter Of Our Discontent.
It isn’t easy to remain cheerful when interest rates are set “higher for longer,” meaning you might never be able to afford a home of your own as mortgage rates soar from 3 percent to more than 7 percent.
It isn’t easy to remain cheerful when the prices of gasoline and food, the items you buy most frequently, continue an upward trajectory while the savings you accumulated during the pandemic are gone and your credit card is showing signs of wear and tear.
It isn’t easy to remain cheerful when you wake up in the morning not knowing whether your civil servants have been furloughed by a government shutdown, eventually to be compensated with your tax dollars for the time they spent walking the dog, playing with the kids, and 75 percent continue their practice of staying away from the office.
It isn’t easy watching televised lootings that make hundreds of stores so unsafe for staff and customers, and so unprofitable that they are shuttered while miscreants go unpunished.
And it isn’t easy facing a future in which you might be forced to choose between a man seeking vengeance on perceived enemies, including “the Fascists in the White House”, and one who can’t say “hello” to a foreign visitor without reading it from a cue card on his lap, and doing nothing to prevent the economic destruction of cities receiving the 2.2 million immigrants who have crossed the southern border illegally so far this year.
It isn’t easy waking up in a world in which America’s adversaries, led by China’s Xi Jinping and abetted by Russia’s Vladimir Putin, seem to be on the move, extending their hostile presence to within a few miles of Alaska in the north and Florida in the south, while creating a New World Order to replace the American-led democratic alliance.
America’s Enemies Aim To Kill The King
These opponents of democratic capitalism know that victory will require more than military power. It will require replacing America as the world’s leading economic power by ending King Dollar’s reign as the world’s reserve currency.
That role as a reserve currency makes the greenback a powerful weapon in the new cold war. It allows America to impose sanctions on China, Russia, Iran and fellow travelers of the new Axis of Despots. As asset manager Mark Tinker puts it, “If you disagree with U.S. foreign policy, you risk having … [your dollar reserves] confiscated or frozen.” Those sanctions have caused the ruble to lose one-third of its value, and the Russian central bank to raise interest rates to a growth-stifling 13 percent. That’s power.
Acceptance of the dollar as a reserve currency also allows America to continue borrowing at lower interest rates than other countries, providing a boost to economic growth. Its value relative to other countries’ currencies controls the flow of world trade. As treasury secretary John Connally told a group of European finance ministers as they reeled from President Nixon’s 1971 decision to end the dollar’s convertibility to gold, “The dollar is our currency, but it’s your problem.”
XI Is A Patient Assassin
Xi would dearly love to be able to say the same thing of China’s currency, but his currency management and the absence of any semblance of the rule of law in China makes that a far-off day. Until then, slow progress will suffice. His new best friend will now accept yuan in payment for Russian oil he sells to China and to his largest customer, India. India and the United Arab Emirates now trade with each other in their local currencies, as do China and Brazil. Malaysia is calling for the establishment of an Asian Monetary Fund and has begun settling its trade with India in rupees. The BRICS countries – Brazil, Russia, India, China and South Africa – are considering a currency to replace the dollar in their cross-border trade.
Tinker sums it up, “There is a whole non-U.S. block that’s growing. I think there is going to be a re-internationalization of [currency] flows.”
The dollar now accounts for 88 percent of payments in global transactions, and has for decades. But its share of world reserve currencies has declined from 71 percent in 2000 to 58 percent, and is headed lower as our politicians’ financial incontinence induces central bankers to diversify their reserve portfolios further.
There’s A Lesson In “Sixteen Tons”
With the national debt at $33 trillion and rising, we can ill afford to open our eyes every morning as did the coal miners in Tennessee Ernie Ford’s 1956 ballad, “another day older and deeper in debt”.