The crisis facing the US expressed in 3 numbers
Inflation continues to rise, while Wall Street stocks and investment firm Blackrock plummet.
Published: September 18, 2022, 9:53 am
In the Italian weekly l’AntiDiplomatico, Pasquale Cicalese considers the collapse of the US to be unstoppable and justified his argument with three numbers: Core inflation in the USA rose from 5,9 to 6,3 percent, Wall Street lost 5 percent on Tuesday and has not yet recovered, and the investment firm Blackrock lost 7,5 percent on the same day.
These are turbulent times for the global economy: 2008 the financial crisis, 2020 the “pandemic” and now the war in Ukraine. The balance of power is shifting and the hegemon US is constantly losing strength, Cicalese believes.
Inflation not only drives interest rates from the Federal Reserve, but also corrodes asset price inflation, the author explained. Blackrock – which is nothing more than a custodian of other people’s money – currently fears its global customers are withdrawing their money.
The US, “which has lived off other people’s money for 60 years,” is trying to attract capital, Cicalese said. They have succeeded with the Europeans, but other parts of the world, like China, will not be convinced. In addition, the lack of production and the inflation differential with China has led to the economic turmoil in the US and Europe.
According to Cicalese, assets are deflating. This will eventually lead to the destruction of fictitious capital, which – coupled with a non-existent manufacturing economy – would mean the loss of US hegemony. China has registered the collapse of the West and has turned inward.
Il sole 24 ore, an Italian national daily business newspaper owned by Confindustria, the Italian employers’ federation, provided a few more disconcerting figures. In 1950 the proportion of people employed in American industry was 30 percent, today it is 8; the share of world trade accounted for by the US was 25,3 percent in 2000; today it is 16,9 percent; the share of intermediate products, reflecting the overlaps between production systems, has fallen even more, from 24,5 to 16,1 percent; the share of manufacturing industry accounted for by the US fell from 23,2 to 15,7 percent between 2000 and 2008.
And according to Brown University’s Costs of War Project, the conflicts waged by the United States in this century have cost $8 trillion and counting.
Cicalese commented: “I would be interested to know how many of the 8 percent employed in industry work in the defense industry; a country that produces nothing, with hundreds of millions of citizens living on handouts and a few tens of millions engaged in real estate, finance, insurance. We [Italians] are on the same path. When there’s a hitherto unspoken protest from small business owners, freelancers, and retailers, don’t blame the ‘shopkeepers’. They are just the telltale sign of what has been going on in our country for decades.”
It is estimated that half of US economic output depends directly or indirectly on the military and defense industries. In the context of the numbers presented above, this does not bode well for the war in Ukraine and the sabre-rattling with China over Taiwan. “The dominant narrative for keeping the Pentagon budget at its current size remains China, China, China. It matters little that the greatest challenges posed by Beijing are political and economic, not military,” William Hartung noted in The Nation.
Half of the members on the boards of arms-making corporations, working as consultants for the arms industry, or for think tanks heavily funded by the same contractors, serve on the US National Defense Strategy Commission, a congressionally mandated body charged with overseeing the Pentagon’s official strategy document. Not surprisingly, the commission has called for a 3 percent to 5 percent annual increase in the Pentagon budget.
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