Contrary to MSM narratives, we’re not building a prosperous brown super power. A globalized USA in which Whites have become a minority would be a failed state because a Third World population simply cannot provide the social services of a First World society while maintaining a global empire indefinitely. At a certain point, the disparity between fiscal imperatives and the ability to pay for them will lead to a reckoning.
That fact that we’ve gotten so far along in the process without experiencing such a crisis can be attributed in large part to the fact that the US dollar is the world’s premier reserve currency. It’s a powerful mechanism which enables the country to run massive deficits while being vendor-financed from abroad. This is an inherently unsustainable arrangement, and thus it must eventually come to an end. That’s not entirely a bad thing. If this globalist project was even remotely affordable, then we’d really be in trouble.
By the end of WWII, the US was an industrial colossus. As a result, it had come into possession of roughly 2/3rds of the world’s monetary gold. Thus, when the postwar economic order was laid out at the Bretton Woods Conference in 1944, it was agreed that the dollar would be the backbone of nearly all currencies. Excess foreign holdings of dollars could be redeemed for gold.
However, by 1971 American deficits rendered this system untenable because sufficient gold reserves no longer existed to exchange for dollars. Other countries had realized that Uncle Sam didn’t have anywhere near enough gold to back all the dollars being created. In simplistic terms, we were sending them dollars in return for free stuff. This prompted a large scale conversion of dollars into gold, which forced Nixon to “temporarily suspend” convertibility. All currencies were now “fiat,” backed by confidence with a price referenced in dollars.
This wasn’t a complete solution because the dollar still needed to remain the basis for international transactions in order to finance deficits. Thus, in 1975 Saudi Arabia (and OPEC by extension) was forced to conduct oil transactions exclusively in dollars. Oil is the world’s largest traded commodity. Any country that either sold or purchased oil had no choice but to accumulate dollars. Nearly 100% of international crude oil transactions are conducted in dollars. This monetary system has been unassailable for decades, reinforced by American economic and military hegemony.
Back in the 1960’s, economist Robert Triffin argued that the country which issues a reserve currency must run trade deficits in order to supply an adequate amount of this currency abroad. Otherwise, it cannot fulfill its function. There’s misguided assumption that this process can continue indefinitely. Yet, as Triffin explained, that’s an unhealthy paradox. Trade deficits are a temporary expedient which eventually leads to a serious problem. The Chinese clearly agree. Among other prominent officials, Zhou Xiaochuan, the recently retired head of the People’s Bank of China, has attributed the financial crisis back in 2008 to the negative effects of dollar hegemony and argued for a gradual termination of the current system.
China is now the world’s largest crude oil importer. On March 26th, it launched the first major step in the broad and lengthy process of breaking dollar hegemony. Crude oil futures can now be traded on China’s own platform via contracts denominated in yuan. In order to attract foreign participants, they’ve been exempted from income tax on commissions for the first 3 years of trading. Moreover, they’re given the option of matching their oil-yuan sale with a yuan-gold purchase on certain exchanges.
Since the implications for American Globalism are so dire yet gradual, it’s largely been dismissed by the MSM as insignificant story rather than the seismic shift that it actually heralds. After all, even if all of China’s oil imports are denominated in yuan, that’s probably only around 12% of the global volume.
Nonetheless, crude oil is not the only commodity that China imports in enormous quantities. It’s merely the first of what’s likely to become a comprehensive list of yuan-denominated commodity transactions. Moreover, China is moving to denominate its broader bilateral trade with other countries in yuan as well. It has the economic clout to prompt this transition across the board. That will only grow stronger as it gradually cultivates confidence in its currency. Expect the ponderous Belt & Road Initiative to play a decisive role as it will offer many projects in which to invest yuan and spur strong growth in demand for commodity imports.
China is approaching a point where it cannot avoid undermining the dollar’s reserve status if it wants to further its own development and mercantilist objectives. It appears to be seeking to reestablish the link between commodity prices and gold (of which they’ve quietly amassed enormous tonnages), while steadily replacing the dollar with the yuan in an economic sphere that will far surpass that of the US. It has little incentive to act impetuously since it holds well over a trillion dollars in US treasuries alone. China probably wouldn’t risk wrecking the value of its assets absent an appalling escalation in hostilities between the US and Russia, Iran, and Syria. Another concern that’s most certainly in the mind of Chinese officials is that during the 2008 financial crisis, exports fell precipitously. It’s clear that they’re looking to make a slow transition rather than induce a meltdown.
China is also confronting the fact that some of its key strategic interests are in Uncle Sam’s gun-sights. For example, Russia sends 25% of its oil exports across their shared 4,200km border. The Russians are engaged in a high stakes game of countering military encirclement while avoiding economic collapse as a result of ever-escalating US sanctions. It’s likely that Russia will ultimately be cut off from SWIFT, an action which the Russian government has described as “crazy.” To counter this, China and Russia launched a new, dollar-free transaction system last year so that their bilateral trade cannot be disrupted. China wishes to scale such systems up in order to protect its entire sphere of non-western economic interests.
Beyond Chinese resentment towards the costs America’s financial dominance imposes on everyone else, there is an understanding that it will not last. Although the timing and specifics of its demise are unclear, the Chinese are certainly planning ahead in order to insulate themselves from the fallout. Any objective outsider assessing the US can simply take a quick look at staggering imbalances: a 2017 trade deficit of $566 billion, soaring federal debt in excess of $21 trillion, a few trillion more in growing state and local debts, unfunded federal liabilities in excess of $100 trillion, unfunded state and local liabilities in excess of $5 trillion. Next, they can weigh these against a contracting productive population, expanding subsidized population, and a GDP of $19.7 trillion in 2017. Moreover, they can cut federal deficit spending from our GDP growth statistics and observe that it’s actually been contracting for years.
When examined in depth, these problems are actually much more serious than this brief summary implies. So, after a rational assessment, who would conclude that this empire will endure for a couple more decades? The Chinese certainly haven’t done so, which is why they’re establishing a new system in order to avoid getting dragged down by ours. A lack of desire to participate in someone else’s train wreck doesn’t necessarily equate to ill-intent. Sure, they’re an intellectual property-thieving, mercantilist nation. Yet, our gravest wounds are self-inflicted.
Is there an upside in all of this?
Well, it’s complicated because choppy waters are on the horizon. It’ll probably be rough on everybody, but not a reason to go build a bunker in Montana. Cheer up, because most things that we here on the Alt-Right find infuriating are also unproductive. Vast swathes of the population are currently employed doing nothing useful whatsoever. Since they generate no return, they couldn’t exist in a more balanced economy. But, while we’re able to unsustainably utilize productivity from abroad, they can keep toiling away. Here’s one example: America fields a vast army of diversity commissars and vibrant make-workers. These parasites can’t be funded forever. We’re fast approaching a time when Americans will be forced to choose whether or not they want the roads paved or someone to keep up the fight against white privilege. What do you think they’ll pick?