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Running on Empty

There is no more consequential issue than the on-going economic ruin of the Republic.

by Bob Gilbert

The fact is, there is little that the rest of the world has any desire to purchase from the U.S. (weaponry being a blood-stained exception).

I was recently reading a stock analyst's evaluation of a Canadian company that owns and operates a fleet of huge container ships. A section of the report particularly caught my eye: "That's a boon considering the trade route from China to Europe is the industry's fastest growing. Many ships that used to carry home furnishings to the U.S. are being rerouted through the Suez Canal to Rotterdam and Hamburg to feed burgeoning Eastern European demand. On the return trip to Asia, 60%-70% of the ships are full with luxury goods and consumables like Evian water. Ships returning from the U.S. are mostly empty." [emphasis provided—Ed.]

Now, the sentence "Ships returning from the U.S. are mostly empty" did not surprise me, since I was familiar with this state of affairs, having visited and having knowledge of the operations at one of the largest ports in the U.S.—Long Beach, CA. Some time ago, I had been told that for every three ships that arrive filled with gewgaws for consumption by the American lemmings, two leave empty. The imbalance has worsened since then. It is also significant to recognize that none of the thousands of the ships in this trade have been built or flagged in the U.S. Other than those very few built to comply with the "Jones Act" (a barrier to shipping erected by Congress to protect a remnant of U.S. shipbuilding from real competition), no owner in his/her right mind would have a ship built in the U.S. today.

Nevertheless, my somewhat informed view of the situation did not inoculate me from the reality of the analyst's stark message. It gave me pause, as it should any American who cares a wit about the sad state of our Republic. The fact is, there is little that the rest of the world has any desire to purchase from the U.S. (weaponry being a blood-stained exception). Our manufacturing base has been allowed to be hollowed-out and replaced by valuable services, such as burger-flipping and latte-making.

While our political "leaders" at all levels, municipal, state, and Federal, fiddle about inconsequential matters, and fiddle away our time and energy creating and blathering about all manner of imagined and semi-imagined ghosts and goblins associated with their opponents, the Republic burns. These "leaders" fill the air with inane jibber-jabber to the extent that there cannot possibly be any rational and reasoned discussion about issues of consequence. Reelection and pandering to the electorate are the operative modes. Economist Joseph Schumpeter succinctly summed up the situation: "Politicians are like bad horsemen who are so preoccupied with staying in the saddle that they can't bother about where they go."

There is no more consequential issue than the on-going economic ruin of the Republic. All of the trillions of dollars spent on national "defense" will be of no account when America's standing as a financial/economic banana republic is confirmed. And, all of the tasteless and baseless rhetorical salvos about who's "patriotic" and who's not, and the silly ramblings about various politically-connected "religious" figures, will do nothing to convince the Chinese to continue loaning Uncle Sugar the money to pay for gold-plated bombs and toilet seats. Amazingly and sadly, "conservative" G.W. Bush and his accomplices have placed more U.S. Treasury debt into the hands of foreign powers than all of his predecessors combined. Of course, he is merely the latest and most profligate in a long line of perpetrators, "liberal" and "conservative."

It is also estimated that China is now earning a negative 18% per annum on their U.S. debt holdings.

It is estimated that the Chinese alone now hold about one trillion dollars of U.S debt. It is also estimated that China—because of raging world-wide inflation and the continuing downward pressures on the value of the U.S. dollar caused by U.S. government and Federal Reserve policies (including the relaxation by China of the U.S. dollar-China renminbi peg that Lindsey Graham has been "demanding")—is now earning a negative 18% per annum on their U.S. debt holdings. Yes, that's negative 18%. The Chinese know this and will act accordingly. And, contrary to R. B. Cheney's flippant proclamations, deficits do matter. Deficit spending and unrestrained borrowing have turned Uncle Sugar into, by far, the biggest dead-beat in the history of the world.

The "plan" for paying off this debt is a continued devaluation of U.S. currency. A dollar bill held at the time of the creation (1913) of the group of private bankers (known as The Federal Reserve System) that exercises control over the U.S. currency, will now buy you about five cents' worth of goods, according to the Government's own calculations. That fact alone, impressed on the minds of an interested, informed and concerned citizenry, should be enough to result in revolution against their uninformed, mendacious and oppressive "leaders." However, the lack of expressed outrage about the traitorous behavior of all manner of political figures leads me to conclude that the "average" American is like the burglary suspect, who, when asked in the course of a police interrogation: "Are you ignorant or just indifferent?," answers: "I don't know and I don't care."

Bob Gilbert writes from South Carolina.

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This story was published on July 11, 2008.