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22 March, 2008

Declining dollar portends collapse of American power

It is well known that the war the US waged to free Kuwait from Iraqi occupation was bankrolled by the Gulf States. That war ended with a clear profit: the funds provided by the oil-rich states exceeded the actual US expenditure.

Who is financing the present US war in Iraq and Afghanistan? These wars are financed principally by China and Japan, which buy the Treasury bonds that the USA issues to balance its budget, says Paul Craig Roberts, an academic who has been Associate Editor of the Wall Street Journal and worked as Assistant Secretary of the Treasury under President Reagan.
Roberts says, financially, the USA is not an independent country. Foreign borrowing is paying government salaries--perhaps that of the President himself--or funding the expenditures of the various cabinet departments.

He warns that the dollar is failing in its role as reserve currency and will soon be abandoned. When that happens, the USA will no longer be able to pay its bills by borrowing more from foreigners.

On to Paul Craig Roberts' article at countercurrents.org site

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