SOUND OFF: Of things to come

The 1944 Bretton Woods Agreement cemented the USD as the world’s reserve currency; thus, beginning the cyclical lender/lendee relationship between the United States and its allies.

A relationship the American right wing now perceives as nothing more than a veiled ‘globalist’ trick meant to keep the United States down, while they decry institutions like the International Monetary Fund as efforts by a hidden – often Jewish – cabal to destroy the very fabric of American society. Consider all the ramblings about George Soros and you get the picture.

Ironically enough, it is these very mechanisms that have placed the United States as the current King of the Hill, so to speak. In fact, as the Council on Foreign Relations puts it, such mechanisms have allowed the U.S. to “…use currency as a tool of diplomacy…” which has, in turn, given them wholesale control of the world order. The recent sanctions on Russia meant to punish them for the invasion of Ukraine are a good example. And there are many others.

Antisemitic conspiracies aside, there remains some shred of truth that it is the United States’ own economic leverages that are causing it pain now. In fact, according to the Council on Foreign Relations, the greenback’s dominance “…hurt domestic industries that sell their goods abroad and lead to job losses.” And they have.

Nowhere is this more apparent than America’s now-defunct manufacturing core, the so-called ‘Steel Belt’ – now aptly named the ‘Rust Belt’.

Indeed, it was promises of restoring the Rust Belt to its former glory which heavily contributed to Donald Trump’s first election to office, and it’s his oaths of ‘restoring balance’ to America’s trade relationships that keep him there.

A fool’s errand, to be sure, for the United States lacks either the comparative or competitive advantages necessary to ever compete industrially with the likes of China (or Canada for that matter).

With this in mind, there are really only two choices facing an administration trying to do so, and neither are particularly attractive: increase their competitive advantage through lowering the value of their currency and, therefore, make domestic production more attractive abroad, or attack their competitor’s comparative advantages through punishing sanctions and tariffs.

But saying and doing are two different things, and enacting plans is rarely as easy as making them.

Any attempt to reduce the value of its currency will only lead to difficulties paying down its ballooned deficit or crash its markets – both of which will, by necessity, lead to the erosion of the average American’s quality of life, while efforts to increase exports among its allies – who are really its customer base – will fail as a result of the strength of its dollar, which will also make it impossible to overcome foreign comparative advantages. A razor tightrope that will end in bloody feet no matter which choice is made!

What causes the rise also causes the decline, remember?

Despite current events it isn’t the United States that I wish to discuss, but another superpower. One that adheres more to Rome’s old-world understanding of strength. Russia.

According to Britannica, by the Second World War’s end the Red Army numbered around 11,365,000. A vast army to hold onto their territorial gains east of Berlin, and also to shield their fledgling empire behind the Iron Curtain.

And yet, Soviet obsession with military might would also prove to be their undoing.

As a result of the competition with the American war machine during the Cold War, the U.S. State Department remarks that the Soviet Union’s “…arms race helped to create the economic conditions that preceded the collapse.” In other words, it was their massive military that eventually led to their ruin. Beginnings and endings, and so on.

Today’s Russia is no different than their Soviet progenitor either, for Vladimir Putin has pursued the exact same type of policy as his predecessors — namely, expansion and expression of power through armed conflict. The invasion of Ukraine serves as a clear example.

Consequently, the Russian Federation is now bleeding itself dry trying to hold onto territory that rightfully belongs to the Ukrainians, all the while using flimsy, lazy justifications to spur on the conflict. It seems that while serving the Soviet Union, Putin forgot to actually learn any lessons from it.

With the backing of the West, Ukrainian defenders have managed to decimate the Russian army to the point that, as the BBC reports, the Kremlin was forced to change its conscription laws to make up for the shortfall.

And things will only get worse for him and Russia when the war ends, for as the Centre for European Policy Analysis states, “…Russia’s dependence on military spending, low-tech exports, and high inflation may lead to economic stagnation of the kind seen in the Soviet Union in the 1980s.” Just like the Soviet Union before it, contemporary Russia is suffocating under the crushing weight of its military. Beginnings and endings, and all that. The cycle continues.

The invasion of Ukraine is, in my humble opinion, the death knell of Putin’s powerbase and the end of the Russian Federation’s position as a global superpower. But only time will tell if Ukraine is able to hold out long enough to see that day, and if Russia will fall by the same methods that propelled its rise.

Until then, Slava Ukraine and the expectation of things to come!

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Editor’s Note: This opinion piece reflects the views of its author, and does not necessarily represent the views of CFJC Today or Pattison Media.

by Jeffrey Peterson

SOUND OFF: Of things to come

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