The Big Sulk – The US Is The Spoiled Brat At Every Party

Thanks. I look forward to seeing it.

Like I say, I’d expect the $system’s “vigorish” to be in the <0.1% region. Whatever the number is, enormous sums flow to the US allowing its govt to spend nearly $1T more than it takes in, but also yields enormous sums for Wall St.
Of course, the real power that flows from owning the $ystem is coercive. The $ystem dictates onerous terms to "non-core" members that keep them at the fringes of development and allows their resources to be exploited by the core group while effectively preventing them to develop as competitors.

Cat, thanks for the thoughtful reply.

“All of it is/was going to happen anyway, the deal might stave it off a while but it was never going to stop that train let alone reverse its direction…The lie is their implication all this will not happen if Congress just signs the deal:”
Of course, what can’t go on won’t and everyone knows it, but if you’ve got a good thing going the first imperative is to do nothing to bring it to a stop, and especially not to an abrupt, uncontrolled stop. That that fundamental strategy has apparently been Trumped by ME political considerations and Zionist ideology is what makes the situation dangerous. One worries that things haven’t been thought through.

My point was that the JCPOA helps extend the lifespan of the U$ystem, and so it was imperative that it be executed and maintained. The goal, presumably, would then be to bring “that train” to a controlled stop – aka, a soft(er) landing – over a period of decades. The whole world wants this, but the world is starting to realize that a harsh reality is coming sooner rather than later. That the US is not acting pragmatically, but according to an alien, self-destructive ideology that threatens to pull the temple down over everyone’s heads.

Nevertheless, the US doing a crash ‘n burn train wreck is in no-ones’ interest. The US is at the core of all of the international institutions that run the modern world – and it’s not just the dollar, but extends across 100s of fields from industrial and scientific standards, to trade, governance, legal, educational, humanitarian, military and cultural institutions, etc, etc. An American crash ‘n burn would cut those 100s of institutions, agreements and treaties adrift from their moorings and they would have to be re-constituted to resume their work. Not a small task. It took 100 yrs to build them, and it would probably mean that many of them would simply never be re-constituted. In quite a few cases, that may be a good thing, but the uncertainties surrounding such a collapse would create international chaos and no-one really knows what the world would look like “the day after”.

The other thing that gets forgotten in these discussions is that the collapse of the U$ystem, and specifically the dollar itself, means that every currency necessarily collapses with it. From the Yuan to the Rouble, to the EURO, to the Rand, every currency in the U$ystem is but a derivative of the dollar. There’s more Dollars outside the US than inside. If the dollars that reside overseas, in the various Central Banks’ reserves as well as privately in the reserves of international banks, corporations and even individuals go suddenly worthless, the local currencies necessarily go suddenly worthless with them. Unless the entire U$ystem is also immediately abrogated and some new system, with its 1000s of rules and credit creation processes pops instantly into its place, there will be serious, long-lasting disruptions to the trade that almost all economies are today dependent on. Yes, preparations are underway on bilateral terms amongst a few dozen nations, but there are no multi-lateral preparations that have developed to the point where they can begin to imagine taking up the slack.

That’s just not gonna be allowed to happen, unless extraordinary circumstances pertain. We’re not there yet, and Putin’s primary message when he announced Russia’s new weapons is that there’s no there there. As John Connally told the Europeans when Nixon closed the gold window: “It may be our dollar, but it’s your problem”. He was dead right, and what Trump is now doing is plain, good ol’ brinksmanship in the mould of Nixon’s declaration that the dollar ain’t “good as gold” anymore, and “whachyagonnadoaboudit”? In the event, they did nothing. The gambit worked.

By cancelling the JCPOA, Trump’s daring the Europeans especially, but by extension the rest of the world, to break the dollar and collapse the world’s economy. He’s saying “I double dog dare ya”. It’s the financial/monetary equivalent of MAD, and like the nuclear MAD of the cold war, it’s “held the peace” financially for decades. I’d be surprised if the authors of this move haven’t gamed it out and reached the conclusion that the world will back down again. I’d also be surprised if they gamed it out far enough to understand that the world will now come to the realization that they will have to force the U$ystem to crash ‘n burn to save themselves and will begin working on just that. Their goal, I’d surmise, will be to be ready just prior to the US reaching that moment “When the times comes that “being in the right” is no longer as important as “going to war”…” and thus prevent them from going to war by collapsing the US’ ability to pay for it, if Putin’s message failed to get through.

IOW, “We’d have to cut off countries like China from the American financial system
Hasn’t happened yet – but China (and Russia) are prepared for it.”
I seriously doubt they are across the entire spectrum of what’s required, especially for China who’s current well-being and future plans are utterly dependent on international stability. Rather, I expect that “countries like China” will throw their own dare back at the US and force it to look the other way while the sanctions were broken.

“China +Russia had already begun their conversion to “own currencies” and were already drawing other countries into that pot.”
Currency swaps, as China & Russia and others have instituted can ameliorate the impact of a U$ystem collapse by allowing a trickle of trade to continue flowing. There’s no escaping the radical reduction in liquidity that would follow a $$ crash, but currency swaps will allow trade to keep trickling along and to grow as new systems get created and come on line.

In summary, it ain’t that simple.