Thursday, April 21, 2022

America in the 2020s: Its Most Dangerous Decade - By Donald W. Miller, Jr., MD

 We face turbulent times. The 2021-2030 decade is stacking up to be the most dangerous one in America’s 32-decade history.

The United States of America emerged from World War II a manufacturing colossus. During the war it built 141 aircraft carriers (all types), 203 submarines, 62,000 bombers (12,700 of them B-17s), 88,000 tanks—and 4 atom bombs. One atom bomb that used uranium was dropped on Hiroshima, August 6, 1945; a second plutonium one was dropped on Nagasaki, August 9. Two more plutonium bombs had been built but not used, when on August 15 Japan surrendered.

The U.S. dollar replaced the British pound sterling as the world’s reserve currency and became a “petrodollar” when the Saudis and other Arab oil nations agreed to accept only U.S. dollars for their oil. When the Soviet Union collapsed in 1991 the USA became the world’s sole super-power. America now, however, must share that status with China and  Russia. Over the last thirty years Russia, shorn of its Soviet Socialist Republics, and China both also have become super-powers, militarily and technologically.

China is fast becoming the world’s largest economy, reflecting its fourfold greater population—1.4 billion people—compared with a U.S. population of 335 million. Both economic and military dangers confront America, which makes the 2021-2030 decade particularly dangerous.

Economic Collapse

U.S. dollar bills once were redeemable in gold, with the avowal “IN GOLD COIN, PAYABLE TO THE BEARER ON DEMAND” printed this way on them. Gold was money, at $20.67 per troy ounce. People used gold coins to make purchases and pay debts, up until 1933 when a presidential Executive Order made it illegal for U.S. citizens to own gold, except for collectible numismatic gold coins and gold jewelry. Foreign countries and their central banks could still exchange U.S. dollars for gold, at $35 per ounce.

America had 21,770 tonnes of gold reserves when World War II ended. With gold priced at $35/oz., this large amount of gold backed only 17 percent of the country’s $147 billion money supply. By 1971 U.S. gold reserves had dropped to less than 10,000 tonnes. This amount backed only 1 percent of the country’s expanding money supply, rendering default inevitable.

The U.S. government completely suspended convertibility of U.S. dollars into gold on August 15, 1971, turning the U.S. dollar into a fiat currency—a government-issued currency not backed by any physical commodities, notably gold or silver.

Americans are suffering increasingly severe inflation caused by a substantial increase in the supply of money. Gold has gone from $35 per ounce in 1971 to $1,950 per ounce now. Priced in gold, the American dollar has lost 98.3% of its value—its purchasing power—over the last 50 years.

John Williams’ newsletter Shadow Government Statistics” calculates inflation the way the Fed did in the 1980s. Williams reports that the March 2022 y/y CPI inflation rate was actually 16.8%, not the Fed’s now measured 8.5% rate. This March’s 16.8% inflation rate tops the 14.8% high set in March of 1980. It is the highest one in 75 years, close behind the 17.6% rate set in June 1947.

Dealing with inflation in the early 1980s, Fed Chair Paul Volker reduced the money supply by drastically raising interest rates, boosting the prime lending rate to 21.5% and the 10-yearTreasury yield to 15.5%. U.S. money supply has grown from $685 billion in 1971 to $21.84 trillion now. Raising interest rates to the 15-20% level now would court economic collapse.

U.S. gold reserves are reported to be ~8,000 tonnes, but half of that amount, or more, may be leased out and not easily retrievable. It has been decades since the physical existence of American gold has been independently checked and validated. Russia and China recently announced that they collectively hold 34,000 tonnes of gold–12,000 tonnes in Russia and 22,000 tonnes in China.

The Russian invasion of Ukraine is dismantling the U.S. petrodollar-dominated global financial system. With American-led economic sanctions blocking transactions in dollars, Russia now will only sell its petroleum products to “unfriendly” (European) nations in rubles or gold. Buyers in China can use their yuan and in India, their rupee to buy Russian oil. The U.S. dollar’s role as the worlds Reserve Currency and Petrodollar is now coming to an end.

In “Weaponized Dollar May Explode in America’s Face,” financial analyst Brian McGlinchey identifies the following consequences resulting from a dethroned dollar: 1) Costlier imports and rising prices; 2) Higher government borrowing costs; 3) Higher rates on mortgages, credit cards and auto loans; 4) Rising deficits; 5) Higher taxes, decreased spending, and/or runaway inflation; and 6) The end of prosperity created by the Fed’s printing press.

Swiss gold expert Egon von Greyerz predicts that the dollar will cease to exist within 5 years, and that the world will see terrifying hyperinflation followed by a deflationary depression. Noting that throughout history all currencies have become extinct, it will be the dollar’s fate next.

In their written language, the Chinese character for money and for gold is the same.

Nuclear War

The war in Ukraine carries a substantial risk of developing into a nuclear World War III. The American media uniformly demonizes President of Russia Vladimir Putin for his “unprovoked invasion of a peaceful neighboring country.” The U.S. and NATO, so far, are only sending Ukraine weapons, not troops, and they have declined to invoke a no-fly-zone.

The U.S., Russia, UK, France, and China are acknowledged “Nuclear Weapon States.” Israel, Pakistan, and North Korea also possess nuclear weapons. And five NATO countries—Belgium, Germany, Italy, the Netherlands, and Turkey house nuclear weapons. Ukraine also had nukes when it was part of the Soviet Union.

There are now some 13,000 nuclear weapons in the world, and the U.S. and Russia share equally 90 percent of them. Russia’s Air Force, for example, has 79 bombers carrying more than 800 nuclear-armed cruise missiles; and its Navy has 12 submarines carrying some 600 nuclear-armed ballistic missiles. A World War III will most likely employ nukes.

A major risk factor for World War III going nuclear is that America is undergoing a Fourth Turning. The concept of generational “Turnings” posits that human history has a seasonal, cyclical nature. Each cycle is around 80 years long. This table shows the four Cycles that have occurred in American history so far:

Each Cycle has four “seasons,” called Turnings. Fourth Turnings are named Crisis, especially since they are associated with war. The American Revolution happened in the Fourth Turning of the country’s initial Revolutionary Cycle, followed by the Civil War and World War II in the Fourth Turnings of subsequent Cycles. The American Revolution had 25,000 military and civilian deaths; the Civil War, 750,000 deaths; and 85 million people died from all causes in World War II. At that rate billions of people will die in a nuclear World War III.

I was born during the last Fourth Turning, in Honolulu, Hawaii where my dad, a Navy surgeon, was stationed, 15 months before the Japanese attacked Pearl Harbor.

We must do everything possible to prevent a World War III. The demonization of Vladimir Putin must stop. Lew Rockwell writes: “Putin is not the maniac they portray hm to be but rather a cautious statesman pursuing Russia’s legitimate security interests.” Oliver Stone does a great job uncovering Vladimir Putin’s true nature in Oliver Stone’s The Putin Interviews,

The Ukraine war actually started in 2014 with the CIA/U.S. State Department-sponsored Maidan Revolution, which overthrew democratically elected (pro-Russian) Prime Minister Viktor Yanukovych. Since then, the Ukrainian neo-Nazi Azov Battalion has been intermittently shelling people in Donbas, the industrial Russian-speaking region in southeastern Ukraine, killing thousands. The final straw for Putin and Russia was Ukraine’s announced intention to join NATO.

Having NATO’s nukes placed in Ukraine and pointed at Moscow 450 miles away is like the Soviet Union installing nuclear-armed ICBMs in Cuba in 1962, pointed at Washington, D.C. 1140 miles away. The United States could not tolerate that, and the world came to the brink of nuclear war until the missiles were removed. Neither will Putin and Russia tolerate them being installed in hostile, neighboring Ukraine.

Americans must back away from confronting Russia in Ukraine, stop sending Ukraine weapons, and drop the economic sanctions imposed on Russia. That might also help the U.S. avoid an economic collapse. Finally, we must heed Albert Einstein: “The release of atomic power has changed everything except our way of thinking… The solution to this problem lies in the heart of mankind. If only, I had known, I should have become a watchmaker.”