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Why America love war and conflict and how it benifit from it
Dollar need to go for the sake of world peace
America is private bank that have militar
Ever thought about why America start so many war and conflict?
I. The pattern of the US Dollar Index Cycle
A. The first Financial Empire in history
On August 15, 1971, when the US Dollar stopped being pegged to gold, the Dollar ship threw away its anchor, which was gold.
Let’s take a step back. In July 1944, to help the US to take over the currency hegemony from the British Empire, President Roosevelt pushed for three world systems: the political system – the United Nations; the trade system – the General Agreement on Tariffs and Trade (GATT), which later became the World Trade Organization (WTO); and the currency financial system – the Bretton Woods system.
The Americans’ desire was to establish the US Dollar’s hegemony over the world via the Bretton Woods system. However, from 1944 to 1971, the Dollar didn’t gain that power. What blocked the Dollar? It was gold.
When the Bretton Woods system was set up, the US promised the world that the US Dollar would be pegged to gold while every other country’s currency could peg to the Dollar. One ounce of gold was fixed at US$35. With this promise, the US couldn’t do anything according to its own will. In other words, the Americans couldn’t print an unlimited number of Dollars. Whenever it printed a Dollar bill, it had to add one additional ounce of gold into its treasury as a reserve.
The US made that promise to the world because it held eighty percent of the world’s gold reserve at that time. The Americans thought that, with that much gold in hand, it was enough to support the US Dollar’s credibility.
However, it was not that simple. The US stupidly got involved in the Korean War and the Vietnam War, which cost it dearly. The Vietnam War especially cost US $800 billion. The cost became so much that the US couldn’t bear it. Based on the US’s promise, every time it spent US$35, it meant a loss of one ounce of gold.
By August 1971, the Americans had about 8,800 tons of gold left. They knew they were in trouble. Other people continued creating new trouble for them. For example, French President De Gaulle didn’t trust the US Dollar. He asked the French Finance Minister and Central Bank President and was told that France had about US $2.3 billion Dollars in reserve. He told them to sell all of that for gold. Some other countries followed suit.
Thus, on August 15, 1971, then US President Nixon announced that the US stopped pegging the Dollar to gold. It was the beginning of the collapse of the Bretton Woods system, and also a way in which the Americans cheated the world. However, the world didn’t realize it.
People trusted the US Dollar because it was supported by gold. The US Dollar had been the international currency, the settlement currency, and the reserve currency for over 20 years. People were used to the Dollar. When the US Dollar suddenly lost its tie to gold, it then, in theory, became a pure piece of green paper. Why did people still use it?
In theory people could stop using it., But in practice what would people use for international settlement? Currency is a measure of value. If people stopped using the US Dollar, was there any other currency they trusted?
Thus, the Americans took advantage of people’s inertia and forced the Organization of the Petroleum Exporting Countries (OPEC) to accept the US condition that the world’s oil trade must settle in US Dollars. Previously, oil trades were settled in any international currency, but, since October 1973, settlement was limited to the US Dollar only.
After unpegging from precious metal, the Americans linked their Dollar to oil. Why? The Americans were very clear: people might dislike the US Dollar, but they could not live without energy. Every country needed development and thus needed to consume energy. In this way, the need for oil translated into the need for the US Dollar. For the US, this was a very smart move.
Not many people had a clear understanding of this at the time. People, including economists and financial experts, didn’t realize that the most important thing in the 20th century was not World War I, World War II, or the disintegration of the USSR, but rather the August 15, 1971, disconnection between the US Dollar and gold.
Since that day, a true financial empire has emerged, the US Dollar’s hegemony has been established, and we have entered a true paper currency era. There is no precious metal behind the US Dollar. The government’s credit is the sole support for the US Dollar. The US makes a profit from the whole world. This means that the Americans can obtain material wealth from the world by printing a piece of green paper.
This has never happened in the world before. Throughout mankind’s history there have been many ways for people to obtain wealth: an exchange with currency, gold, or silver, or using war to grab things (however, war is very costly). When the US Dollar became just a piece of green paper, the cost for the US to make money became extremely low.
Without the restriction of gold, the US can print Dollars at will. If they keep a large amount of Dollars inside the US, it will certainly create inflation. If they export Dollars to the world, the whole world is helping the US to deal with its inflation. That’s why inflation is not that high in the US
However, once the US exports its Dollar to the world, it doesn’t have much money. If it continues to print money, the US Dollar will keep devaluing, which is not good for the Americans. Therefore, the US Federal Reserve is not, as some people have imagined, a central bank that prints money irresponsibly. The Federal Reserve knows what “restriction” means. From its establishment in 1913 through 2013, the Federal Reserve only printed US$10 trillion.
B. The relationship between the US Dollar Index Cycle and the Global Economy
The US avoided high inflation by letting the Dollar circulate globally. It also needs to restrain the printing of Dollars to avoid a Dollar devaluation. Then what should it do when it runs out of Dollars?
The Americans came up with a solution: issuing debt to bring the Dollar back to the US The Americans started to play a game of printing money with one hand and borrowing money with the other hand. Printing money can make money. Borrowing money can also make money. This financial economy (using money to make money) is much easier than the real (industry-based) economy. Why will it bother with manufacturing industries that have only low value-adding capabilities?
Since August 15, 1971, the US has gradually stopped its real economy and moved into a virtual economy. It has become an “empty” economy state. Today’s US Gross Domestic Product (GDP) has reached US$18 trillion, but only $5 trillion is from the real economy.
By issuing debt, the US brings a large amount of Dollars from overseas back to the US’s three big markets: the commodity market, the Treasury Bills market, and the stock market. The US repeats this cycle to make money: printing money, exporting money overseas, and bringing money back. The US has thus become a financial empire.
Many people think that imperialism stopped after the U.K. became weak. Actually, the US has conducted a hidden imperialism through the US Dollar and has made other countries its financial colony. Today, many countries, including China, have their own sovereignty, Constitution, and government, but they are dependent on the US Dollar. Their products are measured in Dollars and they have to hand over their material wealth to the US in exchange for the US Dollar.
This can be seen clearly in the cycle of the US Dollar index over the past 40 years. Since 1971, when the US started to print money freely, the US Dollar index has been dropping in value. For ten years, the index has kept going down, indicating that it was overprinted.
Actually, it was not necessarily a bad thing for the world when the US Dollar index went down. It meant an increase in the supply of Dollars and a large outflow of Dollars to other countries. A lot of US Dollars went to Latin America. This investment created the economic boom in Latin America in the 1970s.
In 1979, after flooding the world with US Dollars for nearly 10 years, the Americans decided to reverse the process. The US Dollar index started climbing in 1979. Dollars flew back to the US and other regions received fewer Dollars. Latin America’s economy boomed due to an ample supply of Dollar investment, but this suddenly stopped as its investments dried up.
Argentina, which once had its per capita GDP among the ranks of the developed countries, was then the first to drop into a recession. Unfortunately, then Argentine President Galtieri, who came to power through a military coup, chose to use a war to solve the problem. He turned his eyes toward the Malvinas Islands (which the British called the Falkland Islands), which are 400 miles away from Argentina. These islands had been under British rule for over 100 years. Galtieri decided to take them back.
Of course, he couldn’t take on a war without the US’s blessing. He sent an intermediary to inquire about the US’s opinion. US President Reagan answered it lightly: it was between you and the U.K.; the US had no position and would stay neutral. Galtieri took it as acquiescence by the US He started the war and took over the islands with ease. The Argentinians were crazy.
However, then U.K. Prime Minister Margaret Thatcher claimed that they would absolutely not accept it and forced the US to speak out. Reagan tore off his neutral mask, issuing a statement to blame Argentina for the invasion and to stand by the U.K. The British dispatched a task force with an aircraft carrier, travelling 8,000 miles, to take the Malvinas Islands back.
The US did not start the war, but it did not let a crisis go to waste. At the same time, the US Dollar appreciated and international capital flew back to the US just as the US had wished. When the Malvinas Islands War started, investors around the world concluded that a regional crisis had started in Latin America and the Latin American investment environment would deteriorate. So investors withdrew their capital from there. The Federal Reserve, at the same time, announced an increase in interest rates, which further accelerated the withdrawal of capital from Latin America as well as the appreciation of the Dollar.
The Latin American economy dropped to the bottom. The capital leaving there went to the US’s three big markets. It gave the US the first bull market since the Dollar had been unpegged from gold. The US Dollar index jumped from 60 to 120, a 100 percent increase.
The Americans didn’t stop after making big money from their bull market. Some took the money they just made and went back to Latin America to buy the good assets whose prices had just fallen to the ground. The US harvested handsomely from Latin America’s economy.
If this had happened only once, it could be argued as a small probability event. As it has occurred repeatedly, it indicates an intended pattern.
In 1986, the US had just completed its first cycle of having a weak Dollar for ten years followed by six years of a strong Dollar. The US Dollar index started to decline again. Ten years later, in 1997, the Dollar index started climbing. This time, the strong Dollar also lasted for six years.
During the second ten-year weak US Dollar stage, US Dollars went mainly to Asia. What was the hottest investment concept in the 1980s? It was the “Asian Tigers.” Many people thought it was due to Asians’ hard work and how smart they were. Actually the big reason was the ample investment of US Dollars.
When the Asian economy started to prosper, the Americans felt it was time to harvest. Thus, in 1997, after ten years of a weak Dollar, the Americans reduced the money supply to Asia and created a strong Dollar. Many Asian companies and industries faced an insufficient money supply. The area showed signs of being on the verge of a recession and a financial crisis. This mirrored what happened in Latin America in 1979.
A last straw was needed to break the camel’s back. What was that straw? It was a regional crisis. Should there be a war like the Argentines had? Not necessarily. War is not the only way to create a regional crisis.
We saw that an American financial investor named Soros took his Quantum Fund, as well as over one hundred other hedge funds in the world, and started a short selling attack on Asia’s weakest economy, Thailand. They attacked Thailand’s currency, the Thai Baht, by short selling for a week. This created the Baht crisis. Then it spread south to Malaysia, Singapore, Indonesia, and the Philippines. Then it moved north to Taiwan, Hong Kong, Japan, South Korea, and even Russia. Thus the East Asia financial crisis fully exploded.
The camel’s back was broken. The world’s investors concluded that the Asian investment environment had gone south and withdrew their money. The US Federal Reserve promptly blew the horn and increased the Dollar’s interest rate. The capital coming out of Asia flew to the US’s three big markets, creating the second big bull market in the US It was a mirror image of Latin America.
When the Americans made ample money, they followed the same approach they did in Latin America: they took the money that they made from the Asian financial crisis back to Asia to buy Asia’s good assets which, by then, were at their bottom price. The Asian economy had no capacity to fight back.
The only lucky survivor in this crisis was China
It was as precise as the tide; the US Dollar was strong for six years. Then, in 2002, it started getting weak. Following the same pattern, it stayed weak for ten years. In 2012, the Americans started to prepare to make it strong. They used the same approach: create a regional crisis for other people.
Therefore, we suddenly saw several events happening in relation to China and US allies at that time: the dispute over the Senkaku/Diaoyu Islands with Japan, and the dispute over Scarborough Shoal with the Philippines. All these happened during this period. These might not appear to have much to do with the US Dollar index, but was it really that case? Why did it happen exactly in the tenth year of the US Dollar being weak?
The US could wait a little bit more, because it played with too much fire in its own mortgage market earlier and got itself into a financial crisis in 2008. The US could afford to delay it’s scheduled Dollar hike a bit.
If we acknowledge that there is a US Dollar index cycle and the Americans use this cycle to harvest from other countries, then we can conclude that the next harvesting time for the Americans would be from none other than China. Why? Because China had obtained the largest amount of investment from the world. The size of China’s economy was no longer the size of a single country; it was even bigger than the whole of Latin America and about the same size as the rest of East Asia’s economy.
This also explains the US’s Pivot To Asia foreign and military policy change in 2012, which was really a “Pivot to China”. This also explains the sudden onslaught of negative media, in the US and all of its allies such as S. Korea, Japan, NATO, etc., against China since the Pivot To Asia. The Americans were conditioning their population for conflict by portraying China in a negative light, and moving their military to surround China.
Since 2012, incidents have kept popping up around China, including the confrontation over China’s 981 oil rigs with Vietnam and Hong Kong’s “Occupy Central” event. Can they still be viewed as simply accidental? “Occupy Central” was openly supported and funded by the NED (National Endowment for Democracy), a US NGO which is just the public arm for CIA operations. The US has had its hands in toppling many governments around the world since the 1960s. To fully explore this topic would take an entire book, altogether.
Hong Kong authorities in May 2014 heard that an “Occupy Central” movement was being planned and could take place by end of the month. However, it didn’t happen in May, June, July, or August.
What happened? What were they waiting for?
Let’s look at another time table: the US Federal Reserve’s exit from the Quantitative Easing (QE) policy a.k.a printing money. The US said it would stop QE at the beginning of 2014. But it stayed with the QE policy in April, May, June, July, and August. As long as it was in QE, it kept overprinting Dollars and the Dollar‘s price couldn’t go up. Thus, Hong Kong’s “Occupy Central” should not happen either.
At the end of September, the Federal Reserve announced the US would stop it’s QE. The Dollar started going up. Then Hong Kong’s “Occupy Central” almost immediately broke out in early October.
The Senkaku/Diaoyu dispute, Scarborough Shoal, the 981 rigs, and Hong Kong’s “Occupy Central” movement were actually all bombs. The successful explosion of any one of them would lead to a regional crisis or a worsened investment environment around China. That would force the withdrawal of a large amount of investment from this region, which would then return to the US
Perhaps the Chinese knew something was awry, because they did not take the bait. All of these situations were defused and none escalated to the point of international conflict.
As of today, the last straw to break the camel’s back has yet to occur and the Camel is still standing. Therefore, the Federal Reserve couldn’t blow its horn to increase the interest rate, either. The Americans realized that it was hard for them to harvest China, so they looked for an alternative.
Where else did they target? Ukraine, the connection between the EU and Russia. Of course there were some problems under Ukraine President Yanukovych’s administration, but the reason that the Americans picked it was not simply because of his problem. They had three goals: teach a lesson to Yanukovych who didn’t listen to the US, prevent the EU from getting too close to Russia, and create a bad investment environment in Europe.
Thus, a “color revolution,” took place, which the Ukrainians themselves appeared to have led. The US achieved its goal unexpectedly: Russian President Putin took over Crimea. Though the Americans did not plan it, it gave the Americans better reasons to pressure the EU and Japan to join the US in sanctioning Russia, adding more pressure to the EU’s economy.
Why did the Americans do this? People tend to analyze it from the geo-political angle, but rarely the capital angle. After the Ukraine crisis, statistics showed over US$1 trillion in capital left Europe. The US got what it wanted: if it couldn’t get Dollars out of China, it would get Dollars out of Europe.
However, the next step didn’t occur as the Americans planned. The capital out of Europe didn’t go to the US Instead, it went to Hong Kong.
One reason was that the global investors preferred China, which claimed the world’s number one economic growth rate, despite the fact that its economy started to cool down. The other reason was that China announced that it would implement the Shanghai-Hong Kong Stock Connect. Investors over the world wanted to get a handsome return through the Shanghai-Hong Kong Stock Connect.
In the past, Western capital was cautious about entering China’s stock market. A key reason was China’s strict foreign currency control: you can come in freely but you can’t get out at will. After the Shanghai-Hong Kong Stock Connect, they could invest in Shanghai’s market from Hong Kong and leave immediately after making a profit. Therefore, over US$1 trillion stayed in Hong Kong.
This is why the hand behind “Occupy Central” has kept planning a comeback and has not wanted to stop. The Americans need to create a regional crisis for China, to get the money back to the US The US tried one more time in Hong Kong: the 2019 riots.
What started out as a protest over an extradition bill proposed by Hong Kong lawmakers, quickly exploded into an international incident. NED, again, has publicly supported the 2019 Hong Kong Riots.
Riot leader Joshua Wong testified before the US congress. Joshua Wong and high profile opposition leaders Anson Chan and Martin Lee were seen speaking to Julie Eadeh, the US Consulate General in Hong Kong. Opposition leader Jimmy Lai has even met with the Vice President, the second highest position in the US government, Mike Pence. Hong Kong youth were waiving American flags . Some protesters voiced desire to be an independent nation. Videos can be seen of the rioters violently attacking other Hong Kong citizens and police, anyone from mainland China, destroying public infrastructure such as subway stations and roads, and faking their injuries for photographers.
Why was there so much attention put on Hong Kong globally, especially when in 2019 riots raged on in France, Iraq, Afghanistan, etc. with much more death?
(Hong Kong has had two confirmed deaths. One was a rioter who fell off a narrow bridge connecting two parking structures while wandering alone, and a man who was killed after being hit with a brick thrown by a rioter).
Why were the rioters so irrationally violent, destructive, and politically provocative over an extradition bill? The US was baiting Beijing to intervene, but once again Beijing did not take the bait.
Why does the US economy rely so desperately on capital flowing back to its market? It is because, since 1971, the US has given up producing real products. They called the real economy’s low-end or low-value- creating manufacturing industries garbage industries or sunset industries and transferred them to developing countries, especially China. Besides the high-end industries, such as IBM and Microsoft, that it kept, finance become important and it become a hollow state which has little real economy to offer investors a big return.
The Americans have no choice but to open the door of the virtual economy, which is its three big markets. It wants to get the money from the world into these three markets so that it can make money. Then it can use that money to harvest other countries.
The Americans only have this one way to survive now. This is the US’s national survival strategy. The US needs a large amount of capital flowing back to sustain its daily life and its economy. If any country blocks that capital flow, it is the enemy of the US
II. The extreme importance of the US Dollar as the reserve currency of the world
A. Why did the birth of the Euro Lead to a war in Europe?
On January 1, 1999, the Euro was officially born. Three months later, NATO, led by the US, started its war against Yugoslavia. Many people thought the US and NATO fought the war to stop the Milosevic administration’s genocide of the Albanians, a scary humanitarian tragedy. After the war, this was soon proved to be a lie. No country ever does anything that is not in its own self interest. The Americans acknowledged it was a setup, done jointly by the CIA and the Western media. The real goal was to attack the Euro.
The European Union (EU), a US $27 trillion economy when formed. It surpassed the economy of the North American Free Trade Area (FTA) with a size of US $24-25 trillion, becoming the world’s largest economic zone. For such a large economy, the EU didn’t want to use the Dollar to handle its trades, so it created the Euro.
At first, the Euro’s exchange rate to the US Dollar was 1:1.07, but after 72 days of bombing, the Europeans found something was not right: the Euro was ruined. Once again, the US used its military and an international crisis to achieve a goal.
The Euro lost 30 percent of its value; one Euro could only get 0.86 Dollars. The Europeans realized that they had been cheated. This was why later, when the US insisted on having a war with Iraq, France and Germany, two staunch US allies, were unusually strongly opposed to it.
The Kosovo War was an indirect financial war that the Americans fought against the Euro. On the surface it was against Yugoslavia, but the Euro got the real hit. This was because the birth of the Euro touched the US Dollar’s lunch. Before, the US Dollar was used to commanding 80% of the international transaction market. It dropped to 60% of the market when the Euro arrived. The Euro took a big piece of the pie from the Dollar.
Some people say that the Western democratic countries don’t fight among themselves. It is true that, since World War II, the Western countries haven’t officially declared war, but that does not mean they do not have any military conflicts or economic or financial wars amongst themselves.
In 2020, the Dollar is back to being used in 81.08% of all global transaction settlements, and the Euro has also fallen to 7.87%. Europe is back to being an ally to the US.
B. What is the US Trying to Balance with Its “Asia-Pacific Rebalance” aka “Pivot to Asia” Strategy?
China’s rise made China the new challenger to the Dollar’s global dominance. The fights over the Senkaku/Diaoyu Islands and the Scarborough Shoal didn’t cause a large amount of capital to flee out of China, but the Americans achieved partial success–two of China’s efforts died. At the beginning of 2012, China, Japan, and South Korea were close to reaching an agreement on the negotiation of the Northeast Asia FTA. In April 2012, China and Japan had also reached a preliminary agreement on currency exchange and on holding each other’s national debts. However, the conflicts over the Diaoyu/Senkaku Islands and the Scarborough Shoal occurred, blowing away the FTA and the currency exchange.
A few years later, China finally finished the negotiation with South Korea on the bilateral FTA, but it did not have much significance. Why? The original Northeast Asia FTA, once established, would include China, Japan, South Korea, Hong Kong, Macao, and Taiwan. It would be the third largest economy in the world, with a size of over US $20 trillion. Furthermore, it would likely expand south to integrate with the ASEAN FTA, forming the East Asia FTA. That would become the largest economy in the world, with a magnitude of over US$30 trillion in size.
We can further imagine that the East Asia FTA could continue expanding: adding India and South Asia in the south, the five Central Asian countries in the north, and the West Asia countries (part of the Middle East) in the west. This Asia FTA would then have a scale surpassing US$50 trillion, more than the EU and US combined. For such a big FTA, would it use the Euro or the Dollar to settle its internal trade? Of course not. This meant that an “Asian Dollar” would be born.
If indeed there is an Asia FTA, the Renminbi would likely become the primary currency of Asia, just as the US Dollar first became the currency of North America and then the currency of the world. It would, along with the Dollar and the Euro, share the world.
When the Americans announced that they would shift their focus to the East, they pushed the Japanese to create an issue over the Diaoyu Islands and they supported the Philippines to have a confrontation with China over the Scarborough Shoal. Do not be so naive as to think this was just caused by the right-wing Japanese or by the Philippines President Aquino.
It was the Americans’ deep and careful thought to prevent the renminbi from being a challenger to the Dollar. The Americans were very clear about what they were doing. If the Northeast Asia FTA were formed, with its chain reaction, the Renminbi, the Euro, and the Dollar each would a large part of world trading market. Then for the US, would it still have the currency hegemony if it had only one third of it? Without a real economy, if it were to lose its currency hegemony, how could the US remain as the world’s dominator?
Once one understands this, he will know why, behind every one of China’s problem, the US is there. What does the US try to “rebalance” in the Asia-Pacific? Does it really want to play the role of balancer between China and Japan, China and the Philippines, and China and other countries? Of course not. It has only one goal in mind: nullify the trend of China’s rise.
III. The secret that the US Military fights for the Dollar
A. The Iraq War and whose currency was used for oil trades
People all say that the strength of the US is based on three pillars: currency, technology, and military force. Actually today we can see that the real backbone of the US is its currency and military force. The backing of its currency is its military force.
Every country in the world spends a large amount of money when it has a war. The US, however, is unique. It can also make money while spending money on a war. No other country can do that.
Why did the Americans fight a war in Iraq? Many people would answer, “For oil.” However, did the Americans truly fight for oil? No. If they indeed fought for oil, why didn’t they take a single barrel of oil out of Iraq? Also, the crude oil price jumped to US $149 a barrel after the war from a pre-war price of $38 a barrel. The American people didn’t get a low oil price after its army occupied Iraq.
The US fought the war not for oil, but for the Dollar. Why? The reason was simple. To control the world, the US needed the whole world to use the Dollar. It was a great move in 1973 to force Saudi Arabia and other OPEC countries to install the Dollar as the settlement currency for oil trades.
Once you understand that, you can understand why the US fought a war in an oil producing country. The direct result of fighting a war in an oil producing country was to increase the price oil. Once the oil price shot up, the demand for the Dollar also went up.
For example, if you had US$38, you could buy a barrel of crude oil before the war. After the war, the price went up over four times to $149. Your $38 could only get you a quarter of a barrel. How could you get the other three quarters? You had to use your products and resources to trade the Americans for Dollar. Then the US government could openly, legitimately print more Dollars. This was the secret.
The US’s war in Iraq was not only for that goal. It was also to keep the Dollar’s hegemony. Saddam didn’t support terrorists or Al-Qaeda, nor did he have weapons of mass destruction. But why was he still hung? It was because he played a game between the US and EU. After the Euro was created in 1999, he announced that Iraq’s oil trade would be settled in Euros. This angered the Americans, especially when many other countries followed suit. Russian President Putin, Iranian President Ahmadinejad, and Venezuelan President Hugo Chavez all made the same announcement. Libya’s PM Muammar Gaddafi was a strong supporter of creating a single currency for the African Union to be used for oil transactions. Notice these states all suddenly became US enemies.
Before they arrested Saddam, the Americans rushed to form the temporary Iraqi government. The first order that the temporary government published was to announce that the Iraqi oil trade would switch from the Euro back to the Dollar for settlement.
B. The Afghanistan War and the Net-flow of Capital
Someone may say, “I can see that the Americans fought the Iraq War for the Dollar, but Afghanistan does not produce oil. Then it shouldn’t be for the Dollar that the Americans fought the Afghanistan War. Also the war was after the September 11 attack. The whole world knew it was to revenge the Al-Qaeda and punish the Taliban which supported the Al-Qaeda.”
Was that true? The Afghanistan War started a month after September 11. It started in a rush. By the middle of the war, Americans used up all of its cruise missiles. As the war continued, the US Defense Department had to open its nuclear weaponry. It took out 1,000 nuclear cruise missiles, replaced the nuclear warheads with conventional warheads, and fired another 900 cruise missiles to win the war. Obviously the Americans were not ready for this war. Why did they rush into it?
That’s because the Americans couldn’t wait any longer. Their financial life was in big trouble. In the early 21st Century, as a country without real material producing industries, to keep it running at the current level, the US needed to have a net inflow of US$700 billion from other countries every year. After the September 11 event, the global investors showed great concern about the investment environment in the US. As a result, US$300 billion fled from the US quickly and it certainly was not in their typical Dollar Index Cycle plan.
This forced the US to fight a war quickly to stop the fleeing. It was not only to punish the Taliban and Al-Qaeda, but also to rebuild the global investors’ confidence in the US as the most stable and powerful nation. After the first cruise missiles exploded in Kabul, the Dow Jones index jumped up 600 points in one day. The capital that left the US started to flow back. By the end of 2001, US$400 billion came back to the US. Afghanistan was fought for the Dollar and for capital.
C. The Rise of the Renminbi
China’s currency, the Renminbi, is the latest challenger. In 2020, financial transactions in Renminbi are a modest 8.66%, but they will only increase as China rolls out its BRI initiative. This is another reason for the US’s current targeting of China and strong opposition to China’s BRI initiative. Actually it is probably the strongest reason.
Remember, having the US Dollar as the world’s reserve currency is a cornerstone to how the US economy functions.
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Originally Posted by Insuperable
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