Financial, Economic and Social Mood Update (July 1, 2020)
The subject of this month’s update is the apparent fall of the “American empire.” America has likely never been as dysfunctional as it is today, which is represented by its utter lack of leadership on the national level. Whatever the outcome of its national election in November 2020, America needs to rejoin the global community of nations in a fully functional manner and the world as a whole needs to work together, to cooperate, to make this world work and function much better and much more fairly & morally for all of its inhabitants, be they human or otherwise. According to one of the regional Federal Reserve Banks, US GDP (Gross Domestic Product) has collapsed by 52 percent since the Covid 19 pandemic began – significantly worse than during the Great Depression of 1929-1941. And the Federal Reserve is now bailing out more companies than banks, insurers, automakers – incredibly, they are now pumping money into the likes of AT&T, Walmart, Apple Computer and even the distiller Jack Daniel’s. If even Walmart and Apple need to be bailed out, America is doomed.
Official job losses equal 45 million (27 percent of the labor force). When one includes those partially furloughed or with pay cuts, this jumps to almost 100 million people. 31 percent of Americans have stopped paying or are now behind on their bills, health insurance and debt payments. 47 percent of small businesses in the USA anticipate closing PERMANENTLY (from a survey taken by Alzo, a financial services company) – this includes 85 percent of independently owned restaurants. As small businesses in the USA still employ 58.9 million people today (after the loss of 43 million jobs due to the pandemic) this would add yet another 27,683,000 Americans to the ranks of the unemployed for a grand total of 72,183,000 people – a staggering 43 percent of the pre-pandemic US labor force of 167 million people. Yet another strong warning sign with respect to the lack of health of the US economy is a survey done by www.studyfinds.org that 47 percent of homeowners are considering selling their homes due to difficulties with making their mortgage payments. In 2004, 33 percent of brand new housing in the USA was financially subsidized by quasi-government entities, which require new homebuyers to be employed (or to have a pension), to have annual income below a certain level (USD $70,000 in 2014) and to have virtually no liquidity (less than a few thousand Dollars in total savings). Today, an incredible 65 percent of brand new housing in the USA is financially subsidized by such quasi-government entities – yet more proof of the evaporating purchasing power of the now feeble US Dollar. Safewealth Group of Switzerland forecasts a US inflation rate of 22.5 percent per annum by 2022, but grocery store food prices have already risen by a whopping 70 percent since the pandemic began.
GDP in the United Kingdom has collapsed by 20 percent due to the pandemic, and auto manufacturing in the UK had collapsed by 95 percent in the month of May 2020 compared to the same period one year ago.
Political groupings coalesce around interest groups and factions, and today’s world has no fewer than three major and one minor groups. These groups include 1) Mainland China (the PRC), 2) the formerly British Commonwealth, 3) the Roman Catholic Church (i.e., Europe and especially the European Union or EU centered in Germany) and 4) a non-majority of the USA (i.e., what remains of the past American power structure).
The largest group centers on Mainland China, which includes China and those countries working most closely with China – this comprises roughly 44 percent of the human race on earth today. Most people outside of China have profoundly little understanding and knowledge of China, which can easily translate into xenophobia. The fact of the matter is that modern China, for all of its shortcomings, behaves very much as China has throughout its very long history – going back to the time when China was a monarchy with an emperor. Many people in the West (especially in the USA) resent China for its newfound prosperity and might. But what we see today is a modern Chinese state which has overturned imperialism and which has returned China to her ancient global position of wealth and power. The peak of imperialism was in 1914 just before the outbreak of World War One. At that time, Europe, America and Japan pretty much ruled the entire world. China was one of the last parts of the world which was very much in the process of being carved up into spheres of colonies and influence by the Europeans, the Americans and the Japanese. World War One put an end to that.
The second largest global grouping centers on the formerly British Commonwealth of Nations (35 percent of the human race). Its largest members are not British – they include the likes of India, Pakistan, Nigeria and Bangladesh (these 4 countries comprising 79 percent of the Commonwealth’s population). The Commonwealth is a trans-national legislative legacy of the former British Empire. Its largest member, India, much like China, was a bona-fide superpower for much of ancient history – up to the time when the European powers expanded globally during the era of “discovery,” colonialism and imperialism.
The third largest global grouping centers on the Roman Catholic Church (the Judeo-Christian church), Europe, the European Union (EU), and non-European countries around the world which share this way of life (20 percent of the human race). The Roman Catholic Church is not merely successor to Jesus Christ – it is also the most major global geopolitical organization which influences finance, economics and governments regardless of these entities being in a Roman Catholic country or not.
Europe’s geographical, economic and financial center remains Germany. The former “Holy Roman Empire of the German Nation” (800-1806) named itself the successor to the old Roman Empire, as well as naming itself the “First German Empire,” or “Reich” in German. The most powerful German-speaking state during that time was Austria, which was ruled by the noble family of Habsburg-Lorraine. This family remained on top of German affairs until it was displaced by Prussian Germany in 1866, which became a modern nation-state and which proclaimed a “Second German Empire” which lasted from 1871-1918. The inept leadership of the Second German Empire led to the mistake we know as the First World War (1914-1918) – its leadership was inept, but not evil. The humiliation of defeat but most especially the worldwide economic depression which followed led to extreme tragedy of the “Third German Empire” (1933-1945) whose leadership was blatantly evil, and the to the tragedies of the Holocaust and the Second World War (1939-1945). Postwar German governments have consistently made amends for the wrongdoings of the past. These amends can never undo history, but good behavior since that time, today and into the future ensure that such a tragedy will not be repeated. In other words, it is by changing our outlook and behavior that we can become better people. The modern day European Union (EU) seeks to ensure that there will never again be war, most especially never again a “world war.” Germany continues to be on the receiving end of bad feelings largely in the Western world, due to the fact that two world wars put a brutal end to the European & American adventure into global colonialism & imperialism. But the flip side of this is that modern Germany’s (and modern Europe’s) reputation in the rest of the world is extremely good. Modern Europe, much like modern China, has ventured into the rest of world in the form of economic development, exports and many quality products which the peoples of the world both want and need. The future of global finance could well see Bitcoin (and other similar digital electronic crypto-currencies) representing the value of gold bullion and other tangible natural resources around the world. The paper fiat US Dollar may be replaced by the new digital electronic Chinese Yuan as the world’s primary reserve currency.
The sole remaining group (minor in global population but still in the possession of nuclear weaponry) is what remains of the old power structure of the USA…………representing but minority (less than half) of the entire American population. It is this group now in the midst of a political and societal collapse, much like the former Soviet Union collapsed in 1991. With political change, hopefully this group will rejoin the rest of the world in an effort to make the entire world a better place for all of its inhabitants, with no exceptions. Note that major Republican figures including Colin Powell (US Secretary of State from 2001-2005), Carly Fiorina (former CEO of Hewlett-Packard and the GOP candidate for the US Senate from California for 2010), Mark Cuban, George Walker Bush (US President from 2001-2009) and Mitt Romney (GOP candidate for President in 2012) as well of hundreds of higher level employees from the Bush administration have all said that they will NOT back the attempted re-election of Donald John Trump in November 2020 – much like the national Republican party did not endorse David Duke when he ran for both US Senator from Louisiana (1990) and for Governor of Louisiana (1991).
The major secular global legislative body since 1945 has been the United Nations (UN) in New York City, where 195 member nations have one seat each regardless of their population. The UN Security Council is something of an “upper house” of parliament which has 15 members, including 5 permanent members with “veto” power and 10 rotating members with no veto power. This is a less representative and less direct form of government, comparable to the US Senate where all 50 US states have 2 Senators regardless of population. Next month’s blog will address the issue of the need for more representative government on this global level as well, with the alternatives being parliamentary systems “first past the post” (i.e., by individual districts as in the UK, Canada, the USA, Australia, New Zealand and South Africa) or based upon more proportional representation as in the European Union and other parts of the world.
