Friday, November 14, 2008

Who is paying USA soldiers?

Most people who read these days understand that the USA is bankrupt and yet maintains over 700 military bases worldwide. In addition, it spends more than 4 billion dollars per week on the Iraq occupation. Soldiers do not kill without being paid. Munitions are not manifactured out of thin air. Of course the Federal Reserve can always turn on the printing press for dollars, which amounts to little more than adding a few zeros to some balance sheet on a computer. How are they getting away with this?

The answer is that the USA dollar has maintained status as world reserve currency since Bretton Woods. As long as it does so, the soldiers will be paid and the bombs will people manufactured with more worthless dollars from the Feds.

But how does the world manage to tolerate such a system of monetary imbalance, and why are we not changing this? How does the USA continue to maintain its military activities at the expense of its own citizens.

The short answer is support for the dollar from China and Japan. China at present is awash with dollars and yuan, but short on gold. China buys the USA debt (treasury bills) which allows the government to run its day to day operations and create more money to finance war activities. If China stopped supporting USA debt, the economic system and the war machine would deflate like an overly full balloon whose stopper is removed.

China is complicit in the war machine in this way but not to be confused as being an ally of USA warmongers; it is rather looking after itself and trying to cut its losses from holding so much dollar debt.

To be sure, Beijing regularly rails against what it sees as Washington's irresponsible stewardship of the dollar and against market volatility that endangers the stability that China craves.

But discussion of the crisis in Beijing is dominated by the risks for China of holding so many dollars in its reserves. Reuters

Once again we have ordinary people, soldier ants and worker bees, who have no (nor do they care to have) an understanding of global economics pointing fingers at each other and blaming everyone for the current situation. Divide and conquer has always been the most effective strategy of the elites seeking to maintain their power.

Until China and Japan find it in their self-interest to abandon the dollar as reserve currency, they will be complicit in the murders committed by the USA military. To this end, all concerned citizens with compassion for others should pressure their governments to abandon the dollar as the dominant trade currency.

Talking is not enough. Spending money on those items not produced in China, Japan or the USA is the only input we have. And let the economic powers that be know why.

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