US Thinks to Itself: What a Beautiful Recession!

The current world wide depression is a tragedy to the working people everywhere – especially in the third world. The robber barons of US Imperialism, however, are endeavouring to use this ‘crisis’ to increase their hegemony of the world’s strategic resources. The dominance of finance capital over industrial capital pointed out by Lenin is now obvious. Industry’s depression is now finance capital’s boom and the robber barons are on a shopping spree.

The so called ‘bailout’ is exactly that: Bailing public money into the coffers of the financial robber barons responsible for this crisis. Far from improving the situation this massive transfer of wealth to the financial giants is the cause of further financial collapse. The real and possibly intended consequence of the ‘bailout’ is the unprecedented concentration of banking power and wealth into the hands of the financial robber barons. The bailout money is reinvested in the acquisition of real assets. The financial imperialists, through their overriding control over credit, are in the process of transforming paper wealth into the ownership and control of real productive assets around the world, including industry, services, natural resources and infrastructure.

This unprecedented concentration of financial power spearheads entire sectors of industry into bankruptcy, leading to the layoff of tens of thousands of workers. In the US the old giant companies with huge pension fund debts to its workers are being liquidated. This is paving the way for a neo-liberal manufacturing process, free of all the gains won by workers over the past 100 years. The ensuing mass poverty and world wide decline in living standards is the outcome of the preexisting policies of so called economic rationalism that saw whole industries shifted to low wage countries. The current crisis extends the dominance of the cheap labor economy, and subsequent concentrations of working poor to include even the middle class, in the so-called developed countries Michael Chossudovsky sums it up perfectly.

“The financial crisis is being used by Wall Street big-wigs to restructure the economy and create a permanent class of working poor”. [Michel Chossudovsky: The Great Depression of the 21st Century: Collapse of the Real Economy.] http://www.globalresearch.ca/index.php?context=va&aid=10977

In his article The G-20 Washout, Mike Whitney (November 17, 2008) pointed out that the recent G 20 conference was “a blueprint for maintaining dollar hegemony and Wall Street's continued dominance over global finance.”

“Despite the outcry for meaningful reform, the summit only reinforces the status quo; the same old American-led financial system. In fact, there appears to be growing consensus that the IMF should spearhead the programs that provide liquidity to the developing countries that are getting pounded by the downturn. This is a major setback. It restores the IMF--which is the "iron fist" of the US Treasury-- to its former glory so it can once again use its extortionist loans to thrust faltering nations into structural adjustment, privatization and slave wages. The meetings are breathing new life into the failed neo-liberal policies….”

The US dollar is the world’s reserve currency. All OPEC oil and most of the world’s commodity trade is conducted in US dollars. This means all countries trading commodities must retain large reserves of US dollars. The process of trading commodities-hiring ships and more importantly financing and insuring cargoes, is done by the 400 year system of Letters of Credit and this is largely conducted in US dollars. This has been seen as a low risk financial transaction because the loan was guaranteed by the value of the cargo itself. But today the violent fluctuation in the value of commodities has resulted in the collapse of the system which is known as the Baltic Dry Index. [The London Banker and RGE Monitor. Letters of Credit and The Disruption of International Trade: Systemic Risk, Contagion and Trade Finance’ http://www.informationclearinghouse.info/article21231.htm’].

The result is that those with goods to export and those with goods to import, no matter how worthy and well capitalised, are left standing quayside if they lack the bank finance for trade. Non-US banks have been progressively starved of dollar credit. Recent currency swaps between central banks and the allocation of Federal Reserve dollar liquidity has been restricted pro US countries. The US is in the position to constrain or extend trade finance liquidity at its discretion, prejudicing the economic prospects of a large part of the world that is either indifferent or hostile to the continuation of American dollar hegemony.

“If cargo trade stops, a whole lot of supply chain disruption starts. Controlling access to trade finance determines who loses their jobs, whose children go hungry, who riots, which governments fall.” Countries in Latin America such as Venezuela can be brought to their knees, and the IMF (US Treasury) will once again entangle them in their web of debt. November 15, 2008 -- "Global Research"

The US is peddling the idea of a new Breton Woods to restore their world order and dollar tyranny. The people need a system that strengthens national sovereignty, cooperation, and international law and embodies protection for strategic national resources and industries. This is in the interests of working people in Australia. The conspiracies of the Empire directly confront the working people. The Imperialists base their confidence in success on their forces of police, courts and military. That underestimates the strength of a united working class.

Don Wilson
Brisbane, Australia
19 November 2008