America cannot afford another war

Feb 15, 2024·Alasdair Macleod

America cannot afford another war because the US Government is in a debt trap already, and it would merely hasten the collapse of her finances. Measured in dollars, gold would soar handing economic power to Russia and China.

We can be sure that the highest levels of government in the US Treasury realise this. Earlier this month, a team of five Treasury officials went to Beijing “to discuss the economy”. We can be certain that the Treasury’s real concern is to find out China’s intentions with respect to her Treasury holdings, and at the least persuade her not to sell any more. 

This is an approach by the Americans on bended knee. The Treasury has already tapped out banking and money fund liquidity by issuing T-bills at an interest cost of over 5%, and in the next few months will have to start issuing notes and bonds of longer maturities. As the marginal demand factor, foreigners must be persuaded that it is in their interest to keep buying so as to put a cap on yields.

The problem for the Treasury is that they can talk to their opposite numbers in China as much as they like, but the reality is that America’s political class is openly belligerent against China over Taiwan, and also against Russia and Iran — China’s allies. China has shown herself to be more patient with the Americans than Russia and Iran. But unless China can extract convincing commitments from America to back off over Taiwan and what they are now calling West Asia (the Middle East to us), the hapless Treasury officials are likely to leave empty handed.

With Donald Trump likely to be the next US President, to the Chinese convincing commitments are virtually impossible, particularly with America’s track record of reneging on its promises and the upcoming presidential regime change. Therefore, the US Treasury will have to tell the White House that funding the anticipated budget deficit will be very difficult. Consequently, the US cannot afford to continue funding Ukraine and protect the Israelis in a conflict which will not only increase the already record budget deficit, but by potentially driving oil and gas prices higher collapse the American economy and those of her NATO partners. Therefore, for the foreseeable future — which is not very long — it remains predominantly a propaganda war, the state of which was revealed by Tucker Carlson’s interview of a calm, cool, and collected President Putin.

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