The city of Yekaterinburg may become known not only as the end of the road for the tsars but of American hegemony; where US U-2 pilot Gary Powers was shot down and the US-centered international financial order was brought down.
Challenging America is the prime focus of extended meetings in Yekaterinburg, Russia today for China, Russia and other top officials of the six-nation Shanghai Cooperation Organization (SCO) comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined by Brazil for trade discussions among the BRIC nations (Brazil, Russia, India and China).
US diplomats may ask does this mean an end to US hegemony? What does a multi-polar world mean?. Yet the Yekaterinburg meeting has elicited only a yawn from the US & European press.
Shrub built on Clinton's legacy of driving Russia, China and their neighbors to find a way to replace the dollar which the US has used to run balance-of-payments deficits ad infinitum.
Overspending by U.S. consumers on imports in excess of exports, U.S. buy-outs of foreign companies and real estate, and the dollars that the Pentagon spends abroad all end up in foreign central banks. These banks then face a hard choice: either to recycle these dollars back to the United States by purchasing US Treasury bills, or to let the "free market" force up their currency relative to the dollar thereby pricing their exports out of world markets, creating domestic unemployment and business insolvency.
U.S."free markets" trap other countries in a system that forces them to hold dollars without limit. This system finances the Pentagon and US buyouts of foreign assets expected to yield much more than the Treasury bonds that foreign central banks hold.
The aim of this discussion is to create a reserve currency "that is disconnected from the USA.
China and Russia see the USA as a lawless nation, financially as well as militarily. How else to characterize a nation that proclaims a set of laws for others on war, debt repayment and treatment of prisoners but flouts them itself?
Foreigners see the IMF, World Bank and WTO as Washington surrogates in a financial system backed by 716 American military bases and aircraft carriers encircling the globe. US military power is muscle-bound, based more on atomic weaponry and long-distance air strikes than on ground operations, too politically unpopular to mount on any large scale.
There is no way the US can work off the $4 trillion it owes foreign governments, whose central banks and the sovereign wealth funds set up to dispose of the global dollar glut. America has become a militarily aggressive deadbeat, struggling to hold onto the immense power it once earned by economic means.
US officials wanted to attend the Yekaterinburg meeting as observers. They were told No. It is a word that Americans will hear much more in the future.
Excerpted from Michael Hudson @ Counterpunch
