After dropping the gold standard, the US maintained its position through dollar recycling, where it purchased from abroad and the dollars sent to pay were invested back into US stocks and bonds. The petrodollar system is the most well known mechanism. US securities became the backbone of the financial system, with foreign central banks and private entities supporting ballooning US debt. Having off-shored its industry and lost its creditor status, the US empire needs a new strategy, and that strategy is to become a rentier economy by obtaining monopoly control over critical aspect of the global economy and charging monopoly rents to everyone else. Essentially this is an attempted takeover of the global economy by a corrupt oligarchic mafia. It’s a bold gamble for a late stage empire facing the loss of its former supremacy as rivals rise and power is shifting eastwards. The plan is being implemented, but there is no guarantee of success. In fact failure is far more likely, and a failed attempt will impose an enormous cost on the entire world in terms of wanton destruction.
The empire is currently attempting to take control of oil globally. It attacked Iran, knowing that would result in the closure of the strait of Hormuz. In the process it cut off shipments to rising powers in Asia. It’s using its Ukranian proxy to destroy Russian oil infrastructure, first refineries and now shipping. It took over Venezuela, and now controls Venezuelan oil revenues, only allowing them to be invested in the US. It had planned to do the same to Iran, and also to use Iranian frozen assets to bail out American farmers harmed by Trump’s failed tariff regime. This has not worked out as intended. It almost certainly encouraged Saudi Arabia to bomb Sanaa airport in Yemen, prompting Ansarallah (the Houthis) to close the Bab-al-Mandab southern entrance to the Red Sea to Saudi shipping, further impacting oil exports. Isolating China is a major goal.
Despite signing a Memorandum of Understanding (MOU) that granted control of Hormuz to Iran, the US moved immediately to pressure Oman into allowing for a southern route through the strait, to be under de facto American control. Iran had proposed a small fee for transit through its northern route, but the US complained this would violate the law of the sea, although various routes through territorial waters (the Dardanelles, the Panama canal, the Suez canal) already charge. Trump then announced that the US would take full control of Hormuz and charge a fee 20 times the size of what Iran had proposed. He later changed this to a demand that the countries of the Gulf invest billions of dollars into US industry instead, and said that henceforth the US would be considered the guardian of Hormuz. This is very unlikely to succeed as the US lacks the military capacity to make it happen, and Iran has the military capacity to prevent it.
The empire also wants control over information technology and the internet. It already has this to a large extent, with only China having its own independent versions of the big American platforms. A few others use the Chinese systems, but much of the world still uses American systems that allow for their populations to be propagandised, sometimes into colour revolutions and regime change if that suits the empire. Digital hygiene is very difficult for countries dependent on these platforms for much of their economic activity. The Silicon Valley techbro oligarchs are major global players, and they’ve already used their platforms to steal enormous amounts of people’s data, and have developed comprehensive surveillance and control technology that they plan to implement everywhere they can reach. Like China, they plan to impose a social credit score system for total control of the population.
The US is building out the data centres it needs for this level of control, but opposition is growing rapidly, due to the huge demand for energy and water, and the impact of noise, light and fumes. The increased demand is forcing up prices to the point where local residents cannot afford to live. One way out of this problem is for the US to partner with its vassal states in the Gulf, encouraging them to build the data centres and use their energy to run them instead of exporting it. Unfortunately for this strategy, those data centres have become targets in retaliation for the damage inflicted on Iran. The US appeared to believe its own propaganda that Iran had been defeated and would not be able to hit back, but as with control over Hormuz, Iran’s capabilities were drastically underestimated. Iran could also damage the internet cables that run through Hormuz, which would further hamper the plans of the empire to exert electronic control at a global level.
China is attempting to avoid the maritime choke points that the US empire is trying to control by building out land based connectivity in the form of railways and pipelines. These have then been bombed by the empire in its war on Iran, which is a critical hinge point in the Belt and Road initiative. The point is to prevent the formation if a coherent block of allies with the economic and military power to challenge the empire. Another American goal is to fully vassalise and then cannibalise as many of its former allies as possible, forcing them into win-lose trade and investment deals, and using their people to fight proxy wars. Dependency is to be locked in, and freedom to act in their own economic self-interest is to be a thing of the past. In earlier stages of vassalisation, some of the client states were allowed to benefit, but once they were fully captured this ended. The process is comparable to the ‘enshitification’ of electronic platforms, which only provided a good experience for users until they had become fully dependent, at which point the expeience was deliberately degraded in order to maximise profits from a captive user base. Europe, Japan, the Philippines, South Korea, and the Gulf monarchies have all been subjected to this to varying extents.
The era of free trade is over. It was only promoted while it was of benefit to the US, as it had previously been promoted because it was of benefit to the British empire. Now, as during the Great Depression, is increasingly an era of sanctions, trade wars, neo-mercantilism, and gunboat diplomacy. In the 1930s, this caused trade to collapse by 66% in two years. Now the globalised world is vastly more dependent on trade, and the complex supply chains that have developed. These have already been compromised by the war in the Gulf, and the situation will get very much sorse if the Red Sea is closed to more than just Saudi shipping, as fully 60% of global goods shipments take this route. The empire intends to control both the passage of goods and the flow of money in return by weaponising the financial system that it largely controls. It has the ability to throttle the economies of non-compliant countries, destroy their currencies, and wreck their banking systems. It already sanctions many countries, although this has sometimes acted to increase the development of self-sufficiency rather than achieving the empire’s desired behaviour change. Russia is a prime example of this, as is Iran to some extent.
There are many looming failure points in the empire’s strategy for global domination. It’s military is not the exceptionally powerful force it once was. It has not been on the winning side of a major war since WW2, which was primarily won by the Russians. It’s bullied many small countries since, but has not faced a peer competitor for a very long time. It consistently underestimates its adversaries, as it regards them as inherently inferior. The world can see that it has been humbled by Iran for exactly this reason. It lacks sufficient naval assets to control enough vital maritime chokepoints. It’s stockpile of missiles and interceptors is substantially depleted, and it lacks the surge capacity to produce more in time. It’s military industrial complex maximises profit rather than battlefield effectiveness, so it’s weaponry tends to be overly complex and too fragile. Its military mindset is outdated, and much of its equipment is obsolete as a result. One only needs to look to Russia and Ukraine to see how modern drone warfare operates, but the US has not learned these lessons.
The US is financially dominant, but also mired in $40 trillion of unrepayable debt. It’s attempting to address this through the issuance of stablecoins backed by US treasuries, pitched at the retail level worldwide. If this succeeded, it would destroy most other currencies, and the commercial banking system, and would distribute support for US debt to the entire population. Stablecoins would also be fully programmable, exactly like the central banks digital currencies (CBDCs) that people are beginning to understand and oppose. They would form a major part of the technological control framework that the techbro oligarchs have in mind, as they could be programmed in accordance with social credit scores, and could be turned off in order to punish dissent.
A financial reset is coming anyway, as the financial system is at the end of a credit cycle. The legal framework has been rewritten to confer super-priority in bankruptcy on the owners of derivatives contracts, which would deprive everyone else of financial assets. The planned asset tokenisation system is then intended to come for the physical assets as well. However, all of this requires a huge increase in complexity, and the ability to implement and maintain complexity is a function of surplus energy, and the global energy system is being destroyed. The empire believes it can conduct a controlled demolition of the global economy and end up the last man standing in control of everything that remains. However, wars are not controllable, and neither is the utter chaos that could easily result from collapsing supply chains. War and chaos are likely to take on a life of their own. No plan survives first contact with an enemy, and the plans of the empire rest on very shaky foundations and a great deal of hubris. The deliberate destruction currently underway will leave a much poorer and more disconnected world in its wake. Empires never die quietly, but this is the first time a failing empire has possessed such destructive capabilities. A dark period in human history is approaching.
