May 20, 2023
Dr. Paul Craig Roberts: The United States, despite my best efforts and the efforts of others for decades, has been destroyed by its ruling elites for the sake of short-term profits and short-term growth in power over the people. By offshoring its manufacturing jobs, the global corporations destroyed the American middle class and the ladders to upward mobility that had made America the “opportunity society.” Today many former American manufacturing and industrial cities look like the remains of bombed cities.
As US corporations produce the goods abroad that they market to Americans, the goods enter the US as imports. Thus, offshoring production for the home market worsens the trade deficit.
The trade deficit has to be financed. This is no problem for the US as long as the dollar is in demand as the reserve currency by all countries in order to pay for their international transactions, and countries with trade surpluses keep their monetary surpluses in US Treasury bonds, thus financing both the US trade and budget deficits. Washington in an act of incredible stupidity has driven a dagger through the heart of the US dollar as world reserve currency, thus ending Washington’s ability to pay its bills by printing money. The dagger was the Biden regime’s Russian and other sanctions and the seizure of Russia’s central bank deposits. This finally convinced the rest of the world that holding dollar balances exposed a country to the risk of expropriation or control by Washington.
The consequence is that the world is moving away from the use of the dollar, instead settling their trade balances in their own or other currencies. Therefore, the demand for dollars is declining, but the supply is rising because of the US trade and budget deficits.
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