Economic realties shaping new global order.

 IRREVERSABLE SHIFT UNDERWAY

HOPE FOR MANAGED ACCEPTANCE

This week we see the U.S. set out to insure dominance over the western Hemisphere. This new focus is being caused by the realization that the U.S. can no longer dictate economic and political policies to the world. While there are many who would like to continue that ability, it is on an irreversible path to coming to an end. Attempting to force or intimidate others will only speed up that shift and isolate the U.S. in the future.

We have watched as Trump has attempted to continue that U.S. ability to require adherence with sanctions  and even punishing tariffs. In this hemisphere he is threatening regime change and military punishment. We can assume that there are factions advising everything from increased economic and political pressure to outright war, all will not stop the global shift underway.

We have watched as India openly refused to end oil purchases from Russia and then signed over 20 economic agreements with Russia. Looking at the map, we see they are neighbors, Russia has the resources that India needs and has had respectful and cooperative relations for decades. Threatening economic relations by the United States as compared to the growing economic opportunity in BRICS is a no brainer for India. They cannot damage their economic future for a tentative access to U.S. markets. This reality is materializing most everywhere.

Recently Japan was pressured by the United States to cut off some selective machine tools to China, this resulted in billions of dollars of canceled contracts by China. Those orders were then picked up by Russia and may never return to Japan. The U.S. then pressured Japan to stop buying oil from Russia, the new conservative president did not hesitate in saying, NO. With gulf oil supplies increasingly vulnerable, it will not commit economic suicide, even if it risks access to U.S. markets.

We can expect that this scene is going to be repeated in South Korea, Thailand, Vietnam, Taiwan and even Australia. These countries are all neighbors with China and Russia and a cooperative economic reality is essential to their future. China is the dominant trading partner with all of them and contrary to western narrative, they are not feeling militarily threated by China. 

The same is also true in Africa, were many are throwing off the last remnants of European colonialism in exchange for mutually advantageous economic development and prosperity. 

While the U.S. may attempt to force adherence in the western Hemisphere it will  not be any easy ride. Brazil is committed to economic trade with the BRICS and there is a lot of fence sitters watching what is happening all around the world. More false and disrespectful moves by the U.S. to force control, will likely cause them to move away from the U.S., both politically and economically.

Internally we watched as the fed lowered interest rates, as many hoped, at the same time in reaction, Gold moved to $4325 and silver to $64.10 a symptom of an increase flow out of dollars into metals, in expectation of a further decline in the buying power of the dollar. This is also going to relate to a further hard sell for the increasing U.S. debt, 

While most Americans pay little attention to the dismal situation that the U.S. is in, the rest of the world, adversaries and trading partners, do understand that hard times are in the works.

While many would like to blame Trump for this situation it is an accumulated reality caused by decades of corruption and mismanagement, it will not be saved by any single administration. There is no painless playbook, there is no magic formula, it is a whole spectrum of crisis all converging at once.

I believe the least effective way of dealing with all this is by threats, bluster and intimidation, those tactics no longer work and are counterproductive. The United States can adjust to the new economic realities and even prosper, it will not be painless, but doable. It will need to stop the anti-everybody propaganda and realize the United States does sit in a very secure position with vast oceans all around. Most of the world does not wish the country harm, but does desire a new economic and political reality that respects national sovereignty. 

For the U.S. to be successful it will need to be united. Is that possible or will it be whipsawed by some sort of reaction to more authoritarian and socialist economic policy, similar to what is happening in the EU, that will really put a fork in the great American experiment.