1. NATO’s “High Five”
Israel’s Netanyahu is a spider in the brain of America’s Donald Trump. The usual game plan is the emperor builds his empire from wealth extracted using his vassals armies.
But in this case we have to update the game plan in a couple of ways. America is using its financial might coming from the exorbitant privilege of having the dollar as the world's reserve currency, as much as its military, to subdue and extract the energy, food, commodities and talent of its vassals.
Another unique feature - the state seems to have become rather dependent on the bond markets - the "Epstein class ++" - to finance its fiscal and trade twin shortfalls.
Also on the technological prowess of the Israel lobby, allowing Israel’s own mini-haha emperor, Netanyahu, to coattail and pursue apocalyptic plans for his own mini empire in West Asia.
2. The Usual Imperial Pattern
But apart from this Israeli wrinkle, the rise and fall follows the usual historic path.
The immense wealth and needs of the capital start pulling in more and more immigrants so that they begin to change and even replace the culture of the original people.
As the rising costs of maintaining the empire, including paying the troops, begin to outstrip the returns, leaving only a cruel and pointless power, the hegemon has many tricks. For example: reduce the value of his currency so making it cheaper to repay his debt. Inflation is the same thing. Raising taxes or tariffs, imposing sanctions or confiscations.
Debasement is a good trick: reduce the precious metal content of the coin by replacing some of the silver with copper while keeping the same face value. Today banks create credit digitally to expand the money supply in the same way.
What we are seeing today is that war is emptying the state’s treasury, having increasing difficulty refinancing its Ponzi scheme, killing trade - which is its lifeblood, the Emperors credibility is evaporating.
3. The Strategic Question
As Mearsheimer constantly reminds us, America is an absolutely ruthless and determined enemy. Well, that is true of all emperors.
It is not clear for how much longer Putin can continue to remain so passive in the face of such provocation without risking being replaced. It seems that his own military and his own people are asking why he is not more aggressive in defending the homeland.
Would you slam an Oreshnik into Whitehall or The City or GCHQ in Cheltenham; or at least go for NATO’s military bases, supply depots, infrastructure, its barracks, ships and aircraft?
Of course that would be a short jog to nuclear Armageddon.
But otherwise, what does Putin have to fear from NATO’s “high five”?
Glossary
NATO Article 5 - the collective defence clause stating that an attack on one NATO member is treated as an attack on all members.
Debasement – reducing the precious metal content of a coin while keeping the same face value, historically used by rulers to finance spending.
Oreshnik - a reported Russian intermediate-range ballistic missile system capable of striking targets across Europe.
Empire - a political system in which a central power exercises control or dominance over other territories or states.
Hegemon - a dominant state or power that exercises leadership, authority, or control over other states within a regional or global system. In modern geopolitical usage it often functions as a softer or analytical synonym for what was called the emperor: a power that creates the institutions, sets the rules of the system, enforces them through military, financial, or political means, and expects other states (often called vassals or "allies" ) to follow its lead.
Bond Markets - the network of financial markets through which governments and large institutions borrow money by issuing bonds, which are tradable debt securities. When the United States runs a budget deficit, the U.S. Treasury sells Treasury bills, notes and bonds to investors. By purchasing these securities, investors effectively lend money to the U.S. government, which uses the proceeds to finance public spending and refinance existing debt. In return, the government promises to repay the principal at maturity and to pay regular interest.
The main buyers are large financial institutions: commercial banks, pension funds, insurance companies, sovereign wealth funds, central banks and asset-management firms operating in global financial centres such as New York, London and Tokyo. Because the U.S. dollar is the world’s principal reserve currency, American Treasury bonds have become the backbone collateral of the global financial system.
Historically the roots of modern bond markets lie in the early development of European financial capitalism in the seventeenth and eighteenth centuries. Institutions in Amsterdam and London helped finance the great chartered trading companies such as the Dutch East India Company and the British East India Company. Over time this system evolved into today’s network of international banks and financial houses concentrated in major financial centres like the City of London and Wall Street, which continue to play a central role in organising global capital and government borrowing.
BIS ank for International Settlements – Global Bond Market Statistics
https://www.bis.org
Niall Ferguson – The Ascent of Money
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