Hurricane Sandy: The Beginning of the End of the USA?

November 21st, 2012
in Op Ed

Editor’s Note:This article is republished with permission of LEAP/E2020. See end of article for credits.

- Public announcement GEAB N°69 (November 16, 2012) -

As anticipated by LEAP/E2020 for several months, a major shock to the world economy and global stability has arrived in the Fall of 2012, in the form of a symbolic landmark in world history: Hurricane Sandy.

In the method of political anticipation upon which LEAP bases its analyses (1), Sandy corresponds to two characteristics: the “last-straw” event in which accumulated failures become unbearable and break the system, and the symbolic event that strikes the imagination and permanently transforms an image of reality, knowing one must always distinguish between the reality of a systemic change (at work since at least 2008) and its collective acceptance (in this case, that America is not what it once was).

Follow up:

The month of October 2012 will appear in history books as the date of the end of America as we knew it in the twentieth century. On October 29, the Hurricane Sandy hit New York 83 years to the day after the Black Tuesday crisis of 1929, revealing to the world the real state of American society and its symbol, New York City. The shift in perceptions in the media has been striking to behold, particularly in light of the aftermath of an election whose results the world should have applauded to: an America “changed,” “divided,” “third world,” “at an impasse,” “apocalyptic,” etc. (see a list of links below). Sandy has definitively shattered the American mirror.

Confirming all forecasts of the LEAP/E2020 team over the last six years regarding the deteriorating health of the U.S., particularly those since GEAB No. 65 (2), Hurricane Sandy is the event marking the last step in the collapse of the American system. Affecting the financial center of the country, highlighting the inability of the nation’s most powerful city to resist a “small” hurricane known about several days in advance, it marks the end of America as it had been known.

As anticipated in January of 2006, the “dollar wall” (3) has been cracking for six years, and Sandy struck it with full force, revealing a “naked king” (4). The devastation of New Orleans by Hurricane Katrina in 2005 can be compared to Chernobyl in 1986 (surprising the world by the poor management of the crisis and the real state of the economy), and the “dollar wall” can be compared to the Berlin Wall. Destroyed by the crisis, the dollar is no longer a wall and 2013 will be the years of the collapse of twentieth century America.

U.S.: Public federal debt, unemployment, manufacturing jobs, trade deficit - Source: Der Spiegel, 05/11/2012
U.S.: Public federal debt, unemployment, manufacturing jobs, trade deficit - Source: Der Spiegel, 05/11/2012
From Katrina to Sandy we passed through the Lehman Brothers and a series of shocks shaking US power down to the bedrock. The confidence of the world is gone. One should take note of an incredible article in Der Spiegel: “Divided States of America: Notes on the Decline of a Great Nation” (5), a real condensation of six years of anticipations from LEAP, which in such a mainstream publication as Der Spiegel is not to be considered trivial.

After Sandy and the presidential election, the media has clearly made a u-turn, including the European media usually so enamored with the U.S., now looking at this country with the critical eye of reality (6). The conclusion is unanimous – the great power that emerged from the Second World War is no more.

In the wake of Sandy, the re-election of Obama left a very bitter taste in half of the U.S. and in the rest of the world, as seen in the press: what should have been good news, for Obama was the best-choice candidate for the rest of the world, actually enables to see no change at all ahead, the worst news of all in light of what is now known about the U.S.’s economic and social situation. Everything that went unresolved in the last four years remains on the table. The campaign tamped them down, and now they emerge stronger and more intractable.

With the re-emergence of those problems evaded during the election campaign, and with the re-election of Obama difficult to swallow for Republicans, the U.S. will not be able to overcome the challenges coming in late 2012 and early 2013: on the economic side, the fiscal cliff, the debt ceiling, the bond bubble, the student loan bubble; on the social side, the explosive divide between the white, pro-Romney majority and the mostly pro-Obama minorities, with, as predicted in GEAB No. 68, the possibility of riots escalating into civil war and secession trends, given the amount of weapons in circulation, which in turn could lead to a military coup in order to maintain order. We develop this analysis of the collapse of the U.S. in GEAB No. 69.

The Dis-United States - Illustration by JP Trostle, (14/11/2012)
The Dis-United States - Illustration by JP Trostle, (14/11/2012)
We also discuss the problems of the U.S.’s big neighbour, Canada, with the explosion of its housing bubble and aftermath. Although the Canadian situation is far less serious than that of the U.S., North America is preparing to live through serious times.

But our team reminds that the crisis is global and will not spare even emerging nations, China in the first place. We’re back in this issue discussing challenges facing China, including social movements that will affect it in 2012 (as we have seen in Europe and the U.S. in the last two issues).

We also, of course, provide our monthly suggestions (on currency exchanges, etc.) and the GlobalEurometre.

Even if we focus on the U.S. this issue, we should not lose sight of the explosive state of the world and of geopolitics in particular, which must be tied to the loss of US influence. As seen in the secondary role it has played in Libya, Mali, and Syria, due to budgetary constraints, America’s new strategy is to outsource its agenda to its partners: France and the U.K. in Libya, ECOWAS in Mali (7), Israel in Syria (8)…The lack of the geopolitical leader of the last 80 years makes the situation in the Middle East particularly parlous, with disparate interests mingling in a cacophony.

It is on the European side or on the Russo-Chinese side that the solutions are to be found in fact. But Europeans are still not ready to dissociate themselves from their former US ally, a self-neutralization in effect. The Russians or Chinese do not have the prestige of “good powers,” those whose interests are combined to true universal values. Therefore, neither Russia nor China, which need to build their image on such values in order to wield real power, can yet replace the lost leader, unless by force, which is the worst solution for them…and for everyone else.

Another sign of the weakening of U.S. power, the Iranian sanctions appear to be powerless except in spreading Iranian hatred of the West. It is a thorn in the Europeans’ foot, which they put there themselves instead of buying oil with Euros. Instead, oil now flows to China and Turkey (still a NATO member), with Turkey paying in gold via Dubai (9). The system exhibits the fragility of the Western alliance and the ease with which countries get over the dollar to pay for their oil, a principle which was the cornerstone of the hegemony of the U.S. Dollar and of the U.S. in the world. In a future issue of GEAB, we will focus on the global challenges surrounding the oil, a central element of today’s geopolitics.

Finally, according to LEAP/E2020, the influence of the U.S. on Europe too is less apparent. If the situation in Europe is not rosy, with high unemployment and increasing poverty in Spain and Greece in particular, the Anglo-Saxon media has become less eager to announce the explosion of the Euro, a less and less credible option, especially compared to the increasingly visible problems of the U.S. – and England. Changes made in Euroland, initiated in pain, are beginning to bear fruit (10). Decoupling from Wall Street and the City has been going on during the “Euro-crisis,” and continues apace (11); in the case of the City, it is the U.K. itself that takes a distance (12). Thus, if Euroland will, like everyone, be shaken by the collapse of the U.S. system, it will not be taken down with it. Nevertheless, many challenges await Europeans, including the fact that the attitude of Angel Merkel does not facilitate discussions with her partners. We shall return in GEAB No. 70 to the political future of Germany in 2013 and beyond.

(1) See A Manual of Political Anticipation, Marie-Hélène Caillol, Editions Anticipolis

(2) Crisis resumption precisely anticipated for the Fall.

(3) See GEAB N°1 and N°52.

(4) Drawn from Andersen’s tale, The Emperor’s New Clothes. Source : Wikipedia

(5) Source: Der Spiegel, 05/11/2012

(6) Read, for example: “L’avenir sombre de l’Amérique, nouvel adversaire d'Obama” (Libération et Süddeutsche Zeitung, 07/11/2012), “Les États-Désunis d'Amérique” (La Tribune, 06/11/2012), “Rebuilding America” (Foreign Policy, 14/11/2012), “Waarom Amerika niet langer wereldmacht is” (, etc.)

(7) Source: Le Monde, 11/11/2012.

(8) Source: The New York Times, 12/11/2012.

(9) Sources : Reuters, 23/10/2012 ; ZeroHedge, 23/10/2012

(10) The latest example being the better European management of certain hedge funds (“naked” CDS and short selling on state debt) has gone relatively unnoticed but strengthens European defenses against financial offenses. Source: Le Monde, 01/11/2012.

(11) For example, in the banking sector, see Seeking Alpha (18/12/2011). Or the German demand to have a right to know more about their gold stored in the U.S. Source: Der Spiegel, 30/10/2012

(12) Sources: Financial Times, 04/11/2012; Le Monde, 31/10/2012; Der Spiegel, 02/11/2012); etc.

Vendredi 16 Novembre 2012

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Editor’s Note: This article is a Global Europe Anticipation Bulletin (GEAB No. 69) from think-tank LEAP/Europe 2020, published in partnership with the Dutch foundation GEFIRA. As such, their aim is to provide state-of-the-art analysis of geo-political anticipation centered around the study and follow-up of the global systemic crisis, itself focused on the evolution of the dollar and of the US economy, and their impact on international economy and financial markets, all that seen from a European perspective.

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