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

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.

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.