Why we are different ...
American Empire: In recent years, the United States of America has become the undisputed world leader and predominant commercial empire. Although roots of this accomplishment have grown for most of the 20th Century, the technical turning point could be considered year 1945. Why? The U.S. became the real victor of World War II and demonstrated its technological supremacy by detonating the atomic bomb.
What distinguishes the American Empire from others in the past is that it is not about land mass. Beyond its shores the Stars and Stripes flies over only very few territories. In fact, the U.S. has about as many troops (300,000) abroad as did ancient Rome, even though its population is some three times larger. Also, at the time of Jesus Christ world population was estimated at 250 million people vs. today’s 6 billion plus.
The reason, of course is that its power is not territorial, but commercial and cultural. It’s Microsoft , Wal-Mart and General Motors. It’s Hollywood, CNN , Oprah and All in the Family.
In China they watch Titanic. In Israel, they shop at Office Depot . Everywhere, they watch “Who Wants To Be A Millionaire?”
Yet, for all the notions of the pushy Uncle Sam, the Americans seem wary of the world. Oddly, at the height of their power, they have become isolationist. Now they have even less interest in foreign issues than they did during the Cold War; and it is said many members of the U.S. Congress do not even hold passports.
While the U.S. is happy to export its sitcoms and software, today, Americans do not like foreign missions; whether it is making war or keeping peace, they remain suspicious of the U.N. and other international organizations they cannot control. Curiously, Americans do not stay up nights plotting how to dominate the world; being practical people they have little use for ideology preferring simply trade and finance. Perhaps because of this, the world comes to them naturally, as if the universe was unfolding to a preordained commercial script.
Questions: Will this trend continue? How long will the U.S. remain the world leader with obvious implications for the currency and financial markets?
For all the commercial and technological advances few can forget the past humiliations. Political killings of the 60s, defeat in Vietnam, energy debacle, Watergate crisis, rampant crime, gun ownership, racism, political correctness, widespread hypocrisy, cultural crassness and only the most rudimentary insured health care, to name just a few.
No Mystery: Also, only a decade or so ago, the dominant perception was that the U.S. economy was about to be taken over by Japan and other Asian tigers. So, the prosperity of the 1990s was not exactly a mysterium of wisdom and supreme leadership but rather a highly beneficial result of geopolitical and cyclic forces at play at certain historic junctures.
Yet, as long as the present continues, American supremacy will remain unquestioned. And yet, weakening performance of the US Dollar against gold and major currencies may be a signal that the secular end of American Empire may be closer at end then generally perceived.