Superpower Under Siege
By Joel Hilliker
March 2006
It is difficult to imagine the United States becoming a second- or
third-rate power. Of course, the same was true of the formerly great Britain just a
century ago.
From a resources standpoint, the British Empire was enormously wealthy. With
far-flung colonies encircling the globe, and possessing the mightiest navy
in history, it controlled the world’s most strategic sea gates, thereby
securing the world’s trade. Canada, Australia, New Zealand, India, Gibraltar, Hong
Kong, Hawaii, the Falkland Islands, many Caribbean islands and much of Africa
—including South Africa, Rhodesia, Kenya, Egypt and Sudan—all hoisted the
Union Jack. Under the colonial relationship, the British colonies (later to be
known as the British Commonwealth) had a guaranteed market for selling
their raw resources: Mother Britain. Conversely, British manufacturing was
guaranteed an exclusive market for its goods: all of the British colonies. On the
back of this system, Britain and its colonies became among the richest
nations on Earth.
The picture dramatically changed with World Wars i and ii, which bled
Britain of its finest men and the lion’s share of its treasure. Though resources
flowing from the colonies helped sustain Britain through both wars, by the
end of World War ii Britain was bankrupt. It could no longer sustain the
operating costs associated with empire, particularly that of maintaining a
military capable of protecting resource-supplying countries.
The resource demand void left by Britain was soon filled by the rising
industrial power of the United States (and the developing markets of East
Asia). The U.S. dominated the Western Hemisphere for the latter half of the
20th century, and when the Cold War ended, it became the world’s lone
superpower. Its economy and military might stood unrivaled.
But superpower status is incredibly expensive. And just as the costly
tragedies of world war hobbled the British Empire’s ship of state, so are the
rising costs of sitting atop this dangerous and catastrophe-prone world taking
their toll on America.
Troubling Trends
The American economy is now unsustainably bloated with debt. Where the U.S.
once outproduced all other nations with its resource-fueled, self-sufficient
economy, it is now the world’s largest debtor nation by far—a net importer
of goods from food to consumables, even the high-tech goods whose production
it pioneered. Saddled on one side with wartime expenses from operations in
Iraq and Afghanistan, and on the other by pricey natural disasters and a
jittery job market at home, America couldn’t be facing a supply crunch and price
hike on vital resources at a worse time.
Thus far, the U.S. has gotten away with carrying such a large deficit,
partly because it owns the world’s reserve currency and nations have been eager
to hold dollars in their vaults. But this privileged position is slipping away
as confidence in the dollar falls and its status as a reserve currency is
challenged by a younger, and increasingly attractive, rival—the euro. Over the
last several years, central banks around the world have let go their dollar
reserves while increasing their euro holdings.
We are witnessing the beginning of a devastating trend: foreign capital
flight.
As the dollar’s status as the world’s reserve currency shifts, so too will
strategic power in global markets. The U.S. will simply no longer enjoy the
many advantages of owning the world’s reserve currency. It happened to Great
Britain after World War ii. It will happen to the U.S.
But the forces eroding American dominance are more malevolent than just the
capricious winds of currency valuation. From South America to Europe to
Asia, many nations are calculating how best to cripple the world’s largest
consumer of resources and to assume control over its suppliers. The U.S.’s shaky
economic position and absorbing commitment to the war on terror is providing
these nations a unique opportunity.
For example, China saw Washington’s post-9/11 disengagement from Latin
America and the Caribbean, and the ensuing explosion in anti-Americanism in
those regions, as an opportunity to pounce. It has moved in on America’s oil
supply in Venezuela and taken control of vital sea gates through which
resources must travel into the U.S.—the Panama Canal and Freeport, Bahamas. The
greatest concentration of U.S. oil refineries, terminals and storage facilities,
including the nation’s Strategic Petroleum Reserve, is in the Gulf of Mexico
region, which means that much of the oil must pass through the Caribbean—a
route now significantly controlled by China. In addition, China is establishing
a huge deep-water port in Gwadar, Pakistan, at the entrance to the Persian
Gulf.
These troubling moves must be viewed in combination with those of two other
powers that pose an increasing danger to U.S. trade traffic: the Islamic
powers and the European Union. Islamic governments presently control access to
Persian Gulf oil resources through the gulfs of Oman and Aden and the Suez
Canal, with China operating many of their major port facilities. Turkey,
another Islamic state, stands at the crossroads of the Dardanelles, pathway of
oil from Eurasia. The southern gateways of Jakarta and the Straits of
Malacca, through which shipments from Pacific and Asian oil fields must be
transported, are bordered by Islamic nations. The European Union controls the
crucial northern gates of the Mediterranean and the North Sea, through which oil
from Russia, the Caucasus and Eurasia passes.
Lack of control over these strategic gateways puts the U.S. in a very
vulnerable position—one that is sure to be exploited in the coming resource war!
Can we recognize the possibility of foreign powers, when the moment is
right, simply blockading these supply lines—shutting the gate on trade with the “
mighty” U.S.?
As the United States is declining—like Britain in the 20th century—other
powers are rising quickly, and their thirst for resources, primarily energy, is
also growing rapidly. This need puts these countries in direct competition
with the U.S.—and with each other.
With reporting by Robert Morley
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