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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