Oh what a difference…

Oh, what a difference twenty years makes. Scanning through the finance section on the Telegraph website a piece by Edmund Conway caught my attention. The article, in short, detailed the difficulties the United States would have in financing its debts — particularly since the US bonds tend to have a fairly short maturation — 4.4 years to be exact. This is where the juicy irony comes in… Late in the Bush Administration and now, during the Obama administration, the United States has managed to spend its way into such a hole that it would take generations to pay off. The lion’s share of this, the debts accrued in late 2008 and Obama’s incontinent spending on anything under the sun in 2009 will come due in the period of late 2012-2013. Twenty years before this the Soviet Union collapsed in on itself. The United States will, at that point, be even more reliant on foreign sources for its oil. As the Middle East is rapidly drying-up much of this oil will be Russian. Since the United States doesn’t have two farthings to rub together it will rely increasingly on surplus-states like, say, Russia. to finance its deficits — especially with Mr Hope-and-Change’s  spending plans. It is not that I am overly sympathetic to Russia — Russia is Russia and has its place in the world but is certainly not the most kind or just of lands. It just strikes me that, not too long after the United States poked its finger in Russia’s eye at every opportunity — just a few short years after the American establishment mocked Russia and its travails that the United States would, itself, be prostrate.

Author: Christopher-Dorset

A Bloody Kangaroo

7 thoughts on “Oh what a difference…”

  1. It is interesting, Christopher, and ironically as you say, Russia was enemy, or rather Communism in truth.

    Yes, might well have been better for the US, has they not “won”. They were not the sole cause of the collapse as you say, but it is now a classic case of “”Be careful what you wish for, it might just come true”

    This is late and a hasty response.

  2. Araminta: it was for the best that the USSR collapsed. I have been fortunate enough to know people from former Soviet and Soviet-client states such as Estonia, Lithuania, Poland, Romania, and the Czech Republic who are more than happy that the USSR is dead and gone. The United States made the mistake that victors often make — they, in their triumph, lost sight of their own problems spinning out of control. It seems that when countries do not get too far up themselves after victory, such as the British after the Napoleonic Wars, they will continue to thrive and also avoid bitter hostility from the vanquished enemy. The United States did not show good grace to Russia after the Soviet collapse. Throughout the 1990s little was done but insult Russia and impose on Russia — if not try to push Russia aside when it seemed conducive. It was only in 2003 that a prominent US newspaper referred to Russia as a “glorified petrol station”.

  3. Ah, well, I certainly did not mean to imply that it was bad thing that the USSR collapsed and it was inevitable perhaps, although the aftermath for the citizens and the soviet client states was quite brutal. There were some, and still are some who preferred the old regime. Raw capitalism, combined with corruption is not pretty.

    I do take your point, Christopher, about the attitude of the victors. Realpolitik suggests that at some point is may be sensible to take into account that an Orwell had it right. The “enemy” of today changes.

  4. A very interesting post, Christopher. I read just this morning that China, among others, is now once again purchasing US (and UK) bonds.

  5. There’s an saying along the lines of ‘be careful who you trample on the way up – they will remember when you’re on the way down’…

    I was under the impression that the USA had been conserving its oil resources against the day that the Middle East sources dried up. I’m obviously wrong.

  6. Sheona: China has a policy which prevents it from using its reserves on domestic projects.
    This purchase is likely to be one of the last major ones. It is as the old saying goes: “if I owe you a hundred pounds I have a problem. If I owe you a million pounds you have a problem”.
    There is also a great deal of distrust over the euro and yen. The euro was a foolish thing to do to begin with and Japan’s debts are beyond the point of repayment. It can only finance its debts as it is if they can pay barely any interest.

    Boadicea: one of the biggest supplies of natural gas is off the coast of California. State policy prevents that from benefiting Californians — what is used here is natural gas brought in from elsewhere. The point of that? The labyrinth of local, state, and federal regulations is terrifying and often contradictory. The US might have the oil, but it simply has too many self-imposed obstacles to get to it. Now, after the Gulf Coast leak, there is little pressure being put on further exploration of many sources. (What is not often reported is that Obama called off inspections of BP oil wells in early 2009, with the knowledge of the problems of their design, as they had given him large campaign contributions in 2008. )

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