The Western world is heading for the next big social and economic crisis. America’s hegemony is waning and its establishment is fighting among themselves. To uphold American supremacy, President Trump and his administration are trying to reshape the nation into a neo-feudal society with a new relationship between the President (sovereign), the financial elite (fief holders, the privileged vassals) and the people (subjects performing socage). If the country is doing well, the population lives in relative stability and the leader is loved. The US is facing a demographic decline and a rapid replacement with migrants from Central America and Africa. This internal development will have profound effects on social stability and economic prosperity. The US can only be a superpower if the country is stable and the nation supports the establishment.
Jerome Powell, the head of the FED, is derailing Trump’s stimulus programme by increasing the interest rate and reducing the federal reserve balance sheet. The actions of the FED result in a drop in stock prices and the increase in the cost of debt servicing for the highly indebted US corporations. The US is now the world’s largest oil consumer and producer thanks to its shale oil industry. However even with the oil price around $70 the industry has lost more than it earned. A high interest rate and a low oil price make the industry vulnerable.
The US will become a neo-feudal nation
The political process that is taking place in the United States resembles the transition that Russia underwent under Vladimir Putin at the beginning of this century. After the initial fall of the system that went by the name of socialism or communism the country was up for grabs to domestic and foreign entrepreneurs, speculators and the powers that be. Within a couple of years there appeared billionaires in an otherwise poor nation and they began to hold the reins of power, even if from the backseat. This economic and political process was only brought under control when Vladimir Putin was appointed president. Gradually Russia’s oligarchs were forced to toe the line in that they were presented with a simple choice: you either work for the benefit of the nation or else. As a result some had to emigrate, some were sentenced to imprisonment, the majority complied.
China is following the same path. Both Moscow and Beijing have arrived at the conclusion that rather than combat unfavourable social and economic phenomena they had better put them to good use. Kleptocrats are not only inevitable but also necessary for a nation to prosper. That explains why the class of super-rich people is not merely tolerated but allowed to make money. These people are tools by means of which Russia and China intend to catch up with and eventually overtake the West.