Tsipras, Putin and the Decline of America

The Tsipras-Putin meeting reflects Greece’s lack of confidence in Europe. Could recent events reveal a lack of confidence in the United States, foreshadowing the decline of America?

Bullion.Directory precious metals analysis 9 April, 2015
By Terry Kinder
Investor, Technical Analyst

President Obama was elected to his first term on a wave of hope. In Berlin, candidate Obama was greeted by throngs of people as he announced,

People of Berlin – people of the world – this is our moment. This is our time.

It was, perhaps, America’s moment, but it soon slipped away. Since then, America has slunk from one blunder to the other. All of the hope, goodwill, faith and trust placed in President Obama was cast like pearls before swine until, what was thought to be another American Century is looking like one that, at least in part, will be shared with China.

Tsipras-Putin Meeting

So, today we witness the Tsipras-Putin meeting. Certainly, Putin and Tsipras have much in common. Their countries have both been deceived by Europe, perhaps willingly, but deceived nonetheless. Tsipras’ Greece believed the lie that a European monetary union, without political union and common debt, could prosper and benefit all of its members over the long-term. Putin’s Russia believed, at the end of the Cold War, that America and Europe would treat them as partners and equals. Instead, Russia has been lied to and isolated. Russia, like China, has been the target of America’s efforts to box them in and cut them off from the rest of the world.

None of this is to say that the motives of the Russian and Chinese governments are more or less pure than that of any other government. None of this is to say there isn’t a certain logic to a policy of containing nations perceived as threats. It is equally logical for the targets of said containment to attempt to break out of the boxes being constructed around them. From America’s standpoint, as long as it can keep the support of its allies, it has a chance to keep Russia and China boxed in. Recent events, however, reveal that America’s closest allies are preparing for a world where U.S. leadership is no longer unquestioned.

Preparing for a World Where U.S. Leadership is no Longer Unquestioned

Below are some recent events:

• Tsipras and Putin meet in Russia as Greece looks to alternative financing should a deal with the Troika (aka The Institutions) fail.
• Vietnam joins Russia-led economic union
• Several nations, including close U.S. allies decide to join the Chinese-led Asia Infrastructure Investment Bank, including China, Germany, Britain, France, Italy, Italy, Iran and UAE.
• China requests to be included in the International Monetary Fund’s Special Drawing Rights (SDR)

Is the American Century Over?

Joseph S. Nye, author of “Is the American Century Over?” doesn’t think it’s over yet, but he does believe it won’t be as easy for America to dominate in the future.

We are, assuredly, moving from a time where the United States has been, effectively, the only major power. Few dared to challenge America after the end of the Cold War. It is likely, that U.S. dominance, especially military dominance, will continue for decades to come.

However, recent events have demonstrated that China and Russia aren’t satisfied with the current balance of power and will not submit to being boxed in economically, militarily or otherwise. Instead, both Russia and China are seeking to construct institutions independent of the U.S. and institutions supported by the U.S. such as the IMF and World Bank.

Future Implications

In a worldwide marketplace of ideas, potential challenges to America should be welcomed by the U.S. rather than feared. These challenges present an opportunity to make course adjustments and restore allies’ confidence in U.S. leadership. Equally, should America continue down its current path and be seen as continuing to overplay its hand, then it could suffer negative long-term consequences, including further loss of confidence both externally and internally. As Martin Armstrong has pointed out often, it is the loss of confidence that, ultimately, results in the decline and fall of empires.

As confidence fails, expect the U.S. Dollar to be adversely affected. It may not be something that occurs overnight. We may even see the dramatic rise of the dollar continue as problems roil Europe. Eventually the crisis of confidence will reach America’s shores and the dollar bull will reverse. In such an environment of political and economic instability it would be wise to buy and hold gold.

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