US power is faltering

In the 1920ies and 1930ies world power moved from Europe (Great Britain) West accross the Atlantic. It was not until the 1950ies that everybody understood that European power had collapsed and that the USA was racing ahead. The 1956 Suez crisis caused the world to realise what the new power realities were. Exit Europe. All eyes on the USA and the new contender, Soviet Russia and world communism.

Right now we can see a similar power shift. In the stage of the 1920ies and 1930ies shift of power, when the UK needed US capital to develop the economies of its empire in the Middle East and Asia. The new global financial power is China. And it has started to openly flex its muscle: "Two Chinese officials at leading Communist Party bodies have given interviews in recent days warning, for the first time, that Beijing may use its $1,330bn (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies."

And a key US Policy maker is taking heed (HT Parapundit). David Walker, comptroller general of the US recently warned:

"The US government is on a ‘burning platform’ of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon"

The fiscal imbalance meant the US was “on a path toward an explosion of debt”.

The recent waves made by the US sub-prime mortgage crisis only underscore the words of the US comptroller general. European and Asian banks are underwriting US consumption. The US saving rate is close to zero. The US does not have the capital to develop its own infrastructures, let alone the infrastructures of societies in the Middle East. Moreover unfettered Third World immigration is straining US education, transport, health and many other infrastructures. Its economy is strongly consumption driven and this consumption is fuelled by credit. Meanwhile China is sitting on a mountainous treasure, much like Fafnir, Sigurd's Dragon.

The US government and the Federal Reserve must make economies. But these cutbacks will cause a recession and unemployment. Together with a disastrious foreign war this will make US internal politics unstable and depressed in the next decade. Think of the post-Vietnam era, but then much worse.

After 1990, the US was the only power and we lived in uni-polar world. We are moving back into a bi-polar world and I would expect local powers to become restless as well. Similar to what happened in the 1920ies when Japan and Germany tried to fill the British power vacuum with military adventurism and warrior ideologies.

Countries that could play such a role are Iran, Turkey and Egypt, for the Middle East. Iran has already allied itself in the SCO with Russia and China for such a role.

A strengthening Anti-American coalition

The response to the terror attack on New York in 2001 was the US-led invasions of Afghanistan and Iraq. Both countries were not able to resist the US military superiority and succumbed to occupation.

Both however are massive liabilities to the US, eating away resources.

The ruling elites of Non-Western nations looked on in initial alarm at the invasions of Afghanistan and Iraq. Their fear was for their own hides in case the US might try something similar with their own nations, removing the elites from power and bringing Iraq-style disorder to their nations.

Already before the war in the Middle East there was concern in China and Russia about US-hegemonism. In order to strengthen themselves these nations, which are growing in economic and societal power and centeredness started to improve their co-operation.

Initially the co-operation took the form of weapons sales by the cash-starved Russians to the Chinese, plus the transfer of military technology to the Chinese military. Later the co-operation was solidified in the form of the Shanghai Co-operation Organisation (SCO), a formal alliance with a permanent secretariat and staff, based in the capital of China. Kazakhastan, Kyrgystan, Tajikistan and Uzbekistan also became members of the alliance.

Important goals of the alliance is furthering trade between the member states and the fight against terrorism against the member states. China is a dynamic economic and monetary powerhouse and an increasingly strong competitor of Western Nations. Russia is also becoming economically stronger, while it also has technological and military production strength. It furthermore has vast oil reserves, which are increasingly becoming scarce, hence the rising price of oil. The other nations in the alliance are also strong in oil and commodities, underwriting the economic expansion of the more prosperous members of SCO.

Recently Iran, India, Mongolia and Pakistan became members of SCO. This means that the alliance now borders on US occupied Afghanistan and Iraq. Four members of SCO have nuclear weapons (Russia, China, Pakistan and India). The alliance gives Iran enormous strategic depth.

The US is under pressure of the Taliban in Afghanistan. And under pressure of Sunni nationalist and Islamic groups of fighters. These groups are fighting in a highly dispersed pattern, in order to nullify the US lead in firepower.

The US forces fighting the Sunnis in and around Bagdad, the core of the Sunni demographic in Iraq are depending on a long supply line to the port city of Basra on the Persian Gulf. Astride the supply line lie the Shia villages, towns and cities. The Shias thus control US logistics. Weapons, food, spare parts, re-inforcements, fuel, medical evacuation can be turned of if the Shia Mullahs. The Shia Mullahs have been put in power by the US organised elections. And by the dismantling of the old Iraqi Army and the nationalist Baath party, which left religious and tribal groupings as the only forms of social and political organisation in Iraq.

Iran is also able to cut off oil supplies to the rest of the world due to their ability to interdict shipping when it travels through the Hormus Straits, the bottleneck for transporting Iraqi, Kuwaiti, Iranian and most of Saudi Arabia's and Gulf State oil deliveries. Just threatening the flow of oil to Asia and the West would send the oil price sky high, slowing down investment in the US economy and hurting the US labour market, which is already under pressure from out of control Mexican immigration.

The US has a technological edge over Iran, militarily. It will be able to destroy Iranian air defense easily and defeat the Iranian Army in the field. However it will run in far greater trouble than it is currently in when it tries to occupy Iran's population centres and faces a new urban guerrilla from its 68 million population.

And then the Iranians will be able to pull the plug on the US Army in Iraq's logistics lifeline and deny the world economy of its oil in a market that has no swing capacity, as in 1973.

The threats that the US have uttered against Iran on Israel's behalf are essentially empty.