In this way, the US hopes to preserve the dollar’s premier status as the world’s reserve currency and its world leadership based upon the dollar and its military might. I have a better, cheaper, and more peaceful way to accomplish these US goals (i.e., remove every incentive to leave). It’s as simple as that. At a minimum that means preserving the purchasing power of the dollar and ending the policy of confiscating the assets of other nations, even those with whom the US has serious disputes. In other words, end coercion and begin real world leadership based on trust and fair dealing.

This will be a tall task, because what nation today would believe in America’s honesty, integrity, and commitment to international law? Nevertheless, it is the only way that the American-led West can find its place in a new world. There is a new world coming and the US must be a part of it if it wishes to prosper well into the future and not just through the current election cycle. Here’s a short list of actions that the US should consider adopting:

1. Return all stolen assets to Russia and other nations.
2. End blackballing Russia and other nations from using the SWIFT trade messaging system.
3. Turn the ownership and running of SWIFT to neutral hands, perhaps the Swiss or some combination of nations that cannot be sanctioned by America.
4. Stop inflating the dollar, which of course is the main cause of its loss of purchasing power, in order to balance an out-of-control budget.
5. Return all gold held in American vaults (the New York Fed/Fort Knox) to its rightful owners as quickly as possible.
6. Place the dollar on a true gold standard by shipping American gold to neutral hands where it can be exchanged on demand for dollars. In other words, make the dollar “as good as gold.” (This is the most difficult and contentious action, but it is the only way that the world will accept dollars in the future when there is an alternative through membership in BRICS.)

American attempts to preserve its leadership status in the world will fail unless it enacts reforms such as these, which really are nothing more than behaving in a legal and honorable way. What American would not desire this? But who will believe that America will honor its commitments for the long term?

That is why the SWIFT messaging system and its gold reserve must be placed in neutral hands abroad. We have destroyed our reputation and this is the price we must pay. Otherwise, we will watch one former ally after another slip away to join BRICS, which is certain to adopt protective measures for its participants so that no one nation, no matter how large and powerful, can game the system for its own unearned advantage.

Real leadership is bestowed upon leaders by willing followers, not taken or preserved at the point of a gun.

Look to Past Actions

Tom Fitton, CEO of Judicial Watch, answered this question (regarding another matter) during a Q&A session at the annual banquet of the Conservative Caucus of Delaware. His answer was simplicity itself and should have been obvious to us all. He said that if we want to predict what a person will do, just look at what he did previously under similar circumstances. People really don’t change much. In fact, regarding economic philosophy, my experience has been that it is very, very difficult to entice someone even to consider an alternative.

That is why the Fed has been itching to find any reason whatsoever to lower interest rates. A few weeks ago, the Fed convinced itself and its Keynesian admirers that price inflation had moderated to below its arbitrary target of two percent, which it felt justified lowering the Fed Funds rate by a half a percentage point. Of course, attempting to goose the economy before an election had nothing to do with it. Oh, no. And if you believe this, I have a bridge in Brooklyn I’ll sell you…cheap!

Why Don’t People Change?

A bigger question arises: why continue to do the same thing that caused all the trouble in the first place? Don’t people learn? Don’t they take a good hard look at the never-ending booms and busts and ask themselves why this keeps happening? That answer is more difficult, but I believe it has to do with human nature. No one ever wants to admit that he might be wrong.

All the governments of the Western bloc are wedded to Keynesian economics that itself is rooted in the Great Depression of the 1930’s. Against all evidence and completely ignoring Say’s Law of Markets, in his magnum opus The General Theory of Employment, Interest, and Money, John Maynard Keynes posited that overproduction had caused an unstoppable deflationary price spiral and that the solution was to increase aggregate demand through government spending. This was a godsend to free-spending politicians, who previously had been encouraged—correctly, by the way—to cut government spending in the face of a recession in order to free capital to revive the wealth-generating private sector. The evidence of the rightness of this policy, in addition to its logical correctness, was the post-World War I Wilson-Harding depression that was over in about a year and a half. The government actually cut spending in order to wash out capital-consuming parasites that always emerge during war economies. Mark Thornton has this statement in his 2018 book The Skyscraper Curse: And How Austrian Economists Predicted Every Major Economic Crises of the Last Century:

The alternative approach to business cycle contractions is espoused by the classical economists, the Austrian-school economists, and the real business cycle theorists. This “do nothing” approach involves shrinking government and balancing the budget, expanding resources in the private sector, and a nonexpansionary monetary policy. This was employed by Presidents Woodrow Wilson and Warren G. Harding during the fifteen-month-long depression of 1920–21. This period was one of the most severely deflationary in US history, and yet it is hardly mentioned in history textbooks.

But no one, especially those in government and their politically-connected cronies, will entertain the idea of sound money and reduced government spending today. Oh, no! We are living in the age of “countercyclical spending” in which the cart goes before the horse. In fact, our economic system is full of mandatory spending in the face of recession. All manner of welfare programs have been passed to protect workers and businesses from being forced to adjust to the realities of the market. For example, politicians are lauded for extending unemployment benefits beyond previously-established maximums. But here’s the rub—the economy cannot recover unless people and businesses are willing to change. Working in industries that the market desires at a price the market is willing to pay is the only path to economic recovery. Not working at all and refusing to change business models perpetuates and deepens the recession.

Conclusion

So, what is the answer? It is obvious. The people who have been given the power to enact Keynesian policy must be removed from positions of power. They are not going to change. They and their Keynesian policies must be sent to the dustbin of history. It will not be easy. But it’s either adapt to new market realities or suffer an economic collapse unprecedented in US history.