by Bill Bonner
Empires usually end their lives with a heady cocktail of too much spending and too much violence. Often, keeping people under control — at home and abroad — becomes the major expense
A test version of the US Air Force’s Massive Ordinance Air Blast (MOAB ‘bunker buster bomb from 2003, Source: Getty Images
‘History tells us that while all flourishing civilizations look similar, each failing civilization degenerates in a distinctive way. Today, we see unmistakable signs that the West is on an accelerating downward trajectory. Were we to hit bottom, we’d be the first to do so in a state of buffoonery that borders on the hilarious.’
–Michael Brenner
The US is creating its own ‘Devil’s Island.’ USA Today:
In Florida, an ICE detention facility in the middle of the Everglades
“Alligator Alcatraz” expected to house up to 1,000 immigrants
Empires usually end their lives with a heady cocktail of too much spending and too much violence. Often, keeping people under control — at home and abroad — becomes the major expense. An empire is fundamentally a protection racket; what Eisenhower called the ‘military-industrial complex’ is its major beneficiary.
On both scores — money and war — Washington seems to be following the script history provides. But as Michael Brenner tells us, each decaying empire dies in its own ditch.
In the US, 2025, the budget debate shows no sign of ending the deficits that are ruining the US. Instead, progress — towards a fiscal crisis — continues unmolested. USA Today:
Trump’s ‘big, beautiful bill’ is shrinking in the Senate
And the latest bombing of Iran suggests that while a rise in politics and violence may be common to all failing empires, each has its curiosities. Bloomberg reports that Iran’s nuclear research centers may not have been obliterated after all:
US Strikes Inflicted Limited Damage to Iran’s Nuclear Sites, Pentagon Says
A report said the bombing likely didn’t cripple the core components of Iran’s program below ground.
As you recall, the bond market hit an all-time high in July 2020. Since then, it has been downhill for the full faith and credit of the US government. Its debt has sold off more than at any time in history. Bond prices have generally been in retreat for five years. The longest bond ETF – $ZROZ — has lost 60% of its value. The dollar has dropped by 10% this year alone, and foreign stocks have outrun US competitors, 16% to 2%. Foreign buyers of US stocks or bonds have suffered a double hit.
The great bull market in debt, 1982-2020 is well and truly over. And since bond market trends last for a very long time, we should expect rising interest rates for the rest of our lives.
Back in 2020, the Brookings Institute looked ahead and saw:
“Trillion dollar deficits as far as the eye can see.”
Then, in 2023, the Fiscal Times looked out and saw:
“Crisis-sized deficits, as far as the eye can see.”
This year, Pacific Research sees:
“Deficits as far as the eye can see.”
Apparently, only blind people are buying Treasuries.
Deficit gaps need to be filled with borrowed money. The trouble is, a society only has so much in ‘capital’ — savings. It can use it to build more factories, add more infrastructure and fund more innovations. Or, it can be taken by the feds and squandered on budget busters.
Already, as Prof. Stephen Hanke showed us, federal borrowing is ‘crowding out’ private borrowing…which means, more and more of America’s precious savings is being diverted to unproductive ‘investments’ — such as bunker busting bombs.
Which of course, brings us to the second part of the empire-destroying formula. The bunker busters may or may not destroy the bunkers in which the Iranians may or may not be making nuclear bombs. But they definitely help bust the budget of the world’s richest country.
They also help convince foreign countries that they should get together and gun-up to protect themselves. Enemies proliferate…and eventually find a way to bust our own bunkers.
But at least for now, as State Department spokesperson Tammy Bruce put it:
“The US “is still the greatest country on Earth, next to Israel.”
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