Thanks for Mr. Adeniran for responding and posting my reply.
"I don't know who Lester is....": I'm a polyglot retired professor of history, investments and entrepreneurship and angel investor in tech startups living in Latvia and Portugal. I represent nobody.
Let's separate the debate into its two essential questions:
1. His forecast that the American empire's demise is imminent.
2. Whether it's morally and geopolitically deserved.
First, the forecasting question:
Mr. Adeniran still hasn't put his money where his mouth is and told readers about his $ short positions. I guess he doesn't have any. I'm an experienced forex trader who used knowledge of financial and Japanese history to short 20m JPY in 2013. Profits: about two years' living expenses: https://medium.com/datadriveninvestor/the-smart-money-studies-history-438531cdb6c
Since the $ is still a safe haven currency and I'm an elderly market bear, I hold lots more $ than euros, CHF or GBP, even though I live in the EU.
"gold represents money": Canada and Australia have lots of gold mines. Compare the volatility and performance of commodity currencies vs the $. The question answers itself. Gold, like any other hard asset, puts the country that holds lots of it at the mercy of its buyers' appetites for that commodity. The anti-commodity currency par excellence, the CHF, is a fiat currency. It's the best performer of any currency. So is its Asian counterpart, the SG$. The idea that the deflationary pro-cyclical gold standard is sound economics was disproved by FDR when he took the US off it in 1933. Keynes advocated counter-cyclical policies in a downturn. The gold standard does the opposite.
"hyperinflation took over": Really? Germany was the only country that briefly had hyperinflation in 1923. At that time reparations-hobbled Germany was certainly not Europe's most important economy. Post-WWI NL, F, IT, GB didn't have hyperinflation. Italian inflation from 1920-24 was about 10% in total. https://encyclopedia.1914-1918-online.net/article/post-war_economies_italy
"Has America paid back its debt to China, Japan....?" --Of course not. A reserve currency empire runs deficits by design to keep its currency as the primary vehicle for international trade. That’s its “exorbitant privilege.”
Debt/GDP ratio: about 1/3 of the 122% US debt to GDP figure is owed by the treasury to the Social Security Administration, the largest holder of treasuries. So the effective ratio is a very affordable 80%. Germany’s is 71%. In 1815 the UK’s debt/GDP ratio was 225% and it was selling 100 year 4% Consols with no problem. Why could it? To paraphrase James Carville’s "it’s the economy stupid": it’s the denominator stupid. The US has a higher growth rate than the EU. It’s debt/GDP ratio is still quite affordable, especially since it’s denominated in its own currency. I’ve already demolished the zombienomics bond vigilante debt hawks elsewhere: https://medium.com/@ljgolden55/zombienomics-or-nikki-haleys-day-of-debt-reckoning-c63ac5e3635d
Evergrande vs Enron, SVB etc: The American counterparts to Evergrande and Country Garden didn't represent 29% of US GDP, as China's real estate sector did. Enron was certainly no structural threat to a booming internet bubble economy.
"American lackeys"--Leninist fossil-speak for "allies". America’s 31 NATO allies must be defined as the same, I suppose. In terms of soft power, the US empire is an historic world champion. Putin has Crimea (for the moment) while America has Marilyn Monroe, Tony Curtis and Jack Lemmon in Some Like it Hot and the imported Hungarian and German Jewish talent that created Hollywood, modern photojournalism, the computer industry and the Manhattan Project (Billy Wilder, Michael "Casablanca" Curtiz, Peter "Maltese Falcon" Lorre, Szilard, Einstein (with his letter to FDR) Teller, Eugen Vigner, John von Neumann, Andy Grove, Andre Kertesz, Robert Capa). Rich viable empires meritocratically import talent from the entire world. China has an unexportable tonal language without an alphabet, the great invention for democratizing literacy.
"Wagner vs France": If you prefer the sledgehammer left at Prigozhin's shrines to the Extractive Industries Transparency Initiative (https://eiti.org/), and believe the late, great warlord of Bakhmut is Africa's liberator, your audience knows how you think. Somehow, Mr. Adeniran still finds Russia's land-based commodity extraction kleptocratic empire built over half a millenium of genocidal conquest of 190+ peoples to be free of the taint of colonialism. How he doesn't see Ukraine's war for independence against its Russifying invader to be as legitimate as Algeria's and Indochina's against France or the anti-apartheid struggle led by Mandela is beyond my comprehension. (BTW it was US-led sanctions against South Africa that convinced the business community to tell DeKlerk to negotiate and choose profits over apartheid).
Burry: There's always a crash coming. Financial markets are both bubblicious and crash prone. I hedge with index puts. At the moment fear is cheap (low implied volatility), so I buy some while having 40% of assets in cash as well as half a dozen uncorrelated to stock market startup investments.
Tying Burry’s put options to a forecast of the imminent demise of the $ and the American empire is laughable. Again, show me screenshots of your bets on this one. I predict Mr. Adeniran will never do this as I have. Why? Because he knows that if he does he will blow up his trading account (if he has one). This de-dollarization fantasy is demolished here: https://medium.com/illumination-curated/russian-useful-idiots-financial-illiteracy-9cef68e82f2c
Argentina: The idea that China, the Saudis and the UAE will subsidize a crippled and already largely dollarized Argentine economy is laughable. Our Latvian grandson is now in La Rioja, Argentina on an international high school exchange and has $1000 in cash to avoid the official exchange rate on cards. That tells you what you need to know about Argentina.
Chile: I remember the other 9/11 very well. I was 18 and saw it as Kissinger-Nixon crime. So why Mr. Adeniran so admires the libertarian and gold standard “Road to Serfdom” Hayek and his allegedly “sound money” policies is beyond my understanding. Hayek was widely condemned for visiting Pinochet’s Chile and praising the regime's Chicago Boys’ policies. But I’m just an FDR Democrat who knows JMK as the best investor of his generation managing the Oxbridge endowmen Chest Fund (12% compounded annual returns from 1921–46). Hayek predicted a renewed depression in the early post-WWII period. Who would you bet your money on? (Keynes vs Hayek rap videos: https://www.youtube.com/results?search_query=keynes+vs+hayek+rap). For me the Keynesian vs Austrian economics debate is over based on their track records alone.
BTW, If I were Chileno I'd have voted for the current president. Same in Colombia. Here’s why:
"American pretensions"--I prefer empires with a fig leaf of soft power lip service to democracy. It confers bargaining power to the geopolitical midgets in that empire's alliances. Would you prefer Vlad the Retreater?
FDR’s Good Neighbor policy was an improvement over what preceded it. The current US-Vietnam relationship is certainly an improvement over the LBJ era. I’m sure the Vietnamese prefer lackey over target status.
Or would Mr. Adeniran prefer the hypocrisy-free models of Mao, Mussolini, Hitler, Hirohito and Stalin?
BRICS new members: Since the BRICS, like NATO, have a unanimity charter, new members will make agreeing on anything more than empty talk that much harder. When Mr. Adeniran gets the phone number of the BRICS' currency's central bank, please send it. When China's mfrs start taking payments in Argentine and Ethiopian currencies, let me know.
"end of the American empire"-- Certainly, but after the demise of the far more malignant Russian and Chinese empires.
The forecasting question: No empire is permanent. 10000 years of post-neolithic history prove that. But forecasting imminent demise? That's like thinking I can forecast the market's short term moves. No sensible investor believes that. But if I had to place a long bet on the USA, Russia or China, I'd bet on the USA. No question. Here's how Mr. Adeniran has fallen into the same underestimating America trap that Japan and Germany did:
https://www.washingtonpost.com/opinions/2023/01/19/robert-kagan-america-trap-world-war-hitler-japan/
Whether demise is deserved: Having lived through the criminal war in Vietnam, the other 9/11 in Chile, American support for Somoza in Nicaragua in 1979 and the 1980s death squad regimes in Central America, I'm quite aware of the crimes of the American empire (https://medium.com/lessons-from-history/post-cards-from-the-border-refugee-crisis-e152c3a7e96c, 1953 Iran, 1954 Guatemala, 1964 Brazil, etc).
So I’d prefer the EU’s shared sovereignty model. In the meantime power abhors a vacuum and the EU’s military pygmy status tells us that none of the above isn’t on the menu, just as it wasn’t on June 23, 1941 when Hitler turned Stalin into Jeffersonian Uncle Joe. Deal with it. Or does Mr. Adeniran despise the American empire and its allies in the institutional West to the point of viewing the victory of Russia’s genocidal Ukraine erasure project as a moral victory? Visit Kyiv, the mass graves in Bucha, Irpin and Izyum and the looted Kherson art museum before answering.
