Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: End of American Empire Page 4 of 12

Keep Your Eyes On The Long Game of Imperial Collapse

By

On January 5, 2026

35 Comments

The kidnapping of Maduro is fascinating and it’s interesting to speculate whether it was inside job. Some sources have claimed it, we’ll know by the actions the new leadership takes. If they let the oil majors and American “advisors” in, then the allegations are probably true. Other sources are saying that Acting President Delcy and the new leadership are actually more dedicated Chavistas than Maduro was. Until we see what the Venezuelan government we don’t know which storyline is true.

There’s also talk of taking Greenland and perhaps even Canada or Mexico.

This is all standard late Imperial collapse messiness.

But nothing has changed in the fundamentals. The US is in auto-catabolic collapse and so far there is no sign of the oligarchy losing control, which is the pre-condition for any attempts to change the trajectory. I’ve now seen data indicating China is leading in 89% of key tech fields, up from 80% a couple years ago. US industry is still collapsing. Research funding has been slashed. Final bastions like chips, AI, civil aviation and biotech/pharma are all under assault and will fall like dominoes over the next five to ten years. The US has no ship building capacity to speak of, is behind on drones and missiles (the key weapon systems of modern war) and can’t even make key components in its military chain without Chinese help. Dollar hegemony is no more than five years out from being lost.

None of the trends have changed, and there is zero sign that they will change. Actions against Venezuela will speed up the purchases of Russian and Chinese AA, missiles and drones by other countries to avoid this situation, and while China’s reluctant to send “advisors”, Russia is much less so and once the Ukraine war is over (this year or next) it’ll be happy to do so, with combat proven troops and tech. This is going to make South America more resistant to America and more determined to diversify away, not less.

As I have repeatedly said “Empires die bloody.” The US is no exception. But it is dying and NOTHING has changed which effects that. Imperial power in the modern world is entirely a product of industrial capacity and technological supremacy, with resources and population placing upper limits on what industry can accomplish.

The US is done, this is just the thrashing about of a dying giant. A lot of people will die or be hurt in the process, but, again, nothing of significance has changed.

This site is only viable due to reader donations. If you value it and can, please subscribe or donate.

The Accelerating Nature Of Financialization Collapse

By

On January 1, 2026

21 Comments

There’s a lot of confusion about the end of the American empire, and the fall of neoliberalism. Many people think the US will just be in “second place” and it’ll be OK.

No.

The problem is the nature of America’s decline. Since 1980 the US economy has been progressively financialized. Profits are all that matters, not what is done to make profits. In properly functioning markets the idea is that products fill a need, on net improve human welfare and lead to more growth of real products.

If a company doesn’t make a profit, that means it isn’t growing the real economy with products which are a net positive. In such a case it goes out of business.

This is approximately how the Chinese economy works. It’s how the US economy worked for much of its history. It’s how the British economy worked up till about 1890 or so.

It’s not how the US economy works.

You could say that the US economy is currently auto-catabolic. The more money that is made, the more the real economy is damaged. You see this most purely in Private Equity. They buy up companies, loot the company, load it up with the debt (including all the debt used to buy the company), then the company goes out of business. This is what happened ToysRUs, it is also, contrary to the current storyline, what happened to Blockbuster. The company was trying to pivot to online, but all profits were drained out by PE owners.

This happened to, literally, tens of of thousands of companies.

The sort of monopoly roll-ups which Matt Stoller so ably covers increase prices without increasing product quality. Health care price increases provide no utility (you can get a CT or MRI scan in China for under $100.) All of this damages the economy. Headline GDP goes up, but the actual strength of the economy decreases. I would estimate that fully half of US GDP is essentially “fake”, driven entirely by increased prices and fake profits. The US economy has been smaller than China’s, in real (not PPP adjusted, but “how much do we produce”) terms for at least ten years.

This process continues till there is no muscle left to consume.

The only possibility of the US avoiding the UK’s fate, despite being a continental power, is for the oligarchs to lose power and for there to be a huge compression of asset and service prices. This process will be extremely painful and is currently politically impossible, due to the control of the duopoly. Both parties are owned by oligarchs, the tech bros are rising and none of them have the least interest in creating a good economy when it’s so much more profitable to loot America.

Real innovation is moving to China and will increasingly do so. They are at least equal in pharma and will soon be ahead in biotech. Their markets prioritize increased production (which westerners complain about as “over-capacity.”) The Chinese government does not want high GDP numbers or high profits, they want increased human welfare and a more powerful state and country. So their markets are organized, well, as actually competitive markets, the most “free” in any major economy.

So Americans who are patting themselves on the back, figuring “well, how bad can it get? We’ll still be number 2” are underestimating how bad the economy is going to get. India is effectively a continental power too, and it punches way below its geographical weight.

This isn’t to say there is no hope for the US, but decline has a long way to go yet because reversing it requires the most powerful people in society to give up massive profits, and many of them, in the process, would lose their fortunes. Meanwhile many ordinary Americans are still doing “OK” if not great, and they don’t want radical (change from the roots) change either.

All of this is not a worse case scenario either, it’s the default—maybe even slightly optimistic. The worst case scenario involves some form of civil war, not like the War between the States, but low grade shit wafare that slowly drives a country into the dirt.

The bottom is not yet close.

This site is only viable due to reader donations. If you value it and can, please subscribe or donate.

 

2025 Is The Year The US Empire Acknowledged The End of Hegemony

By

On December 31, 2025

17 Comments

Let’s keep this brief. In 2025 the US:

  • Gave up trying to win the Ukraine war;
  • Turned NATO from a vassal protection scheme into a vassal looting scheme;
  • Slashed scientific spending massively;
  • Lost a trade war to China;
  • Doubled down on the AI Bubble, in a race it will lose;
  • Was humiliated by China’s rare-Earth sanctions, realizing it couldn’t build weapons without China;
  • Pivoted hard to trying to hold onto Latin America, after almost all Latin American countries had replaced the US with China as their main trade partner;
  • Went to war with their own university system;
  • Realized (this is now widespread) that dollar hegemony is almost over;
  • completely destroyed what remained of their moral soft power to enable a genocide in Palestine, making everyone realize America is run by people who might as well be Nazis;
  • Was governed by the most corrupt and stupid President of the 20th and 21st centuries; and,
  • Gave up on solar and renewable energy.

Some of this is sort of admirable. Ukraine can’t be won, so you might as well not pretend it can be and acknowledging the end of dollar hegemony is wise. Pivoting to the Americas won’t work in the medium run, but it’s at least an acknowledgement of actual power realities.

However basically the US now knows that it is weaker than China. China has a larger navy by ship number, and it won’t be long before they have more tonnage (if they wanted to, they could have larger navy by tonnage in two years, they have the capacity.) The Chinese and Russians have more advanced missiles and drones, and far more production capacity. The Chinese are ahead in almost all tech areas with only a few bastions (civil aviation, chips, space launch being the most important ones) remaining and all those bastions are under assault and WILL fall. There is precisely no question that in 10 years, perhaps even five, China will be equal to the West or ahead in every important technology and almost all non-important techs.

What people are not understanding is that while the US may be able to turn Venezuela (MAY) their days of throwing their weight around are almost over. The drone/missile revolution and China’s advances in making them cheap and abundant mean that sitting offshore and freely bombing other nations is a strategy whose best-by date is now in sight.

The US/West had already lost years ago in the most important sense: all the important trends (tech, industrial capacity, military build capacity, shipbuilding) were running against it and there was zero possibility that those trends would change. For over 20 years I have pointed out that US policy and international trends meant the US dollar would lose its reserve and default trade status, now it is becoming common wisdom.

2025 wasn’t the year the US lost, but it was the year when everyone with two brain cells to rub together and even a smidgen of objectivity realized it.

The US is still a great power, and ex-hegemons do not go gracefully into that long night. America will kill and impoverish a lot of foreigners and Americans as its decline accelerates.

But it is all over but the shooting, and 2025 is the year it became impossible to argue otherwise without people laughing in your face.

This site is only viable due to reader donations. If you value it and can, please subscribe or donate.

American Sanctions Are Now Benefiting Countries

By

On December 30, 2025

22 Comments

The war against Russia was a big bet on sanctions. The Russian military was always stronger than Ukraine, but the West believed that sanctions would destroy the Russian economy, enabling a win and hopefully weakening Russia so much that it could be broke up.

Instead Russia’s economy has performed better since the war than it did before. Sanctions encouraged re-industrialization and Russian and Chinese businesses replaced Western ones.

Venezuela has been under sanctions ever since Chavez launched his Bolivarian revolution. Every year there are more sanctions. For a while, it worked. But…

That’s right, the most sanctioned country in South America has the highest GDP growth. It’s not doing as well as it was a couple years ago, but it’s still growing fastest.

This explains, in part, the desperate attempt to overthrow Maduro and install an American backed government.

The simple truth is that America and Europe just don’t matter much any more:

No one needs the West any more. They’ve got China. Thus the oil blockade, which is a simple act of piracy. Sanctioned ships are only sanctioned by the West, not by the countries that Venezuela is sending oil to like Cuba, China and Iran. This is a last ditch effort to collapse Venezuela’s economy, in a way that failed with Russia. The bet is simple enough: you can’t really mass-seize Russian ships, because Russia is a great power and anyway, increasingly oil is shipped by land. Venezuela has one major weakness left and Trump, led by the nose by Neocons and Cuban exiles is making a last gasp government change effort.

We’ll see if it succeeds. My money is on “no”, though they can cause a lot of damage along the way, and probably hope that seeing the damage, other countries will be dissuaded from outright hostility to America.

My bet is that it doesn’t work: Chinese and Russian anti-ship and and anti-air systems will be sold in vast quantities to developing countries and increasingly America will find itself unable to enforce blockades. It couldn’t even defeat Ansar-Allah, after all.

The twilight of Empire is an ugly time, but this is America’s twilight.

This site is only viable due to reader donations. If you value it and can, please subscribe or donate.

Western Leadership Is The Most Worthless In My Life

By

On December 22, 2025

21 Comments

Which is saying something,  because worthless has been in charge of the West for generations. There are no leaders in charge of any major Western country who aren’t functionally morons.

Europe is run by utter idiots who want war with Russia, refuse to acknowledge that Ukraine is losing, are actively speeding up their loss of industry and imagine they can bully China and think America was their friend before Trump.

Trump is the stupidest president of my lifetime. No one else even comes close. Reagan with Alzheimers was better. Congress is a sewer of morons. Every major American politician, even AOC and Bernie, are functionally psychopaths. (Yes, both Bernie and AOC have repeatedly voted to send more money and weapons to Israel.)

Britain’s Starmer is the stupidest PM of my lifetimes and stunningly incompetent and evil. Yes, his job is to make rich people richer and suck off Netanyahu, but a competent pol would do that without destroying Labour as a party.

Macron has accomplished nothing for France except to make it weaker and its citizens poorer. Germany’s government is presiding over the destruction of a German industrial base that is 150 years old and one of the greatest in the world: the very foundation of Germany’s power and affluence.

Australia is acting as if America is more important to them than China with a military buildup, which is insane since Australia’s future is with China, or it has no future. Japan is antagonizing China, again, insane, without a serious plan. Either make nice or try and get nukes, there are no other paths.

Everyone is destroying free speech to symp for a genocide. Everyone is immiserating their own populations, setting up serious future political instability.

The US is all-in on AI, spending trillions it does not have, driving up energy prices, and creating a larger more concentrated bubble than the real-estate bubble which caused the 2008 crash. If AI is everything they say, it will utterly destroy the US economy by replacing 30% of workers, and if it isn’t, it’ll never pay back all the resources spent. Plus China will win the AI race anyway, since no one with sense will pay for a proprietary model when Chinese open source models are about as good and mean you can’t suddenly be hit with a massive price increase or rate restrictions.

Politicians are either ignoring climate change and doubling down on fossil fuels (which are more expensive than solar) or using climate change as an excuse to immiserate their own people.

Britain is destroying their own farmers.

Meanwhile morons are constantly whining about fertility rates when humanity is in population overshoot so severe that it is causing the second fastest great extinction in Earth’s history. Most countries would be better off with fewer people, but because they don’t know how to stabilize an economy whose population isn’t always growing leaders and their intellectual dupes are panicking.

Only China is handling this with some grace, but they’re not Western. They’re trying to increase fertility somewhat but have accepted there will be population decreases and are moving hard on robotics to care for an aging population and reduce the need for workers.

There isn’t a single major challenge that the West is facing that our leaders are not actively making worse, not better. Not a single one. It’s extraordinary. Even Nixon managed to sign Clean Air and Water Act and to pivot on China. Reagan reduced nuclear weapons. Clinton made everything worse long-term, but was able to manage the economy during his Presidency, at least, so that it felt good to ordinary people, including pushing oil prices under $20/barrel. George Bush Sr. managed the collapse of the USSR with grace. Biden had good anti-trust policy and half decent industrial policy. Trump has done nothing good of significance. Nothing. Even when he has a good idea (tariffs, reduction in H1-B Visas) he fucks it up completely because he can’t execute and has the attention span of a coked up flea.

This reminds me of the Weimar Republic or the late Roman Empire. Most things can be fixed in principle: in theory. Nothing can be fixed in practice because leadership is beyond corrupt and incompetent, high on their own wealth and convinced they are the masters of universe and that reality is what they want it to be.

Prepare, if you’re in the West. By all means feel free to keep working at the politics, but don’t count on it. Instead prepare as individuals and groups. Government isn’t going to save you, not in the West. Your leaders are the number one danger to you, more than any outsider, “terrorist” or “foreign enemy.” Treat them as such, and protect yourselves from them.

We just spent a couple thousand getting the site and email subscriptions working properly. If you value this site and can, please subscribe or donate.

Revisiting The Ivy League “Super Conformer” Thesis

By

On December 16, 2025

22 Comments

Back in 2021 I wrote

What the Ivies have tended towards for generations now are “super conformers” — straight As and spent all their time in adult run extra-curriculars. People who spent all their time doing what authority wants. But in the past, they did seek out a few of the very smartest, too.

But, with the triumphal fall of the USSR and the “End of History” the Ivies decided that the system no longer needed smart people and stopped looking for them, they wanted nothing but super-conformers. But every system needs some smart people who aren’t entirely conformist.

This was anecdotal but fit everything I was seeing. Now here’s another data point:

This tracks my interactions with Ivy League grads exactly. Some of the older ones are brilliant, but anyone younger than their later 40s is a drone. Perhaps an intelligent drone, but a drone nonetheless.

People who are super conformers can’t actually be good analysts or creatives, because they can’t think original thoughts or challenge consensus views. And if you can’t do that, you can’t do paradigm changing real things or say “uh, boss, what we’re doing won’t work.”

American elites didn’t want any non-conformists any more. They wanted smart yes-men. So they lost Russia and sold their military, technological and industrial lead to China. They got filthy rich in exchange, in dollars that in 20 years won’t buy anything that matters internationally, leaving them as the equivalent of rich Indians in 1990. Yeah, you have servants and gold toilets and a mansion, but you run a country that doesn’t actually matter, and outside your gilded circle your society is a garbage dump. (If you visited India in those years you know that’s barely a metaphor. It’s just a description.)

What I have seen over and over again thru my adult life is that being right against the consensus is a career killer. (It sure did nothing for my career, but I’ve seen it in plenty of cases so this isn’t just “Ian is a bitter failure!” Heh.) I remember a study looking at media pundits who got the Iraq war right: people in the system already—fired, laid off or never promoted again. Pundits who got it wrong, but with the consensus? Their careers did well, thanks.

Incentives like this are picked up on quickly. You want everyone to be wrong with the elite consensus? You’ll get it! (See Matt Yglesias and Ezra Klein for the centrist pundit versions.)

And this is just as true in most corporations. Look at all the morons jumping on the AI train. Spending trillions rather than just waiting and buying the tech once it’s clear which models work (and probably just using a Chinese open source model.)

Now, of course, this “be wrong with the crowd” incentive has always been most of the case in the sense that being wrong against the crowd would get you fired, and being wrong with the crowd wouldn’t usually hurt your career. But there was a time when the mavericks who were right against the crowd were rewarded and glorified, and that mattered.

Post collapse of the USSR and during the “End of History” era (Fukuyama is the poster boy for “got everything wrong but said what elites wanted to hear so was rewarded far beyond his merits”) elites didn’t want to hear anything but how everything they produced, including their shit, smelled like roses. There was no competition, so they didn’t have to be competent or care about results.

Or so they thought. Turns out that Russia wasn’t down permanently, just for a generation or two, and that China was real competition, but being smart they followed Deng’s prescription “Hide your strength, bide your time” and sucked up to American elites, whispering “send us your industry and we’ll make you rich and you won’t have to put up with uppity American workers and unions!”

American elites got what they wanted. The pure peace of being able to smash anyone who contradicted them, the joy of forcing workers to work for less and less and shut the fuck up about wanting to share in profits, vast wealth, plus two generations of courtiers who were entirely yes men, telling them how wonderful they were. “Oh no my lord, your shit smells like lilacs! Yes my lord, I’d love to lick it up, it tastes like bacon!”

China got what it wanted: the tech and industrial lead and the end of American hegemony.

No leader worth his salt doesn’t have a few people around him saying “you know, Jack, I don’t think this is a good idea.”

It’s been a long time since America had any leaders worth their salt.

We just spent a couple thousand getting the site and email working again properly. If you value this site and can, please subscribe or donate.

Higher US Profits Are WHY The US Can’t Compete (American won’t re-industrialize)

By

On December 15, 2025

14 Comments

A couple weeks ago we discussed why money still flows into America: returns are higher.

Generally US assets are highly valued and money tends to flow into the US over other countries. This is because US assets out-perform. The Chinese stock market, like the US market of the 50s and 60s, trades sideways. The US stock market since Greenspan never stops going up: crashes are just speed bumps. Likewise, US housing prices just keep going up, and so on.

On its face, money flooding into the US seems odd. After all, it’s not even close to the world’s most dynamic economy. China is ahead in 80% of technologies, the world’s largest manufacturer, and increasing its lead. In the last 3 years it has increased the numbers of cars it produces by five times, surpassing the US, Japan, South Korea and Germany, all of whom it was behind.

This is a good thing (sort of) if you’re rich and own a lot of assets in the US. It is a bad thing if you don’t, and you’re American. (Europe is similar, but in some ways better for ordinary people.)

American companies just aren’t competitive, because they are always seeking higher profits, which means higher prices, and they actively work to make sure there is no real competition inside the US. Everyone wants to be a monopoly or part of an oligopoly. They want a “moat”, something that means other companies can’t compete with them and government refuses to regulate price gouging.

That produces higher returns, but if you’re going up against a country which has actual competitive markets you’re screwed because they have lower prices and always will. This is the argument for tariffs, to keep American companies competitive in America against cheaper foreign goods. To re-industrialize it would have to be profitable, and it isn’t. The US market is increasingly only America and whatever allies can be convinced to tariff China (which many do, but will they continue to do so?)

Plus, even then, American companies won’t invest unless they can make profits higher than what Chinese companies would accept.

American companies are all financialized. They’re looking for unfair profits, they’re not actually competitive and worse, they don’t want to compete.

OTOH, a lot of Chinese companies are sharks. They compete savagely and they are willing to cut profits razor thin to gain market share.

Additionally the Chinese just move faster, and they have 90% of their own stack in China, while the US has less than 50%. America, ironically, needs China’s help if it wants to rapidly re-industrialize, it needs aggressive anti-trust enforcement, and it needs to change various laws to make financialization far more difficult.

Start with just outlawing PE. Get rid of stock buybacks. Stop pumping the stock market. Ruthlessly go after everyone deliberately raising real-estate, rent, food and other prices.

Slash, in general, all excess profits (like healthcare). Crash the cost structure. Free up consumer demand.

Everything’s being spent on AI, which is increasing energy costs for every other business in the country, and draining investment from anything actually productive. and the US cannot win the AI race, it’s impossible. At best it can get a draw and I doubt it’ll even get that. Chinese AI is open source and uses far less energy, plus the Chinese are building new energy like crazy.

To re-industrialize and compete with China is impossible for the time being. Not in theory, it’s possible theoretically, but it is impossible in practice.

Why? Because NO ONE in power or who can get into power wants to give up their outsized unfair financialized profits.

This is why it’s all Kabuki bullshit. China will keep pulling away. The US cannot compete, because the US refuses to compete. Its only effective policy is to loot its vassals, but that won’t save it.

To a large degree this is why I don’t bother with wonky analysis any more, except occasionally to show it’s pointless. The game is over. The US lost its last chance in 2009, everything since then has just been playing out a game the US cannot win because its elites will never allow the policies necessary to win.

The only way out is thru. The US economy will have to essentially collapse, this type of elite will have to be driven entirely out of power and replaced by industrial elites. Only IF and THEN will it be possible to re-industrialize. That is, best case, a decade in the future, and will start from an even worse position than now.

By then we’ll have even worse climate change and cascading environmental problems.

The next 40 years are going to be UGLY for most of the West.

This site is only viable due to reader donations. If you value it and can, please subscribe or donate.

JOIN OUR NEWSLETTER
And get new posts emailed to you once a day.

No Spam, just new posts and the rare admin notice. See our  privacy policy..

The Loss Of American Dollar Privilege Is The Second Most Important Factor In US Decline

By

On December 9, 2025

16 Comments

Dollar privilege: everyone using the dollar for trade, and the US controlling the system that moves currency around the world is important. When it goes away, and it will in the next five years, I’d guess, the US will take a huge hit to its ability to command the world’s resources and will lose most of its ability to sanction anyone outside the US vassaldom area. (And the vassals will find it easier to leave if they choose.)

But to see the loss of dollar privilege as primary is a huge mistake. It’s downstream from the only thing that really matters: actual national capacity.

Industrial output, tech, secure resource availability (people, food, energy, rare earths, oil, uranium, etc.)

Fundamentally everything flows from having the most industry and the tech lead, combined with enough resources to make use of that industry and tech lead. Dollar privilege happened because after WWII the US controlled over 50% of the world’s manufacturing ability and was the most powerful non-Soviet state in the world. As such, in a cold war situation, it took charge and created a “free” world in the image it wanted. That certainly included controlling money and money flows, and if you wanted or needed anything you either had to get it from the US and over time its allies (Europe, Japan, South Korea, Taiwan) or from the USSR. When the USSR went away, the US was able to go hog-wild with sanctions, because there was not alternative to using their system and buying from them and their allies.

Now there is. Almost everything you want you can get from China, Russia or some nation outside the “West”. There are exceptions, but they are small in number and that number is decreasing every year. It won’t be long before China delivers satellites to orbit cheaper than the US and had domestic jets that don’t have to buy jet engines (one of those last things) from the West. And hey, virtually everything the Chinese sell is cheaper than if you buy it from the West.

But this is not just about civilian stuff. The fact is that China’s military tech is now more advanced than America’s in most areas. Better missiles. Better drones. Better jets. On top of that they have far more capacity to build ships and drones and missiles and weapons and ammunition than does the West.

Industry/tech (and the resources to use them)=military power. America had a tiny army before WWII, but was able to ramp up seemingly overnight because it had more industry than anyone else. There is zero possibility of America winning a conventional war against China. Zero. Cannot happen. The last chance of doing it was a “resource choke” but that can’t be done now because Russia isn’t going to cooperate. It required Russia as an ally.

To return to our initial point, dollar privilege is a lagging indicator. You get currency domination after you’ve already won, and you lose it after you’ve lost. Once you are no longer the world’s leading industrial and technological state you will lose it, the only question is when. America could have kept it for quite a long time if America’s leaders hadn’t abused it with constant sanctions because while currency privilege has advantages it’s also damaging to the actual productive economy of whoever has it and China is going to great lengths to avoid this.

But as it stands everyone with sense wants out, so the US will lose dollar privilege soon thru most of the world, without, if China can manage it, China creating Yuan privilege.  America may retain it in relation to the usual vassals: the anglosphere, Japan, South Korea, Taiwan and Europe, but once the alternative exists (and the Chinese and Russians have and are building those alternatives) and has reached critical mass, one by one even the vassals will move to using other systems in addition to SWIFT and will make themselves largely sanctions proof.

This is another “last days of the American Empire” thing, and thank God. Dollar privilege has been used, literally, to kill many millions of people thru the world, and to impoverish hundreds of millions. It will be a great day for every non-American when it ends.

This site is only viable due to reader donations. If you value it and can, please subscribe or donate.

Page 4 of 12

Previous

Next

Powered by WordPress & Theme by Anders Norén