Amid all the bad news, all the thrashing of a dying Empire, I re-iterate that while one needs to maneuver through this period deftly, the big picture remains unchanged.
There was a slow decline from 2014 to 2022, which could have just been part of normal perambulations. But from 2022 to 2025 the US dollar has dropped from 50% of reserves to 40%. That’s FAST. Right now there is no alternative reserve currency, everyone’s piling into gold. However trade is increasingly being done in local currencies.
This is exactly as predicted. It will continue to accelerate. Venezuela is in part an attempt to shore up the US dollar. It might make a slight bump, but it’s irrelevant to the trend or larger picture.
There’s a comment from Some Guy I want to highlight in whole:
The Interstate Bridge crosses the Columbia River, connecting Oregon and Washington State. It has a moderate length, about 1km, and was built first in 1917 and then twinned in 1958.
There has been talk of replacing it for decades, but it was reported today that the estimated cost has risen to a range of $14bn – $18bn (USD), with the new estimate so high that is simply may not be feasible to replace the bridge. Part of the eye-watering price tag is the expected timeline for construction, with the replacement taking 20 years and finishing in 2045.
By way of comparison, and barely scratching the surface, China completed the Huajiang Canyon Bridge a few months ago. The bridge is not particularly long by Chinese standards, 2.8km, but is noteworthy for being the highest bridge in the world. It was constructed in under 4 years, for a cost of roughly $300mn USD.
Nothing more really needs to be said, in my opinion.
The US is done. Done. Done. It will, as I keep saying, die ugly. But it is a walking corpse. This is really basic stuff. China can build infrastructure for less than 5% of the cost of America, and in less than a quarter the time. (Often 10% of the time.) This is a general Western problem, by the way, all of us are expensive and slow. Until we fix this very basic issue, nothing else matters. In fixing something this basic we will have to fix almost everything else.
It’s not just that China is ahead in tech, it’s that we are no longer even able to do things we could do twenty, forty or in many cases a hundred year ago in any reasonable time frame at any reasonable cost. This is, in Jane Jacobs’ term, a “Dark Age”, a forgetting. Dark Ages are when you lose the ability to do what you used to be able to do. That’s us. It goes far beyond building: we had defeated multiple infectious diseases like Mumps and Measles, for example, which are coming back. We literally can’t make products we used to make 30 years ago, because we sent all that industry to China and we DO NOT have the know-how any more. That know how is embodied in people and those people are dead or sixty or seventy or eighty years old.
Modern generative “AI” slop cannot actually learn. It is a copying mechanism. We do not have the people it can copy from. It cannot solve this problem for us, whatever the insane boosters say, and we have just laid our entire bankroll on the table in one huge bet, which we will probably lose and which even if we win will still not solve our fundamental problems.
If there was ANY sign of reversal, that’d be great, but there isn’t. In fact we are doubling down: we are deskilling even faster than we were before and giving up on research. We aren’t re-shoring industry, we’re still losing it.
Venezuela sucks. Gaza sucks. Greenland will suck. None of it matters to the big picture. State power since the Industrial Revolution is a function of industrial power and technological level as limited by resources and population. Population and resources are limiters, they are not useful by themselves except in rare cases that are weakening over time. (aka. mass infantry for horrific attrition warfare.)
If you’re in the West, prepare for the continued decline. If you’re elsewhere, know the the days of suffering at America’s hands are now running down. If you live another twenty years you WILL see the end of most of this nonsense. Trump has announced he wants to increase the military budget by 50%, but it doesn’t really matter, because money cannot buy what the US needs unless it fixes its real problems, which defense spending done the way Trump or Democrats will do it will not.
Empires die ugly. But this Empire IS dying and it is accelerating towards its end.
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mago
Rapidly dying yes, but the fall out from those death throes is sickening and quickening. Move fast and smash things is the order of the day. There’s no entertainment value in this horror show, so screw the popcorn.
Troy
Also comparatively, the Canadian province of BC is completing the stal̕əw̓asəm Bridge, which is a four-lane, 1.2 km (0.74 mi) bridge, for an estimated price of $1.6 billion. Construction started in 2021 and will complete in 2026.
Ontario’s Gordie Howe International Bridge, started in 2018 and will also open sometime this year, is a length of 2.5 km (1.6 mi). Total costs should be about $6.4 billion.
So while those costs are well above China’s costs, it’s still well below American costs, especially considering trade value of CAD to USA. (The BC bridge then becomes about $1.1 billion USD and the Ontario bridge is about $4.6 billion USD).
Something really is rotten in the US when it comes to construction costs.
Mark Pontin
Ian W: ‘If you live another twenty years you WILL see the end of most of this nonsense. Trump has announced he wants to increase the military budget by 50%, but it doesn’t really matter, because money cannot buy what the US needs ….’
Less than twenty years.
From Thoughts on The Imminent Western Silver Insolvency – Craig Tinsdale
https://substack.com/@ctindale/note/c-193673806
.’…The irony deepens when we consider the US chosen instrument of deterrence. The Pentagon has bet the farm on the “Hellscape” strategy. This is a plan to flood the Taiwan Strait with thousands of autonomous drones to deny the PLA access.
‘…Every one of those drones is a flying circuit board requiring 5N (99.999%) purity silver paste. The West consumes 13,000 tonnes of silver for industrial use annually, yet we have offshored the capacity to produce the ultra-high purity powder and paste required for advanced electronics.
‘China produces over 80% of the solar and semiconductor supply chain materials.
‘We are attempting to build a robotic kill chain using a metal that must be refined and chemically processed by the adversary……
.
…But the adversary is not playing our game. The “Silent Siege” is already underway. The hoarding of 700 million tonnes of grain and the export restrictions on antimony (a munitions primer) These are the actions of a fortress preparing for a siege.’
Me: China has to worry about not provoking the US into the kind of desperate counter-reaction that Japan took at Pearl Harbor after the US cut off Japan’s oil supply pre-WW2. So metering how much of the necessary RE etc. gets to the US-Japanese-EU MICs — prolonging the process but giving the US time to slide further down the decay spiral — is the safer way to go.
To state the blindingly obvious, nevertheless, China with its control of resources on the one hand and, on the other hand, Russia and Iran with steady military aggression against Western satraps have the West in a pincer where it’s forced to expend military materials faster than it can replace them — till in fact it can’t replace them. And we’re already there to some extent: as early as late 2024, for the last Israeli-US attack on Iran, Jake Sullivan was dumb enough to admit that he’d had to call around the world to round up every last Patriot missile — which is a piece of crap, anyway — for Israel from every other US vassals .
someofparts
It is actually dangerous to talk too much these days if one happens to read a lot and have a reasonably expansive adult vocabulary. This is because most people don’t understand many of the words a well-read person uses these days, but even more so because the poor media-addled dupes think in sound bytes and buzzwords.
This means that any moderately complex sentence one uses in conversation may include buzzwords that trigger the dupes, who then mistake the buzzword for my actual meaning and never even hear the sentence in which it was embedded in the first place.
What makes it even better is that this pattern is something I observed mainly in managers and proprietors that I reported to at various job sites. With illiterates running our businesses I’m sure things will be just fine.
different clue
@someofparts,
It might be time for people with high literacy and knowledge to start talking exactly the way you describe to everyone in their orbit to see who is smart enough to understand them and who isn’t.
And then begin slowly and silently deleting the dumm and the semi-dumm from one’s circle of concern. Be nice to them but talk to them on their level only, and only if necessary. As somebody-or-other once said . . . ” Act like a dummshit and they’ll treat you as an equal”. One could just as well say ” talk like a dummshit etc. etc.” as well and it would work.
And test to see if any of those people might be dummshit-savants. They might be smarter than you, me or anyone on a very particular skill or subject. If that skill or subject could be important to your future survival, create a “circle of pragmatic transactional involvement” to keep yourself in with regard to them.
Jan Wiklund
“This is a general Western problem” – indeed! They are now building one of the missing railway links in northern Sweden, and it will according to plan be done in 20 years. If they had built the main Swedish trunks, which were in reality finished by 1900, by that speed they would’t have been finished yet.
As late as in the 60s my father took part in constructing a gigantic sewer tunnel connecting all the suburbs of northern Stockholm. It was done in seven years. So was the Channel Tunnel between England and France. Now it is said that the new 6 km subway eastwards from Stockholm center will also take seven years.
What are they doing? What is it that takes all that time? Don’t they know their business? Is it bureaucratic inertia? Is it dizzyness? Or is it just the idea that they shouldn’t do anything, the market will miraculously fix everything by itself?
vmsmith
Although I agree that empires die and reserve currencies change, I would argue some details of this post.
First, I just checked about six sources for the dollar’s percent of reserve currency today, and they’re all in the 57% range, plus or minus a bit. So even though I subscribe to Bloomberg and generally hold it in relatively high regard, I would say there’s something really off about that chart.
Second, this is the kind of trend that depends on where you start. If you started at 1991, you’d see that the dollar’s percentage as the global reserve currency then was between 47% and 50% (depending on the source). So if that’s your start point, the dollar’s share as a global reserve currency is actually up quite a bit.
Again, yes, someday the dollar will cease to be the premier global reserve currency. But every time I see someone predict its near-immanent demise, I recall something Mark Twain allegedly said, “The reports of my death are greatly exaggerated.”
KT Chong
I’ve been researching and looking into Greenland.
Greenland is actually a BROWN majority country. ~90% of the population is BROWN and indigenous. White Europeans are the minority in Greenland, less than 10% of the population and concentrated in only one city, even though they get all the media attention.
If Trump gets Greenland, it will likely be followed by a genocide, especially under Stephen Miller.
I’ll post more about it.
Jan Wiklund
The outsourcing-financialization-privatization mania that led to this debacle was endorsed by ”the most remarkably unimaginative and conformist political elite in many generations” wrote José Gabriel Palma in 2009. Those who came after them were even worse. But that doesn’t bother me so much as the fact that there is no viable alternative to them. Where are the people who could set up an alternative to the ridiculous ones that are – ”rearm, and all will be better”, or ”kick out the immigrants, and all will be better”?
In theory it is easy; it is already written into books by Ha-Joon Chang, Erik Reinert, Alice Amsden, Mariana Mazzucato, Carlota Perez, Chalmers Johnson, Robert Wade…. But in practice one needs to know the artisanry. Nobody that hasn’t worked in serious business has got that. No revolution has ever been won without a sizable chunk of the ruling class going over to the revolutionaries. But of course, there must be people with real determination and a real program for them to go over to. And these don’t seem to exist.
On the other hand they didn’t exist in Britain in the 30s either. The opposition is pensioned, as George Orwell wrote, they are in the same position as a son who lives from allowances from a father he hates, with a deep resentment not paired to a real wish to escape.
Less than a decade after there were, however, people perfectly willing to work at least serious reforms. The war had come in between.
So I wonder if the imminent explosion of Nato is the shock we need to stop whining and begin to talk real programs?
Carborundum
That’s one of those frustrating vizes where one of the most interesting things is what’s not visible. Note that the basket of currencies plus gold depicted does not sum to 100%. The USD decline that you’ve highlighted is indeed due to the rising importance of other reserve currencies, as the viz in the link makes clear (note that I link only for the viz, haven’t read the article [bad analyst, no cookie!]):
https://efmsoc.com/evaluating-the-future-of-the-dollar-as-the-dominant-global-reserve-currency/
The thing I would love to see is a clearer depiction of the relative currency performance against gold since the US recently so clearly highlighted that it is actually completely and totally insane (tangentially, this is one of the reasons why stacked line charts need to be supplemented with other vizes – they demand way higher cognitive loads that the average Twitter-addled policymaker can muster).
That’s going to be the real kicker – if there’s a greater relative flight from USD to gold compared to other currencies, it should tell us a lot.
I will note that while it is fascinating to watch the US shoot itself so emphatically over and over in the ‘nads, I would really rather they weren’t next door.
cc
Within the big picture that Ian paints:
Four observations on the US kidnapping of Nicolas Maduro
https://www.jonathan-cook.net/blog/2026-01-07/observations-kidnapping-maduro/
Jonathan Cook points out how our Western media tries to turn our attention away from the crux of what happened:
“Instead we’re being subjected to ridiculous debates about whether Maduro is “a bad man”, or whether he mismanaged the Venezuelan economy. Sky News used an interview with Britain’s former Labour party leader, Jeremy Corbyn, to harangue him, demanding he condemn Maduro. Why? Precisely to deflect viewers’ attention from the actual story: that in invading Venezuela, the US committed what the Nuremberg trials after the Second World War judged to be the supreme international crime of aggression against another state. Where have you seen any establishment media outlet highlight this point in its coverage?”
Certainly not here in Canada … Last night, it was the same playbook being used by our state news agency CBC News, trying to whitewash the thuggish night abduction of Maduro and his wife by instead referring to it as the “arrest of Maduro”, persistently using the word “regime”, and even trotting out the words “gulag” and “torture” to try to make Canadians think of Venezuela and Maduro as bad, in support of the US thuggery. As Jonathan Cook writes, “If Sky and other media are so worried about “bad men” running countries – so concerned that they think international law can be flouted – why are they not haranguing Keir Starmer and Yvette Cooper over Israel’s Benjamin Netanyahu, who is wanted by the International Criminal Court for crimes against humanity? Doesn’t that make him a very “bad man”, far worse than anything Maduro is accused of?”
Carney is set to go to China. Let’s hope he can make things a little less bad for Canada within the context that Ian outlines, but given that he just promised to give away another $2.5 billion in Canadian taxpayer money (borrowed at deficit on our collective national credit card) to the cesspool of corruption that is Ukraine, my hopes are not high.
cc
@vmsmith, was the 57% figure you mention possibly a percentage of the fiat currency reserves excluding gold holdings? In the Bloomberg graph above that Ian included, it looks like the USD holdings and the other currency holding are all declining (but the USD line is dropping a lot more than the other 3 currencies shown, especially since 2015 or so) while central bank gold holdings are increasing at the expense of the fiat currency holdings, especially since 2022.
Carborundum
vmsmith: I suspect the difference is the presence of gold in the Bloomberg presentation.
cc
Meanwhile Canada sold off all our gold reserves from the 1960-1970s down to zero by 2016. Was that possibly a directive from the US? (Sell your gold, buy USD?)
If Canada had over 1,000 tonnes in 1965, that would be worth around $130-150 billion USD at today’s prices. But it was probably sold off at maybe an average of 1/8th the current price? So we got say maybe say $16 billion for what would today be worth $130-150 billion?
Canada is apparently the only G7 and G20 nation that does not hold any gold as part of its official reserves.
What does that say about our sovereignty? Or our vassality? Perhaps it’s no wonder Trump feels free to call us a 51st state. Give the public “Elbows Up” soundbites but have zero plans by the Bank of Canada to sell USD and hold Canadian physical gold?
responseTwo
As an old man, born in 1952, this article is spot on. Our government and big-money controllers are desperate, yet they won’t admit it. Karl Marx knew his stuff when he predicted the demise of capitalism.
Eric Anderson.
Wtf?
As a bioregional planning and community design MS, I immediately read the above and seek solutions. Such as: https://bettercities.substack.com/p/americas-infrastructure-costs-are
I don’t buy the doomerism. It’s not that that there aren’t people with the know how in this country. There are plenty. It’s a combination of neoliberal greed and social friction. For christ sake, it staring everyone in the face and nobody talks about it. I could, and probably should right a book about the philosophic basis of american governance.
We live in an “adversarial system” whose usefulness has long since passed it’s sell by date. The Madisonian/Hamiltonian system was a terrible idea born of the historical friction common of the age between the agrarian and mercantile class. Think Shea’s rebellion.
It’s the notice and comment system that pits sides against each other with bureaucrats in the middle who side with whoever shouts loud enough through their money microphone. It’s not built to “get things done.” It’s built to separate classes because our early founders were terrified of getting lynched by the agrarian class.
The stunning achievements america made all avoided this through a narrow window during the roosevelt and great society years because the sentiment was rooted in an activist federal government favoring the agrarian class over the mercantilists.
Fast forward to the Powell memo and mercantile class struck back and have been striking ever since, weaponizing the notice and comment system against everyone not in the 1%.
This isn’t difficult shit to figure out for anyone with a sense of US History. Ironic there are those upthread having the temerity to talk about how stupid everyone in america is becoming. Look in the mirror and think for yourselves.
Ian’s been banging this drum. I get it. “Elements” of it are true in my opinion. But for crying out loud, try using your brains and stop with all the sycophancy.
Sorry Ian. Love ya man 🙂
Eric Anderson
Sorry, gonna rant more about the adversarial system.
Ask yourselves, how many other countries follow the common law system beside the US? Look at the link I posted above. How many of those common law “adversarial” legal systems have low costs? Look at the US, the brits, NZ, hong kong and singapore all clustered together. Ask yourself what they have in common?
Answer? Hangovers called the common law adversarial legal system inherited from the brits, that what. This is a “pay to play” legal system that is easily weaponized by the rich. If it doesn’t benefit the elite, they sue you into pauperdom. Doesn’t matter if you’re the federal or state government. If your governments are stupid enough to let the mercantile class get filthy rich, then they lawfare you into oblivion. Nothing that doesn’t benefit that class gets done. They kill it with lawyers.
Now contrast the civil law systems. It’s ALL CODIFIED. There is no “adversarial proceeding” that takes years and millions of dollars wasted on making lawyers rich while they play their procedural games for the elite. Social friction & greed.
The elite give no shits about “public” infrastructure because they don’t USE it. They sure have big beautiful banks and law firms though. Funny that …
Ian Welsh
Sorry Eric, but I’m right on this one. There are things where my odds are low, but I’m a pretty good judge of things where I’m almost certainly right, and this one is a good 10/1 odds situation. America now has very little in common with Roosevelt’s time.
To fix this you need a crash and another Great Depression, but it’ll be harder this time. Last time, even after the Great Depression hit the US was still the world’s #1 industrial power.
Note that I am arguing against interest. America’s decline is not good for me, personally.
Love ya!
Eric Anderson
I’m not saying you’re wrong in the outcome at all.
I’m saying how we got to this point is definitely more nuanced. And I rarely hear about (from anyone, not just you) the role the tiny minority archaic common law adversarial system plays into it.
And I don’t disagree with the antidote. But, if the commentariat is any metric we are losing institutional historical knowledge and the ability to analyze it and come to conclusions about the cure. Maybe AI is to blame for the sycophancy.
But, when/if I drop my next post I expect to be blasted by the commentariat. That’s good! That’s healthy! It’s why I come here. To participate in the perpetual exchange of ideas and solutions.
Hart Liss
We’re a third world state, a shithole.
We’ve wealth and arms and absolutely nothing more.