Glenn Diesen: US Hegemonic World Order Is OVER
Quick Read
Summary
Takeaways
- ❖The 'Iran war' is perceived by Iran as an existential threat, not just a regime change attempt, leading to a fight for survival.
- ❖The Ukraine war is failing due to manpower, weapon, and economic shortages, exacerbated by the 'Iran war' diverting US resources.
- ❖Europe faces economic meltdown due to escalating energy prices and misjudged Russian security concerns.
- ❖China views disruptions in Iran as negative for its oil supply but benefits if US failure in the Middle East weakens the petrodollar and the US AI tech bubble.
- ❖The US hegemonic era, established after the Cold War, is transitioning to multipolarity, marked by rising debt and other powers balancing US influence.
- ❖US attempts to 'knock out' Russia and Iran have backfired, pushing them into closer alignment with China.
- ❖The US is making a strategic mistake by diverting resources to Europe and the Middle East, pulling assets from East Asia, contrary to its stated pivot strategy.
- ❖Israeli interests in a prolonged war to weaken Iran diverge from US strategic interests in focusing on peer competition in East Asia.
Insights
1Iran War as an Existential Threat
The current conflict with Iran is not just about regime change but potentially the destruction or balkanization of the country. This existential threat explains Iran's predicted response of closing the Strait of Hormuz and attacking US bases, escalating the conflict significantly.
When everyone speaks of regime change, there is no replacement government in the rear which can simply be put in with legitimacy. So either this would have to be Shah 2.0 or the country would then just disintegrate into civil war. Once Iran sees this as an existential threat, it shouldn't be any surprise that it reacts in this way.
2Iran War's Impact on Ukraine and European Economy
The 'Iran war' has major implications for the Ukraine conflict, which was already struggling with manpower, weapon, and economic shortages. The new conflict further diverts US weapons and resources, exacerbating Europe's energy crisis and pushing it towards economic meltdown, making it difficult to sustain support for Ukraine.
The Ukraine war was already going very poorly... now of course with the Iran war also entering then there's even less weapons coming from the US and the Europeans they are well the energy prices are now going from bad to worse and they're preparing themselves for complete economic meltdown.
3China's Strategic Positioning Amidst US Conflicts
While China doesn't want disruptions to its oil supply from Iran, a US failure in the region could be strategically beneficial. If the US is no longer a key security provider in the Middle East, it could undermine the petrodollar's foundation, potentially impacting the US AI tech bubble and benefiting China in the AI competition.
If the United States now fails in this war... if the US is no longer a key security provider in the Middle East... some of the foundation of the petrodollar goes away. Why would they still then trade only in dollars... what would happen with the AI tech bubble, which is in direct competition in the AI competition with the Chinese?
4The End of US Hegemony and Rise of Multipolarity
The world is witnessing the end of the US hegemonic era, established after the Cold War, and a transition to multipolarity. The US's attempts to maintain dominance by keeping other powers down have led to exhaustion and prompted nations like those in BRICS to collaborate to balance US hegemonic aspirations.
We're living in a very historical time. We're seeing the end of the hegemonic era which was established after the cold war and we're now seeing this transition into multiparity... other centers of power would then figure out that they have to work together to balance the US. So you see institutions such as BRICS...
5US Strategic Misdirection and Diverging Interests
The US is making a strategic mistake by remaining deeply involved in Europe and the Middle East, as these engagements absorb American resources and push Russia and Iran closer to China. This contradicts the US national security strategy to pivot focus and resources to East Asia, where its peer competitor (China) resides, and creates a divergence of interests with allies like Israel.
The longer he remains in Europe that absorbs American resources but it also pushes the Russians further to China and also in the Middle East. The longer it stays in Iran, the more it's going to divert its focus away from East Asia. Indeed, the US had to pull out its THAAD missiles and Patriots from South Korea to send to the Middle East. The whole point of pivoting to Asia was that it was supposed to go the other way.
Bottom Line
The potential failure of the US as a key security provider in the Middle East could directly undermine the petrodollar's foundation, as Gulf states would have less incentive to trade exclusively in dollars.
A weakened petrodollar could have cascading effects on the US economy, including the AI tech bubble, as fewer petrodollars are recycled into US assets, potentially shifting global financial power.
Nations and businesses should explore alternative currency mechanisms and diversified investment strategies to mitigate risks associated with a potential decline in dollar dominance and capitalize on emerging economic centers.
The US strategy of 'knocking out' regional powers like Russia and Iran has consistently backfired, leading to stronger alliances between them and China.
This counterproductive strategy accelerates the formation of a powerful anti-hegemonic bloc, making it harder for the US to address its primary strategic challenge in East Asia.
Policymakers should consider a 'pull back' strategy, allowing regional powers to soft-balance each other, thereby conserving US resources and focusing on domestic strength and core strategic priorities.
Key Concepts
Hegemonic Peace vs. Indivisible Security
Hegemonic peace posits that global security is maintained by a single dominant power whose dominance prevents rivalry. Indivisible security argues that true peace comes from recognizing and elevating the security concerns of all major powers, preventing a security dilemma where one nation's defense is another's threat.
Lessons
- Businesses reliant on stable Middle East energy supplies should develop contingency plans for potential disruptions, including alternative sourcing and hedging strategies.
- Investors should monitor the petrodollar's stability and the US AI tech sector for vulnerabilities tied to geopolitical shifts and the recycling of global capital.
- Policymakers should reassess the long-term costs and strategic benefits of military interventions in the Middle East and Europe, considering their impact on resource allocation for competition in East Asia.
Quotes
"If the US is no longer a key security provider, then some of the foundation of the petrodollar goes away. Why would they still then trade only in dollars, especially when they have new economic centers of power?"
"We're living in a very historical time. We're seeing the end of the hegemonic era which was established after the cold war and we're now seeing this transition into multiparity."
"The whole point of pivoting to Asia was that it was supposed to go the other way. The weapons were supposed to be pulled out of Europe and the Middle East and sent to East Asia. So, we're seeing everything going in reverse."
Q&A
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