Over the past recent decades the euro-petrodollar based monetary system has teetered upon the brink of a chain reaction collapse only to have been pulled back via papering over insolvency of illiquid assets. This has been at the expense of looting the safety net assets of the "little people" such as pension funds. Now a new threat is ferociously rearing up larger than ever.
As Professor Mearsheimer has just warned the trigger for a worldwide collapse is very near. The only way out of this is a radical financial reorganization whereby the U.S. banking system is "ring fenced" against the consequences of a chain reaction house of cards collapse. And a new financial architecture is set up whereby the multi trillion dollar derivative securities speculative system is replaced without which chaos leading to geopolitical earthquakes is unleashed.
The illiquid dollar based monetary assets of the U.S. banking system must be transformed through writing off worthless speculative instruments and strict regulation of new Glass-Steagall regime. Since the Nixon administration in 1971 removed the Bretton Woods agreement gold reserve guardrails set up after WWII, exotic financial "innovations" have lead to the current crisis step by step.
The solution to avoid a vicious spiral leading into a monetary meltdown and new world war is a new global system of trade tied into actual physical production. The U.S. must forgo its role of policing the world via some 750 military bases and instead join the new BRICS monetary system not as a hegemon but as an equal partner. It must use the constitutional power to recreate a truly Hamiltonian National Bank that will issue long term credit for vast infrastructural improvements focusing on water, power and healthcare. The engine for this will be a new mission for rapid development of space age technologies such a fusion energy and propulsion.
