The United States at the end of World War Two saw that we couldn't
suffer another surprise attack in the nuclear age.  After the
Lusitania in World War One and Pearl Harbor in World War Two, we
geared up for war.  This wouldn't work with an adversary who possessed
nuclear weapons.  So, we decided to maintain a constant war footing
following the second world war.  We re-organized the OSS and other
assets, to monitor overseas activities and avoid warfare by whatever
means possible and maintain an overwhelming superiority by investing
heavily in military hardware.

We paid for all of this by segmenting our economy and keeping the most
profitable portions for ourselves.  Wise guys in the 1940s noted that
there were three kinds of jobs;

 (1) extraction
 (2) production
 (3) retail/banking

And they noted those that extracted made a dollar's worth of stuff,
wheat, fish, wood, ore...  and those that produced made five dollars
worth of stuff with it, flour, frozen fish sticks, lumber, steel.. and
those that bought and sold stuff made twenty-five dollars worth of
stuff with it.  donuts, white fish with risotto, homes, cutlery ...
and decided to let our friends extract for us, and let our allies
build for us, while we bought and sold everything.  This way, we could
have the world's lowest taxes while we also had the world's strongest
military - and in this way avoid a global thermonuclear war.

This worked!

From 1900 through 1950 the world suffered two devastating wars and a
few minor wars.  From 1950 through 2000 the world suffered only
regional conflicts and has never had a major global thermonuclear war.

But there was a price to pay.

We bought stuff from Germany and Japan after the war, and paid with
dollars.  But there wasn't anything made in America that Germans or
Japanese could buy with those dollars.  From 1948 through 1970 they
could buy gold at $35 per ounce.  This led to Nixon abandoning the
gold standard in 1971.

Germany and Japan then started buying real-estate.

This led Nixon opening up to China and transferring our business
there, causing a banking crisis in Europe and Japan, but ending any
possibility that Germany and Japan would continue buying up US real-
estate.

Still, since the USA abandoned the gold standard, the price of
commodities, principally oil, began to rise.  In 1960s oil was $2 per
barrel.  In the 1970s it rose to $10 per barrel.  It has risen ever
since.  Along with every other commodity.

This is a reflection of the fundamental weakness of the US currency
following Nixon abandoning the gold standard.

In 1980 Ronald Reagan did something about this.  The Depository
Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA)
was introduced and passed.  It did in the Savings & Loans and turned
the assets over to the Commercial Banks.

For those who wonder about what a Savings & Loan is, I urge you to
watch ITS A WONDERFUL LIFE Directed by Frank Capra. Starring James
Stewart, Donna Reed, Lionel Barrymore. An angel helps a compassionate
but despairingly frustrated businessman by showing what life would
have been like if he never existed.  James Stewart plays George
Bailey, owner of Bailey Savings & Loan.  He fights the evil Mr.
Potter, played by Lionel Barrymore.  Mr. Potter owns a Commercial Bank
and hates George's competition.

In short, Ronald Reagan turned America from Bedford Falls to
Potterville - something the Commercial Banks wanted to do since FDR
introduced the S&Ls back in the Depression.  Why?  Because we wanted
to take the low value paper owned by those S&Ls and package them to
sell overseas.

Why didn't people bitch about this?  Because they were thrown a few
crooked S&L bankers in the press - John Keating - looking a lot like
Bernie Madoff Today was thrown by the Press to the public - who then
didn't question why a 40 year old institution was no more.
Commercial banks were then free to take the high quality low risk
loans and keep them, and package low quality high risk loans for sale
to overseas investors.

Now finally, America had something foreigners could buy.   Our crap
loans.

A frozen food processor could sell fish sticks to Mrs. Pauls get paid
in dollars and buy small business credit-card debt with them.  Chinese
Central Committee could sell tee-shirts to Wal Mart and get paid in
dollars and buy housing loans from Freddie Mac and Fannie Mae.  The
Saudi Royal family could sell oil to Chevron and Texaco get paid in
dollars and buy GMAC loans and oil company credit card debt.

All was right with the world.

It was morning in America.

Except in 1980 America saved 9% of its income each year.  In 1980
America owed 60% of its income in debt.  In 1980 America owned 90% of
all the stock on American stock exchanges and 90% of all the assets in
American banks.  90% of all millionaires in the world were American.

In 2000 America saved -4% - that is, it borrowed 4% of its income each
year.  In 2000 America owed 160% of its income in debt.  In 2000
Americ owned 30% of all th estock on American stock exchnges and 30%
of all assets in American banks.  30% of all Millionaires in 2000 were
American.

Alan Greenspan came to Congress in 2000 said these changes didn't
matter.  That's because despite the growing importance of foreign
capital in US markets, foreigners were keeping their capital IN
AMERICA and he didn't forsee that this would change.

Then, came the attacks of 9/11.

Now, why did Bin Laden attack the World Trade Center?

This is an important question.   Of all the things Bin Laden could
attack, why the world trade center?

He attacked the WTC because he wanted to send a message to foreigners
who invested in America - that America was no longer a safe haven.

Why did he want to do that?

Because he knew America had become dependent on foreign capital.

Why did he know that?

Because he read Wasily Leontief's papers on the Leontief Paradox.

http://en.wikipedia.org/wiki/Leontief_paradox

and concluded that America could be destroyed if foreigners could be
induced to invest someplace other than America.

That's why he attacked the World Trade Center.

It worked, with the help of George Bush!   George Bush made the War on
Terror the centerpiece of his administration.  Why?  Because it was a
way he could be more popular than he would be otherwise.

Didn't he do it because it was right for America?

No, he did it because it was right for him.

So, the war on terror wasn't good for America?

No, that's why Clinton ignored the first attack on the World Trade
Center in 1993 and wanted to bomb Afghanistan in response.   People in
the State Department knew that the reason Bin Laden and his buddies
were attacking US targets was to scare foreigners out of investing in
America, and they advised the President to the degree possible to down
play the attacks for this reason.

http://en.wikipedia.org/wiki/1993_World_Trade_Center_bombing

That's what CLinton did.  Had the WTC fell then, it might have been
harder.  But, Clinton had the right advice and followed it.  He did
launch attacks in Afghanistan though to get at the camps set up by Bin
Laden.

http://articles.cnn.com/2006-09-24/politics/clinton.binladen_1_bin-uss-cole-afghanistan?_s=PM:POLITICS


Newt Gingrich said in 1993 the Afghanistan never did anything to
America and opposed extending the War Powers Act so Clinton could
destroy Bin Laden in 1993.

Privately Gingrich worried that people wouldn't care about Monica
Lewinsky if Clinton got involved in a shooting war in Afghanistan and
looked in his words, 'too Presidential'

Why do we have problems with extremist Muslims anyway?

Well, remember that in 1979 the Russians invaded Afghanistan.  We
didn't want to spark a nuclear war so, we sought a way to challenge
them indirectly.  Ronald Reagan noticed that extremist Muslims were
upset by the invasion.  Reagan asked the CIA, couldn't we organize
extremist Muslims to oppose the Russians?  The State Department
advised against it.  There is little difference in the eyes of
extremist Muslims between Christian Americans and Communist Russians.
They could turn against us.   The CIA said, what's the worst that
could happen?  Afghanistan is the poorest country on Earth.  We're the
richest.  So, the Reagan Doctrine was born;

http://en.wikipedia.org/wiki/Reagan_Doctrine

And we used CIA assets to identify, recruit, train, arm and fund
extremist Muslims from around the world, to oppose Communists.

And it worked!

The Soviet Union fell.

It was time to pay off on our promises.

We didn't.

The program was ended, and the first George Bush said, in response to
our former allies being ignored, and getting angry, and then declaring
war on us, as the State Department warned, using all they learned from
us, Bush asked what can they do to us?  We are the most powerful
nation on Earth.

We don't need to end the drug trade in Afghanistan.  We don't need to
rebuild the irrigation system destroyed by the Soviets.

Things that would have led to a lasting peace with those who did what
they said they would do for us in Afghanistan.

Instead we got;

The attack of Feb 26, 1993

Which was ignored by President Clinton, but led to covert bombing of
base camps we built in Afghanistan.

The attacks of Sep 11, 2001

Which was not ignored by President Bush, and led to the continuing war
on terror, the invasion of Afghanistan - and the transfer of $8
trillion out of USA banks by foreign investors.

http://www.us.capgemini.com/worldwealthreport09/

and the demise of the USA as a leading economic power in the world.

Since the 1940s there have been several changes in the organization of
work.  First, is resource depletion and environmental degradation,
which increases the value of commodities.  Second, is the automation
of work, which increases the value of production, and makes of retail
and banking an easily replicated commodity.  This has caused a loss of
control of markets by US retail and banking institutions and combined
with the loss of capital following the mis-steps of Bush after 9/11 -
lead eventually to the collapse of the US economy in 2008.

What can we do?

Change our approach to world peace - the attacks of 9/11 are a signal
that the containment paradigms no longer work - the next attacks will
be loose nukes, unless we quickly take effective action to forestall
them.

By attracting new investment
http://www.youtube.com/watch?v=ZYuK0iJqpNA

And ending our wasteful investment in outdated military programs
http://www.youtube.com/watch?v=xCJl-ZbHOYc

Can not engaging in military adventures really pay dividends?

Sure!

The Swiss didn't get involved in World War One or World War Two.  As a
result, their currency emerged at the end of World War Two as one of
the strongest in the world.  Their banking system became a destination
location for most of the world's wealthiest people.  Today, the Swiss
have one of the most modern armies, but spends 1/10th what America
spends per person.

Why can't we do the same?

There is no reason we cannot.  The World spends $1.6 trillion on
warfare.  Of this the USA spends $800 billion.  Our allies spend $400
billion.  Our enemies spend $400 billion.  Half of what our allies
spend are paid for by us in foreign aid - the balance of what they
spend, is dictated by us.  What our enemies spend is largely a
response to what we spend money on.

If the US took the initiative to reduce military spending world wide,
we could reduce figures to 1/10th what they are today, and direct the
savings to expanding our economy.

What can we spend money on?

 (1) global wireless internet
 (2) alternative energy systems less costly than coal
 (3) advanced farming and manufacturing system

and other things I mentioned in my videos.