Imperial Over-Stretch

The Empire, it seems, is "overextended" in more than one sense. Jeff Vail discusses the Fed's announcement of plans to stop publishing figures for M3 (which includes foreign countries reserve holdings of US dollars), at the same time as Iran switches to the petroeuro. Surprise, surprise, surprise. In a totally unrelated development, the IDF has been ordered to readiness for strikes on Iran.

And James Kunstler has a long New Year's piece on likely economic trends in the U.S. under the double whammy of peak oil and a collapsing housing bubble.

Addendum. Ken Macleod links to a Mike Macnair piece on the possibility that a strike on Iran will involve tac nukes, and the insane neocon logic by which this makes strategic sense:

Iraq is beginning to look like a disaster not merely for the neocons' policy but also for the global authority of the US military. It is the global authority of the US military which backs the status of the dollar as the ultimate reserve currency and hence the elaborate financial manipulations of neoliberal 'globalisation'. There are thus very big stakes in the question as to whether a US pull-back from Iraq looks like a US defeat....

If the Iranians do not back down and the US actually drops the bomb on Iran, a moral and political line will be crossed which has held since 1945. The US will be able to hold the threat of nuclear attack over every country which does not already have strategic nuclear weapons targeted on the US. The authority of the US military will be reasserted, and what happens in Iraq will become unimportant to world politics....

It would be a gamble: maybe dropping the bomb on Iran would provoke not fear but a global backlash against the US. But the Bush administration has already, in Iraq, shown itself willing to gamble on a large scale, and Bush is no longer seeking re-election.

If Bush leaves office as the president who got the US into an Iraqi quagmire which was seen in the end as a US defeat, his memory will be damned on all sides. If he leaves office as the president who 'freed America’s hands' to use nuclear blackmail, and 'dealt with Iran', US big capital and its supporters may adopt the old motto, oderint, dum metuant: 'Let them hate me, so long as they fear me.' He would then certainly have left his mark on history.

And the people in the Fuhrerbunker are in such deep shit now, they don't have a lot to lose.

Macnair concludes:

The best way to stop US-British aggression is for it to be politically defeated at home. If it is not politically defeated at home, it will go on until it eventually creates a coalition of major powers willing to fight the US in a general world war.

Or as Ken said earlier in regard to Abu Ghraib, which sadly may soon be a comparatively minor U.S. atrocity:

You know how this stuff ends? It ends with your cities in rubble, your capital occupied, and your leaders hanged.