Robert Fisk has put is fox among the chickens with his scoop on the dollar.  According to Fisk the Gulf Sheiks along with China, Russia, Japan and France are all holding talks aimed at no longer pricing oil in US dollars.

Of course all of the above rushed to deny it. However Fisk insists in his story and if I have to choose between the word of Robert Fisk and word of a group of diplomats, I'll take Fisk every time.

What explanation could fit both versions?

Well, if these people have huge dollar reserves they are primarily concerned about the value represented by those reserves. They don't want to do anything to create a panicky run on the dollar which would drain the value from their reserves. That would explain the denials.

At the same time, if they believe that it is quite possible that the dollar might collapse in a foreseeable future, they would like to have a plan B to avoid being wiped out. That would explain the conversations.

The important thing for them would be, in case of a panic, not to trample each other to death running for the exits like in a theater of discotheque fire. They would have to have a commonly agreed on vehicle to transfer the value of the dollars to something else in an instant. They might only have a few hours to act before markets opened after some traumatic event that set off the panic. There would be no time to improvise, it would have to all go like clockwork or their economies would be ruined.

In other words, Fisk has observed them running a fire drill.

Why are they so worried?

Why have they so little confidence in America's ability to come through all this with flying colors?

What has happened?

I have my own little theory which I will share with you.

A while back I wrote this:

This particular crisis is about a vacuum in credibility. It isn't exactly America's "fall of the wall" moment... yet, but it is moving in that direction. Think what it means when a whole ideology crashes.

When I was a young fellow many people truly believed, and had made huge personal sacrifices all their long lives in the belief that history's inevitable march was toward socialism and that the Soviet Union was the genuine vanguard in that march. Many were still believing it right up till the moment when Gorbachev pulled down the Red Flag on the Kremlin.

It is impossible to exaggerate what an intellectual and political hole that left... a hole big enough for people like Alan Greenspan and George W. Bush to walk through.

Now that ideology has been trashed too.

The vacuum it leaves is of even greater proportions and those proportions are only beginning to sink in.

There is a curious wrinkle here. This is not just about dry figures, there is a grotesque, intensely human story that sums it all up: Madoff.

For me the Madoff story is the poster boy of the whole credibility collapse and the collapse of the American myth.

Huh?

Let me explain.

When I first came to Europe, many years ago, I was amazed -- shocked at first -- at how so many Europeans of both the left and right, would affirm with a totally straight face that America was run by  its Jewish citizens. I thought that it was simple antisemitism at first, but it was and is much more complicated than that.

It is really the only explanation they can find for our success.

Most Europeans think that the average, white bread, boy and girl next door, all-American type, is just too spontaneous, too innocent, too narrow minded or just too plain dumb if you will, to have ever put together anything like our good ol' evil empire. 

Since the only Americans that Europeans find "European", which for most Europeans -- no matter how dumb they are -- means intelligent, educated, subtle and sophisticated, are the American Jews, Europeans just naturally assume the Jews are behind America's success. 

That is why the Madoff scandal embodies the damage this crisis has done to US credibility: American Jews have turned out to be just as dumb as American goyim.  

The Madoff scandal is the quintessential caricature of the whole moment. The idea that people had around the world had was that American Jewish people were the only people intelligent enough to really understand advanced financial products and it turns out that America's richest, therefore smartest, Jewish people were as stupid as it was possible to be, and even Madoff himself was, dumb to ever think he could get away with it, all this has destroyed centuries of malignant stereotypes of the Jews preternatural craftiness at the worst possible and inopportune moment.  The bottom line is: If America's richest Jews are just as stupid as the rest of the world's goyim, then... who is minding the store?

So, the world is waiting for the other shoe to drop.

They hope it wont come too soon, but they have to be prepared for when it does otherwise they too will be pulled down to ruin.

In my last post I wrote:

Certainly I think the progressive community of the United States deserves a better home than the Democratic party. Things have to get done, people have to get organized, strikes and demonstrations have to be called and the Democrats are never going to do any of that... They exist so that those things wont ever happen.

To which Dickday sagely inquired:

DAVID, WHAT IS THE FRICKIN ALTERNATIVE?

Because of the time zone difference between Madrid and the USA I was happily in dreamland when he posted that comment and by the time I was back online my post had rolled off into TPM purgatory.

Just a short reply.

I don't know.

Short.

They say that necessity creates the organ.

What I am noticing is a change in the USA that is not yet reflected in the political system.

Class divisions in the USA are beginning to harden in ways similar to  third world countries. This is totally new.

How, exactly, this will change American politics I'm not sure, but I'm sure it will.

I also see for the first time in US history (correct me if I'm wrong here) the appearance of a large group of university educated cadres who are not being employed at the level they were trained for and whose social and economic aspirations are being frustrated.

Highly trained, life is passing them by.

This class of frustrated intellectual is historically the most volatile and subversive political actor of all. These are the people that make revolutions.

So, in my opinion, something is going to happen as this class of highly trained malcontents grows.

Growing inequality, hardening class differences and a large mass of frustrated university graduates is an explosive mix. 

This is why the police and the army are always occupying college campuses in the countries with great inequality and poverty.

I don't know when this will all come to a head, but in less there is some sort  of miracle, come it will.

The Democratic Party is one of the two right wings of Gore Vidal''s "Party of Property".

American politics is a pantomime where these two right wings carry out their Punch and Judy show. The idea being that everything changes so that nothing ever changes (hat to Lampedusa).

The Democratic Party is designed to neutralize unrest and dampen progressive politics and if the present social and economic trends continue it will go the way of the Whigs.

When?

When was New Orleans supposed to flood?

When will the San Andreas fault shrug?

Things that are just waiting to happen.