7 that this currency can be exchanged for cheap natural resources. Armed with the central banking-warfare model, the Western world has pooled trillions in capital and subsidized our lifestyle at the expense of the developing world. However, with globalization and increased in- vestment, per capita incomes in certain develop- ing areas (particularly China and East Asia) are converging with those in the developed world. Since World War II, the United States has en- joyed the benefits of issuing the world’s reserve currency and globalization has permitted a significant expansion of the dollar base. How- ever, the recent wave of globalization is now in a period of consolidation. Numerous countries around the world are moving to develop greater global liquidity of their own currencies as well as independent payment systems to reduce their dependency on the US dollar. The benefits of issuing the world’s reserve cur- rency came with the cost of supplying a global military presence, including satellites and an extensive naval presence. With the explosion in the size and scope of the US military-industrial complex (and recent wars in the Middle East), the costs of a global military presence are sig- nificant. The US defense budget is a particular financial problem for the federal government because many of the assets acquired during for- eign wars have accrued to private corporations and investors rather than to the government which must service the debt used to finance these wars. Thus, the central banking-warfare model has run its course and we must now reinvent our global currency arrangements and the global economic model. With the end of the long-term bull market in bonds and the growth of global equity markets, ideally, we can shift to an equi- ty-based model over time. As you can imagine, however, changing a 500-year-old model is a major undertaking. All signs indicate that this change is going to be a painful birthing process. Mr. Global and Our Invisible Governance Structure This brings us to the deep structural problems in the US budget. I offer a detailed description of these problems in my article, Coming Clean Beyond the Fiscal Cliff. In essence, the clash of civilizations and the de- cision regarding whether we will be a human or an inhuman society are at the very heart of our budget battles. In this process, we must grapple with several serious structural imbalances: • We can no longer afford to maintain a global empire and our existing global mili- tary presence. Yet, here we are with a major military force stretched thin across the globe and with numerous private invest- ment and corporate interests depending on it to perform. • To quote Jack Ma, the United States has spent $14 trillion on global wars over the last 30 years – but most of the resulting as- sets gained were privatized. The US taxpay- er has been left liable for the resulting debt, military pensions, and health care costs. • We now have over $11.5 trillion in undoc- umentable adjustments in the federal ac- counts since federal fiscal year 1998. Where that money went has not been disclosed: the federal government has refused to comply with Constitutional requirements and financial laws, including those requir- ing audits and transparency of accounts and audits. • The US government maintains a significant “black budget.” There is reason to believe that much of the technology created and funded through this vehicle is owned by private companies who were paid via the black budget. This corporate windfall is one of the greatest in history. • During the process of the bank bailouts, trillions in debt were shifted to the federal government balance sheet without shifting “the United States has spent $14 trillion on global wars over the last 30 years – but most of the resulting assets gained were privatized. The US taxpayer has been left liable for the resulting debt, military pen- sions, and health care costs. ”