Crash Buyer
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Posts posted by Crash Buyer
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Of course they are not 'fiddled'. But the biggest assumption is what the shopping basket looks like.
As mentioned above, all inflation is measured relative to a basket of goods. Different people have different baskets of goods. Generally, anyone who buys goods that requires the services of someone working in this country is exposed to the wage inflation of a person working in this country. Thus if you buy much teaching or dentistry services, your inflation is very high. If by contrast you eat fast food, buy shirts made in a sweat shop in Vietnam, and watch TV on a plasma screen, your personal inflation rate is probably negative.
I calculate my personal inflation rate via my household (family) budget. This inflates around 7%. (I have accurate figures on this for the last 15 years).
The reason is the things I purchase are UK service related are mostly not reflected in the RPI. My children need educating, and fees go up with salaries, I travel by train to work, and season tickets inflate in a way that reflects rail workers wages, i.e. by much more than RPI, etc etc.
I know how inflation is calculated, Paasche, Laspeyres indices etc.
CPI is correct by definition (of the basket) but this is extremely misleading to the public. The basket should represent the main expenditures of consumers. A key problem is that its reported as the 'cost of living', but excludes many basic requirements for living such as the cost of shelter.
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the economically inactive don't recieve benefits
Many do, actually. The ONS defines economically inactive as -
Long term sick/disabled
Looking after family/home
Student
Retired
Other
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Finally, it's all about money. And then you don't get around the g-word since it is the only 'sound' money the world knows.
A bit mercenary but fair enough
If things turn out very badly for the US (although I'm not expecting a complete collapse), no doubt you will be laughing all the way to the bank, er, bullion vault!
BTW, if the middle names of Sir Christopher started with GNA, his initials would be CGNAO.
Conspiracy alert!
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If the question is "will the UK and US dominate the global economy over the next 100 years the way they have over the previous 100 years" then the answer is "No" - obviously - because other more populous countries such as China and India are going to claim a much bigger share in the past.
What I don't see as a logical conclusion is that the UK and US must therefore decline to nearly the standards that China and India are in now. Don't we all end up in the middle???
Back when England had an empire, Spain, France, Portugal and the Netherlands also had their fair share of foreign territories. What has happened to those countries now? I don't see self-destruction of their economies or mass poverty and civil disorder, just some ordinary countries going about their business, taking a fair share of the global resource pie.
The future of the UK is not just a debate of "new paradigm" vs "armageddon" - there is surely middle ground?
In my earlier post I speculated that the UK was on its way to 2nd world rather than 3rd world status, so I agree with your view.
Empire was a lot briefer than people imagine. 500 years could only be supported if you included Ireland.A technical point, but I'd start around there (imperialist actions).
It's interesting how often the British Empire is regarded as having contributed to the wealth of the UK. This is a mistake made by both sides of the political spectrum - the 'we should have kept our commonwealth economic ties' side and the 'stealing the wealth of other nations' side. In fact from about the mid-19th century the empire was a net loss to Britain - a vast collection of historical baggage spread throughout the globe with no real coherence, which required vast resources to maintain. It has been described as the greatest strategic overstretch in history. It benefited neither the UK nor those countries under the dubious privilege of our governance. But it did give public school boys something to do, and we had been doing it a long time and, hey, it made us feel good about ourselves. So we carried on doing it, until the action of Germany and Japan in WW2 demonstrated that we no longer possessed the industrial power to maintain an empire. Not that that stopped us trying to maintain it for the next 30 odd years. Economic alignment with Europe started well before joining the EC. The commonwealth was an economic dead-end - as soon as Sterling was made convertible, everyone bought US goods - not surprisingly given that our industry was moribund. Joining the EC was simply an acceptance of economic and political reality.Anyway, we've not had an empire for some time now, thank goodness. We need to look at overhauling our education system so that future generations can hold their own in the world.
I completely disagree.
So the empire was not the result of greed? It was expensive to run but at least it kept rich boys busy? Rubbish.
I'm sure the victims of Empire would also disagree - you need to look at it from both sides.
The UK gained massively from transfers of wealth and the restructuring of the international economy to suit itself (including deindustrialisation abroad to support the industrial revolution). The powerful manipulate markets to suit themselves.
Look at Iraq as a current example - nothing to do with dominating oil supplies is it? The elite, e.g. Haliburton (Cheney) has not benefitted?
The US forced the end of the UK empire, when the UK was not in a financial position to resist, mostly due to the costs of successive wars (in addition to imperial overreach, or greed as I would call it). The timing was not a coincidence.
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Gold is a commodity, but it is a commodity that is money. No one burns gold to power cars or factories. We will see a depression and skyhigh gold prices at the same time. This is no contradiction in any way. The best cash (gold) will be the most expensive one. And one thing is sure, cash is/will be king.
Gold also does not oxidise, is an excellent conductor and therefore has many industrial and commercial uses (ignoring jewellery etc). It is not just an asset.
I agree that gold is fine in the short term, but completely disagree with your outlook for gold prices in the medium term.
However, to return to the original topic, the inflation prediction is a load of nonsense. Do all threads lead to gold (as outlined by the excellent analysis by Red Kharma)?
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The problem is, what do you measure gold against?
I think deflation is also likely, but not in everything. I think we may have an inflation problem prior to deflation though.
I don't believe in new paradigms, I believe in history. History shows quite clearly when gold will peak, when high real interest rates return. This will be the time to sell.
I agree with your post but not with some of the others above - I agree there will be stagflation in the short term, which is the traditional path into recession, followed by deflation.
Gold is fine in the short term and may also be useful as a currency hedge during that period.
Therefore, in line with my views outlined above, I firmly believe that the article's prediction for GBP and USD is complete nonsense.
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Regression into 2nd/3rd world status awaits us.....
The UK is already well on the path to 2nd world status and the US will follow in its footsteps.
Empire is the key word here.
The UK was OK whilst it was stealing the wealth of other nations, under the guise of the British Empire, for 500 years. Now the UK is more self reliant but still has the advantages of centuries of imperial plunder. Hence the UK has already gone from the world's largest economy at its peak to 6th (GDP at PPP). There is much further to go.
The US is acting like the UK 200 years ago, but China and India are regaining their traditional role as the main world economic superpowers faster than the US and UK can comprehend. US hegemony won't last long, and will end with a massive shock to the US psyche which will confirm their diminished role in the NEW 'new world order'.
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Crash Buyer
QUOTE
Economically inactive: People who are neither in
employment nor unemployed. This includes those who want
a job but have not been seeking work in the last four weeks,
those who want a job and are seeking work but not available
to start work, and those who do not want a job.
Sounds about right.
Includes those who are effectively kept off the unemployment lists as savings eman that they would be entitled to nothing anyway, so why go along with the poxy govt schemes to get you to apply for whatever crappy job they deem you fit for. I know, people shouldn't be selective but we are talking about such absurd discrepancies between required earnings to match cost of living and the supply of two but min wage jobs that for many people the mere act of turning up for that work would not improve their situation one iota. It costs money to work - travelling expenses, childcare, lost opportunity in reducing some bills by spending time selective buying, doing own repairs etc any benefit may marginal. Downsizing, getting rid of one car, getting rid of all unneccessary expenditure etc can potenitally save more than a low wage job can earn. A crappy job can also ruin a CV - what do you do take it and declare it, take it and declare it, does it make you look like a loser or a pragmatic potenital employee? I dunno HR departments are a mystery to me.
Onlyme, agreed, working is an expensive business! (especially when "real" wages are falling)
I speculated that "economically inactive" includes the following - not sure about which benefit recipients are included though.
I suppose it includes the followingEarly retired (under 65)
Housewives
Students
Various benefit recipients such as incapacity benefit
Black economy workers
Chavs
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Why the laughter? M4 in the UK is currently 14%. In the USA they have stopped saying how many dollars they are printing.
So you think 25% average (real) inflation over the next 10 years is likely?
To me and many others this is nonsense, to us, deflation is a much more likely outcome.
Of course others may disagree, hyperinflation here we come
Do not make the foolish mistake of taking a small chunk of a secular bull market data as the entire bull run.If investors ducked out in '75 thinking the bull market was over they would have missed out on the spectacular gains in 1980 - see charts.
The fundamentals have not changed, the technical analysis is not showing weaknesss and the geopolitical is only getting worse.
Gold/Silver are still cheap!
IMO gold is definitely not cheap, unless you believe in a "new paradigm".
Let me put it another way. Do you believe a recession is coming? Commodity booms don't outlast a recession.
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Whenever I see a news article about price rises for, say, train fares, gas etc, it's reported as being "twice (say) the rate of inflation".
Now (and this may be nit-picking), isn't the rate of inflation the rate of price rises? In that case, how can the price rise faster than inflation (if the price rise is inflation itself)?
I'd love to see articles describe it as "twice the official rate of inflation" instead, because then people might actually cotton on to the fact that the inflation measure is a bunch of doo-doo.
Is it that I don't understand the definition of "inflation" or are the journalists wrong?
The "rate of inflation" means the average change in prices for a particular basket of items, so they should refer to the index used (CPI, RPI etc). So one particular item can change in price at a different rate than the overall basket.
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whats the difference between 'unemployed' and 'economically inactive'?
Please refer to this definition I posted in an earlier discussion on this topic
http://www.housepricecrash.co.uk/forum/ind...mp;#entry797206
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This also on the BBC - more negative sentiment
UK house prices 'at risk of fall'
Britain may be facing a fall in house prices similar to that currently being endured in the US, the International Monetary Fund (IMF) has warned. -
Seen the shedfish chart before.
As they say history doesn't repeat but it does rhyme. I personally think gold has some way to go yet. Fortunately, like the housing market, the top will be easy to spot and I'll be out.
Well good luck with timing it.
I'm sure there is some more growth left but IMO we are approaching the tricky bit of the cycle. The easy money has already been made. Now that even the Sunday paper Money supplements are increasingly mentioning gold, I'd be getting worried.
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I'd agree with that. The time to sell gold is when central banks start seriously fighting inflation and high real interest rates return. The price of gold will plummet when this happens as we can see from history.
We're some way off that at the moment though and gold has certainly been a good wealth preserver during this period of negative real interest rates.
Agreed, gold has had a good run and does have a role for investors (but only if you bought it cheap enough in the first place!). However I would be concerned now that the 20 year gold chart appears to be approaching the wrong end of the chart in Shedfish's sig.
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HPC? ---------> Buy gold
Dollar crisis? ----------> Buy gold
Sterling crisis? -----------> Yep, gold
Bank run? -----------> gold
Inflation? -----------> er.....gold?
Deflation? -----------> gold
Immigration? -----------> gold (probably)
Oil crisis? ------------> don't forget gold
Policital crisis? ------------> gold again
SM crash? ------------> gold, obviously
Yen tanking? ------------> gold (ichimotu clouds say so)
Wage deflation? ------------> try gold
Gold crisis? ------------> you're kidding right?
Of course, in practice what has happened to gold during every recession since the end of Bretton Woods?
They call it a commodity boom for a reason, followed by a bust.
Unless its different this time, as is the case with houses. I'm sure we can all think of some 'new paradigm' reasons.
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I think we are concentrating too much on the three bull reasons - to put these into perspective, here is the full article.
Overall, I'd say that the tone of the article is definitely designed to create doubt amongst the sheeple at this early stage.
Sentiment appears to be turning rapidly.
10 reasons why falling house prices could benefit YOU!17/10/2007
It looks like the housing boom is finally running out of steam.
Some parts of the country are already seeing prices fall and the number of people moving has dropped sharply.
Mortgage lending is also down and the number of inquiries from potential buyers have dipped at their fastest rate for more than four years.
While few people expect a house price crash, it does look as if rising interest rates have finally slammed on the brakes.
Any hint of a property slump will alarm many in a country obsessed with house prices.
Perversely, while we demand the price of everything else goes down we - at least those on the property ladder - want house prices to keep rising.
But here are 10 reasons why a downturn might not be bad...
1 First-time buyers cannot afford to buy and are taking massive risks
The national average wage is £25,000 but most buyers need to earn £35,580 to get on the ladder.
Repaying the interest on a mortgage now takes up one-fifth of their pay - and that's before tax.
Many are taking huge risks by taking loans of more than five times their salary.
Some are even saddling themselves with 40-year loans, lured by cheaper repayments.
On a 40-year deal, repayments on a £170,000 loan would fall by £160 a month compared with a typical 25-year loan.
But over the entire 40-year mortgage you would end up paying a whopping £434,836 for your £170,000 home - £114,000 more.
2 Vital workers in the community are left stranded
The numbers of schemes designed to help key workers is growing.
But they are still relatively few and far between, and exclude many vital members of the community.
While nurses may qualify, hospital porters, cooks and cleaners - who are even more poorly paid - do not.
Other people doing crucial jobs also miss out.
Most will probably never earn enough to live near jobs in big cities and will be forced to move miles away to buy an affordable home.
Falling prices would make more properties available to these people on lower incomes.
3 Those already on the ladder are overstretched
Most homeowners forget that they will have to pay proportionally more for their next property.
They may be forced to stretch their finances again to trade up.
Put simply, if your £200,000 home has risen in value by 10 per cent, you're £20,000 better off.
But if the £300,000 house you had been hoping to move to has also risen 10 per cent it will cost you £30,000 more to buy it.
The only ways to bridge that £10,000 gap are to borrow more or eat into your savings.
But if prices fall by 10 per cent, the £200,000 property will fall £20,000 and the £300,000 by £30,000, narrowing the gap and making it more affordable.
And with five interest rate rises since August last year, people are already having to find an extra £160 a month on a typical mortgage, so any saving is welcome.
4 The cost of moving has become prohibitively expensive
Barclays Bank says that it costs around £5,000 when you sell but this seems a bit on the low side.
For starters, there is stamp duty. You pay a percentage of the sale price - so the more the property costs, the more you pay.
Today, more than half of all movers pay stamp duty. This gives £6.4billion a year to the government, against the £2.7bn paid in 2002.
Soaring prices have pushed 5.4million homes above the £250,000 barrier and into the two per cent stamp duty bracket.
With the average house price now £198,898, most movers pay almost £2,000 in stamp duty.
Estate agents fees also grab about 1.5 per cent of the selling price, or £3,000 on the average home.
So the house you bought for £200,000 - and has increased by 10 per cent - earned the agent an extra £200. Stamp duty and agents' fees are lower if house prices don't rise.
On top of this, there are now home information packs (Hips) costing around £400 when you put your property on the market.
Solicitors can set you back upwards of £500 - then there is another £900 for surveys.
Finally, there is the cost of moving your furniture. Firms will normally set you back around £500.
5 High house prices give a false promise of a pension
Millions are still not saving enough for retirement and many do not have a pension, believing their property will provide them with adequate retirement funds.
This is a duff decision and puts all your eggs in one basket.
What do they intend to live in when they retire? They will have to sell up their home and buy a smaller house. Often this means relocating away from friends and family, and at extra cost.
6 Thousands are considering equity release when they shouldn't
Because millions have been let down by their pensions, they are turning to equity release plans.
Soaring house prices have encouraged a misplaced feelgood factor among homeowners who feel wealthy so take out loans from insurance companies giving either a regular income or lump sum.
The insurer then charges interest for the loan and deducts the final bill from the sale price of your house when you die.
But this is just paying for your house a second time. For a £200,000 mortgage at 5.75 per cent you would have already paid £177,463 total interest on your 25-year loan.
A 65-year-old taking a further £50,000 loan over 10 years to use as a pension would pay a further £46,949 in interest.
For a £70,000 loan they would have to pay back £65,000.
7 Repossessions are soaring
As homeowners need to take out bigger mortgages it means that even the smallest change in interest rates can hit them hard.
In the past six months, 76 homes were repossessed every day.
That's a third higher than the same time last year.
With 600,000 coming off cheap fixed rates in the next two months this problem is likely to get worse.
8 People think they are better off than they are
High street spending has boomed since the surge in house prices began. This spending spree has driven up inflation which, in turn, is why interest rates have risen.
But this does not necessarily show we are getting any richer. Figures from payments association Apacs show that spending on credit cards has soared by a fifth as people feel better off.
But this debt has to be repaid - often at a high cost. And this means that, really, you are just getting poorer.
9 It's bad for future generations
Increasing numbers of families are forced to remortgage, use their pension or tap in to their savings to help their kids buy a house.
As prices keep rising, generation after generation will come to rely on their parents' hand-outs to help them on the ladder.
10 Workers get stuck in their jobs
Those on lower incomes find it harder to move. Many families could not afford to buy the house they now live in.
This can make it harder for them to change jobs because it means moving.
This lack of mobility can create skill shortages in some areas and makes it tough for firms to fill vacancies in property hotspots.
..AND THREE REASONS WHY THEY STILL MAY NOT FALL
1) Interest rates are still low
At 5.75 per cent, the Bank of England base rate is historically still fairly low. It may not match the 3.5 per cent it dipped to in 2003 but it's a tiny fraction of the 10 and 11 per cent rates which homeowners faced at the time of the last big crash in the early 1990s.
2) There is full employment
More of us are working than ever before. Almost 29million Brits are employed. With so many in regular jobs, it means that most should steer clear of debt problems.
3) There is still a huge lack of houses to buy
The buy-to-let boom, that has seen landlords snap up almost one million homes in five years, has caused demand for suitable properties to soar. This, coupled with a drastic shortage of new homes being built - particularly in the South East - means there are often several buyers chasing a property.
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Don't we have a thread for gold ramping already?
Actually, I think there's an entire sub-forum
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I think the vote is encouraging. I feared it would be a lot closer. However they do seem to be forward planning rates in batches at the moment - as in "let us look united and all vote no this month and yes next month".... All but most rampant paid-up dove agree.
Blanchflower is a laughing stock, but I bet Merv has a picture of his delectable visage on a dart board behind the kitchen door. Merv has to put up with two Scotsmen and a Yankee ruining his life these days......
Agreed, this is good news for the bears. I was also expecting two or three votes for a reduction. Now that Idiot Blanchflower has been exposed as the lone voter for a cut, I am now expecting a hold next month.
From the minutes -
A reduction in Bank Rate this month was not widely expected. There was a danger that suchaction would be misinterpreted as a signal that the outlook for growth and inflation had shifted
decisively to the downside. Furthermore, the economy had just emerged from a period where inflation
had been above target. On some measures, inflation expectations remained elevated, despite the fall in
actual inflation. It was possible that a cut in rates this month could be misinterpreted as a signal that
monetary policy was focused on supporting the financial system and not on meeting the inflation target.
Expectations of major central banks’ policy rates, derived from interest rate swap agreements,had fallen internationally. At the time of the August Inflation Report, the markets had been pricing in
another rise in Bank Rate by the beginning of next year. But by the time of the October meeting, they
appeared to be pricing in a 25 basis points cut by the end of 2007, although conditions in money
markets meant that these market-based measures were highly uncertain. None of the economists
polled in a Reuters’ survey expected a rate change at this meeting, but a clear majority anticipated a
rate cut at some point in the next six months. The decline in expected policy rates at shorter maturities
had been accompanied by a rise in longer-term forward rates since the August Inflation Report.
Since the August Inflation Report, the sterling exchange rate had declined and short-term riskfreeinterest rates had fallen.
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His final prediction is that the purchasing power of the dollar and the pound will be only 10 per cent of what it is now in 10 years' time – maybe five.[/b]
http://www.telegraph.co.uk/portal/main.jht.../ftchris117.xml
So this 'expert' is predicting inflation averaging at least 25% per year over the next decade and possibly much more?
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We already have one - changes in M4.
MV=PT but are V and T constant (in the short term)?
Changes in money supply are a top-down approach, the opposite of the method above. The advantage of the method I posted is that it is completely transparent and doesn't involve any civil servants collecting data.
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This is the crux of the problem people have with the CPI figures IMHO. People feel much worse off than can be accounted for by the CPI numbers. This is largely due to the fact that the percentage of our net income available for discretionary spending is in decline. In other words, the decrease in the value of the pound in your pocket (ie the rate of devaluation of Sterling as a currency) is amplified by the fact that there are less pounds in your pocket to start with.
The two issues are related.
If your earnings increase by 3% and CPI increases by 2%, your disposable income should increase by 1%. However, if your actual expenses increase by 7%, your disposable income declines and you are worse off.
Yup, bin hedonics and add mortgage repayments and you'll have a pretty decent measure straight away. The Bank can then continue their trivial fretting about furniture and three-for-two offers at their leisure.Agreed, the 'cost of living' should at least try to reflect living costs, with shelter being a basic requirement!
Nobody really wants an accurate measurment of inflation. If governments wanted such a thing it could be quite easily implemented. There are any number of web sites that display prices for almost everything and supermarkets and shops all use computers to hold prices.We could, if we really wanted, build a real-time exact measurement of inflation and we could have any number of variations to use as or in our analytical tools.
The important thing about measuring inflation is the raw data; everything else is opinion.
We all know that inflation is way higher than any official figure, but an accurate and current measurement is not something they actually welcome.
Agreed, the above data (obtained online with little effort) shows that even a simple example exposes the CPI and RPI data for their obvious faults and inaccuracies.
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Just a few points:
You don't want your measure of inflation distorted by interest rate changes, so it makes sense to exclude mortgage and other loan interest. If you don't then at least include a negative increase for those with savings.
Taxes are generally excluded from inflation measures, presumably because a tax cut would reduce an inflation measure when its effect is likely to be to increase it. Unless you feel that council tax buys you useful services that you would purchase were they not funded by taxation, I suppose it might be best to exclude it. Either way, you need a clear rule to decide which taxes are included and which not.
Best not put in quick guesses. The official statistics don't have any obvious flaws, so you would need to do a rather competent job before your numbers were any more reliable.
BTW, you may be trying to point out an apparent discrepancy between low inflation and declining disposable income. This can be explained even without some major conspiracy involving the official inflation measures. You may also observe a high rate of personal inflation, but that would not contradict the official figures if you are sufficiently unusual.
Thanks for your comments.
I deliberately included include taxes and interest, since I want an inflation measure that reflects the main expenses of UK consumers (CPI does not). As you point out, the ONS has a different issue of not wanting policy to affect the inflation outcome. However I agree with the point about saving - currently the savings ratio is about 3%.
However, I totally disagree that the official stats don't have any obvious flaws - this issue has been discussed on many other inflation threads.
Also, rather than measuring changes in disposable income, I am interested in changes in expenditures.
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Every month on HPC we complain about the inflation stats - can we come up with our own alternative estimate?
To start off here are some (very) quick calculations.
A quick attempt to measure real inflation - any additional/alternative data, comments or suggestions welcomed.
I've concentrated on the main bills etc, over £1,000 each pa. and put everything else into 'Other' expenditure.
Assumes married couple with two children and average mortgage
Category - Spending - % inflation
Food - 40 per week per person (8320pa) - 6% (food RPI is 4%)
Mortgage - 7080pa - 15% (a quick online find from Woolwich report May 2007 - a bit out of date!)
Gas/Elec - 1000pa est - 5% (http://stats.berr.gov.uk/energystats/qep213.xls)
Council tax - 1200pa - 5%
Petrol - 1000pa - 13% (previous post on this thread)
Other - 10k pa (a quick guess) - assume 2%
Weighted average inflation 7%
I think we could refine this and come up with our own sensible guess at real inflation - suggestions please.
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Edit: moved to its own thread
A quick attempt to measure real inflation - any additional/alternative data, comments or suggestions welcomed.
I've concentrated on the main bills etc, over £1,000 each pa.
Assumes married couple with two children and average mortgage
Category - Spending - % inflation
Food - 40 per week per person (8320pa) - 6% (food RPI is 4%)
Mortgage - 7080pa - 15% (a quick online find from Woolwich report May 2007 - a bit out of date!)
Gas/Elec - 1000pa est - 5% (http://stats.berr.gov.uk/energystats/qep213.xls)
Council tax - 1200pa - 5%
Petrol - 1000pa - 13% (previous post on this thread)
Other - 10k pa (a quick guess) - assume 2%
Weighted average inflation 7%
I think we could refine this and come up with our own sensible guess at real inflation - suggestions please.
Is It The End Of Empire For The Uk And Usa
in House prices and the economy
Posted · Edited by Crash Buyer
That misrepresents what I meant. Much of the empire was built up initially under the guise of trade (Asia has a long and prosperous history of trade), but did not last that way - you should ask why the UK could not conform to an existing trading model. Also invading countries is no accident - again I would point to Iraq as a current example.
Yes there were many interests and reasons. However, you can't have it both ways - your argument implies that empire was an accident, but the Iraq disaster was not (that the US deliberately abandoned an optimal option of supporting Saddam).
The US model is arrogant, corrupt and incompetent - also witness the New Orleans response. The US underestimated the opposition to its aims in Iraq. I would say that Iraq displays the results of 'unintended consequences' (to the US at least). Oil is one reason, but a major reason, because controlling oil confers power (note that official records show that the US was prepared to invade Saudi during the Arab-Isreali war to ensure control of supplies). Another reason is that the US also wanted to order the region to conform to its capitalist shock therapy model (witness the laws passed by Bremer in Iraq), as the middle east defies US hegemony.
I never said the US govt is a single entity - of course there are different interests. However I didn't want to write a long essay on the subject.
I think you are emphasising the wrong part of the overall picture here. Also when you say "cannot keep hundreds of millions of people ... in an Empire they don't want to be part of anymore" I think you will find the vast majority never wanted to be in the empire and were not asked for their opinion. Empire was not a democracy. If you want more evidence, again I would point to Iraq - is the US interested in the opinions of Iraqis? Did Iraqis vote for the US occupation?