Watching the Olympics makes me a bit nostalgic. My father was born in Leeds, England, and I have a British passport. I am not a real big fan of many of the sports. In addition, there has been so much and still is so much drug abuse in the games that I really do not want to get that into it. Although, I am a huge fan of the Jamaican sprinter Usain Bolt.

When I watch the games, I enjoy seeing the world-class city London has become over the years. I think of Winston Churchill’s great speeches during World War II. And I cannot help but remember that the British Empire was the greatest and most powerful Empire in the history of mankind.

At one time, the British controlled nearly one-quarter of the world’s land mass. Their culture can be seen and heard everywhere, from the use of common law throughout the world to the popularity of British sports such as soccer, rugby and cricket to the use of a certain word that starts with an F that is commonly used throughout the world.

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However, we must also remember how the British Empire declined and fell. The British simply overexpanded. When controlling one-fourth of the world, even if you are taking resources from that land, it costs an enormous amount of money to maintain. And World War II simply drained all of the resources the British had. After the war, they were given an emergency loan from the United States and the Empire fell piece by piece as nations gained independence.

In the end, the British sacrificed the Empire to fend off the Nazis, which was a noble cause for sure. However, overexpansion of the empire and too much debt lead to its implosion, as well.

The Americans filled in for the British as police officers of the world. There are some 730 U.S. military installations in over 50 countries around the world. Like the British Empire, this costs an enormous amount of capital to maintain.

Probably the most symbolic end to the American Empire is the war in Afghanistan. No one really wins in Afghanistan. You can capture Kabul, but the rest of the terrain is so rocky and dangerous you just get picked off in the mountains. Alexander the Great, the British and the Russians all failed in Afghanistan.

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As it is famously stated, “Afghanistan is where empires go to die.” Sure, the United States caught Osama Bin Laden, but little to no progress has been made in much of the country.

The only thing that is really stopping an out-and-out collapse of the American Empire is low interest rates. If rates were 6 to 7 percent like they are in Spain and Italy, the United States would add hundreds of billions of dollars to the deficit and massive cuts would have to be made to military bases all over the world. I do expect this to occur, but we are still a few years away.

So, as we watch the Olympics and remember one great Empire, let us remember that another is making all of the same mistakes and will see its demise, sooner rather than later.

About the Author: David Skarica David Skarica is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He also writes the Gold Stock Adviser. Discover more by Clicking Here Now.