By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “and forgive them their debts”: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year< Jointly posted with Hudson’s website
The end of America’s unchallenged global economic dominance has arrived sooner than expected, thanks to the very same Neocons who gave the world the Iraq, Syria and the dirty wars in Latin America. Just as the Vietnam War drove the United States off gold by 1971, its sponsorship and funding of violent regime change wars against Venezuela and Syria – and threatening other countries with sanctions if they do not join this crusade – is now driving European and other nations to create their alternative financial institutions.
This break has been building for quite some time, and was bound to occur. But who would have thought that Donald Trump would become the catalytic agent? No left-wing party, no socialist, anarchist or foreign nationalist leader anywhere in the world could have achieved what he is doing to break up the American Empire. The Deep State is reacting with shock at how this right-wing real estate grifter has been able to drive other countries to defend themselves by dismantling the U.S.-centered world order. To rub it in, he is using Bush and Reagan-era Neocon arsonists, John Bolton and now Elliott Abrams, to fan the flames in Venezuela. It is almost like a black political comedy. The world of international diplomacy is being turned inside-out. A world where there is no longer even a pretense that we might adhere to international norms, let alone laws or treaties.
The Neocons who Trump has appointed are accomplishing what seemed unthinkable not long ago: Driving China and Russia together – the great nightmare of Henry Kissinger and Zbigniew Brzezinski. They also are driving Germany and other European countries into the Eurasian orbit, the “Heartland” nightmare of Halford Mackinder a century ago.
The root cause is clear: After the crescendo of pretenses and deceptions over Iraq, Libya and Syria, along with our absolution of the lawless regime of Saudi Arabia, foreign political leaders are coming to recognize what world-wide public opinion polls reported even before the Iraq/Iran-Contra boys turned their attention to the world’s largest oil reserves in Venezuela: The United States is now the greatest threat to peace on the planet.
Calling the U.S. coup being sponsored in Venezuela a defense of democracy reveals the Doublethink underlying U.S. foreign policy. It defines “democracy” to mean supporting U.S. foreign policy, pursuing neoliberal privatization of public infrastructure, dismantling government regulation and following the direction of U.S.-dominated global institutions, from the IMF and World Bank to NATO. For decades, the resulting foreign wars, domestic austerity programs and military interventions have brought more violence, not democracy.
In the Devil’s Dictionary that U.S. diplomats are taught to use as their “Elements of Style” guidelines for Doublethink, a “democratic” country is one that follows U.S. leadership and opens its economy to U.S. investment, and IMF- and World Bank-sponsored privatization. The Ukraine is deemed democratic, along with Saudi Arabia, Israel and other countries that act as U.S. financial and military protectorates and are willing to treat America’s enemies are theirs too.
A point had to come where this policy collided with the self-interest of other nations, finally breaking through the public relations rhetoric of empire. Other countries are proceeding to de-dollarize and replace what U.S. diplomacy calls “internationalism” (meaning U.S. nationalism imposed on the rest of the world) with their own national self-interest.
This trajectory could be seen 50 years ago (I described it in Super Imperialism [1972] and Global Fracture [1978].) It had to happen. But nobody thought that the end would come in quite the way that is happening. History has turned into comedy, or at least irony as its dialectical path unfolds.
For the past half-century, U.S. strategists, the State Department and National Endowment for Democracy (NED) worried that opposition to U.S. financial imperialism would come from left-wing parties. It therefore spent enormous resources manipulating parties that called themselves socialist (Tony Blair’s British Labour Party, France’s Socialist Party, Germany’s Social Democrats, etc.) to adopt neoliberal policies that were the diametric opposite to what social democracy meant a century ago. But U.S. political planners and Great Wurlitzer organists neglected the right wing, imagining that it would instinctively support U.S. thuggishness.
The reality is that right-wing parties want to get elected, and a populist nationalism is today’s road to election victory in Europe and other countries just as it was for Donald Trump in 2016.
Trump’s agenda may really be to break up the American Empire, using the old Uncle Sucker isolationist rhetoric of half a century ago. He certainly is going for the Empire’s most vital organs. But it he a witting anti-American agent? He might as well be – but it would be a false mental leap to use “quo bono” to assume that he is a witting agent.
After all, if no U.S. contractor, supplier, labor union or bank will deal with him, would Vladimir Putin, China or Iran be any more naïve? Perhaps the problem had to erupt as a result of the inner dynamics of U.S.-sponsored globalism becoming impossible to impose when the result is financial austerity, waves of population flight from U.S.-sponsored wars, and most of all, U.S. refusal to adhere to the rules and international laws that it itself sponsored seventy years ago in the wake of World War II.
Dismantling International Law and Its Courts
Any international system of control requires the rule of law. It may be a morally lawless exercise of ruthless power imposing predatory exploitation, but it is still The Law. And it needs courts to apply it (backed by police power to enforce it and punish violators).
Here’s the first legal contradiction in U.S. global diplomacy: The United States always has resisted letting any other country have any voice in U.S. domestic policies, law-making or diplomacy. That is what makes America “the exceptional nation.” But for seventy years its diplomats have pretended that its superior judgment promoted a peaceful world (as the Roman Empire claimed to be), which let other countries share in prosperity and rising living standards.
At the United Nations, U.S. diplomats insisted on veto power. At the World Bank and IMF they also made sure that their equity share was large enough to give them veto power over any loan or other policy. Without such power, the United States would not join any international organization. Yet at the same time, it depicted its nationalism as protecting globalization and internationalism. It was all a euphemism for what really was unilateral U.S. decision-making.
Inevitably, U.S. nationalism had to break up the mirage of One World internationalism, and with it any thought of an international court. Without veto power over the judges, the U.S. never accepted the authority of any court, in particular the United Nations’ International Court in The Hague. Recently that court undertook an investigation into U.S. war crimes in Afghanistan, from its torture policies to bombing of civilian targets such as hospitals, weddings and infrastructure. “That investigation ultimately found ‘a reasonable basis to believe that war crimes and crimes against humanity.”[1]
Donald Trump’s National Security Adviser John Bolton erupted in fury, warning in September that: “The United States will use any means necessary to protect our citizens and those of our allies from unjust prosecution by this illegitimate court,” adding that the UN International Court must not be so bold as to investigate “Israel or other U.S. allies.”
That prompted a senior judge, Christoph Flügge from Germany, to resign in protest. Indeed, Bolton told the court to keep out of any affairs involving the United States, promising to ban the Court’s “judges and prosecutors from entering the United States.” As Bolton spelled out the U.S. threat: “We will sanction their funds in the U.S. financial system, and we will prosecute them in the U.S. criminal system. We will not cooperate with the ICC. We will provide no assistance to the ICC. We will not join the ICC. We will let the ICC die on its own. After all, for all intents and purposes, the ICC is already dead to us.”
What this meant, the German judge spelled out was that: “If these judges ever interfere in the domestic concerns of the U.S. or investigate an American citizen, [Bolton] said the American government would do all it could to ensure that these judges would no longer be allowed to travel to the United States – and that they would perhaps even be criminally prosecuted.”
The original inspiration of the Court – to use the Nuremburg laws that were applied against German Nazis to bring similar prosecution against any country or officials found guilty of committing war crimes – had already fallen into disuse with the failure to indict the authors of the Chilean coup, Iran-Contra or the U.S. invasion of Iraq for war crimes.
Dismantling Dollar Hegemony from the IMF to SWIFT
Of all areas of global power politics today, international finance and foreign investment have become the key flashpoint. International monetary reserves were supposed to be the most sacrosanct, and international debt enforcement closely associated.
Central banks have long held their gold and other monetary reserves in the United States and London. Back in 1945 this seemed reasonable, because the New York Federal Reserve Bank (in whose basement foreign central bank gold was kept) was militarily safe, and because the London Gold Pool was the vehicle by which the U.S. Treasury kept the dollar “as good as gold” at $35 an ounce. Foreign reserves over and above gold were kept in the form of U.S. Treasury securities, to be bought and sold on the New York and London foreign-exchange markets to stabilize exchange rates. Most foreign loans to governments were denominated in U.S. dollars, so Wall Street banks were normally name as paying agents.
That was the case with Iran under the Shah, whom the United States had installed after sponsoring the 1953 coup against Mohammed Mosaddegh when he sought to nationalize Anglo-Iranian Oil (now British Petroleum) or at least tax it. After the Shah was overthrown, the Khomeini regime asked its paying agent, the Chase Manhattan bank, to use its deposits to pay its bondholders. At the direction of the U.S. Government Chase refused to do so. U.S. courts then declared Iran to be in default, and froze all its assets in the United States and anywhere else they were able.
This showed that international finance was an arm of the U.S. State Department and Pentagon. But that was a generation ago, and only recently did foreign countries begin to feel queasy about leaving their gold holdings in the United States, where they might be grabbed at will to punish any country that might act in ways that U.S. diplomacy found offensive. So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. U.S. officials pretended to feel shocked at the insult that it might do to a civilized Christian country what it had done to Iran, and Germany agreed to slow down the transfer.
But then came Venezuela. Desperate to spend its gold reserves to provide imports for its economy devastated by U.S. sanctions – a crisis that U.S. diplomats blame on “socialism,” not on U.S. political attempts to “make the economy scream” (as Nixon officials said of Chile under Salvador Allende) – Venezuela directed the Bank of England to transfer some of its $11 billion in gold held in its vaults and those of other central banks in December 2018. This was just like a bank depositor would expect a bank to pay a check that the depositor had written.
England refused to honor the official request, following the direction of Bolton and U.S. Secretary of State Michael Pompeo. As Bloomberg reported: “The U.S. officials are trying to steer Venezuela’s overseas assets to [Chicago Boy Juan] Guaido to help bolster his chances of effectively taking control of the government. The $1.2 billion of gold is a big chunk of the $8 billion in foreign reserves held by the Venezuelan central bank.”
Turkey seemed to be a likely destination, prompting Bolton and Pompeo to warn it to desist from helping Venezuela, threatening sanctions against it or any other country helping Venezuela cope with its economic crisis. As for the Bank of England and other European countries, the Bloomberg report concluded: “Central bank officials in Caracas have been ordered to no longer try contacting the Bank of England. These central bankers have been told that Bank of England staffers will not respond to them.”
This led to rumors that Venezuela was selling 20 tons of gold via a Russian Boeing 777 – some $840 million. The money probably would have ended up paying Russian and Chinese bondholders as well as buying food to relieve the local famine.[4]Russia denied this report, but Reuters has confirmed is that Venezuela has sold 3 tons of a planned 29 tones of gold to the United Arab Emirates, with another 15 tones are to be shipped on Friday, February 1.[5]The U.S. Senate’s Batista-Cuban hardliner Rubio accused this of being “theft,” as if feeding the people to alleviate the U.S.-sponsored crisis was a crime against U.S. diplomatic leverage.
If there is any country that U.S. diplomats hate more than a recalcitrant Latin American country, it is Iran. President Trump’s breaking of the 2015 nuclear agreements negotiated by European and Obama Administration diplomats has escalated to the point of threatening Germany and other European countries with punitive sanctions if they do not also break the agreements they have signed. Coming on top of U.S. opposition to German and other European importing of Russian gas, the U.S. threat finally prompted Europe to find a way to defend itself.
Imperial threats are no longer military. No country (including Russia or China) can mount a military invasion of another major country. Since the Vietnam Era, the only kind of war a democratically elected country can wage is atomic, or at least heavy bombing such as the United States has inflicted on Iraq, Libya and Syria. But now, cyber warfare has become a way of pulling out the connections of any economy. And the major cyber connections are financial money-transfer ones, headed by SWIFT, the acronym for the Society for Worldwide Interbank Financial Telecommunication, which is centered in Belgium.
Russia and China have already moved to create a shadow bank-transfer system in case the United States unplugs them from SWIFT. But now, European countries have come to realize that threats by Bolton and Pompeo may lead to heavy fines and asset grabs if they seek to continue trading with Iran as called for in the treaties they have negotiated.
On January 31 the dam broke with the announcement that Europe had created its own bypass payments system for use with Iran and other countries targeted by U.S. diplomats. Germany, France and even the U.S. poodle Britain joined to create INSTEX — Instrument in Support of Trade Exchanges. The promise is that this will be used only for “humanitarian” aid to save Iran from a U.S.-sponsored Venezuela-type devastation. But in view of increasingly passionate U.S. opposition to the Nord Stream pipeline to carry Russian gas, this alternative bank clearing system will be ready and able to become operative if the United States tries to direct a sanctions attack on Europe.
I have just returned from Germany and seen a remarkable split between that nation’s industrialists and their political leadership. For years, major companies have seen Russia as a natural market, a complementary economy needing to modernize its manufacturing and able to supply Europe with natural gas and other raw materials. America’s New Cold War stance is trying to block this commercial complementarity. Warning Europe against “dependence” on low-price Russian gas, it has offered to sell high-priced LNG from the United States (via port facilities that do not yet exist in anywhere near the volume required). President Trump also is insisting that NATO members spend a full 2 percent of their GDP on arms – preferably bought from the United States, not from German or French merchants of death.
The U.S. overplaying its position is leading to the Mackinder-Kissinger-Brzezinski Eurasian nightmare that I mentioned above. In addition to driving Russia and China together, U.S. diplomacy is adding Europe to the heartland, independent of U.S. ability to bully into the state of dependency toward which American diplomacy has aimed to achieve since 1945.
The World Bank, for instance, traditionally has been headed by a U.S. Secretary of Defense. Its steady policy since its inception is to provide loans for countries to devote their land to export crops instead of giving priority to feeding themselves. That is why its loans are only in foreign currency, not in the domestic currency needed to provide price supports and agricultural extension services such as have made U.S. agriculture so productive. By following U.S. advice, countries have left themselves open to food blackmail – sanctions against providing them with grain and other food, in case they step out of line with U.S. diplomatic demands.
It is worthwhile to note that our global imposition of the mythical “efficiencies” of forcing Latin American countries to become plantations for export crops like coffee and bananas rather than growing their own wheat and corn has failed catastrophically to deliver better lives, especially for those living in Central America. The “spread” between the export crops and cheaper food imports from the U.S. that was supposed to materialize for countries following our playbook failed miserably – witness the caravans and refugees across Mexico. Of course, our backing of the most brutal military dictators and crime lords has not helped either.
Likewise, the IMF has been forced to admit that its basic guidelines were fictitious from the beginning. A central core has been to enforce payment of official inter-government debt by withholding IMF credit from countries under default. This rule was instituted at a time when most official inter-government debt was owed to the United States. But a few years ago Ukraine defaulted on $3 billion owed to Russia. The IMF said, in effect, that Ukraine and other countries did not have to pay Russia or any other country deemed to be acting too independently of the United States. The IMF has been extending credit to the bottomless it of Ukrainian corruption to encourage its anti-Russian policy rather than standing up for the principle that inter-government debts must be paid.
It is as if the IMF now operates out of a small room in the basement of the Pentagon in Washington. Europe has taken notice that its own international monetary trade and financial linkages are in danger of attracting U.S. anger. This became clear last autumn at the funeral for George H. W. Bush, when the EU’s diplomat found himself downgraded to the end of the list to be called to his seat. He was told that the U.S. no longer considers the EU an entity in good standing. In December, “Mike Pompeo gave a speech on Europe in Brussels — his first, and eagerly awaited — in which he extolled the virtues of nationalism, criticised multilateralism and the EU, and said that “international bodies” which constrain national sovereignty “must be reformed or eliminated.”[5]
Most of the above events have made the news in just one day, January 31, 2019. The conjunction of U.S. moves on so many fronts, against Venezuela, Iran and Europe (not to mention China and the trade threats and moves against Huawei also erupting today) looks like this will be a year of global fracture.
It is not all President Trump’s doing, of course. We see the Democratic Party showing the same colors. Instead of applauding democracy when foreign countries do not elect a leader approved by U.S. diplomats (whether it is Allende or Maduro), they’ve let the mask fall and shown themselves to be the leading New Cold War imperialists. It’s now out in the open. They would make Venezuela the new Pinochet-era Chile. Trump is not alone in supporting Saudi Arabia and its Wahabi terrorists acting, as Lyndon Johnson put it, “Bastards, but they’re our bastards.”
Where is the left in all this? That is the question with which I opened this article. How remarkable it is that it is only right-wing parties, Alternative for Deutschland (AFD), or Marine le Pen’s French nationalists and those of other countries that are opposing NATO militarization and seeking to revive trade and economic links with the rest of Eurasia.
The end of our monetary imperialism, about which I first wrote in 1972 in Super Imperialism, stuns even an informed observer like me. It took a colossal level of arrogance, short-sightedness and lawlessness to hasten its decline — something that only crazed Neocons like John Bolton, Elliot Abrams and Mike Pompeo could deliver for Donald Trump.
Footnotes
[1]“It Can’t be Fixed: Senior ICC Judge Quits in Protest of US, Turkish Meddling,” January 31, 2019.
[2] Patricia Laya, Ethan Bronner and Tim Ross, “Maduro Stymied in Bid to Pull $1.2 Billion of Gold From U.K.,”Bloomberg, January 25, 2019. Anticipating just such a double-cross, President Chavez acted already in 2011 to repatriate 160 tons of gold to Caracas from the United States and Europe.
[3] ibid
[4] Corina Pons, Mayela Armas, “Exclusive: Venezuela plans to fly central bank gold reserves to UAE – source,”Reuters, January 31, 2019.
[5] Constanze Stelzenmüller, “America’s policy on Europe takes a nationalist turn,” Financial Times, January 31, 2019.
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We see the Democratic Party showing the same colors.
Yes we do. no escape? that I see…
Well, if the StormTrumpers can tear down all the levers and institutions of international US dollar strength, perhaps they can also tear down all the institutions of Corporate Globalonial Forced Free Trade. That itself may BE our escape . . . if there are enough millions of Americans who have turned their regionalocal zones of habitation into economically and politically armor-plated Transition Towns, Power-Down Zones, etc. People and places like that may be able to crawl up out of the rubble and grow and defend little zones of semi-subsistence survival-economics.
If enough millions of Americans have created enough such zones, they might be able to link up with eachother to offer hope of a movement to make America in general a semi-autarchik, semi-secluded and isolated National Survival Economy . . . . much smaller than today, perhaps likelier to survive the various coming ecosystemic crash-cramdowns, and no longer interested in leading or dominating a world that we would no longer have the power to lead or dominate.
We could put an end to American Exceptionalism. We could lay this burden down. We could become American Okayness Ordinarians. Make America an okay place for ordinary Americans to live in.
aye! Know thy Farmer!
local autarky has been my goal for a long while…in fits and starts, and sometimes without clear articulation.
why should my food security be impacted when some new guy in an office in NYC leaves a window open and lets the truth out(“there’s no there, there”)…crashing the world economy?
on an intellectual level, this is an increasingly easy sell…even way out here in tealand.
on a practical, Phronetic, level, not so easy to do.
we’re tangled up in the matrix…and often not even aware of it, so that we uncritically adopt the “need to”‘s of the Machine as our own.
Today, I’m changing the barrel on the composting toilet(no permit, no water, no power. nutrients stay here, unmonetised, feeding the pasture/orchard), seeding out more trees, as well as the early attempts at veggies, and planting more blackberries.
every bit of food i can grow is a dollar i don’t have to make in the first place.
this is NOT a ready method of enriching myself…if “enrichment” means “getting a bunch of money”….but to get veggies and fruits of a similar quality(and ethical nature), i must drive 50 miles and spend FERNs.
…and vote with those Ferns for an unethical immortal fiction.
there’s a sort of inchoate movement out here that understands this sort of thing, at a largely unconscious level.
people trading chickens for zukes for raw milk…relatively rich retirees and dirt poor immigrants, and everyone in between.
a secondary purpose in me finally getting back into gardening on a larger scale, is to enter that inchoate movement.
if the grasshoppers cooperate, I’ll report on how it goes.
(we’ve had 2 years in a row of a locust plague. if it happens again, I’ll suspect the cia,lol)
Not to worry, the locust problem likely predates the formation of the CIA et al. :)
https://en.wikipedia.org/wiki/Grasshopper_Glacier_(Montana)
Are there any kind of poultry birds who just love locusts? Would their be ways of devising light easy-to-pull flat sheets of sheet metal with a trough at the trailing end, a trough full of cheap edible oil? Into which grasshoppers would jump and get stuck when the sheet-and-trough was dragged across grass to kick up the grasshoppers?
And then the mess of hoppers and oil could be fed to the hungry birds?
guinneas!
fun to watch, and hell on hoppers.
i have 15, currently, and am in line to get more.
that and Nosema Locustae, mixed with bran flakes, put out as soon as you see the tiny hoppers. canibalism does the rest.
problem last 2 years was $$$.
Keep losing ours to hawks and pythons, here in Cairns, Amfortas.
We don’t have locusts, just rain… eh
How could entire city-state regions develop the sort of semi-stable autarky-in-small-things which could last from week-to-week or even few-months to few-months . . . so that some insulation could be attained against nasty shocks from higher bigger levels of social organization? Whole city-state loads of people could do it more stably and effectively than lone people all by themselves. ( But lone people by themselves could possibly inspire onlookers to do up-organized versions of the same at the City-State level).
Lambert Strether once offered the “fungal internet of tree roots” as being an inspirational model for certain multi-human social efforts. When I read about water spreading from the coasts to the interior of continents by a sort of bucket-brigade rainsharing advancing in stages, I thought that might offer inspiration for another multi-human activity.
The article I read and now can’t find ANYwhere noted that moist ocean air blows maybe 150 miles inland and falls back as rain. The forests gas some of that water up into their own zone of overhead atmosphere and the prevailing winds carry it inland another 150miles, where some of it falls as rain again on the next zone of trees . . . who gas some of the water up into the air from which it goes aNOTHer 150 miles inland and falls as rain and etc. The “same” dose of water can be recycled several times watering several zones of forest going inland from the sea-source of the water to begin with.
So why not people living in towns and cities taking that as an inspirational action-metaphor? And spending some of their money “like rain” on goods and services from providers just a little way out of town? Who would then spend some of that money on THEIR providers of goods and services a little further out of town either figuratively or literally? And then another stage of the bucket money brigade spending some of that money again further upwind and upstream?
For example, a million artisanal-food-seeking customers in-around the Greater New York City area could keep thousands of artisanal food-growing farmers in bussiness. Those farmers could keep hundreds of artisanal farm-tool suppliers and rock-and-mineral soil-food suppliers and farm-seed suppliers in bussiness. And so on in concentric rings spreading outward till the money flowed back “downhill” to the cities again for re-earing and re-spending back into the bucket money brigade? That would be a way for City-State economic autonomy-minded
Citysiders to do their initiatory part in starting money-cycles flowing to the near-countryside. Eco-citysiders could help “grow” Transition Towns into City-State “power down” existence.
A million artisanal pickle eaters could support 50,000 artisanal pickle makers.
Who could support 5,000 artisanal picklecumber growers. Who could support 50 or 100 artisanal eco-fertilizer makers. Etc. etc. etc. That’s a lot of local pickles and local money and local economic exchanges.
And enough people are already doing enough of that to support several artisanal seed companies in New York and New England . . . Johnny’s Selected Seeds, Fedco Seeds, High Mowing Seeds, Vermont Bean Seed Company, The Maine Potato Lady, Fruition Seeds, Hudson Valley Seeds, Turtle Tree Seeds, and probably others too by now.
that’s the world before Big Ag…more or less.
we could do a lot better with our knowledge, today.
The problem right now is hydraulic despotism/monopsony…a few giant monoliths sit astride the supply chain, upstream and down, and dictate who passes muster and who may participate….often in subtle, “industry standard” ways(particular size of ziploc for fancy lettuce, for instance, that can only be had from a sister corporation of your giant corporate farmer competitor).
“consumers” have been trained, as well.
one stop shopping at the big box grocer, and the tiny farmer’s market(let alone the farm) is an afterthought.
Sans hoppers, I intend to grow for us, and sell what’s left at our little FM in town…and thus act as the inspiration you mentioned.
Gray Market Produce….even now, I deliver eggs like they’re weed….surreptitiously, in alleys.
I read somewhere that the Czarist Imperial Army had a saying . . . “Quantity has a Quality all its own”.
My tentative vision-maybe was of what might be possible in, around and just beyond cities big enough to have substantial customer bases. If enough people to add up to making a difference were prepared to pay artisanal prices for artisanal food, their collective spending might add up to artisandustrial quantities of money permitting large numbers of artisan food producers to produce artisandustrial quantities of artisanal food. In such a situation, artisan foodbuyers might be able to support enough artisan foodgrowers to form a micro-class or even a mini-class. Which could then support whole micro-or-mini-classloads of further out there suppliers. At that real-but-small scale it need not even be gray market. It could be overt parallel supply and demand chains and circles.
Here in Ann Arbor there has been a farmers market. A couple of years ago someone decided to try a fixed-location produce market based around the food the farmers were selling at the farmers market.
It is the same farmers but bringing their production to the fixed location
market. The exact same price is charged there as what is charged at the farmers market. The fixed location market gets 20% of the money.
It might almost be called food on consignment. The farmers are able to get produce sold while being able to do something else somewhere else at the same time. The farmers market itself becomes a kind of “vendor display”.
And here is the store in question.
http://www.argusfarmstop.com/
Enough of different versions of this sort of thing multiplied tens and then hundreds of thousands of times will allow the emergence of semi-separate parallel economy-societies which can be semi-detached and semi-defensible from the decay of longer-distance more-fragile systems.
Just made my first batch of cuke pickles in my new 5 gal. Polish crock: mild, but very tasty! Next up, homade kimchee, followed by beets, etc….
Winning! ;~)
Did anyone see word one in our free press of Bolt-ons tirade to the ICC?
In the immortal words of Yakoff Smirnoff, “What a country!”
Don’t get mad at the locust get even:
People in Israel Really Are Eating Swarming Locusts
and they are even kosher.
fried, light tempura, with honey(John the Baptist).
boys like them. very nutritious it turns out.
kind of nutty tasting.
Translating from language to language to language can be tricky. I read somewhere that the “locusts” referred to as what John the Baptist ate in the desert might have been carob tree pods. But I don’t know that. I only know that I read that somewhere.
Central American style … pan fried in banana oil w/ splash of local rum, plantains, then drizzled with homemade sauce – quart canning jar stuffed with garlic, local chilies and herbs marinading in banana vinegar.
Bonus – legs of these large sorts make fine tooth picks ….
Mr. Hudson – If I may … Wurlitzer is a fine musical instrument, that with skill can uplift its audience, now in this case, I think Hurdy Gurdy is more befitting considering its historical roots.
Spinning off the American World Order nightmare of this diary a bit, but…
Fact: Grasshoppers are extremely efficient at converting plants to protein. An ideal cure for protein starved diets.
Drumlin,
If Populists, I assume that’s what you mean by “Storm Troopers”, offer me M4A and revitalized local economies, and deliver them, they have my support and more power to them.
That’s why Trump was elected, his promises, not yet delivered, were closer to that then the Democrats’ promises. If the Democrats promised those things and delivered, then they would have my support.
If the Democrats run a candidate, who has a no track record of delivering such things, we stay home on election day. Trump can have it, because it won’t be any worse.
I don’t give a damn about “social issues.” Economics, health care and avoiding WWIII are what motivates my votes, and I think more and more people are going to vote the same way.
Good point about Populist versus StormTrumper. ( And by the way, I said StormTRUMper, not StormTROOper). I wasn’t thinking of the Populists. I was thinking of the neo-etc. vandals and arsonists who want us to invade Venezuela, leave the JCPOA with Iran, etc. Those are the people who will finally drive the other-country governments into creating their own parallel payment systems, etc.
And the midpoint of those efforts will leave wreckage and rubble for us to crawl up out of. But we will have a chance to crawl up out of it.
My reason for voting for Trump was mainly to stop the Evil Clinton from getting elected and to reduce the chance of near immediate thermonuclear war with Russia and to save the Assad regime in Syria from Clintonian overthrow and replacement with an Islamic Emirate of Jihadistan.
Much of what will be attempted ” in Trump’s name” will be de-regulationism of all kinds delivered by the sorts of basic Republicans selected for the various agencies and departments by Pence and Moore and the Koch Brothers. I doubt the Populist Voters wanted the Koch-Pence agenda. But that was a risky tradeoff in return for keeping Clinton out of office.
The only Dems who would seek what you want are Sanders or maybe Gabbard or just barely Warren. The others would all be Clinton or Obama all over again.
Let’s say the US $ puts in a performance similar to the Argentine Peso since the turn of the century and becomes worth 1/40th as much compared to every other currency, and we turn into an export regime on steroids on the strength of our weakness?
This has been a long time coming, if you were to look at currencies as sports teams and the value of said was based on performance, we’d be the Oakland Raiders. Once a powerful competitor, now a joke in the league.
And in regards to all that glitters…
Could there be another reason for non delivery of Venezuela’s, in that the cupboard is bare back in merry olde England?
It took us 5 years to deliver a small part of Germany’s back to them, in a transaction that would’ve taken no longer than a week, if the vault shelves were full of the real deal.
The imf loaned argentina american dollars which america can make at will. Ask Paul Singer. Apples and oranges comparison, not that the us won’t do to itself what it’s done to argentina in order to keep the rich getting richer…the reason for not delivering the gold is “he who who has the gold rules” or “because we want to destroy their ability to exist outside of the us based finance system”. As valuable as the gold is, it’s not the main commodity in venezuela, and like we did in argentina, we will starve them out.
It would appear that Argentine soybean growers ‘starved out’ American growers, no?
If the US $ becomes worthless, it will be because we don’t make anything anyone wants anymore.
There will never be a reason why Americans can’t produce goods and services for Americans, other than the will to do so. The “value” of the medium of exchange is irrelevant to that end.
We would have to crush and exterminate the Free Trade Conspirators within the borders of the United States. We would then be free to withdraw from all the Free Trade Agreements going back to GATT Round One. We would then be able to protect our recovering domestic economy from alien import aggression while we were restoring our ability to make our own production for our own consumption.
Till we can crush and exterminate the Free Trade Conspiracy, what we want has nothing to do with anything.
It should be obvious if we don’t have that or somehow muster it we’re doomed.
” the cupboard is bare back in merry olde England?” – and in NY, of course.
yeah, first thing that occurred to me, too. They can’t deliver what they don’t have.
I couldn’t really find any details about the new INSTEX system – have you got any good links to brush up on? I know they made an announcement yesterday but how long until the new payment system is operational?
Here is a bit more info on it but Trump is already threatening Europe if they use it. That should cause them to respect him more-
https://www.dw.com/en/instex-europe-sets-up-transactions-channel-with-iran/a-47303580
The NYT and other have coverage.
https://www.google.com/amp/s/www.nytimes.com/2019/01/31/world/europe/europe-trade-iran-nuclear-deal.amp.html
arguably wouldn’t it be better if for USD hegemony to be dismantled?
A strong USD hurts US exports, subsidizes American consumption (by making commodities cheaper in relative terms), makes international trade (aka a 8,000-mile+ supply chain) easier.
For the sake of the environment, you want less of all three. Though obviously I don’t like the idea of expensive gasoline, natural gas or tube socks either.
It would be good for Americans, but the wrong kind of Americans. For the Americans that would populate the Global Executive Suite, a strong US$ means that the stipends they would pay would be worth more to the lackeys, and command more influence.
Dumping the industrial base really ruined things. America is now in a position where it can shout orders, and drop bombs, but doesn’t have the capacity to do anything helpful. They have to give up being what Toynbee called a creative minority, and settle for being a dominant minority.
Having watched the 2016 election closely from afar, I was left with the impression that many of the swing voters who cast their vote for Trump did so under the assumption that he would act as a catalyst for systemic change. What this change would consist of, and how it would manifest, remained an open question. Would he pursue rapprochement with Russia and pull troops out of the Middle East as he claimed to want to do during his 2016 campaign, would he doggedly pursue corruption charges against Clinton and attempt to reform the FBI and CIA, or would he do both, neither, or something else entirely? Now we know. He has ripped the already transparent mask of altruism off what is referred to as the U.S.-led liberal international order and revealed its true nature for all to see, and has managed to do it in spite of the liberal international establishment desperately trying to hold it in place in the hope of effecting a seamless post-Trump return to what they refer to as “norms”. Interesting times.
Exactly. He hasn’t exactly lived up to advanced billing so far in all respects, but I suspect there’s great deal of skulduggery going on behind the scenes that has prevented that. Whether or not he ever had or has a coherent plan for the havoc he has wrought, he has certainly been the agent for change many of us hoped he would be, in stark contrast to the criminal duopoly parties who continue to oppose him, where the daily no news is always bad news all the same. To paraphrase the infamous Rummy, you don’t go to war with the change agent and policies you wished you had, you go to war with the ones you have. That might be the best thing we can say about Trump after the historic dust of his administration finally settles.
Rummy was famously wrong about going to war unprepared and it showed. Not having a plan for success isn’t working for Brexit and it won’t work for Trump the savior either, these messes will be historic. No amount of logic pretzel twisting will turn either into good ideas or benefit the greater good, they were just awful messes that could have been avoided had more rational voices prevailed.
Look on some bright sides. Here is just one bright side to look on. President Trump has delayed and denied the Clinton Plan to topple Assad just long enough that Russia has been able to help Assad preserve legitimate government in most of Syria and defeat the Clinton’s-choice jihadis.
That is a positive good. Unless you are pro-jihadi.
Clinton wasn’t going to “benefit the greater good” either, and a very strong argument, based on her past behavior, can be made that she represented the greater threat. Given that the choice was between her and Trump, I think voters made the right decision.
Yuuuuup, AND I VOTED FOR STEIN.
Yes, voting for Stein was also a choice, yet the probability of her becoming president was approximately zero.
Voters did not decide. The Electoral College did. (Stein voter from Trumpian state of Ohio here.)
Technically you are correct, of course, however saying “the Electoral College made the right choice” sounds odd and takes away the agency of voters in the electoral process.
The voters of each separate state “strongly advised” the electors of each separate state whom to vote for. In practice, the electors have generally voted for the candidate they were elected on-behalf-of by the voters in their state. Very few electors become “faithless”.
So yes, the voters of each state decided what the electoral college would decide, one state’s electoral-college-load of delegates at a time.
Great stuff!
Excellent article but I believe the expression is “cui bono”: who benefits.
Hudson could use a good editor, but the content is brilliant and important, as you say. (I don’t expect our hosts to copy-edit articles by others. They have enough to do.)
Hudson’s done us a service in pulling these threads together. I’d missed the threats against the ICC judges. One question: is it possible for INSTEX-like arrangements to function secretly? What is to be gained by announcing them publicly and drawing the expected attacks? Does that help sharpen conflicts, and to what end?
Maybe they’re done in secret already – who knows?
The point of doing it publicly is to make a foreign-policy impact, in this case withdrawing power from the US. It’s a Declaration of Independence.
It certainly seems as though the 90 percent (plus) are an afterthought in this journey to who knows where? Like George C.Scott said while playing Patton, “The whole world at economic war and I’m not part of it. God will not let this happen.” Looks like we’re on the Brexit track (without the vote). The elite argue with themselves and we just sit and watch. It appears to me that the elite just do not have the ability to contemplate things beyond their own narrow self interest. We are all deplorables now.
Quibble. Although “Nixon took us off the gold standard,” is an idea popular with goldbugs, I don’t think that we can regard a time when it was ILLEGAL for US citizens to own gold bullion as one when we were on the gold standard. Only central banks could exchange their dollars for gold. And they were discouraged from doing so.
A quibble with your quibble.
Americans weren’t allowed to own gold bullion in ingot form, or any coins dated after 1933, which allowed for any citizen to own any US or foreign gold coin minted in 1932 or earlier.
This also created a cottage industry among foreign mints, which restruck coins dated much earlier, such as all of the various 1915 Austrian gold coins, Swiss 20 Franc gold coins, etc.
As far as discouragement by our government in regards to central banks wanting to trade their greenbacks for gold, i’d like to see some documentation on that, as i’ve never heard of such a thing prior to 1971.
p.s.
Of all the efforts by foreign mints to get around the post 1933 law, the Turks were very ingenious, in that their gold coins were struck with a frozen date of 1923, and you had to add the number below that date to get the year of issuance.
This one was dated 1923 and had 47 below it, so the coin was struck in 1970.
https://www.ma-shops.com/eidler/item.php?id=1199&lang=en
Unfortunately this
The end of America’s unchallenged global economic dominance has arrived sooner than expected
Is not supported by this (or really the rest of the article). The past tense here, for example, is unwarranted:
At the United Nations, U.S. diplomats insisted on veto power. At the World Bank and IMF they also made sure that their equity share was large enough to give them veto power over any loan or other policy.
And this
So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. …Germany agreed to slow down the transfer.
Doesn’t show Germany as breaking free at all, and worse it is followed by the pregnant
But then came Venezuela.
Yet we find out that Venezuela didn’t managed to do what they wanted to do, the Europeans, the Turks, etc bent over yet again. Nothing to see here, actually.
So what I’m saying is he didn’t make his point. I wish it were true. But a bit of grumbling and (a tiny amount of) foot-dragging by some pygmy leaders (Merkel) does not signal a global change.
“So what I’m saying is he didn’t make his point. I wish it were true. But a bit of grumbling and (a tiny amount of) foot-dragging by some pygmy leaders (Merkel) does not signal a global change.”
I’m surprised more people aren’t recognizing this. I read the article waiting in vain for some evidence of “the end of our monetary imperialism” besides some ‘grumbling and foot dragging’ as you aptly put it. There was some glimmer of a buried lede with INTEX, created to get around U.S. sanctions against Iran ─ hardly a ‘dam-breaking’. Washington is on record as being annoyed.
Currency regime change can take decades, and small percentage differences are enormous because of the flows involved. USD as reserve for 61% of global sovereigns versus 64% 15 years ago is a massive move. World bond market flows are 10X the size of world stock market flows even though the price of the Dow and Facebook shares etc get all of the headlines. And foreign exchange flows are 10-50X the flows of bond markets, they’re currently on the order of $5 *trillion* per day. And since forex is almost completely unregulated it’s quite difficult to get the data and spot reserve currency trends. Oh, and buy gold. It’s the only currency that requires no counterparty and is no one’s debt obligation.
That’s not what Hudson claims in his swaggering final sentence: “The end of our monetary imperialism, about which I first wrote in 1972 in Super Imperialism, stuns even an informed observer like me.” Which is risible as not only did he fail to show anything of the kind, his opening sentence stated a completely different reality: “The end of America’s unchallenged global economic dominance has arrived sooner than expected”
So if we hold him to his first declaration, his evidence is feeble, as I mentioned. As a scholar, his hyperbole is untrustworthy.
I ‘sacked’ my financial managers and took my portfolio off them when they put a couple of % of its value into ‘gold’ against my express instructions.
Gold pays no dividends, and I have to pay someone to keep it for me. It’s only value is the gamble of a capital gain, but as the Jews of Europe discovered in the period 1939-1944, when your back is to the wall gold’s value is suddenly very low even when you’re offering the real thing. If push came to shove what would be the value of a piece of paper purporting to be a right to a chunk of a gold ingot in a basement half a world away which you can’t legally take possession of anyway?
Even if the ingot exists, which I doubt. I’ve a suspicion that if everyone with a such a piece of paper turned up outside the fund’s door wanting their chunk of ingot it would be quickly be discovered that there was a lot more gold on paper than there was in the vault.
Yes, the same applies to my deposits at the bank. But at least that is supposedly regulated by third party authorities and even to some extent guaranteed by the state.
No, gold is pretty enough lying on the bosom of a lady-friend but that’s about its only usefulness in the real world.
Always bemusing that gold bugs never talk about gold being in a bubble …. yet when it goes south of its purchase price speak in tongues about ev’bal forces.
I don’t agree, and do agree. The distinction is this:
Will the USD lose reserve currency soon? Probably no. And that is where I agree with you that the elites will fight to save USD as reserve currency.
Will USD lose it’s hegemony? Probably yes, and I don’t the U.S., The Empire, or the elites can stop that.
If you fix a few of Hudson’s errors, and take him as making the point that USD is losing it’s hegemony, IMO he is basically correct.
thanks Mr. Hudson. One has to wonder what has happened when the government (for decades) has been shown to be morally and otherwise corrupt and self serving. It doesn’t seem to bother anyone but the people, and precious few of them. Was it our financial and legal bankruptcy that sent us over the cliff?
That is the thing about a Michael Hudson article. You don’t so much read it as study it. I am going to say that it is Washington’s overreach and their treatment of their allies as recalcitrant vassals that is really fueling this move away from the US system. US dollars are not yet radioactive which is good for world trade but their share of usage is gradually decreasing over time. A few months ago the US tried to stop Russia selling military equipment to China as there were US dollars involved somewhere so now the Russian and Chinese are plugging these vulnerabilities. So if you use US dollars anywhere in the world, the US gets a say so on how you spend it. That is not the optimization for an international currency.
Another source of friction is the militarization of US law with the assumption that an American law applies the whole world over. I just read today that a US court has ordered that Syria “is liable for at least $302.5 million in damages for its role in the 2012 death of renowned American journalist Marie Colvin”. I think that another court a few months ago found that Iran was responsible for 9/11 (cough-Saudi Arabia-cough) and now has a judgement against it. US law has become a bit of a backwater internationally the past few years so its use in matters overseas is really grinding gears. That Chinese Mafia Princess arrested in Canada recently? It was, at core, because China sold gear to Iran without US permission which would never be granted.
With the US now saying who can trade with whom is going a step too far. I remember when in 2014 the US was ordering countries to cease trade with Russia – at the same time that their trade with Russia was increasing. With smart and sensitive leadership the US could ameliorate the worse excesses of US policies but after the past few years where you had a Bush, an Obama and now a Trump so you can forget that approach. The outlook, weather-wise, is overcast with the promise of a total s***storm.
And speaking of American overreach, did you know that you can be prosecuted in the U.S., as an American citizen, for violating another country’s laws?
See the video “Don’t Talk to The Police! Richard Duane, Regents University” for an excellent primer on this along with some damn good commons sense observations for any American.
Michael Hudson – “export crops like coffee and bananas” …
Anybody else notice the “abundance” of avocados in the stores lately??
Guatemala!
Guatemala? I thought it was Mexico.
I went to 5 stores (including 3 that should know better – Natural Grocers, Sprouts Farmers Markets and Trader Joe’s – the others were Walmart and Fry’s (Kroger)) yesterday to get our super bowl avocados and all only had ones from Mexico, which I wouldn’t buy because they are destroying Monarch butterfly habitat to put in the farms. No guac for us this year.
If you can wait a little while with climate change kicking in, avocados will be able to be grown in the Central Valley, but for now, it’s still a little too cold for them to make it here.
I have a hardy citrus growing, called Yuzu Ichang. It hasn’t bloomed yet, but it’s made it through several winters. I think it’s hardy to below 20 – but not zero; we tried that a few years ago.
The thing is, there used to be avocados grown in warmer parts of California, and in South Florida too I believe. And then they were price-undercut by lower-priced avocados from Mexico. Meanwhile Mexican corn was price undercut by lower priced corn from the Midwest.
NAFTA was designed to destroy targeted agricultural sectors in both countries to reduce in-country-production for in-country-use in each country, and force the amount of food trade between each country UP by tearing DOWN agricultural production within each country for use within each country.
Mexico, Dominican Republic, Peru, Colombia are the biggest producers of avocado.
I eat at least one a day.
Other significant avocado producing countries include Peru, Colombia and Indonesia.
The Biggest Avocado Producing Countries In The World
Rank
1 Mexico. 1.52 (millions of tonnes, 2014)
2 Dominican Republic 0.42
3 Peru 0.35
4 Indonesia 0.31
5 Colombia 0.28
Avocado’s are abundant this time of year because there is a conflux of the two varieties, the fuerte and the Haas. The dominant selling avocado is the rough-skinned Haas. The California grown fuerte avocado is readily available in the Western US.
I remember from long ago avocados which were sort-of bigger than the current Haas, and smoother skinned with a more green color skin. Could that be the Fuerte?
Nah, they’ve been cheap for quite a while…even in August, I was seeing the for $1.25 or $1 each, nice big Haas avocados.
I’m sympathetic to the argument, but coming from an academic the presentation is a bit sloppy. Not only does he invent the meaningless phrase “quo bono” (as has been pointed out, it’s “cui bono”) he’s wrong about World Bank Presidents being former Defence Secretaries (the current incumbent is Korean, anyway). He’s completely confused about the legal side, and has invented an entirely mythical organisation – the “United Nations International Court.” He seems to be mixing up two organisations: the International Court of Justice in The Hague, which is nothing to do with the UN, and settles international law questions where the countries agree to accept its judgements, and the International Criminal Court also in The Hague which deals with violations of international humanitarian law, and is a treaty-based organisation of which the US is not a member anyway. Five minutes checking in Wikipedia could have avoided all these errors. I wonder how many others there are? As I say, I’m not unsympathetic to the argument, but you expect better from a distinguished academic.
Who is confused?
International Court of Justice;
W4B;
Making stuff up is against this sites rules.
It predates the United Nations as the Permanent Court of International Justice, although it has a link to the UN now, as practically all global organisations do. The UN is obviously the right place to elect the judges, for example. It is not a “UN Court” and has jurisdiction only over international law questions where both sides agree in advance to accept the verdict. The article is conflating and confusing two organisations in the Hague, quite different, which in each case have a link to the UN, but are not, individually or collectively, a “UN Court.”
I second David’s remarks. The author should get his terms right and be clear what court he’s referring to — he does seem to conflate the ICC and the ICJ.
One other correction: I believe it was FDR, not LBJ, who famously remarked “He may be a son of a [family blog] but he’s our son of a [family blog],” in reference to the Nicaraguan dictator Anastasio Somoza.
I had thought FDR said that about Rafael Trujillo of the Dominican Republic. And it was said in a spirit of rueful resignation.
Someone did a little history of the forms of this quote and whom it might have applied to.
http://www.marxmail.org/archives/july98/somoza.htm
Sorry David, you can’t dodge the fact that you don’t have this exactly straight, which I believe is your quibble with MH. the fact that the International Court of Justice was established by the Charter of the United Nations stands in stark contrast to your contention that it has “nothing to do with the UN”.
And along this line, your comment below is also imprecise;
The Permanent Court of International Justice didn’t become the ICJ, it would be just as correct to say it ceased to exist, and was replaced by the ICJ.
At any rate, these criticisms of Michael Hudson’s article don’t amount to enough to cause one to question his main point.
Michael Hudson is a God that Walks the Planet!!!
Hudson for World Philosopher King!
What up, Doc?
Indeed! It is to say the least encouraging to see Dr. Hudson return so forcefully to the theme of ‘monetary imperialism’. I discovered his Super Imperialism while looking for an explanation for the pending 2003 US invasion of Iraq. If you haven’t read it yet, move it to the top of your queue if you want to have any idea of how the world really works. You can find any number of articles on his web site that return periodically to the theme of monetary imperialism. I remember one in particular that described how the rest of the world was brought on board to help pay for its good old-fashioned military imperialism.
If it isn’t clear to the rest of the world by now, it never will be. The US is incapable of changing on its own a corrupt status quo dominated by a coalition of its military industrial complex, Wall Street bankers and fossil fuels industries. As long as the world continues to chase the debt created on the keyboards of Wall Street banks and ‘deficits don’t matter’ Washington neocons – as long as the world’s 1% think they are getting ‘richer’ by adding more “debts that can’t be repaid (and) won’t be” to their portfolios, the global economy can never be put on a sustainable footing.
Until the US returns to the path of genuine wealth creation, it is past time for the rest of the world to go its own way with its banking and financial institutions.
Its interesting that in Asia, the USG also says it wants to help build infrastructure for LNG use (as an element of its anti China strategy) but then also wants Asian nations like Vietnam to buy American LNG (to reduce America’s trade deficits, etc.) once the infrastructure is in place. Except it would be economically stupid for anyone in Asia to buy more expensive US LNG, when adequate supplies of LNG at lower costs are available from nations like Australia, Malaysia and Indonesia and of course Qatar. I guess when you really can’t compete because you subsidize the military and FIRE sectors and don’t invest in your society, you resort to government interference in the market or “regime change”, and then criticize anyone for doing the same thing. Hypocrisy at its finest.
The use of the stick will only go so far. What’s the USG going to do if they refuse?
In other words, after 2 World Wars that produced the current world order, it is still in a state of insanity with the same pretensions to superiority by the same people, to get number 3.
I remember being utterly amazed about 10 years ago when the Germans wanted to just look at their gold in the vaults at the New York Fed, and were told by the US authorities “NO!” , and the Germans backed down. And another moment of gob-smacking arrogance during the Reagan years when the US refused to recognize the World Court’s jurisdiction when Nicaragua sued the US for mining it’s harbors. The US refused to participate, lost the case and was able to get away with not paying the judgment. Is my memory faulty on any of this?
Ever hear of the “Hague Invasion Act” passed under Bush? In short, if you are an American or an American ally (e.g. Israeli) and you find yourself in Hague charged with war crimes or crimes against humanity, the Pentagon is authorized to go into the Hague, if necessary, and break them out-
https://en.wikipedia.org/wiki/American_Service-Members%27_Protection_Act
Re: Where’s the left in all this? I think the left is a mostly busted flush. Corbyn might just be the last serious chance in Europe but I’m not holding my breath. The US has dropped any pretences and these are end of empire spasms. Europe has made itself hostage to American fortune. I think the Gilettes Jaunes point the way to what might come next.
UK withholding Gold may start another Brexit? IE: funds/gold held by BOE for other countries in Africa, Asian, South America, and the “stans” with start to depart, slowly at first, perhaps for Switzerland?
Where is the left in all this? Pretty much the same place as Michael Hudson, I’d say.
Where is the US Democratic Party in all this? Quite a different question, and quite a different answer. So far as I can see, the Democrats for years have bombed, invaded and plundered other countries ‘for their own good’. Republicans do it ‘for the good of America’, by which the ignoramuses mean the USA. If you’re on the receiving end, it doesn’t make much difference.
Agreed! South America intervention and regime change, Syria ( Trump is pulling out), Iraq, Middle East meddling, all predate Trump. Bush, Clinton and Obama have nothing to do with any of this.
” it has offered to sell high-priced LNG from the United States (via port facilities that do not yet exist in anywhere near the volume required).” – facilities that are themselves dangerous and highly controversial. Oregon is in the midst of one of those controversies, trying to stop construction of an LNG export “facility” at Coos Bay, a scenic but impoverished port on the southern Oregon coast. It would come with a pipeline across the state, which is also highly unwelcome. LNG facilities are a fuel-air bomb waiting to happen, if it should leak – the Oregon coast is subject to Magnitude 9 subduction quakes and tsunamis. The project would also involve massive dredging that would threaten the local seafood industry. And gas pipelines are subject to their own threats, doubly so in earthquake country. Maybe they can be built uncontested in Europe – but I doubt it.
” So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. ”
What proof is there that the gold is still there? Chances are it’s notional. All Germany, Venezuela, or the others have is an IOU – and gold cannot be printed.
Incidentally, this whole discussion means that gold is still money and the gold standard still exists.
Wukchumni beat me to the suspicion that the gold isn’t there.
What makes you think that the gold in Fort Knox is still there? If I remember right, there was a Potemkin visit back in the 70s to assure everyone that the gold was still there but not since then. Wait, I tell a lie. There was another visit about two years ago but look who was involved in that visit-
https://www.whas11.com/article/news/local/after-40-years-fort-knox-opens-vault-to-civilians/466441331
And I should mention that it was in the 90s that between 1.3 and 1.5 million 400 oz tungsten blanks were manufactured in the US under Clinton. Since then gold-coated tungsten bars have turned up in places like Germany, China, Ethiopia, the UK, etc so who is to say if those gold bars in Fort Knox are gold all the way through either. More on this at-
http://viewzone2.com/fakegoldx.html
A non-accountable standard…
It’s more obvious BS than what is going on now.
It wasn’t last year that Germany brought back its Gold. It has been ongoing since 2013, after some political and popular pressure build up. They finished the transaction in 2017.
According to an article in Handelblatt (but it was widely reported back then) they brought back pretty much everything they had in Paris (347t), left what they had in London (perhaps they should have done it in reverse) and took home another 300t from the NY Fed. That still leaves 1236t in NY. But half of their Gold (1710t) is now in Frankfurt. That is 50% of the Bundesbanks holdings.
They made a point in saying that every bar was checked and weighed and presented some bars in Frankfurt. I guess they didn’t melt them for assaying, but I’d expect them to be smart enough to check the density.
Their reason to keep Gold in NY and London is to quickly buy USD in case of a crisis. Thats pretty much a cold war plan, but that’s what they do right now.
Regarding Michal Hudsons piece, I enjoyed reading through this one. He tends to write ridiculously long articles and in the last few years with less time and motivation at hand I’ve skipped most of his texts on NC as they just drag on.
When I’m truly fascinated I like well written, long articles but somehow he lost me at some point. But I noticed that some long original articles in US magazines, probably research for a long time by the journalist, can just drag on for ever as well I just tune out.
This is making sense. I would guess that tearing up the old system is totally deliberate. It wasn’t working so well for us because we had to practice too much social austerity, which we have tried to impose on the EU as well, just to stabilize “king dollar” – otherwise spread so thin it was a pending catastrophe. Now we can get out from under being the reserve currency – the currency that maintains its value by financial manipulation and military bullying domestic deprivation. To replace this old power trip we are now going to mainline oil. The dollar will become a true petro dollar because we are going to commandeer every oil resource not already nailed down. When we partnered with SA in Aramco and the then petro dollar the dollar was only backed by our military. If we start monopolizing oil, the actual commodity, the dollar will be an apex competitor currency without all the foreign military obligations which will allow greater competitive advantages. No? I’m looking at PdVSA, PEMEX and the new “Energy Hub for the Eastern Mediterranean” and other places not yet made public. It looks like a power play to me, not a hapless goofball president at all.
The Saudis didn’t want our Dollars initially all that much, for what it’s worth.
https://coinweek.com/coins/news/unusual-items-us-mint-gold-disks-made-for-oil-payments-to-saudi-arabia/
So sand people with sociological attachment to the OT is a compelling argument based on antiquarian preferences with authoritarian patriarchal tendencies for their non renewable resource …. after I might add … it was deemed a strategic concern after WWII ….
Considering the broader geopolitical realities I would drain all the gold reserves to zero if it was on offer …. here natives have some shiny beads for allowing us to resource extract … we call this a good trade… you maximize your utility… as I do mine ….
Hay its like not having to run C-corp compounds with western 60s – 70s esthetics and letting the locals play serf, blow back pay back, and now the installed local chiefs can own the risk and refocus the attention away from the real antagonists.
Was that LBJ quote about “bastards…” real, or was it a remembering of FDR’s statement about the elder Anastasio Somoza of Nicarugua: “he may be a SOB but he’s our SOB” ? But attribution of the statement to FDR is also uncertain — Snopes traces the general trope of “he may be a ____ but he’s our ____” back to at least Thaddeus Stevens during post-Civil War reconstruction.
I remember that statement about bastards being attributed to someone else other than LBJ.
Indeed. Thanks so much for this. Maybe the RICS will get serious now – can no longer include Brazil with Bolsonaro. There needs to be an alternate system or systems in place, and to see US Imperialism so so blatantly and bluntly by Trump admin – “US gives Juan Guaido control over some Venezuelan assets” – should sound sirens on every continent and especially in the developing world. I too hope there will be fracture to the point of breakage. Countries of the world outside the US/EU/UK/Canada/Australia confraternity must now unite to provide a permanent framework outside the control of imperial interests. The be clear, this must not default to alternative forms of imperialism germinating by the likes of China.
” … such criticism can’t begin to take in the full scope of the damage the Trump White House is inflicting on the system of global power Washington built and carefully maintained over those 70 years. Indeed, American leaders have been on top of the world for so long that they no longer remember how they got there. Few among Washington’s foreign policy elite seem to fully grasp the complex system that made U.S. global power what it now is, particularly its all-important geopolitical foundations. As Trump travels the globe, tweeting and trashing away, he’s inadvertently showing us the essential structure of that power, the same way a devastating wildfire leaves the steel beams of a ruined building standing starkly above the smoking rubble.”
http://www.tomdispatch.com/blog/176373/tomgram%3A_alfred_mccoy%2C_tweeting_while_rome_burns
Way I see it is we are in an era of unparalleled Econ War. Economic Warfare is the way of war as nuclear war is unthinkable. Nuclear war is thought of.
My thing is a nation of airports. Of course I can’t think of having nuclear weapons since I’d never be able to get out of my own way.
Tactical nuclear weapons are dialed down thermonuclear weapons that act like the neutron bomb & kill tank crews. A EU RU Tank Treaty is called for now as a return to doing things in order. Putin could get away with using tanks in Ukraine to get what he wants, without triggering a nuclear exchange. Putin would withdraw before triggering a tactical use of nuclear weapons to kill his tank crews.
Ukraine gave up (Its) nuclear weapons. Hudson meant “Bottomless Pit” not “bottomless it”. -pit of corruption. Sanctions applied against Putin’s Russia for the annexation of Crimea and invasion of Ukraine are Economic Warfare.
Lesson from WWII is that Sanctions must be resolved in a timely manner or they lead to real war. The militarized Japanese executed a “Sneak Attack” on the US at Pearl Harbor.
“Spies and Mobsters know war never ends.” RSD.
“Gold is for bribing border guards.” -I forget who wrote that about gold, but it is apt
.
The release from the Gold Standard and the conceptual art that is Sovereign Currency, fiat currency, or the military industrial complex petrodollar Clinton Unit II currency has another side.
The good side of the conceptual art currency is its connection on real limits such as production capacity and whatever is real. A real need creates real limits. Sovereign currency can be created to pay for real necessities.
We didn’t get the Keynes Bancor. We got the World Bank and the IMF which use US Dollars and aspire to give the US de facto status as the World Government, which when corrupted as part of the International United Oligarchy creates a reaction, a stop.
The Euro is still somewhat respected, so as a fiat world currency could pay for the necessities in the world mobilization to prevent the collapse of the food chain.
The most important necessity is a machine and a system for its employment to actually suck CO2 out of the atmosphere. We do need a work of art to fix a world problem. We do need a work of art to pay engineers to make machines & systems to protect the food chain.
God knows all all the time. God gives me the prospect of knowing what I need to know when I need to know it. I’m finite. God is infinite.
Finance is finite, Economics is infinite.
It is simply a way of thinking about it.
Thanks. I gave you here a scattershot stream of consciouness comment after reading Michael Hudson’s column and reading all of the other comments. I took some of what Prof. Hudson wrote as de facto realities. I’d be a stone cold atheist were it not for what I get out of reading readings for the day from the Bible and chance readings from the I Ching done at the same time.
I double checked Hudson’s assertion that Presidents of the World Bank are traditionally US SecDefs. According to Wikipedia, there are 1-2 deputy /ass’t secdefs, 1 secdef (mcnamara), and a bunch of others w/no background in the dept of defense.
I always trust Michael Hudson to get details right – can anyone help square this apparent circle? Did he make a mistake with this statement?
Thanks.
Start with McCloy. Get the names. Then look at their backgrounds. It should be obvious. It helps to actually have meet them and known their priorities.
What I appreciated here was your characterization of the big picture.
Um, Jim Wolfensohn had nothing to do with the US security state. An Australian, a partner at Salomon Brothers, then headed his own boutique investment bank. Paul Volcker later became chairman of his firm. Didn’t do any banking for MIC types. And Larry Summers later petitioned hard to get the job.
INSTEX seems to be set up to fail. US-poodle UK as its supervisory board. It was UK that refused to ship gold to Venezuela just this week.
No way the EU misleadership will do something to make life better for its citizens.
“EU lawmakers voted 439 in favor to 104 against, with 88 abstentions, at a special session in Brussels to recognize Venezuelan congress head Guaido as interim leader.
In a statement with the non-binding vote, the parliament urged the bloc’s 28 governments to follow suit and consider Guaido “the only legitimate interim president””
“lawmaker” aka the EU pseudo-parliament.
In Venezuela the people can trigger a recall referendum on the government/president (is there any country in EU where the people can do this?)
The process to instigate a recall referendum in Venezuela:
• 1% of voters on the electoral roll have to sign a petition within 30 days to kick-start the process
• 20% of voters (almost four million) have to sign a second petition in order to trigger the referendum
• For the referendum to be successful, an equal or greater number of voters than those who elected Mr Maduro would have to cast their vote in favour of the recall – he won the 2013 election with 7,587,579 votes
The image we are getting from MSM are that almost all Venezuelans hate Maduro “dictatorship”, how hard could it be to get 20% of the voters for a referendum?
I read something like this and I am like, some of these statements need to be qualified. Like: “Driving China and Russia together”. Like where’s the proof? Is Xi playing telephone games more often now with Putin? I look at those two and all I see are two egocentric people who might sometimes say the right things but in general do not like the share the spotlight. Let’s say they get together to face America and for some reason the later gets “defeated”, it’s not as if they’ll kumbaya together into the night.
This website often points out the difficulties in implementing new banking IT initiatives. Ok, so Europe has a new “payment system”. Has it been tested thoroughly? I would expect a couple of weeks or even months of chaos if it’s not been tested, and if it’s thorough that probably just means that it’s in use right i.e. all the kinks have been worked out. In that case the transition is already happening anyway. But then the next crisis arrives and then everyone would need their dollar swap lines again which probably needs to cleared through SWIFT or something.
Anyway, does this all mean that one day we’ll wake up and a slice of bacon is 50 bucks as opposed to the usual 1 dollar?
Driving Russia and China together is correct. I recall them signing a variety of economic and military agreement a few years ago. It was covered in the media. You should at least google an issue before making silly comments. You might start with the report of Russia and China signing 30 cooperation agreements three years ago. See https://www.rbth.com/international/2016/06/27/russia-china-sign-30-cooperation-agreements_606505. There are lots and lots of others.
He’s draining the swamp in an unpredicted way, a swamp that’s founded on the money interest. I don’t care what NYT and WaPo have to say, they are not reporting events but promoting agendas.
The financial elites are only concerned about shaping society as they see fit, side of self serving is just a historical foot note, Trumps past indicates a strong preference for even more of the same through authoritarian memes or have some missed the OT WH reference to dawg both choosing and then compelling him to run.
Whilst the far right factions fight over the rudder the only new game in town is AOC, Sanders, Warren, et al which Trumps supporters hate with Ideological purity.
Imagine the response of the USA Goobermint if, in an obverse scenario of the Venezuelan fiasco, the Roosians and Chai-nese decided Trump was an undemocratic dictator and declared they are depositing all USA payments they owe into Bernie Sander’s accounts?
Oh, I’m sorry, bad analogy: unlike Guaido, Sanders actually ran and would be hanging around the oval office if we had a democracy.
Highly doubt he is a “witting agent”, most likely is that he is just as ignorant as he almost daily shows on twitter. On US role in global affairs he say the same today as he did as a media celebrity in the late 80s. Simplistic household “logics” on macroeconomics. If US have trade deficit it loses. Countries with surplus are the winners.
On a household level it fits, but there no ”loser” household that in infinity can print money that the “winners” can accumulate in exchange for their fruits of labor and resources.
One wonder what are Trumps idea of US being a winner in trade? Aka sending away its fruits of labor and resources overseas in exchange for what? A pile of USD? That US in the first place created out of thin air. Or Chinese Yuan, Euros, Turkish liras? Also fiat-money. Or do he think US trade surplus should be paid in gold?
When the US political and economic hegemony will unravel it will come “unexpected”. Trump for sure are undermining it with his megalomaniac ignorance. But not at all sure it’s imminent.
Anyhow frightening, the US hegemony have its severe dark sides, but there is absolutely nothing better on the horizon, a crash will throw the world in turmoil for sure, probably for decades or longer. A lot of bad forces will see their chance to elevate their influence. There will be fierce competition to fill the gap.
One could imagine the insane economic model of EU/Germany being on top of global affairs, a horribly frightening thought. Misery and austerity for all globally, a permanent recession. Probably not much better with the Chinese on top.
Ill take the USD hegemony any day compared to that prospect.
Highly doubt he is a “witting agent”, most likely is that he is just as ignorant as he almost daily shows on twitter. On US role in global affairs he says the same today as he did as a media celebrity in the late 80s. Simplistic household “logics” on macroeconomics. If US have trade deficit it loses. Countries with surplus are the winners.
On a household level it fits, but there no ”loser” household that in infinity can print money that the “winners” can accumulate in exchange for their resources and fruits of labor.
One wonder what are Trumps idea of US being a winner in trade (surplus)? I.e. sending away their resources and fruits of labor overseas in exchange for what? A pile of USD? That US in the first place created out of thin air. Or Chinese Yuan, Euros, Turkish liras? Also fiat-money. Or does he think US trade surplus should be paid in gold?
When the US political and economic hegemony will unravel it will come “unexpected”. Trump for sure are undermining it with his megalomaniac ignorance. But not sure it’s imminent.
Anyhow frightening, the US hegemony have its severe dark sides. But there is absolutely nothing better on the horizon, a crash will throw the world in turmoil for decades or even a century. A lot of bad forces will see their chance to elevate their influence. There will be fierce competition to fill the gap.
On could the insane economic model of EU/Germany being on top of global affairs, a horribly frightening thought. Misery and austerity for all globally, a permanent recession. Probably not much better with the Chinese on top.
Ill take the USD hegemony any day compared to that prospect.
Highly doubt Trump is a “witting agent”, most likely is that he is just as ignorant as he almost daily shows on twitter. On US role in global affairs he says the same today as he did as a media celebrity in the late 80s. Simplistic household “logics” on macroeconomics. If US have trade deficit it loses. Countries with surplus are the winners.
On a household level it fits, but there no ”loser” household that in infinity can print money that the “winners” can accumulate in exchange for their resources and fruits of labor.
One wonder what are Trumps idea of US being a winner in trade (surplus)? I.e. sending away their resources and fruits of labor overseas in exchange for what? A pile of USD? That US in the first place created out of thin air. Or Chinese Yuan, Euros, Turkish liras? Also fiat-money. Or does he think US trade surplus should be paid in gold?
When the US political and economic hegemony will unravel it will come “unexpected”. Trump for sure are undermining it with his megalomaniac ignorance. But not sure it’s imminent.
Anyhow frightening, the US hegemony have its severe dark sides. But there is absolutely nothing better on the horizon, a crash will throw the world in turmoil for decades or even a century. A lot of bad forces will see their chance to elevate their influence. There will be fierce competition to fill the gap.
On could the insane economic model of EU/Germany being on top of global affairs, a horribly frightening thought. Misery and austerity for all globally, a permanent recession. Probably not much better with the Chinese on top.
I’ll take the USD hegemony any day compared to that prospect.
Sorry for the double posts, there seems to be a long delay until my posts was visible. Please remove, the first two.
Former US ambassador, Chas Freeman, gets to the nub of the problem.
“The US preference for governance by elected and appointed officials, uncontaminated by experience in statecraft and diplomacy, or knowledge of geography, history and foreign affairs”
https://www.youtube.com/watch?annotation_id=annotation_882041135&feature=iv&src_vid=Ge1ozuXN7iI&v=gkf2MQdqz-o
When the delusion takes hold, it is the beginning of the end.
The British Empire will last forever
The thousand year Reich
American exceptionalism
As soon as the bankers thought they thought they were “Master of the Universe” you knew 2008 was coming.
The delusion had taken hold.
Michael Hudson, in Super Imperialism, went into how the US could just create the money to run a large trade deficit with the rest of the world.
It would get all these imports effectively for nothing, the US’s exorbitant privilege.
I tied this in with this graph from MMT.
This is the US (46.30 mins.)
https://www.youtube.com/watch?v=ba8XdDqZ-Jg
The trade deficit required a large Government deficit to cover it and the US government could just create the money to cover it.
Then ideological neoliberals came in wanting balanced budgets and not realising the Government deficit covered the trade deficit.
The US has been destabilising its own economy by reducing the Government deficit.
Bill Clinton didn’t realise a Government surplus is an indicator a financial crisis is about to hit.
The last US Government surplus occurred in 1927 – 1930, they go hand-in-hand with financial crises.
Richard Koo shows the graph central bankers use and it’s the flow of funds within the economy, which sums to zero (32-34 mins.).
https://www.youtube.com/watch?v=8YTyJzmiHGk
The Government was running a surplus as the economy blew up in the early 1990s.
It’s the positive and negative, zero sum, nature of the monetary system.
A big trade deficit needs a big Government deficit to cover it.
A big trade deficit, with a balanced budget, drives the private sector into debt and blows up the economy.
It should be remembered Bills early meeting with Rubin, where in he was informed that wages and productivity had diverged – Rubin did not blink an eye.
Excellent round-up of US foreign policy, which is dependent on “whatever is good for US business”
It is a wonder that MH has any belief in the Capitalist system left.