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Changes in Superimperialism
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Oscar Brisset:

Welcome to the first event of the Oxford Economics Society for this academic year. I’m Oscar, the Co-President of our society, and I’m glad to welcome you back for another term of exciting discussions. Although we were hoping last term to be back in-person by January, due to the worsening Covid-19 situation in the UK our events this term are going to remain online, so that everyone at home can still participate.

A new year calls for new resolutions, and our society’s resolution for 2021 is to increase the diversity of economic topics discussed. To give you an idea, we’ll be hosting a presentation on Decolonising Economics and its role in Emerging Markets by Dr. Ingrid Kvangraven, the executive board member of Diversifying and Decolonising Economics. We’ll be hosting Prof. Randall Wray, a strong proponent of the much-discussed modern monetary theory, who was also as I just discovered, professor at the University of Missouri-Kansas City, like our guest today. We’ll also be hosting a presentation on the Young Scholars Initiative run by the Institute of New Economic Thinking at Oxford, a community some of you will definitely be interested in joining that brings together more than 15,000 young economists from around the world. Finally, we’ll be organizing a moderated discussion with the FT’s Chief Economics commentator Martin Wolf, and many other events of course.

To start us off, we are proud to host Michael Hudson, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, former balance-of-payments economist at Chase Manhattan, and an economic advisor to governments worldwide, including Iceland, Latvia and China, on finance and tax law. Now, nearly 50 years after the original publication of “Super Imperialism“, Professor Hudson will be discussing “Changes in Super Imperialism: The position of the USA & China in our Global Economic System”. How has the rise of China and the Covid-19 pandemic affected the USA’s capacity to control financial flows? How will the USA modify its behaviour as a result?

The talk will last 45 minutes, with 15 minutes of questions at the end. Make sure to send in your questions throughout the talk through our Pigeonhole page. The link should be in the description of this event. If you would like to re-watch our events, they’ll be posted to our YouTube channel afterwards.

Thank you for joining us, Professor Hudson…

Prof Hudson:

It’s good to be here. Thank you for inviting me, especially since you mentioned people that I’ve known for a long time. Randall Wray, both of us are now at the Levy Institute and working in other places, and Martin Wolf I’ve been friends with.

The reason that I’m writing a new version of Super Imperialism is that I was asked to by China, and I thought, “As long as they want to bring out a new translation and basically an update of the book, I might as well do it in English too.” I bought the rights back from Pluto and in about two or three months I will be reissuing the English language edition. The context for de-dollarization today by China, Russia and other countries is basically “How do you make an alternative to an international financial order that really was designed from the beginning to benefit the United States in its own self-interest?”

This issue was discussed after WWI when the intergovernmental debt system broke down into Allied debts and German reparations. It was discussed again at the 1930s when the United States sort of scuttled the London Economic Conference of 1933, and it was especially discussed in 1945 in December, in parliament. In the House of Commons, the British parliamentarians were discussing, “Do we want to accept the terms of the British loan?” which ended up being 3.75 billion USD, written down from what Keynes had wanted, or “Do we want to go it alone?”

It was the Conservative pro-empire Members of Parliament that wanted to reject the loan. Churchill wanted at least to abstain, but there was no alternative. In 1945 and again in 1971 when America moved off gold, in every case the alternative seemed to be anarchy. The U.S. strategy was to say, either you accept U.S. rules that favored the United States – in the beginning creditor rules, but debtor rules after 1971, and essentially gave it control of the world economy – or you go it alone and risk anarchy.

Britain was not able to go it alone in 1945. I did not include the parliamentary discussion in the first version of Super Imperialism, but I’ve included that discussion in the new version, because Britain said very clearly: “The United States basically wants to absorb the British Empire and the Sterling area into the Dollar area on its own terms and leave us almost broke. What can we do about it?” Both parties said: “We see that the United States is treating us, its ally in WWII, as a defeated party.” They came right out and said that. “But we don’t have an alternative because we can’t go alone. We have to rely on the United States.”

Let me review what the U.S. strategy is, and what’s led to major changes over time. Dollar supremacy was established after World War I by America’s creditor position. Something very novel happened after. In every previous war, for instance the Napoleonic wars and the earlier wars England had been involved with, the allies had forgiven all of their mutual debts at the end of the war. There was something that the British called “shared sacrifice”, and the idea was “We’re going to have a clean slate after the war.”


Tis idea goes all the way back to Babylonia in the second millennium BC. Throughout history there was a debt cancellation. There was no carryover of war debts after victory was achieved, because the idea was that if you leave war debts in place, that’s going to bankrupt the allies that you had during the war. It’s also going to bankrupt the defeated countries, and leave them no choice except to fight back.

The laws of Hammurabi showed this. His whole dynasty showed this. My book on Forgive Them Their Debts is a whole history of debt cancellations. But the United States broke this practice after WWI and said: “The debts have to be paid.” The amazing thing is that Europe went along with it. It had a pro-creditor ideology. It believed in the sanctity of debt, and was not going to question that because there was a guiding assumption – which is erroneous – that all debts somehow can be paid if only countries will either devalue or transform their economy, or impose austerity.

Keynes had a long debate with the anti-German Jacques Rueff of France and the American-Swede Bertil Ohlin. Keynes explained that there was no way that debtor countries like the allies or Germany could pay their debts to the creditor unless the creditor is willing to buy their exports, to provide them with the foreign exchange to pay. That debate obviously he won in reality, but that assumption was rejected by the United States, and continues to be rejected by the International Monetary Fund today. The junk economics that was brought in after World War One to consolidate the American position was: “Of course you can pay: simply destroy your economy and let us take you over, and sell out all of your industry and raw materials out to us, and that will enable you to pay.” That’s what the American demanded. It’s what the creditor demand has always been. Essentially you have to be willing to destroy your economy in order to pay your debts.

Keynes said this was crazy and he was right, but Europe went along with it and said, “Yes, we are willing to destroy our economies; we are willing to create the resentment for World War II rather than question the assumption that all the debts have to be paid.”

What Keynes pointed out was that there was a distinction between the budget problem – in other words, taxing the economy to raise a domestic fiscal surplus in German Marks or British Sterling – and the transfer problem of paying foreign currency. What happened was that the Allies said, “If America is going to insist that we pay, we’re not going to wreck our economies. We’re going to make Germany pay reparations.”

As you all know, the result was to bankrupt Germany, causing a hyperinflation there that was only solved by Germany essentially borrowing the money from the United States. German municipalities would borrow the money in dollars for local spending, use the Dollars to turn over to the Reichsbank to pay the Bank of England and the Bank of France, in turn to pay their dollar debts to the United States. That was a circular flow.

It could only be kept going by the Federal Reserve making interest rates very low here in the United States to promote an outflow of foreign investment to Germany. But those low interest rates also created a stock market boom that crashed in 1939. In the end, the Inter-Ally debts had to be canceled. There had to be a moratorium, along with German reparations as the system broke down in 1931. There was an attempt to reconstruct the economy at the London Economic Conference of 1933 but Roosevelt scuttled that and said, “We’re going to go it alone.”

The basic principle of American foreign policy is that no other country can tell us what to do. We can tell other countries what to do, but they cannot tell us what to do. So we will not join any agreement in which we don’t have a veto power that gives us control of the World Bank and the International Monetary Fund, or the veto power in the United Nations and any international organization that the United States will join. So the question is: how could this supremacy be established all over again as World War II came to a close?

In 1944 and 1945, America made plans for the postwar economy. Its guiding logic was that: “In order to have full employment in the United States we have to have an export-based industry. Now that we’ve destroyed Germany and Japan our major enemy is the United Kingdom.” It became very clear that America’s enemy immediately on the ending of World War II was not Russia or the Soviet Union, but England. It developed a strategy that was designed to essentially bankrupt England with the 1946 British Loan, to force England to accept to end Imperial Preference, to break up its empire, to make it free the about 10 billion pounds Sterling, to be used for spending not in England as blocked currency as the British Board of Trade expected, but in the United States. So England was stripped of all of the blocked currency, stripped of the currency area, stripped of its exclusive Sterling Area, and thereby the empire that became absorbed into the Dollar Area.

The parliamentarians and members of the House of Lords said, “We know that we’re bankrupting Britain, but the alternative is to go it alone, and we can’t really make an alternative.” Keynes said, “Of course you could create your own currency and trading area with India, Canada and other countries, but that would involve a great shrinking.”


At the time they believed still that there had to be some means of settling international payments on creditor terms with gold. The United States had most of the gold in 1945. The British understood very clearly that what seemed to be the gold exchange standard – for countries that settled their balance of payments deficits in gold – was really the Dollar standard, because the dollar was defined in terms of gold. What seemed to be a gold standard was actually the Dollar standard, and in fact the arrangements that America created in 1945 were so one-sided that by 1950 it had drawn another five billion dollars’ worth of monetary gold into the United States out of Europe. There was a refugee flight of gold in the 1930s that was followed by a post-war flight out of Europe. British banks and the wealthiest classes began to move their money to the United States.

By the time of the Korean War in 1950 and 1951, America’s balance-of-payments deficit changed abruptly. From 1951 through the 1960s and 1970s, the entire U.S. balance of payments deficit was military. At first this deficit was welcomed by Europe and by other countries because finally the United States was providing the rest of the world with dollars that it needed to grow. The dollar outflows became the basis of Europe’s central bank reserves along with gold. Some of the dollars were cashed into gold especially by France, and by Germany even more.

The U.S. balance-of-payments deficit was entirely due to America’s military spending. The U.S. private sector was exactly in balance. All of the deficits were on government account, and were entirely military. American foreign aid actually made money in balance-of-payments terms. In the 1960s when I was working at the Chase Manhattan Bank, every Friday the Federal Reserve would publish statistics on the gold cover. All of the paper currency in the United States had to be backed 25 percent by gold. Every Friday we would look at what is the gold cover – how much over the 25 percent does America have in free gold to sell, to settle the military deficit from spending in Southeast Asia, in the Vietnam War and other military operations throughout the world.

It was obvious already in the mid-60s that the United States at some point would run out of gold if it continued its military spending. That led Chase Manhattan’s Chairman of the Board George Champion to oppose the Vietnam War, saying was fiscally irresponsible. It was the business community and the right-wing in the United States that opposed America’s foreign war, not the labor movement. The labor movement was for the war because it was causing an inflation and helping wages rise. The golden age of American labor was the 1960s and 1970s, resulting from the balance of payments deficit. It was the business community that opposed the war – but not David Rockefeller when he took over from George Champion. Rockefeller wanted to “do the right thing.” He sort of followed what the Treasury asked Chase to do and the other Wall Street leaders followed suit.

Already in the mid-60s the United States faced the problem of how to avoid its balance-of-payments deficit. The solution was to make America the haven for criminal capital in the world. Somebody from the State Department joined Chase Manhattan, and asked Chase to set up enclave affiliates in the Caribbean to essentially attract the criminal capital of the world. As they explained it to me: “We want to be the new Switzerland.” They said the most liquid people in the world are the criminal class, the drug dealers. “We want the drug dealer money; we want the criminal money because it’s liquid. They have nowhere to go. Let’s make America safe for the flight capitalists, for the kleptocrats, for the crooked heads of states of the world for putting their money. Don’t have them put them in Switzerland to push up the Swiss currency. Have them put it in the branches of Wall Street banks that then would take this money in the Caribbean tax evasion and offshore banking center enclaves and then send the money to the head offices.”

The Federal Reserve every three months would publish statistics on head office bank liabilities to their branches in the Caribbean and Panama and Liberia and other countries that were used as tax avoidance centers. We were following that quite closely. Despite trying such stratagems, the United States went off gold in August 1971. At the time it worried about what on earth was going to happen. “Are we going to lose the creditor position that has enabled us to dictate the trade rules and the financial rules and political diplomacy of the world when they went off gold?”

In 1972, a year after the United States went off gold, my Super Imperialism was published. Its theme was that American diplomacy was in an even stronger position now that its deficit was not having to be paid with gold. What were other countries to do? How were foreign central banks going to hold their international reserves? There was only one currency that they could hold, and that was the U.S. dollar. So the fear by Wall Street and the U.S. Government that the dollar would be devalued as a result of its military spending didn’t materialize, because foreign central banks were in a quandary: If they did not recycle the dollars that they received from the America’s balance of payments deficit, their currencies would rise and that would hurt their export interests.

From the American point of view, central banks recycled dollars into Treasury bond holdings, because foreign central banks at that time could only invest in official government securities; they were not creating sovereign wealth funds. America’s balance-of-payments deficits thus financed its domestic budget deficits.


The response to my book on Super Imperialism was not primarily from the Left but from the U.S. Government, especially the Defense Department. I went to work for the Hudson Institute with Herman Kahn, and immediately we got a contract from the Defense Department to explain to them how Super Imperialism was working. I didn’t want to call the book Super Imperialism. I wanted to call it Monetary Imperialism, but the publisher thought differently. Most of the copies were sold in Washington to the Defense Department, the State Department and the CIA, and Herman Khan brought me numerous times down to the White House to discuss this. The Americans made it very clear that – for instance when OPEC quadrupled its oil prices in 1973 and 1974, after America quadrupled its grain prices – Kissinger and the State Department and Treasury told them that they could charge whatever they wanted for the oil, but whatever they charged they had to recycle into U.S. financial markets, mainly into government bonds. They also could buy U.S. stocks and U.S. corporate bonds, but couldn’t buy majority ownership of any big American industry. American had to be in control of its industry. The Arab countries were told “you can buy all the stocks you want through the stock market”. I think one of the Saudi Arabian kings bought a million shares of every company on the Dow Jones Industrial Average.

So you had a recycling. The more dollars Americans spent abroad on its military deficit, the more money flowed into the bond market to finance America’s budget deficit. What the American government had achieved by its creditor status before 1971, it achieved by its debtor status after 1971. Once again, it told the rest of the world: “What’s the alternative? The alternative is anarchy.” Essentially it used that threats. President Johnson insisted that Europe give America special trade favoritism, special advantages, and the rest of the world felt that it had to go along to survive.

At the time there was a discussion concern the advantages of gold. Herman Khan was a monetary right-winger, and believed that gold should be reintroduced into the international monetary system. He and I went down and gave a presentation to the U.S. Treasury, saying, “Gold is a peaceful metal because it’s a constraint on the balance of payments. If countries had to pay their balance-of-payments deficit in gold, they would not be able to afford the balance-of-payments costs of going to war.” That was pretty much accepted and that was why the United States basically responded, “That’s why we’re not going back to gold. We want to be able to go to war and we want the only alternative to hold central bank reserve to be the United States Dollar.”

The United States also arranged the World Bank and the International Monetary Fund to favor the U.S. economy. In the World Bank it would only make foreign currency loans to other countries. It sent out missions to foreign countries to say “What does the country need?” and almost every mission said “What Latin America, Africa and the Near East need is not foreign currency. They need domestic currency for agricultural development.” You had a latifundia problem in Latin America. The United Nations came out with two wonderful reports on the need for land reform throughout the Third World in order to grow domestic food. But the World Bank was set against other countries becoming food independent. The most important heads of the World Bank were former Secretaries of Defense like McNamara and John McCloy. You can look through who the heads were. The Americans said that any foreign country wanting to grow its own food instead of depending on U.S. grain exports was counted as an Act of War and would be overthrown. That was the explicit reason why the United States established military dictatorships and client oligarchies in Latin America.

The World Bank did promote plantation agriculture but the plantation agriculture was for tropical export crops to compete with other exporting countries, to lower the price of export crops, of tropical crops that could not be grown in the United States. These countries were not supposed to grow their own food supply.

The World Bank became a huge market for American firms to build dams etc. I was told that the World Bank person in charge of designing dams had been a chronic bed-wetter as a child, sort of acting it all out. It also got countries into debt, and once countries were in debt they were forced into the International Monetary Fund, which said basically” “In order to pay your debts, you have to engage in a vicious class war against labor”. You have to lower wages because it’s the only variable in world trade. There’s a common world trade [price] in raw materials: All countries pay the same price for copper, machinery, and other materials. There’s a common world price for oil; there’s a common world price for capital goods. The one variable in foreign trade is the price of labor. So the IMF said, “You’ve got to prevent unionization, you’ve got to prevent any kind of pro-labor reform. Your only way of paying debts is to polarize your economy and impoverish your labor force.”

That is exactly what the opponents of Keynes had urged in the 1920s, and you saw the result in Germany. The same thing was imposed on the Third World countries. That is why, until a few years ago, all the countries of the world tried to get free of the IMF’s “conditionalities,” the terms on which the IMF would lend money. You should essentially think of the IMF as a small office in the basement of the Pentagon, deciding what countries to support, and what countries are following policies that the United States do not want and therefore wants to wreck. That explains why the IMF will give loans to completely non-creditworthy countries such as Argentina under the dictators, or the Ukraine with no visible means of paying off the debt.

The loans to Ukraine, the loans to Greece recently that ended up bankrupting it, the loans yet again to Argentina have demoralized the IMF staff. They complained that every forecast they make shows that the debts can’t be paid, but the IMF continues to make them anyway. The IMF has become a pariah among competent financial analysts throughout the world. The United States is still trying to force countries into the IMF as a means of controlling them, saying “Either you engage in a pro-American war against labor and [engage in] neoliberalism, or the alternative is wreckage.”

Ironically what’s changing all this is the United States’ cold war against Russia and China. The United States has begun to impose sanctions on the Russian and other post-Soviet economies, and on China. This is driving them into a position where their only defense is to do what Britain could not do in 1945L to create an alternative economic order with its own rules. So for the last five years or so China, Russia and other countries are discussing how to de-dollarize their economy.


What do they want to do? They say: “The first thing we have to do is we don’t want to hold our international reserves in loans to the U.S. Government, because that finances the United States military deficit, building its 800 military bases all around us, to try to threaten us militarily. If we withdraw from this international financial system based on the U.S. dollar free-lunch, then dollars can’t be spent ad infinitum without any constraint on military policies that we don’t agree with – right-wing and anti-labor policies that we don’t agree with. So we’re going to take the lead in creating a new grouping – China, Russia, Iran, the Shanghai Cooperation Organization members basically – to do this.”

They’re trying to do what the world began to talk about doing in 1933 at the London Economic Conference: “How do we make a fair system?” What Keynes outlined his plans for Bretton Woods in 1944, his alternative was the Bancor. He said there should be a central bank that can make loans, creating fiat money to enable deficit countries to pay. So that if they ran a balance-of-payments deficit, they wouldn’t have to impose austerity. Austerity and anti-labor policies never enable a country to pay debts. It makes them less able to pay, and even more dependent on creditor countries. So the Chinese and Russians are discussing today “How do we create a currency, a central bank that will help us actually develop? We’ll use international reserves to promote the industrialization and the upgrading of labor and public infrastructure investment, instead of the U.S. demand to privatize infrastructure development and sell it off to foreign rent-seekers.”

What China and Russia found out very quickly is what initially seemed to be an economic rivalry between America and China and other countries was not really an anti-China rivalry as such. It’s a conflict of economic systems. The conflict is between neoliberalism – a financialized world order that wants to privatize all infrastructure and create monopoly rents for transportation, education, healthcare, like what occurs in the United States – and having these basic investments in the public domain, to be subsidized and their services provided at minimum cost. The question at issue is what kind of economy the world is going to have. Will it be a neoliberal economy, a privatized economy – Reaganized, Thatcherized and financialized, organized by central planning in Wall Street – or is the government going to plan?

China and Russia do not want a centrally planned economy anywhere near as centralized as the United States is promoting with Wall Street. In the United States the center of economic planning has been shifted from Washington to Wall Street financial institutions. Banks create credit not to create new means of production, not to build new factories and plant and equipment, but essentially to extend credit against assets already in place. Eighty percent of bank loans in the United States and in England are mortgage loans for real estate, against real estate that’s already in place. I think three percent of mortgage loans are for new construction as long as these loans are already collateralized with promises to buy apartments etc.

So the question is what kind of financial system are you going to have to back up a central banking system and credit creation? Is credit going to be a public infrastructure enterprise as it is in China, where the banks of China are able to decide who is going to get the loans. A public bank is not going to make corporate takeover loans or loans to corporate raiders. It’s going to make loans to actually increase the tangible economy, not to take it over and turn public infrastructure – the education system, healthcare, transportation and communications – into rent extraction.

We’re having today finally a revival of the kind of debate that classical economics was all about in the 19th century – Adam Smith, John Stuart Mill, down through Marx and Alfred Marshall. At issue was how to minimize unearned income as economic rent. At that time, the main form of economic rent they were trying to minimize was land rent. The idea was to get rid of the hereditary landlord class, which was treated as a form of overhead. In today’s economy the main rentiers are financial. There’s not a landlord class anymore, because two-thirds of Americans own their own home (on credit, to be sure). Home ownership rates are higher in continental Europe and England. You don’t have a hereditary landlord class living off land rent. What you do have is a financial class that’s emerged after World War I in a way that they have become the new central planners. It’s a new concentration of wealth, engaging in a new kind of economic war, not only against labor but against government as well, to appropriate the public domain by financializing it. This is done by getting governments into debt and having them sell off the public infrastructure. That’s happening in America at the state and local level, for indebted cities and states like New York.

How do China and Russia avoid their economies becoming financialized? How do they avoid a financialized economy from becoming a high-cost economy and losing their international trade advantage? What’s at stake in de-dollarization is how to create an alternative to a financialized, dollarized economy, one that is going to try to minimize the cost of living and minimize the cost of doing business, instead of a high-cost economy as is occurring in the United States.

The answer they have is that to some extent there’s going to be gold as a means of settlement. But most of all China, Russia, Iran, and other countries are going to mutually hold each other’s trading currencies. They’re replacing dollars with gold and with each other’s currencies. That essentially is the response that the world could have taken after World War One and didn’t, and could have taken after World War II if it had followed Keynes’s policies. Finally, with the help of Donald Trump isolating China and Russia, U.S. diplomacy is creating an independent bloc and helping them do what was unthinkable in the past.

Oscar Brisset:

Great, thank you very much. We’ve got some questions coming in.


To start off, yesterday Joe Biden was inaugurated, making him the 46th President of the United States. What are your expectations regarding his stance on China? We’ve heard him talk a lot about democracy as a guiding foreign-policy principle to distinguish between what is good and what is bad for the U.S. Which measures are likely to be used to advance the USA’s interests: will it be tariffs, sanctions or could we even see a military buildup and embargoes?

Prof Hudson:

The question is, what are the U.S. interests? Again and again in the 1920s, the 1930s and today, the U.S. Government interests were the opposite of U.S. industrial interests, opposite of U.S. economic interests. Just because the Biden administration has an emotional hatred of Russia does not mean that it’s in the U.S. interest. The Biden administration said, “On second thought we’re not going to join the Iran agreements because we’re going to talk to Israel first,” and Blinken, his neocon Secretary of State, said that we won’t do anything without Israel’s approval regarding Iran. Biden also said that the United States will not do anything about solving the world problem of global warming that the oil industry doesn’t like, because basically what’s called the “interest of the United States” is that of his political campaign contributors. So almost his first act was to approve more oil drilling. Here we have Supreme Court’s Citizens United ruling that lets campaign contributors dominate U.S. policy, not the voters. The American voters were not given a choice in this election. Biden did not do well in the early primaries and Kamala Harris got only one percent of the primary vote.

Polls show that what American voters want is basically a Bernie Sanders type policy. They want what you have in Europe. They want public healthcare, universal healthcare. They don’t want to have to pay 18 percent of America’s GDP for medical insurance and medical expenses, because there’s no way that American industry can compete in markets and American labor be employed in export industries, having health care monopolies protected by successive administrations.

The American public didn’t want the Obama administration to evict 10 million American families, and it looks like the Biden administration is going to outdo Obama. Biden basically says, “We’re going to evict another 10 million American families. What Obama did I can do more.” Many families have not been able to pay the rent or even pay the mortgage if they’ve been unemployed or if their income is reduced because of the Coronavirus. There’s going to be a huge wave of evictions in the United States that will be even larger than the Obama evictions.

The Obama evictions were targeted mainly against Black and Hispanics, who were the victims of the junk mortgage loans. Biden has made a point of appointing many Black women and men to administer positions as a cover story for the fact that his policies are going to be just as viciously anti-Black and anti-minority and anti-Hispanic as the Obama administration’s were. They found that as long as you can have identity politics front and center you can do whatever you want economically to crush the people that you pretend to be representing in identity politics.

Nobody can see really any way in which the American economy can recover. The stock market can recover. because the Federal Reserve credit and quantitative easing has been going into supporting stocks and bonds, including junk bonds. Sheila Bair wrote a Wall Street Journal editorial on that. But the underlying economy is shrinking rapidly while the stock market’s going up. That’s what the American economists call a K-shaped recovery – up for the One Percent, down for the 99 Percent.

Oscar Brisset:

I’m going to ask one more question on the China topic and then talk a bit more about historical things you mentioned. China has been building up a network of support and trade deals to drive its expansion. You mentioned some of the policies. It’s also been growing its presence in the U.N. system and even putting together alternative international organizations like the Asian Infrastructure Investment Bank. Is there a line that the U.S. would not tolerate China crossing, after which the U.S. would start devoting much larger resources and spending to contain China, or is the U.S. already at full power?

Prof Hudson:

The United States is muscle-bound. Despite its huge military budget it can’t field an army. It has a foreign legion. ISIS, for instance, is part of its foreign legion. The European NATO is part of its foreign legion. But there’s no way American can ever have a land war again, so you can never invade and conquer a country with a military army. All America has is the Atom bomb, and that’s muscle bound. It cannot go to wage any kind of war except atomic war. There’s nothing in between.

I think Russia and China know that, and Russia at least has taken steps to protect itself and said, “If the United States wants atomic war, we’ll be wiped out but it’ll be wiped out too, and Europe will be wiped out.” I think probably the first exchange would be to wipe out England and Europe, to say “We don’t want to go to war with you and really blow up the world, America. Let’s just show you what we can do. Let’s blow up England and Europe so at least you won’t have your colonies there.” If America persisted, it would be the end of the world. Will America really do that? There was worry that Donald Trump would do that so he could go down in history as the man who destroyed civilization, but I don’t think other people are going to do that.

Oscar Brisset:


Moving now into some of the historical things you mentioned, for example in the 19th century the most powerful European empire was the British Empire. I am trying to see if there’s a parallel between the UK and the American. Did the UK establish such currency dominance similar to the one the U.S. has today? Did it use similar methods to the U.S. to establish its dominance, for example creating international organizations in which it had an institutional advantage, or for example through the control of key energy deposits?

Prof Hudson

England thought that it was establishing currency dominance with the Sterling area. In other words it would spend money abroad and other countries would save their money in Sterling. All during the 1930s the surpluses earned by India and by other members of the Sterling area were basically kept in London, paid to England. But then England ran a deficit with the United States so ultimately the benefit of England’s Sterling area, the financial benefit, was all spent to the United States already in the 1930s. You can look up the balance of payments articles on that.

In 1945, as I mentioned, England thought, “We have 10 billion Pounds of all the savings of Argentina and India, countries that have been providing the raw materials for the World War that we fought, World War II. Now there is going to be a demand for English exports and we can recover by employing our labor to make exports.” But the terms of America’s British Loan said: “No, you have to open up the Sterling area and let these countries cancel their contracts with England.” England had long four-year and five-year capital purchase contracts from India, Argentina. “They can cancel them all and buy from the United States”. England went along with that. So the attempt to create a currency area was smashed by the United States.

Ever since the 19th century America looked at England as the great rival, not the Soviet Union. The Cold War in the 19th century was against England. The fight for protectionism in the United States went so far as to create state colleges and universities that would teach an alternative to Anglo-centered free-trade economics and Anglophile moral philosophy. There was a feeling in the late 19th century of America creating a new civilization and it would not be the religious-based, unscientific civilization of Europe. It would be a new secular civilization. That feeling of a new civilization in America is what led Americans to think, “We will never let other countries tell us what to do because they’re part of the decadent old world and we’re the new world. We’re going to make our own rules.”

Oscar Brisset

You also discussed Bretton Woods. Would it be beneficial to recreate, very hypothetically, a system similar to the Bretton woods one today? I think a key question that underlies that is, “Does the country that runs such a system reap a benefit from running it or are they just constrained?” Will there be an interest for China to set up such a system?

Prof Hudson

They realize that they cannot set up any system in which the United States is a member because the United States will insist on veto power. If it has veto power, then they can’t do the kind of economic system that I described. Bretton Woods was designed one-sidedly to give all the benefit to the United States, and to make other countries dependent on the U.S. economy, on U.S. exports – largely of agriculture, but also industry – and also on the U.S. dollar. Obviously, that’s not going to be done. The agreement that is being developed on an ad hoc spontaneous basis between China, Russia and neighboring countries is their own system of international payments that will be based on mutual benefit, of holding of each other’s currencies, of preventing any payment surplus country – and it could be China – any payment surplus country ending up with so much credit in a creditor position vis-a-vis debtors. The new system will not impoverish the debtors.

The IMF system was designed to impoverish debtors. The purpose of the IMF was to make other countries so poor and dependent on the United States so they could never be militarily independent. In the discussion of the British loan for instance, in the 1930s the discussion in the London Economic Conference was, “Yes, we’re bankrupting Europe, but if we give Europe enough money to avoid austerity, they’re just going to spend the money on the military.” That was said by the Americans in the State Department and the White House again and again, especially by Raymond Moley who was basically in charge of President Roosevelt’s foreign policy towards Europe.

The question is: how do you create an international financial system designed to promote prosperity, not austerity? The Bretton Woods is for austerity for everybody except the United States, which will have a free ride forever. The question that I’m involved with in the work I’m doing in China and with other countries is how to create a system based on prosperity instead of austerity, with mutual support between creditors and debtors, without the kind of financial antagonism that has been built in to the international financial system ever since World War I. Financial reform involves tax reform as well: how do we end up taxing economic rent instead of letting the rentiers take over society. That is what classical economics is all about: how do we revive it?

Oscar Brisset

Final question: these austerity and anti-labor policies which the IMF imposes on countries of the global South seem to be well known practices from before the IMF was created, from what you’ve discussed. Did the IMF invent anything new? In addition, in the 19th century, was predatory lending something common, or was direct invasion always the go-to method for subjugating a territory?

Prof Hudson


The 19th century was really the golden age of industrial capitalism. Countries wanted to invest to make a profit. They didn’t want to invest in dismantling an existing industry, because there wasn’t much industry to dismantle. They wanted to make profit by creating industry. There was a lot of investment in infrastructure, and it almost always lost money. For instance, there was recently a criticism of China saying, “Doesn’t China know that the Panama Canal went bankrupt again and again, and that all the investments in canals and the railroads all went broke again and again?” Of course China knows that. The idea is that you make investment not to make a profit on basic large infrastructure. The 19th century was basically inter-state lending, inter-governmental lending, public sector lending. That’s where the money was made. The late 20th century was one of financialization, dismantling the industry that was already in place, not lending to create industry to make a profit. It’s asset-stripping, not profit-seeking

Oscar Brisset

Thank you very much for joining us today. Our next event will be on February 4th and we look forward to seeing you all then. Thank you very much Prof. Hudson.

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  1. Michael Hudson, thank you, sir. Epoch-making!

    But if memory serves me correctly, Germany demanded huge reparations after winning the Franco-Prussian War. Wasn’t that war debt?

  2. JWalters says:

    Great article. As Senator Dick Durbin said about the US Senate, “The banks own the place”. In Secrets of the Federal Reserve Eustice Mullins describes how the Federal Reserve Bank was established by Wall Street banks, with JP Morgan in a leading role and ownership (via branch banks). Further, JP Morgan was Wall Street’s powerhouse bank because it was in essence an American arm of the mega Rothschild bank in London. Further, the Rothschild bank financed and created Israel, whose interests Biden is required to accommodate. More history is in
    “War Profiteers and Israel’s Bank”

  3. Malla says:

    Excellent article Mr. Hudson. I have been writing about this for a long time here. This is the best page to repost my comment.
    From the book: The New Unhappy Lords

    “As far as is known “America’s” anti-British policy was first given concrete expression in the brief that General Marshall took with him to the Quebec Conference in 1943.
    This was to the effect that the greatest single obstacle to the expansion of America’s export-capitalism after the war would be not the Soviet Union but the British Empire. What this meant, in practical terms, was that as soon as the enemies in the field had been disposed of would come the turn of the British Empire to be progressively destroyed and that means to this end would be shaped even while hostilities raged. The moment they were over the campaign could begin in real earnest, the signal for which was to be Truman’s abrupt dropping of Lend-Lease to an ally whose economy had been so closely geared to war production that many markets for her goods had been systematically referred to U.S producers.
    The British Empire was not the only ally marked down for liquidation. The Dutch Empire in the East Indies and the French Empire in Indo-China and Africa were also high on the list ”


    In Page 22 of the book we read

    “However, as has happened time and again throughout history, the money-lenders had tended to overplay their hand. The six million German unemployed who were the victims of the “Great Depression” resulted in a formidable revolt against the Money Power—the revolt of Adolf Hitler. There was also a rebellion, although of a much milder kind, in Great Britain and the British nations overseas, whose representatives met in Ottawa in 1932 to hammer out a system of Imperial Preferences calculated to insulate the British world against Wall St. amok-runs. These Preferences, as we shall see, incurred the unrelenting hostility of the New York Money Power and the only reason why a show-down was not forced was the far more serious threat to the international financial system implicit in the economic doctrines of the Third Reich.”

    Thus by the Imperial preference system of the British Empire, the Empire (close to 25% of the World) put trade barriers to Wall Street to protect them from the Wall Street crazies after the Great Depression. Wall Street scumbags realised that the immediate threat to their global economic system were Third Reich Germany, Japanese Empire and Fascist Italy but in the long term all European Empires were a threat even greater then the USSR. Thus Wall Street financed decolonization movements against all European Empires including the French Empire, Dutch Empire, Belgian Empire, Portuguese Empire and most importantly the largest of them all the British Empire.
    More on that conference in Ottawa
    British Empire Economic Conference in Ottawa Canada, 1932
    India was represented by Sir Atul Chandra Chatterjee who had earlier served as the Indian High Commissioner to the United Kingdom from 1925 to 1931.
    From the above link
    “The British Empire Economic Conference (also known as the Imperial Economic Conference or Ottawa Conference) was a 1932 conference of British colonies and the autonomous dominions held to discuss the Great Depression. It was held between 21 July and 20 August in Ottawa.
    “The conference saw the group admit the failure of the gold standard and abandon attempts to return to it. The meeting also worked to establish a zone of limited tariffs within the British Empire, but with high tariffs with the rest of the world. This was called “Imperial preference” or “Empire Free-Trade” on the principle of “home producers first, empire producers second, and foreign producers last”. The result of the conference was a series of bilateral agreements that would last for at least 5 years.[1] This abandonment of open free trade led to a split in the British National Government coalition: the Official Liberals under Herbert Samuel left the Government, but the National Liberals under Sir John Simon remained.
    The conference was especially notable for its adoption of Keynesian ideas such as lowering interest rates, increasing the money supply, and expanding government spending.
    The United States were annoyed by the implementation of Imperial Preference as it affected them economically.[2]”

  4. Malla says:

    This American (read: Wall Street) desire to destroy the gigantic European Empires is collaborated with some books by Douglas Reed. This desire by Wall Street thugs (and their lackeys in London) to destroy the Colonial Empires sheds some light about this historic event called “decolonization”.

    “America makes local forays “against Communism” which leave no dent in the thing itself and end in semi-fiasco (witness Korea, Vietnam, Cuba). Between whiles, American State patronage of the revolution in reality goes on and is plainest to see in Africa, where implacable American pressure for “black majority rule” has helped bring about the present chaos of racial and tribal warfare in northern Africa, under cover of which communism, leaping over the Middle East and the Indian Ocean, has planted its first overseas colony-in-embryo at Dar es Salaam on the East African coast, whence “news” about the rest of Africa reaches the ears of “the free world” through the B.B.C. and the Voice of America.

    “The logical next step was independence for Southern Rhodesia, far more advanced than the others, self-governing for forty years, raised by its own bootstraps to its status, without monetary or other help from others. More than thirty new “States” had been fabricated out of the tribal complex of Africa and were being propped up with British money while they clamoured for war in New York.^^^ It was unimaginable, in 1963, that to Rhodesia alone, in all this continent, independence should be denied. ”

    more from the book


    “As by careful planning, all the sources of war conjoin at this moment in time: the case against South Africa at the International Court, the published plan for war on South Africa (see a later chapter), the siege of Rhodesia, the communist terrorism in Rhodesia, the war- mongering majority of irresponsibles in the United Nations, and, above all, the now public incitement by the United States (if its representative there speaks for the President, as one must assume, and not against him).

    A perilous brink, my masters, and I trust that you may think on these things when next you hear or read about “freedom fighters” or “guerillas” in Rhodesia. May your minds then conjure up the image of that constant shuttle- service between Lusaka, Dar es Salaam and the distant communist terrorist-camps; of the encouragement given to all that by your politicians in London, Washington and New York; and of that lonely mud-and-wattle hut blazing in the night with black folk trapped inside. ”

    “All that was done, and could not come again unless it came from outside. But the voices from across the border, from London, from something incomprehensible to “the African people” called the United Nations in New York continued their incitement: the shuttle-service between Dar es Salaam and communist Asia plied on … The terror by night still lurked in the alien shadows. ”

    Tanzania (hence its capital Dar es Salaam) was a semi communist country then and the communist Soviets and Chinese had set up training camps in that country for these terrorists, often described as “Black Nationalists” or “freedom fighters” by the controlled commie Western media. All funded by American/British money.

    more from the book below

    These were forced on it by the encouragement given in London and New York to the terrorists called “African nationalists” (a meaningless term in any context, let alone that of a continent containing a multitude of different, mutually antagonistic races, peoples and tribes. Are there, then “European nationalists” and “Asiatic nationalists”? Would the United States tolerate the idea of “South American nationalists”?). ”

    • Replies: @Malla
  5. Malla says:

    More snippets from another of Mr. Reed’s book ‘The Siege Of Southern Africa’, published in 1974


    “In Angola they are engaged, as they well know, in a war (“Rebels” vs the Portuguese colonial Govt) which they cannot militarily win because it is not a war at all, in any sense in which the word was ever used in history. It is an international conspiracy (in support of the “rebels” against the Portuguese Empire) in which half the governments of the world join, wearing the mocking mask of moral indignation: Russian and Chinese Communists, American Quakers, British Socialists, Norwegian, Swedish and German Socialists. It can go on as long as hireling murderers can be enlisted by the promise of loot, women, private vengeance and political appointments. It can go on as long as America, Russia, China, “the satellite States”, Cuba and Algeria flood Africa with arms for these hirelings, and as long as the Socialist party in England and the Roosevelt school in America lavish money on them.”

    “The open frontal attack has not happened, or not yet, and the siege of Southern Africa which has been conducted during the last decade is of an entirely new nature. It is one of bombardment by falsehood, threat and menace from the body ludicrously called the “United Nations” in New York; of murder, arson and rapine by hired assassins on the borders of the four countries chiefly besieged; and of incitement by words and money gifts from innumerable “democratic” Governments and Communist “cover organizations” all over the world.”

    “These emissaries infiltrate into the Ovambo villages by night and “disturb and incite the tribespeople, particularly the young men, with tales of coming invasions patronized by the House of Helots (United Nations) in New York and limitlessly supplied with Chinese and Russian arms. The leftist-liberal world conspiracy has reached into this remote and peaceful pastoral community.

    “Mr. Ruark did not add what I will append here: these hideous miscreants were the proteges of those ravening wolves, the Liberals of New York, as well as the hirelings of Communism. Their leader, an abominable creature of many aliases, is best known as Holden Roberto. Just eighteen months before the massacre he went to the United States where he was made warmly welcome by the American Committee on Africa, the State Department, the Central Intelligence Agency and Mrs. Eleanor Roosevelt.”
    Hideous miscreants in the above snippet refers to terrorists (today history calls them “freedom fighters” LOL) who massacred both blacks and Whites, trained by communist USSR, China and North Korea and financed by the USA (Wall Street bankers).

  6. jsinton says:

    So when I max out my credit card, and I over extend the payments, and create a whirlpool vortex that the ship of my affairs gets sucked into, I can just get the bank to forget about the debt and give me more, bigger credit cards, and everything will be hunky dory? Glad we worked that out.

    • Replies: @onebornfree
    , @Goldhoarder
  7. I sort of agree that the first casualties of WW3 would be England and Europe, that then America would do nothing. But that posits Russia as a threat to Europe which is unfortunate.

    Looking at Britain’s aggressive stance towards Russia, the Skripal fraud / fiasco etc. etc., I guess that if the USA goes to the brink of war with Russia, Russia might suddenly end all mammalian life on the Island of Britain, which she could do in a couple of hours at any time, and continental Europe would not suffer at all.

    If that happened I think America would fall silent, do nothing. So it would be all over.

    So that, it seems to me, would be the best way to go. I don’t like saying it, I’m of English heritage, but it seems to me time for Britain to de-dollarize and cuddle up to Russia and China, and join the EEU and BRI. The alternative is that, an empty island.

  8. Sean says:

    Michael Hudson is quite scintillating when he is just allowed to talk at length. All credit to Oscar for letting him do that.

  9. “The question at issue is what kind of economy the world is going to have. ”


    ‘We’ have ten years?
    “ . . . our best estimate is that the net energy
    33:33 per barrel available for the global
    33:36 economy was about eight percent
    33:38 and that in over the next few years it
    33:42 will go down to zero percent
    33:44 uh best estimate at the moment is that
    33:46 actually the
    33:47 per average barrel of sweet crude
    33:51 uh we had the zero percent around 2022
    33:56 but there are ways and means of
    33:58 extending that so to be on the safe side
    34:00 here on our diagram
    34:02 we say that zero percent is definitely
    34:05 around 2030 . . .
    34:43 need net energy from oil and [if] it goes
    34:46 down to zero
    34:48 uh well we have collapsed not just
    34:50 collapse of the oil industry
    34:52 we have collapsed globally of the global
    34:54 industrial civilization this is what we
    34:56 are looking at at the moment . . . “

  10. Sara says:

    Your link to archive. org gives “Item not available”.

    • Replies: @Malla
  11. GMC says:

    What a tag team scenario being launched, between the Federal reserve, Wall street, US military, the World bank, the IMF and the Globalist corporations vs any country that sits in the crosshairs. I had a ringside seat in Ukraine since 2008 – and was quite an eye opener. Today, I can now fully understand the entire game, that was played, starting with the Globalists and the State Dept in the early 2000 s and where it sits today. Thanks to M Hudson, and others that helped connect the dots.

  12. @Ann Nonny Mouse

    You’re right about Germany demanding reparations after 1871. However, France simply borrowed the money to pay. Economic life was not disturbed because the debt could be paid.
    Germany’s reparations were too large to be paid, esp. after grabbing its land.

  13. @Ann Nonny Mouse

    As a wonderful TV series put it: “You may say it. I couldn’t possibly say it.”

    • Replies: @GeeBee
    , @Wizard of Oz
  14. Mefobills says:

    It helps to know the iron rules, and the behavior of sovereign debt instruments.

    Humanity has scales in its eyes, especially since the iron rules are not taught. Balance of payment difficulties are a direct result.

    1) Money’s true nature is law.
    2) Never let your national money extend past your law.
    3) All foreign trade is only barter
    4) Never let your debts be denominated in another nations unit.

    Globalists/Internationalists want a global money, and hence they need a one world government to have one world law.

    This is of-course against the natural order, as man organizes himself into nation-states to preserve his language, race, and culture. Why? Because man is more than an economic animal, he also has reason. Man wants to live in accordance with his biological programming, and that includes blood and soil and hence nation and state.

    If money is law, which it is, then force is part of the equation. Hence, militaries are used when the law breaks down, and then there is war.

    All foreign trade is barter, which Keynes recognized with his Bancor. If nations get out of trade balance (barter balance in goods), then the bancor would signal to adjust national exchange rates. The same goes for gold trading standard. Note that Michael admits that the balance of trade was out of balance in gold, only because of American overseas military spending, in a “dollar” unit. American law was unnaturally extended overseas, and the dollar was a unit of account in foreign lands abrogating the first two iron laws. The international gold trading standard came under pressure because of American deficit spending on military and war, ultimately breaking law three. Especially after going off of the gold trading standard in 1971, and new petrodollar standard in 1973, law four was abrogated to an increasing extent in order to acquire oil, now priced in dollars. Foreign countries required dollars for the now petrodollar and dollar as reserve “international” banking system, which induced them into a dollar debt position.

    One way out is as Michael alludes to, is using mutual debt instruments and gold, to balance external trade flows (bartering of goods). The gold is a return to the international gold trading system, where gold is used to mark external trade (bartering of goods), to then signal for national exchange rate adjustment.

    For mutual debt, Russia and China create off-setting debt instruments and house said debts in their central banks. New Rubles and Yuans are hypothecated into existence at the same time as the new debts. New rubles go to China and new yuans go to Russia. The debt instruments stay in their respective countries of origin, housed in their central bank, and within reach of national law. China can then buy oil or whatever Russia has to sell, which is priced in rubles, and Russia can buy Chinese goods prices in yuans.

    Note that these debts are sovereign and are isolated to trade (barter) flows, and do not run afoul of the iron rules. Since the debts are not denominated in another nations currency, and they are within reach of the law (held in a state or central bank), they can be controlled to not make exponential “international” claims, such as would loans from the IMF. These mutual debts can also be erased or jubileed based on mutual national benefit.

    In other words, our (((international))) friends run afoul of the iron laws in an unnatural way, to then promulgate lies that are out of alignment with the logos. Putting countries into unnatural debts is a sophisticated form of usury.

    Nation states can trade with each other, without mercantilism and going to war. NSDAP Germany exited, or was forced to exit the international trade system due to sordid gains thrust upon Germany with punishing Versailles treaty demands. Germany was disallowed from selling goods to acquire dollars, to then pay off attached war debts into the circular flow. This ultimately led to the hyperinflation as German mark came under exchange rate pressure.

    One of Schacht’s innovations was Germany’s trading bank system, which isolated debt instruments into national trading banks, and hence was within reach of national law, but still allowed bartering of goods between nations.

    Clown world is a function of the “international” finance class wanting global corporate power, so they can do rake-offs; and what they want is against the moral and reasoning instinct of man.

    • Replies: @Alfred
    , @nokangaroos
  15. You really make sense to me, Michael. Wish I had had your work when I was reading psychoanalysis from the USO library in Cu Chi , Viet Nam in ’68. There was an intimate apprehension of how empire does war.
    As it is, you and Pepe Escobar inspired me to read economics and I am over half way through Marx’s first volume (I bought all three along with your and Dave Graeber’s debt volumes.) I am sorry for your loss (and all of ours). I read Dave’s and am into yours now. That Marx is quite a card. I was raised as a Christian Zionist in a Protestant missionary family on the Navaho reservation and love his jokes. Me and the most high have had our rows but we’re friends again.
    You take care. Rob

  16. anon[173] • Disclaimer says:

    Magisterial talk. Jerry Silverman recounted the blow-by-blow of Bretton Woods’ contempt for the outside world

    One marginal note: McCloy was a lot of things, but not, it seems actually SecDef

  17. Wally says:

    Hudson said:
    “The loans to Ukraine, the loans to Greece recently that ended up bankrupting it, the loans yet again to Argentina have demoralized the IMF staff. They complained that every forecast they make shows that the debts can’t be paid, but the IMF continues to make them anyway.

    Should read:
    ‘but countries like notoriously unproductive & lazy Argentina & Greece keep demanding loans anyway’.

    Don’t like debt?

    Don’t insist upon loans.

  18. @Malla

    It is said, by his son, that FDR intended for the British Empire to be scuttled!

    World War II forced FDR and the establishment to fully engage in sane economic policy: Parity Floor Prices for Agricultural Commodities….which was the basis for the post war economic boom.

    Parity was scuttled in 1952 so the :interests whose interest is interest could sell loans to Americans rather than allowing a system that created full employment without debt expansion to be allowed to stay in place.

    • Agree: Malla
  19. GeeBee says:
    @michael hudson

    I believe you’re thinking of the 1990 British political series ‘House of Cards’, in which the ambitious Tory Chief-Whip, when presented with a rather stark analysis of a delicate political matter by a young female journalist, replies: “You might very well think that, but I couldn’t possibly comment”.

    • Agree: Wizard of Oz
  20. Alfred says:

    There is no question that the USA planned to take down the colonial powers – UK, France, Netherlands and Portugal. Forget what the US governments have been publicly saying. Just look at their actions or lack of them:

    1- The French, British and Israelis were thwarted in their invasion of Egypt during the Suez Crisis. The USA compelled them to withdraw.

    2- The French in Indochina were not supported in their fight against the Vietminh. A few bombing missions would have disabled the heavy artillery bombarding the French at Dien Bien Phu. The US dithered and did not support the French although the French believed that they had been promised support.

    3- Portugal receive no support whatsoever in Angola and Mozambique.

    4- The Netherlands received no support in Indonesia. After independence, they= USA forced the Dutch to hand over West New Guinea – which had no cultural or historical affinity with Java.

    • Agree: Malla
    • Replies: @Malla
    , @Anon 55
    , @Anon
  21. Mefobills says:

    Should read:
    ‘but countries like notoriously unproductive & lazy Argentina & Greece keep demanding loans anyway’.

    After the Berlin Wall fell, Greek comprador elite were no longer in a position to demand dollars. During the cold war, Greece was held up with dollar inflow loans and grants as payment for being a bulwark against communism.

    Post wall comprador elite in Greece, took on Euro/Dollar loans to then provide the goodies to the Greek population that formerly was showered upon Greek citizens during the cold war.

    These new Euro loans were hypothecated into Euros in private banks in Germany and England (predominantly).

    Greek citizens had a party, where they bought BMW’s and other Euro priced goods. Ultimately, the Euros ended up in a German bank, maybe in the same bank where the debt instrument was located.

    Iron laws 2 and 4 were especially abrogated, and eventually the IMF stuck a debt hook in the Greek populations mouth, to then pay off German bond holders.

    The same goes for Argentina, where the loans aim at a comprador class that puts their population into debt.

    You should have some feeling for the population of Greece and Argentina as they are victims of “international” debt mechanics. The laboring population didn’t authorize the international loans, and you are blaming the victims.

    Some Greek women had to resort to hooking, and Greece ended up selling off some of their national patrimony to “foreign” bond holders, to then pay for exponential debt claims.

    • Agree: Curmudgeon
  22. Alfred says:

    This ultimately led to the hyperinflation as German mark came under exchange rate pressure.

    You have this back-to-front. The German government confiscated 10% of everyone’s bank account. This made the German public lose confidence in their government. The rush was on to convert the 90% of their money remaining into other currencies, precious metals or goods of value. Loss of confidence results in hyperinflation – not the increase in money supply.

    Just look at the ongoing money printing in the USA – which has so far resulted in minimal inflation. This will change when people start losing confidence in the US government. Taxing the wealth of people is going to result in this loss of confidence.

    People making these proposals are totally insane IMHO. Here is a woman with an Indian name proposing this:

    It’s Easy to Fix Inequality: Tax the Rich

    • Agree: Agent76
    • Replies: @Mefobills
    , @Goldhoarder
  23. This was another excellent presentation by Michael Hudson. A uni-polar world, based on military superiority and fiat currency control, seems utterly impossible now. New monies created by a blockchain, maintained by an internet based ledger architecture such as bitcoin, may in the future circumvent the powers of state sovereignty and traditional banking throughout the world. To complicate matters further, the foundation of international commerce has always centered around some specialization(s) such as a unique manufacturing process (means of production) coupled with a pool of technicians with know-how, the result being trade with a finished product(s) protected by recognized intellectual proprietary rights in exchange for foreign goods obtained from countries with extraction economies, for example, oil, pig iron, rare earths and so on. However this current trading system will suffer from another decentralizing effect, that of 3D CAD-CAM printing, robotics and ever increasing pools of the highly educated. They will continue to disregard, the proprietary whilst scabbing competitively for lower and lower wages.

    The SCO-BRICS nations may permit (by backdoor negotiations with the Five Eyes) a pseudo- world policeman to exist. The USA combined forces will put on a great show, sinking pirate ships, boarding Chinese mercantile shipping while on the China Sea but the Eurasian Consortium will always know the truth, that any naval vessel on surface waters can be sunk with a weapon one thousandth the value in terms of blood and treasure. This tongue and cheek departure from serious confrontation will open the door to true peace, better than “Peace Gold bullion” again by back room negotiations such as Russia permitting a return of the Sakhalin Islands to Japan. A necessary charity, because the Fukushima disaster has begun to seep into Tokyo. Now, Five Eyes member or not, Japanese youth cannot endanger their offspring with any radio-contamination (particularly during pregnancy) After all, Europeans kept on eating those one hundred isotopes spewed from Chernobyl without too much of a fuss.

    • Replies: @Alfred
    , @IronForge
  24. nsa says:

    In 1913 a new system of financial alchemy was installed……..JOONOMICS. Money and credit are created out of thin air and doled out to fellow cock cutter cultists, friends, relatives, apparatchiks, and assorted necessary useful idiots, who then use the ersatz money and credit to obtain real stuff….real estate, equities, interest paying bonds and mortgages, commodities, patents, communications licenses, etc.

  25. Malla says:

    The French in Indochina were not supported in their fight against the Vietminh.

    I heard in some podcast somewhere that the French IndoChina Govt were more scared of the American consulate than the Soviet consulate, in the support for Communists.

  26. Malla says:

    Sorry, that was an old link.
    Here is a newer and active one
    The New Unhappy Lords: An Exposure of Power Politics

    • Replies: @Sara
  27. Alfred says:

    but countries like notoriously unproductive & lazy Argentina & Greece keep demanding loans anyway

    A remarkably ignorant and condescending statement. Ordinary Greeks and Argentinians work much longer hours that the Germans.

    In reality, the money being loaned to these countries (the same happened in Ukraine, Brazil etc.) ended up in the hands of an elite class which promptly sent the money to their offshore dollar bank accounts.

    When the countries went bankrupt and needed to borrow more money, despite offering outrageous interest rates foreigners were not interested. These bonds were bought by insiders, the same people who had spirited their money abroad. They knew that these loans would be repaid because they were in control.

    And so the milking cycle continues. And ignorant people and the financial media of the West blame the victims.

    • Agree: Agent76
  28. Agent76 says:

    Dec 16, 2020 Markets of Tomorrow | Jobs Reset Summit 2020 by The World Economic Forum is the International Organization for Public-Private Cooperation.

    An inclusive and sustainable reset of our economies is needed. How can we combine technological and institutional innovation to create “markets of tomorrow” to deliver the new services and products our societies need?

  29. Alfred says:

    3D CAD-CAM printing

    This was all the rage some years ago with fantastic projections. But anyone who has ever worked in a factory or a machine shop could have told them, it is as ridiculous a concept as perpetual motion. The productivity and quality of items made by 3D printing when compared with that of items made the conventional way are vastly inferior.

    3D printing might have a place in producing one-off prototypes / dentures / bones but that is as far as it will ever go.

    Much media attention is directed to home-made weapons and suchlike. But the quality is inferior to the original. And the productivity is close to zero. For the Russians, it probably costs $20 to manufacture a genuine AK-47.

    “3D Printed AK-47”

    • Replies: @elmerfudzie
  30. @Wally

    I’m not going to comment on Argentina, but a well traveled Irish friend commented on Greece shortly after the Euro came into existence. It went along these lines:
    -The only good thing about the Euro for the general population, was comparative. What did the Euro buy you in another country, and what did that other country have, or not have.
    -Greece hasn’t much of anything, other than good weather. Few natural resources, no big manufacturing capability, no opportunities for large scale projects, like hydro-electric. Tourism is a huge part of their economy.
    -It made no sense for them to be in the Euro in the first place. They can’t compete with Spain or Italy, much less France or Germany, in GDP. The Euro will prohibit them from devaluing the drachma in order to adjust for the disparity in GDP and payments with France or Germany, and will likely be a disaster.

    Interesting to note that is exactly what happened to the PIGS, as Spain and Portugal became more and more tourist destinations. Ireland’s problem was the government bailed out its banks, which had put themselves into truly idiotic positions. The bailout of the banks caused the problem in Ireland, the economy was fine.

    • Agree: Mefobills, Alfred
    • Replies: @nokangaroos
  31. China, Russia, and Iran. The future seems to be in the East. I just hope those parasitic financiers are shut down or at least heavily subdued. I will be long gone by the time the shift is solidified, so I won’t know how properly the financiers are checked.

  32. @Ann Nonny Mouse

    … It was the one point Keynes got right (and the one the EU keeps ignoring)
    – that reparations would make Germany stronger and the leeches weaker.

    La France paid off the reparations after the 70s War in record time,
    followed by la vie douce and colonial expansion (and revanche fantasies 😛 ).
    Germany´s lack of colonies (“My map of Africa hangs in Europe” – Bismarck) gave them another shot, but it was WWI (and their plans to keep Germany in servitude until 2016!) that they never recovered from
    (up to a point, the Germans just got the transition to industrial warfare better).

    Little Britain was about 1908 where the US are now – seemingly invincible but bankrupt and unable to keep the three power standard (i.e. be stronger than any possible coalition).
    The US can (still) spend, but at the price of unemploying their own industrial base;
    it is not eebil ™ China any more than it was eebil ™ Russia or eebil ™ Germany before.

    • Agree: Curmudgeon
  33. Rdm says:

    Thanks Michael.

    That was a very interesting transcript I read in one sitting. I used to frequent FT, Bloomberg for financial news. But they became propaganda outlets over the years.

    With your insight into global financial system and Pepe Escobar’s on his ground work at the East Asia development, you two are really treasures amongst arm-chair experts.

    Regarding German reparations, didn’t the US control something like 4000 tons of German gold and shipped to the States? The last time I heard Germans were claiming their gold back from the US. Does that fact still hold true today?

  34. Mefobills says:

    Both you and Agent76 are not aware of certain facts on the ground. You will have to update the false narratives rattling around in your brain.

    It was the shorting of the mark that led to the hyperinflation. And.. this occurred while the Reichbank was privatized under the Dawe’s plan. The shorting of the mark was due to exchange rate pressure. Exchange rate pressure was due to dollar debts in wall street, as well as the Versailles payments.

    Below link is a description of what happened. Propaganda has a continuous lifespan unless it is dispelled.

    • Replies: @Alfred
  35. @Curmudgeon

    All the PIGS are addicted to devaluation – it was downright suicidal of them to join the Euro.
    But there was the promise of cheap credit and “the Germans would pay for everything”…

    Ireland alone used the cheap credit to increase productivity (at insane cost)
    and together with a few tax sleights it somehow worked;
    all others went on sprees like a drunken sailor
    (always the weakness of socialist governments).
    Next up:”More power to the ECB”… not a solution either as anyone can see in
    Northern vs. Southern Italy, where the exact same mechanisms are at work.

    For Greece I see no way around bankruptcy – the sooner the better for all concerned – and a return to the drachma (which would mean no more German submarines and no more islands a stone´s throw from the Turkish coast overrun with fugees – what´s not to like?).

  36. @Malla

    President Roosevelt knew that continued fighting with the Germans would destroy the British empire, so he strongly supported continuing the war and not accepting German offers to withdraw to 1918 borders in 1940. All this explained here:

    • Thanks: Malla
  37. antibeast says:

    Ever since the 19th century America looked at England as the great rival, not the Soviet Union. The Cold War in the 19th century was against England.

    So the Yanks decided that it was their ‘Manifest Destiny’ to backstab their English cousins by financing and supporting Hitler’s rise to power in Germany so they could support and finance Stalin’s war against Hitler so that they could claim the spoils of WWII which was nearly over by the time they joined the war effort. Scarred by the bloodiest conflict in world history, Europeans lay helpless and prostrate before the Yanks who then deliberately fomented a Cold War against the Soviet Union so they could devour the dying carcasses of the European Empires by instigating Third World National Liberation movements against their European allies with the help of the Soviet Union and Communist China during the Cold War when the Yanks were supposed to protect and defend their European allies against the Soviet Union and Communist China.

    • Replies: @Mefobills
  38. bayviking says:

    Wally has no clue,

    The loans are heaped on the poor population by crooked international Banksters and local crooked politicians, who often run away with the money. The Banks collect huge fees upfront and then charge interest in a foreign currency. The poor locals, saddled with foreign debt earn subsistence wages in local currency. When default seems imminent the lenders demand ports, mines, farmland, water supply systems, railroad systems, and anything else the Government owns. If this doesn’t satisfy them, and it rarely does, they demand tax increases on the population or wage cuts. The debt falls on the people that never saw any benefit from the loan.

    … and that Virginia, is how high finance steals from the poor, completely indifferent to human suffering.

    What is the solution? Every sovereign nation must maintain its own currency, so that it can always print more money to pay off its debts, as the USA, England, Sweden and every other country with a Central Bank are always in a position to do. By making sure the Central Bank is nationalized, instead of privatized, as in the USA, the cost of borrowing is cut in half.

    • Replies: @Mustapha Mond
    , @Anon
  39. Anon 55 says:

    JFK excoriated the French while he was in Congress for being in Viet Nam, calling them imperialists., though they had been there for a hundred years by then. As soon as the French obliged the Americans and left, president JFK sent the Americans in. Fighting communism supposedly but I ‘ve always suspected it was really to prevail in Viet Nam, where the French were unable to. Just as I’ve always suspected that a lot of the cold war was not just anti Soviet Union but anti French.

    • Replies: @Alfred
  40. Mefobills says:

    There were two views on manifest destiny. One was the Imperial view, which emanated from England and the American South. The imperial view was part of finance capitalism and mammonism.

    The other view was from the Industrial Capitalist north of America, which at the time was anti-imperialist.

    The anti-imperialists of the American System (industrial capitalism) wanted to keep out the European imperialists, to then help South America develop, especially by sending rail roads and development capital south. The English system of Atlantacism/Finance Capitalism was an enemy of the American revolution, and to some extent FDR resurrected the American System of the founders and Lincoln.

    So the Yanks decided that it was their ‘Manifest Destiny’ to backstab their English cousins by financing and supporting Hitler’s rise to power in Germany so they could support and finance Stalin’s war against Hitler so that they could claim the spoils of WWII which was nearly over by the time they joined the war effort.

    The evidence is that Hitler and the National Socialists used their own money power via their bill system, to then finance themselves. This whole American or “others” financing and supporting of Hitler always fails the smell and evidence test.

    Germany’s most unforgivable crime before the Second World War was her attempt to extricate her economic power from the world’s trading system and to create her own exchange mechanism which would deny world finance its opportunity to profit.

    Scarred by the bloodiest conflict in world history, Europeans lay helpless and prostrate before the Yanks

    Growing evidence is that Churchill and English finance capital (London) was the prime variable in fomenting WW1 and 2.

    Below link is an attempt to overturn foundational lies about WW2.

    Post War, the Bretton woods operation might have been much different if FDR was still alive. I agree though, that it was predatory to push dollar as reserve on the world, especially when Keyne’s Bancor was the better system.

    • Replies: @antibeast
  41. onebornfree says: • Website

    It’s only possible when you’re a government that can “legally” steal peoples money via taxes [or counterfeit it when stealing too much via taxes is politically impossible] .

    The fact that a person like Hudson [and most commenters here, apparently] believes that its totally OK for the criminal government of nation 1 to steal its peoples money, then loan it out to the criminal government of nation 2 ,or, to simply counterfeit it, and that its then perfectly OK for it to forgive the loan, and that it never even crossed his tiny mind that the whole scheme is pure criminality , reveals exactly what Hudson is- an excuse manufacturer for criminal governments the world over, and in particular, now apparently, the Chinese criminal government.

    As Rothbard said about persons such as Hudson:

    “States have always needed intellectuals to con the public into believing that its rule is wise, good, and inevitable”Murray Rothbard

    “The State is a gang of thieves writ large – the most immoral, grasping and unscrupulous individuals in any society.”Murray Rothbard

    Regards, onebornfree

    • Agree: Bro43rd
    • Troll: Ann Nonny Mouse
  42. @Alfred

    Reply to Alfred in reference to elmerfudzie commentary: Please update info about 3d technology, it’s gone way beyond manufacturing gun copies. Visit It is here you will be astonished that entire cars are being manufactured AND driven with customer satisfaction!

    • Replies: @Alfred
  43. @bayviking

    And don’t forget manipulating exchange rates so that the debt, denominated in the lender’s preferred currency, can multiply magically, right on cue, at the worst possible time.

    Isn’t banksterism wonderful?

  44. In the United States the center of economic planning has been shifted from Washington to Wall Street financial institutions. Banks create credit not to create new means of production, not to build new factories and plant and equipment, but essentially to extend credit against assets already in place.

    The late 20th century was one of financialization, dismantling the industry that was already in place, not lending to create industry to make a profit. It’s asset-stripping, not profit-seeking

    The Arc of financial decay has its own measurement –

    George Washington / 1789 to LBJ / 1967 Administrations #1- #36 –
    % of National debt incurred Per Admin =
    A tiny fraction of a percent up to 0.9% during FDR

    Nixon/ 1973 – % of National debt incurred = 0.5
    Ford / 1976 – % of National debt incurred = 0.7
    Carter / 1980 – % of National debt incurred = 1.3
    Reagan 1981 / 1988 – % of National debt incurred = 7.7 (It begins)
    Bush I / 1992 – % of National debt incurred = 6.6
    Clinton / 2000 – % of National debt incurred = 7.3
    Bush II / 2008 – % of National debt incurred = 19.8
    Obama / 2016 – % of National debt incurred = 43.3
    Trump / 2019 – % of National debt incurred = 11.1

    Beginning at the onset of the 80’s a backroom decision was made to begin living off of future generations, while fulfilling the wishes of a International Donor-class elect, today.

    As with the Roman state lifespan, being the worlds’ arbiter and guarantor is the death of a people long before the invasion force finally breaches the frontiers.

    Once the productive industry was traded away to the benefit of the ruling class and their financiers, the engineers sought to initially shore up the asset-stripped nation through social safety net dissolution (cut Social Security for private 401k, which would have by now failed at least twice, and required a full taxpayer bailout) and when this swindle failed to gain traction, the printing press did what no foreign adversary was capable of.

  45. antibeast says:

    The anti-imperialists of the American System (industrial capitalism) wanted to keep out the European imperialists, to then help South America develop, especially by sending rail roads and development capital south. The English system of Atlanticism/Finance Capitalism was an enemy of the American revolution, and to some extent FDR resurrected the American System of the founders and Lincoln.

    That was the Monroe Doctrine which sought to keep European Imperialism out of America’s backyard. But ‘Manifest Destiny’ added to the impetus behind US Imperialism to expand beyond the Americas to the Pacific which culminated in the Spanish-American War, decades before WWI and WWII. So while the ‘America First’ movement opposed US involvement in WWI and WWII, Wall Street which represented Atlanticism (Finance Capitalism) dragged the USA into WWI and later WWII, two wars which completely devastated Europe while paving the way for America’s rise to become the biggest creditor and largest industrialized economy on this planet after the end of WWII. FDR’s Lend-Lease allowed American manufacturing industries to recover from the Great Depression by producing weapons and other war products for export to US allies during WWII. The Cold War then laid the ideological foundation for the US Military-Industrial Complex to continue producing weapons which necessitated all these wars to justify even more defense spending. This is what Michael Hudson calls ‘Super Imperialism’ as the USA displaced European Imperialism by imposing the USD as the world’s only reserve currency as a result of the Bretton Woods Agreement towards the end of WWII.

    In other words, the Yanks wanted to have their cake and eat it too by keeping European Imperialists out of their colonies while at the same time financing and supporting the Third World into existence with the help of the Soviet Union and Communist China. That way, the Yanks could practice ‘Super Imperialism’ by imposing the USD as the world’s reserve currency as part of the US-led globalized economy.

    The evidence is that Hitler and the National Socialists used their own money power via their bill system, to then finance themselves. This whole American or “others” financing and supporting of Hitler always fails the smell and evidence test.

    There’s evidence that the Yanks supported Hitler’s rise to power before Germany became National Socialist, helped by the titans of Industrial Capitalism in America such as Ford, IBM, Du Pont, etc. Bush Sr’s grandfather, Prescott Bush, represented the Wall Street firm Brown Brothers Harriman which directly financed Hitler’s rise to power:

    Growing evidence is that Churchill and English finance capital (London) was the prime variable in fomenting WW1 and 2.

    That was the proximate cause of WWI and WWII although Wall Street played the biggest role in financing and supporting the Bolshevik Revolution in Russia as well as Hitler’s rise to power in Weimar Germany. Both political events created the necessary condition for WWI and WWII which benefitted the Yanks the most as the USA became the largest creditor and biggest industrialized economy in the world while Europe lay in ruins, saddled in debt to Wall Street, with the dying carcasses of European Empires ripe for the picking by the financial vultures of Wall Street as the USD became the world’s only reserve currency while the USA expanded its military footprint all over the world.

    In other words, Yanks went from being cowboys in the 19th century into reliving Rudyard Kipling’s ‘White Man’s Burden’ of promoting ‘freedumb and dumbocracy’ as part of Pax Americana in the 20th century. Add the mission civilisatrice of promoting ‘homo rights, negro worship, gay marriage, transgender children, political correctness, gangsta rap’ in the 21st century and you get the dumbest piece of Hollyweird shit in the history of this planet.

    • Replies: @Mefobills
  46. Factorize says:

    This type of big thinking outside of the economics textbook is new to me. Might anyone have any comments of how a neo-Bretton Woods arrangement might help the global economy to return to balance? After the unwinding of Bretton Woods in the 1970s problems such as rising economic inequality, debt crises etc. followed. Might a return to Bretton Woods help?

  47. What China and Russia found out very quickly is what initially seemed to be an economic rivalry between America and China and other countries was not really an anti-China rivalry as such. It’s a conflict of economic systems. The conflict is between neoliberalism – a financialized world order that wants to privatize all infrastructure and create monopoly rents for transportation, education, healthcare, like what occurs in the United States – and having these basic investments in the public domain, to be subsidized and their services provided at minimum cost. The question at issue is what kind of economy the world is going to have. Will it be a neoliberal economy, a privatized economy – Reaganized, Thatcherized and financialized, organized by central planning in Wall Street – or is the government going to plan?

    China and Russia do not want a centrally planned economy anywhere near as centralized as the United States is promoting with Wall Street. In the United States the center of economic planning has been shifted from Washington to Wall Street financial institutions. Banks create credit not to create new means of production, not to build new factories and plant and equipment, but essentially to extend credit against assets already in place.

    Sounds like capitalism vs. socialism to me. Of course when conservatives and libertarians (demons) think of “government” they think of our current “government” which is really nothing but corporate lobbyists and lawyers that rotate back and forth from government to corporate board rooms. Socialism is government by the productive members of the world, the working class, rather than the parasites on the working class, the capitalists. Government of the people, by the people, for the people. Period!

    Enough with the failed system of rich capitalists owning all the means of production including banking, all levers of government, and all the major media. Everything that we do is geared around making rich capitalists richer. Things will only continue to get worse if nothing changes. If they have their way they will kill us all in a nuclear war.

  48. Sean says:

    I suppose the basic idea of modern finance capitalism is balance of payments doesn’t matter; the people who consume the most are the richest, not the ones with the most productive capacity. So according to that received wisdom Germany is poorer than it would be if it was drawing in imports rather than exporting capital goods to China and saving. Trump may have been produced by finance capitalism, but he was not of that school of thought.

    In addition to the war reparations debts history post ww1, Hudson mentioned the interesting fact that it was German amassing of bullion as much as French that forced the US off the gold standard. But why does Hudson does not talk about Germany’s current economic policies? It seems to me Hudson could use Germany is an example of industrial capitalism in action, one that is more easily applicable to the West.

  49. Mefobills says:

    But ‘Manifest Destiny’ added to the impetus behind US Imperialism to expand beyond the Americas to the Pacific which culminated in the Spanish-American War, decades before WWI and WWII.

    There is usually two things happening simultaneously. It is the tug of war man has against his own nature. One half of man’s nature tends toward evil. The other half tends toward a higher self conscious. Low level humans are operating always in any context.

    No doubt that finance capital turned outward toward plutocracy by the Spanish American War.

    Triumphant Plutocracy by Pettigrew, is a ring-side seat leading up to Spanish American war, and the battles between types of people. Some were greedy and grabbing, and wanted war and an easy life. Pettigrew laments how they (congress) did not develop internal waterways and do internal improvements for physical economy, but instead turned outward to war, and he names the culprits and their benefactors.

    Pettigrew was the first Senator from South Dakota.

    The proximate cause of WW1 and 2 was finance maneuvering the American public, especially with the election of 1912. Our (((friends))) funded the Bull Moose Party, and brought Teddy out of retirement, to then split the ticket from Taft, to then get the war they wanted, including control of the money power, which morphed into a private money trust.

    The American people never wanted imperialism or war. They also would have been against a private money trust if they actually were informed. Then is just like today, the American people always vote against war, and vote against massive immigration, yet they get what they don’t want.

    Clown world wants free-dumb and dumb-ocracy. Clown world is funded into being. The Republic failed, and now it is a demonocracy, but the conversion to demonocracy happened slowly over time, and there were battles along the way. Clown world is finance capitalism hidden actors pulling finance strings from behind the scenes, and this “oligarchy” has been operating to control the West for some time now. Its main base of operations is London. Usury flows out of the money system are recycled to fund clown world, and to pay for manufacturing consent. Only a very small Oligarchy operate at the top of the pyramid pulling strings to get their way.

    I’ve mentioned it before, the point of weakness in the Republic was not codifying the money power properly. It was also not understanding how to tax properly.

    Today’s democracies use corporate money to manufacture consent – to turn people into blind and dumb dupes, as they are told what to think by an owned press. The intent of the Republic was to have postal roads, and a vigorous free press, so that the people would be informed, and not propagandized. The intent did not work out as intended.

    Your right about manifest destiny and Monroe doctrine as not the same. Manifest Destiny is a type of religious thinking akin to “indispensable nation.” If you have a money type that hypothecates against land, then you need to acquire more and more land to pay expanding debt claims. Manifest destiny is to support debt instruments that expand with mathematical precision, making claims against nature. Manifest destiny is also religion, which somehow also was changed; and we can find the usual suspects there too.

    Fish rot at the head, and all of life is a hierarchy. How you staff your hierarchy, and organize your hierarchy is the most important question. If money and prices inform human behavior, in the same way the water temperature and water pressure inform fish, then why is it a surprise that America became corrupted, when the money power itself was mal-formed practically from the beginning..

    England operated pretty well under King Edwards Talley stick system, where debts were balanced yearly. England became usurped by 1694, in the same way the America was usurped later in history, especially by 1912.

    Hudson notices the debt cycle and debt mechanics in world history; which the republic was not immune to. This is why he calls the Western World a detour in history. The ancient near east had their god-kings to flush out wannabe plutocrats, and to force jubilees, to then rebalance their civilizations.

    I’m saying the West isn’t a detour, that a real attempt was made by well meaning people, but there was no god-king to step in and behead the sociopath bad guys, who in turn were ruling from behind the scenes against the moral instinct of the population.

    I suggest you cast your net a little wider, and not blame Americans for all the worlds ills. WW1 and 2 was a tragedy with a lot of bad actors on all sides.

    Do you really think the average American is responsible for these aspersions?:

    homo rights, negro worship, gay marriage, transgender children, political correctness, gangsta rap’ in the 21st century and you get the dumbest piece of Hollyweird shit in the history of this planet.

    America’s finance blood stream got Jewed by 1912, and really before that with the battles during the first bank. The body politic cannot work properly when it gets false price signaling. The body politic cannot work when usury is operative to then steal the life energy of a population.

    If the “head” of a civilizational hierarchy is occupied by an insane parasite, then expect the body to not operate well.

    • Replies: @antibeast
  50. @Malla

    When I clicked on your first link- to an URL I got

    “The item is not available due to issues with the item’s content.”

    Help needed.

    • Replies: @Malla
  51. @Ann Nonny Mouse

    There’s probably quite a number of “purely military” targets, or almost so (ie minimal collateral), amongst the 800+ bases around the world.
    Diego & Pine Gap come to mind, both of which happen to be enormously strategic.

    Of course London is probably one of the most symbolic and strategic. And as you mention, no love lost there.

    From what I’ve seen the Russians behave far more humanely than the west, when it comes to civilians, so hopefully when it comes to it they will choose the former options.

    I doubt that an atomic hot war will start as a direct confrontation between superpowers though. It is more likely that their hands will be forced by a certain other party (eg a nuke on Tehran).

  52. @michael hudson

    I see GeeBee has given the correct quote which I was prevented from tagging Agree. I also think there is something in what you were commenting on. If Russia (or China) didn’t already have the idea of a demonstration of power against a third party it would only have to recall the way Australia is being beaten up in trade matters by China (though to little immediate effect thanks to the iron ore that China has to buy from Australia) and the taking of Canadian businessmen as hostages.

    *** ***
    I tke this opportunity for expressing appreciation of the stimulus to lateral thinking your address and answers to questions provided. But I reserve judgment. More thought and research needed. For example, although I can see the US taking advantage without scruple of post WW1 andWW2 conditions I question the problem you describe of poor countries not being able to borrow in their own currencies to finance farmers and food production. What’s the problem? It doesn’t take genius to discover the possibility of a country’s central bank buying its own government’s bonds and printing the money to do so. It wouldn’t have been called QE or MMT but Hitler managed it before he could loot other countries. Anyway not at all unthinkable.

  53. antibeast says:

    I suggest you cast your net a little wider, and not blame Americans for all the worlds ills. WW1 and 2 was a tragedy with a lot of bad actors on all sides.

    Not at all. My view is that a group of wealthy and powerful Atlanticists (finance capitalists) in Wall Street and the City of London took over the USA in 1913. They had been plotting the destruction of Germany whose model of industrial capitalism combined with social democracy threatened the Atlanticist-model of financial capitalism in Wall Street and the City of London.

    Here’s a book review of ‘Secret Origins of the First World War’ by Gerry Docherty and Jim MacGregor:

    After a century of propaganda, lies and brainwashing about the First World War, cognitive dissonance renders us too uncomfortable to bear the truth that it was a small, socially advantaged group of self-styled English race patriots, backed by powerful industrialists and financiers in Britain and the United States, who caused the First World War. The determination of this London-based Secret Elite to destroy Germany and take control of the world was ultimately responsible for the deaths of millions of honorable young men who were betrayed and sacrificed in a mindless, bloody slaughter to further a dishonorable cause.

    In the USA, the Wall Street banking house of JP Morgan which underwrote the war debts of Britain and France bought up US mass media outlets to agitate for America’s entry in the war against Germany. After Germany’s defeat, the Americans made sure that Britain and France demanded ‘war reparations’ in the Treaty of Versailles imposed upon Germany which would end up paying the war debts of Britain and France owed to the Americans.

    Here’s an article on the Treaty of Versailles:

    The Treaty of Versailles didn’t just blame Germany for the war—it demanded financial restitution for the whole thing, to the tune of 132 billion gold marks, or about $269 billion today.

    The Germans had to pay through the nose, taking 92 years to finally pay off the war debts of Britain and France owed to the Americans by 2010, which was imposed by the Treaty of Versailles in 1919.

    • Replies: @Mefobills
  54. Alfred says:

    It is here you will be astonished that entire cars are being manufactured AND driven with customer satisfaction!

    Amazing. How can you make such an effort to refute my point without mentioning cost per item?

    Believe it or not, manufacturing the modern way is a heck of a lot faster and cheaper than 3D. So much so, that newspapers like the Financial Times have almost stopped spewing drivel about 3D.

    Here is a piece from the FT of 2 years ago. Breathless!

    Star Trek featured a glowing device called a “replicator” that can create any object out of thin air. Now, advances in 3D printing are bringing science fiction a step closer to reality.

    While the technology cannot yet produce anything you want on the spot, the materials that can now be printed include metals, glass, ceramics, carbon fibre and various plastics and resins.

    More dramatic changes lie ahead. Several experts speculate that future consumers may enjoy easy access to high-quality 3D printing facilities that can produce a range of products from a custom-shaped bicycle seat to a replacement handle for a refrigerator.

    How 3D printing will transform mass production

    As you can see, they resorted to using “Star Trek” in their article. I doubt if any reputable German, Japanese or Chinese newspaper would write such garbage. They actually make car components in those countries.

    Good luck with making your replacement bicycle seat and fridge handle. I can only laugh. 🤣

    When 3D can produce a starter motor for under $50 each, wake me up.

    • Replies: @elmerfudzie
  55. Alfred says:
    @Anon 55

    I’ve always suspected that a lot of the cold war was not just anti Soviet Union but anti French.

    That was part of it. Another part of the explanation is that the CIA saw how the French Sûreté (its equivalent) was making a mint out of the drugs exported from the Golden Triangle. They wanted this monopoly for themselves.

    When the Americans were kicked out of the area, the CIA had to get the USA to invade Afghanistan to continue the opium/heroin market. They also control the cocaine market from South America.

    We no longer hear about anyone like Peblo Escobar – because he was a maverick. Now, it is all under control. Of course, the banks are in on the game. Anyone who tries to bypass this monopoly ends up either dead or in prison.

    Colombian Farmer Finds Pablo Escobar’s $600,000,000 Buried On His Farm

    • Replies: @Malla
  56. Mefobills says:

    I’m in high agreement with you.

    Not at all. My view is that a group of wealthy and powerful Atlanticists (finance capitalists) in Wall Street and the City of London took over the USA in 1913.

    We’ve had this discussion. I am making the case that the “Atlantacists” also operated on America, especially by the election of 1912, and even before.

    Don’t blame the victims. If a country is operated by a parasite, it is out of its mind. The same can be said of England post 1694.

    Yes, the German’s had to pay through the nose. My handle is MEFOBILLS after all – a German finance instrument. I am a national socialist, and I consider national socialism to be the final expression of industrial capitalism, not communism. My comment history is full of explanations of what finance capitalism is, including with you.

    Don’t forget about the hyperinflation, which was a shorting mechanism operated on Germany by private finance, which stripped the wealth from generations of German families, and then transferred it to international (((others))).

    The mark was shorted, and this formed a bear trap, or otherwise known as a short squeeze. Bear traps can go exponential, which is what a hyperinflation is; unwanted positive feedback in the money system. The shorts were precisely because of Germany taking out dollar loans – which in turn helped pay Versailles debts with more debt. There was also the not so small problem of American politicians disallowing Germany to sell goods to acquire dollars to then pay debts.

    The iron rules were abrogated because the parasite does not give a damn about the people, it is interested only in self aggrandizement, which is a pathological condition. The levers of power cannot be allowed to be controlled by these kinds of people. Americans have been propagandized to believe in free markets and private money, when the country was not founded under those principles. It is an implanted memory.

    • Agree: GeeBee, Lurker
    • Replies: @IronForge
  57. @Mefobills

    The Natzees´secret weapon was Gustav Ruhland

    who had been commissioned by Bismarck to lay out a national economic policy
    (Bismarck was, erm, retired before it was finished) as no one measure is applicable in all situations; among other things he argued when fighting the foreign exchange game from a position of weakness the first thing you have to secure is food self-sufficiency i.e. the diametral opposite of the IMF prescription – it is an abomination the EU dumps chicken wastes on West Africa, ruining local farmers and their balance of payments in one swoop.

    Sorry I couldn´t find it in English 😉

    • Thanks: Mefobills
    • Replies: @JM
    , @Mefobills
  58. Alfred says:

    Both you and Agent76 are not aware of certain facts on the ground. You will have to update the false narratives rattling around in your brain

    Are you claiming that the German government did not confiscate 10% of all bank deposits?

    Do you seriously think that if the US government were to confiscate 10% of all bank deposits, there would be no fallout? People would not rush to move their deposits elsewhere? it would not trigger a massive increase in the velocity of money and hyperinflation?

    German Hyperinflation & What They Don’t Teach You At School

    • Replies: @Mefobills
  59. Malla says:
    @Wizard of Oz

    Sorry, that was an old link.
    Here is a newer and active one
    The New Unhappy Lords: An Exposure of Power Politics

    • Thanks: Wizard of Oz
  60. Malla says:

    Another part of the explanation is that the CIA saw how the French Sûreté (its equivalent) was making a mint out of the drugs exported from the Golden Triangle.

    Yes, the French Sûreté worked in this business closely with the Corsican Mafia, Marseilles in Southern France is a major entry point for drugs into all of Europe even toady.. Later on the CIA under its Operation Phoenix drugged parts of Vietnam and got help from the Taiwanese KMT. The predecessors of the CIA, the OSS had earlier worked very closely with Ho Chi Min. Later the same CIA pushed LSD on the American people themselves during the Hippie “Movement” days. Today the CIA are big in the Cocaine route from Columbia to Northern America. They work closely with powerful Mexican and Canadian entities, like a corporation.
    Remember Skull and Bones and that Yale University was closely linked to the Opium Trade with China. And interestingly Mao Zedong was a Yali in China. Strange & interesting connections.

  61. @Alfred

    Alfred, yes initial price discovery for potential mass production products are always high. Think of the flat screen TV, or the first releases of laptops. Once public acceptance (trust) and mass production begins, the price falls precipitously. Injecting AI software into this effort will turn a linear progression for production of 3D products into an exponential one. Encourage investment, instill creativity!

    • Replies: @glib
  62. Bro43rd says:

    It may be a simplistic idea, but money determined by market forces instead of by government fiat is the answer. This would most probably lead to asset backed money. Giving all productive players a skin in the game & limiting the parasitic class that Mr Hudson imo righteously denigrates. To expect more government control over the economy to somehow produce a more “fair” outcome is, as the saying misappropriated to AE, insanity defined.

    • Replies: @Mefobills
  63. Sara says:

    Thank you Malla; your new link works.

  64. Tom Welsh says:
    @Ann Nonny Mouse

    “But that posits Russia as a threat to Europe which is unfortunate”.

    Not quite. It posits Russia as a nation that can and will defend itself if forced to do so. If Europe and the UK allow themselves to be used as US stooges and cannon fodder, they cannot complain if they join in an attack on Russia and if it then destroys them.

    “Cet animal est tres mechant;
    Quand on l’attaque, il se defend”.

    (“This animal is vicious; when you attack it, it defends itself”).

  65. Factorize says:

    Might China avoid the capitulation of the right hemisphere brain in economics? In the West, the reign of the right brain lasted for a few short years from the late 1960s into the 1970s until the neuropathology of drug culture finally lead to its collapse. From the 1980s till today, Western economic thought has been dominated by left brain rationality. The pendulum swung right and has stayed right decade after decade as the internal logic of this philosophy continues to maintain cohesion. Yet, some could argue that the nearly half century of a more strictly rational logic has now lead us to the “irrationality of the rational”; to an economic system that is more computer like than human like. While this could be true, the self-evident problem is that swinging back to the left might only offer us another short and unstable time before quickly swinging right again. It might ultimately be concluded that it was not so much that the ideas of the left were entirely wrong, it was more that they were unable to maintain a framework of rationality long enough to actually realize their ideas. That they had important insights yet their behavior prevented these insights from making a positive contribution to society.

    Perhaps Chinese society will offer the world a more self-sustaining form of human centered economic thought based upon right hemisphere dominance.

  66. Anon[256] • Disclaimer says:

    Thank you BayViking, I mostly agree.

    Your proposed “Solution” usually gets derailed by the Usual Suspects (private central banksters) in the Usual Way (subversion – economic collapse – war).

    The Solution to the loop-holes in your Solution is simple Supply and Demand.

    So long as there is a Demand for CORRUPTION: there will be a Supply of CORRUPTION.

    So long as their is a Demand for easy-money loans: their will be a Supply of corrupt-bank loans.

    The Key Is: How to Simply Allocate Resources to Worthwhile Projects, without reliance on Corrupt Bank Loans.

    • Agree: Philip Owen
    • Replies: @bayviking
  67. glib says:

    Can you 3D-print millions of barrels of oil a day? Because that’s where it’s at.

  68. bayviking says:

    I get your point about corruption. After investigating the Great Depression and the Savings and Loan Scandal almost a thousand “Corrupt Banksters” were locked up after each financial crime spree. Yet all the principle criminals that destroyed the global economy in 2008 were never investigated, much less prosecuted. Democrats & Republicans just want some of these extraordinarily successful Banksters money. Nothing else hardly matters to Bush or Obama. Next comes Trump, for whom nothing else ever matters.

    Capital is necessary to develop every new industry. But so is natural resources, infrastructure (including education, healthcare and roads for example), labor and technology. You need all of it to be competitive.

    • Agree: annamaria
    • Replies: @Anon
  69. JM says:

    “The Natzees´secret weapon was Gustav Ruhland…”

    Appreciated. I have heard that ‘Nazi’ economic/monetary policy was their worst “crime” in the eyes of the International Financiers…but that it had serious continuity with the policies of the C19th…Bismarck and maybe then even (implicitly) the earlier Social Democrats.

    I never learned this in all my studies and for a non German speaker, alas, this more or less remains a mystery.

    What I read half a century ago was that many leading 1940’s Keynesians were full of reluctant praise for the 1930’s German economic miracle.

  70. Anon[256] • Disclaimer says:

    Always ask yourself: how do the TRAN$NATIONAL BANK$TER$ fit into this narrative?

    How do the TRAN$NATIONAL BANK$TER$ fit into the opposing narratives of:
    1) “IMF – neoliberal private central banking system”, versus
    2) “China, Russia, Iran – government run central banking system”?

    To place blame on the USA for its Imperialism from 1914-2021 is just as naive as placing blame on England or Germany for WW1 and WW2…

    Always ask yourself: what covert role do the TRAN$NATIONAL BANK$TER$ play in this imperialism/conflict?

  71. Anon[256] • Disclaimer says:

    Yes, corruption can overpower ANY form of government or economics.

    Unfortunately the US appears to be in the end phases of decline: where parasitical corruption, and infighting are destroying our once great nation. The TRAN$NATIONAL BANK$TER (parasites) are victimizing the US, just like they did England, Germany, Russia, etc. by:
    1) parasitically bleeding-dry a Rising Economic Power,
    2) discarding the damaged host, and then
    3) moving on to its next victim (China and possibly the Entire Planet via “Great-Reset” Globalism).

    Will humanity ever be free of the parasitic BANK$TER$ ?

  72. @jsinton

    Maybe read slower next time? Or study a bit more?

  73. @Wally

    Incredibly stupid comment. Comparing macroeconomic policy, the politics of trade between nation states, and the power dynamics between empires to a person spending too much. You have no business commenting on an articlelike this.

  74. @Alfred

    Or you do…. why did the German government need to confiscate 10 percent of savings? This is Hudson’s point.

    • Replies: @Mefobills
  75. The fact is that money gangsters don’t waste their time philosophizing about economics, they go straight to the point: steal everything they can and if they have to kill pay for others to kill, it’s that simple.

  76. Mefobills says:

    I read your link and it is just speculation:

    Here is what it says:

    Hyperinflation thus unfolded in Germany because those with money saw what Lenin had done in Russia and sent whatever wealth they had to other places, particularly the United States. The Weimar Republic then just printed money to pay reparation payments and the entire system collapsed.

    It was a balance of payment problem, which then meant that Germany couldn’t pay reparations.

    Read the link I provided.

    To paraphrase Hudson and others, all hyperinflations in the modern era are a function of some sort of balance of payments, usually with debts monetized in a unit not your own. The balance of payment problem, then causes exchange rate pressure. Bear raiders then sniff this out and begin to do currency shorts.

    The exception is Zimbabwe, where the means of production was turned over to negroes, which collapsed the economy.

    Lolbertarians especially have a hard time believing that it was private banking, especially foreign private banksters, that caused the Hyperinflation. The body blows that Germany received were mostly not of her own making, but were foreign hits. The Weimar republic didn’t print marks, the Reichsbank was privatized during the hyperinflation episode.

  77. Mefobills says:

    It may be a simplistic idea, but money determined by market forces instead of by government fiat is the answer.

    LoL. The Weimar hyperinflation was a “market forces” operation.

    The offshoring of jobs to China to then get wage arbitrage, was a market forces operation.

    Even in the U.S., the money is not government fiat, it is federal reserve notes, where the fed is a private money trust. Does anybody at the FED get a government pension?

    No? I didn’t think so.

    • Agree: GeeBee
    • Replies: @Bro43rd
  78. Mefobills says:

    I cannot find any data on German government confiscating German savings during the Hyperinflation. Capital flight would only have been another trigger for the bear trap shorting mechanism, which was the real causative agent.

    What Schacht did is that he introduced a new money, the Rentenmark. He then made the Rentenmark non-convertible for the currency “shorts” that were in play. International (((groups))), including some traitor Germans, could not exit their short positions into Rentenmarks. Their short positions were convertible only into Deutschmarks.

    Schacht also slammed privateer banks heads against the wall, by denying them central bank services, especially when privateers defied his guidance to the banks. His guidance included telling them to stop covering short positions. These privateers really pissed Schacht off bad, as he felt they were taking sordid gain on innocent Germans. Schacht was not a Jewish agent, simply when viewing this aspect of his personality.

    Re-instituting chancellorship control over the Reichsbank, the rentenmark, capital controls, and then slamming privateer heads against the wall is what fixed the hyperinflation.

    Confiscation of savings, if it did happen, is not what caused the hyperinflation, nor could confiscation of savings fix a hyperinflation. It might have been a trigger, but so what? There would have been no need to confiscate, and that would not be something that Schacht would do, he was way too smart. I am dubious of the claim, it fails the sniff test, and is something a lolbertarian would invent.

    The bigger picture is that there was a triangular position of debt instruments, and debts make exponential claims. There was no mechanism for erasing debts, and general stupidity about how money works abounded (just like today). The debt claims could not be paid with productivity and physical economy, as Germany was denied export selling of goods for dollars. Germany could not put dollars into channels paying off Versailles debts, and then French/English could not pay their dollar denominated debts to U.S. Treasury.

    Your sentiments are correct though, it was not in German government policy to screw over their populace.

  79. IronForge says:

    You’re a Retard.

    LOOK at a Map of Japan before commenting about the Fukushima Situation.

  80. IronForge says:

    Well said, Sir MEFOBILLS:

    I was going over some quotes from USA.Founders on the Republic and Economy a few weeks ago; and skimmed across a bit of correspondence Jefferson had regarding the Privateer Rentier-Bankers of his Day.

    Looks like the Anglo-American, ZioMasonic Renditions of Rentier-Bankers took over the Reigns of what I refer to as a KleptOchlarcy since 1913.

    Best Regards,

  81. IronForge says:

    @michael hudson

    Great Interview, Doctor.

    I look forward to your completed Revision. Thank you.

    Best Regards,

  82. Mefobills says:

    nokangaroos, there is a very perceptive quote from a book author, that sums things up:

    It is at your link:

    see below:

    In math terms, it is two curves that don’t overlay. The growth hysteria as a function of the money system, and its demands vs the natural world and productive economy.

    The former is an exponential, and the latter is a natural curve.

    Economists that pride themselves on their mathematical prowess, ignore reality, which is quite stunning. They ignore reality, because they won’t bit the hand that feeds.

    The growth hysteria, which is fueled by politicians and economists alike, is based solely on the assumption that it is possible in the long term to satisfy the growing interest claim on assets from the growth in the volume of the real economy. But because the real economy grows more linearly, while the growth curves of money run exponentially, the fundamental impossibility of this idea is well known, but is nevertheless denied by those responsible for as long as how the gap between money supply growth and performance growth can still be closed with all violence. The overexploitation of public budgets and social systems that we are currently experiencing, known as “saving”, is nothing but an attempt to satisfy the hunger for money from interest and compound interest at the expense of the population’s standard of living. However, this is denied. to satisfy the hunger for money by interest and compound interest at the expense of the living standards of the population. However, this is denied. to satisfy the hunger for money by interest and compound interest at the expense of the living standards of the population. However, this is denied.

    The fact that many institutions of public welfare, culture and science can no longer be financed and that we are experiencing the greatest clear-cut in the social systems since 1929 is becoming – completely untenable and unrealistic – optionally either The laziness of the unemployed or missing children and old people who have lived too long, or an allegedly too short weekly or lifetime working time, too high wages or all alleged causes: But before the Moloch interest that devours us, eyes are tightly closed.

    Quotation from:
    Egon W. Kreutzer
    Wolf’s crazy economics
    Volume III – About money, page 282 f.EWK
    -Verlag Kühbach-Unterbernbach 2005
    ISBN: 3-938175-16-8

  83. Bro43rd says:

    The FED is not market forces, it is a government granted monopoly. Try paying your debts in silver/gold, LOL. Just because the fraudsters at the FED don’t get a government pension doesn’t mean they’re free market. Of course they don’t, how could they justify their super premium golden pensions compared to the normal government pensioners pittance.

    Very little about today’s market is free market, government has it’s tentacles intertwined in just about everything. Yard/garage sales are kind of free market, except being forced to use FRN, so not even that is truly free market. Even barter by tradesmen is not permitted by law. If one cannot trade work for work how can this be considered a free market.

    A true free market would allow trade in whatever the traders agreed to. But I’m fairly certain you knew that & really are just schlepping for the government system. I hope they at least pay you & you aren’t just doing it for free.

    • Replies: @Mefobills
  84. Mefobills says:

    The FED is not market forces, it is a government granted monopoly.

    The government abrogated its constitutional mandate, and handed over the money power to a money trust.

    The money trust in turn is private banking corporations – a trust. A trust is a system..

    The FED is only one part of the system. The FED backstops the private banking system/trust.

    No loan has ever been denied because a private bank does not have reserves on hand. Find an example for me sherlock and I will agree with your point. But, you can’t.

    Banks find reserves at the last minutes on the overnight market, and if they can’t get reserves, they go to the FED discount window. The FED is the lender of last resort to the private bank system. Private bank system is part of the “market” and not government… Private banks are lauded as not government and are supposed to fail by market forces, or deliver the best results because they are non government. Yeah Right.

    The same goes for the recent post 2008 laws passed by Congress to give away even more money power. Frank-Dodd act means that the FED is unregulated to act, for example in the Repo market, where the FED intervened in these “private markets” at the behest of finance corporations – many of whom were hedge funds and other non-bank finance entities.

    So, let’s modify your statement. The FED is part of a money trust, which operates at the behest of its system owners. The system owners are represented by the finance class, who in turn are usurers.

    Usury is a power relation, where they system has been rigged so they get back-stopped on their risky bets. Heads I win, tails you lose.

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