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The Rise (And Failure) of U.S. Dollar Imperialism
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RADHIKA DESAI: Hello everyone. Welcome to the fourth Geopolitical Economy Hour, our fortnightly show on the political and geopolitical economy of our times. I’m Radhika Desai.

MICHAEL HUDSON: And I’m Michael Hudson.

RADHIKA DESAI: Today we are continuing our discussion of de-dollarization. As many of you know we have structured our discussion around some ten questions, and last time we dealt with the first five.

What is money? What is the relation between money and debt? Is money a commodity? What is the theory of how the dollar serves as world money?

And then because this theory so much relies on the sterling system we discussed the sterling system. What is it? What was this real basis not gold but actually empire etcetera.

And then we decided that in this show we will discuss the next five questions which are, how did the sterling system end? What really happened between the world wars? something on which Michael has written an enormous amount and he knows a great deal.

Then we will discuss the dollar system between 1945 and 1971 which is the year when the dollar’s gold link was broken. How did the dollar system actually function during this time? Because we are always told that this was the time when everything was hunky-dory and the dollar system was fine until 1971; but the reality is quite different.

And then we are told that after the dollar’s gold link was broken, that this was not somehow some kind of a great disaster. On the contrary, the United States kind of pulled a fast one on the rest of the world and managed to get the dollar to function as the world’s money without the burden of linking it to gold. Is that really the case? What really went on?

And then we finally come to the crisis of today. What are the main dimensions? What are the forms that de-dollarization takes?

I should say Michael and I were discussing exactly how far we are going to get to this, since we have an hour, and we have a lot to discuss. It’s possible that we go through all of this, but it’s quite possible that we will get to question three or question four and then have to leave the rest for the next show.

Having said that, let me dive straight into the question of how the sterling system ended.

As we discussed last time, the sterling system was naturalized and portrayed as if it could have lasted forever. Basically making the world believe that it is perfectly natural and okay for the currency of one country to serve as the world’s money.

And of course its functioning was attributed to gold. And we saw last time that this was not so. And it’s important to clarify this, because people still hanker after a gold standard, and in reality you have to understand that while gold was the benchmark of the value of sterling, it was not what make the system tick.

What made the system tick were the surpluses as I showed in the map that I showed last time. Essentially the fact that Britain had a large empire meant that surpluses, as you see in the map, flowed from Britain’s non-settler colonies — principally British India but also some other countries — as you see in the blue arrows, all this flowed towards Britain.

These flows were based on Britain essentially charging these colonies for the privilege of being ruled by Britain, [and] Britain appropriating the gold and foreign exchange value of the huge export services that these colonies ran through the rest of the world and so on.

So these surpluses were centered in Britain and then they were recycled into the famous capital exports which essentially financed the industrialization of Europe at this time, of North America, of southern Africa, and also of course the Antipodes Australia and New Zealand.

So essentially this is where the distinction between the settler and non-settler colonies becomes very important.

We also pointed out that, even though Britain sat on top of the largest empire the world has ever known, the fact of the matter was that this was also a period during which other countries were emerging to challenge Britain’s power.

Germany linked its currency to gold, not in order to subordinate itself to some sort of gold standard, but rather to make its own currency attractive to the rest of the world, in order that it may increase the market for German goods and increase, generally speaking, Germany’s power over large parts of the world.

The United States also waited until 1913 but finally got around to creating the Federal Reserve system, and this was another way of essentially asserting its own priorities and so on.

So in this context as Marcello De Cecco, whose famous book Money and Empire is really worth the read, pointed out it’s very important for us not to take what he called a Ricardian interpretation of the sterling system, but to take a Listian one.

He’s referring, of course, to David Ricardo (1772 – 1823) the famous 19th century political economist who was a great partisan of free trade and the idea that the world economy was simply a homogeneous whole united by markets and so on.

And De Cecco is referring to Friedrich List (1789 – 1846) who, on the contrary — and Michael and I would agree much more with List — portray the world order as a world order composed of national economies.

And these national economies were often in competition, struggle, and conflict with one another. And in this context the industrialization of other major powers to challenge Britain’s industrial dominance was bound to destabilize the sterling system and indeed did.


And of course it also relied on the fact that Britain’s industrial classes and industrial capitalist classes would accept a regime that was actually quite harmful to that interest. And there was quite a lot of disturbance on that front as well, where they were basically questioning the priorities of the city of London and the workings of the gold sterling system.

And finally it rested on working class acquiescence: the idea that Britain could periodically inflict upon its own economy severe recessions in order to maintain the value of sterling and severe recessions meant, of course, heavy unemployment and working class people were getting more and more organized and opposing [the policies].

So for all of these reasons, the sterling system was actually weakening in the period [up to 1914 and the] outbreak of the First World War.

One should add here that, while this really got going only after the First World War, there was also the beginning of nationalist restiveness in the colonies which would also threaten to take away the basis of the sterling system.

So all of this was happening and after the First World War of course the British Empire was drastically weakened and a stable return to the gold standard on the part of sterling was simply not possible.

So, this is the story of how the sterling system ended, and after the sterling system ended, and during and after the First World War there were a number of really important shenanigans on the part of the United States in particular vis-a-vis Britain that Michael will now talk about, because really our second question is exactly what happened between the world wars. And Michael, also please feel free to add anything else about the end of the sterling system that you would like to.

MICHAEL HUDSON: Well most of our discussion from here on end is going to be about intergovernmental finance and what WWI did was for the first time it changed the whole rules of how allies and other countries settled all of the balances and the mutual aid that had built up during the war.

After earlier wars, like the Napoleonic Wars, it was normal for allies to say, “Well okay we’ll forgive the debts, we’re all fighting the same fight, we’ll start again.”

Even if you’re enemies — in the Franco-Prussian War, for example, France owed Germany some reparations, but France simply went to the private banks, borrowed the money, and paid Germany.

So, the whole connections between the world monetary systems were basically private sector finance.

All this changed when the United States said, “Well during the war of course we’re not going to charge you for the tanks and all the aid we gave you during the war, but we didn’t enter the war when you British did and French did, so you’re still going to have to pay us all the debts that you ran out when we were a neutral country, before we entered the war.” These debts were enormous, and the Allies didn’t know what to do. They didn’t want to be impolite to the United States so they said, “All right, we’re going to make Germany, the loser, pay reparations. That will enable us to pay you the inter-ally debts.”

So the Allies, with American agreement, said Germany has to pay the money that we’ve charged them for the debts that they didn’t expect to have to pay after WWI.

Well the result was very rapidly a crisis.

Germany was stripped of its steel making regions, it was stripped of its assets, it was left almost unable to pay, but burdened with enormous reparations that it couldn’t possibly pay, and the result was a collapse.

Germany tried to pay by simply throwing marks — its currency, the German mark — onto the foreign exchange market, and the foreign exchange rate would plunge.

When a foreign exchange rate goes down — just as a what happened in the Third World and after World War II — the price of imports goes up. If the price of everything Germany needed — oil, steel, machinery was all denominated in dollars — the price of imports went up, and as a result the German Reichsbank had to create more money to finance the transactions of people and businesses at the higher prices.

Now, this is the exact opposite of what you’re told by today’s monetary theorists.

Today’s monetary theorists say, “Well governments run a deficit, and that puts money into the economy, and that causes a trade deficit, and that leads to foreign borrowing.”

Just the reverse. Germany only created money at home because its international currency was falling. So, immediately, [and] for the balance of the 1920s — after 1921 there was a huge debate over: should Germany have to pay reparations, and should the Allies have to pay international debts.

Now this argument is very important because the arguments put forth in the 1920s were the identical arguments that the IMF would put forth after WWII. And the 1920s bankruptcy of Europe was a dress rehearsal for how the IMF has bankrupted Third World countries and the Global South countries.

There were two sides to the argument, as I’ve discussed in my book Trade, Development, and Foreign Debt, [in which] I go over these arguments.

On the one hand you had the people who not only hate Germany but, even more than they hated Germany, they hated labor. Bertil Ohlin in the United States, and Jacques Rueff in France, said that any country could pay any amount of foreign debt simply by taxing the country domestically and lowering the price of labor — lowering the wages. You could squeeze enough out if you just squeeze labor enough, and that would somehow create — whatever you took away from the domestic economy in marks could be paid right over to the Allies.


Well, Keynes and, in the American economy, Harold Moulton said, “This is nonsense. Solving the budgetary problem — raising a budget surplus — does not help the transfer problem. Germany was able to tax its labor and its industry in mark, but how did it pay in dollars? It can’t tax them in dollars because Germany used the the mark system. The question is, how on earth can Germany translate this economic surplus, that it squeezes out of labor and industry, to pay foreign countries?”

Well, that’s exactly the same problem that occurred in Argentina and in other countries after WWII.

Keynes pointed out, saying, “Well the country is going to have to export, but that means that the only way Germany can pay is by having other countries buy its exports. But as soon as the German mark begin to go down, as it tried to pay its foreign debt — and foreign debt is the main factor that pushed down the third world exchange rates in the 1960s, 70s, and 80s — is this happened, America immediately raised its tariffs and it passed a law in 1921 against countries selling and depreciated currencies.

So the United States said, “Well Germany has to pay the Allies [so the Allies can] pay us, but we’re not going to buy German exports to provide the dollars. We’re not going to give the rest of the world dollars at all. It will have to pay us in dollars without any way of earning them.”

Well obviously this wouldn’t work. The question is: What did happen?

In practice, the United States said, “Well, we’ll settle it the old-fashioned way, by having the private sector balance matters by having the Federal Reserve lower interest rates” in the 1920s —just like today’s quantitative easing — and the lower interest rates would make it profitable for American investors to buy the bonds of German municipalities, and to buy up Germany companies.

So the American investors would buy German municipal bonds and lend to German companies — or buy German companies — Germany would take these dollars and pay the Allies, the Allies would pay the United States, and there would be a circular flow, and everything would balance.

Meanwhile, England still had problems paying the United States, and the Bank of England came to the United States and said, “You’ve got to keep your interest rates really low so that people will lend to England too, because we need to get money so we won’t be strapped.”

So the United States — the Federal Reserve — flooded the economy with money. A lot of this money was used for the stock market boom. And the stock market boom finally collapsed in 1929 because it was all funded on credit.

People were using this credit to buy stocks on margin. And just as in subsequent financial bubbles, they are created by borrowing money to buy stocks on margin, and they are all basically debt-financed bubbles, and that’s what happened.

Finally there was a collapse in 1929. Countries moved into depression, 1929, 1930. Finally in 1931 the governments got together and declared a moratorium on foreign debt, on inter-Ally debt, on German reparations. They declared a moratorium.

The United States [said], “Well, we won’t ask for money now, but we may ask for European money later. If Europe ever gets prosperous, we’re going to ask for the money, and we’re still going to make it pay. But for the time being, we understand, we forced you into depression.”

Roosevelt came to office and he immediately devalued the dollar and blocked gold sales and said, “Well, we’re not going to be tied by gold anymore. We’re going to basically nationalize the gold stock.”

Keynes wrote, in England, “Roosevelt is magnificently right. Of course you don’t want gold to limit what any country does.”

So America and the rest of the world go free. They still didn’t recover from the depression until WWII. And WWII, of course, changed matters. And I think Radhika has a few things to say about that.

RADHIKA DESAI: Yeah, thanks Michael, that’s really excellent. As you were speaking, I remembered a few things that I felt I should really add to what you were saying.

So first of all, I just wanted to say that, in your Super Imperialism, you make a really important point that is worth quoting, so that’s what I’m going to do.

What Michael was discussing, about the US’s refusal to essentially agree that the aid that it had given to the Allies during the First World War should just be treated as a grant and the US should not demand repayments.

The way in which this set off the financial merry-go-round of the British demanding reparations from Germany, and then the whole US supplying — so essentially what it did is that Germany had to pay reparations to Britain, Britain and France had to pay debt repayments to the United States.

And the United States, having made it next to impossible for Germany to earn much through exports, then essentially forced the private sector to lend to German municipalities. So there was this financial merry-go-round which eventually collapsed, as Michael says, with the 1929 crash.

But in the beginning of this, Michael says in Super Imperialism, that it would be false to say that the United States provoked WWII.

It is true, however, that no act, by whatever nation, contributed more to the genesis of WWII than the intolerable and insupportable burden which the United States deliberately imposed on its allies of WWI, and, through them, on Germany.

So I think this is a really valuable important point and it also will connect up with the other points we will be making about how essentially the United States has, over the last century and a half, or certainly over the last century, mastered the technique of profiting from wars that it often — that it can instigate or otherwise encourage, thousands of miles away. And I think this has been very important.


And also, Michael, you said that the United States was keeping rates low in order to essentially force the private sector to finance — to essentially lend money to Germany. But it was also the case that the US at this time, although it really wanted to make the dollar the world’s money because sterling was no longer capable of doing so, it found that it could not do so quite so easily.

And for a time it was countenancing some sort of “dollar-sterling condominium” so to speak, a joint dollar-sterling system. And in the interest of pursuing this, the US was also keeping interest rates low during the early and mid 1920s in order to essentially encourage Britain to go back onto gold after the interval after the First World War.

And finally a really important point which is very critically important, partly because there are so many people that think that somehow a gold standard would solve everything. It’s important to remember that a gold standard has typically been quite deflationary, because essentially, as we said early on, capitalism and money have a strange sort of relationship, because capital can only be accumulated in money.

Therefore, capitalists want money to retain its value. SO what capitalists need from money in order to retain its value is to restrict its supply, because that is the only way capitalist states know how to make money retain its value.

But at the same time, in order for money to facilitate the expansion of capitalism, in order to facilitate ever-wider accumulation, you need money to be in good supply, so a deflationary monetary order is a bad thing.

So capitalists essentially want to have their cake and eat it too, and they can’t have both at the same time, so they are always in this problem.

Gold has typically been deflationary because it is an artificial way of restricting the supply of money in order that money will retain its value, because it does not have any rational way of deciding on investment priorities and so on, so it can only do it in this fashion.

Now, yes, I do have some other things to say, which are relevant to this second question, which is, what happened in the interwar period.

The final thing, in addition to what Michael is saying — the final thing that happened is Keynes’s Bretton Woods proposal. That is to say, Keynes, in order to —

In the interwar period, there was a great depression, international trade and payment systems had collapsed, there was a lot of uncertainty, currencies were very volatile against one another. And this was not making recovery any easier.

So there was a big conference, as it became clear that the Allies were going to win the war, especially after 1943 and Stalingrad, it became clear that the war would be won by the Allies, it was only a matter of time.

So then, post-war planning, planning for the post-war period began in earnest. A large part of this planning took place at the New Hampshire resort called Bretton Woods. And out of that have come the post-Second World War systems of international economic governance, which include the United Nations, it includes the WOrld Bank, the International Monetary Fund.

And, given that the effort to try to create an International Trade Organization failed, they had to accept a stopgap arrangement that was the General Agreements on Tariffs and Trade which after 1995 became the World Trade Organization.

So, in order to understand — it is very important from our point of view to understand the proposals Keynes made at Bretton Woods

So you see here in this diagram, basically Keynes arrived at Bretton Woods as the head of the British delegation. Britain had between the two wars experienced what can only be described as the steepest decline in the power and status that a country has ever known.

Because in 1914, Britain sat on top of the biggest empire the world had ever known, and the biggest creditor to the world. And in the course of the next thirty-odd years, Britain declined from these positions. Its industry was increasingly uncompetitive, its financial hold on the world and monetary hold on the world had declined. Its colonies were getting restive and decolonization was impending.


So Keynes arrived at Bretton Woods with a set of proposals that would make it possible for a much weakened country, like Britain, to still try and pursue policies that were beneficial to British people and the British economy.


He was very aware, and he knew, by the way, better than practically anyone how the gold-sterling system worked, because his first book Indian Currency and Finance had been about nothing but that.

So he knew that the time in which those arrangements could have worked was past, and new arrangements were needed. He was very aware, also, that not only was Britain no longer the head honcho in the world system, but that there was now a greater dispersion of productive power and financial power around the world.

So he came to Bretton Woods with an original set of proposals, and I underline “original” because over the course of much negotiation they tended to be whittled down, and many people think that the post-war system that we got in the end was a result of Keynes’s proposals, but in fact it was the result of Keynes’s eventual defeat.

But the reason it’s very important to understand what he proposed is that it gives us the framework of thinking which allows us to see what’s wrong with the post-war system.

So basically he proposed that there should be a multilaterally-created, new currency. He said, for want of a better name, I’m going to call it “bancor” — and that’s what you see at the bottom of the screen there with the green little dot.

And the value of bancor, Keynes said, would rely on that of thirty commodities — thirty of the most heavily traded primary commodities.

Remember last time we discussed that primary commodities are critically important because primary commodities go into the production of everything else. So whether it is oil, or iron ore, or copper, or what have you, wheat, et cetera, these primary commodities go into the production of everything else. Every economy needs these and therefore the prices of these are critically important for any economy.

So [bancor] would be based not on gold — gold was one of the thirty commodities — but on these thirty primary commodities.


Bancor would be issued by an organization which received the ??? called the International Clearing Union (ICU). And bancor would not be used as domestic currency. You and I wouldn’t use it to buy a restaurant meal or a bar of chocolate. Only central banks could use it in order to settle imbalances.

So say between two countries, if one country exported $50 worth of goods to another country, and that country exported $70 worth of goods to the first country, then the imbalance is not $50 + $70 ($130), the imbalance is only $20 ($70 – $50).

Those were the imbalances that bancor would be used to settle.

And the other important thing about bancor is that countries could buy bancor, but they could not sell bancor. So they would need to buy bancor in order to settle their imbalances, but once having done so they could not sell it, so that meant that — the idea was that countries were to be discouraged from accumulating too much bancor, and the way they could use it to buy other things, and settle their accounts with their each other, their imbalances with each other, but they could not use it to, say, make an investment in a foreign country or what have you. So they could buy bancor but they could not sell bancor [back to the ICU].

All of this — there were a couple of other things that are important about this.

Number one, this system would only function in a system of capital controls.

The idea was that you cannot manage your economy, for example, for full employment, for high levels of activity, unless you were able to control the inflow and outflow of funds.

And this is very important, because, you know, in more recent times, particularly after the 1980s and 1990s when so many countries lifted capital controls, we have been asked to become used to the idea that not having capital controls, having free capital flows, is totally natural and desirable. But this is actually not the case.

We are told that, for example, there is a so-called “holy trinity.” That is, you can have a stable currency, an independent monetary policy, and free capital flows.

[But really], you can’t have all three things at the same time. You have to choose one of them.

Most people say you have to, essentially, choose either one or the other, but keep free capital flows open.

In reality, that is the thing that can most easily go, because all countries need a stable currency and an independent foreign policy. So it’s very important to know that capital controls are very critically important.

And also, countries lift capital controls — not because it’s beneficial for you or me and ordinary people. They lift capital controls so that rich people can easily take money into and out of economies. And it is entirely so that they can take their money wherever they want; they can escape taxes; they can look for more lucrative opportunities. But it does not help us.

And the final element that Keynes proposed in his Bretton Woods system, was creditor adjustment.

That is to say, that if you have a trade imbalance they would not persist. That is different from the system we have today when some countries have persistent trade surpluses and other countries have persistent trade deficits and similarly also some countries are persistently exporting capital, other countries are persistently importing capital, leading to the accumulation of large imbalances.

All these sorts of balances would be settled, moreover, not just by imposing adjustment on the weaker part, on the trade deficit countries and the capital deficit countries — or, that is to say, to make them tighten their belts and to make themexport more and so on. It would also be imposed on the stronger part, by making countries export less and import more in the case of trade imbalances.

Creditor adjustment was also critically important. That is to say, if you are exporting too much, of either goods or capital, you will have to reduce your export surplus, either by importing more, or exporting less, take your choice.

This was regarded by Keynes as important, and he actually made it a part of the structure of the system by essentially pointing out that, since you could not sell bancor, and you can only accumulate bancor, what was the point of accumulating something that you could only use to settle imbalances?

So that was the main thing.

And secondly, you could not accumulate bancor beyond a certain point. If you did, then it would essentially be hived off to finance development in various parts of the world that needed it.

So this was the structure of the system that Keynes brought to Bretton Woods. And it was nixed, essentially, by the United States, who would not accept that any other such multilateral currency could be the world’s money because it wanted the dollar to be the world’s money.

I’ve spoken a lot, so I should give Michael a chance to come in and add anything he wants on this matter.

MICHAEL HUDSON: Well, what I want to add is the reason that Keynes made these proposals. What was he trying to avoid?

Well, he was trying to avoid the fact that England was broke. In order to understand it, you have to understand how America’s strategy, throughout WWII, was to look at England as its main potential post-war rival.

In 1942, when the Allies won their first major victory, at El Alamein, Churchill gave his famous speech, saying, “This is not the beginning of the end, but the end of the beginning.” [“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” – ed.]


Just what is that “beginning”? The beginning was really shaped in Lend-Lease. When America joined the war, it had a discussion, “How are we going to supply the Allies with armaments? We can’t have inter-ally debts like there were before. We are going to have to negotiate some means of payment. England can’t pay money right now, but what it canpay is, giving up its empire. It can end the Sterling Area. It can agree to become a satellite of the United States and essentially force itself into a depression and bankruptcy after WWII as the price of our giving it support.”

Well that basically was Lend-Lease.

Radhika reminded me yesterday that the wikipedia [page] on Lend-Lease says, “The aid was given for free on the basis that such help was essential for the defense of the United States.”

If you look at my Super Imperialism, it has a whole chapter on Lend-Lease, describing the negotiations that occurred, back and forth. What the United States Congress insisted was the price of Lend-Lease.

There were a number of prices.

The first was that — when there was going to be peace, England would give up its system of Imperial Preference. That is what Radhika was discussing before, as how did England create an empire of dependent colonies.

Imperial Preference meant that England would give trade favoritism — tariff favoritism — to its colonies, to members of its empires.

This was very important, because during WWII, India, Egypt, Argentina, and other raw materials suppliers, built up enormous savings in income that they got. They sold their grain, mining materials, all sorts of things, to the Allies. And the Allies paid them, and they built up enormous international balances.

British colonies had ten billion dollars of balances they’d saved during the war. Not only was there Imperial Preference, but these balances were blocked. England’s colonies said, “You can use these Sterling Area balances to pay other Sterling Area countries, namely, us, in England.”

The whole idea was that, England’s hope was that, after WWII, all these balances that its colonies had built up would be spent on [England’s] exports, and that would enable [England] to have full employment instead of the mass unemployment that led to a general strike.

So the United States basically — this was the beginning of America’s “rules-based order.” The rules-based order means — it’s a double standard. “We have one set of rules [for us], one set for others.”

England had to agree to abolish the Imperial Preference system and let the countries spend their ten billion dollars anywhere — meaning, on the United States as well

But the United States did not promise to lower its tariffs and enable these countries to earn money from the United States. Only England was supposed to do this.

You’ll remember what Henry Kissinger said: “It’s dangerous to be an enemy of the United States, but it’s fatal to be an ally.”

England was an ally and it suffered a fatality.

So you could say that Lend-Lease was America’s victory over the Allies even while WWII was going on. Principally against England, because England was viewed almost with as much worry as America was worried about socialism.

Just as the socialist economies had their capital controls and their price subsidy, so England seemed to America to be a planned economy to the extent that it wanted its own economy to grow — its own labor force to be employed, instead of the American labor force.

So Britain had to agree to a “free market” that ended Imperial Preference. It also had to agree not to devalue sterling to make its exports more important. England — when Lend-Lease gave way to — soon as the war ended, within a week, it happened very quickly, because of the atom bomb on Japan — England had hoped that the war would last a year longer so that it would have a chance to settle things more in its favor.

But all of a sudden it was broke, it needed money, and America said of course, “Now that there’s not a war anymore, we don’t have to give you any support, but we will give you a loan, but you have to agree not to devalue sterling until 1949. You have to hold sterling at such a high price that nobody can afford to buy your exports.”

And [the US] said, “There’s one great advantage that we know Mr. Churchill will love. Without exports, you’ll have mass unemployment. Without mass unemployment, you’ll have low wage rates. You will win the war against labor, and we’ll win the war against you.”

That was basically the deal that was made, and basically it was foreign policy agencies.

The United States — if you look at the debates during Lend-Lease and the British loan, Congress said, “Well, you know, they say that they need money. But if they really need money they have plenty of assets. Let them sell Shell Oil to the United States. Let Mr. and Mrs. Astor put their wealth up on the block. They have plenty of things they can give us.”

In other words, they treated Britain as a dress rehearsal for how the International Monetary Fund (IMF) was going to treat Third World countries after the 1950s.

You have to pay a foreign creditor, sell off all of your assets, sell off your public domain, your mining rights, your public infrastructure.

That basically is what the United States insisted that Britain do. And by [Britain] agreeing to all of this economic surrender, the United States went to the rest of Europe and said, “Well we’ve got Britain to agree with this. This is a fait accompli. Either you join us, or you don’t. Either you’re with us, or without.”

You didn’t need George W. Bush to say that. That was the policy that America went to Europe with. England has always, ever since, acted as America’s proxy; as America’s battering ram. It will sell out, and then give a model for America to impose on other countries.

So essentially the IMF, when it was being structured, was to enforce this system.

Well what Keynes said — the reason that he put forth this idea of the bancor, that Radhika described, is he described, “Creditor countries have moral obligation that we want to make into a legal obligation, to enable the debtors to pay them. You can’t say you’re a creditor making a loan if you prevent the countries from paying the loan.”

Keynes said that the key element in his proposal for the International Monetary Fund was the “scarce currency” clause. That countries would borrow this special IMF currency, the bancor — they would accumulate it.

But if a country would run a sustained surplus for more than seven years — and we know what country he meant, the United States — then the surplus would be wiped out, because it was so large that it would be unpayable.


This logic is exactly the logic that Keynes applied in the reparations debate in the 1920s, when he said, “Look what happened. When reparations couldn’t be paid, finally the world saw reality and they canceled the reparation debts‚ the inter-ally debts. My system with the bancor is designed to write that into law.”

“That if a country” like the United States — [Keynes] didn’t [actually] mention any country — “is a chronic surplus country, and other countries will be chronic debtors, at a certain point this imbalance will be wiped out. That’s the way that we’re going to create market balance. We will create a marketplace that has the rules to prevent the market from transferring all the wealth of the world into the creditor countries and bankrupting debtor countries and forcing depression on them.”

Well the United States said, “That’s what we want! We want the IMF to enforce depression on the rest of the world, because then we can ask Argentina and Chile and Latin America and Asia to do just what England did. You owe us the money — sell off your public infrastructure. Sell off your oil rights. Sell off your mineral rights.”

And essentially if you look at the debate over Keynes’s proposals and what British politicians in the House of Lords wrote, you see this all spelled out.

The House of Lords warned that this would happen. The advocates, fighting against workers, the main anti-worker party, was of course the Labour Party. And the Labour Party said, “We’ve got to agree with the Americans. Even though it will be mass unemployment, well, they’re Americans.”

The Conservatives fought against bankrupting labor. The Labour Party, even before Tony Blair, advocated fighting against Keynes’s proposals and wanted abject surrender to the United States.

And basically, that’s what happened.

The task of the IMF turned out to be a replay of Lend-Lease agreements, and the British loan of 1945— it’s to lend to the Third World export countries. Its prime directive was to promote dependence there.

But I’ll get to the 1950s after Radhika makes the transition from what Keyenes did to what happened after WWII.

RADHIKA DESAI: Thanks Michael. Again, really very interesting, and it just makes me think of several things that I thought I should really mention here.

Not only is the wikipedia entry wrong, that somehow this Lend-Lease was essentially free aid. As you point out, the big price that had to be paid was essentially the surrender of national sovereignty. Essentially agreeing to do what the United States wanted you to do on important policy issues.

But there’s also something further.

Actually, countries like the UK were very aware of what the US was doing, and that the end game that the US was looking for was essentially to be a creditor which could then dictate, if not repayment, then essentially dictate policies.

And in order to avoid being in that situation, for a large part of the Lend-Lease, Britain essentially tried to sell assets as much as possible, whatever it could, in order to pay for it anyway. So actually it was both monetarily paid for, in the bulk of the instances, and it was also paid for in terms of surrendering policy.

And very critical policy. I mean, if you could buy policies like these, they are cheap, actually.

And secondly, this discussion is very important from the point of view of today, because as some of you may know, the idea of Lend-Lease has been dusted off and put into practice once again, vis-a-vis Ukraine. And we’ll probably be discussing this in a later show, because we intend to do one on the political economy and the geopolitical economy of the Ukraine war.

But it’s important to say that, again, most people think that the aid that’s being given to Ukraine, and the Lend-Lease, and so on, is free. It isn’t. The United States is running a tab. At the end of this war, whenever that may be, Ukraine, or whatever entity is the successor to Ukraine, because it will be as likely as not a much diminished entity, will be saddled with a big bill.

And if it can’t pay, all the better, because the United States will be able to dictate policy. So one way or the other, the people — not only are they destroying Ukraine right now, but they are going to be squeezing it further.

I should also add one other thing.

The United States, because it essentially demanded that the UK not devalue for a period of time — until 1949, et cetera — also ended up — it did that, and it also ended up enlisting the colonies of Britain in its own favor.

Because essentially the colonies did not want to purchase things with overvalued sterling, and they said, “Why can’t we use our sterling balances, because they are our sterling balances?”

Remember this is also the time when these colonies are becoming one by one independent, and they said, “Why can’t we use this to buy American goods?” Because of course at that time, with much of the productive capacity of the world destroyed around the world, the United States was the only major economy left standing, and the only major economy capable of exporting the things that the colonies might want.

And then, finally, Michael has pointed out this whole point about austerity, this whole point about how essentially exclusively debtor adjustment — which is the opposite of what Keynes wanted.

Keynes wanted creditor adjustment — to have exclusively debtor adjustment means you are making the weaker party even further weaker by making them tighten their belt by making them consume less by imposing recessions on them, et cetera.

And from this point of view, again, remember, this is not the only way to pay off your debt. There are actually two very different ways of paying off debt. And I think it’s important to remember them as we try to assess these arrangements.


One is, yes, you restrict your consumption — you say, okay, if I owe you x amount of dollars, I’m going to restrict my consumption, I’m going to not eat, I’m going to not heat my house, and I’m going to repay the debt.

Some people can do so with minor difficulties, for others it will be too great a difficulty, and for societies creating generalized misery by paying debts these ways and also inflicting misery on those least able to bear it, like working people, the poor, et cetera.

But there is another way of paying debt, which is to increase your capacity to pay. So you invest in that society and its productive capacity. Or, if you are talking about an individual, you say, “Okay, I want to take on further debt for now, I’m going to train myself as this or that, increase my capacity to earn, and then I will pay off the debt.”

This is a very different way and Keynes wanted to institute this way of repaying debt, in his ideas about an International Clearing Union and the dollar and so on. So that it does not inflict such misery.

But the United States wanted the opposite.

And so now, let us come slowly to the third question, about the dollar system between 1945 and 1971, which is when the dollar’s gold link was broken. How exactly did it work?

So essentially, before we get there, it’s important to remember a couple of things. One of them, as I discussed in my Geopolitical Economy, the United States could see that the sterling system was weakening already in the early part of the twentieth century.

And, throughout the period that we have just been talking about — the two world wars, the Great Depression, et cetera — the United States basically calculated its policy actions in a way as to try to realize the possibility that the dollar would replace sterling as the world’s money.

Essentially the United States saw itself as the country that would replace the United Kingdom.

Of course the US knew that it was never going to be able to acquire an empire the size that Britain had, but it would essentially try to say, “Forget about that, but we will try to make the dollar the world’s currency.”

The problem with this was of course that the sterling system relied on empire. If you [didn’t] have an empire, you were going to have a pretty tough time. You were going to have to engage in some pretty shady shenanigans in order to make the dollar the world’s money.

But this desire on the part of the US has been there all along. The United States has always been an expansionary society. And if you read critical historians and writers on the US like Charles and Mary Beard or, more recently, William Appleman Williams or Andrew Bacevich, and so on.

All of these people emphasized that the United States was always expansionary. It justified that by saying that, “We are always producing more than we can consume, and we are creating more capital than we can employ. We need the whole world to be open to us.”

So ideas of Manifest Destiny, the Frontier Thesis, the Monroe Doctrine — all of these ideas justified US expansionism. And as I said, by the early twentieth century the US had actually made this general expansionism of its history very focused on making the dollar the world’s money.

And one more preliminary point, before we look at how the dollar system operated.

Michael discussed monetary imperialism, and that is really quite important. Because when you look at ideas — last time we mentioned hegemony stability theory — hegemony stability theory is not really a theory, it’s really an [ideological] discourse justifying the dollar’s world role. And so it tends to not be particularly consistent.

So sometimes you see that hegemony is — they talk about hegemony as though it were productive superiority. The most competitive country is the leading country of the world.

And other times they talk about the country whose currency the world accepts.

But these are two quite different things. And it’s interesting from one point of view, because we have already seen that running the sterling system actually affected the British productive economy adversely.

Because it required a financial system that was the opposite of what an expanding, productive economy requires. It was the absolute opposite of that.

Therefore it is not surprising that Britain’s monetary imperialism — that is to say, the gold-sterling system — coincided with the period when Britain was losing manufacturing superiority rather rapidly to other countries.

As we’ll discuss — probably in the last show, when we discuss the last two questions — we will show that the United States’s attempt to emulate this, it’s the second phase of it which became reliant very much on certain types of financialization — that also has coincided with the rapid decline of US competitiveness.

That is to say, all the people who are talking up the dollar and saying the dollar is naturally the world’s money, are not just hiding from people the cost the rest of the world pays, they are also hiding from you that American workers — US workers, even US small business people — are paying for this crazy system.

Already this monetary imperialism was a sign of expanding multipolarity, because it showed that Britain no longer had productive dominance. it would exercise monetary dominance to some extent thanks to its empire. But this was also limited by time.

Now, essentially, like I said before, the United States left the world with no choice but to accept the dollar as the world’s currency by simply nixing all alternative plans. Simply saying that the world could not come to any multilateral agreement, it was not going to cooperate.

So we are told, however, by [advocates of] hegemony stability theory, that the dollar system functioned perfectly fine up until 1971 and then there was some little (unintelligible) difficulty and the dollar’s gold link had to be broken.

And in any case it was a masterstroke. But nevertheless, all the people who talk about US hegemony tend to think that the post-Second World War period up to 1971 was a period of dollar hegemony and American or US hegemony.

But if we actually look at the reality of the period from 1945 to 1971, we see the opposite. What we see is an extremely tumultuous couple of decades and a half.

So essentially the story can be compressed into the following.


First of all, without an empire, the dollar could not export capital to the rest of the world. It did a little bit after the Marshall Plan, but the Marshall Plan itself is totally hyped up. It was not really necessary for European recovery which was largely done under its own steam.

And what’s more, the Marshall Plan credit that was given to Europe also came with multiple strings attached, including strings that made this aid not particularly helpful to Europe.

But nevertheless the US could not export much capital.

So essentially what the US started doing was eventually — when this period of export of capital was over — essentially it started supplying the world with liquidity by running deficits.

So this is the opposite — Britain was the creditor nation of the world when it ran this gold-sterling system, and it could do that thanks to her empire. Without an empire, the US could only run the dollar system by running deficits, by becoming increasingly indebted to the world.

In the 1940s, actually, we had a special period in which the United States — thanks to the devastation of the rest of the world’s economy, and the great boost that the war gave to the US economy — was running huge export surpluses.

And because when you are running an export surplus the world has to pay you dollars, rather than you making dollars available to the rest of the world. There was a general condition of dollar shortage.

The Marshall Plan was not really able to alleviate this dollar shortage. And of course as a consequence, European economies, rather than opening themselves up to free trade, naturally chose to protect themselves as much as possible, because they had to manage the relations between their economies and the rest of the world carefully in order to conserve scarce foreign exchange.

So this was the situation. The dollar system was there, there was no alternative, but it wasn’t working particularly well either. And certainly not contributing to the world’s recovery.

In fact, the only proposal of Keynes that actually survived the US’s nixing of Keynes’s proposal was capital controls. The US had to accept that, unless European countries practiced capital controls — that is, managed the inflow and outflow of money from their economies and into their economies — there would be such a lot of economic devastation, and this could only increase the attractiveness of communism in western Europe.

And this was to be avoided at all costs, so the United States accepted capital controls.

Capital controls was what made it possible for all these European economies to organize their recoveries with a lot of state involvement, a lot of state ownership, et cetera. But they allowed them to organize this.

So, they did manage to do it, and by 1958 they were sufficiently recovered to be able to finally make the currencies convertible. And of course with convertible currencies of these countries, they could also use each other’s currency in their trade.

And almost overnight what had been a dollar shortage turned into a dollar glut. Nobody wanted dollars, since their were European currencies of far stronger economies that were becoming convertible.

Remember, the bulk of the growth of the post-Second World War period took place in the recovering economies.

So essentially there was a dollar glut. And also around this time, you also began to see the first post-war declines in US exports. Eventually these declines in exports would become trade deficits, but we can discuss that another time.

And also around this time, the famous Belgian economist Robert Triffin proposed there was something inherently wrong about supplying the world with liquidity via deficits.

At that time, remember, these deficits were not due to trade deficits but because of the US’s military spending abroad in the Korean War and later the Vietnam War.

So [Triffin] said that these sorts of deficits — basically he proposed that there was a dilemma here. Because the more liquidity you supply via the deficits, the greater the deficits. That may mean greater liquidity, but the size of the deficit made the dollar less attractive.

And the Triffin dilemma essentially operated throughout this period. Essentially, the major trading partners of the United States, rather than accepting dollars, said, “No, the dollar is convertible into gold, so we want gold instead.”

So within a very very short period, between 1958 and 1961, the European (unintelligible) had drained so much gold out of the United States that the United States could no longer back the dollar with gold on its own.

So a gold pool had to be created, pooling the gold of all the countries involved, in order to back the dollar. And the countries involved only did so because they thought this would give them a place at the table when eventually this crazy system came to an end and they could negotiate a better system.

And even while the United States kept trying to talk as though there was no problem, saying, “We have lots of assets abroad, there’s nothing to worry about, we are not living beyond our means.” Nevertheless they may be talking in this way, but they were walking in a very different way.

Because they were taking a number of measures trying to reduce the payment deficits by removing tax incentives for outgoing FDI (??), trying to keep money within the United States by imposing a tax on interest earned elsewhere. Increasing domestic military procurement, et cetera.. There is a whole long list, I won’t go into that. But a number of efforts were made in order to curb US deficits.

Things did not improve, and by 1967 they were so bad that the domestic convertibility of the dollar into gold had to be ended. The same year the French withdrew from the gold pool, saying, “This simply is not making sense.”

The United States kept the game going by basically requiring the rest of the world to not demand gold but eventually by 1971 (the slide should say 1971) there was a run on the dollar and the Nixon administration had to end convertibility.

So if you look at this series of events, you would not believe that the dollar was the world’s money in any kind of stable fashion. So that is the story.

Michael, perhaps you want to add something.

MICHAEL HUDSON: I want to add a quantitative backing of all of this.


In 1945, the United States had its gold reserves — its gold reserves had all been flowing to the United States in the 1930s, and during the war. It was “flight capital”. People were afraid to hold their gold in Europe because they thought Germany was going to attack.

So most of the gold was in the United States in 1945. If America had really wanted to create a system of balance, it would have done what you described, it would have helped other countries actually invest to develop.

What you describe as the “nightmare” for the United States, that other countries would invest to develop, and wouldn’t need to be dependent on the United States.

Between 1945 and 1950, the United States raised its gold holdings from 20 billion to almost 25 billion. 75% of the world’s monetary gold stock was held in the United States. And that was what you called the “dollar shortage.”

Other countries, without having enough dollars, they were forced to do what England called Stop-Go.

Whenever England would begin to recover — its business would expand, workers would be employed — they’d have to import their grain, they’d have to import their food, they’d have to import other things. Pound sterling would go into deficit. England would have to raise its interest rates in order to borrow the money to finance the deficit — to keep the exchange rate of sterling stable. And this rising interest rate would cause it to fall back into depression.

That was Stop-Go. Which mainly meant, stop stop stop whenever you begin to become solvent.

Everybody was complaining by 1950. The United States solved the problem in a way that nobody had expected. The Korean War — from the time America entered the Korean War in 1950/51, every single year its balance of payments moved into chronic deficit that got deeper and deeper until 1971 when it was forced off gold.

The entire balance of payments deficit was equal to, year after year, to America’s military spending abroad.

WHen I left Chase Manhattan Bank, I was employed by Arthur Anderson to do an analysis of the US balance of payments. I produced the charts and the statistics — they are repeated in Super Imperialism — to show the entire deficit was indeed U.S. foreign military spending.

At that time, Mr. John McNamara, the Secretary of Defense, telephoned Arthur Anderson and said, if they supply [Michael’s] report, [Arthur Anderson] would never get another contract with the US government.

So my boss Mr. Barsanti came in and apologized to me and said that they couldn’t publish it.

Their art department had made very nice charts and he gave them to me. And I went to New York University’s business school and I published it, all these statistics, and a monograph summarized in Super Imperialism.

The Federal Reserve, then, thought, “How are we going to cope with this?”

They didn’t want to attack me obviously, so they attacked all the publications of NYU’s business school. They said that the fact that I found the Vietnam War responsible for the deficit and military spending doesn’t give confidence in NYU’s editorial decision.

But then one of my students, at The New School where I was teaching international finance and trade, worked for the Federal Reserve and showed me their internal memos saying, “Yes this is true, we can’t let it get out.”

All of this discussion about international balance and fairness, as if all the balance of payments deficits were international trade, ignored two things.

They ignored, number one, military spending that was the key to the deficit, and that actually has been since the thirteenth century. War forces countries into deficit. War forces countries to borrow. That was why the Catholic Church, the papacy in the thirteenth century, legitimized interest-bearing debt to finance the wars — the crusades and the wars it was fighting.

So this is a constant throughout history. It doesn’t appear in any of the “free trade” economic models. It’s as if governments don’t exist.

And the other thing that doesn’t exist in this, saying that balance of payments equilibrium is all trade — they then say that all trade is a result of labor asking for [higher] wages. And the way to run a deficit is to institute a class war against labor. You want to fight the labor unions, you want to lower wage levels to enable countries to have achieved balance.

Well what they mean by “balance” is obviously to finance this US-centered, military order, because the dollars that countries who are accumulating — when they weren’t asking for gold — were loans to the US Treasury by buying Treasury Bills that financed not only the domestic budget deficit — that was largely military — but also the balance of payments deficit.

So the entire stability between 1951 and 1971, for 20 years, was provided by military spending as the United States put military bases all over the rest of the world.

So what achieved balance was military — the military deficit. Not trade adjustment. Not investment adjustment. All of this is left out.

Trade theory does not have room for the gunboats. And if you look at the balance of payments for the last 800 years, it’s all about the gunboats. That’s the amazing thing.

And what we’re focusing on is the politics. International exchange rates and relations are not a function of “free market” arrangements. They are a function of intergovernmental debt — not so much private [debt] — and military spending. And governments paying their foreign currency by selling off their infrastructure.

I want to make one final comment. When Radhika says that “stability is achieved by investing,” I said that was the US nightmare.

That nightmare was imposed — the iron hand was the World Bank. There is a reason it’s usually led by defense department and military heads. The prime directive of the World Bank is, “No country should compete with major products that the United States exports — above all, grain.

The one thing that the World Bank has opposed is other countries growing their own food grain.


From the very beginning, it’s fought against land reform, against land redistribution. It’s said, “We will make loans for export facilities, for roads and ports. You can export plantation crops from huge latifundia. You must not grow your own grain. You must depend on the United States. That’s the free market. You must not have government investment.”

The World Bank publishes country missions for every member country. Every single mission report has recommended that the first thing they need is domestic currency for agricultural extension – for marketing, seed development, rural education. In other words, for all these things that the United States has done under its Agricultural Adjustment Act (1933) that Roosevelt sponsored. That helped American agricultural productivity in the 1930s and 1940s grow faster than any industry in world history had grown.

Farm productivity. That’s exactly what America looked at as its nightmare if Argentina — if Latin America and Africa would grow their own grain

The idea of dollar dependency was based on the United States using the market to prevent other countries from investing to become independent of reliance on the dollar and on products that are exported by the United States, primarily oil and grain.

RADHIKA DESAI: This is fascinating, Michael. And I should say, we are probably over an hour, so we should stop this for today and we will take up the last two questions, that is to say, Was there really a Bretoon WOods II — that is to say, things just simply carry on as normal after 1971. And, this will become a prelude to understanding the contradictions of the system after 1971 will help us to understand the current possibility of the demise of the dollar as the world’s money.

But before closing let me just say that, as part of this story, Michael’s absolutely right.The United States is really afraid of the rest of the world developing, growing, et cetera.

But the fact is, it has not been able to prevent it, which is one of the fundamental reasons for the current crisis.

So the United States — what it wants to have, and what it can have, the difference between the two has grown wider and wider. And this is partly why we see increasingly desperate military actions of the United States.

So in the story we have to tell, first the Europeans essentially check out of the dollar system by creating European monetary integration. And later on, other countries — today, even the oil-importing countries, the OPEC countries, which for a while were persuaded to hold vast quantities of US currency, they are also checking out.

The Chinese, Russians, Japanese — everybody is increasingly wary of holding dollars. So this is the story we will tell.

And even the IMF and the World Bank. They have been loyal servants of the United States in imposing austerity on the rest of the world, as much as possible. But by the early twenty-first century, you also see that the rest of the world, having been bitten several times, were now quite shy of the IMF.

And the IMF and the World Bank loan portfolios actually shrank, and remained so until after the 2008 financial crisis.

What the US wants, and what it can have — the distance between these two things, as I say, we will show how this expanded in our next program, which will definitely be the last one we will do on de-dollarization. And then we will move on to other topics.

Michael and I were thinking we would do one on the political and geopolitical economy of the Ukraine, the conflict over Ukraine.

So thanks very much. Thanks to Paul Graham, who is behind the scenes, recording all this and being our wonderful videographer. And thanks again to Ben again for hosting our show. See you in a couple of weeks.

• Category: Economics • Tags: Dollar 
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  1. Jews mess up the world by being too smart and swindling dimwit goyim, and blacks mess up the world by being too dumb and destroying everything.

    Jews use smarts unwisely, and blacks use stupidity wildly.

    South Africa, from apartheid to fallapartheid. Everything falling apart like crazy.

    • LOL: Brosi
    • Troll: mulga mumblebrain
    • Replies: @Brosi
    , @Z-man
    , @Doug Ryler
  2. Jim H says:

    ‘a deflationary monetary order is a bad thing.’ — Radhika

    This is a commonly held notion. But is it true?

    From the time it resumed gold redemption in 1871 until William Jennings Bryan’s ‘cross of gold’ plaint in 1896, the US economy was heavily deflationary. Yet technology and living standards galloped ahead.

    Capital was not diverted into real estate speculation, because property prices generally (except in the path of urban expansion) were falling. Farmland prices fell about 1 percent annually. Accordingly, productivity was compelled to advance, and it did.

    As one example, Edison, Tesla and Westinghouse began the electrification of the economy in the late 19th century — a giant leap in productivity.

    If the ‘deflation bad’ myth is dropped, then the gold standard remains an attractive and proven way of keeping inflationist politicians at bay, while also making it more difficult to finance wars.

    Absent the Federal Reserve’s mad-dog keystroke kurrency printers, the US would not be sending $100 billion worth of rapidly depreciating dollars to the Ukies. And we would all be far better off as a consequence.

  3. Thanks, plenty of food for thought here. Look forward to the next episode.

    • Agree: JR Foley
  4. Jim H says:

    ‘if a country is a chronic surplus country, and other countries will be chronic debtors, at a certain point this imbalance will be wiped out.’ — Dr Michael Hudson

    Quite so. And Germany’s enormous TARGET2 surplus will have to written off when the euro fails, will it not?

  5. Rubicon says:

    Take the time and listen carefully to Michael Hudson: He describes precisely how/why the US became a hegemonic power right after WWI.

    Following all European wars, each nation would get loans from their banks to pay off their war debts.

    It wasn’t until WWI that the US hoodwinked the European nations into blaming Germany for WWI.
    RESULT: The US Govt. forced Germany to pay millions in War Reparations, via US LOANS.

    Once that began it screwed up German/others holding gold, etc. causing A Great Depression in Germany and in the US.

    This is the procedure the US has used to destroy the economies of Africa, Latin America, Indo-china and may other nations, who now realize what they’ve gotten into with these US Loans: DEBT PEONAGE!!!

    So it ALL STARTS with WWI. Then came the Lend Lease Loans the US forced upon Great Britain.
    It basically destroyed the already withering British Empire.

    Please watch/listen to what Dr. Hudson is telling us about The US’ enslavement of many, many nations.

    • Thanks: TheTrumanShow
  6. Chebyshev says:

    The incentive for the U.S. government during the Korean and Vietnam Wars was to spend as much money on those wars as possible, leading to higher deficits and more U.S. debt held by the rest of the world. The U.S. gained power despite losing in Vietnam as it went further into debt and more countries bought this debt and became creditors to the U.S.

  7. The dollar replaced sterling, US hegemony replaced British. And the pattern goes on. US global dominance looks like having reached its apex, only down now – the way of all empires. This places a certain difficulty on the planet. Of course, imperial rivalries have resulted in major wars throughout history. And the last century saw two world wars over power struggles. The current crisis points to another world war, which cannot be avoided without nuclear Armageddon. The historic maxim leaders must focus on: every empire eventually faces the war it is trying to avoid.

    • Replies: @Franz
  8. anon[963] • Disclaimer says:

    I stopped reading at “America knew it would never have an empire the size of Britain.” Utterly ridiculous. The Kingdom of England didn’t have an empire until well after it was 500 years old. The American and Soviet Blocs during the Cold War were each more impressive than the British empire. America is such a young country and is likely to have an even larger empire once it grows up.

    I don’t see any reason at all for Indians in North America including this Radhika character. The Declaration of Independence mentions how much of a nuisance they are (red dot and feather are the same in this regard, hence the term “Indian”) and how they are part of anti-American plot by the King of England. What’s old is new again.

  9. Anon[398] • Disclaimer says:

    De-dollarization will take maybe 3-7 years. De-dollarization means no one will buy Federal Gov’t debt except at staggering interest rates.
    Note – Half of Federal Budget is funded with debt.

    Reflect on those implications.

  10. Franz says:
    @peter mcloughlin

    The dollar replaced sterling, US hegemony replaced British.

    The collapse of the British pound to the US dollar was a godsend to the British working class at the time. True, they botched it up via Brussels but the point is the empire had been a net drain on the ordinary worker and all else being equal the elasticity should return.

    Same with the States. Our fatcats will lose the right to set wages for peons worldwide and good riddance. Let them reinvest in the US and sweat their way back to profitability.

    Globalism was a chimera…now ending, thank god!

  11. Hudson’s columns prove the law of eternal recurrence.

    • Agree: Bro43rd
  12. bert33 says:

    Iexpect asia will have a euro equvalent in the next couple years independent of the dollar. Asia rising…

  13. DeSelby says:

    “it’s all about the gunboats”

    Australia has just approved a deal to buy the US nuclear sub vaporware, 8 subs for $121 billion to be delivered in 25 years, on top of basing US soldiers and war planes (we wont tell you if they are nuclear armed) at Australian taxpater expense.

    Sounds like a good deal (for someone).

    • Replies: @mulga mumblebrain
  14. Brosi says:
    @Priss Factor

    Radhika Desai

    Does anyone else find this photograph off-putting? At first I thought she was a Jew.

    Anyway, here is what the article says about her:

    Radhika Desai is Professor at the Department of Political Studies and Director,Geopolitical Economy Research Group, University of Manitoba, Winnipeg,Canada. She is the author of Geopolitical Economy: After US Hegemony,Globalization and Empire (2013), Slouching Towards Ayodhya: From Congress to Hindutva in Indian Politics (2nd rev ed, 2004) and Intellectuals and Socialism: ‘Social Democrats’ and the Labour Party (1994), a New Statesman and Society Book of the Month, and editor of Theoretical Engagements in Geopolitical Economy (2015), Revitalizing Marxist Theory for Today’s Capitalism (2010) and Developmental and Cultural Nationalisms (2009).

    Indians are the most racist people on the planet, and their propensity to lie about it and their hypocrisy is only eclipsed by Jews. What caste is this bimbo anyway?

    Her Guardian column is called “New Political Economy”.

    Indians are toxic for western society for more reasons than just their eagerness to be Shabbez Goyim for Jews. The are almost all diversity loving socialists and communists

    • Agree: Z-man
    • Replies: @Malla
    , @JR Foley
    , @Malcolm X
  15. Z-man says:
    @Priss Factor

    ‘Fallapartheid’, I like that.
    The white population is down to 8% I see. Yep, going into the crapper.
    Just that should warn European nations but do they listen? How can they when Jooz call the shots.

  16. Jim H says:

    ‘War forces countries into deficit. War forces countries to borrow.’ — Dr Michael Hudson

    Thus the Federal Reserve is, first and foremost, an engine of war finance. It’s how the US can send $100 billion to the Ukies, while its own domestic finances (such as Social Security being ten years away from hitting the wall) are in shambles.

    This is the end state of any politically-managed ‘elastic currency.’ Populists always will demand more credit, while the masters of war will do the same under the phony guise of national security.

    War is a racket, said General Smedley Butler. Audit the Fed, I say. Then shut the sucker down.

    • Agree: Bro43rd
  17. anonymous[135] • Disclaimer says:

    I predict, because of some of the points from MH lecture above, but also because of the Destruction of Nord Stream one and the attempt to cut Germany and the rest of Europe off from access to cheap Russian oil that Germany will eventually become a vassal state of Russia..

    Already Saudi Arabia and Turkey are joining SCO, which means no more bonds for oil .. and the economy of Israel is about to tank? That cannot be good for the dollar.

    as MH said “all the people who are talking up the dollar and saying the dollar is naturally the world’s money, are not just hiding from people the cost the rest of the world pays, they are also hiding from you that American workers — US workers, even US small business people — are paying for this crazy system.” I ask why should not everyone, who is not an Oligarch, be against a currency system that allows a few hidden Oligarchs to control the quality of life in the world?

    But I do not agree the USA dreamed up these deeds, it was just following orders given by the global Oligarchs (organized within the banking and marketing sections of the City of London, Denmark, Switzerland, HK and Wall Street).

  18. anon[148] • Disclaimer says:

    I have to say Michael, she is pretty for an old gal, congratulations you old dog. haha

  19. Durruti says:

    “There’s one great advantage that we know Mr. Churchill will love. Without exports, you’ll have mass unemployment. Without mass unemployment, you’ll have low wage rates. You will win the war against labor, and we’ll win the war against you.”

    That statement (and the article), does not make any sense. Either an unconscious typo, (lots of unconscious and lots of typos), or the thesis of Hudson & Desai? makes no sense. It appears to be a compilation of unconnected (something?).

    Commentator # 16 continues the compilation of nonsensical -analysis?

    Social Security being ten years away from hitting the wall

    Social Security is financed by its recipients. Workers pay into the fund with deductions from their salaries (you work, & you get a salary – whether it is a high or low or average salary is irrelevant). A wage earner pays for his/her social security. Yes the fund is raided-stolen by the thieves in government who control our lives. They may destroy the system, by looting it. But the system of SS, on its own will hit no wall. Even Ron Paul, one of my most admired people, has declared that he would continue the system (if he were President).

    A construction worker understands economy better than the two authors above. That is a trick statement; I did not declare that a construction worker understands economy. He may or may not.

    Many nonsensical articles appear on this forum (as well as other sites). There is much confusion voiced. I cannot help them. Economy 101 is where I got off. In Brooklyn, adults said “The rich get richer & the poor get poorer.” Even that is not etched in granite. Some rich get richer. Some get poorer.

    Since the end of WW II, the poor have improved their standard of living. As they accomplished that improvement, they have sold their sons in wars, and their daughters – to the oldest profession, and lost their Honor. Since 11/22/1963, we Americans lost our Republic, and by ignoring that fact, we have lost our LIBERTY.

    I’ll cheer up once I finish my coffee.

    • Replies: @Stripes Duncan
  20. Salcio says:

    “In the Franco-Prussian War, for example, France owed Germany some reparations, but France simply went to the private banks, borrowed the money, and paid Germany.”
    Yes, France paid war reparations within 5 years.
    However, after WW1, when Germany was burdened with the same reparations (the same as part of GDP as France in 1871) she did not pay.
    Often forgotten detail.

  21. @Priss Factor

    Being smart is being wise. Not mutually exclusive. So, nope. Jews aren’t smart. If they were, they’d be Christians not Pharisees, followers of Satan.

  22. @anon

    America is such a young country and is likely to have an even larger empire once it grows up.

    Delusional and phantasmagorical. The rest of the world will just be standing around with their hands in their pockets?

  23. Anonymous[261] • Disclaimer says:

    I am eager to read further comments from these two economists – I am especially interested in their comments as to why the USA has stirred up this Ukrainian mess. Anyone with an independent brain can see how Nuland, et. al. started a revolution in that country and exactly how it will end to the absolute destruction of Ukraine. I am interested as to how Ms. Nuland, et. al. were empowered and allowed to pull off this stunt and just why can’t the Ukrainians not see their eventual destruction themselves.
    I don’t fear WWIII or some nuclear exchanges coming out of this little nonsense – China and the rest of the World will not allow it. And I really believe that China will soon run this World and we will probably be glad when it happens – it will be nice to get rid of Zionist control.

    • Agree: Arthur MacBride, vox4non
    • Thanks: JR Foley
  24. I Am says:

    Progress and Property Rights: From the Greeks to Magna Carta to the Constitution [Paperback]
    Walker F. Todd

  25. I Am says:

    Michael Hudson ALSO stepped up early aughts with (Todd et al) many we who were not allowed to sue “Federal Reserve Shylocks” THE money is digital algorithms since computers please do the math on usury

  26. Brilliant article but I would like to see more of exchange of goods on world market.

  27. CSFurious says:

    Who really controls the U.S.?

    • Replies: @Mary Marianne
  28. Malla says:

    Indians are the most racist people on the planet, and their propensity to lie about it and their hypocrisy is only eclipsed by Jews.

    Indians are some of the most racist people in the World
    India among world’s most racist countries, says survey
    The global social attitudes study claims that the most racially intolerant populations are all in the developing world, with Bangladesh, Jordan and India in the top five.

    Britain is one of the most racially tolerant countries on the planet, a survey claims.

    The global social attitudes study claims that the most racially intolerant populations are all in the developing world, with Bangladesh, Jordan and India in the top five.

    By contrast, the study of 80 countries over three decades found Western countries were most accepting of other cultures with Britain, the U.S., Canada and Australia more tolerant than anywhere else.

    The data came from the World Value Survey, which measured the social attitudes of people in different countries, as reported by the Washington Post.

    The survey asked individuals what types of people they would refuse to live next to, and counted how many chose the option ‘people of a different race’ as a percentage for each country.

    Researchers have suggested that societies where more people do not want neighbours from other races can be considered less racially tolerant.

    The country with the highest proportion of ‘intolerant’ people who wanted neighbours similar to them was Hong Kong, where 71.8 per cent of the population would refuse to live next to someone of a different race.

    Next were Bangladesh on 71.7 per cent, Jordan on 51.4 per cent and India with 43.5 per cent.

    • Agree: William Gruff
    • Thanks: Brosi
    • Replies: @Lin
    , @William Gruff
  29. Rubicon says:

    If you listened carefully, NOW do you see the fight Russia/China/Non-Western nations has in trying to escape the Monster Claws the US’ IMF/World Bank/The FED imposes upon most nations around the world. IN simple terms, its how this huge edifice purposely destroys people’s wages and their ability to pay their debts?

    If you can’t understand that, then you can’t awaken to what the US/EU/UK Financial Aristocrats have in store for YOU.

  30. Xafer says:

    Thanks Prof. Hudson and Prof. Radhika, your command on modern economic history is simple awe inspiring. The most brilliant primer i have read on the machinations, motivations and interests for the creation of reserve currency.

    I am thrilled by this series. Although i have to read each piece multiple time to absorb the deluge of facts you discuss.

    Thank You.

    • Agree: Rubicon, JR Foley
    • Replies: @JR Foley
  31. Lin says:

    ‘Racism’ in many countries often mean anti-foreign or anti-immigrant sentiment but it
    has a different set of meaning in India and is more deep rooted. I read that ‘caste’ actually means ‘race’ there.
    Like it or not, race-mixing always happen….starting from ‘Kill all the men and rape all the women’ tribal warfare…to modern day murika mullato procreation.
    –Hungarians are said to be descendents of Huns..
    –Russia is a good example of eurasia mixing..
    In Bharat, the caste system is part of the religion and obviously is more antagonistic towards ‘mixing’.

    • Replies: @Chebyshev
    , @Franz
    , @Malla
  32. @Rubicon

    The ‘vampire squid’ is the USA. Goldman Sachs is a tiddler-the US regime is the Kraken.

  33. Chebyshev says:

    –Hungarians are said to be descendents of Huns..
    –Russia is a good example of eurasia mixing..

    All South Slavs are examples of race mixing. For example, Serbs are descended about half from swarthy Dinaric Balkan people and about half from lighter Slavic and Gothic invaders. This mixing began in the third century AD.

  34. @DeSelby

    It is Imperial Tribute. As possibly the worst Five Eyes goon, we join every US aggression and genocide eg Korea, Vietnam, Iraq, Afghanistan, and must pay the US MIC billions in tribute in the form of arms purchases ( John Howard’s horrendous Free Trade Agreement handed the jewels of the economy over to the Yanks). Our military have worked with the Yanks for so long that bad habits rubbed off, and our Special Forces troops were caught committing atrocities in Afghanistan in true Yankee fashion.
    The nuke subs are a biggie. Hundreds of billions will go down the toilet, money that cannot be spend fixing the country itself. They are offensive weapons, designed not to defend Austfailia, but attack China thousands of kilometres away, but will be sunk by the Chinese in minutes of hostilities breaking out. But, who cares? Kissing Yankee arse is ALL our ‘elites’ know how to do.

  35. Franz says:

    –Hungarians are said to be descendents of Huns

    That was considered partly-true. By the time the Huns got that far west they’d married in to eastern European tribes, Scythian descendants mostly. They mated enough in that area to make the proto-Magyars who then pushed a bit further east and took Rome’s old province of Pannonia.

    Makes more sense than thinking Hungarians came all the way from the Altai Mountains.

  36. @Franz

    Globalism will have the last laugh in the form of global ecological collapse.

    • Agree: Zarathustra
    • Replies: @Franz
  37. Sven says:

    Hudson’s insights are an international treasure. The other part of this discourse consumes most of the space and is an egregious waste of time. Let Hudson speak without the unnecessary additions.

  38. Alrenous says: • Website
    @Jim H

    however, the ability to construct this fleet was hampered both by a lack of available public funds and the low credit of the English government in London. This lack of credit made it impossible for the English government to borrow the £1,200,000 (at 8% per annum) that it wanted to construct the fleet.

    In other words, William of Orange was broke and a deadbeat.

    The bank was […] the only limited-liability corporation allowed to issue bank notes.

    Trading raw gold coins has lots of limitations, which banknotes fix.
    Couldn’t have anyone competing with Orange’s fraud scheme.

    Banknotes don’t fix anything if fractional reserve is allowed. Which means legalized counterfeiting. It’s done so the bank can give broke deadbeats money without risking any, you know, actual money.

    The Credit crisis of 1772 has been described as the first modern banking crisis

    Turns out pretending worthless paper money is not worthless is what’s known as a ‘lie.’ Lies are bad, mmmkay.

    The transaction costs faced by gold have been pretty much copied by BTC. Which could again be solved by banks and banknotes.
    As long as nobody reserves them fractionally.

  39. Alrenous says: • Website

    So Keynes arrived at Bretton Woods with a set of proposals that would make it possible for a much weakened country, like Britain, to still try and pursue policies that were beneficial to British people and the British economy.


    Keynes arrived at Bretton Woods with a set of proposals where America bullied the crap out Britain and made its central bank subservient to America’s central bank. Then America bullied the rest of the world into doing the same.

    It did this because every country with a central bank engages in legalized counterfeiting. Debasement allows the mint to steal from everyone who holds their bank notes. Raw parasitism.

    America wanted to be able to steal from the entire world instead of just America. If you read the transcripts it’s clear the attendees didn’t want to say yes. They recognized the scam for what it was. Apparently the nations at Bretton Woods felt that they couldn’t say no, and didn’t.

    Today 75% of USD are held overseas, and as such America mainly steals from its colonies rather than local citizens. This is the basis of much of America’s vaunted ‘wealth.’ Dollars flow out, goods flow in. Remember, when you trade worthless and depreciating linen paper for steel I-beams, that’s a trade ‘deficit.’ The more I-beams you get, the bigger a ‘deficit’ it is.

  40. JR Foley says:

    Say HI to Shemp- Larry and Moe in the Federal Reserve–nyuk nyuk nyuk —-

  41. JR Foley says:

    “When I left Chase Manhattan Bank, I was employed by Arthur Anderson to do an analysis of the US balance of payments. I produced the charts and the statistics — they are repeated in Super Imperialism — to show the entire deficit was indeed U.S. foreign military spending.

    At that time, Mr. John McNamara, the Secretary of Defense, telephoned Arthur Anderson and said, if they supply [Michael’s] report, [Arthur Anderson] would never get another contract with the US government.

    So my boss Mr. Barsanti came in and apologized to me and said that they couldn’t publish it.”

    It is interesting to note here that Arthur Andersen tanked with Kenny Lay ( Pal of George W Bush) and auditor Dennis Duncan shredding working papers at Enron —and Bernardino was Boss Man of AA in the Windy City.

    Arthur Andersen —this was the Final BIG Deal — US Government contracts among many more clients !!!!

    • Replies: @Xafer
  42. JR Foley says:

    Projection is the KEY to USA exceptionalism. USA does things like blowing up pipelines connecting Russia and Germany and then states “Russia did it !” but anyone with an ounce of intelligence would realize that Russia would only have to turn off the valve in Russia.

    However–when a person watches FOX or CNN and any mainline news program OR reads the mainline news in USA –it is all rehashing what the CIA has ordered them to cut and paste. Such sources numb the grey matter separating the ears.

    USA citizens are Racists –simply go to other Unz articles for proof —-Jews Blacks and many more NON WHITES are on the Projection Hit List —–

    • Agree: Mary Marianne
    • Replies: @Malla
    , @Mary Marianne
  43. Xafer says:
    @JR Foley

    Agreed. This kind of ammunity by promising confidentiality to government led to many other financial crimes. In case of AA, enron.

  44. @Durruti

    Social Security assumed the average person would die before they drew very much money from the system. US life expectancy in the 1930s was roughly 60 for men and 63 for women.

    In addition, there was a near-moratorium on immigration to the United States from 1924-1965. Ten years ago I worked with a Chinese couple who fled Indonesia in their 60s, became US citizens and immediately began drawing Social Security. Did they finance their Social Security benefits? How many more like them in America?

    Social Security was designed as a wealth transfer program. It has always been welfare.

    • Agree: Palmm
    • Replies: @Palmm
  45. Palmm says:
    @Stripes Duncan

    Social Security was a wealth transfer program from high hazard working poor TO lower hazard white collar workers UNTIL 1983, when up to 85% of Social Security benefits became taxable.

    There’s no way to gloss over the fact that total government spending is mostly subsidies, transfers, etc.
    The divide and conquer strategy is the left focuses on defense spending, while the right focuses on the welfare, medicare etc., and nothing really gets done.

  46. Malla says:

    Racism’ in many countries often mean anti-foreign or anti-immigrant sentiment but it
    has a different set of meaning in India and is more deep rooted. I read that ‘caste’ actually means ‘race’ there.

    Caste system is akin to racism and the Indian caste system was far brutal than any discriminatory system in human history. How so, we will Churchill explain
    Churchill Speech: Our Duty in India

    “Let me just direct your attention once more upon these untouchables, fifty or sixty millions of them, that is to say more than the whole population of the British Isles; all living their lives in acceptance of the validity of the awful curse pronounced upon them by the Brahmins. A multitude as big as a nation, men, women and children deprived of hope and of the status of humanity. Their plight is worse than that of slaves, because they have been taught to consent not only to a physical but to a psychic servitude and prostration.”

    As far as caste and skin colour or “varna” (Aryan-Indo European cognate to the English term “varnish”) , today race and caste in India is similar to what it is in Brazil rather than say South Africa. Brazilian Whites have loads of Native Americana nd African ancestry and Brazilian Blacks have loads of European and native American ancestry and yet we see a rough colour hierarchy in Brazil. Same in India, because back in history there was a period when boundaries fell and mass mixing happened (during the Buddhist period) and once Hinduism was re-established, a new caste system reestablished with those with more Aryan ancestry becoming priest, warrior and merchant elites while the rest doing dirty work. There was a clash in between “Liberal” Aryans and “Conservative” Aryans on mixing. The Liberals won during Buddhism but the Conservatives won back during rise of Puranic hinduism later on, but by then the “damage” was done.
    So, even if upper caste populations are lighter skinned on average you come across many dark skinned Brahmins. Wez all got mixed.

    Russia is a good example of eurasia mixing..

    Ethnic Slavic Russians did go through some mixing with Mongols and Native Siberians, but they are still overwhelmingly White Europeans. They are a mix of Slavs, Balts and Finnic populations. Many white Americans/ Canadians have Native American ancestry, so they are not that different from Russians in “mixing”.

  47. Malla says:
    @JR Foley

    Projection is the KEY to USA exceptionalism.

    All countries in the World project, including China. Blaming others for something for what one does is classic classic classic Communist tactic.

    USA citizens are Racists –simply go to other Unz articles for proof —-Jews Blacks and many more NON WHITES are on the Projection Hit List —–

    Stop barking like a buffon. Whites do not project on Jews or Blacks. The personalites and mentalities are too different.
    And you say USA CITIZENS are racists, those Blacks and Jews are US citizens too. And yes they are more racist than White Americans on average.

    • Replies: @GomezAdddams
    , @vox4non
  48. Franz says:
    @mulga mumblebrain

    Globalism will have the last laugh in the form of global ecological collapse.

    You may be right but keep in mind SILVER. Everyone talks about gold but silver gets good mileage when the grid gets tricky.

    • Replies: @mulga mumblebrain
  49. annamaria says:

    The World Economic Forum of committed fascists, and Yuval Noah Harari, the ignorant hack striving to appear as a superman.

    Humans are now hackable animals,” Harari said. “Humans have this soul or spirit and they have free will, and nobody knows what’s happening inside me, so whatever I choose, whether in the election or whether in the supermarket, this is my free will — that’s over.”

    “Harari has made the point that the Fourth Industrial Revolution is different from past industrial revolutions because … in the late 19th century, you had two classes — the exploited and the unexploited. And he says, in contrast, now the Fourth Industrial Revolution will mean there will be three classes — the unexploited, the exploited, and the irrelevant.

    And he argues that it’s much better to be exploited than irrelevant. In this scenario, the unexploited would be the oligarchs of society … he’s essentially admitting that the Fourth Industrial Revolution is a recipe for neo-feudalism, one that’s managed by extremely invasive, advanced technology.”

    Eventually, the goal is to make implantable devices capable of reading your thoughts as commonplace as cellphones are today. “Harari, at World Economic Forum meetings, says the point that technology gets into your body and is capable of surveilling your thoughts is the line that the world crosses into digital dictatorship — where the leadership will be able to know what you really think about them and what you really think about issues. And if you don’t agree — to use his words — you’ll end up in the Gulag the next morning.”

    Education and beleifes:

    Harari studied at the Hebrew University of Jerusalem (BA) and Jesus College, Oxford (DPhil). He first specialized in medieval history and military history. Harari is gay. His husband has also been Harari’s personal manager.

    Normal children and their future are not Hariri’s specialty since, according to the ignorant “futurist,” “Homo sapiens as we know them will disappear in a century or so.”

    Even those who are barely knowledgeable about the problems of creating Artificial Intelligence can explain to the fool Harari the difficulty of incorporating the main aspect of human life — the ability to experience emotions — into AI. Without feelings and emotions, human beings are not clinically normal humans. Machines can calculate, yet machines are not able to achieve intellect on par with the human mind because we still do not understand the mechanisms of thought and the mechanisms of emotional processing.

    Hariri was accused of “nihilistic composure about human suffering” in addition to “how surprisingly little he seems to have read on quite a number of essential topics. It would be fair to say that whenever his facts are broadly correct they are not new, and whenever he tries to strike out on his own he often gets things wrong, sometimes seriously.” This obnoxious supremacist ignoramus is naturally admired by the World Economic Forum.
    Hariri is recycling the same old talmudic dream of “effendi” and “2000 goys.”
    “Israeli Sephardic leader Rabbi Ovadia Yosef’ sermon said that non-Jews exist to serve Jews.”

    With gentiles, it will be like any person: They need to die, but God will give them longevity. Why? Imagine that one’s donkey would die, they’d lose their money. This is his servant. That’s why he gets a long life, to work well for this Jew,” said the rabbi, who recently turned 90.

  50. Malcolm X says:

    Yes! This is exactly the reason I can’t read these transcripts. If it were Hudson writing or lecturing on his own, I could stand it, but I wouldn’t trust this woman as far as I could throw her. She is obviously trying to raise her own profile by monkey-branching onto Hudson’s reputation. The sad part is that the “conservative” goyim will eat it up because they don’t want to be seen as racist. They only want to be seen as anti-Black because of “crime statistics & IQ”. But, let people like Jews, Asians, and Indians infiltrate and subvert their culture and countries, and they are fine with it.

    • Replies: @GomezAdddams
  51. The American Empire: A Private Enterprise
    After centuries of care and maintenance the exhausted British elected to turn over the keys of Empire to the US. We had been, for decades, carefully planning for that day to come. The Brits had woven their presence into most of the world and the average English citizen felt a part of it all. As a multi generational reality it was quite normal for a citizen to spend a portion of life abroad doing the Empire’s work.
    This in-country presence over generations had gifted English language and Western ethos worldwide. Upon receiving the keys, as had long been anticipated, America’s approach to Empire was quite different. Our Empire was to be a private enterprise and ownership would remain in select hands in perpetuity. In fact the words American Empire were to never appear in any official communique.
    Ownership was to be allocated carefully with one firm caveat. No elected official was ever to be admitted; too transitory, thus unreliable. Of course, this would apply to the highest offices in the land. Presidents would come and go not fully aware they were considered to be figureheads by the rulers. The British had established and maintained a presence in many countries for centuries.
    The US would attempt the same but American civilians in-country would not be a dominant feature. Our major presence would be the military.

    It was agreed that a form of governance was the first order of business. Since we would not have a State to control, determine and direct proceeding, we would put in place a Deep State, answerable only to the masters. We had not disarmed as most nations had after World War ll. The war machine was left in place and would be added to for decades.

    Therefore the military would be welcomed well up into the power circle. The largest business enterprises supplying the military were enjoined as well. Large investment banks were invited gleefully. Especially welcomed was the Federal Reserve Bank which had been created to assure a supply of money for the Empire, always. To prevent any inertia remaining that might slow down the dollar flow, gold as value was removed so the dollar could live beyond its means at the will of the elite..
    Now, five decades later, the worldwide ensorcellment of the dollar and money does enchant us so, has allowed creation of unlimited fiat currency and the resultant monstrous debt that is to be guaranteed, of course, by our descendants. The keystone to this most ambitious undertaking has been without doubt, the major media. The early stage was confined to print media; radio tagged along soon after. Television and film were problematic but eager helpers from viewer protection agencies kept close watch; to keep the conversation on a proscribed track.

    The internet should/could have been a problem for the elite, but interest in factual accuracy had long since been excised from the public psyche about our hegemon, that secret power cabal. All aspects of control are solidly in place to permanently maintain an American Empire which does not officially even exist. So…
    The game continues.

  52. @Franz

    Ye canny eat silver, Franz. It’ll just lie around, gathering radio-active dust.

  53. Sarah says:

    You’ll remember what Henry Kissinger said: “It’s dangerous to be an enemy of the United States, but it’s fatal to be an ally.”


  54. Sarah says:

    the 1920s bankruptcy of Europe was a dress rehearsal for how the IMF has bankrupted Third World countries and the Global South countries.

    In other words, they treated Britain as a dress rehearsal for how the International Monetary Fund (IMF) was going to treat Third World countries after the 1950s.

    You have to pay a foreign creditor, sell off all of your assets, sell off your public domain, your mining rights, your public infrastructure.

    That basically is what the United States insisted that Britain do. And by [Britain] agreeing to all of this economic surrender, the United States went to the rest of Europe and said, “Well we’ve got Britain to agree with this. This is a fait accompli. Either you join us, or you don’t. Either you’re with us, or without.”

    You didn’t need George W. Bush to say that

    Highly informative👍👌

  55. @Malla

    I hope you don’t have much coin in Silicon Valley Bank.

  56. @Malcolm X

    You are not a racist–you are simply stupid.

  57. @CSFurious

    Who really controls the U.S.?

    Military industrial complex, big pharma, silicon valley, etc. The USA is basically an oligarchy.

  58. @JR Foley

    Yeah, I’m getting pretty tired of the constant refrain of “JOOOZZZ, ZOOOOGGGG, BLAAACCCKKZZZZ CHYAINNNAAAAA & RUZZZIIIYAAA DID IT!!!!!”

    Zero self-awareness and zero self-reflection. That’s why the USA is doomed to fail and doomed to repeat its failures. The next Dark Age is coming upon the American-led west; may Russia carry on the Byzantine spirit and live for another thousand years with the last remnants of western civilization.

  59. @Franz

    Globalism was a chimera…now ending, thank god!

    Depends on how you define “globalism”.

    If you define globalism as imperialism with all the “Divide et Impera” tactics involved as the west generally does, then, yes, it’s a drain on all the workers and a horrible system.

    If you define globalism as “we just wanna trade as two equal sovereign nations”, like the rest of the world does, then globalism is generally a good thing. That’s why countries love to be part of the Belt and Road Initiative, but don’t want to have anything to do with Build Back Better.

    • Agree: dogbumbreath
  60. @anon

    The USA has never had an empire and has no idea how to acquire, maintain and administer one. The USA is simply a global rogue state, militarily occupying much of the world; there is no recognisable colonial administrative structure nor any idea what is involved in building one. The USA is not an imperial power and is never going to be one because the country is disintegrating and cannot survive beyond 2050. Oceania has had it.

    • Replies: @vox4non
  61. @Malla

    Anyone who has ever had anything to do with Indians, and Pakistanis, knows how unpleasant they are. Being English of a certain age, although born after Indian independence, I am familiar with the Indian belief in their own racial superiority, and also that of the Chinese.

    Why they were ever allowed to come into my country, and participate in its political system, is a mystery only the Jews can answer.

    • Agree: Malla
  62. vox4non says:


    Your logic does not compute. On one hand, you say:

    All countries in the World project, including China. Blaming others for something for what one does is classic classic classic Communist tactic.

    On the other hand, you say:

    Whites do not project on Jews or Blacks. The personalites and mentalities are too different.

    Aren’t whites also part of the countries in the World?

    Now, I’ll like to believe that we don’t project but let’s be honest, everyone does it. Question is to what degree. Similarly, prejudice exists in everyone. Only to the extent and how much it is actually acted upon.

  63. vox4non says:
    @William Gruff

    Eh, what about the acquisition of American Samoa, Hawaii, Wake, Northern Marianas islands, Puerto Rico, Guam? Former colonies such as the Philippines, Federated States of Micronesia, the Marshall Islands, and Palau?

    I agree that “the USA is simply a global rogue state,” and while there is no obvious colonial administrative like the British Colonial offices and the control appears to be self-governed, there is congressional oversight.

    Let’s call a spade a spade, the USA ever since it broke out from the 13 colonies has been expanding and acquiring lands, mostly by force of arms. The USA has not stopped being an imperial force, through its multitude of bases (800) and is hampered by funds running low, not for lack of trying.

    Unsurprisingly, like many Americans, you are ignorant of what the USA actually is. Probably like a citizen of Rome who thinks it is still a republic in the days of the Caesars.

    A more eloquent examination for your reference:

    • Replies: @William Gruff
  64. @vox4non

    I’m not Usonian, I’m English and aware of something you are not; foreign possessions, of which the ‘U’K still has a surprising number, do not make a country an imperial power. The USA has a few foreign possessions, it does not have an empire.

    • Replies: @vox4non
  65. vox4non says:
    @William Gruff

    Let’s set some basic definitions.

    Since Imperial is pertaining to Empire, the definition of an Empire
    = a group of countries ruled by a single person, government, or country- (Cambridge Dictionary)
    = a major political unit having a territory of great extent or a number of territories or peoples under a single sovereign authority (Merriam-Webster)

    And power
    = possession of control, authority, or influence over others (Merriam-Webster)
    = the amount of political control a person or group has in a country (Cambridge)

    Doesn’t the UK / USA exercise ultimate power over the territories / ‘possessions’ they control?
    Put in another way, can the ‘possessions’ do the following as a Sovereign entity:
    1) issue their own currency (and not as a branch of the centre’s central bank)? and
    2) negotiate with foreign powers directly, for their own interest?
    If not, then isn’t the central sovereign (Washington / London) an Empire, regardless of what it calls itself? Just like many countries like to call themselves democracies but are at best representative republics.

    Colour me surprised that you as an English do not understand this. You must still be thinking that imperial power is like that of yore, with armies drawn from all corners of the empire, and gunboats blazing. UK is still an imperial power, though much diminished, and London still thinks as such with its grandiose proclamations recently of taking on the Russians.

    The US behaves like an imperial power although it does not call itself one. What else would you call its haughtiness in demanding countries to do as it commands, use the USD, extra-territorial economic levers like the FATCA, buys its weapons, allow its military to set up bases. Wasn’t it Karl Rove who said, “we make our own reality?”

    If it looks like a duck, walks like a duck, quacks like a duck – what else is it but a duck?

    • Thanks: Deep Thought
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