by Morley Evans
What's going on?
In this interview on TRNN, Professor Michael Hudson provides a clear vision of what is going on in the world today. What Hudson sees is consistent with what is seen by Paul Craig Roberts, one on the left, the other one the right.
What’s going on? The essence of what’s going on is the collapse of the US Dollar Empire that was established after World War II making the US dollar the reserve currency of the world (replacing the Pound Sterling and the British Empire). In recent years (when Ben Bernanke took over Chairmanship of the Federal Reserve System from Alan Greenspan) the United States has been lavishly printing its own money through the sale of Treasury Bills to foreign suckers (mostly China) who have been adding dollars to the dollar mountain they already possess. Why would foreign governments do this? They have been buying US debt 1). because the US doesn't have anything else they want to buy (hence the "trade imbalance" and 2). because if the dollar were to collapse, the dollars they own would instantly become worthless. However, the end of the Dollar Empire is inevitable since the United States is no longer the centre of the world’s economic activity. US allies have been bailing out. Just the other day, Stephen Harper (who is a stooge of Washington, himself) signed an agreement with China to bypass the US dollar international payments system with regards to Canada's trade with China. Australia did that earlier this year. Various European counties are using Rubles to buy natural gas from Russia. The end of Washington’s empire is nigh. “This is the way the world ends…"
This is political-economy 101. Political-economy is the nexus of history, current affairs and economics. Political-economy is where the rubber hits the road. The Austrian School — represented by Ludwig von Mises and Friedrich August von Hayek — is real economics. Marx thought bureaucracy and politics could replace the market to bring about more equitable results. Lenin, Stalin, and Mao added "political power grows from the barrel of a gun," something we already knew. Russia and China learned that Marx was profoundly wrong. We, here in the so-called "Free World," still think Marx was right! We think Lenin, Stalin and Mao were right too, since Mafia-style "gunboat diplomacy" is what we've been doing all along. Today, we are the commies (and the fascists). That is exactly why the United States and Great Britain before it are no longer the economic engines of the world.
China studied Lee Kuan Yew who studied Adam Smith who was right after all. We in the "Free World" need to go back to school.