Friday, April 25, 2008

Decline of Dollar, Decline of Empire

Here's a summary of some videos on YouTube of "Decline of Dollar, Decline of Empire" a discussion at York University in Toronto (on January 18, 2008) about the subprime crisis and the decline of the dollar from a Marxist perspective. (see Law of value and capital accumulation)

The 600 billion in losses due to sub-prime crisis (as of that time) damaged the dollar's status as the primary reserve currency and further weakened the "Washington Consensus", which, in some views, is a polite name for American hegemony. (see Democracy and The Washington Consensus - J. Williamson)

Several developments give the current crisis the potential to threaten American imperialism. Credit markets have become complex and opaque. US capital is no longer willing to pay for an empire - federal revenue as a proportion of GDP has declined sharply with Reagan and has continued to decline. The dollar's status as the global reserver currency is in decline.

Dollar convertibility to gold ended in 1971. The Dollar's reserve status has been sustained by demand for US assets. This gave the US state the right of global seigniorage - the ability to print money accepted worldwide. This right is eroding. International reserves are moving away from the dollar. In 1999 the Euro was introduced. A regime of more than one center of world money is taking shape.

During the same periode, the working class in the US and europe maintained its standard of living not by wage increases but by credit - a process whose end may be signaled by the crisis.

(see also Ron Paul's End of Dollar Hegemony)

http://www.listal.com/video/3552015

No comments:

Post a Comment

A political economy

A recent piece in the Economist ( A new anthology of essays reconsiders Thomas Piketty’s “Capital” , May 20, 2107) ends with these words: &q...