Financial Marxism: The Problem of International Economic Opposites
Dr.. Appearance of Mohammed Saleh
Dr.. Appearance of Mohammed Saleh
I have a question from an Iraqi parliamentarian known as follows:
I read your wonderful article (The New Cold War: The War of Diversification of the Chinese Currency).
Before that, I was thinking about the problem of adopting China or its participating countries in terms of the alternative currency of the dollar, and I was standing before me to imagine how they could work against the dollar and weaken it or drop it as a difficult currency.
Those countries are holding US bonds and a surplus in dollars (as you mentioned). China has 3.1 trillion reserves.
This question I did not understand?
How can these countries hit the dollar, which represents the cornerstone of their economy, considering the assets of the treasury of dollars and bonds and other things to know?
The other thing is that it is known that America is printing (issuing) the dollar without covering it with gold.
What is it that prevents America from issuing its currency continuously and dealing with its deficit?
I would like to clarify these two things whenever possible.
US financial influence has been inherited since the United States won World War II and its role in establishing the IMF and World Bank system in 1945 as multilateral international financial institutions or the Bretton Woods.
As the international monetary system was linked to the US dollar and made it an international reserve currency (boosted by gold) to meet the needs of world trade and the stabilization of exchange systems and their stability in the currency of the dollar as a strong stable international currency linked to gold and on the basis that one ounce of gold equals 36 US dollars 24-caliber concepts prevailing in the Iraqi gold market).
At a time when the gross domestic product of the United States exceeded half the world's total output on the day that the IMF system emerged.
Because of the lack of gold in the components of the US reserve to exchange dollars when needed with the United Nations, America took a decision in mid-August 1971 to stop the conversion of the dollar to gold and expressed at the same time its willingness to exchange the dollar (which is in the possession of countries) US goods or services or US government bonds or any rights Are permitted to be owned or permitted to be owned within the United States itself.
So far, the dollar has dominated more than 80 percent of global trade and international economic exchanges, and also accounts for more than 60 percent of global bank loans and more than a third of official state reserves.
Although the United States' gross domestic product (GDP) currently does not exceed 26% of global income or output, the United States has maintained its hold on the international financial payment system with high efficiency, which the world still complies with.
The financial influence of the United States allowed the world to absorb profits and surpluses from the economies of other countries.
US currency flows and their continued transformation into investments within America are parallel to their technological and military influence.
Just as the role of energy and international oil policy as a power of influence has been reduced, its effectiveness has become more effective since the suspension of the IMF system and the introduction of nationalization policies in the 1970s, the liberalization of oil prices and the high levels of demand for the dollar.
Here, the oil payments system and the liberalization of its related transactions are an attractive way to continue the global demand for the US currency because the international oil market has been dealing with the dollar since its inception (before World War I).
While the new American oil / financial influence generated another direct impact on the global banking system by using and recycling surpluses of oil revenues to achieve additional financial accumulations called the petrodollar phenomenon, especially in the past four decades to plunge the world into the features of crisis called the international debt crisis.
The petrodollar surplus has been lent to the so-called deficit countries and the emergence of the global debt crisis, which has been plagued by problems since the late 1970s until today, accompanied by high interest rates through the Stagflation, especially in the last three decades of the last century.
While the European banking system in Europe, the Eurodollar, has helped to turn oil surpluses and lending them into banks and financial institutions that provide continuous loans to third world countries and others that have developed as a European dollar system with the accumulation of petrodollar surpluses.
The United States has also tied its trading partners with surplus trade accounts to the temptations of investment in US government bonds.
Here, the US trade deficit with either Japan or the surplus countries and then China has turned into a surplus in the capital account of the US balance of payments.
The commercial profit of the trade surplus countries largely turned into financial investments in the US bond market, which generated the dollar itself in a US economic cycle that begins with a trade deficit and ends with a balance-of-payments capital surplus that may last until the end of the existing international monetary system.
The world was truly immersed in an almost monolithic monolithic system imposed by the conditions of the victor in World War II and reinforced by unilateral polarization since the late twentieth century.
The United States is now issuing its currency most often for the world to lend to the US government their financial surpluses with the United States by exchanging US Treasuries, a US government borrowing of the US dollar in cash, the exchange of surplus dollars by other countries with US bonds to fill the US budget deficit.
Thus, the United States has become a currency exporter and importer of goods and services, especially capital-intensive goods, in return for exporting labor-intensive goods and services to ensure a high level of employment and fighting unemployment, which is called the strange American phenomenon (Leontief Paradox).
The ratio of US debt to gross domestic product currently stands at 105 percent, from 1940 to 2017, an average of 61.7 percent.
The US banking system, financial institutions in particular and the outside world in general buy these bonds in dollars for guaranteed interest payments, which are distributed among 30% of US banks and financial institutions, 70% for different countries of the world.
Finally, a new mercantile or commercial system was born of financial capitalism as a global imperialist phenomenon called "financial Marxism", the antithesis of the old "mercantile trade" that countries were looking for to achieve surplus trade because their exports of goods and services exceeded their imports.
The US financial mercantile is creating a surplus in the capital account of US balance of payments components equivalent to or nearing the current account deficit of goods and services to the US balance of payments itself.
And then America is saving its active and desirable for investment purposes from converting the world's surpluses to the impossibility of today to domestic investments and in contrast with the continued enjoyment of the American nation high consumer welfare and within the phenomenon also called double deficit, namely the deficit in the balance of payments and the current account of the balance of payments dual deficit, Real monopolistic benefits of a highly dominant imperialist financial system based on the monetary issue of an international reserve currency.
In conclusion, it is a historic conflict within the US balance of payments component that epitomizes the triumph of the financial Marxism represented by the token economy of the trade economy of other nations with trade surplus generated by the production function of a real economy and serves the symbolic economy of the United States
It is the global mercantile (commercial) subordination of Marxism that embodies the dominance of one pole.
Views 165 Date Added 06/11/2018