US creates financial instability, profits from other countries

09 May, 2022 - 00:05 0 Views
US creates financial instability, profits from other countries Professor Michael Hudson

The Herald

New York. — Michael Hudson, a well-known American economist and professor of economics at the University of Missouri-Kansas City, said in an exclusive interview with reporters recently that, represented by the Federal Reserve’s monetary policy, the United States used the hegemony of the dollar to create financial market instability and put other countries into economic difficulties. 

The United States profited from it.

Hudson said that after the Fed starts raising interest rates, some countries in Africa and Latin America will be in trouble due to capital outflows, and oil and food prices will rise sharply due to the Russian-Ukrainian conflict and Western sanctions against Russia. 

Even when these countries turn to international financial institutions, they are often subject to various conditions. 

Hudson, who has long studied US financial hegemony, said that since the 1970s, the US has been using the US dollar hegemony to steal economic interests from other countries. 

The US allows foreign central banks to acquire dollars through military spending overseas, and these countries return dollars to the U.S. in the process of purchasing US. 

Treasury securities. US.Treasury bonds held by other countries are equivalent to “IOUs” issued by the United States, and “IOUs” can be written indefinitely. 

  Fundamentally, the US is using the Federal Reserve’s monetary policy to bankrupt third world countries and force asset sales, Hudson said, and the US wants companies to buy other countries’ industries for high returns. On the other hand, the US. restricts companies from other countries from purchasing US industries, and the dollars held by other countries can only obtain very low returns by purchasing US Treasury bonds. This is a double standard. 

However, Hudson said that the US restriction of the Russian central bank’s use of foreign exchange reserves in the United States after the outbreak of the Russia-Ukraine conflict is prompting other countries to reduce their holdings of U.S. dollars and buy gold, and the dollar’s hegemony is coming to an end.

Hudson said that in the Russia-Ukraine conflict, the United States also squeezed the European economy, and the dollars held by European countries were basically used to buy American liquefied natural gas and grain.

When it comes to the United States’ own problems, Hudson said that since 2008, most of the increase in wealth in the United States has been acquired by the 1 percent of the population. 

Since the outbreak of the new crown epidemic, most of the trillions of dollars in stimulus funds launched by the US government have flowed into the stock and bond markets, benefiting the 1% as well as monopoly institutions, the real estate industry, and private capital. 

And for home-owners, working class and students, the economy continues to shrink. — Xinhua

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