Michael Hudson — The American Empire self-destructs.

The recent escalation U.S. sanctions blocking Europe, Asia and other countries from trade and investment with Russia, Iran and China has imposed enormous opportunity costs – the cost of lost opportunities – on U.S. allies. And the recent confiscation of the gold and foreign reserves of Venezuela, Afghanistan and now Russia, along the targeted grabbing of bank accounts of wealthy foreigners (hoping to win their hearts and minds, along with recovery of their sequestered accounts), has ended the idea that dollar holdings or those in its sterling and euro NATO satellites are a safe investment haven when world economic conditions become shaky.

So I am somewhat chagrined as I watch the speed at which this U.S.-centered financialized system has de-dollarized over the span of just a year or two. The basic theme of my Super Imperialism has been how, for the past fifty years, the U.S. Treasury-bill standard has channeled foreign savings to U.S. financial markets and banks, giving Dollar Diplomacy a free ride. I thought that de-dollarization would be led by China and Russia moving to take control of their economies to avoid the kind of financial polarization that is imposing austerity on the United States. But U.S. officials are forcing them to overcome whatever hesitancy they had to de-dollarize.

I had expected that the end of the dollarized imperial economy would come about by other countries breaking away. But that is not what has happened. U.S. diplomats have chosen to end international dollarization themselves….

The U.S. confiscations thus may finally lead Russia to end neoliberal monetary philosophy, as Sergei Glaziev has long been advocating in favor of MMT.…

What Michael Hudson means is Russia realizing the implications of MMT for correctly understanding macroeconomics, finance, and public policy instead of following the neoliberal playbook.

Regarding the rest of the post, Michael Hudson is combining a short, intermediate and long term for the sake of brevity. There are already short term consequences, but there will also be intermediate and long term consequences. Many of these consequences will be foreseen and unintended.

Keep in mind as a framework that US foreign policy is to break Russia and China economically and then break them up politically into smaller nations that will be unable to challenge the US-led rules-based order/US global hegemony/world domination/superimperialism or what ever else one wishes to call it. Russia and China are will aware of this and realize this is a zero-sum game that is existential for them.

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism

The American Empire self-destructs.
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University