[lbo-talk] Duck, Duck, Goose: Financing the War, Financing the World

[Marta Russell]

>More important, prof.
>Hudson explains how the US managed to use its debtor status to
>exploit the world.
>
>By going off the gold standard at (the) precise moment that it did,
>the United States obliged the world's central banks to finance the
>U.S. balance-of-payments deficit by using their surplus dollars to
>buy U.S. Treasury bonds, whose volume quickly exceeded America's
>ability or intention to pay. All the dollars that end up in European,
>Asian, and Eastern central banks as result of American's excessive
>import-imbalance, have no place to go but the U.S. Treasury. Because
>of the restrictions placed on the central banks - there is no place
>else for this money to go - these countries were forced to buy US
>treasuries or else accept the worthlessness of the dollars received
>through trade.

Could someone explain to me, the non-economist, this relationship 
between Treasury Bills and the Central Banks. What is a balance of 
payment deficit in this case? Why would the surplus dollars be put 
into Treasury Bonds? Dollar surplus abroad was created by what? US 
Loans? To what the Central Banks?  HELP!

Hudson seems to have hit upon something really important if only I 
could grasp it.
It may explain why the other governments tolerate our over the top 
arrogance, militarism and secondary corporate imperialism.
Marta

-- 
Marta Russell
Los Angeles, CA
http://www.disweb.org