[lbo-talk] US dollar supremacy (Was: David Brooks, so worried)

moominek at aol.com moominek at aol.com
Tue Oct 14 04:27:42 PDT 2008


J Gulick wrote:


>Will the EU and East Asia, in tandem or individually, have in place
any time
>soon the social structures of accumulation that would enable them to
play the
>“market of last resort” role? Germany and Japan are still trade
surplus titans,
>and China has become one. It’ll take them quite a while to retool
their
>political economies to perform the sort of functions typically
associated with
>being financial-monetary hegemons.

I never understood the logic of the "lender of last resort" slogan, even less the logic of the "buyer of last resort", if there is any logic and not only a misunderstanding about realization of surplusvalue in circulation. But surely there has to be some mechanism to distribute a currency in the world to make it a widely used reserve. This mechanism was - in the past - mostly capital export. The Post-WWII US-econmy was in trade surplus too - but on the other hand were counterbalancing transactions on the service (military) and capital account. For the Eurozone as a whole there is not so much Capital export. Most is needed right now in establishing the eastern european backyard, wich sooner or later will become part of the Eurozone. So I don't see the mechanism. China is different - and will have so look for the interior changes in the next years.


>Also, the previous world of multiple reserve currencies was also the
era of
>inter-impe
rialist rivalry. Do you really think the state apparatuses and big
>bourgeoisies of the capitalist powers not only share joint interests
but are <able to cognize this and translate it into policy? For a world of multiple <reserve currencies to avoid degeneration into competitive blocs during phases of
>crisis and contraction, the answer to this question would have to be
in the
>affirmative.

Difficult to say. It worked - some way or another - over the Atlantic for more than 60 years. (Japan seems me to be a little different, more dependent on the US.) Last week we saw a coordinated rate cute of all the big Central banks, someone said: for the first time. Surely the powerplay now between the Eurozone and the US is about the steping back of the US from uncoordinated world politics. The first geopolitical result of the Euro was the non-engagement of "old Europe" (= more or less the Eurozone) in the Iraq 2003, including a collaboration with the old arch enemy Russia. Now they are much stronger. The so called "new Europe" of Rumsfeld disappeared, only the missile defense in Poland and the Czech republic may remain. Of course there are blocks and nation states. But these have been "open" blocks for a long time. This may continue for a while.

Sebastian

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