Did Fake President (FP) Joe Biden Just Murder the Dollar?

By N.S.

For over 20 years now, economist and political thinker Paul Craig Roberts has been predicting that the dollar is on the precipice of being replaced, any moment now, as the world’s reserve currency. Well, according to economist Michael Hudson, that time arrived last Wednesday, and it is all thanks to the hubris of Fake President (FP) Joe Biden.

That’s when FP Biden decided to freeze the dollar reserves in the U.S. of Russia, Venezuela, and Afghanistan.

Stolen elections have consequences. Because of the dollar’s status as the world’s reserve currency, other countries would routinely cycle dollars through the American economy, but if they can no longer trust America to be an honest banker, that will stop.

But instead of being something that China and Russia imposed on the U.S., it was FP Joe Biden who imposed de-dollarization on us!

“Well, what happened was that, as I’ve described in Super Imperialism, when the United States went off gold, foreign central banks didn’t have anything to buy with their dollars that were flowing into their countries – again, mainly from the US military deficit but also from the investment takeovers. And they found that these dollars came in, the only thing they could do would be to recycle them to the United States. And what do central banks hold? They don’t buy property, usually, back then they didn’t. They buy Treasury bonds. And so, the United States would be spending dollars abroad and foreign central banks didn’t really have anything to do but send it right back to buy treasury bonds to finance not only the balance of payments deficit, but also the budget deficit that was largely military in character. So, dollar hegemony was the system where foreign central banks keep their monetary and international savings reserves in dollars and the dollars are used to finance the military bases around the world, almost eight hundred military bases surrounding them. So, basically central banks have to keep their savings by weaponizing them, by militarizing them, by lending them to the United States, to keep spending abroad.

“This gave America a free ride. Imagine if you went to the grocery store and you just paid by giving them an IOU. And then the next week you want to buy more groceries and you give them another IOU. And they say, wait a minute, you have an IOU before and you say, well just use the IOU to pay the milk company that delivers, or the farmers that deliver. You can use this as your money and just you’ll as a customer, keep writing IOU’s and you never have to pay anything because your IOU is other people’s money. Well, that’s what dollar hegemony was, and it was a free ride. And it all ended last Wednesday when the United States grabbed Russia’s reserves having grabbed Afghanistan’s foreign reserves and Venezuela’s foreign reserves and those of other countries.

“And all of a sudden, this means that other countries can no longer safely hold their reserves by sending their money back, depositing them in US banks or buying US Treasury Securities, or having other US investments because they could simply be grabbed as happened to Russia. So, all of a sudden this last week, you’re seeing the world economy fracture into two parts, a dollarized part and other countries that do not follow the neoliberal policies that the United States insists that its allies follow. We’re seeing the birth of a new dual World economy.

“And all of a sudden, this means that other countries can no longer safely hold their reserves by sending their money back, depositing them in US banks or buying US Treasury Securities, or having other US investments because they could simply be grabbed as happened to Russia. So, all of a sudden this last week, you’re seeing the world economy fracture into two parts, a dollarized part and other countries that do not follow the neoliberal policies that the United States insists that its allies follow. We’re seeing the birth of a new dual World economy.”

MF: “Wow, there’s a lot to unpack there. So, are we seeing then other countries starting to disinvest in US dollars? You’ve written about how the treasury bonds that these central banks buy up have been basically funding our domestic economy. Are they starting to shed those bonds or what’s happening?” MH: “No, they haven’t been funding our domestic economy because the Federal Reserve can create its own money to fund the domestic economy. We don’t need to borrow from foreign countries to fund our economy. We can print it ourselves. What the dollar hegemony does is fund the balance of payments deficit. It funds our spending in other economies, our spending abroad. It doesn’t help our economy, but it does help us get a free ride from other countries. The more dollars we spend in making a military base, all these military expenditures get turned over to the local Central Bank that turns and sends them back to the Federal Reserve or deposits them in US bank accounts. So, it’s the international free ride we get, not a domestic free ride.”

N.S.: I disagree with Hudson, regarding foreign vs. domestic free rides. My understanding is that we keep borrowing money from Red China, in order to back the fiat money we’ve been printing (which is largely to pay for our black and hispanic domestic and invading enemies). If China pulls out of the dollar economy, it will no longer lend money to us, which it knew it was never going to get paid back. And then our economy, dominated by White billionaires and black and hispanic thugs, collapses.

“US Dollar Hegemony Ended Abruptly Last Wednesday”

https://www.unz.com/mhudson/us-dollar-hegemony-ended-abruptly-last-wednesday/