Re: Re: Protectionism US style
> Ulhas Joglekar wrote: > My question was about the nature of this organic relationship in the > contemporary capitalism in concrete terms, as it impacts world's willingness > to accept dollars ? > > Ulhas > In the contemporary capitalism and in concrete terms, the Luxemburgist relationship links the imperialist expansionism (Balkans, Agghanistan, Georgia and soon Irak) with the necessities and the crises of the process of accumulation (accumulation being exogenous in the Luxemburgist conception). As for the willingness to accept dollar, it would be a choice, only if the most of nations could rise up against the empire. Yen has been high in relation to the dollar for a long time, because Japan was by force the kind banker of the winner and in this quality obliged to defend its currency against the dollar. Every time Japanese or European central banks drop million dollars on the Open Market, to defend their currency, they cancel graciously a quantum of American debt, due to the status of dollar as the world account unit of debt. RK
RE: Re: RE: Re: Re: Re: Protectionism US style
This is something that pen-l has discussed a lot in the past, so I'm not going to provide a full-scale reply. But, _of course_ their are limits to U.S. power and I didn't say otherwise. And the fall of the USSR was crucial to boosting the power of the US, so that the dollar is better seated as the world currency than it was in the 1970s or 1980s. Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine > -Original Message- > From: Ulhas Joglekar [mailto:[EMAIL PROTECTED]] > Sent: Wednesday, May 15, 2002 1:36 PM > To: pen-l > Subject: [PEN-L:26017] Re: RE: Re: Re: Re: Protectionism US style > > > Devine, James: > > > Ulhas writes:>Why does the world continue to accept debt payment in > dollars? > > I remember De > > Gaulle refusing dollars and demanding payment in gold in '60s.< > > > > because the U.S. is the most powerful country in the world > and in the era > > since 1971-73, money based on political-military power has > replaced money > > based on precious metals. > > US is powerful, but there are limits to US power. (e.g. US > has not been able > to capture Bin Laden 8 months after 9/11) US is the most > powerful country > in the world, but this power has grown dramatically after the > disintegration > of fSU. US power wasn't so all pervading in the 70s and 80s. > e.g. India's > trade with the Soviet block (between 15-20% of India's > foreign trade) was > entirely in Indian currency. US political- military power > could do nothing > about it. Can US compel China to hold fx reserves in dollars, > if China was > unwilling? > > Yes, precious metals have been replaced by $. But, if Euro or Yen > were strong enough, the rest of the world would, perhaps, > hold its reserves > or a portion of them, in those currencies? > > Ulhas > > > >
Re: Re: Re: Re: Re: Protectionism US style
Romain Kroes wrote: > Ulhas Joglekar wrote: > How would Luxemburgism explain this phenomenon? > > In this matter, Luxemburgism postulates an organic relationship between > imperialism and capital accumulation process. Current "Globalization" is > verifying it. My question was about the nature of this organic relationship in the contemporary capitalism in concrete terms, as it impacts world's willingness to accept dollars ? Ulhas
Re: RE: Re: Re: Re: Protectionism US style
Devine, James: > Ulhas writes:>Why does the world continue to accept debt payment in dollars? > I remember De > Gaulle refusing dollars and demanding payment in gold in '60s.< > > because the U.S. is the most powerful country in the world and in the era > since 1971-73, money based on political-military power has replaced money > based on precious metals. US is powerful, but there are limits to US power. (e.g. US has not been able to capture Bin Laden 8 months after 9/11) US is the most powerful country in the world, but this power has grown dramatically after the disintegration of fSU. US power wasn't so all pervading in the 70s and 80s. e.g. India's trade with the Soviet block (between 15-20% of India's foreign trade) was entirely in Indian currency. US political- military power could do nothing about it. Can US compel China to hold fx reserves in dollars, if China was unwilling? Yes, precious metals have been replaced by $. But, if Euro or Yen were strong enough, the rest of the world would, perhaps, hold its reserves or a portion of them, in those currencies? Ulhas
Re: Re: Re: Re: Protectionism US style
Ulhas Joglekar wrote: > Why does the world continue to accept debt payment in dollars? I remember De > Gaulle refusing dollars and demanding payment in gold in '60s. During the second half of 19th century, England, because of her systematically negative balance of trade, had invented the "balance sterling" with wich she paid her debt with her debt. This system was possible and well self-maintained, due to holders of these sharing parts of the debt, who prefered to see their financial capital on the banks of Thames, because England was then the metropolis of the capitalist world system. But that was not irreversible, as sterling was convertible into gold at a fixed parity. Between the two World Wars, the "Gold exchange standard" advised nations not to demand gold in payments, but "balances" in any kind of convertible currency (convertible theoretically into gold). After the second World War, the treaty of Bretton Woods has reduced the previous "Gold exchange standard" to one bench currency: the dollar which took on itself the convertibility of all convertible currencies into gold. So that it was not necessary to demand gold in payment, as the gold of the whole capitalist world system was more secured, sleeping within Fort-Knox. Two reasons for such a belief. First, all convertible currencies were by definition in a relationship of fixed parities. Second, due to European debt toward the USA, the balance of trade of these latter was expected to be positive. In 1958, the currencies of Bretton Woods's system became, as planned, "convertible". But the USA's balance of trade had become negative. Nevertheless, due to Cold War, the allies of the USA, that is the capitalist world system, did not dare to demand gold payments from the metropolis and their nuclear umbrella. Additionally, capitalist individuals and corporations perfered to see their financial capital in Wall-Street. Between 1953 and 1958, the USA balanced their debt by only 18% in gold. De Gaulle obliged Washington to increase this part to 48% between 1958 and 1962. After what it was the relentless crisis of dollar. In 1971, president Nixon unilaterally suspended, then abolished any kind of convertibility for the dollar. What was to be done, when the wold system of trade was based on dollar? The only possibility of escaping such a trap is a consensus between a sufficient huge number of nations, for do not putting themselves into debt in dollars any more. You can see the level of the problem. > US trade balance is negative, but not Japan's. What is the net balance for > the metropolis, Japan and EU included? European balance toward the USA, as Japan's, is positive. But European balance toward the rest of the world, except the USA, is negative. In the capitalist world system, there is a main metropolis and there are secondary ones. > How would Luxemburgism explain this phenomenon? In this matter, Luxemburgism postulates an organic relationship between imperialism and capital accumulation process. Current "Globalization" is verifying it. RK
RE: Re: Re: Re: Protectionism US style
Ulhas writes:>Why does the world continue to accept debt payment in dollars? I remember De Gaulle refusing dollars and demanding payment in gold in '60s.< because the U.S. is the most powerful country in the world and in the era since 1971-73, money based on political-military power has replaced money based on precious metals. Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
Re: Re: Re: Protectionism US style
Romain Kroes wrote: > I have already answered this pertinent question. The asymmetry is due to the > status of dollar as the wolrld account unit of debt. So that the USA are the > only ones paying their debt with their debt. Why does the world continue to accept debt payment in dollars? I remember De Gaulle refusing dollars and demanding payment in gold in '60s. >The very question is : why is > the trade balance of world system's metropolis systematically negative > through history, US trade balance is negative, but not Japan's. What is the net balance for the metropolis, Japan and EU included? >from ancient Athens to the USA, notably through Rome, > 16th-century Europe and Victorian England? and the answer can be found in a > Luxemburgist way. How would Luxemburgism explain this phenomenon? Ulhas
Re: Re: Protectionism US style
I have already answered this pertinent question. The asymmetry is due to the status of dollar as the wolrld account unit of debt. So that the USA are the only ones paying their debt with their debt. The very question is : why is the trade balance of world system's metropolis systematically negative through history, from ancient Athens to the USA, notably through Rome, 16th-century Europe and Victorian England? and the answer can be found in a Luxemburgist way. RK - Original Message - From: "Michael Pollak" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, May 15, 2002 11:50 AM Subject: [PEN-L:26008] Re: Protectionism US style > > On Mon, 13 May 2002, Michael Perelman wrote: > > > > Theoretically speaking, how does a deteriorating fiscal position lead > > > to a strong dollar? > > > > deficits => high interest rates => strong dollar. > > That makes perfect sense. Except how come for all other countries, > growing deficits lead to weaker currencies? And how come, during the 90s, > surpluses and low interest rates led to a strong dollar? And deficits and > high interest rates led to a weak Euro? Are these not considered enough > anomalous results to make this theory slightly questionable under present > arrangements, where capital accounts are all wide open? > > Michael > >
Re: Protectionism US style
On Mon, 13 May 2002, Michael Perelman wrote: > > Theoretically speaking, how does a deteriorating fiscal position lead > > to a strong dollar? > > deficits => high interest rates => strong dollar. That makes perfect sense. Except how come for all other countries, growing deficits lead to weaker currencies? And how come, during the 90s, surpluses and low interest rates led to a strong dollar? And deficits and high interest rates led to a weak Euro? Are these not considered enough anomalous results to make this theory slightly questionable under present arrangements, where capital accounts are all wide open? Michael
Re: Re: Re: Protectionism US style
Michael Perelman wrote: > deficits => high interest rates => strong dollar. I propose another algorithmic system: 1. USA's trade deficit ) +) ==> strong dollar Dollar as account unit of debt) 2. Hardening elasticity between growth rate and price index ==> inflation tendency ==> Mr Greenspan's constipation I mean strong dollar and high interest rates are independent processes, as far as the USA are concerned. What is true of any other country and currency is not of the USA and dollar, because, due to the status of dollar as the world account unit of debt, the USA are the only economic territory which pays its debt with its debt. World-System order is an asymmetric one. Romain Kroës
Re: Re: Protectionism US style
On Monday, May 13, 2002 at 07:13:16 (-0700) Michael Perelman writes: >deficits => high interest rates => strong dollar. => cheap imports => protectionism => militarism Bill
Re: Re: Protectionism US style
deficits => high interest rates => strong dollar. On Mon, May 13, 2002 at 02:58:37AM -0400, Michael Pollak wrote: > > On Thu, 9 May 2002, Joseph Stiglitz was quoted as saying: > > > Many of America's problems are made in USA. America's deteriorating > > fiscal position is leading to a strong dollar, just as the deteriorating > > fiscal position of the US after Reagan's irresponsible tax cut of two > > decades ago did. > > Theoretically speaking, how does a deteriorating fiscal position lead to a > strong dollar? And as a statement of fact, isn't this future progressive > tense -- implying that the dollar will get stronger from here on -- a > little questionable just right now? > > Michael > -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Protectionism US style
On Thu, 9 May 2002, Joseph Stiglitz was quoted as saying: > Many of America's problems are made in USA. America's deteriorating > fiscal position is leading to a strong dollar, just as the deteriorating > fiscal position of the US after Reagan's irresponsible tax cut of two > decades ago did. Theoretically speaking, how does a deteriorating fiscal position lead to a strong dollar? And as a statement of fact, isn't this future progressive tense -- implying that the dollar will get stronger from here on -- a little questionable just right now? Michael
