Michael Hudson: The Shape of the Venezuelan Economy, from Chavez to Maduro and Beyond


Naked Capitalism has the article Michael Hudson: The Shape of the Venezuelan Economy, from Chavez to Maduro and Beyond.

There is no way that’s Chavez and Maduro could have pursued a pro-Venezuelan policy aimed at achieving economic independence without inciting fury, subversion and sanctions from the United States. American foreign policy remains as focused on oil as it was when it invaded Iraq under Dick Cheney’s regime. U.S. policy is to treat Venezuela as an extension of the U.S. economy, running a trade surplus in oil to spend in the United States or transfer its savings to U.S. banks.

Wow, this connects the dots you didn’t even know were there. Is Trump about to end the dominance of the USA in the world by causing an uprising of other countries?

The U.S. has overplayed its hand in destroying the foundation of the dollar-centered global financial order. That order has enabled the United States to be “the exceptional nation” able to run balance-of-payments deficits and foreign debt that it has no intention (or ability) to pay, claiming that the dollars thrown off by its foreign military spending “supply” other countries with their central bank reserves (held in the form of loans to the U.S. Treasury – Treasury bonds and bills – to finance the U.S. budget deficit and its military spending, as well as the largely military U.S. balance-of-payments deficit.

Knowing how much of a devotee of Modern Money Theory that Michael Hudson is, it is hard to digest his talk of how our military and deficit spending is financed by other countries holding Treasury securities. There is a parenthesis missing in the above quote which would have clarified some of what he meant. The parenthesis is missing from the original publication on Michael Hudson’s web sit in the article Venezuela as the pivot for New Internationalism?

The only thing I can think of is that MMT does seem to depend on the continued acceptance of the USA dollar as a world reserve currency. If that stopped being true, there would certainly be major ramifications on the economic policy options we have.

Whenever I read about the policy options MMT says that the USA has, I do think that we had better hurry up and take advantage of those options before we fritter away those possibilities. By destroying the status that the USA dollar enjoys in the rest of the world, we could no longer depend on getting the rest of the world to supply us with cheap imports in exchange for our dollars.

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