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Prepare to meet your maker, Uncle

By Owen Paine on Monday June 15, 2009 01:27 PM

"What may prove to be the last rites of American hegemony"
-- Thus opens the latest installment of Hudson's Baying BRIC Hounds of Doom, now playing over at Counterpunch.

BRIC is Brazil, Russia, India, and China, the new order quartet. Uncle's days as hegemon are numbered, sez Hud, who started this particular final countdown in 1972. A long count to end all long counts, eh?

Hudson predicts nothing less than "the replacement of the global dollar standard with a new financial and military defense system," and yet, as he notes, a now-ongoing meeting of this grand anti-Yank posse "has elicited only a collective yawn from the US and even European press."

Imagine that! The complacent fools! Why -- Attila is practically at the gates -- and attacking on two fronts:

I: Replacement of the global dollar standard with a new financial system.

The dollar is imperial because of a single because: if it's to be a trans-nat's limited-liability world, the dollar works fine for now.

Hey, isn't it prolly easier to guide Washington than some open UN-sponsored global monetary authority in... ZURICH?

World money, or its essential homunculus, a supra-national world C-bank-only reserve currency, adds nothing border-transgressing corporations can imagine they want that Uncle Lucky Dollar can't provide already. The old known-quantity gimmick operates here.

II. A new military defense system.

That is, ending the NATO gang's romp license. Yikes!

Then we might as well talk about a world army, too, while we're at it, eh? Like folks first offered up seriously after the first Great War.

Okay, so that meme du jour didn't exactly turn into a global wild fire like Charlie Chaplin and Mary Pickford -- alas. Even after four years of utterly senseless mutual big-power slaughter -- even then we didn't get an earth-wide consolidated supranational army to preserve international peace.

We got the Spanish flu instead.

Comments (24)


China and Argentina, and some others are working out trade agreements to be marked in remnimbi (or is it renminbi?). This is not a global reserve currency, just a local arrangement between a serious oil power and the emerging global hegemon. No trans-nat corporatists involved, so far. When (and how) Russia or India enters the game, the aforesaid may be a factor. I'm not sure. My reading of Hudson is that the current system is beginning to fray -- how could it do otherwise? -- and without dumping their treasuries and destroying their own investments -- countries like China are trying to conduct future business in a different way. Hedging their bets, you might say.

It's always healthy, and probably psychologically irresitible to celebrate any little cracks in the wall of empire.


"the emerging global hegemon"

makes me respond like tonto

"hmm ..you look ahead ..beyond our years kimosabe "


"It's ... probably psychologically irresitible to celebrate any little cracks in the wall of empire."

if they are real cracks and likely to become big cracks but this ??
sand box stuff
the economic part at any rate
the geopolitical part
is real enough
of course

so long as traded currencies are involved
and they aren't here
the trans nat inc's
will emerge uber alles

the unit of account
for any future transaction
has no impact on the system
except between the two traders involved
it's a bet
a price could be in gold ounces
nails of a specified quality
any third currency whatever

so long as you allow payment
in any convertable currency
and why not ???

hudson is a one note soprano
and its about a middle c

"hudson is a one note soprano
and its about a middle c"

Hudson is dean-on correct and frankly has been from day one. The funny-money era is over. Have you not been paying attention?

That would be "dead-on" correct I mean.


Is "traded currency" different from currency used in trade?


By A traded currency
I mean a currency with an internationally open "capital" market

An Open currency
Not controled by its c bank

Now just stating it like that turns many shades of gray into black and white
The rmb is used in trade but its exchange market for other currencies is controled very narrowly by the bank of china

Uncle sam's imperial dollar is allowed to float on the free waves of the naked exchanges


The test

Cut loose the rmb
About as much as the dollar is now
And it would rise
Against the north currencies

Of course interest rate policy can effect the currency exchange rate but its an indirect effect
The B Of C
Simply pegs the rmb to a weighted index
Of other currencies
And buys and sells other
Currencies to maintain the peg

Obviously it overwhelmingly sells rmb
Since it must fight the spontaneous tendency of the rmb to rise given the PRC's Balance of payments surplus

"Uncle sam's imperial dollar is allowed to float on the free waves of the naked exchanges"


It will be interesting to have this conversation five years from now.


Ren min bi, hce. The "People's currency." "Ren" is "person."

What is it with the hair dye these days?

Son of Uncle Sam:

Maybe we'll get a little more then meager interest from allies when it comes to playing the world's lunch aid- Probably better VA benefits, which soldiers will need after eating Romanian street food.


dol/ lar
dol= fuck
lar= little people
in bankazian


this is his stage whig md
was wron by hubert humphrey during his chemo fraud

like that little cyrus slut
our mike fm here
has a second 'realer'
post modern headed self
that plays an arabist



What then are Russia, China, Brazil and India talking about when they say they want a "more diversified currency basket"? (NYT, today)

Are you saying the Euro/dollar nations still have the clout to maintain the ancien regime?


"Are you saying the Euro/dollar nations still have the clout to maintain the ancien regime? "

i'll narrow that
the dollar euro duet
is really
and the us

london and tokyo are yankee tail feathers


OK, one more feeble question from the smart alec sloucher in the back: one of the suggested motives for invading Iraq was the fear that Saddam was planning to sell oil in euros, thus threatening the dollar's reserve currency role. Isn't that just the sort of thing China and Argentina are talking about, and Russia and some Gulf states already doing?

Donald McBane:

O.P. you do a disservice by failing to finish the story here. Of course BRIC is a paper tiger. But it's meant to be, by all concerned (i.e., the Money Men, our earthly overlords, whose influence extends into BRIC). And, surely you know what will soon be considered by the masses to be the natural response to their lost confidence in all currencies; they'll say, "A nation's currency must be based on its natural resources, like gold and silver. But not yellow or white gold ... black gold! We got oil... Pump our oil too! Save the dollar!" The world runs on oil and the Money Men still own the oil. We have a One World Currency and a One World Government NOW! As you imply, are they gonna give that up? Nope.

Consolidation of US, Mexico and Canada, with the oil of all three just waiting for exploitation after a long hibernation, will be seen as in everyone's best interest.

Not conspiracy, just logical. We'll be fine. Oh, and gold will go through the roof for a period. Just don't forget to sell.


doesn't matter what you price anything in

would the world be a different place if the dollar was not say 70% of world's currency reserves ??
of course it would
but why switch and to what ???

gold silver
dollar euro
get it
still metal

still north currencies

the share of world reserves held in dollars
as a measure of uncle's hegemony ???

so we watch it and we'll see
who gets contained and who doesn't


OK, people keep saying that the dollar's status as reserve currency makes the dollar, or Treasury bonds, a safe haven. i.e. reserve currency = safe haven. Is that true? Secondly, safe haven = ability to borrow beyond our means. Is that true?

Hints about rising T-bill rates seem to mean that investors are already considering the dollar less of a safe haven. True?


The forex path of. The USD vsEURO

One would like to hold the one with the highest return

But if you need to maintain a peg with dollar playing its trade weighted role or more then you're
Buying dollars and holding em

The forex market
Is a game worth understanding
Unlike pub second micro
And closed system macro
I am self taught in these. Waters

Mundell at hand not withstanding


Uncle can't borrow beyond his means
So long as it's a dollar debt uncle can pay up
He controls the us. Price level
And thus the real value of any external debt

Safe haven in this case is the value of the homeland and the future of it's currency

Wanna bet on the euro ?? Long run ??

The common undiscussed denominator/currency of all this paper chasing?

The planet's dwindling supplies of things like light sweet crude and light sweet phosphorus.


Finally, rubbing his blood-shot, tear-stained eyes, duck in the back stands up, closes his yellow notepad and heads to the library, to read up on Forex. But first, a stop at Harry's Dockside Pub.


some day i need to address raw commodity prices

i noticed p krugman admited commodity price bubbles after denying into the middle of last year
they were happening to crops and crude

i think the pop in prices of crude
last fall
proves any commodity peak
is a shortage mirage

but i need to prove my case
not somply declare it eh ??

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This page contains a single entry from the blog posted on Monday June 15, 2009 01:27 PM.

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