[Marxism] Are we facing the mother of all bubbles?

Joaquin Bustelo jbustelo at gmail.com
Thu Mar 5 14:07:13 MST 2009


Nestor wrote: "Are we not beginning to see the DOLLAR BUBBLE?" 

There's probably a lot of that going on, but when you get right down to it,
how many aircraft carrier groups and nuclear warheads stand behind the Yen,
Pound Sterling or the Euro for that matter? 

Granted, steel, gunpowder and plutonium are not as good as gold, but a lot
better than what anyone else has. It's all fiat money, it has value because
the government says it has value, and the government gets to say it has
value because it has a monopoly of violence within a given territory, that's
what makes it a "sovereign." The U.S. is in a much better position to hold
up the value of its currency with military force than anyone else is in
relation to their currency. A qualitatively, incomparably better position.
Even on the level of, how many military bases and troops do the Brits,
Japanese, and Germans have within the United States and in neighboring
countries? And how many does the U.S. have in/near Great Britain, Germany
and Japan? The Japanese don't even HAVE nukes and the Germans would need to
borrow them from France. Fat chance.

Of course, bourgeois constitutional theory says all sovereigns are equal,
but the reality is that the U.S. is a lot more equal that others. 

But there is more: If/as the depression deepens, the Euro, which is the
dollar's main competitor as a reserve currency, is likely to come under
great strain and may even fall apart as different countries facing different
economic challenges seek to retake control of "their own" monetary policy. 

Apart from the Euro, the economic base of the pound sterling and the yen,
the other reserve currencies, is much narrower than that of the dollar *just
looking at the national economies* of the three countries, and WAY smaller
when you consider that almost all international trade in oil takes place in
dollars, that most foreign currency reserves are currently held in dollars,
etc.

Joaquin





More information about the Marxism mailing list