Americas control mechanisms are not those of industrial supremacy, but those of a financialized de-industrializing economy, whose inconvertible currency is the foundation of the worlds monetary system, allowing it to run balance-of-payments deficits without limit.
Foreign central banks no longer area ble to hold America to account by cashing in their surplus dollars for gold or for appropriation of U.S. asssets. As Americas balance-of-payments deficit widens, foreign central banks simply add the surplus dollars to their reserves, mainly in the form of U.S. Treasury IOUs. Other countries monetary assets are thus Americas monetary debt. This foreign official saving finances the U.S. domestic budget deficit in the process of funding the U.S. international deficit.
In this book Michael Hudson illuminates one of the most powerful forces in global economics one which is hidden, and widely misunderstood.
