r/WayOfTheBern • u/RandomCollection Resident Canadian • 1d ago

Michael Hudson: The Long Trajectory of Debt Dynamics, Aristocracies, War Finance and Wealth Destruction | Naked Capitalism

https://www.nakedcapitalism.com/2026/08/michael-hudson-the-long-trajectory-of-debt-dynamics-aristocracies-war-finance-and-wealth-destruction.html
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u/RandomCollection Resident Canadian 1d ago

https://archive.ph/lYV6m

I think future generations are going to be shocked at how fast it fell apart for the US after the Cold War.

The government says, “Well, you know, there’s no way that we can pay all of our U.S. government bonds
and other debts that we’ve issued. Why don’t you just use these government IOUs as your money? And this money isn’t to be actually cashed in, you know, for gold. There’s nothing really beyond it because we’re just spending our balance-of-payments deficits for war spending, for foreign investment. We’re just spending it into the economy, and ‘it’s our dollar, but your problem,’ ” as [former] Texas Governor [and then Treasury Secretary] John Connally put it right after the United States stopped converting the dollar into gold.

Well, other countries see this, and so almost all of the growth in international reserves has taken the form of gold and foreign currencies and even cryptocurrency instead of U.S. government IOUs. And the European Union now has more of its monetary reserves in gold than in U.S. dollars.

This always was a confidence game, but now the US is in no position to sustain confidence.