this post was submitted on 22 Sep 2023
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The video is great. However, it skips one point that is balance of payments. There are Global south countries like Pakistan, India, South Africa etc which have their own currencies but they are limited by colonialism/imperialism. They can't raise deficit because doing so would result in speculative attacks against their currencies and bond rating downgrades by western credit rating agencies (the same ones who were responsible for 2008) which makes it difficult for these countries to borrow foreign exchange (mainly dollars) from international markets. U.S. is in a special position because of the dominance of the dollar as the reserve currency, it doesn't have to worry about balance of payment and as everyone else uses the dollar, there are no such problems. However, America is a shithole and it still doesn't do basic shit.
This is why reducing import dependence and obtaining modern tech is so important for the third world.
That said I love his focus on real resources as what determines a country's capabilities.
Don't forget the influence of the petrodollar. Everyone uses the dollar not necessarily because they want to, but because the US has taken actions to ensure that oil can only be traded in dollars. This is part of why BRICS is seen as such a threat to US hegemony. If Saudi Arabia, Russia, and China are all agreeing to trade oil in something other than dollars, then suddenly the solvency of all of the economies of the world are far less reliant on the solvency of the dollar itself.
Yes & yes & yes. To understand the international aspects, my go-to is Michael Hudson.
Yeah look at what happened to Zimbabwe when they tried to print more money. The currency got devalued to the extreme, people's entire pensions could only buy a carton of eggs.
Usually countries only print a shit ton of money like the way Zimbabwe did when they are forced to because of internal instability or currency speculation attacks. Sri Lanka was forced to do the same last year when its forex reserves were almost completely depleted. They couldn't borrow dollars from IMF because IMF likes when global south suffers (easier to control when the country is weaker) and to pay for essential expenses, it was forced to print currency (without issuing any bonds).
If Global south countries want to attain greater currency sovereignty, they'll need to reduce import dependence and partially decouple from the capitalist markets.
There are other ways to do trade as well. USSR had a local currency settlement system with its allies like India where trade is done at fixed exchange rate set by a deal. This has some problems if trade balance is constantly skewed towards one side. However, as USSR had a giant economy, this wasn't much of a problem.