tjir_v1n2fra01

tjir_v1n2fra01 - U.S. Economic Overstretch and...

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Alternatives: Turkish Journal of International Relations, Vol.1, No.2, Summer 2002 1 U.S. Economic Overstretch and Military/Political Imperial Blowback? Andre Gunder Frank* IMF forecasters, and also those of the OECD and the U.S. government are and have never been right, as demonstrated by comparison between their published [also their internal un-published?] estimates and subsequent real world events. They have always been over- optimistic, because over-optimism is built in-to their estimation mechanisms, if only because political economic reasons mandate them to avoid any realism and make un-realistic prognoses that are meant to act as self-fulfilling prophesies, which are also designed to maintain political support for their continued existence. The IMF -which de facto is an arm of the US Treasury Dept but is not accountable to anyone other than the US Treasury - does have some power to make prophesies that are in part self-fulfilling for American and some other big business interests by sinking currencies, economies and income especially in the ''Third'' and now also the former ''Second'' world at whose costs the economies in the First world - that yes is first but in another sense - rest much of their own relative prosperity I and James Tobin [ author of the ''Tobin Tax'' proposal] already in the mid-1980s published and predicted deflation, and ''wise'' policy makers did ignore this risk [not really risk, but necessary consequence] while continuing their policies designed to fight inflation. Nonetheless, since then commodity prices have fallen sharply and consistently. Moreover in world economic terms, high inflation in terms of their national currencies [pesos, rubles, etc.] and their sharp devaluation against the dollar world currency has been an effective de facto major deflation in the rest of the world. That has reduced their prices and made their exports cheaper to those who buy their currencies with dollars, primarily of course consumers, producers and investors in - and from! - The United States. These additionally, which is hardly ever mentioned!, can and do buy up the rest of the world with dollars that ''cost'' only their printing and distribution, which for Americans have virtually no cost. [The $ 100 dollar bill is the world's
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Alternatives: Turkish Journal of International Relations, Vol.1, No.2, Summer 2002 2 most used cash currency on which runs the entire Russian economy, and there are two to [now?] three times as many of them circulating outside as inside the US]. The American boom and welfare and then ''balanced'' federal budget 1992-2000 Clinton administration, contrary to its populist claims, only happened to coincide with this boom and the also same 8 year long prosperity of the United States was entirely built on the backs of the terrible depression, deflation and thus generated marked increase in poverty in the rest of the world [during this one decade,
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tjir_v1n2fra01 - U.S. Economic Overstretch and...

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