Michael Hudson: De-Dollarization Is Necessary to Save The Global Economy (TRANSCRIPT NOW POSTED)

Interview with Radhika Desai

Do take cognizance of this in the few days we have of the BRICS summit. We see the different system being implemented.

Is the world quietly reviving a plan the United States buried eighty years ago? Professor Michael Hudson joins me to revisit Keynes’ original Bretton Woods proposals, built on balance, capital controls, and the principle that bad debts should be written off rather than enforced into depression. Washington rejected all of it and built the dollar system instead, one designed to keep the world dependent on American credit and American rules.

Now Russia, China and Iran are building the alternatives Keynes once imagined, from Lavrov’s proposed SCO development bank to China’s CIPS system shielding Iranian oil trade from US sanctions, while even the Netherlands has asked Washington to send its gold home. The dollar system is unraveling. The question is what replaces it, and whether the world has the will to build something more balanced this time.

Radhika Desai and Michael Hudson: Geopolitical Economy Hour Transcript

Radhika Desai: Hello and welcome to another Geopolitical Economy Hour, the socialist and anti-imperialist conversation that illuminates the fast-changing political economy and geopolitical economy of our times. I’m Radhika Desai, geopolitical economist. Today’s show is our regular fortnightly Geopolitical Economy Hour with Professor Michael Hudson. Welcome, Michael.

Michael Hudson: It’s good to be back here.

Radhika Desai: Michael, we were both invited to the Eastern Economic Forum at Vladivostok last week, at the invitation of the PSB, the Promsvyazbank, the leader in the field of de-dollarizing Russia’s payments. They had asked us to talk about de-dollarization. And in our last show, which we did before going to Vladivostok, we talked about the situation of the dollar and how, as strains on the dollar system are growing, we may expect the end to come. We will paste a link, by the way, to that conversation in the description. At Vladivostok, both of us spoke, each in our own way, about Keynes’s original proposals at Bretton Woods, and why we need to recall them today as we try to construct alternatives to the dollar system. And in this show, we want to continue and rehearse that conversation to convey to our viewers some of the flavor of what we said.

So let me start us off by saying that I like to emphasize the principles of Keynes’s original proposals for an international clearing union and bancor, because the actual proposals are too specific to the current moment. That was 80 years ago, and they were tied to the fortunes of Britain on the eve of losing the empire. And I emphasize original because the proposals changed a great deal in the course of the negotiations, particularly as the US flexed its financial muscle before the UK, which had been reduced by war to the status of a very needy borrower.

And then, if I were to name the most important principles underlying Keynes’s proposals, to me there were four of them. Firstly, that it should be a truly international currency, not a national currency masquerading as an international one. It would work alongside national currencies, which would remain in use domestically. Secondly, Keynes emphasized that the system should aim towards balance, which is completely the opposite of what we have today, a system founded on imbalances. And that balance would be achieved by the principle of creditor and surplus country adjustment. And of course, if it were a balanced system, the amount of liquidity it would require, the amount of actual money creation it would require, would be very low, because there’d be hardly any imbalances to pay for. So that’s the second one. The third is that, of course, to operate that system would require capital controls. That is, every central bank and every government should be able to govern how much money comes into and out of the economy, and this means that the system did not assume short-term capital flows, as we have today. And finally, and this is more disputed, people say Keynes mentioned this in an earlier work, the Treatise on Money, but he did not put this in the original Bretton Woods proposals, the idea was that the currency might be based on the average of the prices of some 30 widely traded commodities.

So those are the principles. What I want to do is discuss these and related themes as we go along. I don’t want to discuss all of them at the same time. But Michael, let me start off the conversation by asking you how you see Keynes’s original proposals. Where do you think they arose from? And why should we recall them today?

Michael Hudson: Well, it may seem esoteric and academic for us to discuss proposals that were made way back in 1944, and to revive Keynes, and I think you and I are among the few people who’ve been discussing it. But the reason we were invited to discuss these proposals is that the world was at a turning point at the end of World War II over what kind of post-war international relationships there were going to be. And right now, finally, the whole post-1945 international order that was designed by the United States to promote its own interests, very much against those of Britain, all of this is being discussed again. So people are beginning to look back in time, over 80 years ago, and ask where things went wrong.

So let’s describe Keynes’s plans, and the debt problems they tried to avoid, and then I want to explain why the United States rejected it and demanded very harsh pro-creditor rules, such as the IMF has imposed on debtor countries, which is the antithesis of Keynes’s plans. And later we can discuss where the world’s going from here, which is what we were trying to summarize in Vladivostok.

Well, there were two plans for the post-1945 international order that were discussed as World War II was coming to an end. In 1944, Britain was worried that an increasingly wealthy United States, after the war, was going to insist on free trade and an ending of capital controls, and that would end Britain’s imperial preference system, which obliged India and its former colonies and members of the sterling area to spend all the savings they had accumulated during World War II in other sterling area countries, mainly in Britain. Under the free trade the United States wanted, these countries could spend their money anywhere. And Britain worried that, well, that means not us.

And not only that, but it realized the United States had most of the world’s gold, I think 75 percent, and that Britain, as a result of the loans it had contracted with the United States in order to get through World War II, was going to fall into constant deficit. And so Keynes’s job, working for the British Treasury, was to say, how do we avoid falling into deficit and being subject to US rules that are going to require us to stifle our economy in order to repay these foreign debts?

And Keynes had gained renown for his criticism of how similar pro-creditor rules were imposed by the United States after World War I. The United States surprised its allies by demanding payment of the inter-ally debts the allies had borrowed from the United States to wage World War I before the United States had entered the war. The United States imposed enormous debts on them, and they met it by saying, well, okay, we’re going to impose German reparations, it lost the war, let it pay the allies, and we’ll pay that money to you. Well, the result created the Depression. First of all, it stifled the growth of not only Germany, but it stifled the growth of Britain, leading to the General Strike of 1926. It caused hyperinflation in France. And meanwhile, all this money from Europe flowing into the United States inflated the stock market, leading to a crash. And finally, by 1931, the whole world agreed, well, we’ve got to have a moratorium on the inter-ally debt and German reparations. But it was too late. The world had already gone into a depression. And Keynes had warned that all this would happen.

And his job was to say, how do we prevent a similar depression from occurring after World War II? And the United States is once again trying to impose very pro-creditor rules, because it’s the major creditor, and free trade rules, because its industry made it the leading industrial country at the time. And so the United States wanted to create, as we know what happened, a post-war order of free trade, no capital controls. Britain indeed fell into debt to the United States. And not only did Britain fall into debt, but its colonies began to spend their money in the United States, and since 1945, the whole world, the Global South and other countries, have all run into increasing foreign debt by following free trade rules and a very heavy US-organized trade system that’s helped the United States and prevented them from developing their economy in the way that would have followed the industrial capitalism that made Britain, Germany, and the United States so successful in the 19th century. They ended up specializing in raw materials production, food production, running into debt, and the International Monetary Fund, as we’ll discuss later, said, well, you have to pay this by selling off your natural resources to us, and privatizing your infrastructure and selling it off.

And right now, all of this is being brought to a head, because the Asian countries and the whole rest of the world are facing a world depression that’s going to erupt later this year, as rising oil prices are forcing industries to close down, because many industrial companies, like Germany was, after it stopped importing Russian gas, the prices went so high that industrial companies can’t afford to continue in production at these high energy prices and still have markets. And so the question is, what are they going to do about it? And especially, what are they going to do about it if they’re faced with a choice?

Countries today are having to choose, if they are going to pay more money for the higher oil and gas prices, especially in Europe and Britain right now, where gas prices are going up, governments are being called on, won’t they subsidize households to pay for heating and lighting their homes, what are they going to do as a result of this? Countries have to decide, are they going to put their own economies first, or are they still going to pay all of the foreign dollarized debts that they owe? If they pay all, they can’t afford both to pay for the higher oil prices that we’re seeing and pay their foreign debts. So this is the issue that Keynes pointed out. How do we prevent the world’s debt overhead from becoming so large that it stifles industrial development, because countries have to pay their foreign creditors instead of financing their own industry, subsidizing their industry, investing in public infrastructure, and avoiding the neoliberal privatization that’s made the West deindustrialize, while China has provided a marvel of not financializing but creating its own money to industrialize.

So Keynes had a very detailed idea of how to do that, and I’ll just do what you asked me to do and spend two paragraphs saying what he wanted to do. He said that this international clearing union would really be in charge of keeping a balance sheet of the balance of trade and payment surpluses of countries, and the deficits. And he said, what’s going to happen when some countries become chronic creditors and keep accumulating so much money, credits, that they find their counterparts in the debts of other countries becoming chronic debtors? If you don’t stop this relationship, you’re going to have international polarization and subservience of debtor countries to the creditors. We British are going to be a debtor country, how do we avoid it? So his rule said, when the creditor countries’ loans become so large that it’s obvious the debts cannot be paid, then the international credits will simply be wiped out, and the debts of chronic debtors that have followed the US policies, we’re going to become hewers of wood and drawers of water. We’re not going to feed ourselves, we’re going to buy US exports. They followed the US rules, and they’ve fallen into a chronic trade deficit and an increasing deficit in their foreign debt payments that are stifling their growth.

And Keynes said, it’s better to wipe out the debts, just as Europe finally did in 1931, than to impose a world depression. And that’s what’s going to happen if you really follow a world designed by the United States and the International Monetary Fund. Well, now finally the other countries are deciding, gee, Keynes was right in his warning, how do we untrack the whole direction in which the world’s finance capitalism has been leading us. So this was the topic of our meeting.

Radhika Desai: But before we continue with this episode, let me take a minute to remind you to please like and share this video, subscribe to our YouTube channel, and if you can, please donate. You can do this through our Patreon, or by becoming a paid subscriber on Substack, or becoming a member here on YouTube. It helps us to produce high-quality content and keep it free. And now, back to the main topic of the day.

Absolutely. And let me add a couple of points to that, to support further the points you were making. So, as you said, Keynes was very aware, he didn’t want Britain to become a debtor country in this way and be reduced to the status of hewers of wood and drawers of water, but there were a few other things he had in mind that he wanted to accomplish.

One thing people don’t remember about Keynes is that, during the interwar years, Keynes’s career is very interesting, Michael, if you think about it: his first major book, Indian Currency and Finance, came out in 1913, he passed away in 1946, so his entire working life spanned what we call the thirty years’ crisis, this extremely crisis-ridden period, which gave him a number of insights. Now, during this crisis-driven period, he sat on, I think, at least two commissions on British industry. He knew how British industry was getting deindustrialized. And he also realized some of the reasons for this. Essentially, Britain was losing competitiveness. Its industry was not investing in the same sense. Its financial system was not geared for industrial investment. All of this he knew.

Secondly, he was very aware that in this period of deindustrialization, Britain had become reliant on her empire for markets, because internationally the goods were not competitive. So only the empire countries could be forced to buy British goods. And, of course, during the war, given the extent to which Britain had to mobilize colonial troops and so on, it also had to make all sorts of promises of independence. So Britain was basically, after the war, on the point of losing empire. So all in all, Britain, and of course the war itself had destroyed so much productive capacity in the UK and so on, so all in all, Keynes arrived at Bretton Woods speaking for a country that was already very weak and about to become a lot weaker. And that’s why people say, Joseph Schumpeter used to say that all of Keynes’s advice is advice from a British point of view, which is true in many ways, and I don’t think Keynes would have regarded that as an insult. He would have said, yes, that’s absolutely right, I speak for my country. But because he was speaking for a very weak country, what he had to propose was in the interests of the vast majority of the countries of the world. So that’s the first point I wanted to make.

Secondly, Keynes’s first book was Indian Currency and Finance, and given how central British India’s affairs were to the operation of the sterling system, the book is regarded as a primer on understanding how the sterling system operated, the international money system that preceded the dollar system. And he knew very well that the sterling system provided the world with liquidity by exporting capital. But he also knew very well that this capital came from the empire, and no other country would be in a position, without an empire of the size Britain had, there would be no way of operating the system in a stable fashion, because Britain had control over the empire, the empire could not affect the working of the system, and so it could provide the world with liquidity. So the imbalances on which the sterling system depended could be stabilized because of Britain’s imperial control. But the imbalances on which the American system relies, which is essentially by providing the world with liquidity by running deficits, these were inherently unsustainable, and Keynes knew that, and that’s why he said we can no longer have the currency of any one country becoming the currency of the world. So he proposed bancor, which was not a currency that we would use to buy shoes or shirts or whatever, only central banks could use it, in their mutual relations.

So that’s the first principle, that it should be not the currency of any individual country but a currency between central banks. The second principle was, of course, that it should not be based on imbalances, and that the purpose should be to balance the system. And so, the responsibility that he enshrined in the international clearing union, the institution that would run bancor, the principle of creditor responsibility and surplus country responsibility. So basically, what he put into the system is that, while of course every country will have an occasional imbalance, a trade deficit, a trade surplus, persistent surpluses and persistent deficits were to be equally penalized. The result would be that, rather than this kind of beggar-thy-neighbor situation in which debt reduces countries, impoverishes countries and damages their productive abilities and so on, this created a structural situation in which surplus countries had an interest in increasing the productive capacities of the deficit countries. So the overall effect would have been developmental.

The bancor was a fiat paper currency, only, as you said, to be used among governments, and later the IMF itself began to create just such a currency, the Special Drawing Rights, the SDRs, which it created to give to what became the world’s largest debtor country, the United States, to finance its war and its military spending abroad. But what made Keynes’s bancor so different from the SDR was, he didn’t provide liquidity saying, we’ll give you enough liquidity to support your exchange rate so it doesn’t go under, we’re going to subsidize your dependency on us, we realize you’re losing more and more money because you’re not able to become self-sufficient in food and industry because of the policies we impose, but we’ll lend you the money so you can keep subsidizing this dependency, and the condition is these famous IMF conditionalities, we will only lend you money if you agree to have a class war against labor and lower your wages in order to make your economies more competitive. Well, it didn’t make them more competitive, it crippled them. And Keynes was exactly the opposite. Keynes wanted to avoid all of that.

Michael Hudson: Well, here’s the problem that he addressed, and that the whole world is addressing right now. Some form of international debt, of debt credit, is necessary. Countries are going to need credit. What are countries going to do when, let’s say, China comes in with its Belt and Road Initiative and says, well, all right, we’re going to help build your ports, we’re going to help your economy? How do we have a good credit system instead of a bad debt system?

Well, the answer is, you make a productive loan, which is a loan to help the country earn enough economic surplus so it can repay the loan with the interest charges, if any. And if it ends up it can’t repay the loan without imposing a depression, then it’s a bad loan, and a bad loan means bad debt, and that should be written off. And that essentially is the core of what Keynes realized. Bad loans and bad debts have to be written down. And the entire International Monetary Fund philosophy of neoliberalism, you have to privatize because you’ve become dependent, you’re going to have to pay the price of paying for your trade deficits and your debt service deficits by privatizing your infrastructure and selling it off to foreign companies that are going to treat these as monopolies and squeeze everything they can out of you. Otherwise, you’re going to go under. And if you try to elect a socialist government, like happened in Venezuela and sometimes other Latin American countries, then we’re not going to lend you the money, and we’re just going to let your currency depreciate, and then we’ll say, you see, socialism doesn’t work, you better try neoliberalism. Well, that was the US game that has been played as a result of its rules.

And it was that Keynes tried to avoid, by saying the litmus test for the good credit that we need, and the kind of valid debts that are okay, are going to be credit that helps countries grow, not force them into a dependency relationship that ends up as an extractive, rent-extracting policy. The International Court of Investment Disputes, for instance, says, if a country like Venezuela right now tries to tax its oil production or natural resources, then it has to pay reparations to the original investors that thought, hey, we thought we’d stolen your natural resources free and clear, and that you couldn’t tax your economic rent, like Adam Smith and David Ricardo and the whole 19th century urged. So you have to pay us. They’re in a stranglehold, and the world is now trying to finally break away from the stranglehold that was created by the way the international dollarized financial system was created and has been weaponized, especially in the last few years, under the Biden and Trump administrations.

So the question is, how are they going to create an alternative to the International Monetary Fund, an alternative set of international relations, now that China, Russia and Iran enable countries joining them to become self-sufficient and resilient, and they don’t need Europe and the dollar anymore, as they did back in 1945.

Radhika Desai: Exactly. And let me also add here, the point you were making about the policies, the conditionalities the IMF and the World Bank imposed. The very nature of these conditionalities is such that, by essentially preventing the government from intervening in the economy, the idea is that governments should not intervene in the economy. Their purpose is to ensure that no government is able to act in the interests of its own people, that all governments end up acting in the interests of American corporate capital, which can go in and out of that country, exploit and extract whatever it likes, without any restriction.

But in reality, Keynes was very aware that true development required a great deal of government intervention. It has only ever taken place when governments have directed markets and essentially had an overall planning function. No matter how much private enterprise there may be within the economy, there should be some overall direction given by governments. And here in particular, one thing was very important to Keynes, and that was capital controls, to prevent the unregulated inflow and outflow of large amounts of short-term capital, which he knew would be extremely destabilizing.

And let me just give you an idea of how opposite neoliberal thinking is to Keynes’s thinking. Neoliberals like to talk about the trilemma. They say that of the three desirable things, an autonomous monetary policy, stable exchange rates, and free capital flows, you can only have any two of them at the same time. Well, quite frankly, to me it’s a no-brainer. We don’t need free capital flows, we must have capital controls. And if you have capital controls, then an autonomous monetary policy and stable exchange rates are equally possible. And so Keynes had designed the ICU and bancor in such a way as to permit every government to run its economy for full employment, for growth, and retaining the ability to adjust the exchange rates based on their own developmental priorities. So that’s something that’s really quite important, and it’s often forgotten about, and even today, after all this talk about how we need a new international monetary system, very few people actually point out that any fair and stable system, any system that allows each government the autonomy to run its economy in the interests of its own people, will require capital controls. This is hardly ever mentioned.

Michael Hudson: Well, you made the point that not only Keynes, but the entire world, back in 1945, saw a rising role of government. Roosevelt and the United States, it seemed obvious that you needed a mixed economy, with public investment especially in infrastructure. You didn’t want basic needs to be monopolized and have monopoly rents. How is an economy going to be competitive with others? Well, the whole strategy of industrial capitalism was to evolve into socialism, or let’s say a mixed public economy. But the United States said, well, that’s socialism. And socialism wasn’t a bad word in the 19th century, it was what industrial capitalism was evolving into. But once economies became financialized, the banking sector, the financial sector, the real estate sector, and the monopolies all joined forces to say, no, no, there’s no such thing as economic rent, everybody earns whatever they want, and we’ve got to reject any interference with the free market, meaning our freedom to charge monopoly prices, our freedom to tell you not to grow your own grain but to export plantation crops and buy your food from the United States, not to buy Russian gas but to buy your gas from the United States. That’s a free market under our control. It’s free for you, as long as you are free within the economic system we have designed to impoverish you and deliberately to make you more dependent, so that you lose your sovereignty. And as American officials have been saying in the last week, the United Nations is our enemy. The United Nations is based on the principle that every country has its own sovereign right to be independent, and if other countries are sovereign and secure, that threatens America’s security, all of our wealth. These days, now that we’ve deindustrialized, we’re not creating industrial wealth anymore, we’re dependent on other countries’ subsidy. That’s what Donald Trump has said. Our economy cannot live if we can’t grab other countries’ resources. Grab Venezuela, we’re going to grab Greenland. And just in the last few days he made a new map and said, well, we’re going to grab all the way to Iceland, to prevent countries from trading, using the Arctic trade route, and getting through Greenland and Iceland and Britain at the other end, we can block them all off, to make them dependent on us. Is the world going to have a dependency system or not?

Well, that’s what makes our discussion so geopolitical, which is what we’re having here. A de-dollarized economic order will block the United States from just running its dollarized balance of payments deficits to spend on military, fighting to enforce this dependency system through client oligarchies and the rest of the world. That’s what all of this, implicit in this discussion in Vladivostok, and the discussions over what East Asia is going to do when oil prices rise, how will South Korea and Japan survive, well, do you think Iran and the other OPEC countries allying with it are going to give preference to American satellites, or are they going to Africa and the global majority and the Global South countries it wants to draw into its alliance, it’s called BRICS, but it’s really centered in Russia, China and Iran. That’s what we’re seeing now, a geopolitical realignment that essentially, now that Donald Trump has said we’re going to isolate all of these, we’re going to declare sanctions, trade sanctions, financial system sanctions against Russia, China and Iran. Well, the United States is now isolating itself from this. And so other countries are going to say, most of our foreign debts that we can’t afford to pay now are in dollars, and it’s the dollar system, run by the United States, that’s created all of this problem. It’s the dollar, it’s the United States that went to war with Iran and has caused this international crisis and a trade breakdown that’s led to a financial breakdown. So, let’s have a moratorium of perhaps indefinite time on the dollarized debts, so that we can use the resources we have and run up productive credit with China, Russia and Iran, for the oil and the industrial resources we need to grow.

Radhika Desai: Absolutely. And let me underline another aspect, and we should probably be winding down this conversation in a little while, but let me underline another aspect of it, which is that, when countries had capital controls, in the first three decades after the Second World War, they were also the most financially stable period in history. There were no massive financial crises in this roughly three-decade period. But once western countries began to lift capital controls, beginning in the 1980s, we’ve had financial crisis after financial crisis, and of course these have been extremely destabilizing for the world economy as a whole. And although Keynes’s proposals were rejected at Bretton Woods, capital controls had to be retained at that time, because the United States did not have the power to ensure the stability of Western Europe, in particular, in the face of communism and the popularity of left-wing ideas, it had to concede that countries could have capital controls. And as long as they lasted, the world economy was much more stable, and of course experienced the golden age of growth, because behind the walls of capital controls, countries were indeed free to manage their economies for development and growth.

Michael Hudson: Well, since you said we’re winding down, I want to point out that Lavrov gave a speech two days ago, and he said, well, there’s been talk of a BRICS New Development Bank, but the BRICS countries are a broad, bell-shaped curve of political formations, not all are very progressive, a lot are neoliberal, a lot are in the US orbit themselves, what are we going to do? And he said, well, we’re going to develop our own prototype through the Shanghai Cooperation Organization. And so he’s proposed to establish an SCO Development Bank that’ll be funded on very different principles from either the IMF or even what’s been discussed by the BRICS. And so Russia is trying to figure out how to create a plan that’ll be independent, with its own clearing system. And while the United States has, just yesterday and the day before, said we’ve imposed sanctions, we’re going to grab and ban all transactions with Chinese banks that help provide the funding to buy Iranian oil, we’re going to blacklist these banks, China has created an alternative to the SWIFT bank clearing system, and the CHIPS system, the clearing house system, with its own CIPS system. And so Iran and other countries are now able to use the Chinese system, which is hermetically sealed from the United States, immune from it. This is why countries are now getting rid of their dollar holdings, and moving towards Chinese systems, and also cryptocurrency, because although the United States did seize a hundred billion dollars of Iranian cryptocurrency that were invested in US securities, it hasn’t been able to grab Bitcoin. This is a transitory system.

Radhika Desai: But you see, this is where Keynes’s principle of balance comes in. These payment systems can be accepted and used, provided there is balanced trade between countries. If China and Iran, for example, are importing and exporting roughly the same, with imbalances remaining small, then Iran is happy to accept rubles, and China is happy to accept rial in payment of small imbalances. But once you get very large imbalances, and once you get imbalanced trade like that between Russia and India, then this system does not work, because creating payment systems is one thing, but ultimately who uses them is determined by who is willing to accept that currency, and you’d only be willing to accept a certain currency in payment of imbalances so long as the imbalances are not too great, and so long as, unlike Russia, you’re not left holding a lot of rupees you don’t know what to do with. So this is the situation, and this is the context in which Keynes’s emphasis on balance becomes really important.

Michael Hudson: Well, the question is, why would China agree to such a system, if it’s going to be giving up its debt claims, if they can’t be paid, because it’s going to be probably the major creditor. Well, the answer is, yes, it’s going to give up debt claims that can’t be paid, because this will create a system that frees it, and its whole trading area that it wants to prosper with trade, from the United States’ whole system. This is why the United States views this alternative bank, and other countries’ sovereignty, as an existential threat to its finance capitalism, precisely because of what China is able to do by creating an alternative economic philosophy. It’s not that they’re rivals in the same system, it’s a difference in system. And that’s why this is really a decision over what is the direction in which the whole world economy, you could call it civilization if you want, the whole world is going to be following, breaking away from this long detour, since really World War I, and especially World War II, into a US-based finance capitalism.

Radhika Desai: Yeah, exactly. And as we’ve talked about in our previous discussions, Michael, the entire dollar system relies on destabilizing short-term capital flows, imbalances, the imposition of openness on the rest of the world economy. And what does openness mean? Openness to be exploited by American capital. It means nothing more or less than that. And so, people have only started remarking on the weaponization of the dollar system in 2022, when it was weaponized against Russia. But it has historically been a weapon with which to oppress other countries. And this is what essentially the whole world needs to move away from.

Michael Hudson: Well, I’m going to make a final geopolitical comment. Where is all this going to leave Europe? Which direction will Europe go in? Well, the Dutch have just asked, please, all this gold we’ve been keeping in America, after World War II, when it seemed safe to keep money there, we’ve been leaving it at the Federal Reserve, please send it back. And the United States has been loading up airplanes to send the gold back to Holland. Germany also said, can you send us back our gold? The United States said, no, you’re our puppet, not you, we’ll give it to Holland, but Mr. Merz works for us, we’re not going to give you our gold, you want to fight, and Germany surrendered, Holland didn’t. What’s the rest of Europe going to do? Is it going to turn eastward, or is it going to become, let’s say, the fifty-third state, after Iceland becomes the fifty-second, and Greenland the fifty-first? I’m leaving out Canada, forgive me.

Radhika Desai: Well, I think that’s another whole story, which we can discuss another time. Canada’s counter-retaliatory tariffs just went into effect the other day, so we will perhaps come back to that and discuss it. But Michael, thanks again so much for this wonderful discussion. I’m glad we were able to have both a pre-Vladivostok and a post-Vladivostok discussion on what’s wrong with the dollar system, and what are the principles on which a different system might be based. I hope our audience liked it, folks. We hope you liked it, and until next time, goodbye.