by From Asad Zaman This material is taken from first 15 minutes of Michael Hudson’s Webinar: a 4000-year perspective on economy, money and debt.These are real-world economics lessons, not found in textbooks. Loans to 3rd World Meant for Control Michael Hudson’s First Wall Street Job was at Chase-Manhattan Bank. He was asked to Evaluate the ability of Latin American Countries to pay back their loans. The goal was to make new multi-billion-dollar loans to countries. After doing the analysis, he came to the conclusion that Latin American Countries have no capacity to repay foreign debts! If you add up all potential export earnings in dollars, and subtract dollar liabilities, you get a negative number. Any loans made to them simply cannot be paid back. When he reported this to senior
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from Asad Zaman
This material is taken from first 15 minutes of
Michael Hudson’s Webinar: a 4000-year perspective on economy, money and debt.
These are real-world economics lessons, not found in textbooks.
Loans to 3rd World Meant for Control
Michael Hudson’s First Wall Street Job was at Chase-Manhattan Bank. He was asked to Evaluate the ability of Latin American Countries to pay back their loans. The goal was to make new multi-billion-dollar loans to countries. After doing the analysis, he came to the conclusion that Latin American Countries have no capacity to repay foreign debts! If you add up all potential export earnings in dollars, and subtract dollar liabilities, you get a negative number. Any loans made to them simply cannot be paid back. When he reported this to senior management of Chase Manhattan, they responded as follows: We will loan them the money to pay back their loans! Our goal is to control the country. If government plays by our rules, they will get the loans required for payment. If not, we will topple the government by denying them credit.
Take any textbook of International Trade theory – you will not find any mention of this motive for lending. read more