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Yanis Varoufakis on the decision to manage the actual crisis of capitalism by managing the surplus of other industrial nations via the U.S. financial system. This is an excerpt from the presentation of the book "The Global Minotaur: America, Europe and the Future of the Global Economy" (https://www.bloomsbury.com/uk/global-minotaur-9781783606108/) on May 15, 2013 in Zagreb, Croatia (https://www.youtube.com/watch?v=MEUWxNifJJ8) [THE COMPLETE BIOGRAPHY OF THE AUTHOR/PRESENTER YOU COULD SEE IN THE "Yanis Varoufakis" WIKIPEDIA ARTICLE: https://en.wikipedia.org/wiki/Yanis_Varoufakis] Note: The unilateral cancellation of the direct international convertibility of the United States dollar to gold happened in 1971 when president Nixon directed Treasury Secretary Connally to suspend, with certain
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Yanis Varoufakis on the decision to manage the actual crisis of capitalism by managing the surplus of other industrial nations via the U.S. financial system. This is an excerpt from the presentation of the book "The Global Minotaur: America, Europe and the Future of the Global Economy" (https://www.bloomsbury.com/uk/global-minotaur-9781783606108/) on May 15, 2013 in Zagreb, Croatia (https://www.youtube.com/watch?v=MEUWxNifJJ8) [THE COMPLETE BIOGRAPHY OF THE AUTHOR/PRESENTER YOU COULD SEE IN THE "Yanis Varoufakis" WIKIPEDIA ARTICLE: https://en.wikipedia.org/wiki/Yanis_Varoufakis] Note: The unilateral cancellation of the direct international convertibility of the United States dollar to gold happened in 1971 when president Nixon directed Treasury Secretary Connally to suspend, with certain
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| Yanis Varoufakis on the decision to manage the actual crisis of capitalism by managing the surplus of other industrial nations via the U.S. financial system. This is an excerpt from the presentation of the book "The Global Minotaur: America, Europe and the Future of the Global Economy" (https://www.bloomsbury.com/uk/global-minotaur-9781783606108/) on May 15, 2013 in Zagreb, Croatia (https://www.youtube.com/watch?v=MEUWxNifJJ8) [THE COMPLETE BIOGRAPHY OF THE AUTHOR/PRESENTER YOU COULD SEE IN THE "Yanis Varoufakis" WIKIPEDIA ARTICLE: https://en.wikipedia.org/wiki/Yanis_Varoufakis] Note: The unilateral cancellation of the direct international convertibility of the United States dollar to gold happened in 1971 when president Nixon directed Treasury Secretary Connally to suspend, with certain exceptions, the convertibility of the dollar into gold or other reserve assets, ordering the gold window to be closed such that foreign governments could no longer exchange their dollars for gold. Although Nixon's actions did not formally abolish the existing Bretton Woods system of international financial exchange, the suspension of one of its key components effectively rendered the Bretton Woods system inoperative. While Nixon publicly stated his intention to resume direct convertibility of the dollar after reforms to the Bretton Woods system had been implemented, all attempts at reform proved unsuccessful. By 1973, the Bretton Woods system was replaced de facto by the current regime based on freely floating fiat currencies. More information: Varoufakis, Y. (2014): United States monetary policy in the post-Bretton Woods era: Did it cause the crash of 2008?, FESSUD Working Paper Series, No. 50, University of Leeds.: First appeared on Varoufakis' own website in November 8, 2013: https://varoufakis.files.wordpress.com/2013/11/united-states-monetary-policy-in-the-post-bretton-woods-era.pdf A quote from it for explanation: "From the 1970s onwards, the United States began absorbing an increasing portion of the Rest of the World’s surplus industrial products. America’s net imports were, naturally, the net exports of surplus countries like Germany, Japan and later China; the main source of their aggregate demand. In turn, approximately 70% of the net profits earned by the surplus nations’ entrepreneurs were channelled, daily, to Wall Street, in search of higher returns." And quoting its concluding Epilogue (because its significance, today being even much more significant than back in 2013): "The Crash of 2008 was not the result of the Fed having abandoned its Taylor Rule in favour of a return to the discretionary monetary policies of yesteryear. While the Fed had, indeed, lost control over the aggregate money supply, this was not due to some erroneous application of its Taylor Rule but, rather, the result of a global sea change which, following the demise of Bretton Woods, allowed the financial sector to decouple from both the official sector and the ‘real’ economy. And when Wall Street’s exploitation of this novel ‘exorbitant privilege’ led to the Crash of 2008, the unstable global surplus recycling mechanism that had been maintaining the illusion of some ‘Great Moderation’ broke down. Put simply, Wall Street’s capacity to ‘close’ the loop of global surplus recycling seems to have been irreparably damaged. No monetary authority can, without the assistance of government, repair a broken down global surplus recycling mechanism against the powerful interests of a financial sector that grew even stronger, politically, after 2008; especially when the missing global surplus recycling mechanism requires inter-governmental cooperation not dissimilar in scope, if not necessarily content, to another Bretton Woods conference." |