[Marxism] [Pen-l] Michael Hudson: The game is over

[Steve Palmer]

--- Jim Devine <jdevine03 at gmail.com> wrote:
> 
> why does the Fed have to support the dollar exchange rate? Why not
> simply enjoy an export surge?

Inflation. Except in front of the children, it is obvious that inflation is
running at over 10% p.a. The import substitution elasticity is virtually
non-existent in any reasonable time frame: you've gotta buy your stuff from
China etc. 

Hudson's faith in the power of US imperialism to "rub the faces" of European
and Asian capitalisms is touchingly patriotic but utterly wrong. He ignores the
Eurodollar market: dollars do *not* have to be recycled via central banks - in
the foreign exchanges it is the relative, not the absolute inflation rates that
matter. The Fed is f*cked either way: put rates up makes recession worse;
cutting them increases inflation. 

"I study a lot. That is one of the responsibilities of every revolutionary." Hugo Chavez.