June 14, 2009
The Financial Times

Washington Cannot Call All the Shots

US officials wanted to attend Yekaterinburg as observers. They were told no

by Michael Hudson

Challenging America will be the focus of meetings in Yekaterinburg, Russia, on Monday and Tuesday for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other leaders of the six-nation Shanghai Co-operation Organisation. The alliance comprises Russia, China, Kazakhstan, Tajikistan, Kyrgyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia.

The attendees have assured American diplomats that dismantling the US financial and military hegemony is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the US or for the dollar as a vehicle for trade among these countries.

The meeting is an opportunity for China, Russia and India to "build an increasingly multipolar world order", as Mr Medvedev put it in a St Petersburg speech this month. What he meant was this: we have reached our limit in subsidising the US military encirclement of Eurasia while also allowing the US to appropriate our exports, companies and real estate in exchange for paper money of questionable worth. "The artificially maintained unipolar system", Mr Medvedev said, was based on "one big centre of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks".

. . . Mr Medvedev concluded his St Petersburg speech: "What we need are financial institutions of a completely new type, where particular political issues and motives, and particular countries, will not dominate."

. . . Foreigners see a financial system backed by American military bases encircling the globe. The IMF, World Bank, World Trade Organisation and other Washington surrogates are seen as vestiges of a lost American empire no longer able to rule by economic strength, left only with military domination. They see this hegemony cannot continue without adequate revenues and are attempting to hasten the bankruptcy of the US financial-military world order. If China, Russia and their allies have their way, the US will no longer live off the savings of others, nor have the money for unlimited military spending.

US officials wanted to attend Yekaterinburg as observers. They were told no. It is a word that Americans will hear much more in the future.


[Michael Hudson is professor of economics at the University of Missouri.]

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Enver Masud, "A Four-Point Plan for Bailing Out America," The Wisdom Fund, February 7, 2009

[There needs to be a general acceptance that the current model has failed. The brakes-off, deregulate or die, privatise or stagnate, lunch is for wimps, greed is good, what's good for the financial sector is good for the economy model--John Lanchester, "It's Finished," London Review of Books, May 28, 2009]

[It is the first formal step by our major trading partners to replace the dollar as the world's reserve currency. If they succeed, the dollar will dramatically plummet in value, the cost of imports, including oil, will skyrocket, interest rates will climb and jobs will hemorrhage at a rate that will make the last few months look like boom times. State and federal services will be reduced or shut down for lack of funds.--Chris Hedges, "The American Empire Is Bankrupt,", June 14, 2009]

[ . . . despite hopes by BRIC nations for a more diverse system, the dollar remains for now the undisputed king of currencies.--Dan Molinski, "Dollar Declines; BRIC Nations Want Diversity,", June 16, 2009]

Stephen Koff and Sabrina Eaton, "Members of U.S. House Financial Services Committee snapped up or dumped bank stocks as bottom fell out of market,", June 25, 2009

Eric Hobsbawm, "On Empire," New Press; Reprint edition (July 1, 2009)

FILM: "Capitalism: A Love Story,", October 2, 2009

[In the most profound financial change in recent Middle East history, Gulf Arabs are planning - along with China, Russia, Japan and France - to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. . . .

The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves. . . .

The current deadline for the currency transition is 2018. . . .

Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.--Robert Fisk, "The demise of the dollar," Independent, October 6, 2009]

Robert Fisk, "A Financial Revolution with Profound Political Implications," Independent, October 7, 2009

"Dollar facing 'power-shift': analysts,", October 11, 2009

Ye Xie and Anchalee Worrachate, "Dollar Reaches Breaking Point as Banks Shift Reserves,", October 12, 2009

[Without the slave trade and colonization, Europe could never have made the kind of breakthrough it did (p27). . . . we should see the last two centuries in which economic power became concentrated in a relatively small part of the world's population, namely Europe and North America, as something of an historical aberration (p29).--Martin Jacques, "When China Rules the World: The End of the Western World and the Birth of a New Global Order," Penguin Press HC, The (November 12, 2009)]

["The best victory is to win without actually fighting. Supreme excellence consists in breaking the enemy's resistance without fighting."--Jon Basil Utley, "Sun Tzu and America’s Way of War,", February 3, 2010]

Laura Gottesdiener, "7 Chomsky quotes that expose the American empire,", January 18, 2013

August 1, 2013

Liu Chang, "U.S. fiscal failure warrants a de-Americanized world,", October 13, 2013

Pepe Escobar, "The birth of the 'de-Americanized' world,", October 15, 2013

Andre Vltchek, "The Empire is Crumbling, That is Why it Needs War,", December 26, 2014

[The day will come when the confidence in the dollar will be greatly diminished worldwide. Under those conditions the tremendous benefits that we in the United States have enjoyed as the issuer of the reserve currency will be reversed.--Ron Paul, "A Green Light for the American Empire,", March 14, 2015]

Parick L Smith, "A veteran CIA agent spills the goods on the Deep State and our foreign policy nightmares,", February 7, 2016

Bruce Fein, "U.S. foreign policy flies under banner 'American Exceptionalism',", February 10, 2016

Paul Street, "The Empire Has No Clothes,", January 27, 2017

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