Monetary Imperialism

The following excerpt is taken from Michael Hudson's book Super Imperialism: The Economic Strategy of the American Empire. (2002)

 When central banks are obliged to add dollars to their 
international reserves, this transfers an equivalent value of resources from their own 
citizens to finance the U.S. payments deficit – and with it, pari passu, America’s own 
federal budget deficit. From $10 billion a year in the early 1970s, the nation’s foreign trade 
and payments deficits grew to nearly $150 billion a year in the late 1980s, and double that 
amount by the end of the 20th century. (in 2003: 500 billion) 
 
 If deficits of this magnitude no longer inspire crises such as those that occurred in 
the spring of 1973, it is because the central banks of Europe, Japan, OPEC and other 
dollar-accumulators have acquiesced so thoroughly  in what truly 
may be called a monetary imperialism. The vehicles for this super imperialism are not 
private international firms or private finance capital, but central banks. Through these 
international financial maneuverings the United States has tapped the resources of its 
Dollar Bloc allies. It has not done so in the classic fashion of a creditor extorting debt 
service, not so much via its international firms and their investment activities, and certainly 
not any longer through its export competitiveness and free competition. Rather, the 
technique of exploitation involves an adroit use of central banks, the IMF, World Bank and 
its associated regional lending institutions to provide forced loans to the U.S. Treasury. This 
rigged game has enabled America to flood the world with dollars without constraint as it has 
appropriated foreign resources and companies, goods and services for nothing in return 
except Treasury IOUs of questionable (and certainly shrinking) value.
 
In sum, the United States is able to rule not through its position as world creditor, 
but as world debtor. Rather than being the world banker, it makes all other countries the 
lenders to itself. Thus, rather than its debtor position being an element of weakness, 
America’s seeming weakness has become the foundation of the world’s monetary and 
financial system. To change this system in a way adverse to the United States would bring 
down the system’s creditors to America.   

Given this context, it looks like the US/Fed leaders will do anything to maintain the monetary empire. What scares me is that if (when) the current strategy fails, surely they won't hesitate to stage another war (do I dare to think 9/11) to re-establish the empire. Bottom line: The next twenty years are going to be completely unlike the last twenty years.