Page 50 - AEI Insights Vol. 7 2021

AEI Insights, Vol 7, Issue 1, 2021

already by the Vietnam war, with the Nixon shock only officializing it. However, the US
imperium managed to survive and to outlive the Soviets. How?
The United States, with its financial capital (or an outfoxing illusion of it), evolved into a debtor
empire through the Wall Street guaranties. Titanium-made Sputnik vs. gold mine of printed-
paper… Nothing epitomizes this better than the words of the longest serving US Federal
Reserve’s boss, Alan Greenspan, who famously quoted J.B. Connally to then French President
Jacques Chirac: “True, the dollar is our currency, but your problem”. Hegemony vs.
hegemoney.

House of Cards (Forever r>g)
Conventional economic theory teaches us that money is a universal equivalent to all goods.
Historically, currencies were a space and time-related, to say locality-dependent. However, like
no currency ever before, the US dollar became – past the WWII – the universal equivalent to
all other moneys of the world. According to history of currencies, the core component of the
non-precious metals’ money is a so-called promissory note – intangible belief that, by any
given point in future, a particular shiny paper (self-styled as money) will be smoothly
exchanged for real goods.
Thus, roughly speaking, money is nothing else but a civilizational construct about
imagined/projected tomorrow – that the next day (which nobody has ever seen in the history
of humankind, but everybody operates with) definitely comes (i), and that this tomorrow will
certainly be a better day then our yesterday or even our today (ii).

This and similar types of collective constructs (horizontal and vertical) over our social contracts
hold society together as much as its economy keeps it alive and evolving. Hence, it is money
that powers economy, but our blind faith in constructed (imagined) tomorrows and its alleged
certainty is what empowers money.
Tellingly, the universal equivalent of all equivalents – the US dollar – follows the same pattern:
Bold and widely accepted promise. For the US, it almost instantly substan-tiates extraterritorial
economic projection: American can print (any sum of) money without fear of inflation.
(Quantitative easing is always exported; value is kept home.)

(Empire’s currency loses its status when other nations lose confidence in ability of that imperial
power to remain solvent. For the pre-modern and modern history, it happened with 5 powers –
two Iberian, Dutch, France and the UK – before the US dollar took the role of world reserve
currency. Interestingly, each of the empires held it for roughly a century. The US century is
just about to expire, and there are already contesters, territorial and non-territorial, symmetric
and asymmetric ones. On offer are tangibles and intangibles: gold, cryptocurrencies, and
biotronics/nano-chemoelectricals.)

But, what does the US dollar promise when there is no gold cover attached to it ever since the
time of Nixon shock of 1971?
Pentagon promises that the oceanic sea-lanes will remain opened (read: controlled by the US
Navy), pathways unhindered, and that the most traded world’s commodity – oil, will be
delivered. So, it is not a crude or its delivery what is a cover to the US dollar – it is a promise
that oil of tomorrow will be deliverable. That is a real might of the US dollar, which in return
finances Pentagon’s massive expenditures and shoulders its supremacy.

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