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主题：廖子光：为什么中国必须把美元贸易盈余购买美国债 -- 过来看井大
家园 廖子光：为什么中国必须把美元贸易盈余购买美国债 说实话，我没有看懂。希望河里的高手解释一下。
他的观点有道理吗？尤其井底老大说中国可以不买美债！
谢谢！
http://www.henryckliu.com/page215.html
By
Henry C.K. Liu
Many have suggested China is not compelled to buy US Treasuries with her trade surplus dollars. They point out that China does so voluntarily because US sovereign debt is the safest insturment as a storer of value. This is now obviously no longer true. So why does China continue to buy US sovereign debt? The answer is China has no other options but to become a creditor to the US due to US-China trade imbalance. The following explains why.
A debt is not an independent thing. It is a designation of financial relationship between parties. For a debt to exist between parties, one party, or parties, must be the debtor, or debtors, and a counterparty or counterparties must be the creditor, or creditors. A debt cannot exist without a counterbalancing credit position.
Credit drives the economy, not debt. Debt is the mirror reflection of credit. Even the most accurate mirror does violence to the symmetry of its reflection. Why does a mirror turn an image right to left and not upside down as the lens of a camera does? The scientific answer is that a mirror image transforms front to back rather than left to right as commonly assumed. Yet we often accept this aberrant mirror distortion as uncolored truth and we unthinkingly consider the distorted reflection in the mirror as a perfect representation.
In the language of finance economics, credit and debt are opposites but not identical. In fact, credit and debt operate in reverse relations. Credit requires a positive net worth and debt does not. One can have good credit and no debt. High debt lowers credit rating. When one understands credit, one understands the main force behind the modern finance economy, which is driven by credit and stalled by debt. Behaviorally, debt distorts marginal utility calculations and rearranges disposable income. Debt turns corporate shares into Giffen goods, demand for which increases when their prices go up, and creates what former Federal Reserve Board Chairman Alan Greenspan calls "irrational exuberance", the economic man gone mad.
Monetary economists view government-issued money as a sovereign debt instrument with zero maturity, historically derived from the bill of exchange in free banking. This view is valid only for specie money, which is a debt certificate that can claim on demand a prescribed amount of gold or other specie of intrinsic value. But fiat money issued by a sovereign government is not a sovereign debt but a sovereign credit instrument. Sovereign government bonds are sovereign debt while local government bonds are agency debt but not sovereign debt, because local governments, while they possess limited power to tax, cannot print money, which is the exclusive authority of the Federal government or a central government. When money buys bonds, the transaction represents sovereign credit canceling public or corporate debt. This relationship is rather straightforward but is of fundamental importance.
Money issued by government fiat is now exclusive legal tender in all modern national economies. The State Theory of Money (Chartalism) holds that the general acceptance of government-issued fiat currency rests fundamentally on government's authority to tax. Government's willingness to accept the fiat currency it issues for payment of taxes gives such issuance currency within a national economy. That currency is sovereign credit for tax liabilities, which are dischargeable by credit instruments issued by government in the form of fiat money. When issuing fiat money, the government owes no one anything except to make good a promise to accept its money for tax payment. A central banking regime operates on the notion of government-issued fiat money as sovereign credit. A central bank operates essentially as a lender of last resort to a nation’s banking system, drawing on sovereign credit. A lender's position is a creditor position.
Thomas Jefferson famouslly prophesied: "If the American people allow the banks to control the issuance of their currency, first by inflation, and then by deflation, the banks and corporations that will grow up around them will deprive people of all property until their children will wake up homeless on the continent their fathers occupied ... The issuing power of money should be taken from the banks and restored to Congress and the people to whom it belongs." This warning applies to all other peoples in the world as well.
Government levies taxes not to finance its operations, but to give value to its fiat money as sovereign credit instruments. If it chooses to, government can finance its operation entirely through user fees, as some fiscal conservatives suggest. Government needs never be indebted to the public. It creates a government debt component to provide a benchmark interest rate to anchor the private debt market, not because it needs money. Technically, a sovereign government needs never borrow. It can issue tax credit in the form of fiat money to meet all its liabilities. And only a sovereign government can issue fiat money as sovereign credit.
If fiat money is not sovereign debt, then the entire conceptual structure of finance capitalism is subject to reordering, just as physics was subject to reordering when man's worldview changed with the realization that the earth is not stationary nor is it the center of the universe. The need for capital formation to finance socially-useful development will be exposed as a cruel hoax, as sovereign credit can finance all socially-useful development without problem. Private savings are not necessary to finance public socio-economic development, since private savings are not required for the supply of sovereign credit. Thus the relationship between national private savings rate and public finance is at best indirect.
Sovereign credit can finance an economy in which unemployment is unknown, with wages constantly rising to provide consumer buying power to prevent production overcapacity. A vibrant economy is one in which there is persistent labor shortages that push up wages to reduce overcapacity. Private savings are needed only for private investment that has no intrinsic social purpose or value. Savings without full employment are deflationary, as savings reduces current consumption to provide investment to increase future supply, which is not needed in an economy with overcapacity created by lack of demand, which in turn has been created by low wages and unemployment. Say's Law of supply creating its own demand is a very special situation that is operative only under full employment with high wages. Say's Law ignores a critical time lag between supply and demand that can be fatally problematic to the cash-flow needs in a fast-moving modern economy. Savings require interest payments, the compounding of which will regressively make any financial scheme unsustainable. The religions forbid usury for very practical reasons.
The relationship between assets and liabilities is expressed as credit and debt, with the designation determined by the flow of obligation. A flow from asset to liability is known as credit, the reverse is known as debt. A creditor is one who reduces his liability to increase his assets, which include the right of collection on the liabilities of his debtors. Sovereign debt is a pretend game to make private monetary debts denominated in fiat money tradable.
The sovereign state, representing the people, owns all assets of a nation not assigned to the private sector. This is true regardless whether the state operates on socialist or capitalist principles. Thus the state's assets is the national wealth less that portion of private sector wealth after tax liabilities, plus all other claims on the private sector by sovereign right. High wages are the key determinant of national wealth. Privatization generally reduces state assets while it may increase tax revenue. As long as a sovereign state exists, its credit is limited only by the national wealth. If sovereign credit is used to increase national wealth, then sovereign credit is limitless as long as the growth of national wealth keeps pace with the growth of sovereign credit.
When a sovereign state issues money as legal tender, it issues a monetary instrument backed by its sovereign rights, which includes taxation. A sovereign state never owes domestic debts except by design voluntarily. When a sovereign state borrows in order to avoid levying or raising taxes, it is a political expedience, not a financial necessity. When a sovereign state borrows, through the selling of sovereign bonds denominated in its own currency, it is withdrawing previously-issued sovereign credit from the financial system. When a sovereign state borrows foreign currency, it forfeits its sovereign credit privilege and reduces itself to an ordinary debtor because no sovereign state can issue foreign currency. Dollar hegemony prevents all states beside to US to finance their domestic development with sovereign credit.
Government bonds act as absorbers of sovereign credit from the private sector. US Government bonds, through dollar hegemony, enjoy the highest credit rating, topping a credit risk pyramid in international sovereign and institutional debt markets. Dollar hegemony is a geopolitical phenomenon in which the US dollar, a fiat currency, assumes the status of primary reserve currency in the international finance architecture. Architecture is an art the aesthetics of which is based on moral goodness, of which the current international finance architecture is visibly deficient. Thus dollar hegemony is objectionable not only because the dollar, as a fiat currency, usurps a role it does not deserve, but also because its effect on the world community is devoid of moral goodness, because it destroys the ability of sovereign governments beside the US to use sovereign credit to finance the development their domestic economies, and forces them to export to earn dollar reserves to maintain the exchange value of their own currencies.
本帖一共被 1 帖 引用 (帖内工具实现)家园 关键是老美限制太多 中国也想买资源、象巴菲特一样买一些便宜的好公司，可是老美都盯着你呢，不是你想买啥就能买啥的。
家园 老廖的主要观点，就是打破美元霸权 让大家各国政府靠自己的本币来发展经济。
这个是华盛顿共识最怕的。
家园 那对于各国来说 马上面临巨大的通货紧缩压力。
全球贸易体系崩溃，附着在其上的全球经济分工体系也随之崩溃。
世界就会陷入大动荡之中。
家园 欺负偶不懂E文~~~~~~转贴辛苦，丢朵花飞走~ 家园 用毒狗翻译了一下。凑合读一读吧。多谢花儿！ 廖子光的偶像是毛主席。他不是国内那些脑残+接轨派。
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通过
亨利C.K.刘
许多人认为中国是不是被迫与她买美元的贸易顺差，美国国库券。他们指出，中国这样做是因为美国自愿的主权债务，是作为价值储存人最安全的insturment。这是现在显然已不再正确。那么，为什么中国继续购买美国国债？答案是中国没有别的选择，只能成为美国因美中国贸易不平衡的债权人。下面解释了为什么。
阿债务是不是一个独立的事情。这是各方之间的财政关系指定。对于债务的当事人之间存在，一方或双方，必须是债务人或债务人，和对手或交易对手必须是债权人或债权人。阿债务不能存在没有制衡的信用状况。
信用驱动的经济，而不是债务。债务是信用镜面反射。即使是最准确的镜子没有暴力到其反射对称性。为什么镜子转图像从右至左，而不是颠倒作为一个镜头一样吗？科学的回答是，镜像变换从前到后留下的，而不是一般认为的权利。然而，我们经常接受一个无色异常镜歪曲事实，我们不假思索地认为，在一个完美的代表扭曲的镜子反射。
在金融经济学，信贷和债务语言是对立的，但并不完全相同。事实上，信贷和债务工作在反向关系。信贷要求有一个积极的净资产和债务没有。人有良好的信誉，没有债务。高负债降低信用评级。当一个人了解信贷，一了解背后的现代金融的经济，这是推动信贷和债务停滞不前的主要力量。行为上，债务扭曲的边际效用计算和重新排列可支配收入。债务转换成吉芬商品法人股，这增加的需求时，其价格上升，并创建被前美国联邦储备委员会主席格林斯潘所说的“非理性繁荣”，经济人发疯了。
货币经济学家认为政府发行作为一个主权零到期债务工具的钱，来自于历史上的自由银行汇票。这种观点只适用于实物货币，这是一个债务凭证，可以根据需要要求黄金或其他实物的内在价值规定的数额。但法定货币由政府发行的主权不是一个主权债务，而是一个主权信用工具。主权政府债券的主权债务，而地方政府债券是政府机构债券，但不是主权债务，因为地方政府，虽然他们拥有有限的权力，税，不能打印的钱，这是联邦政府或中央政府的专属权力。当钱购买债券，而交易表示主权信用取消公共或企业债券。这种关系是比较简单，但具有根本重要性。
钱由政府命令发出的唯一法定货币，现在所有现代国家的经济。国家的货币理论（Chartalism）认为，普遍接受的政府发行的法定货币，从根本上取决于政府的权力税。政府愿意接受法定货币的纳税问题，它使国家经济在发行货币等。这货币是主权信贷税务负担，这是由政府发行的法定货币形式的信用工具履行。当发行法定货币，政府欠任何人任何东西，除非有良好的承诺接受缴税的钱。阿中央银行制度的运作，政府的概念已作为主权信用不兑现纸币。中央银行的运作基本上是作为最后贷款人对一个国家的银行体系，对主权信贷绘图。贷款人的立场是债权人的地位。
托马斯杰斐逊famouslly预言：“如果美国人民让银行控制他们的货币发行，通胀首先，和通货紧缩，然后，银行和企业的成长，将剥夺他们周围的一切财产的人，直至其子女将非洲大陆上被占领...他们的父亲的钱后，无家可归者发出的权力应采取的银行，恢复国会和向谁属于人民。“此警告适用于世界所有其他民族也。
政府不征收税，以资助其业务活动，而是给予其价值，作为法定货币主权信用工具。如果选择，政府可以资助它的运作完全是通过用户收费，因为有些财政保守派建议。政府需要永远感激市民。它创建了一个政府债务组件提供一个基准利率，以锚定私人债务市场，并不是因为它需要钱。从技术上讲，一个主权政府的需要永远不能借用。它可以发出的法定货币形式的税收优惠，以满足其所有债务。只有主权问题，因为政府可以不兑现货币主权信用。
如果菲亚特钱不是主权债务，那么整个金融资本主义的概念结构是受重新排序，就像物理学受当人的世界观的认识到，地球不是静止改变重新排序，也不是宇宙的中心。对于资本形成需要资金对社会有用的发展将面临一个残酷的骗局，可以作为主权信贷融资问题的所有情况下对社会有用的发展。私人储蓄，并不一定要资助公共社会经济的发展，因为私人储蓄，是不是主权信贷供应需要。因此，国家之间的私人储蓄率和公共财政的关系充其量是间接的。
主权信贷可以资助一个经济中失业是未知的，与不断上升，提供消费者的购买力，以防止产能过剩的工资。充满活力的经济，是指有持续的劳动力短缺，提高工资，以减少产能过剩。私人储蓄，需要为私人投资只是并没有内在的社会目的或价值。不充分就业的储蓄是通货紧缩，减少电流消耗为储蓄提供投资，以增加未来的供应，这不是一个经济需要与需求，这反过来又受到低工资和失业造成的缺乏，造成生产能力过剩。萨伊建立自己的供求法律只有在充分就业的一个非常特殊的情况是执行高工资。萨伊定律忽略了供给和需求之间的可致命问题的关键时刻，落后的现金流需要在瞬息万变的现代经济。储蓄需要支付利息的复利，其中将退步任何不可持续的财务制度。在宗教禁止高利贷的非常实际的原因。
在资产和负债之间的关系表现为信贷和债务，由确定的义务的流动指定。来自资产负债流动被称为信用，相反是众所周知的债务。债权人是谁的责任，以减少他的资产增加，其中包括收集他的债务人的债务的权利。主权债务是假装游戏作出法定货币计价的货币流通的私人债务。
在主权国家，代表人民，拥有不分配给私营部门的一个国家的所有资产。这是真正的无论是否国家对社会主义或资本主义的原则运作。因此，国有资产是国家财富减少的部分税后负债私人财富，再加上由主权权利私营部门的所有其他索赔。高工资是国家财富的关键因素。私有化通常可以减少国有资产的同时，也可能会增加税收。只要一个主权国家存在，其信用是有限的，只有国家的财富。如果主权信用是用于增加国家财富，然后主权信用是作为国家财富的不断增长的无限与主权信贷增长的步伐。
当一个主权国家的问题作为法定货币的钱，它会发出一种金融票据的主权权利，其中包括税收的支持。一个主权国家从来没有欠除非设计内债自愿。当一个主权国家借贷，以避免征收或提高税收，这是一个政治上的权宜之计，而不是财政的必要性。当一个主权国家借贷，通过在其本国货币计价的主权债券的销售，它正在撤出先前发行的金融体系主权信用。当一个主权国家借入外汇，要剥夺其主权信贷的特权，并减少自己一个普通的债务人，因为没有一个主权国家可以发行外币。美元霸权阻止所有国家旁美国资助，主权信用本国的发展。
政府债券作为主权信用吸收来自私营部门。美国政府债券，通过美元霸权，享有最高的信贷评级，超过了国际主权和机构债券市场信用风险的金字塔。美元霸权是一种地缘政治的现象，其中美元，法定货币，假设在国际金融体系的主要储备货币的地位。建筑是其中的美学是道德上的善，其目前的国际金融体系结构是明显不足的艺术。因此，美元霸权的反感，不仅是因为美元作为法定货币，侵占的作用，但不值得，而且还因为其对国际社会的影响是缺乏道德上的善，因为它破坏了主权政府旁边的美国能否利用主权信贷来资助发展的国内经济，并迫使它们出口赚取的美元储备，以维持本国货币的交换价值。
钱由主权政府的命令发出的是一个主权垄断，而不是债务。可接受的信用评级与任何人都可以借用或出借，但只有主权政府可以发行作为法定货币法定货币。当一个主权政府发行法定货币，它发出排放的主权国政府强加给它的公民纳税义务的主权资信证明良好。私人发行的钱可以存在，只有在宽限期和主权的许可，并从不同的主权政府发行的，私人发行货币的钱是从发行人借据，与由于持有人的钱的支持内容发行。但是，主权政府发行的法定货币是不是从政府的债务，因为这些钱是一个潜在的债务支持从税务负债的形式持有。菲亚特货币发行是作为法定货币，由法律解决好所有债务，私人和公众一个主权政府。任何人都拒绝接受美国的美元债务的偿还是违反美国法律。仪器用于清偿债务的信用工具。
收购与政府主权债券发行的法定货币是政府的一种方式释放到经济更主权信用。按照常理，在一个经济体货币供给的是，政府的债务，因为如果增加货币供给意味着增加国家债务，然后放松货币政策将紧缩信贷的经济。但经验证据表明情况恰恰相反：货币减轻增加信贷供应。因此，如果菲亚特由主权政府增加信用货币创造，货币由主权政府的命令发出的信用票据。
经济学家海曼明斯基正确地指出，只要发出信贷，货币被创建。在信用卡发行上创建对方的部分债务，但债务的不是钱，信誉。金钱是负的债务，金融反物质形式。物理学家理解物质和反物质之间的关系。爱因斯坦的理论认为，从能源和保罗狄拉克结果集中的问题概念化通过了能源问题所创造的反物质产品创新。碰撞的物质和反物质湮灭产生的物质和反物质返回到纯粹的能量。也是同样的道理信贷和债务，两者是相关的，但相反。他们是创造出来的金融能源生产问题（信贷）和反物质（债务）在不同的形式。碰撞的信贷和债务将产生毁灭并返回由此产生的工会纯粹的金融能源联合国人类的利益利用。支付债务的小康终止金融互动。
金融债务偿还的金钱。主权国家的政府不会成为债务人发出法定货币，而在美国，采用了美国联邦储备说明，不是一般的银行票据形式。该“银行”一词没有出现在美元。零期限货币对美元的经济（ZMM），等于货币供应M2以及所有的货币市场基金，减去定期存款。它衡量按面值赎回的金融资产的供应需求。 ZMM增长到五千五百点零零亿美元在1971年尼克松总统起飞，1美元的黄金标准，为2009年12月至96万亿美元，是不是一个联邦债务。该数额约占美国国内生产总值67.3％的十四万二千六亿美元略高于的一二三三○○○○○○○○○○美元国债，在相同的时间点。主权信用是什么使美国经济的内在力量。
一种法定货币持有人是持有人的主权信用。菲亚特货币的持有人是不是一个国家的债权人，因为一些货币经济学家误索赔。菲亚特钱只有其持有人有权从政府更换同样的钱罢了。美元，作为美国联邦储备说明，持有者可以换到另一个相同的说明注意在联邦储备银行，而不是其他。菲亚特货币的持有人是作为一个国家代理人的充分信心和背后的文书，这对纳税信誉良好的状态，是对所有公共和私人债务的法定货币。菲亚特钱，如护照，持有人有权向国家在实施保护主权信用。这是一个国家金融主权的固有权力证书。
金钱的债权Chartalist政府的理论，通过虚拟的权力征收应缴税款与政府指定的法定货币，并不需要外部融资。因此，主权信用使政府能资助一个充分就业的经济，即使在规范的市场经济。该Chartalism原因，过低的税率将导致对货币需求低逻辑，慢性政府的财政盈余和不可持续的经济起反作用，因为它占用了经济持续信贷。在英国殖民政府利用非洲的土地税，促使无忧无虑当地人利用其货币和从事金融生产力。
因此，根据Chartalist理论，一个经济体系与金融主权信用本国发展需要，实现充分就业，最大限度地没有任何主权债务或外国贷款或投资的需要平衡增长与繁荣，没有罚款的恶性通货膨胀。但Chartalist理论是主要的执行只在封闭的国内货币制度。在新的国家参加国际自由主义“自由贸易管制下的全球金融和货币市场宙斯盾”无法操作，因为外汇困境Chartalist原则。任何政府印刷自己的货币资金超过其外汇储备规模的合法的国内需求将很快发现它在外汇市场兑换的货币的攻击，无论是在货币的固定汇率，以另一种货币挂钩，或者是自由浮动。因此，所有非美元经济体被迫吸引外资以美元计价的，即使满足国内需求。但非美元经济体必须积累储备，才能吸引外资。即使是资本管制，外资只能投资于出口部门的美元收入，可以赚来的。但是，美元的出口经济体的贸易盈余积累只能投资于美元资产，剥夺国内部门的非美元经济体所需的资金。从国内货币的这种袭击的唯一保障，是暂停完全可兑换，然后将保持外国投资了。因此，美元霸权，所有其他货币征服菲亚特作为关键储备货币的美元，饿死，剥夺了他们的政府的权力，以国内发展问题的主权信用的非美元经济体所需的资金。
根据Chartalism原则，符合外国资本帝国主义以外的议程中没有一个有用的住宅用途。美元霸权本质税抢走了美国的贸易伙伴的融资能力，在本国货币自己国内的发展，迫使他们寻求外国贷款和美元，其中美国，只有美国，可以打印计价的投资将与相对权。
蒙代尔一弗莱明论文，为此，罗伯特蒙代尔获得1999年诺贝尔文学奖，指出，在国际金融，政府一直在（1）稳定的汇率，（2）国际资本流动和（3）国内政策的自主性（充分的选择就业，利率政策，反经济周期的财政支出等）。随着全球金融市场的管制，政府只能有三个选项2。
通过美元霸权，美国是唯一可以无视蒙代尔一弗莱明论文。一个多自冷战结束10年来，美国一直大大高于其实际经济价值的菲亚特美元，吸引了资本账户顺差和全球化的范围内行使财务支配的美元霸权体系的单边主义政策的自主权。这是复杂的，但单一的最重要的原因，所有的主要商品，主要是石油，以美元计值主要是作为一个超级大国地缘政治的延伸，其原因。这一事实是美元霸权使美国金融霸权的可能，这使得美国可能exceptionism和单边主义的支柱。
当中国出口的真正财富菲亚特美元到美国，接受它是物质财富的交流在美国sovereing货品形式的信贷。因此，美国的贸易赤字以美元计价的，其实是美国对中国的贷款，通过买入soveriegn信贷中的商品。中国现在是美国法定货币持有人，因此是充当美国国务院代理的充分信任和仅次于美国的主权信用工具（美元），这是美国的税收支付，并充分利用信贷，法定货币的所有债务公共和私人在美国。菲亚特钱，如护照，持有人有权向国家在实施保护主权信用。这是一个国家金融主权的固有权力证书。由于中国不付美国税，中国的美元获得只能用于购买美国通过extingusishing主权creidt instruents（美元），美国的主权债务（国债）。通过这一交易，中国改变其债权人将从一个美国主权信用代理人的地位，对美国。这就是为什么中国必须购买美元的盈余Tresuries - 改变它章一家美国代理poistion美国的债权人。
对于中国成为唯一途径这种困境的自由，是要求所有中国的出口将在中国货币支付。
2009年1月5日
家园 给自己顶一下 给自己顶一下
家园 论文剩下部分 Money issued by sovereign government fiat is a sovereign monopoly while debt is not. Anyone with acceptable credit rating can borrow or lend, but only sovereign government can issue fiat money as legal tender. When a sovereign government issues fiat money, it issues certificates of its sovereign credit good for discharging tax liabilities imposed by the sovereign government on its citizens. Privately-issued money can exist only with the grace and permission of the sovereign, and is different from sovereign government-issued money in that privately issued money is an IOU from the issuer, with the issuer owing the holder the content of the money's backing. But sovereign government-issued fiat money is not a debt from the government because the money is backed by a potential debt from the holder in the form of tax liabilities. Money issued by a sovereign government by fiat as legal tender is good by law for settling all debts, private and public. Anyone refusing to accept dollars in the US for payment of debt is in violation of US law. Instruments used for settling debts are credit instruments.
Buying up sovereign bonds with government-issued fiat money is one of the ways government releases more sovereign credit into the economy. By logic, the money supply in an economy is not government debt because, if increasing the money supply means increasing the national debt, then monetary easing would contract credit from the economy. But empirical evidence suggests otherwise: monetary ease increases the supply of credit. Thus if fiat money creation by sovereign government increases credit, money issued by sovereign government fiat is a credit instrument.
Economist Hyman Minsky rightly noted that whenever credit is issued, money is created. The issuing of credit creates debt on the part of the counterparty; but debt is not money, credit is. Debt is negative money, a form of financial antimatter. Physicists understand the relationship between matter and antimatter. Einstein theorized that matter results from concentration of energy and Paul Dirac conceptualized the by-product creation of antimatter through the creation of matter out of energy. The collision of matter and antimatter produces annihilation that returns matter and antimatter to pure energy. The same is true with credit and debt, which are related but opposite. They are created in separate forms out of financial energy to produce matter (credit) and antimatter (debt). The collision of credit and debt will produce annihilation and return the resultant union to pure financial energy un-harnessed for human benefit. The paying off of debt terminates financial interaction.
Monetary debt is repayable with money. Sovereign government does not become a debtor by issuing fiat money, which, in the US, takes the form of a Federal Reserve note, not an ordinary bank note. The word "bank" does not appear on US dollars. Zero maturity money (ZMM) in the dollar economy, is equal M2 plus all money market funds, minus time deposits. It measures the supply of financial assets redeemable at par on demand. ZMM grew from $550 billion in 1971 when President Nixon took the dollar off a gold standard, to $9.6 trillion as of December 2009, is not a federal debt. It amounts to about 67.3% of US GDP of $14.26 trillion, slightly over the national debt of $12.33 trillion at the same point in time. Sovereign credit is what gives the US economy its inherent strength.
A holder of fiat money is a holder of sovereign credit. The holder of fiat money is not a creditor to the state, as some monetary economists mistakenly claim. Fiat money only entitles its holder a replacement of the same money from government, nothing more. The dollar, being a Federal Reserve note, entitles the holder to exchange the note to another identical note at a Federal Reserve Bank, and nothing else. The holder of fiat money is acting as a state agent, with the full faith and credit of the state behind the instrument, which is good for paying taxes and is legal tender for all debt public and private. Fiat money, like a passport, entitles the holder to the protection of the state in enforcing sovereign credit. It is a certificate of state financial power inherent in sovereignty.
The Chartalist theory of money claims that government, by virtual of its power to levy taxes payable with government-designated legal tender, does not need external financing. Accordingly, sovereign credit enables the government to finance a full-employment economy even in a regulated market economy. The logic of Chartalism reasons that an excessively low tax rate will result in a low demand for currency and that a chronic government fiscal surplus is economically counterproductive and unsustainable because it drains credit from the economy continuously. The colonial administration in British Africa used land taxes to induce the carefree natives to use its currency and engage in financial productivity.
Thus, according to Chartalist theory, an economy can finance with sovereign credit its domestic developmental needs, to achieve full employment and maximize balanced growth with prosperity without any need for sovereign debt or foreign loans or investment, and without the penalty of hyperinflation. But Chartalist theory is operative only in predominantly closed domestic monetary regimes. Countries participating in neo-liberal international “free trade” under the aegis of unregulated global financial and currency markets cannot operate on Chartalist principles because of the foreign-exchange dilemma. Any government printing its own currency to finance legitimate domestic needs beyond the size of its foreign-exchange reserves will soon find its convertible currency under attack in the foreign-exchange markets, regardless of whether the currency is pegged at a fixed exchanged rate to another currency, or is free-floating. Thus all non-dollar economies are forced to attract foreign capital denominated in dollars even to meet domestic needs. But non-dollar economies must accumulate dollars reserves before they can attract foreign capital. Even with capital control, foreign capital will only invest in the export sector where dollar revenue can be earned. But the dollars that exporting economies accumulate from trade surpluses can only be invested in dollar assets, depriving the non-dollar economies of needed capital in domestic sectors. The only protection from such attacks on domestic currency is to suspend full convertibility, which then will keep foreign investment away. Thus dollar hegemony, the subjugation of all other fiat currencies to the dollar as the key reserve currency, starves non-dollar economies of needed capital by depriving their governments of the power to issue sovereign credit for domestic development.
Under principles of Chartalism, foreign capital serves no useful domestic purpose outside of an imperialistic agenda. Dollar hegemony essentially taxes away the ability of the trading partners of the US to finance their own domestic development in their own currencies, and forces them to seek foreign loans and investment denominated in dollars, which the US, and only the US, can print at will with relative immunity.
The Mundell-Fleming thesis, for which Robert Mundell won the 1999 Nobel Prize, states that in international finance, a government has the choice among (1) stable exchange rates, (2) international capital mobility and (3) domestic policy autonomy (full employment, interest rate policies, counter-cyclical fiscal spending, etc). With unregulated global financial markets, a government can have only two of the three options.
Through dollar hegemony, the United States is the only country that can defy the Mundell-Fleming thesis. For more than a decade since the end of the Cold War, the US has kept the fiat dollar significantly above its real economic value, attracted capital account surpluses and exercised unilateral policy autonomy within a globalized financial system dictated by dollar hegemony. The reasons for this are complex but the single most important reason is that all major commodities, most notably oil, are denominated in dollars, mostly as an extension of superpower geopolitics. This fact is the anchor for dollar hegemony which makes possible US finance hegemony, which makes possible US exceptionism and unilateralism.
When China exports real wealth to the US for fiat dollars, it is receiving US sovereing credit in exchange of material wealth in the form of goods. Thus the US trade deficit denominated in dollars is in fact US lending to China through buying Chinese goods on soveriegn credit. China now is a holder of US fiat money and as such is acting as a state agent of the US, with the full faith and credit of the USe behind the US sovereign credit instrument (dollar), which is good for paying US taxes and is legal tender for all debt public and private in the US. Fiat money, like a passport, entitles the holder to the protection of the state in enforcing sovereign credit. It is a certificate of state financial power inherent in sovereignty. Since China does not pay US taxes, the dollars that China recieves can only be used to buy US sovereign debt (Treasuries) through extingusishing the US sovereign creidt instruents (dollars). Through this transaction, China changes its position from that of an agent of US sovereign credit to that of a creditor to the US. This is why China must buy Tresuries with its surplus dollar - to change it s poistion from that of a US agent to that of a US creditor.
The only way for China to become free of this dilemma is to require all Chinese exports to be paid in Chinese currency.
January 5, 2009