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Bretton Woods established a post-war international monetary system, including the IMF and World Bank's original missions:
-- the former to establish stable exchange rates linked to the dollar and bridge temporary payment imbalances; and
-- the latter to provide credit to war-torn developing countries. Both bodies, in fact, proved hugely exploitive, their purpose to this day.
In his book "Super Imperialism: The Economic Strategy of American Empire" and other writings, Michael Hudson explained how the dollar glut finances US imperialism and corporate interests by:
-- circulating surplus dollars globally to further financial speculation and corporate takeovers;
-- global central banks "recyl(ing) these dollar inflows (into) US Treasury bonds to finance the federal US budget deficit; and most important the military character of the US payments deficit and the domestic federal budget deficit."
In other words, dollars finance US corporate takeovers, speculative excesses creating bubbles and global economic crises, as well as America's reckless spending, militarism, imperial wars, hundreds of bases worldwide, and overall belligerence and exploitation at the expense of democratic values and social justice.
Sooner or later, however, excesses erode confidence and produce change, especially today with the Federal Reserve sacrificing dollar strength to bail out Wall Street at the expense of productive economic growth and stability. The greater the dollar erosion, the less likely foreign investors will tolerate buying bad assets, giving America a free lunch to finance counterproductive policy.
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