Power of the Dollar and US Strategic Interests

["John Gelles" <indexed-savings@xxxxxxxxxxxxx>]

William Hummel, in countering Henry Liu's claim
-- that the popularity of the dollar, among nations,
industries, firms and individuals, created hegemony
and near-empire, and that the USA used that hegemony
against the real interest of most of its fans (just listed)
-- to repeat, Hummel countered that the USA was
"not guilty".

            Hummel found the popularity of the
dollar to be a fact -- not a result of malign design.
I agreed with Hummel, in my way, and went on to
discuss the strategic interests of the USA that the
popularity of the dollar might advance.
            I included the potential for the USA to
"monetize" its debt IF (and only IF) it had to.

Hummel interprets "monetization" differently than
I do.
            Warren Rudman and I believe we have
NOT monetized dollar debt when the Treasury sells
notes and bonds in exchange for US dollars (which
are largely backed by the collateral and credit-worthi-
ness of borrowers from banks and other lenders.)
            Rudman and I say we only monetize debt IF
the Treasury spends money it never received by bor-
rowing (including borrowing from its central bank)
and/or taxing or other collections.

Ben Bernanke explained one way to monetize
debt -- the Treasury prints money or spends it
into circulation, as it did in WW II, against
FUTURE borrowing or taxing -- that is, the bonds
it may print are held in vaults and not sold before
there will be money enough to buy them.

In effect, such monetization is backed by expected
growth -- from present production under government
contract, often a cost-plus contract.

Hummel said, specifically: "The point here is that
liquidity is never a problem in a well-managed fiat
money system.  [Here Hummel is right and Greenspan
proves it every day. Hummel goes on:]

        "The call for  MORE  money is really a call
for a more equitable distribution of wealth, which
is what I believe Gelles has been arguing for.
            [signed] --  William F Hummel "

Here Hummel misses the point badly:  The call
for  MORE  spending money for the USA is made
because without it we are waging war on the cheap
and waging peace on the cheaper.

I have never wanted or worried about equitable
distribution of wealth.  Rather I have been pleading
for a high real minimum income for every American
-- especially when they work -- with no worry about
a maximum.  The minimum income would prevent
deflation.  I also want and argued for fully automated
production to raise the supply of necessities -- and so
prevent them from becoming unaffordable, that is to
prevent the kind of inflation nobody defends.

In the particular message I sent earlier on "the de
facto power of the dollar"  I also gave some support
to my PKT and CSL audiences who loathe our "pre-
emptive"/preventive war policies and our contempt
for unfaithful friends:
                            I admitted that China, Russia,
India, Europe and the USA, as real and potential
continental super-powers, might work together
(with a softer lead) to reduce terrorism and put
and end to spreading Islamic fascism.
                            And I admitted that Islamic demo-
crats and near-democrats might end Islamic fascism,
more or less the way red fascism was ended, that is,
without a preemptive war.
                            (Of course Korea, Vietnam and
the Cold War were costly enough in American and
other peoples' lives. Would that Stalin, not Roosevelt,
had died and that Roosevelt had been alive to shepherd
lend-lease through years more of effective application.)

    John Gelles