[FooBarBizBazz]

I posted the interview in a sibling post to yours.

But yeah. What does Graeber mean?

The argument would go something like --

Many countries are in debt to the United States (immediate question: Isn't the US in huge debt to China?), which drives up demand for US dollars (since everyone needs to pay those back), which makes the dollar strong. As a result, if you have access to these dollars at low interest rates (i.e, are a bank), you can get lots of stuff from other countries "for free". But a strong dollar also has the effect of destroying domestic industry, because it makes exports too expensive for anyone to buy.

So he's saying "finance" is all these institutions with access to dollars, and "real estate" is a bunch of other institutions that are one more step removed from the Fed.

Something like that.

Like, are you a cloud provider, or do you run a lot of cloud jobs? Either way, you're "into the cloud", but you're on opposite sides.

That's about as much sense as I can make of it.

Or maybe it's all bullshit. Which would be funny, given the other things Graeber has written. I don't know.

I do notice it's weirdly aligned with RT's narrative. Not that that means it can't also be true.

[imtringued]

>Many countries are in debt to the United States (immediate question: Isn't the US in huge debt to China?),

The US is in huge debt to the rest of the work because that is how a reserve currency works. You issue currency, in this case USD can only be created through debt, when it leaves the country to enter the world economy there is not enough USD in the US so the government has to do deficit spending or tax cuts (i.e. never retrieve the money it created).

[FooBarBizBazz]

Let's see if I can expand and work through what you wrote. Someone else may need to correct parts.

So the Fed/Treasury passes over the void, and in this vacuum forms a dollar and a T-bill, a particle/antiparticle pair. In this transaction, the Treasury sells a debt obligation (the T-bill), which someone buys with dollars. Then again, and again: We now have a few T-bills and dollars.

There are a few purchasers involved -- a few places to which T-bills flow, and from which dollars flow.

One: A T-bill flows to China. A dollar flows in the opposite direction (they used it to purchase the T-bill).

Another: The Federal Reserve buys a T-bill. This is "quantitative easing", or colloquially "money printing" (as it can be done within the current system). The Federal Reserve gets the T-bill, and the Treasury gets dollars, which then fund US government spending.

The T-bill/dollar current to China is superposed with an opposite current: Simultaneously, a different stream of dollars impinges on China, prompting another current of cargo ships in the opposite direction. These carry iPhones, and flip-flops, and everything else sold at big-box stores.

Enter countries in the US / IMF / World Bank sphere. These have dollar denominated debts (they used the loans to build (hopefully useful) infrastructure). Now they do something to acquire dollars, like accept a stream of tourists, or export coltan or palm oil. In the case of the raw materials, some go to the US (palm oil to food processors), and others to China (coltan to whoever makes tantalum capacitors, which eventually end up in iPhones).

In a net sense, then, dollars flow into the "developing" world, and resources flow out to the West, with those needing industrial steps of the "value chain" traveling via China.

And each of those dollars has a corresponding T-bill "antiparticle", held either in China (or another country), or at the Fed. This prompts another flow of dollars to the holders of all those T-bills, which we call interest. Those dollars now, can come from the sale of yet more T-bills.

Now here I realize that my metaphor is wrong. T-bills and dollars only exist in "pairs" when they are created by a QE transaction. Other T-bills attract dollars from outside (e.g. those sold to China).

Finally, I have left out the commercial banks. I'll need to work fractional reserve banking into this somehow.

This is all becoming pretty complicated. But it still feels like a simplified stock-and-flow model is within reach...

[slaymaker1907]

A big part of the issue is because the US effectively controls the world's money printer due to the use of USD as a reserve currency. This necessitates a trade deficit so that other countries can actually have access to USD.

[imtringued]

The solution to that problem would be the introduction of regional bancors. The EU needs one for internal use. Technically the euro is a very "shitty" bancor which rather than being used as a unit of account, was directly adopted as a currency in each member state. In theory each country should have had its own branch euro which are then exchanged via the bancor. i.e. regional currencies. The bancor is actually just a barter exchange for currency. I mean that is what it boils down to.

https://en.wikipedia.org/wiki/Barter#Exchanges