Dollar-denominated debt is bankrupting the Global South during the Great Inflation
Evidence
The rising price of food and fuel caused by the Great Inflation has pushed the Global South into a debt crisis as gruesome as that of the 1970s and 80s. Having been encouraged for decades to borrow dollars to import raw materials in order to produce goods for export (and also to facilitate the conversion of their oligarchs’ domestic profits into US assets), the governments of the Global South are now being bankrupted by the vastly increased cost of servicing their dollar debts. — Yanis Varoufakis, Technofeudalism, 626
Categorization
- XREF: Echoes the debt-trap and original sin literature (Eichengreen, Hausmann) on developing countries’ dollar borrowing. — connects to: Global South elites also profit from Federal Reserve rate hikes — Clara E. Mattei, Escape from Capitalism, 340; Petrodollar recycling pressured the Global South to accept uniform rules. — Quinn Slobodian, Globalists: The End of Empire and the…, 797; Unequal North-South exchange has drained trillions from the Global South — Andrew deWaard, Derivative Media: How Wall Street…, 61 (+9 more)
- corroborated: 2 independent passages support this claim — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 626
Broader Connections
- Unequal North-South exchange has drained trillions from the Global South
#expands(0.78) — Andrew deWaard, Derivative Media, 61 - Inflation erodes the real cost of fixed-interest debt
#contradicts(0.78) - Fighting inflation transfers wealth from debtors to creditors and is not value-free
#expands(0.75) — Jessica Whyte, The Morals of the Market, 339 - Rising interest rates and falling commodity prices triggered the franc zone debt crisis
#exemplifies(0.72) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 205 - Inflation acts as a class-specific tax benefiting debtors over creditors
#corroborates(0.72) — Mark Blyth, Austerity, 46 - Austerity since colonial times has devastated the global periphery
#expands(0.70) — Clara E. Mattei, Escape from Capitalism, 288 - OPEC’s 1973 embargo inspired the Global South’s New International Economic Order.
#expands(0.70) — Jessica Whyte, The Morals of the Market, 413