Re: [OPE-L] [Jurriaan] Notes on gold

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Thu Oct 13 2005 - 19:22:59 EDT

----- Original Message -----
From: "Jurriaan Bendien" <>
Sent: Thursday, October 13, 2005 3:26 PM
Subject: Notes on gold


Previously I wrote on this topic:

"But maybe there's some new ways to mediate that contradiction..."

One thought I had about it among others was that the ultimate argument the
Fed has, is that "if you guys don't back the US dollar, then we're all down
the tubes", i.e. that in a real crisis situation, other countries would be
either motivated or forced to back the dollar, because if they didn't do
it, the trading circuit would collapse. Thus, any move away from
dollar-denominated international trade could only be a gradual one; any
sudden shift to alternative currencies of a very large magnitude would be
unlikely (in geostrategic policy shifts, the timing is always very
important - as you can see with regard to Iraq; some US strategists argue
the job should have been done earlier, some argue it should have been done
later; similarly, Lenin remarked it was no good being correct beforehand or
afterwards, one had to be correct at the correct time, which is what made
real politics hellishly difficult, never mind the analysis, i.e. what
analysis do you do, at what time). Maybe Mandel would say "den of thieves,
but they stick together".

Just to give you a quick idea of the current role of the US in the world
market, to show you some broad proportions:

estimated US exports of goods and services in 2004: $1.1 trillion
estimated Other US income receipts from abroad $379 billion
estimated US imports of goods and services in 2004: $1.7 trillion
estimated Other US income payments to foreign countries $349 billion
estimated US-owned assets abroad in 2004: $10 trillion
estimated Foreign-owned assets in the US: $12.5 trillion

That's a very big market process, let me tell you that now. And a few
numbers on the EU (regrettably, although eurostat has a lot of nice graphs,
data trees and pictures, it's still a bit difficult for me to get useful
data from straightforward tables for standard measures; it looks to me that
data presentation is fast becoming a science in itself):

estimated extra-EU25 imports of goods and services in 2004 $1.2 trillion
euro (15% from the US)
estimated extra-EU25 exports of goods and services in 2005 $968 billion euro
(24% to the US)
estimated EU25 holdings of foreign FDI stocks in 2001 $1.7 trillion
estimated holdings of FDI stocks by foreigners in the EU25 in 2001 $1
trillion (can't get data on total asset holdings so far).

By the end of 2003, the estimated EU15 direct investment in the US amounted
to US$856 billion, or 62% of total foreign direct investment in the US.
Similarly, estimated US direct investment in the EU15 amounted to US$845
billion, or 47%percent of total US Foreign Direct Investment.  An estimated
3.3 million US jobs were supported by EU15 investment in the US in 2002

 In the case of Japan (I am not much good yet with Japanese data),

estimated Japanese 2004 exports about US$562 billion
estimated Japanese 2004 imports about US$430 billion

A very large part of world trade, of course, occurs within the triad.

The total value of world merchandise trade in 2002 was estimated at $4.9
trillion, and the total value of world commercial services trade in 2002
was estimated at $5.5 trillion (excluding significant re-exports), giving a
total value of world trade of $10.4 trillion.

In 2002, I calculated a while ago that the top ten players in the world's
commercial services trade were:

USA ( 17.4% of world exports, of  14.3% world imports),
Germany (6.2% of world exports, of 9.4% world imports),
Japan (4.2% of world exports, 6.9% of world imports) ,
France (5.5%  of world exports,  4.2% of world imports),
China (2.9% of world exports, of 2.9% world imports),
UK ( 7.9% of world exports, of 6.4% world imports),
Italy ( 3.8% of world exports, of  4% world imports),
Spain (4% of world exports, 2.4% of world imports)
Netherlands ( 3.6% of world exports, of 3.7% of world imports),
Belgium/Luxemburg ( 3.5% of world exports,  3.1% of world imports).

(In addition, Canada represents 2.4% of world exports, and 2.9% of world

Totalling up the figures, in 2002 the world's top ten countries exported 59
percent of the world's commercial services by dollar value, and adding
Canada, the figure is over 61 percent. The top ten countries import 54
percent of the world's commercial services by dollar value.

In 2002, the top ten players in the world's merchandise trade (i.e. traded
tangible goods) were:

USA (10.8% of world exports, of 18 % world imports),
Germany (9.5% of world exports, 7.4% of world imports),
Japan (6.5% of world exports, of 5% world imports) ,
France (5.1% of world exports, 4.9% of world imports),
China (5.1% of world exports, 4.4% of world imports),
UK (4.3% of world exports, of 3.6% world imports),
Canada (3.9% of world exports, of 3.4% world imports),
Italy (3.9% of world exports, of 3.6% world imports),
Netherlands (3.8% of world exports, 3.3% of world imports),
Belgium (3.3% of world exports, 2.9% of world imports).

So, in 2002 the world's top ten countries exported 56 percent of the
world's goods by dollar value, and they imported about 56.5 percent
of the world's goods by dollar value. That's "globalisation" for you.

I realise you would like an in-depth, sophisticated dialectical analysis of
the world market, starting off with the law of value, its modifications in
the course of market expansion, and then integrating various aspects of
capital finance etc., but, to do that takes a lot of time, and I haven't
got that just now, I mean, I'd have to do a lot of work on it, if I wanted
go  beyond verities and platitudes. Nor do many academics have the time
actually, they are often forced to spend more time on admin, management and
teaching than they can shut out the world for a bit, and spend time on
substantive research. But maybe somebody out there is inspired to do this,
and enlighten us all.

In terms of my previous argument about Marxian dialectical analysis, the
project really has to begin with assimilating and analysing a mass of
factual material, or at any rate, some objective reality (as well as a
critique/conspectus of the current theories about foreign trade, as a guide
to the data; but this is to a large extent already done in the literature,
if you get it). Otherwise you would have only a dialectical formalism, a
dialectic without content, a dialectic of pure thought, rather than a
dialectic operating in the real world. Maybe a creative mental dialectics
is very useful, but as I said, this could end up any place, unless
by the facts of experience. Or, you could just have a dialectical mess, a
"morass" or "mire" of contradictions to borrow Lukacs's phrase. I've had
that problem before. I do aim to study Hegel more myself at some point from
good sources, but I haven't even enough hours for that just now.

I suppose some Marxists might take a dim view of "vulgar" and "superficial"
things like data and empiria, believing they've already got the "insuperable
dialectical Theory process that can unlock the secret of the march of world
history". Maybe they're right, who knows? E.P. Thompson was a bit skeptical
of that. But anyway for an ordinary person like me, dialectical thought is
something that can only develop through practical experience (aided by
theory), it is a lot of work that has to be done. In the 1872 Preface to the
French edition of Das Kapital Vol. 1, Marx emphasised in this regard that
"There is no royal road to science, and only those who do not dread the
fatiguing climb of its steep paths have a chance of gaining its luminous
summits". I've noticed the odd exception to that, but in general it seems
to be true, at least for mere mortals like me. The mind might soar in flight
of  fancy, but meanwhile you've got to deal with everyday life as well,
who you are, rather than a God dancing from one soul to the next.



In my world, it all makes me think of that Pink Floyd number:

And if the dam breaks open
many years too soon
And if there is no room
upon the hill
And if your head explodes
with dark forebodings too
I'll see you on the dark side of the moon.

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