The Hidden Hand of American Hegemony
Subtitle: Petrodollar Recycling and International Markets (Cornell Studies in Political Economy)
Publisher: Cornell University Press
Published: September 1999
Language: eng
Format: Hardcover
Number of pages: 177
ISBN-13: 9780801428845
Subjects: International relations; International trade; Petroleum & oil industries; Political economy; Petroleum products; International - General; International Finance; Petroleum Industries (Economic Aspects); Politics/International Relations; Business & Economics; Politics / Current Events; USA; Economic History; International - Economics; International Relations - General; Prices; Industries - General; Arab countries; Balance of payments; Investments, Arab
First sentence: The successful resolution of the disequilibrium in global balance of payments caused by the oil price revolution was one of the most remarkable achievements of the postwar era.
Description: "Between 1973 and 1980, the cost of crude oil rose suddenly and dramatically, precipitating convulsions in international politics. Conventional wisdom holds that international capital markets adjusted automatically and remarkably well: Enormous amounts of money flowed into oil-rich states, and efficient markets then placed that new money in cash-poor Third World economies. This massive reallocation of wealth is labeled petrodollar recycling."--BOOK JACKET.

"David Spiro has followed the money trail, and the story he tells, based on interviews and a painstaking accumulation of fragmentary evidence, contradicts the accepted beliefs both in the particulars and in broad outline. Most of the sudden flush of new oil wealth did not go to poor oil-importing countries around the globe.

Instead the United States made a deal with Saudi Arabia to sell it U.S. securities in secret, a deal resulting in a substantial portion of Saudi assets being held by the U.S. government. With this arrangement, the U.S. government violated its agreements with allies in the developed world. Spiro argues that American policy makers took this action to prop up otherwise intolerable levels of U.S. public debt.

In effect, recycled OPEC wealth subsidized the debt-happy policies of the U.S. government as well as the debt-happy consumerism of its citizenry."--BOOK JACKET.