In the years that followed, US budget deficits began to grow as a result of the massive military spending it was using to violently suppress burgeoning struggles for national sovereignty around the world, which were seen as obstacles to US capital expansion into foreign markets.
When this ballooning trade deficit caused gold to begin flowing back to Europe, the US broke the dollar-gold link in í71. At the time, no country was willing to call the USís financial bluff, since crashing the dollar would have devastated the export industry in surplus countries
- I can understand why war leads to a budget deficit. But not a trade deficit.
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