DEVS 100 Lecture Notes - Lecture 20: Petrodollar Recycling, Financialization, Debt Relief
25 Nov 2015
School
Department
Course
Professor
Document Summary
1970s oil price spike: creation of opec in 1973. Determined the volume of oil produced to predict the income they would receive by producing oil: spike in oil prices, massive opec revenues. Hundreds of billions of : money invested in private banks, mostly in the us. Recycling money to the south: northern banks lend out deposits to make money, loan billions to states in the south. Cold war politics: not always used for development projects, banks used floating interest rates". Countries that were borrowing did not know if interest rates would. Odious lending fluctuate and by how much: no principles by lenders. Apartheid state: loans spent on unproductive things: Military, corruption, white elephant projects etc: considered safe" because of sovereign debt. Economic crisis of 1980s: interest rates shoot up to reduce inflation. Had to pay enormous money back: leads to recession in the north.
