Michael Hudson: Postponing the World’s Financial Winter, But For How Long? Iran’s MAD Standoff with the Rest of the World
But now that the United States has de-industrialized and become debt-ridden, it has abandoned and indeed reversed these rules that served it eighty years ago. What U.S. officials call national security strategy is how to recover and maintain America’s control over other countries by weaponizing the dollar-centered financial system and its foreign trade. And instead of protecting other countries and their economic sovereignty, its attempt to enforce its dominance disruptively and militarily has become a threat to the entire world’s security. And unlike the balance of power that Mutually Assured Destruction had established, most other countries have not mounted any symmetrical check to U.S. bullying by isolating themselves from America’s weaponization of its trade and financial relations. …
By acting as a major catalyst for reshaping the international order, Iran has made itself a world power – not a major military power, or even an economic power as an investor nation or market, but a moral and political power pushing the world to create an alternative international order. The emerging Global Majority is destined to be led by China, Russia and Iran providing the core for a region-wide self-sufficiency in Asia and the Global South, so that countries in these regions no longer need to depend on the U.S.-centered West for their energy, fertilizer, chemicals, credit and other essentials.
CounterPunch: Postponing the World’s Financial Winter, But For How Long? Iran’s MAD Standoff with the Rest of the World
Photograph by Nathaniel St. Clair
Announcing that “A whole civilization will die tonight,” Donald Trump threatened on April 7, 2026, to destroy “every bridge in Iran” and “every power plant … burning, exploding, and never to be used again.” His intention to continue committing war crimes is driving the world toward a Financial Winter as devastating as the Great Depression. Iran’s April 8 response called his bluff, laying down the terms for ending the conflict and opening the Strait of Hormuz. Oil-importing countries will need to compel U.S. and Israeli compliance with these terms in order to avoid an economic crisis.
We are seeing the economic version of what the 1960s called Mutually Assured Destruction (MAD).[1] The term referred to the military standoff that avoided the global Nuclear Winter that would have occurred if the world’s leading powers had used atomic weapons against each other. The possession of atomic bombs by both the United States and Soviet Union assured that they would not attack each other as long as the arms race maintained nuclear parity. The resulting balance of terror made the U.S.-Soviet Cold War relatively peaceful as far as fighting among the world’s most heavily armed adversaries was concerned. Their mutual restraint enabled America to wage its wars in Southeast Asia and Latin America without threatening world conflagration.
Today’s world is threatened with an economic kind of global collapse. Iran is defending itself against the prospect of U.S. and Israeli military attack by threatening to destroy OPEC’s oil and gas trade if its survival as a sovereign country is endangered. This threat is confronting the world with a fateful choice: Either countries will suffer a deep depression if Trump follows through on his threat to destroy Iran and seize its oil – in which case Iran’s retaliation will destroy OPEC’s energy trade on which many countries have become dependent – or they must actively move to prevent the U.S. attack.
In the 1960s, it was understood that an atomic attack by either of the major powers would not be survivable by them in meaningful terms. But today’s economic version of MAD has no such restraint on America’s floundering attempts to reverse the loss of its economic power that has left it with few major levers to exert control over other countries. Its main leverage is its ability to threaten countries with economic and financial chaos, by closing off the U.S. market to their exports and by blocking their access to oil and gas from Russia, Iran and (until just recently) Venezuela in its drive to force reliance on its own energy supplies and Arab OPEC oil under its control.
This threat of trade disruption has worked best against America’s closest allies. President Trump’s “Liberation Day” tariffs of April 2, 2025 imposed exorbitant levies that Trump offered to relax on the condition that other countries sign “giveback” agreements in the form of agreeing to impose trade and financial sanctions on America’s designated enemies, headed by Russia and Iran, and to shift their oil purchases to the United States.
This is not the first time that U.S. strategists have broken the rules of international relations that America itself had put in place in 1945 to shape the post-World War II economic order. Controlling 75% of the world’s monetary gold, it dictated creditor-oriented rules of international finance, and also rules of free trade as a means of breaking up Britain’s imperial preference trade restrictions. These rules prevented other countries from following protectionist policies to protect their agriculture and industry as the U.S. itself was doing. The United States also created a global military presence, promising to protect the world against the specter of Soviet military attack and to prevent countries enacting strong government controls or socialist policies that would pose an alternative to the U.S.-backed system of international finance, trade and private investments.
But now that the United States has de-industrialized and become debt-ridden, it has abandoned and indeed reversed these rules that served it eighty years ago. What U.S. officials call national security strategy is how to recover and maintain America’s control over other countries by weaponizing the dollar-centered financial system and its foreign trade. And instead of protecting other countries and their economic sovereignty, its attempt to enforce its dominance disruptively and militarily has become a threat to the entire world’s security. And unlike the balance of power that Mutually Assured Destruction had established, most other countries have not mounted any symmetrical check to U.S. bullying by isolating themselves from America’s weaponization of its trade and financial relations.
In the present crisis Iran’s main defense to the U.S. attack has been to block OPEC oil and gas through the Strait of Hormuz, and even to threaten to directly destroy OPEC production. These acts have confronted the world’s oil-importing countries with a crisis of their economies if they do not act to counter the U.S. threat to Iran’s sovereignty, which indeed is threatening their own economic and financial sovereignty.
America’s attempts to preserve its ability to weaponize the world’s oil trade …
Caution is advised with this Hudson guy;
he’s a commie disguised as Cassandra…
irony.
Hudson is a marxist economics type. There is some usefulness in that approach. However you do not have to be a marxist to perceive what is what in the Iran war. Speaking of a ‘whole civilization dying tonight” had to come from the Jew Mind, not the dim witted Trumpstein.
This Jew hyperbole expresses The Jew desperation that its existence hangs by a thread today, especially with the Persian statement, similar to Next Year in Jerusalem, that it will go full force if attacked again…. on Israel and the “comprador”, another marxist term for the Arab gulf vassals of the USA, and , ahem, wipe them all out, or as Trumpstein would parrot, annihilate the Amalek.
Trump is a Jew
Germany is short 1.4 million homes. However, the government is investing 233 million euros in Ukraine. You have to set priorities: first resolve the international housing crisis, then ignore your own. https://i.ibb.co/FL2RMPDP/money.png
https://ua.news/en/ukraine/u-donki-mera-dnipra-imovirno-znaishli-villu-na-ozeri-komo-za-8-4-miliona-ievro
Ukraine Gets 90 Billion: The Scandal and the Consequences!
The EU is providing Ukraine with 90 billion euros in interest-free loans. There is no repayment date. The interest amounts to around 3 billion euros per year. Germany alone must pay around 750 million euros per year just for that. The media is keeping this scandal under wraps.
It is one of those political events that are dutifully reported—but in such a way that you are no wiser afterward than you were before. The European Parliament has approved a €90 billion loan package for Ukraine. No interest for the recipient. No specific repayment date. Financed by new EU debt. And the leading German media outlets? They report on the amount—but hardly on the structure behind it.
Where does the money come from?
Short answer: It’s being borrowed fresh. The EU is taking on debt on the international capital markets—in the form of joint EU bonds—and passing this money on to Ukraine as a loan. This borrowing is secured by the so-called “headroom,” i.e., the remaining financial leeway in the EU’s current Multiannual Financial Framework (2021–2027).
Previously, the EU had planned a different approach: to tap directly into the approximately 300 billion euros in frozen Russian state assets. But this plan failed—in part due to Belgian demands for unlimited guarantees, since a large portion of these funds is held at the Euroclear clearing house in Brussels. So they switched to Plan B: joint debt.
90 billion euros in loans for 2026 and 2027—of which 30 billion is for budgetary aid and 60 billion for armaments and defense. This amounts to two-thirds of Ukraine’s estimated total needs during this period.
Why doesn’t Ukraine pay interest?
This is where it gets interesting—and expensive. Because, of course, the EU pays interest on the bonds it issues. Who pays this interest? The EU budget. And who finances that? The member states—including Germany.
Ukraine receives the loan interest-free. The interest burden is borne by the EU. The Commission itself estimates these costs at around 1 billion euros in 2027—and thereafter at about 3 billion euros per year, for the foreseeable future. That is just the interest payments. The principal itself—the 90 billion—is entirely separate from that.
What the headlines leave out
The fact that the loan is “interest-free” for Ukraine sounds like a favor. But it is a hidden subsidy paid for by EU taxpayers: The interest is paid from the EU budget—that is, by Germans, French, and Dutch citizens. No headline reads: “Germany is co-financing Ukrainian interest payments for the foreseeable future.”
When does Ukraine have to repay the loan?
That is precisely the central question—and the answer is as remarkable as it is rarely discussed: Ukraine is obligated to repay the principal only if it receives war reparations from Russia.
This is not a target date. It is a condition whose fulfillment is entirely uncertain. Russia has not acknowledged any obligation to pay reparations. No international tribunal capable of enforcing such payments exists in the necessary form. Even in the event of a peace agreement, reparations of any significant amount would be politically almost impossible to enforce.
“Realistically speaking, the loan to Ukraine is therefore effectively a grant from the Union.” — Prof. Hanno Kube, University of Heidelberg
The only other repayment obligation arises in the event of serious violations of the rule of law by Ukraine—particularly in cases of corruption. This is a clause that is difficult to enforce in practice. De facto, this “loan” is largely a grant.
Is it even permitted for the EU to borrow on behalf of third countries?
This is where the legal minefield begins—one that the German press has largely ignored. The loan is based on Article 212 of the TFEU, which permits economic and technical cooperation with third countries. The EU has previously assisted Ukraine on this basis—though nowhere near on this scale.
The real problem is refinancing. To raise debt on the capital market, the Multiannual Financial Framework must be amended—and unanimously. Hungary, the Czech Republic, and Slovakia refused to participate. The solution: the “enhanced cooperation” procedure, which allows a majority of member states to proceed without unanimity.
What falls by the wayside in this process is the clear anchoring in the Own Resources Decision—that is, the constitutional-like foundation of EU finances. Unlike the NextGenerationEU (NGEU) COVID-19 recovery fund, where member states’ liability shares were precisely regulated, this remains strikingly vague in the Ukraine package.
A Constitutional Gray Area
The EU’s Own Resources Decision was amended for the €750 billion NGEU package—including clear liability shares for member states. In the case of the 90-billion-euro Ukraine package, this decision is deliberately left untouched. According to constitutional law expert Hanno Kube, there are “no concrete plans” for long-term repayment. This is no trivial matter—it is structural uncertainty regarding a liability in the hundreds of billions.
What the German Press Is Keeping Quiet
Reporting in Germany’s leading media outlets follows a pattern: the total amount is stated, the humanitarian and security-related justifications are laid out in detail, and then—silence. The questions that a normal bank advisor would ask any borrower are not asked:
When exactly will the loan be repaid? What happens if Russia never pays reparations? How much of the liability does Germany actually bear? Who will cover the interest if the EU budget is insufficient?
Instead, the framing dominates: Ukraine = good, support = necessary, criticism = suspicious. That may be politically understandable. Journalistically, it is a failure. Because anyone who calls 90 billion euros a “loan” without explaining the terms is not providing information—they are engaging in public relations.
3 billion euros in interest payments per year starting in 2028—from the EU budget, meaning from the taxpayers of the member states. Germany contributes around 25% of the EU budget, meaning approximately 750 million euros in interest annually—for this package alone.
A scandal—but which one?
Is it a scandal to help Ukraine? That is a political decision that can and should be debated. But that is not the real scandal.
The real scandal is the packaging. A de facto grant is labeled a loan. An unclear liability structure is sold as “secured.” Long-term interest burdens for EU citizens are hidden in the fine print. And the public—who will ultimately pay for all of this—is not being given the opportunity to form an informed opinion.
“That is precisely the central question—and the answer is as remarkable as it is rarely discussed: Ukraine is obligated to repay the principal only if it receives war reparations from Russia.”
I think I am seeing a pattern here like Versailles. Force the victors to totally extract every shekel out of the vanquished.
I think I understand more or less most things ongoing these days…Jews, Israel, Trump’s war for the Jews, mud-flood, BRICS’s threat to the dollar denominated finance system of the Atlanticist cabal, and some related details.
But I do not understand why Europe is abetting the US attack on Russia. OK, it is Western Imperialism and traditional Jew hatred of Russia going back hundreds of years. But the Germans allowed US destruction of Russian gas pipeline to Europe…worth probably a billion dollars and counting…Nordstream, etc. Why and how? Is it just caving in to Trump/Jew hatred of Russia?
Don’t they appreciate how Russia is legally permitted to retaliate against them, how a couple Oreshniks could make for a few bad days in Belgium, or England? Are they fools? Has Trumpstein promised to pay their bills? How do they reckon that they can militarily stand up to Russia, since Nato is a joke? Hasn’t Trump made clear that they are on their own? Or has He, Master of you name it…made that clear? I don’t get it.
Felix, you know lots about all of this, please help.
Video description: “Fewer crimes and less violent crime
in Germany!” Really? With these tricks, the 2025 crime
statistics are pulling the wool over the public’s eyes.
Activate available English (AI) audio track.
https://www.youtube.com/watch?v=5NhQ4_DFZBY
https://archive.ph/OA4Wz
At least there’s some good news: “Free Timmy”
has (finally) succeeded—at least for now.
https://www.youtube.com/watch?v=Qm7fQXhj1kw
In German, ‘Segelohren’ is the everyday word for protruding ears. It literally means ‘sail ears,’ because the ears stick out like sails. Geoff has some too—practically mouse ears, which some young ladies would surely find “extremely cuddly.”
However, they don’t give him any exceptional oceanographic expertise. If they did, he’d know that cities like Bremerhaven, Wilhelmshaven, and Cuxhaven are all located on the North Sea coast and have a combined population of 250,000.
https://www.youtube.com/watch?v=2VS3KSOPBlM
Geoff has invited a highly knowledgeable Bavarian woman, whose ears, however, are covered by headphones, and who, due to her wisdom, addresses him as “Jeff.” She insists that Bavaria’s main problems lie in climate change and right-wing populism.
https://www.youtube.com/watch?v=nHGL8ZZmQ4I
Hudson’s article is good and regardless of Hudson’s left wing (commie?) dunno. But what is a Commie now in terms of traditional pedigree? His overall sketch of the current world-political and economic reality seems OK.
For WN today and the working and middle classes….there seems to be hard times coming. Europe is in trouble, Nato is a joke, and South Korea and Japan are very vulnerable to oil politics. BRICS is formidable, but not a huge danger to Atlanticist (read American) hegemony. Still Trumpstein has handed the US over to the dems/muds and Europe is politically probably going to move soon to the right, despite Orban’s mistakes. Still, Europe is in large demographic trouble, not greater than the US with our 57% White demographic disaster. The next election in November is going to the Dems-Muds although with at least diminished Jew control. Trumpstein is dead-man walking right now and ditto the GOP. Let the Dems take over and break the bank, the liberal social contract (straitened budgets) and race taboos of Equality Now!. More War…I saw Jeffrey Sachs a couple days ago state that the Iran war has already cost us 6 or 7 trillion, with a T. Compliments of the Christ-Trumpstein drive to World Conquest for Donny. Onward with the Contradictions. Give Him a Nobel,
Will China, Russia, Iran alliance make a large difference soon? Probably a small difference depending on how severe the Depression will be. Locally, SF Bay Area, I see reports on cutbacks to mud programs. If it gets really bad, the muds will be in revolt and the cops will be in trouble. BRICS will eventually damage the Atlanticist/Jew control and thus this is a good thing.
The only thing that is going to help us is crisis when the muds start mau-mauing in the streets and frightening the soccer moms, etc.