ABSTRACT: Given the magnitude of capital and financial flows internationally it is obvious that attempts to comprehend the global mechanisms of ‘uneven development’ or imperialism in today’s world would have to address this dimension. However, a peculiar feature of the present international economy is that the leading ‘hegemonic’ country in the sense of the country whose currency
enjoys the status of ‘international money’ has a large and mounting external deficit which it finances by issuing debt in its own currency, while absorbing savings and capital from the rest of the world. The US can be seen to be at the apex of a pattern of triangular payments with large and growing deficits with major trade partners like Japan and China and surpluses with countries in what we call the periphery of open liberalized emerging market countries (the debtor countries of Latin America). By precipitating a shift from assets denominated in domestic currency to those denominated in dollars, capital flight from these countries acts like a safety valve for the international monetary system hinged on the piling up of dollar liabilities. Critical to the analyses is the privileged role of dollar as an international reserve currency with the US playing the role of a financial intermediary internationally.