A Critical Essay

 A Scene from Reality: When the Fed Sneezes, the World Catches a Cold

On January 29, 2026, U.S. President Donald Trump announced the nomination of " Kevin Warsh " to chair the Federal Reserve (America's central bank) , Within hours:

-  Gold prices plummeted ~5% (worst single day since 1980)

- The "Turkish lira" depreciated 2.3% against the dollar

- Egyptian sovereign bond yields spiked (borrowing costs increased)

- Gulf stock markets declined across the board

The Question : What connects an internal American administrative decision to the price of bread in Cairo, a civil servant's salary in Riyadh, or a small business loan in Amman?

The Simple Answer : Everything.

The Complex Answer : This essay.

 The Problem : Why Are We Absent from This Conversation ?

When searching for in-depth Arab analyses of Federal Reserve decisions, you will find :

- Literal translations of Bloomberg and Reuters reports

- Superficial summaries ("The Fed raised rates... markets declined...")

- Citations of Western experts without any critical context or Arab perspective

- Near-total silence from Arab research centers
 

The Paradox : The Arab world possesses :

- Oil reserves priced in dollars

- Massive sovereign debts denominated in dollars (Egypt, Jordan, Lebanon, Tunisia)

- Financial markets organically linked to dollar flows

-  Rentier economies dependent on dollar stability
 

Yet we consume Western analyses as "spectators", not as producers of alternative critical knowledge.

The Central Question :  Why this silence?

 Deconstructing the Problem: Three Structural Causes

 Cause One: The Technical Illusion ("Economics is for Economists Only")

A prevailing belief exists that "monetary policy" is a "neutral technical subject" requiring specialized academic credentials. This is a "manufactured illusion" produced by academic and financial elites to protect their knowledge monopoly.

The Truth : Monetary policy is "not neutral science", but "political decision-making" par excellence:

- Who benefits from lowering interest rates? (Large borrowers: corporations, real estate developers)

- Who suffers? (Small savers, retirees)

- Who makes the decision? (An unelected financial elite)

Historical Example : In the early 1980s, Fed Chair "Paul Volcker" raised interest rates to 20% to "break inflation." The result:

- Unemployment jumped to 10.8% (6 million jobless)

- Labor unions collapsed (unable to negotiate)

- Wall Street celebrated (inflation = enemy of the wealthy)

Was this a "neutral technical decision"? Or "class warfare" disguised as numbers?

As economist "Joseph Stiglitz"  argues: "Monetary policy is never neutral—it is always a choice about who bears the burden of adjustment." (Stiglitz, 2012, The Price of Inequality).

Cause Two: Epistemological Hegemony ("We Read Through Their Eyes")

When an Arab analyst writes about the Fed, they typically:

- Cite "Martin Feldstein" or "Lawrence Summers" (American economists)

- Use "their terminology" without critical Arabization (Quantitative Easing, Tapering)

- Accept "their analytical framework"  (New Keynesian, Monetarist) without interrogation

The Problem : These experts do not write from a vacuum, but from positions of power:

- They served in U.S. administrations (advisors to the White House, Treasury, the Fed itself)

- They work for investment funds (BlackRock, Goldman Sachs)

- They write—consciously or not—to protect U.S. financial system interests

Example : When Silicon Valley Bank collapsed in March 2023, Bloomberg wrote:

"An isolated crisis, no cause for concern about the banking system"

Two months later: Two more banks collapsed, and the Fed was forced to inject $300 billion in emergency funds.

Question : Was Bloomberg lying ? No—it was reassuring investors (its functional role). 

But: Is the American investor's interest = the Arab citizen's interest? Absolutely not.

Anthropologist "David Graeber" observed: "Economic 'expertise' often serves to mystify power relations rather than illuminate them." (Graeber, 2011, Debt: The First 5,000 Years)

 Cause Three: Absence of Research Infrastructure

Where are the Arab research centers specialized in analyzing global monetary policy?

- Centre for Arab Unity Studies (Beirut): Excellent political analysis, but rarely delves into monetary depth

- Egyptian Institute for Studies (Cairo): Closed by political decree

- Al Jazeera Centre (Doha): Focuses more on geopolitics than economic-financial analysis

- Gulf centers (Abu Dhabi, Riyadh): Produce excellent reports, but confined to oil and energy

The Result : When a monetary earthquake occurs (like Warsh's nomination), we resort to the same Western sources that analyze from their own interests' perspective.

 Why Should We Care? Four Practical Reasons

 Oil Price = Dollar Price

Oil has been priced in dollars since the "Bretton Woods Agreement" (1944) and the "Petrodollar Deal" with Saudi Arabia   (1974) .

The Equation:

- If the dollar rises → oil becomes "more expensive" for foreign buyers → demand falls → price drops

- If the dollar falls → the reverse

Example: In 2022-2023, the Fed aggressively raised rates → the dollar surged 15% → oil fell from $120 to $70/barrel → Gulf states lost billions in revenue.

Question: Is this an "internal American decision"? Or  indirect economic aggression ?

Economist "Michael Hudson" argues: "The dollar's role as reserve currency allows the U.S. to export its economic problems to the rest of the world." (Hudson, 2003, Super Imperialism)

 Sovereign Debt = Dollar Trap

Egypt owes "$165 billion" in external debt. When the Fed raises rates:

- Refinancing costs increase (new interest is more expensive)

- The Egyptian pound depreciates (investors flee to higher-yielding dollars)

- Imported inflation spikes (expensive dollars = expensive imports = higher prices)

The Result : The Egyptian citizen "pays the price for a decision" made by 12 people in Washington (FOMC members) who likely cannot locate Cairo on a map.

This dynamic is what legal scholar "Katharina Pistor" calls the "legal privilege" of dollar debt: "Dollar-denominated debt creates structural dependency that transcends voluntary market relations." (Pistor, 2019, The Code of Capital)

 Foreign Investment = Destructive Volatility

"Hot money" flows into emerging markets when:

- U.S. rates are low (investors seek higher returns in Turkey, Egypt, Saudi Arabia)

And flees when:

- U.S. rates are high (they return to the "safe" dollar)

Example : In 2013, Fed Chair "Ben Bernanke" announced QE tapering. Within weeks:

- Indian rupee collapsed 20%

- Brazilian real fell 15%

- Turkey and Indonesia entered crisis

This is called "Taper Tantrum"—and may recur now if Warsh implements his promised balance sheet reduction.

Economist "Dani Rodrik" notes: "The global financial system operates for the benefit of advanced economies, with emerging markets bearing the adjustment costs." (Rodrik, 2011, The Globalization Paradox)

 Global Inflation = American Export

When the Fed prints trillions of dollars  (as it did 2020-2021), this money doesn't stay in America:

- It flows globally (via trade, investment, loans)

- Creates excess demand for goods

- Ignites global inflation

Then: When the Fed raises rates to "fight inflation," it's fighting inflation it exported.

The Irony: America exports inflation, then blames others for poor economic management.

Naomi Klein observes: "Monetary expansion in core economies creates crisis conditions in periphery economies, which are then exploited for structural adjustment." (Klein, 2007, The Shock Doctrine)

 What Should We Do? From Critique to Construction

I'm Not Calling for "Dollar Boycott" (currently impossible)

But for "Epistemological Independence": Producing Our Own Analyses

First Step: Break the "Technical Neutrality" Illusion

- Monetary policy = politics (in the full sense)

- Every economic decision = distributional decision (who wins, who loses)

- Economic experts are not neutral—they have agendas and interests

Second Step: Build a "Critical Thinking Collective"

- We don't need massive research centers (now)

- We need a network of independent researchers:

  - Young economists (dissatisfied with prevailing discourse)

  - Critical thinkers (philosophers, sociologists, historians)

  - Investigative journalists (tracking money and interests)

Third Step: Produce Alternative Knowledge

- Quarterly reports: Monitoring monetary policy's impact on the Arab world

- Simplified guide: Explaining to ordinary citizens how Fed decisions affect their lives

- Arabized terminology : We reject borrowing—we create conceptual equivalents

 Conclusion: An Invitation to Participate, Not Spectate

This essay is not a final pronouncement, but an invitation to dialogue.

I am not a specialized economist (and this may be an advantage, not a defect):

- I carry no financial institutions' agendas

- I seek to satisfy no funding bodies

  - My sole purpose: Opening serious Arab discussion about how we produce our own economic knowledge, instead of importing it ready-made

Questions I Pose to You:

 Do you know how a Fed decision affects your salary, loan, investment?

Have you ever read a deep Arab analysis (not a translation) of an American monetary decision?

 Do you believe Arab silence is a conspiracy, negligence, or epistemological hegemony?

 What if we built together an informal think collective to monitor monetary policy?

If you are An economist frustrated with prevailing discourse, A journalist seeking deep economic investigations, A reader wanting to understand (only):

We won't wait for "official" research centers (they may never come). 

We won't wait for the "certified expert" (they're part of the problem). 

We'll build our knowledge -now- through collaboration, critique, and intellectual rigor.

Naif A. Shaaban

 Independence forum for political & strategic Studies – Damascus
 

 References & Further Reading

Critical Western Economists (Our Allies in Critique):

- Graeber, D. (2011). Debt: The First 5,000 Years. Melville House.

- Hudson, M. (2003). Super Imperialism: The Economic Strategy of American Empire. Pluto Press.

- Klein, N. (2007). The Shock Doctrine: The Rise of Disaster Capitalism. Metropolitan Books.

- Pistor, K. (2019). The Code of Capital: How the Law Creates Wealth and Inequality. Princeton University Press.

- Rodrik, D. (2011). The Globalization Paradox: Democracy and the Future of the World Economy. W.W. Norton.

- Stiglitz, J. (2012). The Price of Inequality: How Today's Divided Society Endangers Our Future. W.W. Norton.

Arab Thinkers (Building on Our Tradition):

- Bin Nabi, M. (1954/2003). Conditions of Renaissance [Shurūṭ al-Nahḍa]. Damascus: Dār al-Fikr.

- El-Messiri, A. (2003-2009). Encyclopedia of Jews, Judaism and Zionism [Epistemological critique applicable to all hegemonic knowledge]. Cairo: Dar al-Shorouk.

- Taha Abdurrahman. (2006). The Spirit of Modernity [Rūḥ al-Ḥadātha]. Beirut: Arab Cultural Center.

Next Article Preview:

A detailed analysis of Kevin Warsh: Who is he? What does he want? How will he impact our markets?

Until Then: Start reading Fed reports directly (available free on their website), and ask yourself: "Whose interests are they serving?"

This essay does not provide investment advice, but critical analysis of prevailing economic discourse.

Licensed under Creative Commons (CC BY-NC-SA 4.0): May be shared and modified provided attribution, non-commercial use.

BY: Naif Ayoub Shaaban