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In December I wrote an essay about four
organizations with the real power in this world. They were The Council on Foreign
Relations, The Trilateral Commission, The Bilderberg
Group and The Royal Institute of International Affairs.
This essay was entitled “Twilight’s Last
Gleaming.” Most of you have read it already, but if you
haven’t and wish to do so, it’s hyperlinked here. And be
forewarned that it is a big read with multiple hyperlinks…all of which
should be read in order to absorb the fine details.
Towards the end of the essay I wrote the
following….
“This is not to say that
these groups are going to ultimately win the war. Other countries, races, and
religious organizations throughout the world are now wise to this game (and
have been for years) and are fighting back. China,
India, Russia, parts of Europe and the Arab countries
are now beginning to co-operate on a scale never before seen, as they attempt
to curb America’s
power at all levels.”
“Even within these four
organizations themselves, there is infighting going on…Europe vs. Britain vs. the USA. Some of the old 19th
and 20th century rivalries are resurfacing, and there are some
serious cracks showing up in what will prove to be the biggest power struggle
the world has ever seen. And the losers will be us if we’re not
careful.”
“This is what is going on
below the surface. It is the “Grand Conspiracy”...the
“Great Game” come back to life. If you want to read more about
“The Great Game” try the book “A Peace to End All Peace:The Fall of the Ottoman
Empire and the Creation of the Modern Middle East”
by David Fromkin.”
“With Samuel P. Huntington (in
his book “The Clash of Civilizations and the Remaking of World Order”)
and his pal Zbigniew Brzezinski laying out the
groundwork for U.S. hegemony…is
a new Roman Empire just around the corner? I
don’t know, but the dogfight is on. Will the U.S. Constitution and the
world’s democracies survive what’s coming? Some people don’t
think so.”
Having written these words fairly recently, the
essay below by former Maryland Senator Tim Ferguson, made the hair on the
back of neck stand up as I was reading it. It was written on January 19th
and arrived unsolicited in my mailbox earlier this week.
I quote the following from his web
site….“The Ferguson Report is published by former Maryland
Senator Tim Ferguson, who served from 1995 thru 2003 as a fairly conservative
Republican representing Frederick & Carroll counties. Views expressed reflect
Constitutional precepts -- not partisan rhetoric. Those who hold the reigns
of power benefit from public scrutiny whether they are Democrat, Republican,
Independent, Liberal, Conservative or Moderate.”
“Tim Ferguson, registered as a Republican
since 1976, believes that The Constitution and America
come first. Political party loyalty should never trump America’s
strength -- which is derived from covenantal morality. "Cookie-cutter"
Republicans, who place political conformity ahead of social justice, damage
the party and the nation.”
Here is essay...and it is quite amazing. The URL, if
you want to read it directly from his site, is hyperlinked here.
The
New American Century? Not!
Author: Tim Ferguson
Date:19 January 2004
Despite the apparent swift U.S. military success in
Iraq,
the U.S. dollar has yet to benefit as safe haven currency. This is an
unexpected development, as many currency traders had expected the dollar to
strengthen on the news of a U.S.
win. Capital is flowing out of the dollar, largely into the Euro. Many are
beginning to ask whether the objective situation of the U.S. economy
is far worse than the stock market would suggest. The future of the dollar is
far from a minor issue of interest only to banks or currency traders. It
stands at the heart of Pax
Americana, or as it is called, The American Century, the system of
arrangements on which America's
role in the world rests.
Yet, even as the dollar is steadily dropping against
the Euro after the end of fighting in Iraq,
Washington
appears to be deliberately worsening the dollar fall in public comments. What
is taking place is a power game of the highest geopolitical significance, the
most fateful perhaps, since the emergence of the United States in 1945 as the
world's leading economic power.
The coalition of interests which converged on war
against Iraq as a
strategic necessity for the United
States, included not only the vocal and highly visible
neo-conservative hawks around Defense Secretary Rumsfeld and his deputy, Paul Wolfowitz. It also included
powerful permanent interests, on whose global role American economic
influence depends, such as the influential energy sector around Halliburton,
Exxon Mobil, Chevron Texaco and other giant multinationals. It also included
the huge American defense industry interests around
Boeing, Lockheed-Martin, Raytheon, Northrup-Grumman
and others. The issue for these giant defense and
energy conglomerates is not a few fat contracts from the Pentagon to rebuild
Iraqi oil facilities and line the pockets of Dick Cheney or others. It is a
game for the very continuance of American power in the coming decades of the
new century. That is not to say that profits are [not] made in the process,
but it is purely a byproduct of the global
strategic issue.
In this power game, least understood is the role of
preserving the dollar as the world reserve currency, as a major driving
factor contributing to Washington's power
calculus over Iraq
in the past months. American domination in the world ultimately rests on two
pillars -- its overwhelming military superiority, especially on the seas; and
its control of world economic flows through the role of the dollar as the
world's reserve currency. More and more it is clear that the Iraq war was
more about preserving the second pillar -- the dollar role -- than the first,
the military. In the dollar role, oil is a strategic factor.
American Century: the three phases
If we look back over the period since the end of
World War II, we can identify several distinct phases of evolution of the
American role in the world. The first phase, which began in the immediate postwar period 1945-1948 and the onset of Cold War, could
be called the Bretton Woods Gold Exchange system.
Under the Bretton Woods
system in the immediate aftermath of the World War, the order was relatively
tranquil. The United
States had emerged from the War clearly as
the one sole superpower, with a strong industrial base and the largest gold
reserves of any nation. The initial task was to rebuild Western Europe and to
create a NATO Atlantic alliance against the Soviet Union.
The role of the dollar was directly tied to that of gold. So long as America enjoyed the largest gold reserves, and
the U.S.
economy was far the most productive and efficient producer, the entire Bretton Woods currency structure from French Franc to
British Pound Sterling and German Mark was stable. Dollar credits were
extended along with Marshall Plan assistance and credits to finance the
rebuilding of war-torn Europe. American
companies, among them oil multinationals, gained nicely from dominating the
trade at the onset of the 1950's. Washington
even encouraged creation of the Treaty of Rome in 1958 in order to boost
European economic stability and create larger U.S. export markets in the
bargain. For the most part, this initial phase of what Time magazine
publisher Henry Luce called 'The American Century', in terms of economic
gains, was relatively 'benign' for both the U.S.
and Europe. The United States still had the
economic flexibility to move.
This was the era of American liberal foreign policy.
The United States
was the hegemonic power in the Western community of nations. As it commanded
overwhelming gold and economic resources compared with Western Europe or Japan and South
Korea, the United States could well afford
to be open in its trade relations to European and Japanese exports. The tradeoff was European and Japanese support for the role
of the United Sates during the Cold War. American leadership was based during
the 1950s and early 1960s less on direct coercion and more on arriving at
consensus, whether in GATT trade rounds or other issues. Organizations of
elites, such as the Bilderberg meetings, were
organized to share the evolving consensus between Europe and the United States.
This first, more benign phase of the American
Century came to an end by the early 1970s.
The Bretton Woods Gold
Exchange began to break down, as Europe got
on its feet economically and began to become a strong exporter by the
mid-1960s. This growing economic strength in Western Europe coincided with
soaring U.S. public
deficits as Johnson escalated the tragic war in Vietnam. All during the 1960's, France's de
Gaulle began to take its dollar export earnings and demand gold from the U.S.
Federal Reserve, legal under Bretton Woods at that
time. By November 1967 the drain of gold from U.S. and Bank of England vaults
had become critical. The weak link in the Bretton
Woods Gold Exchange arrangement was Britain,
the 'sick man of Europe'. The link broke as Sterling was devalued
in 1967. That merely accelerated the pressure on the U.S. dollar, as French
and other central banks increased their call for U.S. gold in exchange for their
dollar reserves. They calculated with the soaring war deficits from Vietnam,
it was only a matter of months before the United States itself would be
forced to devalue against gold, so better to get their gold out at a high
price.
By May 1971 the drain of U.S. Federal Reserve gold
had become alarming, and even the Bank of England joined the French in
demanding U.S.
gold for their dollars. That was the point where rather than risk a collapse
of the gold reserves of the United States, the Nixon Administration opted to
abandon gold entirely, going to a system of floating currencies in August
1971. The break with gold opened the door to an entirely new phase of the
American Century. In this new phase, control over monetary policy was, in
effect, privatized, with large international banks such as Citibank, Chase
Manhattan or Barclays Bank assuming the role that central banks had in a gold
system, but entirely without gold. 'Market forces' now could determine the
dollar. And they did with a vengeance.
The free floating of the dollar, combined with the
1973 rise in OPEC oil prices by 400% after the Yom Kippur War, created the
basis for a second phase of the American Century, the Petrodollar phase.
Recycling petrodollars
Beginning in the mid-1970s, the American Century
system of global economic dominance underwent a dramatic change. An
Anglo-American oil shock suddenly created enormous demand for the floating
dollar. Oil importing countries from Germany
to Argentina to Japan, all
were faced with how to export in dollars to pay their expensive new oil
import bills. OPEC oil countries were flooded with new oil dollars. A major
share of these oil dollars came to London and New York banks where a
new process was instituted. Henry Kissinger termed it, 'recycling
petrodollars'. The recycling strategy was discussed already in May 1971 at
the Bilderberger meeting
in Saltsjoebaden, Sweden. It was presented by
American members of Bilderberg, as detailed in the
book Mit der Ölwaffe zur Weltmacht.[1]
OPEC suddenly was choking on dollars it could not
use. U.S. and UK banks took the OPEC dollars and re-lent
them as Eurodollar bonds or loans, to countries of the Third
World desperate to borrow dollars to finance oil imports. The buildup of these petrodollar debts by the late 1970's
laid the basis for the Third World debt
crisis in the 1980's. Hundreds of billions of dollars were recycled between
OPEC, the London and New
York banks and back to Third World
borrowing countries.
By August 1982 the chain finally broke and Mexico
announced it would likely default on repaying eurodollar
loans. The Third World debt crisis began when Paul Volcker and the U.S. Federal Reserve had
unilaterally hiked U.S.
interest rates in late 1979 to try to save the failing dollar. After three
years of record high U.S.
interest rates, the dollar was 'saved', but the entire developing sector was
choking economically under usurious U.S. interest rates on their
petrodollar loans. To enforce debt repayment to the London
and New York
banks, the banks brought the IMF in to act as 'debt policeman'. Public
spending for health, education and welfare (were) slashed on IMF orders to
ensure the banks got timely debt service on their petrodollars.
The petrodollar hegemony phase was an attempt by the
United States
establishment to slow down its geopolitical decline as the hegemonic center of the postwar system. The
IMF 'Washington Consensus' was developed to enforce draconian debt collection
on Third World countries, to force them to repay dollar debts, prevent any
economic independence from the nations of the South, and keep the U.S. banks
and the dollar afloat. The Trilateral Commission was created by David
Rockefeller and others in 1973
in order to take account of the recent emergence of Japan as an industrial giant and try to bring Japan into
the system. Japan,
as a major industrial nation, was a major importer of oil. Japanese trade
surpluses from export of cars and other goods were used to buy oil in
dollars. The remaining surplus was invested in U.S. Treasury bonds to earn
interest. The G-7 was founded to keep Japan
and Western Europe inside the U.S. dollar
system. From time to time into the 1980's various voices in Japan would
call for three currencies -- dollar, German mark and yen -- to share the
world reserve role. It never happened. The dollar remained dominant.
From a narrow standpoint, the petrodollar phase of
hegemony seemed to work. Underneath, it was based on ever-worsening economic
decline in living standards across the world, as IMF policies destroyed
national economic growth and broke open markets for globalizing
multinationals seeking cheap production outsourcing in the 1980s and
especially into the 1990s.
Yet, even in the petrodollar phase, American foreign
economic policy and military policy was dominated by the voices of the
traditional liberal consensus. American power depended on negotiating
periodic new arrangements in trade or other issues with its allies in Europe,
Japan and East Asia.
A petroeuro rival?
The end of the Cold War and the emergence of a new
Single Europe and the European Monetary Union in the early 1990s began to
present an entirely new challenge to the American Century. It took some
years, more than a decade after the 1991 Gulf War, for this new challenge to
emerge full-blown. The present Iraq war is only intelligible as
a major battle in the new, third phase of securing American dominance. This
phase has already been called, 'democratic imperialism', a favorite term of Max Boot and other neo-conservatives. As
Iraq
events suggest, it is not likely to be very democratic, but definitely likely
to be imperialist.
Unlike the earlier periods after 1945, in the new era,
the U.S.
freedom to grant concessions to other members of the G-7 is gone. Now raw
power is the only vehicle to maintain American long-term dominance. The best
expression of this argument comes from the neo-conservative hawks around Paul
Wolfowitz, Richard Perle, William Kristol and others.
The point to stress, however, is that the neo-conservatives
enjoy such influence since September 11 because a majority in the U.S. power establishment finds their views
useful to advance a new aggressive U.S. role in the world.
Rather than work out areas of agreement with
European partners, Washington increasingly
sees Euroland as the major strategic threat to
American hegemony, especially 'Old Europe' of Germany
and France.
Just as Britain in decline
after 1870 resorted to increasingly desperate imperial wars in South Africa and elsewhere, so the United States
is using its military might to try to advance what it no longer can by
economic means. Here the dollar is the Achilles heel.
With creation of the Euro over the past five years,
an entirely new element has been added to the global system, one which defines
what we can call a third phase of the American Century. This phase, in which
the latest Iraq
war plays a major role, threatens to bring a new, malignant or imperial phase
to replace the earlier phases of American hegemony. The neo-conservatives are
open about their imperial agenda, while more traditional U.S. policy
voices try to deny it. The economic reality faced by the dollar at the start
of the new Century, defines this new phase in an ominous way.
There is a qualitative difference emerging between
the two initial phases of the American Century -- that of 1945-1973, and of
1973-1999 -- and the new emerging phase of continued domination in the wake
of the 9.11 attacks and the Iraq War. Post-1945 American power before now was
predominately that of a hegemon. While a hegemon is the dominant power, in an unequal distribution
of power, its power is not generated by coercion alone, but also by consent
among its allied powers. This is because the hegemon
is compelled to perform certain services to the allies such as military
security or regulating world markets for the benefit of the larger group, itself included. An imperial power has no such obligations
to (its) allies, and not the freedom for such, only the raw dictates of how
to hold on to its declining power -- what some call 'imperial overstretch'. This
is the world which neo-conservative hawks around Rumsfeld and Cheney are suggesting America has
to dominate, with a policy of pre-emptive war.
A hidden war between the dollar and the new Euro
currency for global hegemony is at the heart of this new phase.
To understand the importance of this unspoken battle
for currency hegemony, we first must understand that since the emergence of
the United States as the
dominant global superpower after 1945, U.S. hegemony has rested on two
unchallengeable pillars. First, the overwhelming U.S. military superiority over
all other rivals. The United
States today spends on defense
more than three times the total for the entire European Union, some $396
billion versus $118 billion last year, and more than the next 15 largest
nations combined. Washington
plans an added $ 2.1 trillion over the coming five years on defense. No nation or group of nations can come close in defense spending. China is at least 30 years away
from becoming a serious military threat. No one is serious about taking on U.S. military
might.
The second pillar of American dominance in the world
is the dominant role of the U.S. dollar as reserve currency. Until the advent
of the Euro in late 1999, there was no potential challenge to this dollar
hegemony in world trade. The petrodollar has been at the heart of the dollar
hegemony since the 1970's. The dollar hegemony is strategic to the future of
American global predominance, in many respects as important if not more so,
than the overwhelming military power.
Dollar fiat money
The crucial shift took place when Nixon took the
dollar off a fixed gold reserve to float against other currencies. This
removed the restraints on printing new dollars. The limit was only how many
dollars the rest of the world would take.
By their firm agreement with Saudi Arabia, as the
largest OPEC oil producer, Washington guaranteed that the world's largest
commodity, oil, the essential for every nation's economy, the basis of all
transport and much of the industrial economy, could only be purchased in
world markets in dollars. The deal had been fixed in June 1974 by Secretary
of State Henry Kissinger, establishing the U.S.-Saudi Arabian Joint
Commission on Economic Cooperation. The U.S. Treasury and the New York
Federal Reserve would 'allow' the Saudi central bank, SAMA, to buy U.S.
Treasury bonds with Saudi petrodollars. In 1975 OPEC officially agreed to
sell its oil only for dollars. A secret U.S.
military agreement to arm Saudi
Arabia was the quid pro quo.
Until November 2000, no OPEC country dared violate
the dollar price rule. So long as the dollar was the strongest currency,
there was little reason to as well. But November was when French and other
Euro land members finally convinced Saddam Hussein to defy the United States by selling Iraq's oil-for-food not in dollars, 'the enemy
currency' as Iraq
named it, but only in euros. The euros were on deposit in a special UN
account of the leading French bank, BNP Paribas. Radio Liberty of the U.S. State Department ran a
short wire on the news and the story was quickly hushed.
This little-noted Iraq move to defy the dollar in favor of the euro, in itself,
was insignificant. Yet, if it were to spread, especially at a point the
dollar was already weakening, it could create a panic sell off of dollars by
foreign central banks and OPEC oil producers. In the months before the latest
Iraq war, hints in this
direction were heard from Russia,
Iran, Indonesia and even Venezuela. An Iranian OPEC
official, Javad Yarjani, delivered a detailed
analysis of how OPEC at some future point might sell its oil to the EU for
euros not dollars. He spoke in April, 2002 in Oviedo
Spain
at the invitation of the EU. All indications are that the Iraq war was
seized on as the easiest way to deliver a deadly pre-emptive warning to OPEC
and others, not to flirt with abandoning the Petro-dollar
system in favor of one based on the euro.
Informed banking circles in the City of London and elsewhere in Europe privately confirm the
significance of that little-noted Iraq move from petrodollar to petroeuro. 'The Iraq
move was a declaration of war against the dollar', one senior London banker told me
recently. 'As soon as it was clear that Britain
and the U.S. had taken Iraq, a great sigh of relief was heard in London City banks. They said privately,
“now we don't have to worry about that damn euro
threat.”'
Why would something so small be such a strategic
threat to London and New
York, or to the United
States that an American President would
apparently risk fifty years of alliance relations globally, and more to make
a military attack whose justification could not even be proved to the world?
The answer is the unique role of the petrodollar to
underpin American economic hegemony.
How does it work? So long as almost 70% of world
trade is done in dollars, the dollar is the currency which central banks
accumulate as reserves. But central banks, whether China
or Japan or Brazil or Russia, do not simply stack
dollars in their vaults. Currencies have one advantage over gold. A central
bank can use it to buy the state bonds of the issuer, the United States.
Most countries around the world are forced to control trade deficits or face
currency collapse. Not the United
States. This is because of the dollar
reserve currency role. And the underpinning of the reserve role is the
petrodollar. Every nation needs to get dollars to import oil, some more than
others. This means their trade targets dollar countries, above all the U.S.
Because oil is an essential commodity for every
nation, the petrodollar system, which exists to the present, demands the buildup of huge trade surpluses in order to accumulate
dollar surpluses. This is the case for every country but one -- the United States
which controls the dollar and prints it at will or fiat. Because today the
majority of all international trade is done in dollars, countries must go
abroad to get the means of payment they cannot themselves issue. The entire
global trade structure today works around this dynamic, from Russia to China,
from Brazil to South Korea and Japan. Everyone aims to maximize
dollar surpluses from their export trade.
To keep this process going, the United States
has agreed to be 'importer of last resort' because its entire monetary hegemony
depends on this dollar recycling.
The central banks of Japan,
China, South Korea, Russia and the rest all buy U.S.
Treasury securities with their dollars. That in turn allows the United States
to have a stable dollar, far lower interest rates, and run a $ 500 billion
annual balance of payments deficit with the rest of the world. The Federal
Reserve controls the dollar printing presses, and the world needs its
dollars. It is as simple as that.
The U.S.
foreign debt threat
But, not so simple perhaps. This is a highly
unstable system, as U.S.
trade deficits and net debt or liabilities to foreign accounts are now well
over 22% of GDP as of 2000, and climbing rapidly. The net foreign
indebtedness of the United
States -- public as well as private -- is
beginning to explode ominously. In the past three years since the U.S. stock collapse and the re-emergence of
budget deficits in Washington, the net debt
position, according to a recent study by the Pestel Institute in Hanover, has almost doubled. In 1999, the
peak of the dot.com bubble fury, U.S. net debt to foreigners was
some $ 1.4 trillions. By the end of this year, it will exceed an estimated $
3.7 trillion! Before 1989, the United States
had been a net creditor, gaining more from its foreign investments than it
paid to them in interest on Treasury bonds or other U.S. assets. Since
the end of the Cold War, the United
States has become a net foreign debtor
nation to the tune of $3.7 trillion! This is not what Hilmar Kopper could call 'peanuts'.
It does not require much foresight to see the
strategic threat of these deficits to the role of the United States.
With an annual current account (mainly trade) deficit of some $500 billion,
some 5% of GDP, the United
States must import or attract at least
$1.4 billion every day, to avoid a dollar collapse and keep its interest
rates low enough to support the debt-burdened corporate economy. That net
debt is getting worse at a dramatic pace. Were France, Germany, Russia
and a number of OPEC oil countries to now shift even a small portion of their
dollar reserves into euro to buy bonds of Germany or France
or the like, the United
States would face a strategic crisis
beyond any of the postwar period. To preempt this threat, was one of the most strategic hidden
reasons for the decision to go for 'regime change' as it is known, in Iraq. It is
as simple and as cold as this. The future of America's
sole superpower status depended on pre-empting the threat emerging from Eurasia and Euroland
especially. Iraq
was and is a chess piece in a far larger strategic game, one for the highest
stakes.
The euro threatens the
hegemony
When the euro was launched
at the end of the last decade, leading EU government figures, bankers from
Deutsche Bank's Norbert Walter, and French President Chirac went to major
holders of dollar reserves -- China, Japan, Russia -- and tried to convince
them to shift out of dollars at least a part of their reserves, and into
euros. However, that clashed with the need to devalue the too-high euro, so German exports could stabilize Euroland growth. A falling euro
was the case until 2002.
Then, with the debacle of the U.S. dot.com bubble bursting, the Enron and Worldcom finance scandals, and the recession in the U.S., the
dollar began to lose its attraction for foreign investors. The euro gained steadily until the end of 2002. Then, as
France and Germany prepared their secret diplomatic strategy to block war in
the UN Security Council, rumors surfaced that the
central banks of Russia and China had quietly began to dump dollars and buy
euros. The result was a dollar free-fall on the eve of war. The stage was set
should Washington lose the Iraq war, or
it turn into a long, bloody debacle.
But Washington,
leading New York banks and the higher
echelons of the U.S.
establishment clearly knew what was at stake. Iraq was not about ordinary
chemical or even nuclear weapons of mass destruction. The 'weapon of mass
destruction' was the threat that others would follow Iraq and shift to euros
out of dollars, creating mass destruction of the United States' hegemonic
economic role in the world. As one economist termed it, an end to the dollar
reserve role would be a 'catastrophe' for the United States. Interest rates of
the Federal Reserve would have to be pushed higher than in 1979 when Paul Volcker raised rates above 17%
to try to stop the collapse of the dollar then. Few realize that 1979 dollar
crisis was also a direct result of moves by Germany,
and France, under Schmidt
and Giscard, to defend Europe together with Saudi Arabia
and others who began selling U.S. Treasury bonds to protest Carter
Administration policy. It is also worth recalling that after the Volcker dollar rescue, the
Reagan Administration, backed by many of today's neo-conservative hawks,
began a huge U.S. military
defense spending to challenge the Soviet
Union.
Eurasia versus the Anglo-American Island
Power
This fight over petrodollars versus petroeuros, which started in Iraq, is by no means over, despite the
apparent victory of the United States
in Iraq.
The euro was created by French geopolitical
strategists for establishing a multi-polar world after the collapse of the Soviet Union. The aim was to balance the overwhelming
dominance of the U.S.
in world affairs. Significantly, French strategists rely on a British geopolitical
strategist to develop their rival power alternative to the U.S., namely
Sir Halford Mackinder.
This past February, a French intelligence-connected
newsletter, Intelligence Online, wrote a piece, 'The Strategy Behind
Paris-Berlin-Moscow Tie'. Referring to the UN Security Council bloc of
France-Germany-Russia to try to prevent the U.S.-British war moves in Iraq, the Paris
report notes the recent efforts of European and other powers to create a
counter power to that of the United
States. Referring to the new ties of France with Germany and more recently with Putin, they note, 'a new logic,
and even dynamic seems to have emerged. An alliance between Paris,
Moscow and Berlin
running from the Atlantic to Asia could foreshadow a limit to U.S. power. For
the first time since the beginning of the 20th Century, the notion of a world
heartland -- the nightmare of British strategists -- has crept back into
international relations.’ (Read the book: “A Peace to
End All Peace: The Fall of the Ottoman Empire and the Creation of the Modern
Middle East” by David Fromkin
– Ed)
Mackinder, father of
British geopolitics, wrote in his remarkable paper, 'The Geographical
Pivot of History' that the control of the Eurasian heartland, from
Normandy France to Vladivostock,
was the only possible threat to oppose the naval supremacy of Britain. British
diplomacy until 1914 was based on preventing any such Eurasian threat, that
time around the expansion policy of the German Kaiser eastwards with the
Baghdad Railway and the Tirpitz German Navy buildup. World War I was the result. Referring to the
ongoing efforts of the British and later Americans to prevent a Eurasian
combination as rival, the Paris intelligence report stressed, 'That strategic
approach (i.e. to create Eurasian heartland unity) lies at the origin of all
clashes between Continental powers and maritime powers (UK, U.S. and Japan)
... It is Washington's supremacy over the seas that, even now, dictates
London's unshakeable support for the U.S. and the alliance between Tony Blair
and Bush.'
Another well-connected French journal, Reseau Voltaire.net, wrote on
the eve of the Iraq war
that the dollar was “The Achilles heel of the USA”. That
is an understatement to put it mildly.
Iraq was planned
long before
This emerging threat from a French-led Euro policy
with Iraq and other
countries, led some leading circles in the U.S. policy establishment to
begin thinking of preempting threats to the
petrodollar system well before Bush was even President. While Perle, Wolfowitz and other leading neo-conservatives
played a leading role in developing a strategy to preserve the faltering
system, a new consensus was shaping which included major elements of
traditional Cold War establishment around figures like Rumsfeld and Cheney.
In September 2000, during the campaign, a small Washington
think-tank, the Project for a New American Century, released a major policy
study: 'Rebuilding America's
Defenses: Strategies, Forces and Resources for a
New Century'. The report is useful in many areas to better understand
present Administration policy. On Iraq, it states, 'The United
States has sought for decades to play a more permanent role in Gulf regional
security. While the unresolved conflict with Iraq provides the immediate
justification, the need for a substantial American force presence in the Gulf
transcends the issue of the regime of Saddam Hussein.'
This PNAC paper is the essential basis for the
September 2002 Presidential White Paper, 'The National Security Strategy
of the United States of
America'. The PNAC's
paper supports a 'blueprint for maintaining global U.S.
pre-eminence, precluding the rise of a great power rival, and shaping the
international security order in line with American principles and interests. The
American Grand Strategy must be pursued as far into the future as possible.' Further,
the U.S.
must, 'discourage advanced industrial nations from challenging our leadership
or even aspiring to a larger regional or global role.' (Emphasis
is mine – Ed)
The PNAC membership in 2000 reads like a roster of
the Bush Administration today. It included Cheney, his wife Lynne Cheney,
neo-conservative Cheney aide, Lewis Libby; Donald Rumsfeld; Rumsfeld
Deputy Secretary Paul Wolfowitz.
It also included NSC Middle East head, Elliott Abrams;
John Bolton of the State Department; Richard Perle, and William Kristol. As well, former Lockheed-Martin vice
president, Bruce Jackson, and ex-CIA head James Woolsey were on board,
along with Norman Podhoretz,
another founding neo-con. Woolsey and Podhoretz
speak openly of being in 'World War IV'. (Emphasis is mine
– Ed)
It is becoming increasingly clear to many that the
war in Iraq
is about preserving a bankrupt American Century model of global dominance. It
is also clear that Iraq
is not the end. What is not yet clear, and must be openly debated around the
world, is how to replace the failed petrodollar order with a just new system
for global economic prosperity and security.
Now, as Iraq threatens to explode in
internal chaos, it is important to rethink the entire postwar
monetary order anew. The present French-German-Russian alliance to create a
counterweight to the United
States requires not merely a French-led
version of the petrodollar system…some petroeuro
system that continues the bankrupt American Century, only with a French
accent…(with) euros replacing dollars. (This)
would only continue to destroy living standards across the world, adding to
human waste and soaring unemployment in industrial as well as developing
nations. We must entirely rethink what began briefly with some economists
during the 1998 Asia crisis, the basis of a
new monetary system which supports human development, and does not destroy
it.”
END.
This is a fascinating essay to say the least. I
believe it gives us a direct window into what is going on out there, and why
things are happening the way they are in the world today. This essay pleases
me a great deal because it pretty well backs up everything that I (and
others) spoke of in my own essay on these matters…except there are many
more details here. I consider his commentary to be right on the money.
Near the end of his essay is this paragraph…. “Another
well-connected French journal, ReseauVoltaire.net, wrote on the eve of the
Iraq war that the dollar was 'The Achilles heel of the USA'.That
is an understatement to put it mildly.”
I totally agree with that statement.
It’s always been my feeling that the forces
now aligned against the United
States are more bent on economic
“terrorism” than anything else. And forget 9/11…it was an
inside job…a great public relations exercise (by the Neo-cons and the Zionists using the Mossad and CIA
as their instruments of choice) to get Americans on side for this “war
on terrorism” and give justification for their invasions of Iraq and
Afghanistan, and the renewal of the “Great Game”…plus be
close at hand with a big stick to protect Israel.
I’ve always been deeply suspicious of this WAT
that the USA and Britain are
fighting, and have been since day one. That suspicion has grown a lot
stronger since I read the above essay, and I’m obviously not the only
person who feels this way. If the players in this “Great Game”
are trying to take on the USA,
they know they aren’t going to win it on the field of battle…but
they are certainly giving it the old college try in Iraq right
now.
Not only are the Iraqi people, their culture, and
their country being shredded; it’s also the poor American soldier
that’s paying the price. They shouldn’t be there, and they all
know it…as they too have also come to the understanding as to what this
“war on terrorism” is all about. There's a recent interview with
a couple of American soldiers that fits in quite nicely with the above essay.
As Tim says, the only field in which “the
terrorists” have a chance to win is in the currency market, the gold
market…and the oil market…the soft and very vulnerable underbelly
of US
hegemony. It's my belief that the “terrorist’s” strategy is
somewhere along the lines of US$ = Zero.
In an interesting aside, the word
“terrorist’ as defined by the United States, is any person,
organization, or country that is opposed to the US long-term interests both
at home and abroad. In the geopolitical sense, this also means those opposing
them in trying to gain control of what’s left of the world’s oil
reserves in the Middle and Far East. This
would now include Russia
and China.
And a story that popped up in the Asia Times the other day
that illustrates this point very well.
Also in his essay, I lost track of how many times
Ferguson mentioned the word GOLD, but it was a lot.And
as you may remember, in the last couple of paragraphs he had this to
say….“What is not yet clear and must
be openly debated around the world is how to replace the failed petrodollar
order with a just new system for global economic prosperity and security. ”Ferguson
continues… “That would only continue to destroy living
standards across the world, adding to human waste and soaring unemployment in
industrial as well as developing nations. We must entirely rethink what began
briefly with some economists during the 1998 Asia
crisis, the basis of a new monetary system which supports human development,
and does not destroy it.”
To me, and hopefully to him, there is only one
currency that will do this, and that is a return to currencies that are once
again backed by gold and silver. If Mr. Ferguson in saying “some
economists” is embracing Robert Mundell’s one world
currency, then God help us all. But I can’t believe from everything
else he wrote in his essay that this is what he really means.
What is closer to the truth is what Reg Howe says in his essay “Long Con: Mother of Bank Runs”…and
I love to quote it just as much as you like to read it…
“In many ways a more
interesting question is how foreign central banks -- stuffed to the gills
with dollar-denominated paper -- can accomplish the same objective. And the
answer is the same: with gold, their traditional reserve asset. When the
central banks realize that too many are not just wise to their scam but also
are taking advantage of it, that the gold con artists themselves have become
the marks, the greatest bank run in history will shift into high gear. It
will be a run not just from dollars or even from paper currency in general,
but from modern central banking itself as the lenders of last resort succumb
to the resurrected worldwide preference for the financial asset of last
resort.”
The warning signs are everywhere these days that
there is going to be a monstrous debacle in the bond and currency markets
somewhere down the road…most likely within the next twelve month. Nobody
is quite sure whether it will be before or after the presidential election in
the USA.
Bill Gross of Pimco has the latest commentary on that, joining a long
list of preeminent economists, financial and market
pundits who are raising red flags both here and abroad.
It’s interesting to note that the day before Ferguson published the
above article; the following news story appeared on the Reuters news
wire… JEDDAH, Saudi Arabia, Jan. 18 - Former Malaysian Prime Minister Mahathir Mohamad
said on Sunday that Saudi Arabia should sell oil for gold, not dollars, to
avoid being "short-changed" by a decline in the U.S. currency.
As the U.S. dollar heads lower, it seems apparent
that the rest of the world is slowly heading for the exits. Any major economic,
political or military ‘event’ could certainly turn the exodus
into a mass stampede. If or when it happens, there won’t be a thing
that the world’s central banks will be able to do about it this time.
I don’t think any nation (or any of us) wants
to get caught in the cross fire of this event…as the current monetary
system…led by the U.S. dollar, gets flushed down the fiat currency
drain.
Then for sure it will be every country for itself as
“all hands” scramble for the gold and silver lifeboats…and
to hell with the women and children…and the men.
Ed Steer
Director
Gold Anti-Trust
Action Committee
www.GATA.org
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