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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.
© 2004 Ed
Steer
Editorial Archive
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Ed Steer
Gold Anti-Trust Action Committee (GATA)
Edmonton, Alberta, Canada
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