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a_century_of_war [2008/02/11 09:45]
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a_century_of_war [2019/11/08 10:39] (current)
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| **A Century of War, William Engdahl** | **[[wp>William Engdahl]], 2004 (revised edition), //A Century of War: Anglo-American Oil Politics and the New World Order//, London: Pluto** |
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| ====== 1. The Three Pillars of the British Empire ====== | ====== 1. The Three Pillars of the British Empire ====== |
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| The period in question began with the 1814-15 Congress of Vienna, during which Continental Europe was shuffled around in the wake of Napoleon's final defeat at Waterloo. The Congress divided Europe sufficiently to prevent a significant threat to British power, whilst giving Britain "rights to dominate the seas.� | The period in question began with the 1814-15 Congress of Vienna, during which Continental Europe was shuffled around in the wake of Napoleon's final defeat at Waterloo. The Congress divided Europe sufficiently to prevent a significant threat to British power, whilst giving Britain "rights to dominate the seas." |
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| Engdahl sees British power as being centred in three elements: firstly, total naval superiority. This acted as a tacit subsidy for British shipping -- the Merchant Navy could expect protection in transit, whereas foreign shipping had to purchase expensive insurance against loss. The second pillar was domination of world finance. Most shipping finance relied on London. London financial houses were able to dump massive British exports on foreign markets through manipulation of the money market (although he doesn't explain how). Thirdly, and of increasing importance, Britain's domination of natural resources: especially cotton, metals, coffee, coal and increasingly oil. | Engdahl sees British power as being centred in three elements: firstly, total naval superiority. This acted as a tacit subsidy for British shipping -- the Merchant Navy could expect protection in transit, whereas foreign shipping had to purchase expensive insurance against loss. The second pillar was domination of world finance. Most shipping finance relied on London. London financial houses were able to dump massive British exports on foreign markets through manipulation of the money market (although he doesn't explain how). Thirdly, and of increasing importance, Britain's domination of natural resources: especially cotton, metals, coffee, coal and increasingly oil. |
| Britain's long-range strategy for maintaining its world position was to perpetually oppose the greatest power in Continental Europe by supporting weaker nations, building temporary alliances and fermenting conflict. That power had often been France. But with the Great Depression beginning in 1873 (until 1896) in England, Britain's manufactures became progressively less able to compete with Germany, who had abandoned free-trade ideas in favour of state investment in infrastructure and education combined with protectionist policies against imports. A German bank panic in 1890 linked to losses in Argentina and Uruguay lead to a massive restructuring to ensure future stability (moving towards banks investing in companies in the long term rather than a volatile stock exchange). Germany invested heavily in its shipping, beginning to rival British technologies after the turn of the century, and began construction of a rail link from Berlin to northern Turkey in 1889 (aiming for Baghdad, so called the Berlin-Baghdad railway). | Britain's long-range strategy for maintaining its world position was to perpetually oppose the greatest power in Continental Europe by supporting weaker nations, building temporary alliances and fermenting conflict. That power had often been France. But with the Great Depression beginning in 1873 (until 1896) in England, Britain's manufactures became progressively less able to compete with Germany, who had abandoned free-trade ideas in favour of state investment in infrastructure and education combined with protectionist policies against imports. A German bank panic in 1890 linked to losses in Argentina and Uruguay lead to a massive restructuring to ensure future stability (moving towards banks investing in companies in the long term rather than a volatile stock exchange). Germany invested heavily in its shipping, beginning to rival British technologies after the turn of the century, and began construction of a rail link from Berlin to northern Turkey in 1889 (aiming for Baghdad, so called the Berlin-Baghdad railway). |
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| In the late Nineteenth Century, Britain had seen Russia as the Eastern threat, and had supported the Ottoman Empire against Russia. With the new railway and increasing economic links between Germany and the Ottoman Empire, Britain turned to supporting Russia against Germany, a shift "evident from the late 1890s�. Links with Russia were cemented after the 1905 revolution and the Russo-Japanese war (in which Britain had supported Japan). Russia signed over rights to Afghanistan and parts of Persia. By 1907, a secret military alliance with both France and Russia was in place. | In the late Nineteenth Century, Britain had seen Russia as the Eastern threat, and had supported the Ottoman Empire against Russia. With the new railway and increasing economic links between Germany and the Ottoman Empire, Britain turned to supporting Russia against Germany, a shift "evident from the late 1890s". Links with Russia were cemented after the 1905 revolution and the Russo-Japanese war (in which Britain had supported Japan). Russia signed over rights to Afghanistan and parts of Persia. By 1907, a secret military alliance with both France and Russia was in place. |
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| ====== 3. A Global Fight for Control of Petroleum Begins ====== | ====== 3. A Global Fight for Control of Petroleum Begins ====== |
| Berlin-Baghdad concerned Britain for various reasons. Firstly, simply the potential for economic development was worrying, in the context of Britain's decline and Germany's rapid advances. Secondly, it seemed Germany would gain a secure source of oil, increasingly important as the German navy expanded and modernised. But it also increased the capacity of Germany and Turkey to move large troop numbers quickly, via a route that was beyond the reach of the British Navy. German troops could rapidly threaten the Egyptian colony, and therefore Britain's link with India, Suez. German-Ottoman cooperation also meant Alexandretta and control of the Dardanelles could give Germany substantial naval power in the Mediterranean. | Berlin-Baghdad concerned Britain for various reasons. Firstly, simply the potential for economic development was worrying, in the context of Britain's decline and Germany's rapid advances. Secondly, it seemed Germany would gain a secure source of oil, increasingly important as the German navy expanded and modernised. But it also increased the capacity of Germany and Turkey to move large troop numbers quickly, via a route that was beyond the reach of the British Navy. German troops could rapidly threaten the Egyptian colony, and therefore Britain's link with India, Suez. German-Ottoman cooperation also meant Alexandretta and control of the Dardanelles could give Germany substantial naval power in the Mediterranean. |
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| The weak link in a chain of allies (German empire, Austro-Hungarian empire, Bulgaria and Turkey) was Serbia. Serbia was seen as Britain's first line of defence, to prevent the emergence of a Berlin-Baghdad system. Hence, argues Engdahl, the wars in this region prior to 1914: the Turkish War, Bulgarian War and "continuous unrest in the region�. | The weak link in a chain of allies (German empire, Austro-Hungarian empire, Bulgaria and Turkey) was Serbia. Serbia was seen as Britain's first line of defence, to prevent the emergence of a Berlin-Baghdad system. Hence, argues Engdahl, the wars in this region prior to 1914: the Turkish War, Bulgarian War and "continuous unrest in the region". |
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| In 1901 with the support of the Sheik of Kuwait, Britain declared that Kuwait (formerly Ottoman) was now a British protectorate. | In 1901 with the support of the Sheik of Kuwait, Britain declared that Kuwait (formerly Ottoman) was now a British protectorate. |
| ^ Russia (before the revolution) | Ottoman Armenia and Kurdistan, south of Jerevan (although I don't think this promise was honoured?). | | ^ Russia (before the revolution) | Ottoman Armenia and Kurdistan, south of Jerevan (although I don't think this promise was honoured?). | |
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| The Balfour declaration was a private letter from Balfour, Britain's foreign secretary to Lord Rothschild, a member of the British Federation of Zionists in November 1917. It committed Britain to supporting a Jewish homeland in Palestine after the war. It is significant that this declaration was made to a representative of a *British* Jewish organisation that was already involved in financing the emigration of European (primarily Polish and Russian) Jews to Palestine. The concept was to establish a European community in the heart of an area in which Britain had few natural allies, which required British power projection due to its oil reserves, and also due to its commanding position for dominating the Mediterranean, overlooking Suez, still crucial to British economic interests as the link between the UK and India. A Jewish settlement in Palestine would provide a long-term excuse for a British protectionary force, and would clearly permanently back British interests against the Arabs. It fitted very much into the Round Table vision of a British Empire extending uninterrupted from the Cape of Good Hope to Suez and from Palestine to British India, alongside the annexation of German possessions in Southern Africa which helped to complete the picture. The Round Table had instigated the Boer War of 1899-1902 to unite South Africa and its massive gold reserves under British control. | The Balfour declaration was a private letter from Balfour, Britain's foreign secretary to Lord Rothschild, a member of the British Federation of Zionists in November 1917. It committed Britain to supporting a Jewish homeland in Palestine after the war. It is significant that this declaration was made to a representative of a //British// Jewish organisation that was already involved in financing the emigration of European (primarily Polish and Russian) Jews to Palestine. The concept was to establish a European community in the heart of an area in which Britain had few natural allies, which required British power projection due to its oil reserves, and also due to its commanding position for dominating the Mediterranean, overlooking Suez, still crucial to British economic interests as the link between the UK and India. A Jewish settlement in Palestine would provide a long-term excuse for a British protectionary force, and would clearly permanently back British interests against the Arabs. It fitted very much into the Round Table vision of a British Empire extending uninterrupted from the Cape of Good Hope to Suez and from Palestine to British India, alongside the annexation of German possessions in Southern Africa which helped to complete the picture. The Round Table had instigated the Boer War of 1899-1902 to unite South Africa and its massive gold reserves under British control. |
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| ====== 5. Combined and Conflicting Goals: The United States Rivals Britain ====== | ====== 5. Combined and Conflicting Goals: The United States Rivals Britain ====== |
| ====== 7. Oil and the New World Order of Bretton Woods ====== | ====== 7. Oil and the New World Order of Bretton Woods ====== |
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| British and American oil came out of the second world war in a tight cartel rather than in any degree of competition, which reflected an era of close cooperation more generally -- it was acutely recognised that only America had the economic and military power to establish and maintain an informal empire, whilst London had unique assets in intelligence and international expertise -- an imperial project could only be conducted jointly, therefore. The CFR's time had come. In the 1950s the New York banks cartelised in a spate of mergers, their business increasingly involved in big oil (note Rockefeller connections through Chase National and National City) but also dominating international finance to an extent not seen since the height of London's dominance. The Marshall Plan (ERP) had an important relation to oil. Oil was the single greatest expense of ERP money -- around ten per cent of total American aid. Oil was purchased at "grossly inflated� prices. Recipients were forbade using ERP money to develop domestic refinery capacity -- this was the exclusive realm of big oil. There was significant discrimination in the prices European countries paid for oil (eg Britain paid less than half Greece's price). | British and American oil came out of the second world war in a tight cartel rather than in any degree of competition, which reflected an era of close cooperation more generally -- it was acutely recognised that only America had the economic and military power to establish and maintain an informal empire, whilst London had unique assets in intelligence and international expertise -- an imperial project could only be conducted jointly, therefore. The CFR's time had come. In the 1950s the New York banks cartelised in a spate of mergers, their business increasingly involved in big oil (note Rockefeller connections through Chase National and National City) but also dominating international finance to an extent not seen since the height of London's dominance. The Marshall Plan (ERP) had an important relation to oil. Oil was the single greatest expense of ERP money -- around ten per cent of total American aid. Oil was purchased at "grossly inflated" prices. Recipients were forbade using ERP money to develop domestic refinery capacity -- this was the exclusive realm of big oil. There was significant discrimination in the prices European countries paid for oil (eg Britain paid less than half Greece's price). |
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| Britain and the USSR invaded Iran in 1941 despite its neutrality, on the pretext that the presence of German engineers posed a threat. It was an obvious strategic target to protect during the war. 100,000 Russian troops and 70,000 Anglo-Indian troops were stationed there. Russia ransacked the north for food, and much American Lend-Lease were redirected north where they were doubtless badly needed in Russia. Anyway, treatment of the Iranians under occupation was not good. | Britain and the USSR invaded Iran in 1941 despite its neutrality, on the pretext that the presence of German engineers posed a threat. It was an obvious strategic target to protect during the war. 100,000 Russian troops and 70,000 Anglo-Indian troops were stationed there. Russia ransacked the north for food, and much American Lend-Lease were redirected north where they were doubtless badly needed in Russia. Anyway, treatment of the Iranians under occupation was not good. |
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| British forces were forced out after a long struggle at the UN in 1948, oil concessions intact. Mossadegh gradually rose to premiership in Iran purely on the basis of arguing for a renegotiation of oil concessions. Iran was getting something on the order of ten per cent (Engdahl's figures are vague) of oil revenues, whereas Venezuela was getting 50. Despite increasingly insistent demands for renegotiation they were ignored by Britain until March 1951 -- Mossadegh became prime minister and Iran's oilfields were nationalised. Britain was furious. An economic blockade followed, supported by Washington; no oil companies would accept Iranian oil and the economy collapsed. Iran was fully within her legal rights to nationalise, provided fair compensation was granted -- which Engdahl claims was the case (what is "fair�? Surely not adequate to cover net present value of future profits, because those would be far beyond the means of Iran). Britain went to the World Court, who in July 1952 declared that the case was rightfully under Iranian jurisdiction. Mossadegh lasted 28 months, after which time he was overthrown by an August 1953 coup contrived by Anglo-American intelligence, with the help of Norman Schwarzkopf Snr, who had previously trained police forces in Iran and had made friends with high-ranking military officers and the Shah. The issue was blamed on Mossedegh's (fabricated) Soviet leanings. Result: 40 per cent Anglo-Persian (which now became BP), 14% Royal Dutch Shell, 40% American big oil and 6% CFP (France state oil). | British forces were forced out after a long struggle at the UN in 1948, oil concessions intact. Mossadegh gradually rose to premiership in Iran purely on the basis of arguing for a renegotiation of oil concessions. Iran was getting something on the order of ten per cent (Engdahl's figures are vague) of oil revenues, whereas Venezuela was getting 50. Despite increasingly insistent demands for renegotiation they were ignored by Britain until March 1951 -- Mossadegh became prime minister and Iran's oilfields were nationalised. Britain was furious. An economic blockade followed, supported by Washington; no oil companies would accept Iranian oil and the economy collapsed. Iran was fully within her legal rights to nationalise, provided fair compensation was granted -- which Engdahl claims was the case (what is "fair"? Surely not adequate to cover net present value of future profits, because those would be far beyond the means of Iran). Britain went to the World Court, who in July 1952 declared that the case was rightfully under Iranian jurisdiction. Mossadegh lasted 28 months, after which time he was overthrown by an August 1953 coup contrived by Anglo-American intelligence, with the help of Norman Schwarzkopf Snr, who had previously trained police forces in Iran and had made friends with high-ranking military officers and the Shah. The issue was blamed on Mossedegh's (fabricated) Soviet leanings. Result: 40 per cent Anglo-Persian (which now became BP), 14% Royal Dutch Shell, 40% American big oil and 6% CFP (France state oil). |
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| ===== Mattei ===== | ===== Mattei ===== |
| By the end of the 1950s, American manufacturing capital and education was lagging that of Continental Europe, whose productivity was still soaring in a continued post-war boom. The New York banks were central in channelling investment abroad rather than into American manufacturing, sealing America's industrial fate over the following two decades. New York earned far higher profits investing abroad, particularly in Western European firms. The stagnation of the American industrial base, coupled with a realignment of higher education away from sciences and engineering towards softer subjects and the intervention in Vietnam created a massive US deficit, large dollar accounts were accumulating in European banks and American gold reserves, which had been almost total at the end of the war, were continually being drained. The dollar was, apparently, overvalued compared to gold; France called for a 50 per cent devaluation. Kennedy attempted to stem the outflow of investment by taxing American investment abroad, but by exempting Canada and loans to US citizens, the result was to force all US foreign investment to be channelled through British banks in Toronto, Montreal and London. | By the end of the 1950s, American manufacturing capital and education was lagging that of Continental Europe, whose productivity was still soaring in a continued post-war boom. The New York banks were central in channelling investment abroad rather than into American manufacturing, sealing America's industrial fate over the following two decades. New York earned far higher profits investing abroad, particularly in Western European firms. The stagnation of the American industrial base, coupled with a realignment of higher education away from sciences and engineering towards softer subjects and the intervention in Vietnam created a massive US deficit, large dollar accounts were accumulating in European banks and American gold reserves, which had been almost total at the end of the war, were continually being drained. The dollar was, apparently, overvalued compared to gold; France called for a 50 per cent devaluation. Kennedy attempted to stem the outflow of investment by taxing American investment abroad, but by exempting Canada and loans to US citizens, the result was to force all US foreign investment to be channelled through British banks in Toronto, Montreal and London. |
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| The UK was undergoing a similar lack of investment, coupled with high interest rates designed to draw money into the Sterling area to support London's continued bid to be a financial capital. However, the pound was even weaker than the dollar, and Britain was forced to devalue from $2.80 to $2.40 in 1967. Afterwhich all attention switched to the dollar, clearly in an unmaintainable position with a war-deficit ballooning out of control as Tet approached and no productivity recovery in sight. In the beginning Vietnam had provided a boost to the American economy, but apart from narrow sections of military industry and the financial elite who managed the war bonds, the overall effect was to weaken America's position relative to her trading partners. The government backed insurgents to create riots across the US in an attempt to fuel racist division between the predominantly white unionised northern cities (Detroit, Chicago, Pittsburgh, New York) against cheap, nonunionised black labour in the south. King's assassination was designed to prevent his support for a drive to unionise black labour in south. Kennedy's assassination was to prevent a range of anti-financial elite policies, including his plans to withdraw from Vietnam and to force US investment capital into domestic projects. | The UK was undergoing a similar lack of investment, coupled with high interest rates designed to draw money into the Sterling area to support London's continued bid to be a financial capital. However, the pound was even weaker than the dollar, and Britain was forced to devalue from $2.80 to $2.40 in 1967. Afterwhich all attention switched to the dollar, clearly in an unmaintainable position with a war-deficit ballooning out of control as Tet approached and no productivity recovery in sight. In the beginning Vietnam had provided a boost to the American economy, but apart from narrow sections of military industry and the financial elite who managed the war bonds, the overall effect was to weaken America's position relative to her trading partners. The government backed insurgents to create riots across the US in an attempt to fuel racist division between the predominantly white unionised northern cities (Detroit, Chicago, Pittsburgh, New York) against cheap, nonunionised black labour in the south. King's assassination was designed to prevent his support for a drive to unionise black labour in the south. Kennedy's assassination was intended to prevent a range of anti-financial-elite policies, including his plans to withdraw from Vietnam and to force US investment capital into domestic projects. |
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| ====== 9. Running the World Economy in Reverse: Who Made the 1970s Oil Shocks? ====== | ====== 9. Running the World Economy in Reverse: Who Made the 1970s Oil Shocks? ====== |
| The American economy was in recession by the end of 1969. Nixon expanded the money supply and capital fled the US. Vietnam put the US in a weak position fiscally and in terms of trade balance. Wall Street refused to allow a substantial devaluation of the dollar to prevent a further collapse. The devaluation would be good for American industry, but would have reduced the value of Wall Street's overseas assets in real terms, since most of these were denominated in dollars. | The American economy was in recession by the end of 1969. Nixon expanded the money supply and capital fled the US. Vietnam put the US in a weak position fiscally and in terms of trade balance. Wall Street refused to allow a substantial devaluation of the dollar to prevent a further collapse. The devaluation would be good for American industry, but would have reduced the value of Wall Street's overseas assets in real terms, since most of these were denominated in dollars. |
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| Instead, Wall Street's solution, organised through the Bilderberg group, was to create and artificial permanent hike in the price of oil, in order to greatly expand the global demand for dollars, since the American-dominated oil market was denominated in dollars. Oil-importers which for the first time had suffered terribly under the quadrupling price of oil would see the value in holding a sizeable dollar reserve against future uncertainty, and the oil companies were in a position to take a sizeable cut of the increased revenues. | Instead, Wall Street's solution, organised through the Bilderberg group, was to create an artificial permanent hike in the price of oil, in order to greatly expand the global demand for dollars, since the American-dominated oil market was denominated in dollars. Oil-importers which for the first time had suffered terribly under the quadrupling price of oil would see the value in holding a sizeable dollar reserve against future uncertainty, and the oil companies were in a position to take a sizeable cut of the increased revenues. |
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| The shock was principally carried out by Kissinger. He fostered the October 1973 Yom Kippur War with the aid of British and American intelligence by misleading both sides of the conflict about the true situation in order to avert a peaceful outcome. US intelligence on the buildup were suppressed by Kissinger. America diplomatically attempted to line up Europe in blaming the Arab states for the war, creating a standoff and embargo, allowing only the UK to remain neutral (thereby retaining good relations with the Arab states). North Sea oil began to turn a profit after the 400 per cent rise, which Engdahl believes was a highly unlikely outcome without foreknowledge of the embargo, thus raising questions about what was known when decisions to invest heavily in North Sea oil were being made in London (although arguably the North Sea could be seen as a valuable strategic resource even if never profitable?). | The shock was principally carried out by Kissinger. He fostered the October 1973 Yom Kippur War with the aid of British and American intelligence by misleading both sides of the conflict about the true situation in order to avert a peaceful outcome. US intelligence on the buildup were suppressed by Kissinger. America diplomatically attempted to line up Europe in blaming the Arab states for the war, creating a standoff and embargo, allowing only the UK to remain neutral (thereby retaining good relations with the Arab states). North Sea oil began to turn a profit after the 400 per cent rise, which Engdahl believes was a highly unlikely outcome without foreknowledge of the embargo, thus raising questions about what was known when decisions to invest heavily in North Sea oil were being made in London (although arguably the North Sea could be seen as a valuable strategic resource even if never profitable?). |
| A 1975 US-Saudi agreement committed Saudi to invest a sizeable chunk of its windfalls in financing US deficits. | A 1975 US-Saudi agreement committed Saudi to invest a sizeable chunk of its windfalls in financing US deficits. |
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| After personal assurances from Kissinger, the Shah of Iran pushed for further price hikes rather than calling for restraint in January 1974. He has been previously concerned about angering the US -- who were, of course, officially supporting Israel which further angered the Arab states and fuelled their desire to force up prices -- until Kissinger had revealed otherwise. From 1949 to 1970, oil prices averaged $1.90 a barrel. In early 1973, around the time of the Bilderberg meeting, they rose to $3.01. When Iran supported further rises on 1st January 1974, the OPEC benchmark rose to $11.65. | After personal assurances from Kissinger, the Shah of Iran pushed for further price hikes rather than calling for restraint in January 1974. He had been previously concerned about angering the US -- who were, of course, officially supporting Israel which further angered the Arab states and fuelled their desire to force up prices -- until Kissinger had revealed otherwise. From 1949 to 1970, oil prices averaged $1.90 a barrel. In early 1973, around the time of the Bilderberg meeting, they rose to $3.01. When Iran supported further rises on 1st January 1974, the OPEC benchmark rose to $11.65. |
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| Oil stocks in the US had been artificially lowered in the run up to the crisis, to exacerbate the degree of panic and price fluctuation in the US. The shock wiped out many developing countries' trade surpluses, such as India's. The developing world's collective trade deficit rose 400 per cent to $35 billion between 1973 and 1974. The drop in global output between 74 and 75 was the largest since the war. Most of the oil revenues were invested through London and New York banks, setting the stage for the 1980s debt crisis. | Oil stocks in the US had been artificially lowered in the run up to the crisis, to exacerbate the degree of panic and price fluctuation in the US. The shock wiped out many developing countries' trade surpluses, such as India's. The developing world's collective trade deficit rose 400 per cent to $35 billion between 1973 and 1974. The drop in global output between 74 and 75 was the largest since the war. Most of the oil revenues were invested through London and New York banks, setting the stage for the 1980s debt crisis. |
| ====== 10. Europe, Japan and a Response to the Oil Shock ====== | ====== 10. Europe, Japan and a Response to the Oil Shock ====== |
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| The 1974 oil shock created a global depression, felt most acutely in the developing sector. LDCs faced an instant and unbridgeable current account deficit, having to cut development expenditure sharply and borrow internationally in order to meet their energy requirements. In 1974-75 there followed "the worst global drought in decades� which saw many developing countries rely on large-scale import of basic foodstuffs from Europe, at prices inflated by the shortage. The shortfall in global liquidity was met primarily by the London and New York banks, lending recycled petrodollars under exclusive arrangements actively supported by Kissinger, particularly with Saudi. All payments for oil to OPEC remained denominated in dollars, despite the increasingly irrationality of this position -- large European powers would find it far easier to pay for oil imports in their own or other European currencies, which were at that time more stable than the dollar, providing benefits to oil suppliers. The power of the Anglo-American banks increased substantially, as they brokered a massive international debt between OPEC and the developing world. | The 1974 oil shock created a global depression, felt most acutely in the developing sector. LDCs faced an instant and unbridgeable current account deficit, having to cut development expenditure sharply and borrow internationally in order to meet their energy requirements. In 1974-75 there followed "the worst global drought in decades" which saw many developing countries rely on large-scale import of basic foodstuffs from Europe, at prices inflated by the shortage. The shortfall in global liquidity was met primarily by the London and New York banks, lending recycled petrodollars under exclusive arrangements actively supported by Kissinger, particularly with Saudi. All payments for oil to OPEC remained denominated in dollars, despite the increasingly irrationality of this position -- large European powers would find it far easier to pay for oil imports in their own or other European currencies, which were at that time more stable than the dollar, providing benefits to oil suppliers. The power of the Anglo-American banks increased substantially, as they brokered a massive international debt between OPEC and the developing world. |
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| Engdahl claims that the US could easily have intervened in order to bring down oil prices in the aftermath of 1974 and that it is essentially unthinkable that the American government could have disapproved of, but tolerated, the move. He believes the the US had sufficient control of OPEC to create the hike, intending that OPEC take the blame for it internationally. | Engdahl claims that the US could easily have intervened in order to bring down oil prices in the aftermath of 1974 and that it is essentially unthinkable that the American government could have disapproved of, but tolerated, the move. He believes the the US had sufficient control of OPEC to create the hike, intending that OPEC take the blame for it internationally. |
| The Colombo gathering of the non-aligned movement lead to a significant attempt to challenge Anglo-American domination of energy and international finance. Lead by Sirimavo Bandaranaike of Sri Lanka (the conference's host), Indira Gandhi of India and Frederick Wills (minister of foreign affairs) of Guyana, the movement called for | The Colombo gathering of the non-aligned movement lead to a significant attempt to challenge Anglo-American domination of energy and international finance. Lead by Sirimavo Bandaranaike of Sri Lanka (the conference's host), Indira Gandhi of India and Frederick Wills (minister of foreign affairs) of Guyana, the movement called for |
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| * the IMF to be replaced by a raft of International Development Banks who would aim at "the just division of the gains from an unequal global economic system� | * the IMF to be replaced by a raft of International Development Banks who would aim at "the just division of the gains from an unequal global economic system" |
| * a fundamental reorganisation of international trade to improve the terms of trade | * a fundamental reorganisation of international trade to improve the terms of trade |
| * a worldwide reorganisation of industrial production which would incorporate improved access by the LDCs to industrial products and technology transfer | * a worldwide reorganisation of industrial production which would incorporate improved access by the LDCs to industrial products and technology transfer |
| * the initiation of negotiations as to the terms of current international debt, with a view to debt restructuring or moritoria: "The time for a debt moratorium has arrived.� | * the initiation of negotiations as to the terms of current international debt, with a view to debt restructuring or moritoria: "The time for a debt moratorium has arrived." |
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| The strength of the movement lay in their numbers: 85 non-aligned states were calling for a debt moratorium simultaneously. Their potential success depended on being able to fight together, and not being separated. There is a substantial explanation by Wills in letters to Engdahl on pp158-160. | The strength of the movement lay in their numbers: 85 non-aligned states were calling for a debt moratorium simultaneously. Their potential success depended on being able to fight together, and not being separated. There is a substantial explanation by Wills in letters to Engdahl on pp158-160. |
| There was an immediate crisis of confidence on Wall Street, share prices in New York banks involved in international lending fell and so did the dollar, having to be supported by the Fed. The European Community, lead by Italy and West Germany, met in December 1976 to consider the proposals, and possible increased cooperation between the EC, OPEC and the NAM much to Kissinger's irritation. | There was an immediate crisis of confidence on Wall Street, share prices in New York banks involved in international lending fell and so did the dollar, having to be supported by the Fed. The European Community, lead by Italy and West Germany, met in December 1976 to consider the proposals, and possible increased cooperation between the EC, OPEC and the NAM much to Kissinger's irritation. |
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| Gandhi was forced into elections, in the midst of which several key members of her party defected over IMF-imposed austerity; she was out of office by March 1977. Sri Lanka was paralysed by strikes in January 1977 organised by 'Trotskyites' who were reportedly linked to UK-US intelligence. Bandaranaike was out by May. Wills was "forced to resign� in February 1978 under "repeated external pressures.� According to "diplomatic sources�, Kissinger was involved in all three cases, with British support. Engdahl cites Kissinger's effusive praise of the Foreign Office, in which he says that he often kept the Foreign Office better informed and more involved in his international dealings than the State Department. | Gandhi was forced into elections, in the midst of which several key members of her party defected over IMF-imposed austerity; she was out of office by March 1977. Sri Lanka was paralysed by strikes in January 1977 organised by 'Trotskyites' who were reportedly linked to UK-US intelligence. Bandaranaike was out by May. Wills was "forced to resign" in February 1978 under "repeated external pressures." According to "diplomatic sources", Kissinger was involved in all three cases, with British support. Engdahl cites Kissinger's effusive praise of the Foreign Office, in which he says that he often kept the Foreign Office better informed and more involved in his international dealings than the State Department. |
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| ===== Nuclear Proliferation Again ===== | ===== Nuclear Proliferation Again ===== |
| The second prong of the global attempt to escape the banking-big oil stranglehold was to secure greater energy independence, and the obvious means of doing this at the time was through massive nuclear programmes. Brazil signed a $5bn contract with Germany to provide nuclear facilities and a further $2.5bn with France. Mexico announced plans to build 15 reactors in 20 years with the help of Germany and Japan. The Bhutto government in Pakistan entered agreements with France, becoming a lobby throughout the Middle East for nuclear energy. Kissinger puts pressure on both France and Pakistan to abandon the agreements and is alleged to have made various threats against Bhutto. Bhutto was overthrown in a military coup in 1977 by General Zia ul-Haq and hanged. During his legal defence he claimed Kissinger was responsible for the coup. The ul-Haq government abandoned the nuclear programme and returned to the American fold, receiving large military assistance from the US. In Iran, the Shah was also committed to using part of the proceeds of the oil price rises to develop a massive nuclear-based energy infrastructure in Iran (rather than invest it in American banks). By 1978, Iran had the fourth largest nuclear programme in the world. Its main partners were France and Germany, in whom Iran became involved in joint ventures for research and development (extending massive loans), and bought shares in firms involved in the manufacture of nuclear technology. The US refused involvement in all of these programmes. | The second prong of the global attempt to escape the banking-big oil stranglehold was to secure greater energy independence, and the obvious means of doing this at the time was through massive nuclear programmes. Brazil signed a $5bn contract with Germany to provide nuclear facilities and a further $2.5bn with France. Mexico announced plans to build 15 reactors in 20 years with the help of Germany and Japan. The Bhutto government in Pakistan entered agreements with France, becoming a lobby throughout the Middle East for nuclear energy. Kissinger puts pressure on both France and Pakistan to abandon the agreements and is alleged to have made various threats against Bhutto. Bhutto was overthrown in a military coup in 1977 by General Zia ul-Haq and hanged. During his legal defence he claimed Kissinger was responsible for the coup. The ul-Haq government abandoned the nuclear programme and returned to the American fold, receiving large military assistance from the US. In Iran, the Shah was also committed to using part of the proceeds of the oil price rises to develop a massive nuclear-based energy infrastructure in Iran (rather than invest it in American banks). By 1978, Iran had the fourth largest nuclear programme in the world. Its main partners were France and Germany, in whom Iran became involved in joint ventures for research and development (extending massive loans), and bought shares in firms involved in the manufacture of nuclear technology. The US refused involvement in all of these programmes. |
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| By 1975, Kissinger's heavy-handed 'divide and rule' approach to international relations was viewed as thuggish by the New York establishment; opposition was mounting and the threat of other power centres organising against Washington was perceived to be rising. The newly formed Trilateral Commission created the Carter administration as their planned change of course. The administration was packed with Trilateralists (a group which grew out of Rockefeller and Bilderberg interests); Carter himself was unveiled as "the next president of the US� by David Rockefeller in April 1975, 18 months before the US elections. He was portrayed as an outsider of the US establishment, although there was little substantive content to this purported 'new approach'. Having said that, it seems at least partially true: it seems that Carter was not even told about many important interventions of his presidency. | By 1975, Kissinger's heavy-handed 'divide and rule' approach to international relations was viewed as thuggish by the New York establishment; opposition was mounting and the threat of other power centres organising against Washington was perceived to be rising. The newly formed Trilateral Commission created the Carter administration as their planned change of course. The administration was packed with Trilateralists (a group which grew out of Rockefeller and Bilderberg interests); Carter himself was unveiled as "the next president of the US" by David Rockefeller in April 1975, 18 months before the US elections. He was portrayed as an outsider of the US establishment, although there was little substantive content to this purported 'new approach'. Having said that, it seems at least partially true: it seems that Carter was not even told about many important interventions of his presidency. |
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| Immediately in the wake of the 1974 crisis, various groups around the world moved to bring gold back into international trade to displace the dollar, particularly between Europe, the USSR (a major gold producer) and South Africa. Planning became more elaborate, tying gold-based trade to a broader development plan which would extend from the more developed African centres of South Africa, Ivory Coast and Algeria through the entire southern African region, with European involvement. In 1976, riots erupted in Soweto (SA), coinciding with a visit by Kissinger, which promoted the image of SA as a pariah apartheid state increasing pressure on Europe to avoid close economic cooperation. Jurgen Ponto, Dresden bank chairman and one of the key figures in these plans was assassinated in July 1977. A few weeks later, Hanns-Martin Schleyer of the German employers' federation was kidnapped and murdered by the same group. The assassinations ended prospects of the project continuing. However, instead of relying on gold, Europe initiated the first phase of European monetary union in June 1978. | Immediately in the wake of the 1974 crisis, various groups around the world moved to bring gold back into international trade to displace the dollar, particularly between Europe, the USSR (a major gold producer) and South Africa. Planning became more elaborate, tying gold-based trade to a broader development plan which would extend from the more developed African centres of South Africa, Ivory Coast and Algeria through the entire southern African region, with European involvement. In 1976, riots erupted in Soweto (SA), coinciding with a visit by Kissinger, which promoted the image of SA as a pariah apartheid state increasing pressure on Europe to avoid close economic cooperation. Jurgen Ponto, Dresden bank chairman and one of the key figures in these plans was assassinated in July 1977. A few weeks later, Hanns-Martin Schleyer of the German employers' federation was kidnapped and murdered by the same group. The assassinations ended prospects of the project continuing. However, instead of relying on gold, Europe initiated the first phase of European monetary union in June 1978. |
| ====== 11. Imposing the New World Order: Reagan and Thatcher ====== | ====== 11. Imposing the New World Order: Reagan and Thatcher ====== |
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| The Thatcher-Reagan economic model was to enable rapid speculative gain at the expense of broad economic development. Their professed motivation of "controlling inflation� was a cover: the main source of inflation on their arrival into power were the 1970s oil shocks; in 1979 the price of oil had risen a further 140 per cent. They raised interest rates sharply: in the UK from 12 to 17 per cent and in America from 10 to 20 per cent supposedly to control inflation. The real result was to drastically change the terms on which international debt had to be paid: these debts were linked to US and UK base rates. Capital flooded into New York and London to take advantage of these rates; the dollar and pound rose, further increasing the real value of Southern debt. Deregulation provided an outlet for the money flooding into the financial centres in speculation -- medium-term industrial investment was impossible due to the prohibitive interest rates which made borrowing viable only for speculation, just as in the 1920s. A broad assault on the unions ensured stagnating and declining standards of living which enabled huge tax cuts and increases in military spending in the US without pressure on inflation, as the purchasing power of the poor collapsed. The original monetary shock was created by Paul Volcker at the Fed, which in part lead to Carter's loss of the 1980 election; Reagan adopted Volcker and his Freidmanite policies far more fervently than Carter. | The Thatcher-Reagan economic model was to enable rapid speculative gain at the expense of broad economic development. Their professed motivation of "controlling inflation" was a cover: the main source of inflation on their arrival into power were the 1970s oil shocks; in 1979 the price of oil had risen a further 140 per cent. They raised interest rates sharply: in the UK from 12 to 17 per cent and in America from 10 to 20 per cent supposedly to control inflation. The real result was to drastically change the terms on which international debt had to be paid: these debts were linked to US and UK base rates. Capital flooded into New York and London to take advantage of these rates; the dollar and pound rose, further increasing the real value of Southern debt. Deregulation provided an outlet for the money flooding into the financial centres in speculation -- medium-term industrial investment was impossible due to the prohibitive interest rates which made borrowing viable only for speculation, just as in the 1920s. A broad assault on the unions ensured stagnating and declining standards of living which enabled huge tax cuts and increases in military spending in the US without pressure on inflation, as the purchasing power of the poor collapsed. The original monetary shock was created by Paul Volcker at the Fed, which in part lead to Carter's loss of the 1980 election; Reagan adopted Volcker and his Freidmanite policies far more fervently than Carter. |
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| Third world debt spiralled out of control. The debts massive borrowing that had been required to maintain basic energy needs became unrepayable in the wake of interest rate hikes and the rapid strengthening of the currencies in which the debts were denominated. From 1976, Mexico had been using its oil revenues to pursue a broad developmental programme, investing in ports, roads, petrochemical pants, irrigated agriculture and nuclear power, under president José López Portillo. By 1981 the Mexican threat was becoming an increasing concern to Washington. A run on the peso was organised, initiated by William Colby (previously CIA head, now consultant on "political risk� to various multinationals) who predicted a devaluation of the peso before the coming elections in a NYT interview. Articles were planted throughout the American press fostering the rumour by the same agency behind the Iranian flight, Probe International. By early 1982, Mexico was forced into implementing austerity programmes, a thirty per cent devaluation, cutting its industrial programmes. López Portillo appealed to the UN general assembly, warning that countries such as Mexico would be forced into unilateral default if efforts to negotiate a moratorium were blocked. | Third world debt spiralled out of control. The debts massive borrowing that had been required to maintain basic energy needs became unrepayable in the wake of interest rate hikes and the rapid strengthening of the currencies in which the debts were denominated. From 1976, Mexico had been using its oil revenues to pursue a broad developmental programme, investing in ports, roads, petrochemical pants, irrigated agriculture and nuclear power, under president José López Portillo. By 1981 the Mexican threat was becoming an increasing concern to Washington. A run on the peso was organised, initiated by William Colby (previously CIA head, now consultant on "political risk" to various multinationals) who predicted a devaluation of the peso before the coming elections in a NYT interview. Articles were planted throughout the American press fostering the rumour by the same agency behind the Iranian flight, Probe International. By early 1982, Mexico was forced into implementing austerity programmes, a thirty per cent devaluation, cutting its industrial programmes. López Portillo appealed to the UN general assembly, warning that countries such as Mexico would be forced into unilateral default if efforts to negotiate a moratorium were blocked. |
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| Engdahl claims that Thatcher, with the support of Casey and Bush (then VP) prepared an "example� highly indebted LDC in order to prove that Britain would be prepared to use military force to punish any potential default. He claims the Falklands was an attempt to unite NATO around expanding their own perception of their mandate to include out-of-area deployment of forces to settle debt disputes. Argentina was then the third most indebted LDC. | Engdahl claims that Thatcher, with the support of Casey and Bush (then VP) prepared an "example" highly indebted LDC in order to prove that Britain would be prepared to use military force to punish any potential default. He claims the Falklands was an attempt to unite NATO around expanding their own perception of their mandate to include out-of-area deployment of forces to settle debt disputes. Argentina was then the third most indebted LDC. |
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| There followed what Engdahl considers a close parallel of the 1920s Versailles experience, with the Anglo-American banks acting through the IMF using the leverage of unrepayable debt to strip the South of all available assets. Currencies collapsed, then state assets were sold off cheaply to Western corporations. Industrialisation collapsed under chronic lack of investment as fiscal resources poured into debt finance. Engdahl describes a "neo-Malthusian� ideology, prevailing in some Washington circles, that the answer to Third-World poverty lay in controlling and reducing population rather than in growth in industrial output; this policy seemed aimed towards these ends. IMF conditionalities replayed the Dawes and Young plans. | There followed what Engdahl considers a close parallel of the 1920s Versailles experience, with the Anglo-American banks acting through the IMF using the leverage of unrepayable debt to strip the South of all available assets. Currencies collapsed, then state assets were sold off cheaply to Western corporations. Industrialisation collapsed under chronic lack of investment as fiscal resources poured into debt finance. Engdahl describes a "neo-Malthusian" ideology, prevailing in some Washington circles, that the answer to Third-World poverty lay in controlling and reducing population rather than in growth in industrial output; this policy seemed aimed towards these ends. IMF conditionalities replayed the Dawes and Young plans. |
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| One component of conditionality was to slash imports, to free up forex for debt repayments: clearly, this was highly damaging to Western industry -- a direct diversion of finance from the broad industrial economy (those industries exporting to LDCs) to the financial centres. The "restructuring� of debt that was granted developing countries following adoption of conditionalities was negligible -- it provided almost no real reduction in the debt burden, and largely destroyed LDCs' long-term capacity to develop an industrial base which could ever repay the debt. | One component of conditionality was to slash imports, to free up forex for debt repayments: clearly, this was highly damaging to Western industry -- a direct diversion of finance from the broad industrial economy (those industries exporting to LDCs) to the financial centres. The "restructuring" of debt that was granted developing countries following adoption of conditionalities was negligible -- it provided almost no real reduction in the debt burden, and largely destroyed LDCs' long-term capacity to develop an industrial base which could ever repay the debt. |
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| The US economy weakened in 1985. Fearful for Bush's election chances, Washington persuaded Saudi to provide a reverse oil shock, bringing oil down from $26 to $10 in a matter of months in early 1986, to stabilise at around $15. Wall Street claimed a "victory over inflation�. The economy began a further climb based on massive real estate speculation, as a result of very low interest rates. A fashion for leveraged buyouts burdened the industrial core of America's economy with large extra debts. But by the end of the 1980s everything began to unravel, and Thatcher left office with inflation at the same level as on her arrival. | The US economy weakened in 1985. Fearful for Bush's election chances, Washington persuaded Saudi to provide a reverse oil shock, bringing oil down from $26 to $10 in a matter of months in early 1986, to stabilise at around $15. Wall Street claimed a "victory over inflation". The economy began a further climb based on massive real estate speculation, as a result of very low interest rates. A fashion for leveraged buyouts burdened the industrial core of America's economy with large extra debts. But by the end of the 1980s everything began to unravel, and Thatcher left office with inflation at the same level as on her arrival. |
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| ===== German Reunification ===== | ===== German Reunification ===== |
| ===== The Gulf War ===== | ===== The Gulf War ===== |
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| The Anglo-American planned response was to create a pretence under which military forces could once more take tight control of Middle Eastern oil, to resecure the "veto power� that control of these supplies granted America over continental Europe, Russia and Japan. Iraq seemed like the obvious choice: thought to be the largest source of unexplored oil fields after the Soviet Union, and far more closely allied with France and Russia than Saudi. | The Anglo-American planned response was to create a pretence under which military forces could once more take tight control of Middle Eastern oil, to resecure the "veto power" that control of these supplies granted America over continental Europe, Russia and Japan. Iraq seemed like the obvious choice: thought to be the largest source of unexplored oil fields after the Soviet Union, and far more closely allied with France and Russia than Saudi. |
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| Iraq had been tempted into war with Iran by spurious American intelligence promising easy victories, and emerged from the Iran-Iraq war in 1988 with massive war debts to the Russia and Eastern Europe (who expected to be repaid in oil), Kuwait, Saudi and French, British and American banks: a total of $65bn. Kuwait had been encouraged by the UK-US to extend extensive credit to Iraq in order to prevent the Iraqis suing for peace, because of the profits the UK-US was making from arms sales. In the spring of 1990, with UK-US encouragement Kuwait changed tack, rapidly increasing oil output and forcing the price down from $19 to $13 a barrel. Iraq and other OPEC members pleaded with Kuwait to return within its OPEC quota, but the Kuwaitis refused. Iraq became unable to service its debt. | Iraq had been tempted into war with Iran by spurious American intelligence promising easy victories, and emerged from the Iran-Iraq war in 1988 with massive war debts to Russia and Eastern Europe (who expected to be repaid in oil), Kuwait, Saudi and French, British and American banks: a total of $65bn. Kuwait had been encouraged by the UK-US to extend extensive credit to Iraq in order to prevent the Iraqis suing for peace, because of the profits the UK-US was making from arms sales. In the spring of 1990, with UK-US encouragement Kuwait changed tack, rapidly increasing oil output and forcing the price down from $19 to $13 a barrel. Iraq and other OPEC members pleaded with Kuwait to return within its OPEC quota, but the Kuwaitis refused. Iraq became unable to service its debt. |
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| Saddam started drawing attention to the American insistence on maintaining a large naval presence in the Middle East, despite Russia's increasing incapacity to project force in the region and the end of the Iran-Iraq war. He called for greater pan-Arab cooperation and the use of oil wealth to forge better relations with Europe, Russia and Japan. | Saddam started drawing attention to the American insistence on maintaining a large naval presence in the Middle East, despite Russia's increasing incapacity to project force in the region and the end of the Iran-Iraq war. He called for greater pan-Arab cooperation and the use of oil wealth to forge better relations with Europe, Russia and Japan. |
| ===== Yugoslavia ===== | ===== Yugoslavia ===== |
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| During the cold war Yugoslavia had received American aid, fostering Tito's mixed socialism as an alternative to the Soviet system. By the late 1980s, the Yugoslav economic model was seen merely as a threat. The solution was what later became known as "Balkanisation�, using NGOs financed by Washington to encourage the dissolution of Yugoslavia into tiny, controllable states, each dependent on the US and IMF. The main body used by Washington was the National Endowment for Democracy (NED) who bought influence with local NGOs and independent media. Under IMF policies, the Yugoslav economy went into a steady decline from 1990. In 1991, whilst demanding a free float for the dinar, the IMF prevented the government securing credit from its own central bank. Engdahl claims that this freeze amounted to a "de facto secession by Croatia and Slovenia�. | During the cold war Yugoslavia had received American aid, fostering Tito's mixed socialism as an alternative to the Soviet system. By the late 1980s, the Yugoslav economic model was seen merely as a threat. The solution was what later became known as "Balkanisation", using NGOs financed by Washington to encourage the dissolution of Yugoslavia into tiny, controllable states, each dependent on the US and IMF. The main body used by Washington was the National Endowment for Democracy (NED) who bought influence with local NGOs and independent media. Under IMF policies, the Yugoslav economy went into a steady decline from 1990. In 1991, whilst demanding a free float for the dinar, the IMF prevented the government securing credit from its own central bank. Engdahl claims that this freeze amounted to a "de facto secession by Croatia and Slovenia". |
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| In November 1990, the US Congress passed the Foreign Operations Appropriations Act, cutting all US aid to any area of Yugoslavia that refused to declare independence within six months. The law demanded separate elections to be supervised by the US in each republic, and that all aid should be paid directly to the republic rather than to the central Yugoslav authority. Money was funnelled through NED to nationalist groups. Reacting to this initiative, President Milosovic organised a new Communist Party in November 1990 to defend a unified Yugoslavia, setting the stage for a spate of regional wars. In 1992 Washington added a total economic embargo, destroying the economy with hyperinflation and 70 per cent unemployment. The Dayton peace agreement coincided with the realisation in Washington that pipelines would need to be built through Yugoslavia in order to achieve full exploitation of Caspian reserves. From Dayton on, Bosnia became a pliant IMF-Nato puppet. During the 1990s, Europe advanced various initiatives to link Caspian reserves to Europe independent of the US. The bombing of Serbia was required by America to derail these plans. "Negotiations� over human rights abuses amounted to the Rambouillet ultimatum, in which Milosovic was required to allow Nato troops full access to Kosovo and Serbia. He could not agree and bombing followed, in contravention of the UN Charter, the Nato Charter (which commits Nato to a purely defensive role -- bombing Serbia was the crucial "out of area deployment� that the US and UK had been seeking for decades), the 1975 Helsinki Accords and the US constitution (which specifies that only Congress can declare war). The bombing extensively hit civilian targets, doing $40bn of damage to the Serb economy. After the bombing, a Serb withdrawal from Kosovo was negotiated (as, seemingly, could have been negotiated at Rambouillet) and the Pentagon began construction of one of the largest US bases in the world, Camp Bond Steel in southeast Kosovo, to permanently house 3000 US soldiers and an airfield. This provided the US with strategic control of all oil routes from the Caspian to Europe, amidst a destroyed Yugoslav economy controlled by the IMF. | In November 1990, the US Congress passed the Foreign Operations Appropriations Act, cutting all US aid to any area of Yugoslavia that refused to declare independence within six months. The law demanded separate elections to be supervised by the US in each republic, and that all aid should be paid directly to the republic rather than to the central Yugoslav authority. Money was funnelled through NED to nationalist groups. Reacting to this initiative, President Milosovic organised a new Communist Party in November 1990 to defend a unified Yugoslavia, setting the stage for a spate of regional wars. In 1992 Washington added a total economic embargo, destroying the economy with hyperinflation and 70 per cent unemployment. The Dayton peace agreement coincided with the realisation in Washington that pipelines would need to be built through Yugoslavia in order to achieve full exploitation of Caspian reserves. From Dayton on, Bosnia became a pliant IMF-Nato puppet. During the 1990s, Europe advanced various initiatives to link Caspian reserves to Europe independent of the US. The bombing of Serbia was required by America to derail these plans. "Negotiations" over human rights abuses amounted to the Rambouillet ultimatum, in which Milosovic was required to allow Nato troops full access to Kosovo and Serbia. He could not agree and bombing followed, in contravention of the UN Charter, the Nato Charter (which commits Nato to a purely defensive role -- bombing Serbia was the crucial "out of area deployment" that the US and UK had been seeking for decades), the 1975 Helsinki Accords and the US constitution (which specifies that only Congress can declare war). The bombing extensively hit civilian targets, doing $40bn of damage to the Serb economy. After the bombing, a Serb withdrawal from Kosovo was negotiated (as, seemingly, could have been negotiated at Rambouillet) and the Pentagon began construction of one of the largest US bases in the world, Camp Bond Steel in southeast Kosovo, to permanently house 3000 US soldiers and an airfield. This provided the US with strategic control of all oil routes from the Caspian to Europe, amidst a destroyed Yugoslav economy controlled by the IMF. |
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| ====== 13. A New Millennium for Oil Geopolitics ====== | ====== 13. A New Millennium for Oil Geopolitics ====== |
| Washington is now therefore committed, before all else, to dominating all oil and gas reserves, everywhere. Classical imperial conquests of Iraq and Afghanistan, coupled with the associated building of massive military installations in the former Soviet empire (Uzbekistan and Kyrgyzstan) have effectively turned the entire Middle East into an American protectorate. Iraq is a colony, dismantling extensive agreements with France, Russia and China to develop Iraqi oilfields. Afghanistan is a colony. Georgia (on the route of Baku-Ceyhan) has been a protectorate since the 2004 elections. Kuwait is a protectorate. Pakistan is dependant on US support. | Washington is now therefore committed, before all else, to dominating all oil and gas reserves, everywhere. Classical imperial conquests of Iraq and Afghanistan, coupled with the associated building of massive military installations in the former Soviet empire (Uzbekistan and Kyrgyzstan) have effectively turned the entire Middle East into an American protectorate. Iraq is a colony, dismantling extensive agreements with France, Russia and China to develop Iraqi oilfields. Afghanistan is a colony. Georgia (on the route of Baku-Ceyhan) has been a protectorate since the 2004 elections. Kuwait is a protectorate. Pakistan is dependant on US support. |
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| Moves for other oil reserves have met less resistance, but have been no less assiduous. In early 2003, Washington reached agreements over the use of the Pacific islands of Sao Tomao and Principe, both within striking distance of the west African oilfields from Morocco to Nigeria, Equatorial Guinea and Angola. Up to 25 per cent of US oil needs will soon come from west Africa, according to some predictions. Military aid continues to pour into Colombia. The removal of Chávez was attempted in 2002. The US imports more oil from Colombia, Venezuela and Ecuador than the entire Middle East. Libya returned to Washington's circle of friends in January 2004, throwing out agreements to develop oil with Japan, Italy, China and France (countries not bound by US sanctions). Somebody was impressed by the Iraqi invasion? New US military bases have been built in Indonesia under terrorist pretexts. Washington has so far managed to block Japanese agreements to develop Iranian oil and is locked in ongoing attempts to become more involved in Russian oil developments. | Moves for other oil reserves have met less resistance, but have been no less assiduous. In early 2003, Washington reached agreements over the use of the East Atlantic islands of Sao Tomao and Principe, both within striking distance of the west African oilfields from Morocco to Nigeria, Equatorial Guinea and Angola. Up to 25 per cent of US oil needs will soon come from west Africa, according to some predictions. Military aid continues to pour into Colombia. The removal of Chávez was attempted in 2002. The US imports more oil from Colombia, Venezuela and Ecuador than the entire Middle East. Libya returned to Washington's circle of friends in January 2004, throwing out agreements to develop oil with Japan, Italy, China and France (countries not bound by US sanctions). Somebody was impressed by the Iraqi invasion? New US military bases have been built in Indonesia under terrorist pretexts. Washington has so far managed to block Japanese agreements to develop Iranian oil and is locked in ongoing attempts to become more involved in Russian oil developments. |
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| >> "If you want to rule the world, you need to control oil. All the oil. Anywhere." --Michel Collon | > "If you want to rule the world, you need to control oil. All the oil. Anywhere." --Michel Collon |
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| >> "The basic and generally agreed plan is unilateral world domination through absolute military superiority, and this has been consistently advocated and worked on by the group of intellectuals close to Dick Cheney and Richard Perle since the collapse of the Soviet Union in the early 1990s... For the group around Cheney, the single most important consideration is guaranteed and unrestricted access to cheap oil, controlled as far as possible at its source." --Anatole Leven (Carnegie Endowment for International Peace) | > "The basic and generally agreed plan is unilateral world domination through absolute military superiority, and this has been consistently advocated and worked on by the group of intellectuals close to Dick Cheney and Richard Perle since the collapse of the Soviet Union in the early 1990s... For the group around Cheney, the single most important consideration is guaranteed and unrestricted access to cheap oil, controlled as far as possible at its source." --Anatole Leven (Carnegie Endowment for International Peace) |
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| >> "Let's look at it simply. The most important difference between North Korea and Iraq is that economically, we just had no choice in Iraq. The country swims on a sea of oil." --Paul Wolfowitz (President of the World Bank, former Deputy Defence Secretary under Rumsfeld during Iraq II) | > "Let's look at it simply. The most important difference between North Korea and Iraq is that economically, we just had no choice in Iraq. The country swims on a sea of oil." --Paul Wolfowitz (President of the World Bank, former Deputy Defence Secretary under Rumsfeld during Iraq II) |
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| Washington's plan is "total spectrum dominance�, through which it hopes to gain a virtual monopoly of global oil supplies, controlled by military might at the source. As circumstances in the global oil market inevitably develop through Peak, this will place it in a position to determine who receives oil and at what price -- it will gain the discretion to offer sufficient oil at a low enough price for some economies to develop and thrive, but at the same time it will be in a position to deny many a sufficient energy supply to maintain a viable economy -- giving it even greater political power to determine which administrations shall succeed and which will be thrown out amid economic chaos than it has ever known before. The Iraqi "disaster� is not a reflection of American overconfidence or misjudgement -- the issue of controlling oil at source is about to become so dominant that the costs of an anomic Iraq are insignificant besides the direct control of world affairs that America is set to inherit. There is no limit to how messy Iraq may become -- no cost can possibly be great enough to make a withdrawal the more profitable option for Washington. | Washington's plan is "total spectrum dominance", through which it hopes to gain a virtual monopoly of global oil supplies, controlled by military might at the source. As circumstances in the global oil market inevitably develop through Peak, this will place it in a position to determine who receives oil and at what price -- it will gain the discretion to offer sufficient oil at a low enough price for some economies to develop and thrive, but at the same time it will be in a position to deny many a sufficient energy supply to maintain a viable economy -- giving it even greater political power to determine which administrations shall succeed and which will be thrown out amid economic chaos than it has ever known before. The Iraqi "disaster" is not a reflection of American overconfidence or misjudgement -- the issue of controlling oil at source is about to become so dominant that the costs of an anomic Iraq are insignificant besides the direct control of world affairs that America is set to inherit. There is no limit to how messy Iraq may become -- no cost can possibly be great enough to make a withdrawal the more profitable option for Washington. |
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| >> "Every single empire, in its official discourse, has said that it is not like all the others, that its circumstances are special, that it has a mission to enlighten, civilise, bring order and democracy, and that it uses force only as a last resort." --Edward Said | > "Every single empire, in its official discourse, has said that it is not like all the others, that its circumstances are special, that it has a mission to enlighten, civilise, bring order and democracy, and that it uses force only as a last resort." --Edward Said |
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