Michael Hudson is a prominent American economist and formerly a leading Wall Street analyst. He is known for his criticism of loan policy: in his opinion, the real sector of the economy suffers from the need to give huge amounts of money to moneylenders. Such views have given Hudson a dislike for the dominant schools of economics, who claim the benefits of lending to the economy.
Major media are diligently avoiding the question of what is behind the seemingly insane elimination of IRGC General Qasem Suleimani at the beginning of the year. The truth is that what happened was not a momentary whim of Donald Trump, but a consequence of a long-established doctrine of American foreign policy. The assassination of the Iranian general was indeed an act of undeclared war and a violation of international law, but it fit perfectly into the long-term American strategy, clearly endorsed by the US Senate during the Pentagon budget debate last year.
This assassination was supposed to expand the American presence in Iraq, allowing the United States to better control the oil resources in the region and to support the Saudi Wahhabi formations (Al-Qaeda, ISIS, Al-Nusra and other branches of this American Foreign Legion) as a guarantee of control over the Middle East oil and stability. American dollar. This fact is key to understanding why the conflict develops instead of naturally dying down.
I was present at discussions of this foreign policy strategy at the time of its inception half a century ago. Then I worked at the Hudson Institute and attended meetings at the White House, met with generals in research centers and with diplomats at the UN. I was recruited as a balance of payments specialist with experience in Chase Manhattan Bank, Arthur Andersen auditing company, in the oil industry and the military-industrial complex. It was the oil industry and military spending that were two of the three main lines of thought in American foreign policy and diplomacy at the time (the third was the search for a way to pay for the war in a democracy and refuse the draft caused by the Vietnam War).
The media and opinion leaders have diverted attention from this strategy by injecting the view that what happened was initiated by Trump, who hoped in this way to divert attention from the story of impeachment, who sought to support Israel in its struggle for living space or simply succumbed to typical neoconservative Iranian hate syndrome.
Balance of payments measurement
For a long time, an important item of the deficit of the American balance of payments was the cost of military presence abroad. This deficit, which began during the Korean War and widened during Vietnam, caused the 1971 Nixon Shock, the rejection of the dollar's peg to gold. The question then before military analysts was how to keep the support of allies and the operability of eight hundred US bases without undermining America's financial power.
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The solution was to replace gold with US Treasury securities as the basis of the reserves of foreign central banks, which after 1971 had no choice but to buy the mentioned securities with the gold they had. Thus, the costs of a military presence abroad did not hit the dollar, or even compel the Treasury and the Fed to raise interest rates in the hope of attracting foreign buyers of securities. In fact, the American military presence overseas ensured the flow of money into the American economy and covered the domestic deficit.
Saudi Arabia and several other Middle Eastern OPEC members quickly became the guarantors of the dollar's strength. After these countries quadrupled the price of oil (in response to America's quadrupling of grain prices, which was then the basis of the American trade balance), American banks were flooded with a mass of foreign deposits, the money from which was lent to third world countries, which resulted into a wave of bad loans. The result of this wave was the announcement of the insolvency of Mexico in 1972 and the collapse of the lending system of the third world countries, which led to their dependence on the United States through the IMF and the World Bank.
To top it off, hundreds of billions of dollars that Saudi Arabia does not set aside in dollar assets is being spent on purchasing American weapons. This, in turn, makes them dependent on American supplies of spare parts for this equipment and its maintenance, and America allows them to cut off these supplies, immobilizing the Saudi troops in the event of the slightest disobedience.
Thus, the dollar's status as the world's reserve currency has become a cornerstone of the US military budget. Other countries don't need to pay the Pentagon directly - they just invest in US Treasury securities.
Fears of alternative routes were the main reason for the American campaign against Libya, which kept its reserves in gold and actively urged other African countries to throw off the yoke of "dollar diplomacy". Hillary and Obama invaded, seized hundreds of billions of dollars of gold (and no one still has a clue where it went), destroyed the Libyan government, destroyed the public education system, public infrastructure, and any non-neoliberal political movement.
A huge threat to the established order of things lies in the plane of "de-dollarization", because gradually China, Russia and other countries are trying to break out of the circle of processing the dollar. Without the dollar's function as fuel for global savings and the Pentagon generating debt to fuel the value of US Treasury securities, the United States will be just as constrained militarily and diplomatically as it was before the Nixon shock.
This is the strategy that the United States has followed in Syria and Iraq. Iran threatened its implementation and the carriers of American oil diplomacy.
The oil industry as the basis of the American balance of payments and foreign policy
The trade balance is supported by a surplus of oil and agro-industrial products. Oil in this case is the most important, since it is imported by American companies with almost no balance of payments value (and payment settles in the offices of oil corporations as profits and salaries to staff), while the profits of American oil companies selling oil abroad are returned to the United States through offshore centers, mainly Liberia and Panama. As mentioned above, OPEC countries are forced to keep their reserves in American securities, loan documents and shares, but not through the purchase of American oil companies. Finally, OPEC countries are clients of the dollar zone.
US efforts to maintain control of these areas explain its opposition to any move by foreign governments to reverse the process of human-induced global warming and weather extremes caused by the world's dependence on US oil sales. Such steps from European or any other countries are perceived by America as attempts to reduce dependence on American oil sales, and therefore as a threat to the US's ability to use oil as an instrument of pressure, which makes these steps seem hostile to the States.
Oil is also key to understanding America's rejection of Nord Stream as a tool for exporting Russian energy. The United States wants to see energy as its national monopoly, as a result of which the only way to achieve success is the path of Saudi Arabia. This path involves sending surplus production to the United States, but not redirecting them to the development of its own economy and foreign policy. Control over oil flows also implies control over a consistently high rate of global warming - this is an innate feature of the American global strategy.
How a "democratic" country can sponsor international terrorism and wars
The Vietnam War showed that modern democracy cannot wage major conflicts with a conscript army. A government that calls for a general conscription will be stripped of power through a vote, and without an influx of fresh soldiers any invasion is doomed to failure.
From this, there are only two strategies that a democratic country can apply to achieve military success. The first is the financing of the Air Force, capable of bombing any opponent. The second is the creation of their own Foreign Legion, consisting of mercenaries and soldiers of the supported regime.
Once again, Saudi Arabia plays a key role here, having control over the Wahhabi Sunnis, turned into jihad terrorists, ready to blow up, bomb, kill and destroy anyone declared an enemy of "Islam" (this euphemism means Saudi Arabia under US auspices). The truth is that religion has nothing to do with it - I have not heard of a single attack by ISIS or similar Wahhabis on Israeli targets. America needs Saudi funding and supplies for the Wahhabi madmen. In addition to its role in providing the US balance of payments described above, Saudi Arabia supports the US Foreign Legion - ISIS, al-Qaeda and al-Nusra - with people. Terrorism has become a "democratic" regime in American military policy.
What makes America's oil wars "democratic"? That these are the only wars in which democracy can take a direct part is a complex of air raids preceding the invasion of an army of rabid terrorists, masking the fact that no democracy can have a conscript army in our time. Thus, terrorism has become a "democratic" way of waging war.
What is "democracy" in terms of American benefit? In modern Orwellian vocabulary, it means support for American foreign policy. Bolivia and Honduras became "democracies" in the immediate aftermath of the coups, as did Brazil. Chile, under the rule of Pinochet, was guided by the principles of the Chicago School of Economics and was a "democracy" with a free market. So were Iran under the Shah and Russia under Yeltsin, but only until Putin was elected, just as China was a "democracy" before the arrival of Chairman Xi.
According to the same dictionary, the opposite of the word democracy is terrorism. This word refers to the politics of any country that wants to fight for its independence from American neoliberalism, but does not include the American proxy armies.
Iran's role as an enemy of the United States
What stands in the way of the process of "dollarization" and the spread of the military-oil strategy? Obviously, Russia and China have long been considered strategic enemies because of their independent methods of domestic and foreign policy, but immediately behind them on the list is Iran, which has been under the gun of American weapons for almost seventy years.
America's hatred of Iran stems from attempts to control its oil industry, exports, and profits. Its roots go back to 1953, when Mohammad Mossadegh was overthrown because of the desire to control Anglo-Persian oil resources. The coup, orchestrated by the CIA and MI6, replaced him with a malleable Shah who established a police state to suppress any hint of Iranian independence from the United States. The only place free from all-out surveillance was the mosques, which made the Islamic Revolution a natural way to remove the Shah and restore Iranian sovereignty.
The Americans had come to terms with OPEC's oil independence by 1974, but the reasons for their dislike for Iran were religious and demographic. Iran's support for Shiites in other countries and aid to the poor through quasi-socialist policies rather than neoliberalism made Iran a rival to Saudi Arabia, their Sunni sectarianism and the role of the base of the American Foreign Legion.
First of all, General Soleimani thwarted the Americans with his fight against ISIS, which is controlled from Washington in an attempt to destroy Syria and destroy the Assad regime, replacing him with a number of US-compliant leaders in full accordance with the old British principle of "divide and rule". From time to time, Soleimani collaborated with the US military in the fight against ISIS units that "went beyond" Washington's instructions. All the same, all indications are that in Iraq he found himself in an attempt to negotiate with the local government to establish control over the oil fields, whose takeover Trump so bragged.
Back in early 2018, Trump demanded that Iraq pay for the American "salvation of their democracy," meaning the bombing of the remnants of Saddam's economy. The payment was supposed to be in the form of oil. Most recently, in 2019, Trump asked why not just grab Iraqi oil. The giant oil region has become a trophy for Bush and Cheney in their oil war after 9/11. “It was a pretty run-of-the-mill and mundane meeting,” a source told Axios, until at the very end Trump grinned and asked, “What are we going to do about oil?”
Trump's idea that America should receive some kind of redress after the destruction of the Iraqi and Syrian economies fully reflects the direction of American foreign policy.
In late October 2019, the New York Times reported: “In the last few days, Trump has seen in Syria's oil reserves a new reason to deploy hundreds of additional soldiers in a war-torn country. He said the United States "kept" the oil fields in the chaos of the northeast of the country and suggested that the seizure of oil resources justified the expansion of the US military presence in Syria. “We have taken them and are safely guarding them,” Trump said during a speech at the White House dedicated to the elimination of the head of ISIS, Al-Baghdadi. A CIA official reminded a journalist who asked that taking control of Iraqi oil fields was one of Trump's campaign promises.
The lust for oil explains the invasion of Iraq in 2003, and now Trump is asking why not just take that oil. This also explains the Obama-Hillary war against Libya - not only because of the oil itself, but also because of the desire of the Libyans to invest in the gold reserves of other countries, and not to pour the excess into US Treasury securities. And, of course, because of following the course of a secular socialist state.
This also explains why the neoconservatives were so afraid of Soleimani and his desire to regain control of the Iraqi oil fields and repel Iraqi attacks by terrorists supported by the US and Saudi Arabia. All of this made the assassination of Soleimani a matter of increased urgency.
American politicians have discredited themselves by talking about what a terrible person the murdered Suleimani was. For example, Elizabeth Warren recalled the general's involvement in the assassination of American soldiers and the planning of Iraqi defensive schemes erected in an attempt to defend against the American invasion of oil. Warren simply echoed the American media's description of Soleimani's enormity, diverting attention from the strategic reasons why he was killed right now.
Countermeasures against US dollar diplomacy, oil and global warming
This foreign policy strategy will continue to operate until the targeted countries abandon it. If Europe and a number of other regions do not do this, they will reap the consequences in the form of an influx of refugees, terrorism, global warming and weather anomalies.
Russia and China are already at the forefront of the de-dollarization process as the primary means of keeping their balance of payments outside the framework of American military diplomacy. But everyone is already debating what Iran's response should be.
The explanation - or rather, the distraction - circulating in the American media described the inevitability of a terrorist attack on the United States. New York Mayor De Blasio deployed police officers at the most obvious points in the city in order to make it clear how serious the threat of Iranian terrorism is - as if it were the Persians, not the Saudis, who staged the 9/11 attacks and as if the Persians had ever fought against the United States at all. The media and talking heads from TV flooded the media space with fears of Islamic terrorism, and TV broadcasters predicted future locations for possible attacks.
The message was that the assassination of General Soleimani was an act of defense for the Americans. As Donald Trump and a number of military officials said, the general was responsible for the killings of the Americans and plotted an unprecedented attack on the United States that would kill many innocent Americans. This message was an expression of America's position in the world - vulnerable, defenseless and in need of defensive action in the form of offensive action.
But what is Iran's goal? Indeed, this is undermining the American oil and dollar strategy, squeezing American troops out of the Middle East and its oil-bearing regions. It so happened that the assassination of Soleimani had the opposite effect to what President Trump had hoped for. Already on January 5, the Iraqi parliament issued a document ordering the American armed forces to leave the country. General Soleimani was a guest in Iraq, not an invader, which cannot be said about the American military. If the US leaves Iraq, Trump and the neoconservatives will lose control of Iraqi oil and the ability to intervene in the common Iranian-Iraqi-Syrian-Lebanese defense axis.
Behind Iraq looms Saudi Arabia, which has become a citadel of absolute evil, the source of Wahhabism and the legions of American mercenary terrorists who have become the reason for US control over the Middle East and the exodus of millions of its inhabitants from their native lands to Turkey and Europe.
The ideal outcome of the current order of things would be to destroy the source of Saudi power that lies beneath the surface of the oil fields. The Saudis have been hit hard by the simple Yemeni bombs, so if Iran really wants to threaten the American neoconservatives, it should launch a full blown strike against the oil-producing areas of Saudi Arabia and its allied sheikhs. This will put an end to Saudi support for Wahhabism and the dollar.
Such action should undoubtedly be synchronized with the call for Palestinians and other foreigners in Saudi structures to remove the monarchy and get rid of its henchmen.
After that, Saudi Arabia, Iran and other supporters of a break with neo-liberal and neo-conservative US policy should begin to put pressure on Europe, convincing it to leave NATO, which is a tool for imposing US dollar and oil diplomacy. This will help avoid climate change and military confrontation that is pulling Europe into the American whirlpool.
Finally, what are anti-war Americans doing to prevent neo-conservative attempts to destroy any part of the world that resists American neoliberal autocracy? The answer is disappointing - nothing. Trump's impulsive accusations leveled at Warren, Sanders and Buttidjich ignored the fact that Trump's actions fell within the framework of a planned strategy - to draw a line in the sand that affirmed that America is indeed READY to fight Iran in order to continue to maintain control of the Middle East and banking systems of the OPEC countries. America will not hesitate to defend its legions of ISIS as if any threat to the policies they pursue were a direct threat to the United States.
I can understand the message of the new calls for the impeachment of Donald Trump, but you need to understand that this is an obvious dead end. Firstly, because these calls too clearly come only from the Democratic Party, and secondly, the very accusation that the assassination of Soleimani was an abuse of presidential powers is false.
Congress approved the assassination, and it bears the same blame for the act as it did for approving the Pentagon's budget and striking out from the 2019 National Defense Authorization Act (NDAA) the amendment proposed by Sanders, Yudall and Khanna and separately contained a ban The Pentagon for military operations against Iran and its leaders. When the law with this amendment was sent to the Senate, the Pentagon and the White House (that is, the totality of representatives of the military-industrial complex and neoconservatives) removed this restriction. It was a signal that the White House was indeed preparing to start a war against Iran and kill its leaders. Congress did not have the courage to defend the amendment in the face of public debate.
Behind all this is the Saudi-inspired 9/11 attack, which took away from Congress the sole authority to finance wars. This is the 2002 Authorization for the Use of Military Force, supposedly designed to fight al-Qaeda, but in fact it became the first step in the long-term support of the United States of the same group that staged the attack.
The question is how to make world politicians - American, European, Asian - see that the American “all or nothing” approach threatens the world only with new wars, waves of refugees, disruption of oil supplies from the Strait of Hormuz, global warming and the imposition of the neoliberal cult of the dollar in all countries. An indicator of how insignificant the power of the UN is, is that no country is calling for a new Nuremberg process, no country threatens to leave NATO, and no country dares to keep reserves in anything other than dollars going to the US military budget.
Translated by Ilya Titov