By Sergio Weigel for the Saker blog
Everybody understands the importance of the dollar system as the Achilles heel for the US empire yet oddly, when analysing imperial action of Warshington of the last decades, the focus is usually on ideologies like Zionism or American exceptionalism, or on at most partial aspects such as fossil fuels and pipelines. Another focus, favored mainly among Americans, is that America once was great but now has lost track somehow. I still think that the means of production, or in case of the US selling dollar annotated debt masked as investment, is far more paramount for US decision-making than ideology or oil, and that America hadn’t lost track but instead desperately tries to hold on to its track.
First, a few words about America’s track. The imperialists of the US regime desperately cling to their empire, that’s a classic, that’s what imperialists do. The Nazis clung to their short-lived empire until Germany was in ruins, the Romans clung to theirs until defeated, and the British struggle during WW2 was far more about preserving theirs than it was about defeating Nazi Germany. Empires usually don’t dismantle themselves. But it’s also the American people, serfs to the empire, who are desperately clinging. That’s what I found so appalling about the Occupy movement. These millennial brats had no political agenda but to demand their cheap flat screens back from the banksters. They didn’t want change, they wanted continuity. The same is true for the so-called “alt-right” movement who have zero political agenda for a better future. They lament the present while dreaming of a past 1950s/1960s America that has never even really existed. When they say America has lost its track, they might have Middle Eastern wars in mind, but that’s rubbish because there is nothing new or different in these wars than in any wars Warshington had fought before against the Natives, their own Southern brethren, Mexico, Spain, Philippines, Korea, Vietnam, you name it, and the meddling on Maidan is in no way different to what they’ve been doing in Latin American countries since the mid 19th century. Psychologically, I think, what they mourn is that the mask has fallen off and that they cannot go back to that cozy, simple, and ignorant lifestyle they had been able to enjoy up until 9/11.
To me the US empire is an historic aberration of humanity. With its genesis, its unparalleled level of violence, the categorically insolidary and segregated society and surreal consumer culture it has created, and the delusional ideology and mythology with which it justifies itself based on a borderline psychotic Messiah complex (Manifest Destiny), it represents an exceptional oddity among nations. But beyond its mental problems there is a cold, hard fact – at least within the realm of capitalism – that explains the actions and reactions of US imperialism throughout the years, especially in recent decades. It is both fuel and failure of the empire: the dollar as the world’s reserve currency, or rather the system behind it which consists of masquerading and selling debt as investment.
Many people consider the US to be a proper republic with a valid constitution, separation of powers, rule of law and all that jazz. I think that is baloney. In truth the US government is a front for a criminal enterprise and it has been like that ever since the US Constitution has been created and passed by whom Gore Vidal rightfully dubbed as “frightened men of property”. While the American Revolution in itself was a truly unique and valuable moment in human history, the system that resulted from it was and still is designed by men of wealth for men of wealth to obtain as much wealth as possible at the expense of everybody else without the tedious social responsibilities the French republicans came up with. In fact, this lack of social responsibility is what they mean when they say freedom. The American nation never had a chance to develop to its potential, because it was hijacked early on by networks/cartels of the rich. What is commonly referred to as the American dream should therefore rather be named the American deception. In my view, the Pursuit of Happiness is the largest middle-finger ever erected in human history. America has never lost its track, I think it has always been on the same track, yet it is about to derail hard.
While Europe has managed (more or less) to develop, kill and struggle itself into a bunch of societies in which solidarity, social justice and rule of law remain core cultural and social concepts – to a certain extent even for the rich (Napoleonic Code) -, America has developed into a rat race society based on property, materialism and a general save-your-own-ass mentality. A smart guy from New York once described his own country to me as money talks, bullshit walks. The fish rots or rather trickles down from the head. America is run by a bunch of mafia cartels no better than street gangs – Wall St, Big Oil, Big Pharma, Big Media, Military-Industrial-Complex etc. – with the Federal Reserve as their giant money laundering corporation, a bureaucracy of ridiculous proportions as both the mafia’s hitmen (CIA, Pentagon) and legal front (Congress), and the US president as the constantly changing promotion mascot. There is very often no love lost between these cartels or their players, but there are two things that unite them. First, the US dollar system, the single largest Ponzi scheme in human history and, second, an extremely elitist self-concept inherited from English aristocracy asserting that it is them, and only them, who shall rule the world. Take the infinite callousness and arrogance of the English upper class, offer them a vast country and endless influx of human material for exploitation and what you get is the United States of America and its WASP regime. The US has been an imperialist project right from the start, because it was founded out of (British) imperialism.
From their elitist perspective the American or any other people serve as human cattle to be duped, exploited and used. It is the ultimate Fordist nightmare, which Aldous Huxley could only vaguely anticipate in his novel A Brave New World. The people are made to live under conditions comparable to that of farm cattle with TV screens flickering in their stables. To the regime they are nothing but salary and consume cattle, cynically dubbed as human resources in the business world, a euphemism for slaves if you ask me. Lives, thoughts and views, food, medicine and drug use, culture, or the fairy tale people are supposed to believe as history are determined and conditioned by a gigantic propaganda industry that makes Joseph Goebbels drool in his coffin. Hollywood is the manifestation of what he could only dream of.
Europeans suffer from pretty much the same state of shallow and philistine slave existence, but it’s mostly a post-WW2 imported American thing for us. We still have a choice and we have all the necessary cultural, nutritional and intellectual roots to free ourselves from it. I might be dead wrong in my observations, but I don’t see how Americans with what I consider as their still prevalent settler mentality could really do that. I hope they will find a way and if only after the collapse of the empire. Regardless, you cannot properly understand US imperialism, let alone the so-called “West” in general, unless you fully appreciate the manufactured fake that it really is. Therefore let’s start with the only real thing about it – at least in a capitalist sense – the dollar system.
Empire of Snakes and Weasels
Through their dubious actions and policies of supporting all sides before and during WW2 the US cartels managed to weasel their host country’s way from the world’s number one debtor before the war to the world’s number one creditor after the war. With this leverage at their disposal the US entered the Bretton Woods negotiations in 1944. The Bretton Woods conference was in essence the result of Anglo-American establishments contemplating on how to rule and dominate the world after WW2. British imperialists, the other oddballs of human history and well worth an article of their own, and America’s ruling cartels had already united their criminal enterprises, although from different perspectives. While the British were mostly interested in using American muscle to preserve their empire which had been struggling especially against Germany’s rising economic power since the late 19th century, the American cartels were eager to establish themselves on a global and especially European stage, an endeavor for which Britain served well as springboard.
It is therefore no surprise that the English speaking imperialists on both sides of the Pond had different views on how to run future currency-based world domination. England was represented by British economist John Maynard Keynes – himself one of the initiators of the Bretton Woods conference – who put forward the idea of an international bank called International Clearing Union which would issue its own currency – the bancor – as an account currency between nations. The idea was to have trade surplus or creditor nations invest in the economies of trade deficit or debtor nations and so to even out global economic imbalances. Lord Keynes was one of the few if not the only competent of capitalist economists.
Keynes proposed that any country racking up a large trade deficit (equating to more than half of its bancor overdraft allowance) would be charged interest on its account. It would also be obliged to reduce the value of its currency and to prevent the export of capital. But – and this was the key to his system – he insisted that the nations with a trade surplus would be subject to similar pressures. Any country with a bancor credit balance that was more than half the size of its overdraft facility would be charged interest, at a rate of 10%. It would also be obliged to increase the value of its currency and to permit the export of capital. If, by the end of the year, its credit balance exceeded the total value of its permitted overdraft, the surplus would be confiscated. The nations with a surplus would have a powerful incentive to get rid of it. In doing so, they would automatically clear other nations’ deficits. (source)
This is – within the realm of capitalism – a pretty neat idea, one that would have, for example, prevented the flaws of the euro system, in which the common currency is undervalued for Germany (great for exports, pretty shit for the domestic market) but overvalued for pretty much everyone else with the result of German industry and its retailers Lidl and Aldi literally eating up the rest of Europe. Had the euro been designed as a common account currency with a proper multilateral treaty based on Keynes’s ideas while preserving national currencies, we wouldn’t have had to experience the euro crisis with all its terrible humanitarian consequences, and Germany would not have had the chance to abuse its imperialist power within Europe the way it did. I don’t think that the crappy euro design was a mistake but rather one deliberately made by German bankers and industrialists who prevailed over French and others when drafting the euro – but that’s something others have already written extensively and are more skilled about. The same flaws we can see in the euro system persist in the dollar system on a global scale since Bretton Woods, when one country can dominate the rest using the leverage of currency.
In the beginning of the conference everyone was with the ideas of Lord Keynes for they were as reasonable as it can get within a capitalist frame. But it was the American imperialists, represented by Harry Dexter White, who had quite different ideas for their currency-based world domination. They wanted to seize the opportunity by establishing an International Stabilization Fund which would put the whole burden of economic imbalance on the debtor nations. Instead of a global account currency like the bancor they wanted to establish their own US dollar as the world’s reserve currency. It is not documented how many arms the US cartels had to twist in how many directions at Bretton Woods, but eventually they prevailed and the notorious Bretton Woods system with the US dollar as sole reserve currency was implemented with the infamous IMF at its core, an institution that evidently turns everything it touches into deep shit as it keeps working along utmost economic illiteracy – even for capitalists – designed only to withdraw further capital from already troubled nations.
Having one country’s currency as the world’s sole reserve currency was and is so far unique in history. It is often and commonly believed that the US dollar had just replaced the British pound as the world’s reserve currency, but this is not quite accurate. British pound, German mark, French franc or Portuguese escudo had at their respective times always been reserve currencies alongside each other. Some were more regionally focused, like the French franc in Africa, with the British pound playing the major but not singular role globally. Bretton Woods, however, introduced the US dollar as the world’s or rather capitalist world’s sole reserve currency with all other currencies having fixed exchange rates to it. The US cartels gained tremendous political and economic clout by that, especially since it later allowed them to run a much larger and longer state and trade deficit than they could have, had the dollar been just been one garden variety currency among others. But how did it go and what does it mean today, when the world appears to be returning to a “normal” state of affairs again with the rise of euro and yuan?
A Roller Coaster That Only Goes Downhill
Many of America’s grumpy nostalgics who thought that a billionaire with a terrible hairdo would help them out of their misery by building a wall consider America to have been great in the past. Of course, it was never great at all. Those were times of heinous crimes against humanity by the US regime against the world and its own people, earlier even inspiring other villains. On principle it was just like today and how it has always been. The USAF was carpet bombing Asian countries and everybody was scared of Russians. Still, the times felt great, because the country was surfing the big post-war Kondratieff wave and enjoyed a