“Crisis of the US financial system will lead to an economic depression worse than that of the 1930’s” – interview W.F. Engdahl – part 1

“Crisis of the US financial system will lead to an economic depression worse than that of the 1930’s”

considers the writer and political analyst F. William Engdahl

F. William Engdahl, is a famous economist and writer, author of the best-selling book on oil and geopolitics, “A Century of War: Anglo-American Oil Politics and the New World Order”, which has been translated into French, Arabic, Korean, German, Croatian and Turkish. In 2007, he completed “Seeds of Destruction: The Hidden Agenda of GMO”. He has written on issues of political economy, geopolitics, energy, Worl Trade Organization (WTO), International Monetary Fund (IMF), for more than 30 years, beginning with the first oil shock and world grain crisis in the early 1970s. After a degree in politics from Princeton University and graduate study in comparative economics at the University of Stockholm, he worked as an economist and free-lance journalist in New York and in Europe, covering subjects including the majority important economic and politic events. He has spoken at numerous international conferences on geopolitical, economic, GMO, economic and energy subjects, including a keynote address to the Montreaux Global Investors’ Forum, the Centre for Energy Policy Studies in London, the International Chamber of Commerce in Zagreb and the International Institute of Strategic Studies in Moscow. He currently lives in Germany and in addition to writing regularly on issues of economics, energy and international affairs, is active as a consulting geopolitical risk economist. In this fall is expected publication of the new book “Entire Dominate Spectru: Plans Geopolitice Backs Raising the Global Military Force to Washington”.

– Mr. Engdahl, you are among those who have clearly explained why the present day oil price is the result of some financial and engineering speculations and not at all the traditional result of demand and supply. Explain us how things are.

WE: – The Cheney-Bush regime is a project supported by Big Oil and the military industrial complex. Their agenda requires them to manipulate the oil price dramatically higher to control world economic growth among other things. In the past several years, the Bush Administration has taken steps to deregulate the trading of oil futures contracts. The responsible futures regulator, to protect market users and the public from fraud, manipulation, and abusive practices, the CFTC (U.S. Commodity Futures Trading Commission) has explicitly abdicated its oversight over the trading of oil futures on the Atlanta ICE futures exchange since 1966. My conservative calculation is that at least 60% of today’s $100 per barrel price of crude oil comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York NYMEX futures exchanges and uncontrolled inter-bank or Over-The-Counter trading to avoid scrutiny. US margin rules of the government’s Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only 6% of the value of the contract. At today’s price of $128 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme “leverage” of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population. The Government and the Congress know well what is going on but the power of the banks is so strong in Washington that they have done nothing to control the speculation, even as prices last summer hit $147 a barrel. In fact, it is a political decision by the US Government to allow Wall Street banks to control oil prices.

– As for cutting off the medusa head it is necessary to reach out the higher levels of the United States administration, which are the chances to end this kind of speculations?

WE: – As we have seen since the outrageous rise of oil futures prices in June and July to $135-147 a barrel, Congress lacks the political will especially in an election year, to alienate the powerful American Bankers Association and Wall Street. They have done nothing meaningful, even when prices jumped by $25 in a day last month, to control the destructive speculation. It goes to the highest levels of the White House and Congress. What happened in the last week on U.S. financial market is the new proof that they are overshadowed by the situation.

– Another area is the controversial arms sales. The US Defense Department announced they are going to sell GBU-39 bombs  to Israel, news that were further speculated as giving Israel the needed weapons to use against Iran. How do you comment?

WE: – I see little possibility of an Israeli attack on Iran in the near future. The Bush administration badly needs Iranian cooperation to control Iraq. It has been in secret back-channel talks with Teheran for months while sabre rattling and making public show of a possible US attack. In reality President Bush recently told Israel it would not condone an independent Israeli strike. In my view military attack on Iran is out of the question for both Israel and Washington, regardless of US weapons sales. It is far too dangerous. The US military is badly over-stretched, morale is at a severe low according to direct reports. The US financial system is in a systematic crisis that will lead to an economic depression worse in my estimation than that of the 1930’s.

– In the last two years, USA sold 32 billion dollars weapons. Most of the political analysts exclude a new military intervention in the USA as, despite the huge amount of funding invested, the Afghanistan and Iraq wars have been a mistake. With the economical recession perspective as an argument, it was told that USA can’t afford a new war. In these conditions, don’t you think that we have to deal with an US aggressive rhetoric meant to start a psychosis of war and a new race towards weapons that would fill the pockets of some „smart guys”?

WE: – There is now a bitter behind the scenes factional split in the US establishment that runs right through the Bush Administration. There is strong evidence it was Dick Cheney who gave Georgia’s Saakashvili encouragement to retake South Ossetia and Abkhazia last August, likely knowing full well it would force some Russian reaction. Why? Cheney is the spokesperson for the war faction, the neo-conservative warhawks who are responsible for the Iraq debacle, Afghanistan. Cheney is doing all he can to get his friend, John McCain as next President. An international conflict with Russia over remote Georgia boosts McCain as the experienced war hero, or at least it seemed. In addition, Cheney and the military industry desperately wants to revive a new Cold War to justify its military existence and expand its power. The dangerous and provocative US missile defense in Poland and the Czech Republic is coming from this Cheney neo-conservative faction. It is provocative in the extreme and risks pushing the world to the brink of nuclear war by miscalculation. It is not about money or fat guys lining their pockets, so much as an increasingly desperate American power elite trying to preserve its role as world empire without necessarily calling it that—world sole superpower. The financial disintegration now underway signals the end of the US as the postwar financial superpower. Iraq since 2003 marks the end of the US as military sole superpower. The Russian response in Georgia merely confirmed that fact for all the world to see. The US as a declining imperial power is in a state of denial and that is dangerous, both for the future of the United States and for the world.

(to be continued)

Published: http://arhiva.cadranpolitic.ro/view_article.asp?item=2658

One response to ““Crisis of the US financial system will lead to an economic depression worse than that of the 1930’s” – interview W.F. Engdahl – part 1

  1. Pingback: Power&Politics Weblog

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