[Petrodollar]

Announcement:
For those familiar with my research, and are interested in the arcane subject matter of the global economy, Peak Oil, and the unspoken oil currency war between the dollar the euro, I am pleased to announce that my book is finally being released this week. It only took 3 years of research, 1.5 years of writing, and 640+ footnotes, to produce my little magnum opus, but I think most objective readers will find it interesting, even if somewhat disconcerting. Here's the publisher's Press Release:

July 2005 Re: Consideration for Review
Reveals the background – and blowback – from the first oil currency war

— FOR IMMEDIATE RELEASE —
Petrodollar Warfare Oil, Iraq and the Future of the Dollar by William R. Clark PROJECT CENSORED AWARD WINNING AUTHOR, 2003 and 2005
The invasion of Iraq may well be remembered as the first oil currency war. Far from being a response to 9-11 terrorism or Iraq’s alleged weapons of mass destruction, Petrodollar Warfare argues that the invasion was precipitated by two converging phenomena: the imminent peak in global oil production, and the ascendance of the euro currency.

Energy analysts agree that world oil supplies are about to peak, after which there will be a steady decline in supplies of oil. Iraq, possessing the world’s second largest oil reserves, was therefore already a target of U.S. geostrategic interests. Together with the fact that Iraq had switched its oil currency trade to euros — rather than U.S. dollars — the Bush administration’s unreported aim was to prevent further OPEC momentum in favor of the euro as an alternative oil transaction currency standard.

Meticulously researched, Petrodollar Warfare examines U.S. dollar hegemony and the unsustainable macroeconomics of ‘petrodollar recycling,’ pointing out that the issues underlying the Iraq War also apply to geopolitical tensions between the U.S. and other countries including the member states of the European Union (EU), Iran, Venezuela, and Russia. The author warns that without changing course, the American Experiment will end the way all empires end – with military over-extension and subsequent economic decline. He recommends the multilateral pursuit of both energy and monetary reforms within a United Nations framework to create a more balanced global energy and monetary system – thereby reducing the possibility of future oil depletion and oil currency-related warfare.

A sober call for an end to aggressive U.S. unilateralism, Petrodollar Warfare is a unique contribution to the debate about the future global political economy.

About the Author: William Clark has received two Project Censored awards, first in 2003 for his ground-breaking research on the Iraq War, oil currency conflict, and U.S. geostrategy and again in 2005 for his research on Iran’s upcoming euro-denominated oil bourse. (Censored 2004: The Top 25 Censored Stories, Seven Stories Press). He is an Information Security Analyst, and holds a Master of Business Administration and Master of Science in Information and Telecommunication Systems from Johns Hopkins University. He lives near Bethesda, Maryland.

288 pages 6 x 9” Current Affairs / Political Science & Government / Finance
ISBN 0-86571-514-9 US$17.95 / Can$24.95

***…Here's what others said about this new book (based on the gallery/proof manuscript)…

Advance Praise for Petrodollar Warfare; Oil, Iraq, and the Future of the Dollar

William R. Clark's Petrodollar Warfare is an oracle of our times exposing the hidden geopolitical strategies of the power elite and the interlocking agendas of big oil and the neo-conservatives in power today. Clark is a winner of two Project Censored awards for publishing important news stories ignored by the corporate media in the US.

-- Dr. Peter Phillips, Professor Sociology, Sonoma State University and Director Project Censored

Petrodollar Warfare by William R. Clark is an important contribution to the question what the Iraq war was and is all about. Clark links the emerging Euro currency to Iraq’s pricing of its oil as one significant factor leading to Washington’s decision to topple Saddam Hussein. It might be open for argument whether a ‘Petroeuro’ as a replacement for the ‘Petrodollar’ is likely or not, given the many divisions within the European Union. But Clark’s thorough documentation of the discussion, notably plans for an Iranian Oil Bourse to counter NYMEX and the London IPE, provides a useful basis for further thinking about one of the vital strategic issues of today. Clark also extensively treats the issue of Peak Oil, or global depletion, as a major unspoken factor in the US oil agenda. This book is definitely worth careful reading.

-- F. William Engdahl, author of A Century of War: Anglo-American Oil Politics and the New World Order

If you think you understand the headlines, think again: current events can only be understood when we follow the money. In Petrodollar Warfare, William Clark guides us through the hidden history of the petrodollar era and deftly uncovers the basis of current US strategy in the Middle East.
This sobering book not only elucidates our past and present, but shows the way toward global monetary reform. As Clark makes clear, America's founding ideals can only be fulfilled if the people of the US are willing to confront the twin demons of proto-fascism and kleptocracy.

-- Richard Heinberg, author of The Party's Over: Oil, War and the Fate of Industrial Societies, and Powerdown: Options and Actions for a Post-Carbon World
Not only does Petrodollar Warfare give you the big picture of the intertwined world of war, oil, and money, but Clark also provides ideas for change. This book helps to fuel the grassroots engine for progress in America.

-- Jim Hightower, radio commentator and author of Let’s Stop Beating Around the Bush, and Thieves in High Places: They’ve Stolen Our Country and its Time to Take it Back


In Petrodollar Warfare, William Clark provides important new insights into the strategic thinking of American leaders. Anyone who seeks a more complex and revealing explanation for the U.S. invasion of Iraq and other recent US policy initiatives will find this book well worth reading.

-- Dr. Michael T. Klare, author of Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency, and professor of peace and world security studies, Hampshire College


Back in 1997, when I wrote about M. King Hubbert and Peak Oil in the first edition of The Last Hours of Ancient Sunlight, not many people were aware that we were fast approaching a worldwide energy crisis. Now we're in the middle of two wars over it, as William Clark so brilliantly documents in Petrodollar Warfare. Oil in Euros, deceptions from the White House, wars for profits and political power; it reads like a Ludlum novel. Unfortunately, it may well be altogether too true.

-- Thom Hartmann, author of The Last Hours of Ancient Sunlight, and Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights

It is clear to almost all informed observers that both the US and the world are entering new, dangerous, and quite uncharted territory, especially now that questions about global oil supplies have exploded into mainstream prominence. All of this leads to an ever more complex world with no simple explanations, and nowhere is this more true than the tragic interplay between oil, politics, and money. Petrodollar Warfare is therefore to be greatly welcomed, since William Clark's book provides a badly needed, carefully researched explanation of the deep and dark mechanisms underlying international movements of money and military forces. Clark tells the fascinating and distressing story of how America achieved world dominance and looks with tough honesty and realism at what the future might hold. If Petrodollar Warfare's bold analysis can help more Americans to understand the current pathology of their own extraordinary country, then it will assist both the world and America to find a better path into a less violent and energy-addicted future.

-- Julian Darley, founder of Global Public Media and the Post Carbon Institute, author of High Noon for Natural Gas: The New Energy Crisis and Relocalize Now! Getting Ready for Climate Change and the End of Cheap Oil

I first became aware of William Clark’s writings in the latter part of 2004. I was amazed by his clarity and almost intuitive grasp of economic issues as well as his ability to relate those to everyday life across several disciplines. Watch what this man says. In Petrodollar Warfare, he may be telling us things that we will need to hear for our own survival.

-- Michael C. Ruppert, author of Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil

[FatherOfTwo]

This thread is clearly in violation of the COC and should be deleted immediately.

[Petrodollar]

Over the past year I noticed my previous online essays re Iraq and Iran have been discussed on this board, and generated several posts (& Project Censored awards in 2003 & 2005). I hope this announcement regarding the availability of a new book concerning global Peak Oil, macroeconomics, and geopolitical tensions is an acceptable post.

[SD_Scott]

Sounds like a winner. I'll certainly check it out.

[PO_TimeCr0ss]

I'll buy it.

[FatherOfTwo]

Unsolicited Advertisements This includes offering goods, services, employment, or soliciting donations. This also includes advertising for a website. If you have something to sell, please contact an administrator and buy a banner

[some_guy282]

I'll probably check it out too.

[Barbara]

I simply think it's not fair to sign on the board just to advertise a book, through very interesting.
Let's see if petrodollar keeps posting here or disappear right after the ad!

[rowante]

Yeah I'd love to read your book... but this does seem to breach the COC... I would recommend sending a copy to EnviroEngr for review and buying an advertising banner. This thread will be deleted [or moved to the review section... yay].

[DantesPeak]

An interesting concept that I've seen discussed over the last few years. Maybe you could make an excerpt available.

I will not be totally convinced of the ascension of the euro until those in charge of the euro - Europe - want it to become the world currency and OPEC and other oil producers move to a basket pricing mechanism.

Maybe your book will shed light on this.

[lapulapu]

I would agree it breaches COC - the poster should've wrote personally about the topic and then mention the book rather then just cut and paste from a PR...IMHO

[Tyler_JC]

PetroDollar, I'm afraid I have to move this to the Books/Media forum because...it fits better there.

[Petrodollar]

After reading a couple of comments to my post, I asked the site's administrator to review and advise. I didn't see the Book/Media reviews option at first, but now that I know about it, I concur with the moderator's decision.

Anyhow, I welcome critiques and feedback on this subject matter. As Engdahl noted in his endorsement, the choice of oil currency is one the "vital strategic issues of today' - although it is typically only the elites and associated intell services that have the requisite appreciation of this arcane but crucial macroeconomic issue (In otherwords, they don't teach you anything about 'petrodollar recycling' during those econ classes for MBA school...)

I will post a few exerts for those interested in the following post...

[Petrodollar]

DantesPeak,
Per your request for an exert, here's a very abbreviated list of exerts to consider...

Origins of Petrodollar Recycling

(exert from the book- Chapter 1)....By the summer of 1971 the drain on the Federal Reserve’s gold stocks had become critical, and even the Bank of England joined the French in demanding US gold bullion for their dollars. In August 1971 the British ambassador showed up at the Treasury Department to redeem $3 billion for its fixed exchange value in gold of $35 per ounce (approximately 5.3 million ounces, or 2600 tons of gold). At this time the Nixon administration opted to abandon the dollar-gold link entirely, thereby going to a system of floating currencies on August 11, 1971. Otherwise Nixon would have risked the collapse of the gold reserves of the US. Rather than risk damaging US credit, he changed the rules, or more accurately, he abandoned the rules.

The break with gold effectively ended the Bretton Woods Agreement and opened the door to an entirely new phase of the American Century. In this phase, large international banks, such as Citibank, Chase Manhattan, or Barclays Bank, in effect privatized control over monetary policy. These institutions assumed the role that central banks held under the Bretton Woods gold system, but of course without any ability to redeem dollars for gold. In this phase, market forces determined the dollar’s value, which resulted in substantial inflation during the early 1970s. In an effort to stem this inflation, the Nixon administration adopted wage-price freezes in late 1971, but inflation continued to increase significantly during the 1970s.

The combined forces of a free-floating dollar, a growing US trade deficit, and massive debt associated with the ongoing Vietnam War contributed to both the volatility and devaluation of the dollar in the 1970s. According to research outlined in David Spiro’s book, The Hidden Hand of American Hegemony, it was during this time that OPEC began discussing the viability of pricing oil trades in several currencies. This unpublished proposal involved a basket of currencies from the Group of Ten nations, or G-10. These members of the Bank of International Settlements (BIS), plus Austria and Switzerland, included the major European countries and their currencies, such as Germany (mark), France (franc), and the UK (pound sterling), as well other industrialized nations, such as Japan (yen), Canada (Canadian dollar), and of course the US (US dollar). It should be noted the powerful G-10/BIS also has one unofficial member, the governor of the Saudi Arabian Monetary Authority (SAMA).

In order to prevent this monetary transition to a basket of currencies, the Nixon administration began high-level talks with Saudi Arabia to unilaterally price international oil sales in dollars only — despite US assurances to its European and Japanese allies that such a unique monetary/geopolitical arrangement would not transpire. In 1974 an agreement was reached with New York and London banking interests that established what became known as “petrodollar recycling.” That year the Saudi government secretly purchased $2.5 billion in US Treasury bills with their oil surplus funds, and a few years later Treasury Secretary Blumenthal cut a secret deal with the Saudis to ensure that OPEC would continue to price oil in dollars only.

In typical understatement Spiro noted that, “clearly something more than the laws of supply and demand ... resulted in 70 percent of all Saudi assets in the United States being held in a New York Fed account.” Naturally, this arrangement with the Saudi government prevented a market-based adjustment and was the basis for the second phase of the American Century, the petrodollar phase. What follows is the extraordinary history in which petrodollar recycling was vigorously implemented during the 1970s...

(here's an interesting warning from the CIA circa 1975 re petrodollar recycling...)

Though it was less concerned with the secrecy of Arab investments, the CIA concurred that OPEC money continued to have a great potential for disrupting markets if an Arab government became displeased with US policy. [The CIA report stated] ‘Temporary dislocation of international financial markets would ensue, if the Saudi Arabian government ever chose to use its accumulated wealth as a political weapon.’ [emphasis added]

-CIA memo “Saudi Arabian Foreign Investment”, marked “Secret, Not Releasable to Foreign Nationals,” reviewed for declassification in May 1985, as noted in David Spiro’s book, The Hidden Hand of American Hegemony


Fast Forward to 2000 - Prewar momentum towards a “petroeuro”

"The [Iraqi] cabinet has decided to assign a committee of economists with the task of seriously studying the possibility of using the euro or any other currency instead of the dollar in the commercial transactions of our foreign contracts. The dollar is one of the levers of our enemy’s influence and power on both regional and international levels."

- The Iraqi News Agency, quoting a statement by the cabinet after a meeting chaired by President Saddam Hussein, September 14, 2000


"On Sept. 24, 2000, the regime of Saddam Hussein stunned the world after a routine cabinet meeting by announcing that it would no longer accept dollars for oil being sold under the UN Oil for Food program. All oil sales were to be paid for in euros. A government statement said the move was to confront the “daily American-Zionist aggression,” an apparent reference to support for UN sanctions. The Iraqi move did little to hurt the US economy. It paid off for Iraq when the euro appreciated by 30%.

- Robert Block, the Wall Street Journal, April 15, 2003


"In the long-term, perhaps one question that comes to mind is could a dual system operate simultaneously? Could one pricing system apply to the Western Hemisphere in dollars and for the rest of the world in euros .... Should the euro challenge the dollar in strength, which essentially could include it in the denomination of the oil bill, it could be that a system may emerge which benefits more countries in the long-term.

- Javad Yarjani, Head of OPEC’s Petroleum Market Analysis Department, in a speech to Spanish officials, April 2002


Saudi Arabia’s Prince Muhammad Bin-Turki Bin-Abdallah Bin-Abd-al-Rahman said … rather than resorting to an [oil] embargo … he argues that a more effective punishment for the United States, Israel’s principal source of financial and political support, would be to change the currency in which oil is traded from the dollar to the euro, something that Iraq has already done. This option, he said, is a strategic and rational one, compared with cutting off production, and it is purely commercial. The Arab countries have the right to choose the currency, just as it is the right of consumer countries to choose to deal with oil-exporting countries. [emphasis added]

“Protest by Switching Oil Trade from Dollar to Euro,” Oil and Gas International, (US), April 15, 2002

Postwar momentum

‘In the future the euro is (going to be) taking a place in the international markets in general as the money of exchange.’ Asked if a switch to pricing oil in euros was possible, ‘Of course, in the oil market and in any market. It’s a stable and a strong currency, the role of the euro is going to be increased step by step. It’s normal.’

- Loyola de Palacio, European Energy Commissioner, June 16, 2003


'I don’t see any particular merit in that for the average oil producing country. It really is a question of which currency (oil producers) feel most comfortable with over the long run — and the dollar’s always won out.'

- Guy Caruso, director of the U.S. Energy Information Admintration, June 17, 2003 (note this is the following day after the above EU comments)

OPEC Secretary General Alvaro Silva said the oil producers' cartel is considering trading oil in euros or a basket of currencies other than the dollar to compensate for the decline in the value of the greenback. ‘There is talk of trading crude in euros -- it is one of the alternatives,’ Silva told.

- OPEC Secretary Gerneral Alvaro Silva, December 9, 2003


OPEC is considering a move away from using the US dollar — and to the euro — to set its price targets for crude oil, the highest-profile manifestation of the debilitating effect of depreciation on the greenback’s standing as the currency of international commerce.

Several members of the Organization of Petroleum Exporting Countries are seeking formal talks on using the euro, as well as the US dollar, when determining price targets for crude, a senior oil minister within the cartel said Monday. ‘There are countries that are proposing this,’ Venezuela’s Oil Minister Rafael Ramirez said in Caracas. ‘It’s out there, under discussion.’

Mr. Ramirez did not specify which OPEC members are pushing the proposal, but much of the impetus is believed to come from Persian Russian Gulf producers.

- Globe and Mail, January 2004

Postwar commentary
(exert from Chapter 4 of Petrodollar Warfare)

On June 5, 2003, an article in Financial Times briefly mentioned that the first “postwar” Iraqi oil sales returning to the international markets were once again denominated in US dollars — not euros, thus confirming my original hypothesis that the US would immediately seek to reconvert Iraqi oil exports to the dollar.

"The tender, for which bids are due by June 10, switches the transaction back to dollars — the international currency of oil sales — despite the greenback's recent fall in value. Saddam Hussein in 2000 insisted Iraq’s oil be sold for euros, a political move, but one that improved Iraq’s recent earnings thanks to the rise in the value of the euro against the dollar."

Not surprisingly, the US corporate media has not run a single news story on the reconversion of Iraq’s oil exports from petroeuros to petrodollars. The swiftness with which the Bush administration achieved this tactical goal was impressive. This hidden fact helped illuminate one of the crucial, yet overlooked, macroeconomic rationales for the 2003 Iraq War.


(more exerts from Petrodollar Warfare)

Although this little-noted Iraqi move to defy the dollar in favor of the euro, in itself, did not have a huge impact, the ramifications regarding further OPEC momentum toward a petroeuro were quite profound. If invoicing oil in euros were to spread, especially against an already weak dollar, it could create a panic sell-off of dollars by foreign central banks and OPEC oil producers. In the months before the latest Iraq War, hints in this direction were heard from Russia, Iran, Indonesia, and even Venezuela. There are indicators that the Iraq War was a forceful way to deliver a message to OPEC and other oil producers: Do not transition from the petrodollar to a petroeuro system. Engdahl’s conversation with a forthright London-based banker is rather enlightening:

Informed banking circles in the City of London and elsewhere in Europe privately confirm the significance of that little-noted Iraq move from petrodollar to petroeuro. ‘The Iraq move was a declaration of war against the dollar,’ one senior London banker told me recently. ‘As soon as it was clear that Britain and the US had taken Iraq, a great sigh of relief was heard in London City banks. They said privately, “now we don’t have to worry about that damn euro threat.”’

Petrodollar recycling works quite simply because oil is an essential commodity for every nation, and the petrodollar system demands the buildup of huge trade surpluses in order to accumulate dollar surpluses.

This is the case for every country but the US, which controls the dollar and prints it at will or fiat. Because the majority of all international trade today is conducted in dollars, other countries must engage in active trade relations with the US to get the means of payment they cannot themselves issue. The entire global trade structure today has formed around this dynamic, from Russia to China, from Brazil to South Korea and Japan. Every nation aims to maximize dollar surpluses from their export trade because almost every nation needs to import oil.

This insures the dollar’s liquidity value and helps explain why almost 70 percent of world trade is conducted in dollars, even though US exports are about one third of that total. The dollar is the currency that central banks accumulate as reserves, but whether it is China, Japan, Brazil, or Russia, they simply do not stack all these dollars in their vaults. Currencies have one advantage over gold. A central bank can use it to buy the state bonds of the issuer, the United States. Most countries around the world are forced to control trade deficits or face currency collapse.

Such is not the case in the United States, whose number one export product is the dollar itself. This unique arrangement is largely due to the dollar’s World Reserve Currency role, which is underpinned by its petrodollar role. Every nation needs to get dollars to purchase oil, some more than others. This means their trade targets are countries that use the dollar, with the US consumer as the main target for export products of the nation seeking to build dollar reserves.

Synopsis

The “safe harbor” status of the US dollar since 1945 rests on it being the World Reserve Currency. In conjunction with the oil industry’s historical roots in Texas in the early 20th century, it has traditionally assumed the role of the main currency for international oil transactions. The dollar’s monopoly began to breakdown in the early 1970s due in part to the debts of the Vietnam War, with its associated drain of the US’ gold reserves, and the emergence of reinvigorated European and Japanese economies. Secret, unilateral US agreements with Saudi Arabia in 1974 thwarted movement toward a basket of multiple currencies for international oil trades. This has produced a fundamentally unbalanced global economy.

For the past 30 years the US Federal Reserve has printed hundreds of billions of oil-backed petrodollars, which US consumers provide to other nations by purchasing imported goods. Then those nations use these dollars to purchase oil/energy from OPEC producers. These billions of surplus petrodollars are recycled from OPEC and invested back into the US via Treasury bills or other dollar-denominated assets, such as US stocks, bonds, and real estate. The structural imbalances in the US economy are sustainable as long as

• nations continue to demand and purchase oil for their energy/survival needs,
• the world’s monopoly currency for global oil transactions remain the US dollar, and
• the three internationally traded “crude oil markers” remain denominated in US dollars.

However, the introduction of the euro is a significant new factor, and it appears to be the primary challenge to US economic domination. Saddam’s switch to a petroeuro in November 2000 was the 'first shot across the bow' regarding the unsustainable supremacy of the US dollar, and Iran’s up-coming euro-denominated oil Bourse is the second - and potentially far more important – international development in the battle for oil-currency supremacy. (note: the Iranian bourse if scheduled to “go live” on March 21, 2006).

Well, I hope this information was useful in helping others understand that it is not only the impending arrival of global Peak Oil that is driving - but also the associated unspoken oil-currency war. Iraq was the first proxy war in this high-stakes game of geopolitical influence….

[DantesPeak]

Petrodollar - Thanks very much for your excerpt, which I hope meets board guidelines.

I would be also interested if you found other reviews about your book.

Thanks again!

[Petrodollar]

DantesPeak,
I hope you found the exerts useful and informative. My book is so new (i.e. this week) that it will likely take a few weeks or a month before reviews start appearing, but the 8 endorsements that I received based on the draft manuscript should provide a decent overview from a diverse set of authors.

BTW, I think this board is going to ask me to write an editorial, etc. (They seem to be quite interested in hearing more about my research)

[Doly]

Petrodollar, do you have an opinion on the Chinese unpegging the yuan?

[EnviroEngr]

I am essentially in agreement with the Thread being here (a), and (b), as long as there is active discussion about the theme of the book, I don't see it as hawking, per se.

But, a review copy should be sent to someone who can go through it and validate what's being said about it.

Thanks.

[Petrodollar]

Doly,
I have been asked by the website administrator to write a 500 word editorial on the oil currency issues. In this essay, I'll address the Chinese currency move too, but in the meantime, below are some exerts from my book, as I have been anticipating a yuan re-valuation for quite some time....among other things as well.

I will note right now that as long as oil is still priced in dollars, China just lowered its oil importation bill by a few percentage points...but the real question is - how long will that dynamic last? and what is the "weighting" of the basket of currencies China has now adopted?... Regardless, China's move means that they are losing confidence in the stability and value of the dollar, and my guess is that the euro is moving into their pricing peg methodology (as was hinted in Jan 05' in Davos, Switzerland).
-William

(exerts from Petrodollar Warfare - Chapter 7)

China: Emerging Third Pole of Power

Something surprising is happening to China’s currency. Although not fully convertible, the renminbi, the ‘people’s money,’ is growing in use as a hard currency outside China — the first sign of its potential role as ‘Asia’s money.’ In Hong Kong and along China’s borders with Southeast Asia, an emerging renminbi zone can be traced, fuelled by burgeoning Chinese trade and tourism.

- “The Renminbi Zone,” Asia Times, 2003


In the last century, American people were pioneers of system and technology innovation. However, the interests of a few American financial monopolies now lead this country to war. This is such a tragedy for the American people.

- Wang Jian, Chinese bureaucrat, 2003


The US dollar is no longer … in our opinion (seen) as a stable currency, and is devaluating all the time, and that's putting troubles all the time. So the real issue is how to change the regime from a US dollar pegging ... to a more manageable reference, say Euros, yen, dollars — those kind of more diversified systems.

- Fan Gang, director of the National Economic Research Institute, China Reform Foundation, quoted at the World Economic Forum in Davos, Switzerland, January 26, 2005


(...here's a few more interesting tidbits...)

The rising geopolitical influence of China will be based upon its economic clout, but its increased demand for sources of hydrocarbons will not transpire without the potential for geopolitical tension with the US. In 2003 a Chinese bureaucrat, Wang Jian, portrayed a very disconcerting picture of impending geopolitical conflict as we enter the 21st century. His white paper advised China to prepare itself for what he foresaw as an inevitable war between the US and the EU — not between the US and China:

"Clouds of war are gathering. Right now, the most important things to do for China are:

1. Remain neutral between two military groups while insisting on an anti-war attitude.
2. Stock up in strategic (oil) reserves.
3. Get ready for a short supply of oil.
4. Strengthen armament power.
5. Speed up economic integration with Japan, Hong Kong, Korea and Taiwan.

War is the extension of politics and politics is the extension of economic interests .... America’s wars abroad have always had a clear goal; however, such goals were never made obvious to the public. We need to see through the surface and reach the essence of the matters. In other words, we need to figure out what the fundamental economic interests of America are. Missing this point, we would be misled by American government’s shows and feints."

Wang’s argument suggesting this conflict is largely based on the structural imbalances endemic to the current US economy. He offered the following candid advice to Chinese policy-makers:

"While (the dollar) has been bringing to America economic prosperity and hegemonic power over money, it has its own inborn weakness. In order to sustain such prosperity and hegemonic power, America has to keep unilateral inflow of international capital to the American market .… If America loses its hegemonic power over money, its domestic consumption level will plunge 30-40%. Such an outcome would be devastating for the US economy. It could be more harmful to the economy than the Great Depression of 1929 to 1933."

Assuming that such a major US economic dislocation could occur, every effort should be undertaken to lesson geopolitical tensions that could develop between the US, EU, and China. In any event, the US economy’s structural imbalances justify a re-evaluation of fiscal/tax policies as well as foreign polices. Ultimately we will witness the emergence of a multi-polar world. These trends underline why US policy-makers must quickly begin realigning some longstanding foreign policies in an effort to rebuild its goodwill.

[OilsNotWell]

Fascinating excerpt....Thank you!!!

Your book would seem to make a fine companion to William Engdahl's A Century of War.