[wilburke]

The subtitle of this book is "Anglo-American Oil Politics and the New World Order".

My interest in this book was piqued after reading William Clark's excellent "Petrodollar Warfare," and then after hearing Engdahl interviewed on Jim Puplava's Financial Sense Newshour (http://www.financialsense.com/Experts/2005/Engdahl.html). Engdahl's thesis is quite ambitious, namely that the current world order, dating back some 150 years, has been arrranged around the banking interests, both US and British, and that all of the major wars have been fought to protect their dominant role in world affairs, especially with regard to that most precious resource, oil. The game is simple: maintainence of the world's reserve currency (formerly the Pound Sterling, now the Dollar), complete control of the world's natural resources, and the subjugation or sabotage of any competing economic models. The people that count are the bankers and industrialists, while the rest of us, whether or not a citizen of the dominant power, do not figure into the power equation. With the repeal of the Corn laws in the 1840s, the British power structure was quite willing to allow the populace to struggle and starve, while cheap grain was easily obtained from the struggling and starving masses in the colonies. We see the same game happening now, only it has a different name: Globalism.

Whenever there arose a rival to Anglo-American economic power, that rival was crushed, either miliarily or through economic subterfuge. The examples abound: Germany (pre-WWI), Italy (post-WWII), Russia, Japan, the "Asian Tigers," etc. There are many more examples. The pattern is depressingly predictable.

The original version of "A Century of War" was published in 1994, but a revised version came out in 2004, and includes information about Peak Oil (Engdahl supports Peak Oil theory). There is much more to this book, including some incredible conclusions (most notably his analysis of the anti-Nuclear movement of the 1970s, which he sees as being a corporate-funded attack against Big Oil's main rival), all of which make you stop and think about the events we've been witnessing for the past few decades. If for nothing else, read this book for Engdahl's analysis of the 1973 "Oil Shock", and for his analyis of the Bilderbergers, Trilaterals, etc. Well written, fascinating, infuriating.....

[aldente]

The book is excellent and was published in Germany in 1994 for the first time (Engdahl is an American who lives in Germany) under the titel "Mit der Ölwaffe zur Weltmacht", literally "to superpower though the oil weapon".
Supposedly Endahl was close to the LaRouche movement for a while which would explain the somewhat conclusive conspiracy style of his reasoning , however, the book is a great read that contains valuable data, I digged it.

Here an excellent article that reflects his synopsis:

A new American Century?

[Petrodollar]

Funny that you mention Engdahl's book, as I was re-reading parts of it this past Saturday. One of most fascinating parts of his book is that he was able to buy at a Paris bookstore the original minutes of a May, 1973 Bilderberg meeting. Engdahl actually provides photocopies of the book's cover and various exerts that reveal something quite shocking.

One of the American's presented a "scenario" in which the world would see "huge increases in the price of Middle East Oil," and in the back of the book this was modeled at 400%. The concern of these elites was not to stop this upcoming oil shock, but instead, devise ways to "manage" the "flow" of surplus dollars that would be created in this "scenario."

Kissenger referred to this as "recycling petrodollar flows." I referance that documet in my book, and I find it fascinating that this May 1973 scenario transpired exactly as predicted 5 months later with the outbreak of the Yom Kippur War. From 1973 oil went from about $3 barrel to $11.65 by Jan 1974....

Another shocker revealed in this book is that it was Henry Kissinger who asked the Shah of Iran to increase the oil prices for the oil embargo...Yes, Kissenger wanted the higher oil prices, most likely to implement the petrodollar recycling system and increase the demand/liquidity value of the dollar via petrodollar loans from the IMF. Here's an exert from my book that quotes Engdahl's work:


US Dollar: Fiat Currency or Oil-Backed Currency?

"What the powerful men grouped around the Bilderberg had evidently decided that May [1973] was to launch a colossal assault against industrial growth in the world, in order to tilt the balance of power back to the advantage of Anglo-American financial interests and the dollar. In order to do this, they determined to use their most prized weapon — control of the world’s oil flows. Bilderberg policy was to trigger a global oil embargo in order to force a dramatic increase in world oil prices. Since 1945, world oil had by international custom been priced in dollars …. A sudden sharp increase in the world price of oil, therefore, meant an equally dramatic increase in world demand for US dollars to pay for that necessary oil.

Never in history had such a small circle of interests, centered in London and New York, controlled so much of the entire world’s economic destiny. The Anglo-American financial establishment had resolved to use their oil power in a manner no one could have imagined possible. The very outrageousness of their scheme was to their advantage, they clearly reckoned."

– F. William Engdahl, A Century of War, 2004


At this point he makes an extraordinary claim: ‘I am 100 percent sure that the Americans were behind the increase in the price of oil [circa 1973-1974]. The oil companies were in real trouble at that time, they had borrowed a lot of money and they needed a high oil price to save them.’
‘He says he was convinced of this by the attitude of the Shah of Iran, who in one crucial day in 1974 moved from the Saudi view’ … ‘to advocating higher prices.’

‘King Faisal sent me to the Shah of Iran, who said: “Why are you against the increase in the price of oil? That is what they want? Ask Henry Kissinger — he is the one who wants a higher price.”’ [emphasis added]
Yamani contends that proof of his long-held belief has recently emerged in the minutes of a secret meeting on a Swedish island, where UK and US officials determined to orchestrate a 400 per cent increase in the oil price.

– Observer (UK) interview with Sheikh Yaki Yamani (Saudi Arabian Oil Minister from 1962–1986) at the Royal Institute of International Affairs, January 14, 2001

****

Needless to say, but I highly recommend this book, as Engdahl has done his homework. I used Engdahl's research quite liberally in Chapter 1 of my book (and I acknowledge this in the Introduction.) Anyhow, here's an exert of that crucial period in 1973-1974...


*****

Throughout this time President Nixon was increasingly embroiled in what became known as the Watergate Scandal. Consequently he named Henry Kissinger both Secretary of State and head of the White House’s National Security Council. In these highly empowered roles, Kissinger promptly pursued the monetary strategy as outlined in the Bilderberg plan. During 1973–1974 US Treasury Secretary William Simon began secret negotiations with the government of Saudi Arabia in an attempt to buttress global oil sales in dollars only, and thereby thwart discussions at that time of transitioning oil trades to a basket of currencies. Saudi Arabia, as the largest OPEC oil producer, was the natural choice. Neither Congress nor the CIA was informed of these agreements until Saudi Arabia had completed their purchases of $2.5 billion in US Treasury bills. By the time Congress was informed of this “add-on arrangement,” it was a fait accompli.

Engdahl contended that Kissinger, acting as Nixon’s intelligence czar, was able to “misrepresent to each party [Israelis, Syrians and Egyptians] the critical elements of the other, ensuring the [October 1973 Yom Kippur] war and its subsequent Arab oil embargo.” He reasoned that once the oil embargo began, “the Arab oil-producing nations were to be the scapegoat for the coming rage of the world, while the Anglo-American interests responsible stood quietly in the background.”

Regardless of whether subsequent events unfolded as envisioned by the Bilderberg group, it is obvious their prophetic “scenario” of oil prices escalating by 400 percent, along with dramatic increases in dollar liquidity, did in fact occur seven months later. By January 1974 the price of OPEC’s benchmark oil stood at $11.65 per barrel (up from $3.01 in early 1973). Furthermore, it is also a matter of historical record that, during this time, the US had engaged in secret negotiations with the Saudi Arabia Monetary Authority to establish a petrodollar recycling system via New York and City of London banks.

This brilliant, if somewhat nefarious, act of monetary jujitsu enormously benefited not only the US/UK banking interests, but also the Seven Sisters of the US/UK petroleum conglomerate (Exxon, Texaco, Mobil, Chevron, Gulf, British Petroleum, and Royal Dutch/Shell). These major oil interests had incurred tremendous debts from the capital requirements in their large, new oil platforms in the inhospitable areas of the North Sea and Prudhoe Bay, Alaska. However, following the 1974 oil price shocks, their profitability was secure. Engdahl candidly noted that“while Kissinger’s 1973 oil shock had a devastating impact on world industrial growth, it had an enormous benefit for certain established interests — the major New York and London banks, and the Seven Sisters oil multinational of the United States and Britain.”

The unique monetary arrangement was formalized in June 1974 by Secretary of State Kissinger, establishing the US-Saudi Arabian Joint Commission on Economic Cooperation. The US Treasury and the New York Federal Reserve would “allow” the Saudi central bank to buy US Treasury bonds with Saudi petrodollars.

Likewise, London banks would handle eurozone-based international oil transactions, loaning these revenues via Eurobonds to oil-importing countries. The debt and interest from these loans would then flow to the dollar-denominated payments to the IMF, thereby completing the recycling of surplus petrodollars to the Federal Reserve.

Until November 2000, no OPEC country violated the petrodollar oil price arrangement. As long as the dollar was the strongest international currency, there was little reason to consider other options. However, in the autumn of 2000, Saddam Hussein emerged from a meeting of his government and announced that Iraq would soon transition its oil-export transactions to the euro. Saddam referred to the US dollar as currency of the “enemy state.” It is not clear if Saddam initiated the idea of transitioning to a petroeuro or if the EU approached him with this idea. Regardless, Iraq opened up a euro-based bank account with the leading French bank, BNP Paribas. Shortly thereafter, Iraqi oil proceeds went into a special UN account for the Oil for Food program and were then deposited in BNP Paribas.

At the time of the transition, Iraq’s UN Oil for Food account held $10 billion. A short news story detailing this development appeared on November 1, 2000, on the Radio Liberty website of the US State Department. CNN ran a very short article on its website on October 30, 2000, but after this one-day news cycle, the issue of Iraq’s switch to a petroeuro essentially disappeared from all five of the corporate-owned US media outlets. (Note: These five conglomerates collectively control 90 percent of the information flow within the United States.)

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.”

notes:
F. William Engdahl, “A New American Century? Iraq and the Hidden Euro-dollar Wars,” currentconcerns.ch, no. 4, 2003, http://www.currentconcerns.ch/archive/2 ... 030409.php.

F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New World Order, 2nd edition, Pluto Press, 2004

[seahorse2]

Interesting you question whether the dollar is truly a "fiat" currency. I read the website "The Daily Reckoning" which constantly attacks America's fiat currency. I've emailed that website several times arguing that the dollar is not a fiat currency - it is backed by oil. It made sense to switch the dollar from gold to oil, bc:

(1) American became a net importer of oil in the 70s;
(2) Oil is worth more than gold - in terms of use;
(3) Like gold, oil is finite - both physically and politically;
(4) By replacing the gold standard and tieing the dollar to oil, America locked up the world's oil reserves.

The problem, now, however, is that the supply of oil is diminishing and the dollar is increasing, so, the dollar's value in relation to the oil supporting it becomes less and less. In light of the deflating value of the dollar, its only natural that the world would attempt to find a new currency to be backed by oil. That's my .02 cents worth.

[rogerhb]

As far as I'm aware people don't burn gold.

[Carlhole]

F. William Engdahl is one of my favorite authors to read. He is one of those historians that do not believe that things happen "by chance". He believes that major world events always happen for a reason and so he has paid much attention to groups such as the Bilderbergers who he believes do more in the world than meet for a chat once in a while.

His description of the 1973 Arab Oil Embargo is much different than the way it is described conventional history reviews. It's worth reading.

If you like F. William Engdahl, you can read articles by him at Current Concerns

[seahorse]

Roger,

People don't burn gold, but they do turn melt it into meaningless jewelry. Oil is far more important to the modern world than gold ever was or will be.

[rogerhb]

$this->bbcode_second_pass_quote('seahorse', 'R')oger,

People don't burn gold, but they do turn melt it into meaningless jewelry. Oil is far more important to the modern world than gold ever was or will be.

[seahorse]

Roger,

I'm following you now, but, and I'm guessing here, it could be argued that historically gold had significance for several reasons: (1) could be used for money before people knew how to make paper; (2) early paper did not store well or last very long, and people had to hand write on the paper, thus not good for denominations etc; (3) early paper money could be easily counterfeited, gold couldn't be; (4) gold didn't need a denomination to have value, it was traded by the ounce, thus, old gold coins often have scars on them where people would cut some off to buy whatever they wanted to buy, paper money couldn't do this back then.

But I think that the historical reasons which made gold a good currency have disappeared. In fact, most buying today does not require anything physical, it all occurs on the computer. Money transfers now are done via the net or other type of electronic transfers, so physical paper money will someday be a thing of the past (debit cards for example).

I think there are a lot of reasons why the world began with gold but has recently moved away from gold and will continue to move away from it in the future.

I think the U.S. moving to an "oil" backed currency only made sense. It wasn't backed in the same way that dollars used to be backed by physical gold, but it could be argued backing dollars with oil was more important to dollar strength than backing it with gold, at least, hindsight shows it was a really good move politically and economically. If America had kept the dollar back by gold, it would not have enjoyed the political and economic dominance that it has enjoyed over the last 30+ years (it may all come crashing down, yet to be seen).

[Petrodollar]

$this->bbcode_second_pass_quote('', 'S')eahorse said:
I think the U.S. moving to an "oil" backed currency only made sense. It wasn't backed in the same way that dollars used to be backed by physical gold, but it could be argued backing dollars with oil was more important to dollar strength than backing it with gold, at least, hindsight shows it was a really good move politically and economically. If America had kept the dollar back by gold, it would not have enjoyed the political and economic dominance that it has enjoyed over the last 30+ years (it may all come crashing down, yet to be seen).

[Guest]

Of course it would be an unfriendly act. The United States government prints dollars at will and the world absorbs it simply because oil is priced excusively in US dollars. Infact the US getting maufactured products for free...

[orwell76]

Wonder what are the Arabs doing with current flood of petrodollars due to the recent hike in oil price. I don't think they will repeat the same mistake of putting it in the US/London banks.

[bobcousins]

Are you sure?

Report: Oil profits return to U.S.

$this->bbcode_second_pass_quote('', 'N')EW YORK (CNN/Money) - Some of the billions in windfall profits going to overseas oil producers are coming back to the United States in the form of foreign investment, according to a published report.

[Petrodollar]

Thanks for that article, but where is the data? It's rather ambigious, stating for example...

"The newspaper reports that the overseas oil exporters have huge windfall profits that they can invest."

Yes, OPEC revenues have increased, but the question is - where is the surplus money going? I don't see any empirical data to suggest it is still flowing back to the US like it did in earlier phases. In fact, I tend to value the data from the "central banker of central bankers" - the BIS. Here's what they noted 11 months ago...and it is unclear at best if this 3-year trend has suddenly changed, but me thinks it has not...

Opec sharply reduces dollar exposure
December 6, 2004
http://news.ft.com/cms/s/67f88f7c-47cb- ... s01=2.html

Oil exporters have sharply reduced their exposure to the US dollar over the past three years, according to data from the Bank for International Settlements.

Members of the Organisation of Petroleum Exporting Countries have cut the proportion of deposits held in dollars from 75 per cent in the third quarter of 2001 to 61.5 per cent. {in the 3rd qtr of 2004}

Middle Eastern central banks have reportedly switched reserves from dollars to euros and sterling to avoid incurring losses as the dollar has fallen and prepare for a shift away from pricing oil exports in dollars alone.

Private Middle East investors are believed to be worried about the prospect of US-held assets being frozen as part of the war on terror, leading to accelerated dollar-selling after the re-election of President George W. Bush.

The BIS data, in the organisation's quarterly review, state that Opec countries' stock of dollar-denominated deposits has fallen by 4 per cent in cash terms since 2002 in spite of Opec revenues' surging to record levels this year.

Opec officials say the cartel is trying to protect its purchasing power per barrel, as Europe is its largest trading partner. Opec imports from Europe rose 29 per cent between 2001 and 2003 while those from the US fell by 14 per cent, according to Morgan Stanley, the US investment bank.

Simon Derrick, head of currency research at Bank of New York, said: "It makes sense to diversify their reserves as much of their spending is in the eurozone and Japan."

Opec officials also point to political motivations after the 2001 terror attacks on the US.

Middle Eastern foreign exchange reserves are relatively small - those of Saudi Arabia, UAE, Kuwait and Qatar are estimated at $61bn by BNP Paribas - but any switch may be seen as indicating the mood of private investors in the region, who control far greater wealth.

Hans Redeker, global head of foreign exchange strategy at the French bank, said the Patriot Act, introduced after September 11 to stop US financial institutions being used by terrorists to launder money, was worrying private investors.

"If you trade with what the US regards as a 'dodgy' bank, you are at risk of your assets in the US being frozen," he said. "After the re-election of George Bush, the Middle East started to sell dollars like crazy due to the fears of assets being frozen."

The BIS report also showed that, in spite of oil prices having risen 85 per cent since the fourth quarter of 2001, overall OPEC bank deposits have barely risen. "Oil reserves have not been channeled into the international banking system in the most recent cycle," the report said.

One school of thought is that Middle Eastern businesses and individuals increasingly prefer to invest at home, leading to sharp rises in real estate and equity prices in many countries. Another argument is that many Opec governments are having to increase public spending to support rapidly growing populations.

[orwell76]

The rate that the Gulf states are developing their countries, I suspect they are ploughing the money back to their own countries.

[Barlow]

I found Engdahl's book totally fasinately. There were points of view in it that I had NEVER thought of or about before. I was going to say it completely altered my view on many things I thought I understood. It may not have become totally convinced of his permise(s), but I sure throw them into my thinking anymore.

Engdahl is a German, born in Texas, as I've seen. So in some regard, I consider his point of view a Continental/German point of view. That's not bad. It is what it is.

That said, I really enjoyed the book.

[aldente]

William Engdahl is an American that chose to live in Germany (married to a German). I suffer through the same destiny reversed, marriage is always a form of suffering by default, but who do I tell that... the non married? Here a pic of William Engdahl:

[Barlow]

Thank you, Albente, for clarifying that about Mr. Engdahl. I thought he lived in Germany, but didn't make that clear in my post.

I too am about the join the trans-atlantic family. My son's engaged to a Swedish girl.

[aldente]

This is a remarkable audio:

http://www.financialsense.com/Experts/2005/Engdahl.html

[eric_b]

Yes, that was excellent. Engdahl was quite articulate I thought.

The history of all this is fascinating. It's my contention that many people
don't know recent history well, as in the last 100 years.

It really is amazing how oil/war/money have become intertwined, and it's
also noteworthy how quickly the 'oil age' appears to be burning itself
out.

I also wasn't aware of all the new and recent US military bases around
the globe, especially the ones in Iraq. It's something seldom discussed or
mentioned in the media here in the US.