By Geraldina Colotti on June 11, 2022
In this June of summits (especially summits of the powerful), the Bilderberg Club 2022 also took place. From the 2nd to the 5th, in the usual secrecy, the main decision-makers met in Washington, those who move the levers of the globalized world: commanders of the CIA, NATO, politics, finance, industry, academia, journalism… They meet every year since 1954, when the American billionaire David Rockefeller founded the club of the world elite.
This year, former Secretary of State Henry Kissinger, war criminal and “Nobel Peace Prize winner”, still in the breach at the age of 99, was also present. As an expert in “legitimacy”, the theory of realism in legitimacy, based on the search for profit through hegemony and not on principles and morality, Kissinger already at the Davos Forum said that it would be a mistake “to want to humiliate Putin” in the conflict in Ukraine. The Europeans would be making a “fatal mistake” by losing relations with Moscow and allowing it to establish ever stronger links with China.
The issues discussed by the Club, communicated to the press, reflect the concerns of the world bourgeoisie for its business in the context of the conflict in Ukraine and the scenarios it opens up. The “disruption of the global financial system”, “de-globalization”, the “challenges of NATO”… were some of the themes of the debate. For the American maneuverers, it is a matter of understanding in what terms to continue to exploit the “trick” on which the process of “financial colonization” launched by the United States since August 15, 1971, with the end of the Bretton Woods Agreements, is based.
The World Bank’s Global Economic Prospects Report predicts the next two years of global growth “close to zero” and a decade of “modest growth due to weak investment in most of the world”, and rising prices. He notes that the situation is reminiscent of the 1970s, the era of the two oil shocks of 1973 and 1979, and the resulting slowdown in growth and rising prices.
Conditions today are exacerbated by the consequences of the pandemic and the conflict in Ukraine, which has driven up the prices of some commodities and fueled inflation.
The threat of global stagflation – a simultaneous mix of high inflation and recession – could have particularly severe effects in the global south, where per capita income this 2022 remains almost 5% below pre-pandemic levels, says the World Bank.
Persistent inflation, the Report warns, increases the chances that the Federal Reserve and other central banks will sharply raise interest rates to cool demand, as happened in the late 1970s, but that could lead to a “more punishing” global crisis and financial crises in some emerging markets.
The European Central Bank is also trying to curb inflation four times above the targeted threshold by raising interest rates, but trying not to “traumatize” bond investors as happened in July 2011 with the peripheral debt crisis and deflation in Europe. Those who, of course, will be “traumatized” will be the popular sectors, but the bankers do not care. On the contrary, they will unload the few increases they will have to bear on mortgages for the purchase of workers’ houses.
In the complexity of the globalized world, and in the light of the changes in the mode of production, triggered by technological and information developments, the economic-financial wars of the third millennium with their correlative armed conflicts, as far as the USA is concerned, have to do with the defense of the hegemony of the dollar and competition with the euro, and with the emergence of a decentralized and multipolar system, today favored by the same technological innovation hitherto controlled by them.
It may be useful to focus on the process of development of the hegemony of the dollar after the end of the Bretton Wood agreements, the devaluation of gigantic quantities of greenbacks that were launched into circulation on the planet, and the domination of monopolies which, in addition to weakening the productive potential of nations, caused prices to rise according to their own profit.
Since then, after Washington abolished the role of gold in commercial exchanges, replacing it with pure credit (paper money or banknotes), Nixon and the Federal Reserve have secured a solid position for the dollar by tying it to oil, making it regulate all transactions: first with Saudi Arabia, then with the rest of the world. Since then, they have piloted changes in the economy, in the context of the great worldwide industrial division of labor, making the globalization of the dollar the essence of economic globalization.
A system in which the US produces greenbacks and the rest of the world produces the goods to be exchanged with those greenbacks. The war in Vietnam was financed by printing inorganic money to cover a growing fiscal deficit, which has remained a constant feature of the United States. Meanwhile, Keynesian economic policies, implemented in the two decades of the growth boom, were running out of steam. The expansionary cycle ran out of steam, with serious consequences for output and employment levels, and traditional anti-inflationary policies were unable to contain inflation.
The real American economy has gradually moved out of the country, to those areas of the South where it is possible to achieve high exploitation of living labor, therefore a high profit, and the domestic industry has been depowered.
Exporting dollars implies importing a large number of products from other countries and thus maintaining a current account deficit. In this way, cyclically, the United States was able to lower or raise interest rates like great floodgates of water, dealing fatal blows to those who had benefited from the previous “flood” of greenbacks. However, such a model of national survival implies always running a surplus, to avoid a deficit in the capital account.
With an almost non-existent savings rate, to maintain their lifestyle and super-power “status”, they need a gigantic daily net flow, and therefore always have a capital account surplus. Capital exported to the rest of the world must then have a return, in order to again provide the money to buy global products. If you look at the wars waged by US governments in the last twenty years, you can see how they have been designed for this purpose: because if the capital does not return, the banks must keep printing money and the dollar will devalue.
So, on the one hand, the US government donates dollars through its own international institutions, while on the other it gets back the ones it previously dispersed through Treasury bonds. And how to ensure that capital returns? Partly by offering strong points of economic growth, driven by technological innovation (before, Obama’s attempt at reindustrialization and then Trump’s, now Biden’s “green
transition”): a very partial attempt, considering the structural crisis of the capitalist model and the level reached by the virtual economy.
And therefore, the colonial mechanism consolidated over all these years returns, the military-industrial complex being a voracious engine of the whole scheme: it is necessary to create crises and conflicts, even armed ones, in competing areas, making sure that they cease to be attractive to investors, and convincing them at least of the lesser evil, even at a time when the US economic recovery is not enough to attract again the world’s capitals. Washington uses its “unparalleled military means to herd capital like a flock of sheep,” says Chinese analyst Qiao Liang, explaining in his writings “the cyclical law of the dollar index.”
Between a cut and a rise in interest rates, he says, in the end the global economy changed, and all those who during the “flood” period “benefited” from the dollar, when the floodgates closed, suffered a very heavy blow. This happened in Latin America in the early 1980s, the first time the United States used its “financial trick”. Then, the Falklands war and the regional crisis that followed, provoked a massive withdrawal of investors.
Faced with the financial crisis that erupted in Latin America, the Federal Reserve raised interest rates, leaving investors with no choice but to seek U.S. federal government bonds and other financial assets. The United States then returned to South America and, thanks also to “vulture fund” activity, took over thriving businesses that had become scrap paper. In the next cycle, the target was Southeast Asia. Now, the contrast between the dollar and the euro, the attack on Russia in the global confrontation between the US and China, is being staged.
It will be recalled that in November 2000, after the launching of the euro, Saddam Hussein expressed his intention to regulate oil transactions with the new European currency, thus questioning the hegemony of the dollar. We know how the asymmetric war unleashed by Bush Jr. ended, and how, after the fall of the Iraqi government, the new government put in office by US “democracy” soon re-imposed the return of the dollar in the local oil trade by decree.
And one can share Liang’s analysis, also when reading the Kosovo war, launched in March 1999, as a strong warning to the nascent currency, the euro, officially launched on January 1, 1999. After 72 days of bombing, also launched by European Union air forces, and fueled by the dirty media war that accused the Milosevic government of having massacred 90,000 Albanians in Kosovo, not only did the Yugoslav government collapse, but the euro-dollar exchange rate fell by 30%.
Today, war propaganda is trying to blame the global crisis on “Putin’s war”, even going so far as to draw up “ban lists” of those who do not agree, as is being done in Italy. In a script well tested in other scenarios, starting with Bolivarian Venezuela, an attempt is being made to hide the perverse effect of the “sanctions” that European governments have imposed on Russia, even obtorto collo, and even against their own interests, to comply with the orders of the American master, who is going to measure his hegemony at the next NATO summit in Madrid.
According to FAO, the international sanctions imposed on the Russian Federation will weigh even on the income of Russian farmers because, although Moscow is a net exporter of fertilizers, its agriculture is particularly dependent on imports of seeds and pesticides, mainly from European countries.
Russia and Ukraine supply many markets with important raw materials. Russia is the world’s largest wheat exporter, Ukraine the fifth. Together, the two countries account for about 30% of world wheat exports, 20% of corn, mineral fertilizers and natural gas, and 11% of oil exports. The prices of these products have risen sharply since the beginning of the conflict, following the “sanctions” imposed on Moscow at Washington’s instigation. The FAO has already warned of the imminent possibility of a food crisis for those developing countries which are heavily dependent on Russia and Ukraine and which, already pandemic-tested, cannot afford such high costs for food and energy.
To pay for the consequences of the crisis, in terms of rising prices of food and services, of the consequent depreciation of wages and loss of jobs, will be, as always, the popular sectors, starting with the peoples of the South, object, to their regret, of the lucrative business of “humanitarian aid” and “post-war reconstruction”.
We are, therefore, in the presence of a powerful and complex moment of repositioning of the balance of power at the international level. A framework in which the coordinated action of those countries inhabiting a continent rich in resources and increasingly unwilling to see itself as the “backyard” of the United States, i.e. Latin America, is becoming more important. This was seen at the Summit of the Americas, rightly called the Exclusion Summit, which was deserted by most progressive Latin American countries in disagreement with the decision to exclude Cuba, Venezuela and Nicaragua.
In this context, the Eurasian tour of President Nicolás Maduro takes on even more importance. A trip to strengthen South-South relations and financial agreements through peace diplomacy, combined with social justice: in the perspective that an increasingly multicentric and multipolar world will lead to the fall of the last empire and accelerate the twilight of capitalism.
Source: Cuba en Resumen