“The final 45 years of the Anglo-Saxon Empire” – William Engdahl interviewed by Gazprom magazine

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William Engdahl

April 9, 2015
Alex Anpilogov – Live Journal
Translated by Kristina Rus

In March of this year, I literally by a week missed the author of the remarkable book “A Century of War”, William Engdahl, which I have talked about in my old blog, before its release by the publisher “Selado” in a paper version.




However, despite I was unable to personally meet with William Engdahl – I still managed to arrange an exclusive interview of Engdahl with “Gazprom” magazine, recorded by the editor-in-chief, Sergey Pravosudov.




I hope the perspective of one of the classics of modern geopolitical journalism will help you understand the eternal “springs” of geopolitics and geo-economics, and to draw conclusions about those sudden changes of the world order, on the threshold of which we stand.




For me, the interview with William Engdahl is interesting, because he is a known critic of the theory of “peak oil”, which I personally think is quite reasonable and visibly influences global processes.




The more interesting is that having some diametrically opposed assumptions, Engdahl comes to very similar, and even identical conclusions about the future of global processes.




“USA is a Titanic”

The American economist and political scientist Frederick William Engdahl answered our questions.

– Mr. Engdahl in your book “A Century of War” you give an interesting analysis of the events that occurred in the twentieth century. I especially liked your description of the crisis of 1973, when oil has risen sharply.

– In my opinion, it is obvious that the growth of oil prices is not just the fault of the oil sheikhs, but the US and the UK. More precisely, the Anglo-Saxon banks, oil companies and military industrial complex. By 1971, the gold reserves amounted to less than one quarter of the official obligations of the United States. It basically meant that if all foreign holders of dollars demanded the gold, Washington could not do this. Announcing to the international holders of dollars that their paper will no longer be exchanged for gold, President Nixon “pulled the plug” on the global economy. The world trade after 1971 became another arena of speculation with different currencies.

The true architects of Nixon’s strategy sat at the influential commercial banks in the city of London. Sir Siegmund Warburg, Edmond de Rothschild, Jocelyn Hambro and others saw a massive opportunity in Nixon’s abandonment of the Bretton Woods gold standard  in the summer of 1971. After August 1971, when the White House adviser on national security was Henry Kissinger, the dominant U.S. policy became the control, and not the development of world economies. A priority during the 1970’s became the decrease of the population in developing countries, and not at all a transfer of technologies and strategies for industrial growth.

The American Ministry of Finance has developed a secret agreement with the Currency Agency of Saudi Arabia, officially approved in February 1975. Under the agreement, the huge new Saudi windfall from oil sales was to be invested largely in the repayment of deficits of the U.S. government. A young investment banker from Wall Street by the name of David Mulford was sent to Saudi Arabia, who became the main “investment adviser” at the Central Bank of Saudi Arabia to steer Saudi petrodollars into the correct banks, naturally to London and New York.

It is necessary to pay special attention to how the oil crisis has affected the FRG. The economy of this country successfully developed, the growth of industrial indicators surprised the whole world. After 1971, when the US stopped redeeming dollars for gold, many countries began to prefer payments in German marks. As a result the mark has greatly strengthened against the dollar, in the US it was perceived as a threat. Moreover, in 1969 the post of Chancellor was occupied by the social democrat Willy Brandt, who began to pursue a policy of rapprochement with the USSR, both in the political and economic spheres. It was he who in 1970 signed the famous deal “Gas – Pipes”. Moreover, during the Arab-Israeli war of 1973, Willy Brandt announced that FRG will take a neutral position and forbade Americans to use their bases in Germany for the supply of weapons to Israel. However, the United States ignored the ban. As a result Germany, like other Western countries, has experienced the effects of the “oil weapon”. It is obvious that the Americans could not forgive such disobedience from the country, which since WWII was actually occupied by their troops. In 1974 the effect of the oil crisis led to the bankruptcy of a number of German banks and to the weakening of the German mark. The cost of oil imports to Germany increased in 1974 by an incredible amount of $17 billion German marks, and half a million people became unemployed. The shock of the sudden 400% increase in the price of primary energy resource has had a devastating effect on German industry, transport and agriculture. In 1974, Willy Brandt was forced to resign. He was accused of not coping with the oil crisis. Besides, it was “suddenly discovered” that Brandt’s adviser, Günter Guilliom, was the GDR intelligence agent.

The vast majority of the less developed world economies that do not have significant oil resources, were suddenly faced with an unexpected and impossible for them 400% increase in the cost of their energy imports, not to mention the cost of chemicals and fertilizers for agriculture, produced from oil. India in 1973 had a positive trade balance, it was a healthy situation for a developing economy. By 1974, India had the total reserves in foreign currency in the amount of $629 million – of which it had to pay the annual bill for oil imports of $1.2 billion, i.e. almost twice the amount. Sudan, Pakistan, the Philippines, Thailand and many other countries in Africa and Latin America were faced in 1974 with gaping deficits in their balance of payments. Overall, according to the IMF, in 1974 the developing countries had the total trade deficit of $35 billion dollars, an enormous sum in those days. Not surprisingly, this deficit was four times greater than in 1973, i.e., proportional to the increase in oil prices.

While the oil shock had a devastating impact on world industrial growth, it has resulted in enormous profits for some well-known circles: the largest New York and London banks and for the “Seven Sisters” – oil corporations from the U.S. and Britain. The bulk of dollar revenues of OPEC was placed in leading banks in London and New York, which operated with dollars, as the entire international oil trade.

Unlike Germany, Britain was able to benefit from the oil crisis. Rising oil prices have made the oil field development in the North sea cost-effective, and the Anglo-Saxon companies were able to earn good money.

– Why was there a sharp decline in oil prices in the mid 1980’s?

– During Reagan’s presidency, American economic prosperity associated with investments in the most advanced industrial technologies, disappeared. Steel was declared the “rust belt” of industry, steel mills were abandoned. Where “there was money”, they built shopping centers, new casinos and luxury resort hotels.

To fund this wild fun during the speculative boom, during almost the entire Reagan’s term the money came from abroad. No one thought about the fact that during those five short years for the first time since 1914 the United States from the largest creditor in the world has turned into a debtor state. The credit was “cheap” and grew exponentially. Families took on record levels of debt to buy houses, cars, VCRs. The government went in debt to finance the lost tax revenue and Reagan’s expanded military build-up. In 1983, the annual budget deficit climbed to an unprecedented level of $200 billion. Together with a record deficit grew the national debt, while the Wall Street bond dealers and their customers were paid record amounts. Interest payments on total debt of the U.S. government in six years has grown from $52 billion in 1980, when Reagan came to power, to more than $142 billion by 1986 (the amount equal to one-fifth of all state revenues). However, despite these worrying signs, money continued to flow out of Germany, Great Britain, Holland, Japan, to obtain speculative profits in the real estate and financial markets. In 1980 total private and public debt of the United States amounted to $3.9 trillion dollars, and by the end of the decade it reached $10 trillion.

To anyone with a sense of history or a long memory, it was all too familiar. This has already happened in the “roaring 20’s” until 1929, when the market crash brought the roulette to a sudden halt. When in 1985storm clouds started gathering on the US economic horizon , threatening future presidential ambitions of Vice President George H. W. Bush, oil again was to play the role of a “Savior”. Only this time in a very different way from the Anglo-American oil shocks of the 1970’s. Obviously, Washington reasoned as follows: “If we can raise the price, then why we can’t we drop it, when it’s more convenient for our purposes?”

Saudi Arabia was persuaded to go for a “reverse oil shock” and to flood the depressed world market with its oil. By the spring of 1986 the OPEC price of oil dropped like a stone below $10 per barrel from the average price of almost $26 just a few months before. In March 1986, when a further fall in oil prices threatened to destabilize the vital interests of not just small independent competitors, but the largest British and American oil corporations, George Bush Senior took a secret trip to Riyadh, where he, reportedly, offered king Fahd to stop the price war. The Minister of Oil of Saudi Arabia, Zaki Yamani, acted as a convenient scapegoat for politics invented in Washington, and oil prices have stabilized at a relatively low level of about 14-16 dollars per barrel. Texas and other oil-producing states in the USA fell into depression, but property speculation in other states soared at a record pace, and the stock market began a new rise to dizzying heights. The fall in oil prices in 1986 gave rise to a speculative bubble, comparable to the situation in 1927-1929 in the United States. Interest rates declined further, as money constantly flew to the New York stock exchanges to snatch a large profit. A new financial perversion became fashionable on Wall Street – debt acquisition.

In 1979, when in the midst of the second oil crisis, Paul Volcker began his monetary shock, the government counted 24 million Americans below the poverty line, defining that line as 6 thousand dollars a year. In 1988, the figure had increased by more than 30 percent to 32 million As never before in the history of U.S. the tax policy of Reagan-Bush has concentrated the wealth of the country in the hands of a small elite. Since 1980, according to a study conducted by the Budget Committee of the House of Representatives of US Congress, the real income of the richest 20% of US citizens increased by 32%.

Direct appeal of Washington to the Japanese government of Prime Minister Nakasone, claiming that any President from a Democratic party would harm Japanese-American trade, bared fruit. Nakasone has pressured the Bank of Japan and the Ministry of Finance to make them more flexible. Japanese interest rates since October 1987 kept decreasing, giving U.S. stocks and bonds, as well as real estate, the visibility of a relatively “cheap” investment. Billions of dollars went from Tokyo to the United States. During 1988, the dollar remained strong, and Bush managed to win the elections against his rival from the Democratic party, Dukakis. To provide this support, Bush gave private guarantees to the highest Japanese officials that his presidency will improve the Japan-US relations.

– What was the point of the two attacks of the U.S. on Iraq?

In 1990 Iraq had a very large external debt and the U.S. government hinted to Saddam Hussein that they won’t mind if he robbed Kuwait. However, when Iraq invaded Kuwait, the US declared war on Iraq. It is characteristic that this war was financed by the allies: Germany, Japan, Saudi Arabia and Kuwait, who paid Americans $54.5 billion. As a result, the United States completed the operation “Desert Storm” with net profit of $19 billion dollars. This war was needed by the U.S. to strengthen its position in the Middle East and to threaten allies in Europe and Asia. The causes of the war of 2003 were similar.

– Why did the USA allow a sharp decline in oil prices at the end of last year, if it has led to a drastic reduction of investment in shale oil production? Couldn’t they use their connections with the terrorists to organize attacks on oil fields in Iraq, Nigeria, Angola, Algeria and other countries instead?

– Regarding the oil issue: the strategy of the U.S. State Department and the CIA is that Saudi Arabia brings down oil prices primarily to put pressure on Russia, Iran and Venezuela. I do not think that the shale oil the US was taken into account initially. Don’t underestimate the stupidity of the key figures in Washington, and don’t overestimate it. In this case, possibly, they believe that ExxonMobil, Chevron and BP will be able to withstand 6 months of reduced prices. Shale oil industry consists of medium and small companies. Big Oil in the US was pushed into the background. Last year Shell called the investment in shale oil its biggest mistake and withdrew before the prices went down. The terrorist attacks on the oil infrastructure and production capacity may soon be resumed. The strategy of Washington is to break Russia. This is the mission of the faction of the military-industrial complex – Lockheed-Martin, Boeing, Raytheon, General Dynamics, etc. and Wall Street banks who want to destroy Russia for geopolitical reasons. In geopolitical terms with the return of Vladimir Putin to presidency, Russia refuses to kneel down and become a vassal of the West, refuses to compromise on issues affecting the country’s security like missile defense and pre-emptive nuclear strike on the United States. The growing economic, political and military cooperation of Russia and the BRICS and Russia and China pose a threat to the hegemony of the American political elite: Eurasia, united economically, financially and militarily independent (in particular thanks to the military capabilities of Russia).

Washington has eliminated the independent EU defense 20 years ago with the signing of the Maastricht Treaty. Now the EU plaintively proposes to create an army, independent from NATO, but Washington just laughs. Moreover, Russia is increasingly attracting the German industry. According to the head of the U.S. private intelligence company “Stratfor”, George Friedman, in the last one hundred years, the US strategy was to prevent any rapprochement between Russia and Germany. That’s why in my opinion Washington requested Saudi Arabia to stage the collapse in oil prices. It’s not about the oil companies on the brink of bankruptcy, but the crumbling Empire of US elites: Syria is not working for them, Egypt is not working for them, Turkey is not working for them, BRICS is creating a new bank infrastructure outside of the control of the IMF and World Bank.


This is a desperate bunch of American oligarchs trying to plug holes in their “Titanic”. Nothing will help them now. People are getting too smart.

The interview was taken by Sergey Pravosudov

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