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Engdahl: US-China strategy driving Afghan war, but no real long-range thinking in place

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington, DC, and joining us now from Frankfurt, Germany, is F. William Engdahl. He’s the author of the book Full Spectrum Dominance. Thanks for joining us, Mr. Engdahl.


JAY: So, looking back at 2009, looking forward to 2010, in terms of geopolitical trends, what do you think we should be paying most attention to?

ENGDAHL: I think clearly the most obvious point of 2009 is the not surprising decision of President Obama to ramp up the US troop deployment by 30,000-plus in Afghanistan and widening the war to Pakistan. I think the real point about that has nothing to do with the Taliban or putative al-Qaeda in Afghanistan; it has to do with the fact that the US is positioning itself and the Pentagon is positioning itself for the future emergence of China, and in conjunction with other Eurasian nations, in the manner that Brzezinski laid out in his 1997 book The Grand Chess Game, the conjunction of those nations to form an independent policy poll, an independent economic poll, that would not be dominated by NATO and, essentially, the US superpower hegemony.

JAY: You could argue the other way, though. You could argue getting bogged down in Afghanistan and having thousands of troops and another trillion dollars down the toilet, that in the long term actually weakens US positioning vis-à-vis Eurasia. I mean, they’ve had a dominant position in Eurasia for decades without having any bases in Afghanistan.

ENGDAHL: Yeah. Well, I think the point is this is kind of an end-game process that’s played out from the US side since September ’01. And when I say “end game,” I mean they’re going for it all globally: domination of land, sea, air, cyberspace, outer space, militarization of outer space. And I think it’s a mad agenda, it’s an undoable agenda. But they have no alternative. The economic base of the United States power projection is bankrupt. Look at what’s happened since September ’08 with the bailout of AIG, Goldman Sachs, all the major Wall Street and New York megabanks. But it becomes clear that’s being done at taxpayer expense. The US economy is going down the tubes in grand style.

JAY: But every time there’s a real blip, the markets get shaky, the global finance capital gets scared, they buy more American dollars.

ENGDAHL: Yeah. Well, who’s doing that?

JAY: All the global elites seem to be in on it.

ENGDAHL: The point about the dollar is not a short-term consideration. The dollar, the long-term prospects of the dollar, are extremely negative. But, of course, central banks like the People’s Bank of China, the Bank of Japan, the major holders of dollar reserves, the Russian Central Bank, they, of course, don’t want to precipitate a dramatic freefall in the dollar, but they see where the winds are blowing, and there are very strong tsunami winds that are blowing against the dollar. So I think what’s developing—. And also another aspect of 2009 that has been receiving very little play is the quiet emergence of regional and multinational currency, informal currency arrangements, such as between South Korea, China, other ASEAN nations [Association of Southeast Asian Nations], to price their trade in national currencies not mediated through the dollar. The same thing with the talks going on between oil-producing and oil-consuming nations. This was reported back in September of last year, where Saudi Arabia, interestingly enough, Brazil, China, other such nations, and reportedly also Russia, are talking about pricing their oil export and import, respectively, not in dollars. That has been an iron law since 1945 and the emergence of the American century, the American domination; that’s been an iron law of international oil trade, the pricing in dollars and dollars only. Well, that’s gradually giving way. The nations of the Arab Gulf countries, the Gulf Cooperation Council, almost all of them have agreed to form a common currency and, long-term, a common central bank. It would be based in Riyadh in Saudi Arabia. So these are all small steps. They’re gradual steps at this point. But the world has positioned itself, the take on it, and certainly the take on the Obama presidency after the first year, is that it’s a failure in terms of any promise of real change. And one need only to read the New York Times account of the humiliation of Obama at the Copenhagen Summit, where he was forced to ask for a chair at a private meeting between the Chinese, the Brazilians, the Russians, and the Indian governments, the BRIC countries, to try to bully the Chinese into a deal on global warming, and it failed. It’s not the issue of global warming, pro or con; it’s the issue of the lack of clout, the lack of leverage that the US has in world affairs. And that, I think, is the most profound change of 2009.

JAY: So looking forward to this decade, what excites you? What concerns you?

ENGDAHL: Well, what concerns me is that most US policy—I’m completing work on a book that’ll be out, I hope, in around March in English called The Gods of Money: Wall Street and the Death of the American Century, and the title is deliberately chosen, because you had a system taken over—the Constitution, the laws of the United States, and so forth—a country that was, after 1945, the world’s leading industrial nation, the leader in innovation, technology, science, and so forth, and here we are a scant six decades later, and the United States is indebted beyond belief, privately the corporate sector, the private households, not just mortgage debt—credit card debt, automobile debt, and every other conceivable kind of debt—and you have the hollowed-out industrial base in the United States outsourced to nations like China and Mexico, Eastern Europe, and so forth.

JAY: Is it essentially that they’re just fighting fires, there is no real long-term thinking anymore?

ENGDAHL: That’s the impression one gets. I mean, from all the evidence, Yemen is about trying to militarize the Gulf of Aden there, that choke point, one of the seven major oil-shipment choke points where oil from the Persian Gulf goes up through the Red Sea into the Suez Canal and into the Mediterranean to Europe and so forth. The whole piracy thing of Somalia, the militarization of the waters there, using piracy as the excuse, one wonders where the guns and the technology that the pirates have are coming from. There’s a lack of a grand strategy, a really creative or dynamic grand strategy, and you compare that with what countries like China and Russia are doing, they’re popping up in every part of the globe.

JAY: Is part of the issue that the fundamental balance of economic power has shifted—the rise of China-Brazil to now Russia? It’s no longer a unipolar economic world, but the geopolitics hasn’t caught up with economic reality, and it certainly doesn’t seem to have caught up with most of the consciousness in Washington—or I should say most of the consciousness of Washington hasn’t caught up with that reality.

ENGDAHL: I think that’s the better way to put it. The impression I have is that they’re reacting, not acting, and they’re acting and reacting on the basis of a bankrupt strategy. And that’s really the dangerous thing in all of this, because nothing they try is working in a real sense.

JAY: Well, please join us for part two of our conversation with F. William Engdahl on The Real News Network.


Please note that TRNN transcripts are typed from a recording of the program; The Real News Network cannot guarantee complete accuracy.

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F William Engdahl is an economist and author and the writer of the best selling book "A Century of War: Anglo-American Oil Politics and the New World Order." Mr Engdhahl has written on issues of energy, politics and economics for more than 30 years, beginning with the first oil shock in the early 1970s. Mr. Engdahl contributes regularly to a number of publications including Asia Times Online, Asia, Inc, Japan's Nihon Keizai Shimbun, Foresight magazine; Freitag and ZeitFragen newspapers in Germany and Switzerland respectively. His newest book is called "Gods of Money: Wall Street and the Death of the American Century". He is based in Germany.