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US$ - Debased? Debauched? Or both?

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Debased dollar? by New Republic

It is not my usual field to review and comment on books on economics as that is not my main background.  However, after following several websites that are concerned with global/U.S. finances over the past two years, and having read a few recent works on the global monetary crisis, I am starting to understand better what is occurring.

In relation to U.S. foreign policy, I have read works by Stiglitz, Galbraith, Ha-Joon Chang, and others that tie foreign policy to U.S. monetary policy, works that do not get into the details about how the markets function (or not). Having just finished reading James Rickards "Currency Wars" this background information raised some interesting contextual questions for me.

In the first section of two chapters (War Games), Rickards describes a war game he participated in with the Pentagon, revealing essentially how stultified their thinking was, how narrow their perspective, and how they were (are?) basically unprepared for anything resembling economic 'war'. From there, he goes into the main part of his work describing the various currency 'wars' that have occurred this century. It is clearly written and generally comprehensible for those not normally in tune with the lexicon of economists and market managers/manipulators.

Yet, at the same time, after having presented the first two chapters within the Pentagon, tacitly recognizing that 'real' war and currency 'war' are related, he avoids that contextual position throughout the work.

There is no connection of these currency wars to the U.S. dollar, as the fiat reserve currency, having and retaining that status in good part under the influence of the U.S. military. There is also no connection of the dollar and its reserve status for energy purchases around the world (the petro-dollar), a situation which forces other currencies to buy into the US$ in order to get oil and gas, and to exchange US$ as per its needs after the sale of the oil and gas.

From my reading on U.S. foreign affairs over the last decade, it is this combination of the petro dollar and the Pentagon that plays a crucial role in the currency wars. Rickards' main view on the currency wars is that of one country or another trying to gain trade advantages over another as the currency values change according to the money supply. All that is well and good, but it is just as narrow-minded and stultified thinking as was presented about the Pentagon in the first section.

The mainstream media tend to support the U.S. ideology and rhetoric about freedom and democracy and all that exceptional stuff. What they do not offer but is found within non-mainstream media is the knowledge of how countries are attacked covertly or overtly by the U.S. in order that it can maintain - or try to more fully achieve - its global hegemony. Afghanistan ultimately was not about freedom and democracy as it is for the search for pipeline routes and containment of Russia and China. If not, why then maintain military bases there and worry about a SOFA agreement with the government? Bin Laden has been killed, and could have been captured had the U.S. used more intelligence than belligerence.

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Likewise in Iraq. The war was propagandized with cultured fears of WMDs and terrorists, neither of which existed prior to the invasion and occupation by a unilateral non UN supported mission. The real concern was twofold: first to support Israel; and within that support was the intention to stop Hussein from using gold or the Euro to sell his oil. Okay, he was not a democrat, but that has never stopped the U.S. from supporting someone who is on their side and is definitely not democratic (to wit most recently, Saudi Arabia, Bahrain, Yemen, al-Qaeda in Syria).

Similarly and most recently, U.S. actions and rhetoric concerning Ukraine have only highlighted the hypocrisy of U.S. words, with Obama's recent speech in Brussels containing many errors and fabrications if not outright lies. The U.S. could care less about Ukrainian freedom and democracy except as it suits their purposes in containing Russia and within that controlling the oil resources of Russia and its export to the EU - and thus help maintain the petrodollar for a little bit longer and keep the EU within their grasp.

There are many other examples, way too many to discuss here, but the above characterizes the ties between the Pentagon, the petrodollar, and U.S. foreign interventions within the context of global finances. The best reference for these many other actions is the writing of William Blum, although there are literally hundreds of other authors that discuss the true nature of U.S. foreign policy from Andrew Bacevich to Howard Zinn.

There is perhaps a reason for Rickards' narrow focus. It could be that he simply wanted to outline how the currencies of the world are balanced off against one another vis-a-vis international trade balances. and how the U.S. is defeating itself by printing so much fiat currency.

But perhaps there is another reason, combining an implication that there is something different about the dollar and that Rickards himself believes the rhetoric from his government about shining lights and democracy and freedom:

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While all currencies by definition represent some store of value, the dollar is different. It is a store of economic value in a nation whose moral values are historically exceptional and therefore a light to the world. The debasement of the dollar cannot proceed without the debasement of those values and exceptionalism.

Really? Moral values that include DU and phosphorous munitions, extradition, torture, drone assassinations, unilateral invasions, racism, apartheid (vis-a-vis Israel), and, among other features of hegemonic imperialism, currency manipulation?

Words of moral value carry no weight in comparison to the many actions taken around the world that contradict those words. I would postulate that the opposite of what Rickards states will carry much more truth: the dollar is currently debauched ("perverted from virtue or morality") and is well deserving of its debasement ("lower in quality, value; depreciate"). The end of the petrodollar will do much harm to the U.S./western economy, but not necessarily so to "the rest of the world."


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A long time student/critic/analyst of the American empire and all that entails, having initially focused on Palestine with many articles submitted to Palestine Chronicle. Since then, other global websites have distributed the reviews and (more...)

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