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In the third installment of the series, FC&B compares the precarious situations of the United States, China, and Saudi Arabia to a global Mexican Standoff due to late 20th century US foreign policy. In the piece, he also notes the implications for the rest of the world were any of the countries be the one to pull the trigger first.

Intro/Spoiler Alert
Because of actions of the United States government in the past few decades and their consequences, planet Earth has turned into a Quentin Tarantino movie cliche on a global scale.

For those of you who are unfamiliar with the phrase, a Mexican Standoff is a commonly-used plot device in Spaghetti Westerns where three separate parties have the jump on one another simultaneously. All three are in a precarious position, and all three are capable of taking the life of another. However, in doing so, one party squeezing the trigger effectively means everyone dies all at once.

Tarantino uses them in almost all of his movies: Samuel L. Jackson draws on Tim Roth in Pulp Fiction as Amanda Plummer points her own piece at Jackson's head. Later in that scene, John Travolta appears brandishing a gun at Plummer. While everyone escapes alive from that scene, those of you who have seen Inglourious Basterds know that the standoff in the rendezvous scene ends in a bloody blaze of gunfire.

All movie analogies aside, the world is now in a stand-off that is looking to end like the basement rendezvous in IB. But instead of merely three parties, this particular stand-off could effectively plunge most of the developed world into chaos in the next few years unless things change soon.

The Saudi Arabian Money Laundering Affair (SAMA)
In Confessions of an Economic Hit Man, one particular incident John Perkins looks back upon with even more regret than usual is the SAMA. One one hand, it secured the dollar as the world's dominant currency, backed by an even more precious resource than gold. On the other hand, Perkins also played a key role in ensuring the Corporatocracy's reign would extend through the 21st century. On Perkins' MAIN resume, it can be seen on the last line of the last column as "U.S. Treasury Dept., Kingdom of Saudi Arabia."

After the gold standard was revoked, the US dollar was regarded simply as legal tender, backed by little more than faith. In Confessions, Perkins remembers a conversation with a colleague, where he speculated that the dollar would soon be backed by an oil standard, instead of gold. His colleague's prediction came true after the famous Saudi oil embargo imposed upon us in 1973.

As history has shown, the US's insatiable addiction to oil made us highly reliant upon Saudi Arabia. Without their oil, the American economy was brought to its knees that year and into the next for several months by the OPEC leader, simply because Nixon supported Israel. Thus, his administration took action that reversed the situation in our favor. However, the SAMA was an exception to our standard way of doing business.

While the previous two pieces in this series discuss the process in detail, I should hope by now that my readers are familiar with the nefarious process in which we secretly conquer the globe financially. First, Economic Hit Men like John Perkins are sent in to make inflated economic forecasts for infrastructure projects meant only to benefit the top income earners of a country. Assuming the leaders are corrupt, they allow the projects to commence with huge loans from the World Bank and IMF, justified by the initial forecasting.

If leaders prove to be incorruptible (Jacobo Arbenz, Salvador Allende, Omar Torrijos, Jaime Roldos, Mohammed Mossadegh, etc.) then the CIA goes about instigating military coups, where a corrupt right wing dictator subservient to the US is put in power. (Mohammed Reza Pahlavi, Saddam Hussein, Manuel Noriega, Roberto D'Aubisson, etc.) If the CIA fails, we send in the military to turn that country into a smooth piece of glass (Panama in 1989, Iraq in 2003). Point being, the projects always get built, and the rich corporate executives in the US (Bechtel, Stone and Webster, Halliburton, etc.) and corrupt heads of state elsewhere profit at the expense of the environment and indigenous people.

While our old way of business was intended as a way to subjugate countries with debt after defaulting on their World Bank loans, oil-rich Saudi Arabia had the resources necessary to finance the loans. Our companies quickly went to work in the mid-1970s "westernizing" Saudi Arabia. We gave the Saudis everything from garbage trucks to power plants to industrial parks, complete with neighborhoods, airstrips, and mini-malls. We marketed the affair as a bold step forward for democracy and capitalism in a region that typically favored neither. The international banks, private contractors, elected officials and their media aimed to use Saudi Arabia's example as enticement for other countries to follow suit. Saudi Arabia was now not only a key player in the Middle East, but in world affairs as well. You may ask what the United States got in return for bestowing such wealth and power upon a nation known for harboring terror cells and international fugitives.

Oil: The New Gold Standard
The United States had a quid-pro-quo system with the Saudi Royal Family in the 1970s, and it is still very much present today. SA's westernization was set into motion after we guaranteed ourselves an unlimited supply of Saudi oil through a clandestine agreement.

The Saudi leaders of OPEC had to promise not to ever place the US under a trading embargo ever again- our bargain was that we would guarantee political support for the Saud family, and keep them in power as long as OPEC's chief trading currency was the US dollar. In effect, the dollar was now backed by an even stronger and infinitely more valuable resource than even gold. Even if other currencies rose in influence and were valued more than the dollar, we would still have the coveted Oil Standard. The Fed can still be free to print all of the paper it wants, because as much as inflation rates will rise, we still have Saudi Arabia's oil backing up our currency.

As we can see, this has already happened in the global market; the Euro has now become the most valuable currency, beating the dollar into submission as the exchange rate grows wider and wider between the two. As powerful and vast as the US Corporatocracy is, it still depends entirely on the dollar's OPEC oil standard. The Corporatocracy is also well-aware that the Iraq war started the United States' rapidly expanding debt, which continues to plummet further into a hole to which we cannot foresee an end.

Without OPEC's support of our money, the Corporatocracy and the foundations of the modern US economy will crumble.

The Worldwide Mexican Standoff
We're currently in an multi-trillion debt with China largely because of the War on Terror and the Fed's budget for fiscal year 2009. Should OPEC decide to start using the Euro as their standard currency instead of the dollar, China would then have an excuse to come knocking on our door, demanding we immediately pay our $11 trillion in debt with Euros. The exchange rate would be astronomical. The United States would have to liquidate every single asset. We would be immediately brought to our knees. Even if were to wage a war with China if they proceeded with such an action, the Department of Defense would be bankrupt. A war would be waged and lost in an instant; not with guns, but with checkbooks.

However, OPEC and Saudi Arabia know that if they were to convert to trading in Euros rather than dollars, the United States, foreseeing the financial backlash, would immediately go about turning the majority of the Persian Gulf into a sea of glass. Saudi Arabia foresees the destruction we are capable of wreaking, and would immediately hesitate considering such an action.

So there you have it; China has the jump on the US, the US has the jump on Saudi Arabia, and Saudi Arabia has the jump on all of those who depend on their oil. The first person to squeeze the trigger in this Mexican Standoff will likely spark the next World War, which would span from the Atlantic to the Pacific. All Mayan predictions aside, a likely date for such an event were it to occur could very well be December of 2012. Three years from now we will have possibly just elected a new president, and China has a tendency of testing our newly-elected leaders, as does the Middle East.

So how do we possibly avoid such a dreadful and catastrophic situation?

The Venus Project: Financial Panacea on a Global Scale
In early 2009, I wrote in-depth about about a proposed overhaul of a money-based economy for a resource-based one. The heart of The Venus Project is a global society that lives entirely sustainably, produces as much as it consumes, and no longer has to work tirelessly for a living. In this system, all methods of distribution, production and inventory would be fully automated. Indeed, we already have the technology to automate most jobs done by humans. Crops could be grown, irrigated and harvested by machines; factories could operate independent of human hands, simply with a renewable energy supply. It would be as the ancient Greek societies were, where slaves did the menial labor while man was free to create, read, write, learn, and communicate meaningfully with their fellow man. Except this time, instead of slaves, we would have science hard at work for us.

If the world converted to such a system, all money-based jobs would become obsolete. Political and financial decisions could be made in an instant by a digital system not capable of being bought off by special interests. This system wouldn't have to raise money for election campaigns, squabble in a Capitol building with other politicians, work against progress in exchange for material gifts, or work seasonally. It would be put in place by leaders from all sides of the world, and it's bottom line would be progress, growth and equality instead of more votes in the next election cycle.

Resources could be shared globally, and all global citizens could enjoy vast amounts of wealth; plenty of food to eat, shelter for themselves and their families, water to drink, and unlimited electricity powered by renewable energy. There would no longer need to be a Corporatocracy to ensure cheap cars, cellphones, computers, petroleum, gold, diamonds, shoes and clothes for Americans at the expense of Third World peoples or their land. It would be a truly ideal egalitarian society free from political or religious dogma and human error. It would be a united society that fosters virtue and innovation, rather than greed and corruption. New human beings would be born into a system that venerates creativity over material wealth.

There you have it. We are faced with a crisis- we can either watch the horror unfold before our very eyes, or unite and work together to stop it from ever taking place. As wiser men have said before, we must be the change we want to see in the world.

Originally posted to Free Chicken and Beer on Wed Sep 16, 2009 at 04:03 PM PDT.

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Comment Preferences

  •  Tip Jar (6+ / 0-)

    "It has to start somewhere. It has to start sometime. What better place than here? What better time than now?" -Rage Against The Machine

    by Free Chicken and Beer on Wed Sep 16, 2009 at 04:03:53 PM PDT

  •  nice Big Picture view of some of the (0+ / 0-)

    problems we face.

    As to your proposal, how do suppose we get there? The issue is not really one of inadequate use of automation, etc., IMHO.

    It's one of balancing the human inclination toward selfishness with the human inclination toward altruism.

    In every age, in every economic and political system, villainy abounds, cheaters prosper, and games are rigged.

    What needs to happen is not necessarily a total change of the entire economic, social, political, and technological systems - probably desirable in many ways, but hardly achievable!! - but a sustained, organized pushback against the corporatocracy to rein in and regulate the biggest offenders against human economic and political rights.

    In other words, it's fun to speculate about what you would do to make everything different, but those total societal makeovers tend to have a way of biting the dreamers in the butt.

    Fear is the mind-killer - Frank Herbert, Dune

    by p gorden lippy on Wed Sep 16, 2009 at 04:29:00 PM PDT

  •  While I'm sure (0+ / 0-)

    That China wouldn't mind getting 11 trillion euro's from the US it's also unlikely at present that they will ask for it.

    If the US were to go the way of the Soviet Union it would damage the Chinese economy greatly as well. At present it's realistic to assume that China would want to keep the status quo for another 20 years or so until it develops it's own seperate economy more.

    "You show me a capitalist, and I'll show you a bloodsucker." - Malcolm X

    by Dr Marcos on Wed Sep 16, 2009 at 04:56:16 PM PDT

  •  your end goal is undeniable (1+ / 0-)
    Recommended by:

    While its going to take a long time to ween people off the Consumerism teat and reteach the ability to have joy and happiness without material goods filling the holes in our hearts, something like your end vision there has to come about eventually.  Barring wingnut armageddon of course, then we'll just be happy to have farm equipment.

    Not sure I like the idea of a computer making the decisions.  While I understand your uncorruptable idea, we've learned far to well how easy it is for people to corrupt the machines and then have no way to prove those corruptions.  Its doable to create something unhackable, but most people don't have the creativity to do it and certainly not our current leaders who would encourage leaving loopholes.

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