One of the most targeted countries for this new Anglo-American anti-nuclear offensive in this time was Germany.
by F. William Engdahl
Nixon pulls the plug
By the end of President Richard Nixon’s first year in office, 1969, the U.S. economy had again gone into recession. In order to combat the downturn, U.S. interest rates by 1970 were sharply lowered. As a consequence of the falling interest rates, speculative ‘hot money’ began once more to leave the dollar in record amounts, seeking higher short-term profit in Europe and elsewhere.
One result of by now almost decade-long American refusal to devalue the dollar, and her reluctance to take serious action to control the huge unregulated Eurodollar market, was an increasingly unstable short-term currency speculation. As most of the world’s bankers well knew, King Canute could pretend to hold the waves back for only so long.
 |
| Representational Image: A Pump-jack mining crude oil during sunset (Photo: Zbynek Burival/ Unsplash) |
As a result of Nixon’s expansionary domestic U.S. monetary policy in 1970, the capital inflows of the previous year reversed, and the U.S. incurred a net capital outflow of $6.5 billions. But, as U.S. recession persisted, as interest rates continued to drop into 1971, and money supply to expand, these outflows reached then-huge dimensions, totaling $20 billions. Then, in May of 1971, the United States recorded its first monthly trade deficit as well, triggering a virtual international panic sell-off of the U.S. dollar. The situation was indeed becoming desperate.
By 1971 U.S. official gold reserves represented less than one quarter of her official liabilities, meaning that theoretically if all foreign dollar holders demanded gold instead, Washington would have been unable to comply without drastic measures.
The Wall Street establishment had persuaded President Nixon to abandon fruitless efforts to hold the dollar against a flood of international demand to redeem for gold. But, unfortunately, they did not want the required dollar devaluation against gold which had been intensely sought for almost a decade.
On August 15, 1971 Nixon took the advice of a close circle of key advisers which included his chief Budget adviser, George Shultz, and a policy group then at the Treasury Department including Paul Volcker, and Jack F. Bennett, who later went on to become a director of Exxon. That sunny quiet August day, in a move which rocked the world, the President of the United States announced formal suspension of dollar convertibility into gold, effectively putting the world fully onto a dollar standard with no gold backing, and by this, unilaterally ripping apart the central provision of the 1944 Bretton Woods system. No longer could foreign holders of U.S. dollars redeem their paper for U.S. gold reserves.
Nixon’s unilateral action was reaffirmed in protracted international talks that December in Washington, between the leading European governments, Japan and a few others, which resulted in a bad compromise known as the Smithsonian Agreement. With an exaggeration which exceeded even that of his predecessor, Lyndon Johnson, Nixon announced after the Smithsonian talks, that they were, ‘the conclusion of the most significant monetary agreement in the history of the world.’ The U.S. had formally devalued the dollar a mere 8 percent against gold, placing gold at $38/fine ounce instead of the long-standing $35, hardly the 100 percent devaluation being asked by allied countries. The agreement also officially permitted a band of currency value fluctuation of 2.25 percent instead of the original 1 percent of the IMF Bretton Woods rules.
By declaring to world dollar holders their paper would no longer be redeemed for gold, Nixon ‘pulled the plug’ on the world economy, setting into motion a series of events which was to rock the world as never before. Within weeks, confidence in the Smithsonian agreement had begun to collapse.
De Gaulle’s defiance of Washington in April 1968 on the issue of gold and adhering to the rules of Bretton Woods, had not been sufficient to force through the badly needed reordering of the international monetary system, but it had sufficiently poisoned the well of Washington’s ill-conceived IMF Special Drawing Rights scheme to cover over the problems of the dollar.
The suspension of gold redemption and the resulting international ‘floating exchange rates’ of the early 1970’s solved nothing. It only bought some time.
An eminently workable solution would have been for the U.S. to set the dollar to a more realistic level. From France, de Gaulle’s former economic adviser, Jacques Rueff, continued to plead for a $70/oz. gold price, instead of the $35 level the U.S. unsuccessfully defended. This would calm world speculation and allow the U.S. to redeem her destabilizing Eurodollars balances abroad, without plunging the domestic U.S. economy into any severe chaos, Rueff argued. If done right, it could have given a tremendous spur to U.S. industry as its exports would cost less in foreign currency. American industrial interests would again have predominated over financial voices in U.S. policy circles. But reason was not to prevail.
The Wall Street rationale was that the power of their financial domain must be untouched, even if at expense of economic production or American national prosperity.
Gold itself has little intrinsic value. It has certain industrial uses. But historically, because of its scarcity, it has served as a standard of value against which different nations have fixed the terms of their trade and therefore their currencies. When Nixon decided no longer to honor U.S. currency obligations in gold, he opened the floodgates to a worldwide Las Vegas speculation binge of a dimension never before experienced in history. Instead of calibrating long-term economic affairs to fixed standards of exchange, after August 1971 world trade was simply another arena of speculation on which direction various currencies would fluctuate.
The real architects of the Nixon strategy were in the influential City of London merchant banks. Sir Siegmund Warburg, Edmond de Rothschild, Jocelyn Hambro and others, saw a golden opportunity in Nixon’s dissolution of the Bretton Woods gold standard the summer of 1971. London was once again to become a major center of world finance, and again on ‘borrowed money,’ this time with American Eurodollars.
After August 1971, dominant U.S. policy, under White House National Security Adviser, Henry A. Kissinger, was to control, not to develop, economies throughout the world. U.S. policy officials began proudly calling themselves ‘neo-Malthusians.’ Population reduction in developing nations, rather than technology transfer and industrial growth strategies, began to be the dominating priority during the 1970s, yet another throwback to nineteenth-century British colonial thinking. How this transformation took place we shall soon see.
The ineffective basis of the Smithsonian Agreement led to further deterioration into 1972, as massive capital flows again left the dollar for Japan and Europe, until February 12, 1973 when Nixon finally announced a second devaluation of the dollar, of 10 percent against gold, pricing gold where it remains to this day for the Federal Reserve, at $42.22/ounce.
At this point all the major world currencies began a process of what was called the ‘managed float.’ Between February and March of 1973, the value of the U.S. dollar against the German Deutschmark dropped another 40 percent. Permanent instability had been introduced into world monetary affairs in a way not seen since the early 1930’s. But this time strategists in New York, Washington and the City of London were preparing an unexpected surprise to regain the upper hand and recover from the devastating loss of the monetary pillar of their system.
An unusual meeting in Saltsjoebaden
The design behind Nixon’s August 15, 1971 dollar strategy did not emerge until October 1973, more than two years later, and even then, few persons outside a handful of insiders grasped the connection. The August 1971 de-monetization of the dollar was used by the London-New York financial establishment to buy precious time, while policy insiders prepared a bold new monetarist design, a ‘paradigm shift’ as some preferred to term it. Certain influential voices in the Anglo-American financial establishment had devised a strategy to create again a strong dollar, and once again to increase their relative political power in the world, just when it appeared they were in decisive rout.
In May 1973, with the dramatic fall of the dollar still vivid, a group of 84 of the world’s top financial and political insiders met at the secluded island resort of the Swedish Wallenberg banking family, at Saltsjoebaden, Sweden. This gathering of Prince Bernhard’s Bilderberg Group, heard an American participant outline a ‘scenario’ for an imminent 400 percent increase in OPEC petroleum revenues. The purpose of the secret Saltsjoebaden meeting was not to prevent the expected oil price shock, but rather, plan how to manage the about-to-be-created flood of oil dollars, a process U.S. Secretary of State Kissinger later called ‘recycling the petro-dollar flows.’
The American speaker to the Bilderberg on “Atlantic-Japanese Energy Policy” was clear enough. After stating the prospect that future world oil needs would be supplied by a small number of Middle East producing countries, the speaker declared, prophetically: ‘The cost of these oil imports would rise tremendously, with difficult implications for the balance of payments of consuming countries. Serious problems would be caused by unprecedented foreign exchange accumulations of countries such as Saudi Arabia and Abu Dhabi.’ The speaker added, ‘A complete change was underway in the political, strategic and power relationships between the oil producing, importing and home countries of international oil companies and national oil companies of producing and importing countries.’ He then projected an OPEC Middle East oil revenue rise, which would translate into just over 400 percent, the same level Kissinger was soon to demand of the Shah.
Present at Saltsjoebaden that May were Robert O. Anderson of Atlantic Richfield Oil Co.; Lord Greenhill, chairman of British Petroleum; Sir Eric Roll of S.G. Warburg, creator of Eurobonds; George Ball of Lehman Brothers investment bank, and the man who some ten years earlier as Assistant Secretary of State, told his banker friend Siegmund Warburg to develop London’s Eurodollar market; David Rockefeller of Chase Manhattan Bank; Zbigniew Brzezinski, the man soon to be President Carter’s National Security Adviser; Italy’s Gianni Agnelli and Germany’s Otto Wolff von Amerongen among others. Henry Kissinger had been a regular participant at the Bilderberg gatherings.
The Bilderberg annual meetings were first begun, in utmost secrecy, in May, 1954 by an anglophile group which included George Ball, David Rockefeller, Dr. Joseph Retinger, Holland’s Prince Bernhard, George C. McGhee (then of the U.S. State Department and later a senior executive of Mobil Oil). Named for the place of their first gathering, the Hotel de Bilderberg near Arnheim, the annual Bilderberg meetings gathered top elites of Europe and America for secret deliberations and policy discussion. Consensus was then ‘shaped’ in subsequent press comments and media coverage, but never with reference to the secret Bilderberg talks themselves. This Bilderberg process has been one of the most effective vehicles of postwar Anglo-American policy-shaping.
What the powerful men grouped around Bilderberg had evidently decided that May, was to launch a colossal assault against industrial growth in the world, in order to tilt the balance of power back to the advantage of Anglo-American financial interests, and the dollar. In order to do this, they determined to use their most prized weapon–control of the world’s oil flows. Bilderberg policy was to trigger a global oil embargo, in order to force a dramatic increase in world oil prices. Since 1945, world oil trade had by international custom been priced in dollars as American oil companies dominated the postwar market. A sharp sudden increase in the world price of oil, therefore, meant an equally dramatic increase in world demand for U.S. dollars to pay for that necessary oil.
Never in history had such a small circle of interests, centered in London and New York, controlled so much of the entire world’s economic destiny. The Anglo-American financial establishment had resolved to use their oil power in a manner no one could imagine possible. The very outrageousness of their scheme was to their advantage, they clearly reckoned.
Kissinger’s Yom Kippur oil shock
On October 6, 1973, Egypt and Syria invaded Israel, igniting what became known as the ‘Yom Kippur’ war. Contrary to popular impression, the ‘Yom Kippur’ war was not the simple result of miscalculation, blunder or an Arab decision to launch a military strike against the state of Israel. The entire events surrounding outbreak of the October war were secretly orchestrated by Washington and London, using the powerful diplomatic secret channels developed by Nixon’s White House National Security Adviser, Henry Kissinger.
Kissinger effectively controlled the Israeli policy response through his intimate relation with Israel’s Washington ambassador, Simcha Dinitz. As well, Kissinger cultivated channels to the Egyptian and Syrian side. His method was simply to misrepresent to each party the critical elements of the other, ensuring the war and its subsequent Arab oil embargo.
U.S. intelligence reports including intercepted communications from Arab officials confirming the buildup for war, were firmly suppressed by Kissinger, who was by then Nixon’s intelligence ‘czar.’ The war and its aftermath, Kissinger’s infamous ‘shuttle diplomacy,’ were scripted in Washington, along the precise lines of the Bilderberg deliberations of the previous May in Saltsjoebaden, some six months before outbreak of the war. Arab oil-producing nations were to be the scapegoat for the coming rage of the world, while the Anglo-American interests responsible, stood quietly in the background.
In mid-October 1973 the German Government of Chancellor Willy Brandt told the U.S. Ambassador to Bonn that Germany was neutral in the Middle East conflict, and would not permit the U.S. to resupply Israel from German military bases. With an ominous foreboding of similar exchanges which would occur some 17 years later, on October 30, 1973 Nixon sent Chancellor Brandt a sharply worded protest note, most probably drafted by Kissinger:
‘We recognize that the Europeans are more dependent upon Arab oil than we, but we disagree that your vulnerability is decreased by disassociating yourselves from us on a matter of this importance…You note that this crisis was not a case of common responsibility for the Alliance, and that military supplies for Israel were for purposes which are not part of alliance responsibility. I do not believe we can draw such a fine line…’
Washington would not permit Germany to declare its neutrality in the Mideast conflict. But, significantly, Britain was allowed to clearly state its neutrality, thus avoiding the impact of the Arab oil embargo. Once again London had maneuvered itself skillfully around an international crisis it had been instrumental in precipitating.
One enormous consequence of the ensuing 400 percent rise in OPEC oil prices was that investments of hundreds of millions of dollars by British Petroleum, Royal Dutch Shell and other Anglo-American petroleum concerns in the risky North Sea could produce oil at a profit. It is a curious fact of the time that the profitability of these new North Sea oil fields was not at all secure until after Kissinger’s oil shock. Of course, this could have only been a fortuitous coincidence. Or was it?
By October 16, the Organization of Petroleum Exporting Countries, following a meeting on oil price in Vienna, had raised their price by a then-staggering 70 percent, from $3.01/barrel to $5.11. That same day, the members of the Arab OPEC countries, citing the U.S. support for Israel in the Mideast war, declared an embargo on all oil sales to the United States and Netherlands–the major oil port of Western Europe.
Saudi Arabia, Kuwait, Iraq, Libya, Abu Dhabi, Qatar and Algeria announced on October 17, 1973 that they would cut their production below the September level by 5 percent for October and an additional 5 percent per month, ‘until Israeli withdrawal is completed from the whole Arab territories occupied in June 1967 and the legal rights of the Palestinian people are restored.’ The world’s first ‘oil shock,’ or as the Japanese termed it, ‘Oil Shokku’ was underway.
Significantly, the oil crisis hit full force just as the President of the United States was becoming personally embroiled in what came to be called the ‘Watergate affair,’ leaving Henry Kissinger as de facto President, running U.S. policy during the crisis in late 1973.
When the Nixon White House sent a senior official to the U.S. Treasury in 1974 order to devise a strategy to force OPEC into lowering the oil price, he was bluntly turned away. In a memo the official stated, ‘It was the banking leaders who swept aside this advice and pressed for a ‘recycling’ program to accommodate to higher oil prices. This was the fatal decision…’
The U.S. Treasury, under Secretary Jack Bennett, the man who helped steer Nixon’s fateful August 1971 dollar policy, had established a secret accord with the Saudi Arabian Monetary Agency, SAMA, an agreement finalized in a February 1975 memo from U.S. Assistant Treasury Secretary Jack F. Bennett to Secretary of State Kissinger. Under the terms of the agreement, the huge new Saudi oil revenue windfall was to be invested in significant sums into financing the U.S. government deficits. A young Wall Street investment banker with the leading Eurobond firm of White Weld & Co. based in London, by the name of David Mulford, was sent to Saudi Arabia to become the principal ‘investment adviser’ to SAMA, to guide the Saudi petrodollar investments to the correct banks, naturally in London and New York. The Bilderberg scheme was operating fully as planned.
Kissinger, already firmly in control of all U.S. intelligence estimates as Nixon’s all-powerful National Security Adviser, secured control of U.S. foreign policy as well, persuading Nixon to name him Secretary of State in the weeks just prior to outbreak of the October Yom Kippur war. Kissinger, symptomatic of his central role in events, retained both titles as head of the White House National Security Council and as Secretary of State, something no individual had done before or after him. No other single person during the last months of the Nixon presidency wielded as much absolute power as did Henry Kissinger. To add insult to injury, Kissinger was given the 1973 Nobel Peace Prize.
Following a meeting in Teheran on January 1, 1974, yet a second price increase of more than 100 percent more was added, bringing OPEC benchmark oil prices to $11.65. This was done on the surprising demand by the Shah of Iran, who had been secretly told to do so by Henry Kissinger.
The Shah had only months earlier opposed the OPEC increase to $3.01 for fear this would force Western exporters to charge more for the industrial equipment the Shah sought to import for Iran’s ambitious industrialization. Washington and Western support for Israel in the October war had fed OPEC anger at the meetings. And Kissinger’s own State Department had not even been informed of Kissinger’s secret machinations with the Shah.
From 1949 until the end of 1970, Middle East crude oil prices had averaged approximately $1.90/barrel. They had risen to $3.01 in early 1973, the time of the fateful Saltsjoebaden meeting of the Bilderberg group which discussed an imminent 400 percent future rise in OPEC’s price. By January 1974 that 400 percent increase was fait accompli.
The economic impact of the oil shock
The social impact of the oil embargo on the United States in late 1973 could be described as panic. All throughout 1972 and early 1973, the large multinational oil companies, led by Exxon, had pursued a curious policy of creating short domestic supply of crude oil, allowed to do so under a series of odd decisions made by President Nixon on advice of his aides. When the embargo then hit in November 1973, therefore, the impact could not have been more dramatic. At the time, the White House was responsible for control of U.S. oil imports under provisions of a 1959 U.S. Trade Agreements Act.
In January 1973, Nixon had appointed then-Treasury Secretary George Shultz to be the Assistant to the President for Economic Affairs as well. Shultz oversaw White House oil import policy in this post. His Deputy Treasury Secretary, William E. Simon, a former Wall Street bond trader, was made chairman of the important Oil Policy Committee which determined U.S. oil import supply in the critical months leading up to the October embargo.
In February 1973, Nixon was persuaded to set up a special ‘energy triumvirate’ which included Shultz, White House aide John Ehrlichman, and National Security Adviser Henry Kissinger, to be known as the White House Special Energy Committee. The scene was quietly being set for the Bilderberg plan, though almost no one in Washington or elsewhere realized the fact. Domestic U.S. stocks of crude oil by October 1973, were already at alarmingly low levels. The OPEC embargo triggered a gasoline buying panic among the public, calls for rationing, endless gas lines and a sharp economic recession.
The most severe impact of the oil crisis hit the United States’ largest city, New York. In December 1974, nine of the world’s most powerful bankers, led by David Rockefeller’s Chase Manhattan, Citibank, and the London-New York investment bank, Lazard Freres, told the Mayor of New York, an old-line machine politician named Abraham Beame, that unless he turned over control of the city’s huge pension funds to a committee of the banks, called the Municipal Assistance Corporation, the banks and their influential friends in the media would ensure financial ruin to the city. Not surprisingly, the overpowered Mayor capitulated, New York City was forced to slash spending for roadways, bridges, hospitals and schools in order to service their bank debt, and to lay off tens of thousands of city workers. The nation’s greatest city was turned into a scrap heap beginning then. Felix Rohatyn, of Lazard Freres, became head of the new bankers’ collection agency, dubbed by the press as ‘Big MAC.’
In Western Europe the shock of the oil price rise and the embargo on supplies was equally dramatic. From Britain to the Continent, country after country felt the effects of the worst economic crisis since the 1930’s. Bankruptcies and unemployment rose to alarming levels across Europe.
Germany’s government imposed an emergency ban on Sunday driving, in a desperate effort to save imported oil costs. By June 1974 the oil crisis effects had contributed to the dramatic collapse of Germany’s Herstatt-Bank and a crisis in the D-mark as a result. As Germany’s imported oil costs increased by a staggering 17 billion D-marks in 1974, with half a million people reckoned to be unemployed because of the oil shock and its effects, inflation levels reached an alarming 8 percent. The shock effects of a sudden 400 percent increase in the price of Germany’s basic energy feedstock were devastating to industry, transport, and agriculture. Keystone industries such as steel, shipbuilding, and chemicals all went into a deep crisis at this time as a result of the oil shock.
Willy Brandt’s government was effectively defeated by the domestic impact of the oil crisis, as much as by the Stasi affair revelations against his close adviser, Guenther Guillaume. By May 1974 Brandt had offered his resignation to Bundespresident Heinemann, who then appointed Helmut Schmidt Chancellor. Most governments across Europe fell in this period, victim to the consequences of the oil shock on their economies.
But the economic impact on the developing economies of the world–for at this time they still could be rightly called developing, rather than the fatalistic Third World designation so in vogue today–the impact of an overnight price increase of 400 percent in their primary energy source was staggering. The vast majority of the world’s less-developed economies, without significant domestic oil resources, were suddenly confronted with an unexpected and unpayable 400 percent increase in costs of energy imports, to say nothing of costs chemicals and fertilizers for agriculture derived from petroleum. During this time, commentators began speaking of ‘triage,’ the wartime idea of survival of the fittest, and introduced the vocabulary of ‘Third World’ and ‘Fourth World’ (the non-OPEC countries).
India in 1973 had a positive balance of trade, a healthy situation for a developing economy. By 1974, India had total foreign exchange reserves of $629 millions with which to pay–in dollars–an annual oil import bill of almost double that or $1,241 million. Sudan, Pakistan, Philippines, Thailand and throughout Africa and Latin America country after country was faced in 1974 with gaping deficits in their balance of payments. As a whole, developing countries in 1974 incurred a total trade deficit of $35 billions according to the IMF, a colossal sum in that day, and, not surprisingly, a deficit precisely 4 times as large as in 1973, or just in proportion to the oil price increase.
Following the several years of strong industrial and trade growth of the early 1970’s, the severe drop in industrial activity throughout the world economy in 1974-75 was greater than any such decline since the war.
But while Kissinger’s 1973 oil shock had a devastating impact on world industrial growth, it had an enormous benefit for certain established interests–the major New York and London banks, and the Seven Sister oil multinationals of the U.S. and Britain. Exxon replaced General Motors as the largest American corporation in gross revenues by 1974. Her sisters were not far behind, including Mobil, Texaco, Chevron and Gulf.
The bulk of OPEC dollar revenues, Kissinger’s ‘recycled petrodollars,’ was deposited with the leading banks of London and New York, the banks which dealt in dollars as well as international oil trade. Chase Manhattan, Citibank, Manufacturers Hanover, Bank of America, Barclays, Lloyds, Midland Bank, all enjoyed the windfall profits of the oil shock. We shall later see how they recycled their ‘petro-dollars’ during the 1970’s, and how it set the stage for the great debt crisis of the 1980’s.
Taking the bloom off the ‘nuclear rose’
One principal concern of the authors of the 400 percent oil price increase, was how to ensure their drastic action did not drive the world to accelerate an already strong trend towards construction of a far more efficient and ultimately less expensive alternative energy source–nuclear electricity generation.
Kissinger’s former dean at Harvard and his boss when Kissinger briefly served as a consultant to John Kennedy’s National Security Council was McGeorge Bundy. Bundy left the White House in 1966 in order to play a critical role in shaping the domestic policy of the United States as president of the largest private foundation, the Ford Foundation. By December 1971 Bundy had established a major new project for the foundation, the Energy Policy Project under direction of S. David Freeman, with an impressive $4 million checkbook, and a three year time limit. Precisely in the midst of debate during the 1974 oil shock, Bundy’s Ford study, titled, ‘A Time to Choose: America’s Energy Future,’ was released, in order to shape the public debate in the critical time of the oil crisis.
For the first time in American establishment circles the fraudulent thesis was proclaimed that, ‘Energy growth and economic growth can be uncoupled; they are not Siamese twins.’ Freeman’s study advocated bizarre and demonstrably inefficient ‘alternative’ energy sources such as windpower, solar reflectors and burning recycled waste. The Ford report made a strong attack on nuclear energy, arguing that the technologies involved could theoretically be used to make nuclear bombs. ‘The fuel itself or one of the byproducts, plutonium, can be used directly or processed into the material for nuclear bombs or explosive devices,’ they asserted.
The Ford study correctly noted that the principal competitor to the hegemony of petroleum in the future was nuclear energy, warning against the ‘very rapidity with which nuclear power is spreading in all parts of the world and by development of new nuclear technologies, most notably the fast breeder reactors and the centrifuge method of enriching uranium.’ The framework of the U.S. financial establishment’s anti-nuclear ‘green’ assault had been defined by Bundy’s project.
By the early 1970’s nuclear technology had clearly established itself as the preferred future choice for efficient electric generation, vastly more efficient (and environmentally friendly) than either oil or coal. At the time of the oil shock, the European Community was already well into a major nuclear development program. Plans of member governments as of 1975 called for completion of between 160 and 200 new nuclear plants across Continental Europe by 1985.
In 1975, the Schmidt government in Germany, reacting rationally to the implications of the 1974 oil shock, passed a program which called for an added 42 GigaWatts of German nuclear plant capacity, for a total of approximately 45 percent of German total electricity demand by 1985, a program exceeded in the EC only by France’s, which projected 45 GigaWatts new nuclear capacity by 1985. Italy’s Industry Minister Carlo Donat Cattin in the fall of 1975, instructed Italy’s nuclear companies, ENEL and CNEN to draw up plans for construction of some 20 nuclear plants for completion by the early 1980’s. Even Spain, just then emerging from four decades of Franco rule, had a program calling for construction of 20 nuclear plants by 1983. A typical 1 GigaWatt nuclear facility is generally sufficient to supply all electricity requirements for a modern industrial city of one million people.
The rapidly growing nuclear industries of Europe, especially France and Germany, were beginning for the first time to emerge as competent rivals to American domination of the nuclear export market by the time of the 1974 oil shock. France had secured a Letter of Intent from the Shah of Iran, as had Germany’s KWU, to build a total of four nuclear reactors in Iran, while France had signed with Pakistan’s Bhutto government to create a modern nuclear infrastructure in that country. Negotiations also reached a successful conclusion in February 1976, between the German government and Brazil, for cooperation in the peaceful uses of nuclear energy which included German construction of eight nuclear reactors as well as facilities for reprocessing and enrichment of Uranium reactor fuel. German and French nuclear companies, with full support of their governments, entered in this period into negotiations with select developing sector countries, fully in the spirit of Eisenhower’s 1953 Atoms for Peace declaration.
Clearly, the Anglo-American energy grip, based on their tight control of the world’s major energy source, petroleum, was threatened if these quite feasible programs went ahead.
Nuclear energy represented in the postwar period precisely the same quality of higher technological level, which oil had been over coal when Lord Fisher and Winston Churchill argued at the end of the last century for Britain’s navy to convert to oil from coal. The major difference was that Britain and her cousins in the United States in the 1970’s, held the grip on world oil supplies. World nuclear technology threatened to open unbounded energy possibilities, especially if plans for commercial nuclear fast breeders were realized, as well as thermonuclear fusion.
In the immediate wake of the 1974 oil shock, two industry organizations were established, both based significantly enough in London. In early 1975 an informal semi-secret group was established, the Nuclear Suppliers Group, or ‘London Club’ as it was known. The group included Britain, the US, Canada together with France, Germany, Japan and the USSR. It was an initial Anglo-American effort to secure self-restraint on nuclear export. It was complemented in May 1975 by formation of another secretive organization which grouped the world’s major suppliers of nuclear uranium fuel, the London ‘Uranium Institute,’ dominated by traditional British regions including Canada, Australia, South Africa and the UK. These ‘inside’ organizations were necessary but by no means sufficient for the Anglo-American interests to contain the nuclear ‘threat’ in the early 1970’s.
As one prominent anti-nuclear American from the Aspen Institute put their problem, ‘We must take the bloom off the ‘nuclear rose.’‘ And take it off they did.
Developing the Anglo-American green agenda
It was not exactly accidental that a growing part of the population in Western Europe, especially in Germany, following the oil shock recession of 1974-5, began talking for the first time in the postwar period about ‘limits to growth,’ or threats to the environment, and began to question their faith in the principle of industrial growth and technological progress. Very few people realized the extent to which their new ‘opinions’ were being carefully manipulated from the top by a network established by the same Anglo-American finance and industry circles behind the Saltsjoebaden oil shock strategy.
Beginning the 1970’s an awesome propaganda offensive was launched from select Anglo-American think-tanks and journals, intended to shape a new ‘limits to growth’ agenda, which would insure the ‘success’ of the dramatic oil shock strategy. The American oilman present at the May 1973 Saltsjoebaden meeting of the Bilderberg group, Robert O. Anderson, was a central figure in the implementation of the ensuing Anglo-American ecology agenda. It was to become one of the most successful frauds in history.
Anderson and his Atlantic Richfield Oil Co. funneled millions of dollars through their Atlantic Richfield Foundation into select organizations to target nuclear energy. One of the prime beneficiaries of Anderson’s largesse was a group called Friends of the Earth, which was organized in this time with a $200,000 grant from Anderson. One of the earliest targets of Anderson’s Friends of the Earth was to finance an assault on the German nuclear industry, through such anti-nuclear actions as the anti-Brockdorf demonstrations in 1976, led by Friends of the Earth leader Holger Strohm. Friends of the Earth French director was the Paris partner of the Rockefeller family law firm, Coudert Brothers, one Brice LaLonde, who in 1989 became Mitterrand’s Environment Minister. It was Friends of the Earth which was used to block a major Japan-Australia uranium supply agreement. In November 1974 Japanese Prime Minister Tanaka came to Canberra to meet Australian Prime Minister Gough Whitlam. The two made a commitment potentially worth billions of dollars, for Australia to supply Japan’s needs for future uranium ore and enter a joint project to develop uranium enrichment technology. British uranium mining giant, Rio Tinto Zinc, secretly deployed Friends of the Earth in Australia to mobilize opposition to the pending Japanese agreement, resulting some months later in the fall of Whitlam’s government. Friends of the Earth had ‘friends’ in very high places in London and Washington.
But Robert O. Anderson’s major vehicle to spread the new ‘limits to growth’ ideology among American and European establishment circles, was his Aspen Institute for Humanistic Studies. With Anderson as Chairman, and Atlantic Richfield head Thornton Bradshaw as vice-chairman, the Aspen Institute was a major financial conduit in the early 1970’s for creation of the establishment’s new anti-nuclear agenda.
Among the better-known trustees of Aspen at this time were World Bank President and the man who ran the Vietnam war, Robert S. McNamara. Lord Bullock of Oxford University and Richard Gardner, an anglophile American economist who later was U.S. Ambassador to Italy, and Wall Street banker, Russell Peterson of Lehman Brothers Kuhn Loeb Inc., were among the carefully selected trustees of Aspen at this time, as were EXXON board member Jack G. Clarke, Gulf Oil’s Jerry McAfee, Mobil Oil director George C. McGhee, the former State Department official who was present in 1954 at the founding meeting of the Bilderberg group. Involved with Anderson’s Aspen as well from this early period, was Hamburg’s Die Zeit publisher Marion Countess Doenhoff, as well as former Chase Manhattan Bank chairman and High Commissioner to Germany, John J. McCloy.
Robert O. Anderson brought in Joseph Slater from McGeorge Bundy’s Ford Foundation to serve as Aspen’s president. It was indeed a close-knit family in the Anglo-American establishment of the early 1970’s. The initial project Slater launched at Aspen was the preparation of an international organizational offensive against industrial growth and especially nuclear energy, using the auspices (and the money) of the United Nations. Slater secured support of Sweden’s UN Ambassador Sverker Aastrom, who steered through the UN a proposal, over strenuous objections from developing countries, for an international conference on the environment.
From the outset, the June 1972 Stockholm United Nations’ Conference on the Environment was run by operatives of Anderson’s Aspen Institute. Aspen board member, Maurice Strong, a Canadian oilman from Petro-Canada, chaired the Stockholm conference. Aspen as well provided financing to create under UN auspices, an international zero-growth network called the International Institute for Environment and Development, whose board included Robert O. Anderson, Robert McNamara, Strong and British Labour Party’s Roy Jenkins. The new organization immediately produced a book, ‘Only One Earth,’ by Rockefeller University associate Rene Dubos and British malthusian Barbara Ward (Lady Jackson). The International Chambers of Commerce were persuaded at this time as well to sponsor Maurice Strong and other Aspen figures in seminars targeting international businessmen on the emerging new environmentalist ideology.
The Stockholm 1972 conference created the necessary international organizational and publicity infrastructure such that by the time of the Kissinger oil shock of 1973-4, a massive anti-nuclear propaganda offensive could be launched, with the added assistance of millions of dollars readily available from oil-linked channels of the Atlantic Richfield Company, the Rockefeller Brothers’ Fund and other such elite Anglo-American establishment circles. Among the groups which were funded by these people in this time were organizations including the ultra-elitist World Wildlife Fund whose chairman was the Bilderberg’s Prince Bernhard, and later Royal Dutch Shell’s John Loudon. (10).
Indicative of this financial establishment’s overwhelming influence in the American and British media, is the fact that during this period, no public outcry was launched to investigate the probable conflict of interest involved in Robert O. Anderson’s well-financed anti-nuclear offensive, and the fact that his Atlantic Richfield Oil Co. was one of the major beneficiaries from the 1974 price increase of oil. Anderson’s ARCO had invested tens millions of dollars into high-risk oil infrastructure in Alaska’s Prudhoe Bay and Britain’s North Sea, together with Exxon, British Petroleum, Shell and the other Seven Sisters.
Had the 1974 oil shock not raised the market price of oil to $11.65/barrel or thereabouts, Anderson’s, as well as British Petroleum and Exxon and the others’ investments in the North Sea and Alaska would have brought financial ruin. To ensure a friendly press voice in Britain, Anderson at this time purchased ownership of the London Observer. Virtually no one asked if Anderson and his influential friends might have known in advance that Kissinger would create the conditions for a 400 percent oil price rise.
Not to leave any zero growth stone unturned, Robert O. Anderson also contributed significant funds to a project initiated by the Rockefeller family at the Rockefeller’s estate at Bellagio, Italy with Aurelio Peccei and Alexander King. This Club of Rome, and the U.S. Association of the Club of Rome, in 1972 gave widespread publicity to their publication of a scientifically fraudulent computer simulation prepared by Dennis Meadows and Jay Forrester, titled, ‘Limits to Growth.’ Adding modern computer graphics to the discredited essay of Malthus, Meadows and Forrester insisted that the world would soon perish for lack of adequate energy, food and other resources. As did Malthus, they chose to ignore the impact of technological progress on improving the human condition. Their message was one of unmitigated gloom and cultural pessimism.
One of the most targeted countries for this new Anglo-American anti-nuclear offensive in this time was Germany. While France’s nuclear program was equally if not more ambitious, Germany was deemed an area where Anglo-American intelligence assets had greater likelihood of success given their history in the postwar occupation of the Federal Republic. Almost as soon as the ink had dried on the Schmidt government’s 1975 nuclear development program, an offensive was launched.
A key operative in this new project was to be was a young woman whose mother was German and stepfather American and who had lived in the U.S. until 1970, working for U.S. Senator Hubert Humphrey, among other things. Petra K. Kelly had developed close ties in her U.S. years to one of the principal new Anglo-American anti-nuclear organizations created by McGeorge Bundy’s Ford Foundation, the Natural Resources Defense Council. The Natural resources Defense Council included Barbara Ward (Lady Jackson) and Laurance Rockefeller among its board at the time. In Germany, Kelly began organizing legal assaults against construction of the German nuclear program during the mid-1970’s, resulting in costly delays and eventual large cuts in the entire German nuclear plan.
Population control becomes US ‘national security’
In 1798 an obscure English clergyman, professor of political economy in the employ of the British East India Company’s East India College at Haileybury, was given instant fame by his English sponsors for his ‘Essay on the Principle of Population.’ The essay itself was a scientific fraud, plagiarized largely from a Venetian attack on the positive population theory of American Benjamin Franklin.
The Venetian attack on Franklin’s essay had been written by Giammaria Ortes in 1774. Malthus’ adaptation of Ortes’ ‘theory’ was refined with a facade of mathematical legitimacy which he called the ‘law of geometric progression,’ which held that human populations invariably expanded geometrically, while the means of subsistence were arithmetically limited or linear. The flaw in Malthus’ argument, as demonstrated irrefutably by the spectacular growth of civilization, technology and agriculture productivity since 1798, was Malthus’ deliberate ignoring of the contribution of advances in science and technology to dramatically improve such factors as crop yields, labor productivity and such.
By the mid-1970’s, indicative of the effectiveness of the new propaganda onslaught from the Anglo-American establishment, American government officials were openly boasting in public press conferences that they were committed ‘neo-Malthusians,’ something for which they would have been laughed out of office a mere decade or so earlier. But nowhere did the new embrace of British malthusian economics in the United States show itself more brutally than in Kissinger’s National Security Council.
On April 24, 1974, in the midst of the oil crisis, White House National Security adviser, Henry Alfred Kissinger, issued a National Security Council Study Memorandum 200 (NSSM 200), on the subject of ‘Implications of Worldwide Population Growth for U.S. Security and Overseas Interests.’ It was directed to all cabinet secretaries, the military Joint Chiefs of Staff as well as the CIA and other key agencies. On October 16, 1975, on Kissinger’s urging, President Gerald Ford issued a memorandum confirming the need for ‘U.S. leadership in world population matters,’ based on the contents of the classified NSSM 200 document. The document made malthusianism, for the first time in American history, an explicit item of security policy of the government of the United States. More bitter the irony, was the fact that it was initiated by a German-born Jew. Even during the Nazi years government officials in Germany were more guarded about officially espousing such goals.
NSSM 200 argued that population expansion in select developing countries which also contain key strategic resources necessary to the U.S. economy, posed potential U.S. ‘national security threats.’ The study warned that under pressure from an expanding domestic population, countries with needed raw materials will tend to demand better prices and higher terms of trade for their exports to the United States. In this context, the NSSM 200 identified a target list of 13 countries singled out as ‘strategic targets’ for U.S. efforts at population control. The list, drawn up in 1974, no doubt, as with all other major decisions of Kissinger, also involving close consultation with the British Foreign Office, is instructive.
Kissinger explicitly stated in the memorandum, ‘how much more efficient expenditures for population control might be than (would be funds for) raising production through direct investments in additional irrigation and power projects and factories.’ British 19th century Imperialism could have expressed it no better. By the middle 1970’s the government of the United States, with this secret policy declaration, had committed itself to an agenda which would contribute to its own economic demise as well as untold famine, misery and unnecessary death throughout the developing sector. The 13 target countries named by Kissinger’s study were Brazil, Pakistan, India, Bangladesh, Egypt, Nigeria, Mexico, Indonesia, Philippines, Thailand, Turkey, Ethiopia and Colombia.
F. William Engdahl is an award-winning geopolitical analyst, strategic risk consultant, author, professor and lecturer. He has been researching and writing about the world political scene for more than thirty years. His various books on geopolitics—the interaction between international power politics, economics and geography—have been translated into 14 foreign languages from Chinese to French, from German to Japanese.
Post a Comment