04 May, 2009
The world economy is not only showing few signs of recovery, but
we are also looking at the end of the American century, according
to German author and economist William Engdahl.
In an exclusive interview with RT, he highlights the different
ways in which the crisis has affected America and Europe and their
subsequent responses.
RT: Recently we have seen several American banks beat the
forecast and record an increase in profit. So, is the worst now
over for the world's economy?
William Engdahl: This is by no means the sign of the end of the
crisis. I estimate that we are perhaps 40% into the losses alone in
the US real estate sector and these banks.
When we talk about banks we really talk at most about seven or
eight huge institutions that are in the center of the crisis and
not about tens of thousands of smaller banks in the US.
RT: So, in your opinion, do you think it is too soon to be
optimistic?
W.E.: Absolutely too soon to be optimistic in the US. The US is
the heart of a global problem, the core of the problem. And US
financial and banking deregulations since the end of the 1990s are
the proximate cause of the problem.
And that is a process now which is going to put the US into what
I called ten years of hell. It is going to be worse in some respect
than the Great Depression of the 1930s for most Americans, and
everything that the current administration and the previous
administration have done about the problem is merely going to make
it worse for the actual economy.
RT: So now let's shift to Eastern Europe. Could you perhaps
paint us a picture about the situation there at the moment? Which
countries are the most affected?
W.E.: The problem in Eastern Europe is a derivative problem of
cheap credit coming out of Wall Street for the last seven years.
And as the [Federal Reserve] lowered its interest rates after 2002,
partly to create this real estate bubble and to feed the Wall
Street banks’ securitization process, the interest rates worldwide
came down: the European interest rates, and so forth. So, banks in
Europe were able to borrow money very cheaply and lend it out to
Eastern European countries that were in the EU, like Poland, or
Hungary, or the Czech Republic.
I don't see it as the same kind of crisis as the derivatives
crisis in the US banks, because there is a real housing deficit
after 50 years of the controlled economy command economy of the
Warsaw Pact Soviet era. And people do have jobs there. This is not
derivative speculation off the books. This is simply normal banking
loans. And what EU governments have done in one form or another is
to step in with IMF funds – I am not a fan of IMF in any way –
but the purpose of the funds was to stabilize the currency so that
it does not become a speculative target and make the crisis worse.
I think for the moment that it's, quote-on-quote, “under control.”
It does not have the leverage potential that the American crisis
has.
RT: And Russia is currently in the similar situation with
rumors that many banks will soon go bust if more negotiation does
not happen with the West sometime soon. So what doe you think is
the best option available to Russia?
W.E.: Russia has to, and this is I think one thing that the
current government and when Vladimir Putin was president tried very
much to do, is to bring the crucial elements of the sovereign
nation back under state control.
That does not say going back to the era of central planning
communism, but certainly to control your currency, to control your
credit system – these are things that every sovereign system
should rightly have. And in terms of the banking crisis perhaps
there are some banks that would do better if nationalized if the
losses are too great. At least nationalized so that they could be
then cleaned up from the toxic waste and the bad investments and
that the real economy comes out of this as a healthy factor and not
pure financial speculation for the good of a few oligarchs at the
expense of the Russian economy and Russian people.
RT: So how long do you think it is going to take before we
see the end of this recession?
W.E.: The point is we are at an epochal change. This is
something that happens perhaps every four or five hundred years.
This is not a once a decade recession we are living through. And I
call it in my new book the ‘Decline of the American century’. This
is a terminal decline as you had with the British Empire after WWI.
It would not matter if Jesus Christ was the President of the US
today. There would be nothing he could do to reverse that decline
process. We would almost have to reorganize and start from scratch,
because the cancer of this financial system has embedded so deeply
that they’ve destroyed the industrial technology in the US.
They outsourced manufacturing over the past 25-30 years to Asia,
to Eastern Europe, all over the world. The American elite have
rotted itself from the inside out over the past 30-40 years since
the early 1970s.
So Europe, very much including Russia or let's say Eurasia…
Eurasia is a vast continent which has every resource man could
imagine for everything we would want to build economically. It has
the brainpower, it has the scientific talents, and we have not
totally destroyed that as in the case of the US. And that is all we
need. It has the raw materials, Russia has unlimited resources of
natural gas and oil. The Russian geology is likely years ahead of
American and Western geology, geophysics let's say, because it is
based on real physics science and not on hocus-pocus to hide the
fact of how much oil the world has. There is nothing that is
lacking.
The decision in the Western Europe, the EU is, for many European
elites, I know this from discussions here in Germany in the recent
years – they have to make a choice, and they’re schizophrenic about
that choice right now: either strengthen the
Atlantic alliance with Washington and go down with the sinking
Titanic called the American century, or carefully try to reorient
the supertanker called the EU and build bridges of cooperation with
Russia above all, with China above all for economic markets and
whatnot.
RT: What are your thoughts on US President Barack Obama? Do
you think he is the man to control the situation?
E.W.: No. To my mind, and I said this in print a year before
Barack Obama became president, the American power establishment
since the time at least of Abraham Lincoln, with the possible
exception of John F. Kennedy, has never allowed any candidate to
get near White House who they do not totally control.
We see that in the case of president Obama, so there is nothing
that the Obama administration is doing to rock the boat. He is
merely, if you will, a cosmetic change. How do you say – ‘old wine
in a new bottle’? That’s Barack Obama. He is simply an attempt to
deceive, to put the rest of the world off balance, but I think it
is certainly wearing thin on the American public. They realize he
has not done anything fundamental to improve the situation. He has,
I think, perhaps another two or three months before he becomes,
like George Bush, the most hated man in America.
RT: You touched upon George Bush there. In one of your books
you wrote about the hidden history of oil and money, and how that
it is hidden cause, the underlying cause, behind a lot of conflicts
since WWII. So, if we consider the US agenda in Iraq – was it
about oil?
W.E.: Very much it was about oil but not in the sense that many
journalists speculated at the time.
The question of oil for the United States’ elite – first of
all let's look at the Bush-Cheney presidency. Institutionally, the
Bush-Cheney presidency represented the geopolitical power of the
American military industry complex combined with big oil. They are
inseparable.
Halliburton is this poster child for this. Halliburton is at one
and the same time the largest construction company building
military bases around the world for the Pentagon, and Halliburton
is also the largest oil field geophysical services company around
the world.
So they’re in every country where there is suspected to be oil,
onshore or offshore. So that is a massive intelligence capability.
But the point about controlling Iraq and militarizing the Middle
East goes back to something that US Secretary of State Henry
Kissinger said in the 70s. If you control the oil you control whole
nations, or groups of nations.
Who was in Iraq before the war? China, Russia, and France. Who
howled with protest in the UN Security Council and refused to
sanction the US war against Saddam Hussein? China, Russia, and
France – for a very good reason. The control of Iraq
militarily means that the emerging powers of Eurasia lose the
ability to have an independent supply line of oil. Look around
Africa. Where are the hot spots in Africa? Darfur. Ask yourself why
after 2004 does genocide in Darfur suddenly become such a human
concern for George W. Bush that he is crying crocodile tears or
George Clooney the actor who is going on stage pleading to stop
genocide in Africa? It just so happens if you look beneath the
surface – Darfur has huge untapped oil recourses.
RT: And continuing then on the subject of oil, many people
forecasted that the price of oil will be stable for years to come,
for decades actually. Do you think that Russia was perhaps wrong in
concentrating all of its attention on oil?
W.E.: No, I don't. I think the strategy of then president Putin,
and now president Medvedev’s government to use Russia's vast
recourses of natural gas and oil is highly intelligent and
absolutely crucial part of trying to counterweight the military
power of Washington by creating networks of economic cooperation
with Western Europe, especially Germany. I think I would do the
same myself, were I sitting in Moscow.
http://www.russiatoday.com/Politics/2009-05-04
http://www.engdahl.oilgeopolitics.net
