By Ignatius Muotoh
Americans as individuals are probably, one of the nicest people on the planet, and at the very worst they are just like all other peoples of the world. But politically, America is obsolete and morally bankrupt in her foreign policies. This can be seen in the verbal pronouncements of President Donald Trump at the brutal murder of the Saudi Arabian exile, and a columnist to the Washington Post, Jamal Khashoggi.
While most of the civilised world’s conscience are currently tilting towards morality, America through Trump is seen to be tilting towards capital interest at the expense of morality. But, who’s Uncle Tom trying to deceive? Who are the America politicians trying to bamboozle in trying to distance their positions from Trump’s over the killing of Khashoggi in the Saudi Arabian Consulate in Istanbul, Turkey?
The barbaric murder of the Washington Post Columnist inside the Saudi Arabia Consulate in Turkey (within seven minutes of walking into the building) could possibly be the last straw that broke the camel’s back in the long standing American foreign policy mantra of capital interest first and morality later. Trump’s current posture and verbal pronouncements to exonerate the Saudi Kingdom from this barbaric and unparalleled murder is at best absurd.
For the students of International Politics, the word morality for the American government, was for quite some time, replaced with economic interests towards the end of the Second World War, and President Trump is only adhering strictly to the script written many years back before his presidency.
In order to understand the dilemma facing both Republicans and Democrats over Trump’s embarrassing position in accepting that the killing of Khashoggi in the Saudi Arabian Consulate could be the work of “rogue killers”, one needs to go way back to previous US administrations and, perhaps, towards the end of the Second World War in Europe.
‘As the carnage of World War II was winding down two things had become clear: The Allies were going to win, and after the war the United States would be the economic strongman of the world. For three weeks in July 1944, with the end of hostilities in Europe still nine months away, 730 delegates from all 44 allied governments gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, for the United Nations Monetary and Financial Conference-now simply referred to as the Bretton Woods Conference. They came to design the financial structure of the postwar world. At the end of the conference, all present signed an agreement with two key monetary provisions: To promote ease of international trade and to help fund postwar reconstruction.
On these, each member state agreed to maintain a fixed exchange rate for its currency versus the US dollar (and by implication, fixed exchange rate versus all other participating currencies).
To that end, each signatory pledged to buy and sell US dollars as needed, and also to keep its currency within one percent of its agreed-upon exchange rate.
The United States, for its part, assured the solidarity of the arrangement by pledging to deliver gold at the price of USD35 per ounce, to any foreigner who chose to tender its dollar (although this was later modified to honour redemptions only by foreign central banks).
The Bretton Woods Agreement places the United States at the centre of international finance. This Agreement ushered in the dollar’s golden age, and thus made the dollar the world’s reserve currency.
The promise of gold redeemability was honoured for 27 years. It ended when the US trade deficits and creeping price inflation undermined confidence that the US government would be able to live up to its promise much longer. To keep the open-market price of gold from rising more than pennies above USD35, the United States and its partners in the London Gold Pool had to sell larger quantities of the metal. That of course couldn’t go on forever.
In 1967, France withdrew from the effort and added the insult of repatriating back to France, the gold it had been storing with the Federal Reserve Bank of New York.
This calamitous effect on gold reserves continued until President Richard Nixon ‘closed the gold window’ on August 1971 thus ending the convertibility of dollars into gold.
Though, the dollar was still the world’s reserve currency, but it had become fiat money or paper money. With gold no longer part of the money system, something had to be done to maintain the dollar’s preeminence as the world’s reserve currency.
This prompted America to search for a way to gain a grip on the global financial system that would be so strong to protect the dollar’s status as the world’s reserve currency.
Conveniently, an opportunity for protecting the dollar’s status was ready and waiting. It came from a commodity far more important to the world economy than gold: Oil.
Though, rightly disdained for much of what he did, Richard Nixon underwrote his country’s dominance for decades to come, by devising the Petrodollar System.
After closing the ‘gold window’, Nixon dispatched his Secretary of State, Henry Kissinger to Saudi Arabia to offer the ruling House of the Saudis a four-part deal: The US government would provide military protection for Saudi Arabia and its oilfields, sell to the Saudis any weapons they needed, guarantee the Saudis protection from Israel and any other Middle Eastern states, such as Iran that might attempt to destabilise the kingdom and secure the Saudi family’s place as rulers of the country in perpetuity.
This last point-perpetuity-was the clincher. In return, the Saudis would do two things: They would invest oil sales in US dollars only and they would invest their surplus oil proceeds in the US treasuries. These deductions were made by Marin Katusa in ‘The Colder War’.
This was, of course, the ‘carte blanche’ to the Saudis from the Americans to do as they please, including the murder and the dismemberment of Khashoggi in the Saudi Consulate in Turkey.
This explains the lack of decorum and morality from the American President when the whole civilised world stood gob smacked at the barbaric killing of the Washington Post journalist.
It also, explains Saudi Arabia’s ‘we don’t give a damn to world’s opinion’ on what we do in the Kingdom.
Muotoh, a foreign policy analyst writes from Langley, UK