Transcription
Pricing the oils and R&B has, uh, turned the tables on the United States by using its control of the world oil trade as a means of, uh, uh, supporting the dollar. In this case, the oil, henceforth the oil trade, is going to be used to, uh, be spent on non-dollar currencies. The nightmare of America's dollarization.
So by essentially voting for the war, the, uh, and support of, uh, Israel as America's foreign legion, uh, along with, uh, ISIS and al-Qaeda, uh, is its second foreign legion in the Middle East. Uh, you, you have a, a sort of self-financing, self-promotion way for the, uh, Congress people to get rich, including, no doubt, all of those insiders who made a killing last weekend on, on, uh, Trump's charade that we've just been discussing.
>> Welcome, everybody. Thank you so much for joining us. I'm Lyanna Petrole with a new episode of World Affairs and Context. Today, I'm honored to welcome back Professor Michael Hudson, a renowned economist, distinguished research professor of economics, and author. By the way, I'm currently reading one of Michael's books titled "Super Imperialism: The Economic Strategy of American Empire." I actually have it right here. It's become one of my favorite books. This book is absolutely fascinating and, um, I would say that it is so appropriate for anyone seeking to gain a deeper understanding of the current events in the world. This is the book to read. I highly recommend it. Please follow Michael on Patreon as well as his website. I will link both in the video description below. Professor Hudson, welcome back to the program. It's so great to see you again.
>> Well, it's good to be here back with so much happening in the world.
>> Yes, it's great to have you. Um, by now, I think the majority of us would agree that Iran has masterfully used the Strait of Hormuz as leverage against the aggression of the United States and Israel. In recent days, um, there have been reports of Iran charging $2 million for safe passage of vessels that are not linked to the United States and Israel. Um, there are allegedly negotiations between Iran and several other states to settle Iranian crude oil sales in Chinese Yuan as well. And I thought that was a fascinating sort of turn of events. Can the US dollar survive the Iran war and can it remain a global reserve currency? What is your interpretation of Iran retaliating not just militarily but also economically and doing it so powerfully?
>> Well, closing the Strait of Hormuz always has been recognized as Iran's first and most obvious response. Way back in the 1970s, we were talking about that. Uh, and first of all, the, uh, Strait of Hormuz has remained open all of this time. All of the, uh, Trump's threats that we're going to need an army to reopen it are irrelevant, uh, because Iran is, as you just pointed out, letting ships, uh, from India, Japan, and other countries use it. So there's been no need to liberate it. That's not what the imminent attack on Iran is all about. It's not about opening the Strait of Hormuz. It's, it's not about, uh, stopping Iran from having an atom bomb, which it wasn't aiming for in all these past decades. And it's not even about stopping Iran from having missiles and dismantling them. It's always about a strategy that the United States has been planning, uh, and announced formally in 2003 when, uh, Wesley Clark, the general, said that they were going to, uh, America was going to occupy five countries in seven years, ending with Iran. The whole aim of America's using the Middle East to control the major source of oil exports, uh, has centered upon, uh, removing Iran from the picture. At least removing Iran's, uh, nationalistic leadership that overthrew the Shah from the picture. With Iran out of the picture, the United States can easily control the Arab OPEC countries, as it's done now. So this whole pretense that the fight that's going to occur this weekend, uh, Friday morning, uh, Friday evening, uh, near Eastern time, and Saturday morning US time, is about sending troops to occupy an island in the, uh, strait or to force open the strait. That's all a diversionary effect.
But what Iran has done so far, uh, since you mentioned it, is put in place a very simple strategy. Uh, first of all, the, uh, by charging this $2 million for OPEC Arab ships going through, it's made an advance payment on what it's going to be charging for reparations for the damage that's already been done by the United States and Israel, uh, against itself. And, uh, it will simply use these, these charges to rebuild Iran. So, uh, that the first of all, it's laid the, this has laid the groundwork for how Iran is going to, uh, impose, or I should say, reparations. Secondly, uh, this, uh, prevents Trump from threatening the use of force, uh, because if the strait, if ships are going in and out through the strait, it isn't closed. It's only closed to Iran's enemies. Uh, so Trump is really trying to say, let, uh, our OPEC countries' companies, uh, export, uh, without having to pay you, uh, any money at all. We want, uh, OPEC countries to have all the money so that they can, uh, do what they want as part of the American dollarized economic system.
Well, third, pricing the oils and R&B has, uh, turned the tables on the United States by using its control of the world oil trade as a means of, uh, uh, supporting the dollar. In this case, the o, henceforth the oil trade, is going to be used to, uh, be spent on non-dollar currencies. The nightmare of America's dollarization. And fourth, uh, this turns the tables also on US government policy by using the threat of closing off oil as a, as a means of imposing sanctions on other countries. The United States has been able to use the threat of closing, uh, OPEC oil to say, if, uh, it can turn off the energy flow to countries that are not agreeing to follow policies that follow the United States, uh, leadership. Well, here it's Iran that's imposing sanctions on these countries, uh, saying that the America's allies, saying, "Well, if, if you're going to ally yourself with the United States and, uh, don't meet the terms for, uh, us, uh, breaking the US control over the entire Middle East and its oil exports, then, uh, we're not going to let, uh, uh, let you conduct this trade." So, uh, this is the big US, uh, big Iranian strategy that has led the United States to make all the threats, uh, that it's been making, using the Hormuz, uh, is just one of the excuses. And that is, is going to back what apparently Trump is going to announce this weekend. Uh, Trump threatened to destroy Iran's energy infrastructure several days ago and he gave around 48 hours. And then on Monday, first thing, he delayed the attack for five days. Earlier today, Trump also said that there is progress in talks with Iran. He actually, uh, I think he pretty much went as far as to say, "We already won the war." Um, although, of course, Iran keeps denying any such talks are taking place and that there's any sort of negotiation between the United States, Israel, and Iran.
But what's interesting is that in the meantime, sort of in the backdrop of all of these events that I think are very much meant to distract and confuse, Trump's five-day pause in the war is the exact amount of time that it takes for thousands of US Marines to arrive in the region. So, is, is Trump simply trying to sort of buy time, keep a lid on oil prices, and, and manipulate the stock market, or is he actually setting the scene for yet another escalation? As you said, there's, you know, you, you are expecting one this coming weekend.
>> There's been a lot of wonderful commentary on that. Uh, yesterday's Naked Capitalism had an article on its coffee break, "Trump's, uh, taco designed to manipulate the markets." Matt Stoller has, uh, an explanation of how, uh, this whole charade of, first of all, uh, threatening last Friday to, uh, create chaos in the world economy, crashing the markets, pushing, uh, oil prices up and stock prices down, and then just a few minutes before the New York financial markets opened on Monday morning, saying, "Oh, there's, we don't have to attack anyway. Iran has agreed to peaceful relations. We're on the way to agreement. I, I don't think there's any reason for the markets to be upset." Well, uh, that led, of course, the markets to jump, 100 points, uh, at one point, uh, at one point on the New York Stock Exchange for the Dow, Dow Jones Industrial Average, and other averages followed. Well, it turns out that, uh, there were a lot of insider trades apparently by Trump coteries who were just, who were aware of exactly what Trump was going to do. And it's as if Trump had orchestrated this whole threat and then solving the threat on Monday morning to enable his, uh, associates to make, to bet a half a billion dollars in buying positions to, uh, to make a killing when the stock prices went up, oil prices went, uh, back down. And it's all been a financial, uh, maneuver, uh, to enrich themselves. This is the most ostensibly, invisibly, and even proudly corrupt regime in American history. Uh, at least on the national scale. I suppose the Tammany Hall regime in New York, uh, was an example. But now you have Tammany Hall, Tammany Hall going big, uh, as it were.
So I think that, uh, uh, this coming weekend is sort of softened up the market for saying, well, maybe Trump is going to try to make another market manipulation. He's going to attack Iran and then he's going to suddenly, uh, on Monday morning, maybe he'll pull back and say, well, you know, we've settled everything. Iran, uh, said, don't hurt us anymore. We're going to settle and everything will be okay, and it'll make another run-up. But I don't think that's the plan this time. I think the plan, uh, main plan is generally to throw everything they have against Iran. And, uh, this has been reviewed by almost all of the military commentators, uh, that I watch, and probably most of your own viewers watch, and saying this is going to be suicidal for the United States. But, uh, it's a plan that, after all, the United States has been preparing for more than two decades. How are they going to militarily defeat Iran? Well, obviously, they've refined it again and again since, uh, 2003 to take account of all of the changes in military technology, changes in Iran's buildup. Uh, and based on last summer's, uh, US and Israeli attack on Iran, they, they think that they've got a pretty good profile on how Iran is going to, uh, defend itself. But I don't think, uh, Iran showed its full hand at all in this profile. So I think that for, for this weekend, Trump, uh, really is not going to back off. Uh, he may try to back off once, uh, or if and when the US attack is a disaster. But I think, uh, this is the last chance that the United States has to try to really follow through this, uh, plan that it has never given up on, uh, attacking Iran. So, uh, I think, uh, in terms of the stock market, uh, people, I think that a lot of investors are going to say, when the attack begins on, uh, New York time, Saturday morning, they'll say, well, fool me once, shame on you. Fool me twice, shame on me. We're not going to, uh, get involved. And they're just, uh, it's not going to be a stock market operation. It's going to be a real military operation. Uh, of all of this. So, uh, it's, there's going to be real reason for the markets to be scared after, after this weekend, if indeed America follows through on Trump's say, "Well, we're giving you five days." In other words, let's, uh, let all of the, the stock market, uh, respond and let's hear what the response from other countries is. And it looks like other countries are saying, "Well, this isn't our war. We're standing on the sidelines."
>> It does feel as though this war has been eye-opening from many different perspectives. Not only does it prove that the United States government is for the most part subservient to the interests of a foreign actor, Israel, but also it emphasizes the incompetence, the pure incompetence in Washington when it comes to diplomacy. In fact, Washington destroyed its own credibility by attacking Iran not once but twice during high-level negotiations. So it would be very naive to think that, well, this time will be different. This time Trump is saying, you know, is telling the truth. He's saying exactly what's happening. So arguably, the credibility and the trustworthiness of a state are highly valuable assets, and I think it would be fair to say the United States has lost both of those assets. Um, and, uh, it effectively proved itself to be the major destabilizing force in the world. Um, and, and many view this war as an opening act of the collapse of the US empire. Would you agree with that perspective, Professor Hudson?
>> There was no incompetence in American diplomacy in the last few weeks. It was all a fake. Uh, the, and you know that when, uh, the United States made what it thought were unacceptable demands on Iran, they wanted Iran, remember, uh, what was the lead-up on February 28th? The lead-up was they wanted Iran to agree, uh, to turn over its enriched uranium to prove that it could not build an atom bomb, as if that was the whole thing that they were negotiating about, which it wasn't. Uh, and Iran, uh, agreed to, uh, other, uh, uh, so many other of the US demands that, uh, there, there really, it looked as if there was going to be no reason for the American pretended reason for war with Iran, because if it was giving up its, uh, uranium and letting it be sent somewhere else and agreeing to some sort of oversight of its missiles, well, that was what the United States said. And the Omani, uh, over-referee for these, uh, came out and said, uh, you know, there's now, there's really a basis for peace. That terrified the United States because Iran called America's bluff. They said, "Okay, it's not worth having, uh, a war, and we know that we can win it, but we also know that, uh, in winning it, we're going to suffer a lot of damage by the US and Israeli, uh, and, uh, attacks, air attacks on, uh, our oil, our infrastructure, and our population. We want, we're willing to pay a real heavy price to avoid the war. So, we're agreeing." Well, this panicked the United States so much that they said, "We've got to immediately, uh, start, uh, attack Iran so that, uh, it cannot say there's no need for an attack." The United States was dead set already that the aim of these negotiations was just a pretense, a public relations exercise to justify, uh, the attack on Iran, and Iran, uh, uh, prevented that. And, uh, that is was the trigger. I, I wrote all about this in an article. The articles that I've been doing for Democracy Collaborative end up putting on my site and on other sites, uh, as well.
So, uh, the, the United, bluffing is not really a negotiation. America never came out with saying outright what is it we want from Iran? Well, of course, it hasn't, because what it wants from Iran is to control the entire Near East, not only Iran, but the entire Middle Eastern oil trade so that it can get a choke point, a stranglehold on the world's supply of oil exports so it can continue to use that as one of the fundamental levers of weaponizing its foreign trade policy and its foreign monetary policy. And all that was, uh, uh, countered very adeptly by Iran.
The, the United States, if we look at this war and then look at, you know, what other things that have been going on these past several years and, and definitely several, you know, 12 plus months. We can, I think, tell that the United States is fighting against any country that is focused on achieving self-sufficiency, um, in terms of energy security, in terms of food security, and of course, information technology. AI is a big deal. It's being used in military and, and, and in so many different other areas. So, are we effectively seeing a sign of an empire in decline? Sort of that last stage of the US empire in decline when it needs to destroy others in order to stay in power and to survive?
>> Well, it's destroying others by an attack on international law. Uh, what the United States is doing is, is violating all the rules of war, all the rules that were laid down in the United Nations Charter. It's, this is not simply a war against Iran. The United States knows very well that this is, uh, that the, uh, result of fighting Iran is going to be to close off the, uh, OPEC oil trade for the rest of the year, probably well into next year, mainly war. This is the beginning of a long-term war to determine whether the United States can still maintain unipolar control of the world economy and, and prevent other countries, as you pointed out, from expressing their own sovereignty when the idea of national sovereignty is the basis for all international law. So all of the countries of the world are threatened by this. This is what makes the war in Iran and last February 28th the, uh, official opening of World War III. It's a world war because the entire world needs energy and is going to be affected by the cutback in oil exports, gas exports, fertilizer exports, and all of the, uh, production that is based on, uh, energy, electricity, oil for, uh, plastics, uh, helium gas also, because, uh, cutters, uh, helium, uh, plants have been destroyed by Iran. And, uh, that has already caused cutbacks in the use of, uh, medical scanning devices that need them. And, uh, helium is also used for, uh, computer chips. Frozen cryogenic helium is needed in order for the ultra-low-violet lithography to etch computer chips and, uh, in a hard enough, uh, cold enough form that it doesn't just spill all over. So, uh, the, the entire strain of the world economy that has been based on interdependence with free oil exports is now being, uh, thrown into chaos. And, uh, this is going to affect the supply of fertilizer and hence agricultural yields. That'll probably affect the global South countries more than, uh, anyone else. Uh, and, uh, uh, it's, it's, it's not only chaos, but, uh, the, there's never, uh, chaos at the end of a revolution. One country wins or other, or another country will. And so the chaos is America's idea of, uh, putting it in a position where, because America is so self-sufficient in oil and many other material and food and other materials, uh, it can come out ahead stronger than, uh, Asian countries or global South countries and will, will be able to use its economic strength to control world diplomacy in the same way that it did after World War II, too. So, uh, this is, this is a calculated, it's an attack on the United, by the United States, not only on all other countries, but on the very principles that, uh, civilization was held to uphold, the idea of, uh, sovereignty, of no undeclared war, that if you are going to have a war, no attacks on civilians, especially on hospitals and basic infrastructure. Every rule of war and of international law has been broken by the United States. So the other countries, I think, are stunned into, uh, cognitive dissonance. They can't believe what they have to do to defend themselves because, as the chaos unfolds over the course of the coming year, the only defense is to create an entirely new system of international diplomacy to replace the United Nations in its present form, to replace the IMF and the World Bank, to replace all of the institutions that the United States has, uh, uh, put in place as means of control, uh, to, uh, including Trump's tariffs that, uh, can just manipulate foreign access to the US market. The whole rest of the world has to become independent of the United States. And what that, in, will lead to is essentially isolating the United States instead of the United States being able to isolate its advers, what it calls its adversaries, the rest of the world, uh, who do not follow its own policy. So, uh, this is really as much of a civilizational fight, if not more, as World War II was.
>> Certainly. Um, Michael, you mentioned many times that at the core of this is the, at the core of the US aggression is the desire to control energy, right? As a way to leverage, uh, power and as a way to control other states and their access to energy. Um, the damage that has been done to the, uh, to the Gulf, to the Gulf Cooperation Council infrastructure is, is enormous, and to Iran's infrastructure is enormous, and certainly it would take years to rebuild to sort of go back to the same levels of production that, um, that have been sort of normal to them, to where they satisfy the demand. What's interesting is that US news outlets are now openly admitting that we are seeing early warnings of stagflation ahead. So, are we looking at stagflation, though, or, or are we looking at something much worse, such as a global depression, for example?
>> Yeah. Is a depression? Depressions are not inflationary, uh, as such. They're deflationary. So the whole idea, the whole pretense that, oh, oil prices are going to go up, that's going to increase the price level and, uh, that reduces the ability of financial claims and bond holdings to, uh, have command over commodities. That's all, uh, ideology. That's, that's all this free market libertarian ideology. Uh, the oil prices and gas prices and helium prices and fertilizer prices will go up. But that's going to cause whole industries to close down, and that, that's going to put labor and these industries out of business. Uh, and there's a depression is the opposite of an inflationary situation. So the stock markets don't have a clue about how, uh, money and prices are affected through the economy, and, uh, there's no analysis of how the balance of payments, uh, is affected of all this. So the stock market, instead of having a, a, a realistic point of view of how to cope with what's going to happen, all they think is, well, the trend is my friend. If people are buying, uh, stocks, then jump on the bandwagon and try to rise it up and jump out on time. And if markets are going down, then sell everything, uh, sell them short, and then try to buy in at the bottom. That's the extent of, uh, their tunnel vision when it comes to understanding what's really going to happen. So the stock market is only, uh, a narrow slice of, uh, of the economy without understanding the whole context within what prices and wealth and asset values and wage levels and purchasing power, uh, evolve.
>> Um, I think if you look at Iran, it's been under sanctions for, for decades, and it is a regional Middle Power. I think that would be an appropriate way to describe it. And Iran has taken on a great power state, the United States, that's working hand-in-hand with the nuclear-armed Israel, which also has the strongest military in the Middle East. It goes without saying that to support war efforts, any state, whether it is the United States or Iran or, or any other state, um, it, it needs economic resources. And it's absolutely remarkable that after being subjected to Western sanctions for nearly four decades, Iran has proven itself to be such a strong adversary. It's, it's in the driver's seat right now. As you pointed out, it has the leverage that it needs, and arguably it established at least partial deterrence because Trump was forced to call off his 40-hour, 48-hour, excuse me, ultimatum. So, what does the Iran war reveal about the United States' ability to, um, compete militarily or economically with not just middle powers such as Iran, but great powers such as China and Russia?
>> Well, we're going to find out this weekend that, uh, there must be some plan in place for, uh, what they're going to do with these battleships they have there, excuse me, the aircraft carriers, all of the troops that are there. Uh, it, we know that the United States can send bombs. Uh, I'm not sure they can send bombers because, uh, Iran has defenses against a lot of bombers. Uh, you mentioned Israel's military. Uh, Israel is not going to get involved in this war. It, uh, it's, uh, it's willing to fight to the last American, um, in this war, but I don't think you're going to have the Israeli, uh, army is busy, uh, carving out Lebanon. So the Israelis will have a place to go after Israel's all bombed up, uh, and, and the, uh, Israeli military defense is spent. They don't have any more defense. The whole idea of the Golden Dome was fictitious. It was all a junk. All of the American arms it has were not arms to really fight with. And the arms that the Gulf countries had were not arms that really work. They were prestige arms. They were to have a parade with, sort of like having an expensive Mercedes automobile, but not actually to fight because they're, they're, uh, ineffective against the, uh, the Iranian arms. So, uh, there really isn't any, uh, American defense and military, uh, except trying to actually land all of these Marines to fight to the last Marines. Well, according to all of the military, uh, commentators, uh, that I've been reading on almost every site, they all say these Marines, whether they're lacking in landing in, uh, the Strait of Hormuz and the Persian Gulf, or whether they're landing on the southern coast of, uh, Iran, or in Baluchistan, or moving from Azerbaijan, or the Kurdish territories, wherever they are, they're going to be eaten up. And the generalists must be aware of that because I don't think they have a clue as to just how thorough the Iranians have been able to defend themselves. I don't know. Nobody knows because it's secret that what they've, they've said. And so, uh, we're going to find out. But I think the United States says, "All right, this is going to be our Alamo." Uh, and just as the Americans said, "Remember the Alamo" for the great defeat of the Alamo to try to mobilize, uh, patriotic support for the war. Let's get vengeance on it. I think the, uh, American idea must be, be, well, let's get vengeance on what the Iranians have done to, uh, the American army and the Israeli bombs. Well, I don't think there's going to be any patriotic "Remember the Alamo" feeling either in America or in Europe. Europe has already said, "This isn't our war. You didn't consult us. You didn't make us part of the planning. We don't have a clue as to what you're doing. So, uh, include us out." And the, uh, American public is not in favor of the war. And, uh, more, I think the American public, when they see the chaos and the expense that there's going to be here, including on their own pocketbooks, not only for gasoline, but for agricultural products and for all of the products that we've been talking about that, uh, uh, use, uh, oil and gas and other OPEC exports, uh, they're going to say, "Well, this was, uh, Trump's war. This was the neocons's war." Some will say this is Israel's war, although it really is as much America's war as Israel's war. Um, and they, they're not going to be supportive. And it, uh, uh, it, uh, does not bode well for the fortunes of Trump or the Dem, or the Republicans, or the the Democrats that are just as pro-war, just as, uh, in favor of this as the Republicans, as you can see in Congress's refusal to do anything at all to try to stop this war.
Michael, and maybe the last question for, for today. With November midterms coming up, I would imagine that Republicans ought to be in panic mode. Donald Trump's approval ratings are underwater on every single issue. According to the most recent poll, voters are juggling higher prices, economic instability, and of course, a widening war with Iran, its consequences, and, and as we know from history, um, that kind of environment rarely favors the party in power. So, Republicans are definitely on that hot seat. How much political will or political appetite is there in Washington, do you think, uh, to continue this war of choice, given that gasoline prices are rising, food prices are rising, and those two things are sort of the most sensitive areas for the US population?
>> What is Washington? What do you mean by Washington?
>> Uh, the foreign policy establishment for the most part. The, it's a one-man, uh, right now, it's a one-man band. Uh, it's Trump and his coterie of, uh, he's appointed a cabinet that's completely loyal to himself. Uh, you have, uh, the Republican, the Senator, South Alabama Senator, they're all in favor. They're all, all in favor of the suicide march. They're like lemmings. They're, they're not going to protest. They're all afraid of going against Trump. That, uh, there, there is obviously a whole wing of, uh, the Republican party, the isolationist wing, that's always been part of the Republican party, but they seem to be, uh, in quite a minority. You just don't have, uh, many people. Uh, you have the Southerners are all, no, South Carolina and the others are, uh, all in favor of it. And the Democrats, all are, if you look at, uh, who is paying for the campaigns of America's senators and Republicans, it's Aipac. And they all, they want, they seem to only care about their paychecks. They don't care about, uh, who wins the war. They want their paychecks. That's what they've shown. The utter corruption of, uh, the Senate and the, the Republicans and the, the, uh, result of the Supreme Court's ruling that, uh, there's no limit on private contributions to campaigns has been essentially to privatize and financialize the election process in the United States. So, uh, your, the elections for the campaign that are determined by what politicians can raise the most campaign funding is, uh, all open to the highest bidder. And, uh, the Congress has set up a circular flow between the United States and Israel. The United States will give, uh, enormous amounts of money to Israel that will turn around and siphon some percentage of this back into its own lobbyists to, uh, reward the senators and the republic, and the representatives that have, uh, voted, uh, in its favor. So by essentially voting for the war, the, uh, and support of, uh, Israel as America's foreign legion, uh, along with, uh, ISIS and al-Qaeda, uh, is its second foreign legion in the Middle East. Uh, you, you have a, a sort of self-financing, self-promotion way for the, uh, Congress people to get rich, including, no doubt, all of those insiders who made a killing last weekend on, on, uh, Trump's charade that we've just been discussing.
>> Absolutely. These are very interesting times, right, Professor Michael Hudson, thank you so much for joining us and thank you so much for sharing your perspective on these events. I hope that you come back for a new episode and I know our viewers are looking forward to seeing you here again.
>> Well, thanks for having me, Lena. That's been a, a good discussion, and we'll see what happens this.