CODIGO PE/GP - 15

 GEOPOLITICAL ASPECTS OF THE WORLD FINANCIAL

SYSTEM

ALEXANDER DUGIN
February 2001
This text, kindly sent us by the Author, will be published on the
forthcoming issue of Elementy (Moscow).

 1. World reserve currency: its genesis

   Question: is the present world reserve currency – the US dollar – the result of
a set of purely economical processes? The univocal answer is: NO.
   How did it happen, that just the dollar plays this role?
   It is obvious that the evolution of the economy – and especially of the financial
system, the pivot of contemporary economy – goes within a multi-dimensional
context. Let us briefly summarise the stages of the dollar’s rise to a sovereign
position.
 
2. The stages of the rise of the US 

   The US began to systemically move to an hegemonic position in the world

market already since 1919. According to the Belgian Luc Michel (Economic
Nationalism Against the World Economy, Elementy, n.4, 1993):

   « The first competitors whom they must outpace have been the English,
whose political-economic presence was spread all over the planet. Americans’
operations came one after the other. English military bases disappeared from
Bermudas. Jamaica, Antigua, Bahamas, St.Lucia and St.John’s, to be replaced
by American military bases. The Americans appeared also in Iceland and
Greenland, although those country were formerly within the English sphere of
influence. The US lent England huge loans (the interests on which already
amounted to fabulous sums) in exchange for the access to key financial and
trade spheres. Consolidation of the political alliance to Canada, control upon
English capitals placed at American businesses, infiltration into Singapore, the
western African coast, and up to the Persian Gulf (isle of Bahrain)… The deal
even reached an unprecedented interference in the affairs of a sovereign state
– president Roosevelt’s representative, Harry Hopkins, being present at the
English cabinet confidential sessions.

   The “decolonization” process, stimulated by the US, was in fact the way to
establishing the American continental hegemony.
   In 1945 the main winner of the world war were the US. Their sole competitor,
the Soviet Union, was exhausted by a five years’ war on her own territory, and
weakened by the loss of million lives. Besides the obvious division of the world
between the US and the USSR, Yalta also meant the “defenestration” of the
European “allies” on the world political scene (what Churchill stressed). Since
that time the US have been the unchallenged dominator in the world market.

1
 CODIGO PE/GP - 15

They had nothing left to do but reshaping the market to their image and reaping
the greatest benefit ».

   « In 1944 all western economists, both liberals and Marxists, forecast an

inevitable crisis of the American industry, linked to the inevitable restructuring of
the economy due to the transition from war to peace. Despite of all those
forecasts, something completely opposite happened. Thanks to the American
economic expansion into Europe and to giant investments outlined in the
Marshall Plan, the US could save their position, and prepare for themselves an
excellent sales market.

   The American military-industrial complex, which according to the logic of

economic prognosis should have become a drag on economic and industrial
development, became on the contrary the key factor of success. 
Nobody could expect that the post-war period would quickly evolve into the
“cold war”. Taking upon themselves world-wide responsibility for the fight
against communism, the US definitively replaced England in the capitalist world,
making of their military power the main warranty of economic stability. Thanks
to the superiority of the military-industrial complex, the US could leave once for
all behind the last stock exchange crisis of 1929. The unemployment level
decreased by 4.5 times in comparison to the pre-war years; factories and plants
worked at 100% of their productive capacity (before the war: 75%).

   Half the world’s profits belonged now exclusively to the US. America could
impose in the world such economic environment as to benefit first of all herself.
Thanks to the “cold war” the US met no moral or political obstacles in reshaping
the world economy in conformity to their own schemes ». 
   (Dominic Barukh, The Restructuring of the American Industry)
   In 1945 the US had reached the goals they set themselves at the beginning of
the XIX century.

   One cannot help but recall the words of senator Beveridge, herald of
American imperialism at the end of the XIX century: « Destiny has
predetermined our policies – world trade must be in our hands. Our trade ships
cross all the oceans. The American Law, the American civilisation now reign on
all shores, even those farthest and deep into the darkness of ignorance and
barbarism – but they lay prosper and happy under the check of forces given us
by God ». 

   François Perroux, the eminent French economist, wrote: 

   « The representatives of neo-classical liberalism lived in the epoch of forming
nations. In the framework of the nation, according to their theory, economic
interest is reduced to the utmost freedom of exchange. In their view labour
division among nations would g,n theory the most efficient way to realise this
freedom…. But in practice the concepts of liberalism clash with economic
reality, where an already formed “inequality of structures” does exist; and
because of this inequality the most powerful and stronger nations aim at
securing themselves the greatest economic benefit to the detriment of the
remaining nations ».

2
 CODIGO PE/GP - 15

 
3. The geopolitical content of the dollar since 1947

   If GEOPOLITICS is responsible for the phenomenon of the dollar’s

globalisation, we must therefore refer to the situation in the “cold war” period
(1949-1991). Because during that period the dollar became what it is now – the
world reserve currency.

   Emerging as the GEOPOLITICAL pole of the West, the US especially

exploited mostly in that period the “inequality of structures”. If in the first half of
the century the US gained the United Kingdom’s strategic position by swapping
it for credits – that is, using financial mechanisms – in the “cold war” era to the
solution of the European and Japanese (Asian) problems were offered not only
the Marshall financial plan, but also strategical-military tutelage. The US
became a comprehensive pole, projecting its own structures on two thirds of the
world. The main conceptual element of American geopolitics at that time was
the existence itself of Russia, of the socialist camp.

   The “common enemy”, the imperative of defence against potential “Soviet

threat” were central arguments in the organisation of world structures under US
control. Here also lie the foundations of the imperialism of the dollar : the US
rose to the strategic (military) role of protector of non-socialist countries and
issuer of monetary and ideological signs. 

   It is important to stress that at that time the dollar began to gain a different
quality.
   The abolition of the gold standard as a consequence of the stock exchange
crisis of 1929 made the national currency a function of the concrete trade
balance – according to Keynes’ theory and Roosevelt’s “New Deal”. Prosperity
of the “grand economic spaces” (“economic islands”) – in the differing forms of
Stalinism and European national-socialism since the United Kingdom meeting
of Ottawa in 1932. In this period the “reserve currency” does not have a clear-
cut expression, being dependent on the international political cycle. Which leads
to the second world war.

   After that the American economy does not return neither to the pure liberal
pattern of the Roosevelt epoch, nor to the isolationist Keynesian pattern. The
dollar acquires a new quality: it becomes a GEOPOLITICAL unit, a function of
the strategic and ideological potential of the US, of the role of the US in the
world environment.

   The world financial system, the function of the dollar as the world currency
reserve are inseparably linked to the concrete geopolitical situation of the
second half of the XX century. If one does not tale into consideration this
geopolitical perspective, only relying on the analysis of purely economic-
financial processes, one cannot understand anything in this field.
 

3
 CODIGO PE/GP - 15

4. Trilateralist Model and finance

   The Trilateral Commission, founded in 1973, put before itself the task of
reorganising the world economic space into large blocs under Western and US
control. The geopolitical meaning of this project was enforcing the insulation of
the USSR by way of the “anaconda strategy”. To this purpose the world had to
be divided into three geoeconomic zones – the US, Europe, and the Asia-
Pacific region.

   The storming economic development required the creation of additional

leading centres, besides the US, and also preparing the legitimisation of new
structures of global direction (excluding the USSR). The three geoeconomic
regions outlined there were not given an equal significance: the American
regional held a privileged position, while the other two remained auxiliary. The
Trilateral initiative came from Rockefeller and George Franklin, then leaders
of the CFR.

   There the process of European unification and introduction of European and

Asian-Pacific currencies were for the first time decided.
   Auxiliary currencies were called to foster the economic homogenisation of the
corresponding sources, integrating them into economic-financial paradigms
such as to favour in the best way and consolidate the privileged position of the
US, based upon the “inequality of structures”

   The euro and the would-be “Asia-Pacific yen” are essentially projects of the
Trilateral Commission. By the way, Chinese perestroika took its start in the
1980s just from contacts between the Chinese government and the Trilateral
representative George Bertwin, leading the European office.
   The dollar – being the world currency reserve, provided with a set of
geopolitical obligations undertaken by the US, and before the US by other
powers – was to be sidelined by the two complementary macro-regional
currencies.
   The process was not supposed to be rapid – indeed it is still going on.
 
5. Syncope : the crash of the USSR, the unexpected and extraordinary
challenge of unipolarity

   The Trilateral Commission supposed the slow choking of the USSR, with its
gradual absorption within the logic of Atlantism and an easy restructuring of
Soviet Eurasian sectors into the zones of influence of the three macroeconomic
regions.

   In this sense the coming euro, the dollar and the hypothetical Asian currency
should serve as instruments to the step-by-step involvement of the USSR
economy into the world system, gradually disconnecting the socialist camp
structures. Also this process was started under direct influence of the Trilateral
and of its gorbachevian representative in Moscow in the mid-1980s.

   But at the threshold of the 1990s the unforeseeable happened: instead of the
gradual cycle of convergence and integration of the USSR, the latter suddenly

4
 CODIGO PE/GP - 15

dissolves and unilaterally starts an active process of self-liquidation.

   The rouble was devalued, thus becoming pegged to the dollar with no delay.
The US were directly involved in the post-Soviet financial system.
   In parallel to this, the main element of the geopolitical map of the “cold war”
world was aiming at self-liquidation – an element whose presence itself was,
conceptually and structurally, the main corner-stone of the whole geopolitical
construction on which, among other things, the dollar was based.
   Being confronted not with the obvious and foreseeable “Soviet enemy”, but
with a “black hole”, unforeseeable, chaotic, irrationally aggressive, not foreseen
in any of their gradual positive economic-financial projects, the US unexpectedly
found themselves in a new situation.

   This new geopolitical situation involved the US in a process of accelerated,

extraordinary unipolarity. In the US economy this was accompanied by the
overheating of the hi-tech market, the financial pyramids, the rise of the purely
financial sector at a detriment of the real sector. Also the military-industrial
complex, fundamental for the US economic system, found itself facing a new
situation, sharply different from the preceding one.
 
 6. The new role of geoeconomic sectors

   The unforeseen pace of liquidation and disintegration of the Soviet (=eurasist)

geopolitical pole created a new situation on the world geopolitical map,
correspondingly setting a new challenge to the US financial system. From now
on that system would have to start an accelerated realisation of unipolarity, i.e.
globalisation. 
   Some of the previously planned stages disappeared. As a consequence, a
new and unexpected situation was rising in line of principle: the dollar was
compelled to become the world reserve currency quickly and without
intermediate stages; the US acquired the unchallenged hegemony at the
strategic level; the demand ripened for a quick restructuring of international
institutions – the United Nations – reflecting the post-Yalta equilibrium; America
was compelled to hasten to make use of the “inequality of structures”.
   All this was shown under the direction of the democrats of the Clinton
administration. Fukuyama’s “end of history” had come too soon.
   Very relevant economic and logistic problems loomed.
   Broadly speaking: the US were not ready to assume here and now the role of
unipolar globalisator. This was expressed
 in the understanding of this very fact on part of the Americans (the victory of
Bush jr.);
 in the financial pyramids-like crisis of the overheated market, with the dip of the
NASDAQ and Dow Jones indexes;
 in the looming catastrophe of the dollar as the world currency reserve;
 in the unpreparedness of the basic geopolitical subjects to be involved in
globalisations according to times and modes set by the US.
   The absence of the eurasist pole, the turning of Eurasia into a “black hole”
generated geopolitical problems never evaluated in a short-term perspective.
  The presence of a conventional, formal, foreseeable in the medium-term
opposition on the part of Eurasia represented the main element of the American

5
 CODIGO PE/GP - 15

strategy in the first half of the XX century. Once this element was removed, the
whole construction was being jeopardised.

   The absence of a formal and limited threat from the East radically changed
both the geopolitical meaning of the European Union, and the corresponding
role and mission of the euro.

   The European Union was developing not in the conditions of confrontation vis-
à-vis the USSR, as it was supposed – and this point had been decisive in
shaping the preservation of American influence in Europe, also in terms of
financial view – but just at the moment of the USSR self-liquidation. It
consequently assumed a completely different function, revealing itself as a
potential geopolitical subject at the planetary level. The introduction of the euro
gets a different meaning. As a principle, it means a challenge to the dollar as
the world reserve currency.
   The new entry of Europe on the historical scene is loaded with the most
severe shocks for globalisation in its unipolar form. The variants either of
“regional” or “continental” integration, or of multi-polar globalisation become
necessary; which in both cases goes against that process in which, as dragged
by an avalanche and independently of their willingness, the US are today
involved.

   Something similar is true also of the Asia-Pacific region. Here the Chinese
factor has to be added. But the euro and the European Union were already
enough for the unipolar domination of the US to be severely shaken, and
consequently for weakening the dollar and the financial instruments linked to it.

   As far as the dollar is linked to world geopolitics, and not only to the US
economy, a change in the balance of power in that sphere automatically entails
a radical change in the function of the dollar. The nature of the dollar changes,
hence its function as the world reserve currency losing its obviousness.

   The US must reassess their role in the world, and correspondingly found
again on the new geopolitical map the function of the world reserve currency –
the dollar. The extreme difficulty of such task is out of question.

   The whole US economic system is based on the global reallocation of labour

in the schumpeterian condition of “inequality of structures”. 

   The transformation of this system entails the most severe consequences.

   The same can be said of the “new economy”, with the over-development of
financial and equity sectors. The real paradigmatic actors, which stayed
constantly out of the framework of the “new economy”, but which predetermine
the basic trends of the financial markets (exteriorly represented as independent
from non-market factors, separated from the fundamentals of economics) are
just geopolitics and the univocal US supremacy. The game-like feature of those
trends is the myth for the “stock market proletarians”, simple brokers never
allowed to go beyond the scenes of finance – where there sit not simple
successful speculators, but experts from the CFR, the Bilderberg Club and the
Trilateral, like George Soros. Here the rules of the game are set. The collapse

6
 CODIGO PE/GP - 15

of equity market or national currencies is not a matter of brilliant operation, as of

plans elaborated and prepared in detail.

 
7. Trying to rein in globalisation: the conceptual blind alley of George Bush jr.

   The consolidation of the European and Asia-Pacific sectors, the issue of a

strong regional currency linked to not to the global geopolitics, as to continental
or insular geopolitics (from this point of view, it is significant the new – cautious
– reference to keynesism on the part of modern social-democracies) narrows
the scope of the US. 
   This requirement is – albeit partially – fulfilled by the Bush jr. administration.
Bush jr. means the attempt to rein in globalisation. But this cannot resolve the
problems laying at the roots – American geopolitics is overheated, the American
empire is overstretched.
  We stand before a conceptual blind alley: the US cannot give up pursuing an
active unipolar globalisation, but they are not able to do so.
   The very same thing is true of the dollar: the US are not able to preserve the
dollar as the world reserve currency, yet they cannot refuse the dollar this
function.
Here is a paradox – the disappearance of the enemy (the USSR) put the winner
in an inconvenient position. A typical pyrrhic victory.
 
8. The second coming of Eurasia

   The original project of the Trilateral Commission was outlined in order to

gradually but inexorably liquidate the USSR (Russia) by means of partition.
   On the contrary, the USSR was dissolved not gradually but suddenly, she
became a geopolitical “zero”, and gave impulse – albeit potentially – to the
historical existence of Europe and Asia.
   The future fate of Russia-Eurasia will be straightway linked to the fate of the
US, and accordingly to the fate of the dollar.
   The collapse of US seigniorage will give Russia an extraordinary chance of
revival.
   But this will be accomplished only by means of an adequate geopolitical
strategy towards Europe and Asia.
   If Russia will throw its standing strategic potential – including logistic and
nuclear – in support to every alternatives to unipolar globalism, history has a
chance to go on, and the dollar crack will become the crack of the great
geopolitical slavery of mankind under the dollar.
 
 
Note
Trilateral Commission
   The latest stage of the organisation of mondialism secret net was the creation
of the Trilateral Commission, gathering the “cream” of the Council on Foreign
Relations and the Bilderberg Club. It is called Trilateral from the number of
basic participants: the US, Europe, and Japan.
   Its centre is located in the US (345 East 46th Street, New York). 

7
 CODIGO PE/GP - 15

   Its foundation took place in July 1974. But its decision was approved at the
secret council of November 1972 by the president of Chase Manhattan Bank
David Rockefeller (leader of the Bilderberg Club and promoter of the Council on
Foreign Relations), Max Konigt (vice-president of the ‘Jean Monnet’ Committee
for European Integration) and George Franklin, formally head of the CFR.
   The first great success of the Trilateral Commission was bringing to the
presidency J.Carter, formerly unknown until the eve of elections. Once elected
president, Carter placed at the highest levels of power members of the Trilateral
Commission: Walter Mondale, Cyrus Vance, Harold Brown, Zbigniew
Brzeszinski, Michael Blumenthal, Richard Cooper, Anthony Solomon, Samuel
Huntington etc.  In November 1977 the American magazine Penthouse wrote
about it: « It would not be correct to say that the Trilateral Commission leads the
Carter government. The Trilateral Commission is also the Carter government ».
 
The meaning of the action of the Trilateral Commission, and of mondialism as a
whole, can be expressed in the words of James Paul Barbourg, pronounced
before the American senate on February 17, 1950: «Whether you want it or not,
we shall have a World Government. The only question is whether this will
happen through consent or violence ».
 (L. Okhotin, The Threat of Mondialism, Den’ 1991)