Anglo-american oil politics and the new world order

Gold, dollar crises and dangerous new potentials from Europe

At a private, closed-door gathering convened in Tokyo in April 1975, a group of hand-picked policy spokesmen organized by Chase Manhattan Bank chairman David Rockefeller, and Bilder-berg founder George W. Ball, met to discuss a special project. Lord Roll of Ipsden, chairman of S.G. Warburg bank, and a director of the Bank of England was present. David Ormsby Gore, Lord Har­lech, London's Ambassador to Washington during the fateful Kennedy years of the early 1960's, also attended. Barclays Bank chairman, Sir Anthony Tuke, was also present in the secretive Tokyo discussions that April, together with the Earl of Cromer, George Baring, a man closely tied to Morgan Guaranty Trust in New York and to Royal Dutch Shell, who had been Ambassador to Washington during the time of Kissinger's oil shock, when the U.S. Secretary of State acknowledged his unusually close policy coordination with the British Foreign Ministry. Also present in the fateful Tokyo talks was John Loudon, chairman of Royal Dutch Shell, who also sat on the Advisory Committee of David Rocke­feller's Chase Manhattan Bank.

What concerned the hundred or so influential policy-makers at the April meeting of Rockefeller's newly-formed Trilateral Commis­sion, was the dangerous risk to the Anglo-American establishment of continuing the offensive U.S. foreign policy stance against the rest of the world associated with Secretary of State Henry Kissinger and the Republican administration. Kissinger's hard-line "divide and rule" tactics had been adopted to isolate one country after another, whether European, developing sector or OPEC, portraying OPEC as the villain to developing countries whose economic growth had been destroyed by Kissinger's 1973 oil shock policy.

By 1975, his thinly-veiled "thug" approach to international di­plomacy risked creating an enormous international backlash. A 'hew "image" was needed to sell the world on the need for conti­nued American hegemony. Therefore, at the Trilateral Commis­sion Tokyo gathering of that April, little more than a year-and-a-half from the 1976 American presidential elections, David Rocke­feller introduced a man to his influential international friends as the next president of the United States. Few Americans, not to mention foreigners, had ever heard of the small-town Georgia peanut farmer who preferred to be called, "Jimmy" Carter. ^{9 :} Following his initiation at the 1975 Tokyo meeting, Carter re­ceived an extraordinary public relations media buildup from es­tablishment media such as the liberal New York Times. That news­paper hailed Carter as a dynamic exponent of America's "New South." In November 1976, despite allegations of large-scale vot­ing irregularities, Carter did become President.

Carter brought with him such a large number of policy advisers who were members of the Trilateral Commission, that his presi­dency was dubbed the "Trilateral Presidency." Not only was Vice President Walter Mondale, like Carter, a member of the elite secret Trilateral organization—Carter's National Security Adviser Zbig-niew Brzezinski, Secretary of State Cyrus Vance, Treasury Secre­tary Michael Blumenthal, Defense Secretary Harold Brown, United Nations' Ambassador Andrew Young, State Department senior officials Richard Cooper and Warren Christopher were all part of the exclusive Trilateral club.

The public profile of Carter's presidency was "human rights" for the Third World, "negotiation, not confrontation." He por­trayed himself as an "outsider" to the Washington power estab­lishment, but the content of U.S. policy under Carter, with his pre­

selected crew of establishment advisers, was to maintain the American Century at all costs. Under the rhetorical facade of "re­forming the old order" of U.S. foreign policy, the Carter Adminis­tration continued the basic Anglo-American neo-malthusian strat­egy initiated by Kissinger at the National Security Council under National Security Study Memorandum 200. Third World develop­ment was to be blocked, and a "limits to growth" post-industrial policy was to be imposed in order to maintain the hegemony of the dollar imperium. Carter's "humanrights" would soon become a bludgeon to justify unprecedented U.S. intervention into the inter­nal affairs of targetted Third World nations. The strategy failed miserably.

A significant problem arose in the immediate wake of the oil shock, which threatened to undo the edifice of the new Anglo-American "Petro-dollar Monetary System." Already in 1974, the Commission of the European Community proposed to the mem­ber country central banks a system for settling intra-EEC trade bal­ances with gold, priced at a market price then at around $150 per fine ounce. The European proposal would have greatly eased the oil payment burden for a number of European countries, and re­duced the influence of the dollar. The U.S. Treasury, for the obvi­ous political reasons of dollar hegemony, insisted ever more ada­mantly that central banks value gold at the artificially low price of $42.22 per fine ounce gold. A valuation of gold at the higher price within the EEC could have opened the door to significant trade possibilities with two leading gold producing countries, South Af­rica and the Soviet Union. U.S. Treasury Undersecretary Paul Volcker went to London in the autumn of 1974 to deliver a blunt warning against any such European moves to bring gold back to the monetary system.

But the idea, naturally, did not die. Rather the opposite. At the time, the South African government of John Vorster was strug­gling to maintain economic stability in the wake of the severe oil price increase, dependent on imported oil. At the same time, it was extending tentative feelers to neighboring black African states for some form of economic development cooperation, despite the rigid regime of Apartheid at home.

Angola was rich in oil, South Africa had industrial technology and infrastructure needed by Angola and other African states. The region required financial investment and secure foreign trade out­

lets for it to work. In late 1974, South African Finance Minister Ni-colaas Diederichs publicly called for a revaluation of the interna­tional central bank gold price to a market level, echoing the debate in Europe. "I have consistently pressed for monetary authorities to be allowed to sell gold among themselves at a market-related price...gold in official vaults of central banks would be revalued; and there would be much more money to pay the Arabs; secondly, the dollar would lose value," he noted.

At the same time, Germany and Italy entered a bilateral agree­ment under, which gold was used as collateral for a German loan with gold valued at 80% of the then-market price of $150. European discussions around some effective use of gold as an alternative to the tyranny of the dollar standard were clearly gaining momentum.

But these possibilities of closer trade and economic linkage between Continental Europe and South Africa received a devas­tating blow. Soviet and Cuban support to the MPL A in Angola put that country under the control of a regime hostile to Pretoria. In addition, repeated unannounced large dumping-sales of official U.S. gold reserves onto the market severely depressed the world gold price and brought growing economic difficulties for the South African mining industry. Then, in May 1976, riots erupted in the South African township of Soweto. The riots, curiously enough, coincided with a visit of U.S. Secretary of State Kissinger to South Africa. The international political backlash from a brutal South African police repression at Soweto against the rioters made effective economic linkage between South Africa and European governments more difficult. But the talks were continuing, as the situation somewhat stabilized the following months, and the im­portance of the world's largest gold producing country to any at­tempt to stabilize world monetary relations was absolutely crucial.

In July 1977, a South African business monthly, 7b the Point Inter­national, published an interview with a leading West German banker, Dresdner bank chairman Juergen Ponto. In the interview, Ponto outlined his vision of a solution to the economic and racial crises then enveloping all Southern Africa. Speaking of the vital role which Europe had to play in resolving the crisis of Africa, Ponto stressed, first, that Europe must restore order in its econo­mies following the oil and related economic crises. In order to do this, Ponto stated, "priority must be given to the creation of a stable monetary system; when a smaller but economically impor­

tant region of the world such as the European Community starts the stone rolling, by eliminating its own monetary chaos, then we will be on the way to realize this."

Ponto further elaborated a concept for European economic de­velopment initiatives to the entire Southern African region, in­cluding wealthy African states, such as South Africa, Ivory Coast, and Algeria, which would enable those countries to develop the poorest states: "They can produce sufficient food, employment and education possibilities for the entire Continent, provided that the restrictions can be removed in the course of developments." Ponto was a close personal friend of South African Finance Minis­ter Nicolaas Diederichs, and Diederichs' designated successor, Robert Smit. There were clearly advanced discussions between in­fluential European banking and industry and the resources-rich governments of Southern Africa. A potential combination was emerging which could have changed the geo-political map of the entire Anglo-American world, to the clear disadvantage of Lon­don and New York.

On July 31 in Frankfurt Juergen Ponto was assassinated by ter­rorists claiming to be the Baader-Meinhof.

Some weeks later, the chairman of the German Employers' fed­eration, Hanns-Martin Schleyer, was kidnapped and later mur­dered by the same organization in Cologne. While the assassins' trail led back to the East, there was good reason to believe that cer­tain powerful western intelligence services had had a role in both assassinations. In any event, West Germany was plunged into po­litical chaos and gripped by fear as never before in the postwar pe­riod. The possibility of any significant development initiative to­wards South Africa had been killed along with Ponto and Schleyer. The initiative to break with the dollar imperium had been stalled for the moment.