Chapter 64 Developing countries suffering from the oil crisis

〖The well-designed petrodollar system of Britain and the United States has swept wealth all over the world.Revolving around control and anti-control, a protracted, bloody and invisible war was launched between the European Community, the Non-Aligned Movement and other countries and the Anglo-American financial group. 〗 Although the sharp rise in oil prices in 1974 had a huge economic and financial impact on the world, by the second half of 1975, industries in some areas had begun to resume development. Despite the huge blow, they returned to the original development path . The oil shock of 1974 guaranteed the attainment of some of the goals of the Anglo-American Bilderberg Group, but the indicators of global industrial development did not entirely change in a direction to their satisfaction.Their strategic vision of long-term domination of the world economy still faces a fatal threat.

World steel production, as well as shipping trade volumes, provide clear indicators of the health of the world economy. In the early 1950s, as the world began to rebuild from the ashes of World War II, world crude steel production in metric tons began to rise steadily.The output of steel has been one of the important criteria used to evaluate the overall development of a country's economy until today.Unlike the more fashionable GNP (gross national product), which measures the price level, it does not take into account whether the economic activity is productive or non-productive.For example, for an economic activity, GNP does not care whether you are infrastructure construction or gambling consumption in Las Vegas casinos.Steel production in metric tons cannot be falsified.In addition, steel is the basis for transportation, buildings and all kinds of infrastructure.

Steel production in the Western world, including developing countries, rose steadily from less than 175 million tons in 1950 to a peak of almost 500 million tons in 1974, when the oil crisis hit.The steel industry is also one of the most energy-intensive industries.In the two to three years after the oil crisis, world steel production reflected the impact on the economy, falling rapidly by almost 15 percent from the peak of steel production in 1974-1975.But from 1976 onwards, steel production began to climb steadily again. The same changes took place in world seaborne trade. As a response to the 1974 oil shock and the severe downturn in the world economy, the total volume of seaborne trade fell sharply, but it recovered slowly and steadily in 1977-1978. 1975 saw the first sharp decline in world trade since the end of World War II in 1945, by 6 percent, but there was a slow recovery.

However, one of the areas that failed to recover from the financial and inflationary shocks after the war were the less developed countries of the southern hemisphere, especially those that were not self-sufficient in oil.Throughout the 1960s, for most developing regions, the oil crisis meant the end of development, and the financial industry and agriculture could not be improved, which made people's hope of improving life in many regions come to naught. As if misfortunes never come singly, the oil crisis coincided with the worst global drought in decades between 1974 and 1975, resulting in severe crop failures, especially in parts of Africa, South America and Asia. The economic impact of the oil crisis to reach maximum.At the time, most of the developing world was facing famine and could not afford the growth in food imports, let alone finance the oil shock, as it desperately needed to import more grain and other food than ever before from the United States and Western Europe. .

The Anglo-American decoupling of the dollar from gold in August 1971, and the subsequent forced quadrupling of oil prices, spelled disaster for most of the world's people living in developing regions. Guido Carri, chairman of the Bank of Italy, noted that at the time, “there was a growing hostility towards banks...a feeling of mistrust that began with the conviction that commercial banks had too much dominance over money.” The impact of the oil shock on world finance was described in a speech to fellow banks in early 1976.With the decoupling of the dollar from gold and floating exchange rates in 1971, the new oil prices created a worldwide currency deficit. "The international shortage of currency is caused by the banks," Cary pointed out, "and a large part of it is caused by American banks through their foreign establishments."

Cary commented that some people see this process as a "validation of evil intentions" by those who hide in the background and promote the establishment of a so-called new dollar currency order that has nothing to do with gold exchange. The decoupling, and failure to replace it with officially sanctioned tools, demonstrates a malicious scheme designed to reinforce the dominance of Bank of America." Some people do think it's malicious.By 1975, the industrialized countries had recovered somewhat slowly from the initial oil shock, however, the overall condition of the developing country economies had further deteriorated due to the quadrupling of oil prices.The aggregate conventional account deficit in developing countries rose from an average of about $6 billion per year in the early 1970s to over $26 billion per year in 1974 (another quadrupling, equal to the increase in oil prices), and rising again by 1976 to an unaffordable seven times - $42 billion.The vast majority of these deficits are in developing countries, which also have the lowest per capita income levels in the world.

Under the threat of not being able to borrow more money from the World Bank and other private banks in industrialized countries, these less developed countries were forced to spend precious money that should have been spent on industrial and agricultural development to reduce their trade deficits.They had to pay for oil imports, and in dollars, but their raw material export revenues plummeted during the global recession of 1974-1975. Under the Bilderberg Group's "petrodollar recycling" strategy, private banks in the United States and Europe began to open a breakthrough to borrow money from these countries, but they did so only to "balance" the wreckage of the oil shock caused by the United States and Britain. Remaining accounts, rather than funding the building of necessary production infrastructure or technological development.These private petrodollar loans come from London-based US and UK Eurodollar banks.The oil revenues of Saudi Arabia, Kuwait and others are paid in dollars, and these dollars are funneled and "guided" overseas to London-based Eurodollar banks, which in turn lend to developing countries hurt by the oil crisis. nation.

Dr. Kissinger and his friends left no holes in the process.A senior partner of an American investment bank at the center of the Eurodollar market, David Mulford, who was then head of Eurodollar operations at White Weld & Company in London, was appointed as the head of the Central Bank of Saudi Arabia. Director and chief investment advisor of the Saudi Arabian Monetary Authority (SAMA); as OPEC's largest oil producer, Saudi Arabia is controlled by major US oil companies.The highly unusual appointment, which has gone largely unnoticed, comes just months after Saudi Arabia also announced an oil embargo.Along with White Wilder, the Saudi Arabian Monetary Authority also received confidential investment advice from the London merchant bank, Baring Brothers.

As head of the Saudi Arabian Monetary Authority, David Mulford was a key figure in ensuring the Saudi authorities used its new financial windfall "wisely".To ease Mr Mulford's role, New York's Citibank, which has close ties to Exxon and the American oil companies involved in Saudi Arabia's American Petroleum Corporation (ARAMCO), was inexplicably able to do business in Saudi Arabia at the time. The only wholly foreign-funded bank.Not surprisingly, in 1974, a full 70 percent of OPEC's surplus oil proceeds were invested offshore in stocks, bonds, real estate, or otherwise.Of the huge assets totaling US$57 billion, more than 60% went directly to financial institutions in the US and UK.

As early as June 8, 1974, within the purview of the US Secretary of State, Henry Kissinger signed an agreement establishing a joint US-Saudi Economic Cooperation Committee that went unnoticed.Among other items, the scope of the agreement included "cooperation in the financial sphere" (Kissinger occupied an unprecedented dual post: national security adviser to the president and secretary of state, a post he held until Ford's presidency). By December 1974, the nature of this cooperation was relatively clear, despite the strict secrecy of both the Saudi government and Washington.The U.S. Treasury Department signed an agreement with the Saudi Arabian Monetary Authority in Riyadh to “establish a new relationship with the (U.S.) Treasury’s lending operations through the Federal Reserve Bank of New York. Under this arrangement, The Saudi Arabian Monetary Authority will purchase new U.S. Treasury securities with a holding period of at least one year."This was explained by Jack Bennett, Assistant Secretary of the Treasury; he later became a director of Exxon.The Bennett memorandum explaining the agreements reached two months earlier was dated February 1975 and sent in full to Secretary of State Kissinger.

Among them, the career of Jack Bennett is noteworthy. In 1971, he was hired by the Nixon Administration's Treasury Department to work from Exxon, with the task of helping Paul Volcker prepare for possible financial problems in the coming "petrodollar" monetary system and decommissioning the gold standard.After the oil crisis of 1973-1975 and the successful establishment of the petrodollar circulation system, Bennett returned to Exxon.Much like this, in 1971, Victor Rothschild left his position as head of strategic research at Royal Dutch Shell to head the Central Policy Review Unit, which reports directly to the Prime Minister.In this role, he had an extraordinary influence on UK energy policy, as he was "fortunate" to predict the rise in oil prices before the 1973 oil crisis.During this period, he kept in touch with Henry Kissinger of the US National Security Council. For those who do not understand the history of the development of British and American interests in the Persian Gulf, what is really shocking about this series of agreements between the United States and Saudi Arabia is that the OPEC oil countries only accept the US dollar as the settlement currency for oil transactions, which is a Exclusive policy; only dollars, not Deutschmarks, nor yen, French francs, or Swiss francs, although they all have definite values. Pricing oil in U.S. dollars was originally a practice introduced by major U.S. oil companies and New York bankers after World War II.After the oil crisis in early 1974, in order to meet the demand for oil imports, major European countries started serious negotiations with Arab oil suppliers to secure long-term oil purchase contracts, which they planned to pay in their own currencies - an extremely wise The move, as it would significantly reduce the impact of an oil shock on Europe, is unusual for OPEC.It would have been easier for Germany or France to use their currency - the Deutschmark or the Franc - to secure payment for oil imports, rather than buying dollars for the same oil.What is even more curious is that OPEC ministers met in 1975 and agreed to accept the US dollar as the only payment currency for oil exports, and no other currencies, not even the British pound. Such an arrangement, without explanation, has in fact proved to be of great value to the US dollar and financial institutions in New York and the Eurodollar market in London.The entire world is constantly forced to buy vast amounts of dollars to pay for their vital oil imports.Even more unusually, this dollar-pricing agreement maintained its influence even as the dollar spiraled over the next decade or more, costing OPEC a lot. One consequence of the cycle in which these petrodollars were directed in London and New York was to make American banks world banking giants, as well as their clients, the "Seven Sisters" oil multinationals, world industrial giants.The combination of British and American oil and banking so overwhelmingly tipped the balance of business in general that their influence and power seemed invincible. Through the actions of the U.S. Treasury Department and David Mulford, and covert arrangements such as OPEC's odd dollar-pricing provisions and Saudi's U.S.-Saudi joint pact, Washington and New York's banks have effectively turned their already flawed post-war Breton The forest gold trading system switched to a new, extremely unstable oil-based dollar trading system, which was not as controllable by their calculations as the gold trading system.Kissinger and the financial world in New York and London effectively replaced the old gold trading standard of the postwar world with their own "petrodollar standard". After all, who really controls OPEC?Only the politically naive would believe that the Arab states would suddenly be allowed to act independently on matters of vital British and American interest.If it really thinks that the oil shock is a fatal thing, Washington will have many ways to let OPEC restore the oil price to a reasonable level.All they want is high oil prices, and all they need is for OPEC to take the blame. The two reserve currencies of the Bretton Woods system, the pound and the dollar, maintained their centrality in the new petrodollar order of the 1970s.Sterling could easily profit from the massive extraction of North Sea oil and, as mentioned earlier, in time benefit from a quadrupling in the price of oil.Sterling is recognized as the "petroleum currency". The U.S. dollar is also profitable through the above channels.Obviously, the plan of the Bilderberg Group at the Salzjobaden meeting in May 1973 had already calculated who would win and who would lose.For them, no matter how artificially creating skyrocketing oil prices, it is just a way of manipulating the world economy. It has indeed caused unprecedented consequences of transferring the overall wealth of the world to a very small number of countries.If not, what is the point of Adam Smith's "magic" of the market? It might seem understandable to think of these approaches as a perverted twist on the old Mafia "Umbrella" game.The Anglo-American interest groups that have quadrupled oil prices by manipulating political events have turned their targets to those countries that were victims of the oil shock, "proactively" lending them petrodollars to finance their purchase of expensive oil and other vital imports— Of course, these are available at extremely high prices. The development of industry and agriculture in most parts of the world, as well as the lives of people living in underdeveloped areas, have suffered greatly from the Anglo-American oil policy.Petrodollars are only used to finance deficits, not to fund the construction of new infrastructure to develop agriculture and improve the living standards of people around the world. Throughout 1975, the Anglo-American liberal policy body, the Council on Foreign Relations in New York, under the direction of New York lawyer Cyrus Vance, drew up a series of policy blueprints designed for the 1980s, as in the 1950s It did the same at the turning point of the late Great Depression.In considering the future global monetary order, the Council asserted that "some degree of 'controlled disintegration' of the world economy was a reasonable goal for the 1980s." But what is being disintegrated is the entirety of traditional industrial and agricultural development structure, especially in developing regions. The following August, in Colombo, the capital of Sri Lanka, 85 heads of state and government officials from member states of the so-called Non-Aligned Movement convened a meeting under the auspices of the host country's Prime Minister Srimavo Bandaranaike .Among the leaders present were Indhis Gandhi of India and numerous heads of state in Africa, Asia and Latin America, including the heads of government and dignitaries of Algeria and Iraq.