The relevance of Dickens’ “Tale of Two Cities” to present-day international relations
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair…
These words at the opening of Charles Dickens’ remarkable novel dealing with daily life on both sides of the English Channel during the period before and during the French Revolution first rang true for me back in the 1980s when my wife and I indulged our passion for antiques by making weekly visits to the Sunday antiques and bric-a-brac market on the Sablon square in downtown Brussels. The epiphany moment was precipitated by our purchase there one day of a set of French silver cutlery, meaning matching forks and spoons. They were hallmarked and bore the date 1791. So, while some of the wealthy and aristocratic French were being slaughtered, others were celebrating their marriages and buying excellent silver tableware for the decades of home comfort they hoped to enjoy.
The concurrence of good and evil developments at the level of whole societies giving some the expectation of heaven and others the likelihood of heading in the other direction, as Dickens delicately put it, is not the only element in the book that also characterizes our times. Dickens was describing in great detail the atmosphere of denunciations and political scheming that corrupted the whole of society, another aspect of contemporary life that we must suffer daily.
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What prompted these ruminations were my reading earlier today an article by the Indian commentator M.K. Bhadrakumar on his blog and my viewing the youtube video of a press conference organized by the Schiller Institute.
I will start with the bad news, which was set out in great detail at the conference held in The National Press Club, Washington, D.C. under the heading: “The Danger of Nuclear War is Real” https://www.youtube.com/watch?v=aOrmFJXyAVI&t=4357s
Allow me to be forthright about the organizer: I am not a supporter of the La Rouche movement, which stands behind the Schiller Institute. They espouse an ideology which has a heavy dose of economic philosophy which I do not agree with. For these reasons I have turned down invitations to their many events, including the one that took place on 12 June in Washington. It is a price of my insisting on being an independent as opposed to captive analyst.
With that personal disclosure out of the way, I can say with hand on heart that the press conference on the 12th was a very important event and that two of the speakers in particular delivered a timely and well-articulated message about the perils of nuclear war that the American government is courting today by treating Russia with casual disdain, by crossing its red lines, by insisting that Russia’s threats to defend its sovereignty are a bluff. It would be excellent if the broad American public would listen to and act upon what Scott Ritter and Colonel Lawrence Wilkinson had to say. Here is a case where genuine American patriotism is fully aligned with saving the world for all of its peoples. Though I call out these two speakers, it is well worthwhile to watch at least the first hour of this event.
So far, the video has attracted 43,000 viewers. It needs another 4 million to gain traction. May that happen!
There can hardly be worse news than that the Doomsday Clock readings issued by the Bulletin of Atomic Scientists have just lurched several more seconds closer to midnight. By contrast, the good news brought to us by Mr. Bhadrakumar may seem trivial, but I assure you it is fundamental to all of us working for a multi-polar, or polycentric, or multi-nodal world. These are all the latest terms being given to a world that has moved beyond American global hegemony to a more equitable distribution of power to regulate interests and assure the security of all.
See: https://www.indianpunchline.com/death-of-petrodollar-is-a-biden-legacy/
The article examines in depth the consequences of the Saudi royal family’s having just allowed the 50-year-old agreement with the United States that created the petrodollar to expire without renewal.
As the author tells us, in the 1974 pact Saudi Arabia agreed to price its oil exports in the American currency. It would then store its dollar receipts in U.S. paper assets, namely Treasury bonds. In exchange, the United States assumed responsibility for the security of the kingdom. This arrangement put legs under the U.S. dollar at a critical moment, when since 1971 the currency was unlinked to what had been a fixed exchange rate with gold and became a fiat currency supported only by universal belief in the strength of its economy. The net result for the United States of the petrodollar agreement was to consolidate its position as the global reserve currency of choice, and to ensure seemingly unlimited access to cheap financing of the national debt. In short, U.S. global dominance after the fall of the Soviet Union at the end of 1991 had an economic – financial side that complemented its military supremacy.
With the end of the petrodollar pact, Bhadrakumar sees this economic-financial side as likely to unravel with accelerating speed.
The essay is rich in ideas and I can enthusiastically recommend it. That said, it is not comprehensive in its description of why the Saudis have backed away from the petrodollar, nor in its description of the ramifications.
He says that the oil market dynamics have been a driver, but points to the ‘emergence of alternative energy sources.’ I would rather point to the change in who is buying Saudi petroleum today as opposed to back in 1974. Then it was the United States, now it is China that is the biggest buyer. A petro-yuan makes more sense today. Yes, our Financial Times editors will say that the yuan does not have the deep liquidity to make it a serious contender for global reserve currency. But that is changing. And more to the point, the entire technology of global currencies is changing, with Beijing in the forefront of the move to digital currency – all of which is about to sweep away the arrangements dating from the 1970s.
Moreover, Saudi Arabia has now, in this year become a full member of BRICS and it is logical that it would detach itself from the tight grip of Washington.
As we know, the freezing of Russia’s national reserves held in the West delivered a great shock to the global financial status quo. Countries like Saudi Arabia, and others with vast financial assets held in the United States banks and in the banks of countries bullied by the USA to apply their sanctions on Russia have been looking for the exit, buying gold and otherwise sharply reducing their financial exposure to the Collective West. These Global South countries understood that they could just as easily fall victim to American thievery as had Russia.
Every punishment invented by U.S. Treasury Secretary Yellen to cut Russia off from the world financial system has incentivized de-dollarization around the world. Now the strongest push to de-dollarization is coming from Saudi Arabia. The single biggest commodity in global trade was and is petroleum, and quotations for petroleum set in other currencies seals the fate of the dollar here and now.
What this means for the future of U.S. inflation and for financing the 34 trillion-dollar national debt of the United States is spelled out by Bhadrakumar. Curiously he omits to mention another important consequence of global trade shifting from the dollar to national currencies: global trade transactions will pass through American banks in ever diminishing amounts. This means that the commercial intelligence about who is selling what to whom in every corner of the globe which was available to the federal government for the asking will now be sharply curtailed.
By way of example, let me direct attention to comments in the FT and other mainstream media on how in Q1 of 2024 Chinese trade with Russia had declined by such and such a percent. Has it really and truly declined? Or is it just that the move of Russian-Chinese trade away from the dollar and into their national currencies, avoiding U.S. banks, has blinded Washington to the precise volumes other than what the parties choose to publicize? Without the stealthily obtained intelligence about international trade flows it will be difficult if not impossible for Washington to craft sanctions policies in future.
As I think over these two scenarios, a coming nuclear war and the end of U.S. global financial domination, I am reminded of the final paragraphs in Yann Martel’s Booker Prize winning novel, Life of Pi: which narrative do you wish to believe?
©Gilbert Doctorow, 2024