Interview with Franz J. T. Lee: Venezuela and the USA. February 27, 2008
The demise of the dollar By Robert Fisk. October 06, 2009.
Dr. Franz J.T. Lee is Titular Professor at the University of The Andes, Mérida, Venezuela -- interviewed recently by VHeadline's Spanish-language edition editor Jesus Maria Nery Barrios.
"Are you really saying that not even God trusts in the greenback anymore?"
JMNB: Firstly, Prof. Dr. Franz Lee, it is an honor to make this exclusive interview with you, spotlighting current burning world issues. As well-known socialist revolutionary for nearly half a century, as international political analyst, excellent lecturer at many international universities and author of many writings mainly in German, English and Spanish on global, historical issues, especially about Africa, Europe and the Americas ... could you please tell us whether we are really heading inexorably towards a dreadful, global cataclysm with fatal results for the whole of humanity within a relative short period of time?
FJTL: I am not a divine prophet, a Nostradamus, also not a fortune-teller revealing future strokes of luck, however, as natural scientist and social philosopher I am studying the transhistoric latencies and tendencies, the possibilities and realities of our epoch of imperialist corporate globalization. In this case I fear that you are right, ruling class man, homo homini lupus, is on the verge of destroying life on this planet, that is, within the space-time of only two centuries the current capitalist world order is hell bent on annihilating a huge solar, galactic process that probably took 6 billion years to materialize itself.
JMNB: Getting back to contemporary reality, to the 'plague' about which already Simon Bolivar has warned us, at the end of January, Robert Reich of the 'Financial Times' informed us that the North America's middle class is no longer coping, and is being threatened by bankruptcy.In your opinion, what did he mean, in how far does the housing fiasco in the USA affect the future of the world market, of mankind?
FJTL: A complex question indeed, but let us get down to brass tacks. Other sources have informed us that even in Europe, for example, in Germany, that the middle classes are waning away progressively. As a result of globalization, of concentration of capital, monopolization, merging and fusion of giant corporations like Exxon and Mobil (1998) or even Conoco and Phillips (2002), also Time and Warner (1987, 2000) and even with AOL.
Currently the capitalist mode of production is experiencing its worst crisis, a possible coming global recession. Although the USA annually spends more than the rest of the world together in military budgets, in the production of arms of mass destruction and on aggressive wars, yet its economy is in shambles, is being burdened by trillions worth of internal and external debts and an alarming fiscal deficit.
One wonders why the U.S. economy still is functioning and why its ailing dollar ... not based on productivity, but rather on wild speculation ... has not collapsed as yet.
In fact, nobody knows or can calculate when this crash will happen. The only thing that is sure, is that the U.S. economy will eventually collapse unless, in the last minute by some miracle, the current world system could be changed radically.
Furthermore, the greenback is losing its hegemony as a world currency by the second; the dollar is not worth the paper on which it is printed anymore, it is simply backed by mammoth debts. At the same rate that foreign petro-dollars flee from Wall Street towards the East, towards Europe and Asia, towards the promising realms of the euro and the yuan, the US dollar is losing its value.
Probably, not even the beggars of Manhattan or Harlem want U.S. dollars anymore; everybody is looking for euros or other foreign currencies.
JMNB: Are you really saying that not even God trusts in the greenback anymore?
FJTL: This is neither a joke nor an exaggeration, it is an issue of life or death of North American world hegemony. The acceptance of foreign European money as exchange value to legally buy goods in Manhattan was a thing unheard of until now. Believe it or not, a while ago Reuters informed us that the U.S. dollar, the 'king among currencies' ain't what it used to be.
Now businessmen simply say that 'money is money' and ''Euros Accepted' signs are popping up all over in shops in New York City. Making use of the favorable exchange rates, hordes of European tourists flood New York City with hard cash to burn and to search for cheap 'pleasure' in the 'land of a million opportunities'.
Yes, the American dollar is in death throes.
JMNB: As political scientist, how do you see the slump of the American economy, how is it affecting the middle classes, and in this century can the United States government or anything else for that matter still stop the inexorable collapse of the world market, of global capitalism?
FJTL: To be or not to be? What a question, my countrymen?
The dialectical problem, the contradictory dilemma is simple: if we would conquer power by means of a classical social revolution, by blowing up bridges, by using the guillotine, by means of a 'reign of terror' a la frances, by destroying the infrastructures and power centers of modern capitalism, we would surely not survive the global toxic results, the human chaos, physical hunger and planetary radio-activity. It would be a fierce global class war, a Pyhrric victory.
If we would be doing nothing, and just allow the Nazis of this world to eradicate poverty by simply making us mad, and then as 'mad cows' annihilating the poor, then the very same would happen. Metropolitan imperialism did not produce arsenals of arms of mass destruction to massacre aliens or international terrorists. As their own spokesmen declare, they are being accumulated for the coming global class war.
This is what dialectics is all about, what it means to be on the horns of a dilemma. To enter the current trimensional, micro-, meso- and macro-worlds, we urgently need new emancipatory paradigms and parameters, a new logic, science, philosophy and wisdom; this is the only road left for us, is the crossing of the Rubicon, is creative exodus, is getting out, is exvolution.
But, let us return to current U.S. patriotic reality, to our immediate world problem.
JMNB: Is the current U.S. economic slump spelling future fascist doom?
FJTL: De facto, the United States war economy is already in the fangs of full imperialist over-production of arms and wares of mass destruction, that is, the United States is already the fascist police officer of world corporate imperialism, is entering a cataclysmic recession, which could be followed by violent, terrorist, military aggressions and global invasions, to conquer all remaining energetic sources and resources, and thus will be desecrating the sovereignty of all nations.
JMNB: Does this mean that according to 'full spectrum dominance' Venezuela is next on the list? In quintessence, what is the good news, and what is the bad news for Venezuela at this critical moment of world history?
FJTL: Which news first?
JMNB: The good news.
FJTL: Well, that is very easy. Contrary to many countries of the South, Venezuela practically swims in an eternal ocean of oil, gas and fresh water; it possesses an immense biodiversity, strategic metals and minerals, and a tropical vegetation that could produce oxygen for centuries to come.
JMNB: D'accord. And the bad news?
FJTL: Precisely the very same news. Contrary to many countries of the South, Venezuela practically swims in an eternal ocean of oil, gas and fresh water; ....
This is why Venezuela is practically a member of the sonorous 'axis of evil', is target No.1 for a new 'discovery', 'Christianization', pacification and military conquest, is threatened by the Plan Colombia, and why this Sword of Damocles will forever hover over our heads.
Uncle Sam will commit any crime that could give world capitalism a new lease of life. This is revolutionary dialectics, where 'good' and 'bad' news are two sides of the very same world market coin.
JMNB: Apart from trying to save North American capitalism by means of bloody invasions and world wars, how is the Bush administration trying to counter the internal explosive situation? Are the middle classes disappearing? What is currently happening to them?
FJTL: Totally ignoring the ordeal of the working masses, to counter the economic collapse, President Bush is now offering a $150bn stimulus package, including middle-class tax cuts and an increased spending on infrastructure.
JMNB: Do you think that this will somehow relieve the economic agony? Could it save the middle classes from extinction?
FJTL: No, this aspirin will definitely just heighten the political headache, strengthen the economic fever and activate the fascist cancer. Economically, this is just offering peanuts, when we consider the huge military budget for 2008, that Exxon Mobil makes $1bn profits a week, not even to mention the booty of Chevron, SonocoPhillips, Haliburton, Bill Gates and consorts.
JMNB: In times of severe social uproar, could you please explain briefly the political role of middle classes a little more precisely?
FJTL: Experts in this field have already explained the negative, reformist role of the middle classes in times of depression and recession. Philosophically speaking, concerning the middle classes, they generally play a very opportunistic, even reactionary role in times of social crises, namely, when capitalism shows its true 'democratic' snarl: fascism.
The immense class struggles on a world scale ... exploding in Nepal, East Timor, the Middle East, Pakistan, Zimbabwe, Kenya, Bolivia, Nicaragua, Mexico, Ecuador and, of course, in Cuba and Venezuela ... now even encompasses 'proletarian' and 'bourgeois' nations and even continents. Hence, in globalization where physical labor of billions is becoming obsolete, as predicted by Marx and Engels in the 'Manifesto of the Communist Party', and in 'Capital', the middle classes will rapidly vanish, a few members may reach the shores of the upper echelons of imperialist corporatism, however, the immense majority in geometric numbers will progressively be devoured by the Moloch of global pauperization; as new unemployed starving masses, these ex-middle classes will have to share their misery with the wretched of the earth, and will have to storm the metropolitan flesh-pots and to forget all about their nightmares of 'communism' and their pipe-dreams about a good, capitalist, promised 'land of milk and honey'.
JMNB: Concerning the 'nightmares of communism' in your opinion, is it true that by inherent, inherited, ideological nature nearly all members of the middle classes (also in Venezuela) have a deep-seated, aggressive, anti-socialist, anti-communist and anti-Marxist world outlook?
FJTL: This anti-dialectical materialism, anti-hylozoism and anti-Marxism are not private assets of the middle classes only, some 2,500 years ago, already Anaxagoras was thrown out of Athens, was ostracized because he claimed that the Moon was not a divinity, not Selena, but simply a piece of rock. To preserve the ruling class status quo, all idealists, from Plato to Plotin, from St. Augustine to Saint Thomas of Aquinas, from the Papacy to the Vatican, all hated materialist philosophy. Furthermore, anti-communism, anti-Marxism are inherent basic elements of bourgeois, anti-proletarian, democratic, capitalist ideology: McCarthyism, Stalinism, Catholicism, Christianity, the world religions, Zionism, Apartheid, Gandhism, liberalism, revisionism, reformism, puntofijism, fascism and Nazism, as national socialism, all hated the very thoughts and acts of Marxist revolutionaries. In the last analysis, to them, a Marxist is the incorporation of the devil himself. Now, it seems that even the newly founded United Socialist Party of Venezuela (PSUV) is destined to take this anti-Marxist highway, if this should become true, then: 'Welcome, Uncle Sam'! Bye, Bye, Socialist Revolution!
JMNB: Before we follow up this train of thought, let us clarify another issue: like here in Venezuela, does it mean that the American middle classes have lived beyond their pay cheques, were living on credit, on credit cards? Will the Venezuelan middle classes eventually share the same fate of mass extinction? Will they soon lose their palaces and Hummer luxury cars to foreign and national banks?
FJTL: Yes, but this concerns different countries and distinct social classes and economic realities. We cannot deal in detail with such complex questions here. Nevertheless, could you please formulate your question more precisely?
JMNB: Okay, in what did the North American middle classes spend the money that they did not earn as yet, and will probably never earn, and what is really happening there? Are the North American middle classes eroding away?
FJTL: In spite of all the military pomp and glory, in a capitalist society of economic bankruptcy, in a 'great society', the inherent contradictions deepen, and it is the middle classes that first are feeling the volcanic eruptions. The moment when 'Third World' democratic revolutionaries conquer political power (not economic power), they tend to become middle classes, or at least to construct a new political middle class. This is the case currently in South Africa and Venezuela.
This is extremely dangerous for the forward march of a real, true socialist revolution. This new class, accumulating wealth and privileges, readily aligns itself with the counter-revolution.
JMNB: In brief, in this spirit, over the last months, economically, what really occurred in the USA?
FJTL: A lot of things that could scare us to death, however, the following, the possible collapse of world capitalism, concerns us here. As we have been informed last year the U.S. slump detonated in the housing sector, which abruptly ended the housing boom. Recession was dawning on the belligerent horizon and serious economic problems faced the banks and brokers, who possessed huge assets in mortgage securities. This again immediately affected the opulent middle classes.
JMNB: In this epoch of global class struggles, as mentioned by you before, we know that the middle classes are caught up between the two major contending historic forces, and that usually at first they experience the sysmic tremors of social upheaval. Hence, my questions: faced by an approximating disaster, by recession in the USA, which will spill over to Latin America, how are the Northern middle classes reacting? Did metropolitan capitalism come to their rescue? What is happening to their unpaid debts and homes? What will be their social destiny?
FJTL: Well, surely, these are fundamental questions, very educative for the Venezuelan 'Gente de petroleo', for the new political middle class, for the treacherous 'Chavistas without Chávez'.As we learned from the news, the newly pauperized middle classes, especially the lower sectors, desperately began to borrow. As a result of their home equity loans, in fact, their very homes became piggy banks. At the same time, the banks stepped in and credit cards were raining down like manna from the sky; furthermore, second mortgages and refinancing began to play havoc with this buffer class; like the USA itself, deeper and deeper, millions are progressively falling into the loan abyss, into the bottomless pit of globalization.
All this may cause rumbling, mumbling and roaring in the lower sectors of American society.
As such, in the United States the epoch of easily making and getting money suddenly came to a close. The bursting house bubble flung thousands of homeless citizens onto the merciless streets. ready to accompany the millions of poor devils who since decades were and are already sleeping under falling bridges.
Of course, all over anxiety and fear of dark days ahead, of an uncertain future are gripping not only the toiling laborers, but now also all middle class sectors, all previous lovers of capitalism, that is, all who were searching for a panacea, for change within this exploitative world order, that is, worldwide, from New York to London, from Berlin to Moscow, from Beijing to Tokyo, to Cape Town, to Rio deJaneiro, to Caracas, to Miami, etc. All the so-called technological benefits of globalized economic growth praised over the last decades did not even reach the middle classes, rather they mainly went into the production of arms and means of natural, mental and corporeal mass destruction, which just served the class interests of small global parasitic ruling elites. For example, the class interests of the hundreds of marauding billionaires in the world, of whom the USA harbors the lion's share. 432 of them make super profits worldwide, especially in the U.S. war economy; Germany has 55 billionaires, India 54, Russia 53, China 28, South Africa 3, Egypt 2 and Venezuela/Colombia remain with only 2.But things are becoming worse in the USA. Well known bourgeois analysts and economists like Sal Guatieri or John Ryding are telling us that "compelling evidence" exists that the United States is deep in recession. In fact, currently the recession has already reached the service sectors, restaurants, insurances, health care and hospitals. Well, during the next months, we will witness the Via Crucis of the U.S. dollar and the demise of the USA as a world super power. None of the competitors, neither China nor Europe, neither Russia nor India, show special interest in becoming super powers and to relieve the USA from its inexorable demise. Any final question?
JMNB: Yes, a very important one. It concerns our interview, it concerns countering the lies, myths and hoaxes spread by the huge international mass media about Venezuela, about President Chavez. Is a powerful electronic news medium, in foreign languages, like VHeadline imperative in the defense of democracy and socialism in Venezuela? Finally, do we really have a social, a socialist revolution in Venezuela?
FJTL: The truth is the Achilles Heel of the North American Empire of globalized corporate imperialism, of global fascism. In the fierce 'war of ideas', in this world of 'psychological warfare', of Orwellian Mind and Thought Control, of Newspeak, of a coming Mental Holocaust, urgently independent news media like our VHeadline website in English and Spanish, have to be supported materially and financially.
If we neglect this strategic praxical and theoretical weapon, our class enemies will have all the freedom in the world to denigrate us, to crush us, to assassinate the character of President Chávez and all these will weaken the already tender Bolivarian Revolution more and more, and eventually could nip it mercilessly in the bud.
It is extremely urgent that all forces of global resistance defend the truth in Venezuela, that they know what is going on here.
The counter-revolution is already in our midst, it is already capturing our news media, hence, let us take care. The Bolivarian Revolution is at stake.
Only Knowledge and Truth, only real revolutionary práxis and true emancipatory theory can still save it, that is, scientific and philosophic socialism.
The next months will be decisive, hence we have to act now.In conclusion, definitely, in the epoch of globalization, at the eve of the 21st century, social and socialist revolutions are very rare, very scarce indeed. Not anything is a revolution, is socialism. At least, the latter is the dialectical No, the negation of global capitalism and can be nothing else.
Surely, we are making the Bolivarian Revolution, over the last decade it really demonstrated its working class base: it showed magnificent paradigms of modern trails of elementary class struggle in April and December, 2002, and in January 2003.
Surely, we are constructing indigenous, Christian socialism, well, nothing wrong with this, we decide what we do and think. this is Bolivarian Socialism. However, our duty is to make permanently the world revolution; when it is there, we further it, when it is not there, we create it.
If we should lose it, we have to start all over again, enriched in praxical experience, invincible in social theory and powerful in emancipatory wisdom, creation and creativity.
We do not first support the revolution, then we get frustrated, because the revolution has entered the historical doldrums, then we leave it, and finally join the 'opposition'.
This is not revolutionary, this is cowardice, opportunism, is the behavior pattern of a traitor, of a treacherous reformist turncoat.If one should be the very last revolutionary on earth, it would still be one's duty to fight exploitation, domination, discrimination, genocide and alienation, the quintessence of capitalism, of globalization, we would have to defend the negation of capitalism, to construct its No, its Negation, Socialism.
Comrades, from Revolution to Emancipation, la lutta continua -- ¡Hasta la Victoria Siempre!
JMNB: Prof. Franz Lee, comrade, thanks for a most educative exclusive interview.
The demise of the dollar
By Robert Fisk
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading
In the most profound financial change in recent Middle East history, Gulf Arabs are planning - along with China, Russia, Japan and France - to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
The Americans, who are aware the meetings have taken place - although they have not discovered the details - are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."
This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil - yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.
The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power - along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system - which has prompted the latest discussions involving the Gulf states.
Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.
China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq - blocked by the US until this year - and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.
Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.
Ever since the Bretton Woods agreements - the accords after the Second World War which bequeathed the architecture for the modern international financial system - America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.
The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."
Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.
The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.
"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."
Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.