Economic Warfare and the financial crisis

Since 2008 and by some estimates before then, the globe began its return plunge into the messy financially situation in which it finds itself. Many of us have heard many probably causes for the current financial crisis—some of which were publicised by the Occupy Wall street movement. What has seen little or no media attention is an additional probable source for the current financial crisis—Economic Warfare. It is estimated that $50 trillion dollars of Global wealth has been lost with not many folks asking where the  currency (i.e. current) of global finance has flowed to.

Today we will consider an article I published in the Fair Observer using as a basis a report originally published “under contractual arrangement with a subcontractor of the United States Department of Defense Irregular Warfare Support Program (IWSP) per contractual arrangement between the sub-contractor and Cross Consulting and Services”. While the claims made by the report might at first glance seem absurd, do remember that so was the prognostication of the Chinese Air force Colonels when they published in their 1999 book “Unrestricted Warfare – Assumptions on War and Tactics in the Age of Globalization”, that America could suffer a great explosion at the World Trade Center because of vulnerabilities in its security architecture. History seems to have been on the side of these PLA Colonels. Who knows? Maybe if their book was given more thought and probing and not just chucked away as conspiracy theory, the events of 9/11 might have been averted. We’ll never know for certain but while we still stand on the better side of history as pertains to the report I discuss in my article, the US government still has time to investigate its assertions and take precautionary measures if found to be true.

A copy of the article I wrote can be accessed HERE. In future posts, I will touch on some of the arguments against Economic Warfare and its probable use in the current Financial crisis. At the end of the day, it is up to each of us to inform ourselves and develop our own opinion. The important issue is not who is right or wrong but rather the safeguarding of global economy. Regardless of our individual persuasions about the USA, she still plays a very pivotal role in the global finance arena and if she goes down, she could take a huge chunk of the global family along with her. One question I ask myself is in the absence of America as the global hegemon, who will take her place and are we assured that that new hegemon will operate any differently than the U.S. has with all its successes and failings? I do not thing anyone has a definite answer to this question! Nevertheless maybe it should be one of the topics we discuss in upcoming posts.

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Economic Warfare

Economic warfare has been around for a long while and has been used by world powers to gain leverage in world affairs for a very long time to meet national interests. For some reason, this subject has not gotten much attention in international news media. One wonders why? As a beginning point we’ll consider a definition of Economic Warfare used by the Roosevelt government. It defined this type of warfare as follows:

The battle of economics: It is a war of commerce and shipping, of barter and buying, of loans and agreements, of blacklist and blockade. It is starvation for our enemies and food for our friends… It means fighting the Messer- schmitt before it is a Messerschmitt, fighting the tank before it is a tank, smashing the submarine before it can go to sea. It means preventing the Axis from getting raw materials. It means getting raw materials for our production (quoted in Medlicott, 1959. p. 51).

Source: Journal of Peace Research, vol. 28, no. 2, 1991, pp. 191-204

‘Economic Warfare’ and ‘Strategic Goods’: A Conceptual Framework for Analyzing COCOM* by Tor Egil Førland, International Peace Research Institute, Oslo

According to the same journal article by Tor Egil Førland, that definition was later modified by the US Department of Defense to include ‘aggressive use of economic means to achieve national objectives’ (US Joint Chiefs of Staff, 1974, p. 118).

Summary historical evolution of Economic Warfare

Economic warfare in olden times was waged before actual conventional warfare. It was used to weaken one’s opponent before conventional war. Comparing finances with blood as a metaphor, Economic warfare was a way to bleed ones opponent before actually fighting with them. It was also used to bend an opponent to the will of the aggressor. It involved cutting off a country’s main channel of food or energy supply. An example is the blocking of trading routes. Later it developed into annexing whole nations by imperial powers to meet national interests of their home countries. Home countries needed raw materials to feed their home industries or the industrial revolution and hence developing nations suffered colonial rule. Till today many countries suffer the fallouts of that system of brutality. In more recent years, Economic warfare could be described as being carried out through policies such as the economic structural adjustment programs, inequitable international trade policies, blacklists, blockades and embargos—all of which has done more harm than good for the globe as a collective human family.

Tor Egil Førland for example sees the Coordinating Committee for Multilateral Export Controls (COCOM) as “peacetime economic warfare: the Cold War successor to the blockades of the two world wars”. Based on the book “Unrestricted Warfare – Assumptions on War and Tactics in the Age of Globalization” authored by two senior Chinese Air Force Colonels, Qiao Liang and Wang Xiangsui, economic war in the 1990s included, “the use of domestic trade law on the international stage; the arbitrary erection and dismantling of tariff barriers; the use of hastily written trade sanctions; the imposition of embargoes on exports of critical technologies; the use of the Special Section 301 law; and the application of most-favored-nation (MFN) treatment“. The authors maintain that the Asian financial crisis was triggered as a result of economic war waged by international financiers against the Tiger nations setting them back at least a decade. According to them, this war spiraled out of control when Japan and Russia got involved in the conflict hence transforming an otherwise localized financial crisis into a global phenomenon. Are their assertions true? I do not know but I was quite astonished to find out that in this book of theirs published in 1999, these two PLA Colonels predicted the 9/11 attack on the World trade Center. They wrote:

Whether it be the intrusions of hackers, a major explosion at the World Trade Center, or a bombing attack by bin Laden, all of these greatly exceed the frequency band widths understood by the American military. The American military is naturally inadequately prepared to deal with this type of enemy psychologically, in terms or measures, and especially as regards military thinking and the methods of operation derived from this. This is because they have never taken into consideration and have even refused to consider means that are contrary to tradition and to select measures of operation other than military means.

Now though I cannot substantiate their allegation about the Asian financial crisis and its connection to Economic warfare, the record of history now proves that they were right on the money with regards to other things penned in their book which has since transpired like the major attack on the WTC. For what its worth these men got the attention of the federation of US scientists and hopefully the government as seen by the report sent by the US embassy in Beijing.

In conclusion, Economic Warfare is not a myth. It exists but like all warfare, most of its stratagems are shrouded in mystery for security reasons. Developing nations are well acquainted with this kind of warfare. Ghana was subject to it in the Nkrumah and Acheampong regime leading to the “Ye ntua” saga. Many times, justly democratically elected governments on different continents have been toppled simply by application of some of these economic warfare strategies. The aim of the strategy like a Boa Constrictor is to strangulate an economy until the point where citizens out of economic frustration or hardship revolt against a governing regime because of the financial lack and resulting lack of confidence generated as a result of the warfare. Thank GOD those days are behind most of sub-Saharan countries although there still remains much work to be done.

In future posts we will consider how Economic Warfare may have possibly been waged in recent times. It is  been noted as one of the possible contributing factor to the current financial trough which the entire globe finds itself in. 


Where is the $50 trillion lost in the financial crisis?

In an interview on CSPAN on January 27, 2009, Congressman Paul Kanjorski Chairman of the Capitol Markets Sub-committee told viewers of a 2008 electronic bank run reported by the Secretary of the Treasury and the Chairman of the Federal Reserve to members of Congress in which the US economy was literally drained of $550 billion within a space of only two hours. He explained that by the estimation of the Secretary and Chairman, had immediate action not been taken, then by 2pm that same day, 5.5 trillion dollars would have been drawn out of the money market system of the United States triggering a total collapse of the American economy and within 24 hours he said, “the word economy would have collapsed”  [ SEE VIDEO BELOW ].

Why did this not receive much more media attention and what was the cause of such a run? Additionally according to a report published under contractual arrangement with a sub-contractor of the US Department of Defense Irregular Warfare Support program, the Globe has lost about $50 trillion of global wealth since 2008 in the current financial crises. Money does not just evaporate into thin air.  It is currency (current) so it flows from one place to the other. Hence a better  statement would be to say that $50 trillion has changed hands. But where is this money now and how did such a travesty occur? Who was on watch and who should be held accountable? These are questions that many are grappling with now. Hopefully in upcoming posts we can consider some of the myriad of answers proffered by various actors worldwide. 

You can access the link to the CSPAN video here. To access Congressman Paul Kanjorski’s admission quoted above you can watch the video from about 22:45.