Home Foreign Policy The Geostrategy That Guides Trump’s Foreign Policies

The Geostrategy That Guides Trump’s Foreign Policies

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Authored by Eric Zuesse via The Strategic Culture Foundation,

According to Alastair Crooke, writing at Strategic Culture, on June 5th:

“Trump’s US aims for ‘domination’, not through the globalists’ permanent infrastructure of the US defence umbrella, but through the smart leveraging of the US dollar and financial clearing monopoly, by ring-fencing, and holding tight, US technology, and by dominating the energy market, which in turn represents the on/off valve to economic growth for US rivals. In this way, Trump can ‘bring the troops home’, and yet America keeps its hegemony [America’s control of the world, global empire]. Military conflict becomes a last resort.

He bases that crucially upon a landmark 6 November 2017 article by Chris Cook, at Seeking Alpha, which laid out, and to a significant extent documented, a formidable and complex geostrategy driving U.S. President Donald Trump’s foreign policies. Cook headlined there “Energy Dominance And America First”, and noted that,

“Towards the tail end of the Clinton administration and the Dot Com boom in 2000, [Trump’s U.S. Treasury Secretary until April 2018] Gary Cohn of Goldman Sachs had dinner with his counterpart at Morgan Stanley, John Shapiro. From this dinner was hatched an audacious plan to take control of the global oil market through a new electronic global market platform.”

This “global market platform,” which had been started months earlier in 2000 by Jeffrey Sprecher, is “ICE,” or InterContinental Exchange, and it uses financial derivatives in order to provide to Wall Street banks control over the future direction of commodites prices (so that the insiders can game the markets), by means of the financial-futures markets, locking in future purchase-and-sale agreements. It also entails Wall Street’s buying enormous commodities-storage warehouses and stashing them with such commodities — such as, in that case, aluminum), and so it influences also the real estate markets, and doesn’t only manipulate the commodities markets. Those vast storehouses (and the operation of the U.S. Government’s Strategic Petroleum Reserve, to carry out a similar price-manipulation function in the oil business) are crucial in order for the entire scheme to be able to function, because without control over the storehousing of physical commodities, such futures-price manipulations aren’t possible. Consequently, ICE couldn’t get off the ground without major Wall Street partners, which are willing to do that. Cohn and Shapiro (Goldman, and Morgan Stanley) backed Sprecher’s operation; and Wikipedia states that,

“Wall Street bankers, particularly Goldman Sachs and Morgan Stanley, backed him and he launched ICE in 2000 (giving 80 percent control to the two banks who, in turn, spread out the control among Shell, Total, and British Petroleum).”

This is today’s financial world – a world in which billionaires control the future directions of commodities-prices, and thus manipulate markets, and even determine the economic fates of nations. It’s not the myth of capitalism; it is the reality of capitalism. It functions by means of corruption, as it always has, but the corrupt methods constantly evolve.

However, Trump’s geostrategy goes beyond merely this, especially by bringing into the entire operation the world’s wealthiest person, the trillionaire King Saud, who, as the sole owner of the Saudi Government, which in turns owns the world’s largest corporation Aramco, which in turn dominates the oil market and which is also #6 in the natural-gas market (far behind the three giants, which King Saud is trying to destroy — Russia, Iran, and Qatar — so that the Sauds will become able to dominate even there). Trump’s geostrategy ties King Saud even more tightly than before, into America’s aristocracy. 

King Saud, as Cook noted, is trying to disinvest in petroleum and reposition increasingly into natural gas, because outside the United States and around the world, people are seriously concerned to minimize global warming so as to postpone global burnout from uncontrollably soaring atmospheric carbon. Petroleum has an even worse carbon footprint than does natural gas; and therefore natural gas is the world’s “transition fuel” to a ‘survivable’ future, while solar and other alternatives take hold (even if too late). Despite all of the carbon-fuels industries’ propaganda, people outside the United States are determined to delay global burnout, and the insiders know this. King Saud knows that his petroleum-laden portfolio will have to diversify fast, because the long-term future for petroleum-prices is decline. And he won’t be able to control prices at all in the natural-gas business unless he’s got America’s aristocracy on his side, in the effort to keep those prices up (at least while the Sauds will be increasing their profits from natural gas). Unlike his dominance over OPEC, Saudi Arabia has no such position to control natural gas-prices. He thus needs Wall Street’s cooperation.

Cook said:

“The second objective was a switch from oil to natural gas, and when the U.S. [military] was obliged to leave Saudi Arabia, they [the U.S.] thereupon established their biggest regional base in Qatar, who co-own with Iran the greatest single natural gas reserve on the planet – South Pars.

Energy Dominance

In the four months since President Trump’s announcement, the market strategy developed by Gary Cohn is now being implemented and its elements are emerging into view.

Firstly, there has been a massive inflow of Managed Money into the oil market, particularly the Brent contract, which has seen the Brent oil price increase by 35% since the starting point, which I believe can be dated to the August Brent/BFOE Crude Oil option expiry on June 27th 2017. …

The dominant market narrative is that the backwardation in Brent is evidence of surging global oil demand which has emptied inventories and is leading the price to new sunlit uplands. However, I see the market rather differently.

Firstly, whether the Brent spot month is supported by financial, rather than physical demand, the result will still be a backwardation, and because few oil producers expect a price over $60 to be sustainable they therefore hedge and depress the forward price. In support of this view, I am far from the only market observer who believes that Aramco, and Rosneft would not be selling equity if either Saudi Arabia or Russia believed the oil price trajectory will be positive even in the medium term. …

This still leaves open the $64 billion question of which market participant is motivated and able to support the ICE Brent term structure for years into the future by swapping dollar risk (T-Bills) for long term oil risk (oil reserves leased via prepay purchase/resale contracts).

My conclusion by a process of elimination is that this Big Long can only be Saudi Arabia and regional allies, with Saudi Arabia now under the management of the thrusting young Mohammad bin Salman.”

However, I do not agree with Alastair Crooke’s “In this way, Trump can ‘bring the troops home’, and yet America keeps its hegemony [America’s control of the world, global empire]. Military conflict becomes a last resort.” I explained at Strategic Culture on March 25th “How the Military Controls America” and noted there that “on 21 May 2017, US President Donald Trump sold to the Saud family, who own Saudi Arabia, an all-time-record $350 billion of US arms-makers’ products.” This means that not only Wall Street — the main institutional agency for America’s aristocracy — and not only American Big Oil likewise, are committed to the royal Saud family, but U.S. corporations such as Lockheed Martin also are. Vast profits are to be made, by insiders, in invasions and occupations, just as in gas and oil, and in brokerage.

Although Trump routinely talks about withdrawing U.S. troops, he does the exact opposite. And even if this trend reverses and America’s troop-numbers head down, while the U.S. economy becomes increasingly dependent upon Big Oil and Big Minerals and Big Money and Big Military, America’s military budget is, under Trump, the only portion of the entire U.S. federal Government that’s increasing; so, “Military conflict becomes a last resort” does not seem likely, in such a context. Rather, the reverse would seem to be the far likelier case.

War against King Saud’s chosen enemies (Iran, Qatar, Syria) and possibly even against the U.S. aristocracy’s chosen enemy, Russia (and against Russia’s allies: China, Iran, and Syria) — seems more likely, not less likely, with Trump’s geostrategy.

In fact, on 29 June 2017, when President Trump first announced his “Unleashing American Energy Event,” the President spoke his usual platitudes about the supposed necessity to increase coal-production, and what he said was telecast and publicized; but his U.S. Energy Secretary, the barely literate former Governor of Texas, Rick Perry, also delivered a speech, which was never telecast nor published, except that a few days later, on July 3rd, an excerpt from it was somehow published on the website of Liquified Natural Gas Global, and it was this:

“I want to address what Mr. Cohn was talking about from a standpoint of how important American energy is as an option, not as the only option, but as an option to our allies and to count[r]ies around the world. 

At the G7 it was really kind of interesting. The first thing they beat on the table talking about the Paris accord, you can’t get out of it, and I was kind of like OK. Then we would go into our bilats and they’d go, how about some of that LNG you’ve got? How do we buy your LNG, how do we buy your coal? And it was really interesting, it was a political issue for them. This whole Paris thing is a public relation[s], political issue for them. We made the right decision, the President made the right decision on this. I think it was one of the most powerful messages that early on in this administration that was sent. 

We are in a position to be able to clearly create a hell of a lot more friends by being able to deliver to them energy and not being held hostage by some countries, Russia in particular. Whether it is Poland, Ukraine, the entirety of the EU. Totally get it, if we can lay in American LNG, if we can be able to have an alternative to Russian anthracite coal that they control in the Ukraine. That singularly will have more to do with keeping our allies free and building their confidence in us than practically anything else that I have seen out there. It is a positive message around the world right now.”

If that was more the reality of Trump’s “Unleashing American Energy” policy than just the pro-global-burnout cheerleading of Trump’s mere words, then it seems to be — in the policy’s actual intent and implementation — more like “send more troops in” than “bring the troops home,” to and from anywhere. It is more like energy policy in support of the military policy, than military policy in support of the energy policy.

This sounds even better for the stockholders of Lockheed Martin and other weapons-firms than for the stockholders of ExxonMobil and other extractive firms. On 6 March 2018, Xinhua News Agency reported that, “U.S. President Donald Trump’s chief economic adviser Gary Cohn has summoned executives from U.S. companies that depend on aluminum and steel to meet with Trump this Thursday, in a bid to persuade the president to drop his tariff plan, media reported Tuesday.”

After all: Goldman has warehouses full of aluminum, and has the futures-contracts which already commit the Wall Street firm to particular manipulations in the aluminum (and other) markets. Controlling the Government so that it does only what you want it to do, and only when you want the Government to do it, is difficult. In any aristocracy, some members need to make compromises with other members, no matter how united they all are against the publics’ interests. This is the way it’s done – by compromises with each other.

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