US Issues Financial Warfare Warning
By Joseph Fitsanakis* | intelNews | 02.20.2009
IT TURNS OUT THAT ADMIRAL Dennis Blair wasn’t kidding when he said last week that “the primary near-term security concern of the United States is the global economic crisis and its geopolitical implications”. Barack Obama’s Director of National Intelligence warned during his annual threat assessment that “the longer it takes for the recovery to begin, the greater the likelihood of serious damage to US strategic interests”. The continuing credit vulnerability of the US economy is central to these fears, and it appears to be forcing the rapid rise of microeconomic concerns to the top of the US intelligence community’s threat list.
CHINA AND EASTERN EUROPE
A major aspect of these concerns centers on the hard-to-ignore fact that China currently holds close to $1 trillion-worth of US monetary debt. Trade experts suggest that, should China suddenly decide to offer these securities for sale, “the US dollar would tank”. The chances of this happening are slim -the Chinese economy would also suffer from such a move- but US intelligence agencies are taking no chances. On February 19, the office of the Director of National Intelligence issued a public warning to the Chinese government that it would consider any attempts to sell US Treasury bonds an act of “financial warfare”. It did so by authorizing James Rickards, a self-described “threat finance” expert who advises Admiral Blair, to speak to the US media about “[c]ountries [that] might [...] be tempted to engage in financial warfare” against the United States. Interviewed by National Public Radio (NPR), Rickards warned that the global economic crisis could “damage the ties that hold countries together” –together with the United States, that is. NPR was also granted permission to interview David Gordon, former Director of the Office of Transnational Issues at the CIA, who said that Eastern Europe could potentially detach itself from Washington’s sphere of influence as a result of a prolonged economic crisis. The dramatic decline in the standards of living in most of these countries could lead them to more egalitarian economic arrangements, thus “challeng[ing] the[ir] westward orientation [...] toward markets”, warned Gordon.
NATIONAL INTEREST AND LEGALITY
Predictably, the question of what is best for the populations of these countries, who have seen their currencies plummet to unprecedented levels against the euro and the dollar in recent months, doesn’t feature in the equation. In fact, the sole determining factor appears to be the pursuit of “US economic and political power” around the world. Another item missing from the equation is the issue of legality. Namely, is China legally entitled to sell the nearly $1 trillion of US Treasury bonds in its possession? If not, we should be told. If yes, then those responsible for what James Rickards describes as a potential “financial attack, you know, a Pearl Harbor on the dollar”, are those who have served in leadership positions in Washington during the last two decades. Admittedly, it was they who systematically subverted the stability of the American economy by gradually institutionalizing its dependency on China. Remarkably, the central question of whether it is within China’s right and national economic interest to sell the bonds, which we in America have been so shortsightedly supplying them for decades, arouses no comment from NPR’s reporter.
Instead, he unquestionably and uncritically sanctions the airing of open threats issued against China and Russia, who are apparently not permitted to pursue their economic interests in the same manner that Washington is encouraged to do. Moscow, in particular, is once again implicated in the standard CIA mantra of recent months, according to which the ongoing financial crisis has “reinforced a reflexive anti-American view [in Russia], making [Moscow] more determined to challenge US economic and political power”. We are thus warned that “Russia could take advantage of the economic vulnerability of [Eastern European] countries and try to reassert control” over them. Different national security standards appear to apply to the United States, which is encouraged to try to maintain its control over Eastern Europe, even to the detriment of local economies, which are currently experiencing a dramatic “decline in [...] standard[s] of living” and a “very, very deep crisis” as a result of their “westward orientation [...] toward markets”.
A SOUNDER APPROACH
At a time when Washington finds itself in the midst of the deepest economic swamp in nearly a century, issuing open threats against China and Russia is admittedly not the wisest move one would expect from the office of the Director of National Intelligence. Instead of hiring self-described “threat finance” experts to direct Cold-War-style threats against rising economies, the US intelligence community should actively join forces with domestic political and civic efforts to restructure the shaken foundations of America’s economy. Terminating America’s trade dependency on Southeast Asia, and restoring the industrial character of the country’s economy would be the most efficient way of preventing the threat of “financial warfare” from ever unfolding.
* Dr. Joseph Fitsanakis has been writing and teaching on the politics of intelligence for over ten years. His areas of academic expertise include the institutional analysis of the intelligence community; the interception of communications; and the history of intelligence with particular reference to international espionage during the Cold War. He is co-founder and Senior Editor of intelNews.org. His latest writings for intelNews.org are available here.