Michael Hudson : An Excerpt

This is an excerpt from a slightly older interview that Prof Hudson had with Glen Diesen.  It is termed the ‘oil grab doctrine‘.  The full video and transcript is on Michael-Hudson.com

The excerpt gives a solid overview of the current situation and I’ve bolded some sentences as the economic damage so far and ongoing cannot be put back in the bottle again.

Excerpt:

Michael Hudson: Well, we’ve discussed before how I think this is World War III, precisely because energy, fertilizer, and the other exports of oil-producing countries are so important for the entire world. That makes it a war that has worldwide implications.

And despite the fact that in the last hour or two, the stock market in the U.S. has gone up a thousand points because they imagine that somehow what has happened is all reversible and that when Donald Trump says, “Well, Iran is talking about making an agreement and there are signs on the internet that Iran says, well, all we’re trying to do is protect ourselves” that somehow the world will go back to the way it was, not only before the attack, but really back to the 19th century, maybe the 18th century.

This isn’t simply a war in Iran.

This is a war that, as we’ve discussed, it’s a war by the United States to maintain a choke point on the entire world economy by controlling oil because everybody needs it. And the reason it went to war with Iran is the same reason why last month it went to war with Venezuela and kidnapped the president and took Venezuelan oil under U.S. control so the United States can decide who will get this oil from Venezuela and who will get the money from the oil exports, the United States.

Now, the United States, as I think we’ve discussed, realizes that in order to base its foreign policy on the ability to cut off oil shipments to the world, it has to, number one, prevent any other country’s sovereignty from being able to export oil that’s not under U.S. control. And so, so far, the United States has imposed sanctions first on Iran that remain in place, secondly, on Venezuela, which are now relieved, and finally on Russia. So, the only place where America’s allies that agree to impose sanctions on Russia can get their oil is from places that the United States controls. That’s why the United States was so insistent, last week, in trying to control the Strait of Hormuz, through which much of the Saudi and OPEC oil is exported apart from the Saudi pipeline.

Well, Donald Trump apparently has listened to his military advisors that said, “Look, any troops that we try to grab the Strait of Hormuz islands to control it are going to be sitting ducks. And this is not a defensible situation. And at any rate, Donald, don’t you want to just grab the oil?” And Donald Trump has said that, yes, the real aim that we’re in Iran and have waged war has nothing to do with Iran wanting to get an atom bomb because it hasn’t been trying to get an atom bomb. It has really nothing to do with Iran’s foreign policy. It just wants American oil just like it wanted to grab Iraq’s oil and has grabbed Iraq’s oil.

So all of this, this fight is an attempt to use oil and control of its exports in the same way that Donald Trump has used his tariff policy of saying, “We will create chaos in your economies if you don’t agree to follow what U.S. diplomats ask you to do” in the form of what Trump called give backs for his access to the U.S. economy by reducing tariffs to a less extreme level.

Well, he’s saying the same thing basically now. He wants to grab Iran’s oil, and with that, he will complete the long attempt by the United States stretching for OPEC since, I guess 2003, to take control all of the OPEC, the Arab monarchy’s oil. And Iran was the last country of all of these: Iraq, Syria, Libya, the whole range of oil exporters.

So now the United States alone is seeking control of the Near Eastern oil.

Well, that’s supposed to give it a stranglehold. The problem is that Iran is not going to allow itself to be conquered, even though it said that it’s willing to permit oil exports again and to stop blocking them if other countries will guarantee its security. What it means by security is:

– number one, removal permanently of all U.S. military bases in the Middle East. And of course, the largest military base is Israel, which, of course, the United States is not going to do. Iran will also insist for its security that all of the sanctions that have been imposed by America’s allies by Europe, Japan, Korea, and others be relieved. Until these sanctions are removed, until the United States removes its presence and, in effect, surrenders and admits that it’s lost the war with Iran, the world is not going to go back to the way it was.

And even if, somehow, miraculously the United States would say, all right, we’ve given up our foreign policy. We are no longer going to be the United States as an imperial power. We’re going to be just another country following the rules of law that the United Nations lay down. You know, we’re going to go back to a normal world. Even if it were to do this obviously impossible policy, the fact that the oil has been interrupted and the helium supplies that were coming out of the Middle East have been blown up. There are no cutters. Helium is already cut.

And so the foreign companies that were obtaining helium before, certainly here in the United States and throughout the world, have all put cutbacks on helium. There are cutbacks on fertilizers. And although Iran is permitting oil exports through the Strait of Hormuz in payment for $2 million per ship, it’s not permitting fertilizer exports. And so you’re having the world going into the planting season.

So no matter what happens, the world is going to be in the most serious depression since the Great Depression of the 1930s. No matter what happens, there is no way of avoiding this depression.

And that’s what’s so crazy about the stock market and its recovery. It’s as if somehow they can’t come to terms with the fact that the actions taken by the United States and Israel are irreversible. Who’s going to pay for the reparations to Iran for all of the damage done to make them whole? All of this is going to probably take at least the balance of this year to work out. To answer your question,

…the U.S. economy and the rest of the world are going into a very serious depression.