"The National Security State": Part 3 of 4. Chapter 12 from "Our Country, Then and Now"

"The US-British Divergence," "Bretton Woods"

Serialization of selections from my book Our Country, Then and Now continues with the cooperation of my publisher, Clarity Press. Today we have 3rd installment of Chapter 12: “The National Security State” with sections on “The US-British Divergence” and “Bretton Woods.”

In writing about World War II, we opted not to attempt to include a history of action on the battlefield, as this has been covered exhaustively in the standard literature. Instead, we tried to explain, though briefly, the primary political forces affecting the US role.

These consisted of 1) the British plan to turn Germany and the Soviet Union against each other for purposes of mutual destruction, while using the industrial and military might of the US to advance the purposes of the British Empire; 2) the fact unknown to the US public, but certainly known by the British, that Roosevelt’s administration was heavily infiltrated with communist sympathizers secretly working with Stalin for the Soviets to gain post-war influence in Europe; 3) the presence within the US of a strong popular anti-war movement ridiculed by left-leaning pro-war journalists like Walter Lippmann as being “isolationist”; 4) a virtual takeover of the Roosevelt administration’s policy apparatus by the strongly pro-British Council on Foreign Relations which laid plans for future US global military dominance.

In the following sections we see these forces in action.

The US-British Divergence

[After the Japanese attack at Pearl Harbor], the US was finally in the war, and Britain rejoiced. But not only Britain. The US banks that handled the sale of $150 billion in war bonds were charging the government 12-13 percent of every dollar in service charges. [i]

But the US and Britain soon diverged in a manner that would have profound effects on the post-war world.

Once the US entered the war in December 1941 after the Japanese attack on Pearl Harbor, Germany declared war against the US immediately thereafter. The question facing the US and Britain—with Germany having launched Operation Barbarossa against the Soviet Union six months earlier—was when would the two allies attack Germany on the European continent? Or would they let Germany and the Soviets fight it out and risk a German victory?

General Dwight D. Eisenhower, then stationed in London, was the commander of the US armies in Europe. He favored an early assault across the English Channel on German-occupied France, but British Prime Minister Winston Churchill said this was premature. US Chief of Staff of the Army George C. Marshall, along with President Roosevelt, went along instead with a plan to attack the Axis first in North Africa, then Sicily, then mainland Italy.

It’s believed today that Churchill delayed opening a Western front against Germany for three years to allow the Russians to rout and roll up the German armies in the east. The turning point was the largest battle in history at Stalingrad, where four million soldiers fought and over 1.2 million died. The Battle of Stalingrad ended in February 1943 with the Soviets pushing Germany back along the entire front. Meanwhile, the Allies landed in Sicily in July, crossing to Italy in September.

Eisenhower and the British were now planning for the cross-Channel attack through France sometime in the following year. To the south, as the Americans led the drive through Italy, Churchill wanted them to turn east into the Balkans, where Tito and the Yugoslav communists were waging a bitter guerrilla war against the Germans.

Despite Britain’s July 1941 alliance with Stalin, Churchill was already thinking of a move to dominate a region that the Soviets would soon be eyeing as their own—it was yet another British stab in the back as had happened so often throughout history.

But Roosevelt refused to comply with the British plan. Supposedly he did not want to risk a clash with the Soviets in Eastern Europe. [But there was more to it than that, particularly given the fact that Roosevelt’s administration had long been top heavy with officials far more sympathetic to the Soviet Union than the public had ever been told.]

On June 6, 1944, D-Day, the Allies crossed the Channel to attack the Germans at Normandy in France. As they pushed the Germans back across France, Churchill began advocating for a British flying assault to take Berlin before the Soviets got there. [ii]

But Roosevelt disagreed, concerned that once the Soviets had pushed the Germans back to the Russian border, they would stop, thereby allowing Germany to move its forces from their eastern front to face the Allies on the Rhine. Marshall, Roosevelt, and the Americans also wanted their army in Italy to attack through southern France to protect Eisenhower’s southern flank during his push toward the German homeland.

Churchill was now stymied. In the end, the Americans prevailed, with Eisenhower telling the Soviets that the Americans would not attempt to take Berlin but would meet the Russians further west in Germany at the Elbe River. This later became the boundary between East and West Germany. Thus Churchill never got the British army to Berlin. He also had to watch while south in the Balkans Tito and the communists set up a national state in Yugoslavia allied with Stalin.

All this was epochal. The British plan for the Nazis and Soviets to destroy each other had failed. It failed because Roosevelt had reached an understanding with Stalin and was willing to allow the Soviet Union to create a corridor of communist governments extending from what became East Germany and a reconstituted Poland in the north, down through Czechoslovakia, Hungary, Romania, and Bulgaria, with a southern anchor in Yugoslavia. The Baltic Republics of Latvia, Estonia, and Lithuania had already been incorporated into the Soviet Union.

So instead of a Europe under joint British-American control, the continent was now drastically divided, with a powerful Soviet Union controlling much of it. And France, now under control of a determined French nationalist, General Charles de Gaulle, could in no way be called a British/American satellite. True, the British oversaw a zone within Germany, but that was all. Even Italy had reconstituted itself as a self-directed republic, and Greece, later occupied by the British but evacuated, was collapsing into civil war with a strong communist influence.

It’s possible to read the history of World War II as a constant juggling for position among the purported allies— Britain’s Churchill, the US’s Roosevelt, and the USSR’s Stalin—to determine who would control the world at the end of the most devastating war in history. The US and the Soviet Union were the winners of World War II, with the US winning post-war dominance in the West, while the Soviets had won the most bitter actual fighting. The losers were Germany, Italy, Japan—and Britain. Roosevelt had no intention of allowing Britain to reconstitute its empire, especially now with India on the brink of independence. [This was reflected in Roosevelt’s model for the United Nations, with the Soviet being granted a seat on the Security Council along with the US, Britain, France, and China.]

The result of the war was a stalemate between two superpowers—the US and the Soviet Union—with Germany reduced to rubble by Allied bombing and Japan devastated by American aerial attacks and the A-bomb.

Far from Britain “recovering” the US for the British Empire, Britain had now been relegated to second-power status. Britain’s days as a US “poodle” had begun [though Britain would attempt to claw back influence through its monetary power centered in the City of London. But even its monetary power was now under US Even attack.]

Bretton Woods

Even before the war had ended, the US convened an international conference at Bretton Woods, New Hampshire, on July 1-22, 1944, which established the supremacy of the American dollar as the basis for post-war international trade and commerce. Bretton Woods was a huge step in the direction of American global hegemony, because where the dollar went, military force would follow. The Soviet Union, while it attended the conference, did not join the Bretton Woods system.

The US had the power to create the Bretton Woods system because US allies had sent most of their gold to America to pay for weapons purchases. The US now controlled seventy percent of the world’s monetary gold. [iii]

Rejecting John Maynard Keynes’ idea for a new global currency—the bancor—the Bretton Woods system established the US dollar as the benchmark for international monetary transactions. Now the British pound as the world’s reserve currency was kaput. The US would be in the driver’s seat from this point on—or so it thought until Britain wormed its way back in by becoming the center of world Eurodollar trading by 1970.

Since every nation would be expected to hold a substantial dollar reserve, they could get dollars through trade or by borrowing from US banks. Borrowing could be done directly from the banks or through a new intergovernmental organization, the International Monetary Fund (IMF).

The IMF mission was to monitor exchange rates and lend reserve currencies to nations with deficits in their balance of payments trade ledgers. A major purpose of the system was to prevent nations from unilaterally devaluing their currencies in order to improve their trade postures with other countries, though the British eventually did just that. The system also retained the gold standard for settlement of international trade balances [until US President Richard Nixon removed the “gold peg” in 1971.]

The IMF would become one of the key instruments of international political control, a role it continues to play until today. The IMF has lent to dozens of nations around the world, especially those from the “Global South” with financial problems. Whenever a nation seeks its help, the IMF insists it undertake “free market reforms,” which in actuality means selling off its publicly owned utilities and industries to the big US and international banks and corporations while its population languishes in destitution.

The IMF also requires the borrowing nations to allow Western banks and corporations to take over and exploit those nations’ mining, agriculture, and industry so that they could earn enough income from selling their products abroad to repay the IMF loans. Countries under IMF control gradually lose the ability to create and manage a sustainable economy and policies promoting domestic well-being. It’s neocolonialism—American style, making the IMF the world’s greatest loan shark.

With the dollar triumphant, the US initially had no need to borrow from the IMF or anyone else. Instead, Federal Reserve interest rates would determine the amount of money available for trade, created as always through fractional reserve lending. Later, this would be used to finance the growing US trade deficits through sale of Treasury bonds to foreign nations. It would also pay for the growth of the US military machine’s hundreds of foreign bases.

Eventually, Federal Reserve “money printing” would backfire. In actuality it was a hidden method of devaluing the US dollar. Long-term inflation has been the bane of the US and world economy ever since, especially after Nixon’s abandonment of the gold peg for international exchange in 1971. Now, with Russia, China, and other nations leading the charge against the dollar as a reserve currency, the entire system is poised to blow up with hyperinflation. The US population can scarcely afford to buy a home, a car, or food. [iv] [By 2025, President Donald Trump, faced with the emerging BRICS alliance, would declare that any nation seeking to replace the dollar with trade in their own currency would be committing an act of war against the US.]

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[i] Nomi Prins, All the President’s Bankers, p. 159-160.

[ii] Stephen E. Ambrose and Douglas G. Brinkley, Rise to Globalism: American Foreign Policy Since 1938, Penguin Books, New York, London, Eighth revised edition 1997, p. 28. While I don’t agree with all their interpretations, these two mainstream historians present a competent chronology of events.

[iii] Engdahl, p.212.

[iv] This is the essence of “Bidenomics” as characterized by Robert Barnes on The Duran, August 21, 2023.

The National Security State -- Part 1 of 4

The National Security State -- Part 2 of 4

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Richard C. Cook, Our Country, Then and Now. ORDER HERE

Fadi Lama, Why the West Can’t Win: From Bretton Woods to a Multipolar World. ORDER HERE

Dr. Lewis Coleman: 50 Years Lost in Medical Advance: The discovery of Hans Selye's stress mechanism. ORDER HERE