People's Democratic Republic of Algeria
Total Page:16
File Type:pdf, Size:1020Kb
People’s Democratic Republic of Algeria Ministry of Higher Education and Scientific Research Aboubakr Belkaïd University – Tlemcen – Faculty of Lettres and Languages Department of English The Federal Reserve System Its (Un) Constitutionality and Influence on the American Politics and Militarism 1913-2003 A Dissertation Submitted to the Department of English in Candidacy for a Doctor Degree in American Civilization Presented by: Fanit Izzeddine Board of Examiners Chairman: Dr. Yahia Zeghoudi, University of Tlemcen Supervisor: Pr. Senouci Faiza, University of Tlemcen Examiner: Pr. Abbes Bahous, University of Mostaganem Examiner: Pr. Fewzia Bedjaoui, University of Sidi Bel Abbès Examiner: Dr. Mirad Houari, University of Mostaganem Examiner: Dr. Farid Daoudi, University of Tlemcen 2018 To the memory of my father I ACKNOWLEDGEMENTS I would like to gratefully and sincerely thank my supervisor, Pr. Senouci Faiza, for her keen supervision, understanding, patience, and most importantly for her insightful feedbacks. A Special gratitude goes to Dr. Yahia Zeghoudi, Pr. Abbes Bahous, Pr. Fewzia Bedjaoui, Dr. Mirad Houari, and Dr. Farid Daoudi for accepting to examine this dissertation. I am sure that their comments about this work will be very insightful. I would also like to thank a number of other scholars for their comments on my work, including Barbara Selby from Virginia University, who spared no effort to help me with the necessary documents. She was very kind in issuing letters of invitation to her institution each time I asked for. I would like also to thank Mr. Boudamouz Yacine from the department of Economics, University of Constantine, for his priceless collaboration in this work. Mr. Fares Rekima from the University of Mila was always present to listen and comment on my work, his feedbacks were very supportive. Most importantly, special gratefulness goes to two great men, Mr. Fatmi Fayssal from the University of Jijel and Mr. Ziad Khaled from the University of Mila, who were very helpful at many levels. No language can describe my thankfulness to this man. Finally, I would like to thank my family for their encouragement and support. My mother and my siblings were very sympathetic during the hard times that I went through the course of writing this dissertation. I also thank my wife Wided. Her support, inspiration; quiet patience and unconditional love were undeniably the cornerstone upon which the past two years of my life have been built. Her forbearance of my occasional tempers is evidence in itself of her II unyielding devotion and love. Last but not least, my new born son, Tamim, was the candle that lightened my darkest days. His birth inspired me to work hard and finish this dissertation. III List of Acronyms AMPAC: Australia Muslim Public Affairs Committee AP: Associated Press API: American Petroleum Institute BBC: British Broadcasting Corporation BBL: Barrels BIS: Bank for International Settlements BP: British Petroleum BRICS: Brazil, Russia, India, China, South Africa CBC: Canadian Broadcasting Corporation CBS: Columbia Broadcasting System CEO: Chief Executive Officer CFR: Council on Foreign Regulations CIA: Central Intelligence Agency CNBC: Consumer News and Business Channel CNN: Cable News Network DOFF: Directory Office of Facts and Figures EIA: Energy Information Administration EMS: European Monetary System EMU: European Monetary Union EU: European Union FBI: Federal Bureau of Investigation FDC: Foreign Debt Commission FRB: The Federal Reserve Board IV FTC: Federal Trade Commission GDP: Gross Domestic Product GM: General Motors GRIC: German Reparation International Commission ISG: International Survey Group IMF: International Monetary Fund MPs: Members of Parliament NAC: National Advisory Council on International Monetary and Financial Problems NBC: National Broadcasting Company NEPDG: Nation energy Policy Development Group NMC: National Monetary Commission OPEC: Organization of Petroleum Exporting Countries PNAC: Project of New American Century SSCI: Selected Senate Committee on Iraq UN: United Nations US: United States USSR: Union of Socialist Soviet Republics WB: World Bank WIB: War Industries Board WMD: Weapons of Mass Destruction WWI: World War I WWII: World War II V Abstract This dissertation comes to unravel the untold mechanisms of the American militarized foreign policies. It investigates the authentic motives behind the American militarism in the last 100 years by examining the great wars in which it was involved. The main hypothesis that has been advanced in this work is that the “unconstitutional” Federal Reserve System, which is dominated by ruthless banking interests, influenced the American foreign policies by turning the country into a non-stop war machine. American military interventionism has played a key role in securing the banking interests during/after World War I and II, and in maintaining the dollar hegemony after the War on Terrorism. This dissertation opted for an exploratory research methodology using the technique of case study. WWI, WWII, wars on Afghanistan and Iraq are all examined by investigating the influence/role of the Fed/petrodollar over/in the American militarized foreign policies. The findings of this research confirm the hypothesis in question in the sense that the American central bank, since its creation in 1913, has tremendously militarized the American policies after two centuries of isolationism. The conclusion that this research brought up is that private “interestism” has kidnapped the American policy-making by turning the Federal Reserve into a nonstop money-creating machine and by turning the American government into a war-creating machine which both serve the interests of private bankers. VI Table of Content General Introduction …………………………………………………………….. 1 Chapter One: Historical Background of Central Banking in the United States….. 17 1-1: Central Banking and Economy ………………………………………...……18 1-1-1: Central Banking System ……………………………………………… .20 1-1-2: Theories in Central Banking Systems: State or Independent………….. 21 1-1-3: Fiscal and Monetary Policies ……………………………………….......25 1-1-4: Money Creation and Fractional-Reserve Banking in Modern Economies ………………………………………………………....…...29 1-2: History of Central Banking in the United Sates before 1913 ……………...31 1-2-1: Controversies over the First American Central Bank 1791-1811……… 32 1-2-2: Controversies over the Second Bank of the US 1816-1836………....…..35 1-2-3: Conspiracy Theories of Banking System in the US……………………. 39 1-3: The Federal Reserve System: 1913 (The American Central Bank) ……….. 46 1-3-1: The Setting up of Strong Financial Institutions 1907-1913……………. 47 1-3-2: The Jekyll Island Meeting: the Road towards the Federal Reserve Act of 1913 …………………………………………………… 51 1-3-3: The (UN) Constitutionality of the Federal Reserve Act ………………. .56 Chapter Two: The Federal Reserve System, World War I and World War II.........65 2-1-The Correlation between the Federal Reserve and World War I …………..67 2-1-1: Financial and Military Mobilizations during World War I……………. .68 2-1-2: The Credit Policies, the Allies’ loans and WWI ………………………. 77 2-2: The German Reparations, the American Corporations and the Rise of Hitler during the Interwar Period ……………………………………… 83 2-2-1: The German Reparations during the Interwar Period …………………. 84 2-2-2: The American Corporations and the Rise of Hitler……………………. 89 2. 3: Hitler, the American Banking System and WWII………………………… 96 2-3-1: Hitler’s Battle against Bankers …………………………………………. 96 2-3-2: The Role of the Federal Reserve during WWII …………………………102 VII Chapter Three: The Dollar Hegemony, the Rise of the Petrodollar and the War on Afghanistan ………………………………………………… 116 3-1: The Rise of the Dollar Hegemony ……………………………………………….118 3-1-1: The Bretton Woods System, Marshall Plan and the Rise of the Dollar Hegemony ………………………………………………….......118 3-1-2: Nixon Shock and the Rise of the Petrodollar System………………………124 3-2: The Dollar Hegemony and the Rivalry over Energy Reserves in Eurasia ……126 3-2-1: Unocal, Taliban and the politics of Pipelines….......................................... 127 3-2-2: The American Energy Security and the Military Choice in Afghanistan: A Strong Connection……………………………………..... 133 Chapter Four: The Invasion of Iraq: A pre-emptive Strike or A Petrodollar Diplomacy…………………………………………………………… 145 4-1: Told and Untold in the Invasion of Iraq………………………………….. 146 4.1.1: The False Allegation in the Invasion of Iraq……………………………… 147 4.1.2: Iraqi Oil Lobbying………………………………………………………… 156 4.2: The Petrodollar Warfare: Fighting for Oil or Fighting for Petrocurrencies……………………………………………………………….162 4.2.1 The War for Oil …………………….…………………………………....... 163 4.2.2: Euros vs. Dollars: A Petrocurrency Rivalry ………………………………172 General Conclusion ……………………………………………………………….... 179 Bibliography..........………………………………………………………………...... 192 VIII General Introduction: Since the creation of the Federal Reserve System (the Fed) in 1913, the United States of America (US) has been waging dozens of military interventions around the world. This central bank; which is a privately owned institution, generates benefits primarily by lending money at interests to governments and to other private corporations. Being, for many; like Ron Paul and Eustace Mullins, an unconstitutional monetary and financial institution that is in charge of money supply in the US, the Fed is deemed in this dissertation as the reason behind the militarization of most of the American foreign policies since 1913. The influence of financiers on this institution