Ch 1 : The Matrix : Sections 7-9


Richard Moore

* The emergence of the Anglo-American alliance

London's banking elite accomplished much by its World War I
project.  Germany was eliminated as a major competitor, and
Britain gained a dominant position in the Middle East, making
her strategy of oil-based dominance viable. But London had paid
a high price for these gains: Britain, along with the rest of
Europe, ended up in deep debt to the House of Morgan, and
America rather than Germany had become Britain's chief rival
for global supremacy - in both oil and finance. There followed
a relatively brief period of fraternal rivalry between America
and Britain.

    The ink on the Versailles treat had barely dried when the
    powerful American oil interests of the Rockefeller Standard
    Oil company realized they had been skillfully cut out of the
    spoils of war by their British alliance partners. The newly
    carved Middle East boundaries, as well as the markets of
    postwar Europe, were dominated by British government interests
    through Britain's covert ownership of Royal Dutch Shell and
    the AngloPersian Oil Company (Engdahl, 58).

Britain had positioned herself well, but there was no way she
could maintain for long her timehonored position of global
supremacy. America, in particular Wall Street elites, had
gained too much out of the war, from the debts that were owed,
and from the economic development enabled by Europe's immense
wartime purchases. America's financial and business elites had
tasted global power, and they were no longer going to play
second fiddle to anyone. Britain's elite fraternity
accommodated itself to this new situation by pursuing a dual
strategy: in the short term London competed vigorously with
America, and for the long term British elites planted the
seeds of a strategic collaborative arrangement between the two

During the course of the Versailles talks, a new institution
of Anglo-American coordination in strategic affairs was formed.
Lionel Curtis, longtime member of the secretive Round Table or
'new empire' circle of Balfour, Milner and others, proposed
organizing a Royal Institute of International Affairs.

    ŠThe same circle at Versailles also decided to establish an
    American branch of the London Institute, to be named the New
    York Council on Foreign Relations, so as to obscure its close
    British ties. The New York Council was initially composed
    almost entirely of the Morgan men, financed by Morgan money 
    (Engdahl 55).

The Council on Foreign Relations, as it eventually was named,
was to become the primary vehicle of U.S. elite planning, with
close ties to London. In the interim, however, America found
itself locked in a bitter battle with Britain over oil fields
and the control of markets. Despite its tremendous advantages
of scale and financial resources, the U.S. found itself
outmaneuvered on front after front, including even the
petroleum resources of Latin America, where Britain managed to
get hold of two-thirds of the developed oil fields.

    But in 1922, an unexpected shock forced a process which led
    some years later to a 'truce' in the Anglo-American conflict of
    the postVersailles period. A threatening new combination
    coming out of the East forced Washington and London to forge a
    condominium of global power, in which has formed the strategic
    center of that power to the present day (Engdahl 64).

The 'shock' was a surprise agreement between Germany and the
Soviet Union - the Rapallo Treaty - by which the Soviets
agreed to forgive their war reparation claims, and Germany in
turn agreed to sell industrial technology to the Soviets. This
was very disturbing to Britain because it threatened to enable
Germany get back on her feet, manage her reparations payments,
and obtain oil directly from the Soviets.

Britain immediately began working behind the scenes with her
allies to thwart the German recovery plan. Within two days the
allies formally objected to the treaty, and after some two
months, the architect of the treaty, German Foreign Minister
Walther Rathenau, was conveniently assassinated under
suspicious circumstances. Six months after that, with secret
British encouragement, France occupied the Ruhr and brought
German industrial activity to a halt. Germany was left in
financial shambles, suffering under severe hyperinflation.
Rapallo had been thoroughly defeated, and Britain's role had
been carefully concealed.

From this point forward we begin to see the clear formation of
the Anglo-American strategic alliance, which still operates

    In October 1923, the U.S. secretary of state, Charles Evan
    Hughes, former chief council to Rockefeller's Standard Oil,
    recommended a new scheme to President Calvin Coolidge to
    continue the reparations pyramid of debt collection which had
    been shaken since the April 1922 Rapallo shock. Hughes won the
    appointment of a banker tied to the J.P. Morgan group, General
    Charles C. DawesŠ (Engdahl 72-73)
    The Dawes Plan was the first major indication of the growing
    Anglo-American agreement to consolidate and join forces in the
    postVersailles period. London had wisely reckoned it better to
    let the American's take center stage, while preserving its
    powerful influence on American policy.
    The Dawes Plan was the Anglo-American banking community's
    reassertion of full fiscal and financial control over Germany
    (Engdahl 73)

The next major step in the development of the alliance
occurred in 1927, when the 'Seven Sisters' oil cartel was

    Their secret pact was formalized as the 'As Is' agreement of
    1928, or the Achnacarry agreement. British and American oil
    majors agreed to accept the existing market divisions and
    shares, to set a secret world cartel price, and to end the
    destructive competition and price wars of the previous decade.
    The respective governments merely ratified this private accord
    the same year in what became the Red Line agreement. Since
    this time, with minor interruption, the Anglo-American grip
    over the world's oil reserves has been hegemonic. Threats to
    break that grip have been met with ruthless responses, as we
    shall later see (Engdahl 74-75).

* Wall Street & The City: covert masters of the universe

As we've been reviewing the birth of the Anglo-American
alliance, the supreme power of finance, and the strategy of
oil-based dominance, I've so far been presenting you with
considerable detail. I think this has been necessary in order
to make the story clear, and because in these developments we
can already see the basic patterns that continue to
characterize this alliance to this very day: the constant use
of secrecy and deception, the utter ruthlessness of these
people who plan world wars and economic collapses for their
own enrichment, and the effectiveness with which they achieve
their major objectives.

In this section we'll be moving more quickly, briefly
reviewing some the major historical events since 1927, and
identifying, behind those events, the hidden hand and purpose
of this elite alliance. With each summary, I'll indicate my

Let's begin with Mussolini. In November 1925 his fascist
government worked out an agreement with the U.S. and Britain
to repay Italy's war debts. One week later J.P. Morgan & Co.,
Italy's financial agents in America, loaned Italy $100
million, stabilizing Mussolini's regime. The fascist model
provided the necessary 'discipline' to ensure repayments
(Engdahl 77).

But apart from Italy, the post-Versailles reparation program
was an unstable pyramid of debt, based ultimately on Germany's
ability to pay. One option would have been to encourage German
recovery under its existing government, with Anglo-American
control over the German economy by virtue of the Dawes Plan.
This option was, apparently, considered by the banking elite
to be less desirable than the fascist option.

They decided to bring down the whole houseofcards financial
system, and rebuild it based on a fascist Germany. At the
request of the Bank of England, the Federal Reserve raised
interest rates, precipitating the stock market crash of 1929.
The London and New York banks were then able to arrange the
collapse of the German economy, and begin their 'Hitler
Project' - with support from the highest levels in the British
and American governments. Besides offering the same
'disciplinary repayment' advantage that fascist Italy
provided, along with lucrative investment opportunities, the
British and Americans sought to play Germany and the Soviet
Union off against one another, in typical balanceofpowers
fashion  (Engdahl 78-84).

Germany's war effort, both before and after America and
Germany were officially at war, was a collaboration between
German and American industrialists and bankers (Higham).

    Both Dulles brothers were partners in Sullivan and Cromwell
    which handled the legal affairs of American IG (the U.S.
    subsidiary of IG Farben). The Dulles brothers were also deeply
    involved in a number of U.S. and German firms and banks or
    their subsidiaries that contributed to the Nazi buildup and in
    U.S. firms which later traded with the enemy during World War
    II (such firms as the Chase Bank, Ford, ITT, General Aniline
    and Film, and Standard Oil) (Fresia 108).

    President Franklin Roosevelt knew that these corporations were
    trading with the enemy, there was little he could do.
    "Roosevelt was blackmailed," states Higham. "You can't run a
    war without Chase Bank, or Standard Oil of New Jersey, or ITT"
    (Fresia 109).

By carefully coordinating its assistance to both Germany and
the Soviets, U.S. elites were able to maximize those nations'
mutual devastation. After entering the war officially, America
had the additional lever of military action against the Axis,
so as to further manipulate the progress of the war, in
collaboration with British forces. America emerged from the
war with its industry intact, with 40% of the world's wealth
and industrial capacity, a monopoly on nuclear weapons, and
control of the seven seas. Never before had one nation held
such a degree of hegemony over world affairs.

    If we see that Germany is winning we ought to help Russia and
    if Russia is winning we ought to help Germany and that way let
    them kill as many as possible, although I don't want to see
    Hitler victorious under any circumstances.
    - Harry S. Truman, New York Times, June 24, 1941

The balance of power had quite clearly shifted from London to
New York by this time, but the Anglo-American alliance
continued, with an even firmer grip on global oil supplies.
Winston Churchill declared the existence of the "Iron
Curtain," and the Cold War was launched in order to inhibit
the noncapitalist powers from interfering in, or benefiting
from, the Anglo-American postwar blueprint of economic growth
and popular prosperity.

Our "fresh look" at the previous century has brought us full
circle back to the point where it began: the era of the
postwar blueprint. My purpose in this review has been to show
how the largely covert Anglo-American alliance - of banking,
intelligence, and oil interests - has come to dominate the
world. While in the Matrix banks stay mostly out of the
limelight as regards geopolitical affairs, in reality the top
banks in New York and London are the prime movers in this
alliance, and hence the prime movers in world affairs

    The ten largest bank holding companies in the United States
    [today] are firmly in the hands of certain banking houses, all
    of which have branches in London. They are J.P. Morgan
    Company, Brown Brothers Harriman, Warburg, Kuhn Loeb and J.
    Henry Schroder. All of them maintain close relationships with
    the House of Rothschild, principally through the Rothschild
    control of international money markets through its
    manipulation of the price of gold. Each day, the world price
    of gold is set in the London office of N.M. Rothschild and
    Company (Mullins 47-48).

In Matrix reality nations go to war for noble causes. When we
peel away the first layer of the Matrix, we find that nations
go to war as part of a geopolitical struggle over dominance
and empire. When we peel away the next layer,  we find that
for the past century even competitive imperialism has not been
the full story: geopolitics itself turns out to be a rigged
game, with nations being manipulated from behind the scenes by
an elite financial clique for its own private benefit.

* Abandoning Bretton Woods: the petrodollar scam

The abandonment of the postwar economic blueprint, signaled by
the end of the gold standard in 1971, can be seen as a replay
of the decision by London's banking elite, a century before,
to disinvest in the British economy, beginning the decline of
Britain's economy and industry from their imperial position of
global dominance. Once again the reason was the same: there
was more to be gained in international markets - from
investments and by financial manipulations - than there was in
further domestic investment. And once again, disinvestment led
to the economic and industrial decline of what had once been
the world's greatest industrial power, in this case the USA.

There is however a fundamental difference between these two
parallel scenarios. Britain had never attained quite the same
level of global military hegemony that America did, with its
postwar Pax Americana regime. Britain may have ruled the
waves, but it was relatively weak in land warfare. It could
only maintain its strong geopolitical position by playing a
shrewd balanceofpowers game - within the traditional context
of competitive imperialism. When Britain declined
industrially, its ability to win at this game depended on its
use of covert intrigue and financial manipulations, and
eventually on its strategy of oil-based dominance.

America - with its Pax Americana regime and its Bretton Woods
scheme - had actually transformed the global game itself,
establishing what I have called a system of 'collaborative
imperialism,' as part of a 'postwar blueprint.' While Britain
chose effective strategies within a given game, the U.S. had
actually set up a whole new game.

Similarly, as Wall Street decided to abandon the economic
aspects of the postwar blueprint, it was once again setting up
a whole new game, another blueprint for some new kind of world
economic order. Not only was it now seeking its rewards in
global markets, as did The City a century before, but it was
setting out to change the nature of those global markets to
its own  advantage.

The postwar economic blueprint had been based on global
economic growth and development, Western industrialization,
financial stability, and relatively full Western employment.
New York and London banks sought their rewards by investing in
this immense global growth boom, and they favored stability
and low inflation so as not to dilute the value their eventual
returns from their investments. As it turns out, the
abandonment of this economic blueprint was to be total: every
single one of its foundations was to be cut away.

August 15, 1971 stands as a pivotal date in this transition:
that is when the Bretton Woods accords were officially
repudiated, as regards the dollar gold standard, and that is
when we begin to see the emergence of a new blueprint for the
global economy. But in fact, the process of disinvestment in
the U.S. domestic economy had begun much earlier, in the wake
of the recession of 1957. The U.S. industrial base was aging
by 1957, and in need of major investment and modernization.
This was not an attractive proposition to the big New York
banks, who saw much more promising opportunities in foreign
investments, as did the London banks a century before.

As dollars began to flow out of the U.S., into credithungry
markets in Europe and around the world, the U.S. economy slid
into further decline, and its industry became increasingly
uncompetitive, while the recipient nations of the outward
investments were able to modernize their own industrial
infrastructures. Profits from these foreign investments were
not returned to the U.S., but were reinvested again in foreign
markets. This growing pool of expatriated U.S. capital was the
beginning of what came to be know as the 'Eurodollar market'
(Engdahl 109-113).

Whereas normal investments in the U.S. economy were not
considered desirable by the elite banking community,
investment in a buildup in the highprofit military sector
could offer significant returns. Banking and defense industry
forces combined to encourage intervention in Vietnam.

A young President Kennedy went along with this advice, as with
much of the advice he got from influential circles. But as he
became more confident in his leadership role as President, he
increasingly began to follow his own vision of the national
interest - which not surprisingly diverged with the interests
of banking elites. Among other transgressions against the
interests of this behindthescenes elite power center, Kennedy
had decided, just a few days before his highly controversial
assassination, to withdraw from Vietnam. Johnson, on assuming
office as President only several days later, promptly reversed
that decision (Engdahl 116-117).

John Judge, a lifelong Washington D.C. resident, and a serious
researcher into covert operations, relates an anecdote told to
him by his mother - who at the time of Johnson's assuming
office was a secretary to the Joint Chief's of Staff. Kennedy
was assassinated on a Thursday, and Judge's mother was called
in to do some typing the following Sunday, three days later.
The memo she was asked to type declared that military planners
should plan on the basis of a war that would last ten years
and cost 50,000 American lives. She thought there must be some
error in the figures, and called a member of the Joint Chiefs
to confirm. He replied, in essence, that she should shut up
and type. Ten years and 50,000 lives turned out to be a very
accurate prediction of the actual outcome of the Vietnam

    The Vietnam war strategy was deliberately designed by Defense
    Secretary Robert McNamara, National Security Advisor McGeorge
    Bundy, with Pentagon planners and key advisers around Lyndon
    Johnson, to be a 'nowin war' from the outset, in order to
    ensure a prolonged buildup of this defense component of the
    economy (Engdahl 114-115).

This strategy of militarization and conflict offered a
lucrative investment opportunity for Wall Street capital, but
the Vietnam War could only be pursued by means of deficit
spending on the part of the U.S. government - a situation
reminiscent of Britain's predicament during World War 1. While
Britain solved its funding problem with credit from the House
of Morgan, the U.S. solved its Vietnam funding problems simply
by printing money, in the form of Treasury bond issues. By the
terms of Bretton Woods, these printed dollars became real:
they could be exchanged at a fixed rate with any other major
currency. No one doubted America's ability to stand behind its
bonds, so these printedmoney bonds became a profitable place
to park excess dollars. In this way Europe financed America's
deficits during the Vietnam War (Engdahl 115).

While the Bretton Woods accords gave America this advantage -
it could literally print money and force the rest of the world
to share the inflationary effects - the accords also brought
an accompanying disadvantage: dollars could be exchanged for
gold from the U.S. Treasury at the rate of $35 per ounce.
Given the decline in the American economy, this exchange rate
had become entirely unrealistic, significantly overvaluing the
dollar in real economic terms. As a consequence, the U.S.
experienced a dangerous drain not only of Eurodollar capital,
but also of gold stocks. By 1971 decisive action was called
for - the American economy, and the whole global financial
system, was approaching melt down.

There was an obvious and simple solution available for this
crisis, a solution that could have been expected to restore
financial stability: revaluing the dollar more realistically
with respect to gold. This solution, however desirable it
would have been for the American and global economies, was not
acceptable to elite banking interests. They wanted to retain
the power that an overvalued dollar had given them. As a
stopgap, while they made arrangements for a new financial
blueprint, they decided to abandon the fixed exchange rate
system, in order to stem the drain of U.S. gold reserves. This
is the context in which they advised Nixon, through their
agents in his administration, to take the dollar off the gold
standard (Engdahl 127-129).

The new blueprint, for a new kind of global economy, was to be
based on the timehonored strategy of oil-based dominance, but
applied more drastically than ever before. The new scenario
was presented by State Department economist Walter Levy, at a
secret Bilderberger meeting in May 1973 in Saltsjobaden,
Sweden. The meeting was attended by David Rockefeller (head of
Chase Manhattan Bank), Robert O. Anderson (head of ARCO),
Zbigniew Brzezinski, Henry Kissinger, and others with close
ties to oil and banking interests. The scenario addressed the
question: "What if OPEC oil revenues were to increase by

Besides offering windfall profits to the Anglo-American oil
cartel, the scenario was also very appealing to the bankers.
Since oil was priced in dollars, a sharp increase would lead
to a demand for dollars, creating once again a strong-dollar
regime, and ensuring the continued financial dominance of the
Anglo-American banking elites. In addition, such an increase
would greatly curtail industrial growth globally, shifting the
balance of power even more towards the dollar and
Anglo-American interests. Here was the core of a new financial
blueprint, and it showed real promise. As so often before
(e.g., World War 1, World War 2, Vietnam), an engineered war
was to provide the vehicle for implementation of this elite

Nixon's national security advisor, Henry Kissinger, with his
secret, high-level diplomatic contacts in Israel and the Arab
states, was in a perfect position to stir up the necessary
trouble. By misrepresenting each side to the other, and
blocking intelligence reports from reaching normal U.S.
diplomatic channels, he was able to ensure the outbreak of
war, and a predictable Arab oil embargo - since the U.S. would
be forced to come to Israel's aid. The Yom Kippur war began on
October 6, 1973, some five months after the pivotal
Bilderberger meeting. By January 1974, three months later, the
400% rise in petroleum prices was a fait accompli (Engdahl

Thus began the petrodollar era. Instead of being overvalued by
virtue of a fixed exchange rate and an unrealistic gold
valuation, dollars were now overvalued because they were
needed to pay for high-priced oil. Once again dollars could be
printed, and the rest of the world would be forced to finance
American deficits. This petrodollar wealth would then find its
way to London's unregulated Eurodollar market, where it could
be invested in global markets, taking full advantage of the
speculative opportunities created by fluctuating currency
exchange rates.

The whole Bilderberger scheme had been a brilliant coup, and
the Arab states took the blame for it all, just as Germany
earlier was forced to take the blame for World War 1. Bretton
Woods stability had now been replaced by petrodollar
volatility, and the postwar blueprint of growth and prosperity
had been sabotaged by an engineered oil shock. The stage was
now set to establish an entirely new blueprint for the global
economy, based on a radical 'free trade' agenda. Not only
would this agenda transform the nature of the global economy,
it would also undermine the principle of national sovereignty
itself - a principle that had been the foundation of world
affairs ever since the Treaty of Westphalia was signed in


"Apocalypse Now and the Brave New World"

List archives:

Subscribe to low-traffic list: