by Dr Mahathir Mohamad
1. I have been reading a book by James Rickards entitled ”Currency Wars.
2. He writes that he participated in War Games at the Applied Physics Laboratory (APL) located near Washington, D.C.
3. Set up in 1942, after the Pearl Harbour attack, APL brought applied science to improving weaponry.
4. In 2009 the war game was about a global financial war using currencies and capital markets instead of ships and planes. This financial war games was the Pentagon’s first effort to see how an actual financial war might evolve and to see what lessons might be learnt.
5. James Rickards presented a paper on “the new science of market intelligence, which involves analysing capital markets to find actionable intelligence on the intentions of market participants”.
6. The stated purpose was “to examine the impact of global financial activities on national security issues”.
7. Rickards also gave a presentation on futures and derivatives to explain how these leveraged instruments could be used to manipulate underlying physical markets, including those in strategic commodities such as oil, uranium, copper and gold.
8. He writes, “There is a far more insidious scenario in which currencies are used as weapons, not in a metaphorical sense but in a real sense, to cause economic harm to rivals. The mere threat of harm can be enough to force concessions by rivals in the geopolitical battle space”. (Globalisation and State Capital – page 145)
9. When the Ringgit depreciated in value, the financial and economic experts including those in Malaysia, blames it on bad financial management and contagion. When I suggested that it was due to deliberate action on the part of currency traders to devalue the Ringgit to undermine the Malaysian economy, this was dismissed.
10. Had we failed to handle the crisis, had the economy collapsed, the Government would have to resign. The action taken by the Deputy Prime Minister and Minister of Finance at that time to apply the IMF solution without the IMF would have hastened the collapse. But our unorthodox solution prevented the collapse from taking place and we recovered. Otherwise there could have been a regime change.
11. Whatever, the fact is that the U.S. is aware that a currency war can achieve political objectives just as well as a military war. The idea that the attack against our Ringgit was deliberate is not too farfetched. The Western Press and Government leaders in certain countries had made it clear that they desired to bring down the Government of that time for very many reasons.
12. Towards this end they have used NGOs and funds as they are doing in Egypt now.