In his first few days in office as President, ‘The Donald’ has fired off so many Executive Orders and aggressive tweets that much of the world is dizzy. One policy that’s clearly emerging from the smoke of immigrant ban attempts, XL Keystone pipeline approvals and bellicose threats against Iran, is the Trump team economic agenda, called by Assistant to the President and Chief Strategist, Steve Bannon, “national economics.” The key targets so far are China and Germany, two nations with the largest trade surplus with the United States. A closer look, however, suggests Washington is preparing to launch what James Rickards, sometimes advisor on capital markets to the US intelligence community, refers to as “currency wars.” Aside from the obvious China target, the second and perhaps more important target is to destroy the Euro and its European Monetary System. Here Germany is at the heart, one reason, perhaps, why Chancellor Merkel seems to have severe gas pains whenever the name Trump is uttered

On January 31, new US Trade Czar Peter Navarro accused Germany of using a “grossly undervalued euro to exploit” the US and Germany’s EU partners. Navarro went on to call Germany, the core of the Eurozone economies, a de facto “currency manipulator.” Get used to the term because we‘ll see it often in coming weeks. The manipulation Navarro speaks of, however, is the very creation in 1999-2002 of the Euro single currency. The Euro, with Germany as its largest member, acts like an “implicit Deutsche Mark” Navarro charged, whose low valuation against the US dollar gives Germany a huge advantage against its principal trading partners.

Not surprisingly, Germany has protested vigorously. Angela Merkel immediately declared that monetary policy of the European Central Bank by treaty is mandated to control inflation in the Euro-zone as a whole, claiming further that Germany could not manipulate the euro even if it wanted to because the ECB is, by treaty, “independent.” That’s only a half-truth, as of the 19 of the 28 member states of the European Union today in the Euro-zone, Germany, the Euro-zone economic giant, wields disproportionate influence, not day-to-day, but rather in shaping the very misbegotten construction of the Euro in the 1990’s. Some little-known history is in order.

‘Securing Germany’s Place for the Next Century’

While this all might sound like dry academic economics about currency manipulations, trade advantage and such, it conceals a Washington agenda that de facto calls for destruction of the Euro-zone as its ultimate mid-term goal.

The irony is that that Eurozone was bitterly opposed by then-German Chancellor Helmut Kohl when the French, Italian and British heads of state popped it on a startled Kohl at the December, 1991 heads of state summit of European Economic Commission member countries at Maastricht, Holland where they signed a Treaty on European Union that promised full monetary union by end of 1999. There, Kohl was confronted with their proposal for a treaty establishing a single European currency, today’s Euro, absent a single democratically-chosen European political state, elegantly referred to in Brussels as the “democratic deficit.”

A skeptical France, Britain and Italy, fearing the new weight of an economic powerhouse called unified Germany, demanded surrender of the mighty Deutschemark and the power of her Bundesbank central bank, then the most respected in the world, to a new independent supranational structure to become known as the European Central Bank. Germany agreed, ultimately, following months of hard horse-trading, on condition the new Euro-zone country members submit to the strict so-called Maastricht criteria for limits on public debt-to-GDP of 60% and annual public deficit limits of 3% of GDP, strict arbitrary conditions as drawn up by Hans Tietmeyer’s Bundesbank.

I was actively engaged in following closely those developments at the time as a financial journalist. In the early 1990s I had the fortuitous opportunity to learn the private thoughts of the Danish EU Commissioner, Henning Christophersen. At the time of the Maastricht Treaty negotiations, Christophersen, who recently passed away, was responsible under EU Commission President Jacques Delors for economics and currency relations in the EEC (predecessor to the EU). He, in effect, was the Commissioner primarily responsible for bringing the several sides together into what became the Euro, one person we might say, quite informed of the closed-door debates and fights among member countries at the birth of the Euro.

In 1994 Christophersen told a fellow Danish economist whom I knew quite well, in the sidelines of a London finance conference, that the attitude of Germany and of especially Chancellor Kohl towards the introduction of the single currency, Euro, had “changed 180 degrees since 1991.” He explained that in the intervening three years, the big banks of France and Italy had suffered deep crises and were gasping to survive (interestingly, they still are, even more so–w.e.), while British banks were deep into a real estate debt crisis and no challenge to the robust German banks for domination of Europe credit and capital markets. “Deutsche Bank and the other top German banks convinced Kohl that, if done right, the Euro could secure Germany role at the head of Europe for the next Century or more.”

I personally witnessed the changed view of Chancellor Kohl at a banking conference in Frankfurt shortly after. The once-foot-dragging Euro-skeptic Kohl told the assembled bankers that the Euro was the “key to bind Europe so no future wars would be possible.” He got a standing ovation. He was a skilled orator when he chose to be. In short, the Euro-zone today is a German creation.

The Navarro Euro Agenda

As President, Donald Trump has recently attacked German car imports into the USA, threatening a punitive 35% import tariff on German BMWs made outside the USA. The German response was rather stupid in such a high-stakes diplomacy game, attacking the relative quality of “Made in USA” cars. German Economics Minister, Sigmar Gabriel, when asked what the US could do to get Germans to buy more American cars such as Chevrolets, snapped, “Build better cars.” Not a smart chess play, Sigmar…

The real aim of the Navarro strategy vis-a-vis Germany, however, is not to boost sales of qualitatively inferior US made Chevys in Germany, and they are inferior I can personally attest. It’s ultimately to wreck the highly-flawed and highly vulnerable Euro system, a potential rival to the role of the US dollar as world currency reserve. Since 1944 and Bretton Woods, the global hegemony of America has rested on two main pillars: That the USA have a military unchallenged by any rival and that the US dollar remain the unchallenged world reserve currency, meaning, in essence, foreign nations finance Washington deficits ad infinitum.

Navarro-Ross Strategy Paper

As part of the Trump Presidential campaign backgrounders, then-campaign economic advisers Peter Navarro, economics professor at the University of California, and Wilbur Ross, private equity adviser and billionaire investor, teamed up to release an economic strategy paper for candidate Trump. That paper is what is behind Trump’s cancelling of the Trans-Pacific Partnership, the Trans-Atlantic Trade and Investment Partnership, and his call for renegotiation of NAFTA. It is also behind President Trump’s attacks on Germany as a “currency manipulator.”

Today, of course, Peter Navarro is Trade Czar, head of a newly-created National Trade Council office in the White House. Ross is the new Commerce Secretary. Both are singing from the same sheet of music, and it implicitly calls for the destruction of the Euro-zone, using the argument that Germany disproportionately gains from the fixed Euro, while the United States and even periphery Euro-zone states like Italy, Portugal, Greece, even France, lose big-time.

Four days before Donald Trump took the oath as President, he gave a long interview to the London Times. In it he declared, “…you look at the European Union and it’s Germany. Basically a vehicle for Germany.” Then on the issue of Germany and other EU countries taking in more than one million unscreened war refugees from Syria, Afghanistan, Libya and other predominately Muslim countries, Trump declared, “If they hadn’t been forced to take in all of the refugees, so many, with all the problems that it, you know, entails, I think that you wouldn’t have a Brexit. It probably could have worked out. But this was the final straw, this was the final straw that broke the camel’s back. I think people want, people want their own identity, so if you ask me, others, I believe others will leave. (emphasis added-w.e.)

Trump’s words were not taken out of the fumes he smells from his morning coffee. They came from Peter Navarro’s September 29, 2016 White Paper. After Navarro blasts China for keeping its Yuan stable against its major export partner, USA, by buying US Treasury debt, he turns to Germany and the Euro:

“A similar problem exists because of the European Monetary Union. While the euro freely floats in international currency markets, this system deflates the German currency from where it would be if the German Deutschmark were still in existence.”

Navarro continues:

“In effect, the weakness of the southern European economies in the European Monetary Union holds the euro at a lower exchange rate than the Deutschmark would have as a free-standing currency. This is a major reason why the US has a large trade-in-goods deficit with Germany-–$75 billion in 2015-–even though German wages are relatively high…The broader structural problem is an international monetary system plagued by widespread currency manipulation.”

Navarro concludes with a note of defiance:

“Donald Trump has promised to use his Treasury Department to brand any country that manipulates its currency a “currency manipulator.” This will allow the US to impose defensive and countervailing tariffs if the currency manipulation does not cease.”

Ignoring for the time the fact that China, according to US Treasury criteria, today is no currency manipulator, and in fact has vigorously intervened in the past year or more to strengthen its Yuan against the dollar, the US Treasury rules require a period of one year good faith negotiation to declare Germany an official “currency manipulator” and impose various sanctions. So the stage is being set.

United Anti-Euro Front

The new US Ambassador-designate to the EU, Ted Malloch, gave an interview with Bloomberg on February 5 where he said that he would bet on the euro collapsing and that he wants to “short the euro.” In the same interview he declared there was a “strong reason” for Grexit—Greece’s exit from the Eurozone. Earlier Malloch compared the EU to the defunct Soviet Union, saying the Union needs “taming.”

In another interview, Malloch declared that the Euro could collapse in the next 18 months. He told BBC, “I think it is a currency that is not only in demise but has a real problem and could in fact collapse in the coming year, year and a half…The one thing I would do in 2017 is short the euro.” Malloch, it should be noted, is no stranger to EU politics. He currently teaches as Professor in the business school of the University of Reading, England. Malloch has also served on the executive board of the pro-globalization Davos World Economic Forum in Switzerland and was a Senior Fellow of the Aspen Institute think tank. His remarks about the future of the Euro and of the EU itself are well-calculated.

Furthermore, with 17-year veteran Goldman Sachs partner, Steven Mnuchin, as Treasury Secretary, a person who has stated he has no problem labelling China a currency manipulator, the stage seems set for an all-out US Currency War aimed at destroying the Euro.

Make no mistake. I am on record since it became clear that the Euro as a supranational currency above nation states of the EU would become reality back in the mid-1990s, that the Euro idea as conceived then was a disaster in the making for Europeans and for the world. It was a construct by a cabal of European patriarchs around Jacques Delors, Giscard d’Estaing and others, to try to create a giant EU rival to the dollar as world reserve currency.

Notably, it was Mnuchin’s Goldman Sachs, beginning 2002, who engineered the dodgy derivatives currency swaps operations that allowed the Greek government to hide the fact its deficits were running 12% or more and not the mandated Eurozone 3%. Conveniently, the Greek debt crisis was made public in 2010 just as US budget deficits were exploding in the annual trillion plus levels and China among others threatened a US Treasury boycott. There was well-grounded suspicion at the time that Goldman and the US Treasury deliberately exploded the Greek crisis to put the Euro down versus the dollar.

Now it well could be that the financial wizards of Goldman Sachs in the new Trump Administration and the Trump economic team have decided to go for the kill and get rid of the potential Euro threat once and for all, now that Brexit has made the Eurozone and EU vulnerable as never before. Make no mistake. Such a disruption will bring the EU into major chaos and disruption, banking crises even worse than those of the 1930’s. For Trump, Navarro and Wilbur Ross these social and human factors are pure “externalities” to their mad designs. The Euro is a horrible construct that needs urgent reform, as is the EU.

Why destroy the Euro? British economic historian Harold James suggests the reason: “But what would be the consequences of a euro breakup? It would weaken Europe as a competitor but also make it more unstable as old national rivalries are unleashed again.” No wonder the German Chancellor and others in Berlin are hyper-nervous about what Trump will bring them.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”