China’s Communist Party – A 100-Year Legacy of Success and a Forward Vision

June 30, 2021

China’s Communist Party – A 100-Year Legacy of Success and a Forward Vision

By Peter Koenig with permission and written for China’s Chongyang Institute of the Renmin University in Beijing – for the 100 Anniversary – 1 July 2021 – of China’s Communist Party.

The legendary Chinese success story goes hand-in-hand with the evolution of the Communist Party of China (CPC) and China’s Communist Revolution that began in 1945. The foundation of the CPC on 1 July 1921 signaled the end of some 200 years of China’s oppression by foreign powers, to western invasions and exploitation, grabbing China’s territories and especially her rich natural resources – and to gain trading advantages, including from the riches of China’s resources and crafts.

Background and History
About two centuries ago, foreign interferences were dominated by illegal Opium Trade that eventually culminated in two Opium WarsIn the 18th and 19th centuries Western countries, mostly Great Britain, exported opium grown in India to China. In turn, the Brits used the profits from opium sales largely to buy Chinese luxury goods, like porcelain, silk, and tea. These goods were in high demand in the west.

Much of this opium export was illegitimate and created widespread addiction throughout China, causing serious social and economic calamities. The wars were triggered by China’s attempting to suppress the trade, that grew tremendously from about 1820 onwards. In early 1839 the Chinese government confiscated and destroyed more than 20,000 chests of opium (chest = about 63.5 kg) — some 1,400 tons of the drug—that were warehoused at Canton, Guangzhou Province by British merchants. By 1838 imports had grown to some 40,000 chests annually.

In July 1839, British sailors killed a Chinese villager. The British government refused to turn the accused over to be judged in Chinese courts. The Brits did not wish its subjects to be tried in the Chinese legal system, and refused to turn the accused men over to the Chinese courts.

This conflict prompted the first Opium War (1839 – 1842), fought between the UK and the Qing dynasty (1644 to 1912), with the British objective to legalize the opium trade. This did not happen, which led to the Second Opium war (1856 – 1860), also called the Anglo-French war. But China did not win the wars and the nefarious addiction-causing trade continued for several more decades.

China’s British-forced war-concession to the winner, was to hand over the island of Hong Kong to British administration. In addition, China had to legalize the opium trade and concede a number of trading ports to the Brits, as well as opening travel for foreigners into China and granting residencies for Wester envoys to China. And an important concession for a predominantly Buddhist country was that China had to grant freedom of movement to Christian missionaries throughout China.

The wars and the resulting multiple concession of China, prompted an era of unequal treaties between China and foreign imperialist powers, aka, the UK, France, Germany, the United States, Russia and Japan. China was forced to concede many of her territorial and sovereignty rights. These encroachments on Chinese sovereignty weakened and eventually brought down the Qing dynasty, leading to a revolution on October 10, 1911, bringing the Kuomintang (KMT) to power. They are also referred to as the Chinese National Party and founded the Republic of China on 1 January 1912. 

The founder of the KMT and initial ruler of China after the 1911 revolution, Sun Yat-sen attempted to modernize China along western lines and values – which was not accepted by the Chinese people. The next couple of decades of KMT rule were rather chaotic times, during which Sun Tat-sen was unable to control China which fractured into many regions controlled by warlords. To strengthen its position and to gain back control of the country, the KMT was seeking alliance with the new fledgling Communist Party, forging the first United Front, but was still unable to control all of China. After Sun Yat-sen died in 1925, Chiang Kai-shek (1887–1975) took over and became the KMT strong man.

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The creation of the Communist Party of China on 1 July 1921, was deeply marked by the preceding history. One of the CPC’s key objective was that China would never again be dominated by wester colonial powers. The CPC became a force to be reckoned with, as it grew stronger by increased solidarity forged throughout communities and regions of China which all pursued the same goal – independence from foreign colonization and exploitation and the creation of a sovereign communist China, with a sovereign socialist economy.

With the support of the west, notably the UK and the United States, the KMT-led government of the Republic of China (ROC) entered in 1927 into a civil war with the forces of the CPC. The war was intermittent, but basically played out in two major phases, until 1949. The first phase can be described as a war of attrition. It lasted until 1937, when due to the Japanese invasion of China, KMT-CPC hostilities were put on hold. Instead, a KMT-CPC alliance fought and defeated the Japanese. This was also called the War of Resistance against Japanese Aggression(1937–1945).

The KMT – CPC civil war resumed with the victory over the Japanese forces, and entered its second, but most violent and decisive final phase from 1945 to 1949. This phase is also called the beginning of the Chinese Communist Revolution, during which the CPC gained the upper hand and finally defeated the Kuomintang on the Chinese mainland.

The leader of KMT (1928 – 1975), Chiang Kai-shek, fled the mainland and established himself and the KMT in what was originally called by her Portuguese discoverers in 1542, Ilha Formosa (“beautiful island”), located north of the Philippines and the South China Sea, some 180 km off the Southeastern coast of China.

In 1895 Formosa became “Taiwan” meaning “foreigners” referring to the early Chinese settlers on the island. Today Taiwan is again integral part of China, since the Treaty of San Francisco (WWII Allied Forces Peace Agreement with Japan, signed on 8 September 1951), when Japan ceased its occupation of Taiwan, returning the island back to China.

Though an integral part of China, Taiwan is still occupied by the KMT Regime, calling it the Republic of China or ROC, the name taken over from KMT’s reign over mainland China until their defeat by the CPC in 1949, which also marked the beginning of the new communist People’s Republic of China (PRC).

This internationally illegal control of Taiwan by the KMT has been going on since 1949, but especially for the last 50 years, when on 25 October 1971, the United Nations General Assembly recognized the PRC, led by the CPC, as “the only legitimate representative of China to the United Nations” and removed the representatives of the Chiang Kai-shek ROC regime of Taiwan from the United Nations. Nevertheless, today still 15 nations, including the Vatican, of the 193 UN member nations recognize Taiwan as the official China. Many of them would like to switch to the officially recognized CPC-led mainland China, but are coerced, predominantly by the US and the UK, not to do so.

Over the past several decades, the United States, the UK and other western allies have continually sought to destabilize China by interfering in Taiwan, meaning in China’s internal affairs. The latest such events include the US weapons sale for US$ 5 billion to Taiwan in December 2020, and earlier this year, the U.S. Ambassador to the Pacific Island of Palau (Palau being one of the states recognizing Taiwan), became the first US envoy to travel to Taiwan in an official capacity, since Washington cut formal ties with Taipei in favor of Beijing in 1979.

In addition, the US is promoting closer relations with Taiwan through the so-called Taipei Act, signed in April 2020, calling for strengthening trade relations and diplomatic ties between the US and Taiwan to bring Taiwan closer into “international space”, meaning politically distancing the island territory from the mainland.

This and other interferences of the US in China’s internal affairs, are attempts at disrupting peaceful co-existence with China. They include the US-provoked trade war with Beijing, during the last almost 4 years; the stationing of about 60% of the American Navy in the South China Sea; the Washington orchestrated interference in Honk Kong, seeking independence from Beijing; and wildly falsified accusation of Human Rights abuses of the Uyghurs in the officially known as the Xinjiang Uyghur Autonomous Region, in Northwestern China; as well as similar claims in Tibet. 

Thanks to the steadfast leadership of President Xi Jinping of the People’s Republic of China and of the Communist Party of China, these interferences are being dealt with carefully by Beijing, always trying to find diplomatic and non-belligerent solutions. China is a master in following the paths of non-aggression, while constantly creating and moving peacefully forward – always with the goal of achieving a multipolar world, where people of different nations, regions, races, roots, cultures and believes can prosper peacefully together.
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Present – and Vision for the Future
Since the foundation of the Communist Party on 1 July 1921, China strove for total independence, and never surrendered to foreign invasions or attempts to influence China’s internal, as well as foreign relations policies. What the CPC has attained over the past 100 years is truly remarkable. It comprises not only maintaining internal solidarity, but also and foremost, people’s trust in the government, moving peacefully forward, becoming food, health and education-wise autonomous and self-sufficient and, not least, lifting 800 million people out of poverty. No other nation in the world has achieved such extraordinary objectives for their people’s well-being.

The CPC has today 91 million members. It is by far the largest single party in the world. In addition, thanks to her leadership, starting with Mao Tse Tung in 1949 and today by President Xi Jinping, China, with a population of 1.4 billion people, has become the second largest economy in the world in absolute terms, and since 2017 already the largest, assessed by the only real measure – the Purchasing Power Parity (PPP). This is an indicator of how much people can buy for their money. Within a few years, China is expected to surpass the currently largest economy, the United States, also in absolute terms.

This is, of course, representing a threat for the country that has declared itself as THE Empire of the world, controlling all vital essentials, like energy, food supply and the international monetary system – though faltering, but still dominated by the US-dollar. The self-styled empire is already crumbling. And Washington knows it. Its strongest asset, the US-dollar, is gradually being dismantled. The US-currency has been widely used throughout the world, almost exclusively, to buy vital goods and services, like energy, food and communication services, as well as for other international trade, but it is losing its weight in the international arena.

The reasons for this are both political and economic. On the economic front, the US have created by their 1913 Federal Reserve Act, a fiat currency without any backing, a currency of which the flow and money mass can be expanded at will. This allowed and still allows Washington to “print” money as per necessities, i.e. to finance extensive wars and conflicts around the globe and to accumulate debts that the US Treasury and Federal Reserve (the totally privately owned US Central Bank), will never be able to pay back.

The US-dollar has absolutely no backing whatsoever. When Washington abandoned in 1971 their self-designed so-called gold-standard (Bretton Woods Conference, 1944), the US-dollar became de facto the “new gold standard”, since the gold standard was based on the value of the US-dollar (US$35 / troy ounce, about 31 grams), instead of on a basket of currencies. Since everybody needed US dollars for their reserves, this gave the US Treasury free range to increase its money supply almost infinitely.

When the US, also at the beginning of the 1970s, negotiated with Saudi Arabia, head of OPEC (Organization of Petroleum Exporting Countries), that all hydrocarbons, petrol gas and coal, should be traded in US-dollars, it gave the US another dollar boost – printing freely dollars in abundance, because the entire world needed US-dollars to buy hydrocarbon energy. Even today about 84% of all energy consumed worldwide consists of hydrocarbons (2019 Forbes).

As a counter-measure, the US promised the House of Saud to always protect Saudi Arabia, and proceeded almost immediately building numerous military bases in Saudi Arabia, from which they are now waging different wars in the Middle East.

Due to this phenomenon of freely generating new US-dollars, creating new debt, the US is by far the most indebted country in the world, with currently US$ 49.8 trillion debt, compared with a 2020 GDP of about US$ 21 trillion (Debt – GDP ratio 2.3 = 237% debt over GDP).

There is another important component of US debt, called by the General Accounting Office (GAO), “Unfunded Liabilities”, US$ 213 trillion (all figures 16 April 2021: US Debt Clock – https://www.usdebtclock.org/current-rates.html). These exceptionally high ratios have undoubtedly also to do with incurred covid-debt.

Unfunded liabilities are debt obligations that do not have sufficient funds or assets set aside to pay them. These liabilities generally refer to the U.S. government’s debt-service (unpaid interest on debt), or pension plans and their impact on savings and investment securities, as well as  health-insurance and social support coverage for soldiers returning from wars.

These astronomical debt figures and an unbacked fiat currency are even further reducing worldwide confidence in the US-dollar. It is clear, the US debt will never be paid-off. The Federal Reserve Chair, Allan Greenspan (1987 – 2006), once answered to a journalist’s question, when will the US pay back her debt: Never. We just print new money. So, spoken, so it was and so it is.
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Today and for the last about 10 years the US-dollar has no longer a hydrocarbon trade monopoly, nor are other international contracts primarily established in US-dollars as used to be the case a couple of decades ago. China, Russia, Iran, Venezuela and others have stopped using the US-dollar and are trading in local currencies and increasingly in Chinese yuan.

Why? – Countries’ treasurers around the world started realizing that the dollar is a highly volatile fiat currency, based on nothing, as shown by the above figures. Equally important for the loss of trust in the US-currency is that dollar-denominated international assets and the US banking system are frequently used by Washington to impose draconian, illegal economic sanction on countries that do not follow Washington’s dictate, including blocking countries’ foreign placed reserve assets. These economic and political realities are signaling the end of the US-dollar hegemony.

The trend of diminishing trust in the US-dollar may increase when China rolls out her digital Renminbi (RMB = people’s money) or international Yuan (the terms RMB and Yuan are used interchangeably) which may be used for international trade without touching the international US-dominated SWIFT transfer and US banking system. The Chinese currency being backed by a strong and solid Chinese economy, confidence in the Chinese currency is growing rapidly. Already today, the Chinese currency’s use as an international reserve asset is increasing quickly.

While the US Federal Reserve (FED) is also contemplating a new digital currency, it is not clear to what extent it can be detached from the current dollar and its debt burden. In any case, with US international trade waning, and Chinese trade rapidly increasing, it will be very difficult, if not impossible, for a declining empire to catch up with China.

For example, in the first quarter of 2021, Chinas foreign trade (exports and imports) soared by 29.2%, with Exports jumping 38.7% from the year before, while imports climbed 19.3 percent in yuan terms, according to the General Administration of Customs (GAC).

If anything, these developments – plus the fact that China has been highly successful in overcoming the covid-crisis – within less than 6 months – and putting her industrial apparatus back on line, are testimony for a solid CPC leadership, a sound Chinese economy and fiscal policy. China is the world’s only major economy reporting economic growth in 2020, amounting to 2.3% according to the Wall Street Journal. It is what China calls “Socialism with Chinese Characteristics” – a feature demonstrating a spirit of constant creation and evolution of the CPC.
These facts will further enhance international trust in the Chinese economy, as well as in the Chinese way of seeking a more equal, more egalitarian and more just multipolar world, where nations may keep their national sovereignty over their internal and external political inclinations, their culture, national resources, monetary policies and foreign relations – and live peacefully together.
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CPC and the Chinese Vision

The New Silk Road, or Belt and Road Initiative (BRI), is President Xi Jinping’s brilliant brainchild. It’s based on the same ancient principles as was the original Silk Road, adjusted to the 21st Century, building bridges between peoples, exchanging goods and services, research, education, knowledge, cultural wisdom, peacefully, harmoniously and ‘win-win’ style. On 7 September 2013, President Xi presented BRI at Kazakhstan’s Nazarbayev University. He spoke about “People-to-People Friendship and Creating a better Future”. He referred to the Ancient Silk Road of more than 2,100 years ago, that flourished during China’s Western Han Dynasty (206 BC to 24 AD).

Referring to this epoch of more than two millenniums back, President Xi pointed to the history of exchanges under the Ancient Silk Road, saying, “they had proven that countries with differences in race, belief and cultural background can absolutely share peace and development as long as they persist in unity and mutual trust, equality and mutual benefit, mutual tolerance and learning from each other, as well as cooperation and win-win outcomes.”

President Xi’s vision may be shaping the world of the 21st Century. The Belt and Road Initiative is designed and modeled loosely according to the Ancient Silk Road. President Xi launched this ground-breaking project soon after assuming the Presidency in 2013. The endeavor’s idea is to connect the world with transport routes, infrastructure, industrial joint ventures, teaching and research institutions, cultural exchange and much more. Since 2017, enshrined in China’s Constitution, BRI has become the flagship for China’s foreign policy.

BRI is literally building bridges and connecting people of different continents and nations. The purpose of the New Silk Road is “to construct a unified large market and make full use of both international and domestic markets, through cultural exchange and integration, to enhance mutual understanding and trust of member nations, ending up in an innovative pattern with capital inflows, talent pool, and technology database”.

BRI is a global development strategy adopted by the Chinese Government. Already today BRI has investments involving more than 150 countries and international organizations – and growing – in Asia, Africa, Europe, the Middle East and the Americas. Since the onset of BRI in 2013, BRI investments have exceeded US$ 5 trillion equivalent.

BRI is a long-term multi-trillion investment scheme for transport routes on land and sea, as well as construction of industrial and energy infrastructure and energy exploration – as well as trade among connected countries. Unlike WTO (World Trade Organization), BRI is encouraging nations to benefit from their comparative advantages, creating win-win situations. In essence, BRI is to develop mutual understanding and trust among member nations, allowing for free capital flows, a pool of experts and access to a BRI-based technology data base.  At present, BRI’s closing date is foreseen for 2049 which coincides with the People’s Republic of China’s 100th Anniversary. The size and likely success of the program indicates, however, already today that it will most probably be extended way beyond that date. It is worth noting, though, that only in 2019, six years after its inception, BRI has become a news item in the West. Remarkably, for six years, the west was in denial of BRI, in the hope it may go away. But away it didn’t go. To the contrary, many European Union members have already subscribed to BRI, including Greece, Italy, France, Portugal – and more will follow, as the temptation to participate in this projected socioeconomic boom is overwhelming.

The BRI, also called Belt and Road, or One Belt One Road, is not the only initiative that will enhance China’s economy and standing in the world.

After decades of western aggressions, denigrations and belligerence towards China, in a precautionary detachment from western dependence, China is focusing trade development and cooperation on her ASEAN partners. In November 2020, after 8 years of negotiations, China signed a free trade agreement with the ten ASEAN nations, plus Japan, South Korea, Australia and New Zealand, altogether 15 countries, including China.

The so-called Regional Comprehensive Economic Partnership, or RCEP, covers some 2.2 billion people, commanding some 30% of the world’s GDP. This is a never before reached agreement in size, value and tenor.

The RCEP’s trade deals will be carried out in local currencies and in yuan – no US dollars. The RCEP is, therefore, also an instrument for dedollarizing, primarily in the Asia-Pacific Region, and gradually moving across the globe. Moving away from the dollar-based economies may be an effective way to stem against the western “sanctions culture”. China is soon rolling-out her new digital Renminbi (RMB) or yuan, internationally, as legal tender for inter-country payments and transfers. The digital RMB is primed to become also an international reserve currency, thereby further reducing demand for the US-dollar.

Orientation towards China’s internal economic development – so-called horizontal instead of vertical growth – is a strategy to develop local Chinese internal production and infrastructure to build up and enhance Chinese internal capacities and markets and bringing about wellbeing and a better equilibrium between China’s vast hinterland and China’s prosperous eastern coastal areas.

The future belongs to China
After two thousand years of western “white supremacy”, relentless exploitation, colonization, discrimination and outright enslavement of other colored people, other cultures, throughout the world, the time has come to turn the wheel – and to veer the future of mankind into a more peaceful, more just and more egalitarian world.

During the next hundred years and under the leadership of the Chinese Communist Party – China will guide the East into the era of the Rising Sun – prosperity and good health for all.

This new epoch will strive for a multi-polar world, with win-win trade relations, and bringing about new environmental, social and technological challenges, but also a new awakening for a social consciousness and solidarity. A key instrument for achieving major goals for human wellbeing is the Belt and Road Initiative, providing a steady flow of new ideas, creations, cultural exchange and mutual learning. The future focus may be on:

  • Renewable sources of energy, based mainly on hydro- and solar power, developed with cutting edge technologies, i.e. capturing solar power with a process of photosynthesis, producing high efficiency energy yields;
  • Increasing green areas in urban centers to bring about a balance of natural CO2 absorption and Oxygen production, aiming at zero pollution;
  • Protecting the world’s rain forests and water resources;
  • Keeping natural resources and public services – health, education, food supply, water and sanitation services, electricity, and public transport – in the public domain;
  • Promoting biological and multi-crop agriculture;
  • Developing Artificial Intelligence (AI) to help increase production and transport efficiency and to serve humanity; and
  • Adopting public banking as the primary means of socioeconomic development funding, Leading humanity to building a community with a shared future for mankind.

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Peter Koenig is a geopolitical analyst and a former Senior Economist at the World Bank and the World Health Organization (WHO), where he has worked for over 30 years on water and environment around the world. He lectures at universities in the US, Europe and South America. He writes regularly for online journals. He is also the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed; and  co-author of Cynthia McKinney’s book “When China Sneezes: From the Coronavirus Lockdown to the Global Politico-Economic Crisis” (Clarity Press – November 1, 2020).

Peter Koenig is a Research Associate of the Centre for Research on Globalization and a Non-resident senior fellow of Chongyang Institute for Financial Studies at Renmin University of China

皮特·凯尼格(Peter Koenig),世界银行前高级经济学家、中国人民大学重阳金融研究院外籍高级研究员(瑞士)

الانتخاب التاريخيّ المنعطف الشهداء يعودون والعودّ أحمد…

 محمد صادق الحسيني

إنه الرجل الذي سيحمل راية الجمهورية الثوريّة الثانية بكل ثقة وثبات.

لم يسمع بالفقر في المواعظ المنبريّة، بل عاشه ولمسه منذ الصغر.

عاش يتيماً بعد أن فقد أباه وهو في سن الخامسة. لم تكن عائلته تتمكّن من شراء كيلو رز دفعة واحدة ولا كيلو كامل من اللحم، بل كانوا يشترون من ذلك بمقدار ما يصلهم من رزق.

أمه أرسلته مبكراً الى البازار ليعمل فيه عاملاً بسيطاً يبيع سجادات الصلاة ليساعدها وأهله في تحصيل معاشهم اليومي.

أمه لا تزال تعيش في بيت تحت المتوسط في إحدى نواحي مشهد الفقيرة وترفض الانتقال لطهران العاصمة.

هذا هو الرئيس الإيراني الجديد، المنبعث من بين جمهور الناس، وليس من طبقة الأشراف التي تستمتع بالسلطة منذ النطفة…

لذلك عندما يقول رئيسي إنه سيشكل حكومة ثورية مناهضة للفساد كما ورد في أول تصريحاته بعد فوزه بالرئاسة، فهو صادق وجادّ وسيفعل ذلك بالتأكيد.

رئيسي ليس «محافظاً» كما يوصف في وسائل الاعلام، بل هو أصلاً لا ينتمي لأيّ من الأجنحة السياسية في البلاد.

انه من جنس الشهيد رجائي والشهيد بهشتي والشهيد قاسم سليماني…

إنه من جنس الفقراء، من الناس الذين يمشون في الأسواق ويأكلون الطعام…

دعوني أحاول أن ألخص لكم ماذا يعني تسلم السيد إبراهيم «رئيس الساداتي» الحكومة في إيران، بلغة متفاوتة، كما أراها ـ من وجهة نظري ـ المنتمية إلى عالم ما فوق الميول والاتجاهات السياسية الإيرانية:

فأن يتسلّم السيد رئيسي السلطة التنفيذية في البلاد يعني ذلك ما يلي بلغة الناس:

أولاً ـ إنه سيحبط مشروع إسقاط النظام بالجمهور. وهو الأمر الذي فعله في يوم الانتخاب والذي سيسقطه يومياً في أدائه العملي، كما سيطيح بمقولة الفصل بين الدولة والدين او بين السياسة والدين أو بين رجل الحكم ورجل الدين التي لطالما حاولوا فرضها على إيران، مرة والى الأبد…

لقد حاول الأجانب جهدهم منذ أول الثورة ان يقولوا للشعب الإيراني أنّ رجال الدين يجب ان يذهبوا الى المساجد ويتركوا الحكم للأفندية، ومن ثم تصاعدت المؤامرة وتشعّبت لتقول للأمة الإيرانية بأنّ هؤلاء (أيّ رجال الدين) لا يفقهون بعلوم العصر، ولا بالتعامل مع الدنيا، وأخيراً باتهامهم بأنهم يريدون مصادرة كلّ أشكال الديمقراطية الحديثة وعلوم الحداثة لصالح «الحكومة الإسلامية» المعادية للحريات وحقوق الإنسان والمرأة، فإذا برئيسي وعلى نهج رئيسه وقائده وقائد الثورة والأمة الإسلامية يفاجئهم بحرص مضاعف لا نظير له على كلّ هذه الأمور واعتبارها جزءاً أساسياً من مشروعية النظام، لا مفهوم للجمهورية الإسلامية ولا معنى لها ولا تستقيم من دون الجمهور وصناديق الاقتراع التي حرصوا على احترامها لمدة أربعة عقود متتالية حتى وسط حروب مدمرة للمدن والبلدات، وأن يظهر لهم رئيسي وزوجته جميلة علم الهدى متعلمين ومتبحّربن بالعلوم الحديثة أكثر من سائر المرشحين، بل وأعمق من مرشحين في ديمقراطيات عريقة بينها لندن وباريس وواشنطن.

ثانياً ـ إنه سيحبط مشروع فرض النظام السياسي والاقتصادي النيوليبرالي على إيران. أيّ انه سيعمل ليل نهار على مكافحة الفساد والرشوة ونظام البنوك الروتشيلدية، ويقارع مقولة «أنّ الغرب وحده بيده مفتاح الازدهار والتنمية السياسية والاقتصادية» للبلدان النامية والصاعدة ويطيح بها في الداخل الإيراني بنظرية ومشروع الاقتصاد المقاوم الذي يعتمد الدورة الاقتصادية الإنتاجية الداخلية أولاً، ومن ثم التوجه شرقاً والخروج على هيمنة الدولار الأميركي من خلال إقامة تعاون استراتيجي عميق مع الصين وروسيا وكلّ بلدان العالم المناهضة للاحادية الأميركية.

ثالثاً ـ سيحبط بحزم مشروع فرض «أوسلو» نوويّ على إيران الذي كانوا يعدّونه ويعملون عليه بقوة منذ أيام أوباما ولا يزالون.

وما فرضوه على إيران من شروط حتى الآن لم يكن سوى مقدّمة وتمهيد (من وجهة النظر الغربية) لفرض شروط إضافية تتعلق بفرض محدوديات على المنظومة الصاروخية الإيرانية، وإخراج إيران من المعادلة الإقليميّة من خلال فرض شروط ضرورة تخليها عن حركات التحرّر العربية والاسلامية لا سيما في فلسطين ولبنان وسورية واليمن والعراق.

سيكون رئيسي حازماً كما يريد الإمام الخامنئي، في تعامله مع ما يُسمّى بـ المجتمع الدولي الانتهازي والمنافق، ولن يسمح له لا باستنزاف الديبلوماسية الإيرانية في مفاوضات لا طائل من ورائها، ولا بعزله وحشره في زاوية إما القبول بشروط «أوسلويّة» أو الصدام، بل انتهاج نظرية حليفه الثوري سعيد جليلي الذي ربما تسلّم الخارجية الإيرانية والتي تقضي بإنهاك المفاوض الغربي وجعله هو مَن يلهث وراء المفاوض الإيراني كما فعل به جليلي يوم كان رئيساً لمجلس الأمن القومي في حكومة نجاد.

تذكروا انّ الإمام السيد علي الخامنئي لطالما كرّر بعض الثوابت في هذا السياق ستكون بمثابة قناديل مضيئة لرئيسي في هذا المضمار وهي:

1 ـ إذا أراد الغرب تمزيق الاتفاق فنحن سنحرقه.

2 ـ إذا تطلّبت حاجاتنا ومصالحنا التخصيب بنسبة 90 بالمئة فسنخصّب ولن نفاوض أحداً.

3 ـ نستطيع ان نطوّر صواريخنا إلى مديات 5 آلاف لكننا فعلاً لا نقوم بذلك الآن، وعندما نريد سنفعل ولن نفاوض أحداً.

4 ـ إحباط مفعول العقوبات أهم من إنجاز رفعها.

وبالتالي في زمن رئيسي أظننا لم نعد بحاجة لأمنية عودة واشنطن الى الاتفاق ولا لرفع العقوبات عنا…

تذكروا أنّ السيد رئيسي في مناظراته الانتخابية أعلن بوضوح:

أنه مع المفاوضات حول النووي ولكن بشروط القائد التسعة (الخطوط الحمر المشهورة)، وانّ هذا لن تتمكّن منه إلا حكومة قوية وحازمة.

لقد تخطّت إيران المنعطف التاريخي الداخلي على طريق دخول الجمهورية الثورية الثانية، بقي تحدّي المنعطف التاريخي الدولي وهو الذي ستتخطاه مع مجموع قوى محور المقاومة، باذن الله.

وعليه نستطيع أن نلخص ربما بلغة أكثر قرباً للغة الناس أقول:

السيد ابراهيم رئيسي «الحزب اللهي»، سيتخذ سياسة ثورية حازمة متحركة واضحة شفافة تريد التعامل مع الدنيا بعقل منفتح نعم، وغير منعزلة عن العالم نعم، ولكن ايضاً ليست هجينة ومتردّدة و»رجل بالبور ورجل بالفلاحة» على طريقة:

«هذا قبر سيدنا حجر بن عدي رضوان الله عليه قتله سيدنا معاوية رضوان الله عليه»!

لا أبداً، هذه السياسة ستنتهي وإلى الأبد، وستتمّ تسمية الأشياء بأسمائها، ما يثلج صدر الثوريين الداخليين ومن محور المقاومة.

بعدنا طيّبين قولوا الله…

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Nixon ‘opened’ China, but only superpower China could ‘open’ Iran (1/2)

Friday, 02 April 2021 2:52 PM  [ Last Update: Friday, 02 April 2021 2:52 PM ]

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
Nixon ‘opened’ China, but only superpower, socialist China could ‘open’ Iran (1/2)
Ramin Mazaheri is the chief correspondent in Paris for Press TV and has lived in France since 2009. He has been a daily newspaper reporter in the US, and has reported from Iran, Cuba, Egypt, Tunisia, South Korea and elsewhere. He is the author of ‘Socialism’s Ignored Success: Iranian Islamic Socialism’ as well as ‘I’ll Ruin Everything You Are: Ending Western Propaganda on Red China’, which is also available in simplified and traditional Chinese.

By Ramin Mazaheri  cross-posted with The Saker

One thing about Western business media is that whenever any imperialism-opposing nation has a major success their subsequent understatement speaks volumes, as evidenced by an article in the oil trade press, The Iran-China Axis Is A Fast Growing Force In Oil Markets, at the website OilPrice. For trade journalists they are quite behind the trends of their industry: Iran and China are now a permanent force in the oil world, but far beyond that realm as well.

In reading OilPrice over the years I am not surprised: they have repeatedly reacted to the bilateral 25-year strategic agreement — which has just been fully signed — as though it was something which had not been in discussion for years; with total consternation as to why these two countries could want to ally with other; with an Iranophobia so enormous that their bias is rarely even barely concealed.

The outlook of their journalists is that of businessmen, and thus it’s the incredibly narrow and self-serving point of view of a specialist. It is unsurprising that — when compelled to formulate a political or moral viewpoint — OilPrice has a totally Cold War view of the world, which is typical in the West, and which explains why their headline calls it an “Iran-China Axis” instead of an “Alliance.” The use of such a term is typical Western media propaganda designed to conflate the right-wing Germans of the World War II era with modern Iran and China, even though the latter are totally different from the former in political ideology, economic structure and social morality.

It’s a nonsensical and historically-nihilist conflation, but when examining OilPrice’s take on the Iran-China deal, we are reminded that Western business media is quite content to sensationalize, to warmonger and to create sustained market panic in order to increase the grip of militarism in the Western psyche and to continue the inequitable Western domination of the oil trade. OilPrice, specifically, also wants the price of oil to always increase.

Thus the article is full of many stupidities worthy of the idiocies of George W. Bush, the paranoia of J. Edgar Hoover, the anti-socialist hysteria of the Dulles brothers and the hypocritical phoniness of Barack Obama. Things of the lowest order of political analysis and knowledge abound, such as: “The first is they are both absolute dictatorships,” “the rogue Islamic country,” China’s Belt and Road Initiative is “a shield for China’s true intentions” and a “Trojan horse” for “military expansion,” etc.

(Of course, few international projects as transparently pragmatic and non-ideological as China’s BRI — if you accept China’s offer of mutually-beneficial cooperation there is no additional demand to also legislate acceptance of their “universal” values.)

But we benefit from knowing the oil trade’s viewpoint because while there are so very many financial shenanigans in the Western economy, there is still a “real” economy, and oil is its lynchpin.

Oil is also the lynchpin of the US dollar’s global preeminence and overvaluation. Indeed, this article’s concluding paragraph is a reminder of those very fundamental — yet often forgotten — facts: “Finally, the introduction of a war premium to oil prices will cause a commensurate re-evaluation of oil equities in non-belligerent countries. The modern economy runs on petroleum products and derivatives, and will for many decades.”

 The Great Financial Crisis and subsequent Great Recession proved that the Western economy is indeed incredibly vulnerable to many types of phonily-inflated equities, economic fundamentals-untethered financial products, sham derivatives concocted by high finance and more besides. However, the author is correct when he writes that paragraph because the Petrodollar — the forced sale of oil in dollars — is the most important and longest-running financial sham. It replaced the gold standard, after all.

But China and Iran’s unprecedented petrodollar end run (and via a new joint China-Iranian bank) is just one part of why their bilateral agreement is such a huge deal. Not only does the pact upset the delicate balance of Western financial chicanery, but it permanently upsets longstanding Western geopolitical advantages, global geopolitical reality and especially the idea that the United States is the sole portal through which modern history can enter.

US has fallen so very far since 1971— now they are even behind China, and Iran just proved it

The bilateral deal’s importance can’t be understated for either side, and I have written about it for years. It’s as if — in the year 1545 — the Bolivian silver miners at Potosi struck a fair deal with the Spanish crown: Instead of getting enslaved, sham conversions and colonized Bolivia would still be an Incan cultural force today, with almost 500 additional years of illustrious history, learning and advancement. Thankfully, China is socialist — thus it is anti-imperialist and mindfully chooses cooperation over enslavement (either literally, through local puppets or through debt). Thankfully, Iran is not the shell-shocked Inca — they know who their enemies are, and also who works with enough goodwill to be welcomed.

For a more modern take, the deal is the equivalent of Richard Nixon’s “Opening of China” in 1971, except in a total role reversal: What is historically vital is no longer the position of the US, but the attitude of the superpower China.

Iran is often described as the last great “untapped market” — against all odds, expectations and supposed historical inevitabilities they chose the East as partners, not the West. That’s gigantic.

The deal will mark the “Opening of Iran” because it is not a mere “lifeline” to Iran – as it is often falsely described – but a guarantee of real prosperity, as it will be administered by Iran’s successful, revolutionary political structure. It is absolutely not more than just the achievement of stability, which Iran achieved entirely on its own starting in 1979, when the slogan was “Neither East nor West but the Islamic Republic.”

To quote from the OilPrice article:

“The New York Times is quoted as saying-

 ‘The partnership, detailed in an 18-page proposed agreement obtained by The New York Times, would vastly expand Chinese presence in banking, telecommunications, ports, railways, and dozens of other projects. In exchange, China would receive a regular — and, according to an Iranian official and an oil trader, heavily discounted — supply of Iranian oil over the next 25 years.’

 And there you have it.”

And there you have it, indeed.

Iranian Foreign Minister Mohammad Javad Zarif, right, and his Chinese counterpart Wang Yi are seen in this photo while signing the “Comprehensive Strategic Partnership” deal between the two countries in Tehran on March 27, 2021. (Via IRNA)

Oil-based cars and machines may be significantly phased out by greener technologies in 25 years or so, but Iran has made a superb bargain to sell as much oil as they can while they still can. The “heavy discount” is only about 4%, but I can see how – as a Western “oilfield veteran” – this OilPrice author expects everyone to scratch and claw for every penny he or she can grab. For Iranian bureaucrats, however, a longer-term economic view is required, as is less greed.

War —  and sanctions (what used to be called “blockades” in English) are indeed war — certainly does force civilians and civil servants into more moral and more intelligent behaviors: self-sacrifice, unity, collective action, planning, determination, study, reflection, etc. The West’s sanctions have been perhaps praised in Iran nearly as often as they have been derided because Iran has had no choice but to build up its domestic capabilities — economic, intellectual, moral and natural — which naturally demanded a long-term commitment of domestic effort, political policies and acceptance of the national consensus.

But if the economic impact of illegal Western sanctions encouraged Iran’s leaders to make a 25-year oil bargain at only a 4% loss, then I say: take the money and run. If Washington, London, Paris and Tel Aviv fully had their way Donald Trump would have succeeded in forcing Iran to get 0% value from China —instead Tehran settled for 96% value over 25 years. If Iran doesn’t get yuan for every barrel that’s fine —China has technologies and skills which Iran can learn from, assimilate into future domestic projects and then likely export.

But this is what nobody seems to get about the indubitably socialist-inspired modern Iranian economy: Iran doesn’t do Western capitalism, i.e. it doesn’t sell out. Chinese companies will work alongside Iranian industries, all of which are state-owned and state-controlled to a degree which is unthinkable in the neoliberal West. China is not “buying” Iranian corporations – this is not $400 billion in “mergers” and “take-overs” — they are buying Iranian products or bartering for them via techniques Iran can learn from and projects which Iran needs to see built.

And there you have it: Iran secured money and intellectual investment for 25-years, and there is no danger of this investment being hijacked by foreign capital from any nation, which is how foreign investment works in Western neoliberalism. If the Iranian government can redistribute money downwards so effectively over four decades of hot and cold war, then surely they can do better in times of economic prosperity —this is the argument many Iranians have made over and over and over, and the West is fearfully aware of this rationale.

$16 billion per year in cash/goods/skills, and throw in a little thing called diplomatic unity, over 25 years – remember to compare that with what the West just offered: In 2019 France proposed a one-time $15 billion credit line. It was shot down by Washington, and of course Europe complied because neither want Iran to be prosperous or stable.

An incredibly ‘woke’ cooperation between 2 different ethnicities, cultures, regions & religions

Iran has proven to the world that America no longer has the ability to control the main global gate, and that is indeed a real achievement, but this achievement was equally fueled by Western incompetence, cruelty, intolerance and greed. Iran and China have risen, thanks to their modern and revolutionary cultures and structures — of course — but just look at how far the West has fallen since 1971?

As for China it’s vital to remember that it was an oil embargo which pushed fascist Japan into war with the United States, but China now has a guaranteed source of oil stability. China, which imports 75% of its daily needs, is almost as oil-poor as Japan but now no matter what Western adventurism produces in the Straits of Hormuz Beijing can count on the certainty of enough oil supplies to get by.

Iranian oil is already serving as Beijing’s backup against Western imperialist immolation, as the OilPrice article relates in detail: “China is stockpiling oil at a pace unrivaled in the developed world.” Doing so is, “In a marked dichotomy with the U.S., China is building oil inventories by design.” China, in contrast to Western liberal democracy, actually has competent civil service motivated — not by “universal” values, perhaps — by actual values instead of personal greed.

And there you have it: good governance based on modern political ideas which value the individual citizen over the aristocrat’s dollars. That’s the reason why Iran and China rankle the West so much.

So how could the West possibly like the 25-year strategic pact – it’s a “permanent” sea change. It’s a “permanent” step up in class for both Iran and China, and via an incredibly unprecedented cooperation. “Our relations with Iran will not be affected by the current situation, but will be permanent and strategic,” said China’s Foreign Minister Wang Yi at the signing.

But it’s not based on mere dollars — it’s a “pact” in a very broad cultural and political sense, and that’s both a shocking rejection of the Western model and the exciting proposal of something new for global humanity.

China and the USSR never cooperated as closely as this. Impressive Cuba, all alone in the New World, just can’t bring the heft which Iran brings to the table. North Korea is so beset upon and so war-scarred that they reject diplomatic ties like what Iran just accepted. You’d have to go back to the Eastern Bloc’s cooperation with Moscow to find something similar.

But what makes this cooperation so incredibly and excitingly “woke” is that it’s between two totally different cultures, religions and ethnicities. It’s truly a meeting of minds, as equals. We could truly go on and on about this aspect, and we should. We should also repeatedly point out that Western liberal democracy demands homogeneity via total submission to their hive mind, whereas socialist democracy protects, accepts and elevates differences and minorities in a consensus-based democracy.

It’s a meeting of two longtime empires whose modern political structures now explicitly forbid empire-building. But that’s a point which stresses the past and looks backward.

This is a meeting of two countries bravely and excitingly looking forward to this new century, whether it’s the 15th (less than two weeks ago the Iranian calendar reached the year 1400), or the 48th (it’s year 4719 in China).

It’s an incredible cooperation, and one so very long in the making.

Part 2 of this article examines how Western media responds to Sino-Iranian unity with hysterics at the prospects of reduced income from the Western imperialism machine. The article is titled: The Iran-China pact is a huge blow for Western imperialists who want war in Asia

(The views expressed in this article do not necessarily reflect those of Press TV.)


Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.ir

www.presstv.co.uk

www.presstv.tv

Days of the Future Passed: A Syncretic Look at the Problems of Empire – Book Excerpt

December 10, 2020

‘Days of the Future Passed’ by Jim Miles. (Photo: Book Cover)

By Jim Miles

(Days of the Future Passed – Point of No Return, Jim Miles. Kindle Edition. 2020)

By Introduction

The United States has throughout its existence demonstrated all the features of ‘empire’, from the original settlers using the Papal Doctrine of Discovery (1542)  through to the current propaganda of the global war and terror, now changing to defense doctrines against Russia and China.  My new work, “Days of the Future Passed – Point of No Return” presents the broad outlines of what this represents to the international scene from inception through to today’s ongoing empirical adventures.

The two main constants have been economic influence and military influence.  The two are highly integrated and always have been even from before Independence, through the conquest of much of North America, where sometimes the soldiers led the way, and sometimes the settlers led the way, but neither being far apart from the other.  Today the economy of the US empire is highly dependent on the military mindset of the US supporting its economic adventures overseas, the bottom line being support for the global reserve currency, the fiat ‘petrodollar.’

Three other ideas enter into this picture.  An additional military factor is the threat of nuclear war, an event only a hair trigger action away from ultimately ending all of our problems.  The current increase in propaganda rhetoric against Russia and China makes a nuclear scenario unfortunately all too realistic.  Added to this, climate change is affecting our chances at long term safety and overall survival, much of it caused by our consumer oriented economy based on fossil fuels – control of the latter being of paramount importance for the US dollar and thus the US military.  Add to all that the current Covid-19 pandemic, and the empire appears to be slowly losing its grip on its desired hegemony, but not without threatening much of the rest of the world.

Days of the Future Passed – Point of No Return” argues that we have passed some tipping points for which there will be no return to normal, within economics, the environment, and the military industrial complex.  Ideas for solutions are easy, their implementation is not as the inertia of empire is not easily restrained or controlled.

Excerpt

2020 – Tipping Points

It may not be evident yet, but in another ten or twenty years, the year 2020 may also be looked on as a pivotal year in global interactions – geopolitical, environmental, and financial – all of which are highly interrelated.

Imagine the lowly teeter-totter, a playground piece not as common as it used to be.  The teeter-totter is aptly named as many a child, and many an adult has stood above the bar that makes the plank teeter and totter, trying to maintain balance but also testing how far they can go before touching down on one side or the other.   Now imagine that teeter-totter is poised on the edge of a cliff, where one side can touch down and avoid the unknown drop, and the other side obviously is the drop from which there is no recovery to equilibrium.

It is a simple metaphor, but it illustrates for several sectors of our lives, we have allowed ourselves to drop into the unknown.

The unknown is simply the future.  This future is to be determined by a declining global economy becoming saturated with massive US money printing to prop up the banksters and corporate CEOs.  It will be determined by the disregard domestically and in foreign affairs for the supposed ‘rule of law’ but more importantly international law and true justice for all people. The changes to our environment are at the moment relatively slow but are becoming irreversible under current trends.   Finally, the massive military investments on a global scale for both nuclear and conventional weaponry threatens everyone with a very delicate balance of power.

….Under the Trump presidency, combined with the economic impact of the virus and actions to contain it (for better or worse, not a point of discussion here), the US has assuredly reached a point where its huge national debt can never be repaid.   Combine this with the main source of income and wealth in the US no longer being production, but financialized services simply creating money at the stroke of a keyboard and the economy is surviving precariously on the whim of people servicing the US$.

Put simply, the US survives on the Federal Reserve Bank (a consortium of private banks) pumping money into the economy.   With much of the economy based on debt, and interest rates kept necessarily low in order to service the debt, the strength of the US$  as a global reserve currency – the petrodollar – is jeopardized.

….This year there have been several accounts of how the climate/environment is showing signs of tipping into conditions where there can be no reversals to ‘normal’ without serious changes to our atmospheric inputs:  Greenland’s ice sheet melts more than it accumulates in snowfall each year by a significant amount; the Amazon has reached the status where it can no longer regenerate itself after a series of droughts; the forest fires in Siberia, Australia, and California demonstrate the overall pattern of global warming; each succeeding month has set record new global highs.

….The main feature here is that the combination of China and Russia have created a multi-polar world whether the US is willing to admit it or not.  Russian resources, defensive military achievements, and a renewed domestic scene under the direction of the much-vilified Vladimir Putin have combined with China’s increasing defensive measures in the Western Pacific, its Belt and Road initiative throughout Asia and extending elsewhere, and the economic power that China has achieved as the largest economy in the world (on purchasing power and domestic market basis).

Above all, both China and Russia have stated they no longer support the hegemony of the US$ as the global reserve currency.  They cannot replace it themselves, but they can operate outside of it, and they can support alternate global systems such as a ‘basket’ of reserve currencies, and their own digital exchange systems.   That is what truly scares the US as it sees its own debt problems trap it into hyperinflation while other countries start to shift away from supporting the US$.   That could mean war, hybrid for sure, but it could also go kinetic.

– Jim Miles is a Canadian educator and analyst who examines the world through a syncretic lens.  His analysis of international and domestic geopolitical ideas and actions incorporates a lifetime of interest in current events, a desire to preserve and conserve our natural environment and stop the commodification of the environment.  He has been active as a critical writer in opposition to the US empire and its militarization of most aspects of domestic and international affairs. Miles’ work has been published globally and has appeared on a variety of websites including Palestine Chronicle, Axis of Logic, Countercurrents, and Global Research.  He has appeared on RT News and The Tyee concerning events in Palestine/Israel.  This is his first book and effectively summarizes many years, indeed a lifetime, of interest in international geopolitical and environmental affairs. He contributed this article to the Palestine Chronicle. 

America Escalates its “Democratic” Oil War in the Near East

January 05, 2020

by Michael Hudson exclusively for the Saker Blog

The mainstream media are carefully sidestepping the method behind America’s seeming madness in assassinating Islamic Revolutionary Guard general Qassim Suleimani to start the New Year. The logic behind the assassination this was a long-standing application of U.S. global policy, not just a personality quirk of Donald Trump’s impulsive action. His assassination of Iranian military leader Suleimani was indeed a unilateral act of war in violation of international law, but it was a logical step in a long-standing U.S. strategy. It was explicitly authorized by the Senate in the funding bill for the Pentagon that it passed last year.

The assassination was intended to escalate America’s presence in Iraq to keep control the region’s oil reserves, and to back Saudi Arabia’s Wahabi troops (Isis, Al Quaeda in Iraq, Al Nusra and other divisions of what are actually America’s foreign legion) to support U.S. control o Near Eastern oil as a buttress o the U.S. dollar. That remains the key to understanding this policy, and why it is in the process of escalating, not dying down.

I sat in on discussions of this policy as it was formulated nearly fifty years ago when I worked at the Hudson Institute and attended meetings at the White House, met with generals at various armed forces think tanks and with diplomats at the United Nations. My role was as a balance-of-payments economist having specialized for a decade at Chase Manhattan, Arthur Andersen and oil companies in the oil industry and military spending. These were two of the three main dynamic of American foreign policy and diplomacy. (The third concern was how to wage war in a democracy where voters rejected the draft in the wake of the Vietnam War.)

The media and public discussion have diverted attention from this strategy by floundering speculation that President Trump did it, except to counter the (non-)threat of impeachment with a wag-the-dog attack, or to back Israeli lebensraum drives, or simply to surrender the White House to neocon hate-Iran syndrome. The actual context for the neocon’s action was the balance of payments, and the role of oil and energy as a long-term lever of American diplomacy.

The balance of payments dimension

The major deficit in the U.S. balance of payments has long been military spending abroad. The entire payments deficit, beginning with the Korean War in 1950-51 and extending through the Vietnam War of the 1960s, was responsible for forcing the dollar off gold in 1971. The problem facing America’s military strategists was how to continue supporting the 800 U.S. military bases around the world and allied troop support without losing America’s financial leverage.

The solution turned out to be to replace gold with U.S. Treasury securities (IOUs) as the basis of foreign central bank reserves. After 1971, foreign central banks had little option for what to do with their continuing dollar inflows except to recycle them to the U.S. economy by buying U.S. Treasury securities. The effect of U.S. foreign military spending thus did not undercut the dollar’s exchange rate, and did not even force the Treasury and Federal Reserve to raise interest rates to attract foreign exchange to offset the dollar outflows on military account. In fact, U.S. foreign military spending helped finance the domestic U.S. federal budget deficit.

Saudi Arabia and other Near Eastern OPEC countries quickly became a buttress of the dollar. After these countries quadrupled the price of oil (in retaliation for the United States quadrupling the price of its grain exports, a mainstay of the U.S. trade balance), U.S. banks were swamped with an inflow of much foreign deposits – which were lent out to Third World countries in an explosion of bad loans that blew up in 1972 with Mexico’s insolvency, and destroyed Third World government credit for a decade, forcing it into dependence on the United States via the IMF and World Bank).

To top matters, of course, what Saudi Arabia does not save in dollarized assets with its oil-export earnings is spent on buying hundreds of billion of dollars of U.S. arms exports. This locks them into dependence on U.S. supply o replacement parts and repairs, and enables the United States to turn off Saudi military hardware at any point of time, in the event that the Saudis may try to act independently of U.S. foreign policy.

So maintaining the dollar as the world’s reserve currency became a mainstay of U.S. military spending. Foreign countries to not have to pay the Pentagon directly for this spending. They simply finance the U.S. Treasury and U.S. banking system.

Fear of this development was a major reason why the United States moved against Libya, whose foreign reserves were held in gold, not dollars, an which was urging other African countries to follow suit in order to free themselves from “Dollar Diplomacy.” Hillary and Obama invaded, grabbed their gold supplies (we still have no idea who ended up with these billions of dollars worth of gold) and destroyed Libya’s government, its public education system, its public infrastructure and other non-neoliberal policies.

The great threat to this is dedollarization as China, Russia and other countries seek to avoid recycling dollars. Without the dollar’s function as the vehicle for world saving – in effect, without the Pentagon’s role in creating the Treasury debt that is the vehicle for world central bank reserves – the U.S. would find itself constrained militarily and hence diplomatically constrained, as it was under the gold exchange standard.

That is the same strategy that the U.S. has followed in Syria and Iraq. Iran was threatening this dollarization strategy and its buttress in U.S. oil diplomacy.

The oil industry as buttress of the U.S. balance of payments and foreign diplomacy

The trade balance is buttressed by oil and farm surpluses. Oil is the key, because it is imported by U.S. companies at almost no balance-of-payments cost (the payments end up in the oil industry’s head offices here as profits and payments to management), while profits on U.S. oil company sales to other countries are remitted to the United States (via offshore tax-avoidance centers, mainly Liberia and Panama for many years). And as noted above, OPEC countries have been told to keep their official reserves in the form of U.S. securities (stocks and bonds as well as Treasury IOUs, but not direct purchase of U.S. companies being deemed economically important). Financially, OPEC countries are client slates of the Dollar Area.

America’s attempt to maintain this buttress explains U.S. opposition to any foreign government steps to reverse global warming and the extreme weather caused by the world’s U.S.-sponsored dependence on oil. Any such moves by Europe and other countries would reduce dependence on U.S. oil sales, and hence on U.S. ability to control the global oil spigot as a means of control and coercion, are viewed as hostile acts.

Oil also explains U.S. opposition to Russian oil exports via Nordstream. U.S. strategists want to treat energy as a U.S. national monopoly. Other countries can benefit in the way that Saudi Arabia has done – by sending their surpluses to the U.S. economy – but not to support their own economic growth and diplomacy. Control of oil thus implies support for continued global warming as an inherent part of U.S. strategy.

How a “democratic” nation can wage international war and terrorism

The Vietnam War showed that modern democracies cannot field armies for any major military conflict, because this would require a draft of its citizens. That would lead any government attempting such a draft to be voted out of power. And without troops, it is not possible to invade a country to take it over.

The corollary of this perception is that democracies have only two choices when it comes to military strategy: They can only wage airpower, bombing opponents; or they can create a foreign legion, that is, hire mercenaries or back foreign governments that provide this military service.

Here once again Saudi Arabia plays a critical role, through its control of Wahabi Sunnis turned into terrorist jihadis willing to sabotage, bomb, assassinate, blow up and otherwise fight any target designated as an enemy of “Islam,” the euphemism for Saudi Arabia acting as U.S. client state. (Religion really is not the key; I know of no ISIS or similar Wahabi attack on Israeli targets.) The United States needs the Saudis to supply or finance Wahabi crazies. So in addition to playing a key role in the U.S. balance of payments by recycling its oil-export earnings are into U.S. stocks, bonds and other investments, Saudi Arabia provides manpower by supporting the Wahabi members of America’s foreign legion, ISIS and Al-Nusra/Al-Qaeda. Terrorism has become the “democratic” mode of today U.S. military policy.

What makes America’s oil war in the Near East “democratic” is that this is the only kind of war a democracy can fight – an air war, followed by a vicious terrorist army that makes up for the fact that no democracy can field its own army in today’s world. The corollary is that, terrorism has become the “democratic” mode of warfare.

From the U.S. vantage point, what is a “democracy”? In today’s Orwellian vocabulary, it means any country supporting U.S. foreign policy. Bolivia and Honduras have become “democracies” since their coups, along with Brazil. Chile under Pinochet was a Chicago-style free market democracy. So was Iran under the Shah, and Russia under Yeltsin – but not since it elected Vladimir Putin president, any more than is China under President Xi.

The antonym to “democracy” is “terrorist.” That simply means a nation willing to fight to become independent from U.S. neoliberal democracy. It does not include America’s proxy armies.

Iran’s role as U.S. nemesis

What stands in the way of U.S. dollarization, oil and military strategy? Obviously, Russia and China have been targeted as long-term strategic enemies for seeking their own independent economic policies and diplomacy. But next to them, Iran has been in America’s gun sights for nearly seventy years.

America’s hatred of Iran is starts with its attempt to control its own oil production, exports and earnings. It goes back to 1953, when Mossadegh was overthrown because he wanted domestic sovereignty over Anglo-Persian oil. The CIA-MI6 coup replaced him with the pliant Shah, who imposed a police state to prevent Iranian independence from U.S. policy. The only physical places free from the police were the mosques. That made the Islamic Republic the path of least resistance to overthrowing the Shah and re-asserting Iranian sovereignty.

The United States came to terms with OPEC oil independence by 1974, but the antagonism toward Iran extends to demographic and religious considerations. Iranian support its Shi’ite population an those of Iraq and other countries – emphasizing support for the poor and for quasi-socialist policies instead of neoliberalism – has made it the main religious rival to Saudi Arabia’s Sunni sectarianism and its role as America’s Wahabi foreign legion.

America opposed General Suleimani above all because he was fighting against ISIS and other U.S.-backed terrorists in their attempt to break up Syria and replace Assad’s regime with a set of U.S.-compliant local leaders – the old British “divide and conquer” ploy. On occasion, Suleimani had cooperated with U.S. troops in fighting ISIS groups that got “out of line” meaning the U.S. party line. But every indication is that he was in Iraq to work with that government seeking to regain control of the oil fields that President Trump has bragged so loudly about grabbing.

Already in early 2018, President Trump asked Iraq to reimburse America for the cost of “saving its democracy” by bombing the remainder of Saddam’s economy. The reimbursement was to take the form of Iraqi Oil. More recently, in 2019, President Trump asked, why not simply grab Iraqi oil. The giant oil field has become the prize of the Bush-Cheney post 9-11 Oil War. “‘It was a very run-of-the-mill, low-key, meeting in general,” a source who was in the room told Axios.’ And then right at the end, Trump says something to the effect of, he gets a little smirk on his face and he says, ‘So what are we going to do about the oil?’”[1]

Trump’s idea that America should “get something” out of its military expenditure in destroying the Iraqi and Syrian economies simply reflects U.S. policy.

In late October, 2019, The New York Times reported that: “In recent days, Mr. Trump has settled on Syria’s oil reserves as a new rationale for appearing to reverse course and deploy hundreds of additional troops to the war-ravaged country. He has declared that the United States has “secured” oil fields in the country’s chaotic northeast and suggested that the seizure of the country’s main natural resource justifies America further extending its military presence there. ‘We have taken it and secured it,’ Mr. Trump said of Syria’s oil during remarks at the White House on Sunday, after announcing the killing of the Islamic State leader, Abu Bakr al-Baghdadi.” [2] A CIA official reminded the journalist that taking Iraq’s oil was a Trump campaign pledge.

That explains the invasion of Iraq for oil in 2003, and again this year, as President Trump has said: “Why don’t we simply take their oil?” It also explains the Obama-Hillary attack on Libya – not only for its oil, but for its investing its foreign reserves in gold instead of recycling its oil surplus revenue to the U.S. Treasury – and of course, for promoting a secular socialist state.

It explains why U.S. neocons feared Suleimani’s plan to help Iraq assert control of its oil and withstand the terrorist attacks supported by U.S. and Saudi’s on Iraq. That is what made his assassination an immediate drive.

American politicians have discredited themselves by starting off their condemnation of Trump by saying, as Elizabeth Warren did, how “bad” a person Suleimani was, how he had killed U.S. troops by masterminding the Iraqi defense of roadside bombing and other policies trying to repel the U.S. invasion to grab its oil. She was simply parroting the U.S. media’s depiction of Suleimani as a monster, diverting attention from the policy issue that explains why he was assassinated now.

The counter-strategy to U.S. oil, and dollar and global-warming diplomacy

This strategy will continue, until foreign countries reject it. If Europe and other regions fail to do so, they will suffer the consequences of this U.S. strategy in the form of a rising U.S.-sponsored war via terrorism, the flow of refugees, and accelerated global warming and extreme weather.

Russia, China and its allies already have been leading the way to dedollarization as a means to contain the balance-of-payments buttress of U.S. global military policy. But everyone now is speculating over what Iran’s response should be.

The pretense – or more accurately, the diversion – by the U.S. news media over the weekend has been to depict the United States as being under imminent attack. Mayor de Blasio has positioned policemen at conspicuous key intersections to let us know how imminent Iranian terrorism is – as if it were Iran, not Saudi Arabia that mounted 9/11, and as if Iran in fact has taken any forceful action against the United States. The media and talking heads on television have saturated the air waves with warnings of Islamic terrorism. Television anchors are suggesting just where the attacks are most likely to occur.

The message is that the assassination of General Soleimani was to protect us. As Donald Trump and various military spokesmen have said, he had killed Americans – and now they must be planning an enormous attack that will injure and kill many more innocent Americans. That stance has become America’s posture in the world: weak and threatened, requiring a strong defense – in the form of a strong offense.

But what is Iran’s actual interest? If it is indeed to undercut U.S. dollar and oil strategy, the first policy must be to get U.S. military forces out of the Near East, including U.S. occupation of its oil fields. It turns out that President Trump’s rash act has acted as a catalyst, bringing about just the opposite of what he wanted. On January 5 the Iraqi parliament met to insist that the United States leave. General Suleimani was an invited guest, not an Iranian invader. It is U.S. troops that are in Iraq in violation of international law. If they leave, Trump and the neocons lose control of oil – and also of their ability to interfere with Iranian-Iraqi-Syrian-Lebanese mutual defense.

Beyond Iraq looms Saudi Arabia. It has become the Great Satan, the supporter of Wahabi extremism, the terrorist legion of U.S. mercenary armies fighting to maintain control of Near Eastern oil and foreign exchange reserves, the cause of the great exodus of refugees to Turkey, Europe and wherever else it can flee from the arms and money provided by the U.S. backers of Isis, Al Qaeda in Iraq and their allied Saudi Wahabi legions.

The logical ideal, in principle, would be to destroy Saudi power. That power lies in its oil fields. They already have fallen under attack by modest Yemeni bombs. If U.S. neocons seriously threaten Iran, its response would be the wholesale bombing and destruction of Saudi oil fields, along with those of Kuwait and allied Near Eastern oil sheikhdoms. It would end the Saudi support for Wahabi terrorists, as well as for the U.S. dollar.

Such an act no doubt would be coordinated with a call for the Palestinian and other foreign workers in Saudi Arabia to rise up and drive out the monarchy and its thousands of family retainers.

Beyond Saudi Arabia, Iran and other advocates of a multilateral diplomatic break with U.S. neoliberal and neocon unilateralism should bring pressure on Europe to withdraw from NATO, inasmuch as that organization functions mainly as a U.S.-centric military tool of American dollar and oil diplomacy and hence opposing the climate change and military confrontation policies that threaten to make Europe part of the U.S. maelstrom.

Finally, what can U.S. anti-war opponents do to resist the neocon attempt to destroy any part of the world that resists U.S. neoliberal autocracy? This has been the most disappointing response over the weekend. They are flailing. It has not been helpful for Warren, Buttigieg and others to accuse Trump of acting rashly without thinking through the consequences of his actions. That approach shies away from recognizing that his action did indeed have a rationale—do draw a line in the sand, to say that yes, America WILL go to war, will fight Iran, will do anything at all to defend its control of Near Eastern oil and to dictate OPEC central bank policy, to defend its ISIS legions as if any opposition to this policy is an attack on the United States itself.

I can understand the emotional response or yet new calls for impeachment of Donald Trump. But that is an obvious non-starter, partly because it has been so obviously a partisan move by the Democratic Party. More important is the false and self-serving accusation that President Trump has overstepped his constitutional limit by committing an act of war against Iran by assassinating Soleimani.

Congress endorsed Trump’s assassination and is fully as guilty as he is for having approved the Pentagon’s budget with the Senate’s removal of the amendment to the 2019 National Defense Authorization Act that Bernie Sanders, Tom Udall and Ro Khanna inserted an amendment in the House of Representatives version, explicitly not authorizing the Pentagon to wage war against Iran or assassinate its officials. When this budget was sent to the Senate, the White House and Pentagon (a.k.a. the military-industrial complex and neoconservatives) removed that constraint. That was a red flag announcing that the Pentagon and White House did indeed intend to wage war against Iran and/or assassinate its officials. Congress lacked the courage to argue this point at the forefront of public discussion.

Behind all this is the Saudi-inspired 9/11 act taking away Congress’s sole power to wage war – its 2002 Authorization for Use of Military Force, pulled out of the drawer ostensibly against Al Qaeda but actually the first step in America’s long support of the very group that was responsible for 9/11, the Saudi airplane hijackers.

The question is, how to get the world’s politicians – U.S., European and Asians – to see how America’s all-or-nothing policy is threatening new waves of war, refugees, disruption of the oil trade in the Strait of Hormuz, and ultimately global warming and neoliberal dollarization imposed on all countries. It is a sign of how little power exists in the United Nations that no countries are calling for a new Nurenberg-style war crimes trial, no threat to withdraw from NATO or even to avoid holding reserves in the form of money lent to the U.S. Treasury to fund America’s military budget.

Michael Hudson

  1. https://www.axios.com/trump-to-iraqi-pm-how-about-that-oil-1a31cbfa-f20c-4767-8d18-d518ed9a6543.html. The article adds: “In the March meeting, the Iraqi prime minister replied, ‘What do you mean?’ according to the source in the room. And Trump’s like, ‘Well, we did a lot, we did a lot over there, we spent trillions over there, and a lot of people have been talking about the oil.’” 
  2. Michael Crowly, “‘Keep the Oil’: Trump Revives Charged Slogan for new Syria Troop Mission,” The New York Times, October 26, 2019. https://www.nytimes.com/2019/10/26/us/politics/trump-syria-oil-fields.html. The article adds: “‘I said keep the oil,’ Mr. Trump recounted. ‘If they are going into Iraq, keep the oil. They never did. They never did.’” 

Putin announces the death of the dollar, and soon…

Source

November 18, 2019

U.S. Economic Warfare and Likely Foreign Defenses*

 

July 25, 2019

U.S. Economic Warfare and Likely Foreign Defenses*

by Michael Hudson, posted by special permission on the Saker blog

* Keynote Paper delivered at the 14th Forum of the World Association for Political Economy, July 21, 2019.

Today’s world is at war on many fronts. The rules of international law and order put in place toward the end of World War II are being broken by U.S. foreign policy escalating its confrontation with countries that refrain from giving its companies control of their economic surpluses. Countries that do not give the United States control their oil and financial sectors or privatize their key sectors are being isolated by the United States imposing trade sanctions and unilateral tariffs giving special advantages to U.S. producers in violation of free trade agreements with European, Asian and other countries.

This global fracture has an increasingly military cast. U.S. officials justify tariffs and import quotas illegal under WTO rules on “national security” grounds, claiming that the United States can do whatever it wants as the world’s “exceptional” nation. U.S. officials explain that this means that their nation is not obliged to adhere to international agreements or even to its own treaties and promises. This allegedly sovereign right to ignore on its international agreements was made explicit after Bill Clinton and his Secretary of State Madeline Albright broke the promise by President George Bush and Secretary of State James Baker that NATO would not expand eastward after 1991. (“You didn’t get it in writing,” was the U.S. response to the verbal agreements that were made.)

Likewise, the Trump administration repudiated the multilateral Iranian nuclear agreement signed by the Obama administration, and is escalating warfare with its proxy armies in the Near East. U.S. politicians are waging a New Cold War against Russia, China, Iran, and oil-exporting countries that the United States is seeking to isolate if cannot control their governments, central bank and foreign diplomacy.

The international framework that originally seemed equitable was pro-U.S. from the outset. In 1945 this was seen as a natural result of the fact that the U.S. economy was the least war-damaged and held by far most of the world’s monetary gold. Still, the postwar trade and financial framework was ostensibly set up on fair and equitable international principles. Other countries were expected to recover and grow, creating diplomatic, financial and trade parity with each other.

But the past decade has seen U.S. diplomacy become one-sided in turning the International Monetary Fund (IMF), World Bank, SWIFT bank-clearing system and world trade into an asymmetrically exploitative system. This unilateral U.S.-centered array of institutions is coming to be widely seen not only as unfair, but as blocking the progress of other countries whose growth and prosperity is seen by U.S. foreign policy as a threat to unilateral U.S. hegemony. What began as an ostensibly international order to promote peaceful prosperity has turned increasingly into an extension of U.S. nationalism, predatory rent-extraction and a more dangerous military confrontation.

Deterioration of international diplomacy into a more nakedly explicit pro-U.S. financial, trade and military aggression was implicit in the way in which economic diplomacy was shaped when the United Nations, IMF and World Bank were shaped mainly by U.S. economic strategists. Their economic belligerence is driving countries to withdraw from the global financial and trade order that has been turned into a New Cold War vehicle to impose unilateral U.S. hegemony. Nationalistic reactions are consolidating into new economic and political alliances from Europe to Asia.

We are still mired in the Oil War that escalated in 2003 with the invasion of Iraq, which quickly spread to Libya and Syria. American foreign policy has long been based largely on control of oil. This has led the United States to oppose the Paris accords to stem global warming. Its aim is to give U.S. officials the power to impose energy sanctions forcing other countries to “freeze in the dark” if they do not follow U.S. leadership.

To expand its oil monopoly, America is pressuring Europe to oppose the Nordstream II gas pipeline from Russia, claiming that this would make Germany and other countries dependent on Russia instead of on U.S. liquified natural gas (LNG). Likewise, American oil diplomacy has imposed unilateral sanctions against Iranian oil exports, until such time as a regime change opens up that country’s oil reserves to U.S., French, British and other allied oil majors.

U.S. control of dollarized money and credit is critical to this hegemony. As Congressman Brad Sherman of Los Angeles told a House Financial Services Committee hearing on May 9, 2019: “An awful lot of our international power comes from the fact that the U.S. dollar is the standard unit of international finance and transactions. Clearing through the New York Fed is critical for major oil and other transactions. It is the announced purpose of the supporters of cryptocurrency to take that power away from us, to put us in a position where the most significant sanctions we have against Iran, for example, would become irrelevant.”[1]

The U.S. aim is to keep the dollar as the transactions currency for world trade, savings, central bank reserves and international lending. This monopoly status enables the U.S. Treasury and State Department to disrupt the financial payments system and trade for countries with which the United States is at economic or outright military war.

Russian President Vladimir Putin quickly responded by describing how “the degeneration of the universalist globalization model [is] turning into a parody, a caricature of itself, where common international rules are replaced with the laws… of one country.”[2] That is the trajectory on which this deterioration of formerly open international trade and finance is now moving. It has been building up for a decade. On June 5, 2009, then-Russian President Dmitry Medvedev cited this same disruptive U.S. dynamic at work in the wake of the U.S. junk mortgage and bank fraud crisis.

Those whose job it was to forecast events … were not ready for the depth of the crisis and turned out to be too rigid, unwieldy and slow in their response. The international financial organisations – and I think we need to state this up front and not try to hide it – were not up to their responsibilities, as has been said quite unambiguously at a number of major international events such as the two recent G20 summits of the world’s largest economies.

Furthermore, we have had confirmation that our pre-crisis analysis of global economic trends and the global economic system were correct. The artificially maintained uni-polar system and preservation of monopolies in key global economic sectors are root causes of the crisis. One big centre of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks – these are all factors that led to an overall drop in the quality of regulation and the economic justification of assessments made, including assessments of macroeconomic policy. As a result, there was no avoiding a global crisis.[3]

That crisis is what is now causing today’s break in global trade and payments.

Warfare on many fronts, with Dollarization being the main arena

Dissolution of the Soviet Union 1991 did not bring the disarmament that was widely expected. U.S. leadership celebrated the Soviet demise as signaling the end of foreign opposition to U.S.-sponsored neoliberalism and even as the End of History. NATO expanded to encircle Russia and sponsored “color revolutions” from Georgia to Ukraine, while carving up former Yugoslavia into small statelets. American diplomacy created a foreign legion of Wahabi fundamentalists from Afghanistan to Iran, Iraq, Syria and Libya in support of Saudi Arabian extremism and Israeli expansionism.

The United States is waging war for control of oil against Venezuela, where a military coup failed a few years ago, as did the 2018-19 stunt to recognize an unelected pro-American puppet regime. The Honduran coup under President Obama was more successful in overthrowing an elected president advocating land reform, continuing the tradition dating back to 1954 when the CIA overthrew Guatemala’s Arbenz regime.

U.S. officials bear a special hatred for countries that they have injured, ranging from Guatemala in 1954 to Iran, whose regime it overthrew to install the Shah as military dictator. Claiming to promote “democracy,” U.S. diplomacy has redefined the word to mean pro-American, and opposing land reform, national ownership of raw materials and public subsidy of foreign agriculture or industry as an “undemocratic” attack on “free markets,” meaning markets controlled by U.S. financial interests and absentee owners of land, natural resources and banks.

A major byproduct of warfare has always been refugees, and today’s wave fleeing ISIS, Al Qaeda and other U.S.-backed Near Eastern proxies is flooding Europe. A similar wave is fleeing the dictatorial regimes backed by the United States from Honduras, Ecuador, Colombia and neighboring countries. The refugee crisis has become a major factor leading to the resurgence of nationalist parties throughout Europe and for the white nationalism of Donald Trump in the United States.

Dollarization as the vehicle for U.S. nationalism

The Dollar Standard – U.S. Treasury debt to foreigners held by the world’s central banks – has replaced the gold-exchange standard for the world’s central bank reserves to settle payments imbalances among themselves. This has enabled the United States to uniquely run balance-of-payments deficits for nearly seventy years, despite the fact that these Treasury IOUs have little visible likelihood of being repaid except under arrangements where U.S. rent-seeking and outright financial tribute from other enables it to liquidate its official foreign debt.

The United States is the only nation that can run sustained balance-of-payments deficits without having to sell off its assets or raise interest rates to borrow foreign money. No other national economy in the world can could afford foreign military expenditures on any major scale without losing its exchange value. Without the Treasury-bill standard, the United States would be in this same position along with other nations. That is why Russia, China and other powers that U.S. strategists deem to be strategic rivals and enemies are looking to restore gold’s role as the preferred asset to settle payments imbalances.

The U.S. response is to impose regime change on countries that prefer gold or other foreign currencies to dollars for their exchange reserves. A case in point is the overthrow of Libya’s Kaddafi after he sought to base his nation’s international reserves on gold. His liquidation stands as a military warning to other countries.

Thanks to the fact that payments-surplus economies invest their dollar inflows in U.S. Treasury bonds, the U.S. balance-of-payments deficit finances its domestic budget deficit. This foreign central-bank recycling of U.S. overseas military spending into purchases of U.S. Treasury securities gives the United States a free ride, financing its budget – also mainly military in character – so that it can taxing its own citizens.

Trump is forcing other countries to create an alternative to the Dollar Standard

The fact that Donald Trump’s economic policies are proving ineffective in restoring American manufacturing is creating rising nationalist pressure to exploit foreigners by arbitrary tariffs without regard for international law, and to impose trade sanctions and diplomatic meddling to disrupt regimes that pursue policies that U.S. diplomats do not like.

There is a parallel here with Rome in the late 1st century BC. It stripped its provinces to pay for its military deficit, the grain dole and land redistribution at the expense of Italian cities and Asia Minor. This created foreign opposition to drive Rome out. The U.S. economy is similar to Rome’s: extractive rather than productive, based mainly on land rents and money-interest. As the domestic market is impoverished, U.S. politicians are seeking to take from abroad what no longer is being produced at home.

What is so ironic – and so self-defeating of America’s free global ride – is that Trump’s simplistic aim of lowering the dollar’s exchange rate to make U.S. exports more price-competitive. He imagines commodity trade to be the entire balance of payments, as if there were no military spending, not to mention lending and investment. To lower the dollar’s exchange rate, he is demanding that China’s central bank and those of other countries stop supporting the dollar by recycling the dollars they receive for their exports into holdings of U.S. Treasury securities.

This tunnel vision leaves out of account the fact that the trade balance is not simply a matter of comparative international price levels. The United States has dissipated its supply of spare manufacturing capacity and local suppliers of parts and materials, while much of its industrial engineering and skilled manufacturing labor has retired. An immense shortfall must be filled by new capital investment, education and public infrastructure, whose charges are far above those of other economics.

Trump’s infrastructure ideology is a Public-Private Partnership characterized by high-cost financialization demanding high monopoly rents to cover its interest charges, stock dividends and management fees. This neoliberal policy raises the cost of living for the U.S. labor force, making it uncompetitive. The United States is unable to produce more at any price right now, because its has spent the past half-century dismantling its infrastructure, closing down its part suppliers and outsourcing its industrial technology.

The United States has privatized and financialized infrastructure and basic needs such as public health and medical care, education and transportation that other countries have kept in their public domain to make their economies more cost-efficient by providing essential services at subsidized prices or freely. The United States also has led the practice of debt pyramiding, from housing to corporate finance. This financial engineering and wealth creation by inflating debt-financed real estate and stock market bubbles has made the United States a high-cost economy that cannot compete successfully with well-managed mixed economies.

Unable to recover dominance in manufacturing, the United States is concentrating on rent-extracting sectors that it hopes monopolize, headed by information technology and military production. On the industrial front, it threatens disrupt China and other mixed economies by imposing trade and financial sanctions.

The great gamble is whether these other countries will defend themselves by joining in alliances enabling them to bypass the U.S. economy. American strategists imagine their country to be the world’s essential economy, without whose market other countries must suffer depression. The Trump Administration thinks that There Is No Alternative (TINA) for other countries except for their own financial systems to rely on U.S. dollar credit.

To protect themselves from U.S. sanctions, countries would have to avoid using the dollar, and hence U.S. banks. This would require creation of a non-dollarized financial system for use among themselves, including their own alternative to the SWIFT bank clearing system. Table 1 lists some possible related defenses against U.S. nationalistic diplomacy.

As noted above, what also is ironic in President Trump’s accusation of China and other countries of artificially manipulating their exchange rate against the dollar (by recycling their trade and payments surpluses into Treasury securities to hold down their currency’s dollar valuation) involves dismantling the Treasury-bill standard. The main way that foreign economies have stabilized their exchange rate since 1971 has indeed been to recycle their dollar inflows into U.S. Treasury securities. Letting their currency’s value rise would threaten their export competitiveness against their rivals, although not necessarily benefit the United States.

Ending this practice leaves countries with the main way to protect their currencies from rising against the dollar is to reduce dollar inflows by blocking U.S. lending to domestic borrowers. They may levy floating tariffs proportioned to the dollar’s declining value. The U.S. has a long history since the 1920s of raising its tariffs against currencies that are depreciating: the American Selling Price (ASP) system. Other countries can impose their own floating tariffs against U.S. goods.

Trade dependency as an aim of the World Bank, IMF and US AID

The world today faces a problem much like what it faced on the eve of World War II. Like Germany then, the United States now poses the main threat of war, and equally destructive neoliberal economic regimes imposing austerity, economic shrinkage and depopulation. U.S. diplomats are threatening to destroy regimes and entire economies that seek to remain independent of this system, by trade and financial sanctions backed by direct military force.

Dedollarization will require creation of multilateral alternatives to U.S. “front” institutions such as the World Bank, IMF and other agencies in which the United States holds veto power to block any alternative policies deemed not to let it “win.” U.S. trade policy through the World Bank and U.S. foreign aid agencies aims at promoting dependency on U.S. food exports and other key commodities, while hiring U.S. engineering firms to build up export infrastructure to subsidize U.S. and other natural-resource investors.[4] The financing is mainly in dollars, providing risk-free bonds to U.S. and other financial institutions. The resulting commercial and financial “interdependency” has led to a situation in which a sudden interruption of supply would disrupt foreign economies by causing a breakdown in their chain of payments and production. The effect is to lock client countries into dependency on the U.S. economy and its diplomacy, euphemized as “promoting growth and development.”

U.S. neoliberal policy via the IMF imposes austerity and opposes debt writedowns. Its economic model pretends that debtor countries can pay any volume of dollar debt simply by reducing wages to squeeze more income out of the labor force to pay foreign creditors. This ignores the fact that solving the domestic “budget problem” by taxing local revenue still faces the “transfer problem” of converting it into dollars or other hard currencies in which most international debt is denominated. The result is that the IMF’s “stabilization” programs actually destabilize and impoverish countries forced into following its advice.

IMF loans support pro-U.S. regimes such as Ukraine, and subsidize capital flight by supporting local currencies long enough to enable U.S. client oligarchies to flee their currencies at a pre-devaluation exchange rate for the dollar. When the local currency finally is allowed to collapse, debtor countries are advised to impose anti-labor austerity. This globalizes the class war of capital against labor while keeping debtor countries on a short U.S. financial leash.

U.S. diplomacy is capped by trade sanctions to disrupt economies that break away from U.S. aims. Sanctions are a form of economic sabotage, as lethal as outright military warfare in establishing U.S. control over foreign economies. The threat is to impoverish civilian populations, in the belief that this will lead them to replace their governments with pro-American regimes promising to restore prosperity by selling off their domestic infrastructure to U.S. and other multinational investors.

US Warfare on Many Fronts —————————————————————— Dedollarization defense

Military warfare (the Near East, Asia)NATO and bilateral treaty (Saudi, ISIS, Al Qaida). color revolutions and proxy wars. Shanghai Cooperation Organization, and pressure for Europe to withdraw from NATO unless the U.S. alleviates its New Cold War threats.
Dollarization is monetary warfare. The US Treasury-bill standard finances the mainly military U.S. balance-of-payments deficit. SWIFT threatens to isolate Iran and Russia Dedollarization will refrain from foreign central banks financing U.S. overseas military spending by keeping their savings in dollars.Creation of alternative payments clearing system.
The IMF finances US client regimes and seeks to isolate those not following US policy. An alternative global financial organization, such as Europe’s INSTEX to circumvent US anti-Iran sanctions, and Russo-China alternative to SWIFT.
Creditor policy forcing austerity on debtor economies, forcing them to privatize and sell off their public domain to pay debts. An international court empowered to write down debts to the ability to pay, based on the original principles that were to guide the BIS in 1931.
The World Bank finances trade dependency on US food exports and opposes national food self-sufficiency. An alternative development organization based on food self-sufficiency. Annulment of World Bank and IMF debt as “odious debt.”
Unilateral US trade war based on levy of US protectionist tariffs, quotas and sanctions, Countervailing sanctions, and creation of an alternative to the WTO or a strengthened organization free of US control.
Cyber War, spycraft via US internet platforms, and Stuxnet sabotage. Work with Huawei and other alternatives to US internet options.
Class War: austerity program for labor MMT, taxation of rentier income and capital gains.
Neoliberal monetarist doctrine of privatization and creditor-oriented rules Promotion of a mixed economy with public infrastructure as a factor of production.
US patent policy seeks monopoly rents. Non-recognition of predatory monopoly patents.
Investment control Deprivatization and buyoutsof US assets abroad.
International law and diplomacy The U.S. as the world’s “exceptional nation,” not subject to international laws or even to its own treaty agreements.Veto power in any organization it joins. The basic principle that the U.S. is not subject to any foreign say over its laws and policies.

Global Problems caused by US Policy ——————————-  Response to U.S. Disruptive Policy

U.S. refuses to join international agreements to reduce carbon emissions, Global Warming and Extreme Weather.U.S. diplomacy is based on control of oil to make other countries dependent on U.S. energy dominance. Trade and tax sanctions against U.S. exporters and banks. Taxes on U.S. tax avoidance by the oil industry’s “flags of convenience” (convenient for tax avoidance).Taxation or isolation of U.S. exports based on high-carbon production.
Attempt to monopolize new G5 Internet technology, Sanctioning of Huawei, insistence on US priority in high-tech. Rejection of patents on basic IT, medicine and other basic human needs.
Patent laws in pharmaceuticals, etc. Taxation of monopoly rents.

There are alternatives, on many fronts

Militarily, today’s leading alternative to NATO expansionism is the Shanghai Cooperation Organization (SCO), along with Europe following France’s example under Charles de Gaulle and withdrawing. After all, there is no real threat of military invasion today in Europe. No nation can occupy another without an enormous military draft and such heavy personnel losses that domestic protests would unseat the government waging such a war. The U.S. anti-war movement in the 1960s signaled the end of the military draft, not only in the United States but in nearly all democratic countries. (Israel, Switzerland, Brazil and North Korea are exceptions.)

The enormous spending on armaments for a kind of war unlikely to be fought is not really military, but simply to provide profits to the military industrial complex. The arms are not really to be used. They are simply to be bought, and ultimately scrapped. The danger, of course, is that these not-for-use arms actually might be used, if only to create a need for new profitable production.

Likewise, foreign holdings of dollars are not really to be spent on purchases of U.S. exports or investments. They are like fine-wine collectibles, for saving rather than for drinking. The alternative to such dollarized holdings is to create a mutual use of national currencies, and a domestic bank-clearing payments system as an alternative to SWIFT. Russia, China, Iran and Venezuela already are said to be developing a crypto-currency payments to circumvent U.S. sanctions and hence financial control.

In the World Trade Organization, the United States has tried to claim that any industry receiving public infrastructure or credit subsidy deserves tariff retaliation in order to force privatization. In response to WTO rulings that U.S. tariffs are illegally imposed, the United States “has blocked all new appointments to the seven-member appellate body in protest, leaving it in danger of collapse because it may not have enough judges to allow it to hear new cases.”[5] In the U.S. view, only privatized trade financed by private rather than public banks is “fair” trade.

An alternative to the WTO (or removal of its veto privilege given to the U.S. bloc) is needed to cope with U.S. neoliberal ideology and, most recently, the U.S. travesty claiming “national security” exemption to free-trade treaties, impose tariffs on steel, aluminum, and on European countries that circumvent sanctions on Iran or threaten to buy oil from Russia via the Nordstream II pipeline instead of high-cost liquified “freedom gas” from the United States.

In the realm of development lending, China’s bank along with its Belt and Road initiative is an incipient alternative to the World Bank, whose main role has been to promote foreign dependency on U.S. suppliers. The IMF for its part now functions as an extension of the U.S. Department of Defense to subsidize client regimes such as Ukraine while financially isolating countries not subservient to U.S. diplomacy.

To save debt-strapped economies suffering Greek-style austerity, the world needs to replace neoliberal economic theory with an analytic logic for debt writedowns based on the ability to pay. The guiding principle of the needed development-oriented logic of international law should be that no nation should be obliged to pay foreign creditors by having to sell of the public domain and rent-extraction rights to foreign creditors. The defining character of nationhood should be the fiscal right to tax natural resource rents and financial returns, and to create its own monetary system.

The United States refuses to join the International Criminal Court. To be effective, it needs enforcement power for its judgments and penalties, capped by the ability to bring charges of war crimes in the tradition of the Nuremberg tribunal. U.S. to such a court, combined with its military buildup now threatening World War III, suggests a new alignment of countries akin to the Non-Aligned Nations movement of the 1950s and 1960s. Non-aligned in this case means freedom from U.S. diplomatic control or threats.

Such institutions require a more realistic economic theory and philosophy of operations to replace the neoliberal logic for anti-government privatization, anti-labor austerity, and opposition to domestic budget deficits and debt writedowns. Today’s neoliberal doctrine counts financial late fees and rising housing prices as adding to “real output” (GDP), but deems public investment as deadweight spending, not a contribution to output. The aim of such logic is to convince governments to pay their foreign creditors by selling off their public infrastructure and other assets in the public domain.

Just as the “capacity to pay” principle was the foundation stone of the Bank for International Settlements in 1931, a similar basis is needed to measure today’s ability to pay debts and hence to write down bad loans that have been made without a corresponding ability of debtors to pay. Without such an institution and body of analysis, the IMF’s neoliberal principle of imposing economic depression and falling living standards to pay U.S. and other foreign creditors will impose global poverty.

The above proposals provide an alternative to the U.S. “exceptionalist” refusal to join any international organization that has a say over its affairs. Other countries must be willing to turn the tables and isolate U.S. banks, U.S. exporters, and to avoid using U.S. dollars and routing payments via U.S. banks. To protect their ability to create a countervailing power requires an international court and its sponsoring organization.

Summary

The first existential objective is to avoid the current threat of war by winding down U.S. military interference in foreign countries and removing U.S. military bases as relics of neocolonialism. Their danger to world peace and prosperity threatens a reversion to the pre-World War II colonialism, ruling by client elites along lines similar to the 2014 Ukrainian coup by neo-Nazi groups sponsored by the U.S. State Department and National Endowment for Democracy. Such control recalls the dictators that U.S. diplomacy established throughout Latin America in the 1950s. Today’s ethnic terrorism by U.S.-sponsored Wahabi-Saudi Islam recalls the behavior of Nazi Germany in the 1940s.

Global warming is the second major existentialist threat. Blocking attempts to reverse it is a bedrock of American foreign policy, because it is based on control of oil. So the military, refugee and global warming threats are interconnected.

The U.S. military poses the greatest immediate danger. Today’s warfare is fundamentally changed from what it used to be. Prior to the 1970s, nations conquering others had to invade and occupy them with armies recruited by a military draft. But no democracy in today’s world can revive such a draft without triggering widespread refusal to fight, voting the government out of power. The only way the United States – or other countries – can fight other nations is to bomb them. And as noted above, economic sanctions have as destructive an effect on civilian populations in countries deemed to be U.S. adversaries as overt warfare. The United States can sponsor political coups (as in Honduras and Pinochet’s Chile), but cannot occupy. It is unwilling to rebuild, to say nothing of taking responsibility for the waves of refugees that our bombing and sanctions are causing from Latin America to the Near East.

U.S. ideologues view their nation’s coercive military expansion and political subversion and neoliberal economic policy of privatization and financialization as an irreversible victory signaling the End of History. To the rest of the world it is a threat to human survival.

The American promise is that the victory of neoliberalism is the End of History, offering prosperity to the entire world. But beneath the rhetoric of free choice and free markets is the reality of corruption, subversion, coercion, debt peonage and neofeudalism. The reality is the creation and subsidy of polarized economies bifurcated between a privileged rentier class and its clients, eir debtors and renters. America is to be permitted to monopolize trade in oil and food grains, and high-technology rent-yielding monopolies, living off its dependent customers. Unlike medieval serfdom, people subject to this End of History scenario can choose to live wherever they want. But wherever they live, they must take on a lifetime of debt to obtain access to a home of their own, and rely on U.S.-sponsored control of their basic needs, money and credit by adhering to U.S. financial planning of their economies. This dystopian scenario confirms Rosa Luxemburg’s recognition that the ultimate choice facing nations in today’s world is between socialism and barbarism.

  1. Billy Bambrough, “Bitcoin Threatens To ‘Take Power’ From The U.S. Federal Reserve,” Forbes, May 15, 2019. https://www.forbes.com/sites/billybambrough/2019/05/15/a-u-s-congressman-is-so-scared-of-bitcoin-and-crypto-he-wants-it-banned/#36b2700b6405. 
  2. Vladimir Putin, keynote address to the Economic Forum, June 5-6 2019. Putin went on to warn of “a policy of completely unlimited economic egoism and a forced breakdown.” This fragmenting of the global economic space “is the road to endless conflict, trade wars and maybe not just trade wars. Figuratively, this is the road to the ultimate fight of all against all.” 
  3. Address to St Petersburg International Economic Forum’s Plenary Session, St Petersburg, Kremlin.ru, June 5, 2009, from Johnson’s Russia List, June 8, 2009, #8, 
  4. https://www.rt.com/business/464013-china-russia-cryptocurrency-dollar-dethrone/. Already in the late 1950s the Forgash Plan proposed a World Bank for Economic Acceleration. Designed by Terence McCarthy and sponsored by Florida Senator Morris Forgash, the bank would have been a more truly development-oriented institution to guide foreign development to create balanced economies self-sufficient in food and other essentials. The proposal was opposed by U.S. interests on the ground that countries pursuing land reform tended to be anti-American. More to the point, they would have avoided trade and financial dependency on U.S. suppliers and banks, and hence on U.S. trade and financial sanctions to prevent them from following policies at odds with U.S. diplomatic demands.  
  5. Don Weinland, “WTO rules against US in tariff dispute with China,” Financial Times, July 17, 2019. 

 

Pentagon Angst over China-Russia Strategic Unity

Global Research, July 22, 2019

Sino/Russian unity represents a vital anti-imperial alliance. A DOD/Pentagon white paper called Russia a strategic US  threat, especially united with China.

NYT editors addressed the issue, falsely calling both countries “adversaries.” Indeed they’re “growing closer,” both nations portrayed as strategic threats to US rage for global dominance.

The Times:

“(S)ince Western nations imposed sanctions on Russia after it invaded Ukraine in 2014 (sic), Chinese and Russian authorities have increasingly found common cause, disparaging Western-style democracy (sic) and offering themselves as alternatives to America’s postwar leadership.”

“Now China and Russia are growing even closer, suggesting a more permanent arrangement that could pose a complex challenge to the United States.”

Fact: No Russian Federation invasion of Ukraine or any other country occurred — a US/NATO specialty, not how the Kremlin operates.

Fact: So-called “Western-style democracy” is pure fantasy, not the real thing.

Fact: The US poses an imperial threat to Russia, China, and other countries, not the other way around.

China’s Xi Jinping earlier called Sino/Russia ties stronger than ever, the “best in history,” both nations “each other’s most trustworthy strategic partners,” adding:

“President Putin and I have built good working relations and a close personal friendship” — bilateral ties deepening, Xi calling Putin his “best and bosom friend.”

Leaders of both nations regard each other as key strategic allies — a vital counterforce to endless US aggression, threatening world peace, stability, and security.

Both countries rely on mutual cooperation, sharing a multi-world polarity worldview. They’re jointly implementing Beijing’s hugely ambitious One Belt One Road initiative for greater regional integration and development, involving well over $1 trillion in longterm investments.

The 2,500 mile Power of Siberian pipeline, linking Russia’s Far East to China to be completed this year will supply around 38 billion cubic meters of Russian natural gas to China annually for 30 years, according to agreed on terms between Gazprom and the China National Petroleum Corporation.

Construction of the Power to Siberia-2 pipeline will deliver another 30 billion cubic meters of Russian natural gas to China via a Western route – both projects and other major ones of huge importance to both countries.

Putin and Xi have met face-to-face around two dozen times — testimony to their longterm strategic partnership and friendship.

China is an economic powerhouse, Russia the world’s dominant military power, its super-weapons exceeding the best in the West.

Russia is rich in what China needs most — oil and gas, technological expertise, industrial equipment, and state-of-the-art weapons.

Sharing a common border, both countries want them for defense, not offense like the US, NATO and Israel operate.

A Sino/Russian Investment Committee fosters expanding economic and financial ties, diversifying trade to reduce dependence on global economic conditions.

It promotes and facilitates cooperation in technology-intensive industrial, financial, commercial, and military areas.

Both nations are increasingly trading in their own currencies, bypassing dollar transactions. Global de-dollarization is an idea whose time has come.

Dollar hegemony as the world’s reserve currency facilitates US global dominance.

It finances Washington’s reckless spending, global militarism, its empire of bases, endless wars, corporate takeovers, as well as speculative excesses creating bubbles and economic crises – at the expense of democratic freedoms and beneficial social change.

Ending dollar dominance would be the political, economic, financial, military equivalent of cutting the biblical Sampson’s hair, eliminating his strength.

According to the DOD/Pentagon white paper, the US and its allies aren’t acting effectively enough to counter Sino/Russian aims — falsely accusing both countries of using “gray zone” tactics to foment instability.

It’s how US-dominated NATO, Israel, and their imperial partners operate, not Russia and China.

They’re growing world powers, the US a nation in decline politically, economically and militarily — despite spending countless trillions of dollars to maintain global supremacy.

The myth of American exceptionalism, the indispensable state, an illusory moral superiority, and military supremacy persist despite hard evidence debunking these notions.

The US has been declining for decades. The late Gabriel Kolko believes it began during US aggression against North Korea, continued during a decade of Southeast Asia war, and accelerated post-9/11.

It’s the same dynamic that doomed all other empire in history. The US is declining  because of its imperial arrogance, hubris, endless wars against invented enemies, and unwillingness to change.

Ruinous military spending persists while vital homeland needs go begging.

The US ruling class serves privileged interests exclusively at the expense of peace, equity and justice.

Its power and influence are waning on the global stage while Russia and China are rising — especially united for common longterm constructive aims.

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Award-winning author Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net. He is a Research Associate of the Centre for Research on Globalization (CRG)

His new book as editor and contributor is titled “Flashpoint in Ukraine: US Drive for Hegemony Risks WW III.”

http://www.claritypress.com/LendmanIII.html

Visit his blog site at sjlendman.blogspot.com.

The World Is Dedollarizing

Global Research, July 19, 2019

What if tomorrow nobody but the United States would use the US-dollar? Every country, or society would use their own currency for internal and international trade, their own economy-based, non-fiat currency. It could be traditional currencies or new government controlled crypto-currencies, but a country’s own sovereign money. No longer the US-dollar. No longer the dollar’s foster child, the Euro. No longer international monetary transactions controlled by US banks and – by the US-dollar controlled international transfer system, SWIFT, the system that allows and facilitates US financial and economic sanctions of all kinds – confiscation of foreign funds, stopping trades between countries, blackmailing ‘unwilling’ nations into submission. What would happen? – Well, the short answer is that we would certainly be a step close to world peace, away from US (financial) hegemony, towards nation states’ sovereignty, towards a world geopolitical structure of more equality.

We are not there yet. But graffities are all over the walls signaling that we are moving quite rapidly in that direction. And Trump knows it and his handlers know it – which is why the onslaught of financial crime – sanctions – trade wars – foreign assets and reserves confiscations, or outright theft – all in the name of “Make America Great Again”, is accelerating exponentially and with impunity. What is surprising is that the Anglo-Saxon hegemons do not seem to understand that all the threats, sanctions, trade barriers, are provoking the contrary to what should contribute to American Greatness. Economic sanctions, in whatever form, are effective only as long as the world uses the US dollar for trading and as reserve currency.

Once the world gets sick and tired of the grotesque dictate of Washington and the sanction schemes for those who do no longer want to go along with the oppressive rules of the US, they will be eager to jump on another boat, or boats – abandoning the dollar and valuing their own currencies. Meaning trading with each other in their own currencies – and that outside of the US banking system which so far even controls trading in local currencies, as long as funds have to be transferred from one nation to another via SWIFT.

Many countries have also realized that the dollar is increasingly serving to manipulate the value of their economy. The US-dollar, a fiat currency, by its sheer money mass, may bend national economies up or down, depending in which direction the country is favored by the hegemon. Let’s put the absurdity of this phenomenon in perspective.

Today, the dollar is based not even on hot air and is worth less than the paper it is printed on. The US GDP is US$ 21.1 trillion in 2019 (World Bank estimate), with current debt of 22.0 trillion, or about 105% of GDP. The world GDP is projected for 2019 at US$ 88.1 trillion (World Bank). According to Forbes, about US$ 210 trillion are “unfunded liabilities” (net present value of future projected but unfunded obligations (75 years), mainly social security, Medicaid and accumulated interest on debt), a figure about 10 times the US GDP, or two and a half times the world’s economic output.

This figure keeps growing, as interest on debt is compounded, forming part of what would be called in business terms ‘debt service’ (interest and debt amortization), but is never ‘paid back’. In addition, there are about one to two quadrillion dollars (nobody knows the exact amount) of so-called derivatives floating around the globe. Aderivative is a financial instrument which creates its value from the speculative difference of underlying assets, most commonly derived from such inter-banking and stock exchange oddities, like ‘futures’, ‘options’, ‘forwards’ and ‘swaps’.

This monstrous debt is partly owned in the form of treasury bonds as foreign exchange reserves by countries around the world. The bulk of it is owed by the US to itself – with no plans to ever “pay it back” – but rather create more money, more debt, with which to pay for the non-stop wars, weapon manufacturing and lie-propaganda to keep the populace quiet and in lockstep.

This amounts to a humongous worldwide dollar-based pyramid system. Imagine, this debt comes crashing down, for example because one or several big (Wall Street) banks are on the brink of bankruptcy, so, they claim their outstanding derivatives, paper gold (another banking absurdity) and other debt from smaller banks. It would generate a chain reaction that might bring down the whole dollar-dependent world economy. It would create an exponential “Lehman Brothers 2008” on global scale.

The world is increasingly aware of this real threat, an economy built on a house of cards – and countries want to get out of the trap, out of the fangs of the US-dollar. It’s not easy with all the dollar-denominated reserves and assets invested abroad, all over the globe. A solution may be gradually divesting them (US-dollar liquidity and investments) and moving into non-dollar dependent currencies, like the Chinese Yuan and the Russian Ruble, or a basket of eastern currencies that are delinked from the dollar and its international payment scheme, the SWIFT system. Beware of the Euro, it’s the foster child of the US-dollar!

There are increasingly blockchain technology alternatives available. China, Russia, Iran and Venezuela are already experimenting with government-controlled cryptocurrencies to build new payment and transfer systems outside the US-dollar domain to circumvent sanctions. India may or may not join this club – whenever the Modi Government decides which way to bend – east or west. The logic would suggest that India orients herself to the east, as India is a significant part of the huge Eurasian economic market and landmass.

India is already an active member of the Shanghai Cooperation Organization (SCO) – an association of countries that are developing peaceful strategies for trade, monetary security and defense, comprising China, Russia, India, Pakistan, most Central Asian countries and with Iran waiting in the wings to become a full-fledged member. As such, SCO accounts for about half of the world population and a third of the world’s economic output. The east has no need for the west to survive. No wonder that western media hardly mention the SCO which means that the western average public at large has no clue what the SCO stands for, and who are its members.

Government-controlled and regulated blockchain technology may become key to counter US coercive financial power and to resist sanctions. Any country is welcome to join this new alliance of countries and new but fast-growing approach to alternative trading – and to finding back to national political and financial sovereignty.

In the same vein of dedollarization are Indian “barter banks”. They are, for example, trading Indian tea for Iranian oil. Such arrangements for goods to be exchanged against Iranian petrol are carried out through Indian “barter banks”, where currencies, i.e. Iranian rials and Indian rupees, are handled by the same bank. Exchange of goods is based on a list of highest monetary volume Indian trade items, against Iranian hydrocarbon products, for example, Iran’s large import of Indian tea. No monetary transaction takes place outside of India, therefore, US sanctions may be circumvented, since no US bank or US Treasury interference can stop the bilateral trade activities.

At this point, it might be appropriate to mention Facebook’s attempt to introduce a globe-spanning cryptocurrency, the Lira. Little is known on how exactly it will (or may) function, except that it would cater to billions of facebook members around the world. According to Facebook, there are 2.38 billion active members. Imagine, if only two thirds – about 1.6 billion – opened a Libra account with Facebook, the floodgate of libras around the world would be open. Libra is or would be a privately-owned cryptocurrency – and – coming from Facebook – could be destined to replace the dollar by the same people who are now abusing the world with the US-dollar. It may be projected as the antidote to government-controlled cryptocurrencies, thus, circumventing the impact of dedollarization. Beware of the Libra!

Despite US and EU sanctions, German investments in Russia are breaking a 10-year record in 2019, by German business pouring more than €1.7 billion into the Russian economy in the first three months of 2019. According to the Russian-German Chamber of Commerce, the volume of German companies’ investments in Russia is up by 33% – by € 400 million – since last year, when total investments reached € 3.2 billion, the largest since 2008. Despite sanctions which amounted to about € 1 billion combined for 140 German companies surveyed and registered with the Chamber of Commerce, and despite western anti-Russia pressure, Russia-German trade has increased by 8.4 percent and reached nearly € 62 billion in 2018.

In addition, notwithstanding US protests and threats with sanctions, Moscow and Berlin continue their Nord Stream 2 natural gas pipeline project which is expected to be finished before the end of 2019. Not only is the proximity of Russian gas a natural and logical supply source for Germany and Europe, it will also bring Europe independence form the bullying sales methods of the United States. And payments will not be made in US dollars. In the long-run, the benefits of German-Russian business and economic relations will far outweigh the illegal US sanctions. Once this awareness has sunk in, there is nothing to stop Russian-German business associations to flourish, and to attract other EU-Russian business relations – all outside of the dollar-dominated banking and transfer system.

President Trump’s trade war with China will eventually also have a dedollarization effect, as China will seek – and already has acquired – other trading partners, mostly Asian, Asian-Pacific and European – with whom China will deal in other than dollar-denominated contracts and outside the SWIFT transfer system, for example using the Chinese International Payment System (CIPS) which, by the way, is open for international trade by any country across the globe.

This will not only circumvent punishing tariffs on China’s exports (and make US customers of Chinese goods furious, as their Chinese merchandise is no longer available at affordable prices, or no longer available at all), but this strategy will also enhance the Chinese Yuan on international markets and boost the Yuan even further as a reliable reserve currency – ever outranking the US-dollar. In fact, in the last 20 years, dollar-denominated assets in international reserve coffers have declined from more than 90% to below 60% and will rapidly decline further as Washington’s coercive financial policies prevail. Dollar reserves are rapidly replaced by reserves in Yuan and gold, and that even in such staunch supporters of the west as is Australia.

Washington also has launched a counter-productive financial war against Turkey, because Turkey is associating and creating friendly relations with Russia, Iran and China – and, foremost, because Turkey, a NATO stronghold, is purchasing the Russian S-400 cutting-edge air defense system – a new military alliance which the US cannot accept. As a result, the US is sabotaging the Turkish currency, the Lira which has lost 40% since January 2018.

Turkey will certainly do whatever it can to get out from under the boot of the US-dollar stranglehold and currency sanctions – and further ally itself with the East. This amounts to a double loss for the US. Turkey will most likely abandon all trading in US dollars and align her currency with, for example, the Chinese Yuan and the Russian ruble, and, to the detriment of the Atlantic alliance, Turkey may very likely exit NATO. Abandoning NATO will be a major disaster for the US, as Turkey is both strategically, as well as in terms of NATO military power one of the strongest – if not the strongest – nation of the 29 NATO members, outside of the US.

If Turkey exits NATO, the entire European NATO alliance will be shaken and questioned. Other countries, long wary of NATO and of storing NATO’s nuclear weapons on their soils, especially Italy and Germany, may also consider exiting NATO. In both Germany and Italy, a majority of the people is against NATO and especially against the Pentagon waging wars form their NATO bases in their territories in Germany in Italy.

To stem against this trend, the former German Defense Minister, Ursula von der Leyen, from the conservative German CDU party, is being groomed to become Jean-Claude Juncker’s successor as President of the European Commission. Mr. Juncker served since 2014. Ms. Von der Leyen was voted in tonight, 17 July, with a narrow margin of 9 votes. She is a staunch supporter of NATO. Her role is to keep NATO as an integral part of the EU. In fact, as it stands today, NATO is running the EU. This may change, once people stand up against NATO, against the US vassal, the EU Administration in Brussels, and claim their democratic rights as citizens of their nation states.

Europeans sense that these Pentagon initiated and ongoing wars and conflicts, supported by Washington’s European puppet allies, may escalate into a nuclear war, their countries’ NATO bases will be the first ones to be targeted, sinking Europe for the 3rdtime in 100 year into a world war. However, this one may be all-destructive nuclear – and nobody knows or is able to predict the damage and destruction of such a catastrophe, nor the time of recovery of Mother Earth from an atomic calamity.

So, let’s hope Turkey exits NATO. It would be giant step towards peace and a healthy answer to Washington’s blackmail and sabotage against Turkey’s currency. The US currency sanctions are, in the long run, a blessing. It gives Turkey a good argument to abandon the US dollar and gradually shift towards association with eastern moneys, mainly the Chinese Yuan, thereby putting another nail in the US-dollar’s coffin.

However, the hardest blow for Washington will be when Turkey exits NATO. Such a move will come sooner or later, notwithstanding Ms. Von der Leyen’s battle cries for NATO. The breaking up of NATO will annihilate the western power structure in Europe and throughout the world, where the US still maintains more than 800 military bases. On the other hand, the disbanding of NATO will increase the world’s security, especially in Europe – for all the consequences such an exit will bear. Exiting NATO and economically exiting the US-dollar orbit is a further step towards dedollarization, and a blow to US financial and military hegemony.

Finally, investments of the Chinese Belt and Road Initiative (BRI), also called the New Silk Road, will be mostly made in Yuan and local currencies of the countries involved and incorporated in one or more of the several BRI land and maritime routes that eventually will span the globe. Some US-dollar investments may serve the People’s Bank of China, China’s Central Bank, as a dollar-divesting tool of China’s huge dollar reserves which currently stands at close to two trillion dollars.

The BRI promises to become the next economic revolution, a non-dollar economic development scheme, over the coming decades, maybe century, connecting peoples and countries – cultures, research and teaching without, however, forcing uniformity, but promoting cultural diversity and human equality – and all of it outside the dollar dynasty, breaking the nefarious dollar hegemony.

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This article was originally published on New Eastern Outlook.

Peter Koenig is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21st Century; TeleSUR; The Saker Blog, the New Eastern Outlook (NEO); and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance. He is a Research Associate of the Centre for Research on Globalization.

IN MAJOR THREAT TO DOLLAR’S RESERVE STATUS, RUSSIA OFFERS TO JOIN EUROPEAN SWIFT-BYPASS

Three weeks after a meeting between the countries who singed the Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), which was ditched by US, French, British and German officials said the trade mechanism which was proposed last summer – designed to circumvent both SWIFT as well as US sanctions banning trade with Iran – called Instex, is now operational.

And while we await for the White House to threaten Europe with even greater tariffs unless it ends this special purpose vehicle – it already did once back in May when it warned that anyone associated with the SPV could be barred from the U.S. financial system if it goes into effect – a response from the US is now assured, because in the biggest attack on the dollar as a reserve currency to date, on Thursday, Russia signaled its willingness to join the controversial payments channel, and has called on Brussels to expand the new mechanism to cover oil exports, the FT reported.

Moscow’s involvement in the Instex channel would mark a significant step forward in attempts by the EU and Russia to rescue a 2015 Iran nuclear deal that has been unravelling since the Trump administration abandoned it last year.

“Russia is interested in close co-ordination with the European Union on Instex,” the Russian foreign ministry told the Financial Times. “The more countries and continents involved, the more effective will the mechanism be as a whole.”

… and the more isolated the US will be as a currency union meant to evade SWIFT and bypass the dollar’s reserve currency status will soon include virtually all relevant and important countries. Only China would be left outstanding; after the rest of the world’s would promptly join.

On Thursday, the Kremlin confirmed the foreign ministry’s take:

“We are tracking the information regarding this. If I’m not mistaken, there have already been statements from our side that, taking into account the first experience of using this system, when it is activated, we cannot rule out interaction in this regard,” Dmitry Peskov, Vladimir Putin’s spokesman, told reporters.

“This is an important project. It is aimed at protecting the interests of European economic operators against the background of illegal attempts to restrict their activities by third countries,” he added.

Earlier, the Russian foreign ministry hinted at precisely what will take place next, when it said that “The full potential of Instex will only be able to be deployed if it will be open to the participation of countries which are not members of the European Union.” Such as Russia and China.

Ironically, Mohammad Javad Zarif, Iran’s foreign minister, has previously described Instex as “not sufficient” even though Russia was far more promise, and said Instex was “a good tool in the implementation of projects . . . that the United States has strongly torpedoed” but called for it to be expanded to include crude oil.

“If the encouraging statements by the EU . . . will be backed up by concrete steps and practical advances, including in relation to the use of Instex for servicing trading in Iranian oil, it will help stabilise the difficult situation created around the JCPOA,” it said.

Russia has strengthened its ties with Iran in recent years as part of Moscow’s increased geopolitical importance in the Middle East, including its role of propping up the Assad regime in the war in Syria.

At a meeting with Iran’s president Hassan Rouhani last month, Russian president Vladimir Putin vowed to continue developing trade ties with Tehran and said Moscow was committed to a project to expand the Bushehr nuclear plant in Iran. As the FT correctly notes, efforts to rescue the nuclear deal have been a rare area of co-operation between Brussels and Moscow, whose relations have soured in recent years.

* * *

Since US president Donald Trump pulled out of the deal last May, its other signatories — Germany, France, UK, China and Russia — have scrambled to find ways to maintain trade with Iran. But they have been stymied by companies’ reluctance to risk Washington’s wrath.

As a reminder, Instex was launched in January but subsequently delayed by bureaucratic hurdles and the complications caused by the US sanctions. It only became operational last month and has been criticised by both Tehran – for having big limitations – and the US – for existing.

Iran has a more valid point: just 10 EU states are members and the mechanism’s initial credit line of several million euros is a fraction of EU-Iran trade, which stood at more than €20bn annually before the US sanctions.

Meanwhile, it appears that Moscow will get an invite because as the FT adds, Brussels is interested in bringing Russia into Instex, but it would first seek to get the channel up and running with humanitarian aid trades before potentially expanding its scope or membership.

Federica Mogherini, the EU’s foreign policy head, said this week that the trade mechanism “has always been conceived to be open to third countries . . . and we are already seeing interest by some of them to participate in that”, although she did not identify them. “The issue of whether or not Instex will deal with oil is a discussion that is ongoing among the shareholders,” she added.

And while Iran wants Europe to buy its oil so that it can use the hard currency earnings to import basic commodities and medicines through Instex, Russia is seeking to find ever more creative ways to chip away at US global dominance, with a focus on the dollar’s reserve currency status.

Additionally,  Moscow previously said that it would look into ways to facilitate or finance Iranian oil exports if Instex was not launched or proved to be ineffective.

As we discussed extensively last summer, the idea behind Instex was to set up a mirror image transaction system that replaces potentially sanctionable international payments between Europe and Iran with payments that do not cross Iran’s borders, nor are they denominated in dollars to avoid giving the US veto rights.

As a final point, the FT quotes analyst who said that China, which has repeatedly defied US sanctions on Iran, has greater potential to hand Tehran an economic lifeline by continuing to purchase Iranian crude exports; it has yet to be seen if China will also join Instex.

Source

IMF who? Lagarde shows ECB is the top dollar job in QE age

July 17, 2019

by Ramin Mazaheri for the Saker blog (cross-posted with PressTV by permission)

IMF who? Lagarde shows ECB is the top dollar job in QE age

(Ramin Mazaheri is the chief correspondent in Paris for Press TV and has lived in France since 2009. He has been a daily newspaper reporter in the US, and has reported from Iran, Cuba, Egypt, Tunisia, South Korea, and elsewhere. He is the author of “I’ll Ruin Everything You Are: Ending Western Propaganda on Red China.”)

Christine Lagarde just quit her top post at the International Monetary Fund in order to run the European Central Bank. This shows just far the euro has come (and central bankers), and represents either a historic step backwards or a leap of faith forward in the fight against the global domination of the US dollar.

The dollar’s dominance is what allows Washington to impose murderous, illegal sanctions on countries like Iran, Cuba, Korea and elsewhere, which is why many are so keen to end it.

The dollar’s imposition began after World War II, when the war-ravaged powers were forced to accept equating US paper with (but actually above) gold, a move which Charles de Gaulle bitterly referred to as the “exorbitant privilege” of the United States. The logic is simple: a $100 dollar bill cost Washington only the price of a piece of paper, whereas everyone else still had to mine, barter, earn or steal $100 worth of gold (or its equivalent in goods) to acquire that banknote.

The expensive US failure in Vietnam caused Richard Nixon to end this policy in 1971, but QE – printing money out of thin air – was opposed back then, so a replacement tool had to be quickly found in order to maintain US empire. The solution to effectively maintain the Bretton Woods system was found with the petrodollar” agreement of 1973: every barrel of Saudi oil sold to anyone had to be purchased in dollars, and surplus Saudi profit would be invested in US banks and in US debt securities (“petrodollar recycling”, per Henry Kissinger).

Washington had no qualms about propping up the ruthless, reactionary House of Saud to maintain US economic hegemony. The system expanded to other oil producers to the point where: no dollars? No oil.

The petrodollar keeps money flowing into the US and allows the US to “print gold” – it finances their huge budget deficits, high demand for the dollar fights off their inflation, it gives their banks a source of income for which they do zero genuine work, and the US themselves can buy “as much oil as they can print” from the Saudis. This is obviously a tremendous bargain for the US – the only reason the Saudis accept it is because they know they have absolutely zero legitimacy and would be deposed instantly without US arms and military support.

But the great deal is only for some in the US, as they are rabid neoliberal capitalists: from 1980 onwards the US elite funnelled these huge monies into Wall Street and other asset classes which only their fellow elite can touch, as opposed to intelligently and patriotically using the income to improve the overall conditions of their own nation, or even just raising wages (neoliberals call these concepts “socialism”).

Pick your poison: the US or the IMF?

The IMF, which is always led by a European, has long-pushed something to end this scam that weakens everyone for the US’ benefit, via the concept of the SDR (special drawing rights): a basket of international currencies which could replace the dollar as the world’s backing currency. Who needs the Fed when the SDR can provide international liquidity and financial stability? It wasn’t a great system, but it was closer to the IMF’s original aim of having an international monetary system, instead of the current US empire system of (petrodollar) tribute, which is no different from the Roman era.

The Great Recession pushed the superiority of the SDR to the fore – in 2009 China publicly supported, for the first time, that an international reserve currency be based on the SDR and be run by the IMF. The immorality and business failures of US bankers caused the Great Recession – it was only logical that the Americans lose their banking primacy.

The IMF was thus poised to become top banker, and one of their own was even about to be democratically elected.

In 2011 then-current IMF chief Dominique Strauss-Kahn, a major backer of the SDR basket, was outpolling Nicolas Sarkozy 2 to 1 to head the world’s 5th-largest economy and the neo-imperialist master of North and West Africa. He was certain to win, but on American soil he was accused of attempted rape of a hotel maid, dooming his presidency. The charges were dropped, but Strauss-Kahn admitted the liaison. People screamed “conspiracy” – I always found it highly coincidental that Strauss-Kahn found a maid whose native language was French in a country where seemingly all the cleaning women are Latinas? Conspiracy theorists assumed Sarkozy was behind it, with few noting how the IMF, the SDR and Strauss-Kahn threatened US economic hegemony.

QE means the US’ 1% never have to pay for their crimes

The US pushed back the IMF with one arm while the other arranged the current global financial regime – Quantitative Easing.

QE has been a total failure for the average person worldwide, but nowhere more so than in Europe. Incredibly, 1.5 years after it became official, PressTV and I remain one of the very few people to write about the statistical reality of Europe’s “Lost Decade”. I saw it happening in painful slow-motion, being PressTV’s chief correspondent in Paris.

The reason the Mainstream Media doesn’t want to talk about the failure of QE to provide broad economic growth is because their pro-capitalist media are owned by the same billionaires who get all the profit from QE.

The printing of trillions of paper money (which are certainly not backed by trillions in newly-mined gold) has, just like the oil-produced fruits of the petrodollar, gone to remake the same asset bubbles which sparked the Great Recession.

Once again, only the wealthy are profiting from shady capitalist practices: Housing Bubble II, new stock market records despite the endemic failure of the “real-economy” (evidenced by the Lost Decade), and absurd records in the prices of absurd luxury goods like MBS’ purchase of a da Vinci painting – this has all been paid for by the neoliberal-neoimperialist policy of QE which has failed the average Western citizen and continued the economic misery of the developing world.

But QE has proven one thing: governments are the most powerful forces in society, not bankers. This is something which socialist-inspired democracies are based on, but which only the 1% appear to take advantage of in Western liberal democracies.

Lagarde moving from the IMF to ECB would have been thought of as a step down pre-QE, mainly because nobody imagined that the head of the ECB could create several trillions of dollars simply by tapping a keyboard, as her predecessor Mario Draghi did. The IMF has a lot of money, but they do not have the power to create money.

Lagarde: More bad news for Europe’s 99%

When Lagarde was announced as the new head of the ECB the Western mainstream media provided – of course – none of this background, nor any perspective which fairly criticises the record of neoliberal thought and practice. Instead, their leading media justified Lagarde on one criterion – gender. The New York Times’ article was, “In Tense Times, ‘Call in the Woman’: Lagarde Will Lead the E.C.B”.

The Times championed Lagarde’s own claim that she deserved the job because she was not a male: “As I have said many times, if it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today.”

Such a claim is preposterous and shows how little Lagarde understands the principles and practices of neoliberal economics. However, everyone can quickly see that it also denies the existence of empresses, queens, Thatchers and Clintons; it also denies that women have played any role in shaping the positive and negative aspects of our modern world; it is a justification entirely based on divisive, distracting “identity politics” instead of a class-based true feminism.

Certainly, nobody would claim that simply being a male would be all that is necessary to head the ECB. And yet, such nonsense is all it takes in 2019 – we must all cheer simply because the new boss is female. This is what works with the average American today.

But the ECB is not American – why Lagarde?

The Times repeated the same misleading claim – that Lagarde is an “antitrust lawyer by training” : she worked for the world’s biggest law firm, based in Chicago (the Qom of neoliberal capitalist thought), meaning that she likely worked to manipulate the law in order to maintain trusts, not to dismantle trusts. The Times was forced to acknowledge that she has no experience as a central banker and will thus have a “steep learning curve”.

The West continues to put people in power based on the most absurd pretences of qualification for public service, even when such posts are unelected.

Investopedia had the same assessment as The Times: “However, the absence of an economics background or a discernible opinion on monetary policy means she would have to rely on financial technocrats a fair amount. Lagarde, who says she faced sexism and discrimination in her professional life….”

Lagarde clearly does not have the background required – just like The Times, Investopedia ignores this to assert her “gender qualifications”.

Pity the poor European Mainstream Media reader: Largarde is only a shiny tool whose ascension will do nothing but put an unqualified person in charge of the QE money-printing scheme. She will obviously kowtow to “technocrats” who insist that QE will eventually, one day stop creating Lost Decades.

Lagarde thus got the job not her qualifications but her ideology: it is not Islamic, nor socialist, nor moral – she believes in phony technocratism, because for Lagarde and her ilk “technocrats” are synonymous with “the 1%”. I know Lagarde well from covering the Tapie Affair in France: she was found guilty of negligence and misuse of public funds in a case where she got Sarkozy’s friend Bernard Tapie a hugely controversial 400-million euro payout from the French public coffers.

She only doesn’t have a criminal record and didn’t go to jail, which would seemingly have disqualified her for the ECB Post because…because Frances judicial system is not independent but totally corrupted by 1% influence – the judge simply decided to let her go scot-free, despite her guilt.

Negligence, misuse of public funds, payouts for millionaires – now we understand why Lagarde is considered to be “qualified” to run the ECB, and their QE scam, and to continue the phony “the 99% must work their nation out of debt” justification for austerity policies. More “Western-style leadership”…..

The leap of faith forward I mentioned at the start is this: the ECB runs the world’s largest macro-economy – it is possible they could decouple themselves from the dollar’s decades of exorbitant privilege, and the Chicago school of (neoliberal) capitalism, and start pursuing policies which do not flood the 1% with cheap credit to buy cheaply the lives of people across Europe.

However, the legal structures of the EU and the Eurozone are written in post-1989 language which is even more typically American than what underpins the system of the US itself. Therefore we can have little basis for faith that the cabal of bankers and public-into-private national finance minsters which is the Eurogroup, which runs the Eurozone with zero democratic accountability or even transparency, is going to start caring about the 99% in any of their respective nations.

The selection of the French Lagarde illustrate that Europe is no longer sovereign, but content to be a tool of US economic hegemony.

The BRICS countries hold out hopes for ending the petrodollar-fuelled US global finance domination, but they have effectively lost Brazil via the US-orchestrated coup against Dilma Roussef, and they have foolishly not offered to make it BRIICS, with the second ‘I’ standing for Iran. No need, really: China, Russia and Iran continue to make the most headway against the dollar, via the Belt and Road Initiative but especially the unstoppable petroyuan.

Cryptocurrency is another unstoppable way for countries to oppose US control over the global financial system, which is why The New York Times and the US treasury secretary just screamed, “Cryptocurrencies Pose National Security Threat, Mnuchin Says”. Cryptocurrency was indeed created in order to end the US petrodollar and QE schemes, which is why they are so wonderful and why they must be supported.

Lagarde leaving the IMF for the ECB is definitely a historic shift in the (Western) priority rankings. It is simply tragic for the West’s billion of innocents that unaccountable, unelected central bankers and their ineffective, corrupt cronies have become their political elite. This, of course, has equally lamentable consequences for those nations suffering under neoimperialism, illegal sanctions and other Washington-based policies.

زخمٌ جديدٌ في «طريق الحرير» الصينية: مواجهة لـ«الحمائية» الأميركية

Image result for ‫منتدى الحزام والطريق‬‎

الأخبار

 الثلاثاء 30 نيسان 2019

انتهت أعمال قمة «منتدى الحزام والطريق»، التي عُقدت في بكين بحضور أكثر من 37 من رؤساء دول وحكومات ووفود، مسجّلة صفقات يزيد إجمالي قيمتها على 64 مليار دولار أميركي

اختتم الرئيس الصيني شي جين بينغ، قبل يومين، قمة «منتدى الحزام والطريق»، بحضور قادة من 37 دولة ومنظمة دولية، من بينهم الرئيس الروسي فلاديمير بوتين. القمة، وهي الثانية للمنتدى، شكّلت مرحلة جديدة في مسيرة مبادرة «حزامٌ واحد وطريقٌ واحد» التي أطلقتها بكين قبل ستة أعوام، وتهدف إلى إعادة إحياء طريق الحرير التاريخي، الذي كان يربط الصين بعشرات الدول تجارياً.

شي أعلن في نهاية القمة التي احتضنتها بكين لمدة ثلاثة أيّام، التوصل إلى توافقات واسعة بشأن تدعيم «التعاون العالي الجودة» في إطار المبادرة، مع سعيٍ لطمأنة المتشككين في أن مشروع البنية التحتية الهائل سيركز على «تنمية مفتوحة ونظيفة وصديقة للبيئة» مع الأطراف المختلفة، التي تُجري «مشاورات على قدم المساواة»، مؤكداً أن مزيداً من الدول ستنضم إلى هذا المشروع لإنشاء بنى تحتية تربط بين آسيا وأوروبا وأفريقيا. وفي مؤتمر صحافي، أكد الرئيس الصيني أن مبادئ السوق ستطبق في جميع مشاريع التعاون التي تتضمنها المبادرة التي تهدف إلى إحياء «طريق الحرير» القديم الذي كان يربط بين الصين وآسيا وأوروبا، مشيراً إلى أن الشركات هي المحرك الأساسي لكل مشاريع المبادرة التي ستطبق عليها كل مبادئ السوق، فيما تلعب الدول دوراً داعماً.

أكّد شي أن المبادرة ستواصل رفض «الحمائية» في انتقاد لواشنطن التي تتبع سياسة حمائية (أ ف ب )

وفي تصريحات خلال الجلسة الختامية للقمة، قال شي إن «المزيد من الأصدقاء والشركاء سينضمون إلى المبادرة»، موضحاً أن «الجميع دعم فكرة تطوير شراكة، واتفقوا على تعزيز آليات التعاون». ووُقّعت اتفاقيات تعاون بقيمة تزيد على 64 مليار دولار أميركي في مؤتمر للمديرين التنفيذيين خلال المنتدى. كذلك، أشار البيان الختامي المشترك إلى أن الزعماء اتفقوا على أن يحترم تمويل المشاريع الأهداف العالمية المتعلقة بالديون، وعلى الترويج للنمو الاقتصادي الصديق للبيئة». من جهتها، أعلنت الصين، في بيانٍ منفصل، أنها وقّعت مذكّرة تفاهم مع دول عديدة، من بينها إيطاليا وبيرو وباربادوس ولوكسمبورغ وجاميكا.

أمّا على صعيد مهاجمة الولايات المتحدة المبادرة الصينية، واتهامها بإيقاع الدول النامية في ديون بعرض تمويل رخيص لا يمكنها تحمّله، فقد حاول شي في خطابه تبديد هذه المخاوف. وقال: «هذا العام، يرسل المنتدى رسالة واضحة: المزيد من الأصدقاء والشركاء سينضمون إلى دائرة الحزام والطريق»، مؤكداً أن المبادرة ستواصل رفض «الحمائية»، في انتقاد لواشنطن التي تبنّت سياسات حمائية في عهد الرئيس دونالد ترامب.

والمبادرة التي تم اقتراحها عام 2013، امتدت من آسيا وأوروبا إلى أفريقيا والأميركيتين وأوقيانوسيا، لتفتح مساحة جديدة للاقتصاد العالمي بنتائج أفضل من المتوقع. ووقّع أكثر من 150 دولة ومنظمة دولية على وثائق تعاون مع الصين في إطار المبادرة. واللافت أنه خلال السنوات الخمس الماضية، تجاوز حجم التجارة بين الصين والدول الأخرى المشاركة في المبادرة 6 تريليونات دولار أميركي، فيما تجاوزت استثمارات الصين في الدول المشاركة في المبادرة 90 مليار دولار. كذلك، حظيت المبادرة بدعم قوي من قبل القادة ورجال الأعمال الأجانب. وقد تمظهر ذلك في الكلمات الافتتاحية للرؤساء.

تم توقيع اتفاقيات تعاون في القمة بقيمة تزيد على 64 مليار دولار أميركي

من جانبه، دعا بوتين الدول المشاركة في المنتدى للانضمام إلى مشروعي الطريق البحري الشمالي و«طريق الحرير». وفي كلمته، أوضح الرئيس الروسي أن بلاده تولي اهتماماً كبيراً لتطوير الطريق البحري الشمالي، مضيفاً: «نحن نفكر في إمكانية ربطه بطريق الحرير الصيني، وبالتالي إقامة طريق نقل عالمي وتنافسي، يربط شمال شرق، وشرق وجنوب شرق آسيا بأوروبا». وأكد بوتين أن هذا المشروع الضخم يعني قيام تعاون وثيق بين دول أورآسيا لزيادة حركة الترانزيت وبناء محطات استقبال البضائع والحاويات في الموانئ، وكذلك المراكز اللوجيستية.

يُذكر أن الطريق البحري الشمالي هو وجهة نقل تمتد من المحيط الأطلسي إلى المحيط الهادئ على طول سواحل شمالي روسيا في الدائرة القطبية الشمالية. ويعبر هذا الطريق بحور الشمال بمحاذاة سيبيريا إلى الشرق الأقصى الروسي على الحدود مع اليابان وكوريا، وصار متاحاً أمام حركة الملاحة البحرية مع ذوبان الجليد في القطب الشمالي.

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$0 in Iran oil sales? Anything to stop Muslim democracy… but they won’t stop it

April 27, 2019

by Ramin Mazaheri for The Saker Blog

If 7,000 Greeks can stop the Persian empire at the narrow pass at Thermopylae, I think it’s absurd to think Iran can’t stop 20-30% of global oil traffic at the 3 kilometer-wide shipping lane in the Strait of Hormuz. That would, of course provoke a global crisis and economic disaster.

That’s the “nuclear option” for Iran. It is reportedly part of a military plan called “Ghadir”, which evokes the alpha letter of modern Iranian Islamic history – Ghadir Khumm is the location where Prophet Mohammad anointed Imam Ali his successor, but (those who came to be called) Sunnis amazingly rejected the Prophet’s wishes. Shia – which means “partisans of Ali” – did not.

The US has severely overestimated their military capability to defend this attempt to politicise oil and get Iranian oil exports to zero. Mining the strait, mini-subs, kamikaze speedboats – all of these will be hugely effective against anything the US Navy has. For all the US drones and satellites and aircraft carriers, there is no way they can protect the Straits of Hormuz long-term, not any more than they could hold any of a thousand Afghan mountain passes long-term. Should we trust history or the sales pitches of corrupt Pentagon contractors?

No military can stop endless kamikazes. But who wants to be a kamikaze? What could produce the desire to be a kamikaze?

$0 in oil sales may do it.

There is undoubtedly a part of the Iranian psyche which now wants a final showdown. The years of talking, talking, talking about the JCPOA pact on Iran’s nuclear energy program… and then its failure, thanks to US unilateralism and spineless European hypocrisy, has created a lot of existential angst for Iranians. How can Iranian diplomacy work when the opponents refuse diplomacy and honor?

That is an existential and philosophical question, but there is also a lot of undeniable frustration since the inhumanly effective 2012 Triple Sanctions (US, UN, EU). Iranian society has been forced to become perceptibly more desperate, more coarse, less warm, less Iranian – it is difficult to admit this.

Iran cannot be forced into starvation indefinitely. That is why blocking the Strait of Hormuz – if it ever happens – will certainly be accompanied with an ultimatum: the West must end Iran’s isolation and finally accept the Iranian Islamic Revolution of 1979. The world must live with us, finally, because it cannot live without us in the 21st century.

Unfortunately, due to Islamophobia, even more so than 40 years of media-led Iranophobia, nobody in the West is going to burn a draft card for Iran. The opposition to the obviously immoral war on Iraq produced just a day of street protests in the US – hardly worth the effort. Neither is Iran in the position of the USSR, meaning it has no chance to save the West from racist fascists – after all, the West supports the racist fascists (Taliban in the 1980s, ISIL today, et al).

Because nobody in the West will put any pressure on the governments to stop the oppression of Iran, perhaps Iran has to force the issue by closing the Strait of Hormuz? Is Iran backed into a corner?

I say no, because Iran is not going to sell $0 in oil in month of May.

Firstly, should Iran be worried? Answer: no. The world needs Iranian oil (and revolutionary culture)

When is the last time the US policy worked out in the Middle East? Afghanistan, Iraq, Syria, Yemen – all have had their growth retarded, but are not destroyed… just like Iran.

As Pepe Escobar pointed out, it’s much easier to retard the Colombian dream of Eurasian integration by attacking its weakest major point – Iran, as opposed to China and Russia.

The bottom line is: can the US do what it claims – reduce Iranian oil sales to $0. No, they cannot.

It certainly seems like the US is foolishly believing self-aggrandising and duplicitous claims from Gulf princes, who are overestimating their oil production abilities.

However, we must first remember that Saudi hatred for Iran is not based on religion – even though “Saudis are not Muslims – they are Wahhabis,” as the regional saying goes – it is based on politics: they hate Iran for proving that all monarchies are immoral, ineffective, undemocratic and a hindrance to the type of democracy Muslims want (Islamic socialist). Their animosity is based on Iran’s ability to make Muslims aware of their modern Islamic socialist rights, and to show how acquiring these rights does not – as the West insists – require the exclusion of their culture, history and religion. Iran, in the manner of all true revolutionaries, insists on constantly couching it in these drastic but honest terms, thus continually flouting their rebellion and their success in the face of the horrific Gulf monarchs.

But the Gulf monarchs, shockingly, are liars: They will NOT be able to give China and India enough replacement oil.

Saudi production peaked at 11 million bpd (barrels per day) last November, which was the system’s maximum stress level, but is now down below 10 million. Offsetting Iranian production – getting up to at least 12 million bpd – thus seems impossible: “A 2-million-bpd Saudi production increase would move the Kingdom’s oil production into unchartered territory and would wipe out completely the kingdom’s spare capacity,” according to Gary Ross, head of global oil analytics at S&P global, via Reuters.

Anyway, Saudi Arabia is not going to increase oil production in May despite the sanctions – they want higher prices to continue bankrupting shale oil / fracking. Because the Saudi state full of disorganised and egotistical princes, they are also full of conflicting agendas.

As far as the UAE, they produce only 3 million bpd, so they aren’t capable of tipping the output scales drastically.

Furthermore, OPEC is at its lowest production since 2015, and Venezuela and Libya show no signs of regaining former glories anytime soon. Even if slow increases from the Saudis and UAE arrive, there are other drains on oil inventories to offset even before cutting off Iran.

So why should Iran feel like we aren’t needed anymore?

Only an administration as filled with incompetents as the Trump administration is could take such lies and mixed signals seriously. But the US is about Israel first, corporations second and everyone else last, therefore any attempt to foment regional stability and higher oil prices makes their constituents happy. Of course, it also advances capitalism-imperialism.

Iran – still no retreat, no surrender… still no big deal

Even just moderately-intelligent Westerners know that “Iran sanctions aren’t a realistic path to peace”, because the sanctions are not designed for peace, but for fomenting internal civil war and to support regional US imperialism.

There is another way Iran could decisively end Western antagonism: simply accede to Western demands, as encapsulated by US Secretary of State Mike Pompeo’s totally-absurd 12 demands. All Iran has to do is – just like the North Vietnamese, North Koreans, Cubans and Chinese – is renounce their revolution entirely, like Egypt, post-Sankara Burkina Faso and now, to a lesser extent, Julian Assange-betraying Ecuador.

I examined what steps Iran would have to actually take in order to get the Cold War called off in this article, Iran detente after Trump’s JCPOA pull out? We can wait 2 more years, or 6, or…., which caps my upcoming book on Iran.

Beyond Pompeo’s fatheaded nonsense, it all comes down solely to capitalist-imperialist logic: Iran must sell off a controlling chunk of the nation into Western hands. There is no way Iran will do that – there are just too many people who are too committed to upholding the 1979 Revolution, the Constitution and Iranian sovereignty.

It’s not as if Iran’s politicians are as out-of-touch, arrogant and stupid as a Persian Gulf prince: the current budget is based on only exporting just 1.5 billion barrels per day with a price of only $54 per barrel (or $83 million per day) because we all knew back in early 2016 that a Trump presidency would hit Iran, Cuba and Palestine the hardest. The price is already around $70. If we assume that things really progress badly, we must also assume the price of oil will rise – a price of $80 means Iran needs to sell just 1 million barrels per day ($80 million per day) to stay under budget. Last month, with some countries already instituting cutbacks, Iran sold 1 million barrels.

The reality is that it is all about China and India for Iran – they sell 3 times more oil to them than even Iran’s #3 customer. Reports are conflicting, negotiations are ongoing – we can’t truly say with 100% confidence what will happen in Beijing and New Delhi.

But… India is the more compliant nation, and they are reportedly going to reduce sales to 100,000 bpd using a rupee payment system. The links are going to remain open, and that is all that matters – the numbers will certainly be fudged. Long-term, Iran is quite happy to sell oil in non-dollar denominations and be the pioneer in that move away from the petrodollar.

Regarding China: Some reports say China will actually increase imports from Iran up to 1 million bpd, totally sabotaging the US. I would hold out absolute certainty until the US and China signs their trade deal next month. However, I highly doubt China is going to sabotage the key node – and the absolutely key energy node – in their Belt and Road Project. China might sell out Iran for a couple years, perhaps during the Trump administration, but long-term? No way. China is not an island, and Iran is the only country which has proven to be revolutionary enough for Red China to trust, which is why they have such serious multi-decade plans already signed. Hard to predict the future, but there’s always both short- and long-term considerations, and long-term China and Iran are united, firmly.

Beyond the two big customers, Turkey says they will flout sanctions, but Turkey also talks a much better game than they punch.

Regardless, Iran will still sell oil “illegally”. Iran, as Foreign Minister Javad Zarif recently joked, has a “PhD in that area” of sanctions-busting. Iran was the first modern nation to barter oil for something other than US dollars, and they will be the first nation (I predict) to successfully implement a national crypto-currency.

Iran will obviously send oil to places like Turkey (and India, as Iraq is a top-3 supplier for them) through friendly Iraq. Will Iran lose some profit as a result? Yes, but it’s not like Iranian oil is going to be sold for pennies on the dollar to Iraqis – we are talking minor losses of 10-20%, I’d guess. Over decades that’s significant, but if we are talking about enduring 2 or 6 years more of Trump, then it’s certainly not enough to bankrupt Iran, which is the goal of the illegal US tactic. Crucially, it is certainly fair to assume that now-higher oil costs will offset this new surcharge for sanctions-busting via Iraq.

Regarding bankruptcy: It’s hard to say exactly how much hard currency reserves Iran has, but the IMF said $100 billion in 2017. What reduced oil sales really means – again, $0 won’t happen – is a cutback in new projects.

What does that mean? It means cutting out future infrastructure projects, as well as savings into the National Development Fund. Just as Cuba prioritises their far, far fewer pesos for health, education and food, so will Iran – neither country will starve, neither country will relent… and Iran will still make billions selling oil, unlike Cuba. The years of worsened sanctions has meant things like: Iran have to postpone record breaking projects, like Niayesh Tunnel, the 2nd-largest urban tunnel in the world, finished in 2013, or the Sadr double-decker Expressway, also finished in 2013… but only for a few years. It has meant things like: Iran will get all the global infrastructure in place and start broadcasting PTV Français, and even tap yours truly as its Paris correspondant, but a lack of money means that all the journalism is done solely in Tehran for now. But someday I’ll be reporting in French, Inshallah.

Of course, sanctions do more than retard Iranian growth – the existential angst leads to unnecessary inflation, reluctance for private domestic investment in the “real economy”, and major cutbacks in quality of life for the average Iranian. But, as I’ll point out later – Iran is not Yemen, which is what the US mistakenly thinks they can achieve.

People on the left and the right in Iran actually welcome each new tough sanction with a Persian carpet rollout – it necessarily fuels the “Resistance Economy” championed by Leader Ali Khamenei and others. There is no doubt that a sanctioned people do not just throw up their arms and quit – domestic capacities, initiatives and genius must be honed and further created. In 1995 Iran produced almost no cars – by 2010 they were 14th in the world and the undisputed Middle East leader. These are the types of things I am talking about, but which are not possible without socialist-inspired central planning and central control over industries.

Iran also has recent experience instituting a true War Economy, with rations and coupons to enforce economic egalitarianism, and that is another counterpunch to the US. It also creates countless future economic and cultural benefits.

The Iranian government are not Yemeni rebels, who have no factories, no bureaucracy, no refineries – and thus they are starving, sadly. The Iranian government is the stable status quo, and the status quo always has a million levers to pull before things get hairy… but because they are socialist-inspired, Iran’s government has three million levers. As I have repeatedly demonstrated over the years, the Iranian government controls essentially 100% of the non-Black Market and non-carpet economy. So, far beyond oil, the government actually has the power to completely mobilise the economy in favor of the People, which is something that Eurozone nations no longer have.

The end for US unipolar dominance will arrive swiftly. Iran’s reversal of isolation will also be swift, just as – all of a sudden – the US made detente with China in 1971 after decades of the same sanctions and exclusion Iran deals with. But detente certainly cannot happen during Trump’s first term, given how the US Deep State has so effectively mobilised against him to neuter his once-diplomatic foreign policy plans.

There is no long-term game plan for ending the phobia of Islamic democracy – in 2019, only Iran’s continued determination and success is the answer. Giving up in order to sell oil “legally” is not an answer, nor necessary. Iran has domestic levers to pull for years, and the experience to pull the right ones.

Maybe someday Iran will finally strike back and play their “now the talk really starts” exterior lever – closing the Straits of Hormuz? Iran is all about “neither East nor West but the Iranian Republic”, but I still don’t think that will happen until China feels secure enough to give the signal that they back Iran to the hilt, and that won’t come until the Belt and Road Initiative is further along.

As far as “more sanctions” – certainly disagreeable, but never terminal for Iran.

Ramin Mazaheri is the chief correspondent in Paris for Press TV and has lived in France since 2009. He has been a daily newspaper reporter in the US, and has reported from Iran, Cuba, Egypt, Tunisia, South Korea and elsewhere. He is the author of I’ll Ruin Everything You Are: Ending Western Propaganda on Red China. His work has appeared in various journals, magazines and websites, as well as on radio and television. He can be reached on Facebook.

Moscow’s Strategy: To Win Everywhere, Every Time

Moscow’s Strategy: To Win Everywhere, Every Time

Moscow’s Strategy: To Win Everywhere, Every Time

Important events have occurred in the Middle East and North Africa in recent weeks that underline how the overall political reconfiguration of the region is in full swing. The Shia axis (Axis of Resistance) continues its diplomatic relations and, following Rouhani’s meeting in Baghdad, it was the turn of Adil Abdul-Mahdi to be received in Tehran by the highest government and religious authorities. Among the many statements released, two in particular reveal the high level of cooperation between the two countries, as well as demonstrating how the Shia axis (Axis of Resistance) is in full bloom, carrying significant prospects for the region. Abdul-Mahdi also reiterated that Iraq will not allow itself to be used as a platform from which to attack Iran:

“Iraqi soil will not be allowed to be used by foreign troops to launch any attacks against Iran. The plan is to export electricity and gas for other countries in the region.”

Considering that these two countries were mortal enemies during Saddam Hussein’s time, their rapprochement is quite a (geo)political miracle, owing much of its success to Russia’s involvement in the region. The 4+1 coalition (Russia, Iran, Iraq, Syria plus Hezbollah) and the anti-terrorism center in Baghdad came about as a result of Russia’s desire to coordinate all the allied parties in a single front. Russia’s military support of Syria, Iraq and Hezbollah (together with China’s economic support) has allowed Iran to begin to transform the region such that the Shia axis (Axis of Resistance) can effectively counteract the destabilizing chaos unleashed by the trio of the US, Saudi Arabia and Israel.

One of the gaps to be filled in the Shia axis (Axis of Resistance) lies in Lebanon, which has long experienced an internal conflict between the many religious and political currents in the country. The decision by Washington to recognize the Golan Heights as part of Israel pushed the Lebanese president, Michel Aoun, to make an important symbolic visit to Moscow to meet with President Putin.

Once again, the destabilizing efforts of the Saudis, Israelis and Americans are having the unintended effect of strengthening the Shia axis (Axis of Resistance). It seems that this trio fails to understood how such acts as murdering Khashoggi, using civilian planes to hide behind in order to conduct bombing runs in Syria, recognizing the occupied territories like the Golan Heights – how these produce the opposite effects to the ones desired.

The supply of S-300 systems to Syria after the downing of the Russian reconnaissance plane took place as a result of Tel Aviv failing to think ahead and anticipate how Russia may respond.

What is surprising in Moscow’s actions is the versatility of its diplomacy, from the deployment of the S-300s in Syria, or the bombers in Iran, to the prompt meetings with Netanyahu in Moscow and Mohammad bin Salman at the G20. The ability of the Russian Federation to mediate and be present in almost every conflict on the globe restores to the country the international stature that is indispensable in counterbalancing the belligerence of the United States.

The main feature of Moscow’s approach is to find areas of common interest with its interlocutor and to favor the creation of trade or knowledge exchange. Another military and economic example can be found in a third axis; not the Shia or Saudi-Israeli-US one but the Turkish-Qatari one. In Syria, Erdogan started from positions that were exactly opposite to those of Putin and Assad. But with decisive military action and skilled diplomacy, the creation of the Astana format between Iran, Turkey and Russia made Turkey and Qatar publicly take the defense of Islamist takfiris and criminals in Idlib. Qatar for its part has a two-way connection with Turkey, but it is also in open conflict with the Saudi-Israeli axis, with the prospect of abandoning OPEC within a few weeks. This situation has allowed Moscow to open a series of negotiations with Doha on the topic of LNG, with these two players controlling most of the LNG on the planet. It is evident that also the Turkish-Qatari axis is strongly conditioned by Moscow and by the potential military agreements between Turkey and Russia (sale of S-400) and economic and energy agreements between Moscow and Doha.

America’s actions in the region risks combining the Qatari-Turkish front with the Shia axis (Axis of Resistance) , again thanks to Moscow’s skilful diplomatic work. The recent sale of nuclear technology to Saudi Arabia, together with the withdrawal from the JCPOA (the Iranian nuclear agreement), has created concern and bewilderment in the region and among Washington’s allies. The act of recognizing the occupied Golan Heights as belonging to Israel has brought together the Arab world as few events have done in recent times. Added to this, Trump’s open complaints about OPEC’s high pricing of oil has forced Riyadh to start wondering out aloud whether to start selling oil in a currency other than the dollar. This rumination was quickly denied, but it had already been aired. Such a decision would have grave implications for the petrodollar and most of the financial and economic power of the United States.

If the Shia axis (Axis of Resistance), with Russian protection, is strengthened throughout the Middle East, the Saudi-Israel-American triad loses momentum and falls apart, as seen in Libya, with Haftar now one step closer in unifying the country thanks to the support of Saudi Arabia, the United Arab Emirates, France and Russia, with Fayez al-Sarraj now abandoned by the Italians and Americans awaiting his final defeat.

While the globe continues its multipolar transformation, the delicate balancing role played by Russia in the Middle East and North Africa is emphasized. The Venezuelan foreign minister’s recent visit to Syria shows how the front opposed to US imperialist bullying is not confined to the Middle East, with countries in direct or indirect conflict with Washington gathering together under the same protective Sino-Russian umbrella.

Trump’s “America First” policy, coupled with the conviction of American exceptionalism, is driving international relations towards two poles rather than multipolar ones, pushing China, Russia and all other countries opposed to the US to unite in order to collectively resist US diktats.

Basel 3: A Revolution That Once Again No One Noticed

April 07, 2019

By Aleksandr Khaldey

Basel 3: A Revolution That Once Again No One Noticed
Translated by Ollie Richardson and Angelina Siard
cross posted with https://www.stalkerzone.org/basel-3-a-revolution-that-once-again-no-one-noticed/
source: http://www.iarex.ru/articles/65626.html

Real revolutions are taking place not on squares, but in the quiet of offices, and that’s why nobody noticed the world revolution that took place on March 29th 2019. Only a small wave passed across the periphery of the information field, and the momentum faded away because the situation was described in terms unclear to the masses.

No “Freedom, equality, brotherhood”, “Motherland or death”, or “Power to Councils, peace to the people, bread to the hungry, factories to the worker, and land to the farmers” – none of these masterpieces of world populism were used. And that’s why what happened was understood in Russia by only a few people. And they made such comments that the masses either did not fully listen to them or did not read up to the end. Or they did listen to the end, but didn’t understand anything.

But they should’ve, because the world changed so cardinally that it is indeed time for Nathan Rothschild, having crumpled a hat in his hand, to climb onto an armoured Rolls-Royce [a joke referencing what Lenin did – ed], and to shout from on top of it to all the Universe: “Comrades! The world revolution, the need for which revolutionaries spoke about for a long time, came true!” [paraphrasing what Lenin said – ed] And he would be completely right. It’s just that the results of the revolution will be implemented slowly, and that’s why they are imperceptible for the population. But the effects, nevertheless, will be soon seen by absolutely everyone, up to the last cook who even doesn’t seek to learn to govern the state soon.

This revolution is called “Basel III”, and it was made by the Bank for International Settlements (BIS). Its essence is in the following: BIS runs the IMF, and this, in turn, runs the central banks of all countries. The body of such control is called BCBS – the Basel Committee on Banking Supervision. It isn’t just some worthless US State Department or Congress of American senators. It’s not a stupid Pentagon, a little Department of the Treasury, which runs around like the CIA’s servant on standby, or a house of collective farmers with the name “White House”.

This isn’t even the banks of the US Federal Reserve, which govern all of this “wealth”. This is a Government of all of them combined. That real world Government that people in the world try not to speak about aloud.

BCBS is the Politburo of the world, whose Secretary General, according to rumours, is comrade Baruch, and the underground structure of the Central Committee is even more secret. It has many euphemisms, the most adequate of which is “Zurich gnomes”. This is what Swiss bankers are called. Not even owners of commercial banks, but namely those ordinary-looking men sitting in the Swiss city of Basel who Hitler – who tried to attach the whole world to the Third Reich, and who preserved neutrality with Switzerland during all the war – didn’t dare to attack. And, as is known, in Switzerland, besides Swiss rifleman, in reality there isn’t even an army. So who was the frenzied Fuhrer afraid of?

Nevertheless, the “recommendations” that were made by BCBS on March 29th 2019 were immediately, at the snap of the fingers, accepted for execution by all the central banks of the world. And our Russian Central Bank is not an exception. There is even the statement of the press service of the Central Bank of the Russian Federation posted on the official website of the Central Bank. It is called “Concerning the terms of implementation of Basel III”. The planned world revolution was in 2017 (magic of dates and digits or just a coincidence [a reference to 1917 – ed]?), but it has started only now.

Its essence is simple. In the world the system of exclusive dollar domination established in 1944 in Bretton Woods and reformed in 1976 in Jamaica, where gold was recognised as an equivalent of world money that became invalid, is being cancelled. The dollar indeed became world money, and gold became an ordinary exchange good, like metal or sugar traded in London on commodity exchanges. However, the weather was determined there by only three firms of the “Pool of London” that belong to an even smaller number of owners, but, nevertheless, it’s not gold, but oil that became the dollar filler.

We have lived in such a world ever since. Gold was considered as a reserve of the third category for all banks, from central to commercial ones, where the reserves were, first of all, in dollars and bonds of the US. The norms of Basel III demand an increase, first of all, in monetary reserves. This impeded the volumes of monetary resources of banks that could be used to carry out expansion, but it was a compulsory measure for saving the stability of a world banking system that showed to be insufficient in a crisis.

In Russia pseudo-patriots were very much indignant at this, demanding to reject Basel III, which they called a sign of “a lack of sovereignty”. In reality, this is a quite normal demand to observe international standards of bank security, which were becoming more rigid, but since we [Russians – ed] were not printing dollars, so of course it had an impact on us. And since the alternative is an exit from world financial communications into full isolation, so our authorities, of course, did not want to accept such nonsense that was even designated by pseudo-patriots as a “lack of sovereignty”. To call sovereignty – freedom, to put your head in the noose is, let’s agree, a strange interpretation of the term.

The Basel III decision meant that gold as a reserve of the third category was earlier estimated at 50% of its value on the balance sheets of world banks. At the same time, all owners of world money traded in gold not physically, but on paper, without the movement of real metal, the volume of which in the world wasn’t enough for real transactions. This was done in order to push down the price of gold, to keep it as low as possible. First of all, for the benefit of the dollar. After all, the dollar is tied to oil, which had to cost no less than the price of one gram of gold per barrel.

And now it was decided to place gold not in the third, but “just” in the first category. And it means that now it is possible to evaluate it not at 50, but at 100% of its value. This leads to the revaluation of the balance sheet total. And concerning Russia, it means that now we can quietly, on all legal grounds, pour nearly 3 trillion rubles into the economy. If to be precise, it is 2.95 trillion rubles or $45 billion at the exchange rate in addition to the current balance sheet total. The Central Bank of the Russian Federation can pour this money into our economy on all legal grounds. How it will happen in reality isn’t yet known. Haste here without calculating all the consequences is very dangerous. Although this emission is considered as noninflationary, actually everything is much more complicated.

During the next few months nothing will change in the world. The U-turn will be very slow. In the US the gold reserves officially total 8133.5 tons, but there is such a thing as a financial multiplier: for every gold dollar, the banks print 20-30 digital paper ones. I.e., the US can only officially receive $170 billion in addition, but taking into account the multiplier – $4.5 trillion. This explains why the Federal Reserve System holds back on increasing interests rates and so far maintains the course towards lowering the balance sheet total – they are cautious of a surge in hyperinflation.

But all the largest states and holders of gold will now revaluate their gold and foreign exchange reserves: Germany, Italy, France, Russia, China, and Switzerland – countries where the gold reserves exceed 1,000 tons. Notice that there is no mumpish Britain in this list. Its reserves are less than 1000 tons. Experts suspect that it is perhaps not a coincidence that the dates of Brexit and the date of Basel III coincide. The increased financial power of the leaders of Europe – Germany and France – is capable of completely concluding the dismantlement of Britain on the European continent. It was necessary to get out as soon as possible.

Thus, it seems that it is possible to congratulate us – the dollar era lasting from 1944 to 2019 has ended. Now gold is restored in its rights and is not an exchange metal, but world money on an equal basis with the dollar, euro, and British pound. Now gold will start to rise in price, and its price will rise from $1200-1400 per troy ounce up to $1800-2000 by this autumn. Now it is clear why Russia and China during all these years so persistently decanted its export income into the growth of gold reserves. There is now such a situation where nobody in the world will sell gold.

Injections of extra money will suffice for the world economy for 5-6 months. In the US this money can be used to pay off the astronomical debt. Perhaps this wasn’t Zurich’s last motive for making such a decision. But after all, the most important thing is an attempt to slip out from under the Tower of Pisa that is the falling dollar.

Since the dollar and oil are connected, the growth of the price of gold will directly affect the growth of the price of oil. Now a barrel costs as much as 1.627 grams of gold. A price growth will cause the world economy – where 85% of the money dollar supply turns into stock surrogates like shares, bonds, and treasuries – to cave in. The stock exchange will not be able to bundle together such an additional mass of money any more.

It will be good for oil industry workers – even, perhaps, best of all, but not for long. The economical crash because of expensive oil will become a crash for all oil industry workers too. It is precisely this that is the main reason why our rights for additional emissions can remain unused in full volume, although a gift in such a form will not be completely ignored. The May Decrees of Putin in the current context are being understood completely differently. Russia runs away from the oil-based economic model in all ways. Including by political reforms and changing the elites.

However, why is the decision of Basel a revolution? Because from the autumn the financial flood in the world economy will begin. It will entail the acceleration of Russia and China’s isolation from the dollar system and the crash of the economies that completely depend on the dollar – the vassal countries of the US. It will be worst of all for them. And this means that the reasons for increased distancing between the EU and the US will increase in number manyfold. A redrawing of the map of global unions awaits the world.

And the redrawing of these unions will be carried out not least by military methods. Or with their partial use, but in one way or another, reasoning involving force in the world will increase almost to the level of guaranteed war. “Almost” is our hope for rescue, because the US loses all main instruments of influence on this world. Except force.

But it’s not for this purpose that the “Zurich gnomes” created this world, so that the US is so simply turned into radioactive ashes. The US will be drenched with cold water like a broken down nuclear reactor, while the world has entered the zone of the most global transformations over the past few centuries. The revolution that so many waited for, were afraid of, and spoke so much about has started. Buckle up and don’t smoke, the captain and crew wish you a pleasant flight.

 

Iran looks East amid US trials and tribulations

February 12, 2019

Iran looks East amid US trials and tribulations

by Pepe Escobar (cross-posted with the Asia Times by special agreement with the author)

February 12, 2019

On the 40th anniversary of the Islamic Revolution, this past Friday, Supreme Leader Ayatollah Khamenei made an effort to express Iran’s geopolitical stance in simple terms: ‘We have good relations with all nations in the world, we don’t want to break relations with any European nation’, and an explanation of the slogan ‘Death to America’.

The Ayatollah said ‘Death to America’ “means death to Trump, John Bolton and Mike Pompeo. It means death to American rulers. We have no problems with the American people.”

So, the slogan is indeed a metaphor – as in death to US foreign policy as conducted for much of the past four decades.

That includes, of course, the dismantling, by the Trump administration, of the nuclear deal with Iran, known as the Joint Comprehensive Plan Of Action (JCPOA).

In a rash rebuke of the centrist government of President Hassan Rouhani and Foreign Minister Muhammad Javad Zarif – who negotiated the JCPOA with the Obama administration, as well as Russia, China, France, the UK and Germany – Khamenei stressed he would not have signed it. His legendary distrust of the US now seems more than vindicated.

Payment system

For the Europeans who signed the JCPOA, what’s left is trying to pick up the pieces. Enter Instex – the Instrument in Support of Trade Exchanges, a mechanism backed by the European Union, with its headquarters in Paris and run by a German banker, which in theory allows European banks and companies to keep trading with Iran without being fined, extra-territorially, by the US Department of Justice, or being totally excluded from the American market.

French Foreign Minister Jean-Yves Le Drian called it “an important geopolitical gesture.” But a “gesture” may not be enough, especially because initially it just covers humanitarian goods sold to Iran, such as pharmaceuticals, food and medical supplies.

Tehran pays Instex, and Instex reimburses the food and pharma companies involved. Further on down the road, small and medium-sized European companies might also use Instex to trade with Iran without being slapped with US sanctions.

What’s crucial in the long run about Instex is that the mechanism bypasses the US dollar. So, it will be under immense scrutiny all across the Global South. Instex won’t replace the Swift payment system anytime soon, because the capitalization is set at only $1 billion. The thing is whether other heavyweights, such as Russia, China and Turkey, will start using Instex to bypass US dollars and sanctions, trading way beyond “humanitarian goods”.

Instex, although an embryonic response, shows how Brussels and major European capitals are exasperated by the Trump administration’s unilateralism. Diplomats have been saying on and off the record that nothing will prevent the Europeans from doing business with Iran, buying their energy, investing in their market, and bypassing the US dollar in the process.

This has the potential to offer some breathing space to President Rouhani. The latest internal polls reveal that 40 years after the Islamic Revolution, over 70% of Iranians of all social classes have zero trust in any negotiations involving the US government. And that even includes an increasing number of millennials, for whom the Islamic Revolution is just an echo of a distant past.

That may not be the exact sentiment in Teherangeles, California – the capital of the Iranian diaspora, which may number over half a million people worldwide, mostly upper-middle-class. But it does reflect the pulse of the nation.

PayMon, crypto alternative

Over and over again, the Rouhani administration must tackle an insurmountable contradiction. National pride, boosted by Iran recapturing its role as a major power in Southwest Asia, is always undermined by intimations of social despair, as in countless families surviving on less than $200 a month, under rampant inflation and suffering the effects of the non-stop fall of the rial, whatever the feel-good factors constantly exhorted by the government.

An Iranian girl holds a poster of the late founder of the Islamic Republic Ayatollah Khomeini on the 40th anniversary of his return from exile in Paris at his mausoleum in Tehran on February 1. Photo: AFP

Already in regard to Instex, there has been a backlash. Iran has been told it must join the Financial Action Task Force (FATF), a global body that seeks to combat money laundering and the financing of terrorism, and that it must compromise on its missile program, which it regards as non-negotiable. The chief of Iran’s judiciary, Ayatollah Sadeq Amoli Larijani, branded the two conditions set by the Europeans as “humiliating”.

And on the European front, there’s no evidence yet that small companies trust that the Instex payment system will make them immune to retaliatory action by the US.

Iranians though are opening other creative fronts. Four banks – Bank Melli, Bank Mellat, Parsian Bank and Bank Pasargad – have developed a gold-backed cryptocurrency named PayMon, and negotiations are already advanced with the Europeans as well as Russia, Switzerland and South Africa to expand PayMon trading. Iranian officials are adamant that blockchain will be crucial to improve the nation’s economy.

The Iranian move mirrors Venezuela’s action in launching its own oil-backed cryptocurrency, the petro, last October. But count on the Blocking Iran Illicit Finance Act to swing into overdrive in the US Congress.

Meanwhile, Russia and Iran have all but bypassed the US dollar in bilateral trade, using only ruble and rial and “in case of urgent need, the euro, if we have no other options”, according to the Russian Ambassador to Iran, Levan Dzhagaryan.

China, Russia, Iran and Turkey – the four key vectors of ongoing Eurasia integration – are investing in bypassing the US dollar on trade by any mechanism necessary. The Eurasia Economic Union (EAEU) is also working on a common system for “boosting economic sovereignty”, as defined by President Putin. It has free-trade agreements with an array of partners, including China and Iran.

Arab NATO roll-call

This is the background in the run-up towards what is essentially an anti-Iran conference convened by the Trump administration in Warsaw this Wednesday.

No one in Europe that really matters wants to be publicly associated with Iranian demonization. Federica Mogherini, the EU foreign policy chief, is not going. EU-wide businesses increasingly tell their puny political leaders that the way to go is Greater Eurasia – from Lisbon to Vladivostok, from Murmansk to Mumbai, with Tehran in between, and everything linked to the China-driven Belt and Road Initiative.

Poland is an exception. Ruled by hardcore nationalists, it has been lobbying for a permanent US military base, which President Andrzej Duda wants to call “Fort Trump”.

Unable to force France, the UK, Germany and Italy out of doing business with Iran, what’s left for Washington is to have Persian Gulf governors plus Israel assembled in the same room, pledging their efforts towards an ill-defined, anti-Iran Arab NATO.

What this will certainly accomplish inside Iran is to promote even more hardliners and “Principlists” who are lobbying for a return to former President Ahmadinejad’s “Look East” strategy.

Iran is already looking East – considering its top Asian energy clients and the close ties with the Belt and Road Initiative and the EAEU. Team Rouhani now knows, in realpolitik terms, they cannot trust the US; and the EU is an immensely problematic partner. The next major step would be for Iran to become a full member of the Shanghai Cooperation Organization. China wants it. And Russia wants it.

Venezuela looks to have been targeted for regime change essentially because it’s trying to bypass the US dollar on trade. That should not be a problem for Iran, which has been a target for regime change for decades.

Venezuela – The Straw that Breaks the Empire’s Back?

February 07, 2019

by Peter Koenig for The Saker Blog

Venezuela – The Straw that Breaks the Empire’s Back?

Venezuela in the limelight, on practically all the written, audio and visual mainstream media, as well as alternative media. A purposeful constant drip of outright lies and half-truths, “fake news”, as well as misleading information of all shades and hues about Venezuela is drumming our brains, slowly bending our minds towards believing that – yes, the US has a vital interest in meddling in Venezuela and bringing about “regime change”, because of primarily, the huge reserves of oil, but also of gold, coltan and other rare minerals; and, finally, simply because Washington needs full control of its “backyard”. – BUT, and yes, there is a huge BUT, as even some of the respected progressive alternative media pretend to know: Amidst all that recognition of the AngloZionist empire’s evil hands in Venezuela, their ‘but’ claims that Venezuela, specifically Presidents Chavez and now Maduro, are not blameless in their ‘economic chaos’. This distorts already the entire picture and serves the empire and all those who are hesitant because they have no clue, whom to support in this antagonistic US attempt for regime change.

For example, one alternative news article starts, “It is true that some of Venezuela’s economic problems are due to the ineptitudes of the Bolivarian government’s “socialist command” economy, but this overlooks the role played by the United States, the United Nations, and the European Union….”. Bingo, with such a low-blow beginning, the uninformed reader is already primed to ‘discount’ much of the interference by Washington and its minions. Some of the-so-called progressive writers have already been brain-smeared, by calling Nicolás Maduro a “dictator”, when in fact, there is hardly any country farther away from a dictatorship than Venezuela.

In the last 20 years and since Comandante Hugo Chavez Frias was first elected in 1998 and came to power in 1999, Venezuela had another 25 fully democratic elections, of which 6 took place in the last year and a half. They were all largely observed by the US based Carter Institute, the Latin American CELAC, some were even watched by the European Union (EU), the very vassal states that are now siding with Washington in calling President Maduro an illegitimate dictator – and instead, they side with and support the real illegitimate, never elected, US trained and appointed, Juan Guaidó. Former President Carter once said, of all the elections he and his Institute observed, the ones in Venezuela were by far the most transparent and democratic ones. By September 2017, the Carter Center had observed 104 elections in 39 countries.

Despite this evidence, Washington-paid and corrupted AngloZionist MSM are screaming and spreading lies, ‘election fraud’; and Nicolás Maduro is illegal, a dictator, oppressing his people, depriving them of food and medication, sowing famine – he has to go. Such lies are repeated at nauseatum. In a world flooded by pyramid-dollars (fake money), the presstitute media have no money problem. Dollars, the funding source for the massive lie-propaganda, are just printed as debt, never to be repaid again. So, why worry? The same Zionists who control the media also control the western money machines, i.e. the FED, Wall Street, the BIS (Bank for International Settlement, the so-called Central bank of central banks), the European Central Bank, the Bank of England and the banks of London. The western public, armchair warriors, all the way to caviar socialists, believe these lies. That’s how our unqualified brains apparently work.

A recent independent poll found that 86% of all Venezuelans, including from the opposition, want no interference by the US and her puppet allies, but want to remain a sovereign state, deciding themselves on how to resolve their internal problem – economics and otherwise.

Let me tell you something, if Mr. Maduro would be a dictator – and all the diabolical adjectives that he is smeared with were to apply, he would have long ago stopped the western propaganda machine, which is the western controlled media in Venezuela; they control 90% of the news in Venezuela. But he didn’t and doesn’t, because he believes in freedom of speech and freedom of the ‘media’ – even if the “media” are really nothing more than abject western lie-machines presstitute. Mr. Maduro is generous enough not to close them down – which any dictator – of which there are now many in Latin America (take a pick: Argentina, Chile, Ecuador, Brazil, Colombia, Paraguay, Uruguay, Guatemala, Honduras….) would have done long ago.

***

From the very beginning, when Hugo Chavez was first elected in 1998, Washington attempted to topple him to bring about “régime change”. The first real coup attempt took place on 11 April 2002. Under full command by Washington, Chavez was ousted for less than 2 days, when an on-swell of people and the vast majority of the military requested his reinstatement. Chavez was brought back from his island seclusion and, thus, the directly Washington-led coup d’état was defeated (“The Revolution Will Not Be Televised”). But the pressure mounted with economic sanctions becoming ever bolder and, in the case of Venezuela, they had severe economic and humanitarian impacts because Venezuela imports close to 90% of her food and medication – still today – and most of it from the US.

Both Chavez and Maduro had very little leeway of doing differently what they have already done. Sanctions, boycotts, outside money manipulations, driving inflation to astronomical levels and constant smear propaganda, these predicaments are biting hard. The US has a firm grip on Venezuela’s dollar dependency.

Last week, Washington confiscated about US$ 23 billion Venezuela’s reserve money in US banks, blocked them from use by the legitimate Maduro government, and, instead, handed them to their US-appointed, puppet, never elected, “president”, Juan Guaidó. – He is now able to use Venezuela’s money in his US-EU-and Lima-Group supported “shadow” government. Will he dare? – I don’t think so. However, he has already invited US petro, companies to come to Venezuela and invest in and take over the petrol industry. Of course, it will not happen, as President Maduro stays in power, firmly backed by the military.

All of this sounds like a bad joke. Did you ever heard of Juan Guaidó, before the US and her European vassals almost unanimously and obediently aped Washington in supporting him?

Likewise, the Bank of England withheld 1.2 billion dollars’ worth of Venezuelan reserve gold, refusing to respond to the Maduro Government’s request to return the gold to Caracas. Both cases represent an extreme breach of confidence. Up to now, it was ethically, commercially and financially unthinkable that reserve money and gold deposited in foreign banks would not be safe from hooligan theft – because that’s what it is, what the US is doing, stealing other countries money that was deposited in good fate in their banks.

In a recent interview with RT, President Maduro, said there was absolutely no need for “humanitarian aid”, as the UN suggested, prompted by the US. This so-called humanitarian aid has everywhere in the world only served to infiltrate ‘foreign and destabilizing’ elements into countries, just look at Syria, Libya, Iraq, Afghanistan, to name just a few. While the US$ 23 billion blocked in New York banks could have supplied Venezuela with 20 years-worth of medication for the Venezuelan people, Maduro asserted, Venezuela has enough liquidity to feed and medicate her people.

However, what this latest Trump plunder (the money and gold confiscation) does, is hammering one more nail in the western monetary system’s suicide coffin. It sends an ever-clearer signal to the rest of the world, to those that haven’t noticed yet, the AngloZionist empire cannot – I repeat – CANNOT – be trusted. Ever. And the European Union is intrinsically and “vassalically” linked to the Washington rogue state – not to be trusted either. There is virtually no circumstance under which a countries’ assets in western foreign lands – as bank deposits, or foreign investments – are safe. It will prompt a move away from the dollar system, away from the western (also entirely privately-owned) SWFT international transfer system by which sanctions can be enacted.

Indeed, the Russia and China and much of the SCO (Shanghai Organization Cooperation) members are no longer dealing in US dollars but in their own currencies. We are talking about half the world’s population broke free from the dollar hegemony. Europe has started a half-assed attempt to circumvent the dollar and SWIFT system for dealing with Iran. Europe’s special purpose vehicle, or SPV, is called INSTEX — short for Instrument in Support of Trade Exchanges. It is a project of Germany, France and the UK, suspiciously chaired by the latter, to be endorsed by all 28 EU members.

It aims in a first instance at shipping “humanitarian aid” to Iran. Similarly, to Venezuela, Iran’s foreign Minister, Javad Zarif, after learning about the details, considered the conditions of INSTEX as insulting and rejected any dealings with Europe under this system. Iran, he said, does not need “humanitarian aid”, not from Europe, not from anybody. In the meantime, what was to be expected, has already happened. The Trump Administration issued a stern warning of “sanctions” to the EU, if they would attempt to deal with Iran outside of the dollar system. Europe is likely caving in, as they always do.

***

Back in Venezuela, the NED (National Endowment for Democracy), the extended arm of the CIA, has for the last two decades trained funded and infiltrated ‘traitor’ agents into Venezuela, with the goal to assist the opposition to foment unrest, to carry out assassinations and other ‘false flags’, and to simply create chaos and unrest. However, some of these agents are also lodged in Venezuela’s financial institutions, as the Fifth Column, where they sabotage – often with threats – any economic policies that could rescue Venezuela from its economic predicament.

In June 2017, I was privileged to be a member of an economic advisory team to Mr. Maduro. During three days of intense discussions with government, a number of potential short- medium and long-term solutions emerged. They were well received by Mr. Maduro and his economic team. What became of these recommendations? – Well, maybe there are strong foreign-directed forces at play to prevent their implementation.

Clearly, any accusation that the Maduro Government may bear the blame for some of the economic chaos, have to be vigorously rejected. Mr. Maduro has very little space to maneuver the economy other than what he is already doing. His actions are severely limited by the ever-stronger squeeze by western claws.

With or without Venezuela’s new crypto currency, the oil-based Petro, the Venezuelan economy, including a major proportion of her imports, is strongly linked to the US dollar. With military threats and sanctions left and right, there is little that the Government can do in the immediate future to become autonomous. Yes, Russia and especially China will most likely help with balance of payment support loans, with investments in the oil industry to ease Venezuela’s US-dollar debt burden and vamp up oil production; and in the medium and longer run they may also help boosting Venezuela’s agricultural sector towards 100% food self-sufficiency.

What is the real reason, you may ask, behind Trump’s intense ‘coup d’état’ attempt – aka, Bolton, Pompeo and Elliott Abrams (the ‘regime change’ envoy), or the diabolical troika’s killer mission?

  • Is it oil and other natural riches, like gold, coltan, diamonds and many more rare minerals? Venezuela with some 301,000 MMbbl (billions of barrels) of known reserves has about 12% more hydrocarbon reserves than Saudi Arabia. Shipping from the Gulf to Texas refineries takes 40-45 days and the risk of passing through the Iran-controlled strait of Hormuz. Delivering oil from Venezuela to Texas takes some 2-4 days.
  • Is it that Venezuela committed a mortal sin when circumventing the petro-dollar, when trading her hydrocarbons, notably with China and Russia in other currencies, like the gold-convertible yuan? – Remember, Saddam Hussein and Muamar Gadhafi attempted similar dollar-escaping actions – and look what it brought them. The US-dollar hegemony depends very much on oil and gas trade in US dollars, as per an agreement of the seventies between the US and Saudi Arabia, head of OPEC.
  • Is it that Washington cannot tolerate any socialist or socialist leaning country in its “backyard”? – Cuba and Nicaragua beware!
  • Is Venezuela a crucial stepping stone to fully dominate Latin America and her resources? – And, hence, a step closer to ‘full power dominance’ of the world?
  • Or all of the above?

I believe it’s all of the above, with a strong accent on Venezuela’s abandoning the US-dollar as hydrocarbon trading currency – putting the dollar-hegemony even more at risk. Once the dollar ceases to be the main reserve currency, the US economy will slowly collapse – what it is already doing. Twenty years ago, the US-dollar dominated world reserve coffers with about 90%. Today that proportion has sunk to less than 60%. The dollar is rapidly being replaced by other currencies, notably the Chinese yuan.

Now let’s cut to the chase. – It is clear that the Trump Administration with these stupid actions of dishing out sanctions left and right, punishing allies and foes alike, if they deal with Russia, Iran, or Venezuela – and this special blunt regime change aggression in Venezuela, nominating a 35 year old US puppet, trained in the US by CIA as Venezuela’s new ‘interim president’, confiscating Venezuela’s reserve assets in New York and London, stopping importing petrol from Venezuela and punishing anybody who imports Venezuelan oil – except, of course, Russia and China. The ‘might’ of the US stops short of interfering in these non-dollar deals. With these and more ridiculous actions and military threats – Washington is actually not only isolating itself, but is accelerating the fall of the US economy. Ever more countries are seeking alternative ways of doing business with currencies and monetary systems other than the dollar-based fraudulent SWIFT, and eventually they will succeed. All they need to do is joining the China-Russia-SCO system of transfer in their local currencies and the currencies of the eastern SCO block – and dedollarization is moving a step further ahead.

Dedollarization is the key to the end of the US (dollar) hegemony, of the US economic supremacy. The arrogant Trump, plus the impunity of the unfettered diabolical and outright dumb Bolton-Pompeo-Abrams approach of military threats and intimidations, may just make Venezuela the straw that breaks the Empire’s back.

Peter Koenig is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21st Century; TeleSUR; The Vineyard of The Saker Blog, the New Eastern Outlook (NEO); and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.

Peter Koenig is a Research Associate of the Centre for Research on Globalization.

Saker interview with Michael Hudson on Venezuela, February 7, 2019

February 06, 2019

[This interview was made for the Unz review]Saker interview with Michael Hudson on Venezuela, February 7, 2019

Introduction: There is a great deal of controversy about the true shape of the Venezuelan economy and whether Hugo Chavez’ and Nicholas Maduro’s reform and policies were crucial for the people of Venezuela or whether they were completely misguided and precipitated the current crises.  Anybody and everybody seems to have very strong held views about this.  But I don’t simply because I lack the expertise to have any such opinions.  So I decided to ask one of the most respected independent economists out there, Michael Hudson, for whom I have immense respect and whose analyses (including those he co-authored with Paul Craig Roberts) seem to be the most credible and honest ones you can find.  In fact, Paul Craig Roberts considers Hudson the “best economist in the world“!
I am deeply grateful to Michael for his replies which, I hope, will contribute to a honest and objective understanding of what really is taking place in Venezuela.
The Saker

The Saker: Could you summarize the state of Venezuela’s economy when Chavez came to power?

Michael Hudson: Venezuela was an oil monoculture. Its export revenue was spent largely on importing food and other necessities that it could have produced at home. Its trade was largely with the United States. So despite its oil wealth, it ran up foreign debt.

From the outset, U.S. oil companies have feared that Venezuela might someday use its oil revenues to benefit its overall population instead of letting the U.S. oil industry and its local comprador aristocracy siphon off its wealth. So the oil industry – backed by U.S. diplomacy – held Venezuela hostage in two ways.

First of all, oil refineries were not built in Venezuela, but in Trinidad and in the southern U.S. Gulf Coast states. This enabled U.S. oil companies – or the U.S. Government – to leave Venezuela without a means of “going it alone” and pursuing an independent policy with its oil, as it needed to have this oil refined. It doesn’t help to have oil reserves if you are unable to get this oil refined so as to be usable.

Second, Venezuela’s central bankers were persuaded to pledge their oil reserves and all assets of the state oil sector (including Citgo) as collateral for its foreign debt. This meant that if Venezuela defaulted (or was forced into default by U.S. banks refusing to make timely payment on its foreign debt), bondholders and U.S. oil majors would be in a legal position to take possession of Venezuelan oil assets.

These pro-U.S. policies made Venezuela a typically polarized Latin American oligarchy. Despite being nominally rich in oil revenue, its wealth was concentrated in the hands of a pro-U.S. oligarchy that let its domestic development be steered by the World Bank and IMF. The indigenous population, especially its rural racial minority as well as the urban underclass, was excluded from sharing in the country’s oil wealth. The oligarchy’s arrogant refusal to share the wealth, or even to make Venezuela self-sufficient in essentials, made the election of Hugo Chavez a natural outcome.

The Saker: Could you outline the various reforms and changes introduced by Hugo Chavez? What did he do right, and what did he do wrong?

Michael Hudson: Chavez sought to restore a mixed economy to Venezuela, using its government revenue – mainly from oil, of course – to develop infrastructure and domestic spending on health care, education, employment to raise living standards and productivity for his electoral constituency.

What he was unable to do was to clean up the embezzlement and built-in rake-off of income from the oil sector. And he was unable to stem the capital flight of the oligarchy, taking its wealth and moving it abroad – while running away themselves.

This was not “wrong”. It merely takes a long time to change an economy’s disruption – while the U.S. is using sanctions and “dirty tricks” to stop that process.

The Saker: What are, in your opinion, the causes of the current economic crisis in Venezuela – is it primarily due to mistakes by Chavez and Maduro or is the main cause US sabotage, subversion and sanctions?

Michael Hudson: There is no way that’s Chavez and Maduro could have pursued a pro-Venezuelan policy aimed at achieving economic independence without inciting fury, subversion and sanctions from the United States. American foreign policy remains as focused on oil as it was when it invaded Iraq under Dick Cheney’s regime. U.S. policy is to treat Venezuela as an extension of the U.S. economy, running a trade surplus in oil to spend in the United States or transfer its savings to U.S. banks.

By imposing sanctions that prevent Venezuela from gaining access to its U.S. bank deposits and the assets of its state-owned Citco, the United States is making it impossible for Venezuela to pay its foreign debt. This is forcing it into default, which U.S. diplomats hope to use as an excuse to foreclose on Venezuela’s oil resources and seize its foreign assets much as Paul Singer hedge fund sought to do with Argentina’s foreign assets.

Just as U.S. policy under Kissinger was to make Chile’s “economy scream,” so the U.S. is following the same path against Venezuela. It is using that country as a “demonstration effect” to warn other countries not to act in their self-interest in any way that prevents their economic surplus from being siphoned off by U.S. investors.

The Saker: What in your opinion should Maduro do next (assuming he stays in power and the USA does not overthrow him) to rescue the Venezuelan economy?

Michael Hudson: I cannot think of anything that President Maduro can do that he is not doing. At best, he can seek foreign support – and demonstrate to the world the need for an alternative international financial and economic system.

He already has begun to do this by trying to withdraw Venezuela’s gold from the Bank of England and Federal Reserve. This is turning into “asymmetrical warfare,” threatening what to de-sanctify the dollar standard in international finance. The refusal of England and the United States to grant an elected government control of its foreign assets demonstrates to the entire world that U.S. diplomats and courts alone can and will control foreign countries as an extension of U.S. nationalism.

The price of the U.S. economic attack on Venezuela is thus to fracture the global monetary system. Maduro’s defensive move is showing other countries the need to protect themselves from becoming “another Venezuela” by finding a new safe haven and paying agent for their gold, foreign exchange reserves and foreign debt financing, away from the dollar, sterling and euro areas.

The only way that Maduro can fight successfully is on the institutional level, upping the ante to move “outside the box.” His plan – and of course it is a longer-term plan – is to help catalyze a new international economic order independent of the U.S. dollar standard. It will work in the short run only if the United States believes that it can emerge from this fight as an honest financial broker, honest banking system and supporter of democratically elected regimes. The Trump administration is destroying illusion more thoroughly than any anti-imperialist critic or economic rival could do!

Over the longer run, Maduro also must develop Venezuelan agriculture, along much the same lines that the United States protected and developed its agriculture under the New Deal legislation of the 1930s – rural extension services, rural credit, seed advice, state marketing organizations for crop purchase and supply of mechanization, and the same kind of price supports that the United States has long used to subsidize domestic farm investment to increase productivity.

The Saker: What about the plan to introduce a oil-based crypto currency? Will that be an effective alternative to the dying Venezuelan Bolivar?

Michael Hudson: Only a national government can issue a currency. A “crypto” currency tied to the price of oil would become a hedging vehicle, prone to manipulation and price swings by forward sellers and buyers. A national currency must be based on the ability to tax, and Venezuela’s main tax source is oil revenue, which is being blocked from the United States. So Venezuela’s position is like that of the German mark coming out of its hyperinflation of the early 1920s. The only solution involves balance-of-payments support. It looks like the only such support will come from outside the dollar sphere.

The solution to any hyperinflation must be negotiated diplomatically and be supported by other governments. My history of international trade and financial theory, Trade, Develpoment and Foreign Debt, describes the German reparations problem and how its hyperinflation was solved by the Rentenmark.

Venezuela’s economic-rent tax would fall on oil, and luxury real estate sites, as well as monopoly prices, and on high incomes (mainly financial and monopoly income). This requires a logic to frame such tax and monetary policy. I have tried to explain how to achieve monetary and hence political independence for the past half-century. China is applying such policy most effectively. It is able to do so because it is a large and self-sufficient economy in essentials, running a large enough export surplus to pay for its food imports. Venezuela is in no such position. That is why it is looking to China for support at this time.

The Saker: How much assistance do China, Russia and Iran provide and how much can they do to help?  Do you think that these three countries together can help counter-act US sabotage, subversion and sanctions?

Michael Hudson: None of these countries have a current capacity to refine Venezuelan oil. This makes it difficult for them to take payment in Venezuelan oil. Only a long-term supply contract (paid for in advance) would be workable. And even in that case, what would China and Russia do if the United States simply grabbed their property in Venezuela, or refused to let Russia’s oil company take possession of Citco? In that case, the only response would be to seize U.S. investments in their own country as compensation.

At least China and Russia can provide an alternative bank clearing mechanism to SWIFT, so that Venezuela can by pass the U.S. financial system and keep its assets from being grabbed at will by U.S. authorities or bondholders. And of course, they can provide safe-keeping for however much of Venezuela’s gold it can get back from New York and London.

Looking ahead, therefore, China, Russia, Iran and other countries need to set up a new international court to adjudicate the coming diplomatic crisis and its financial and military consequences. Such a court – and its associated international bank as an alternative to the U.S.-controlled IMF and World Bank – needs a clear ideology to frame a set of principles of nationhood and international rights with power to implement and enforce its judgments.

This would confront U.S. financial strategists with a choice: if they continue to treat the IMF, World Bank, ITO and NATO as extensions of increasingly aggressive U.S. foreign policy, they will risk isolating the United States. Europe will have to choose whether to remain a U.S. economic and military satellite, or to throw in its lot with Eurasia.

However, Daniel Yergin reports in the Wall Street Journal (Feb. 7) that China is trying to hedge its bets by opening a back-door negotiation with Guaido’s group, apparently to get the same deal that it has negotiated with Maduro’s government. But any such deal seems unlikely to be honored in practice, given U.S. animosity toward China and Guaido’s total reliance on U.S. covert support.

The Saker: Venezuela kept a lot of its gold in the UK and money in the USA.  How could Chavez and Maduro trust these countries or did they not have another choice?  Are there viable alternatives to New York and London or are they still the “only game in town” for the world’s central banks?

Michael Hudson: There was never real trust in the Bank of England or Federal Reserve, but it seemed unthinkable that they would refuse to permit an official depositor from withdrawing its own gold. The usual motto is “Trust but verify.” But the unwillingness (or inability) of the Bank of England to verify means that the formerly unthinkable has now arrived: Have these central banks sold this gold forward in the post-London Gold Pool and its successor commodity markets in their attempt to keep down the price so as to maintain the appearance of a solvent U.S. dollar standard.

Paul Craig Roberts has described how this system works. There are forward markets for currencies, stocks and bonds. The Federal Reserve can offer to buy a stock in three months at, say, 10% over the current price. Speculators will by the stock, bidding up the price, so as to take advantage of “the market’s” promise to buy the stock. So by the time three months have passed, the price will have risen. That is largely how the U.S. “Plunge Protection Team” has supported the U.S. stock market.

The system works in reverse to hold down gold prices. The central banks holding gold can get together and offer to sell gold at a low price in three months. “The market” will realize that with low-priced gold being sold, there’s no point in buying more gold and bidding its price up. So the forward-settlement market shapes today’s market.

The question is, have gold buyers (such as the Russian and Chinese government) bought so much gold that the U.S. Fed and the Bank of England have actually had to “make good” on their forward sales, and steadily depleted their gold? In this case, they would have been “living for the moment,” keeping down gold prices for as long as they could, knowing that once the world returns to the pre-1971 gold-exchange standard for intergovernmental balance-of-payments deficits, the U.S. will run out of gold and be unable to maintain its overseas military spending (not to mention its trade deficit and foreign disinvestment in the U.S. stock and bond markets). My book on Super-Imperialism explains why running out of gold forced the Vietnam War to an end. The same logic would apply today to America’s vast network of military bases throughout the world.

Refusal of England and the U.S. to pay Venezuela means that other countries means that foreign official gold reserves can be held hostage to U.S. foreign policy, and even to judgments by U.S. courts to award this gold to foreign creditors or to whoever might bring a lawsuit under U.S. law against these countries.

This hostage-taking now makes it urgent for other countries to develop a viable alternative, especially as the world de-dedollarizes and a gold-exchange standard remains the only way of constraining the military-induced balance of payments deficit of the United States or any other country mounting a military attack. A military empire is very expensive – and gold is a “peaceful” constraint on military-induced payments deficits. (I spell out the details in my Super Imperialism: The Economic Strategy of American Empire (1972), updated in German as Finanzimperium(2017).

The U.S. has overplayed its hand in destroying the foundation of the dollar-centered global financial order. That order has enabled the United States to be “the exceptional nation” able to run balance-of-payments deficits and foreign debt that it has no intention (or ability) to pay, claiming that the dollars thrown off by its foreign military spending “supply” other countries with their central bank reserves (held in the form of loans to the U.S. Treasury – Treasury bonds and bills – to finance the U.S. budget deficit and its military spending, as well as the largely military U.S. balance-of-payments deficit.

Given the fact that the EU is acting as a branch of NATO and the U.S. banking system, that alternative would have to be associated with the Shanghai Cooperation Organization, and the gold would have to be kept in Russia and/or China.

The Saker:  What can other Latin American countries such as Bolivia, Nicaragua, Cuba and, maybe, Uruguay and Mexico do to help Venezuela?

Michael Hudson: The best thing neighboring Latin American countries can do is to join in creating a vehicle to promote de-dollarization and, with it, an international institution to oversee the writedown of debts that are beyond the ability of countries to pay without imposing austerity and thereby destroying their economies.

An alternative also is needed to the World Bank that would make loans in domestic currency, above all to subsidize investment in domestic food production so as to protect the economy against foreign food-sanctions – the equivalent of a military siege to force surrender by imposing famine conditions. This World Bank for Economic Acceleration would put the development of self-reliance for its members first, instead of promoting export competition while loading borrowers down with foreign debt that would make them prone to the kind of financial blackmail that Venezuela is experiencing.

Being a Roman Catholic country, Venezuela might ask for papal support for a debt write-down and an international institution to oversee the ability to pay by debtor countries without imposing austerity, emigration, depopulation and forced privatization of the public domain.

Two international principles are needed. First, no country should be obliged to pay foreign debt in a currency (such as the dollar or its satellites) whose banking system acts to prevents payment.

Second, no country should be obliged to pay foreign debt at the price of losing its domestic autonomy as a state: the right to determine its own foreign policy, to tax and to create its own money, and to be free of having to privatize its public assets to pay foreign creditors. Any such debt is a “bad loan” reflecting the creditor’s own irresponsibility or, even worse, pernicious asset grab in a foreclosure that was the whole point of the loan.

The Saker:  Thank you very much for taking the time to reply to my questions!

The Venezuela Phase of US Global Demise “The end of America’s unc

The Venezuela Phase of US Global Demise

The Venezuela Phase of US Global Demise

“The end of America’s unchallenged global economic dominance has arrived sooner than expected,” wrote US political economist Michael Hudson in a recent cogent essay.

Hudson goes on to point out with copious irony how the “end of US monetary imperialism” has been accelerated by a rightwing former real estate magnate, President Donald Trump, surrounded by a cabal of Neocons in his White House administration.

The author, whose earlier book, ‘Super Imperialism’, prefigured much of today’s geopolitical configuration, contends that: “International finance and foreign investment have become the key flash point in global power politics today.”

Central to the historic loss of US global economic dominance is the imminent demise of the dollar as the premier international currency, and thereby its use as a monetary weapon for Washington.

The latest blow-up in international relations involving Venezuela and Washington’s designs for regime change is but the latest in a whole gamut of international developments, tensions and confrontations which ultimately stem from America’s desperate attempt to maintain its global hegemony.

Over the past 12 months, there has been a slew of countries dumping their holdings of dollars and US Treasury bills. Russia, China, Japan, Turkey and others have been offloading the American currency with spades. Meanwhile, Russia and others have been busy stockpiling gold reserves as a more secure strategic asset.

That is surely a sign of systematic “de-dollarization” owing to a general declining confidence in the American currency, as well as a tacit political decision to discreetly disarm Washington’s “monetary imperialism”.

Other significant indicators include China’s denomination of its enormous oil trade with Saudi Arabia and other petrodollar sources henceforth in the Chinese Yuan.

Russia and China have already innovated bilateral trade using each other’s currencies. This is another example of how Washington’s bullying use of sanctions and control over the international payment system is leading inevitably to the establishment of alternative, non-dollar trade mechanisms.

The launch last week by the European Union of a non-dollar payment system for trade with Iran in order to avoid US sanctions is evidence of further international movement away from dependency on the American dollar as the erstwhile international reserve currency. Again, Washington has been overplaying its hand here too.

Threatening to sanction European nations for doing business with Iran under the terms of the 2015 international nuclear accord – which Trump unilaterally abandoned last year – has forced the Europeans to protect their own vital interests, which necessarily entails circumventing the US dollar system.

In short, the American rulers are unwittingly digging their own grave.

As Michael Hudson points out, the erstwhile US hegemony is entering into an accelerated decline, largely brought on by its own hubris and unilateral aggression – even towards supposed allies.

It seems that in order to avert this collapse of power, the US is amping up the aggression and militarism in a desperate bid to assert itself.

Hence we see the US taking the reckless step of walking away from the Intermediate-range Nuclear Forces (INF) treaty with Russia. Many informed arms control experts around the world, including in the US, are deeply concerned that the Trump administration is gravely damaging global security and “moving the world closer to a nuclear war”.

Behind the US decision to tear up the INF treaty is the calculation in Washington of trying to intimidate Russia and China militarily, whom several recent American planning documents target as “great power rivals”.

Washington’s aggression and threats towards Iran also fit into this ramped up militarism as a form of political power play.

America’s dramatic escalation of tensions with Venezuela over the past two weeks is another page from the same playbook. It is almost staggering the audacity of Washington’s threats of military attack on the South American country.

The Trump administration’s brazen ultimatums for regime change and confiscation of Venezuela’s oil wealth are a shocking violation of international law, according to former UN rapporteur Alfred de Zayas.

Pathetically, many European states are kowtowing to Washington’s aggression towards the government of President Nicolas Maduro, even though these same states have themselves been humiliated of late by American bullying.

Venezuela can thus be best understood as another phase of the US dollar’s historic demise, and the concomitant bigger demise of American global power.

The South American country is believed to hold the largest reserves of oil on the planet, exceeding that of Saudi Arabia. Much of its trade is dedicated to the US market. Unfortunately, that has given Washington a lot of leverage for economic warfare against Caracas.

Again, however, the arrogant Americans are in danger of overplaying their hand. Threats of military aggression – while criminally reprehensible – are easier said than done. If Venezuela can weather this current geopolitical storm, the country will no doubt turn its prodigious oil business further towards Russia, China, Turkey and others in the East who have not joined Uncle Sam’s lynch mob running amok in the Caribbean.

As with Washington’s aggression on so many other fronts – towards Russia, China, Iran, Europe – the American gross misconduct against Venezuela is augmenting the very direction it most fears: a multipolar world where US hegemony no longer prevails.

The configuration of chaos and conflict is a very dangerous one. The volatile mix could blow up into a global military confrontation. Washington’s desperation to avert its fate of demise could result in a one reckless aggression too far. A foolhardy invasion of Venezuela could be such a detonator.

Nevertheless, it is crucial to understand the present international precariousness as stemming from inherent American economic problems. That is the key factor that links up all the other seemingly disparate tensions and conflicts. Venezuela is but another demonstration of a wider structural problem centered on American capitalism’s collapse.

Russian, Chinese and other informed planners are presumably well aware of the fraught transition in global politics away from US imperial dominance. Moscow and Beijing hardly want a sudden collapse of American power because that could precipitate a disastrous military reaction. A gradual undermining and weakening of the dollar in a phased withdrawal is probably the safest way to defuse the American time bomb.

Photo: Pixabay

Seven Days of Failures for the American Empire

Seven Days of Failures for the American Empire

FEDERICO PIERACCINI | 09.12.2018 |

Seven Days of Failures for the American Empire

On November 25, two artillery boats of the Gyurza-M class, the Berdiansk and Nikopol, one tugboat, the Yany Kapu, as well as 24 crew members of the Ukrainian Navy, including two SBU counterintelligence officers, were detained by Russian border forces. In the incident, the Russian Federation employed Sobol-class patrol boats Izumrud and Don, as  well as two Ka-52, two Su-25 and one Su-30 aircraft.

Ukraine’s provocation follows the advice of several American think-tanks like the Atlantic Council, which have been calling for NATO involvement in the Sea of Azov for months. The area is strategically important for Moscow, which views its southern borders, above all the Sea of Azov, as a potential flash point for conflict due to the Kiev’s NATO-backed provocations.

To deter such adventurism, Moscow has deployed to the Kerch Strait and the surrounding coastal area S-400 batteries, modernized S-300s, anti-ship Bal missile systems, as well as numerous electronic-warfare systems, not to mention the Russian assets and personnel arrayed in the military districts abutting Ukraine. Such provocations, egged on by NATO and American policy makers, are meant to provide a pretext for further sanctions against Moscow and further sabotage Russia’s relations with European countries like Germany, France and Italy, as well as, quite naturally, to frustrate any personal interaction between Trump and Putin.

This last objective seems to have been achieved, with the planned meeting between Trump and Putin at the G20 in Buenos Aires being cancelled. As to the the other objectives, they seem to have failed miserably, with Berlin, Paris and Rome showing no intention of imposing additional sanctions against Russia, recognizing the Ukrainian provocation fow what it is. The intention to further isolate Moscow by the neocons, neoliberals and most of the Anglo-Saxon establishment seems to have failed, demonstrated in Buenos Aires with the meeting between the BRICS countries on the sidelines and the bilateral meetings between Putin and Merkel.

On November 30, following almost two-and-a-half months of silence, the Israeli air force bombed Syria with three waves of cruise missiles. The first and second waves were repulsed over southern Syria, and the third, composed of surface-to-surface missiles, were also downed. At the same time, a loud explosion was heard in al-Kiswah, resulting in the blackout of Israeli positions in the area.

The Israeli attack was fully repulsed, with possibly two IDF drones being downed as well. This effectiveness of Syria’s air defenses corresponds with Russia’s integration of Syria’s air defenses with its own systems, manifestly improving the Syrians’ kill ratios even without employing the new S-300 systems delivered to Damascus, let alone Russia’s own S-400s. The Pantsirs and S-200s are enough for the moment, confirming my hypothesis more than two months ago that the modernized S-300 in the hands of the Syrian army is a potentially lethal weapon even for the F-35, forbidding the Israelis from employing their F-35s.

With the failed Israeli attack testifying to effectiveness of Russian air-defense measures recently deployed to the country, even the United States is finding it difficult to operate in the country. As the Washington-based Institute for the Study of War confirms:

“Russia has finished an advanced anti-access/area denial (A2AD) network in Syria that combines its own air defense and electronic warfare systems with modernized equipment. Russia can use these capabilities to mount the long-term strategic challenge of the US and NATO in the Eastern Mediterranean Sea and the Middle East, significantly widen the geographic reach of Russia’s air defense network. Russia stands to gain a long-term strategic advantage over NATO through its new capabilities in Syria. The US and NATO must now account for the risk of a dangerous escalation in the Middle East amidst any confrontation with Russia in Eastern Europe.”

The final blow in a decidedly negative week for Washington’s ambitions came in Buenos Aires during the G20, where Xi Jinping was clearly the most awaited guest, bringing in his wake investments and opportunities for cooperation and mutual benefit, as opposed to Washington’s sanctions and tariffs for its own benefit to the detriment of others. The key event of the summit was the dinner between Xi Jinping and Donald Trump that signalled Washington’s defeat in the trade war with Beijing. Donald Trump fired the first shot of the economic war, only to succumb just 12 months later with GM closing five plants and leaving 14,000 unemployed at home as Trump tweeted about his economic achievements.

Trump was forced to suspend any new tariffs for a period of ninety days, with his Chinese counterpart intent on demonstrating how an economic war between the two greatest commercial powers had always been a pointless propagandistic exercise. Trump’s backtracking highlights Washington’s vulnerability to de-dollarization, the Achilles’ heel of US hegemony.

The American-led world system is experiencing setbacks at every turn. The struggle between the Western elites seems to be reaching a boil, with Frau Merkel ever more isolated and seeing her 14-year political dominance as chancellor petering out. Macron seems to be vying for the honor of being the most unpopular French leader in history, provoking violent protests that have lasted now for weeks, involving every sector of the population. Macron will probably be able to survive this political storm, but his political future looks dire.

The neocons/neoliberals have played one of the last cards available to them using the Ukrainian provocation, with Kiev only useful as the West’s cannon fodder against Russia. In Syria, with the conflict coming to a close and Turkey only able to look on even as it maintains a strong foothold in Idlib, Saudi Arabia, Israel and the United States are similarly unable to affect the course of the conflict. The latest Israeli aggression proved to be a humiliation for Tel Aviv and may have signalled a clear, possibly definitive warning from Moscow, Tehran and Damascus to all the forces in the region. The message seems to be that there is no longer any possibility of changing the course of the conflict in Syria, and every provocation from here on will be decisively slapped down. Idlib is going to be liberated and America’s illegal presence in the north of Syria will have to be dealt with at the right time.

Ukraine’s provocation has only strengthened Russia’s military footprint in Crimea and reinforced Russia’s sovereign control over the region. Israel’s recent failure in Syria only highlights how the various interventions of the US, the UK, France and Turkey over the years have only obliged the imposition of an almost unparalleled A2AD space that severely limits the range of options available to Damascus’s opponents.

The G20 also served to confirm Washington’s economic diminution commensurate with its military one in the face of an encroaching multipolar environment. The constant attempts to delegitimize the Trump administration by America’s elites, also declared an enemy by the European establishment, creates a picture of confusion in the West that benefits capitals like New Delhi, Moscow, Beijing and Tehran who offer instead stability, cooperation and dialogue.

As stated in previous articles, the confusion reigning amongst the Western elites only accelerates the transition to a multipolar world, progressively eroding the military and economic power of the US.

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