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.

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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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