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

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.



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 Untouchable US-Saudi Relation Is a Core Element of US Imperialism


By Frederico Pierccini

Nixon’s decision in 1971 to withdraw the United States from the gold standard greatly influenced the future direction of humanity. The US dollar rose in importance from the mid-1950s to become the world reserve currency as a result of the need for countries to use the dollar in trade. One of the most consumed commodities in the world is oil, and as is well known, the price is set by OPEC in US dollars, with this organization being strongly influenced by Saudi Arabia.

It is therefore towards Riyadh that we must look in order to understand the workings of the petrodollar. After the dollar was withdrawn from the gold standard, Washington made an arrangement with Riyadh to price oil solely in dollars. In return, the Saudis received protection and were granted a free hand in the region. This decision forced the rest of the world to hold a high amount of US dollars in their currency reserves, requiring the purchase of US treasuries. The relationship between the US dollar and oil breathed new life to this currency, placing it at the centre of the global financial and economic system. This privileged role enjoyed by the dollar allowed the United States to finance its economy through the simple process of printing its fiat currency, relying on its credibility and supported by the petrodollar that required other countries to store reserves of US treasuries in their basket of currencies.

This arrangement continued to sustain itself in spite of numerous wars (the Balkans, Iraq, Afghanistan), financial crises (the Black Monday of 1987, the Dotcom bubble of 2000, and Lehman Brothers’ subprime crisis of 2008), and the bankruptcies of sovereign states (Argentina in 1998). The explanation is to be found in the credibility of the US dollar and the US itself, with its ability to repay buyers of treasury bonds. In other words, as long as the US continues to maintain its dominance of the global financial and economic system, thanks to the dollar, its supremacy as a world superpower is hardly questioned. To maintain this influence on the currency markets and the special-drawing rights (SDR) basket, the pricing of oil in US dollars is crucial. This explains, at least partially, the impossibility of scaling down the relationship between Washington and Riyadh. Nobody should delude themselves into believing that this is the only reason why Saudi-US relations are important. Washington is swimming in the money showered by Saudi lobbies, and it is doubtful that those on the receiving end of such largesse will want to make the party stop.

The agreement made between Washington and Riyadh guaranteed that the latter would receive protection from the former and Washington would look the other way regarding Riyadh’s behavior within its kingdom and in the region – so long as Saudi Arabia sold its black gold in US dollars alone. This agreement was clearly a controversial one and has been kept away from the general public, even in the light of Khashoggi’s death and the liberal mainstream media’s piling on the Kingdom. Yet this is not the only reason why US-Saudi ties are so close. The initial agreements between the Saudis and the Americans concerned the petrodollar; but after the Islamic revolution in Iran in 1979 (Iran’s nationalist prime minister, Mohammad Mosaddegh, had been previously overthrown by the US and UK in 1953), Riyadh and Washington decided to declare war on their common enemy, with the hearty approval of Israel. The cooperation between Riyadh and Washington became even closer in the 1980s, through the common campaign against the USSR in Afghanistan through the use of jihadists recruited, trained and armed by the Pakistan, Saudi Arabia, and the US secret services. The use of jihadist terrorism as a geopolitical weapon has been a main feature of Riyadh’s statecraft.

The relationship between Saudi Arabia and the US evolved from a mere economic and protection agreement, to a full-fledged collaboration against the shared enemies of Washington, Tel Aviv and Riyadh, expanding on the existing cooperation since the 1980s of using jihadism to advance strategic objectives. The situation with Iran became of primary importance for US strategy in the region. Riyadh, with the passage of time, assumed a triple role, namely, that of being the guarantor of the petrodollar, a facilitator in the use of Islamic terrorism as a geopolitical weapon, and a regional opponent of Iran.

This relationship has been mutually beneficial. The House of Saud has been free to run its country according to the strict strictures of Wahhabism without Western interference; and Washington enjoys a capacity for unlimited military spending (especially after the 2008 crisis and the beginning of quantitative easing) simply through the printing of debt in the form of government bonds that are immediately acquired by other countries. Washington has effectively been printing waste paper and obtaining consumer goods in return, a state of affairs that has allowed the United States to squander six trillion dollars in wars in Iraq and Afghanistan without suffering significant economic consequences.

Ever since Donald Trump took over the White House, the process of de-dollarization that begun during the Obama era has only accelerated. With the unprecedented move in 2012 to remove Iran from the SWIFT international banking system, a dangerous precedent had been set that acted as a warning to the rest of the world. The United States revealed itself as willing to abuse its dominant position by wielding the dollar as a weapon against geopolitical adversaries.

The consequences of that action continue to be felt today. Many within the Western elite have come to recognize this mistake and are regretting it. Russia and China understood that they were next on the chopping block and set about creating alternative payment systems like CIPS that would serve to act as a backup system in case Washington tried to exclude Moscow and Beijing from the SWIFT system.

Trump contributed more than any of his predecessors towards further pushing the world in the direction of de-dollarization. Sanctions and tariffs have weakened confidence amongst US allies and forced the rest of the world to start looking for alternatives. The cases of Iran and Russia are instructive, with commercial exchanges being undertaken in currencies other than the dollar for a number of years now. There are dozens of other examples where the use of the dollar in commercial transactions has been abandoned. More complicated, however, is the financing of debt for private or public companies that often takes place in dollars. This exposes industries to a difficult situation in the event that their national currencies devalue against the dollar, making it more expensive to find the US dollars needed to repay creditors, leaving what are major national companies with the prospect of facing bankruptcy. As Russia learned in 2014 with the attack on its Ruble, exposure of potentially strategic sectors of the country to the economic influence of a foreign adversary should be avoided.

The push to renounce the use of the dollar in financial transactions also stems from the fear that the next financial crisis may affect global debt as expressed in dollars; not only destroying the US economy, but dragging down with it countries that are large holders of US treasuries. This is not speculation or conspiracy theory but simple deduction from observing the economic situation over the last 10 years. The global economy was saved in 2008 as a result of the confidence held by citizens following the intervention of central banks. The corrosive mechanism laid out by the Fed and its partners became evident months later. Central banks started printing unlimited amounts of money at 0% interest rates and furnishing it to banks and financial institutions to cover the debts left by the bursting of speculative bubbles like the one involving subprime mortgages.

The average citizen, seeing Bernanke and Draghi on TV talking about “unprecedented actions to save the system”, felt reassured, and therefore felt their money remained safe, in banks or in US dollars. The next financial crisis – potentially the worst ever – is likely to be caused by either the raising of interest rates by the Fed and other central banks, or from the popping of one of the numerous debt bubbles around. The central point is that the citizens’ belief in the system will be put to the test because, as Draghi said, “[this weapon of QE] can be used only once”. There is no protection for banks and speculative entities that could be in debt to the tune of many billions of dollars with no chance of survival.

With a view of to the possible collapse of the dollar-based financial system, several countries are selling their US government bonds, reducing their exposure and accumulating gold. This involves not just China and Russia, but even the European Union.

In such a situation, a crisis in relations with Saudi Arabia is unthinkable for Washington, especially when the region now seems to be guided by an axis that starts from Tehran and ends in Beirut, including Baghdad and Damascus. Riyadh is necessary for the Israeli strategy in the region, and Washington follows in tow for reasons related to the US dollar. Factoring the importance of Riyadh in supporting the petrodollar and in countering Iran in the region, it is not surprising why the Israeli lobby in Washington is doing its utmost to calm US senators down intent on punishing Riyadh for the Khashoggi affair.

If Saudi Arabia were really convinced of the innocence of MBS in the Khashoggi affair, it could use this situation to its advantage by reducing the role of Washington in its foreign policy. Turning to the east and increasing partnerships with China and Russia would have beneficial effects on the whole region, as well as reducing the importance of the United States in the world. Saudi Arabia is governed by a large family riven with divisions and feuds spanning decades. MBS has no interest in his kingdom and is occupied with his survival alone. He is aware that Netanyahu and Trump are his best bet for continuing to reign. Trump is equally aware of the importance of MBS in his communication strategy in the US, with a view to the midterm and the 2020 elections. MBS is for Trump the golden goose that finances the MAGA project, thanks apparently to Trump’s mesmerizing negotiation skills with the Saudis. Of course this is far from the truth, but what matters is the spin that Trump gives to this alliance.

Israel is the primary ally of MBS, given that the crown prince is the first Saudi monarch openly willing to establish diplomatic relations with the Jewish State and bring relations between the two countries out into the open. The upper level of the US government, the so-called deep state, tried for a few weeks to use MBS against Trump. But this strategy came to an end after the Israelis, together with some elements of the US deep state, saw the risk of downsizing the global relationship between Saudi Arabia and the US. MBS will hardly be pushed aside, and within the Kingdom his position seems firmer than many expected, as seen at the Davos in the Desert conference. Breaking up with MBS would have had unimaginable repercussions for the US’s hegemonic position, and this is something Washington can ill afford at the moment.

The use of jihadism and petrodollars as political and financial weapon against Washington’s adversaries is reason enough to quickly forget Jamal Khashoggi and go back to ignoring the various abuses committed by Saudi Arabia. In this phase of the transition from a unipolar to a multipolar world, the US cannot afford to renounce some of the most potent weapons in its arsenal to wield against its geopolitical foes.

Prisoners of Words

by Jimmie Moglia for The Saker Blog

During his recent meeting with Putin in Helsinki, Trump, answering a question form a US journalist, said that there was no reason to suspect Russian interference in the 2016 US presidential elections. However, back on home soil, he said that what he meant was the opposite.

In the circumstances, there is some difficulty in assigning to either of Trump’s statements the property of truth. For the correlation between the information communicated in Helsinki and that communicated in Washington, cannot be easily established. Or rather, the correlation, if any, is such as to cause epistemological problems of sufficient magnitude, as to lay upon the logical and semantic resources of the English language, a heavier burden than they can be reasonably expected to bear.

Some believe that concern about linguistic matters is pedantic interference or sentimental archaism, akin to choosing land-line sets over smartphones. Perhaps the practitioners of incoherence harbor the unconscious belief that language is a natural, self-generating entity, rather than an instrument that we shape for our own purposes.

Many believe that the decline or misuse of language is due to political or economic causes, rather than to the bad influence of sundry writers. I subscribe to this view, because most newspapers are unreadable and literature is not read.

However, an effect can become a cause, reinforcing the original cause and producing the same effect, now stronger. A man may start to drink for feeling a failure, only to fail completely because he drinks. Similarly, language becomes ugly and inaccurate because the thoughts producing it are foolish, but slovenliness of language makes it easier to produce foolish thoughts. And the dark at the end of the tunnel of foolishness is insanity.

Unfortunately, the process is irreversible, for bad habits spread by imitation. Avoiding them requires a discipline that few politicians like to practice. And yet getting rid of bad language habits makes thinking clearer, and thinking clearly is rated as the first step for political regeneration. Assuming, but not given, that regeneration is what politicians want.

Political words are routinely abused. For example, the word ‘fascism’ has lost any meaning other than signifying something undesirable. And words like democracy, socialism, freedom, patriotic, realistic, justice, etc. each has several different meanings that cannot be reconciled with one another.

On “collusion”, a word stuffed into the ears of men for the last two years, not only is there no agreed definition, but an attempt to create one would probably be strongly resisted by the very people who accuse Trump of collusion (with Russia). For any definition implies a restriction of the field where the definition applies. And just as an example clarifies a definition, so evidence proves an accusation. In the instance, there being no evidence, the accusation can be endlessly sustained, for it could never be proven. Therefore a never-ending accusation renders its victim never-endingly accused, which is probably the not-so-secret objective of the charade.

But what could have Trump replied to the question about “collusion” with Russia, posed by the MSM American journalist? He may, for example, have answered with a question, e.g. “Did you evacuate your intestine this morning?” And to whatever the journalist may have replied, Trump could have counter-replied, “Your answer is just as relevant to your readers as your question to me. Go and live unhappily ever after.” Alternatively, he could have said, “He that would keep a secret must keep it secret that he hath a secret to keep,” a ditty attributed to Francis Bacon.

But if it had been me – perish the thought – I would have answered with what the French call “le mot de Cambronne”, that is, “Merde!” a term familiar even to most non-French speaking people.

Before explaining why, here is some historical background on Cambronne’s reply to the question he was asked.

Pierre Cambronne (1770-1842) was born and died in Nantes, on the French West Coast. Destined to a career in business, he was engulfed in the fire of the French Revolution. He fought in the Vandean Civil War, distinguishing himself in the battle of Quiberon against forces landed and financed by the British, to support the counter-revolutionaries.

Cambronne had courage and quickly rose to the rank of captain. By the time of the battle of Jena (1806), fought against the Prussians, he had become a colonel and shortly later a major commanding a regiment of the Imperial Guard.

In the battle of Leipzig (1813) he was a brigade general. Faithful among the faithful of Napoleon, Cambronne followed him to his first exile in the Isle of Elba (Italy), becoming the military commander of the island.

In April 2015 he was nominated Count of the Empire. Two months later he was once more fighting in the battle of Waterloo, commanding the elite unit of the Imperial Guard.

Requested to surrender by the British, Cambronne allegedly said, “The Guard dies but does not surrender.”

The British insisted that he surrender, and it is then when he responded with “le mot de Cambronne.”

The British admired his determination and did everything they could to capture him. Seriously wounded, he was finally taken prisoner after what remained of the Imperial Guard was duly massacred.

Later, Cambronne denied the longer sentence attributed to him: “I could not say ‘the guard dies but does not surrender’, since I did not die and I surrendered.” But he did not deny the paternity of the second and more famous reply.

Cambronne’s heroic rudeness inspired a play by French actor and playwright Sacha Guitry, titled “Le Mot de Cambronne.” Since it is in verse and the word in question has only one rhyme (“perde“, conjugation of the verb “perdre“), the spectators’ ears were attuned and ready for its reception.

To conclude this brief biography, Cambronne, wounded at Waterloo, was assisted in an English hospital by a Scottish nurse, Mary Osbum, whom he married.

From England he wrote to King Louis XVIII requesting permission to return to France. The king did not reply but Cambronne returned anyway. Arrested, he was tried for treason (“for having conducted an armed attack against France”). Defended by a royalist lawyer, he was absolved in April 1916, and spent the rest of his years in his native Nantes. Where the historically curious tourist can find his statue, his apartment turned into a museum, and an avenue with his name.

Returning to Trump, a response with the “mot of Cambronne” to the question by the American journalist, would be appropriate. For the nebulous, vague, unproven and undefined word “collusion,” is but a verbal fig leaf for what the deep state wishes to suggest but dares not say, namely ‘treason.’ Where ‘deep state’ is recognized at large as a euphemism for Zionists by blood or interest.

And implying or accusing the US president of treason (that is, serving the interests of an enemy) is, in the circumstances, an idea stubbornly insusceptible of rational comprehension. The same applies to Russophobia, the daughter of “collusion.”

For one thing, it is common knowledge that the American public at large is generally indifferent to geography. Or rather, geographic ignorance is not a liability but an asset. For he who nurtures ideas that do not lead to profit or immediate pleasure fosters suspicion – unless he can prove that geographical knowledge has procured him ostensive and ostentatious profit (an uneasy outcome for common mortals).

All this, in the circumstances, makes the diplomatically unconventional “mot de Cambronne” an appropriate retort to questions about “Russian collusion.”

As for Russophobia, it seems clear that history is a teacher without pupils. For in recent historical times, the late 1980s, the same deep state and/or media that now preaches Russophobia, created Gorbymania. It did it when Gorbachev was not only a Russian but also a Communist.

And given that the most vociferous promoters of current Russophobia are mostly Zionists by ethnicity, interest or mainstream-media affiliation, the issue, I think, is only partially related to the classical historical reasons. That is, Communism, Bolshevism, resentment against the Czars, Russians’ long-standing uneasiness with the Jews, etc. In fact, according to knowledgeable sources, Jews are freer in today’s Russia than ever they were before.

Here are a few but meaningful examples of Russophobia,

CIA Director John Brennan, “… (Russians) try to suborn individuals and they try to get individuals, including US citizens, to act on their behalf either wittingly or unwittingly…. Individuals going on a treasonous path often do not realize it until it is too late.”

James Comey, ex FBI director, “They (the Russians) are coming after America.”

James Clapper (Director National Intelligence), “The Russians, typically, are almost genetically driven to co-opt, penetrate, gain favor.”

Senator McCain “(Russia is) a gas station masquerading as a country” (proving with six words his extraordinary geographical, historical and cultural knowledge of Russia).

A Washington Post sports columnist, referring to very questionable doping allegations, described Russian 2018 medal winners as representatives of “a shamed nation.”

A media commentator, “Treat Russia Like the Terrorist It Is.”

…. and so on.

Given that most of the quoted characters (and more unquoted of similar opinions) hold strong Zionist views and have been pilgrims at the Wailing Wall, the naive observer is driven to ask himself whether there is a correlation.

To prevent the potential and usual accusation of anti-something, the following considerations apply only and exclusively to the neo-cons and their notorious Zionist leanings.

Why? Because few Jews, for example, were involved in the business of Saddam’s inexistent “weapons of mass destruction,” the invasion of Iraq, the massacre of Gheddafi, the destruction of Libya, the orchestration of the Ukrainian coup d’etat, the Odet-Yinon plan for the territorial extension of Israel from the Nile to the Euphrates, the Plan for the new American Century, with the need for a ‘new Pearl Harbor’, etc. The same can be said about the vociferous peddlers of the current Russophobia.

Still, Zionist Judaism functions as a Federal Reserve Bank of sorts, but applied to the mass-psychology of Jewish Americans.

The actual Federal Reserve Bank loans “fiat” money to the government, backed by nothing, literally pieces of paper or electronic transfers. “Fiat” is the Latin impersonal imperative of the verb “fieri.” It means “let it be,” implicitly followed by “because I say so.” In the instance, fiat currency refers to the scary notion that the dollar has value only because the government says it does.

The government commits itself to pay back the loan to the Federal Reserve Bank plus the interest. Statistics and number vary somewhat, but at the moment the outstanding debt is in the range of 25 trillions. This debt will never be paid back, but the government pays every year an interest on the debt to the Federal Reserve. This interest is obtained from taxes, that is, from the proverbial sweat of those who labor (and those who pretend to work but earn more than those who actually do).

I used this example because it is no secret that the Federal Reserve is under strong Zionist influence and control. In fact, and I quote from the Jewish-American magazine, Forward, “Paul Moritz Warburg, a German-Jewish immigrant who was one of the founding fathers of the U.S. Federal Reserve, had a fervent wish that his creation (in 1913), would be seen as one of America’s great monuments — like the old cathedrals of Europe.”

Continuing with the analogy, the Psychological Federal Reserve loans to the Congress and Senate the lies that congressmen and senators are charged and expected to use, diffuse and distribute, while pretending that they are true.

And like the fiat money of the monetary Federal Reserve, the lies of the Psychological Federal Reserve are backed by a baseless fabric of insubstantial nothing.

But in exchange for the popularization of the lies, the Psychological Reserve Bank will physically finance the pliant beneficiaries of the loan.

Interestingly, the first 8 major contributors to Hillary were Zionist Jews. And one, if not the major contributor to Trump, was the king of Las Vegas gambling, the arch-Zionist Adelson (rumored to have exchanged his multi-million contribution for the commitment to transfer the US embassy to Jerusalem.)

The largest overwhelming majority of Jews, though innocent of the US political, military and genocidal crimes perpetrated worldwide, function as a kind of “collateral” for the loan of the lies.

Or perhaps, more than collateral, blackmail. Said succinctly, “Be mindful, executive, to say and do what we (the Psychological Reserve Bank) tell you to do and say. Otherwise, not only you will lose the financial collateral, but we will unleash against you the phalanx of our co-religionaries.

For a co-religionary, rich or poor, practicing or atheist, to reject Judaism equates to reneging his own blood, his own DNA. Their situation has some similarities with that of the early Christian republic, which gradually formed an independent and growing state in the heart of the Roman republic.

All this, on a political-planetary level, helps explain the silence, when not the support, of the most atrocious actions of their Zionist leaders. It is as if the members of the US political machine, at the highest levels, operated with a gun at their head, “Obey or face political death.”

Evidence of the above is extant, though the Psychological Federal Reserve is so efficient as to ostracize and condemn those who dare to point it out.

As for Russophobia, it does not end here. The neo-cons accuse Trump of treason, calling for more anti-Russian sanctions, NATO’s ‘defensive’ exercises at the doors of Russia, etc.

Yet, the equivalent of the New York Times in Israel, the “Haaretz” newspaper, isn’t at all “Russophobic.” And since the sanctions do not involve Israel, Haaretz writes that the sanctions are actually an excellent opportunity for Israeli businessmen.

Besides, Netaniahou visits Moscow regularly and appears to be a good friend of Putin. A friendship that, outwardly at least, Putin seems to reciprocate.

To sum up, given the situation – as regards Russia, Russophobia, Trump, hatred of Putin by the Zionist neo-cons while he is befriended by Israel, etc. – it seems that a coherent explanation or a rational judgment are impossible. But truth and reason seldom find a favorable reception in the world.

Furthermore, taking experience into account, reason teaches us that there are things unexplainable by reason. Said more classically, there are more things in heaven and earth, dear reader, than are dreamt of in our philosophy.

The Essential Saker II
The Essential Saker II: Civilizational Choices and Geopolitics / The Russian challenge to the hegemony of the AngloZionist Empire
The Essential Saker
The Essential Saker: from the trenches of the emerging multipolar world

Erratic Empire Downfalling

July 29, 2018

By Sergio Weigel for the Saker blogErratic Empire Downfalling

Everybody understands the importance of the dollar system as the Achilles heel for the US empire yet oddly, when analysing imperial action of Warshington of the last decades, the focus is usually on ideologies like Zionism or American exceptionalism, or on at most partial aspects such as fossil fuels and pipelines. Another focus, favored mainly among Americans, is that America once was great but now has lost track somehow. I still think that the means of production, or in case of the US selling dollar annotated debt masked as investment, is far more paramount for US decision-making than ideology or oil, and that America hadn’t lost track but instead desperately tries to hold on to its track.

First, a few words about America’s track. The imperialists of the US regime desperately cling to their empire, that’s a classic, that’s what imperialists do. The Nazis clung to their short-lived empire until Germany was in ruins, the Romans clung to theirs until defeated, and the British struggle during WW2 was far more about preserving theirs than it was about defeating Nazi Germany. Empires usually don’t dismantle themselves. But it’s also the American people, serfs to the empire, who are desperately clinging. That’s what I found so appalling about the Occupy movement. These millennial brats had no political agenda but to demand their cheap flat screens back from the banksters. They didn’t want change, they wanted continuity. The same is true for the so-called “alt-right” movement who have zero political agenda for a better future. They lament the present while dreaming of a past 1950s/1960s America that has never even really existed. When they say America has lost its track, they might have Middle Eastern wars in mind, but that’s rubbish because there is nothing new or different in these wars than in any wars Warshington had fought before against the Natives, their own Southern brethren, Mexico, Spain, Philippines, Korea, Vietnam, you name it, and the meddling on Maidan is in no way different to what they’ve been doing in Latin American countries since the mid 19th century. Psychologically, I think, what they mourn is that the mask has fallen off and that they cannot go back to that cozy, simple, and ignorant lifestyle they had been able to enjoy up until 9/11.

To me the US empire is an historic aberration of humanity. With its genesis, its unparalleled level of violence, the categorically insolidary and segregated society and surreal consumer culture it has created, and the delusional ideology and mythology with which it justifies itself based on a borderline psychotic Messiah complex (Manifest Destiny), it represents an exceptional oddity among nations. But beyond its mental problems there is a cold, hard fact – at least within the realm of capitalism – that explains the actions and reactions of US imperialism throughout the years, especially in recent decades. It is both fuel and failure of the empire: the dollar as the world’s reserve currency, or rather the system behind it which consists of masquerading and selling debt as investment.

Many people consider the US to be a proper republic with a valid constitution, separation of powers, rule of law and all that jazz. I think that is baloney. In truth the US government is a front for a criminal enterprise and it has been like that ever since the US Constitution has been created and passed by whom Gore Vidal rightfully dubbed as “frightened men of property”. While the American Revolution in itself was a truly unique and valuable moment in human history, the system that resulted from it was and still is designed by men of wealth for men of wealth to obtain as much wealth as possible at the expense of everybody else without the tedious social responsibilities the French republicans came up with. In fact, this lack of social responsibility is what they mean when they say freedom. The American nation never had a chance to develop to its potential, because it was hijacked early on by networks/cartels of the rich. What is commonly referred to as the American dream should therefore rather be named the American deception. In my view, the Pursuit of Happiness is the largest middle-finger ever erected in human history. America has never lost its track, I think it has always been on the same track, yet it is about to derail hard.

While Europe has managed (more or less) to develop, kill and struggle itself into a bunch of societies in which solidarity, social justice and rule of law remain core cultural and social concepts – to a certain extent even for the rich (Napoleonic Code) -, America has developed into a rat race society based on property, materialism and a general save-your-own-ass mentality. A smart guy from New York once described his own country to me as money talks, bullshit walks. The fish rots or rather trickles down from the head. America is run by a bunch of mafia cartels no better than street gangs – Wall St, Big Oil, Big Pharma, Big Media, Military-Industrial-Complex etc. – with the Federal Reserve as their giant money laundering corporation, a bureaucracy of ridiculous proportions as both the mafia’s hitmen (CIA, Pentagon) and legal front (Congress), and the US president as the constantly changing promotion mascot. There is very often no love lost between these cartels or their players, but there are two things that unite them. First, the US dollar system, the single largest Ponzi scheme in human history and, second, an extremely elitist self-concept inherited from English aristocracy asserting that it is them, and only them, who shall rule the world. Take the infinite callousness and arrogance of the English upper class, offer them a vast country and endless influx of human material for exploitation and what you get is the United States of America and its WASP regime. The US has been an imperialist project right from the start, because it was founded out of (British) imperialism.

From their elitist perspective the American or any other people serve as human cattle to be duped, exploited and used. It is the ultimate Fordist nightmare, which Aldous Huxley could only vaguely anticipate in his novel A Brave New World. The people are made to live under conditions comparable to that of farm cattle with TV screens flickering in their stables. To the regime they are nothing but salary and consume cattle, cynically dubbed as human resourcesin the business world, a euphemism for slaves if you ask me. Lives, thoughts and views, food, medicine and drug use, culture, or the fairy tale people are supposed to believe as history are determined and conditioned by a gigantic propaganda industry that makes Joseph Goebbels drool in his coffin. Hollywood is the manifestation of what he could only dream of.

Europeans suffer from pretty much the same state of shallow and philistine slave existence, but it’s mostly a post-WW2 imported American thing for us. We still have a choice and we have all the necessary cultural, nutritional and intellectual roots to free ourselves from it. I might be dead wrong in my observations, but I don’t see how Americans with what I consider as their still prevalent settler mentality could really do that. I hope they will find a way and if only after the collapse of the empire. Regardless, you cannot properly understand US imperialism, let alone the so-called “West” in general, unless you fully appreciate the manufactured fake that it really is. Therefore let’s start with the only real thing about it – at least in a capitalist sense – the dollar system.

Empire of Snakes and Weasels

Through their dubious actions and policies of supporting all sides before and during WW2 the US cartels managed to weasel their host country’s way from the world’s number one debtor before the war to the world’s number one creditor after the war. With this leverage at their disposal the US entered the Bretton Woods negotiations in 1944. The Bretton Woods conference was in essence the result of Anglo-American establishments contemplating on how to rule and dominate the world after WW2. British imperialists, the other oddballs of human history and well worth an article of their own, and America’s ruling cartels had already united their criminal enterprises, although from different perspectives. While the British were mostly interested in using American muscle to preserve their empire which had been struggling especially against Germany’s rising economic power since the late 19th century, the American cartels were eager to establish themselves on a global and especially European stage, an endeavor for which Britain served well as springboard.

It is therefore no surprise that the English speaking imperialists on both sides of the Pond had different views on how to run future currency-based world domination. England was represented by British economist John Maynard Keynes – himself one of the initiators of the Bretton Woods conference – who put forward the idea of an international bank called International Clearing Union which would issue its own currency – the bancor – as an account currency between nations. The idea was to have trade surplus or creditor nations invest in the economies of trade deficit or debtor nations and so to even out global economic imbalances. Lord Keynes was one of the few if not the only competent of capitalist economists.

Keynes proposed that any country racking up a large trade deficit (equating to more than half of its bancor overdraft allowance) would be charged interest on its account. It would also be obliged to reduce the value of its currency and to prevent the export of capital. But – and this was the key to his system – he insisted that the nations with a trade surplus would be subject to similar pressures. Any country with a bancor credit balance that was more than half the size of its overdraft facility would be charged interest, at a rate of 10%. It would also be obliged to increase the value of its currency and to permit the export of capital. If, by the end of the year, its credit balance exceeded the total value of its permitted overdraft, the surplus would be confiscated. The nations with a surplus would have a powerful incentive to get rid of it. In doing so, they would automatically clear other nations’ deficits. (source)

This is – within the realm of capitalism – a pretty neat idea, one that would have, for example, prevented the flaws of the euro system, in which the common currency is undervalued for Germany (great for exports, pretty shit for the domestic market) but overvalued for pretty much everyone else with the result of German industry and its retailers Lidl and Aldi literally eating up the rest of Europe. Had the euro been designed as a common account currency with a proper multilateral treaty based on Keynes’s ideas while preserving national currencies, we wouldn’t have had to experience the euro crisis with all its terrible humanitarian consequences, and Germany would not have had the chance to abuse its imperialist power within Europe the way it did. I don’t think that the crappy euro design was a mistake but rather one deliberately made by German bankers and industrialists who prevailed over French and others when drafting the euro – but that’s something others have already written extensively and are more skilled about. The same flaws we can see in the euro system persist in the dollar system on a global scale since Bretton Woods, when one country can dominate the rest using the leverage of currency.

In the beginning of the conference everyone was with the ideas of Lord Keynes for they were as reasonable as it can get within a capitalist frame. But it was the American imperialists, represented by Harry Dexter White, who had quite different ideas for their currency-based world domination. They wanted to seize the opportunity by establishing an International Stabilization Fund which would put the whole burden of economic imbalance on the debtor nations. Instead of a global account currency like the bancor they wanted to establish their own US dollar as the world’s reserve currency. It is not documented how many arms the US cartels had to twist in how many directions at Bretton Woods, but eventually they prevailed and the notorious Bretton Woods system with the US dollar as sole reserve currency was implemented with the infamous IMF at its core, an institution that evidently turns everything it touches into deep shit as it keeps working along utmost economic illiteracy – even for capitalists – designed only to withdraw further capital from already troubled nations.

Having one country’s currency as the world’s sole reserve currency was and is so far unique in history. It is often and commonly believed that the US dollar had just replaced the British pound as the world’s reserve currency, but this is not quite accurate. British pound, German mark, French franc or Portuguese escudo had at their respective times always been reserve currencies alongside each other. Some were more regionally focused, like the French franc in Africa, with the British pound playing the major but not singular role globally. Bretton Woods, however, introduced the US dollar as the world’s or rather capitalist world’s sole reserve currency with all other currencies having fixed exchange rates to it. The US cartels gained tremendous political and economic clout by that, especially since it later allowed them to run a much larger and longer state and trade deficit than they could have, had the dollar been just been one garden variety currency among others. But how did it go and what does it mean today, when the world appears to be returning to a “normal” state of affairs again with the rise of euro and yuan?

A Roller Coaster That Only Goes Downhill

Many of America’s grumpy nostalgics who thought that a billionaire with a terrible hairdo would help them out of their misery by building a wall consider America to have been great in the past. Of course, it was never great at all. Those were times of heinous crimes against humanity by the US regime against the world and its own people, earlier even inspiring other villains. On principle it was just like today and how it has always been. The USAF was carpet bombing Asian countries and everybody was scared of Russians. Still, the times felt great, because the country was surfing the big post-war Kondratieff wave and enjoyed a Brave New World of Fordist pleasure based on hard work and hedonistic obedience to advertisement. Milkshakes tasted sweet, Rock’n’Roll pounded loud, and Cadillacs rolled big. Universities were negro-free and retards were sterilized. America was great and Jesus in love with you. The share of household consumption to GDP was already around 60%, but that wasn’t a problem because most of what Americans consumed was also made in America by Americans. But then the wave turned into swash and started lapping against the shore of reality. The markets were saturated. Everyone had a fridge and one or two cars and TVs by then. No new major technological innovation for further consumer goods lurked around the corner to drive the economy. The Kondratieff wave backwashed. Capitalism had once again reached its regular growth limits and the usual meltdown was looming. Voracious for more profits corporations started the big outsourcing frenzy in the 1970s to get their fix by having to share less with their workers in exchange for cheaper products from cheaper countries. Now, outsourcing as such is not a problem if the CEOs know what they’re doing and have a long-term strategy such as using profits generated from saving to invest in research for new innovation, for example. The problem is that the US is for the most part a shareholder economy and CEOs and their corporations are legally obliged to provide profits for them. I am talking about short-term quarterly or yearly profits, not profits for long-term visions. Even if the odd business school graduate working as CEO has a long-term vision, the American cartel model of economy won’t allow him or her to implement it without providing for shareholder profits first. Keep that in mind when you wonder where US industry went compared to German industry, apparently a core part of Trumpish penis envy triggering infantile feelings of unfair.

Over the course of the 1970s to the 1990s American workers increasingly turned into burger flippers, janitors and cashiers, while Mexicans, Filipinos and Chinese started to increasingly sweat in their shops. The purchasing powerof American consumers declined and that threatened the colossal GDP. Reaganomics didn’t trickle down at all, but it made sure that lumberjack shirts presented something non-existent, and banks and corporations got another decade-long profit fix. By the late 1990s, it became obvious that to keep the machine running Americans had to have their credit cards loaded and their stock markets bloated. Therefore, Bill “Never-Inhaled-and-Didn’t Have-Sex” Clinton deregulated the banks so that they could provide Americans with cheap mortgage credits for their consumerist pleasure. Advertisement went on hyperdrive to make Americans buy junk and sprawl suburbanly. Another profit fix for banks and corporations for yet another decade had been conjured up. GDP and plebeian excitement were saved for the day. The result of this policy was the much feared massive trade deficit, because economies in Europe, Asia and Latin America managed to replace American manufacturing globally either with their own products or simply by producing American ones.

In reality it is all a bit more complex, of course, but I’m deliberately keeping it simple to highlight America’s economic failure by design. It’s the sparkler among empires, having burnt so bright for three decades between 1945 and 1975 yet violently fizzling out ever since. What is important to understand at this point is that without Bretton Woods the US cartels would have never been able to run it this far, almost half a century on debt and delusions by now, because even when Nixon ditched the gold standard to free the empire from its shackles to run mile-high deficits, the US dollar remained the world’s reserve currency, first, in lack of another major currency to challenge it, and, second, as a result of a dirty deal made with the Saudi Barbarians: you sell your oil only in US dollars and make the rest of OPEC follow suit and we build up your stone or rather sand aged country American style. Goats as the common garbage disposal system in Riyadh had been replaced by white trucks, skyscrapers built, American weapons bought, and US debt sold to European and Asian oil junkies. John Perkins described this dirty deal perfectly well in his Confessions of An Economic Hitman. With the petrodollar established this way the US cartels could continue their criminal enterprise and it is the only reason why the Saudis have come as close to US imperialism as airplanes into tall buildings.

The US cartels are dependent on the dollar as the world’s sole reserve currency to be able to run the deficits necessary to fuel their criminal enterprise of world domination. In order to do that they need other countries to hoard dollars in the form of US debt, which they will only do if they believe the US was a thriving economy. But since the 1980s the US cartels can hold up the illusion of presiding over an economic powerhouse pretty much only with plebeian consumption running on debt. Currently about 70% of the GDP is private household consumption which is nominally not much more than during America’s self-felt greatness, but it has now turned into the last, almost lost engine rattling to keep if not America’s success at least its success story going. Virtually none of the consumed products are made in America anymore. Industry, engineering, and manufacturing went down the toilet and despite their constant attention whoring neither the narcissists in Hollywood nor Silicon Valley could make up for it. The only industry still pumping hard to inflate the GDP is the bogus financial sector and so the American economy hovers from one bubble to the next, each one inflated with the illusion of a working economy based on a bloated GDP. The question is: why is it so important for the US cartels to keep up a colossal GDP even at the cost of its own economic foundation and what does it have to do with US aggression all around the world, at least in the past two decades?

Welcome to the Dark Side

As the ever so astute American philosopher Homer Simpson once said“People can come up with statistics to prove anything […]. Forfty percent of all people know that.”, so I will toss some stats at you. Please bear with me. I chose to compare military spending, trade deficit, household consumption, household debt, government debt, and GDP – all numbers are in billion dollars.


Numbers are from the World Bank and United Nations and from this site.

The curves aren’t what is striking, they’re obvious, what strikes are the correlations between different data:

Correlation of: Military Spending Trade Balance Household Consumption Household Debt Government Debt GDP
Military Spending 1.00 0.22 0.83 0.89 0.78 0.82
Trade Balance 0.22 1.00 0.11 0.39 -0.12 0.12
Household Consumption 0.83 0.11 1.00 0.91 0.97 0.99
Household Debt 0.89 0.39 0.91 1.00 0.79 0.91
Government Debt 0.78 -0.12 0.97 0.79 1.00 0.96
GDP 0.82 0.12 0.99 0.91 0.96 1.00

I’ll just arrogantly assume that you know what correlation is. The important thing to note is that it’s about whether two data sets are related or not. The first thing that strikes the eye is that US trade deficit is hardly related to any other indicators, except perhaps for the relation to household debt. Therefore, the question arises if the Trump administration really is about trade deficit at all, as Mr Orange likes to claim, since it is mainly debt that cripples the country and shareholder values dependent on a high GDP that drive it. I don’t see Trump battling debt at all, but I modestly assume that there are at least one or maybe even two staffers in Warshington who read and analyse economic data.

The strongest correlation exists between household consumption, household debt, government debt and GDP. They are all above the 0.9 mark, even reaching almost full correlation between GDP and household consumption. In other words, the massive GDP of the US goes hand in hand with household consumption, which goes hand in hand with both private and public debt. The US appears to produce its GDP colossus mostly by investors buying dollar annotated debt. The irony – and eventually system failure – arises from the fact that the US cartels need to fake high economic productivity and reliability by financing high consumption of mostly imported goods on credit to show off a colossal GDP necessary to attract financial investors, both domestic and foreign, whose investments are then again used to finance aforementioned credits. This is what I call a vicious circle and kind of what I imagine to feel like hugging a pork half.

When we put military spending into the mix, the actions of US imperialism become even clearer. It correlates strongly or even very strongly to the other four indicators, yet military spending is hardly the cause of high public debt or GDP. After all, military spending amounts only to about 3.5% of GDP (not counting the totality of national security spending, let alone money made by CIA drug trafficking). Apparently, and in some magical way, US military action, or at least military spending, guarantees high consumption and thus a high GDP.

Bombing for Debt

It is a rather mundane insight, that what one wants and what one can do to get it are two different things. What the US cartels want is clear: Full World Domination (FWD), which even if they got it, would still be a system designed to fail as it cannot survive without a foe. Regardless, Brzezinski formulated it in 1997 in his pamphlet The Grand Chessboard, an American version of Uncle Adolf’s Mein Kampf. Like Mein Kampf was in many parts bootlegging Henry Ford’s The International Jew, Brzezinski hadn’t had one original thought either. His ideas were almost identical to those that British geostrategist Halford Mackinder formulated as Geographical Pivot of History in 1904. This idée fixe, never to let any land power take control in Eurasia or let any kind of Eurasian integration happen, seems to be engraved on the crazed minds of Anglo-American elites since the 19th century and is guideline to their politics ever since then. Germany and Russia had been and still are the main adversaries and targets, but also Iran and China. The whole history of the 20th century can only be understood under this premise. This, however, is not part of the official fairy tale that is bourgeois history. No wonder I didn’t learn about it at school. Anyway, it is also related to the preservation of the dollar system.

When the ever so humble Anglo-American crazies were convinced they had defeated the Soviet Union they started acting right away. The goal was to destroy any possible Silk Road and/or cooperation between the land powers of Germany, France, Russia, China, and Iran. Let me first briefly summarize the pre-millennial actions:

  • They nationally endowed democracy and Russophobia in what today has become the Idiot Belt (Baltics, Poland, Ukraine, Scandinavia) to shape a cordon sanitaire between Germany and Russia.
  • They literally ate up Russia economically during the 1990s and meddled with the aim to once and for all get rid of it as a power to reckon with.
  • They gave Saddam the green light to invade Kuwait in order to have a pretext to set foot in the Middle East – the first step against Iran after Saddam had screwed up the 1980s Gulf War.
  • They broke apart Yugoslavia, the last standing and just too large socialist country in Europe – this time with the help of Germany which had and still has its own imperial ambitions in Europe.
  • They bombed Serbia and sliced out Kosovo in order to establish a military base at the historical end of the Silk Road from China – first step in preventing Eurasian integration (and to control heroin trafficking to Europe as a sweet cherry on top).

So far, so good. But as I already mentioned, by the end of the millennium the dying horse of US economy had turned into a leaky horse-shaped balloon that needed to be constantly inflated with loans and foreign dollar investments, so that they now had to fight two fronts: inflate the balloon and conquer the world. At the same time the EU was about to establish the euro, the first currency able to challenge the dollar as the world’s sole reserve currency. They must have realized that time is running out. I assume this had let them to make an extremely filthy deal with the Zionists and Saudi Barbarians to demolish the World Trade Center in a staged terrorist attack to have political carte blanche for the next couple of years. The attack on Afghanistan was surely still part of the masterplan to encircle Iran, Russia, and China, and to set foot in Central Asia, and thus to block the historical Silk Road at the Chinese end. It was crafted two months before 9/11 after all. However, the following actions became increasingly erratic and, I believe, they were in part deviating from the original plan. The aggressions against Iraq, Iran and Libya, be it bombs or sanctions, all had a monetary background as well. Hussein announced already in 2000 that he wanted to price oil in euro, Iran announced in 2006 to open an oil bourse trading in euro, yuan, rial and rubel, and Libya wanted to introduce a gold backed currency, the dinar, as a joined currency for the African Union (which also heavily undermined French colonial interests in Africa). This can’t be a coincidence. These aggressions, while still more or less in accordance with the original plan yet conducted hastily and often without much of a detailed plan at all, had the primary aim to save the petrodollar by preventing any alternative from emerging. Without the primal petrodollar they wouldn’t be able to run the massive deficit needed to struggle for Full World Domination (FWD). The dollar must remain the world’s primary reserve currency or the house of cards masquerading as empire masquerading as democracy will crumble. It was and still is a rat race against their own demise.

All this bombing, chaos and destruction launched upon the world since 2001 had less PNAC, let alone “Israel”, in mind, but increasingly the assurance of further dollar investments in their debt, the most precious “natural resource” to keep the colossus colossal. Imagine a big fat drug-addicted bully who pummels weaker school children to prove that he is theoretically solvent because he could theoretically take anyone’s lunch money, so that, therefore, other junkie kids borrow him money which he then uses to buy more dope to be fit enough to pummel more kids. This is how the global economy has been working in the early 21st century before Russia and China started to collude effectively to ensure Eurasian integration and a multipolar, post-dollar world.

The difference between the US regime’s pre- and post-millennial actions have been that the former had been carried out carefully, quite successfully and according to plan, while the latter had been executed extremely sloppily and, except for the case of Libya, essentially failed (if the mess is on Europe it is a success to US cartels). Russia “snatched” Crimea, EU and Iran now want to trade oil in euro, Germany is increasingly free-trading with China, Iraq is colluding with Iran, which is selling its oil in yuan to China, and Saudi Barbaria is about to follow suit. The mercenary war against Syria, last hope for the imperialists, has failed because Russia, which has resurrected under pesky Putin, has ruined it for them. If you ask me, ever since the millennium the US regime acts under increasing panic of losing not only their precious PNAC, but also their imperial lifeline: the dollar. The fact alone that the empire is now increasingly relying on mercenaries, be it Academi or ISIS, shows the desperation. The Anglo-American establishments have for about five centuries followed Machiavellian principles and the use of mercenaries is not one of them. When (not if) the dollar crumbles, the empire will never resurrect from the rubble that will be left. This was pretty much the exact situation under which the Hillary Clinton vs. Donald Trump Punch and Judy show was performed.

Realpolitik in a World of Delusions

I must admit, I still can’t quite figure out Trump, but I am convinced that the cartels’ original plan was to install Hillary in order to blind liberals with her pink hat the same way they had before blinded them with O’Bomber’s dark complexion. To liberals women and minorities are fluffy teddy bears unable to do evil stuff and if they go to war then it will be nothing but a humanitarian pillow fight. Rednecks and conservatives, however, have never caused much trouble for the cartels since they had always been patriotically following their leaders and happily joined any mayhem as the cartels’ cannon fodder. However, the latter now were so discontent with their dire social and economic situation, a domestic consequence that is inevitable for any empire, that after generations of patriotic cheering for war they had become a reliability as well. From the cartels’ view Trump turned out to be the better choice. The liberals are now too focused on his chauvinist personality and imagined Russian collusion to notice his disastrous policies, while the grumpy nostalgics still at large view him as their big Orange Hero. While the plebs are in this way tamed and focused, he surely seems to be compliant enough on issues like Syria, Iran, Korea or Zionist apartheid not to be assassinated. But he also keeps antagonizing the US cartels’ core allies in Europe, even the UK now, and that seems rather weird, doesn’t it? I consider it to be a massive sign of the deep perplexity the cartels are in.

If the US regime was a proper republic instead of a criminal enterprise and its deep state as pragmatic as, say, the German deep state, they would surely do the only right thing there is to do in their very host country: dismantle the US military empire and invest heavily in infrastructure at home. The economy would get a boost from such mundane tasks as repairing bridges and highways, but there is plenty of more room to invest. The US doesn’t even have high speed trains, it has a 3rd world power grid, and its family homes still mostly consist of heat wasting carpet boxes. There are also vast possibilities for renewable energies in sunny and windy U.S.A. which, regardless of whether you choose to believe Exxonmobil or science, offer great economic value. Imagine the number of proper jobs that could be created by just bringing the domestic US into the 21st century. That would be realpolitiks. And hopefully will be the future of the United States.

The military highway has been bloating GDP with a certain success for the cartels for years, but it’s a dead end now. Even if they had installed cattish, insane Hillary in Warshington, the US would still not be able to attack Iran – the Europeans would still not have followed, and it would still turn out a ruinous endeavor. The US empire has simply ran out of attackable enemies to pretend to be powerful. Even Venezuela would be too hard for them to attack as they’d entangle themselves in an endless guerrilla war in the jungle, something they’re not exactly brilliant at. Besides, the times when the American people still “cattled” behind every given war are over, and I don’t see any significant European nation to follow. So, what’s left to do? If they went down the road of realpolitiks, the cartels’ would lose their more than two centuries old absolute power over the US. For example, if the US brought their energy regime more closely to the 21st century, the big oil and big nuke cartels would lose out a lot to the more decentralized renewables which then belonged to farmers or local communities (a struggle that is still far from over here in Germany). Large central investments are as key in corporate capitalism round table style as they were in state capitalism Soviet style. The empire cannot be saved, but everything that could save the domestic US from its demise and collapse would in the end mean the end of the iron grip of power of Wall St, Big Oil, Big Pharma, Military-Industrial-Complex, etc. The criminal enterprise that we have known as the U.S.A. is about to come to an end either way – involuntarily and violently destroying the country or voluntarily and peacefully preserving the country. If you haven’t seen the film Der Untergang yet, I assume you should do now by all means.

The cartels don’t give a rat’s arse over the country. That’s why, instead of focusing on domestic issues, they are now going for desperate measures to try to “discipline” Europeans, Chinese, and even Rwanda with silly tariffs in order to somehow keep the global dollar regime by asserting an illusion of power – and with Europeans they’ll always find pleasurable surrender monkeys. But the dollar regime is ending. The greenback will surely remain an important currency (unless it fully collapses), but only next to others like the euro and yuan. I think, they’re still trying to figure out what to do next, not realizing that there is nothing to do next but to deviate from imperialism. The one thing they can count on, however, appears to be the infinite asininity of the American public who now seem to be less divided over Democrat vs Republican groupthink, over empire vs domestic, but more between the Great Russia Panic and the Great Jew Panic. This is painfully facepalming to watch from over here, I can tell you that with all my benevolent heart.

Collapse, civil war, disintegration seem to be ahead for the US. The world in the 2030s might even be a world without the U.S.A., entirely. Instead there might be several new countries on the North American map. And why not? Texas, California and Florida could surely do alone economically, and Hawai’i and their “howdies” don’t even belong to the US one single bit. The smartest grassroot movements in America would call for segregation of their respective state or states such as the Pacific ones. I hate to say it but my money is on a violent collapse and disintegration of the US hopefully not tearing Canada down with them. The erratic empire is downfalling, and while that’s a great thing for humanity in the long run, including for Americans who I believe will eventually benefit from such catharsis, it will at first turn out to be extremely ugly.

Sergio’s Bio:  Born to a Portuguese mother and a German father Sergio was raised in Northern Germany, just two kilometers away from a British-German NATO air base. The daily sonic boom and thunder of low altitude Tornados was the sound of his childhood. They years when NATO wanted to station Pershing-2 missiles with nuclear warheads at the air base, were formative for him and he can still vividly remember the Cold War, Reagan, Thatcher, Chernobyl, the claustrophobic atmosphere, and the relief when the Berlin Wall finally fell. He makes his living as a web-programmer and IT consultant but still avidly studies studies history, geopolitics, economic theories, monetary theory, Hegel, Nietzsche, Marx and music.

The Essential Saker II
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South Front


Syria & Iran Prove There's No Chance For North Korean Peace

(Korea Summit Press Pool via AP)

Written by Brandon Smith; Originally appeared on

There is a saying in geopolitics that peace summits are generally a perfect time to prepare for war. This thinking stems from the military philosophy of Sun Tzu, who believed that when a nation is weak it is important to appear strong, and when a nation is at its most dangerous it is important to appear weak or “diplomatic.” Sun Tzu also often praised the virtues of distraction and sleight of hand, not only in war, but in politics as well.

I would note that Sun Tzu and the Eastern “sleight of hand” methodology is not only a mainstay of Chinese as well as North Korean thought, but also required reading for Western covert intelligence agencies. It is important to fully understand this methodology when examining the East vs. West paradigm, because almost everything you see and hear when it comes to relations with countries like China and North Korea is theater. Their governments have hidden schemes, our governments have hidden schemes and the globalists manipulating both sides have plans that trump everything else.

Keep all of this in mind when you hear about the sudden and almost inexplicable announcements of peace summits with North Korea in May or June between Pyongyang and the Trump administration.

Looking at the scenario purely from the perspective of political motive, it’s difficult to discern why Trump has been so obsessed with North Korea since he first entered office. North Korea has always had nuclear capability as well as the ability to deploy those nukes in one form or another against the U.S. North Korea has also always been involved in further nuclear testing and missile testing. The idea that such testing today is somehow a “violation” of arbitrary international standards and etiquette is absurd. Almost every nation in the world is engaged in military expansion and development.

Then again, if one only looks at surface rhetoric and policy, it is difficult to discern why the Trump White House is equally obsessed with Syria and the Assad regime. One of the primary driving forces behind the Trump election campaign was the idea that this was a candidate that would break from establishment elites in the tradition of perpetual war. Trump’s criticisms of past presidents and their handling of Iraq and the Middle East was supposed to represent a sea change in American policies of aggression. Instead, his cabinet is now laced with the cancers of neo-conservative warhawks (fake conservatives) and globalist banking proponents.

The U.S. was supposedly mere months away from completely removing its military presence from Syria. Yet a well timed “chemical attack” on a Damascus suburb, blamed on Assad, gave Trump a perfect rationale for keeping troops in the region as well as escalating the use of force through missile bombardment. The original claim under President Obama was that we were in Syria because of the growing threat of ISIS (a terrorist movement supported by western covert intelligence). Now, the new enemy is the target globalists always intended — the Syrian government itself.

When I see news of North Korea abruptly embracing peace talks just after meetings with China and not long after wild threats were tossed around of impending nuclear conflict, I wonder about the true nature behind the abnormal shift in rhetoric. When I see Trump suddenly speaking of Kim Jong-un as “very honorable” after months of trading character attacks on social media, I have to wonder when the next false flag event similar to the Damascus farce will take place?

There are already clear signs that all is not as it seems when it comes to a potential North Korean peace agreement.

North Korea’s offer to halt nuclear testing in exchange for a truce with the U.S. rings a bit hollow when one realizes Pyongyang’s primary nuclear testing site has recently collapsed in on itself from overuse. Any halt on testing by North Korea is likely temporary as secondary sites are prepared.

It also should come as no surprise that North Korea is willing to enter into diplomatic talks only months after achieving successful tests on their first ICBMs capable of reaching the eastern seaboard of the US. Again, as Sun Tzu taught, when you are most dangerous it is important to appear weak to your enemies.

Trump’s newest National Security Adviser and neo-con warmonger, John Bolton, expressed “doubts” in interviews that North Korea will “give up” its nuclear armaments. Bolton and other globalists know full well that North Korea has no intention of disarming, and if this is going to be a prerequisite to any peace agreement then I would expect talks to fall apart before they ever begin.

During initial talks to engineer “peace” in Syria under the Obama administration, the establishment argument was that Assad would have to step down as president of Syria in order for diplomacy to move forward. Of course, as noted above, western covert agencies created ISIS out of thin air just as they created the Syrian civil war out of thin air. They caused an extreme civilian genocide through their ISIS proxies, blamed the Assad regime for the instability in the region and then, when their color revolution failed to unseat Assad, they ask him to relinquish power as a good will offering towards the peace process. See how that works?

Obviously, globalists knew Assad was never going to step down. Why would he when he knows that this was the goal behind the creation of ISIS from the very beginning? And so, Syria remains a useful point of chaos in the globalist arsenal as a larger war is an ever present possibility. It is a perpetual powder keg that could be set off anytime the globalists choose.

Iran is also an excellent example of the fraudulent nature of establishment peace agreements.  The initial agreement arrived at in 2015, called the Joint Comprehensive Plan Of Action (JCPOA), listed a drastic reduction in Iran’s Uranium stockpile and enrichment facilities.  Iran seems to have complied with this request according to initial reports, and has complied with IAEA requests for inspections.  However, globalist peace deals are never fixed – they can be changed at a moment’s notice to facilitate a breakdown in the agreement.

The US has recently made demands for the IAEA to inspect not only Iran’s nuclear facilities but also its military sites, which were not under the original IAEA purview.  Iran, of course, is not too happy about the idea of having its military bases subject to foreign inspections.  US officials have also claimed Iran is not following the “spirit of the agreement”; not because of any supposed nuclear development, but because of Iran’s support for the Assad regime in Syria.

On top of this, the US is seeking to change the original JCPOA while refusing to label the changes a “renegotiation”.  Officials have called for a “supplementary deal”, which to my mind is in fact a renegotiation of the original deal.  This is clearly meant to cause a collapse in the JCPOA, as Iran is unlikely to ever accept a renegotiation.

Finally, Israel is now claiming that Iran has broken the JCPOA by secretly developing nuclear technology.  Once again, like WMDs in Iraq and chemical weapons attacks in Syria, no hard evidence whatsoever has been produced to support this claim.  But, that might not matter at all as Israel has already initiated strikes against Iranian targets in Syria (Syria and Iran have a mutual defense pact), and they may very well attack Iran directly within the next year.

Globalists do not care about peace, they only care about timing their wars properly.  The same reality applies to North Korea. Here is how this situation is probably going to play out…

The Trump administration will enter into peace talks with outlandish demands of complete nuclear disarmament. North Korea has so far offered a freeze on testing, but again, this is probably due to the collapse of their main testing site. A freeze on testing is not the same as total disarmament.

North Korea will of course refuse disarmament. The establishment will push harder, causing North Korea to pull back from the talks, to reschedule talks multiple time or to abandon talks altogether. Then, the establishment will say North Korea is not serious about peace, therefore, the force of action may be justified. They will say they gave North Korea a chance to do things the easy way, but now the hard way is necessary.

North Korea missile tests will continue, and new nuke facilities will open. Trump will call for the kinetic termination of such sites.

People who actually believe that globalists will abandon one of its best geopolitical Pandora’s boxes in North Korea have still not learned their lesson from the Syrian debacle, or from Iran. These regions represent a gold mine of potential international chaos which can be used as cover for all sorts of misdeeds as well as continued economic decline.

As I have noted in past articles, it is rather convenient for the banking elites at the Federal Reserve that every time they make an announcement of further cuts to their balance sheet as well as continued interest rate hikes a new geopolitical crisis involving Donald Trump simultaneously erupts. Is this mere coincidence, or should we view it as a discernible trend?

If it is a trend, then I would expect further crisis events involving Syria. Iran and North Korea in May and June as the Fed is set to increase the size of its balance sheet reductions thereby pulling the plug on its long time policy of artificially supporting markets. More strikes in Syria as well as destabilizing relations with Iran are likely. A collapse in talks with North Korea should be expected, followed by more plunges in stocks and other assets.

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