The G20’s Balinese geopolitical dance

FRIDAY, NOV 18, 2022 

BY TYLER DURDEN

Authored by Pepe Escobar via The Asia Times,

Xi has few reasons to take Biden – rather, the group writing every script in the background – at face value…

Balinese culture, a perpetual exercise in sophisticated subtlety, makes no distinction between the secular and the supernatural – sekala and niskala.

Sekala is what our senses may discern. As in the ritualized gestures of world leaders – real and minor – at a highly polarized G20.

Niskala is what cannot be sensed directly and can only be “suggested”. And that also applies to geopolitics.

The Balinese highlight may have featured an intersection of sekala and niskala: the much ballyhooed Xi-Biden face-to-face (or face to earpiece).

The Chinese Ministry of Foreign Affairs preferred to cut to the chase, selecting the Top Two highlights.

1. Xi told Biden – rather, his earpiece – that Taiwan independence is simply out of the question.

2. Xi also hopes that NATO, EU and US will engage in “comprehensive dialogue” with Moscow.

Asian cultures – be they Balinese or Confucianist – are non-confrontational. Xi laid out three layers of common interests: prevent conflict and confrontation, leading to peaceful coexistence; benefit from each other’s development; and promote post-COVID global recovery, tackle climate change and face regional problems via coordination.

Significantly, the 3h30 meeting happened at the Chinese delegation’s residence in Bali, and not at the G20 venue. And it was requested by the White House.

Biden, according to the Chinese, affirmed that the US does not seek a New Cold War; does not support “Taiwan independence”; does not support “two Chinas” or “one China, one Taiwan”; does not seek “decoupling” from China; and does not want to contain China.

Now tell that to the Straussians/neo-cons/neoliberalcons bent on containing China. Reality spells out that Xi has few reasons to take “Biden” – rather the combo writing every script in the background – at face value. So as it stands, we remain in niskala.

That zero-sum game

Indonesian President Joko “Jokowi” Widodo was dealt a terrible hand: how to hold a G20 to discuss food and energy security, sustainable development, and climate issues, when everything under the sun is polarized by the war in Ukraine.

Widodo did his best, urging all at the G20 to “end the war”, with a subtle hint that “being responsible means creating not zero-sum situations.”

The problem is a great deal of the G20 arrived in Bali bent on zero-sum – seeking confrontation (with Russia) and hardly any diplomatic conversation.

The US and UK delegations avowedly wanted to snub Russian Foreign Minister Sergey Lavrov every step of the way. France and Germany is a different matter: Lavrov did speak briefly with both Macron and Scholz. And told them Kiev wants no negotiation.

Lavrov also revealed something quite significant for the Global South:

“US and the EU have given the UN Secretary General written promises that restrictions on the export of Russian grain and fertilizers will be lifted – let’s see how this is implemented.”

The traditional group photo ahead of the G20 – a staple of every summit in Asia – had to be delayed. Because – who else – “Biden” and Sunak, US and UK, refused to be in the same picture with Lavrov.

Such childish, un-diplomatic hysterics is profoundly disrespectful towards ritual Balinese graciousness, politeness and a non-confrontational ethos.

The Western spin is that “most G20 countries” wanted to condemn Russia in Ukraine. Nonsense. Diplomatic sources hinted it may be in fact a 50/50 split. Condemnation comes from Australia, Canada, France, Germany, Italy, Japan, South Korea, UK, US and EU. Non-condemnation from Argentina, Brazil, China, India, Indonesia, Mexico, Saudi Arabia, South Africa, Turkiye and of course Russia.

Graphically: Global South against Global North.

So the joint statement will refer to the impacts of the “war in Ukraine” on the global economy, and not “Russia’s war in Ukraine”.

The collapse of the EU economy

What was not happening in Bali enveloped the island in an extra layer of niskala. Which brings us to Ankara.

The fog thickened because on the backdrop of the G20, the US and Russia were talking in Ankara, represented by CIA director William Burns and SVR (Foreign Intel) director Sergei Naryshkin.

No one knows what exactly was being negotiated. A ceasefire is only one among possible scenarios. And yet heated rhetoric from NATO in Brussels to Kiev suggests escalation prevailing over some sort of reconciliation.

Kremlin spokesman Dmitry Peskov was adamant; de facto and de jure, Ukraine can’t and does not want to negotiate. So the Special Military Operation (SMO) will continue.

NATO is training fresh units. Next possible targets are the Zaporizhzhya nuclear power plant and the left bank of the Dnieper – or even more pressure in the north of Lugansk. For their part, Russian military channels advance the possibility of a winter offensive on Nikolaev: only 30 km away from Russian positions.

Serious Russian military analysts know what serious Pentagon analysts must also know: Russia used at best only 10% of its military potential so far. No regular forces; most of them are DPR and LPR militias, Wagner commandos, Kadyrov’s Chechens and volunteers.

The Americans suddenly interested in talking, and Macron and Scholz approaching Lavrov, point to the heart of the matter: the EU and the UK may not survive next winter, 2023-2024, without Gazprom.

The IEA has calculated that the overall deficit by then will approach 30 billion cubic meters. And that presupposes “ideal” circumstances this coming winter: mostly warm; China still under lockdowns; much lower gas consumption in Europe; even increased production (from Norway?)

The IEA ‘s models are working with two or three waves of price increases in the next 12 months. EU budgets are already on red alert – compensating the losses caused by the current energy suicide. By the end of 2023, that may reach 1 trillion euros.

Any additional, unpredictable costs throughout 2023 mean that the EU economy will completely collapse: industry shutdown across the spectrum, euro in free fall, rise of inflation, debt corroding every latitude from the Club Med nations to France and Germany.

Dominatrix Ursula von der Leyen, leading the European Commission (EC), of course should be discussing all that – in the interests of EU nations – with global players in Bali. Instead her only agenda, once again, was demonization of Russia. No niskala here; just tawdry cognitive dissonance.

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Goodbye G20, hello BRICS+

The increasingly irrelevant G20 Summit concluded with sure signs that BRICS+ will be the way forward for Global South cooperation.

November 17 2022

Photo Credit: The Cradle

By Pepe Escobar

The redeeming quality of a tense G20 held in Bali – otherwise managed by laudable Indonesian graciousness – was to sharply define which way the geopolitical winds are blowing.

That was encapsulated in the Summit’s two highlights: the much anticipated China-US presidential meeting – representing the most important bilateral relationship of the 21st century – and the final G20 statement.

The 3-hour, 30-minute-long face-to-face meeting between Chinese President Xi Jinping and his US counterpart Joe Biden – requested by the White House – took place at the Chinese delegation’s residence in Bali, and not at the G20 venue at the luxury Apurva Kempinski in Nusa Dua.

The Chinese Ministry of Foreign Affairs concisely outlined what really mattered. Specifically, Xi told Biden that Taiwan independence is simply out of the question. Xi also expressed hope that NATO, the EU, and the US will engage in “comprehensive dialogue” with Russia. Instead of confrontation, the Chinese president chose to highlight the layers of common interest and cooperation.

Biden, according to the Chinese, made several points. The US does not seek a New Cold War; does not support “Taiwan independence;” does not support “two Chinas” or “one China, one Taiwan”; does not seek “decoupling” from China; and does not want to contain Beijing.

However, the recent record shows Xi has few reasons to take Biden at face value.

The final G20 statement was an even fuzzier matter: the result of arduous compromise.

As much as the G20 is self-described as “the premier forum for global economic cooperation,” engaged to “address the world’s major economic challenges,” the G7 inside the G20 in Bali had the summit de facto hijacked by war. “War” gets almost double the number of mentions in the statement compared to “food” after all.

The collective west, including the Japanese vassal state, was bent on including the war in Ukraine and its “economic impacts” – especially the food and energy crisis – in the statement. Yet without offering even a shade of context, related to NATO expansion. What mattered was to blame Russia – for everything.

The Global South effect

It was up to this year’s G20 host Indonesia – and the next host, India – to exercise trademark Asian politeness and consensus building. Jakarta and New Delhi worked extremely hard to find wording that would be acceptable to both Moscow and Beijing. Call it the Global South effect.

Still, China wanted changes in the wording. This was opposed by western states, while Russia did not review the last-minute wording because Foreign Minister Sergey Lavrov had already departed.

On point 3 out of 52, the statement “expresses its deepest regret over the aggression of the Russian Federation against Ukraine and demands the complete and unconditional withdrawal of armed forces from the territory of Ukraine.”

“Russian aggression” is the standard NATO mantra – not shared by virtually the whole Global South.

The statement draws a direct correlation between the war and a non-contextualized “aggravation of pressing problems in the global economy – slowing economic growth, rising inflation, disruption of supply chains, worsening energy, and food security, increased risks to financial stability.”

As for this passage, it could not be more self-evident: “The use or threat of use of nuclear weapons is inadmissible. The peaceful resolution of conflicts, efforts to address crises, as well as diplomacy and dialogue, are vital. Today’s era must not be of war.”

This is ironic given that NATO and its public relations department, the EU, “represented” by the unelected eurocrats of the European Commission, don’t do “diplomacy and dialogue.”

Fixated with war

Instead the US, which controls NATO, has been weaponizing Ukraine, since March, by a whopping $91.3 billion, including the latest presidential request, this month, of $37.7 billion. That happens to be 33 percent more than Russia’s total (italics mine) military spending for 2022.

Extra evidence of the Bali Summit being hijacked by “war” was provided by the emergency meeting, called by the US, to debate what ended up being a Ukrainian S-300 missile falling on a Polish farm, and not the start of WWIII like some tabloids hysterically suggested.

Tellingly, there was absolutely no one from the Global South in the meeting – the sole Asian nation being the Japanese vassal, part of the G7.

Compounding the picture, we had the sinister Davos master Klaus Schwab once again impersonating a Bond villain at the B20 business forum, selling his Great Reset agenda of “rebuilding the world” through pandemics, famines, climate change, cyber attacks, and – of course – wars.

As if this was not ominous enough, Davos and its World Economic Forum are now ordering Africa – completely excluded from the G20 – to pay $2.8 trillion to “meet its obligations” under the Paris Agreement to minimize greenhouse gas emissions.

The demise of the G20 as we know it

The serious fracture between Global North and Global South, so evident in Bali, had already been suggested in Phnom Penh, as Cambodia hosted the East Asia Summit this past weekend.

The 10 members of ASEAN had made it very clear they remain unwilling to follow the US and the G7 in their collective demonization of Russia and in many aspects China.

The Southeast Asians are also not exactly excited by the US-concocted IPEF (Indo-Pacific Economic Framework), which will be irrelevant in terms of slowing down China’s extensive trade and connectivity across Southeast Asia.

And it gets worse. The self-described “leader of the free world” is shunning the extremely important APEC (Asia-Pacific Economic Cooperation) summit in Bangkok at the end of this week.

For very sensitive and sophisticated Asian cultures, this is seen as an affront. APEC, established way back in 1990s to promote trade across the Pacific Rim, is about serious Asia-Pacific business, not Americanized “Indo-Pacific” militarization.

The snub follows Biden’s latest blunder when he erroneously addressed Cambodia’s Hun Sen as “prime minister of Colombia” at the summit in Phnom Penh.

Lining up to join BRICS

It is safe to say that the G20 may have plunged into an irretrievable path toward irrelevancy. Even before the current Southeast Asian summit wave – in Phnom Penh, Bali and Bangkok – Lavrov had already signaled what comes next when he noted that “over a dozen countries” have applied to join BRICS (Brazil, Russia, India, China, South Africa).

Iran, Argentina, and Algeria have formally applied: Iran, alongside Russia, India, and China, is already part of the Eurasian Quad that really matters.

Turkey, Saudi Arabia, Egypt, and Afghanistan are extremely interested in becoming members. Indonesia just applied, in Bali. And then there’s the next wave: Kazakhstan, UAE, Thailand (possibly applying this weekend in Bangkok), Nigeria, Senegal, and Nicaragua.

It’s crucial to note that all of the above sent their Finance Ministers to a BRICS Expansion dialogue in May. A short but serious appraisal of the candidates reveals an astonishing unity in diversity.

Lavrov himself noted that it will take time for the current five BRICS to analyze the immense geopolitical and geoeconomic implications of expanding to the point of virtually reaching the size of the G20 – and without the collective west.

What unites the candidates above all is the possession of massive natural resources: oil and gas, precious metals, rare earths, rare minerals, coal, solar power, timber, agricultural land, fisheries, and fresh water. That’s the imperative when it comes to designing a new resource-based reserve currency to bypass the US dollar.

Let’s assume that it may take up to 2025 to have this new BRICS+ configuration up and running. That would represent roughly 45 percent of confirmed global oil reserves and over 60 percent of confirmed global gas reserves (and that will balloon if gas republic Turkmenistan later joins the group).

The combined GDP – in today’s figures – would be roughly $29.35 trillion; much larger than the US ($23 trillion) and at least double the EU ($14.5 trillion, and falling).

As it stands, BRICS account for 40 percent of the global population and 25 percent of GDP. BRICS+ would congregate 4.257 billion people: over 50 percent of the total global population as it stands.

BRI embraces BRICS+

BRICS+ will be striving towards interconnection with a maze of institutions: the most important are the Shanghai Cooperation Organization (SCO), itself featuring a list of players itching to become full members; strategic OPEC+, de facto led by Russia and Saudi Arabia; and the Belt and Road Initiative (BRI), China’s overarching trade and foreign policy framework for the 21st century. It is worth pointing out that early all crucial Asian players have joined the BRI.

Then there are the close links of BRICS with a plethora of regional trade blocs: ASEAN, Mercosur, GCC (Gulf Cooperation Council), Eurasia Economic Union (EAEU), Arab Trade Zone, African Continental Free Trade Area, ALBA, SAARC, and last but not least the Regional Comprehensive Economic Partnership (RCEP), the largest trade deal on the planet, which includes a majority of BRI partners.

BRICS+ and BRI is a match everywhere you look at it – from West Asia and Central Asia to the Southeast Asians (especially Indonesia and Thailand). The multiplier effect will be key – as BRI members will be inevitably attracting more candidates for BRICS+.

This will inevitably lead to a second wave of BRICS+ hopefuls including, most certainly, Azerbaijan, Mongolia, three more Central Asians (Uzbekistan, Tajikistan, and gas republic Turkmenistan), Pakistan, Vietnam, and Sri Lanka, and in Latin America, a hefty contingent featuring Chile, Cuba, Ecuador, Peru, Uruguay, Bolivia, and Venezuela.

Meanwhile, the role of the BRICS’s New Development Bank (NDB) as well as the China-led Asia Infrastructure Investment Bank (AIIB) will be enhanced – coordinating infrastructure loans across the spectrum, as BRICS+ will be increasingly shunning dictates imposed by the US-dominated IMF and the World Bank.

All of the above barely sketches the width and depth of the geopolitical and geoeconomic realignments further on down the road – affecting every nook and cranny of global trade and supply chain networks. The G7’s obsession in isolating and/or containing the top Eurasian players is turning on itself in the framework of the G20. In the end, it’s the G7 that may be isolated by the BRICS+ irresistible force.

The views expressed in this article do not necessarily reflect those of The Cradle.

Russia, India, China, Iran: the Quad that really matters

Tuesday, 15 November 2022 3:55 PM 

By Pepe Escobar

Southeast Asia is right at the center of international relations for a whole week viz a viz three consecutive summits: Association of South East Asian Nations (ASEAN) summit in Phnom Penh, the Group of Twenty (G20) summit in Bali, and the Asia-Pacific Economic Cooperation (APEC) summit in Bangkok.  

Eighteen nations accounting for roughly half of the global economy represented at the first in-person ASEAN summit since the Covid-19 pandemic in Cambodia: the ASEAN 10, Japan, South Korea, China, India, US, Russia, Australia, and New Zealand. 

With characteristic Asian politeness, the summit chair, Cambodian Prime Minister Hun Sen (or “Colombian”, according to the so-called “leader of the free world”), said the plenary meeting was somewhat heated, but the atmosphere was not tense: “Leaders talked in a mature way, no one left.”

It was up to Russian Foreign Minister Sergey Lavrov to express what was really significant at the end of the summit.

While praising the “inclusive, open, equal structure of security and cooperation at ASEAN”, Lavrov stressed how Europe and NATO “want to militarize the region in order to contain Russia and China’s interests in the Indo-Pacific.”

A manifestation of this policy is how “AUKUS is openly aiming at confrontation in the South China Sea,” he said.

Lavrov also stressed how the West, via the NATO military alliance, is accepting ASEAN “only nominally” while promoting a completely “unclear” agenda. 

What’s clear though is how NATO “has moved towards Russian borders several times and now declared at the Madrid summit that they have taken global responsibility.”

This leads us to the clincher: “NATO is moving their line of defense to the South China Sea.” And, Lavrov added, Beijing holds the same assessment.

Here, concisely, is the open “secret” of our current geopolitical incandescence. Washington’s number one priority is the containment of China. That implies blocking the EU from getting closer to the key Eurasia drivers  – China, Russia, and Iran – engaged in building the world’s largest free trade/connectivity environment.

Adding to the decades-long hybrid war against Iran, the infinite weaponizing of the Ukrainian black hole fits into the initial stages of the battle.

For the Empire, Iran cannot profit from becoming a provider of cheap, quality energy to the EU. And in parallel, Russia must be cut off from the EU. The next step is to force the EU to cut itself off from China.

All that fits into the wildest, warped Straussian/neo-con wet dreams: to attack China, by emboldening Taiwan, first Russia must be weakened, via the instrumentalization (and destruction) of Ukraine.

And all along the scenario, Europe simply has no agency.     

Putin, Raeisi and the Erdogan track

Real life across key Eurasia nodes reveals a completely different picture. Take the relaxed get-together in Tehran between Russia’s top security official Nikolai Patrushev and his Iranian counterpart Ali Shamkhani last week.

They discussed not only security matters but also serious business – as in turbo-charged trade.

The National Iranian Oil Company (NIOC) will sign a $40 billion deal next month with Gazprom, bypassing US sanctions, and encompassing the development of two gas fields and six oilfields, swaps in natural gas and oil products, LNG projects, and the construction of gas pipelines.

Immediately after the Patrushev-Shamkhani meeting, President Putin called President Ebrahim Raeisi to keep up the “interaction in politics, trade and the economy, including transport and logistics,” according to the Kremlin.

Iranian president reportedly more than “welcomed” the “strengthening” of Moscow-Tehran ties.

Patrushev unequivocally supported Tehran over the latest color revolution adventure perpetrated under the framework of the Empire’s endless hybrid war.

Iran and the EAEU are negotiating a Free Trade Agreement (FTA) in parallel to the swap deals with Russian oil. Soon, SWIFT may be completely bypassed. The whole Global South is watching.

Simultaneous to Putin’s phone call, Turkiye’s Recep Tayyip Erdogan – conducting his own diplomatic overdrive, and just back from a summit of Turkic nations in Samarkand – stressed that the US and the collective West are attacking Russia “almost without limits”. 

Erdogan made it clear that Russia is a “powerful” state and commended its “great resistance”.

The response came exactly 24 hours later. Turkish intelligence cut to the chase, pointing out that the terrorist bombing in the perpetually busy Istiklal pedestrian street in Istanbul was designed in Kobane in northern Syria, which essentially responds to the US.

That constitutes a de-facto act of war and may unleash serious consequences, including a profound revision of Turkiye’s presence inside NATO.

Iran’s multi-track strategy

A Russia-Iran strategic alliance manifests itself practically as a historical inevitability. It recalls the time when the erstwhile USSR helped Iran militarily via North Korea, after an enforced US/Europe blockade.

Putin and Raeisi are taking it to the next level. Moscow and Tehran are developing a joint strategy to defeat the weaponization of sanctions by the collective West.

Iran, after all, has an absolutely stellar record of smashing variants of “maximum pressure” to bits. Also, it is now linked to a strategic nuclear umbrella offered by the “RICs” in BRICS (Russia, India, China).

So, Tehran may now plan to develop its massive economic potential within the framework of BRI, SCO, INSTC, the Eurasia Economic Union (EAEU), and the Russian-led Greater Eurasia Partnership.

Moscow’s game is pure sophistication: engaging in a high-level strategic oil alliance with Saudi Arabia while deepening its strategic partnership with Iran.

Immediately after Patrushev’s visit, Tehran announced the development of an indigenously built hypersonic ballistic missile, quite similar to the Russian KH-47 M2 Khinzal.

And the other significant news was connectivity-wise: the completion of part of a railway from strategic Chabahar Port to the border with Turkmenistan. That means imminent direct rail connectivity to the Central Asian, Russian and Chinese spheres. 

Add to it the predominant role of OPEC+, the development of BRICS+, and the pan-Eurasian drive to pricing trade, insurance, security, investments in the ruble, yuan, rial, etc.

There’s also the fact that Tehran could not care less about the endless collective West procrastination on the Joint Comprehensive Plan of Action (JCPOA), commonly known as Iran nuclear deal: what really matters now is the deepening relationship with the “RICs” in BRICS. 

Tehran refused to sign a tampered-with EU draft nuclear deal in Vienna. Brussels was enraged; no Iranian oil will “save” Europe, replacing Russian oil under a nonsensical cap to be imposed next month.

And Washington was enraged because it was betting on internal tensions to split OPEC.  

Considering all of the above, no wonder US ‘Think Tankland’ is behaving like a bunch of headless chickens.  

The queue to join BRICS

During the Shanghai Cooperation Organization (SCO) summit in Samarkand last September, it was already tacit to all players how the Empire is cannibalizing its closest allies.

And how, simultaneously, the shrinking NATO-sphere is turning inwards, with a focus on The Enemy Within, relentlessly corralling average citizens to march in lockstep behind total compliance with a two-pronged war – hybrid and otherwise – against imperial peer competitors Russia and China.

Now compare it with Chinese President Xi Jinping in Samarkand presenting China and Russia, together, as the top “responsible global powers” bent on securing the emergence of multipolarity.

Samarkand also reaffirmed the strategic political partnership between Russia and India (Indian Prime Minister Narendra Modi called it an unbreakable friendship).

That was corroborated by the meeting between Lavrov and his Indian counterpart Subrahmanyam Jaishankar last week in Moscow.

Lavrov praised the strategic partnership in every crucial area – politics, trade and economics, investment, and technology, as well as “closely coordinated actions” at the UN Security Council, BRICS, SCO and the G20.

On BRICS, crucially, Lavrov confirmed that “over a dozen countries” are lining up for membership, including Iran: “We expect the work on coordinating the criteria and principles that should underlie BRICS expansion to not take much time”.

But first, the five members need to analyze the ground-breaking repercussions of an expanded BRICS+. 

Once again: contrast. What is the EU’s “response” to these developments? Coming up with yet another sanctions package against Iran, targeting officials and entities “connected with security affairs” as well as companies, for their alleged “violence and repressions”.

“Diplomacy”, collective West-style, barely registers as bullying.

Back to the real economy – as in the gas front – the national interests of Russia, Iran and Turkiye are increasingly intertwined; and that is bound to influence developments in Syria, Iraq, and Libya, and will be a key factor to facilitate Erdogan’s re-election next year.

As it stands, Riyadh for all practical purposes has performed a stunning 180-degree maneuver against Washington via OPEC+. That may signify, even in a twisted way, the onset of a process of unification of Arab interests, guided by Moscow.

Stranger things have happened in modern history. Now appears to be the time for the Arab world to be finally ready to join the Quad that really matters: Russia, India, China, and Iran.

(The views expressed in this article are the author’s own and do not necessarily reflect those of Press TV.)


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

www.presstv.ir

www.presstv.co.uk

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Sun Tzu Walks Into a Kherson Bar…

 NOVEMBER 10, 2022

PEPE ESCOBAR 

The announcement of the Kherson Retreat may have signaled one of the gloomiest days of the Russian Federation since 1991.

Leaving the right bank of the Dnieper to set up a defense line on the left bank may spell out total military sense. General Armageddon himself, since his first day on the job, had hinted this might have been inevitable.

As it stands in the chessboard, Kherson is in the “wrong” side of the Dnieper. All residents of Kherson Oblast – 115,000 people in total – who wanted to be relocated to safer latitudes have been evacuated from the right bank.

General Armageddon knew that was inevitable for several reasons:

no mobilization after the initial SMO plans hit the dust; destruction of strategic bridges across the Dnieper – complete with a three-month methodical Ukrainian pounding of bridges, ferries, pontoons and piers; no second bridgehead to the north of Kherson or to the west (towards Odessa or Nikolaev) to conduct an offensive.

And then, the most important reason: massive weaponization coupled with NATO de facto running the war translated into enormous Western superiority in reconnaissance, communications and command and control.

In the end, the Kherson Retreat may be a relatively minor tactical loss. Yet politically, it’s an unmitigated disaster, a devastating embarrassment.

Kherson is a Russian city. Russians have lost – even if temporarily – the capital of a brand new territory attached to the Federation. Russian public opinion will have tremendous problems absorbing the news.

The list of negatives is considerable. Kiev forces secure their flank and may free up forces to go against Donbass. Weaponizing by the collective West gets a major boost. HIMARS can now potentially strike targets in Crimea.

The optics are horrendous. Russia’s image across the Global South is severely tarnished; after all, this move amounts to abandoning Russian territory – while serial Ukrainian war crimes instantly disappear from the major “narrative”.

At a minimum, the Russians a long time ago should have reinforced their major strategic advantage bridgehead on the west side of the Dnieper so that it could hold – short of a widely forecasted Kakhovka Dam flood. And yet the Russians also ignored the dam bombing threat for months. That spells out terrible planning.

Now Russian forces will have to conquer Kherson all over again. And in parallel stabilize the frontlines; draw definitive borders; and then strive to “demilitarize” Ukrainian offensives for good, either via negotiation or carpet bombing.

It’s quite revealing that an array of NATO intel types, from analysts to retired Generals, are suspicious of General Armageddon’s move: they see it as an elaborate trap, or as a French military analyst put it, “a massive deception operation”. Classic Sun Tzu. That has been duly incorporated as the official Ukrainian narrative.

So, to quote Twin Peaks, that American pop culture subversive classic, “the owls are not what they seem”. If that’s the case, General Armageddon would be looking to severely overstretch Ukrainian supply lines; seduce them into exposure; and then engage in a massive turkey shoot.

So it’s either Sun Tzu; or a deal is in the wings, coinciding with the G20 next week in Bali.

The art of the deal

Well, some sort of deal seems to have been struck between Jake Sullivan and Patrushev.

No one really knows the details, even those with access to flamboyant 5th Column informants in Kiev. But yes – the deal seems to include Kherson. Russia would keep Donbass but not advance towards Kharkov and Odessa. And NATO expansion would be definitely frozen. A minimalist deal.

That would explain why Patrushev was able to board a plane to Tehran simultaneous to the announcement of the Kherson Retreat, and take care, quite relaxed, of very important strategic partnership business with Ali Shamkhani, Secretary of Iran’s Supreme National Security Council.

The deal may have also been the inbuilt “secret” in Maria Zakharova’s announcement that “we’re ready for negotiations”.

The Russians will leave the Dnieper riverbank in a managed military retreat. That would not be possible without managed military-to-military negotiations.

These back channel negotiations have been going on for weeks. The messenger is Saudi Arabia. The US aim, in the short term, would be towards a sort of Minsk 3 accord – with Istanbul/Riyadh attached.

No one is paying the slightest attention to coke clown Zelensky. Sullivan went to Kiev to present a fait accompli – of sorts.

The Dnieper will be – in thesis – the settled and negotiated frontline.

Kiev would have to swallow a frozen line of contact in Zaporizhye, Donetsk and Lugansk – with Kiev receiving electricity from Zaporozhye, hence cease shelling its infrastructure.

The US would come up with a loan of $50 billion plus part of the confiscated – i.e. stolen – Russian assets to “rebuild” Ukraine. Kiev would receive modern air defense systems.

There’s no doubt Moscow will not go along with any of these provisions.

Note that all this coincides with the outcome of the US elections – where the Dems did not exactly lose.

Meanwhile Russia is accumulating more and more gains in the battle for Bakhmut.

There are no illusions whatsoever in Moscow that this crypto-Minsk 3 would be respected by the “non-agreement capable” Empire.

Jake Sullivan is a 45-year-old lawyer with zero strategic background and “experience” amounting to campaigning for Hillary Clinton. Patrushev can eat him for breakfast, lunch, dinner and late night snack – and vaguely “agree” to anything.

So why are the Americans desperate to offer a deal? Because they may be sensing the next Russian move with the arrival of General Winter should be capable of conclusively winning the war on Moscow’s terms. That would include slamming the Polish border shut via a long arrow move from Belarus downwards. With weaponizing supply lines cut, Kiev’s fate is sealed.

Deal or no deal, General Winter is coming to town – ready to entertain his guest of honor Sun Tzu with so many new dishes at their dinner table.

(Republished from Strategic Culture Foundation by permission of author or representative)

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The Real Progressive interview of Michael Hudson (with transcript!)

November 08, 2022

RP Live with Michael Hudson: The Destiny of Civilization

Real Progressive webinar Sept 2022

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Intro

[00:00:06] Luke Parcher: All right. For those who might not know me, I’m Luke Parcher, I’m a student and activist. I volunteer with Real Progressives. I’m on our leadership team and I also do a show on Sundays covering politics and current events, and I do some interviews throughout the week and things which you guys can find on Real Progress in Action.

I want to quickly talk about Real Progressives. If you’re interested in learning more about us, you can go to realprogressives.org. We have articles, content, podcasts, all sorts of things. And if you’re interested in helping us out, we are a nonprofit. You can go to realprogressives.org/donate. I also want to plug our founder and CEO, Steve Grumbine’s shows. He does the Rogue Scholar on YouTube on Real Progress in Action. He also does the Macro N Cheese podcast, where you can find our guest today, Michael Hudson, as one of many fantastic guests on that podcast.

So without further ado, I’d like to introduce our guest today. Michael is an economist, a professor of economics at the University of Missouri, Kansas City. He’s also a researcher at the Levy Institute at Bard College. He’s a former Wall Street analyst, political consultant, and commentator and author. Michael, thank you so much for taking the time.

[00:01:06] Michael Hudson: Well, thanks for inviting me.

Question | Luke Parcher

[00:01:08] Luke Parcher: I wanted to kick things off for the first question. The title of your book is The Destiny of Civilization: Finance Capitalism, Industrial Capitalism, or Socialism.

Can you just explain how you came to such an all-encompassing title?

[00:01:20] Michael Hudson: Well, the world economy is now fracturing between two parts, the United States and Europe is the dollarized part. And this Western neoliberal unit is driving Eurasia and most of the Global South into a separate group. The conflict really is between finance capitalism in the United States and Europe against other countries – China, Russia, Iran, India – that are following the more traditional ethic and strategy of industrial capitalism.

The question is: how are countries going to be economically planned? Because every economy is planned by somebody. In the United States, the central planning has been taken out of the hands of government and put in Wall Street. In the City of London. A very rightwing philosophy. In other countries, there is a mixed economy – China and the rest of Eurasia – and their objective of planning and money creation and credit is to create industrial capital to create the means of production.

Obviously, also environmental cleanup now, not merely the means of production but an overall economic system, not simply to make fictitious capital, finance capital, without any reference to the industrial capital base, the earning of labor and industry together.

So there are two economic philosophies and I began the book by contrasting the dynamics of industrial capitalism with finance capitalism. And industrial capitalism in the United States, Germany, England, and every country where it took off, was to promote a public investment in basic infrastructure monopolies in transportation, communication, education, healthcare.

The idea is that if the government would provide these basic services and basic human rights at subsidized rates – or freely, as in the case of education and healthcare – then employers would not have to pay labor a high enough basic wage to make labor pay for healthcare – as in the United States where 18% of GDP is for healthcare – or to pay for education, the 1.7 trillion that goes for student debt in the United States, not mentioning the education that is not debt-financed.

Finance capitalism basically sought to break away all of the public infrastructure. Most financial fortunes and financial fortunes in history were made just in the way that Zola had described, by prying thefts from the public domain.

But the financial capitalism doesn’t say… You don’t have to steal it; you actually make it your policy, giving away the financial domain in the way that President Yeltsin gave away all of Russia’s natural resources, public utilities, electric companies, anything that yields an economic rent that can be just easy income without any investment. And you financialize it.

You’ve had, for the last – really since the 1980s, but even since World War 1 – this movement to prevent industrial economies from being low cost. But the objective of finance capitalism, contrary to what’s taught in the textbooks, is to make economies high cost, to raise the cost every year.

That actually is the explicit policy of the Federal Reserve in the United States. Turn over the central planning to the banking system to essentially inflate the price of housing, with government guaranteed mortgages, up to the point where buying a home is federally guaranteed up to absorbing 43% of the borrower’s income.

Well, you take that 43%, you take the wage withholding for social security and healthcare, you take the taxes; the domestic market shrinks and shrinks. And the finance capital strategy is exactly what it is in the United States today, in Europe. Shift all of the money away from the profits of industrial capital that are reinvested in making new means of production. To expand capital into a shrinking economy where the financial sector intrudes more and more into the economy of production and consumption and shrinks the economy.

The rest of the book all spells out how this transformation from industrial capitalism to finance capitalism occurred and how the fight between the United States and Russia, China, Iraq, Iran, and India – it’s really a conflict of economic systems. There’s no rivalry because they’re not trying to do the same thing. The objectives of the U.S. and Europe are completely different from the economic objectives of Eurasia. It’s a war of economic systems. And that’s why the United States is trying to prevent other countries from following the same path to industrial prosperity that made the United States, Germany and other countries originally rich.

So you have on the one hand a high productivity, high standard of living economy that used to be in the West and is now in Eurasia, as opposed to an economy of austerity planned by the IMF and central banks, as you’re finding in Europe.

Question | Virginia Cotts

[00:06:38] Luke Parcher: Fantastic. Thank you for that. First here we have Virginia Cotts, one of the people helping us backstage, has a question – if Virginia wants to come on screen and ask.

[00:06:47] Virginia Cotts: Michael, I’m not an economist. Can you explain debt deflation – but also how debt siphons money away from the real economy.

I once heard you say that the finance sector is the overhead of the real economy. I think these questions are related? If you could explain that.

[00:07:09] Michael Hudson: Well, the classic discussion of debt deflation was in Volume 3 of Capital, by Marx. And Marx said that debts tend to grow by compound interest.

He gave a citation of everybody from Martin Luther onwards about how any interest rate is a doubling time, it doubles in a given number of years. And it grows exponentially in an up-curve, like X equals Y squared. But the economy grows in the shape of an S-curve; it tapers off.

And one of the reasons that it tapers off in the business cycle is that as the cycle gains momentum, people go further and further into debt. And if you have to pay debt to a banker, if you have to pay student loans, if you have to pay credit card debt, if you have to pay mortgages on rising house prices, then the money you pay to the banker is not available to be spent on goods and services.

So as you have the debt ratio growing in every economy, that crowds out the ability to spend your income on goods and services. So right now many graduate students – you graduate from school, you have a student debt, and you have to live at home with your parents because you can’t get a mortgage to buy a house because the banks say, “Well, you’re already paying so much of your income for student debt that you don’t have any money left over to buy a mortgage, so you can’t buy a mortgage.”

Right now, you’re having the debt-ridden American economy being squeezed. More and more money is paid, not only for debt, but also for other overhead, like healthcare and various monopoly services that are not available to buy goods and services.

Debt deflation is when the growth of debt exceeds the rate of growth of the economy. And that’s true of every economy. The most sophisticated mathematical models that I’ve seen were the ones that were taught to every student in Babylon in 1750 BC.

We have the models that they were told. They say, how fast does a debt at the going rate of interest, at 20%, double? Well, it’s five years. How long does it take to redouble? Well, that’s 10 years. How long to quadruple? Well, that’s 15 years. You see how fast it is. They also would have students calculate the growth of a herd of sheep for instance, and it would all taper off. And when Assyriologists began to translate these cuneiform tablets, they thought, well, this must be an actual report of how the herd actually grew.

But then they found out that the Sumerians already in the third millennium had quadratic equations and very sophisticated mathematics. The mathematics that they used 5,000 years ago were far in advance of what the National Bureau of Economic Research uses.

The National Bureau here is officially in charge of explaining when there’s a recession, when there’s a boom, and explaining the business cycle. The basic theory was outlined and traced by Joseph Schumpeter. It’s a sign curve going up and down regularly, up and down. And the whole philosophy of the National Bureau is a right wing anti-government philosophy saying the economy has automatic stabilizers.

It can never get out of balance because the free market is always going to prevent any kind of chronic downturn. If you have a boom, well, prices will rise and that will cut into profits and that’ll slow investment. And that’ll means that wages will fall until it’s more profitable to begin employing labor again. And you’ll have a recovery, and things go on and on and on, like a sign curve, at a given frequency, forever and ever.

Well, what this deliberately leaves out of account, deliberately expurgates, is the fact that every recovery in the United States and every other Western economy since 1945, has occurred with a rising level of debt. And as debt grows each time, each recovery has been slower. And the reason it’s slower is because as the volume of debt rises, this leaves less and less income available to spend on goods and services. And so, the so-called recovery is weaker until finally it grinds to a halt.

Well, Ricardo anticipated something like that in 1817 in his Principles of Political Economy. He said: well, look at what’s going to happen to land rent. If we don’t prevent the landlords from being the planners of the economy, then the more and more population increases, the price of food will rise, the rents to the landlords will rise more and more until the entire economic surplus is paid for rent and there won’t be any opportunities available to industrial employers. And Marx said, well, this was the Armageddon of capitalism.

In Ricardo’s day, people didn’t borrow to buy housing. It was still hereditary landlords. If your ancestors conquered England and killed enough Englishmen to become aristocrats, you’d inherit it and you didn’t have to borrow. But now that real estate has been democratized in the United States, England and Europe, you have to go into debt in order to buy a house.

And the largest amount of debt in every economy is for real estate, which accounts for 80% of bank loans in the United States and England. Essentially, if you want to buy a house you go to a bank they’ll calculate — well, here’s the rental value of that house. The winner, if you’re trying to bid for a house or an apartment against somebody else, the winner is the buyer who promises to pay the most for the property by taking out a bank loan that absorbs most of the rent as interest. So today, the rent that Ricardo said was going to drive industrial capitalism to a halt, is turned into interest. So it’s the rise in interest that is the Armageddon of industrial capitalism driving the economy to a halt.

I chart most of these in my book Killing the Host, where I give a history of compound interest. But basically the Western economies are all subject to debt deflation today.

And that’s why they’re shrinking. And living standards here are not rising and the economy is not growing, in contrast to China, Russia, Iran, India, and the other countries that don’t have this kind of financial sector doing their planning.

Question | Luke Parcher

[00:13:47] Luke Parcher: I was hoping you could expand on a point you actually mentioned just before we went live, distinguishing between different kinds of debt and which kinds of debt are parasitic and need to be rid of and which ones do not. Can you just quickly distinguish between different types of debt?

[00:14:00] Michael Hudson: Well, in textbooks that students read, corporations will borrow from a bank and they will use this borrowing to build a factory, and to buy machinery, and to produce something.

And the profits will be paid – shared 50/50 or so – with the creditor. So a productive debt is debt which, actually, enables the creditor to repay the loan with the interest and still keep something for himself. Banks don’t lend money to build factories. The stock market does that. The money the banks lend is unproductive debt.

Unproductive debt is when the debt doesn’t enable you to earn more money to pay the creditor. In an unproductive debt, you have to earn the money elsewhere and take money that you may earn as wages or profits and pay the bank. And it’s your loss. It’s a zero sum game, not a positive sum game.

Now this distinction between productive and unproductive debt was built into Sumerian and Babylonian laws. Only unproductive debts were canceled under the Jubilee year the rulers announced. Their word was, andurarum and, the Hebrew, cognate was deror and that was the word used for the Jubilee year.

It meant the rural debts – that when there was a crop failure, and the borrower could not pay the advance of the land rent and the other means of production. Obviously, if the borrower couldn’t repay because there was a crop failure, or a drought, or a disease, or a flood, then the debts were wiped out because that debt did not enable anyone to repay.

And if you didn’t cancel the debt, then the poor cultivator would be forced into a debt bondage to the creditor. And if he did that, then his labor would belong to the creditor and he couldn’t serve in the army. He couldn’t go to work on building public infrastructure. The business debts were all left in place. Debt denominated in silver were left in place and not canceled. The debts denominated in grain were canceled.

Well, in the 12th and 13th century, crusades flooded Europe with money. The Christian Church saw that commerce was reviving. You needed credit. The church theorists said, okay, there’s a productive debt. You’ll make loans to a merchant to trade. He’ll have the money to repay you, that’s productive. But, a debt to a consumer who can’t, is usury. And so ancient languages had no words to distinguish interest from usury.

But the churchmen said, okay, usury is unproductive debt. Interest is a productive debt. Those two words, those were the original meanings of the distinction between interest and usury. That’s been eradicated today when everything is considered productive and part of the free market. And, if it makes the billionaire class rich, it’s productive. That’s basically the thing today.

And the only debts that are supposed to be canceled are debts that the financial sector owns. The banks don’t have to pay the billionaires. Only people with less than a billion dollars have to pay debt. The poorer you are, the more debt you have to pay. They’ve reversed the whole last thousand years of Christian morality as the church has become privatized and financialized.

Question | L Lewis

[00:17:21] Luke Parcher: Fantastic. We have a question here in the chat. This is from L Lewis. It says China has opted for industrialization and the U.S. corporate class clearly has not. Why is the U.S. so belligerent if it doesn’t even want an industrial system?

[00:17:35] Michael Hudson: Because it doesn’t want any other country to have an industrial system. Just like the West fought against communism threatening a new social system after the 1917 revolution, America’s terrified that if China can succeed by following the exact same policy that the United States got rich on in the late 19th century, then they might try to make America rich. And, oh my God, if they do that then there’s no more free lunch for the billionaires.

This is life and death for the billionaires. They make their money by exploiting the economy without producing. The Chinese billionaires make their money by producing and exploiting the economy. But they also produce a lot. And then they have to give up much of what they exploit. So the United States doesn’t want there to be any success in any country achieving prosperity in a way that doesn’t siphon off all of the income to the 1%.

Question | Andy Kennedy

[00:18:28] Luke Parcher: And we have a question here from Andy Kennedy.

[00:18:32] Andy Kennedy: Michael, I believe that you coined the phrase monetary hegemony. I believe it was in Super Imperialism, a book that you wrote a while back. But I think that’s something that a lot of people really have a hard time grasping what that even means. Can you talk a little bit about how the U.S. dollar hegemony has been a large part of why the U.S. became de-industrialized.

[00:19:01] Michael Hudson: Well, that is what my book, Super Imperialism, was all about, that I published in 1972. Dollar hegemony really began in 1972. Hegemony is a word that I can never really work into conversation very easily. It was actually Henry Liu that emphasized that term. He’s a friend of mine and we were colleagues for many years. The dollar hegemony means the United States can issue dollar bonds, IOUs, and it never has to repay them. If we run a balance of payments deficit in the United States, the dollars end up in the foreign central banks. Most of the U.S. balance of payments deficits since the Korean war have been for military spending.

While America is spending money on creating military bases all over the world, these countries will end up with the dollars that we spend to build the bases and buy off client oligarchies. And these dollars are turned over to the local central bank for domestic currency. And the central bank is going to say, “What do we do with the dollars?” Well, they will tend to hold the dollars in the form of buying a U.S. Treasury bond because central banks aren’t supposed to take risks.

So they will essentially buy the Treasury bonds and the United States has no intention of ever paying the Treasury bonds. How is it going to pay? It was paying in gold until 1971. So when the United States would spend money in Vietnam, the dollars that were spent in Southeast Asia, in Japan, in other countries, would be sent from Vietnam to their head office in Paris.

And General de Gaulle would say, “Well, here are these dollars. Now give us gold.” And the U.S. gold stock was going down and down and down. The American strategists worried that this was going to really hurt the country’s ability to dominate the world. So when they went off gold in 1971, everybody thought that this was going to end American financial leadership.

Instead, it was a great increase. It created dollar hegemony because there was nothing for foreign central banks to hold their reserves in except U.S. Treasury bills, Treasury bonds. In other words, Treasury IOUs. So the more money that America would spend abroad in a balance of payments deficit, this money would end up being recycled to the United States in the form of Treasury securities. And so it was actually the balance of payments deficit by military spending that helped finance the U.S. domestic budget deficit. Other countries really didn’t have an alternative. And so when the United States took the lead in creating the Eurozone, it made sure that the Eurozone would never make the Euro an alternative currency to the U.S. dollar because it limited the Eurozone’s ability to run a budget deficit to just 3% of GDP.

Well, what that means is that when Europe goes into a recession and needs to increase government spending like the United States does when it’s in a recession, or like the United States is doing today, running a budget deficit way in excess of 3% of the GDP, Europe is not. So there are not enough Euro bonds by the central bank to ever become a rival for the United States dollar.

Well, all of this is now being changed by Russia and China that they have discussed for the last few years. “In order to stop U.S. hegemony, we have to avoid financing our own military encirclement by lending to the U.S. Treasury that turns it over to the military industrial complex and Pentagon to build bases here.So we’re going to have an alternative to the U.S. dollar.”

Well, they were talking about it – Russia, China, other countries – really for five years. And amazingly enough, the end of dollar hegemony occurred last year when the United States itself said if any country pursues a policy that we don’t like, we can grab all of the dollar reserves that they hold in the United States.

We can grab all of the Treasury bonds they hold. We can just take them. All the bank deposits they have, we can grab. They grabbed that of Venezuela first. They grabbed that of Iran. They grabbed that of Afghanistan. And then they grabbed the $300 billion of Russia. So now the United States has told any country, if you do anything that we don’t like, if you do not let our companies buy control of your economy, or if you try to sue one of our oil companies that pollutes your land, we will grab all of your money and you’ll be isolated.

Well, this ends other countries’ ability to finance the American empire anymore. Other countries are terrified now. If they’re all saying “Let’s not denominate our trade in dollars. Let’s not use the dollars. Let’s use each other’s currencies. We will finance other governments’ treasuries.”

And these treasuries that they’re financing – between China, Russia, Iran, India, and their neighboring countries – are loans to help their treasuries build infrastructure and internal improvements to actually increase the economy growing. Well, the United States itself has brought this about by all the sanctions that it’s imposing. It’s an example of the self-defeating character of the U.S. strategists.

Fortunately, none of them understand how an economy actually works anymore than they understand how military strategy really works. So we’re having armchair amateurs essentially ending a whole system that was giving America a free lunch for the last 50 years.

Question | Jordan S

[00:24:54] Luke Parcher: So we have one here in the chat from Jordan Soreff. He asks, how do you see the interaction between major shareholders of large financial institutions and major shareholders of industrial enterprises? Do you see a lot of common ownership between these kinds of institutions? And if so, wouldn’t they collaborate in order to avoid starving industrial enterprises of access to credit and guarantee some basic form of growth, not only for financial institutions, but also for industrial enterprises.

[00:25:20] Michael Hudson: Not at all. They’re collaborating in destroying the industrial sector. They collaborate in turning industrial corporations into financial firms. and when you turn the management of a corporation away from the engineers and turn it over to the chief financial officer, the chief financial officer says, “Our job is not to increase our industrial production. Our job is to increase the stock’s price. And we can maximize the stock’s price by, instead of spending on research and development that’ll take years to pay off, we can spend our income on buying the shares.”

92% of the profits of the Fortune 500 are spent on share buybacks and dividend payouts, not on new investment. Once you financialize an industrial corporation, you’re trying to make money by financial engineering, not industrial engineering. And you do this by essentially using your income to buy up the share price. This is short term – and finance lives in the short term. The reason finance has no interest in building up industrial power is that that takes years and years to actually plan a factory, plan the production. You have to develop a whole marketing system.

How are we going to sell the product once we produce it? How are we going to distribute it? It takes a lot of planning. It’s beyond the ability of the financiers. You don’t need brains to be a financier. All you need is greed. And you really don’t need a business school. All you need is greed.

And greed is short term. I want it now. Greed is not long term planning. And so, you have a completely different mentality of a financial corporate leader, as opposed to an industrial leader. Someone like, let’s say, Henry Ford, or like the old type of industrial leaders that would try to increase the overall profits to expand production more and more. Today the objective is to shrink production more and more.

Question | Jonathan Kadmon

[00:27:18] Luke Parcher: And we have a question here from Jonathan.

[00:27:21] Jonathan Kadmon: There’s a concept you mentioned in the book that’s also very near and dear to my heart. The commodification of essential goods and services, and extortionist incentives that come when you…

[00:27:32] Michael Hudson: Is that the title of a book?

[00:27:33] Jonathan Kadmon: No, it’s definitely a theme you touch on a bunch of times in your book.

[00:27:37] Michael Hudson: Oh, okay.

[00:27:37] Jonathan Kadmon: And I was hoping you could talk a little bit about how the hostage situation created by commodifying things like housing, healthcare, food, transportation, fuel, things like that – that people need rather than want – is used to extract rents and siphon wealth out of the productive economy to service the wealth demand of the FIRE sector [Finance, Insurance, Real Estate]

[00:28:00] Michael Hudson: Well, the free trade ideology that backs monopolies says that all markets are a function of choice. But the way to control a market is not to give the consumers a choice. And when you say hostage, what that means is people don’t have a choice between whether to eat or to pay a bank.

If they have to buy food or if they have to buy medical care, they have to pay whatever the going price is. Anatole France said that the rich person was as free as the poor person to sleep under the bridge when he didn’t have a house. So the objective of rent seeking is to essentially create a situation where people have no alternative but to buy the service or the good that you’re producing.

If they have no alternative, then you can charge whatever you want. This is the case with most public infrastructure. If you want to mail a letter, you have to pay whatever the going postage is, or whatever parcel service costs. Well, this is why, for about a thousand years leading up to the late 20th century, all governments kept basic services in the public domain – the post office, education, healthcare. You don’t want to privatize them and leave them to the market because if you leave them to the market, then it really isn’t a matter of choice at all.

It’s a matter of letting a monopolist take something that everybody needs, no matter what the price, and charge as much as the market will bear. And that’s a rent-seeking monopoly. That basically is the philosophy that Margaret Thatcher, Ronald Reagan, and the free marketers developed since the 1980s, when you had a privatization of basic needs, especially in housing. And the most important utility that’s been privatized of course has been money and credit creation – the banking system. What has enabled China to avoid the financialization that’s occurred in the United States is because the Central Bank of China is run by the government, not by a financial oligarchy of bankers that get together to run the credit system for their own benefit. But if the government treats money as a public utility, everybody needs money, everybody needs credit, and the government will provide the credit as needed for the economy to grow.

And if the economy has a slowdown, or if a company runs into a financial problem, if you’re the government as a creditor, you can write down the debt. In the United States, if you’ve made loans to a company like General Electric and all of a sudden it can’t pay, the company either goes bankrupt or begins to sell off its assets piece by piece to other people and you have industry being turned into gentrified luxury housing.

So the same thing with healthcare. If you privatize healthcare, everybody needs to go to the hospital. Everybody needs doctor care. If you privatize it then in the United States, 18% of your GDP is going to go to healthcare. The objective is to make healthcare as inefficient and cheap as possible to maximize the profits of the health insurance companies. And the sicker you get, the more money they make.

Also, by the way, the sicker you get, the more GDP goes up. GDP goes up because you have to spend more money healing yourself. So, that’s, a growing part of the American GDP – along with rent and debt service and interest. Well, if you keep healthcare in the public sector, the public sector is going to try to actually keep people healthy instead of sick. And they’re trying to minimize the expense of getting sick so that you leave more money in the hands of households to spend on the real economy of production and consumption, not on giving money to the monopolies.

But in the United States the main utility beside money that’s been privatized is government. Under the Citizens United ruling, the government is now really up for sale and auctioned off to the highest campaign contributors. In the Democratic Party, for instance, every Democratic representative has to raise a given amount of money from campaign contributors to give to the Democrat National Committee.

So whoever can raise the most money gets to be the committee heads. Well, you’ll have the pharmaceuticals industry giving a lot of money to some representative they want to be head of the health committee. You’ll have the bankers giving money to whoever they want to be the head of the banking committee and so on. So, the function of government itself once it’s privatized is to make money for the donor class, which basically is the financial class and the monopoly class that finance creates. Banks have always been the mother of monopolies and the financial sector’s largest business market is in creating monopolies. So, you have basically the privatization of monopolies.

And the monopoly rent of these monopolies is used for paying interest to the banks that finance the corporate raiders, or whoever wants to take over and buy these monopoly privileges.

Question | Luke Parcher

[00:33:14] Luke Parcher: We have a question here from Paul Birtwell. Paul, go ahead.

[00:33:18] Paul B: Hi, Dr. Hudson. Could you briefly touch on the concept of economic rent and unearned income as well as how the establishment became established by conquering Europe, privatizing the commons all the way up through colonialism, and how they use all these little privileges through copyrights, patents, formula, and it’s not really through effort or innovation, but it’s through rake off.

I remember you in an interview, I’m paraphrasing, saying something like: For the crime of being conquered, the 99% and all of the descendants are obligated to take care of the 1% and all of their descendants into perpetuity.

But it would be great if you could touch on those historical elements because most folks think, “Hey, these folks that are really rich are smarter, they worked harder.” And as we know, it’s not based on effort or individual contribution but rather just milking society.

[00:34:16] Michael Hudson: Well, it’s very hard to answer that question very briefly in a question and answer. I’ve written two chapters of the Destiny of Civilization describing exactly what you’ve asked: economic rent. All classical economics – from Adam Smith through Ricardo, John Stuart Mill, Marx, Alfred Marshall – was all about value and price theory in order to segregate how much of the price is not reflected by a real cost of production. Economic rent is unnecessary income.

Economic rent is what you’re able to charge more than just the cost of producing goods and service with a profit. It’s “What is a free lunch?” And the free marketers say, “There’s no such thing as a free lunch.” That’s what Milton Friedman said. But a rentier economy is all about a free lunch. The concept of economic rent in the 19th century was aimed at landlords because they inherited the land. The land does not have a cost of production. And yet, if you have an ownership right to the land, a privilege of legal ownership of the land, you have a legal boundary and you can charge rent without any effort of your own.

John Stuart Mill said economic rent is what landlords make in their sleep. They don’t have to make a productive effort. Well, actually a theory of rent went way back to the churchmen in the 13th century describing what is a fair return to bankers. The economy needs credit, all economies work on credit, traders need credit. They need the money exchange from one currency to another. The value of banking services is the cost of living, the cost of doing business, the cost to have a certain lifestyle that’s becoming of a banker.

But everything that’s over and above normal living prosperity and costs is called usury. That’s not a valid cost. And so that was deemed illegal already in the 13th century. Well, Ricardo in the 19th century used the landlords as the main rent recipients of the hereditary landed aristocracy. Rent is what a landlord would get just for the ownership privilege of having a land. And so if you go out and buy a house today and the price of land goes up because the city will increase bus service or a transportation service. For instance, in New York City, a few years ago, they extended and built the Second Avenue subway that went uptown, along Second Avenue. Real estate prices all soared for real estate on Second Avenue. That was a free lunch.

The landlords didn’t do anything at all to increase the real estate rents that they were charging. Rents went way up. If you lived on Second Avenue or First Avenue, even Third Avenue, you had to pay much higher rent because you no longer had to walk half a mile to get to the Lexington subway that was very overcrowded. You could have the nice uncrowded, Second Avenue subway.

And yet, this rent increased not by the expenditure of any cost. It was rent without value. It was the price of housing without cost value. So rent is the unnecessary element of price over and above what it actually costs to produce something. And rentier income is the income that is unnecessary.

To actually pay a industrialist for building a factory… industrialists would be happy with making the normal rate of profit. But if you have a special technology monopoly like the drug companies, then you can make super-profits. So rents are super-profits, basically. That’s the difference. Anyway, that’s to your question.

Question | Roxanne D

[00:37:58] Luke Parcher: Right on. We have, a question here from Roxanne Devereaux. She says, if you’ve answered this, maybe just elaborate on your answer, but in a perfect world where government actually served the people, what would a debt jubilee look like and how could it reverberate through society?

Most examples I’m familiar with happened before the industrial revolution.

[00:38:14] Michael Hudson: Well, the best example is the German financial miracle of 1947, 1948, the allied monetary reform. All internal debts were canceled except for people’s bank accounts up to a given amount and except for the money that employers owed their employees.

And the reason is that most of the wealth, most of the bank deposits, most of the creditors’ claims, were by the Nazis. And the American occupation said, well, we don’t want the Nazis to get rich. So the good thing about canceling debts is you cancel the savings of bad guys. In 1947 it was the Nazis; today it’s the 1%.

If you cancel the debts that I’ve said should be canceled – the sort of bad debts that are not necessarily production – then you cancel all of this vast accumulation of savings by the 1%. For instance, if you cancel student debts, that would free income for spending on democracy.

If you cancel all the debts that US banks owe to the offshore banking centers in the Caribbean, Panama, Liberia. All of this is flight capital. This is criminal capital. Cancel out all the debt of criminal capital and fraud. When Greece was running into its financial crisis seven years ago, Greece owed 50 billion euros of debt that it was trying to write down.

And the IMF produced a list called the Lagarde List that had deposits of Greek crooks and tax evaders in Switzerland were $50 billion. That 50 billion could have been wiped out. One of the first debt cancellations that went wrong was in Sparta in the third century, BC, under Agis and Cleomenes. When they canceled the debts, the people who wanted to cancel the debts were people who’d bought land on credit and they wanted their debt.

They wanted to own the land free and clear and cancel the mortgages. So some debts you don’t want to write down. If you were to write down mortgage debts, Donald Trump and real estate speculators would be the richest people in the country. So you don’t want to write down their debts.

Their debts will remain on the books. But if they were written down, well, first of all then, their debts are the banking systems assets. So Citibank would be even more insolvent than it is already and the banks would go under. They would be taken over by the public sector because if you have the mortgage debt wiped out, there’s still economic rent. Because people are willing to pay more money for a well-situated property that would, uh, in place of the banks getting the rental value as mortgage debt, the government would get the same rental value in the form of a land tax. That was what classical economics was all about. That was Adam Smith. That was John Stuart Mill. That was the whole reform movement of the late 19th century. So you want to cancel the bad debts, but you don’t want to make debtors who are just speculators rich in the process.

You want to make sure that you only cancel the bad debts and you don’t create a new rentier class. The idea is to look at the economy as a system and see what should the government receive as economic rent. And it can decide what is it going to receive for healthcare. The government… if the government took over the healthcare industry, it probably would not charge the prices that healthcare charges today. It would charge less. Same thing for housing. If housing were run like England ran its council housing before Margaret Thatcher, it would be very low. In Germany, Germany pays only 10% of its average family income for rent, not 30 or 40% as in the case of the United States.

That’s what used to make Germany, until last month, so competitive an economy. So, you’d restructure the economy so that it would only have debts that were socially necessary to keep the economy operating. Debts will begin to grow all over again.

Debts will always begin to grow over and over again. If you don’t ban interest, you permit debts to grow, but when they get so problematic that they threaten economic growth, then you have to write them down to a level where they will no longer prevent economic growth from occurring as they’re doing today.

Question | Doug G

[00:42:45] Luke Parcher: So we have one from Doug Greer here. He says many people seem to confuse the lessons of MMT with the super imperialism of the US dollar being the reserve currency of the world. Is the ability to create dollars to finance domestic needs of the US, like healthcare and infrastructure, dependent on the US dollar being the reserve currency?

Can you clarify?

[00:43:05] Michael Hudson: They’re completely separate. Any country can use its credit creation, either by the central bank or by commercial banks, to create credit. It doesn’t have to be linked to the balance of payments, except that if a country’s running a balance of payments deficit its currency will fall, unless it can balance the payments somehow.

So they are different questions.

Question | Fabiano D

[00:43:30] Luke Parcher: We have one from Fabiano D. Being that politicians, therefore government, are in the pockets of the rentier class, how do you think we could get rid of such rentier influence in order to implement socially oriented policies?

[00:43:43] Michael Hudson: That has never happened without a revolution. That’s the problem. How do you get rid of them? Well, I don’t see any way for the United States to get rid of them. It took a revolution in China. It took a revolution in Russia. That’s the problem right there.

You did have the beginning of a peaceful revolution in England in the 19th century and, leading to a constitutional crisis in 1909 and 1910, when the House of Commons actually passed the land tax and the House of Lords, being the landed aristocracy, canceled it. That caused a crisis.

And the upshot was the House of Lords was never, again, going to be able to negate a revenue act passed by the House of Commons. So that was actually a peaceful resolution of a constitutional crisis. Then World War I came and changed everything. But today I don’t see that kind of a peaceful resolution occurring in the United States.

They’re not going to repeal the Citizens United act, and, from what it looks like to me, the economy is going to get more and more highly squeezed and more polarized between the 1% and the 99%. I would say it’s a class war except finance isn’t really a class because everybody is a creditor as well as a debtor in some sense or another. So it’s really a financial dynamic against the rest of the economy. One of the points that Marx made in Volume 3 of Capital was that finance grows by purely mathematical laws of its own, having no relation to the growth of the economy. It’s an autonomous economic system.

And I think that autonomous economic system is independent of the government here and yet, unless you have a study of economics as an economic system – understanding what’s causing the polarization and the poverty in the United States – you’re not going to be able to have a reform movement to change the system.

The role of economics departments is to dumb down the understanding of the economy. You’re not going to have any kind of a peaceful reform movement here.

Question | Cristina

[00:45:47] Luke Parcher: We have a question here from Cristina who asks, what are the steps we can take to fix the housing crisis? Kind of a broad question, but if you have any policy prescriptions there, that would be great.

[00:45:57] Michael Hudson: There’s very little that individuals can do. The 19th century dealt with this question increasingly. And their solution was if you have a calculation of the land rent, as opposed to what it costs to build a building – we all know that if you build a building the contractor and the builder or developer have to make a profit, but if the government will tax the land rent, then it will not be available to the banks to charge as interest.

So, if you tax the land rent, then the land rent is not going to be capitalized into a bank loan, and housing prices will be kept down to the actual cost of construction plus normal profits. And as housing becomes more desirable, or as the economy becomes more profitable, or as cities build more Second Avenue subways and the rental value goes up, the taxes will go up. That will prevent this increased rent from taking a financial form and will simply be the source of a government revenue. It requires a tax system to tax away the economic rent, so that housing does not reflect the speculation and the economic rent that is caused by the privatization that’s been occurring. Especially since 2008.

Question | Tim

[00:47:11] Luke Parcher: So this one is from Tim. Tim says one argument against de-dollarization is the liquidity and stability of the US dollar. For example, oil is based in dollars and many OPEC countries have their currencies pegged to the dollar, such that they benefit from a strong dollar. At this age, the transition into trade in local currency pairs against these advantages of dollar as reserve currency.

[00:47:32] Michael Hudson: Well, that’s exactly what this last weekend’s Shanghai cooperation meetings were all about. Any country that holds its central bank reserves in dollars has a stake and in wanting to lose the money. China has the largest dollar holdings of any government and its currency has gone down and down and down.

China’s willing to take a loss on this by moving out of the dollars. The solution is, as both President Xi and President Putin pointed out, we’re going to move out of the dollar so we don’t have a stake in the dollar. It can go up or down. It is not going to bother us. They’re not buying or selling to us anymore.

Anyway, they’re sanctioning us. So let’s go with what president Biden wants. He says, you go your way, we’ll go our way. Fine. Let’s go our own ways and use each other’s currency, and that way, it won’t matter. So, it won’t matter to them. If moving out of the dollar means that there’s less demand for the dollars and it goes down, what they’re gaining is freedom.

So, this is the price of their economic liberty from dollar diplomacy.

[00:48:34] Luke Parcher: We have another question here from Virginia Cotts.

Question | Virginia Cotts

[00:48:36] Virginia Cotts: Michael, I feel like we have… some people have a lot of nostalgia for the post World War II social democracies of Europe. I can’t remember if it was in your book or in an interview you described Thatcher’s process of privatizing in England. Could you talk about that? Because I didn’t know a lot of that.

[00:49:00] Michael Hudson: Well, Margaret Thatcher said that her greatest contribution was Tony Blair. And Tony Blair was an opportunist who got enough support from the United States to move the British Labour party to the right of the Conservative Party and do what Margaret Thatcher never could have done. By even privatizing the railroads, by being more viciously anti-labor, the social democratic parties in every country have been so pushed by what the CIA called “the mighty Wurlitzer of public opinion” – meaning bribes to the politicians – that they’ve financed the campaigns of neoliberals to pretend to be pro-labor, to pretend to be socialist, while actually they’re the far right wing of the political spectrum. I won’t call them fascist. But let’s just say there’s nothing the fascists would not like in the social democratic parties. So, here you have the most right wing parties in Europe are the social democratic parties. Way to the right.

I guess the most right wing neofascist party is, of course, the Greens in Germany that are the pro-war party. And anti-labor. But basically, there is no longer a real labor party representing the interests of labor. They’ve all been co-opted by demagogues. The social democratic parties in a way have been like the peace parties.

The first thing that every peace party does when there’s a war is they’re at the head of the pro-war patriotism parade. That was what Trotsky noted about World War One. The peace parties jumped on the bandwagon in Germany, Austria, England, America. Social democratic parties have done the same thing when there’s a neoliberal right wing corporatist financialization. They’ve all been persuaded to do it.

The equivalent was like what the Clintons did to the United States since the 1990s. In the United States, the Democratic Party is the far right wing party now. And I guess when I answered the question about what can Americans do to help the housing crisis… You cannot solve the housing crisis until you end the Democratic Party. You cannot solve the labor problem without ending the Democratic Party. Because that is the party of Wall Street. That is the party of the 1%. Its function is to make sure that there cannot be any left wing opposition to block the Republican Party’s program.

What Bill Clinton did, the Republicans never could have done. Backing Alan Greenspan and the right wingers in getting rid of the acts preventing banks from owning insurance companies and brokerage houses. Getting rid of the Glass Steagall Act. And no Republican could have done anything as viciously anti-black and anti-Hispanic as President Obama, whose policies are basically identical with those of the Ku Klux Klan.

Obama’s role was essentially to reverse the attempt by blacks and hispanics to become homeowners. His objective was to replace black home ownership and hispanic home ownership with ownership by private capital companies. His role in 2009 was to bail out the banks – the fraudulent banks that had written the junk mortgages – and to keep the junk mortgages on the hook to evict almost 10 million American families. And not fine the banks, not throw a single crooked banker in jail. This ended the hopes of the low income Americans – and especially the minorities – to have housing.

If you say, what can we do about housing? Well, if you’re black or Hispanic, you must avoid the Democratic Party like the plague. And you must come to terms with the fact that it was Obama that was the most anti-black president of the 20th century, except of course for Woodrow Wilson. The damage that he’s done has not been widely recognized here.

And, he has put in place a Democratic Party leadership that is so anti-labor, so white racist. and so pro-Wall Street that I don’t think it is reformable.

Question | Luke Parcher

[00:53:18] Luke Parcher: And just to build on what you were just talking about there, Michael, I’m kind of stunned by the extent to which people buy into the partisan false dichotomy in this country and seem to think there are all these massive differences between the parties.

And that obviously is an issue-by-issue thing, but I’m curious where you think that buy-in comes from and how we might be able to cut into it. The fear mongering about Trump is I think overstating the differences between Trump and Biden on these issues. Can you talk a little bit about that?

[00:53:43] Michael Hudson: Yes. The Republican Party’s role is to say to Wall Street, “Yes, please.” And the Democratic Party’s policy is to say “Yes, thank you.” But that’s basically it. You’ll notice, like in Ohio, the Democratic National Committee is backing a right-winger who is going to play the role of West Virginia Senator Manchin or Arizona’s Sinema. The Democrats want to make sure that it has enough Republicans running as Democrats, that if there’s ever a danger of promoting a bill that is good for the working class or the racial minorities or ethnic minorities, that you’ll have the Republicans running as Democrat to cancel it, to play the role.

There’ll always be many senators right behind Manchin and Sinema in the wings to prevent the Democrats from doing anything that does not serve the short-term immediate interests of their Wall Street bankers… Backers.

Question | Bruce W

[00:54:39] Luke Parcher: Rotating villain is a very real concept for sure. We have a question here from Bruce Wall who asks, which of the public banking and monetary reform movements do you support, if any? I have in mind Public Banking Institute, American Monetary Institute, the Alliance of Just Money, Christine Desan’s Just Money. What about figures like Robert Hockett?

[00:54:58] Michael Hudson: Well, I’m on the board of directors of the Public Banking Institute. Steve Zarlenga was a good friend of mine.

I was at all of his early conferences. So they both have very good ideas. And… I’m blocking out the name. Who’s the head of the public banking?

[00:55:15] Virginia Cotts: That’s not Ellen Brown, is it?

[00:55:17] Michael Hudson: Yeah. Ellen Brown. Ellen would be all in favor of many of the things I’ve talked about, but she doesn’t think that a debt cancellation is politically feasible right now. And of course, she’s right. So she’s said that, well, public banks can provide the model for what could be. The result of what happens if Obama would have let Citibank go bankrupt.

The Republican head of the FDIC [Federal Deposit Insurance Corporation] urged that Citibank, being run by crooks… but, Obama put an even bigger crook in charge. Geithner, who was working for his banker Robert Rubin, basically did not let Citibank go bankrupt because that would’ve wiped out the stockholders.

And as Sheila Bair, the head of FDIC, said, well, it was all about the bond holders. And Sheila said, if Citigroup would’ve gone under, then that meant the government would’ve had the biggest bank in the country, and it could actually run a commercial bank along making good loans instead of making loans to corporate raiders. Instead of making crooked mortgage loans and fake loans, it could actually make loans to help the economy grow. Well, she’s quite right. That would’ve been a good idea.

So she’s concentrated.on public banks for what they can do. And she said, at least by having a public bank, you’ll keep the deposits of the public sector – the government, the state agencies, and hopefully the local city agencies – in the public domain, out of the hands of, the commercial bankers and Wall Street, so that you can use the money for a good purpose.

So, I’m all in favor of what she’s doing. Steve Zarlenga at American monetary Institute was for the hundred percent reserve plan that was proposed in the 1930s. And that is, commercial banks would actually be reduced to the status of savings banks.

A hundred percent reserves. Could not create credit. They could only make loans from deposits. Of course, if they had a productive loan made, the government, the Treasury, would act as the depositor – simply increase the deposits in the bank to enable them to make productive loans.

And that also, in principle, is a very good idea. That’s why I supported that. And of course that was the program that was introduced by Dennis Kusinich in his presidential run. I was Kusinich’s economic advisor. So those are the two groups that I’m most familiar with and the most in favor of.

Question | Rasha 

[00:57:41] Luke Parcher: We have a question here from Rasha. What role does defining money play in shaping the economy? How do you define money? Is it a record of value transferred between economic actors or is it a commodity? If you agree that money is a record of value transferred between two or more economic actors, isn’t it possible to create money on demand by any two or more economic actors in a decentralized manner, as opposed to central private banks providing there is a scientific formula by which value of goods and services is assigned.

[00:58:10] Michael Hudson: Oh, my God. I can’t even begin to answer that. The jargon is so misleading. Money has nothing to do with value. Money is debt. That’s the opposite of value. It’s a transfer of debt among people, it’s not a transfer of value. You’re using a very right wing, quite frankly, a fascist economic terminology, maybe without meaning to. But it’s not value, it’s debt created out of thin air. It’s credit.

When you go into a bank and you take out a loan the bank doesn’t say let me see how much money I have on deposit to lend you. They will just write you a loan. They’ll create a bank deposit and in exchange you’ll give them an IOU. It’s debt, loans, that create deposits, not the other way around. Anyone who talks about money and value, you want to stop talking to them immediately. Because you know that it’s just going to be patter talk for propaganda.

Question | Tom

[00:59:03] Luke Parcher: So we have one here from Tom. Tom asks: all prices of all things for sale are not rising. Therefore, the term inflation is not what we are experiencing. For example, the market is working. Money is moving from those without oil to those with oil.

Why does no trained economist understand and label this a normal market redistribution period or some term listed in textbooks for reference? And why is the concept called inflation, which scares unknowing economists and today’s consumers who needlessly suffer from money famine, so poorly taught and so poorly understood?

[00:59:33] Michael Hudson: The question is so bizarre, I cannot answer it. It’s just how do you, how do you answer a swamp and straighten out what they’re saying to give them an answer? It’s a swamp. I can’t answer that.

[00:59:42] Luke Parcher: I suppose in general, what would you prescribe the price increases that we’ve seen today to?

[00:59:47] Michael Hudson: Very largely monopoly positions. The reason oil prices are going up is not because there’s an oil shortage. It’s because the oil companies find an excuse to use the newspaper reports that there will be an oil shortage at some point to raise the prices right now. Adam Tooze wrote a good article a few days ago, comparing the inflation in Europe to the inflation in the United States. In Europe, the price inflation is almost exclusively for energy and for oil and gas derivatives. In the United States, the inflation is much broader – it’s over the whole course.

Again, you want to look at the economy as a system. You don’t want to reduce everything to one-dimensional “here’s the price level”. You want to look at the multi-layered economy. What are the cost prices? What are the economic rents? What are the monopoly prices? What’s the tax system? You have to look at the economy as a system, not in a one-dimensional way. So, I can’t untangle all of the jumble any clearer than that.

Question | Paul B

[01:00:55] Luke Parcher: We have one here from Paul Birtwell again. Could Dr. Hudson touch on and acknowledge the validity of MMT? What do you think is the importance of MMT and how does it apply to this discussion?

[01:01:04] Michael Hudson: Well, I was on the faculty of the UMKC, which is MMT center for many years. I’m all in favor of MMT. The point of MMT is that just as banks create endogenous credit on their own computers, the government can create credit. The government doesn’t have to borrow money from the 1% or from bond holders in order to spend it; the government can simply print it as it did under the greenbacks.

The government can create its own credit. And there’s nothing wrong with running a budget deficit because a budget deficit does not have to be paid by taxpayers paying taxes. A government deficit can be funded by simply creating the money on your own computer – not by taxes. That’s the point that Stephanie Kelton has been making again and again in what she writes.

And that really is the essence of MMT. But of course the leading exponent of MMT was Donald.Trump, when he said deficits don’t matter, we can just create whatever we want. And I think, Vice President Cheney also said we can spend whatever we want. It doesn’t matter. George Bush said, you know, it’s all really fictitious anyway; we can do it.

The difference between Donald Trump and the Republicans and the MMTers is, we want the government to run deficits to actually spend into the economy. We do not want deficits to be run for $9 trillion to subsidize quantitative easing for the 1% to promote real estate prices and stock and bond prices.

We want them to actually employ workers and to promote full employment. So the difference is that the MMTers are basically in favor of tangible economic growth, not creating money bad MMT of Cheney and Donald Trump style.

Question | Luke Parcher

[01:02:51] Luke Parcher: Can you talk a little bit about how the IMF [International Monetary Fund] and financialization have contributed to what’s going on right now in Ukraine? I know that’s a little bit broad, but if you could tie in what we’ve been talking about here to the situation in Ukraine.

[01:03:02] Michael Hudson: The IMF’s job is to make sure that the economy is impoverished and that all the money that it gives is to support the currency – to enable the kleptocrats, Kolomoyskyi and others, to take the Ukrainian currency they have and transfer it into dollars and pound sterling at a high exchange rate.

So they will lend Ukraine the dollars – essentially to support the hryvnia, however you pronounce its currency – and enable the kleptocrats to make money and then pull the rug out from under them if any alternatives to the Nazis take power. They want.to make sure that, once the kleptocrats have emptied out the economy, they can let the economy collapse.

They’re of course backing the new labor law president Zelensky has pushed, abolishing labor unions, abolishing the rights of labor to negotiate, and making basically the most fascist labor law in any country’s history. So the role of the IMF is to support client oligarchy, to get their money out of a country before there is a possibility of a leftwing government coming in, and then to deny all credit and organize a currency raid on the leftwing government, to say, “You see, socialism doesn’t work”.

The IMF is one of the institutions that is the arm of American hegemony, preventing economic growth occurring outside of the United States. Essentially the IMF is a… it’s a small office in the basement of the Pentagon, run by the neocons, to make sure that other countries cannot have any policy that would not let American firms come in and buy their raw materials and their natural resources and their monopolies.

So, think of the IMF as a tool of the military, but much more right wing than any general would dare to be.

[01:04:55] Luke Parcher: Thank you so much, Michael. We really appreciate you taking the time today.

I also, once again, want to remind people to please go to realprogressives.org to learn more about us, or find our podcasts and articles, including again, Michael, as a guest on Macro N Cheese. With that, we will go ahead and call it a discussion here. Virginia, did you have anything you wanted to add?

[01:05:12] Virginia Cotts: Yes. I wanted to ask Michael where people can find his work.

[01:05:17] Michael Hudson: Well, Amazon, I guess, is the easiest place to go. It’s all available there.

On my website, michael-hudson.com. And you can go to that and join me on Patreon. I do have a Patreon group, and if you’re a contributor at a given level, then you get to talk to me directly every few months.

[01:05:36] Virginia Cotts: Well, we can all use support. Real Progressives also has a Patreon. So, support us all, please.

I just want to say, Michael, you wrote an article with the greatest title I’ve ever seen, which was something like the US Defeats Germany for the Third Time in a Century. I just thought that was such a perfect title. I think you wrote it right when the Ukraine war was beginning.

[01:06:02] Michael Hudson: Right. It was apparent what was going to happen at the very beginning. And I’m amazed that nobody else was writing about that. I’m not very good on military analysis. I can follow what Andrei Raevsky at the Saker says, and Moon of Alabama, and Andrei Martyanov. The one thing I can tell about military operations is the balance of payments aspects and how it all is spelled out.

[01:06:24] Virginia Cotts: Well… and you talked about how the three main sectors benefited.

[01:06:30] Michael Hudson: Yes. Oil is the key to American diplomacy. And I guess if we’re talking about American hegemony, it comes from America’s control of the oil trade. That was one of the reasons that America wanted to isolate first Venezuela, and then Russia, because if the only source of oil are companies controlled by the American oil majors, then…

Every economy needs energy to grow. And in every economy since the beginning of the industrial revolution, there’s a connection between the growth of GDP and energy use per capita. So I talk about the monopoly rent and the victim economy. If you can control oil then you can control, basically, the world economy.

That has been a key to the American policy. The Americans realized that if Europe cannot buy Russian oil anymore, or Venezuelan oil, then it’ll have to spend 10 times as much buying American liquified natural gas. This means the sanctions against Russia have ended German industrial supremacy. It has ended the German steel industry. It has ended German heavy industry.

They’re now going to be dependent thoroughly on the United States. And the euro is going to become a weakening satellite currency of the US dollar as a result of killing off the German economic and industrial leadership of the European economy, along with that of Italy and France.

[01:07:53] Virginia Cotts: Oh, thank you. I hope we didn’t abuse your generosity with your time.

[01:07:59] Michael Hudson: No. I assume if I said anything controversial, you’ll just take it out.

[01:08:03] Virginia Cotts: Oh, no, we like it. We will actually clip it and plaster it all over the internet.

[01:08:12] Luke Parcher: Oh… [laughs]

[01:08:13] Virginia Cotts: Michael Hudson isn’t controversial, is he?

[01:08:18] Luke Parcher: Well, you certainly don’t mince words, and we very much appreciate that about you. Michael, thanks again for giving us so much time today. And I want to give a brief shout out to Jonathan Kadmon, Andy Kennedy, and Virginia Cotts, who’ve been helping behind the scenes today to make this happen.

Thanks to all involved. Great.

[01:08:31] Michael Hudson: Thanks for having me. I liked the discussion.

How bright are EUropeans ?

November 05, 2022

Source

by Jorge Vilches

no contract

Several indications lead to the conclusion that EUropeans at large — exceptions aside — should not be very bright. Or at least not brighter than anyone else as they claim to be. The fact is that – despite their undeniably copious amounts of individual and collective achievements – they have not yet been able to articulate a peacefull co-existence strategy amongst themselves and with third parties. Having failed at that implies that EUropeans are not really that bright, how could they be ? True enough, EUrope´s macro-economic and consumer society development has been ´successful´… but still under a highly unstable political co-existence. IMNSHO the main reason for such disqualifying historical flaw is that – contrary to their own self-image frequently preached sanctimoniously onto others – in political EUrope a “deal” is never a dealIt´s rather an expression of possible temporary abidance always subject to their own interpretation and circumstances yet un-defined. Basically, there is no valid contract, social or political or otherwise in EUrope. Humpty Dumptyness at its best. And the EU governance experiment made things worse with all the key decisions imposed by un-elected officials very clearly in the case of Greece, Italy, Ireland, Portugal, Spain, Poland, and Hungary. The argument could possibly be made that other societies today also struggle along equivalent lines, but then again this would swiftly confirm that EUropeans cannot be considered to be brighter than others… as they bloody insist they are.

EUropean ´superiority´ (not)

Dr. Josep Borrell is the EU´s topmost senior diplomat as High Representative for Foreign Affairs and Security Policy.

Recently joined by another un-elected official namely the EU Commission President Ursula von den Leyen both now roughly insist that EUrope´s problems stem from its addictiveness to excellent and cheap Russian energy and resources, to China´s humongous export markets and high productivity dependency, and to the military ´security´ that the US today supposedly renders to them. So, accordingly their solution for EUrope would be to (a) get itself up in arms yet again and (b) to double-down on the ‘battle of narratives´ which should be interpreted to be just some more effective EU propaganda. So from this perspective rather than being bright EUropeans would just appear to be aggressive, manipulative, and conceited… and not superior to anyone else. So why be so proud about it all ?.

the EU thorny garden

Objectively searching into the EUropean political soul it´s easy to find EUrope´s self-EUthanization vis-á-vis its sheer lack of any ´affectio societatis´. This makes EUrope an un-viable business associate to and for anyone, even amongst themselves in view of the current widespread infighting. But JB´s ´brightness´ does not stop there, now proclaiming that “the world needs Europe” and that EUrope is a “garden” and the rest a mere ”jungle” ready to encroach upon it… So at this rate it would be wise to copernically acknowledge that EUrope is not any “global super-power” and that God Almighty has not appointed the un-elected European Commission as the rule-maker for the rest of the world to follow. Furthermore, the “international community”(sic) is not headquartered at Davos or Brussels and 85% of planet Earth does not even wake up in the West every morning. Making that clear would focus EU politics better than complaining about “too many abstentions” in the UN votes regarding this conflict which EU officials fail to understand and accept.

Ref #1 https://www.eeas.europa.eu/eeas/foreign-affairs-council-remarks-high-representative-josep-borrell-upon-arrival-1_en

Ref #2 http://www.euronews.com/my-europe/2022/10/19/josep-borrell-apologises-for-controversial-garden-vs-jungle-metaphor-but-stands-his-ground

Ref #3 https://news.cgtn.com/news/2022-10-12/Josep-Borrell-looks-backwards-on-China-Russia-and-U-S–1e3XRtUKOJy/index.html

Ref #4 https://www.eeas.europa.eu/eeas/european-diplomatic-academy-opening-remarks-high-representative-josep-borrell-inauguration_en

7 historical catastrophes 7

During the past one hundred years (approx.) aided or not by its supposed “superiority” collective Europe fostered 7 major historical vintage TM® failures, namely (1) enthusiastically fostered World War I – the Great War – “the war to end all wars” amongst themselves + (2) cradled and fully developed Nazism + (3) instigated and deployed World War II + (4) allowed for the firm establishment of ruinous “King Dollar” by calmly and willingly accepting the 1971 US unilateral default on the Bretton Woods Agreement thus perpetuating until today a highly detrimental “exhorbitant privilege” for a thus fiat US dollar + (5) established the currently ticking Euro currency time bomb + (6) fully accepted and even participated with impunity in many dozens of US military unsolicited interventions worldwide as the sole un-elected “world cop” thru its 800+ military bases in 80 countries (7) in 2022 unilaterally provoked an unnecessary and stupid self-harming divorce from Russia which has led the world closer than ever to a nuclear war. Readers may have different opinion regarding the individual interpretation of related events but still all of the above are categorically accepted historical facts. And a society that lies so much – onto itself and third parties — cannot be too bright, can it ?

Ref #5 http://www.theepochtimes.com/on-the-path-to-hyperinflation_4782143.html

Ref #6 http://www.zerohedge.com/markets/path-hyperinflation

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no ´Greater Europe´

Forget any and all dreams about forging a Greater Europe from Lisbon to Vladivostok. Russia tried it, worked very hard at it, and invested tons in such century-milestone project, to no avail. Fact #1: Russia focused on Greater Europe for 30 years. Fact #2: Russia failed miserably in such endeavor. Under deep ´political hypnosis´ — for want of a better term — EUropean leaders supported by complicit constituents ended up deploying their self-harming strategy. For starters, no Referendum on the NATO-imposed, suicidal “let´s divorce Russia” initiative was ever proposed even though many dozens referenda have been held in the EU´s recent past. It´s simple: there is no valid contract in the EU

Russophia was also firmly established as a national cross-border regional sport of sorts spear-headed by complicit Western MSM and loudly outspoken and highly payed for EU officials. Of course, if challenged, Russians have the advantage of becoming quite stubborn when circumstances so require it, so they insisted in the Greater Europe project success and strictly followed the required EUropean Market & Financial Rules. But, yet again, there was no contract compliance. So led by the G-7 leadership, the collective West just plain took effective advantage of Russia in every way it possibly could provoke … and so the Minsk Accords were conveniently extended, postponed… and duly forgotten despite being squarely – and deceitfully — brokered by both Germany and France. The EU´s supposed Ostpolitik was betrayed with every trace of ´affectio societatis´ absent thus DE-stabilising the area and using third parties as pawns. Because, of course, EUropean flagrant unilateralism dictates that there is no room for anything close to having willingness and interest to engage and relate constructively with high-quality business partners beyond the EU´s – and NATO´s — full control. So Russia finally got fed up sick and tired of the West´s lack of “agreement capability” and will thus fully pivot to thriving Eurasia. Meanwhile Europe will immolate itself thru its NATO-induced suicide with shamefull colonialistic sins hovering its soul for the last 500 years until today. Is any of this “bright” ?

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NATO´s ´hypnotic´ spell

British Gral. Hastings Ismay — the first Secretary General of NATO — defined that the purpose of the North Atlantic Treaty Organization was “to keep Russians out, Americans in, and Germans down” which has since become the common way to describe its dynamics and goals. Ismay also proposed that NATO “must grow until the whole free world gets under one umbrella.” So EUrope today and per its own fault, in more than one way and through not-publicized non-sanctum mechanisms, is actually ruled and governed directly by the US. Accordingly, the inclusion of Russia in the Greater Europe project was to be boycotted to death – most specially its association with Germany — and it certainly was. The European leadership thus offered and deployed highly pro-active support to provoke the Ukraine conflict, be it “militarily, financially or politically” thus confirming yet again its direct and unequivocal commitment and participation. During 8 years the Ukraine Armed Forces were trained by NATO to meet NATO combat standards while the Eastern Russian-speaking areas were systematically intimidated and bombed . NATO members proudly admitted to constantly supply the UAF with heavy modern weapons, military advisers and intel.

Ref #7 https://en.wikipedia.org/wiki/Hastings_Ismay,_1st_Baron_Ismay

Ref #8 https://www.azerbaycan24.com/en/eu-again-urged-to-open-wallet-for-kiev/

The Lord Ismay.jpg

To weaken Germany and simultaneously strengthen the US required pitting Russia against Germany in a mutually destructive conflict so that the two countries could not re-establish normal relations for decades to come. The collapse of the EUropean economy would come about by denying cheap Russian energy to Germany. Thus, trillions of dollars of European resources would supposedly relocate to the US jointly with their best and brightest. According to the Rand Report, the main obstacle to Europe´s plundering on a scale which rivaled the Jewish looting of Russia in the 1990s was “the growing independence of Germany” which followed Britain’s exit from the European Union (Brexit) which gave “Germany greater independence and decreased the US influence upon European governments.”

the EU ´bright´ new oil & gas markets

No matter how diced or sliced, under the planned nat-gas EU ´capped-price´ purchase policy Western markets would be missing access to some 50% (approx.) of the 2021 effectively traded and consumed natural gas volumes. Besides, serious doubts remain on (a) the technical quality of such new possible “capped” price nat-gas (b) its delivery terms and conditions and (c) the reliability of such type of possible nat-gas suppliers. But at any rate when EUrope soon necessarily runs out of all possible nat-gas vendors willing to comply with its new capped-price policy — which would never fulfill its physical needs — then Russia and others will be able to charge whatever they want for the remaining nat-gas which EUrope will require in order to function ASWKI. Unless, of course, the deliberate ruinous EUropean plan were exactly THAT …which is an ever larger possibility. High quality nat-gas is high quality nat-gas, markets are markets, and business is business. An equivalent “absurd” sourcing conundrum would also be triggered by the soon-coming EU ban on Russian sea-borne oil with serious refinability problems (diesel !!!) vis-á-vis the different quality and quantity of the replacements yet to be found and the un-vetted reliability of the yet non-existent suppliers. Tom Kloza, Global Head of Energy Analysis says “Without new inventory, by the end of November the wolf will be at the door. And it will look like a big ugly wolf if it’s a cold winter” Ref #9 http://www.nakedcapitalism.com/2022/11/the-u-s-diesel-shortage-is-worsening.html

not-so-bright useful green idiots ?

The reference below describes the green parties in Europe “as being particularly easy to manipulate into running the errands of American imperialism. The prerequisite for Germany to fall into this trap is the dominant role of Green Parties and European ideologies. The German environmental movement is a highly dogmatic, if not fanatical, movement, which makes it quite easy to get them to ignore economic argument.”

Ref #10 https://fair.org/home/us-medias-intellectual-no-fly-zone-on-us-culpability-in-nord-stream-attack/

Ref #11 https://www.veteranstoday.com/2022/10/08/the-attack-on-the-pipeline-and-the-resurrection-of-the-morgenthau-plan-as-the-long-arm-of-jewish-vengeance/ Ref #12 https://nyadagbladet.se/utrikes/shocking-document-how-the-us-planned-the-war-and-energy-crisis-in-europe/

Eurasian pivot

On their part, the Russians — many still astonished by suicidal EUrope – seem to basically be thinking (approx.) …

EUropeans, you didn´t have to love us or even be friends you know… but why hate us ? Always, systematically, by default. Why are you Russophobic ? We only wanted to continue being your vetted trade partners as repeatedly proven with flying colors for 30 years. So just what is wrong with you ? Why do you allow your leaders to lie to you, cheat and mislead you so much ? If you actually wished to scare us away consider it done, good job and good bye EUrope. Now, despite your fully un-necessary EUthanization of our relationship, we still welcome you to set up your investments as our business associates here in Russia. Just consider that your only gateway to the world´s next all-time winner anyway you dice it or slice it — namely Mackinder´s Eurasia — is by relocating to Russia with all our known advantages. Otherwise – per WEF logic — you will not have any worthwhile fuels or natural resources left ( just hyperinflation…and no markets ) and you will not be happy”. So the remaining bright Germans – and other bright minds still in EUrope — would finally understand that 85% of the world´s population is not Western let alone part of today´s non-sensical NATO, fully “brain dead” per French President Emmanuel Macron. And once that the NS1 & NS2 sabotage perpetrators are proven and known, EUropean public opinion – most specially Germans – will see things very differently from today understanding how they have been mis-led into an entirely un-justified Russophobia.

EUropean RE-location

Development requires cheap and excellent all-around energy and natural resources which Germany and others do not have and that Russia has plenty of. It also requires markets with which to trade. So the alternatives are (a) “NATO out” which does not seem feasible right now, meaning “to revolt en masse against the NATO-imposed trade/financial sanctions against Russia, and force Berlin to repair NS1 and commission Nord Stream 2”…or… (b) relocate to the US, meaning total vassalization of the EUropean industrial burgeoisie a-la Werner von Braun…or… (c) relocate to Russia and be part of Eurasia´s new bright future, jointly with China & BRICS & SCO & Global South. Of course, sooner or later some of (b) will surely take place but chances are that (c) — per the assumed Russian offering proposed — will at least be the German predominant choice. Obviously, this would probably mean the sudden demise of the EUro and, soon after, of the US dollar ASWKI. The smarter part of the remaining EUrope would also follow the relocation of bright Germans to Russia. Unexpectedly, along these lines events may pick up unusual speed and EUrope as we know it today would cease to exist. And this would be the final evidence proving that EUropeans at large are not as bright as they think they are. They would all act differently if they were, with no room for cannibalism.

the Overton window

Bright Europeans do exist, but in EUropean politics they are very few and far between. So most today focus on (1) ruining Russia per NATO mandate to supposedly uphold ´democracy everywhere´ even corrupt kleptocracies… and while they are at it…(2) also saving planet Earth. Still, a handfull are finally understanding that this is too high a price to pay as EUropeans would not be willing to accept the MAGNITUDE and DEPTH of the hardships soon to come in what up until today was a flourishing consumer society with an enviable standard of living. Hypothetically, what some few political leaders were waiting and jockeying for was an Overton window large enough to get their heads in, their bets made, and their feet wet. The Overton window defines what is politically possible per the existing public opinion at a given point in time. So it is a very convenient tool to apply in view of the EU Commissariat Master Plan.

Ref #13 https://thesaker.is/natos-green-masochistic-euthanasia/

Ref #14 https://thesaker.is/europe-hypnotized-into-war-economy/

Ref #15 https://oilprice.com/Energy/Energy-General/Europes-Energy-Crisis-Will-Not-Be-A-One-Winter-Story.html

the German oath

All members of the elected government of the German Federal Republic have necessarily taken an oath of office details of which are explicit below. That is the basis for the social and political contract between German leadership and their constituents. But apparently many / all have decided to conveniently dismiss such sworn obligations until the Overton window – Main Street´s hidden weapon — forces them to act accordingly, not before.

“ I swear that I will devote my energies to the well-being of the German people, increase their benefit, protect them from harm, uphold and defend the Basic Law and the laws of the Federation, perform my duties conscientiously and do justice to everyone. So help me God.” Not a single word is ever mentioned relating directly or indirectly to the EU, its governance impact, its interests and/or its goals.

the “most stupid” government in EUrope

Recently Sahra Wagenknecht has defined Germany’s government as the “most stupid” in EUrope for managing to embroil itself in a full-blown economic war with its top – and thus un-replaceable — energy supplier, namely Russia. Speaking at the Bundestag, the former co-chair of the party Die Linke (“The Left”) urged for an immediate end to the anti-Russian sanctions and also for the resignation of German Vice Chancellor and Minister of the Economy, the now infamous ´Herr Green´ Robert Habeck. While still describing the ongoing conflict in Ukraine as a “crime” Wagenknecht insisted that the anti-Russian sanctions are “fatal” for Germany itself. She told her fellow Bundestag leaders in-their-face that “The biggest problem is your grandiose idea of launching an unprecedented economic war against our most important energy supplier. The idea that we are punishing Putin by impoverishing millions of families in Germany and destroying our industry while Gazprom is making record profits – how stupid is that?” she wondered out loud. So, an important German at an important German venue publically told many other important Germans how stupid they were. Not me, she did. “The promise of NATO membership did not help any. Militarily, this war cannot be won”. Of course, this has meant that some Left Party members now demand the expulsion of Sahra Wagenknecht for good.

Ref #16 https://www.wsws.org/en/articles/2022/09/19/qunz-s19.html

Ref #17 https://www.rt.com/business/563382-high-energy-costs-eu-companies/

Ref #18 https://www.rt.com/business/563490-thousands-firms-italy-closure/

Ref #19 https://www.reuters.com/article/ukraine-crisis-eu-energy-smes-idAFL8N30E4WV

Ref #20 https://oilprice.com/Energy/Natural-Gas/Europe-Faces-An-Exodus-Of-Energy-Intensive-Industries.html

´the grandiose idea´ …

Firms in the metal and chemical industries, among others, are trying to relocate to the US, The Wall Street Journal reports: “High energy costs drive companies away from EU”. This means obvious consequences only fools would not foresee: DEpression & UN-employment. German producers warn of food shortages. Die Welt now reports that “There are significant supply gaps in the daily food supply for people in Germany. The situation is “more than serious” an open letter from the industry said. “Companies now fear that production lines will soon come to a standstill and that refrigerated logistics centers for food distribution will be closed. Some are even preparing for possible insolvency.”

Manufacturers of both frozen and fresh products say they cannot cope with soaring energy costs. “The food industry is currently experiencing the worst crisis since the end of the Second World War… It’s a minute to twelve. Act now – otherwise the refrigerators and freezers of the German population will soon be empty” the letter urges. Germany, along with the broader EU, is facing a sharp rise in energy prices and a record inflation surge amid the intensifying anti-Russian sanctions and a policy of abandoning all possible Russian fuels. The situation could also soon lead to energy rationing and shortages, also meaning NO energy, NO fuels at ANY price, period. And forget LNG from whomever or wherever. Too little, too late, too cumbersome, too risky, way dirtier, and way too expensive. Germany needs Russian pipelined nat-gas for many good reasons that they cannot ignore and will necessarily live by soon.

The frozen food industry is particularly susceptible to energy supply problems, due to its strong reliance on electricity for freezers. The EU risks a ‘Wild West’ scenario says IEA head Fatih Birol warning that member states could possibly abandon solidarity to secure their own gas supplies. Many dozens of thousands of small and medium-size businesses (SMEs) in Italy can’t cope with soaring energy bills, ´Corriere della Sera´ reports. Italy is badly dependant on Russian pipelined nat-gas, no substitutes are possible in practice. Supposed “stored” reserves cannot be extracted from sub-surface unless Russian pipelines are also flowing thus allowing to add-on such stored reserves to the main flow. By themselves, underground nat-gas reserves can hardly be produced on surface and still with lots of negative impact.

Ref #21 https://thesaker.is/germanys-failing-stored-nat-gas-lng-experiment/

Larger companies will also add to the un-employed. According to a recent survey, over 70% of Italians are having difficulty or are simply unable to pay their energy bills. SMEs represent 99% of all businesses in the 27-nation EU. SMEs employ around 100 million people, or two thirds of all employed and account for 53% of Europe’s GDP.

Nearly one in six people over 65 in Germany is at risk of poverty, meaning they have less than 60% of the median income at their disposal according to the Federal Statistical Office and published by the German media group Funke. Europe maybe could have articulated a far better and softer transition and slower pathway into “some” renewables under excellent quality and already available + pipeline delivered, cheap Russian nat-gas. But they chose otherwise and now Europe must pay the piper. And with only a fraction of the EU imploding generalized chaos will prevail.

True enough, Hungarian Prime Minister Viktor Orbán led the pack weeks ago by saying “the approach has clearly failed — sanctions have backfired — and our car now has 4 four flat tires”. Just as a reminder, vehicles carry only one spare tire (maybe two) but never four and more to come… Now, also Greek Prime Minister Kyriakos Mitsotaki proposes to lift sanctions on Russia by December at the latest. But the questions remains: beyond some optics, the audio and the visual… just where precisely is the ACTION ? Are these two Heads of State bright enough per the circumstances ? Or are they just better sounding than the overwhelming EUropean political mediocrity ? Oh, you say they aren´t allowed to do any more than that ? If that´s the established system then EUropeans were not very bright…

Ref #22 https://www.euractiv.com/section/global-europe/news/orban-urges-new-eu-strategy-on-ukraine-says-sanctions-have-failed/

Michael Kretschmer

Germany needs Russian gas” – says Michael Kretschmer, Saxony’s Minister-President. Okay, that´s a good starting point to acknowledge don´t you think ? A valid diagnosis is necessarily behind any reasonable therapy and at least in this case – besides being bloody obvious – it´s still reconforting to see that a spanking new “common denominator” is being put together by some in Germany. Herr Kretschmer added that the current exorbitant prices for the fuel are “ruining Germany’s industry”. Okay, sorry to hear that. So that means that Russian energy matters lots, correct ?

Russian gas supplies are critical for Germany, and will remain so in the foreseeable future”. In an interview with Germany’s Funke Mediengruppe Michael Kretschmer also added: “We are already witnessing that we can’t do without Russian gas.” Hmmm….. But then Kretschmer went on to say that now Berlin should try to make sure that it keeps receiving Russian gas after the armed conflict is over. But would that be soon, please tell us ? Because saying that implies ignoring that the end of the armed conflict will most probably not be decided in the battlefield and just come about by a NATO-EU surrender. Why so you may ask ? Well precisely because NATO & the EU leadership provoked and sustained Russian gas to be cut off, so that can be reverted only by them, not the other way around. So whatever happens militarily in the battlefield does not actually matter that much any more unless it were 101% decisive. But many months have elapsed and it does not seem to be anywhere close to that, does it ? So finally EU politicians on their own will have to end this unnecessary war that they started simply because the Overton window for European public opinion will not stand it and they will have to admit they were dead wrong and plain go home, if not to jail.

Ref #23 https://www.rt.com/news/563458-saxony-governor-germany-needs-russian-gas/

Clare Daly (Irish MEP)

Clare Daly is a Member of the European Parliament (MEP) and from the very beginning in March 2022 she has voted against its Resolutions on this matter basically considering them to be “a recipe for prolonging war with escalation”. She believes that “ignoring the role played by the US and NATO in destabilising the area for the past decade,using Ukraine as a pawn in its battles with Russia, only serves to prevent an understanding of the measures necessary to secure peace”. Per Clare Daly, the EP Resolutions “accelerate the provision of military equipment and weapons to Ukraine, strengthen NATO’s forward presence, increase defence spending…and strengthen the European pillar within NATO” while also ”opportunistically call for opening the European energy market to fracked American liquefied natural gas (LNG)…which is far more polluting and terribly far more expensive”. Clare Daly believes that ”there is no military solution to this crisis as the policy of flooding Ukraine with weapons will, at worst, lead to a permanent condition of conflict, as has happened in Afghanistan, Libya and Syria, at best, a greater loss of life and destruction in Ukraine”. Furthermore, Clare Daly believes that the EP Resolutions on this topic do not sufficiently “take into account the impact of the war on workers,their working conditions, and the recognition of the hardship that this entails”.

Ref #24 https://www.europarl.europa.eu/meps/en/197731/CLARE_DALY/other-activities/written-explanations

Ref #25 https://rmx.news/article/shock-eu-commission-president-threatens-italy-on-eve-of-election-says-brussels-has-tools-if-wrong-parties-win/ Ref #26 https://tomluongo.me/2022/09/23/as-democracy-dies-eu-its-sins-are-revealed/

Ref #27 https://oilprice.com/Latest-Energy-News/World-News/London-Banks-Prepare-For-Possible-Blackouts.html

Saint Greta of Thunberg

Days ago Greta Thunberg at the London’s Royal Festival Hall left on record that there is no going “back to normal” as it would mean returning to the Global North climate crisis “system” i.e. “colonialism, imperialism, oppression, genocide and racist, oppressive extractionism”. So only the overthrow of “the whole capitalistic system” will suffice, says Greta. No explanation was given — or even a mild attempt made — to describe how the required transition could possibly be made to get from our current evil point A to future greatly-improved point B. Apparently, there’s no GDP growth — especially of the capitalist sort — without increasing carbon emissions. Supposedly the only solution to this state of emergency is “for rich countries to immediately abandon economic expansion as a social goal.” Full interview credit to Nicholas Harris at Ref #28 https://unherd.com/thepost/greta-thunberg-throws-her-lot-in-with-the-anti-capitalist-left/

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entitlements & cakeism vs. the chicken and the egg DE-globalization economics: FIRE vs real STUFF

If really interested in reducing greenhouse gas emissions mankind worldwide would need to drastically change its way of life in many important ways already very firmly considered by the collective mind-set as genuinely valid entitlements So, politically speaking such proposal is a non-starter waaaay outside any current Overton window we may come up with. In turn, we also can´t have our own cake and eat it too. So which will it be ? On top of it, let´s add that “All service industries (– including FIRE finances –) remain completely dependent on the raw materials and manufactured goods sectors to function… So DE-globalization will increasingly favor those who produce and control the STUFF which underpins everything else…(of course necessarily) leading to devastating closures of (almost all ?) energy and/or resource-intensive industrial operations in Europe due to high energy prices that make their products uncompetitive.” Ref #29 https://oilprice.com/Energy/Energy-General/East-vs-West-Stuff-vs-Finance.html . Full credit to Kurt Cobb via OilPrice.com.

The ‘War of Terror’ may be about to hit Europe

Monday, 24 October 2022 1:40 PM  [ Last Update: Monday, 24 October 2022 1:43 PM ]

By Pepe Escobar

Never underestimate a wounded and decaying Empire collapsing in real time.

Imperial functionaries, even in a “diplomatic” capacity, continue to brazenly declare that their exceptionalist control over the world is mandatory.

If that’s not the case, competitors may emerge and steal the limelight – monopolized by US oligarchies. That, of course, is absolute anathema.   

The imperial modus operandi against geopolitical and geoeconomic competitors remains the same: avalanche of sanctions, embargos, economic blockades, protectionist measures, cancel culture, military uptick in neighboring nations, and assorted threats. But most of all, warmongering rhetoric – currently elevated to fever pitch.

The hegemon may be “transparent” at least in this domain because it still controls a massive international network of institutions, financial bodies, politicos, CEOs, propaganda agencies and the pop culture industry. Hence this supposed invulnerability breeding insolence. 

Panic in the “garden”

The blowing up of Nord Stream (NS) and Nord Stream 2 (NS2) – everybody knows who did it, but the suspect cannot be named – took to the next level the two-pronged imperial project of cutting off cheap Russian energy from Europe and destroying the German economy.

From the imperial perspective, the ideal subplot is the emergence of a US-controlled Intermarium – from the Baltic and the Adriatic to the Black Sea – led by Poland, exercising some sort of new hegemony in Europe, on the heels of the Three Seas Initiative.

But as it stands, that remains a wet dream.  

On the dodgy “investigation” of what really happened to NS and NS2, Sweden was cast as The Cleaner, as if this was a sequel of Quentin Tarantino’s crime thriller Pulp Fiction.

That’s why the results of the “investigation” cannot be shared with Russia. The Cleaner was there to erase any incriminating evidence.

As for the Germans, they willingly accepted the role of patsies. Berlin claimed it was sabotage, but would not dare to say by whom. 

This is actually as sinister as it gets, because Sweden, Denmark and Germany, and the whole EU, know that if you really confront the Empire, in public, the Empire will strike back, manufacturing a war on European soil. This is about fear – and not fear of Russia.

The Empire simply cannot afford to lose the “garden.” And the “garden” elites with an IQ over room temperature know they are dealing with a psychopathic serial killer entity which simply cannot be appeased. 

Meanwhile, the arrival of General Winter in Europe portends a socio-economic descent into a maelstrom of darkness – unimaginable only a few months ago in the supposedly “garden” of humanity, so far away from the rumbles across the “jungle.”

Well, from now on barbarism begins at home. And Europeans should thank the American “ally” for it, skillfully manipulating fearful, vassalized EU elites.

Way more dangerous though is a specter that very few are able to identify: the imminent Syrianization of Europe. That will be a direct consequence of the NATO debacle in Ukraine.

From an imperial perspective, the prospects in the Ukrainian battlefield are gloomy. Russia’s Special Military Operation (SMO) has seamlessly morphed into a Counter-Terror Operation (CTO): Moscow now openly characterizes Kiev as a terrorist regime.

The pain dial is incrementally going up, with surgical strikes against Ukrainian power/electricity infrastructure about to totally cripple Kiev’s economy and its military. And by December, there’s the arrival on the front lines and in the rear of a properly trained and highly motivated partial mobilization contingent.

The only question concerns the timetable. Moscow is now in the process of slowly but surely decapitating the Kiev proxy, and ultimately smashing NATO “unity.”

The process of torturing the EU economy is relentless. And the real world outside of the collective West – the Global South – is with Russia, from Africa and Latin America to West Asia and even sections of the EU.

It is Moscow – and significantly not Beijing – that is tearing apart the hegemon-coined “rules-based international order,” supported by its natural resources, the provision of food and reliable security.

And in coordination with China, Iran and major Eurasian players, Russia is working to eventually decommission all those US-controlled international organizations – as the Global South becomes virtually immune to the spread of NATO psyops.

The Syrianization of Europe

In the Ukrainian battlefield, NATO’s crusade against Russia is doomed – even as in several nodes as much as 80 percent of the fighting forces feature NATO personnel. Wunderwaffen such as HIMARS are few and far between. And depending on the result of the US mid-term elections, weaponization will dry out in 2023. 

Ukraine, by the spring of 2023, may be reduced to no more than an impoverished, rump black hole. The imperial Plan A remains  Afghanization: to operate an army of mercenaries capable of targeted destabilization and or/terrorist incursions into the Russian Federation.  

In parallel, Europe is peppered with American military bases.

All those bases may play the role of major terror bases – very much like in Syria, in al-Tanf and the Eastern Euphrates. The US lost the long proxy war in Syria – where it instrumentalized jihadis – but still has not been expelled.   

In this process of Syrianization of Europe, US military bases may become ideal centers to regiment and/or “train” squads of Eastern Europe émigrés, whose only job opportunity, apart from the drug business and organ trafficking, will be as – what else – imperial mercenaries, fighting whatever focus of civil disobedience emerges across an impoverished EU.

It goes without saying that this New Model Army will be fully sanctioned by the Brussels EUrocracy – which is merely the public relations arm of NATO.

A de-industrialized EU enmeshed into several layers of toxic intra-war, where NATO plays its time-tested role of Robocop, is the perfect Mad Max scenario juxtaposed to what would be, at least in the reveries of American Straussians/neo-cons, an island of prosperity: the US economy, the ideal destination for Global Capital, including European Capital.

The Empire will “lose” its pet project, Ukraine. But it will never accept losing the European “garden.”

Pepe Escobar is a veteran journalist, author and independent geopolitical analyst focused on Eurasia.

(The views expressed in this article are the author’s own and do not necessarily reflect those of Press TV.)


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

www.presstv.ir

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‘Peaceful modernization’: China’s offering to the Global South

Xi Jinping just offered the Global South a stark alternative to decades of western diktats, war, and economic duress. ‘Peaceful modernization’ will establish sovereignty, economy, and independence for the world’s struggling states

October 20 2022

Photo Credit: The Cradle

By Pepe Escobar

President Xi Jinping’s work report at the start of the 20th Congress of the Communist Party of China (CPC) this past Sunday in Beijing contained not only a blueprint for the development of the civilization-state, but for the whole Global South. CPC (China Communist Party)

Xi’s 1h45min speech actually delivered a shorter version of the full work report – see attached PDF – which gets into way more detail on an array of socio-political themes.

This was the culmination of a complex collective effort that went on for months. When he received the final text, Xi commented, revised and edited it.

In a nutshell, the CPC master plan is twofold: finalize “socialist modernization” from 2020 to 2035; and build China – via peaceful modernization – as a modern socialist country that is “prosperous, strong, democratic, culturally advanced, and harmonious” all the way to 2049, signaling the centenary of the foundation of the People’s Republic of China (PRC).

The central concept in the work report is peaceful modernization – and how to accomplish it. As Xi summarized, “It contains elements that are common to the modernization processes of all countries, but it is more characterized by features that are unique to the Chinese context.”

Very much in tune with Confucian Chinese culture, “peaceful modernization” encapsulates a complete theoretical system. Of course there are multiple geoeconomic paths leading to modernization – according to the national conditions of any particular country. But for the Global South as a whole, what really matters is that the Chinese example completely breaks with the western TINA (“there is no alternative”) monopoly on modernization practice and theory.

Not to mention it breaks with the ideological straitjacket imposed on the Global South by the self-defined “golden billion” (of which the really “golden” barely reach 10 million). What the Chinese leadership is saying is that the Iranian model, the Ugandan model or the Bolivian model are all as valid as the Chinese experiment: what matters is pursuing an independent path towards development.

How to develop tech independence

The recent historical record shows how every nation trying to develop outside the Washington Consensus is terrorized at myriad hybrid war levels. This nation becomes a target of color revolutions, regime change, illegal sanctions, economic blockade, NATO sabotage or outright bombing and/invasion.

What China proposes echoes across the Global South because Beijing is the largest trade partner of no less than 140 nations, who can easily grasp concepts such as high-quality economic development and self-reliance in science and technology.

The report stressed the categorical imperative for China from now on: to speed up technology self-reliance as the Hegemon is going no holds barred to derail China tech, especially in the manufacturing of semiconductors.

In what amount to a sanctions package from Hell, the Hegemon is betting on crippling China’s drive to accelerate its tech independence in semiconductors and the equipment to produce them.

So China will need to engage in a national effort on semiconductor production. That necessity will be at the core of what the work report describes as a new development strategy, spurred by the tremendous challenge of achieving tech self-sufficiency. Essentially China will go for strengthening the public sector of the economy, with state companies forming the nucleus for a national system of tech innovation development.

‘Small fortresses with high walls’

On foreign policy, the work report is very clear: China is against any form of unilateralism as well as blocs and exclusive groups targeted against particular countries. Beijing refers to these blocs, such as NATO and AUKUS, as “small fortresses with high walls.”

This outlook is inscribed in the CPC’s emphasis on another categorical imperative: reforming the existing system of global governance, extremely unfair to the Global South. It’s always crucial to remember that China, as a civilization-state, considers itself simultaneously as a socialist country and the world’s leading developing nation.

The problem once again is Beijing’s belief in “safeguarding the international system with the UN at its core.” Most Global South players know how the Hegemon subjects the UN – and its voting mechanism – to all sorts of relentless pressure.

It’s enlightening to pay attention to the very few westerners that really know one or two things about China.

Martin Jacques, until recently a senior fellow at the Department of Politics and International Studies at Cambridge University, and author of arguably the best book in English on China’s development, is impressed by how China’s modernization happened in a context dominated by the west: “This was the key role of the CPC. It had to be planned. We can see how extraordinarily successful it has been.”

The implication is that by breaking the west-centric TINA model, Beijing has accumulated the tools to be able to assist Global South nations with their own models.

Jeffrey Sachs, director of the Center for Sustainable Development at Columbia University, is even more upbeat: “China will become a leader of innovation. I very much hope and count on China becoming a leader for innovation in sustainability.” That will contrast with a ‘dysfunctional’ American model turning protectionist even in business and investment.

Mikhail Delyagin, deputy chairman of the Russian State Duma Committee on Economic Policy, makes a crucial point, certainly noted by key Global South players: the CPC “was able to creatively adapt the Marxism of the 19th century and its experience of the 20th century to new requirements and implement eternal values with new methods. This is a very important and useful lesson for us.”

And that’s the added value of a model geared towards the national interest and not the exclusivist policies of Global Capital.

BRI or bust

Implied throughout the work report is the importance of the overarching concept of Chinese foreign policy: the Belt and Road Initiative (BRI) and its trade/connectivity corridors across Eurasia and Africa.

It was up to Chinese Foreign Ministry spokesperson Wang Wenbin to clarify where BRI is heading:

“BRI transcends the outdated mentality of geopolitical games, and created a new model of international cooperation. It is not an exclusive group that excludes other participants but an open and inclusive cooperation platform. It is not just China’s solo effort, but a symphony performed by all participating countries.”

BRI is inbuilt in the Chinese concept of “opening up.” It is also important to remember that BRI was launched by Xi nine years ago – in Central Asia (Astana) and then Southeast Asia (Jakarta). Beijing has earned from its mistakes, and keeps fine-tuning BRI in consultation with partners – from Pakistan, Sri Lanka and Malaysia to several African nations.

It is no wonder, that by August this year, China’s trade with countries participating in BRI had reached a whopping $12 trillion, and non-financial direct investment in those countries surpassed $140 billion.

Wang correctly points out that following BRI infrastructure investments, “East Africa and Cambodia have highways, Kazakhstan has [dry] ports for exports, the Maldives has its first cross-sea bridge and Laos has become a connected country from a landlocked one.”

Even under serious challenges, from zero-Covid to assorted sanctions and the breakdown of supply chains, the number of China-EU express cargo trains keeps going up; the China-Laos Railway and the Peljesac Bridge in Croatia are open for business; and work on the Jakarta-Bandung High-Speed Railway and the China-Thailand Railway is in progress.

Mackinder on crack

All over the extremely incandescent global chessboard, international relations are being completely reframed.

China – and key Eurasian players at the Shanghai Cooperation Organization (SCO), BRICS+, and Russian-led Eurasian Economic Union (EAEU) – are all proposing peaceful development.

In contrast, the Hegemon imposes an avalanche of sanctions – not by accident the top three recipients are Eurasian powers Russia, Iran and China; lethal proxy wars (Ukraine); and every possible strand of hybrid war to prevent the end of its supremacy, which lasted barely seven and a half decades, a blip in historical terms.

The current dysfunction – physical, political, financial, cognitive – is reaching a climax. As Europe plunges into the abyss of largely self-inflicted devastation and darkness  – a neo-medievalism in woke register – an internally ravaged Empire resorts to plundering even its wealthy “allies”.

It’s as if we are all witnessing a Mackinder-on-crack scenario.

Halford Mackinder, of course, was the British geographer who developed the ‘Heartland Theory’ of geopolitics, heavily influencing US foreign policy during the Cold War: “Who rules East Europe commands the Heartland; Who rules the Heartland commands the World Island; Who rules the World Island commands the World.”

Russia spans 11 time zones and sits atop as much as one third of the world’s natural resources. A natural symbiosis between Europe and Russia is like a fact of life. But the EU oligarchy blew it.

It’s no wonder the Chinese leadership views the process with horror, because one of BRI’s essential planks is to facilitate seamless trade between China and Europe. As Russia’s connectivity corridor has been blocked by sanctions, China will be privileging corridors via West Asia.

Meanwhile, Russia is completing its pivot to the east. Russia’s enormous resources, combined with the manufacturing capability of China and East Asia as a whole, project a trade/connectivity sphere that goes even beyond BRI. That’s at the heart of the Russian concept of Greater Eurasia Partnership.

In another one of History’s unpredictable twists, Mackinder a century ago may have been essentially right about those controlling the Heartland/world island controlling the world. It doesn’t look like the controller will be the Hegemon, and much less its European vassals/slaves.

When the Chinese say they are against blocs, Eurasia and The West are the facto two blocs. Though not yet formally at war with each other, in reality they already are knee deep into Hybrid War territory.

Russia and Iran are on the frontline – militarily and in terms of absorbing non-stop pressure. Other important Global South players, quietly, try to either keep a low profile or, even more quietly, assist China and the others to make the multipolar world prevail economically.

As China proposes peaceful modernization, the hidden message of the work report is even starker. The Global South is facing a serious choice: choose either sovereignty – embodied in a multipolar world, peacefully modernizing – or outright vassalage. 

The views expressed in this article do not necessarily reflect those of The Cradle.

China: Xi Gets Ready for the Final Countdown

October 19, 2022

By Pepe Escobar

Global Research,

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***

President Xi Jinping’s 1h45min speech at the opening of the 20th Congress of the Communist Party of China (CPC) at the Great Hall of the People in Beijing was an absorbing exercise of recent past informing near future. All of Asia and all of the Global South should carefully examine it.

The Great Hall was lavishly adorned with bright red banners. A giant slogan hanging in the back of the hall read, “Long Live our great, glorious and correct party”.

Another one, below, functioned like a summary of the whole report:

“Hold high the great flag of socialism with Chinese characteristics, fully implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, carry forward the great founding spirit of the party, and unite and struggle to fully build a modern socialist country and to fully promote the great rejuvenation of the Chinese nation.”

True to tradition, the report outlined the CPC’s achievements over the past 5 years and China’s strategy for the next 5 – and beyond. Xi foresees “fierce storms” ahead, domestic and foreign. The report was equally significant for what was not spelled out, or left subtly implied.

Every member of the CPC’s Central Committee had already been briefed about the report – and approved it. They will spend this week in Beijing studying the fine print and will vote to adopt it on Saturday. Then a new CPC Central Committee will be announced, and a new Politburo Standing Committee – the 7 that really rule – will be formally endorsed.

This new leadership line-up will clarify the new generation faces that will be working very close to Xi, as well as who will succeed Li Keqiang as the new Prime Minister: he has finished his two terms and, according to the constitution, must step down.

There are also 2,296 delegates present at the Great Hall representing the CPC’s over 96 million members. They are not mere spectators: at the plenary session that ended last week, they analyzed in-depth every major issue, and prepared for the National Congress. They do vote on party resolutions – even as those resolutions are decided by the top leadership, and behind closed doors.

The key takeaways

Xi contends that in these past 5 years the CPC strategically advanced China while “correctly” (Party terminology) responding to all foreign challenges. Particularly key achievements include poverty alleviation, the normalization of Hong Kong, and progress in diplomacy and national defense.

It’s quite telling that Foreign Minister Wang Yi, who was sitting in the second row, behind the current Standing Committee members, never took his eyes off Xi, while others were reading a copy of the report on their desk.

Compared to the achievements, success of the Xi-ordered Zero-Covid policy remains highly debatable. Xi stressed that it has protected people’s lives. What he could not possibly say is that the premise of his policy is to treat Covid and its variants as a U.S. bioweapon directed against China. That is, a serious matter of national security that trumps any other consideration, even the Chinese economy.

Zero-Covid hit production and the job market extremely hard, and virtually isolated China from the outside world. Just a glaring example: Shanghai’s district governments are still planning for zero-Covid on a timescale of two years. Zero-Covid will not go away anytime soon.

A serious consequence is that the Chinese economy will most certainly grow this year by less than 3% – well below the official target of “around 5,5%”.

Now let’s look at some of the Xi report’s highlights.

Taiwan: Beijing has started “a great struggle against separatism and foreign interference” on Taiwan.

The Shape of Things to Come in China. A New Stage in Economic and Social Development

Hong Kong: It is now “administered by patriots, making it a better place.” In Hong Kong there was “a major transition from chaos to order.” Correct: the 2019 color revolution nearly destroyed a major global trade/finance center.

Poverty alleviation: Xi hailed it as one of three “major events” of the past decade along with the CPC’s centenary and socialism with Chinese characteristics entering a “new era”. Poverty alleviation is the core of one of the CPC’s “two centenary goals.”

Opening up: China has become “a major trading partner and a major destination for foreign investment.” That’s Xi refuting the notion that China has grown more autarchic. China will not engage in any kind of “expansionism” while opening up to the outside world. The basic state policy remains: economic globalization. But – he didn’t say it – “with Chinese characteristics”.

“Self-revolution”: Xi introduced a new concept. “Self-revolution” will allow China to escape a historical cycle leading to a downturn. And “this ensures the party will never change.” So it’s the CPC or bust.

Marxism: definitely remains as one of the fundamental guiding principles. Xi stressed, “We owe the success of our party and socialism with Chinese characteristics to Marxism and how China has managed to adapt it.”

Risks: that was the speech’s recurrent theme. Risks will keep interfering with those crucial “two centenary goals”. Number one goal was reached last year, at the CPC’s 100th anniversary, when China reached the status of a “moderately prosperous society” in all respects (xiaokang, in Chinese). Number two goal should be reached at the centenary of the People’s Republic of China in 2049: to “build a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious.”

Development: the focus will be on “high-quality development”, including resilience of supply chains and the “dual circulation” economic strategy: expansion of domestic demand in parallel to foreign investment (mostly centered on BRI projects). That will be China’s top priority. So in theory any reforms will privilege a combination of “socialist market economy” and high-level opening, mixing the creation of more domestic demand with supply-side structural reform. Translation: “Dual-circulation” on steroids.

“Whole-process democracy”: that was the other new concept introduced by Xi. Translates as “democracy that works”, as in rejuvenating the Chinese nation under – what else – the CPC’s absolute leadership: “We need to ensure that people can exercise their powers through the People’s Congress system.”

Socialist culture: Xi said it’s absolutely essential “to influence young people”. The CPC must exercise ideological control and make sure the media fosters a generation of young people “who are influenced by traditional culture, patriotism and socialism”, thus benefitting “social stability”. The “China story” must go everywhere, presenting a China that is “credible and respectable”. That certainly applies to Chinese diplomacy, even the “Wolf Warriors”.

“Sinicise religion”: Beijing will continue its drive to “Sinicise religion”, as in “proactively” adapting “religion and the socialist society”. This campaign was introduced in 2015, meaning for instance that Islam and Christianity must be under CPC control and in line with Chinese culture.

The Taiwan pledge

Now we reach the themes that completely obsess the decaying Hegemon: the connection between China’s national interests and how they affect the civilization-state’s role in international relations.

National security: “National security is the foundation of national rejuvenation, and social stability is a prerequisite of national strength.”

The military: the PLA’s equipment, technology and strategic capability will be strengthened. It goes without saying that means total CPC control over the military.

“One country, two systems”: It has proven to be “the best institutional mechanism for Hong Kong and Macau and must be adhered to in the long term”. Both “enjoy high autonomy” and are “administered by patriots.” Xi promised to better integrate both into national strategies.

Taiwan reunification: Xi made a pledge to complete the reunification of China. Translation: return Taiwan to the motherland. That was met with a torrent of applause, leading to the key message, addressed simultaneously to the Chinese nation and “foreign interference” forces: “We will not renounce the use of force and will take all necessary measures to stop all separatist movements.” The bottom line: “The resolution of the Taiwan issue is a matter for the Chinese people themselves, to be decided by the Chinese people.”

It’s also quite telling that Xi did not even mention Xinjiang by name: only by implication, when he stressed that China must strengthen the unity of all ethnic groups. Xinjiang for Xi and the leadership mean industrialization of the Far West and a crucial node in BRI: not the object of an imperial demonization campaign. They know that the CIA destabilization tactics used in Tibet for decades did not work in Xinjiang.

Shelter from the storm

Now let’s unpack some of the variables affecting the very tough years ahead for the CPC.

When Xi mentioned “fierce storms ahead”, that’s what he thinks about 24/7: Xi is convinced the USSR collapsed because the Hegemon did everything to undermine it. He won’t allow a similar process to derail China.

In the short term, the “storm” may refer to the latest round of the no holds barred American war on Chinese technology – not to mention free trade: cutting China off from buying or manufacturing chips and components for supercomputers.

It’s fair to consider Beijing keeps the focus long-term, betting that most of the world, especially the Global South, will move away from the U.S. high tech supply chain and prefer the Chinese market. As the Chinese increasingly become self sufficient, U.S. tech firms will end up losing world markets, economies of scale, and competitiveness.

Xi also did not mention the U.S. by name. Everyone in the leadership – especially the new Politburo – is aware of how Washington wants to

“decouple” from China in every possible way and will continue to provocatively deploy every possible strand of hybrid war.

Xi did not enter into details during his speech, but it’s clear the driving force going forward will be technological innovation linked to a global vision. That’s where BRI comes in, again – as the privileged field of application for these tech breakthroughs.

Only this way we can understand how Zhu Guangyao, a former vice minister of finance, may be sure that per capita GDP in China in 2035 would at least double the numbers in 2019 and reach $20,000.

The challenge for Xi and the new Politburo right away is to fix China’s structural economic imbalance. And pumping up debt-financed “investment” all over again won’t work.

So bets can be made that Xi’s third term – to be confirmed later this week – will have to concentrate on rigorous planning and monitoring of implementation, much more than during his previous bold, ambitious, abrasive but sometimes disconnected years. The Politburo will have to pay way more attention to technical considerations. Xi will have to delegate more serious policymaking autonomy to a bunch of competent technocrats.

Otherwise, we will be back to that startling observation by then Premier Wen Jiabao in 2007: China’s economy is “unstable, unbalanced, uncoordinated and ultimately unsustainable”. That’s exactly where the Hegemon wants it to be.

As it stands, things are far from gloomy. The National Development and Reform Commission states that compared to the rest of the world, China’s consumer inflation is only “marginal”; the job market is steady; and international payments are stable.

Xi’s work report and pledges may also be seen as turning the usual Anglo-American geopolitical suspects – Mackinder, Mahan, Spykman, Brzezinski – upside down.

The China-Russia strategic partnership has no time to lose with global hegemonic games; what drives them is that sooner rather than later they will be ruling the Heartland – the world island – and beyond, with allies from the Rimland, and from Africa to Latin America, all participating in a new form of globalization. Certainly with Chinese characteristics; but most of all, pan-Eurasian characteristics. The final countdown is already on.

*

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This article was originally published on Strategic Culture Foundation.

Pepe Escobar, born in Brazil, is a correspondent and editor-at-large at Asia Times and columnist for Consortium News and Strategic Culture. Since the mid-1980s he’s lived and worked as a foreign correspondent in London, Paris, Milan, Los Angeles, Singapore, Bangkok. He has extensively covered Pakistan, Afghanistan and Central Asia to China, Iran, Iraq and the wider Middle East. Pepe is the author of Globalistan – How the Globalized World is Dissolving into Liquid War; Red Zone Blues: A Snapshot of Baghdad during the Surge. He was contributing editor to The Empire and The Crescent and Tutto in Vendita in Italy. His last two books are Empire of Chaos and 2030. Pepe is also associated with the Paris-based European Academy of Geopolitics. When not on the road he lives between Paris and Bangkok.

He is a regular contributor to Global Research.

Featured image is from The Ron Paul Institute for Peace and Prosperity

The original source of this article is Global Research

Copyright © Pepe Escobar, Global Research, 2022

Tomorrow starts today: Al Mayadeen marks 10 years with a new identity

10 October 2022 

Al-Mayadeen launches in its second decade with a new look in image, color and ink

Source: Al Mayadeen

By Ghassan Ben Jeddou 

Established under the presidency of late leader Hugo Chavez, teleSUR celebrates its 17th anniversary, at which Al Mayadeen CEO sent a letter of congratulations.

Al Mayadeen Media Network Ghassan Ben Jeddou, standing next to the President of teleSUR, Patricia Villegas.

On the occasion of the 17th anniversary of the launching of the Global South media outlet teleSURAl Mayadeen Media Network CEO, Mr. Ghassan Ben Jeddou, sent a heartening letter to the Venezuela-based television network, praising the steadfastness of the outlet’s vision and work against imperialist media.

TeleSUR was founded in 2005 – funded primarily by the Venezuelan government, as well as other neighboring countries in the region. It was launched under the presidency of revolutionary leader Hugo Chávez, who passed away in 2013. 

TeleSUR, like many alternative media outlets, challenges misleading neoliberal narratives that continue to demonize the struggles of the peoples of the Global South, push forward imperialist and exploitative narratives, and circulate war-mongering propaganda.

In his letter to the media outlet, Mr. Ghassan Ben Jeddou wrote: 

“The establishment of teleSUR was a strategic media event. It is not only an informative channel, in spite of its significant media role and success in Latin America and the world, but it was also indeed a bright and visionary decision from the internationalist leader, Hugo Chávez.

Today, on the anniversary of its establishment, we cannot but recall with much appreciation the channel’s journalistic professionalism, political commitment, strategic decisions, and humanitarian example. 

We extend our warm greetings to all the brave, creative, and resilient media workers in this steadfast outlet. Despite the numerous pressures that have been exerted against teleSUR, it is, however, still devoted to its values, and a reference for all the free peoples of the world. 

This is a tribute to the teleSUR administration on its success in cementing its position as one of the most important media outlets Worldwide.”

Moreover, Mr. Ben Jeddou extended his warm greetings to the President of teleSUR, Mrs. Patricia Villegas, remarking that “Patricia is not only a great president of a great channel, but she is also a media icon in the Global South and international community. 

With Patricia and teleSUR, we have established an influential, high-end, candid, professional, intellectual media partnership… We, at Al Mayadeen Media Network, will proceed in this cooperative partnership in full depth, strength, and a long-term vision.”

“The Al Mayadeen family yields heartful felicitations to all their friends and colleagues on the 17th anniversary of the establishment of teleSUR.

From the bottom of my heart, I extend to my colleagues at teleSUR, and to the dear captain of the ship Patricia, the most sincere congratulations. I do so with the conviction that this leading channel, whose headquarters are rooted in beautiful Caracas – the capital of victorious Venezuela over conspiracies, sanctions, blockades, and slander under the presidency of the unfaltering Venezuelan President Nicolas Maduro, resembles steadfast Venezuela, its great people, its vigorous leadership, and its iconic President.

Thus, teleSUR is destined to succeed, innovate, shine, and triumph.”

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The real US agenda in Africa is hegemony

September 21, 2022

by Pepe Escobar, first published at The Cradle and posted with the author’s permission

Forget development. Washington’s primary interest in Africa today is keeping the Chinese and Russians out.

In a rational environment, the 77th session of the UN General Assembly (UNGA) would discuss alleviating the trials and tribulations of the Global South, especially Africa.

That won’t be the case. Like a deer caught in the geopolitical headlights, UN Secretary-General Antonio Guterres issued platitudes about a gloomy “winter of global discontent,” even as the proverbial imperial doomsayers criticized the UN’s “crisis of faith” and blasted the “unprovoked war” started by Russia.

Of course the slow-motion genocide of Donbass russophone residents for eight years would never be recognized as a provocation.

Guterres spoke of Afghanistan, “where the economy is in ruins and human rights are being trampled” – but he did not dare to offer context. In Libya, “divisions continue to jeopardize the country” – once again, no context. Not to mention Iraq, where “ongoing tensions threaten ongoing stability.”

Africa has 54 nations as UN members. Any truly representative UNGA meeting should place Africa’s problems at the forefront. Once again, that’s not the case. So it is left to African leaders to offer that much-needed context outside of the UN building in New York.

As the only African member of the G20, South African President Cyril Ramaphosa recently urged the US not to “punish” the whole continent by forcing nations to demonize or sanction Russia. Washington’s introduction of legislation dubbed the Countering Malign Russian Activities in Africa Act, he says, “will harm Africa and marginalize the continent.”

South Africa is a BRICS member – a concept that is anathema in the Beltway – and embraces a policy of non-alignment among world powers. An emerging 21st century version of the 1960s Non-Aligned Movement (NAM) is strengthening across the Global South – and especially Africa – much to the revulsion of the US and its minions.

Back at the UNGA, Guterres invoked the global fertilizer crisis – again, with no context. Russian diplomacy has repeatedly stressed that Moscow is ready to export 30 million tons of grain and over 20 million tons of fertilizer by the end of 2022. What is left unsaid in the west, is that only the importation of fertilizers to the EU is “allowed,” while transit to Africa is not.

Guterres said he was trying to persuade EU leaders to lift sanctions on Russian fertilizer exports, which directly affect cargo payments and shipping insurance. Russia’s Uralchem, for instance, even offered to supply fertilizers to Africa for free.

Yet from the point of view of the US and its EU vassals, the only thing that matters is to counter Russia and China in Africa. Senegal’s President Macky Sall has remarked how this policy is leaving “a bitter taste.”

‘We forbid you to build your pipeline’

It gets worse. The largely ineffectual EU Parliament now wants to stop the construction of the 1,445 km-long East African Crude Oil Pipeline (EACOP) from Uganda to Tanzania, invoking hazy human rights violations, environmental threats, and “advising” member countries to simply drop out of the project.

Uganda is counting on more than 6 billion barrels of oil to sustain an employment boom and finally move the nation to middle-income status. It was up to Ugandan Parliament Deputy Speaker Thomas Tayebwa to offer much-needed context:

“It is imprudent to say that Uganda’s oil projects will exacerbate climate change, yet it is a fact that the EU block with only 10 percent of the world’s population is responsible for 25 percent of global emissions, and Africa with 20 percent of the world’s population is responsible for 3 percent of emissions. The EU and other western countries are historically responsible for climate change. Who then should stop or slow down the development of natural resources? Certainly not Africa or Uganda.”

The EU Parliament, moreover, is a staunch puppet of the biofuel lobby. It has refused to amend a law that would have stopped the use of food crops for fuel production, actually contributing to what the UN Food Program has described as “a global emergency of unprecedented magnitude.” No less than 350 million people are on the brink of starvation across Africa.

Instead, the G7’s notion of “helping” Africa is crystallized in the US-led Build Back Better World (B3W) – Washington’s anaemic attempt to counter Beijing’s ambitious Belt and Road Initiative (BRI) – which focuses on “climate, health and health security, digital technology, and gender equity and equality,” according to the White House. Practical issues of infrastructure and sustainable development, which are at the heart of China’s plan, are simply ignored by the B3W.

Initially, a few “promising” projects were identified by a traveling US delegation in Senegal and Ghana. Senegalese diplomatic sources have since confirmed that these projects have nothing whatsoever to do with building infrastructure.

B3W, predictably, fizzled out. After all, the US-led project was little more than a public relations gimmick to undermine the Chinese, with negligible effect on narrowing the $40-plus trillion worth of infrastructure needed to be built across the Global South by 2035.

Have YALI, will travel

Imperial initiatives in Africa – apart from the US military’s Africa Command (AFRICOM), which amounts to raw militarization of the continent – brings us to the curious case of YALI (Young African Leaders Initiative), widely touted in the Washington-New York axis as “the most innovative” policy of the Obama years.

Launched in 2010, YALI was framed as “empowering the new generation of Africa leadership” – a euphemism for educating (or brainwashing) them the American way. The mechanism is simple: investing in and bringing hundreds of young African potential leaders to US universities for a short, six-week “training” on “business, civil leadership, entrepreneurship, and public management.” Then, four days in Washington to meet “leaders in the administration,” and a photo op with Obama.

The project was coordinated by US embassies in Africa, and targeted young men and women from sub-Saharan Africa’s 49 nations – including those under US sanctions, like Sudan, Eritrea, and Zimbabwe – proficient in English, with a “commitment” to return to Africa. Roughly 80 percent during the initial years had never been to the US, and more than 50 percent grew up outside of big cities.

Then, in a speech in 2013 in South Africa, Obama announced the establishment of the Washington Fellowship, later renamed the Mandela-Washington Fellowship (MWF).

That’s still ongoing. In 2022, MWF should be granted to 700 “outstanding young leaders from sub-Saharan Africa,” who follow “Leadership Institutes” at nearly 40 US universities, before their short stint in Washington. After which, they are ready for “long-term engagement between the United States and Africa.”

And all that for literally peanuts, as MWF was enthusiastically billed by the Democrat establishment as cost-efficient: $24,000 per fellow, paid by participant US universities as well as Coca-Cola, IBM, MasterCard Foundation, Microsoft, Intel, McKinsey, GE, and Procter & Gamble.

And that didn’t stop with MWF. USAID went a step further, and invested over $38 million – plus $10 million from the MasterCard Foundation – to set up four Regional Leadership Centers (RLCs) in South Africa, Kenya, Ghana, and Senegal. These were training, long distance and in-class, at least 3,500 ‘future leaders’ a year.

It’s no wonder the Brookings Institution was drooling over so much “cost-efficiency” when it comes to investing “in Africa’s future” and for the US to “stay competitive” in Africa. YALI certainly looks prettier than AFRICOM.

A few success stories though don’t seem to rival the steady stream of African footballers making a splash in Europe – and then reinvesting most of their profits back home. The Trump years did see a reduction of YALI’s funding – from $19 million in 2017 to roughly $5 million.

So many leaders to ‘train’

Predictably, the Joe Biden White House YALI-ed all over again with a vengeance. Take this US press attache in Nigeria neatly outlining the current emphasis on “media and information literacy,” badly needed to tackle the “spreading of disinformation” including “in the months leading up to the national presidential election.”

So the US, under YALI, “trained 1,000 young Nigerians to recognize the signs of online and media misinformation and disinformation.” And now the follow-up is “Train the Trainer” workshops, “teaching 40 journalists, content creators, and activists (half of whom will be women) from Yobe, Borno, Adamawa, Zamfara, and Katsina how to identify, investigate, and report misinformation.” Facebook, being ordered by the FBI to censor “inconvenient,” potentially election-altering facts, is not part of the curriculum.

YALI is the soft, Instagrammed face of AFRICOM. The US has participated in the overthrow of several African governments over the past two decades, with troops trained under secrecy-obsessed AFRICOM. There has been no serious Pentagon audit on the weaponizing of AFRICOM’s local “partners.” For all we know – as in Syria and Libya – the US military could be arming even more terrorists.

And predictably, it’s all bipartisan. Rabid neo-con and former Trump national security adviser John Bolton, in December 2018, at the Heritage Foundation, made it crystal clear: the US in Africa has nothing to do with supporting democracy and sustainable development. It’s all about countering Russia and China.

When it learned that Beijing was considering building a naval base in oil-rich Equatorial Guinea, the Biden White House sent power envoys to the capital Malabo to convince the government to cease and desist. To no avail.

In contrast, Russian Foreign Minister Sergei Lavrov was received like a superstar in his recent extensive tour of Africa, where it’s widely perceived that global food prices and the fertilizer drama are a direct consequence of western sanctions on Russia. Uganda leader Yoweri Museveni went straight to the point when he said, “How can we be against somebody who has never harmed us?”

On 13-15 December, the White House plans a major US-Africa Leaders Summit in Washington to discuss mostly food security and climate change – alongside the perennial lectures on democracy and human rights. Most leaders won’t be exactly impressed with this new showing of “the United States’ enduring commitment to Africa.” Well, there’s always YALI. So many young leaders to indoctrinate, so little time.

‘Samarkand Spirit’ to be driven by ‘responsible powers’ Russia and China

The SCO summit of Asian power players delineated a road map for strengthening the multipolar world

September 16 2022

Photo Credit: The Cradle

By Pepe Escobar

Amidst serious tremors in the world of geopolitics, it is so fitting that this year’s Shanghai Cooperation Organization (SCO) heads of state summit should have taken place in Samarkand – the ultimate Silk Road crossroads for 2,500 years.

When in 329 BC Alexander the Great reached the then Sogdian city of Marakanda, part of the Achaemenid empire, he was stunned: “Everything I have heard about Samarkand it’s true, except it is even more beautiful than I had imagined.”

Fast forward to an Op-Ed by Uzbekistan’s President Shavkat Mirziyoyev published ahead of the SCO summit, where he stresses how Samarkand now “can become a platform that is able to unite and reconcile states with various foreign policy priorities.”

After all, historically, the world from the point of view of the Silk Road landmark has always been “perceived as one and indivisible, not divided. This is the essence of a unique phenomenon – the ‘Samarkand spirit’.”

And here Mirziyoyev ties the “Samarkand Spirit” to the original SCO “Shanghai Spirit” established in early 2001, a few months before the events of September 11, when the world was forced into strife and endless war, almost overnight.

All these years, the culture of the SCO has been evolving in a distinctive Chinese way. Initially, the Shanghai Five were focused on fighting terrorism – months before the US war of terror (italics mine) metastasized from Afghanistan to Iraq and beyond.

Over the years, the initial “three no’s” – no alliance, no confrontation, no targeting any third party – ended up equipping a fast, hybrid vehicle whose ‘four wheels’ are ‘politics, security, economy, and humanities,’ complete with a Global Development Initiative, all of which contrast sharply with the priorities of a hegemonic, confrontational west.

Arguably the biggest takeaway of this week’s Samarkand summit is that Chinese President Xi Jinping presented China and Russia, together, as “responsible global powers” bent on securing the emergence of multipolarity, and refusing the arbitrary “order” imposed by the United States and its unipolar worldview.

Russian Foreign Minister Sergey Lavrov pronounced Xi’s bilateral conversation with President Vladimir Putin as “excellent.” Xi Jinping, previous to their meeting, and addressing Putin directly, had already stressed the common Russia-China objectives:

“In the face of the colossal changes of our time on a global scale, unprecedented in history, we are ready with our Russian colleagues to set an example of a responsible world power and play a leading role in order to put such a rapidly changing world on the trajectory of sustainable and positive development.”

Later, in the preamble to the heads of state meeting, Xi went straight to the point: it is important to “prevent attempts by external forces to organize ‘color revolutions’ in the SCO countries.” Well, Europe wouldn’t be able to tell, because it has been color-revolutionized non-stop since 1945.

Putin, for his part, sent a message that will be ringing all across the Global South: “Fundamental transformations have been outlined in world politics and economics, and they are irreversible.” (italics mine)

Iran: it’s showtime

Iran was the guest star of the Samarkand show, officially embraced as the 9th member of the SCO. President Ebrahim Raisi, significantly, stressed before meeting Putin that “Iran does not recognize sanctions against Russia.” Their strategic partnership will be enhanced. On the business front, a hefty delegation comprising leaders of 80 large Russian companies will be visiting Tehran next week.

The increasing Russia-China-Iran interpolation – the three top drivers of Eurasia integration – scares the hell out of the usual suspects, who may be starting to grasp how the SCO represents, in the long run, a serious challenge to their geoeconomic game. So, as every grain of sand in every Heartland desert is already aware, the geopolitical pressure against the trio will increase exponentially.

And then there was the mega-crucial Samarkand trilateral: Russia-China-Mongolia. There were no official leaks, but this trio arguably discussed the Power of Siberia-2 gas pipeline – the interconnector to be built across Mongolia; and Mongolia’s enhanced role in a crucial Belt and Road Initiative (BRI) connectivity corridor, now that China is not using the Trans-Siberian route for exports to Europe because of sanctions.

Putin briefed Xi on all aspects of Russia’s Special Military Operation (SMO) in Ukraine, and arguably answered some really tough questions, many of them circulating wildly on the Chinese web for months now.

Which brings us to Putin’s presser at the end of the summit – with virtually all questions predictably revolving around the military theater in Ukraine.

The key takeaway from the Russian president: “There are no changes on the SMO plan. The main tasks are being implemented.” On peace prospects, it is Ukraine that “is not ready to talk to Russia.” And overall, “it is regrettable that the west had the idea to use Ukraine to try to collapse Russia.”

On the fertilizer soap opera, Putin remarked, “food supply, energy supply, they (the west) created these problems, and now are trying to resolve them at the expense of someone else” – meaning the poorest nations. “European countries are former colonial powers and they still have this paradigm of colonial philosophy. The time has come to change their behavior, to become more civilized.”

On his meeting with Xi Jinping: “It was just a regular meeting, it’s been quite some time we haven’t had a meeting face to face.” They talked about how to “expand trade turnover” and circumvent the “trade wars caused by our so-called partners,” with “expansion of settlements in national currencies not progressing as fast as we want.”

Strenghtening multipolarity

Putin’s bilateral with India’s Prime Minister Narendra Modi could not have been more cordial – on a “very special friendship” register – with Modi calling for serious solutions to the food and fuel crises, actually addressing the west. Meanwhile, the State Bank of India will be opening special rupee accounts to handle Russia-related trade.

This is Xi’s first foreign trip since the Covid pandemic. He could do it because he’s totally confident of being awarded a third term during the Communist Party Congress next month in Beijing. Xi now controls and/or has allies placed in at least 90 percent of the Politburo.

The other serious reason was to recharge the appeal of BRI in close connection to the SCO. China’s ambitious BRI project was officially launched by Xi in Astana (now Nur-Sultan) nine years ago. It will remain the overarching Chinese foreign policy concept for decades ahead.

BRI’s emphasis on trade and connectivity ties in with the SCO’s evolving multilateral cooperation mechanisms, congregating nations focusing on economic development independent from the hazy, hegemonic “rules-based order.” Even India under Modi is having second thoughts about relying on western blocs, where New Delhi is at best a neo-colonized “partner.”

So Xi and Putin, in Samarkand, for all practical purposes delineated a road map for strengthening multipolarity – as stressed by the final  Samarkand declaration  signed by all SCO members.

The Kazakh puzzle 

There will be bumps on the road aplenty. It’s no accident that Xi started his trip in Kazakhstan – China’s mega-strategic western rear, sharing a very long border with Xinjiang. The tri-border at the dry port of Khorgos – for lorries, buses and trains, separately – is quite something, an absolutely key BRI node.

The administration of President Kassym-Jomart Tokayev in Nur-Sultan (soon to be re-named Astana again) is quite tricky, swinging between eastern and western political orientations, and infiltrated by Americans as much as during the era of predecessor Nursultan Nazarbayev, Kazakhstan’s first post-USSR president.

Earlier this month, for instance, Nur-Sultan, in partnership with Ankara and British Petroleum (BP) – which virtually rules Azerbaijan – agreed to increase the volume of oil on the Baku-Tblisi-Ceyhan (BTC) pipeline to up to 4 million tons a month by the end of this year. Chevron and ExxonMobil, very active in Kazakhstan, are part of the deal.

The avowed agenda of the usual suspects is to “ultimately disconnect the economies of Central Asian countries from the Russian economy.” As Kazakhstan is a member not only of the Russian-led Eurasia Economic Union (EAEU), but also the BRI, it is fair to assume that Xi – as well as Putin – discussed some pretty serious issues with Tokayev, told him to grasp which way the wind is blowing, and advised him to keep the internal political situation under control (see the aborted coup in January, when Tokayev was de facto saved by the Russian-led Collective Security Treaty Organization [CSTO]).

There’s no question Central Asia, historically known as a “box of gems” at the center of the Heartland, striding the Ancient Silk Roads and blessed with immense natural wealth – fossil fuels, rare earth metals, fertile agrarian lands – will be used by the usual suspects as a Pandora’s box, releasing all manner of toxic tricks against legitimate Eurasian integration.

That’s in sharp contrast with West Asia, where Iran in the SCO will turbo-charge its key role of crossroads connectivity between Eurasia and Africa, in connection with the BRI and the International North-South Transportation Corridor (INSTC).

So it’s no wonder that the UAE, Bahrain and Kuwait, all in West Asia, do recognize which way the wind is blowing. The three Persian Gulf states received official SCO ‘partner status’ in Samarkand, alongside the Maldives and Myanmar.

A cohesion of goals

Samarkand also gave an extra impulse to integration along the Russian-conceptualized Greater Eurasia Partnership  – which includes the Eurasian Economic Union (EAEU) – and that, just two weeks after the game-changing Eastern Economic Forum (EEF) held in Vladivostok, on Russia’s strategic Pacific coast.

Moscow’s priority at the EAEU is to implement a union-state with Belarus (which looks bound to become a new SCO member before 2024), side-by-side with closer integration with the BRI. Serbia, Singapore and Iran have trade agreements with the EAEU too.

The Greater Eurasian Partnership was proposed by Putin in 2015 – and it’s getting sharper as the EAEU commission, led by Sergey Glazyev, actively designs a new financial system, based on gold and natural resources and counter-acting the Bretton Woods system. Once the new framework is ready to be tested, the key disseminator is likely to be the SCO.

So here we see in play the full cohesion of goals – and the interaction mechanisms – deployed by the Greater Eurasia Partnership, BRI, EAEU, SCO, BRICS+ and the INSTC. It’s a titanic struggle to unite all these organizations and take into account the geoeconomic priorities of each member and associate partner, but that’s exactly what’s happening, at breakneck speed.

In this connectivity feast, practical imperatives range from fighting local bottlenecks to setting up complex multi-party corridors – from the Caucasus to Central Asia, from Iran to India, everything discussed in multiple roundtables.

Successes are already notable: from Russia and Iran introducing direct settlements in rubles and rials, to Russia and China increasing their trade in rubles and yuan to 20 percent – and counting. An Eastern Commodity Exchange may be soon established in Vladivostok to facilitate trade in futures and derivatives with the Asia-Pacific.

China is the undisputed primary creditor/investor in infrastructure across Central Asia. Beijing’s priorities may be importing gas from Turkmenistan and Uzbekistan and oil from Kazakhstan, but connectivity is not far behind.

The $5 billion construction of the 600 km-long Pakistan-Afghanistan-Uzbekistan (Pakafuz) railway will deliver cargo from Central Asia to the Indian Ocean in only three days instead of 30. And that railway will be linked to Kazakhstan and the already in progress 4,380 km-long Chinese-built railway from Lanzhou to Tashkent, a BRI project.

Nur-Sultan is also interested in a Turkmenistan-Iran-Türkiye railway, which would connect its port of Aktau on the Caspian Sea with the Persian Gulf and the Mediterranean Sea.

Türkiye, meanwhile, still a SCO observer and constantly hedging its bets, slowly but surely is trying to strategically advance its own Pax Turcica, from technological development to defense cooperation, all that under a sort of politico-economic-security package. Turkish President Recep Tayyip Erdogan did discuss it in Samarkand with Putin, as the latter later announced that 25 percent of Russian gas bought by Ankara will be paid in rubles.    

Welcome to Great Game 2.0

Russia, even more than China, knows that the usual suspects are going for broke. In 2022 alone, there was a failed coup in Kazakhstan in January; troubles in Badakhshan, in Tajikistan, in May; troubles in Karakalpakstan in Uzbekistan in June; the non-stop border clashes between Tajikistan and Kyrgyzstan (both presidents, in Samarkand, at least agreed on a ceasefire and to remove troops from their borders).

And then there is recently-liberated Afghanistan – with no less than 11 provinces crisscrossed by ISIS-Khorasan and its Tajik and Uzbek associates. Thousands of would-be Heartland jihadis have made the trip to Idlib in Syria and then back to Afghanistan – ‘encouraged’ by the usual suspects, who will use every trick under the sun to harass and ‘isolate’ Russia from Central Asia.

So Russia and China should be ready to be involved in a sort of immensely complex, rolling Great Game 2.0 on steroids, with the US/NATO fighting united Eurasia and Turkiye in the middle.

On a brighter note, Samarkand proved that at least consensus exists among all the players at different institutional organizations that: technological sovereignty will determine sovereignty; and that regionalization – in this case Eurasian – is bound to replace US-ruled globalization.

These players also understand that the Mackinder and Spykman era is coming to a close – when Eurasia was ‘contained’ in a semi-disassembled shape so western maritime powers could exercise total domination, contrary to the national interests of Global South actors.

It’s now a completely different ball game. As much as the Greater Eurasia Partnership is fully supported by China, both favor the interconnection of BRI and EAEU projects, while the SCO shapes a common environment.

Yes, this is an Eurasian civilizational project for the 21st century and beyond. Under the aegis of the ‘Spirit of Samarkand.’

The views expressed in this article do not necessarily reflect those of The Cradle.

What to Expect at the Arab League Summit in Algiers

Posted by INTERNATIONALIST 360°  

Amin Qammouria

Algeria’s strong anti-colonial stance and ties to Russia, Syria and Iran ensures that the upcoming Arab League Summit in Algiers will be anything but business-as-usual

Algeria will be taking the political centre stage in the Arab world when it hosts the 31st Arab League Summit on 2 November, the first after a three-year pandemic hiatus.

As a former revolutionary state – once at the forefront of resistance against the western settler-colonialism of the twentieth century, and still today a champion of Arab resistance – it is no surprise that majority-Sunni Algeria continues to take positions that are at odds with those of western-backed Sunni Arab governments of West Asia and North Africa.

Algeria’s principles that irk the region’s pro-west monarchies include its vehement opposition to Zionism, support of the Palestinian cause, insistence on maintaining relations with Iran, and engagement with Syria, with Algiers adamantly demanding that the Syrian state be readmitted to the Arab League.

Diplomacy or distraction?

The host country is pinning great hopes on the success of this summit for several reasons, the most important of which is its desire for a major event that restores vitality to Algerian diplomacy.

The state’s regional clout had receded during the years of former President Abdelaziz Bouteflika’s prolonged illness and death, which inhibited his ability to exercise his duties. During this period, widespread street protests thwarted Bouteflika’s plans to extend his presidential term, ultimately bringing down his administration.

By hosting the summit, Algiers seeks an opportunity to shine regionally and highlight its diplomatic reach, distracting Algerians from the daily grind they’ve endured for years. It is a formula Iraq’s prime minister has used to some degree of success.

In this context, Algeria’s leaders have ensured the summit coincides with the 68th anniversary of the launch of their revolution against colonial France, and have planned an elaborate series of political, cultural, youth and artistic activities to burnish Algeria’s image as a regional powerhouse.

These are intended to project the North African state as the new ‘Mecca of Arab diplomacy,’ just as it remains a hub for liberation movements across the Global South and the ‘Mecca for revolutionaries’ since the 1960s.

It’s not such a wild idea. Algeria has come into play in recent years, not just for championing popular Arab worldviews, but for its geopolitical choices that are now in ascent. Like Syria, Algeria’s military is heavily invested with Russian equipment, training, and know-how. The energy-producing state is also receiving windfall profits from skyrocketing fuel and gas prices globally. And the increasing Russian, Iranian and Chinese (RIC) influence in West Asia – concurrent with the receding US presence – places Arab Algiers in a strong starting position.

Energy and food security

Recent global and regional developments, however, may make this Arab League meeting one of its most complex summits. The reverberations of Russia’s military operations in Ukraine just as the world began to emerge from the repercussions of the pandemic, have added a slate of pressing issues to Algiers’ table in November.

The impact of these two events have reshuffled geopolitical cards everywhere, and caused a global energy crisis that has placed several nations on the brink of severe economic and food crises.

In the unlikely scenario that the war in Ukraine ends before this year’s Arab Summit, its impact will remain on the top of the agenda. On the economic level, oil and gas prices will be a priority for both energy-producing and energy-consuming Arab countries, with expectations that the price of a barrel of oil will exceed $160 if the situation continues as is.

Another important agenda item is food security – especially vital crops such wheat and maize. It is expected that the summit will study the possibility of inter-cooperation to develop agriculture within regional states, with the hope that the studies will not remain as ink on paper as is the usual outcome of these gatherings.

Algeria calls for Syria’s return

Syria’s return to the Arab League after its highly politicized and unprecedented suspension in 2011 is another important challenge facing the summit. Algeria, which has maintained good relations with Damascus, has been adamant that Syria should be re-admitted to the League.

Algiers’ position is supported by several Arab countries such as Tunisia, Lebanon, Iraq, the UAE and Bahrain. But Syria’s return depends on buy-in from the remaining members too – with Qatar playing spoiler to Damascus’ regional rehabilitation. This too may change in time, as even Doha’s close Turkish allies are working toward normalizing relations with the Syrian government.

Syria’s membership was suspended at a highly-irregular emergency meeting of Arab foreign ministers in Cairo in November 2011. The move came after the Syrian government failed to implement the terms of the “Arab initiative” that gave President Bashar Al-Assad an unrealistic two weeks to conduct a political dialogue with the opposition, form a “national unity government” within two months, and conduct early presidential and parliamentary elections.

Arab League Secretary General Ahmed Aboul Gheit has said Syria’s participation in the upcoming Arab summit “is still subject to an Arab consensus,” which has not yet been achieved.

It does not seem that the countries that demanded the suspension of Syria’s membership will agree to its return as long as the conditions of suspension still exist. In turn, Damascus is unenthusiastic about returning to the League before certain Arab countries apologize for their material support of the Syrian armed opposition.

In fact, on 4 September, in a phone call with his Algerian counterpart Ramtane Lamamra, Syrian Foreign Minister Faysal Mikdad appeared to unilaterally bow out from the November summit, saying he “prefers not to raise” Syrian’s readmission to the League at this time.

Mikdad said his decision was made to keep the Arab focus on more urgent issues facing the region: “[To] contribute to uniting the Arab world and ranks in facing the challenges posed by the current situation at the regional and international levels.”

Israel’s presence at Algeria’s border

The most pressing diplomatic issue for Algiers though has been its fallout with neighboring Rabat, particularly following the latter’s decision to resume relations and sign defense agreements with Tel Aviv, which has heightened security concerns in Algeria.

It remains to be seen whether Morocco will participate in the summit after Algiers severed diplomatic relations with Rabat in August 2021.

At the heart of the neighbors’ spat is a territorial dispute in the Western Sahara. Both states have long been at odds over this sparsely-populated desert terrain where the Algiers-backed Polisario Front is seeking independence from Rabat’s rule. Morocco, in turn, is believed to have secured Washington’s recognition of its ‘sovereign claim’ to the Western Sahara in exchange for normalizing relations with Tel Aviv.

Morocco fears that, as the summit’s host, Algeria will be able to advance the momentum on this contentious issue and win over other Arab states to its side.

With the escalation in tension between the two countries, Algerian political writer Ahmed Boudaoud expects Morocco to be absent from this summit or reduce its level of representation: “especially with the assurances of Algerian officials that their country’s position will not change as long as the reasons that led to the diplomatic rupture between the two countries persist.”

In order to legitimize the diplomatic and economic estrangement with Rabat, Algeria may insist at the summit on issuing a statement condemning the wave of Arab normalization with Israel.

But such a statement will not be unanimously approved as long as there are influential countries, in addition to Morocco, with which Israel has peace treaties, such as Egypt, Jordan, the UAE, Sudan and Bahrain.

Unwavering Palestinian solidarity

As is customary in all Arab summits, the Palestinian issue is given priority on the agenda – though typically without any practical measures that actually support Palestinians and their oft-neglected cause.

But Algerian President Abdel Majid Tebboune made a special gesture toward Palestinians in an attempt to reconcile key factions at the summit, particularly Fatah and Hamas.

On 6 July, Tebboune brought together Palestinian President Mahmoud Abbas and the head of the Hamas’ political bureau, Ismail Haniyeh, during their attendance at the 60th anniversary celebrations of Algeria’s independence.

Despite the meeting being praised as “historic” after years of estrangement, the gloomy looks on the faces of those present, and the statements issued thereafter, indicated that reconciliation is far from being achieved.

The limits of Algerian diplomacy

The situation in neighboring Libya, around which both regional and European schisms are intensifying, will be another important issue expected to be discussed in Algiers.

Algeria seeks to consolidate Arab consensus around the  adoption of a “Libyan-Libyan solution” which rejects any external interference that might hinder the unification of the Libyan parties and disrupt the course of upcoming presidential elections.

Some Arab countries such as Morocco, however, have accused Algeria of interference in Libya with the intention to dominate its neighbor’s political discourse – taking particular aim at Algiers’ own diplomatic shortcomings in Libya and its failed mediation attempt in the Egyptian-Ethiopian dispute over the Renaissance Dam.

Cracks in Arab “unity” will also appear in discussions on the growing Iranian and Turkish influence in a number of Arab countries.

Given the significant Arab differences over basic regional and global issues, and the preoccupation of each of states with their internal problems and priorities, the Algeria summit will likely be similar to the summits that preceded it: Luxurious receptions, resonant speeches, projects, plans, and decisions that expire the moment participants return to their respective countries.

Although swimming against a powerful tide of Arab states still servile to western diktats, an Algeria noted for its revolutionary struggle toward genuine independence will not entirely be faulted for sticking to its principles. Instead, Algiers will be able to collect its ‘summit success’ from the popular sentiment of the Arab street, which still shares its worldview stances.

US economic decline and global instability Part 2: Rise of BRICS

September 01, 2022

Source

by Phillyguy

Summary

The US emerged from WWII as the world’s preeminent military and economic power. All of the pillars supporting US power are now threatened by decades of neoliberal economic policies, spending vast sums of taxpayer money propping up financial markets, the military and attainment of economic/military parity by the Russia-China-Iran axis. In this essay, I link the continuing economic and social decline in the US/EU (collectively referred to as the ‘west) to an increasingly reckless US foreign policy, the role corporate media serves in promoting these policies to the American/EU public and the rise of Russia, China and other countries in the global south.

Introduction

This is a continuation or my previous article, linking US economic decline and global instability [1]. Briefly, the US emerged from WWII as the world’s leading economic and military power. Since that time, US global power has rested on: 1) unrivaled military and economic power, 2) control of world’s energy reserves (primarily in the Middle East), and 3) maintaining the dollar as the world’s reserve currency. Following the conclusion of WWII in 1945, the US had the world’s largest economy and was the major ‘growth engine’ for western capitalism for the next 3 decades. In the mid-1970s, this began to change as US corporate profits began to stagnate/decline, a direct consequence of spending large amounts of taxpayer money on wars on the Korean Peninsula (1950-1953) and Vietnam (1955-1975) and increased competition from rebuilt economies in Europe, primarily Germany (Marshall Plan) and Asia- Japan, South Korea (Korean and Vietnam wars) and more recently China. Starting in the early 1980s, the US financial elite began pressuring policy makers to pursue neoliberal economic policies, including multiple tax cuts for the wealthy, financial deregulation, austerity, attacks on the poor and labor and outsourcing manufacturing jobs to Mexico, China and other low-wage platforms. The Soviet Union officially dissolved on Dec 26, 1991. This was viewed by the US ruling elite as the removal of the major rival to US global power and would allow unrestrained actions of the American military to invade and occupy countries which are rich in natural resources and/or occupy geo-strategic locations and expand NATO into Eastern Europe up to the Russian border. Since 1991, US/NATO have been involved in conflicts in Yugoslavia, Persian Gulf/Iraq, Afghanistan, Pakistan, Somalia, Libya, Syria, Yemen and Ukraine [2].

Role of Corporate Media

First Amendment of the US constitution-

‘Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.’

It is commonly stated that the press (aka the proverbial ‘4th estate’) in the US is ‘free’ and ‘independent’ and ‘essential for the functioning of a free society’, serving as a ‘watchdog’ on government actions and policies and vital to protect the ‘liberty’ of American citizens. As is often the case, things are not always as they seem.

In a recent interview with Brian Berletic, Mark Sleboda commented that “Western media is in ‘lockstep’ with government on foreign policy to a degree that would make real dictators blush” [3]. While there is no doubt that Western (read corporate) media is indeed promoting US foreign policy, it is not the US government that formulates these polices, rather they are formulated and developed by the ruling elite, using corporate-funded foundations and ‘think tanks’, academic institutions and prominent politicians. These include the Council on Foreign Relations (CFR), Rand Corporation, Rockefeller Foundation, American Heritage Foundation, Atlantic Council, Brookings, Center for Strategic and International Studies (CSIS). Academic institutions such as The Kennedy School (Harvard), Hoover Institution (Stanford), Walsh School of Foreign Service (Georgetown) and School of Advanced International Studies (Johns Hopkins) not only provide ‘experts’ and government officials, such as Wendy Sherman (Kennedy School) current US Deputy Secretary of State in the Biden Administration, they serve as training grounds for government officials and corporate management, some of whom are employed by above listed universities and foundations.

Once formulated, these policies are ‘sold’ to the American public by a compliant and well-disciplined media. Approximately 90% of US media is controlled by six large corporations- Comcast, Walt Disney, AT&T, Paramount Global, Sony, and Fox, with a combined market cap of circa $500 billion [4] [5]. Like other large corporations, media conglomerates have the same class interests as the financial elite, i.e., promoting policies which increase corporate power and profits and maintain US global hegemony. So called ‘public’ media, such as National Public Radio (NPR) and the BBC, in the UK, function in a similar manner. Corporate media is closely integrated with large financial interests and serves as a ‘cheerleader’ for the Pentagon and US foreign policy.

Not surprisingly, major broadcasters, the paper of record (NYT), Wall St. Journal (WSJ), Washington Post, etc. are little more than a sounding board for the US ruling elite and thus, function primarily as the ‘ministry of propaganda’ for large financial interests. Any reporter, military analyst, aka ‘TV General’, etc. who ‘steps out of line’, such as telling the truth about the military debacle facing Ukraine will either be severely reprimanded or find themselves out of a job. Some examples-

1) CBS recently ran a documentary claiming that only 30% of ‘military aid’ sent to Ukraine actually arrived. The video was removed following complaints from the Ukrainian government. [6] [7].

2) David Sanger (Harvard graduate) is chief Washington correspondent for the NYT and also a member of the Council on Foreign Relations (CFR) [8], whose members include corporate executives, bankers, and other representatives of the ruling elite.

3) David Ignatius (Harvard graduate) is a foreign affairs columnist for the WaPo and has close ties to the intelligence community- CIA and Pentagon.

Sanger and Ignatius serve as pundits for US global power, promoting the use of military force to promote American interests.

When you do not toe the corporate line…………

4) Gary Webb was a journalist working for the San Jose Mercury News. In 1996, Webb published a series of articles, “Dark Alliance”, describing how Nicaraguan Contra rebels, working closely with the CIA, supplied crack cocaine to the Black community in Los Angeles and used proceeds from these sales to purchase weapons to overthrow the government of Daniel Ortega’s Sandinista National Liberation Front. Following publication of the Dark Alliance series, corporate media became hysterical, denouncing Webb, effectively ruining his career; he committed suicide in 2004 [9]

5) Julian Assange- In 2010, Wikileaks, founded by Julian Assange, published a series of leaks obtained from Chelsea Manning, a U.S. Army intelligence analyst, documenting US war crimes in Iraq and Afghanistan. Following publication of these leaks, the American government began a criminal investigation into WikiLeaks. In 2010, Sweden issued an arrest warrant for Assange over allegations of sexual misconduct. To avoid extradition, Assange sought refuge in the Ecuadorian embassy in London. In 2019, Assange was arrested by British police at the Ecuadorian embassy and transferred to Belmarsh, a Category-A men’s prison in London. Up to this point, Julian Assange had not been formally charged. However, on May 23, 2019, the United States government charged Assange with violating the Espionage Act of 1917 and is currently awaiting potential extradition to the US [10].

The US has been almost continuously involved in overt and covert military conflicts since 1940 and as a result, war and associated violence has been normalized and institutionalized by corporate media to the point, where these policies are readily accepted by a relatively docile and ignorant American public. When foreign governments deemed hostile to US corporate interests limit press ‘freedom’, they are immediately labeled as repressive/terrorist regimes and potential candidates for direct attack and ‘regime’ change by the US State Department. Apparently, what is ‘good for the goose’ is ‘not good for the gander’. As pointed out above, any journalist that threatens the American empire risks losing their job, imprisonment and/or death.

Accelerating Decline of late-stage American Capitalism

Multiple factors have contributed to the decline of American economic power. These include economic policies, spending astronomical amounts of taxpayer money on the military and war, social instability and rise of China-Russia-Iran axis.

Economic policies

Since the mid-1970s, US policy makers have pursued neoliberal economic policies- financial deregulation, austerity, tax cuts for the wealthy, attacks on labor and job-outsourcing, which has resulted in the massive growth of the FIRE sector of the economy composed of finance, insurance, and real estate. These polices precipitated the Global Financial Crisis (GFC) 2007-2008, the largest financial shock since the Great Depression. Rather than resolve the severe structural problems confronting American capitalism which created this crisis, the FED used the Treasury as a de facto taxpayer-supported ‘piggy bank’ (the FED cannot print money) to prop up equity markets, bonds, over-priced real estate and [still] insolvent banks. To put this in perspective, since 2009, the FED has injected over $40 trillion into financial markets, increasing the wealth of the financial elite, the proverbial ‘1%’. Not surprisingly, over the last 5 years, US government deficits have increased circa $2 trillion annually, currently exceeding $30 trillion (Fig. 1); this figure does not include municipal, corporate or consumer debt. This begs the obvious question of how long can the FED continue this orgy or money printing and debt? Note- for comprehensive background information on the FED’s financial activities, see Wall Street on Parade [11].

Military Spending and War

Since its inception, the US has been built on theft and violence, justified by ‘Christian’ religion and ‘White man’s burden’. The first permanent British settlement in North America was established in Jamestown, Virginia in 1607. A decade later, African slaves were introduced by Dutch slave traders. Over the next 250 years, the US government would continue stealing land and displace/murder circa 90% of the indigenous population. In the mid-19th century, the US had the world’s leading economy, largely built on cotton produced by Black slaves [12]. Fast forward 150 years, the US has been almost continuously at war since 1940. 911 was a godsend for the military- US taxpayers have spent circa $21 trillion ($7.2 trillion going to military contractors) on post-911 militarization [13] [14]. The military appropriation for 2023 exceeds $760 billion. Despite this taxpayer largess, the Pentagon has not ‘won’ a war since 1945, was forced out of Afghanistan after spending $2 trillion, and confronts looming strategic debacles in Iraq, Syria, Libya, Yemen and Ukraine. This has vividly shown the rest of the world the limits of American military power. Unfortunately, after expending so much financial and human capital, the Pentagon appears incapable of extricating itself from these conflicts as doing so is an admission of failure and by extension military weakness. This was clearly seen following Joe Biden’s decision to remove US troops from Afghanistan in 2021 and the push-back he received from corporate media and people in Congress.

Political Chaos and Social Instability

We frequently hear that US society has progressed to the point, where the country appears to be increasingly ungovernable. Indeed, American society is plagued by economic inequality, racism and ubiquitous violence. The American working class has watched their standard of living plummet- a result of decades of neoliberal economic policies, including job outsourcing, austerity, stagnant income growth and since the Covid 19 pandemic, high inflation, reflected by increasing costs for rent, transportation, energy, groceries, medical care and other necessities. To put this in perspective, 60% of Americans do not have $500 in savings and thus are one expensive car repair, medical emergency or job loss away from financial ruin. At the same time the wealth of American billionaires has increased circa $1 trillion during the Covid19 pandemic. Not surprisingly in 2016, Donald Trump skillfully exploited the justifiable anger and frustration of working people, stating that he would ‘Make American Great Again’, blaming American economic problems on immigrants from Mexico and Latin America and China’s economic rise.

Rise of BRICS/SCO and US/NATO debacle in Ukraine

We are seeing the continued rise in the global power and influence of Russia, China and allied nations, on multiple fronts, including organizational, economic and militarily. The BRICS and Shanghai Cooperation Organization (SCO) are expanding. Original BRICS members included Brazil, Russia, India, China and South Africa. Iran and Argentina have applied for admission, while the Kingdom of Saudi Arabia (KSA), Turkey and Egypt are applying for entry next year. SCO is the largest regional economic institution in the world, covering 60% of Eurasia with a population > 3.2 billion and combined GDP of member states circa 25% of global total. Trade between BRICS and SCO member states is increasingly being carried out using local currencies.

The Mir payment system operated by the Russian National Card Payment System [15] is a direct competitor to Visa and Mastercard and now accepted throughout the Russian Federation and in 13 countries including India, Turkey and South Korea and will soon be used in Iran. BRICS nations are developing a global currency for international trade that will directly compete with the dollar [16]. Russia is developing a new international trading platform for precious metals: the Moscow World Standard (MWS) [17]. The Russian Finance Ministry believes this new independent international structure will ‘normalize the functioning of the precious metals industry” and serve as an alternative to the London Bullion Market Association (LBMA; https://www.lbma.org.uk), [18] which for years has been accused of systematically manipulating the price of precious metals markets to depress prices [19]. Collectively, these policies have been designed to significantly reduce the dependence of economies in Russia, China, India and other countries in the Global South on the US/EU and eliminate dependence on the US dollar and Society for Worldwide Interbank Financial Telecommunications (SWIFT) system [20] for international trade. No doubt this is being done in close collaboration with China’s Belt and Road Initiative (BRI) whose goal is to connect Asia with Africa and Europe via land and maritime networks with the aim of improving regional integration, increasing trade and stimulating economic growth [21] [22]. This trajectory has been accelerated following enactment of US/EU sanctions on Russia, Iran and China.

Over the last decade, the military power of Russia, China and Iran has greatly strengthened. The Russian military is a global leader in air-defense systems and hypersonic weapons, which are impermeable to any air-defense systems currently deployed by the US/NATO [23]. Over the last 25 years, China has modernized its military, focusing on People’s Liberation Navy and Army Air Force [24] [25]. China has developed a robust missile arsenal including intercontinental ballistic missiles (ICBMs) [26]. The Pentagon now considers China a ‘formidable military force’ and a ‘major challenge’ to the US Navy in the Western Pacific. The Islamic Republic of Iran has also developed a formidable defensive military capability, which has positioned Iran as a major power broker in the region. The Center for Strategic and International Studies (CSIS) has concluded- ‘Iran possesses the largest and most diverse missile arsenal in the Middle East, with thousands of ballistic and cruise missiles, some capable of striking as far as Israel and southeast Europe.’ [27]. Iran has repeatedly warned the US/NATO that it can target US military bases in the region, including Al Udeid base in Qatar, the largest US base in the Middle East. We are seeing increased assertiveness from the Russia-China-Iran axis in Syria, Ukraine and Western Pacific. This was clearly articulated by Russian President Vladimir Putin’s speech to the St. Petersburg International Economic Forum in June, declaring an end of “the era of the unipolar world” [28]. The Pentagon is being increasingly challenged by the Russia-China-Iran axis in Eastern Europe, the Middle East and Western Pacific.

Ukraine- another US/NATO debacle

For background and historical information covering Ukraine and her relationship with Russia, see [29]. Ukraine is the second largest country in Europe after Russia and occupies a strategic location in Eastern Europe, sharing a circa 2300 km (1227 mi) border with Russia [30] (Fig. 2). As of 2021, Ukraine had the second largest military (circa 200,000 military personnel), after the Russian Armed Forces, in Europe and has the dubious distinction of being one of the most corrupt countries in the world [31]. Historically, the predominantly Russian speaking population in the Donbas region in eastern Ukraine has maintained close ties with Russia.

In February 2014, the US- instigated Maidan coup took place, replacing the democratically-elected President Victor Yanukovych with a Russia-phobic and far-right politician/economist/lawyer, Arseniy Yatsenyuk. Not surprisingly, the Ukrainian government was soon dominated by an alliance of far-right/fascistic organizations including the Right Sector and Svoboda and oligarchic parties, such as Fatherland. This was predictable, as these groups were the most virulently anti-Russian factions in Ukraine [32] and are still very active in the government and military [33] [34]. Soon after the coup took place, the Donetsk and Luhansk Peoples Republics declared their independence, initiating the war in the Donbas. Over the next 8 years, the US/NATO would train circa 100,000 Ukrainian troops and channel $ billions in military aid [35], which was used to equip Ukrainian army and fortify positions adjacent to the Donetsk and Luhansk Republics [30] (Fig. 3). This buildup was accompanied by increased shelling of residential areas in the Donbas region by the Ukrainian military [36] [37], setting up a potential invasion of this region [38]. In response to the escalating attacks by Ukrainian forces. Russia recognized the Donetsk and Luhansk Peoples Republics as sovereign states on Feb 21, 2022, just prior to the Russian invasion on Feb 24, 2022, describing this campaign as a Special Military Operation (SMO) [39]. For an excellent overview of why Russia made the decision to invade Ukraine, see [40].

Going up against a well-trained, well equipped and an entrenched Ukrainian army, Russian forces have managed to take control of circa 20% (~47,000 square miles) of southern Ukraine and are incrementally removing Ukrainian forces from this region [38] (Fig. 3). Significantly, this territory contains prime agricultural and resource-rich land. It appears that Russia is planning on annexing littoral territory extending from the Donetsk/Luhansk region to Odesa [41]. Once this happen, any future Ukrainian state will not only be land-locked and lack direct access to the Black Sea, it will also lose valuable land as well. Military analyst Andrei Martyanov [42] has pointed out the ‘combined West doesn’t have material and technological means of fighting Russia in Eastern Europe without losing catastrophically. Western weapons turned out to be nothing more than commercial items not designed to fight the modern war, plus–no Western economy, including the United States has the capability to produce them in needed quantities anyway.’

The collective west has responded to the Russian invasion by blocking the opening of the Nord Stream 2 energy pipeline, which would directly supply Russian natural gas to Germany, imposed sanctions on Russian energy exports and disconnected Russian banks from the SWIFT system. To the dismay of the US/NATO, these actions have led to large increases in EU energy costs while strengthening the Russian economy [43]. Indeed, the paper of record (NYT) published a recent OpEd bemoaning the fact that despite western sanctions, Russia is making more money than ever on energy exports to China, India and other countries [44]. Despite nonstop condemnation from the US and EU of Russia’s SMO in Ukraine, many nations have not criticized the war [45]; only 1/3 of UN members supported a new anti-Russia resolution this August [46]. Thus, dwindling international support for Ukraine, coupled with success of the Russian SMO indicates that the country will not exist in its current form.

Concluding Remarks

The decline of late-stage American capitalism has been ongoing since the mid-1970s, but has been accelerated by the GFC, Covid-19 pandemic, climate change and Russian SMO in Ukraine. Not surprisingly, the ruling elite and their representatives in Washington have responded by shifting the costs of this decline onto the public, who have watched their living standard plummet, homelessness increase [47], imposed reactionary legislation such as the criminalization of pregnancy by the US Supreme Court, ratcheted up state violence against working people and people of color, while engaging in an astronomically expensive and reckless foreign policy. It appears the ruling elite view the Russia-China-Iran axis as an intolerable obstacle to US global power, reflected in the ongoing war in Ukraine, which is a de facto proxy war between the US and Russia. US-imposed sanctions on Russian energy have driven global energy prices higher; natural gas prices in the EU are 14-fold higher than the 10-year average. As a result, the UK/EU are at risk of not having sufficient quantities of natural gas for the winter, while EU industry will not be competitive with their rivals in Asia, who are being supplied with cheaper Russian energy. This is going to lead to increasing unemployment and social instability in the Eurozone.

The continued presence of US troops in Iraq and Syria is a desperate attempt to maintain control over Middle East energy reserves. The continued recklessness of this occupation can be seen from the constant Israeli attacks on Syrian and Iranian-allied forces by Israel/US, increasing the chances of a war with Iran, which can rapidly escalate, potentially incinerating the entire Persian Gulf region. It appears the US is abandoning the ‘one-China’ policy’ that has guided relations between the two countries for nearly 5 decades and is preparing to recognize Taiwan as an ‘independent’ state, a redline for the Peoples Republic of China. No doubt, this was one motivation for sending House Speaker Nancy Pelosi, from ‘’liberal’ San Francisco, with a net worth exceeding $100 million, to visit Taiwan. The Pentagon is actively encouraging Japan, which is little more than a US stooge/vassal and still occupied by circa 50K US troops, to join in this effort [48]. This begs the obvious question- did Japan learn anything from their defeat in WWII? As Glen Ford has pointed out, hegemons do not have ‘allies’ they only have subordinates [49].

The decline of late-stage American capitalism has progressed to the point where the very survival of the American empire is now contingent upon endless money printing to prop up financial markets and the military. This is becoming increasingly tenuous as this orgy of money printing and debt has created gigantic bubbles in every asset class- ‘everything bubble’, increasing inflation and threatening to derail the dollar’s role as world reserve currency and viability of western capitalism. Considering the weak state of US/EU economies, what economic incentives does the US have to encourage countries in the Indo-Pacific to reduce trade with China? Obviously, this is a nonstarter [50]. The ruling oligarchy are well aware of US economic decline and in desperation, are attempting to directly confront the Russia-China-Iran axis, which has attained economic and military parity (superiority?) with US/NATO. Perilous times ahead.

Notes

1. US economic decline and global instability. The Saker Jan 19, 2021; https://thesaker.is/us-economic-decline-and-global-instability/

2. American Involvement in Wars from Colonial Times to the Present- Wars From 1675 to the Present Day By Martin Kelly Nov 4, 2020; https://www.thoughtco.com/american-involvement-wars-colonial-times-present-4059761

3. Ukraine’s Growing Dependency on Terrorism w/Mark Sleboda The New Atlas Aug 25, 2022; https://www.youtube.com/watch?v=cgiRKbTYbZQ&t=1997s

4. The Big 6 Media Companies By Adam Levy Jun 10, 2022; https://www.fool.com/investing/stock-market/market-sectors/communication/media-stocks/big-6/

5. The 6 Companies That Own (Almost) All Media; https://www.webfx.com/blog/internet/the-6-companies-that-own-almost-all-media-infographic

6. Why military aid in Ukraine may not always get to the front lines. By Adam Yamaguchi and Alex Pena CBS News Aug 7, 2022; https://www.cbsnews.com/news/ukraine-military-aid-weapons-front-lines/

7. CBS censors its own report on Ukraine weapons corruption Multipolarista Aug 14, 2022; https://soundcloud.com/multipolarista/cbs-ukraine-weapons-corruption

8. Council on Foreign Relations; https://www.cfr.org/

9. How Gary Webb Linked the CIA to the Crack Epidemic — and Paid the Ultimate Price by Marco Margaritoff Feb 18, 2022; https://allthatsinteresting.com/gary-webb

10. Julian Assange, Wikipedia; https://en.wikipedia.org/wiki/Julian_Assange#Seth_Rich

11. Wall Street on Parade Pam Martens and Russ Martens; https://wallstreetonparade.com/

12. Half Has Never Been Told by Edward E. Baptist 2016 (Book)

13. State of Insecurity- The Cost of Militarization Since 9/11 by Lindsay Koshgarian, Ashik Siddique and Lorah Steichen Institute for Policy Studies; Link: https://ips-dc.org/report-state-of-insecurity-cost-militarization-since-9-11/

14. Costs of war; https://watson.brown.edu/costsofwar/

15. The exponential rise of Russia’s Mir payment system by James King The Banker

July 20, 2021; https://www.thebanker.com/Transactions-Technology/FX-Payments/The-exponential-rise-of-Russia-s-Mir-payment-system?ct=true

16. Russia and China are brewing up a challenge to dollar dominance by creating a new reserve currency by George Glover Markets Indiser Jun 24, 2022; https://markets.businessinsider.com/news/currencies/dollar-dominance-russia-china-rouble-yuan-brics-reserve-currency-imf-2022-6

17. Precious Metals: Russia Proposes New Standard to Compete with LBMA Goldbroker Aug 17, 2022; https://goldbroker.com/news/precious-metals-russia-proposes-new-standard-to-compete-with-lbma-2826

18. London Bullion Market Association (LBMA); https://www.lbma.org.uk

19. Rigged Gold Price Distorts Perception of Economic Reality by Paul Craig Roberts and Dave Kranzler Sept 22, 2014; https://www.paulcraigroberts.org/2014/09/22/rigged-gold-price-distorts-perception-economic-reality-paul-craig-roberts-dave-kranzler/

20. Society for Worldwide Interbank Financial Telecommunications (SWIFT) system; https://www.swift.com/

21. China’s Belt and Road Initiative in the global trade, investment and finance landscape 2018;

22. Belt and Road Initiative; https://www.beltroad-initiative.com/belt-and-road/

23. Trends in Russia’s Armed Forces- An Overview of Budgets and Capabilities by Keith Crane, Olga Oliker and Brian Nichiporuk Rand Corporation 2019; https://www.rand.org/pubs/research_reports/RR2573.html

24. China Naval Modernization: Implications for U.S. Navy Capabilities—Background and Issues for Congress. Congressional Research Service Mar 8, 2022; https://sgp.fas.org/crs/row/RL33153.pdf

25. An Interactive Look at the U.S.-China Military Scorecard Rand https://www.rand.org/paf/projects/us-china-scorecard.html

26. China is building more than 100 new missile silos in its western desert, analysts say

Image without a caption By Joby Warrick Washington Post June 30, 2021; https://www.washingtonpost.com/national-security/china-nuclear-missile-silos/2021/06/30/0fa8debc-d9c2-11eb-bb9e-70fda8c37057_story.html

27. Missile Defense Project, “Missiles of Iran,” Missile Threat, Center for Strategic and International Studies; https://missilethreat.csis.org/country/iran

28. President Putin’s St. Petersburg International Economic Forum Speech, June 17, 2022. Defense Info; https://defense.info/global-dynamics/2022/06/president-putins-st-petersburg-international-economic-forum-speech-june-17-2022

29. Ray McGovern: Historical Context for Conflicts in Ukraine Consortium News Jul 10, 2022; https://www.youtube.com/watch?v=1gLzsQA3UGY

30. Map Explainer: Key Facts About Ukraine By Bruno Venditti, Graphics/Design: Nick Routley Feb 23, 2022; https://www.visualcapitalist.com/map-explainer-ukraine/

31. Welcome to Ukraine, the most corrupt nation in Europe by Oliver Bullough The Guardian Feb 6, 2015; https://www.theguardian.com/news/2015/feb/04/welcome-to-the-most-corrupt-nation-in-europe-ukraine

32. How and why the U.S. Government Perpetrated the 2014 Coup in Ukraine by Eric Zuesse Modern Diplomacy June 4, 2018; https://moderndiplomacy.eu/2018/06/04/how-and-why-the-u-s-government-perpetrated-the-2014-coup-in-ukraine/

33. Neo-Nazis and the Far Right Are on the March in Ukraine- Five years after the Maidan uprising, anti-Semitism and fascist-inflected ultranationalism are rampant.

By Lev Golinkin The Nation Feb 22, 2019;

34. Medea Benjamin and Nicolas J.S. Davies Fair Observer Mar 11, 2022; https://www.fairobserver.com/region/europe/medea-benjamin-nicolas-js-davies-ukraine-war-russia-ukranian-neo-nazi-fascists-azov-battalion-89292/

35. Ukraine- World Socialist Website; https://www.wsws.org/en/topics/country/ukraine

36. Ukrainian Army terror bombings By Laurent Brayard Jun 6, 2022; https://mronline.org/2022/06/06/ukrainian-army-terror-bombings/

37. Donbass Update: Ukraine Continues to Shell Residential Areas Telesur Feb 24, 2022; https://www.telesurenglish.net/news/Donbass-Update-Ukraine-Continues-to-Shell-Residential-Areas-20220224-0004.html

38. Important — A Message for Americans Gonzalo Lira June 18, 2022; https://www.strategic-culture.org/video/2022/06/20/2022-06-18-important-a-message-for-americans/

39. Putin Announces Start to ‘Military Operation’ Against Ukraine by Anton Troianovski and Neil MacFarquhar NYT Feb. 23, 2022; https://www.nytimes.com/2022/02/23/world/europe/ukraine-russia-invasion.html

40. Why Russia Invaded Ukraine by Eric Zuesse The Duran Sept 1, 2022; https://theduran.com/why-russia-invaded-ukraine/

41. All the way to Odessa by Pepe Escobar The Unz Review Aug 26, 2022; https://www.unz.com/pescobar/all-the-way-to-odessa/

42. Reminiscence of the Future (Andrei Martyanov); http://smoothiex12.blogspot.com/

43. Europe’s Markets and Energy Security Disrupted by Russia Sanctions by Kenneth Rapoza Forbes Aug 23, 2022; https://www.forbes.com/sites/kenrapoza/2022/08/23/europes-markets-and-energy-security-disrupted-by-russia-sanctions/?sh=6d2312b45097

44. Russia Is Making Heaps of Money from Oil, but There is a Way to Stop That

July 29, 2022; https://www.nytimes.com/2022/07/29/opinion/russia-oil-sanctions-biden.html

45. Why have many nations not condemned the war in Ukraine? by Bernd Debusmann News Decoder Apr 4, 2022; https://news-decoder.com/why-have-many-nations-not-condemned-the-war-in-ukraine/

46. Only one in three UN members back new anti-Russia resolution- International support for Ukraine has dropped dramatically since March RT Aug 26, 2022; https://www.rt.com/russia/561627-un-ukraine-resolution-support/

47. Census Bureau: 3.8 million renters will likely be evicted in the next two months — why the rental crisis keeps getting worse by Brian J. O’Connor Yahoo Sun, Aug 28, 2022; https://www.yahoo.com/video/census-bureau-3-8-million-100000978.html

48. U.S. presses Japan to cancel Constitution’s peace-clause. China and Japan must thus finally agree now, to avoid a war by Eric Zuesse The Duran Aug 25, 2022; https://theduran.com/why-a-deal-is-needed-now-between-china-and-japan/

49. Glen Ford’s Ukrainian Crystal Ball Black Agenda Report Jul 27, 2022; https://www.blackagendareport.com/glen-fords-ukrainian-crystal-ball

50. A New World Order is Looming and the West Doesn’t Like it by James ONeill Aug 24, 2022; https://journal-neo.org/2022/08/24/a-new-world-order-is-looming-and-the-west-doesn-t-like-it/

3 Figures

Figure 1: Total US Public Debt

Figure 2. Map of Ukraine

Figure 3. Military situation in Ukraine Aug 31, 2022

Figure 1. Total US public debt. Note that debt in Q1 2020 was $ 23.2 trillion while in Q2 2022 was $ 30.5 trillion, an increase of $7 trillion.

FRED Graph

Source: Total Public Debt; https://fred.stlouisfed.org/series/GFDEBTN

Figure 2. Map of Ukraine

Ukraine Map

Source: US Department of Defense

Figure 3. Military Situation in Ukraine for Aug 31, 2022. Areas in Red are controlled by the allied forces of the Donetsk and Luhansk People’s Militia and Russian military.

Source: Ukraine interactive map; https://liveuamap.com

Geopolitical tectonic plates shifting, six months on

August 24, 2022

by Pepe Escobar, posted with the author’s permission and widely cross-posted

Six months after the start of the Special Military Operation (SMO) by Russia in Ukraine, the geopolitical tectonic plates of the 21st century have been dislocated at astonishing speed and depth – with immense historical repercussions already at hand. To paraphrase T.S. Eliot, this is the way the (new) world begins, not with a whimper but a bang.

The vile assassination of Darya Dugina – de facto terrorism at the gates of Moscow – may have fatefully coincided with the six-month intersection point, but that won’t change the dynamics of the current, work-in-progress historical drive.

The FSB may have cracked the case in a little over 24 hours, designating the perpetrator as a neo-Nazi Azov operative instrumentalized by the SBU, itself a mere tool of the CIA/MI6 combo de facto ruling Kiev.

The Azov operative is just a patsy. The FSB will never reveal in public the intel it has amassed on those that issued the orders – and how they will be dealt with.

One Ilya Ponomaryov, an anti-Kremlin minor character granted Ukrainian citizenship, boasted he was in contact with the outfit that prepared the hit on the Dugin family. No one took him seriously.

What’s manifestly serious is how oligarchy-connected organized crime factions in Russia would have a motive to eliminate Dugin as a Christian Orthodox nationalist philosopher who, according to them, may have influenced the Kremlin’s pivot to Asia (he didn’t).

But most of all, these organized crime factions blamed Dugin for a concerted Kremlin offensive against the disproportional power of Jewish oligarchs in Russia. So these actors would have the motive and the local base/intel to mount such a coup.

If that’s the case that spells out a Mossad operation – in many aspects a more solid proposition than CIA/MI6. What’s certain is that the FSB will keep their cards very close to their chest – and retribution will be swift, precise and invisible.

The straw that broke the camel’s back

Instead of delivering a serious blow to Russia in relation to the dynamics of the SMO, the assassination of Darya Dugina only exposed the perpetrators as tawdry operatives of a Moronic Murder Inc.

An IED cannot kill a philosopher – or his daughter. In an essential essay Dugin himself explained how the real war – Russia against the collective West led by the United States – is a war of ideas. And an existential war.

Dugin – correctly – defines the US as a “thalassocracy”, heir to “Britannia rules the waves”; yet now the geopolitical tectonic plates are spelling out a new order: The Return of the Heartland.

Putin himself first spelled it out at the Munich Security Conference in 2007. Xi Jinping started to make it happen when he launched the New Silk Roads in 2013. The Empire struck back with Maidan in 2014. Russia counter-attacked coming to the aid of Syria in 2015.

The Empire doubled down on Ukraine, with NATO weaponizing it non-stop for eight years. At the end of 2021, Moscow invited Washington for a serious dialogue on “indivisibility of security” in Europe. That was dismissed with a non-response response.

Moscow took no time to confirm a trifecta was in the works: an imminent Kiev blitzkrieg against Donbass; Ukraine flirting with acquiring nuclear weapons; and the work of US bioweapon labs. That was the straw that broke the New Silk Road camel’s back.

A consistent analysis of Putin’s public interventions these past few months reveals that the Kremlin – as well as Security Council Yoda Nikolai Patrushev – fully realize how the politico/media goons and shock troops of the collective West are dictated by the rulers of what Michael Hudson defines as the FIRE system (financialization, insurance, real estate), a de facto banking Mafia.

As a direct consequence, they also realize how collective West public opinion is absolutely clueless, Plato cave-style, of their total captivity by the FIRE rulers, who cannot possibly tolerate any alternative narrative.

So Putin, Patrushev, Medvedev will never presume that a senile teleprompter reader in the White House or a cokehead comedian in Kiev “rule” anything. The sinister Great Reset impersonator of a Bond villain, Klaus “Davos” Schwab, and his psychotic historian sidekick Yuval Harari at least spell out their “program”: global depopulation, with those that remain drugged to oblivion.

As the US rules global pop culture, it’s fitting to borrow from what Walter White/Heisenberg, an average American channeling his inner Scarface, states in Breaking Bad: “I’m in the Empire business”. And the Empire business is to exercise raw power – then maintained with ruthlessness by all means necessary.

Russia broke the spell. But Moscow’s strategy is way more sophisticated than leveling Kiev with hypersonic business cards, something that could have been done at any moment starting six months ago, in a flash.

What Moscow is doing is talking to virtually the whole Global South, bilaterally or to groups of actors, explaining how the world-system is changing right before our eyes, with the key actors of the future configured as BRI, SCO, EAEU, BRICS+, the Greater Eurasia Partnership.

And what we see is vast swathes of the Global South – or 85% of the world’s population – slowly but surely becoming ready to engage in expelling the FIRE Mafia from their national horizons, and ultimately taking them down: a long, tortuous battle that will imply multiple setbacks.

The facts on the ground

On the ground in soon-to-be rump Ukraine, Khinzal hypersonic business cards – launched from Tu-22M3 bombers or Mig-31 interceptors – will continue to be distributed.

Piles of HIMARS will continue to be captured. TOS 1A Heavy Flamethrowers will keep sending invitations to the Gates of Hell. Crimean Air Defense will continue to intercept all sorts of small drones with IEDs attached: terrorism by local SBU cells, which will be eventually smashed.

Using essentially a phenomenal artillery barrage – cheap and mass-produced – Russia will annex the full, very valuable Donbass, in terms of land, natural resources and industrial power. And then on to Nikolaev, Odessa, and Kharkov.

Geoeconomically, Russia can afford to sell its oil with fat discounts to any Global South customer, not to mention strategic partners China and India. Cost of extraction reaches a maximum of $15 per barrel, with a national budget based on $40-45 for a barrel of Urals.

A new Russian benchmark is imminent, as well as oil in rubles following the wildly successful gas for rubles.

The assassination of Darya Dugina provoked endless speculation on the Kremlin and the Ministry of Defense finally breaking their discipline. That’s not going to happen. The advances along the enormous 1,800-mile front are relentless, highly systematic and inserted in a Greater Strategic Picture.

A key vector is whether Russia stands a chance of winning the information war with the collective West. That will never happen inside NATOstan – even as success after success is ramping up across the Global South.

As Glenn Diesen has masterfully demonstrated, in detail, in his latest book, Russophobia , the collective West is viscerally, almost genetically impervious to admitting any social, cultural, historical merits by Russia.

And that will extrapolate to the irrationality stratosphere, as the grinding down and de facto demilitarization of the imperial proxy army in Ukraine is driving the Empire’s handlers and its vassals literally nuts.

The Global South though should never lose sight of the “Empire business”. The Empire of Lies excels in producing chaos and plunder, always supported by extortion, bribery of comprador elites, assassinations, and all that supervised by the humongous FIRE financial might. Every trick in the Divide and Rule book – and especially outside of the book – should be expected, at any moment. Never underestimate a bitter, wounded, deeply humiliated Declining Empire.

So fasten your seat belts: that will be the tense dynamic all the way to the 2030s. But before that, all along the watchtower, get ready for the arrival of General Winter, as his riders are fast approaching, the wind will begin to howl, and Europe will be freezing in the dead of a dark night as the FIRE Mafia puff their cigars.

How a missile in Kabul connects to a Speaker in Taipei

August 03 2022

Photo Credit: The Cradle

Source

By Pepe Escobar

This is the way the “Global War on Terror” (GWOT) ends, over and over again: not with a bang, but a whimper.

Two Hellfire R9-X missiles launched from a MQ9 Reaper drone on the balcony of a house in Kabul. The target was Ayman Al-Zawahiri with a $25 million bounty on his head. The once invisible leader of ‘historic’ Al-Qaeda since 2011, is finally terminated.

All of us who spent years of our lives, especially throughout the 2000s, writing about and tracking Al-Zawahiri know how US ‘intel’ played every trick in the book – and outside the book – to find him. Well, he never exposed himself on the balcony of a house, much less in Kabul.

Another disposable asset

Why now? Simple. Not useful anymore – and way past his expiration date. His fate was sealed as a tawdry foreign policy ‘victory’ – the remixed Obama ‘Osama bin Laden moment’ that won’t even register across most of the Global South. After all, a perception reigns that George W. Bush’s GWOT has long metastasized into the “rules-based,” actually “economic sanctions-based” international order.

Cue to 48 hours later, when hundreds of thousands across the west were glued to the screen of flighradar24.com (until the website was hacked), tracking “SPAR19” – the US Air Force jet carrying House Speaker Nancy Pelosi – as it slowly crossed Kalimantan from east to west, the Celebes Sea, went northward parallel to the eastern Philippines, and then made a sharp swing westwards towards Taiwan, in a spectacular waste of jet fuel to evade the South China Sea.

No “Pearl Harbor moment”

Now compare it with hundreds of millions of Chinese who are not on Twitter but on Weibo, and a leadership in Beijing that is impervious to western-manufactured pre-war, post-modern hysteria.

Anyone who understands Chinese culture knew there would never be a “missile on a Kabul balcony” moment over Taiwanese airspace. There would never be a replay of the perennial neocon wet dream: a “Pearl Harbor moment.” That’s simply not the Chinese way.

The day after, as the narcissist Speaker, so proud of accomplishing her stunt, was awarded the Order of Auspicious Clouds for her promotion of bilateral US-Taiwan relations, the Chinese Foreign Minister issued a sobering comment: the reunification of Taiwan with the mainland is a historical inevitability.

That’s how you focus, strategically, in the long game.

What happens next had already been telegraphed, somewhat hidden in a Global Times report. Here are the two key points:

Point 1: “China will see it as a provocative action permitted by the Biden administration rather than a personal decision made by Pelosi.”

That’s exactly what President Xi Jinping had personally told the teleprompt-reading White House tenant during a tense phone call last week. And that concerns the ultimate red line.

Xi is now reaching the exact same conclusion reached by Russian President Vladimir Putin earlier this year: the United States is “non-agreement capable,” and there’s no point in expecting it to respect diplomacy and/or rule of law in international relations.

Point 2 concerns the consequences, reflecting a consensus among top Chinese analysts that mirrors the consensus at the Politburo: “The Russia-Ukraine crisis has just let the world see the consequence of pushing a major power into a corner… China will steadily speed up its process of reunification and declare the end of US domination of the world order.”

Chess, not checkers

The Sinophobic matrix predictably dismissed Xi’s reaction to the fact on the ground – and in the skies – in Taiwan, complete with rhetoric exposing the “provocation by American reactionaries” and the “uncivilized campaign of the imperialists.”

This may be seen as Xi playing Chairman Mao. He may have a point, but the rhetoric is pro forma. The crucial fact is that Xi was personally humiliated by Washington and so was the Communist Party of China (CPC), a major loss of face – something that in Chinese culture is unforgivable. And all that compounded with a US tactical victory.

So the response will be inevitable, and it will be classic Sun Tzu: calculated, precise, tough, long-term and strategic – not tactical. That takes time because Beijing is not ready yet in an array of mostly technological domains. Putin had to wait years for Russia to act decisively. China’s time will come.

For now, what’s clear is that as much as with Russia-US relations last February, the Rubicon has been crossed in the US-China sphere.

The price of collateral damage

The Central Bank of Afghanistan bagged a paltry $40 million in cash as ‘humanitarian aid’ soon after that missile on a balcony in Kabul.

So that was the price of the Al-Zawahiri operation, intermediated by the currently US-aligned Pakistani intelligence agency, the Inter-Services Intelligence (ISI). So cheap.

The MQ-9 Reaper drone carrying the two Hellfire R9X that killed Al-Zawahiri had to fly over Pakistani airspace – taking off from a US base in the Persian Gulf, traversing the Arabian Sea, and flying over Balochistan to enter Afghanistan from the south. The Americans may have also got human intelligence as a bonus.

A 2003 deal, according to which Islamabad facilitates air corridors for US military flights, may have expired with the American withdrawal debacle last August, but could always be revived.

No one should expect a deep dive investigation on what exactly the ISI – historically very close to the Taliban – gave to Washington on a silver platter.

Dodgy dealings

Cue to an intriguing phone call last week between the all-powerful Chief of Staff of the Pakistani Army, Gen Qamar Javed Bajwa, and US deputy Secretary of State Wendy Sherman. Bajwa was lobbying for the International Monetary Fund (IMF) to release a crucial loan at the soonest, otherwise Pakistan will default on its foreign debt.

Were deposed former Prime Minister Imran Khan still in power, he would never have allowed that phone call.

The plot thickens, as Al-Zawahiri’s Kabul digs in a posh neighborhood is owned by a close advisor to Sirajuddin Haqqani, head of the “terrorist” (US-defined) Haqqani network and currently Taliban Interior Minister. The Haqqani network, needless to add, was always very cozy with the ISI.

And then, three months ago, we had the head of ISI, Lieutenant General Nadeem Anjum, meeting with Biden’s National Security Advisor  Jake Sullivan in Washington – allegedly to get their former, joint, covert, counter-terrorism machinery back on track.

Once again, the only question revolves around the terms of the “offer you can’t refuse” – and that may be connected to IMF relief. Under these circumstances, Al-Zawahiri was just paltry collateral damage.

Sun Tzu deploys his six blades

Following Speaker Pelosi’s caper in Taiwan, collateral damage is bound to multiply like the blades of a R9-X missile.

The first stage is the People’s Liberation Army (PLA) already having engaged in live fire drills, with massive shelling in the direction of the Taiwan Strait out of Fujian province.

The first sanctions are on too, against two Taiwanese funds. Export of sable to Taiwan is forbidden; sable is an essential commodity for the electronics industry – so that will ratchet up the pain dial in high-tech sectors of the global economy.

Chinese CATL, the world’s largest fuel cell and lithium-ion battery maker, is indefinitely postponing the building of a massive $5 billion, 10,000-employee factory that would manufacture batteries for electric vehicles across North America, supplying Tesla and Ford among others.

So the Sun Tzu maneuvering ahead will essentially concentrate on a progressive economic blockade of Taiwan, the imposition of a partial no-fly zone, severe restrictions of maritime traffic, cyber warfare, and the Big Prize: inflicting pain on the US economy.

The War on Eurasia

For Beijing, playing the long game means the acceleration of the process involving an array of nations across Eurasia and beyond, trading in commodities and manufactured products in their own currencies. They will be progressively testing a new system that will see the advent of a BRICS+/SCO/Eurasia Economic Union (EAEU) basket of currencies, and in the near future, a new reserve currency.

The Speaker’s escapade was concomitant to the definitive burial of the “war on terror” cycle and its metastasis into the “war on Eurasia” era.

It may have unwittingly provided the last missing cog to turbo-charge the complex machinery of the Russia-China strategic partnership. That’s all there is to know about the ‘strategic’ capability of the US political ruling class. And this time no missile on a balcony will be able to erase the new era.

Going to Samarkand

July 31, 2022

By Pepe Escobar, posted with the author’s permission and widely cross-posted

The SCO and other pan-Eurasian organizations play a completely different – respectful, consensual – ball game. And that’s why they are catching the full attention of most of the Global South.

The meeting of the SCO Ministerial Council  in Tashkent this past Friday involved some very serious business. That was the key preparatory reunion previous to the SCO summit in mid-September in fabled Samarkand, where the SCO will release a much-awaited “Declaration of Samarkand”.

What happened in Tashkent was predictably unreported across the collective West and still not digested across great swathes of the East.

So once again it’s up to Russian Foreign Minister Sergei Lavrov to cut to the chase. The world’s foremost diplomat – amidst the tragic drama of the American-concocted Era of Non-Diplomacy, Threats and Sanctions – has singled out the two overlapping main themes propelling the SCO as one of the key organizations on the path towards Eurasia integration.

  1. Interconnectivity and “the creation of efficient transport corridors”. The War of Economic Corridors is one of the key features of the 21st
  2. Drawing “the roadmap for the gradual increase in the share of national currencies in mutual settlements.”

Yet it was in the Q@A session that Lavrov for all practical purposes detailed all the major trends in the current, incandescent state of international relations. These are the key takeaways.

How comfortable are you with the US dollar?

Africa: “We agreed that we will submit to the leaders for consideration proposals on specific actions to switch to settlements in national currencies. I think that everyone will now think about it. Africa already has a similar experience: common currencies in some sub-regional structures, which, nevertheless, by and large, are pegged to Western ones. From 2023, a continental free trade zone will start functioning on the African continent. A logical step would be to reinforce it with currency agreements.”

Belarus – and many others – eager to join the SCO: “There is a broad consensus on the Belarusian candidacy (…) I felt it today. There are a number of contenders for the status of observer, dialogue partner. Some Arab countries show such interest, as do Armenia, Azerbaijan and a number of Asian states.”

Grain diplomacy: “In regard to the issue of Russian grain, it was the American sanctions that did not allow the full implementation of the signed contracts due to the restrictions imposed: Russian ships are prohibited from entering a number of ports, there is a ban on foreign ships entering Russian ports to pick up export cargo, and insurance rates have gone up (…) Financial chains are also interrupted by illegitimate US and EU sanctions. In particular, Rosselkhozbank, through which all the main settlements for food exports pass, was one of the first to be included in the sanctions list. UN Secretary General A. Guterres has committed to removing these barriers to addressing the global food crisis. Let’s see.”

Taiwan: “We do not discuss this with our Chinese colleague. Russia’s position on having only one China remains unchanged. The United States periodically confirms the same line in words, but in practice their ‘deeds’ do not always coincide with words. We have no problem upholding the principle of Chinese sovereignty.”

Should the SCO abandon the US dollar? “Each SCO country must decide for itself how comfortable it feels to rely on the dollar, taking into account the absolute unreliability of this currency for possible abuses. The Americans have used this more than once in relation to a number of states.”

Why the SCO matters: “There are no leaders and followers in the SCO. There are no situations in the organization like in NATO, when the US and its closest allies impose one line or another on all other members of the alliance. In the Shanghai Cooperation Organization, the situation that we are currently seeing in the EU does not arise: sovereign countries are literally being ‘knocked out’, demanding that they either stop buying gas or reduce its consumption in violation of national plans and interests.”

Lavrov was also keen to stress how “other structures in the Eurasian space, for example, the EAEU and BRICS, are based and operate on the same principles” of the SCO. And he referred to the crucial cooperation with the 10 member-nations of ASEAN.

Thus he set the stage for the clincher: “All these processes, in interconnection, help to form the Greater Eurasian Partnership, which President Vladimir Putin has repeatedly spoken about. We see in them a benefit for the entire population of the Eurasian continent.”

Those Afghan and Arab lives

The real big story of the Raging Twenties  is how the special military operation (SMO) in Ukraine de facto kick-started “all these processes”, as Lavrov mentioned, simultaneously leading towards inexorable Eurasia integration.

Once again he had to recall two basic facts that continue to escape any serious analysis across the collective West:

Fact 1: “All our proposals for their removal [referring to NATO-expansion assets] on the basis of the principle of mutual respect for security interests were ignored by the US, the EU, and NATO.”

Fact 2: “When the Russian language was banned in Ukraine, and the Ukrainian government promoted neo-Nazi theories and practices, the West did not oppose, but, on the contrary, encouraged the actions of the Kyiv regime and admired Ukraine as a ‘stronghold of democracy.’ Western countries supplied the Kyiv regime with weapons and planned the construction of naval bases on Ukrainian territory. All these actions were openly aimed at containing the Russian Federation. We have been warning for 10 years that this is unacceptable.”

It’s also fitting that Lavrov would once again put Afghanistan, Iraq and Libya in context: “Let us recall the example of Afghanistan, when even wedding ceremonies were subjected to air strikes, or Iraq and Libya, where statehood was completely destroyed, and many human lives were sacrificed. When states that easily pursued such a policy are now making a fuss about Ukraine, I can conclude that the lives of Afghans and Arabs mean nothing to Western governments. It’s unfortunate. Double standards, these racist and colonial instincts must be eliminated.”

Putin, Lavrov, Patrushev, Madvedev have all been stressing lately the racist, neocolonial character of the NATOstan matrix. The SCO and other pan-Eurasian organizations play a completely different – respectful, consensual – ball game. And that’s why they are catching the full attention of most of the Global South. Next stop: Samarkand.

Ideologies are no longer the way we know them and this means that the world is being reconfigured

July 17, 2022

Source

By Guilherme Wilbert

I try to bring a reflection in most of my texts about what competes for the international diplomatic and monetary future after Operation Z in Ukraine, but also, I always try to bring the ideological part into the discussion because this still makes many people’s heads spin. Or are Ukrainian flag-wavers not ideologized?

Capitalism and communism have always been enemies at their core, especially in their own archetypes, since communism is internationalist, while pure capitalism is just the simplest way of doing business: you give me money for what it is worth, and I give you the product.

It turns out that along with the collapse of communism after the Soviet collapse in 1991, capitalism has also spiraled, and its most vile forms are found in meta-capitalists and monopolizing companies, which distort the real meaning of free markets, open competition and more.

What happens is that some businessmen behave like communists with money because they use their companies to carry out monopolies and cartels around the world, with the simplest case being that of Brazil, which has a nation of 200 million people to more and only has 5 banks in Brazilian territory operating, these being: Banco do Brasil (created by D. João VI of Portugal during the Brazilian Empire), Caixa Econômica Federal (which is a kind of banking autarchy of the Brazilian Federal Government), Itaú, Santander and Bradesco.  Even HSBC was strong in the country, but could not stand it and closed its operation last decade.

The case of Brazil is a clear example of a country that fell victim to the metacapitalists, even though it had a leftist government like the Workers Party led by Luiz Inácio Lula da Silva, former president of the country.

And this proves how even orthodox socialism, which is the case of the ideology-north of the Workers Party of Brazil, can be eroded by metacapitalism and its bad ways of doing business.

The point is that cartels, monopolies, oligopolies are distorted forms of capitalism, which look very much like a communist quasi-statist economy because the monopolizer behaves like a communist strong state. And this destroys the sense that is used to identify a communist or capitalist militancy in some countries because the real goals of the ideologies cited here are not made explicit up front. This makes for a dumb and innocuous militancy that sometimes is fighting for the same things without realizing it.

While the communist militant likes a strong State that monopolizes natural resources or not, the meta-capitalist also likes the State because it helps him to make and maintain his monopoly. That is why it is not rare to see people like George Soros, prominent bankers, supporting wealth taxes, for example, because it would be a way for them to continue using the state territory to carry out their monopolies and cartels.

Another practical example coming from Brazil are telephone lines: the country has only 4 cell phone companies, with one (Oi Telecomunicações) in receivership because it is in bad shape.

During Lula’s communist government in the country, the banks had the highest profits, several newspapers reported at the time.  This is a clear proof of the distortion of the communist discourse that usually carries the popular feeling but sometimes only makes its leaders richer and more powerful and more brutal.

Fidel Castro, who died richer than Queen Elizabeth II, it is said.

And a global international reconfiguration is happening right now, with the various economic blocs of countries in the Global South becoming closer together.

This is also because of the ideological capitalist exhaustion due to monopolizing meta-capitalism, or communism, when the exacerbated statization and planned economy is proving wrong again in the countries, making the real economy of production take over the discourse and making smarter heads.

Wars still happen because of ideologies, but they can be stopped by them too

When the clash of civilizations happened in 2019, with the world distrusting China for being bad at preserving Covid-19 cases, as well as trying lockdowns recently that destroyed the global supply chain of production, a lot of bad thought was given to a strong and sovereign state like China’s, especially the more ideologized ones, who blamed the country’s trademark hammer and sickle as the cause of the problems plaguing the world at the time. Except that today, 3 years later, China, which is clearly totally ideologized, may be guiding some parts of the Global South towards an inter-country integration that involves the monetary, diplomatic and trade issues. In other words, the China that would have caused the Covid-19 problem for some ideologues, may be the same country that can save the global economy when the dollar collapses. And it will collapse. It is just a matter of time.

While NATO, which carries an air of the cold war because it still exists even after the end of the Warsaw Pact, is trying to emulate a kind of international police force, going against the very name of the military organization, which in theory would only be in the North Atlantic Sea, today it is already in Asia and Oceania. In what is seen as the opposite thinking of the leaders of Eurasia and the Global South.

Some diplomats from within NATO have even talked about “Global NATO”. What is this if not a trace of colonialism ingrained in the Atlanticist organization to stand up to the enthusiasts of multipolarity, who have sometimes ended up being characterized by the flags with sickle and hammer?

The clearest point I try to make is that ideologies have been eroded by the mistakes or successes of their own leaders, distorting the orthodox common sense of centuries-old doctrines like communism for example. This was seen when the US opened the international market to China, which made them the second global economy today.

But there was also no good interpretation from the West towards Russia for example, which today is a totally different country from the Soviet Union, and could have become an ally. Which would totally change the scenario we are living today.

So ideologies can stop or make wars, either by capitalism or by communists.

Capitalism at war means monopolies arising, while communists at war means massive genocides arising.

Corroded ideology is not necessarily a bad thing, but it shows a breakdown in thinking in society

Ideologies arise as a way of trying to organize models of government, and several of them have even been criminalized around the world due to the massacres they have carried out. But at the same time, this does not mean that they will cease to exist.

When a society thinks 50% one thing and another half thinks 50% another thing, this means that there is a polarity of thoughts that can only lead to chaos and barbarism, because the people, hungry or in difficulty, are not able to come to a consensus, and then authoritarianism and popular uprisings arise.

The corrosion of ideologies, be they capitalist or communist, was something that would happen naturally because time goes on proving some points that have always been pushed by the enthusiasts of such as absolute truths, which are lies.

Several are the cases of communist countries that collapsed and several are the countries that collapse because of meta-capitalism. This is why we must abandon ideologies and simple ways of thinking when it comes to a nation, a homeland.

A homeland is much bigger than a 19th-century German writing. A nation is much bigger and means much more than a Politburo.

Capitalism and communism behave today as different sides of the same coin, with their owners and enthusiasts having the same origins.  Instead of studying the end result, look for the cause. Many coincidences can arise.


Guilherme Wilbert is a Brazilian law graduate interested in geopolitics and international law.

Michael Hudson: Podcast with Michael Hudson, Steve Keen, Steve Grumbine

July 17, 2022

Posted with Michael Hudson’s permission

Grambine, Macro and Cheese, July 9 2022. https://realprogressives.org/podcast_episode/episode-180-the-end-of-dollar-diplomacy-with-steve-keen-and-michael-hudson/.

https://realprogressives.org/macro-n-cheese-podcast/
For those who would like to hear the recorded conversation

Michael Hudson [intro/music]

A central tenet of the World Bank from the beginning is to convince countries not to grow their own food, but to create plantation agriculture to prevent family-owned farming of food, to grow plantation export crops and they become dependent on the United States for their grain.

[00:00:22.610] – Steve Keen [intro/music]

If you look at just the shipping involved in international trade, it’s something of the order of 20%, I think, of our carbon production comes out of the entire mechanics of shipping goods around the planet. And we realize we’ve massively overshot the capacity of the biosphere to support our industrial sedentary civilization. So, one way to reduce that is by reducing international trade.

[00:01:35.130] – Geoff Ginter [intro/music]

Now, let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.

[00:01:43.110] – Steve Grumbine

All right. And this is Steve with Macro N Cheese. Another great episode for everyone today. I have two guests, two very good friends, and very happy to have them join me today. Professor Steve Keen and Michael Hudson. You can’t get two better guys than this. And we’re going to have a very action packed conversation.

We’re going to be talking about central banking, the IMF, World Trade Organization, World Bank. And we’re going to be looking at how the US uses the monetary system to bring about its imperial powers that it exerts on the world. And we’re going to look at some of the things that are happening with Russia and Ukraine right now that ship the US control over the global commerce and the behaviors of non US countries.

They’re starting to think for themselves and make some decisions, and we’re watching the facade crack a little bit. Steve Keen, who is the author of the book Debunking Economics and more recently The New Economics: A Manifesto, is joining me, as well as Michael Hudson, who has just recently written the book The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism. So, without further ado, Michael and Steven, welcome to the show, sirs.

[00:03:04.530] – Michael Hudson

Good to be here.

[00:03:05.800] – Steve Keen

Thank you indeed.

[00:03:06.960] – Grumbine

So the reason why I brought us together, you guys are both phenomenal on your own, but together, I think that we can maybe tackle this. As an MMT advocate, I find myself friends with an awful lot of people, and you gentlemen have been doing this for a long time, and I know that you have some pushback within the MMT community.

In particular, this concept of “imports are a benefit and exports are a cost.” This is a core MMT staple. And some of the concerns that came out as a result of the Covid crisis showed us the resource based failures of a global supply chain and how some of the aspects of our financial system and the shipping of real resources from areas that had high Covid, how it impacted our abilities to take care of life on life’s terms.

It also became quite clear that the US hegemony over the world using dollar diplomacy is starting to show cracks in the foundation as well, as we watch Russia thumb its nose at US sanctions. So, getting into this, Steve Keen, I know that you have taken some issue with Warren Mosler’s prescription that imports are a benefit and exports are a cost.

Taking Warren’s position on this, I believe Warren is saying exports are real goods and services we’re sending out, whereas imports we’re handing pieces of paper to people. And this is a win for the importing nation. And we’ve seen the power of the US dollar and the ability to basically create colonial outposts, colonized communities living and dying off of US dollars. So there’s a power dynamic as well. What is your pushback with Warren’s import/export model?

[00:05:03.270] – Keen

There are quite a few elements to it. First of all, the idea that exports are a cost and imports are a benefit. One term that I’ve seen one Modern Monetary Theory advocate used to explain is to say, the opportunity cost is all theirs. In other words, they have therefore gone by sending a good to us like an automobile to the buyer in return for currency.

They’re doing without the opportunity of the vehicle. And when you take a good look at the manufacturing side of things, the reality for most firms is they have diminishing marginal cost and excess capacity. So the standard thing when you’re competing in a domestic market is you have spare capacity you’re not using, but you can’t get enough demand domestically.

Now, I know MMT can say that should be handled by the government using additional spending power and creating the spending power to absorb the excess capacity. But they don’t at the moment. So what tends to happen instead is that countries will use export-oriented industrialization to use their additional capacity more effectively, which is what’s led to the industrialization of China and in many ways the de-industrialization of America.

Personally, I don’t think the opportunity cost is the right way to think about international trade at all. It’s a neoclassical way of thinking. It assumes neoclassical conditions about production which are empirically false. I don’t think anything in MMT should be based on bad foundations and I think that is a bad foundation.

Then when you see the discussions about monetary sovereignty and saying that countries who don’t have to issue debt in the currency which is not their own currency, they have monetary sovereignty, those who have to issue debt in a currency which is not their own don’t have monetary sovereignty. One way you end up in not having monetary sovereignty is running large balance of trade deficits and not being the reserve currency of the planet.

So I think the advice that exports are a cost and imports are a benefit doesn’t make sense for countries which have been running a trade deficit, are importing more than they’re exporting, so they’re using their own pieces of paper fundamentally, initially, but if they keep on doing it, they’ve got to start using American pieces of paper, and then they’re in deep trouble. So I just think it’s a nice slogan, but I think it’s a bad idea.

[00:07:20.250] – Grumbine

So it makes sense to me given the nature of the pandemic. You and I spoke, I guess it was almost two years ago, about supply chains and pandemics, and we talked at length about how the iPhone is made in some 37 different countries – and countries that were isolated due to the pandemic. It also impacted production in general. Right now I’m in Information Technology, and I work with Cisco, and Cisco being the backbone of the entire Internet globally.

They have lead times even today of up to a year for some of the equipment, partially because of semiconductor shortages. But this is a piggyback to that in that there is the accounting identities of trading paper for goods and services, but then there is the actual functional output of that. And for countries like the United States, we do have Most Favored Nation status in the sense that we are the primary world reserve currency.

And I think part of that has to do with the fact that the price gas and gas purchases are done through US dollars as well. But overall, I think that we have to be aware that we’re not being a very good partner on the planet in general. A lot of the power plays the United States uses to be able to get those goods and services into the US Is done through warfare and sanctions, as we’ve seen all around the world. We use them to great harm in the global South.

However, we saw Russia here recently thumb their nose at us and say, the only thing we’re really lacking is high tech products, and we got China that can hook us up with that. All you’ve done is accelerated our departure from a dollar denominated world, which I guess brings us to you, Michael. Your book talks extensively about this. Can you help piggyback off of what Steve said regarding the supply chains and the impact of that import/export dynamic with what’s going on right now with Russia, China and Ukraine?

[00:09:34.590] – Hudson

Well, MMT has not spent much time talking about the balance of payments. It’s basically a theory of the domestic economy. The problem of the whole discussion that just took place is that trade is not the most important element of the balance of payments. For the United States, the trade balance has been just about in balance for almost 50 years, 70 years, actually.

What’s in balance is America’s military spending abroad. That’s the deficit that is pumping dollars into the world economy. But now to get back to Steve’s point, realizing that we’re dealing with trade, only a small portion of the balance of payments, Steve’s point is, let’s ignore all the other elements of the balance of payments – the debt service and the capital accounts and others.

If you import more than you export, and you have to actually pay cash for the imports and get cash for the export, then you have to borrow money. And once you borrow money, because most trade is denominated in dollars, this means you have to borrow US dollars. You don’t buy imports with your own currency. Now, MMT is all about how sovereign governments can create their own money and create their own currency, but they can’t print their foreign currency.

That’s the problem with having more imports than exports. And once you begin to borrow dollars, you have to pay interest on it. And all of a sudden, they’re running a deficit, it’s going to reduce your foreign exchange rates. Well, let’s look at what’s going to happen this summer as an example. We know that energy prices, oil prices are going way up.

And President Biden just says they’re going to be with us for a very long time because his major contributors are the oil companies, and he’s promised them that he’s going to enable them to make super profits to help raise the Dow Jones average. And the other element is food. Well, America is going to make a killing on oil exports because the United States controls the world oil trade.

The United States is also a major agricultural exporter, and it’ll make a killing because NATO has imposed sanctions on Russia, preventing Russia from exporting oil and food – it’s the largest grain exporter – into the economy. So you’re going to have South America, Africa, and the global South countries all of a sudden running big deficits.

Well, at the same time, there’s an enormous deficit of debt service that they owe to finance all of the trade deficits that they’ve been running ever since they followed neoliberal ideals to open their markets to depend on foreign food and basically US manufacturers. The Federal Reserve has just begun to raise interest rates. And the result of raising interest rates has been the dollar is going way up against the Latin American currencies, the African currencies, the South African rand, the Brazilian currency.

So you’re going to have the global South being in an absolute currency squeeze this summer. What are they going to do? Well, President Putin has said, well, we’re going to offer an alternative in the form of the BRICS bank. Well, it’s true that a bank can’t create foreign currency. The BRICS bank can enable countries to run a deficit in two ways.

Number one, the bank can be fueled by each member giving, say, a trillion dollars or some kind of proportional currency to the bank. So currency swap agreements, just like the United States has been negotiating for the last 50 years. You can all have a currency swap. Also, the BRICS bank can create its version of Special Drawing Rights – IMF SDRs – or what John Maynard Keynes proposed in 1944: “bancors.”

It can create paper gold of its own and distribute to countries. Well, the problem is, Putin said, we’re willing to sell your grain and oil and to take your currency in exchange, but we don’t want to save your balance of payments simply so that now you can afford to pay the debt service that you owe to US dollar bond holders, bank holders, and the IMF and the World Bank that got you into the mess you’re in to begin with.

So the problem is the stability of insulating your trade from the foreign exchange going up and down requires a split of the world into two different economic zones: US/NATO, the white people’s economic zones, and let’s call it the nonwhite economic zones. And remember, the Ukraine say that Russians are not white and racially different. Basically, the Nazi ideology is that any country that’s not neoliberal is not white.

So you’re going to have the world splitting, and we’re really talking about how to create a monetary system for the world splitting. I want to get back to one other thing Steve said about the opportunity cost. If imports are a great advantage to the United States, is it worth having American corporations move to low wage labor abroad, shifting the production abroad so that America is deindustrialized?

Has that been an advantage? Or let’s look at it from Russia’s point of view. Until this last spring, Russia was importing food, cheese, raw materials. And because of the sanctions, Russia has had to all of a sudden develop import substitution. It’s producing its own cheese. It produced its own agriculture that’s thriving.

And President Putin has said that Russia is going to spend more and more of its oil export receipts on funding import-replacing industry. Well, that sounds like a good idea, because we’re really talking about independence. And the balance of payments ultimately determines a constraint on domestic policy. I think that’s what Steve was talking about for opportunity costs.

You can’t just look at the flows on a balance sheet: “Well, we’re getting something for nothing.” If you import more than you export, you’re running up foreign debt, and you’re becoming more and more dependent on foreign countries who are acting in their own interests, not your own interests. So you have to put this whole discussion in the political context.

[00:16:15.210] – Grumbine

So I would see this as a national security issue in that with these essentials – Fadhel Kaboub talks about the spectrum of sovereignty: energy sovereignty, food sovereignty, technological sovereignty, the ability to live without external supports. And each country has varying levels of that. And so each country would have to be looked at differently just based on what they’re even capable of producing.

I guess my question to you, as we think about countries in the global South that have had the kiss of the IMF on them and the debt peonage that they have been laboring under. In Africa, Sankara’s speech talking about “I can either pay you or I can feed my people.” You can see the role that US interests through the IMF have had to import their goods and services into our country.

They don’t have a choice. They are basically colonial states that have the US thumbprint on them. So the United States has exerted this imperial power in this geopolitical nightmare. We are watching them break away from that today.

[00:17:34.050] – Hudson

But you’re leaving one of the real villains in the piece, and that’s the World Bank.

[00:17:38.290] – Grumbine

Oh, yes.

[00:17:39.020] – Hudson

A central element of the World Bank from the beginning is to convince countries not to grow their own food, but to create plantation agriculture, to prevent family-owned farming of food, to grow plantation export crops, and to become dependent on the United States for their grain. Well, if imports are a benefit and imports mean that the United States can put a sanction on you and starve your people like the United States tried to do in China in the 1950s, do you really want to become import dependent on food?

Let’s compare the World Bank to the Chinese Belt and Road and the BRICS bank that’s proposed. The World Bank would only make foreign exchange loans. That meant it would only make loans to countries who would invest in infrastructure that would help its exports. Well, imagine how this works for agriculture.

If you were going to develop your agriculture in the global South countries, you’d do pretty much what the United States did in the 1930s that had the most rapid increase in productivity of any industry in the last few centuries. And that was because the government took the lead in agricultural extension services, seed testing, educating farmers as to seed variety, setting up local farm management organizations.

Before the time that Cargill and Archer Daniels Midland became the great intermediaries in promotion of domestic self-sufficiency for farms, the World Bank wouldn’t make any loans at all for this, even though the World Bank local commissions and reports all said that this is what they need. The World Bank was almost always headed by someone very close to the US Military, starting with John J. McCloy at the beginning and going through McNamara and all of the subsequent Pentagon people who were put in charge of the World Bank.

And above all, they wanted to continue to base America’s export boom in agriculture and to make other countries food dependent. And that is one of the things that has led them into debt. So if you have a country like Chile that has the richest land in the world because it has the richest supply of guano deposits in the world. It also has the most unequal land distribution in Latin America – latifundia and microfundia – not any kind of balanced food production.

So that all of Chile’s exports and copper, by specializing, have been overwhelmed by the costs of importing food that it could have grown all by itself. So the idea of free trade is shaped by what will the international organizations controlled by the US give credit for, ends up to create underdevelopment and dependency instead of development. And that developmental aspect is a different story from MMT money creation. And we’re talking about something else that is part of a much bigger system.

[00:20:43.410] – Grumbine

Steve, based on what Michael just said, I know that you are concerned with the environment and bringing production back home. And around the world, people that are not hip to the US empire are trying to convince countries to look at building bonds between each other to create trade zones that mitigate some of the US power over dominating their countries.

We’ve got a very tiny window to solve climate crisis as well. So all these things are converging at one time trying to deleverage US interests from the world interests and watching as the nonwhite countries are banding together and the white countries are banding together. And it seems like the opportunity to save ourselves from extinction is passing before our very eyes.

In the vein of what he just said, how do we marry some of the ideas that we have, the climate crisis with the geopolitical crisis that we’re battling here?

[00:21:49.110] – Keen

Well, the large part of it is that the focus of neoclassical economics has always been on specialization and doing it with so-called comparative advantage. And what that gives you is an incredibly fragile system, as we’ve seen with Covid, because if you actually distribute production across the planet and you have a long supply chain, then of course that can collapse in an instant with something like Covid coming along.

And equally, if you have a famine, if the major food baskets get wiped out by a famine or a war. We’ve got the war already. The famine may well come by a drought and a crop failure as well. Then suddenly you can’t feed your people and you have no domestic alternative. So I think we have to get away from the focus on efficiency and even in that sense, the gain of swapping paper for goods, which is part of the MMT slogan.

Start thinking: no, we need to be resilient and capable of handling a range of different disturbances which could come our way. And on that basis you need to have your production local.

[00:22:47.310] – Grumbine

So within that space mitigating some of the travel carbon footprint expenses that clearly solves one problem. But where you had smokestacks to create basic amounts of goods and services in one country, now you’re building smokestacks across the globe and I don’t see any meaningful effort to green technology to make those things happen.

I am curious what decentralizing production does in terms of the carbon footprint and how developing local supply chains will in turn impact our ability to stave off climate crisis.

[00:23:30.090] – Keen

Yeah, if you look at just the shipping involved in international trade. It’s something at the order of 20%, I think, of our carbon production comes out of the entire mechanics of shipping goods around the planet, and we realize we’ve massively overshot the capacity to support our industrial sedentary civilization. So one way you can reduce that is by reducing international trade.

I think that’s what’s going to start happening, partly because you have the example of Cisco. You suddenly wait a year to get a piece you used to wait two weeks for because of the breakdown of the supply chain. The same thing will become even, I think, even more extreme when climate change forces us to drastically reduce our production levels.

If you don’t have the domestic production capability, you’re going to lose the possibility of those goods. And in some cases, we have to drastically reduce our consumption of a range of goods. Automobiles is an obvious instance of that. But in others, we want to continue – and food production is one of those. Clearly, you want to produce your food locally.

So, again, I think we’ve been very blase about the physical side of production, and that’s what I would like MMT to start looking at. And in that context, I think it might change the attitude about imports and exports.

[00:24:57.730] – Intermission

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[00:25:49.010] – Grumbine

Michael, in the Russia example, where in one fell swoop they get cut off from the SWIFT system and the US is beating their chest, “We’ve got Putin on the run.” It doesn’t look like Putin is on the run at all right now.

[00:26:02.900] – Hudson

I’m glad you’re bringing up the NATO war against countries resisting neoliberalism, because you use the word “green.” And the European Greens basically are advocating two fuels of the future: coal and cutting down the forests. Germany, by blocking Russia’s gas, they are essentially replacing Russian gas and oil with Polish and Ukrainian coal – and digging down the forest.

I’ve walked very often through German villages, and most houses have whole stacks of cut-down lumber that they essentially burn in their fireplaces for heat. You’re having an enormous deforestation and replacement of gas with coal. And the Green Parties are the advocates for the major polluters in the world, and they’re the advocates for global warming.

And that’s because they’re part of the Cold War attack on Russia. And they say it’s worth having global warming as long as we can fight against countries that resist neoliberalism and resist the American European takeover. So you want to realize the politics – that the Greens of Europe are not friends of the environment.

Now, to get back to your question about the isolating of Russia. Isolating Russia hasn’t isolated it at all. It’s driven Russia together with China, in the first instance, and then China and Russia together have joined with India, Iran, Syria, they’re now joining with Brazil and Argentina all to create an alternative economic order and social order and political order.

And the political order is basically based on the main distinction between the non-neoliberals and the neoliberals, and that is: who will control the money supply. And China is the prime example. Instead of private banking creating the credit to create loans basically for financial reasons, China will create credit to spend into the economy the way that MMTers hope to see credit created.

Namely, spend to hire labor, to make new means of production, hopefully in an environmental way, as opposed to the commercial banks that look at “how do we make money in the short term?” Well, you make money in the short term by cutting down the forest of the Amazon. You don’t look at global warming.

And already you’ve had the heads of American oil companies and investment firms say “what do we care about global warming ten years in the future? We care about the next three months’ earning statement, and the next year. Ten years from now, the sea levels go up. We can deal with it then.” So you’re dealing with two different economic philosophies and as the world divides into these two different economies, this is an important element.

And as Steve just pointed out, neoliberal economics doesn’t take into account the environment because that’s long term. Economists call that exogenous, meaning it’s outside our tunnel vision. And the question is whether you’re going to look at the world economy as the overall system interconnected, which is what Steve and I do, or whether you’re going to say we’re going to just cut the financial sector apart and only look at the corporate and financial sector of how to make money quickly.

That’s really the difference. So obviously Russia was not really troubled very much by being cut off – or even by being isolated. What America is doing is driving Russia together with all of the countries that have refused to condemn it. And America basically is creating an iron curtain, locking these countries – isolating them from Europe and the United States – going their own way, which I don’t think Russia and China are unhappy to see occurring.

[00:29:54.480] – Grumbine

I completely agree with that. The idea that the US thinks they are going to knock these giants down and they’ve just said we’re going to invest in our own country. Instead of being a cooperative society, we see this as a combative society. We decided we have to fight them and create cold wars to isolate them so we can catch up.

But you nailed it with the concept of the private short-term thinking that private collateral, banking, loans, filling short-term needs because we can’t see out as far as those folks because they aren’t living and dying the same capitalist way that we do things here in the United States. They have invested in the public purpose.

China has got the ability to do just about everything. Do you think it’s going to take us getting our proverbial asses handed to us by the rest of the world to wake up? Do you think we’ll ever wake up? Or this is just the way it will always be, at least until tsunamis take us out?

[00:30:56.870] – Hudson

Who is the we? Who’s going to wake up? When you say we, it’s as if you mean American citizens in the population. But we are not the government who makes the policy. We are not the Davos Group and the campaign contributors. Their “we” are the oil industry, the big agricultural monopolies, the other monopolies, and Wall Street. That’s the finance, insurance and real estate sector [FIRE].

And they are going to just continue doing what they want. And you’ve seen from the recent Supreme Court rulings in the United States that the government is not permitted to enforce any climate preservation rules. That has been ruled unconstitutional unless Congress can pass environmental law. And in order for Congress to pass a law, as opposed to just an executive branch joining the environment, you have to have 60 out of 100 votes.

American dual politics doesn’t permit either party to get 60 votes unless there’s a landslide. And the only party that has a prospect of getting 60% would be the Republicans. So basically, even if the people wake up, the government people and their campaign contributors are just going to continue to make money to live in the short term. That’s what differentiates neoliberalism and socialism.

[00:32:17.630] – Grumbine

Very well stated. To me, I think of this as war. Murder. I don’t think of this as some polite gentleman’s disagreement. I see this as wanton death and destruction, all in the name of profit. How do we stop this? Can we stop this? Congress is bought and paid for. Our government, our Supreme Court doesn’t represent the people, and the President has proven to be a feckless neoliberal as well.

I see nothing to feel any sense of hope, and I’m not sure that hope is a requirement. It seems like the only alternative we have is in the street, is to become ungovernable, is to get rid of a government that is no longer representative of the people.

[00:33:04.010] – Hudson

[laughs]  Well, Steve’s gone to Thailand and I’m dealing mainly with China. That’s how we’ve coped. [laughter] Neither of us are going to be President of America.

[00:33:15.690] – Keen

No. The American political system is almost designed to stop anything being done. I was involved in the Australian election recently, as you probably remember. And though my party did extremely badly and money still was obviously vitally necessary to get a political profile, even in countries with good electoral systems, Australia does have a good electoral system, and America has got the best electoral system money can buy, and that’s a disaster.

It’s hard to get away from money enabling parties to have political position to be seen in the media. And that’s actually a great reason for MMT: create money for publicly financed election campaigns rather than having it out of private pockets. But given that, you have an electoral system where you don’t actually vote for anybody, the electoral college piece of nonsense, which itself is crazy.

Every state has got a different system, which is crazy. You don’t have the central bureaucracy handling the voting system, which is crazy. And you have gerrymandering because the boundaries are decided by local political groups, which is crazy. So the extent to which America needs to reform its political structure to approximate a democracy is ridiculous. And that’s partly why money interests can so easily dominate what happens in the American political sphere. And right-wing religious ideology as well.

[00:34:43.950] – Grumbine

Absolutely. The Calvinistic bullshit in this country is over the top. But there’s a tone policing aspect to this. I think there are people out there who don’t understand that this election system that we have in the United States isn’t getting us what we want or need. They think they just need to phone bank harder, vote harder.

Fact is, in my 53 years, I have not seen any meaningful legislation passed. I do not consider the ACA meaningful legislation. I’ve seen a lot of bad legislation pass that hurts us. And this is not really intended to be an America-centric show, except that America seems to be the big bully. It’s creating a lot of the problems. It’s got its own citizens in hell and it’s trying to create hell on earth for the rest of the world.

I spend a lot of time trying to get this information out the door. It’s very important information, but it’s only important in the sense that it’s good to know. I don’t see any of it amounting to a movement, a passing of legislation. We can tell people that if we don’t consider the economy in the world as a superorganism and degrowth, we don’t have anybody thinking this way.

[00:36:00.090] – Keen

There is actually – I don’t know the name of it, but I do know that there’s a political group in America which is campaigning to have Australia’s electoral system adopted by America. Have it include an electoral commission that determines borders between one electorate and another, a single centralized system that counts the votes rather than the crazy range of stuff you have at the state level.

And controls on the size of electorates so they can be no more than 20% larger or smaller than a target – and they should be 10%. And then preferential voting so you don’t just vote for one candidate, like if you vote for the Greens in America, you guarantee the Republicans win the election because the Green votes are taken away from the Democrat.

So have preferential voting, which means you can actually put the party you prefer first and know that the party that’s your fallback will actually get the vote if your first party doesn’t get up. So all these sorts of reforms. I know that there are people who are campaigning about it because the frustration that you’re expressing is very widely felt in America. But of course, try getting that through a Republican-dominated Congress. It ain’t going to be easy.

[00:37:01.170] – Grumbine

No. It does leave you wondering if this is not just political theater. I talked to Warren the other day and Warren asked the question to me. He said, “you ask, are they doing a good job? And I answer back, well, for whom?” Somebody’s doing okay right now. It just isn’t the regular people in society. Somebody’s doing great, though. And I don’t see a path. As much as I want to, I see no path forward.

I don’t want to feel this way, but I don’t see a path forward. Michael, with your international perspective, I guess my question to you, given the fact that you’re focusing on China and you see the US through the lens that we’ve just discussed, do you see an ending to this that is positive for the world, that gets us to a successful conclusion, meaning we survive? Do you see any hope whatsoever in changing that narrative? And if not, what’s next?

[00:38:01.530] – Hudson

There’s no path forward in the way that we’ve been talking about because the suggestions that Steve makes cannot be legislated by Congress. They are limited by the Constitution. And in order to do what Steve recommends – very good ideas – you would need a new Constitutional Convention. The right-wing, the polluters, the monopolists, the bankers, have been preparing for a Constitutional Convention for about 30 years, and it wouldn’t be very nice.

[00:38:32.370] – Grumbine

Yep.

[00:38:32.370] – Hudson

Our Constitution in America was written for the slave owners to permit any states to block any federal power because they worried that the federal power might try to free the slaves. Well, now that element of the Constitution, of state’s rights, is enabling the oil industry, the polluting industry, the banks, the credit card companies to essentially prevent any solution along any lines except those of the ultra right-wing.

But the problem goes beyond America and beyond Europe. Western civilization took a wrong track about 3000 years ago. The Near East and almost all of Asia had a tradition of canceling the debts when they threatened the economy. In Japan, you had revolutions, you had the Near East rulers canceling the debts. That’s what my books are about.

And you had essentially the jubilee years throughout the Near East. And this promotion of economic growth and in effect, prosperity, was always run by a central ruler. There had to be a ruler, the job of divine kingship or undivine kingship, throughout the Near East, Asia, all the way to China. And India. All of these cultures sought to prevent a commercial class and a financial class from emerging and taking over.

And the merchant class was realized as playing an important role, but it was not allowed to dominate society. But around the 8th century BC, when Syrian traders began to move into the Aegean and Mediterranean to Greece and Italy. There weren’t any kings. The west didn’t have kings. They had local chieftains who were a Mafia-type society.

And the result is that ever since Greece and Rome, you had a completely different set of laws and legal philosophy than what you had in the Near East and Asia. You had pro-creditor laws making what is called the security of contracts and the irreversibility of land being forfeited to creditors. And the result is you had creditors oligarchy evolving.

So when President Biden said the current war of NATO against Russia and China is a war of democracy against autocracy, what it means by democracy are Western civilization’s oligarchies. There haven’t been any democracies, really – maybe very briefly in Athens – but the Western cultures are all oligarchies. What he calls an autocracy is a government strong enough to prevent a financial oligarchy from developing and taking over the land and taking over politics and making its own laws for itself.

And it’s a civilizational difference. And both Steve and I have spent a lot of our time talking about how the Western economies cannot evolve further without a debt write-down, without writing down the debts that are of the 99%, they’re owed to the 1%, the oligarchy that’s controlling all of Western politics. Asia has a way to go a different way.

China doesn’t have a financial oligarchy because it treats money and credit as a public utility through the Bank of China. And so the Bank of China, as we said, makes loans to actually develop the economy. And that’s what Russia says it’s going to begin doing, not to create a financial class to make money at the expense of the 99%. So we’re dealing with a civilizational problem.

And the question is, which form of civilization? Can you rescue Western civilization from the wrong track? Well, only by creating an alternative on the right track and leaving Western civilization and say, well, you’re missing out on the development. Do you want to continue in poverty or are you going to have a revolution?

[00:42:31.650] – Grumbine

You’ve seen yellow and blue profile pictures for everybody totally sympathetic to Ukraine. And our government saying “we are not going to abandon them no matter what.” Biden has signaled that we have unlimited money to give to Ukraine, and he can’t possibly write down $2 trillion in student debt. This weird split dichotomy of truth and lies passes right by the average person.

With what you just stated, which side is going to win? Sadly, the bad guys seem to always win. I rarely see the good guys win. Who is “the good guys”? In full disclosure, I’m a socialist. We don’t even have a left party in the United States. There’s no appetite for that kind of thing in the United States. And those of us that want it are the minority. How do you envision this playing out?

[00:43:26.670] – Hudson

I thought I just said it: a different civilization going its own way.

[00:43:31.740] – Grumbine

Well, what you said was the question of good and evil, basically, which one is going to win? I’m asking you, how do you see it playing out? Because the US can’t continue doing what it’s doing and grow. You need the debt jubilee. We’ve chosen not to. Asia has those systems built and they have choices. So the question I’m proposing, given that, do you see any chance of the US coming to grips with itself? Or do you see this being a one-way trip to destitution?

[00:44:03.570] – Hudson

The latter.

[00:44:05.010] – Grumbine

Fair enough.

[00:44:05.830] – Hudson

That’s all I can say. There is no sign at all of a change. The fact that Steve and I can be on your show – we are not published in the major magazines anymore. We’re not on the major network shows. What you call the bad guys always call themselves the good guys. What you call evil calls itself good. So the question is, what kind of good guys you’re going to have?

The good guys that want to blow up the world and impoverish society, which is what neoliberalism says are the good guys or the good guys for the 99%, which America says are autocracies that we have to fight?

[00:44:41.830] – Grumbine

Yeah.

[00:44:42.670] – Keen

I think I might put a bit of a perspective. People often say, “what’s your alternative?” And what they really mean is “what’s your alternative that I’m going to like?” And I think there is an alternative, but as people feel, “I don’t like it” then other people won’t like it as well. And that is that given the scale of the environmental crisis we’re facing and the fact that it’s coming far sooner than we’re being led to believe, because courtesy of believing their classical economists on it.

When it hits, the countries that are most likely to survive will hold together are those that the West calls authoritarian. And the defining feature of those cultures when you’ve actually been inside them, is that, yes, there is a very strong state and yes, it tends to get its own way and people do what they’re told to some extent, but it’s because at the same time they know they’ve benefited from that state.

So back in China, when you talk to people in China, they will be critical of the Communist Party and say at the same time, the industrialization since then has been incredible and their lives have improved radically over that period of time. I know people who were literally in Mao suits in 1969 who are having a very comfortable retirement when they faced far worst terms back under the old strictly communist regime.

But what you have with a country like that is if China decides it has to radically ramp up renewable energy resources, also install nuclear if necessary, it’s going to do it and not face the opposition the German Greens give to new nuclear power stations, for example. So the capacity to have a top down society is more likely to be then you’re going to survive the crisis that comes forward from climate change.

I can’t see countries that call themselves democracies succeeding in that situation because they will not be able to agree on the level of cutback that’s necessary and who it gets imposed upon. We’re a more centralized society. We’re more successful at doing that and more likely to hold together during the downturn the climate will cause.

[00:46:40.110] – Hudson

You need a strong enough government to check the power of an oligarchy and to prevent a creditor landowner oligarchy from developing. And libertarians, while pretending to be for liberty, they’re for a centrally planned economy, but a centrally planned economy by the oligarchy, by the financial sector, and by the real estate owners. So every economy is planned. And the question is, who’s going to do the planning?

[00:47:05.190] – Grumbine

Yes. And with that in mind, I want to read to you some stuff that came out of this NATO 2022 Strategic Concept – just so that people understand exactly how bad it is. Document defines Russia as the most significant and direct threat to the allies’ security while addressing China for the first time and the challenges that Beijing poses towards allies’ security interests and values.

Documents also state that climate change is a defining challenge of our time. Strategic Concept is updated roughly every decade as NATO’s second most important document. It reaffirms the values of the alliance, provides a collective assessment of security challenges, and guides the alliance’s political and military activities. Previous version was adopted at the NATO Lisbon Summit in 2010.

Point I’m making is they’re bringing more countries in and now setting up China and Russia as the bad guys. This has been going on for a long time, I guess Reaganism with the Cold War. And you brought it up, I think it’s worth mentioning, towards the end of the Chinese Revolution and the US efforts back then to do these same things to China then.

All these institutions, World Bank, IMF, the Peace Corps, all these different NGOs, these were brought out as a direct counter to Russia’s communism and a fear that communism would spread to the global South to prevent them from getting in bed with the Russians. But our country, the United States in this case, has been instrumental in setting up these shadow organizations to prevent any kind of socialism or people-led initiatives around the world.

And it seems like this is going to become the next war. If it’s not going to be just another Cold War, it’s definitely going to be some war because they are lining up the Axis and allies already. I guess. Take us out on this note.

[00:49:13.290] – Keen

I think I take it over a different angle and say that the global politics we’ve had over the last 80-100 years, actually, since the dominance of America, which we pretty much say from the end of the Second World War, has been completely oblivious to the impact we’re having on the planet. The biosphere itself. And the biggest political player on the planet is the biosphere.

And that’s going to start determining what the wars are in future. And I don’t think any country in the world is prepared for that battle. China has maybe probably the most effective capacity to respond to the challenges that are coming this way, but there’s no way America or Russia or anywhere in Europe are aware of the threats they face.

This is a warfare against an implacable foe which we’ve created by destroying the sustainability of the biosphere, by expanding human industry to three to four times the scale that the planet could actually support. That’s the real war that is coming our way.

[00:50:08.600] – Hudson

And Steve, you mentioned how global shipping and trade adds to the global warming. Obviously, the military spending is a huge, huge factor. So the Americans and the Green Parties of Europe are on the wrong side of history. They are doing just the opposite of preserving de-development. They are the advocates of more and more global warming. So literally, you have a group, a bloc, wanting to destroy the environment and a bloc trying to protect itself from the Western destruction.

[00:50:40.830] – Grumbine

Yeah, very scary. And then we’ve got a lot of folks that think that they’re going to appeal to their greater sense of reason to get them to suddenly stop all this, vote their way to a Green New Deal, and it’s all just going to go away. Gentlemen, thank you so much for this time. I really appreciate it. It’s rare to have two such phenomenal guests at once, so I really do appreciate this immensely. Michael, tell us where we can find more about your work.

[00:51:07.230] – Hudson

Well, on my website, michael-hudson.com, and on my Patreon account. Steve also has a Patreon account. He got me onto Patreon. And the books that I describe what we’re talking about are available on Amazon. The Destiny of Civilization and Super Imperialism.

[00:51:27.450] – Grumbine

Very good. Steve, I know we got you on Patreon, but tell us a little bit about your books and where we can find more of your work.

[00:51:33.710] – Keen

Okay, well, again, my main recent book is The New Economics: A Manifesto, and that’s published by Polity press. So you can get it through Polity or you can get it through Amazon. There’s more than one way to get a hold of it. And the main thing I’m doing is developing the software package to enable us to think about the economy the way we should think about it, which is dynamically, non equilibrium, monetary and so on.

And that’s Minsky, which people can find at SourceForge, the open source software package site, SourceForge. Search for SourceForge and Minsky together and you’ll find it. But those are my main two things. I’ve also opened up a substack account recently – profstevekeen.substack.com – mainly because Patreon loses a lot of customers by stuffing up their credit cards. So Patreon, Substack and Minsky.

[00:52:18.030] – Grumbine

Very good. All right. And with that, my name is Steve Grumbine. My special guests, Steve Keen and Michael Hudson. This is the podcast Macro N Cheese. We’re out of here.

Russia and China haven’t even started to ratchet up the pain dial

July 13, 2022

by Pepe Escobar and posted with the author’s permission

The Suicide Spectacular Summer Show, currently on screen across Europe, proceeds in full regalia, much to the astonishment of virtually the whole Global South: a trashy, woke Gotterdammerung remake, with Wagnerian grandeur replaced by twerking.

Decadent Roman Emperors at least exhibited some degree of pathos. Here we’re just faced by a toxic mix of hubris, abhorrent mediocrity, delusion, crude ideological sheep-think and outright irrationality wallowing in white man’s burden racist/supremacist slush – all symptoms of a profound sickness of the soul.

To call it the Biden-Leyen-Blinken West or so would be too reductionist: after all these are puny politico/functionaries merely parroting orders. This is a historical process: physical, psychic and moral cognitive degeneration embedded in NATOstan’s manifest desperation in trying to contain Eurasia, allowing occasional tragicomic sketches such as a NATO summit proclaiming Woke War against virtually the whole non-West.

So when President Putin addresses the collective West in front of Duma leaders and heads of political parties, it does feel like a comet striking an inert planet. It’s not even a case of “lost in translation”. “They” simply aren’t equipped to get it.

The “You Ain’t Seen Nothin’ Yet” part was at least formulated to be understood even by simpletons:

“Today we hear that they want to defeat us on the battlefield, well, what can I say, let them try. We have heard many times that the West wants to fight us to the last Ukrainian – this is a tragedy for the Ukrainian people. But it looks like it’s all coming to this. But everyone should know that, by and large, we haven’t really started anything yet.”

Fact. On Operation Z, Russia is using a fraction of its military potential, resources and state of the art weapons.

Then we come to the most probable path ahead in the war theater:

“We do not refuse peace negotiations, but those who refuse should know that the longer it drags, the more difficult it will be for them to negotiate with us.”

As in the pain dial will be ratcheted up, slowly but surely, on all fronts.

Yet the meat of the matter had been delivered earlier in the speech: “ratcheting up the pain dial” applies in fact to dismantling the whole “rules-based international order” edifice. The geopolitical world has changed. Forever.

Here’s the arguably key passage:

“They should have understood that they have already lost from the very beginning of our special military operation, because its beginning means the beginning of a radical breakdown of the World Order in the American way. This is the beginning of the transition from liberal-globalist American egocentrism to a truly multipolar world – a world based not on selfish rules invented by someone for themselves, behind which there is nothing but the desire for hegemony, not on hypocritical double-standards, but on international law, on the true sovereignty of peoples and civilizations, on their will to live their historical destiny, their values and traditions and build cooperation on the basis of democracy, justice and equality. And we must understand that this process can no longer be stopped.”

Meet the trifecta

A case can be made that Putin and Russia’s Security Council are implementing a tactical trifecta that has reduced the collective West to an amorphous bunch of bio headless chickens.

The trifecta mixes the promise of negotiations – but only when considering Russia’s steady advances on the ground in Novorossiya; the fact that Russia’s global “isolation” has been proved in practice to be nonsense; and tweaking the most visible pain dial of them all: Europe’s dependence on Russian energy.

The main reason for the graphic, thundering failure of the G20 Foreign Ministers summit in Bali is that the G7 – or NATOstan plus American colony Japan – could not force the BRICS plus major Global South players to isolate, sanction and/or demonize Russia.

On the contrary: multiple interpolations outside of the G20 spell out even more Eurasia-wide integration. Here are a few examples.

The first transit of Russian products to India via the International North-South Transportation Corridor (INSTC) is now in effect, crisscrossing Eurasia from Mumbai to the Baltic via Iranian ports (Chabahar or Bandar Abbas), the Caspian Sea, and Southern and Central Russia. Crucially, the route is shorter and cheaper than going through the Suez Canal.

In parallel, the head of the Iranian Central Bank, Ali Salehabadi, confirmed that a memorandum of interbank cooperation was signed between Tehran and Moscow.

That means a viable alternative to SWIFT, and a direct consequence of Iran’s application to become a full BRICS member, announced at the recent summit in Beijing. The BRICS, since 2014, when the New Development Bank (NDB) was founded, have been busy building their own financial infrastructure, including the near future creation of a single reserve currency. As part of the process, the harmonization of Russian and Iranian banking systems is inevitable.

Iran is also about to become a full member of the Shanghai Cooperation Organization (SCO) at the upcoming summit in Samarkand in September.

In parallel, Russia and Kazakhstan are solidifying their strategic partnership: Kazakhstan is a key member of BRI, EAEU and SCO.

India gets even closer to Russia across the whole spectrum of trade – including energy.

And next Tuesday, Tehran will be the stage for a crucial face-to-face meeting between Putin and Erdogan.

Isolation? Really?

On the energy front, it’s only summer, but demented paranoia is already raging across multiple EU latitudes, especially Germany. Comic relief is provided by the fact that Gazprom can always point out to Berlin that eventual supplying problems on Nord Stream 1 – after the cliffhanger return of that notorious repaired turbine from Canada – can always be solved by implementing Nord Stream 2.

As the whole European Suicide Spectacular Summer Show is nothing but a tawdry self-inflicted torture ordered by His Master’s Voice, the only serious question is which pain dial level will force Berlin to actually sit down and negotiate on behalf of legitimate German industrial and social interests.

Rough and tumble will be the norm. Foreign Minister Lavrov summed it all up when commenting on the Declining Collective West Ministers striking poses like infantile brats in Bali to avoid being seen with him: that was up to “their understanding of the protocols and politeness.”

That’s diplo-talk for “bunch of jerks”. Or worse: cultural barbarians, as they were even unable to respect the hyper-polite Indonesian hosts, who abhor confrontation.

Lavrov preferred to extol the “joint strategic and constructive” Russian-Chinese work when faced with a very aggressive West. And that brings us to the prime masterpiece of shadowplay in Bali – complete with several layers of geopolitical fog.

Chinese media, always flirting with the opaque, tried to put its bravest face ever depicting the over 5-hour meeting between Foreign Minister Wang Yi and Secretary Blinken as “constructive”.

What’s fascinating here is that the Chinese ended up letting something crucial out of the bag to slip into the final draft of their report – obviously approved by the powers that be.

Lu Xiang of the Chinese Academy of Social Sciences went through previous readouts – especially of “Yoda” Yang Jiechi routinely turning Jake Sullivan into roasted duck – and stressed that this time Wang’s “warnings” to the Americans were “the sternest one in wording”.

That’s diplo-code for “You Better Watch Out”: Wang telling Little Blinkie, “just look at what the Russians did when they lost their patience with your antics.”

The expression ”dead end” was recurrent during the Wang-Blinken meeting. So in the end the Global Times had to tell it like it really is:  “The two sides are close to a showdown.”

“Showdown” is what End of Days fanatic and Tony Soprano wannabe Mike Pompeo is fervently preaching from his hate pulpit, while the combo behind the senile “leader of the free world” who literally reads teleprompters actively work for the crashing of the EU – in more ways than one.

The combo in power in Washington actually “supports” the unification of Britain, Poland, Ukraine and The Three Baltic Midgets as a separate alliance from NATO/EU – aiming at “strengthening the defense potential.” That’s the official position of US Ambassador to NATO Julian Smith.

So the real imperial aim is to split the already shattering EU into mini-union pieces, all of them quite fragile and evidently more “manageable”, as Brussels Eurocrats, blinded by boundless mediocrity, obviously can’t see it coming.

What the Global South is buying

Putin always makes it very clear that the decision to launch Operation Z – as a sort of pre-emptive “combined arms and police operation”, as defined by Andrei Martyanov – was carefully calculated, considering an array of material and socio-psychological vectors.

Anglo-American strategy, for its part, lasers on a single obsession: damn any possible reframing of the current “rules-based international order”. No holds are barred to ensure the perpetuity of this order. This is in fact Totalen Krieg – featuring several hybrid layers, and quite worrying, with only a few seconds to midnight.

And there’s the rub. Desolation Row is fast becoming Desperation Row, as the whole Russophobic matrix is shown to be naked, devoid of any extra ideological – and even financial – firepower to “win”, apart from shipping a collection of HIMARS to a black hole.

Geopolitically and geoeconomically, Russia and China are in the process of eating NATOstan alive – in more ways than one. Here, for instance, is a synthetic road map of how Beijing will address the next stage of high-quality development via capital-driven industrial upgrading, focused on optimization of supply chains, import substitution of hard technologies, and “invisible champions” of industry.

If the collective West is blinded by Russophobia, the governing success of the Chinese Communist Party – which in a matter of a few decades improved the lives of more people than anyone, anytime in History – drives it completely nuts.

All along the Russia-China watchtower, it’s been not such a long time coming. BRI was launched by Xi Jinping in 2013. After Maidan in 2014, Putin launched the Eurasia Economic Union (EAEU) in 2015. Crucially, in May 2015, a Russia-China joint statement sealed the cooperation between BRI and EAEU, with a significant role assigned to the SCO.

Closer integration advanced via the St. Petersburg forum in 2016 and the BRI forum in 2017. The overall target: to create a new order in Asia, and across Eurasia, according to international law while maintaining the individual development strategies of each concerned country and respecting their national sovereignty.

That, in essence, is what most of the Global South is buying. It’s as if there’s a cross-border instinctual understanding that Russia-China, against serious odds and facing serious challenges, proceeding by trial and error, are at the vanguard of the Shock of the New, while the collective West, naked, dazed and confused, their masses completely zombified, is sucked into the maelstrom of psychological, moral and material disintegration.

No question the pain dial will be ratcheted up, in more ways than one.

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