In Moscow, Xi and Putin bury Pax Americana

March 22 2023

Photo Credit: The Cradle

In Moscow this week, the Chinese and Russian leaders revealed their joint commitment to redesign the global order, an undertaking that has ‘not been seen in 100 years.’

By Pepe Escobar

What has just taken place in Moscow is nothing less than a new Yalta, which, incidentally, is in Crimea. But unlike the momentous meeting of US President Franklin Roosevelt, Soviet Leader Joseph Stalin, and British Prime Minister Winston Churchill in USSR-run Crimea in 1945, this is the first time in arguably five centuries that no political leader from the west is setting the global agenda.

It’s Chinese President Xi Jinping and Russian President Vladimir Putin that are now running the multilateral, multipolar show. Western exceptionalists may deploy their crybaby routines as much as they want: nothing will change the spectacular optics, and the underlying substance of this developing world order, especially for the Global South.

What Xi and Putin are setting out to do was explained in detail before their summit, in two Op-Eds penned by the presidents themselves. Like a highly-synchronized Russian ballet, Putin’s vision was laid out in the People’s Daily in China, focusing on a “future-bound partnership,” while Xi’s was published in the Russian Gazette and the RIA Novosti website, focusing on a new chapter in cooperation and common development.

Right from the start of the summit, the speeches by both Xi and Putin drove the NATO crowd into a hysterical frenzy of anger and envy: Russian Foreign Ministry Spokeswoman Maria Zakharova perfectly captured the mood when she remarked that the west was “foaming at the mouth.”

The front page of the Russian Gazette on Monday was iconic: Putin touring Nazi-free Mariupol, chatting with residents, side by side with Xi’s Op-Ed. That was, in a nutshell, Moscow’s terse response to Washington’s MQ-9 Reaper stunt and the International Criminal Court (ICC) kangaroo court shenanigans. “Foam at the mouth” as much as you like; NATO is in the process of being thoroughly humiliated in Ukraine.

During their first “informal” meeting, Xi and Putin talked for no less than four and a half hours. At the end, Putin personally escorted Xi to his limo. This conversation was the real deal: mapping out the lineaments of multipolarity – which starts with a solution for Ukraine.

Predictably, there were very few leaks from the sherpas, but there was quite a significant one on their “in-depth exchange” on Ukraine. Putin politely stressed he respects China’s position – expressed in Beijing’s 12-point conflict resolution plan, which has been completely rejected by Washington. But the Russian position remains ironclad: demilitarization, Ukrainian neutrality, and enshrining the new facts on the ground.

In parallel, the Russian Foreign Ministry completely ruled out a role for the US, UK, France, and Germany in future Ukraine negotiations: they are not considered neutral mediators.

A multipolar patchwork quilt

The next day was all about business: everything from energy and  “military-technical” cooperation to improving the efficacy of trade and economic corridors running through Eurasia.

Russia already ranks first as a natural gas supplier to China – surpassing Turkmenistan and Qatar – most of it via the 3,000 km Power of Siberia pipeline that runs from Siberia to China’s northeastern Heilongjiang province, launched in December 2019. Negotiations on the Power of Siberia II pipeline via Mongolia are advancing fast.

Sino-Russian cooperation in high-tech will go through the roof: 79 projects at over $165 billion. Everything from liquified natural gas (LNG) to aircraft construction, machine tool construction, space research, agro-industry, and upgraded economic corridors.

The Chinese president explicitly said he wants to link the New Silk Road projects to the Eurasia Economic Union (EAEU). This BRI-EAEU interpolation is a natural evolution. China has already signed an economic cooperation deal with the EAEU. Russian macroeconomic uber-strategist Sergey Glazyev’s ideas are finally bearing fruit.

And last but not least, there will be a new drive towards mutual settlements in national currencies – and between Asia and Africa, and Latin America. For all practical purposes, Putin endorsed the role of the Chinese yuan as the new trade currency of choice while the complex discussions on a new reserve currency backed by gold and/or commodities proceed.

This joint economic/business offensive ties in with the concerted Russia-China diplomatic offensive to remake vast swathes of West Asia and Africa.

Chinese diplomacy works like the matryoshka (Russian stacking dolls) in terms of delivering subtle messages. It’s far from coincidental that Xi’s trip to Moscow exactly coincides with the 20^th anniversary of American ‘Shock and Awe’ and the illegal invasion, occupation, and destruction of Iraq.

In parallel, over 40 delegations from Africa arrived in Moscow a day before Xi to take part in a “Russia-Africa in the Multipolar World” parliamentary conference – a run-up to the second Russia-Africa summit next July.

The area surrounding the Duma looked just like the old Non-Aligned Movement (NAM) days when most of Africa kept very close anti-imperialist relations with the USSR.

Putin chose this exact moment to write off more than $20 billion in African debt.

In West Asia, Russia-China are acting totally in synch. West Asia. The Saudi-Iran rapprochement was actually jump-started by Russia in Baghdad and Oman: it was these negotiations that led to the signing of the deal in Beijing. Moscow is also coordinating the Syria-Turkiye rapprochement discussions. Russian diplomacy with Iran – now under strategic partnership status – is kept on a separate track.

Diplomatic sources confirm that Chinese intelligence, via its own investigations, is now fully assured of Putin’s vast popularity across Russia, and even within the country’s political elites. That means conspiracies of the regime-change variety are out of the question. This was fundamental for Xi and the Zhongnanhai’s (China’s central HQ for party and state officials) decision to “bet” on Putin as a trusted partner in the coming years, considering he may run and win the next presidential elections. China is always about continuity.

So the Xi-Putin summit definitively sealed China-Russia as comprehensive strategic partners for the long haul, committed to developing serious geopolitical and geoeconomic competition with declining western hegemons.

This is the new world born in Moscow this week. Putin previously defined it as a new anti-colonial policy. It’s now laid out as a multipolar patchwork quilt. There’s no turning back on the demolition of the remnants of Pax Americana.

‘Changes that haven’t happened in 100 years’

In Before European Hegemony: The World System A.D. 1250-1350, Janet Abu-Lughod built a carefully constructed narrative showing the prevailing multipolar order when the West “lagged behind the ‘Orient.’” Later, the West only “pulled ahead because the ‘Orient’ was temporarily in disarray.”

We may be witnessing a similarly historic shift in the making, trespassed by a revival of Confucianism (respect for authority, emphasis on social harmony), the equilibrium inherent to the Tao, and the spiritual power of Eastern Orthodoxy. This is, indeed, a civilizational fight.

Moscow, finally welcoming the first sunny days of Spring, provided this week a larger-than-life illustration of “weeks where decades happen” compared to “decades where nothing happens.”

The two presidents bid farewell in a poignant manner.

Xi: “Now, there are changes that haven’t happened in 100 years. When we are together, we drive these changes.”

Putin: “I agree.”

Xi: “Take care, dear friend.”

Putin: “Have a safe trip.”

Here’s to a new day dawning, from the lands of the Rising Sun to the Eurasian steppes.

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

Russia and China: a summit of important international agreements and messages

The Valdai meeting: Where West Asia meets multipolarity

March 04 2023

Photo Credit: The Cradle

At Russia’s Valdai Club meeting – the east’s answer to Davos – intellectuals and influencers gathered to frame West Asia’s current and future developments.

Pepe Escobar is a columnist at The Cradle, editor-at-large at Asia Times and an independent geopolitical analyst focused on Eurasia. Since the mid-1980s he has lived and worked as a foreign correspondent in London, Paris, Milan, Los Angeles, Singapore and Bangkok. He is the author of countless books; his latest one is Raging Twenties.

By Pepe Escobar

The 12^th “Middle East Conference” at the Valdai Club in Moscow offered a more than welcome cornucopia of views on interconnected troubles and tribulations affecting the region.

But first, an important word on terminology – as only one of Valdai’s guests took the trouble to stress. This is not the “Middle East” – a reductionist, Orientalist notion devised by old colonials: at The Cradle we emphasize the region must be correctly described as West Asia.

Some of the region’s trials and tribulations have been mapped by the official Valdai report, The Middle East and The Future of Polycentric World.  But the intellectual and political clout of those in attendance can provide valuable anecdotal insights too. Here are a few of the major strands participants highlighted on regional developments, current and future:

Russian Deputy Foreign Minister Mikhail Bogdanov set the stage by stressing that Kremlin policy encourages the formation of an “inclusive regional security system.” That’s exactly what the Americans refused to discuss with the Russians in December 2021, then applied to Europe and the post-Soviet space. The result was a proxy war.

Kayhan Barzegar of Islamic Azad University in Iran qualified the two major strategic developments affecting West Asia: a possible US retreat and a message to regional allies: “You cannot count on our security guarantees.”

Every vector – from rivalry in the South Caucasus to the Israeli normalization with the Persian Gulf – is subordinated to this logic, notes Barzegar, with quite a few Arab actors finally understanding that there now exists a margin of maneuver to choose between the western or the non-western bloc.

Barzegar does not identify Iran-Russia ties as a strategic alliance, but rather a geopolitical, economic bloc based on technology and regional supply chains – a “new algorithm in politics” – ranging from weapons deals to nuclear and energy cooperation, driven by Moscow’s revived southern and eastward orientations. And as far as Iran-western relations go, Barzegar still believes the Joint Comprehensive Plan of Action (JCPOA), or Iran nuclear deal, is not dead. A least not yet.

‘Nobody knows what these rules are’

Egyptian Ramzy Ramzy, until 2019 the UN Deputy Special Envoy for Syria, considers the reactivation of relations between Egypt, Saudi Arabia, and the UAE with Syria as the most important realignment underway in the region. Not to mention prospects for a Damascus-Ankara reconciliation. “Why is this happening? Because of the regional security system’s dissatisfaction with the present,” Ramzy explains.

Yet even if the US may be drifting away, “neither Russia nor China are willing to take up a leadership role,” he says. At the same time, Syria “cannot be allowed to fall prey to outside interventions. The earthquake at least accelerated these rapprochements.”

Bouthaina Shaaban, a special advisor to Syrian President Bashar al-Assad, is a remarkable woman, fiery and candid. Her presence at Valdai was nothing short of electric. She stressed how “since the US war in Vietnam, we lost what we witnessed as free media. The free press has died.” At the same time “the colonial west changed its methods,” subcontracting wars and relying on local fifth columnists.

Shaaban volunteered the best short definition anywhere of the “rules-based international order”: “Nobody knows what these rules are, and what this order is.”

She re-emphasized that in this post-globalization period that is ushering in regional blocs, the usual western meddlers prefer to use non-state actors – as in Syria and Iran – “mandating locals to do what the US would like to do.”

A crucial example is the US al-Tanf military base that occupies sovereign Syrian territory on two critical borders. Shaaban calls the establishment of this base as “strategic, for the US to prevent regional cooperation, at the Iraq, Jordan, and Syria crossroads.” Washington knows full well what it is doing: unhampered trade and transportation at the Syria-Iraq border is a major lifeline for the Syrian economy.

Reminding everyone once again that “all political issues are connected to Palestine,” Shaaban also offered a healthy dose of gloomy realism: “The eastern bloc has not been able to match the western narrative.”

A ‘double-layered proxy war’

Cagri Erhan, rector of Altinbas University in Turkey, offered a quite handy definition of a Hegemon: the one who controls the lingua franca, the currency, the legal setting, and the trade routes.

Erhan qualifies the current western hegemonic state of play as “double-layered proxy war” against, of course, Russia and China. The Russians have been defined by the US as an “open enemy” – a major threat. And when it comes to West Asia, proxy war still rules: “So the US is not retreating,” says Erhan. Washington will always consider using the area “strategically against emerging powers.”

Then what about the foreign policy priorities of key West Asian and North African actors?

Algerian political journalist Akram Kharief, editor of the online MenaDefense, insists Russia should get closer to Algeria, “which is still in the French sphere of influence,” and be wary of how the Americans are trying to portray Moscow as “a new imperial threat to Africa.”

Professor Hasan Unal of Maltepe University in Turkiye made it quite clear how Ankara finally “got rid of its Middle East [West Asian] entanglements,” when it was previously “turning against everybody.”

Mid-sized powers such as Turkiye, Iran, and Saudi Arabia are now stepping to the forefront of the region’s political stage. Unal notes how “Turkiye and the US don’t see eye to eye on any issue important to Ankara.” Which certainly explains the strengthening of Turkish-Russian ties – and their mutual interest in introducing “multi-faceted solutions” to the region’s problems.

For one, Russia is actively mediating Turkiye-Syria rapprochement. Unal confirmed that the Syrian and Turkish foreign ministers will soon meet in person – in Moscow – which will represent the highest-ranking direct engagement between the two nations since the onset of the Syrian war. And that will pave the way for a tripartite summit between Assad, Russian President Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan.

Note that the big regional reconciliations are being held – once again – either in, or with the participation of Moscow, which can rightfully be described as the capital of the 21st century multipolar world.

When it comes to Cyprus, Unal notes how “Russia would not be interested in a unified state that would be EU and NATO territory.” So it’s time for “creative ideas: as Turkey is changing its Syria policy, Russia should change its Cyprus policy.”

Dr. Gong Jiong, from the Israeli campus of China’s University of International Business and Economics, came up with a catchy neologism: the “coalition of the unwilling” – describing how “almost the whole Global South is not supporting sanctions on Russia,” and certainly none of the players in West Asia.

Gong noted that as much as China-Russia trade is rising fast – partly as a direct consequence of western sanctions – the Americans would have to think twice about China-hit sanctions. Russia-China trade stands at $200 billion a year, after all, while US-China trade is a whopping $700 billion per annum.

The pressure on the “neutrality camp” won’t relent anyway. What is needed by the world’s “silent majority,” as Gong defines it, is “an alliance.” He describes the 12-point Chinese peace plan for Ukraine as “a set of principles” – Beijing’s base for serious negotiations: “This is the first step.”

There will be no new Yalta

What the Valdai debates made crystal clear, once again, is how Russia is the only actor capable of approaching every player across West Asia, and be listened to carefully and respectfully.

It was left to Anwar Abdul-Hadi, director of the political department of the Palestine Liberation Organization (PLO) and the latter’s official envoy to Damascus, to arguably sum up what led to the current global geopolitical predicament: “A new Yalta or a new world war? They [the west] chose war.”

And still, as new geopolitical and geoeconomic fault lines keep emerging, it is as though West Asia is anticipating something “big” coming ahead. That feeling was palpable in the air at Valdai.

To paraphrase Yeats, and updating him to the young, turbulent 21^st century, “what rough beast, its hour come out at last, slouches towards the cradle [of civilization] to be born?

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

In Response to Opportunistic Critics: Where I Actually Stand on the Russia-Ukraine War

February 11, 2023

South Africa’s former Minister for Intelligence Services Ronnie Kasrils. (Photo: via Kasrils FB profile)

– Ronnie Kasrils, veteran of the anti-apartheid struggle, and South Africa’s former Minister for Intelligence Services, activist and author. He contributed this piece to The Palestine Chronicle

By Ronnie Kasrils

The recent hatchet job by Greg Mills and Ray Hartley in the Daily Maverick shows they believe it is their hallowed duty to strike down any voice daring to question the Western crusade against the evil Russian Empire.

Debate should always be encouraged, but the search for historic truth and a credible understanding of the facts is ill-served by a descent into a childlike morality tale of good versus evil.

In fact, Mills and Hartley, along with the rest of the increasingly shrill and at times hysterical pro-Western lobby in our media, should learn something from the much more sophisticated contributions that have been developed in the West in response to the USA-NATO belligerence, the crossing of bright red lines regarding Russia and China’s security, and the possibility of dire consequences. Learned American academics such as John Mearsheimer, Edward Curtin, John Bellamy Foster, and military intelligence specialists such as Scott Ritter and Jacques Baud, to name just a few prominent Western thinkers, have produced excellent analyses.

Contrary to what Mills and Hartley infer by twisting my words, I am by no means an uncritical fan of Putin or capitalist Russia. Of course, it is true that a strong legacy exists concerning the support the ANC and other fraternal liberation movements received from the former Soviet Union, but it is far more than that which inclines much of the Global South, to understand Russia’s security needs, and sustains its anathema for USA-NATO imperialist domination.

Indeed, the South African position on the conflict is hardly an outlier in the Global South. Brazil’s Luis Inazio Lula da Silva, for instance, has taken a similar position.

My article in News24 focused on the historical connection between the liberation struggle in South Africa and the Soviet Union because the publication specifically asked me to comment from my perspective as an Umkhonto weSizwe cadre who underwent military training there in 1964 – and in Odessa no less. I learned about Russia and the Soviet Union’s immense sacrifice during World War 2, and the people’s opposition to fascism in all its forms, including the Ukrainian Nazi collaborators, and the Soviet people’s deeply-rooted commitment to world peace.

I also referred to the bellicose emergence of neo-Nazis in present Ukraine. Mills and Hartley have the temerity to cynically spin this factual observation and declare themselves “sickened” by my alleged inference that present-day Ukraine is “somehow a Nazi state”. I said no such thing. I wrote: “Little wonder that President Putin has stated that part of Russia’s objective is the de-Nazification of the Ukraine.”

The emergence of neo-Nazi forces in Ukraine became globally visible during the Maidan Square protests in Kyiv, which turned into a violent rampage in 2014. At the time, mainstream Western media highlighted the role of those Nazi gangs.

Since then, the notorious neo-Nazi Azov Battalion and their ilk have become embedded within the Ukrainian armed forces, adorned with Nazi symbolism, and involved in atrocities. Now the Western media has turned a blind eye.

It is a moral duty to point to the rising peril of neo-Nazism in the streets of Europe, the USA and elsewhere, and the broader populist appeal to white supremacism. I will not be quietened in pointing out how emboldened the neo-Nazis have become in Ukraine.

It is important for readers to be aware that the Brenthurst Foundation is hardly a neutral institution when it comes to an ideological worldview. It is funded by white mining capital and, as a casual look at its board and associates shows, deeply enmeshed in the Western military
establishment – apart from a handful of Africans.

There is so much that is factually incorrect, dangerous and superficial in the Mills and Hartley piece. Particularly revealing is what they studiously avoid, because it does not suit their case.

I turn only to some of their more obvious howlers and deliberate omissions.

The Kyiv regime, which they laud as an example of freedom and democracy, has banned the communist and socialist parties, several left-wing organizations, and the For Life parliamentary opposition platform.

The “democrat” Zelensky, has closed down all opposition television and media outlets and instituted crippling legislation against Ukraine’s trade union movement and civil liberties. No word of this from the Brenthurst duo.

They claim that Crimea voted in a referendum to leave the Russian Federation and join Ukraine. But they don’t specify which referendum and when. There was a referendum among Crimea’s people in 2014, which voted for inclusion in the Russian Federation. What other referendums have occurred other than at the dissolution of the Soviet Union? Those related to the independence of the former constituent republics.

At that time, in December 1991, the three Slavic republics – Belarus, Russia, and Ukraine – proclaimed the establishment of the Commonwealth of Independent States (CIS). That was
not a referendum specifically concerning Crimea.

As to the sanctity of referenda or elections, there is no sound from the Brenthurst pair concerning the Maidan coup of 2014 which overthrew the democratically elected government of President Yanukovych, and the “color revolution” investment of the USA, Germany, Poland and others.

They state that in Africa a very limited number of countries were against supporting Ukraine. There were seventeen, including South Africa, that abstained from the UN General Assembly vote. As for African countries voting against Russia, President Ramaphosa has referred to South Africa being blackmailed and threatened to toe the US-NATO line.

I am accused of ranting about the “morality of US foreign policy, CIA-sponsored coups, punitive sanctions and blockades, military aggression and intervention globally”. Russia, they state appears exempt from my criticism “when it does the same — and far worse — in Africa under the brutal rule of Wagner military interventions that secure mineral wealth for oligarchs.”

The facts are that whatever the sins of Wagner, the most active and destructive mercenary groups that have plundered Africa and the Middle East are American, British and French. Their boots on the ground are numbered in the tens of thousands.

Wagner personnel are 6,000.

By Wikipedia’s broadest definition of military intervention, the US has engaged in nearly 200
since 1950 with over 25% occurring since 1991.

That explains why so many countries in Africa, Asia and Latin America refuse to kowtow to the US-NATO-EU axis. When they do it is either because of fear of the consequences or they are infamous dictators installed by the CIA such as Mobuto Sese Seko, Pinochet, Bolsonaro or Abdel Fattah El-Sisi, loyal to their master’s orders.

As for elephants in the room which Mills and Hartley are silent about, any university undergraduates serious about historical events can point to:

• NATO expansion east to Russia’s doorstep since the collapse of the Soviet Union when it should have been wound up along with the Warsaw Pact;
• Numerous countries added to NATO’s eastern expansion despite promises to Russia to the contrary;
• 15,000 mostly Russian-speaking people in the Donbas killed by Ukrainian forces between 2014 and February 2022;
• 42 massacred at the Odessa trade union building in July 2014;
• Atrocities committed by the Ukrainian forces and Neo-Nazis;
• US rejecting calls from Russia to respect its borders;
• US surrounding Russia with military bases;
• George W. Bush withdrawing the US from the Anti-Ballistic Missile Treaty;
• Trump withdrawing the US from the Intermediate-Range Nuclear Forces Treaty;
• The US asserting its right to a nuclear first strike;
• The US waging an economic war on Russia via sanctions for years.

Mills and Hartley venture into the realm of wild conspiracy theories and cheap insults in hallucinating state capture of our democracy by China and Russia “in politics, unions and business” and, following a now debunked US conspiracy theory, warn of Russia “disrupting elections” as a natural next step.

Whilst our government affirms the need for peaceful negotiations, the pro-NATO position of the Brenthurst duo follows the most dangerous hawks in the West by advocating escalation of the war and more lethal weapons for Ukraine at the risk of a nuclear conflagration.

It seems that Greg Mills has forgotten about Afghanistan. In his years in Kabul serving as ‘special advisor’ to a NATO commander, did he ever conceive of an ignominious reversal?

(This article was originally published in the Daily Maverick)

– Ronnie Kasrils, veteran of the anti-apartheid struggle, and South Africa’s former Minister for Intelligence Services, activist and author. He contributed this piece to The Palestine Chronicle

The War of Terror of a Rogue Superpower: Cui Bono?

February 11, 2023

by Pepe Escobar, widely distributed on the Internet, posted with the author’s permission

When it comes to the Global South, what the Hersh report imprints is Rogue Superpower, in giant blood red letters, as state sponsor of terrorism.

Everyone with a brain already knew the Empire did it. Now Seymour Hersh’s bombshell report  not only details how Nord Stream 1 and 2 were attacked, but also names names: from the toxic Straussian neoliberal-con trio Sullivan, Blinken and Nuland all the way to the Teleprompter Reader-in-Chief.

Arguably the most incandescent nugget in Hersh’s narrative is to point ultimate responsibility directly at the White House. The CIA, for its part, gets away with it. The whole report may be read as the framing of a scapegoat. A very fragile, shoddy scapegoat – what with those classified documents in the garage, the endless stares into the void, the cornucopia of incomprehensible mumbling, and of course the whole, ghastly, years-long family corruption carousel in and around Ukraine, still to be completely unveiled.

Hersh’s report happened to pop up immediately after the deadly earthquakes in Turkey/Syria. This is an investigative journalism earthquake in itself, straddling over fault lines and revealing countless open air fissures, nuggets of truth gasping for air amidst the rubble.

But is that all there is? Does the narrative hold from start to finish? Yes and no. First of all, why now? This is a leak – essentially from one Deep State insider, Hersh’s key source. This 21^st century “Deep Throat” remix may be appalled at the toxicity of the system, but at the same time he knows that whatever he says, there will be no consequences.

Cowardly Berlin – ignoring the nuts and bolts of the scheme all along – will not even squeak. After all the Green gang has been ecstatic, because the terror attack has thoroughly advanced their medieval de-industrialization agenda. In parallel, as an extra bonus, all the other European vassals receive further confirmation this is the fate that awaits them if they don’t follow His Master’s Voice.

Hersh’s narrative frames the Norwegians as the essential accessory to terror. Hardly surprising: NATO’s Jens “Peace is War” Stoltenberg has been a CIA asset for perhaps half a century. And Oslo of course had its own motives to be part of the deal; to collect loads of extra cash selling whatever spare energy it had for desperate European customers.

A little narrative problem is that Norway, unlike the U.S. Navy, still does not have any operational P-8 Poseidon. What was clear at the time is that an American P-8 was commuting back and forth – with mid-air refueling – from the U.S. to Bornholm island.

A positive screamer is that Hersh – rather, his key source – had the MI6 completely vanish from the narrative. SVR, Russian intel, had focused like a laser on MI6 at the time, as well as the Poles. What still cements the narrative is that the combo behind “Biden” provided the planning, the intel and coordinated the logistics, while the final act – in this case a sonar buoy detonating the C4 explosives – may have been perpetrated by the Norwegian vassals.

The problem is the buoy may have been dropped by an American P-8. And there’s no explanation of why one of the sections of Nord Stream 2 escaped intact.

Hersh’s modus operandi is legendary. From the perspective of a foreign correspondent on the ground since the mid-1990s, from the U.S. and NATOstan to all corners of Eurasia, it’s easy for someone like me to understand how he uses anonymous sources and how he accesses – and protects – his extensive list of contacts: trust works both ways. His track record is absolutely unrivalled.

But of course the possibility remains: what if he is being played? Is this no more than a limited hangout? After all, the narrative oscillates wildly between minute detail and quite a few dead ends, constantly featuring a huge paper trail and too many people in the loop – which implies exaggerated risk. The CIA hesitating too much to go for the kill is a certified red alert throughout the narrative – especially when we know that the ideal underwater actors for such an op would have come from the CIA Special Activities Division, and not the U.S. Navy.

What will Russia do?

Arguably the whole planet is thinking what will be the Russian response.

Surveying the chessboard, what the Kremlin and the Security Council see is Merkel confessing Minsk 2 was merely a ruse; the imperial attack on the Nord Streams (they got the picture, but might not have all the insider details provided by Hersh’s source); former Israeli PM Bennett on the record detailing how the Anglo-Americans killed the Ukraine peace process which was on track in Istanbul last year.

So it’s no wonder that the Ministry of Foreign Affairs has made it clear that when it comes to nuclear negotiations with the Americans, any proposed gestures of goodwill are “unjustified, untimely and uncalled for.”

The Ministry, on purpose, and somewhat ominously, was very vague on a key issue: “strategic nuclear forces objects” that have been attacked by Kiev – helped by the Americans. These attacks may have involved “military-technical and information-intelligence” aspects.

When it comes to the Global South, what the Hersh report imprints is Rogue Superpower, in giant blood red letters, as state sponsor of terrorism: the ritual burial – at the bottom of the Baltic Sea – of international law, and even the Empire’s tawdry ersatz, the “rules-based international order”.

It will take some time to fully identify which Deep State faction may have used Hersh to promote its agenda. Of course he’s aware of it – but that would never have been enough to keep him away from researching a bombshell (three months of hard work). The U.S. mainstream media will do everything to suppress, censor, demean and ignore his report; but what matters is that across the Global South it is already spreading like wildfire.

Meanwhile, Foreign Minister Lavrov has gone totally unplugged, much like Medvedev, denouncing how the U.S. has “unleashed a total hybrid war” against Russia, with both nuclear powers now on a path of direct confrontation. And as Washington has declared the “strategic defeat” of Russia as its goal and turned bilateral relations into a ball of fire, there can be no “business as usual” anymore.

The Russian “response” – even before Hersh’s report – has been on another level entirely; advanced de-dollarization across the spectrum, from the EAEU to BRICS and beyond; and total reorientation of trade towards Eurasia and other parts of the Global South. Russia is establishing firm conditions for further stability, already foreseeing the inevitable: the time to frontally deal with NATO.

As kinetic responses go, facts on the battleground show Russia further crushing the American/NATO proxy army in full Strategic Ambiguity mode. The terror attack on the Nord Streams of course will always be lurking in the background. There will be blowback. But that will be at a time, manner and place of Russia’s choosing.

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Trials and Tribulations of the Collective West

February 01, 2023

by Pepe Escobar, widely distributed on the Internet and posted with the author’s permission

Sit back, relax and enjoy a race to the bottom of the Grand Canyon. The only question is who will get there first: the EU, NATO, or both. 

One may be excused to imagine all sorts of amusement games unrolling at the HQ of the Russian General Staff as The Empire and NATO go literally bonkers. What crazy stunt will they come up with next – short of WWIII?

Here is a delightful put down of NATO’s dementia praecox. Everything so far has failed, from “crippling sanctions” to all sorts of wunderwaffen, while the whole Global South marvels at the exploits of Wagner PMC – now configured as the planet’s top urban fighting machine.

CIA mouthpiece Washington Post duly released how Washington, once again, had the Liver Sausage Chancellor Scholz for breakfast, lunch and dinner. The idea was floated by Secretary of State Tony Blinken: let’s announce we will deliver M1 Abrams to Ukraine in a hazy, unspecified future, thus providing cover for Scholz to release the Leopards now.

Don’t you just love German sovereignty in action?

Every military analyst with an IQ over room temperature knows all those Leopards will be duly incinerated – or better yet, captured, and dissected by Russian military specialists.

So what happens next is yet another vector of the – very successful so far – U.S.-unleashed German de-industrualization racket: the Americans will invade the German industrial military complex with their “much improved” Abrams – which may perhaps arrive in 2024, when only a rump Ukraine may still exist, or never arrive at all. So no need for the Abrams to prove themselves in actual combat – as in being captured and/or incinerated.

Rumors in Washington advance that the U.S. “strategy” in Ukraine – extensively detailed by endless think tank reports – had to be adapted. It’s not about “defeating Russia” anymore, but providing Kiev with the means to “scare” Russia. The Russian General Staff must be trembling in their boots.

Meanwhile, in real life, nearly every possible scenario gamed in Washington and Brussels finishes with NATO like a giant, armoured version of Wile E. Coyote plunging to the depths of the Grand Canyon. And that happens even if the much ballyhooded “Big Arrow” Russian offensive starts in a few days or weeks, or never starts at all.

Arguably the Russian General Staff has concluded a long time ago there’s no point in reducing Ukraine to rubble in a matter of hours – something they could easily accomplish. Thus the fabled mincing machine approach – offering no excuses for NATO to “escalate” (which they continue to do anyway, as Jens “War is Peace” Stoltenberg is so fond of parroting).

The trick is that NATO’s escalation overdrive, as it happens, is somewhat controlled by the Russian General Staff, which is always calculating which optimal maneuvers will consume NATO’s military hardware faster. Call it a Russian version of the popular axiom “frog in a boiling pot doesn’t realize it’s being cooked until it croaks.”

Attacking Russia-China-Iran

Absolute desperation is now graphically extrapolating into attacks on Iran. Both Russia and China have Iran as their key ally in West Asia for the whole, complex process of Eurasia integration; strategic partnerships interlink the trio.

So attacking the Ministry of Defense in Isfahan with drones – total fail – and bombing an IRGC convoy of humanitarian aid crossing from Iraq to Syria is a serious U.S.-Israel-coordinated provocation.

Essentially these are also attacks against Russia and China. Israel cannot lift its hand or foot without U.S. permission. Iranian intel may be able to establish how the Straussian neo-con and neoliberal-con cabal in charge of U.S. foreign policy authorized if not ordered these attacks, which of course are directly connected to NATO’s desperation in Ukraine.

When in doubt, just come back to Zbig “Grand Chessboard” Brzezinski: “Potentially, the most dangerous scenario would be a grand coalition of China, Russia and perhaps, Iran, an ‘anti-hegemonic’ coalition united not by ideology but by contemporary grievances. It would be reminiscent in scale and scope of the challenge once posed by the Sino-Soviet bloc.”

And mirroring Ukraine/Russia there’s of course Taiwan/China.

As Credit Suisse strategist Zoltan Pozsar has extensively explained, if Taiwan manufactures chips for U.S. missiles Washington then sends to Taiwan for its “self-defense”, but Taiwan needs to wait because the missiles are needed in Ukraine instead, or chips can’t be shipped to the U.S. owing to a possible sea and air blockade imposed by China, the Americans will be operationally ill-equipped to support their two-front war against peer competitors Russia and China.

Bye bye Pax Americana. It’s the fear, actually paranoia, of a destroyed Taiwan – and the destruction in every scenario would be provoked by the Americans themselves – that has led the Straussian neo-con and neoliberal-con cabal to demand their chips be Made in USA.

On the energy front, since U.S. energy costs are low, Washington gambled that much of the deindustrialization of Germany would revert to American benefit. Yet since Iranian, Russian and Venezuelan oil prices are lower than the U.S., not much production may be shifting to the Hegemon: it will go to China.

To the bottom of the Grand Canyon!

The January 10 joint declaration between EU-NATO graphically shows how the EU is no more than the P.R. arm of NATO.

This NATO-EU joint mission consists in using all economic, political and military means to make sure the “jungle” always behaves according to the “rules-based international order” and accepts to be plundered ad infinitum by the “blooming garden”.

So in the end what’s left of “Europe”, when it’s NATO – actually Washington – that really rules?

“Europe”, according to relentless propaganda, means defending “our values” – as in peace, democracy and prosperity. The trick is that unelected elites forced the implicit identification of this imagined, practically sacred “Europe” with the European Union. And that’s how the EU has acquired a mythical identity.

Of course, in real life the EU – as in the real, politically organized “Europe” – has performed as a toxic instrument of division among European peoples.

Instead of peace, it has invested in all-out rabid war against Russia. The EU is arguably the most democratically irresponsible institution on the planet: spend a day in Brussels and you understand everything. And instead of prosperity, the EU has institutionalized austerity.

So sit back, relax and enjoy a race to the bottom of the Grand Canyon. The only question is who will get there first: the EU, NATO, or both.

‘Fragmented world’ sleepwalks into World War III

Wednesday, 18 January 2023 10:31 AM  [ Last Update: Saturday, 21 January 2023 4:22 PM ]

By Pepe Escobar

The self-appointed Davos “elites” are afraid. So afraid. At this week’s World Economic Forum meetings, mastermind Klaus Schwab – displaying his trademark Bond villain act – carped over and over again about a categorical imperative: we need “Cooperation in a Fragmented World.”

While his diagnosis of “the most critical fragmentation” the world is now mired in is predictably somber, Herr Schwab maintains that “the spirit of Davos is positive” and in the end we may all live happily in a “green sustainable economy.”

What Davos has been good at this week is showering public opinion with new mantras. There’s “The New System” which, considering the abject failure of the much ballyhooed Great Reset, now looks like a matter of hastily updating the current – rattled – operating system.

Davos needs new hardware, new programming skills, even a new virus. Yet for the moment all that’s available is a “polycrisis”: or, in Davos speak, a “cluster of related global risks with compounding effects.”

In plain English: a perfect storm.

Insufferable bores from that Divide and Rule island in northern Europe have just found out that “geopolitics”, alas, never really entered the tawdry “end of history” tunnel: much to their amazement it’s now centered – again – across the Heartland, as it’s been for most of recorded history.

They complain about “threatening” geopolitics, which is code for Russia-China, with Iran attached.

But the icing on the Alpine cake is arrogance/stupidity actually giving away the game: the City of London and its vassals are  livid because the “world Davos made” is fast collapsing.

Davos did not “make” any world apart from its own simulacrum.

Davos never got anything right, because these “elites” were always busy eulogizing the Empire of Chaos and its lethal “adventures” across the Global South.

Davos not only failed to foresee all recent, major economic crises but most of all the current “perfect storm,” linked to the neoliberalism-spawned deindustrialization of the Collective West.

And, of course, Davos is clueless about the real Reset taking place towards multipolarity.

Self-described opinion leaders are busy “re-discovering” that Thomas Mann’s The Magic Mountain was set in Davos – “against the backdrop of a deadly disease and an impending world war” – nearly a century ago.

Well, nowadays the “disease” – fully bioweaponized – is not exactly deadly per se. And the “impending World War” is in fact being actively encouraged by a cabal of US Straussian neo-cons and neoliberal-cons: an unelected, unaccountable, bipartisan Deep State not even subject to ideology. Centennary war criminal Henry Kissinger still does not get it.

A Davos panel on de-globalization was rife on non-sequiturs, but at least a dose of reality was provided by Hungarian Foreign Minister Peter Szijjarto.

As for China’s vice-premier Liu He, with his vast knowledge of finance, science and technology, at least he was very helpful to lay down Beijing’s five top guidelines for the foreseeable future – beyond the customary imperial Sinophobia.

China will focus on expanding domestic demand; keeping industrial and supply chains “smooth”; go for the “healthy development of the private sector”; deepen state enterprise reform; and aim for “attractive foreign investment.”

Russian resistance, American precipice

Emmanuel Todd was not at Davos. But it was the French anthropologist, historian, demographer and geopolitical analyst who ended up ruffling all the appropriate feathers across the collective West these past few days with a fascinating anthropological object: a reality-based interview.

Todd spoke to Le Figaro – the newspaper of choice of the French establishment and haute bourgeoisie. The interview was published last Friday on page 22, sandwiched between proverbial Russophobic screeds and with an extremely brief mention on the bottom of the front page. So people really had to work hard to find it.   

Todd joked that he has the – absurd – reputation of a “rebel destroy” in France, while in Japan he’s respected, featured in mainstream media, and his books are published with great success, including the latest (over 100,000 copies sold): “The Third World War Has Already Started.”

Significantly, this Japanese best seller does not exist in French, considering the whole Paris-based publishing industry toes the EU/NATO line on Ukraine.

The fact that Todd gets several things right is a minor miracle in the current, abysmally myopic European intellectual landscape (there are other analysts especially in Italy and Germany, but they carry much less weight than Todd).

So here’s Todd’s concise Greatest Hits.

– A new World War is on: By “switching from a limited territorial war to a global economic clash, between the collective West on one side and Russia linked to China on the other side, this became a World War”.

– The Kremlin, says Todd, made a mistake, calculating that a decomposed Ukraine society would collapse right away. Of course he does not get into detail on how Ukraine had been weaponized to the hilt by the NATO military alliance.

– Todd is spot on when he stresses how Germany and France had become minor partners at NATO and were not aware of what was being plotted in Ukraine militarily: “They did not know that the Americans, British and Poles could allow Ukraine to fight an extended  war. NATO’s fundamental axis now is Washington-London-Warsaw-Kiev.”

– Todd’s major give away is a killer: “The resistance of Russia’s economy is leading the imperial American system to the precipice. Nobody had foreseen that the Russian economy would hold facing NATO’s ‘economic power’”.

– Consequently, “monetary and financial American controls over the world may collapse, and with them the possibility for the US of financing for nothing their enormous trade deficit”.

– And that’s why “we are in an endless war, in a clash where the conclusion is the collapse of one or the other.”

– On China, Todd might sound like a more pugnacious version of Liu He at Davos: “That’s the fundamental dilemma of the American economy: it cannot face Chinese competition without importing qualified Chinese work force.”

– As for the Russian economy, “it does accept market rules, but with an important role for the state, and it keeps the flexibility of forming engineers that allow adaptations, industrial and military.”

– And that bring us, once again, to globalization, in a manner that Davos roundtables were incapable of understanding: “We have delocalized so much of our industrial activity that we don’t know whether our war production may be sustained”.

– On a more erudite interpretation of that “clash of civilizations” fallacy, Todd goes for soft power and comes up with a startling conclusion: “On 75 percent of the planet, the organization of parenthood  was patrilineal, and that’s why we may identify a strong understanding of the Russian position. For the collective non-West, Russia affirms a reassuring moral conservatism.”

– So what Moscow has been able to pull off is to “reposition itself as the archetype of a big power, not only “anti-colonialist” but also patrilineal and conservative in terms of traditional mores.”

Based on all of the above, Todd smashes the myth sold by EU/NATO “elites” – Davos included – that Russia is “isolated,” stressing how votes in the UN and the overall sentiment across the Global South characterizes the war, “described by mainstream media as a conflict over political values, in fact, on a deeper level, as a conflict of anthropological values.”

Between light and darkness

Could it be that Russia – alongside the real Quad, as I defined them (with China, India and Iran) – are prevailing in the anthropological stakes?

The real Quad has all it takes to blossom into a new cross-cultural focus of hope in a “fragmented world.”

Mix Confucian China (non-dualistic, no transcendental deity, but with the Tao flowing through everything) with Russia (Orthodox Christian, reverencing the divine Sophia); polytheistic India (wheel of rebirth, law of karma); and Shi’ite Iran (Islam preceded by Zoroastrianism, the eternal cosmic battle between Light and Darkness).

This unity in diversity is certainly more appealing, and uplifting, than the Forever War axis.

Will the world learn from it? Or, to quote Hegel – “what we learn from history is that nobody learns from history” – are we hopelessly doomed?

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.}

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

www.presstv.ir

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UK planned over 40 coup bids, including bid to overthrow Abdel Nasser

14 Jan 2023

Source: Declassified UK

By Al Mayadeen English 

These ‘third-world’ nationalist forces were identified by the UK as an extension of the ‘Soviet threat’, as well as an occurrence of Cold War dynamics that needed to be reverted. 

In this June 18, 1956 file photo, Egyptian leader Gamal Abdel Nasser waves as he moves through Port Said, Egypt, during a ceremony in which Egypt formally took over control of the Suez Canal from Britain (AP Photo, File)

A recent report published by Declassified UK details a somewhat exhaustive timeline of the UK’s involvement in plotting coups across the world, both overt and covert, and in most cases conducted with the collaboration of the CIA to depose or assassinate democratically elected leaders.

The report counts a total of 47 coups put into action in 27 different countries since 1945, but the numbers could her higher. 

The point in doing so is obvious: as a former colonial empire, the UK is structurally and historically pre-disposed to impede all signs of democratic and socioeconomic developments across the Global South. 

After WWII, the Soviet Union supported the massive wave of anti-colonial wars to gain national independance. 

These ‘third-world’ nationalist forces were identified by the UK as an extension of the Soviet threat, as well as an occurrence of Cold War dynamics that needed to be reverted. 

Some of the most prominent coups orchestrated against leaders include the overthrow of democratically elected Prime Minister Mohammad Mosaddegh in Iran in 1953.

They also include the assassination of the former Prime Minister of the Democratic Republic of the Congo Patrice Lumumba who was killed in the most tragic way one could possibly think of.

But the UK did not always succeed in effecting a regime change, as it did in Iran, Egypt, Indonesia, and so many African countries. 

For instance, in the 1950s, the British regime tried to draw two consecutive uprisings against the government in Syria – the first in 1956 and the second in 1957 – which were both unsuccessful. 

Read more: Kanaani: West failed to effect regime change in Iran

Another covert operation that foiled was one conducted in 1957 against Indonesia’s Sukarno, the leader of the Indonesian struggle for independence from the Dutch colonialists who propelled Indonesia out of morbid poverty.

Sukarno was ousted a decade later in what appeared to “one of the 20th century’s worst bloodbaths” with the purge of communists and socialists by the Indonesian military under Suharto – an event which was later revealed to have been backed by the UK in 1965-1966.

Other countries which have been targeted during the 1950s and 1960s include Brazil, British Guiana, Egypt, and several countries in the Gulf region. 

One leader took about four decades for the UK to take down, namely Muammar Gaddafi, who nationalized British oil operators as soon as he seized power in 1969. 

After several failed attempts to kill the strongman leader, the UK finally managed to rid of him in 2011 with the assistance of NATO.

Other leaders that were targeted for assassination include Yugoslav leader Slobodan Milosevic in 1992, Ugandan President Milton Obote in 1969, and his successor Idi Amin in the late 1970s.

The list also includes countries of the former Soviet Union, namely Estonia, Latvia and Lithuania.

It further includes Italy because the Communist Party “looked as if it might win or influence the next government,” the report states. 

Read more: Brazil Supreme Court Jan. 8 riots investigations to include Bolsonaro

The most recent coup attempts include failed attempts to depose Syrian President Bashar el-Assad during the Arab Spring, as well as several attempts to depose leaders in Latin American countries, namely lithium-rich Bolivia and oil-rich Venezuela.

Venezuela recently joined the ranks of failed coups after Juan Guaido was ousted and his government dissolved.

The report is relevant to the modern context because the West has recently tried to push for regime change in Iran and Peru. 

In the case of Peru, former President Pedro Castillo had charges fabricated against him to justify his impeachment and imprisonment. 

All-in-all, the UK’s habitus of conducting coups across the Global South is always motivated by strategic interests. These include a wide range of interests but almost always concern the privatization of oil resources. 

In the case where no oil is involved, the UK intervenes to simply ward off the presence of progressive ideologies that strengthen the people against the will of the West. 

Read more: Peru’s Boluarte won’t step down despite calls for resignation

Related Stories

• CIA, Mossad behind Iran riots: IRGC, Intelligence Ministry
• UK intelligence anticipated Ukraine war 30 years ago – Reports
• Ex-UN envoy to Yemen tied to MI6, SIS, Foreign Office: Declassified

Can China help Brazil restart its global soft power?

December 23, 2022

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

Bolsonaro reduced Brazil to resources-exporter status; now Lula should follow Argentina’s lead into Belt and Road

Ten days of full immersion in Brazil are not for the faint-hearted. Even restricted to the top two megalopolises, Sao Paulo and Rio, watching live the impact of interlocking economic, political, social and environmental crises exacerbated by the Jair Bolsonaro project leaves one stunned.

The return of Luiz Inácio Lula da Silva for what will be his third presidential term, starting January 1, 2023, is an extraordinary story trespassed by Sisyphean tasks. All at the same time he will have to

• fight poverty;
• reconnect with economic development while redistributing wealth;
• re-industrialize the nation; and
• tame environmental pillage.

That will force his new government to summon unforeseen creative powers of political and financial persuasion.

Even a mediocre, conservative politician such as Geraldo Alckmin, former governor of the wealthiest state of the union, Sao Paulo, and coordinator of the presidential transition, was simply astonished at how four years of the Bolsonaro project let loose a cornucopia of vanished documents, a black hole concerning all sorts of data and inexplicable financial losses.

It’s impossible to ascertain the extent of corruption across the spectrum because simply nothing is in the books: Governmental systems have not been fed since 2020.

Alckmin summed it all up: “The Bolsonaro government happened in the Stone Age, where there were no words and numbers.”

Now every single public policy will have to be created, or re-created from scratch, and serious mistakes will be inevitable because of lack of data.

And we’re not talking about a banana republic – even though the country concerned features plenty of (delicious) bananas.

By purchasing power parity (PPP), according to the International Monetary Fund (IMF), Brazil remains the eighth-ranked economic power in the world even after the Bolsonaro devastation years – behind China, the US, India, Japan, Germany, Russia and Indonesia, and ahead of the UK and France.

A concerted imperial campaign since 2010, duly denounced by WikiLeaks, and implemented by local comprador elites, targeted the Dilma Rousseff presidency – the Brazilian national entrepreneurial champions – and led to Rousseff’s (illegal) impeachment and the jailing of Lula for 580 days on spurious charges (all subsequently dropped), paved the way for Bolsonaro to win the presidency in 2018.

Were it not for this accumulation of disasters, Brazil – a natural leader of the Global South – by now might possibly be placed as the fifth-largest geo-economic power in the world.

What the investment gang wants

Paulo Nogueira Batista Jr, a former vice-president of the New Development Bank (NDB), or BRICS bank, goes straight to the point: Brazil’s dependence on Lula is immensely problematic.

Batista sees Lula facing at least three hostile blocs.

• The extreme right supported by a significant, powerful faction of the armed forces – and this includes not only Bolsonarists, who are still in front of a few army barracks contesting the presidential election result;
• The physiological right that dominates Congress – known in Brazil as “The Big Center”;
• International financial capital – which, predictably, controls the bulk of mainstream media.

The third bloc, to a great extent, gleefully embraced Lula’s notion of a United Front capable of defeating the Bolsonaro project (which project, by the way, never ceased to be immensely profitable for the third bloc).

Now they want their cut. Mainstream media instantly turned to corralling Lula, operating a sort of “financial inquisition,” as described by crack economist Luiz Gonzaga Belluzzo.

By appointing longtime Workers’ Party loyalist Fernando Haddad as finance minister, Lula signaled that he, in fact, will be in charge of the economy. Haddad is a political-science professor and was a decent minister of education, but he’s no sharp economic guru. Acolytes of the Goddess of the Market, of course, dismiss him.

Once again, this is the trademark Lula swing in action: He chose to place more importance on what will be complex, protracted negotiations with a hostile Congress to advance his social agenda, confident that all the lineaments of economic policy are in his head.

A lunch party with some members of Sao Paulo’s financial elite, even before Haddad’s name was announced, offered a few fascinating clues. These people are known as the “Faria Limers” – after the high-toned Faria Lima Avenue, which houses quite a few post-mod investment banks’ offices as well as Google and Facebook HQs.

Faria Lima Avenue in San Paulo. Photo: Wikimedia Commons

Lunch attendees included a smattering of rabid anti-Workers’ Party investors, the proverbial unreconstructed neoliberals, yet most were enthusiastic about opportunities ahead to make a killing, including an investor looking for deals involving Chinese companies.

The neoliberal mantra of those willing – perhaps – to place their bets on Lula (for a price) is “fiscal responsibility.” That frontally clashes with Lula’s focus on social justice.

That’s where Haddad comes up as a helpful, polite interlocutor because he does privilege nuance, pointing out that only looking at market indicators and forgetting about the 38% of Brazilians who only earn the minimum wage (1,212 Brazilian real or US$233 per month) is not exactly good for business.

The dark arts of non-government

Lula is already winning his first battle: approving a constitutional amendment that allows financing of more social spending.

That allows the government to keep the flagship Bolsa Família welfare program – of roughly $13 a month per poverty-level family – at least for the next two years.

A stroll across downtown Sao Paulo – which in the 1960s was as chic as mid-Manhattan – offers a sorrowful crash course on impoverishment, shut-down businesses, homelessness and raging unemployment. The notorious “Crack Land” – once limited to a street – now encompasses a whole neighborhood, much like junkie, post-pandemic Los Angeles.

Rio offers a completely different vibe if one goes for a walk in Ipanema on a sunny day, always a smashing experience. But Ipanema lives in a bubble. The real Rio of the Bolsonaro years – economically massacred, de-industrialized, occupied by militias – came up in a roundtable downtown where I interacted with, among others, a former energy minister and the man who discovered the immensely valuable pre-salt oil reserves.

In the Q&A, a black man from a very poor community advanced the key challenge for Lula’s third term: To be stable, and able to govern, he has to have the vast poorest sectors of the population backing him up.

This man voiced what seems not to be debated in Brazil at all: How did there come to be millions of poor Bolsonarists – street cleaners, delivery guys, the unemployed? Right-wing populism seduced them – and the established wings of the woke left had, and still have, nothing to offer them.

Addressing this problem is as serious as the destruction of Brazilian  engineering giants by the Car Wash “corruption” racket. Brazil now has a huge number of well-qualified unemployed engineers. How come they have not amassed enough political organization to reclaim their jobs? Why should they resign themselves to becoming Uber drivers?

José Manuel Salazar-Xirinachs, the new head of the UN Economic Commission on Latin America and the Caribbean (ECLAC), may carp about the region’s economic failure as even worse now than in the “lost decade” of the 1980s: Average annual economic growth in Latin America in the decade up to 2023 is set to be just 0.8%.

Yet what the UN is incapable of analyzing is how a plundering neoliberal regime such as Bolsonaro’s managed to “elevate” to unforeseen toxic levels the dark arts of little or no investment, low productivity and less than zero emphasis on education.

President Dilma in da house

Lula was quick to summarize Brazil’s new foreign policy – which will go totally multipolar, with emphasis on increasing Latin American integration, stronger ties across the Global South and a push to reform the UN Security Council (in sync with BRICS members Russia, China and India).

Mauro Vieira, an able diplomat, will be the new foreign minister. But the man fine-tuning Brazil on the world stage will be Celso Amorim, Lula’s former foreign minister from 2003 to 2010.

In a conference that reunited us in Sao Paulo, Amorim elaborated on the complexity of the world Lula is now inheriting, compared with 2003. Yet along with climate change the main priorities – achieving closer integration with South America, reviving Unasur (the Union of South American Nations) and re-approaching Africa – remain the same.

And then there’s the Holy Grail: “good relations with both the US and China.”

The Empire, predictably, will be on extreme close watch. US national security adviser Jake Sullivan dropped in to Brasilia, during the fist days of the World Cup soccer tournament, and was absolutely charmed by Lula, who’s a master of charisma. Yet the Monroe Doctrine always prevails. Lula getting closer and closer to BRICS – and the expanded BRICS+ – is considered virtual anathema in Washington.

Jake Sullivan and Lula in Brasilia on November 28. Photo: Ricardo Stuckert

So Lula will play most overtly in the environment arena. Covertly, it will be a sophisticated balancing act.

The combo behind US President Joe Biden called Lula to congratulate him soon after the election results. Sullivan was in Brasilia setting the stage for a Lula visit to Washington. Chinese President Xi Jinping for his part sent him an affectionate letter, emphasizing the “global strategic partnership” between Brazil and China. Russian President Vladimir Putin called Lula earlier this week – and emphasized their common strategic approach to BRICS.

China has been Brazil’s top trade partner since 2009, ahead of the US. Bilateral trade in 2021 hit $135 billion. The problem is lack of diversification and focus on low added value: iron ore, soybeans, raw crude and animal protein accounted for 87.4% of exports in 2021. China exports, on the other hand, are mostly high-tech manufactured products.

Brazil’s dependence on commodity exports has indeed contributed for years to its rising foreign reserves. But that implies high concentration of wealth, low taxes, low job creation and dependence on cyclical price oscillations.

There’s no question China is focused on Brazilian natural resources to fuel its new development push – or “peaceful modernization,” as established by the latest Party Congress.

But Lula will have to strive for a more equal trade balance in case he manages to restart the nation as a solid economy. In 2000, for instance, Brazil’s top export item was Embraer jets. Now, it’s iron ore and soybeans; yet another dire indicator of the ferocious de-industrialization operated by the Bolsonaro project.

China is already investing substantially in the Brazilian electric sector – mostly due to state companies being bought by Chinese companies. That was the case in 2017 of State Grid buying CPFL in Sao Paulo, for instance, which in turn bought a state company from southern Brazil in 2021.

From Lula’s point of view, that’s inadmissible: a classic case of privatization of strategic public assets.

A different scenario plays in neighboring Argentina. Buenos Aires in February became an official partner of the New Silk Roads, or Belt and Road Initiative, with at least $23 billion in new projects on the pipeline. The Argentine railway system will be upgraded by – who else? – Chinese companies, to the tune of $4.6 billion.

The Chinese will also be investing in the largest solar energy plant in Latin America, a hydroelectric plant in Patagonia, and a nuclear energy plant – complete with transfer of Chinese technology to the Argentine state.

Lula, beaming with invaluable soft power not only personally when it comes to Xi but also appealing to Chinese public opinion, can get similar strategic partnership deals, with even more amplitude. Brasilia may follow the Iranian partnership model – offering oil and gas in exchange for building critical infrastructure.

Inevitably, the golden path ahead will be via joint ventures, not mergers and acquisitions. No wonder many in Rio are already dreaming of high-speed rail linking it to Sao Paulo in just over an hour, instead of the current, congested highway journey of six hours (if you’re lucky).

A key role will be played by former president Dilma Rousseff, who had a long, leisurely lunch with a few of us in Sao Paulo, taking her time to recount, in minutiae, everything from the day she was officially arrested by the military dictatorship (January 16, 1970) to her off-the-record conversations with then-German chancellor Angela Merkel, Putin, and Xi.

President Dilma Rousseff during a bilateral meeting with the president of the People’s Republic of China, Xi Jinping, at the G20 Saint Petersburg summit in 2013. Photo: Wikimedia Commons

It goes without saying that her political – and personal – capital with both Xi and Putin is stellar. Lula offered her any post she wanted in the new government. Although still a state secret, this will be part of a serious drive to polish Brazil’s global profile, especially across the Global South.

To recover from the previous, disastrous six years – which included a two-year no man’s land (2016-2018) after the impeachment of president Dilma – Brazil will need an unparalleled national drive of re-industrialization at virtually every level, complete with serious investment in research and development, training of specialized work forces and technology transfer.

There is a superpower that can play a crucial role in this process: China, Brazil’s close partner in the expanding BRICS+. Brazil is one of the natural leaders of the Global South, a role much prized by the Chinese leadership.

The key now is for both partners to establish a high-level strategic dialogue – all over again. Lula’s first high-profile foreign visit may be to Washington. But the destination that really matters, as we watch the river of history flow, will be Beijing.

Pepe Escobar is a Brazilian journalist who has written for Asia Times for many years, covering events throughout Asia and the Middle East. He has also been an analyst for RT and Sputnik News, and previously worked for Al Jazeera.

Michael Hudson gives an interview to a German magazine

December 16, 2022

Posted with the author’s permission

Boos German interview Dec 15 2022

Dear Prof Hudson,

Once again: Herzliche Grüße aus Berlin!

Last time we spoke for German print magazine “Four” in June. Right now I also work for MEGA Radio, a radio news station for Germany, Austria and Switzerland. We broadcast from Vienna and are located in Berlin, Bavaria and Austria.

Hereby I would like to invite you to another interview via ZOOM to record it for our radio program. It would be an update on our last interview. Maybe around 20-30 Minutes long.

See also our last talk: https://www.vierte.online/2022/06/03/ukraine-a-trojan-for-germanys-us-dependence/

I don’t know if that’s too short notice, but would you have time for such a conversation next week or the week after?

Otherwise, also at the beginning of January.

Here are my questions:

(1.) You made some predictions in our last interview for “Four” magazine which became true.

You talked about crisis for German companies in the production of fertilizer. This just hit the headlines weeks after our interview.

You also said: “What you characterize as “blocking Nord Stream 2” is really a Buy-American policy.” This now also became more than clear after the destroyed Nord Stream pipelines.

Could you comment that?

MH: U.S. foreign policy has long concentrated on control of the international oil trade. This trade is a leading contributor to the U.S. balance of payments, and its control gives U.S. diplomats the ability to impose a chokehold on other countries.

Oil is the key supplier of energy, and the rise in labor productivity and GDP for the leading economies tends to reflect the rise in energy use per worker. Oil and gas are not only for burning for energy, but are also a basic chemical input for fertilizers, and hence for agricultural productivity, as well as for much plastic and other chemical production.

So U.S. strategists recognize that cutting countries off from oil and its derivatives will stifle their industry and agriculture. The ability to impose such sanctions enables the U.S. to make countries dependent on compliance with U.S. policy so as not to be “excommunicated” from the oil trade.

U.S. diplomats have been telling Europe for many years not to rely on Russian oil and gas. The aim is twofold: to deprive Russia of its major trade surplus, and to capture the vast European market for U.S. oil producers. U.S. diplomats convinced German leaders not to approve the Nord Stream 2 pipeline, and finally used the excuse of the NATO war with Russia in Ukraine to act unilaterally to arrange the destruction of both Nord Stream 1 and 2 pipelines.

(2.) For our audience, our listeners: In your new book “The Destiny of Civilization: Finance Capitalism, Industrial Capitalism, or Socialism”

You state that 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. You just stated this in an interview from November.

The Rentier Economy is a Free Lunch

Could you explain this for our outlet?

MH: The split is not only geographic but above all reflects the conflict between Western neoliberalism and the traditional logic of industrial capitalism. The West has deindustrialized its economies by replacing industrial capitalism with finance capitalism, initially in an attempt to keep its wages down by moving abroad to employ foreign labor, and then to try and establish monopoly privileges and captive markets or arms (and now oil) and high-technology essentials, becoming rentier economies.

A century ago, industrial capitalism was expected to evolve into industrial socialism, with governments providing subsidized basic infrastructure services (such as health care, education, communication, research and development) to minimize their cost of living and doing business. That is how the United States, Germany and other countries built up their industrial power, and it also is how China and other Eurasian countries have done so more recently.

But the West’s choice to privatize and financialize its basic infrastructure, dismantling the role of government and shifting planning to Wall Street, London and other financial centers, has left it with little to offer other countries – except or the promise not to bomb them or treat them as enemies if they seek to keep their wealth in their own hands instead of transferring it to U.S. investors and corporations.

The result is that when China and other countries build up their economies in the same way that the United States did from the end of its Civil War to World War II, they are treated as enemies. It is as if U.S. diplomats see that the game is lost, and that their economy has become so debt-ridden, privatized and high-cost that it cannot compete, that it simply hopes to keep making other countries dependent tributaries for as long as it can until the game finally is over.

If the U.S. succeeds in imposing financial neoliberalism on the world, then other countries will end up with the same problems that the United States is experiencing.

(3.) Now the first terminals for LNG from the US are opened in Germany. How will this effect trade and interdependence / dependency between Germany and United States?

MH: The U.S. sanctions and destruction of Nord Stream 1 and 2 have made Europe dependent on U.S. supplies, at so high a cost of LNG gas (about six times what Americans and Asians have to pay) that Germany and other countries have lost their ability to compete in steel making, glass making, aluminum and many other sectors. This creates a vacuum which U.S. affiliates home to fill from their investments in other countries or even from the U.S. itself.

The expectation is that German and other European heavy industry, chemical and other manufacturing will have to move to the United States to obtain oil and other essentials that they are told not to buy from Russia, Iran or other alternatives. The assumption is that they can be blocked from relocating in Russia or Asia by imposing sanctions, fines and political meddling European politics by U.S. NGOs and National Endowment for Democracy satellites in, as has been the case since 1945. We can expect a new Operation Gladio to promote politicians willing to sustain this Global Fracture and the shift of European industry to the United States.

One question is whether Germany’s skilled labor will follow. That typically is what occurs in such situations. This kind of demographic shrinkage is what the Baltic states have experienced. It is a byproduct of neoliberal policies.

(4.) What is your view on the current military situation in the Russian/Ukrainian war?

MH: It looks like Russia will easily win in February or March. It probably will create a Demiliarized Zone to protect the Russian-speaking areas (probably incorporated into Russia) from the pro-NATO West in order to prevent sabotage and terrorism.

Europe will be told to continue to boycott Russia and its allies instead of seeking mutual gains by reciprocal trade and investment. The U.S. may urge Poland and other countries to “fight to the last Pole” or Lithuanian, emulating Ukraine. It will put pressure on Hungary. But most of all, it will insist that Europe spend an immense sum to re-arm, mainly with U.S. arms. This expense will crowd out social spending to help Europe cope with its spreading industrial depression or subsidies to revive its industry. So a militarized economy will become a rising overhead – while consumer and industrial debt increase, along with government debt.

As this occurs, Russia may demand that NATO roll back its borders to pre-1991 boundaries. That is the most likely flash point of conflict.

(5.) What is your view on the current financial situation in this war. The G7 and EU governments talk already about rebuilding and reconstruction of Ukraine after the war. What does this mean for Western businesses and finance capitalism?

MH: Ukraine hardly can be rebuilt. First of all, much of its population has left, and is unlikely to return, given the destruction of housing and infrastructure – and husbands.

Second, Ukraine is owned mainly by a narrow group of kleptocrats – who are trying to sell out to Western agricultural investors and other vultures. (I think you know who they are.)

Ukraine is already debt-ridden, and has become a fiefdom of the IMF (meaning in practice, of NATO). Europe will be asked to “contribute,” and the foreign reserves seized from Russia may be spent on hiring U.S. companies to make a financial killing rebuilding a pretense of an economy in Ukraine – leaving the country even more debt ridden.

A new Democratic Party secretary of state will echo Madeline Albright and say that the killing of Ukraine’s economy, children and soldiers “was all worth it” as the cost of spreading democracy U.S.-style.

(6.) I’ve read lots of background reports on the sanctions against Russia. It seems more and more the sanctions hit Russia hard, because they cannot produce all products, esp. technology, by themselves. On the other hand Russia have now more stable business and buyers with and in China, India.

What real effect do the sanctions have according to your analysis?

MH: The U.S. sanctions have turned out to be an unanticipated godsend for Russia. In agriculture, for instance, sanctions against Lithuanian and other Baltic dairy exports has led to a flowering of a domestic Russian cheese and dairy sector. Russia is now the world’s largest grain exporter, thanks to the Western sanctions that have had much the same effect as protective tariffs and import quotas of the sort that the United States used in the 1930s to modernize its agricultural sector.

If President Biden were a secret Russian agent, he hardly could have helped Russia more. Russia needed the economic isolation of protectionism, but was still too entranced by neoliberal free-trade policy to do this by itself. So the U.S. did it for it.

Sanctions oblige countries to become more self-reliant, at least in basic needs such as food and energy. This self-reliance is the best defense against U.S. economic destabilization to force regime change and similar compliance.

One effect is that Russia will need to buy much less from Europe even after the fighting in Ukraine ends. So there will be less need for Russia to export raw materials to Europe. It can work these up themselves. The industrial core that was Europe may end up more in Russia and its Asian allies than in the United States.

That is the ironic result of NATO’s new Iron Curtain.

(7.) How would you describe China, Russia and India: Do you see Industrial Capitalism or Socialism there?

MH: RIC was the original core of the BRICS, now greatly extended to include Iran and much of Central Asia and the roads involved with China’s Belt and Road initiative. The goal is for Eurasia no longer to have to rely on Europe or North America.

Secretary of Defense Donald Rumsfeld often referred to “Old Europe” as a shrinking dead zone. It failed to follow its plans a century ago to evolve into an increasingly socialized economy with government subsidy of rising living standards and labor productivity, science and industry. Europe rejected not only Marxism but the basis of Marxist analysis in the classical economics of Adam Smith, John Stuart Mill and their contemporaries. That path has been followed in Eurasia, while the right-wing anti-government liberalism of the Austrian and Chicago Schools has destroyed the NATO economies from within.

As the locus of industrial and technological leadership moves eastward, European investment and labor probably will follow.

The Eurasian countries will still visit Europe as tourists, as Americans like to visit England as a kind of theme park of post-feudal gentry, the posting of the palace guards and other quaint memories of the days of knights and dragons. European countries will look more like that of Jamaica and the Caribbean, with hotels and hospitality becoming the main growth sectors, with Frenchmen and German waiters dressed in their quaint quasi-Hollywood costumes. Museums will do a thriving business as Europe itself turns into a kind of museum of post-industrialism.

(8.) Currently we saw the collapse and bankruptcy of the crypto exchange FXT. The management of this company seems to be highly criminal. How do you judge that?

MH: Crime is what made crypto a growth sector for the past few years. Investors bought crypto because it is a vehicle for the fortunes being made in international drug dealing, the arms trade, other crime and tax evasion. These are the great post-industrial growth sectors in Western economies.

Ponzi schemes often are good investment vehicles in their take-off stage – the pump-and-dump stage. It was inevitable that criminals would not only use crypto to transfer funds, but actually set up their own currencies “free of oppressive government regulation.” Criminals are the ultimate Chicago School free market libertarians.

Anyone can create their own currency, much as U.S. wild-west banks did in the mid-19^th century, printing currency at will. When one went shopping in the early 20^th century, the stores still had lists of the shifting valuations of various bank notes. The best designed ones tended to be the most successful.

(9.) Do you have any knowledge about business relations between FTX and Ukraine, the government in Kyiv? There were some rumours and press articles in the alternative media about it?

MH: The IMF and Congress have paid large amounts of money to the Ukraine government and its kleptocrats in charge. Newspapers report that much of this money has been turned over to FTX – which has become the second largest funder of the Democratic Party (behind George Soros, who also is said to be trying to buy up Ukrainian assets). So a circular flow seems to be at work: U.S. Congress votes for funding for Ukraine, which puts some of this money in FTX crypto to pay or the political campaign of pro-Ukrainian politicians.

(10.) Some months ago there were articles in the US press about plans by the FED: They are planning to establish a digital Dollar, a Central Bank Digitcal Currency (CBDC). Also in Europe ECB president Madame Lagarde and the German minister for finance, Lindner, talk about an introduction of the digital Euro.

Here in Germany some critical experts are warning this will only push the total surveillance of the population and customers.

What is your take on digital currencies?

MH: It’s not my department. All banking is electronic, so what does “digital” mean? To libertarians, it means no government oversight, but in government hands, the government will have a record of everything that anyone spends.

(11.) What is your view on the current weakness or strength of the US dollar, the Euro, the British Pound, Gold and Silver?

MH: The dollar will remain in demand, thanks to its success in making the Eurozone dependent on it. The British pound has little means of support, and little reason for foreigners to invest in it. The euro is a junior satellite currency to the dollar.

Without a dollar or other currency to hold their monetary reserves in, governments will continue to increase the proportion held in gold, because it doesn’t have government liabilities attached to it – so U.S. officials can’t simply grab it, as they did with Russia’s foreign reserves. Eurozone countries cannot be trusted not to follow U.S. orders to grab foreign countries’ reserves, so it will be shunned.

As the euro’s exchange rate declines against the dollar, foreign investment will decline, because investors will not want to invest in (1) a shrinking market, and (2) companies that earn domestic euros that are worth fewer and fewer dollars or other hard currency for head offices.

Of course, gold will have to be kept at home, so that it can’t simply be grabbed, as the Bank of England grabbed Venezuela’s gold and gave it to the right-wing U.S. proxy. Germany would be wise to accelerate its airlift of its own gold supply from the U.S. Federal Reserve Bank vaults in New York City.

(12.) What is your current analysis of the energy and financial crises in the world?

MH: No real crisis as much as a slow crash. Rising prices paid for what America exports: oil, food and IT monopoly goods, with living costs for consumers rising faster than wages. So there will be a tightening squeeze or most families. The middle class will discover that it really is the wage-earning class after all, and will go deeper into debt – especially if it tries to protect itself by taking out a mortgage to buy a home.

I’ve been studying the 11^th and 12^th centuries for my history of debt, and I came across a story that may have relevance to the questions that you’ve asked. NATO keeps claiming that it is a defensive alliance. But Russia has no desire to invade Europe. The reason is obvious: No army can invade a major country. More important, Russia does not even have a motive to destroy Europe as a U.S.-puppet adversary. Europe already is self-destructing.

I am reminded of the battle of Manzikert in 1071, when the Byzantine Empire lost to the Seljuk Turks (largely because its general on whom the emperor had depended, Andronikos Doukas, defected, and then overthrew the Emperor. Crusade of Kings, a game supplement, covers the battle extensively, and claims the following conversation took place between Alp Arslan and Romanos:^[52]

Alp Arslan: “What would you do if I were brought before you as a prisoner?”

Romanos: “Perhaps I’d kill you, or exhibit you in the streets of Constantinople.”

Alp Arslan: “My punishment is far heavier. I forgive you, and set you free.”

That is the punishment that Europe will receive from Eurasia. Its leaders have made their choice: to be a U.S. satellite.

The Global South births a new game-changing payment system

November 30, 2022

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

Challenging the western monetary system, the Eurasia Economic Union is leading the Global South toward a new common payment system to bypass the US Dollar.

The Eurasia Economic Union (EAEU) is speeding up its design of a common payment system, which has been closely discussed for nearly a year with the Chinese under the stewardship of Sergei Glazyev, the EAEU’s minister in charge of Integration and Macro-economy.

Through its regulatory body, the Eurasian Economic Commission (EEC), the EAEU has just extended a very serious proposal to the BRICS nations (Brazil, Russia, India, China and South Africa) which, crucially, are already on the way to turning into BRICS+: a sort of G20 of the Global South.

The system will include a single payment card – in direct competition with Visa and Mastercard – merging the already existing Russian MIR, China’s UnionPay, India’s RuPay, Brazil’s Elo, and others.

That will represent a direct challenge to the western-designed (and enforced) monetary system, head on. And it comes on the heels of BRICS members already transacting their bilateral trade in local currencies, and bypassing the US dollar.

This EAEU-BRICS union was long in the making – and will now also move toward prefiguring a further geoeconomic merger with the member nations of the Shanghai Cooperation Organization (SCO).

The EAEU was established in 2015 as a customs union of Russia, Kazakhstan and Belarus, joined a year later by Armenia and Kyrgyzstan. Vietnam is already an EAEU free trade partner, and recently enshrined SCO member Iran is also clinching a deal.

The EAEU is designed to implement free movement of goods, services, capital, and workers between member countries. Ukraine would have been an EAEU member if not for the Maidan coup in 2014 masterminded by the Barack Obama administration.

Vladimir Kovalyov, adviser to the chairman of the EEC, summed it all up to Russian newspaper Izvestia. The focus is to establish a joint financial market, and the priority is to develop a common “exchange space:” “We’ve made substantial progress and now the work is focused on such sectors as banking, insurance, and the stock market.”

A new regulatory body for the proposed joint EEU-BRICS financial system will soon be established.

Meanwhile, trade and economic cooperation between the EAEU and BRICS have increased 1.5 times in the first half of 2022 alone.

The BRICS share in the total external trade turnover of the EAEU has reached 30 percent, Kovalyov revealed at the BRICS International Business Forum this past Monday in Moscow:

“It is advisable to combine the potentials of the BRICS and EAEU macro-financial development institutions, in particular the BRICS New Development Bank, the Asian Infrastructure Investment Bank (AIIB), as well as national development institutions. This will make it possible to achieve a synergistic effect and ensure synchronous investments in sustainable infrastructure, innovative production, and renewable energy sources.”

Here we once again see the advancing convergence of not only BRICS and EAEU but also the financial institutions deeply involved in projects under the China-led New Silk Roads, or Belt and Road Initiative (BRI).

Halting the Age of Plunder

As if all that was not game-changing enough, Russian President Vladimir Putin is raising the stakes by calling for a new international payment system based on blockchain and digital currencies.

The project for such a system was recently presented at the 1st Eurasian Economic Forum in Bishkek.

At the forum, the EAEU approved a draft agreement on cross-border placement and circulation of securities in member states, and amended technical regulations.

The next big step is to organize the agenda of a crucial meeting of the Supreme Eurasian Economic Council on 14 December in Moscow. Putin will be there – in person. And there’s nothing he would love more than to make a game-changing announcement.

All of these moves acquire even more importance as they connect to fast increasing, interlocking trade between Russia, China, India, and Iran: from Russia’s drive to build new pipelines serving its Chinese market – to Russia, Kazakhstan, and Uzbekistan discussing a gas union for both domestic supplies and exports, especially to main client China.

Slowly but surely, what is emerging is the Big Picture of an irretrievably fractured world featuring a dual trade/circulation system: one will be revolving around the remnants of the dollar system, the other is being built centered on the association of BRICS, EAEU, and SCO.

Pushing further on down the road, the recent pathetic metaphor coined by a tawdry Eurocrat boss: the “jungle” is breaking away from the “garden” with a vengeance. May the fracture persist, as a new international payment system – and then a new currency – will aim to halt for good the western-centric Age of Plunder.

US paralyzed by Islamic Republic of Iran’s strategic swing

Monday, 28 November 2022 6:18 PM  [ Last Update: Monday, 28 November 2022 6:21 PM ]

By Pepe Escobar

Iran’s parliament has just approved the accession of the Islamic Republic to the Shanghai Cooperation Organization (SCO), previously enshrined at the Samarkand summit last September, marking the culmination of a process that lasted no less than 15 years.  

Iran has already applied to become a member of the expanding BRICS+, which before 2025 will be inevitably configured as the alternative Global South G20 that really matters. 

Iran is already part of the Quad that really matters – alongside BRICS members Russia, China and India. Iran is deepening its strategic partnership with both China and Russia and increasing bilateral cooperation with India. 

Iran is a key Chinese partner in the New Silk Roads, or Belt and Road Initiative (BRI). It is set to clinch a free trade agreement with the Eurasia Economic Union (EAEU) and is a key node of the International North-South Transportation Corridor (INSTC), alongside Russia and India.     

All of the above configures the lightning-fast emergence of the Islamic Republic of Iran as a West Asia and Eurasia big power, with vast reach across the Global South. 

That has left the whole set of imperial “policies” towards Tehran lying in the dust.

So it’s no wonder that previously accumulated strands of Iranophobia – fed by the Empire over four decades — have recently metastasized into yet another color revolution offensive, fully supported and disseminated by Anglo-American media.

The playbook is always the same. Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei actually came up with a concise definition. The problem is not bands of oblivious rioters and/or mercenaries:  “the main confrontation”, he said, is with “global hegemony.”

Ayatollah Khamenei was somewhat echoed by American intellectual and author Noam Chomsky, who has remarked how an array of US sanctions over four decades have severely harmed the Iranian economy and “caused enormous suffering.”

Using Kurds as expendable assets

The latest color revolution overdrive overlaps with the manipulation of Kurds in both Syria and Iraq. From the imperial perspective, the proxy war in Syria, which is far from over, not only works as an additional front in the fight against Russia but also allows the instrumentalization of highly dependent Kurds against both Iran and Turkey.   

Iran is currently being attacked according to a perverse variation of the scheme applied to Syria in 2011. A sort of “permanent protest” situation has been imposed across vast swathes of northwestern Iran.

What changed in mid-November is that armed gangs started to apply terrorist tactics in several towns close to the Iraqi border, and were even believed to be weaponized enough to take control of some of the towns.  

Tehran inevitably had to send IRGC troops to contain the situation and beef up border security. They engaged in operations similar to what has been done before in Dara’a, in the Syrian southwest.

This military intervention was effective. But in a few latitudes, terror gangs continue to attack government infrastructure and even civilian property. The key fact is that Tehran prefers not to repress these unruly demonstrations using deadly force.

The really critical issue is not the protests per se: it’s the transfer of weapons by the Kurds from Iraq to Iran to bolster the color revolution scenario.

Tehran has issued a de facto ultimatum to Baghdad: get your act together with the Kurds, and make them understand the red lines.    

As it stands, Iran is massively employing Fateh ballistic missiles and Shahed-131 and Shahed-136 kamikaze drones against selected Kurdish terrorist bases in northern Iraq.

It’s debatable whether that will be enough to control the situation. What is clear is that the “Kurdish card”, if not tamed, could be easily played by the usual suspects in other Iranian provinces, considering the solid financial, military and informational support offered by Iraqi Kurds to Iranian Kurds.   

Turkey is facing a relatively similar problem with the Syrian Kurds instrumentalized by the US.

In northern Syria, they are mostly armed gangs posing as “Kurds”. So it’s quite possible that these Kurdish armed gangs, essentially played by Washington as useful idiots, may end up being decimated, simultaneously, in the short to medium term, by both Ankara and Tehran.

If all fails, pray for regime change

A geopolitical game-changer which was unthinkable until recently may soon be on the cards: a high-level meeting between Turkish President Recep Erdogan and his Syrian counterpart Bashar al-Assad (remember the decade-long refrain “Assad must go”?) in Russia, with mediation by none other than Russian president Vladimir Putin.

What would it take for Kurds to understand no state – be it Iran, Syria or Turkey – will offer them land for their own nation? Parameters could eventually change in case Iraqis in Baghdad finally manage to expel the US.

Before we get there, the fact is Iran has already turned West Asian geopolitics upside down – via its smart cruise missiles, extremely effective kamikaze drones, electronic warfare and even state-of-the-art hypersonic missiles.

Empire “planners” never saw this coming: a Russia-Iran strategic partnership that not only makes total sense geo-economically, but is also a military force multiplier.

Moreover, that is inscribed in the looming Big Picture on which the expanded BRICS+ is focusing: Eurasia (and beyond) integration via multimodal economic corridors such as the INTSC, pipelines and high-speed rail.   

The Empire’s Plan A, on Iran, was a mere nuclear deal (JCPOA), devised by the Barack Obama administration as nothing but a crude containment scheme.

Trump actually blew it all up – and there’s nothing left: a JCPOA revival, which has been – in theory – attempted for months in Vienna, was always a non-starter because the Americans themselves don’t know anymore what they want from it. 

So what’s left as Plan B for the Straussian neocon/neoliberal psychos in charge of US foreign policy is to hurl all manner of fall guys – from Kurds to the toxic MEK – into the Iran cauldron and, amplified 24/7 by hysterical mainstream media, pray for regime change.

Well, that’s not going to happen. Tehran just needs to wait, exercise restraint, and observe how so much color revolution virtue signaling will eventually fizzle out.

Pepe Escobar is an independent geopolitical analyst and author, focused on Eurasia integration. His latest book is Raging Twenties.

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

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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 21^st 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 21^st 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.)

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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 5^th 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)

← Bamboo Diplomacy: The China-SE Asia Rom…Rewiring Eurasia: Mr. Patrushev Goes to… →

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

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 deal. It´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

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” ?

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/

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/

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.

• Love Letter to Ireland! (and to ALL the Debt-Enslaved Nations of the World)
• NATO and the Kh-32 missile
• Pyrrhic victory or strategic defeat?
• NATO escalates (again) and achieves nothing (again)
• The New Cuban Missile Crisis That Isn’t

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.)

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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 20^th 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 20^th 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 100^th 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