Death by a thousand cuts: where is the west’s Ukraine strategy?

The pounding, daily western narratives on ‘Ukrainian wins’ and ‘Russian losses’ underpins the lack of an actual, cohesive Grand Strategy against Moscow.

May 16 2022

Wars are not won with tactics and narratives – they require a Grand Strategy. Russia has a master plan behind its Ukraine military operations, but does the west have one? Photo Credit: The Cradle

By Pepe Escobar

While we are all familiar with Sun Tzu, the Chinese general, military strategist and philosopher who penned the incomparable Art of War, less known is the Strategikon, the Byzantium equivalent on warfare.

Sixth century Byzantium really needed a manual, threatened as it was from the east, successively by Sassanid Persia, Arabs and Turks, and from the north, by waves of steppe invaders, Huns, Avars, Bulgars, semi-nomadic Turkic Pechenegs and Magyars.

Byzantium could not prevail just by following the classic pattern of Roman Empire raw power – they simply didn’t have the means for it.

So military force needed to be subordinate to diplomacy, a less costly means of avoiding or resolving conflict. And here we can make a fascinating connection with today’s Russia, led by President Vladimir Putin and his diplomacy chief Sergei Lavrov.

But when military means became necessary for Byzantium – as in Russia’s Operation Z – it was preferable to use weaponry to contain or punish adversaries, instead of attacking with full force.

Strategic primacy, for Byzantium, more than diplomatic or military, was a psychological affair. The word Strategia itself is derived from the Greek strategos – which does not mean “General” in military terms, as the west believes, but historically corresponds to a managerial politico-military function.

It all starts with si vis pacem para bellum: “If you want peace prepare for war.” Confrontation must develop simultaneously on multiple levels: grand strategy, military strategy, operative, tactical.

But brilliant tactics, excellent operative intel and even massive victories in a larger war theater cannot compensate for a lethal mistake in terms of grand strategy. Just look at the Nazis in WWII.

Those who built up an empire such as the Romans, or maintained one for centuries like the Byzantines, never succeeded without following this logic.

Those clueless Pentagon and CIA ‘experts’

On Operation Z, the Russians revel in total strategic ambiguity, which has the collective west completely discombobulated. The Pentagon does not have the necessary intellectual firepower to out-smart the Russian General Staff. Only a few outliers understand that this is not a war – since the Ukraine Armed Forces have been irretrievably routed – but actually what Russian military and naval expert Andrei Martyanov calls a “combined arms police operation,” a work-in-progress on demilitarization and denazification.

The US Central Intelligence Agency (CIA) is even more abysmal in terms of getting everything wrong, as recently demonstrated by its chief Avril Haines during her questioning on Capitol Hill. History shows that the CIA strategically blew it all the way from Vietnam to Afghanistan and Iraq. Ukraine is no different.

Ukraine was never about a military win. What is being accomplished is the slow, painful destruction of the European Union (EU) economy, coupled with extraordinary weapons profits for the western military-industrial complex and creeping security rule by those nations’ political elites.

The latter, in turn, have been totally baffled by Russia’s C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance) capabilities, coupled with the stunning inefficiency of their own constellation of Javelins, NLAWs, Stingers and Turkish Bayraktar drones.

This ignorance reaches way beyond tactics and the operational and strategic realm. As Martyanov delightfully points out, they “wouldn’t know what hit them on the modern battlefield with near-peer, forget about peer.”

The caliber of ‘strategic’ advice from the NATO realm was self-evident in the Serpent Island fiasco – a direct order issued by British ‘consultants’ to Ukraine’s President Volodymyr Zelensky. The Commander-in-Chief of the Armed Forces of Ukraine, Valery Zaluzhny, thought the whole thing was suicidal. He was proven right.

All the Russians had to do was launch a few choice anti-ship and surface Onyx missiles from bastions stationed in Crimea on airports south of Odessa. In no time, Serpent Island was back under Russian control – even as high-ranking British and American marine officers ‘disappeared’ during the Ukrainian landing on the island. They were the ‘strategic’ NATO actors on the spot, doling out the lousy advice.

Extra evidence that the Ukraine debacle is predominantly about money laundering – not competent military strategy – is Capitol Hill approving a hefty extra $40 billion in ‘aid’ to Kiev. It’s just another western military-industrial complex bonanza, duly noted by Deputy Chairman of the Security Council of Russia Dmitry Medvedev.

Russian forces, meanwhile, have brought diplomacy to the battlefield, handing over 10 tons of humanitarian assistance to the people of liberated Kherson – with the deputy head of the military-civil administration of the region, Kirill Stremousov, announcing that Kherson wants to become part of the Russian Federation.

In parallel, Georgy Muradov, deputy prime minister of the government of Crimea, has “no doubts that the liberated territories of the south of the former Ukraine will become another region of Russia. This, as we assess from our communication with the inhabitants of the region, is the will of the people themselves, most of whom lived for eight years under conditions of repression and bullying by the Ukronazis.”

Denis Pushilin, the head of the Donetsk People’s Republic, is adamant that the DPR is on the verge of liberating “its territories within constitutional borders,” and then a referendum on joining Russia will take place. When it comes to the Luhansk People’s Republic, the integration process may even come earlier: the only area left to be liberated is the urban region of Lysychansk-Severodonetsk.

The ‘Stalingrad of Donbass’

As much as there’s an energetic debate among the best Russian analysts about the pace of Operation Z, Russian military planning proceeds methodically, as if taking all the time it needs to solidify facts on the ground.

Arguably the best example is the fate of Azov neo-Nazis at Azovstal in Mariupol – the best-equipped unit of the Ukrainians, hands down. In the end, they were totally outmatched by a numerically inferior Russian/Chechen Spetsnaz contingent, and in record time for such a big city.

Another example is the advance on Izyum, in the Kharkov region – a key bridgehead in the frontline. The Russian Ministry of Defense follows the pattern of grinding the enemy while slowly advancing; if they face serious resistance, they stop and smash the Ukrainian defensive lines with non-stop missile and artillery strikes.

Popasnaya in Luhansk, dubbed by many Russian analysts as “Mariupol on steroids”, or “the Stalingrad of Donbass,” is now under total control of the Luhansk People’s Republic, after they managed to breach a de facto fortress with linked underground trenches between most civilian houses. Popasnaya is extremely important strategically, as its capture breaks the first, most powerful line of defense of the Ukrainians in Donbass.

That will probably lead to the next stage, with an offensive on Bakhmut along the H-32 highway. The frontline will be aligned, north to south. Bakhmut will be the key to taking control of the M-03 highway, the main route to Slavyansk from the south.

This is just an illustration of the Russian General Staff applying its trademark, methodical, painstaking strategy, where the main imperative could be defined as a personnel-preserving forward drive. With the added benefit of committing just a fraction of overall Russian firepower.

Russian strategy on the battlefield stands in stark contrast with the EU’s obstinacy in being reduced to the status of an American dog’s lunch, with Brussels leading entire national economies to varying degrees of certified collapse and chaos.

Once again it was up to Russian Foreign Minister Sergei Lavrov – a diplomatic master – to encapsulate it.

Question: “What do you think of Josep Borrell’s (Lavrov’s EU counterpart) initiative to give Ukraine frozen Russian assets as ‘reparations?’ Can we say that the masks have come off and the west is moving on to open robbery?”

Lavrov: “You could say it is theft, which they are not trying to hide … This is becoming a habit for the west … We may soon see the post of the EU chief diplomat abolished because the EU has virtually no foreign policy of its own and acts entirely in solidarity with the approaches imposed by the United States.”

The EU cannot even come up with a strategy to defend its own economic battlefield – just watching as its energy supply is de facto, incrementally turned off by the US. Here we are at the realm where the US tactically excels: economic/financial blackmail. We can’t call these ‘strategic’ moves because they almost always backfire against US hegemonic interests.

Compare it with Russia reaching its biggest surplus in history, with the rise and rise of commodity prices and the upcoming role of the stronger and stronger ruble as a resource-based currency also backed by gold.

Moscow is spending way less than the NATO contingent in the Ukrainian theater. NATO has already wasted $50 billion – and counting – while the Russians spent $4 billion, give or take, and already conquered Mariupol, Berdyansk, Kherson and Melitopol, created a land corridor to Crimea (and secured its water supply), controls the Sea of Azov and its major port city, and liberated strategically vital Volnovakha and Popasnaya in Donbass, as well as Izyum near Kharkov.

That doesn’t even include Russia hurling the entire, collective west into a level of recession not seen since the 1970s.

The Russian strategic victory, as it stands, is military, economic, and may even coalesce geopolitically. Centuries after the Byzantine Strategikon was penned, the Global South would be very much interested in getting acquainted with the 21st century Russian version of the Art of War.

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

Empire of Bioweapon Lies

May 13, 2022

Pepe Escobar

An ongoing U.S. bioweapons program in Ukraine was one of the Top Three reasons that led to the launch of Operation Z, Pepe Escobar writes.

What are the roots that clutch, what branches grow / Out of this stony rubbish? Son of man, / You cannot say, or guess, for you know only / A heap of broken images, where the sun beats, / And the dead tree gives no shelter, the cricket no relief, / And the dry stone no sound of water. Only / There is shadow under this red rock, / (Come in under the shadow of this red rock), / And I will show you something different from either / Your shadow at morning striding behind you / Or your shadow at evening rising to meet you; / I will show you fear in a handful of dust.

T.S. Eliot, The Waste Land: I. The Burial of the Dead, 1922

This glimpse of “fear in a handful of dust” already ranks as one the prime breakthroughs of the young 21st century, presented this week by Chief of Russian Radiation, Chemical, and Biological Protection Force Igor Kirillov.

The provisional results of evidence being collected about the work of U.S. bioweapons in Ukraine are simply astonishing. These are the main takeaways.

  1. U.S. bioweapon ideologues comprise the leadership of the Democratic Party. By linking with non-governmental biotechnology organizations, using the investment funds of the Clintons, Rockefellers, Soros and Biden, they profited from additional campaign financing – all duly concealed. In parallel, they assembled the legislative basis for financing the bioweapons program directly from the federal budget.
  2. COVID-19 vaccine manufacturers Pfizer and Moderna, as well as Merck and Gilead – of Donald “known unknowns” fame, and affiliated with the Pentagon – were directly involved.
  3. U.S. specialists tested new drugs in the Ukraine biolabs in circumvention of international safety standards. According to Kirillov, acting this way “Western companies seriously reduce the costs of research programs and gain significant competitive advantages.”
  4. According to Kirillov, “along with U.S. pharmaceutical companies and Pentagon contractors, Ukrainian government agencies are involved in military biotechnology activities, whose main tasks are to conceal illegal activities, conduct field and clinical trials and provide the necessary biomaterial.”
  5. The Pentagon, Kirillov pointed out, expanded its research potential not only in terms of producing biological weapons, but also gathering information on antibiotic resistance and the presence of antibodies to certain diseases among the population in specific regions. The testing ground in Ukraine was practically outside the control of the so-called “international community”.

These findings, amply documented, suggest a vast “legitimized” bioweapon racket reaching the highest levels of the American body politic. There’s no doubt the Russians plan to thoroughly unmask it for the benefit of world public opinion, starting with a War Crimes Tribunal to be set up this summer, most probably in Donetsk.

An ongoing U.S. bioweapons program in Ukraine was one of the Top Three reasons that led to the launch of Operation Z, side by side with preventing an imminent NATO-managed blitzkrieg against Donbass and Kiev’s desire to re-start a nuclear weapons program. These are Top Three red lines for Russia.

The strength of the collected evidence may directly correlate with what was largely interpreted as a carefully measured Victory Day speech by President Putin. The Kremlin does not bluff. It will certainly privilege the meticulous presentation of – bioweapon – facts on the ground over grandstanding rhetoric.

The return of Nord Stream 2

Deputy Permanent Representative to the UN Dmitry Polyaniskiy announced Russia’s demand for an open meeting of the UN Security Council to present further evidence related to U.S. biolabs in Ukraine. Even if the meeting would be vetoed by the U.S., the evidence will be entered by Russia on the UN records.

These developments provide an extra indication there’s absolutely no space left for diplomacy between Russia and the U.S./collective West, as Polyaniskiy himself suggested when commenting the possible accession of Ukraine to the EU: “The situation has changed after Mr. Borrell’s statement that ‘this war should be won on the battleground’ and after the fact that the European Union is the leader in deliveries of arms [to Ukraine].”

It gets worse. The next chapter is Finland’s drive to join NATO.

The Americans gamble that Finland – and Sweden – joining NATO will totally discredit Putin’s Operation Z as having accomplished next to nothing strategically: after all, in the near future, potential U.S. hypersonic missiles stationed in Finland and Sweden will be very close to Saint Petersburg and Moscow.

Meanwhile, Russian unmasking of the bioweapon racket will drive a toxic section of American political elites to turbo-charge their warmongering. It’s all following a carefully calculated script.

First, these bioweapon-supervising “elites” ordered the massive Kiev shelling of Donbas in early February. That forced the Kremlin’s hand, pushing it to launch Operation Z.

We should always remember that the ultimate goal in the U.S. plan of training Ukrainians for war since 2014 was to alienate Germany from Russia – as Germany de facto controls Euroland economically.

Imperial control of the oceans allows the Empire to strangle Germany at will into subservience by cutting them off from Russian energy – as the British did to Germany in WWII when Britannia ruled the waves. The Wehrmacht could not supply their mechanized army with fuel. Now, in theory, Germany and the EU will have to look to the seas – and total U.S. dependency – for their natural resources.

The remote-controlled Kiev regime dominated by SBU fanatics and Azov neo-Nazis is making it even harder – by shutting off all natural gas from Russia through Ukraine into Europe, reducing the flow by more than one third.

That translates as U.S.-enforced blackmail to force the EU to increase the Ukro-weaponizing against Russia. The practical consequences for Germany and the EU will be dire – in terms of shut down industries and cost of home heating and electrical power.

Russia, meanwhile, will rely on a bolstered Pipelineistan maze to China and East Asia as well as high-speed rail to transport all its natural resources.

Blowback against the Americans though is not off limits. Stranger things have happened. If gas transit to Europe via Ukraine is totally cut off, there are no alternatives. And that – assuming there are working IQs in Berlin – would open the way for a renegotiation on the future of Nord Stream 2.

As the head of the Energy Development Center Kirill Melnikov notes, “the Yamal-Europe gas pipeline is practically idle and one of the Nord Stream 2 lines is also ready for operation though the German regulator has not issued permission for its launch yet.”

That prompted Melnikov to a priceless comment: “If purchases remain the same, Germany will probably need to urgently allow the launch of one of the Nord Stream 2 lines in order to replace the Ukrainian transit route.”

No one ever lost money betting on the astonishing stupidity permeating EUrocrat decision levels. Even facing economic suicide, the EU is desperate to “abandon” Russian oil. Yet a full ban is impossible, because of energy-deprived Eastern Europe.

Every impartial energy analyst knows replacing Russian oil is D.O.A., for a number of reasons: the OPEC+ deal; the ghastly divide between Washington and Riyadh; the never-ending JCPOA renegotiation, where the Americans behave like headless chickens; and the crucial fact – beyond the understanding of EUrocrats – that European oil refineries are designed to use oil from the Urals.

So just when we thought we could enjoy the summer by watching Europe commit hara-kiri, it’s time to stock up on those Aperol Spritz. Get ready for a new hit series, season 1: Inside the American bioweapon racket.

Megalopolis x Russia: Total War

May 07, 2022

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

After careful evaluation, the Kremlin is rearranging the geopolitical chessboard to end the unipolar hegemony of the “indispensable nation”.

But it’s our fate / To have no place to rest, / As suffering mortals / Blindly fall and vanish / From one hour / To the next, / Like water falling / From cliff to cliff, downward / For years to uncertainty.

Holderlin, Hyperion’s Fate Song

Operation Z is the first salvo of a titanic struggle: three decades after the fall of the USSR, and 77 years after the end of WWII, after careful evaluation, the Kremlin is rearranging the geopolitical chessboard to end the unipolar hegemony of the “indispensable nation”. No wonder the Empire of Lies has gone completely berserk, obsessed in completely expelling Russia from the West-centric system.

The U.S. and its NATO puppies cannot possibly come to grips with their perplexity when faced with a staggering loss: no more entitlement allowing exclusive geopolitical use of force to perpetuate “our values”. No more Full Spectrum Dominance.

The micro-picture is also clear. The U.S. Deep State is milking to Kingdom Come its planned Ukraine gambit to cloak a strategic attack on Russia. The “secret” was to force Moscow into an intra-Slav war in Ukraine to break Nord Stream 2 – and thus German reliance on Russian natural resources. That ends – at least for the foreseeable future – the prospect of a Bismarckian Russo-German connection that would ultimately cause the U.S. to lose control of the Eurasian landmass from the English Channel to the Pacific to an emerging China-Russia-Germany pact.

The American strategic gambit, so far, has worked wonders. But the battle is far from over. Psycho neo-con/neoliberalcon silos inside the Deep State consider Russia such a serious threat to the “rules-based international order” that they are ready to risk if not incur a “limited” nuclear war out of their gambit. What’s at stake is nothing less than the loss of Ruling the World by the Anglo-Saxons.

Mastering the Five Seas  

Russia, based on purchasing power parity (PPP), is the 6th economy in the world, right behind Germany and ahead of both the UK and France. Its “hard” economy is similar to the U.S. Steel production may be about the same, but intellectual capacity is vastly superior. Russia has roughly the same number of engineers as the U.S., but they are much better educated.

The Mossad attributes Israel’s economic miracle in creating an equivalent of Silicon Valley to a base of a million Russian immigrants. This Israeli Silicon Valley happens to be a key asset of the American MICIMATT (military-industrial-congressional-intelligence-media-academia-think tank complex), as indelibly named by Ray McGovern.

NATOstan media hysterically barking that Russia’s GDP is the size of Texas is nonsense. PPP is what really counts; that and Russia’s superior engineers is why their hypersonic weapons are at least two or three generations ahead of the U.S. Just ask the indispensable Andrei Martyanov.

The Empire of Lies has no defensive missiles worthy of the name, and no equivalents to Mr. Zircon and Mr. Sarmat. The NATOstan sphere simply cannot win a war, any war against Russia for this reason alone.

The deafening NATOstan “narrative” that Ukraine is defeating Russia does not even qualify as an innocuous joke (compare it with Russia’s “Reach Out and Touch Someone” strategy). The corrupt system of SBU fanatics intermingled with UkroNazi factions is kaput. The Pentagon knows it. The CIA cannot possibly admit it. What the Empire of Lies has sort of won, so far, is a media “victory” for the UkroNazis, not a military victory.

Gen Aleksandr Dvornikov, of Syria fame, has a clear mandate: to conquer the whole of Donbass, totally free up Crimea and prepare the advance towards Odessa and Transnistria while reducing a rump Ukraine to the status of failed state without any access to the sea.

The Sea of Azov – linked to the Caspian by the Don-Volga canal – is already a Russian lake. And the Black Sea is next, the key connection between the Heartland and the Mediterranean. The Five Seas system – Black, Azov, Caspian, Baltic, White – enshrines Russia as a de facto continental naval power. Who needs warm waters?

Moving “at the speed of war”

The pain dial, from now on, will go up non-stop. Reality – as in facts on the ground – will soon become apparent even to the NATOstan-wide LugenPresse.

The woke Chairman of the Joint Chiefs of Staff, Gen Mark Milley, expects Operation Z to last years. That’s nonsense. The Russian Armed Forces may afford to be quite methodical and take all the time needed to properly demilitarize Ukraine. The collective West for its part is pressed for time – because the blowback from the real economy is already on and bound to become vicious.

Defense Minister Shoigu has made it quite clear: any NATO vehicles bringing weapons to Kiev will be destroyed as “legitimate military targets”.

A report by the scientific service of the Bundestag established that training of Ukrainian soldiers on German soil may amount, under international law, to participation in war. And that gets even trickier when coupled with NATO weapons deliveries: “Only if, in addition to the supply of weapons, the instruction of the conflict party or training in such weapons were also an issue would one leave the secure area of ​​non-warfare.”

Now at least it’s irretrievably clear how the Empire of Lies “moves at the speed of war” – as described in public by weapons peddler turned Pentagon head, Lloyd “Raytheon” Austin. In Pentagonese, that was explained by the proverbial “official” as “a combination of a call center, a watch floor, meeting rooms. They execute a battle rhythm to support decision-makers.”

The Pentagonese “battle rhythm” offered to a supposedly “credible, resilient and combat-capable Ukraine military” is fed by a EUCom system that essentially moves weapons orders from Pentagon warehouses in the U.S. to branches of the Empire of Bases in Europe and then to the NATO eastern front in Poland, where they are trucked across Ukraine just in time to be duly incinerated by Russian precision strikes: the wealth of options include supersonic P-800 Onyx missiles, two types of Iskander, and Mr. Khinzal launched from Mig-31Ks.

Kremlin spokesman Dmitry Peskov has stressed Moscow is perfectly aware the U.S., NATO and UK are transferring not only weapons but also loads of intel. In parallel, the collective West turns everything upside down 24/7 shaping a new environment totally geared against Russia, not caring for even a semblance of partnership in any area. The collective West does not even consider the possibility of dialogue with Russia.

Hence talking to Putin is “a waste of time” unless a “Russian defeat” in Ukraine (echoing strident Kiev P.R.) would make him “more realistic”. For all his faults, Le Petit Roi Macron/McKinsey has been an exception, on the phone with Putin earlier this week.

The neo-Orwellian Hitlerization of Putin reduces him, even among the so-called Euro-intelligentzia, to the status of dictator of a nation chloroformed into its 19th century nationalism. Forget about any semblance of historical/political/cultural analysis. Putin is a late Augustus, dressing up his Imperium as a Republic.

At best the Europeans preach and pray – chihuahuas yapping to His Master’s Voice – for a hybrid strategy of “containment and engagement” to be unleashed by the U.S., clumsily parroting the scribblings of denizens of that intellectual no-fly zone, Think Tankland.

Yet in fact the Europeans would rather “isolate” Russia – as in 12% of the world’s population “isolating” 88% (of course: their Westoxified “vision” completely ignores the Global South). “Help” to Russia will only come when sanctions are effective (as in never: blowback will be the norm) or – the ultimate wet dream – there’s regime change in Moscow.

The Fall

UkroNazi P.R. agent Ursula von der Lugen presented the sixth sanction package of the Europoodle (Dis)Union.

Top of the bill is to exclude three more Russian banks from SWIFT, including Sberbank. Seven banks are already excluded. This will enforce Russia’s “total isolation”. It’s idle to comment on something that only fools the LugenPresse.

Then there’s the “progressive” embargo on oil imports. No more crude imported to the EU in six months and no more refined products before the end of 2022. As it stands, the IEA shows that 45% of Russia’s oil exports go to the EU (with 22% to China and 10% to the U.S.). His Master’s Voice continues and will continue to import Russian oil.

And of course 58 “personal” sanctions also show up, targeting very dangerous characters such as Patriarch Kirill of the Orthodox Church, and the wife, son and daughter of Kremlin spokesman Dmitri Peskov.

This stunning display of stupidity will have to be approved by all EU members. Internal revolt is guaranteed, especially from Hungary, even as so many remain willing to commit energy suicide and mess up with the lives of their citizens big time to defend a neo-Nazi regime.

Alastair Crooke called my attention to a startling, original interpretation of what’s goin’ on, offered in Russian by a Serbian analyst, Prof. Slobodan Vladusic. His main thesis, in a nutshell: “Megalopolis hates Russia because it is not Megalopolis – it has not entered the sphere of anti-humanism and that is why it remains a civilization alternative. Hence Russophobia.”

Vladusic contends that the intra-Slav war in Ukraine is “a great catastrophe for Orthodox civilization” – mirroring my recent first attempt to open a serious debate on a Clash of Christianities.

Yet the major schism is not on religion but culture: “The key difference between the former West and today’s Megalopolis is that Megalopolis programmatically renounces the humanistic heritage of the West.”

So now “it is possible to erase not only the musical canon, but also the entire European humanistic heritage: the entire literature, fine arts, philosophy” because of a “trivialization of knowledge”. What’s left is an empty space, actually a cultural black hole, “filled by promoting terms such as ‘posthumanism’ and ‘transhumanism’.”

And here Vladusic gets to the heart of the matter: Russia fiercely opposes the Great Reset concocted by the “hackable”, self-described “elites” of Megalopolis.

Sergey Glazyev, now coordinating the draft of a new financial/monetary system by the Eurasia Economic Union (EAEU) in partnership with the Chinese, adapts Vladusic to the facts on the ground (here in Russian, here in an imperfect English translation).

Glazyev is way more blunt than in his meticulous economic analyses. While noting the Deep State’s aims of destroying the Russian world, Iran and block China, he stresses the U.S. “will not be able to win the global hybrid war”. A key reason is that the collective West has “put all independent countries in front of the need to find new global currency instruments, risk insurance mechanisms, restore the norms of international law and create their own economic security systems.”

So yes, this is Totalen Krieg, Total War – as Glazyev spells it out with no attenuation, and how Russia denounced it this week at the UN: “Russia needs to stand up to the United States and NATO in its confrontation, bringing it to its logical conclusion, so as not to be torn between them and China, which is irrevocably becoming the leader of the world economy.”

History may eventually register, 77 years after the end of WWII, that neocon/neoliberalcon psychos in Washington silos instigating an inter-Slavic war by ordering Kiev to launch a blitzkrieg against Donbass was the spark that led to the Fall of the U.S. Empire.

Terror from Balochistan: a menacing tool to disrupt Sino-Pakistani economics

A Baloch suicide bombing targeting Chinese workers in Karachi comes a mere month after the US-backed ousting of PM Imran Khan. Pakistan is a critical BRI hub in Beijing’s vast Eurasian connectivity project, and it looks like CPEC is the ultimate target of this disruption.

May 05 2022

Balochistan can only benefit from Chinese infrastructure investment in the immensely impoverished Pakistani province. But an uptick in attacks on Chinese workers by militant separatists suggests that external agendas may be in play. Photo Credit: The Cradle

By Pepe Escobar

This is the concise story of how a suicide bombing may carry the potential to subvert the whole, ongoing, complex process of Eurasia integration.

Recently, the Balochistan Liberation Movement (BLA) had released an ISIS-influenced video threatening “Chinese officials and installations” in Pakistan’s vast province.

Yet what actually happened in late April was a suicide bombing outside of the University of Karachi’s Confucius Institute – not Balochistan – and targeting Chinese teachers, not “officials and installations.”

The suicide bomber was a woman, Shaari Baloch, alias Bramsh, who detonated her vest just as a van carrying Institute staff members approached the entrance. The attack was claimed by the BLA’s Majeed Brigade, which stressed that this was the first time they used a female suicide bomber.

Shaari Baloch was a schoolteacher with a Zoology degree, enrolled to pursue a second Master’s degree, married to a dentist and professor at Makran Medical College in her hometown of Turbat, in southern Balochistan. Her three brothers include a doctor, a deputy director at a government-funded project, and a civil servant. So Shaari Baloch was far from being a mere destitute online-indoctrinated Salafi-jihadi.

The Pakistani Foreign Office had to stress the obvious: this was a “direct attack on the Pakistan-China friendship and ongoing cooperation,” always qualified, by both sides, as “iron brothers.” Pakistan is an absolutely key node of the Chinese Belt and Road Initiative (BRI) to connect the Eurasian landmass.

This was no standard terrorist attack. Its reverberations are immense – not only in one of Pakistan’s provinces and South Asia regionally, but for the whole of Eurasia. It may be a harbinger of serious turbulence ahead.

Shaari Baloch’s act of desperation should be seen, to start with, as the embodiment of a deep-seated Baloch alienation felt by the educated middle classes, from lawyers and traders to students, constantly permeating the complex relationship with a distant Islamabad. A significant part of the puzzle is that 26 Pakistani intel agencies never saw it coming.

Baloch leaders instantly made the point that the best possible reaction would be to call a Grand Jirga – modeled on the Shahi Jirga practiced at the time of the partition of the subcontinent – that would unite all tribal elders to address the most pressing local grievances.

Round up the usual suspects

Balochistan, geostrategically, is as valuable as rare earth minerals: an immense desert positioned east of Iran, south of Afghanistan, and boasting three Arabian Sea ports, including Gwadar, practically at the mouth of the strategic Strait of Hormuz.

Comprising nearly 48 percent of Pakistan’s area, Balochistan is rich in uranium and copper, potentially very rich in oil, produces more than one-third of Pakistan’s natural gas, and sparsely populated. The Baloch account for the majority of the population, followed by Pashtuns. Quetta, the large provincial capital, for years was considered Taliban Central by the Pentagon.

Gwadar, the port built by China on the southwestern Balochistan coast of the Arabian Sea – directly across from Oman – is the absolute key node of the China-Pakistan Economic Corridor (CPEC), and doubles as the essential link in a never-ending pipeline saga. The Iran-Pakistan-India (IPI) gas pipeline, previously known as the “peace pipeline,” with plans to cross from Iranian to Pakistani Balochistan (India still has not made up its mind) is absolute anathema to Washington since the George W. Bush era.

CPEC remains an endless source of controversy even inside Pakistan. Beyond all the links planned between Gwadar and Xinjiang by the year 2030, most of this ambitious connectivity corridor deals with energy, industrial zones and road and rail projects in different parts of the country – an overall improvement of its lagging infrastructure. The Chinese, for years, have quipped that in fact “all of Pakistan is a corridor.”

The US security establishment, predictably, has been planning for years to instrumentalize an insurgency in Balochistan to – what else – “disrupt” first the possibility of an energy pipeline from Gwadar to Xinjiang, and then the overall CPEC project. Usual suspects like the US’s National Endowment for Democracy (NED) are very much present in Balochistan. WikiLeaks had revealed a great deal of the game back in 2015.

A Carnegie Institute report noted how “many Baloch nationalist leaders now come from the urbanized districts of Kech, Panjgur, and Gwadar (and to a lesser extent from Quetta, Khuzdar, Turbat, Kharan, and Lasbela). They are well connected to Karachi and Gulf cities, where tribal structures are non-existent. In fact, while there is violence all over the province, the insurgency seems to concentrate mainly in these urbanized areas.”

Suicide bomber Shaari Baloch came from Turbat, the province’s second largest city, where the BLA is very much active. From the point of view of the usual suspects, these are choice assets, especially after the death of important tribal leaders such as Akbar Bugti. The report duly noted how “the educated and middle-class Baloch youth are in the forefront” of the insurgency.

The anti-China instrumentalization of the BLA also ties in with the regime-change parliament operation in Islamabad that recently deposed former prime minister Imran Khan, who was always a fierce adversary of the American “Forever War” in Afghanistan. Khan resolutely denied Pakistan’s use in “over the horizon” US military ops: that was one of the key reasons for him to be ousted.

Now, with a pliant, Washington-approved, new regime in town, a miracle has just happened: the Pentagon is about to clinch a formal agreement with Islamabad to use Pakistani airspace to – what else – keep interfering in Afghanistan.

Beijing, as well as other members of the Shanghai Cooperation Organization (SCO), won’t be amused. Only weeks before the white coup, Khan had met with Chinese President Xi Jinping and once again underscored how Pakistan and China are “iron brothers.”

Imran Khan was a serious thorn in the side of the west because he kept impressing on Pakistanis that the Forever War in Afghanistan was militarily unwinnable. He knew how all the proxies – including the BLA – that destabilized both Afghanistan and Pakistan for decades were, and continue to be, part of US covert operations.

Not an Iran-India plot

Balochistan is as deeply tribal as the Pashtun tribal areas. Local tribal chiefs can be as ultra-conservative as Islamabad is neglectful (and they are not exactly paragons of human rights either). Most tribes though bow to Islamabad’s authority – except, first and foremost, the Bugti.

And then there’s the Balochistan Liberation Army (BLA), which both Washington and London used to brand as a terrorist group, and then forgot about it. The BLA operated for years out of Kandahar in Afghanistan (only two hours away from Quetta), and already in the previous decade – simultaneous to the announcement of the New Silk Roads and CPEC – stressed it was getting ready to attack non-Balochis (code for the government in Islamabad as well as Chinese foreigners).

Balochis are inclined to consider the BLA as a resistance group. But Islamabad has always denied it, saying their support is not beyond 10 percent of the provincial population.

An ample controversy has raged in Pakistan for years on whether the BLA was totally hijacked by the CIA, the MI6 and the Mossad. During a 2006 visit to Iran, I was prevented from going to the Sistan-Balochistan province in southeast Iran because, according to Tehran’s version, infiltrated CIA from Pakistani Balochistan were involved in covert, cross-border attacks. It was no secret to anyone in the region that since 9/11 the US virtually controlled the Baloch air bases in Dalbandin and Panjgur.

In October 2001, while waiting for an opening to cross to Kandahar from Quetta, I spent quite some time with a number of BLA associates and sympathizers. They described themselves as “progressive, nationalist, anti-imperialist” (and that would make them difficult to be co-opted by the US). They were heavily critical of “Punjabi chauvinism,” and always insisted the region’s resources belong to Balochis first; that was their rationale for attacks on gas pipelines.

Stressing an atrocious, provincial literacy rate of only 16 percent (“It’s government policy to keep Balochistan backward”), they resented the fact that most people still lacked drinking water. They claimed support from at least 70 percent of the Baloch population (“Whenever the BLA fires a rocket, it’s the talk of the bazaars”). They also claimed to be united, and in coordination with Iranian Balochis. And they insisted that “Pakistan had turned Balochistan into a US cantonment, which affected a lot the relationship between the Afghan and Baloch peoples.”

Two decades later, and after the whole ISIS saga in Syria and Iraq, it’s a completely different story. BLA sympathizers may still be prepared to remain within a Pakistani confederation, although with infinitely more autonomy. But now they seem to be willing to use western imperial help to strike not only at the central government in Islamabad, but also at the “near abroad” foreign profiteer (China).

After the Karachi suicide bombing, a narrative started to emerge in some Pakistani circles that Iran and India were in cahoots to destabilize Balochistan.

That makes absolutely no sense. Both Tehran and Islamabad are tightly linked to Beijing through several nodes of the New Silk Roads. Iran would draw less than zero benefit to collude with India to destabilize an area that borders Afghanistan, especially when the SCO is fully engaged in incorporating Kabul into the Eurasia integration process. Moreover, the IPI has its best chances ever to come to fruition in the near future, consolidating an umbilical cord from Southwest Asia to South Asia.

During the late years of Barack Obama’s administration, the BLA, though still a fringe group with a political wing and a military wing, was regrouping and rearming, while the chief minister of Balochistan, Nawab Raisani, was suspected of being a CIA asset (there was no conclusive proof).

Already at the time, the fear in Islamabad was that the government had taken its eye off the Balochistan ball – and that the BLA was about to be effectively used by the US for balkanization purposes. That seems to be the picture right now. Yet the heart of the matter – glaringly expressed by the Karachi suicide bombing – is that Islamabad still remains impervious to the key Baloch grievance: we want to profit from our natural wealth, and we want autonomy.

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

Empire of Lies Eager to Receive Mr. Sarmat’s Business Card

April 29, 2022

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The only antidote to propaganda dementia is served by sparse voices of reason, which happen to be Russian, thus silenced and/or dismissed.

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

Especially since the onset of GWOT (Global War on Terror) at the start of the millennium, no one ever lost money betting against the toxic combo of hubris, arrogance and ignorance serially deployed by the Empire of Chaos and Lies.

What passes for “analysis” in the vast intellectual no-fly zone known as U.S. Think Tankland includes wishful thinking babble such as Beijing “believing” that Moscow would play a supporting role in the Chinese century just to see Russia, now, in the geopolitical driver’s seat.

This is a fitting example not only of outright Russophobic/Sinophobic paranoia about the emergence of peer competitors in Eurasia – the primeval Anglo-American nightmare – but also crass ignorance about the finer points of the complex Russia-China comprehensive strategic partnership.

As Operation Z methodically hits Phase 2, the Americans – with a vengeance – have also embarked on their symmetrical Phase 2, which de facto translates as an outright escalation towards Totalen Krieg, from shades of hybrid to incandescent, everything of course by proxy. Notorious Raytheon weapons peddler reconverted into Pentagon head, Lloyd Austin, gave away the game in Kiev:

“We want to see Russia weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine.”

So this is it: the Empire wants to annihilate Russia. Cue to War Inc.’s frenzy of limitless weapon cargos descending on Ukraine, the overwhelming majority on the road to be duly eviscerated by Russian precision strikes. The Americans are sharing intel 24/7 with Kiev not only on Donbass and Crimea but also Russian territory. Totalen Krieg proceeds in parallel to the engineered controlled demolition of the EU’s economy, with the European Commission merrily acting as a sort of P.R. arm of NATO.

Amidst the propaganda dementia cum acute cognitive dissonance overdrive across the whole NATOstan sphere, the only antidote is served by sparse voices of reason, which happen to be Russian, thus silenced and/or dismissed. The West ignores them at their own collective peril.

Patrushev goes Triple-X unplugged

Let’s start with President Putin’s speech to the Council of Legislators in St. Petersburg celebrating the Day of Russian Parliamentarism.

Putin demonstrated how a hardly new “geopolitical weapon” relying on “Russophobia and neo-Nazis”, coupled with efforts of “economic strangulation”, not only failed to smother Russia, but impregnated in the collective unconscious the feeling this an existential conflict: a “Second Great Patriotic War”.

With off the charts hysteria across the spectrum, a message for an Empire that still refuses to listen, and doesn’t even understand the meaning of “indivisibility of security”, had to be inevitable:

“I would like to emphasize once again that if someone intends to interfere in the events taking place from the outside and creates threats of a strategic nature unacceptable to Russia, they should know that our retaliatory strikes will be lightning fast. We have all the tools for this. Such as no one can boast of now. And we won’t brag. We will use them if necessary. And I want everyone to know about it – we have made all the decisions on this matter.”

Translation: non-stop provocations may lead Mr. Kinzhal, Mr. Zircon and Mr. Sarmat to be forced to present their business cards in select Western latitudes, even without an official invitation.

Arguably for the first time since the start of Operation Z, Putin made a distinction between military operations in Donbass and the rest of Ukraine. This directly relates to the integration in progress of Kherson, Zaporozhye and Kharkov, and implies the Russian Armed Forces will keep going and going, establishing sovereignty not only in the Donetsk and Luhansk People’s Republics but also over Kherson, Zaporozhye, and further on down the road from the Sea of Azov to the Black Sea, all the way to establishing full control of Nikolaev and Odessa.

The formula is crystal clear: “Russia cannot allow the creation of anti-Russian territories around the country.”

Now let’s move to an extremely detailed interview by Secretary of the Security Council Nikolai Patrushev to Rossiyskaya Gazeta, where Patrushev sort of went triple-X unplugged.

The key take away may be here: “The collapse of the American-centric world is a reality in which one must live and build an optimal line of behavior.” Russia’s “optimal line of behavior” – much to the wrath of the universalist and unilateralist hegemon – features “sovereignty, cultural and spiritual identity and historical memory.”

Patrushev shows how “tragic scenarios of world crises, both in past years and today, are imposed by Washington in its desire to consolidate its hegemony, resisting the collapse of the unipolar world.” The U.S. goes no holds barred “to ensure that other centers of the multipolar world do not even dare to raise their heads, and our country not only dared, but publicly declared that it would not play by the imposed rules.”

Patrushev could not but stress how War Inc. is literally making a killing in Ukraine: “The American and European military-industrial complex is jubilant, because thanks to the crisis in Ukraine, it has no respite from order. It is not surprising that, unlike Russia, which is interested in the speedy completion of a special military operation and minimizing losses on all sides, the West is determined to delay it at least to the last Ukrainian.”

And that mirrors the psyche of American elites: “You are talking about a country whose elite is not able to appreciate other people’s lives. Americans are used to walking on scorched earth. Since World War II, entire cities have been razed to the ground by bombing, including nuclear bombing. They flooded the Vietnamese jungle with poison, bombed the Serbs with radioactive munitions, burned Iraqis alive with white phosphorus, helped terrorists poison Syrians with chlorine (…) As history shows, NATO has also never been a defensive alliance, only an offensive one.”

Previously, in an interview with the delightfully named The Great Game show on Russian TV, Foreign Minister Sergei Lavrov had once again detailed how the Americans “no longer insist on the implementation of international law, but on respect for the ‘rules-based world order’. These ‘rules’ are not deciphered in any way. They say that now there are few rules. For us, they don’t exist at all. There is international law. We respect it, as does the UN Charter. The key provision, the main principle is the sovereign equality of states. The U.S. flagrantly violates its obligations under the UN Charter when it promotes its ‘rules’”.

Lavrov had to stress, once again, that the current incandescent situation may be compared to the Cuban Missile Crisis: “In those years, there was a channel of communication that both leaders trusted. Now there is no such channel. No one is trying to create it.”

The Empire of Lies, in its current state, does not do diplomacy.

The pace of the game in the new chessboard

In a subtle reference to the work of Sergei Glazyev, as the Minister in Charge of Integration and Macroeconomics of the Eurasia Economic Union explained in our recent interview, Patrushev hit the heart of the current geoeconomic game, with Russia now actively moving towards a gold standard: “Experts are working on a project proposed by the scientific community to create a two-circuit monetary and financial system. In particular, it is proposed to determine the value of the ruble, which should be secured by both gold and a group of goods that are currency values, to put the ruble exchange rate in line with real purchasing power parity.”

That was inevitable after the outright theft of over $300 billion in Russian foreign reserves. It may have taken a few days for Moscow to be fully certified it was facing Totalen Krieg. The corollary is that the collective West has lost any power to influence Russian decisions. The pace of the game in the new chessboard is being set by Russia.

Earlier in the week, in his meeting with the UN secretary-general Antonio Guterres, Putin went as far as stating that he’d be more than willing to negotiate – with only a few conditions: Ukrainian neutrality and autonomy status for Donbass. Yet now everyone knows it’s too late. For a Washington in Totalen Krieg mode negotiation is anathema – and that has been the case since the aftermath of the Russia-Ukraine meeting in Istanbul in late March.

So far, on Operation Z, the Russian Armed forces have used only 12% of its soldiers,10% of its fighter jets, 7% of its tanks, 5% of its missiles, and 4% of its artillery. The pain dial is set to go substantially up – and with the total liberation of Mariupol and the resolution one way or another of the Donbass cauldron there is nothing the hysteria/propaganda/weaponizing combo deployed by the collective West can do to alter facts on the ground.

That includes desperate gambits such as the one uncovered by SVR – Russian foreign intel, which very rarely makes mistakes. SVR found out that the Empire of Lies/War Inc. axis is pushing not only for a de facto Polish invasion to annex Western Ukraine, under the banner of “historical reunification”, but also for a joint Romanian/Ukrainian invasion of Moldova/Transnistria, with Romanian “peacekeepers” already piling up near the Moldova border.

Washington, as the SVR maintains, has been plotting the Polish gambit for over a month now. It would “lead from behind” (remember Libya?), “encouraging” a “group of countries” to occupy Western Ukraine.

So partition is already on the cards. Were that ever to materialize, it will be fascinating to bet on which locations Mr. Sarmat would be inclined to distribute his business card.

Pepe Escobar and Danny Haiphong; Russia, China, and the Post-Dollar World

April 28, 2022

Aux armes, citoyens: dissecting the stage-managed French elections

April 27, 2022

Macron’s second presidency was as calculatingly managed by France’s liberal elite as his first. As the country’s economic and geographic schisms widen further, yesterday’s Yellow Vest protests will seem like a tea party by comparison.

Emmanuel Macron now has a second term, courtesy of France’s urban elites. But the magnitude of the problems he faces, both domestic and external, will ensure indefinite strife in the country. Photo Credit: The Cradle

Macron’s second presidency was as calculatingly managed by France’s liberal elite as his first. As the country’s economic and geographic schisms widen further, yesterday’s Yellow Vest protests will seem like a tea party by comparison.

The Cradle

By Pepe Escobar,  

In the end, it happened exactly like the French establishment designed it. I called it last December in a column here at The Cradle.

These are the essentials: Certified Arabophobe Eric Zemmour, who is of Algerian origin, was manufactured by key establishment players of the Institut Montaigne variety to cut off the populist right-wing candidacy of Marine Le Pen. In the end, Zemmour’s electoral performance was dismal, as expected. Yet another candidate pulled off a miracle intervention and was even more useful: ambitious egomaniac opportunist and so-called progressive Jean-Luc Melenchon.

‘Le Petit Roi’ Emmanuel Macron generates less than zero empathy across France. That explains the huge voter abstention of 28 percent in the second round of votes.

The numbers tell the story: There are 48,803,175 French citizens registered to vote. Macron got 18,779,809 votes. Marine Le Pen got 13,297,728 votes. Yet the most eyebrow-raising performance was by the Abstention/Nullified/Blank candidate: 16,674,963 votes.

So the president of France was re-elected by 38.5 percent of voters while the real second place, Absention/Nullified/Blank got 34.2 percent.

That implies that roughly 42 percent of registered French voters bothered to hit the polls basically to bar Le Pen: a brand that remains toxic in vast swathes of urban France – yet hardly as much as before – and even with the whole weight of oligarchic mainstream media engaged in Two Minute Hate campaign mode. The five oligarchies who run the so-called ‘audiovisual landscape’ (PAF, according to the French acronym) of campaign messaging are all Macronists.

Madam Guillotine meets the working classes

Who, in fact, is this illusionist Petit Roi that qualifies at best as a messenger of transnational plutocracy?

From the bowels of the system, arguably the sharpest verdict comes from Mathieu Pigasse, informally referred to in Paris as “the punk banker” because of his infatuation with the British punk-rock band The Clash.

When Macron was a mergers & acquisitions banker at Rothschild & Company, Pigasse was working for the opposition, Lazard Freres. It was Macron who convinced Nestlé’s interests to be handled by Rothschild, while Pigasse was representing Danone.

Pigasse also happens to be one of the major shareholders of Le Monde – which used to be a great newspaper up to the 1980s and now is a shallow carbon copy of the New York Times. Le Monde is Macronist to the core.

Pigasse defines Macron as “the purest product of French elitism, in terms of the Parisian microcosm.” Although Macron is a provinciale from Amiens, he perfectly fit into the Parisian beau monde, which is in itself a quite rarefied, and yes, equally provincial universe, like a village where everyone ‘that matters’ knows everyone.

Pigasse also identifies the establishment characters who invented Macron and placed him at the top of the pyramid – ranging from avowed eugenicist Jacques Attali to Serge Weinberg (ex-CEO of Sanofi), Francois Roussely (ex-president of EDF) and Jean-Pierre Jouyet, a former minister under disgraced former President Nicolas Sarkozy and then number two at the Elysée Palace under the supremely incompetent Francois Hollande.

Attali, incidentally, describes Macronism as a “pro-European modernization, engaged, liberal and optimist. That corresponds to a center-right of modern France” – and then Attali himself gives away the game – “which is not necessarily the whole of France.”

“Not necessarily the whole of France” in fact means the majority of France, if one bothers to leave a few tony Paris arrondissements to talk to people in Pas-de-Calais, Bourgogne or the Var. This ‘real’ France identifies the “social market economy” extolled by Attali and promoted by Macron as a gigantic fake.

It would be too easy to paint the current national divide between, on one side, the elderly and the very young carrying a diploma, living in comfort; and on the other side, the 25 to 60 year olds, without higher education and barely making ends meet. That is, the working class masses.

It is more nuanced than that. Still, the two most important factors in this election are that close to one third of voters didn’t even bother to show up – or nullified their vote (even here in Paris). And that the gullible Melenchon horde handed it over to Le Petit Roi, assuming their leader will become a de facto ‘prime minister.’

The working classes will be literally exterminated throughout another five years of hardcore neoliberalism. France’s until recently stellar social welfare system will be decimated. Retirement age will be extended to 65 years old. Smaller pensions will be barely enough to live on. The super-wealthy will pay much lower taxes while the common worker will pay much higher ones. Education and healthcare will be privatized.

France will merrily catch up with the fast decaying casino capitalism of the US and UK. And don’t forget further travel restrictions and food and fuel shortages.

Islamophobia will not dissolve into a mellow woke rainbow. On the contrary: it will be instrumentalized as the perfect scapegoat for serial Macronist incompetence and corruption.

Meanwhile, in Azovstal…

If we add the spectacular performance of the Absention/Nullifed/Blank candidate plus people who didn’t even bother to vote, we have something like a silent majority of 30 million people who instinctively feels the whole system is rigged.

The winners, of course, are the usual suspects: the BlackRock/McKinsey/Great Reset/weapons industry/EuroNazicrat axis. McKinsey virtually run French government policy – bordering on fiscal fraud – a scandal corporate media did everything to bury. For his part, Blackrock CEO Larry Fink, a very close ‘consultant’ of the Elysee Palace, must have popped a few extra bottles of Krug.

And then, there’s France as Great Power. Leader of great swathes of Africa (fresh from receiving a punch in the teeth from Mali); Leader of West Asia (ask the Syrians and Lebanese about it); Leader of the Great Resetting EU; And deeply embedded in the NATO war machine.

Which bring us to the top invisible story before this election, totally buried by corporate media. Yet Turkish intelligence picked it up. The Russians, for their part, have kept themselves deliciously mute, in their trademark ‘strategic ambiguity’ mode.

Denis Pushilin, the head of Donetsk People’s Republic, confirmed once again early this week there are roughly 400 foreign ‘instructors’ cum mercenaries – from NATO – huddling in the bowels of the Azovstal steelworks in Mariupol, with no way out.

Turkish intel maintains that 50 of them are French, some of them high-ranking. That explains what has been established by several Russian sources – but not acknowledged at all by Paris: Macron has placed a flurry of frantic phone calls to Putin to set up a “humanitarian corridor” to extricate his valuable assets.

The measured Russian response has been – once again – trademark geopolitical judo. No “humanitarian corridor” for anyone in Azovstal, be it Azov neo-Nazis or their foreign NATO handlers, and no bombing them to oblivion. Let them starve – and in the end they will be forced to surrender.

Enter the still unconfirmed yet plausible Macron directive: no surrender by any means.  Because surrendering means giving Moscow on a silver plate a series of confessions and all the facts of an illegal, secret operation conducted by the ‘leader of Europe’ on behalf of neo-Nazis.

All bets are off when – and if – the full story breaks out in France. It might as well happen during the upcoming war crimes tribunal to be set up most probably in Donetsk.

Aux armes, citoyens? Well, they have five years down the road to hit the barricades. It may happen sooner than we think.

The Moskva Riddle

April 25, 2022

by Pepe Escobar

Neither NATO nor Russia is telling us what really happened with the Moskva, the legendary admiral ship of the Black Sea fleet.

NATO because in theory, they know. Moscow, for its part, made it clear they are not saying anything until they can be sure what happened.

Moskva Sinking | Know Your Meme

One thing is certain. If the Russian Ministry of Defense finds out that NATO did it, they will let loose all the dogs from Hell on NATO, as in “asymmetrical, lethal and fast”.

On Moskva’s location: it was positioned near one of 3 drilling rigs, used for monitoring a whole sector of the Black Sea with hydrophones and NEVA-BS radar, the most westward one, BK-2 Odessa, approximately 66 km northeast from Snake Island. The whole thing was integrated in the regional monitoring systems. As in everything, literally, was monitored: ships, low flying targets, smaller echoes, even the bobbing head of an unsuspecting swimmer.

So there was a quite slim chance that anything – not to mention subsonic Neptune missiles and Bayraktar drones – could have slipped through this aerial net.

So what could have possibly happened?

It could have been some kind of underwater drone, released either from some sneaky sub, or by a SBS team, coming from the western coast, with a stopover at Snake Island. Then that drone somehow managed to drill itself through the Moskva’s hull from below – and exploded its payload inside.

What follows comes from a top source in Brussels: serious, trustworthy, proven record spanning nearly two decades. Yet he may be just spreading disinformation. Or bragging. Or that may be rock solid intel.

Before we start, we should point out it’s hard to believe the Neptune/Bayraktar fairytale angle. After all, as we’ve seen, the Russian fleet had established a multidimensional surveillance/defense layer in the direction of Odessa.

The Moskva was near Odessa, closer to Romania. A year ago, the source maintains, a new phased array locator was installed on it: the illumination range is 500 km. According to the standard Ukrainian narrative, first the Moskva was hit by a drone, and the locators and antennas were smashed. The Moskva was half blind.

Then – according to the Ukrainian narrative – they launched two Neptune cruise missiles from the shore. Guidance was carried out by NATO’s Orion, which was hanging over Romania. The missiles zoomed in on the ship with the homing heads turned off, so that the radiation beam would not be detected.

So we have guidance by NATO’s Orion, transmitting the exact coordinates, leading to two hits, and subsequent detonation of ammunition (that’s the part acknowledged by the Russian Ministry of Defense).

A strategic hit

The Moskva was on combat duty 100-120 km away from Odessa – controlling the airspace within a radius of 250-300 km. So in fact it was ensuring the overlap of the southern half of Moldova, the space from Izmail to Odessa and part of Romania (including the port of Constanta).

Its positioning could not be more strategic. Moskva was interfering with NATO’s covert transfer of military aircraft (helicopters and fighter jets) from Romania to Ukraine. It was being watched 24/7. NATO air reconnaissance was totally on it.

As the Moskva “killer”, NATO may have not chosen the Neptune, as spread by Ukrainian propaganda; the source points to the fifth-generation NSM PKR (Naval Strike Missile, with a range of 185 km, developed by Norway and the Americans.)

He describes the NSM as “able to reach the target along a programmed route thanks to the GPS-adjusted INS, independently find the target by flying up to it at an altitude of 3-5 meters. When reaching the target, the NSM maneuvers and deploys electronic interference. A highly sensitive thermal imager is used as a homing system, which independently determines the most vulnerable places of the target ship.”

As a direct consequence of hitting the Moskva, NATO managed to reopen an air corridor for the transfer of aircraft to the airfields of Chernivtsi, Transcarpathian and Ivano-Frankivsk regions.

In parallel, after the destruction of the Moskva, the Black Sea Fleet, according to the source, “no longer seems to have a ship equipped with a long-range anti-aircraft missile system”. Of course a three-band radar Sky-M system remains in play in Crimea, capable of tracking all air targets at a range of up to 600 km. One wonders whether this is enough for all Russian purposes.

So what do we really have here? Fantasy or reality? There was only one way to know.

I ran the info past the inestimable Andrei Martyanov, who knew the Moskva “as Slava in 1981 when she was afloat in the Northern Bay of Sevastopol and my class which was at first summer practice on board of old cruiser Dzerzhinsky was given an extensive introduction to her. So, she was an old lady and it is too bad that she had to finish her long life this way and at this time.”

Martyanov, once again, was the consummate professional, stressing no one, at this stage, really knows what happened. But he made some crucial points: “Per NSM (if we accept this version), even with its Low Observability and GPS guidance under normal (that is sea up to state 5-6) and normal radio-permeability, even the Moskva’s old frigate radar would have seen those missiles in distances of tens of kilometers, somewhere between 15-20 for sure. NSM, as any NATO anti-shipping missile, are subsonic, with their velocity roughly 300 meters per second. That leaves, even in a 15 kilometer range, 45 seconds to detect track and develop a firing solution for whatever ‘on duty’ AD complex. More than enough reaction time.”

Martyanov also stresses, “it is impossible to hide the external impact of the anti-shipping missile – one will immediately know what hit the ship. Moreover, to hit and sink such a target as the Moskva one has to launch a salvo and not only two missiles, likely 3-4 at least. In this case, Russia would know who attacked Moskva. Does NATO know? I am positive this event has NATO written all over it, if it is not an internal sabotage which absolutely cannot be excluded at this stage. I am sure if Nebo was operational it would have seen the salvo.”

Which brings us to the inevitable clincher: “If NATO was involved, I am sure we will see some retaliation, after all, as I am on record all the time, US bases in Middle East and elsewhere are nothing more than fat prestigious targets.”

So get ready: something lethally “asymmetrical” may be about to pop up.

Big Tech’s ‘Cancel Culture’ Love Affair

April 21, 2022

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Cancel culture is inbuilt in the techno-feudalist project: conform to the hegemonic narrative, or else.  Journalism that does not conform must be taken down.

By Pepe Escobar
Special to Consortium News

This month, several of us – Scott Ritter, myself, ASB Military News, among others – were canceled from Twitter. The – unstated – reason: we were debunking the officially approved narrative of the Russia/NATO/Ukraine war.

As with all things Big Tech, that was predictable. I lasted only seven months on Twitter. And that was long enough. Contacts in California had told me I was on their radar because the account grew too fast, and had enormous reach, especially after the start of Operation Z.

I celebrated the cancelation by experiencing an aesthetic illumination in front of the Aegean Sea, at the home of Herodotus, the Father of History. Additionally, it was heart-warming to be recognized by the great George Galloway in his moving tribute to targets of the new McCarthyism.

In parallel, comic relief of the “Mars Attacks” variety was provided by expectations of free speech on Twitter being saved by the benign intervention of Elon Musk.

Techno-feudalism is one of the overarching themes of my latest book, Raging Twenties – published in early 2021 and reviewed here in a very thoughtful and meticulous manner.

Cancel culture is inbuilt in the techno-feudalist project: conform to the hegemonic narrative, or else. In my own case regarding Twitter and Facebook – two of the guardians of the internet, alongside Google — I knew a day of reckoning was inevitable, because like other countless users I had previously been dispatched to those notorious “jails”.

On one Facebook occasion, I sent a sharp message highlighting that I was a columnist/analyst for an established Hong Kong-based media company. Some human, not an algorithm, must have read it, because the account was restored in less than 24 hours.

But then the account was simply disabled – with no warning. I requested the proverbial “review”. The response was a demand for proof of ID. Less than 24 hours later, came the verdict: “Your account has been disabled” because it had not followed those notoriously hazy “community standards.” The decision was “reviewed” and “it can’t be reversed”.

I celebrated with a Buddhist mini-requiem on Instagram.

My hit-by-a-Hellfire missile Facebook page clearly identified for the general public who I was, at the time: “Geopolitical analyst at Asia Times”. The fact of the matter is Facebook algorithms canceled a top columnist from Asia Times – with a proven record and a global profile. The algos would never have had the – digital – guts to do the same with a top columnist from The New York Times or the Financial Times.

Asia Times lawyers in Hong Kong sent a letter to Facebook management. Predictably, there was no response.

Of course becoming a target of cancel culture – twice – does not even remotely compare to the fate of Julian Assange, imprisoned for over three years in Belmarsh under the most appalling circumstances, and about to be dispatched for “judgment” in the American gulag for the crime of committing journalism. Yet the same “logic” applies: journalism that does not conform to the hegemonic narrative must be taken down.

Conform, or Else

At the time, I discussed the matter with several Western analysts. As one of them succinctly put it, “You were ridiculing the U.S. president while pointing out the positives of Russia, China and Iran. That’s a deadly combination”.

Others were simply stunned: “I wonder why you were restricted as you work for a reputable publication.” Or made the obvious connections: “Facebook is a censorship machine. I did not know that they do not give reasons for what they do but then they are part of the Deep State.”

A banking source that usually places my columns on the desks of selected Masters of the Universe put it New York-style: “You severely p****d the Atlantic Council”. No question: the specimen who oversaw the canceling of my account was a former Atlantic Council hack.

Ron Unz in California had the account of his extremely popular website Unz Review purged by Facebook on April 2020. Subsequently, readers who tried to post their articles met with an “error” message describing the content as “abusive”.

When Unz mentioned my case to renowned economist James Galbraith, “he really was quite shocked, and thought it might signal a very negative censorship trend on the Internet.”

The “censorship trend” is a fact – for quite a while now. Take this U.S. State Department 2020 report identifying “pillars of Russia’s disinformation and propaganda ecosystem.”

State Dept. Directive

The late Pompeo-era report demonizes “fringe or conspiracy-minded” websites who happen to be extremely critical of U.S. foreign policy. They include Moscow-based Strategic Culture Foundation – where I’m a columnist – and Canada-based Global Research, which republishes most of my columns (but so does Consortium NewsZeroHedge and many other U.S. websites). I’m cited in the report by name, along with quite a few top columnists.

The report’s “research” states that Strategic Culture – which is blocked by Facebook and Twitter – is directed by the SVR, Russian foreign intel. This is ridiculous. I met the previous editors in Moscow – young, energetic, with enquiring minds. They had to quit their jobs because after the report they started to be severely threatened online.

So the directive comes straight from the State Department – and that has not changed under Biden-Harris: any analysis of U.S. foreign policy that deviates from the norm is a “conspiracy theory” – a terminology that was invented and perfected by the C.I.A.

Couple it with the partnership between Facebook and the Atlantic Council – which is a de facto NATO think tank – and now we have a real powerful ecosystem.

It’s a Wonderful Life

Every silicon fragment in the valley connects Facebook as a direct extension of the Defense Advanced Research Projects Agency (DARPA)’s LifeLog project, a Pentagon attempt to “build a database tracking a person’s entire existence.” Facebook launched its website exactly on the same day – Feb. 4, 2004 – that DARLA and the Pentagon shuttered LifeLog.

No explanation by DARPA was ever provided. The MIT’s David Karger, at the time, remarked, “I am sure that such research will continue to be funded under some other title. I can’t imagine DARPA ‘dropping out’ of such a key research area.”

Of course a smokin’ gun directly connecting Facebook to DARPA will never be allowed to surface. But occasionally some key players speak out, such as Douglas Gage, none other than LifeLog’s conceptualizer: “Facebook is the real face of pseudo-LifeLog at this point (…) We have ended up providing the same kind of detailed personal information to advertisers and data brokers and without arousing the kind of opposition that LifeLog provoked.”

So Facebook has absolutely nothing to do with journalism. Not to mention pontificating over a journalist’s work, or assuming it’s entitled to cancel him or her. Facebook is an “ecosystem” built to sell private data at a huge profit, offering a public service as a private enterprise, but most of all sharing the accumulated data of its billions of users with the U.S. national security state.

The resulting algorithmic stupidity, also shared by Twitter – incapable of recognizing nuance, metaphor, irony, critical thinking – is perfectly integrated into what former C.I.A. analyst Ray McGovern brilliantly coined as the MICIMATT (military-industrial-congressional-intelligence-media-academia-think tank complex).

In the U.S., at least the odd expert on monopoly power identified this neo-Orwellian push as accelerating “the collapse of journalism and democracy.”

Facebook “fact-checking professional journalists” does not even qualify as pathetic. Otherwise Facebook – and not analysts like McGovern – would have debunked Russiagate. It would not routinely cancel Palestinian journalists and analysts. It would not disable the account of University of Tehran professor Mohammad Marandi – who was actually born in the U.S.

I received quite a few messages stating that being canceled by Facebook – and now by Twitter – is a badge of honor. Well, everything is impermanent (Buddhism) and everything flows (Daoism). So being deleted – twice – by an algorithm qualifies at best as a cosmic joke.

Pepe Escobar’s latest book is Raging Twenties. He remains un-cancelled on VKTelegram and Instagram.

The views expressed are solely those of the author and may or may not reflect those of Consortium News.

Exclusive: Russian geo-economics Tzar Sergey Glazyev introduces the new global financial system

The world’s new monetary system, underpinned by a digital currency, will be backed by a basket of new foreign currencies and natural resources. And it will liberate the Global South from both western debt and IMF-induced austerity.

April 14 2022

By Pepe Escobar

Sergey Glazyev is a man living right in the eye of our current geopolitical and geo-economic hurricane. One of the most influential economists in the world, a member of the Russian Academy of Sciences, and a former adviser to the Kremlin from 2012 to 2019, for the past three years he has helmed Moscow’s uber strategic portfolio as Minister in Charge of Integration and Macroeconomics of the Eurasia Economic Union (EAEU).

https://media.thecradle.co/wp-content/uploads/2022/04/Unknown-6.jpeg
Leading Russian economist Sergey Glazyev says a complete overhaul of the western-dominated global monetary and financial system is under works. And the world’s rising powers are buying into it. Photo Credit: The Cradle

Glazyev’s recent intellectual production has been nothing short of transformative, epitomized by his essay Sanctions and Sovereignty and an extensive discussion of the new, emerging geo-economic paradigm in an interview to a Russian business magazine.

In another of his recent essays, Glazyev comments on how “I grew up in Zaporozhye, near which heavy fighting is now taking place in order to destroy the Ukrainian Nazis, who never existed in my small Motherland. I studied at a Ukrainian school and I know Ukrainian literature and language well, which from a scientific point of view is a dialect of Russian. I did not notice anything Russophobic in Ukrainian culture. In the 17 years of my life in Zaporozhye, I have never met a single Banderist.”

Glazyev was gracious to take some time from his packed schedule to provide detailed answers to a first series of questions in what we expect to become a running conversation, especially focused to the Global South. This is his first interview with a foreign publication since the start of Operation Z. Many thanks to Alexey Subottin for the Russian-English translation.

The Cradle: You are at the forefront of a game-changing geo-economic development: the design of a new monetary/financial system via an association between the EAEU and China, bypassing the US dollar, with a draft soon to be concluded. Could you possibly advance some of the features of this system – which is certainly not a Bretton Woods III – but seems to be a clear alternative to the Washington consensus and very close to the necessities of the Global South?

Glazyev: In a bout of Russophobic hysteria, the ruling elite of the United States played its last “trump ace” in the hybrid war against Russia. Having “frozen” Russian foreign exchange reserves in custody accounts of western central banks, financial regulators of the US, EU, and the UK undermined the status of the dollar, euro, and pound as global reserve currencies. This step sharply accelerated the ongoing dismantling of the dollar-based economic world order.

Over a decade ago, my colleagues at the Astana Economic Forum and I proposed to transition to a new global economic system based on a new synthetic trading currency based on an index of currencies of participating countries. Later, we proposed to expand the underlying currency basket by adding around twenty exchange-traded commodities. A monetary unit based on such an expanded basket was mathematically modeled and demonstrated a high degree of resilience and stability.

At around the same time, we proposed to create a wide international coalition of resistance in the hybrid war for global dominance that the financial and power elite of the US unleashed on the countries that remained outside of its control. My book The Last World War: the USA to Move and Lose, published in 2016, scientifically explained the nature of this coming war and argued for its inevitability – a conclusion based on objective laws of long-term economic development. Based on the same objective laws, the book argued the inevitability of the defeat of the old dominant power.

Currently, the US is fighting to maintain its dominance, but just as Britain previously, which provoked two world wars but was unable to keep its empire and its central position in the world due to the obsolescence of its colonial economic system, it is destined to fail. The British colonial economic system based on slave labor was overtaken by structurally more efficient economic systems of the US and the USSR. Both the US and the USSR were more efficient at managing human capital in vertically integrated systems, which split the world into their zones of influence. A transition to a new world economic order started after the disintegration of the USSR. This transition is now reaching its conclusion with the imminent disintegration of the dollar-based global economic system, which provided the foundation of the United States global dominance.

The new convergent economic system that emerged in the PRC (People’s Republic of China) and India is the next inevitable stage of development, combining the benefits of both centralized strategic planning and market economy, and of both state control of the monetary and physical infrastructure and entrepreneurship. The new economic system united various strata of their societies around the goal of increasing common wellbeing in a way that is substantially stronger than the Anglo-Saxon and European alternatives. This is the main reason why Washington will not be able to win the global hybrid war that it started. This is also the main reason why the current dollar-centric global financial system will be superseded by a new one, based on a consensus of the countries who join the new world economic order.

In the first phase of the transition, these countries fall back on using their national currencies and clearing mechanisms, backed by bilateral currency swaps. At this point, price formation is still mostly driven by prices at various exchanges, denominated in dollars. This phase is almost over: after Russia’s reserves in dollars, euro, pound, and yen were “frozen,” it is unlikely that any sovereign country will continue accumulating reserves in these currencies. Their immediate replacement is national currencies and gold.

The second stage of the transition will involve new pricing mechanisms that do not reference the dollar. Price formation in national currencies involves substantial overheads, however, it will still be more attractive than pricing in ‘un-anchored’ and treacherous currencies like dollars, pounds, euro, and yen. The only remaining global currency candidate – the yuan – won’t be taking their place due to its inconvertibility and the restricted external access to the Chinese capital markets. The use of gold as the price reference is constrained by the inconvenience of its use for payments.

The third and the final stage on the new economic order transition will involve a creation of a new digital payment currency founded through an international agreement based on principles of transparency, fairness, goodwill, and efficiency. I expect that the model of such a monetary unit that we developed will play its role at this stage. A currency like this can be issued by a pool of currency reserves of BRICS countries, which all interested countries will be able to join. The weight of each currency in the basket could be proportional to the GDP of each country (based on purchasing power parity, for example), its share in international trade, as well as the population and territory size of participating countries.

In addition, the basket could contain an index of prices of main exchange-traded commodities: gold and other precious metals, key industrial metals, hydrocarbons, grains, sugar, as well as water and other natural resources. To provide backing and to make the currency more resilient, relevant international resource reserves can be created in due course. This new currency would be used exclusively for cross-border payments and issued to the participating countries based on a pre-defined formula. Participating countries would instead use their national currencies for credit creation, in order to finance national investments and industry, as well as for sovereign wealth reserves. Capital account cross-border flows would remain governed by national currency regulations.

The Cradle: Michael Hudson specifically asks that if this new system enables nations in the Global South to suspend dollarized debt and is based on the ability to pay (in foreign exchange), can these loans be tied to either raw materials or, for China, tangible equity ownership in the capital infrastructure financed by foreign non-dollar credit?

Glazyev: Transition to the new world economic order will likely be accompanied by systematic refusal to honor obligations in dollars, euro, pound, and yen. In this respect, it will be no different from the example set by the countries issuing these currencies who thought it appropriate to steal foreign exchange reserves of Iraq, Iran, Venezuela, Afghanistan, and Russia to the tune of trillions of dollars. Since the US, Britain, EU, and Japan refused to honor their obligations and confiscated the wealth of other nations which was held in their currencies, why should other countries be obliged to pay them back and to service their loans?

In any case, participation in the new economic system will not be constrained by the obligations in the old one. Countries of the Global South can be full participants of the new system regardless of their accumulated debts in dollars, euro, pound, and yen. Even if they were to default on their obligations in those currencies, this would have no bearing on their credit rating in the new financial system. Nationalization of extraction industry, likewise, would not cause a disruption. Further, should these countries reserve a portion of their natural resources for the backing of the new economic system, their respective weight in the currency basket of the new monetary unit would increase accordingly, providing that nation with larger currency reserves and credit capacity. In addition, bilateral swap lines with trading partner countries would provide them with adequate financing for co-investments and trade financing.

The Cradle: In one of your latest essays, The Economics of the Russian Victory, you call for “an accelerated formation of a new technological paradigm and the formation of institutions of a new world economic order.” Among the recommendations, you specifically propose the creation of “a payment and settlement system in the national currencies of the EAEU member states” and the development and implementation of “an independent system of international settlements in the EAEU, SCO and BRICS, which could eliminate critical dependence of the US-controlled SWIFT system.” Is it possible to foresee a concerted joint drive by the EAEU and China to “sell” the new system to SCO members, other BRICS members, ASEAN members and nations in West Asia, Africa and Latin America? And will that result in a bipolar geo-economy – the West versus The Rest?

Glazyev: Indeed, this is the direction where we are headed. Disappointingly, monetary authorities of Russia are still a part of the Washington paradigm and play by the rules of the dollar-based system, even after Russian foreign exchange reserves were captured by the west. On the other hand, the recent sanctions prompted extensive soul searching among the rest of the non-dollar-block countries. western ‘agents of influence’ still control central banks of most countries, forcing them to apply suicidal policies prescribed by the IMF. However, such policies at this point are so obviously contrary to the national interests of these non-western countries that their authorities are growing justifiably concerned about financial security.

You correctly highlight potentially central roles of China and Russia in the genesis of the new world economic order. Unfortunately, current leadership of the CBR (Central Bank of Russia) remains trapped inside the intellectual cul-de-sac of the Washington paradigm and is unable to become a founding partner in the creation of a new global economic and financial framework. At the same time, the CBR already had to face the reality and create a national system for interbank messaging which is not dependent on SWIFT, and opened it up for foreign banks as well. Cross-currency swap lines have been already set up with key participating nations. Most transactions between member states of the EAEU are already denominated in national currencies and the share of their currencies in internal trade is growing at a rapid pace.

A similar transition is taking place in trade with China, Iran, and Turkey. India indicated that it is ready to switch to payments in national currencies as well. A lot of effort is put in developing clearing mechanisms for national currency payments. In parallel, there is an ongoing effort to develop a digital non-banking payment system, which would be linked to gold and other exchange-traded commodities – the ‘stablecoins.’

Recent US and European sanctions imposed on the banking channels have caused a rapid increase in these efforts. The group of countries working on the new financial system only needs to announce the completion of the framework and readiness of the new trade currency and the process of formation of the new world financial order will accelerate further from there. The best way to bring it about would be to announce it at the SCO or BRICS regular meetings. We are working on that.  

The Cradle: This has been an absolutely key issue in discussions by independent analysts across the west. Was the Russian Central Bank advising Russian gold producers to sell their gold in the London market to get a higher price than the Russian government or Central Bank would pay? Was there no anticipation whatsoever that the coming alternative to the US dollar will have to be based largely on gold? How would you characterize what happened? How much practical damage has this inflicted on the Russian economy short-term and mid-term?

Glazyev: The monetary policy of the CBR, implemented in line with the IMF recommendations, has been devastating for the Russian economy. Combined disasters of the “freezing” of circa $400 billion of foreign exchange reserves and over a trillion dollars siphoned from the economy by oligarchs into western offshore destinations, came with the backdrop of equally disastrous policies of the CBR, which included excessively high real rates combined with a managed float of the exchange rate. We estimate this caused under-investment of circa 20 trillion rubles and under-production of circa 50 trillion rubles in goods.

Following Washington’s recommendations, the CBR stopped buying gold over the last two years, effectively forcing domestic gold miners to export full volumes of production, which added up to 500 tons of gold. These days the mistake and the harm it caused are very much obvious. Presently, the CBR resumed gold purchases, and, hopefully, will continue with sound policies in the interest of the national economy instead of ‘targeting inflation’ for the benefit of international speculators, as had been the case during the last decade.

The Cradle: The Fed as well as the ECB were not consulted on the freeze of Russian foreign reserves. Word in New York and Frankfurt is that they would have opposed it were they to have been asked. Did you personally expect the freeze? And did the Russian leadership expect it?

Glazyev: My book, The Last World War, that I already mentioned, which was published as far back as 2015, argued that the likelihood of this happening eventually is very high. In this hybrid war, economic warfare and informational/cognitive warfare are key theaters of conflict. On both of these fronts, the US and NATO countries have overwhelming superiority and I did not have any doubt that they would take full advantage of this in due course.

I have been arguing for a long time for the replacement of dollars, euro, pounds, and yen in our foreign exchange reserves with gold, which is produced in abundance in Russia. Unfortunately, western agents of influence which occupy key roles at central banks of most countries, as well as rating agencies and key publications, were successful in silencing my ideas. To give you an example, I have no doubt that high-ranking officials at the Fed and the ECB were involved in developing anti-Russian financial sanctions. These sanctions have been consistently escalating and are being implemented almost instantly, despite the well-known difficulties with bureaucratic decision making in the EU.  

The Cradle: Elvira Nabiullina has been reconfirmed as the head of the Russian Central Bank. What would you do differently, compared to her previous actions? What is the main guiding principle involved in your different approaches?

Glazyev: The difference between our approaches is very simple. Her policies are an orthodox implementation of IMF recommendations and dogmas of the Washington paradigm, while my recommendations are based on the scientific method and empirical evidence accumulated over the last hundred years in leading countries.

The Cradle: The Russia-China strategic partnership seems to be increasingly ironclad – as Presidents Putin and Xi themselves constantly reaffirm. But there are rumbles against it not only in the west but also in some Russian policy circles. In this extremely delicate historical juncture, how reliable is China as an all-season ally to Russia?

Glazyev: The foundation of Russian-Chinese strategic partnership is common sense, common interests, and the experience of cooperation over hundreds of years. The US ruling elite started a global hybrid war aimed at defending its hegemonic position in the world, targeting China as the key economic competitor and Russia as the key counter-balancing force. Initially, the US geopolitical efforts were aiming to create a conflict between Russia and China. Agents of western influence were amplifying xenophobic ideas in our media and blocking any attempts to transition to payments in national currencies. On the Chinese side, agents of western influence were pushing the government to fall in line with the demands of the US interests.

However, sovereign interests of Russia and China logically led to their growing strategic partnership and cooperation, in order to address common threats emanating from Washington. The US tariff war with China and financial sanctions war with Russia validated these concerns and demonstrated the clear and present danger our two countries are facing. Common interests of survival and resistance are uniting China and Russia, and our two countries are largely symbiotic economically. They complement and increase competitive advantages of each other. These common interests will persist over the long run.

The Chinese government and the Chinese people remember very well the role of the Soviet Union in the liberation of their country from the Japanese occupation and in the post-war industrialization of China. Our two countries have a strong historical foundation for strategic partnership and we are destined to cooperate closely in our common interests. I hope that the strategic partnership of Russia and the PRC, which is enhanced by the coupling of the One Belt One Road with the Eurasian Economic Union, will become the foundation of President Vladimir Putin’s project of the Greater Eurasian Partnership and the nucleus of the new world economic order.

April 15, 2022

The world’s new monetary system, underpinned by a digital currency, will be backed by a basket of new foreign currencies and natural resources. And it will liberate the Global South from both western debt and IMF-induced austerity.

By Pepe Escobar, posted with the author’s permission and cross-posted at The Cradle. 

Leading Russian economist Sergey Glazyev says a complete overhaul of the western-dominated global monetary and financial system is under works. And the world’s rising powers are buying into it. Photo Credit: The Cradle

Sergey Glazyev is a man living right in the eye of our current geopolitical and geo-economic hurricane. One of the most influential economists in the world, a member of the Russian Academy of Sciences, and a former adviser to the Kremlin from 2012 to 2019, for the past three years he has helmed Moscow’s uber strategic portfolio as Minister in Charge of Integration and Macroeconomics of the Eurasia Economic Union (EAEU).

Glazyev’s recent intellectual production has been nothing short of transformative, epitomized by his essay Sanctions and Sovereignty and an extensive discussion of the new, emerging geo-economic paradigm in an interview to a Russian business magazine.

In another of his recent essays, Glazyev comments on how “I grew up in Zaporozhye, near which heavy fighting is now taking place in order to destroy the Ukrainian Nazis, who never existed in my small Motherland. I studied at a Ukrainian school and I know Ukrainian literature and language well, which from a scientific point of view is a dialect of Russian. I did not notice anything Russophobic in Ukrainian culture. In the 17 years of my life in Zaporozhye, I have never met a single Banderist.”

Glazyev was gracious to take some time from his packed schedule to provide detailed answers to a first series of questions in what we expect to become a running conversation, especially focused to the Global South. This is his first interview with a foreign publication since the start of Operation Z. Many thanks to Alexey Subottin for the Russian-English translation.

The Cradle: You are at the forefront of a game-changing geo-economic development: the design of a new monetary/financial system via an association between the EAEU and China, bypassing the US dollar, with a draft soon to be concluded. Could you possibly advance some of the features of this system – which is certainly not a Bretton Woods III – but seems to be a clear alternative to the Washington consensus and very close to the necessities of the Global South?

Glazyev: In a bout of Russophobic hysteria, the ruling elite of the United States played its last “trump ace” in the hybrid war against Russia. Having “frozen” Russian foreign exchange reserves in custody accounts of western central banks, financial regulators of the US, EU, and the UK undermined the status of the dollar, euro, and pound as global reserve currencies. This step sharply accelerated the ongoing dismantling of the dollar-based economic world order.

Over a decade ago, my colleagues at the Astana Economic Forum and I proposed to transition to a new global economic system based on a new synthetic trading currency based on an index of currencies of participating countries. Later, we proposed to expand the underlying currency basket by adding around twenty exchange-traded commodities. A monetary unit based on such an expanded basket was mathematically modeled and demonstrated a high degree of resilience and stability.

At around the same time, we proposed to create a wide international coalition of resistance in the hybrid war for global dominance that the financial and power elite of the US unleashed on the countries that remained outside of its control. My book The Last World War: the USA to Move and Lose, published in 2016, scientifically explained the nature of this coming war and argued for its inevitability – a conclusion based on objective laws of long-term economic development. Based on the same objective laws, the book argued the inevitability of the defeat of the old dominant power.

Currently, the US is fighting to maintain its dominance, but just as Britain previously, which provoked two world wars but was unable to keep its empire and its central position in the world due to the obsolescence of its colonial economic system, it is destined to fail. The British colonial economic system based on slave labor was overtaken by structurally more efficient economic systems of the US and the USSR. Both the US and the USSR were more efficient at managing human capital in vertically integrated systems, which split the world into their zones of influence. A transition to a new world economic order started after the disintegration of the USSR. This transition is now reaching its conclusion with the imminent disintegration of the dollar-based global economic system, which provided the foundation of the United States global dominance.

The new convergent economic system that emerged in the PRC (People’s Republic of China) and India is the next inevitable stage of development, combining the benefits of both centralized strategic planning and market economy, and of both state control of the monetary and physical infrastructure and entrepreneurship. The new economic system united various strata of their societies around the goal of increasing common wellbeing in a way that is substantially stronger than the Anglo-Saxon and European alternatives. This is the main reason why Washington will not be able to win the global hybrid war that it started. This is also the main reason why the current dollar-centric global financial system will be superseded by a new one, based on a consensus of the countries who join the new world economic order.

In the first phase of the transition, these countries fall back on using their national currencies and clearing mechanisms, backed by bilateral currency swaps. At this point, price formation is still mostly driven by prices at various exchanges, denominated in dollars. This phase is almost over: after Russia’s reserves in dollars, euro, pound, and yen were “frozen,” it is unlikely that any sovereign country will continue accumulating reserves in these currencies. Their immediate replacement is national currencies and gold.

The second stage of the transition will involve new pricing mechanisms that do not reference the dollar. Price formation in national currencies involves substantial overheads, however, it will still be more attractive than pricing in ‘un-anchored’ and treacherous currencies like dollars, pounds, euro, and yen. The only remaining global currency candidate – the yuan – won’t be taking their place due to its inconvertibility and the restricted external access to the Chinese capital markets. The use of gold as the price reference is constrained by the inconvenience of its use for payments.

The third and the final stage on the new economic order transition will involve a creation of a new digital payment currency founded through an international agreement based on principles of transparency, fairness, goodwill, and efficiency. I expect that the model of such a monetary unit that we developed will play its role at this stage. A currency like this can be issued by a pool of currency reserves of BRICS countries, which all interested countries will be able to join. The weight of each currency in the basket could be proportional to the GDP of each country (based on purchasing power parity, for example), its share in international trade, as well as the population and territory size of participating countries.

In addition, the basket could contain an index of prices of main exchange-traded commodities: gold and other precious metals, key industrial metals, hydrocarbons, grains, sugar, as well as water and other natural resources. To provide backing and to make the currency more resilient, relevant international resource reserves can be created in due course. This new currency would be used exclusively for cross-border payments and issued to the participating countries based on a pre-defined formula. Participating countries would instead use their national currencies for credit creation, in order to finance national investments and industry, as well as for sovereign wealth reserves. Capital account cross-border flows would remain governed by national currency regulations.

The Cradle: Michael Hudson specifically asks that if this new system enables nations in the Global South to suspend dollarized debt and is based on the ability to pay (in foreign exchange), can these loans be tied to either raw materials or, for China, tangible equity ownership in the capital infrastructure financed by foreign non-dollar credit?

Glazyev: Transition to the new world economic order will likely be accompanied by systematic refusal to honor obligations in dollars, euro, pound, and yen. In this respect, it will be no different from the example set by the countries issuing these currencies who thought it appropriate to steal foreign exchange reserves of Iraq, Iran, Venezuela, Afghanistan, and Russia to the tune of trillions of dollars. Since the US, Britain, EU, and Japan refused to honor their obligations and confiscated the wealth of other nations which was held in their currencies, why should other countries be obliged to pay them back and to service their loans?

In any case, participation in the new economic system will not be constrained by the obligations in the old one. Countries of the Global South can be full participants of the new system regardless of their accumulated debts in dollars, euro, pound, and yen. Even if they were to default on their obligations in those currencies, this would have no bearing on their credit rating in the new financial system. Nationalization of extraction industry, likewise, would not cause a disruption. Further, should these countries reserve a portion of their natural resources for the backing of the new economic system, their respective weight in the currency basket of the new monetary unit would increase accordingly, providing that nation with larger currency reserves and credit capacity. In addition, bilateral swap lines with trading partner countries would provide them with adequate financing for co-investments and trade financing.

The Cradle: In one of your latest essays, The Economics of the Russian Victory, you call for “an accelerated formation of a new technological paradigm and the formation of institutions of a new world economic order.” Among the recommendations, you specifically propose the creation of “a payment and settlement system in the national currencies of the EAEU member states” and the development and implementation of “an independent system of international settlements in the EAEU, SCO and BRICS, which could eliminate critical dependence of the US-controlled SWIFT system.” Is it possible to foresee a concerted joint drive by the EAEU and China to “sell” the new system to SCO members, other BRICS members, ASEAN members and nations in West Asia, Africa and Latin America? And will that result in a bipolar geo-economy – the West versus The Rest?

Glazyev: Indeed, this is the direction where we are headed. Disappointingly, monetary authorities of Russia are still a part of the Washington paradigm and play by the rules of the dollar-based system, even after Russian foreign exchange reserves were captured by the west. On the other hand, the recent sanctions prompted extensive soul searching among the rest of the non-dollar-block countries. western ‘agents of influence’ still control central banks of most countries, forcing them to apply suicidal policies prescribed by the IMF. However, such policies at this point are so obviously contrary to the national interests of these non-western countries that their authorities are growing justifiably concerned about financial security.

You correctly highlight potentially central roles of China and Russia in the genesis of the new world economic order. Unfortunately, current leadership of the CBR (Central Bank of Russia) remains trapped inside the intellectual cul-de-sac of the Washington paradigm and is unable to become a founding partner in the creation of a new global economic and financial framework. At the same time, the CBR already had to face the reality and create a national system for interbank messaging which is not dependent on SWIFT, and opened it up for foreign banks as well. Cross-currency swap lines have been already set up with key participating nations. Most transactions between member states of the EAEU are already denominated in national currencies and the share of their currencies in internal trade is growing at a rapid pace.

A similar transition is taking place in trade with China, Iran, and Turkey. India indicated that it is ready to switch to payments in national currencies as well. A lot of effort is put in developing clearing mechanisms for national currency payments. In parallel, there is an ongoing effort to develop a digital non-banking payment system, which would be linked to gold and other exchange-traded commodities – the ‘stablecoins.’

Recent US and European sanctions imposed on the banking channels have caused a rapid increase in these efforts. The group of countries working on the new financial system only needs to announce the completion of the framework and readiness of the new trade currency and the process of formation of the new world financial order will accelerate further from there. The best way to bring it about would be to announce it at the SCO or BRICS regular meetings. We are working on that.  

The Cradle: This has been an absolutely key issue in discussions by independent analysts across the west. Was the Russian Central Bank advising Russian gold producers to sell their gold in the London market to get a higher price than the Russian government or Central Bank would pay? Was there no anticipation whatsoever that the coming alternative to the US dollar will have to be based largely on gold? How would you characterize what happened? How much practical damage has this inflicted on the Russian economy short-term and mid-term?

Glazyev: The monetary policy of the CBR, implemented in line with the IMF recommendations, has been devastating for the Russian economy. Combined disasters of the “freezing” of circa $400 billion of foreign exchange reserves and over a trillion dollars siphoned from the economy by oligarchs into western offshore destinations, came with the backdrop of equally disastrous policies of the CBR, which included excessively high real rates combined with a managed float of the exchange rate. We estimate this caused under-investment of circa 20 trillion rubles and under-production of circa 50 trillion rubles in goods.

Following Washington’s recommendations, the CBR stopped buying gold over the last two years, effectively forcing domestic gold miners to export full volumes of production, which added up to 500 tons of gold. These days the mistake and the harm it caused are very much obvious. Presently, the CBR resumed gold purchases, and, hopefully, will continue with sound policies in the interest of the national economy instead of ‘targeting inflation’ for the benefit of international speculators, as had been the case during the last decade.

The Cradle: The Fed as well as the ECB were not consulted on the freeze of Russian foreign reserves. Word in New York and Frankfurt is that they would have opposed it were they to have been asked. Did you personally expect the freeze? And did the Russian leadership expect it?

Glazyev: My book, The Last World War, that I already mentioned, which was published as far back as 2015, argued that the likelihood of this happening eventually is very high. In this hybrid war, economic warfare and informational/cognitive warfare are key theaters of conflict. On both of these fronts, the US and NATO countries have overwhelming superiority and I did not have any doubt that they would take full advantage of this in due course.

I have been arguing for a long time for the replacement of dollars, euro, pounds, and yen in our foreign exchange reserves with gold, which is produced in abundance in Russia. Unfortunately, western agents of influence which occupy key roles at central banks of most countries, as well as rating agencies and key publications, were successful in silencing my ideas. To give you an example, I have no doubt that high-ranking officials at the Fed and the ECB were involved in developing anti-Russian financial sanctions. These sanctions have been consistently escalating and are being implemented almost instantly, despite the well-known difficulties with bureaucratic decision making in the EU.  

The Cradle: Elvira Nabiullina has been reconfirmed as the head of the Russian Central Bank. What would you do differently, compared to her previous actions? What is the main guiding principle involved in your different approaches?

Glazyev: The difference between our approaches is very simple. Her policies are an orthodox implementation of IMF recommendations and dogmas of the Washington paradigm, while my recommendations are based on the scientific method and empirical evidence accumulated over the last hundred years in leading countries.

The Cradle: The Russia-China strategic partnership seems to be increasingly ironclad – as Presidents Putin and Xi themselves constantly reaffirm. But there are rumbles against it not only in the west but also in some Russian policy circles. In this extremely delicate historical juncture, how reliable is China as an all-season ally to Russia?

Glazyev: The foundation of Russian-Chinese strategic partnership is common sense, common interests, and the experience of cooperation over hundreds of years. The US ruling elite started a global hybrid war aimed at defending its hegemonic position in the world, targeting China as the key economic competitor and Russia as the key counter-balancing force. Initially, the US geopolitical efforts were aiming to create a conflict between Russia and China. Agents of western influence were amplifying xenophobic ideas in our media and blocking any attempts to transition to payments in national currencies. On the Chinese side, agents of western influence were pushing the government to fall in line with the demands of the US interests.

However, sovereign interests of Russia and China logically led to their growing strategic partnership and cooperation, in order to address common threats emanating from Washington. The US tariff war with China and financial sanctions war with Russia validated these concerns and demonstrated the clear and present danger our two countries are facing. Common interests of survival and resistance are uniting China and Russia, and our two countries are largely symbiotic economically. They complement and increase competitive advantages of each other. These common interests will persist over the long run.

The Chinese government and the Chinese people remember very well the role of the Soviet Union in the liberation of their country from the Japanese occupation and in the post-war industrialization of China. Our two countries have a strong historical foundation for strategic partnership and we are destined to cooperate closely in our common interests. I hope that the strategic partnership of Russia and the PRC, which is enhanced by the coupling of the One Belt One Road with the Eurasian Economic Union, will become the foundation of President Vladimir Putin’s project of the Greater Eurasian Partnership and the nucleus of the new world economic order.

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

Bretton Woods III: the new Big Bang – “suicidal Europe saved by gold ?“

April 13, 2022

Source

by Jorge Vilches

The unstoppable momentum behind Russia´s new Bretton Woods III finances added to the lack of official gold data available worldwide last week prompted The Saker article NATO´s internal gold war” to publically ask

(1) how hard would it be for most countries to repatriate their now much-needed gold — theoretically still safely vaulted in ´custody´ at the Bank of England — specially if many of them tried to do it at once as most probably would happen…?

(2) why isn´t the current price of gold anywhere near its genuine market value ? Is it due to silent daily central bank interventions that hinder true free-market price-discovery mechanisms? [Ref #1: http://thesaker.is/natos-internal-gold-war/ ]

Gold matters

The above is terribly important vis-á-vis the spanking-new payment system for Russia´s much-needed oil & gas and other essential produce now per Western “sanctions” only buyable either with rubles or gold. With rubles thru yet-not-so-clearnor-yet-vetted banking procedures of unknown sustainability not been tried out even once yet — think revoking clawbacks…or ´artificial defaults´. While with gold it´d be thru old-fashioned sale of tangible bullion. Furthermore, in order to substantially increase its purchasing power, it would be highly meaningfull to be able to sell such gold – possibly with the buyer taking physical delivery — with a genuine market-reference price most probably very significantly above today´s sharply downward-manipulated quotes thru constant central bank interventions since time immemorial. Thus, we would avoid the coming chaos as the “blitzkrieg sanctions” imposed on Russia are not only not working but visibly having the opposite effect. Stubbornly opposing deeply immature EU wishfull thinking, the ruble today is even stronger than before the Ukraine armed conflict. The Anthony Quinn ´gold in Aqaba´ scene in “Lawrence of Arabia” brightly comes to mind [Ref #2: https://off-guardian.org/2022/04/08/despite-sanctions-the-ruble-is-stronger-than-before-the-war-why/%5D

The hungry 800-pound gorilla

So clearly Europe is not only shooting itself in the foot right now but rather both feet, plus knee-caps and elbows… and very soon in the temple (both sides) as exquisitely described by Pepe Escobar in “The Saker” per link below.

So this article would be Part II of NATO´s internal gold war … or, in other words, a tentative draft Plan to AVOID the terrorizing scenario now looming the Old World. This means that the political adults in the room must immediately stop the EU self-shooting spree and face off this hungry 800-pound gorilla with no good intentions in his purposefull mind.

Beware

Agreed, time is of the essence…and the schedule for this draft Plan to succeed may impress as too demanding and/or politically difficult. True enough, it requires careful massaging and political buy-in… and obviously LOTS of hard work, energy, good will and effort from every stakeholder involved. But please beware that this Plan has two huge advantages i.e. (1) having no visible competition and (2) counting with the automatic UK approval as the Brits will not survive without a relatively healthy EU to sell to. Yes, it´s TINA once again…but for a very different Big Bang

Skeptics

If you believe otherwise please just sit back and get the memo from Pepe Escobar re “Europe commits suicide

[ Ref #3: http://thesaker.is/sit-back-and-watch-europe-commit-suicide/ http://thesaker.is/the-total-war-to-cancel-russia/ ]

So this Plan could very well be the only chance for the Western world to literally avoid many millions of its people from starving or freezing to death amidst an economic devastation and scarcity of basic staples that no war has ever inflicted so widespread. There are no brilliant ideas to look forward to with a worsening outlook as we speak, with ever more serious infighting and unsolvable conflicts throughout Europe ´AWKI´ and very soon elsewhere too. Tourism is 25% of EU GDP but without A/C and typical food & essential fuel it´d be dead on arrival at the border.

Europeans, this is it

In a nutshell, right now our Western Graeco-Roman Judeo-Christian millenary culture needs to rise to the occasion. Dear “Europa”, as the cradle of Western civilization that you are supposed to be, please be advised that this is it. Otherwise, not just our culture but also our species could soon become functionally disabled. Or, in financial terms which technocrats enjoy so much, we can soon become a forever ´non-performing asset´ a.k.a. wasted garbage.

The Plan

Accordingly, this draft Plan attempts to AVOID the UK-EU Armageddon that “NATO´s internal gold war” would necessarily bring about. And also please be advised that our success would be the only way at hand to prove the Davos agenda wrong which actually was what brought us to the situation we are now facing in the first place.

The philosopy of The Plan

The basic philosophy behind this über urgent project is probably best represented by a photograph taken at Verdun in 1984 wherein French President Francois Mitterand and German Chancellor Helmut Kohl are firmly holding each other´s hand like two school children both looking straight at the camera for the whole world to see. These two most serious, intelligent and very powerfull elderly statesmen were silently screaming something instantly understood by everyone after French and Germans had killed, maimed and hatefully destroyed each other for decades. Say no more

The math of The Plan

Lacking public domain data, let´s accept a spitball yet trustworthy “back-of-the-envelope” guesstimate of 5000 tons of gold deposited by EU members for custody at the Bank of England. So, if such tonnage were now physically available at today´s ultra low central-bank-manipulated prices it would pay for all of Europe´s oil & gas imports for one full year …while if gold were priced at USD $ 5000 per ounce Troy it would pay for 2,5 years of Europe´s oil & gas needs… And if gold were priced at USD $ 50,000 per ounce (something quite possible if genuine price-discovery mechanisms were set free without central bank manipulation…) those 5000 metric tons of gold at current oil & gas prices (which could be lower due to deflationary pressures) would pay for 25 years of EU´s fuel needs, or more.[Ref #4 https://www.gata.org/node/21861 ] [ Ref #5 https://www.bullionstar.com/blogs/ronan-manly/central-bank-gold-at-the-bank-of-england/ ]

2022 goals of The Plan

Goal (A) is having all countries being able to gradually repatriate their gold bullion now theoretically in custody at the Bank of England if they so desire with a serious and foreseeable schedule in place to be unequivocally complied with.

Goal (B) being able to sell such gold bullion even with buyers taking physical delivery but always at a genuine market price most probably very much higher than today´s fully manipulated quotes thru central bank daily interventions.

Governance & Management of The Plan

1. Arbiter Czar

Immediate appointment of a high caliber Arbiter Czar — with proper staffing & facilities + open budget + funding both in London and Brussels – preferably of non-European or US origin, irrefutably knowledgeable and impartial to be duly followed by UK & EU leaders and institutions in the implementation of this Plan as per guidelines herein. Both the UK and EU Parliaments must immediately approve the political appointment of this Czar ( and substitute sub-Czar ) under these terms with unequivocal and unmitigated support behind his/her role.

2. Full legal open-ended amnesty

Full legal amnesty & indefinite end-of-story “forgiveness forever” to both UK and EU on this topic reconfirmed by ECJ + ECB + BoE + British Judiciary & BIS Basel III thru specific legal homologation by July 1 while setting this topic separate from pending Brexit negotiations with plenty of shared UK + EU blame all around.

3. UK & BoE gold bullion all-inclusive official public domain status Report

Full-disclosure UK & BoE transparent gold-holdings & historical evolution Report + Audits Stages #1 & #2

4. UK official public domain gold bullion transparent Repatriation Plan

Proposed fully-descriptive UK official gold bullion repatriation Plan with time-table & schedule per (3) above.

1. Gold at real free-market price

Definitive and conclusive end to Ponzi scheme derivatives & option futures and central bank interventions etc etc etc allowing gold price to freely reach its own price-discovery + elimination of VAT and other taxes etc

2. “Financial Equivalence” Protocol

Financial Equivalence” Protocol approval under normal Brexit mechanisms already foreseen.

3. Political reconfirmation and legal homologation

EU Parliament + UK Parliament + BIS Basel III + ECB + BoE + ECJ + British Judiciary of points (2) + (4) & (5).

The all-losers “blame game” (… which badly requires amnesty…)

“ALL-losers”… ALL as in ´everyone´ so don´t even think of it … so just please hold your nose and stick to The Plan.

But to clear the air and thus never coming back to this aspect ever again, let´s leave on record that there was plenty of shameless blame BOTH sides of the English Channel, fog or no fog. Clearly, they were both non-compliant. The UK of course, but also EU members which faked to “trust” the UK while playing parallel games to reap huge benefits from

  1. EU membership, economics & subsidies despite clear non-compliance with Maastricht inclusion criteria.
  2. a full euro “free ride” with no questions asked despite the fact that EU financial strategy was unsustainable from get-go like a bunch of drunken sailors coming out of a pub very late at night leaning on each other.
  3. so they all swept it under the rug, whistled the mess away, and “one hand washes the other” so to speak
  4. both sides played hardball “for keeps” the only problem being that Russia has now taken their ball away…

Per reknown internationally published experts, everybody that mattered knew and knows — ECB and BIS included – that Western central banks deploy daily surrepticious derivatives & options interventions in the futures market to control commodity prices and protect government fiat currencies against the public’s recognition of their devaluation.

Thus, for decades the price of gold was artificially maintained at ULTRA low levels so nobody in the EU cared much…

Now Russia has changed all that with a BigBang commodities-based Bretton Woods III deal and suddenly gold bullion matters lots because it buys oil & gas and everything Russian that Europe badly needs, or else…. So there was

  • NO due diligence nothing meaningful done by the EU or the UK, sheer negligence & carelessness.
  • NO world-class fully independent full-scale & depth public domain audits from anyone nor UK nor EU.
  • The ´Authorized Custodian´ incurred in guiltfull non-compliance of known tasks, duties & malfeasance
  • With deceitfull impunity, BOTH sides always irresponsibly stonewalled every question, doubt or query.

Initial schedule of The Plan

To be expanded and modified on the fly under the leadership and directions of the all-powerfull Arbiter Czar in order to achieve Goal (A) + Goal (B) described before by November 30, 2022.

May 1

Meeting to be held in London between UK Prime Minister Boris Johnson and President Ursula von der Leyen of the European Commission and President Charles Michel of the European Council in order to

  1. officially submit candidates for Arbiter Czar + substitute both to be agreed upon by mutual UK-EU consent.
  2. discuss and agree on the general framework of the tentative draft plan outlined herein as possibly modified.
  3. discuss and agree and formally approve the tentative procedures and schedule for execution + open budget

June 1

Both the UK and EU Parliaments must have already approved the political appointment of the Arbiter Czar + substitute under the terms of this outline thru an over-arching Law superseding and over-imposed above any other law, ruling, treaty or order. The above should also include proper staffing & facilities + open budget + funding both in London and Brussels plus objectives, goals and procedures to be followed per (A) + (B) + (C).

July 1

Approval of full legal amnesty law & indefinite end-of-story “forgiveness forever” concept for both UK and EU and everyone else on this topic, as approved simultaneously by ECJ + ECB + BoE + British Judiciary & BIS re Basel III with specific legal homologation from whomever else is needed while setting this matter completely separate from any possible pending Brexit negotiations.

Repeat

Granted The Plan is very tight and politically difficult. But there is no other plan for the EU-UK survival as we know them, unless with BoJo´s help we readily welcome the very angry pitchforks to come inside the Palace and warm up

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Jorge Vilches is proud to have been introduced many times as “ the quintessence of the independent columnist ”.

Former op-ed contributor for The Wall Street Journal – New York and other financial media, has studied this topic in depth for the past 20 years. WSJ-NY “The Americas” column, editor David Asman today Fox Business News anchor.

The Total War to Cancel Russia

April 09, 2022

source

By Pepe Escobar,

Vast swathes of NATOstan have been corralled into behaving like a Russophobic lynch mob. No dissent is tolerated.

By now it’s abundantly clear that the neo-Orwellian “Two Minute Hate” Russophobic campaign launched by the Empire of Lies after the start of Operation Z is actually “24/7 Hate”.

Vast swathes of NATOstan have been corralled into behaving like a Russophobic lynch mob. No dissent is tolerated. The full psyops has de facto upgraded the Empire of Lies to the status of Empire of Hate in a Total War – hybrid and otherwise – to cancel Russia.

Hate, after all, packs way more punch than mere lies, which are now veering into abject ridiculousness, as in U.S. “intelligence” resorting to – what else – lies to fight the info war against Russia.

If the propaganda overdrive has been lethally effective amidst the zombified Western masses – call it a “win” in the P.R. war – in the front where it really matters, inside Russia, it’s a major fail.

Public opinion support for both Operation Z and President Putin is unprecedented. After videos of torture of Russian POWs that caused widespread revulsion, Russian civil society is even bracing for a “Long War” lasting months, not weeks, as long as the targets of the Russian High Command – actually a military secret – are met.

The stated aims are “demilitarization” and “denazification” of a future neutral Ukraine – but geopolitically reach way beyond: the aim is to turn the post-1945 European collective security arrangement upside down, forcing NATO to understand and come to terms with the concept of “indivisible security”. This is an extremely complex process that will reach the next decade.

The NATOstan sphere simply cannot admit in public a series of facts that a military analyst of the caliber of Andrei Martyanov has been explaining for years. And that adds to their collective pain.

Russia can take on NATO and smash it to bits in 48 hours. It may employ advanced strategic deterrence systems unmatched across the West. Its southern axis – from the Caucasus and West Asia to Central Asia – is fully stabilized. And if the going gets really tough, Mr. Zircon can deliver his hypersonic nuclear business card with the other side not even knowing what hit it.

“Europe has chosen its fate”

It may be enlightening to see how these complex processes are interpreted by Russians – whose points of view are now completely blocked across NATOstan.

Let’s take two examples. The first is Lieutenant General L.P. Reshetnikov, in an analytical note examining facts of the ground war.

Some key takeaways:

– “Over Romania and Poland there are airborne early warning aircraft of NATO with experienced crews, there are U.S. intelligence satellites in the sky all the time. I remind you that just in terms of budgets for our Roscosmos we allocated $2.5 billion a year, the civil budget of NASA is $25 billion, the civil budget of SpaceX alone is equal to Roscosmos – and that is not counting the tens of billions of dollars annually for the entire U.S. feverishly unfolding the control system of the entire planet.”

– The war is unfolding according to “NATO’s eyes and brains. The Ukronazis are nothing but free controlled zombies. And the Ukrainian army is a remotely controlled zombie organism.”

– “The tactics and strategy of this war will be the subject of textbooks for military academies around the world. Once again: the Russian army is smashing a Nazi zombie organism, fully integrated with the eyes and brain of NATO.”

Now let’s switch to Oleg Makarenko, who focuses on the Big Picture.

– “The West considers itself ‘the whole world’ only because it has not yet received a sufficiently sensitive punch on the nose. It just so happened that Russia is now giving him this click: with the rear support of Asia, Africa and Latin America. And the West can do absolutely nothing with us, since it also lags behind us in terms of the number of nuclear warheads.”

– “Europe has chosen its fate. And chose fate for Russia. What you are seeing now is the death of Europe. Even if it does not come to nuclear strikes on industrial centers, Europe is doomed. In a situation where European industry is left without cheap Russian energy sources and raw materials – and China will begin to receive these same energy carriers and raw materials at a discount, there can be no talk of any real competition with China from Europe. As a result, literally everything will collapse there – after industry, agriculture will collapse, welfare and social security will collapse, hunger, banditry and chaos will begin.”

It’s fair to consider Reshetnikov and Makarenko as faithfully representing the overall Russian sentiment, which interprets the crude Bucha false flag as a cover to obscure the Ukrainian army torture of Russian POWs.

And, deeper still, Bucha allowed the disappearance of Pentagon bioweapon labs from the Western mediasphere, complete with its ramifications: evidence of a concerted American drive to ultimately deploy real weapons of mass destruction against Russia.

The multi-level Bucha hoax had to include the Brit presidency of the UN Security Council actually blocking a serious discussion, a day before the Russian Ministry of Defense struggled to present to the UN – predictably minus the U.S. and the UK – all the bioweapon facts they have unearthed in Ukraine. The Chinese were horrified by the findings.

The Russian Investigative Committee at least persists in its work, with 100 researchers unearthing evidence of war crimes across Donbass to be presented at a tribunal in the near future, most probably set up in Donetsk.

And that brings us back to the facts on the ground. There’s a lot of analytical discussion on the possible endgame of Operation Z. A fair assessment would include the liberation of all of Novorossiya and total control of the Black Sea coastline that currently is part of Ukraine.

“Ukraine” in fact was never a state; it was always an annex to another state or empire such as Poland, Austria-Hungary, Turkey, and crucially Russia.

The landmark Russian state was Kievan Rus. “Ukraine”, in old Russian, means “border region”. In the past, it referred to the westernmost regions of the Russian Empire. When the Empire started expanding south, the new regions annexed mostly from Turkish rule were called Novorossiya (“New Russia”) and the northeastern regions, Malorossiya (“Little Russia”).

It was up to the USSR in the early 1920s to jumble it all together and name it “Ukraine” – adding Galicia in the west, which was historically non-Russian.

Yet the key development is when the USSR broke up in 1991. As the Empire of Lies de facto controlled post-Soviet Russia, they could never have possibly allowed the real Russian regions of the USSR – that is, Novorossiya and Malorossiya – to be again incorporated to the Russian Federation.

Russia is now re-incorporating them – in an “I Did It, My Way” manner.

Vamos a bailar in European Puerto Rico

By now it’s also quite clear to any serious geopolitical analysis that Operation Z opened a Pandora’s box. And the supreme historical victim of all the toxicity finally let loose is bound to be Europe.

The indispensable Michael Hudson, in a new essay on the U.S. dollar devouring the euro, argues half in jest that Europe might as well surrender its currency, and go on like “a somewhat larger version of Puerto Rico.”

After all, Europe “has pretty much ceased to be a politically independent state, it is beginning to look more like Panama and Liberia – ‘flag of convenience’ offshore banking centers that are not real ‘states’ because they don’t issue their own currency, but use the U.S. dollar.”

In synch with quite a few Russian, Chinese and Iranian analysts, Hudson advances that the war in Ukraine – actually in its “full-blown version as the New Cold War” – is likely to last “at least a decade, perhaps two as the U.S. extends the fight between neoliberalism and socialism [meaning the Chinese system] to encompass a worldwide conflict.”

What may be seriously in dispute is whether the U.S., after “the economic conquest of Europe”, will be able to “lock in African, South American and Asian countries”. The Eurasia integration process, rolling in earnest for 10 years now, conducted by the Russia-China strategic partnership and expanding to most of the Global South, will go no holds barred to prevent it.

There’s no question, as Hudson states, that “the world economy is being enflamed” – with the U.S. weaponizing trade. Yet on the Right Side of History we have the Rublegas, the petroyuan, the new monetary/financial system being designed in a partnership between the Eurasia Economic Union (EAEU) and China.

And that’s something no puny Cancel Culture War can erase.

Sit back and watch Europe commit suicide

If the US goal is to crush Russia’s economy with sanctions and isolation, why is Europe in an economic free fall instead?

April 07, 2022

Washington’s competition with rising power Russia is so fierce, it is willing to sacrifice Europe.Photo Credit: The Cradle

By Pepe Escobar

The stunning spectacle of the EU committing slow motion hara-kiri is something for the ages. Like a cheap Kurosawa remake the movie is actually about the Empire of Lies-detonated demolition of the EU, complete with subsequent rerouting of some key Russian commodities exports to the US at the expense of the Europeans.

It helps to have a 5th columnist actress strategically placed – in this case astonishingly incompetent European Commission head Ursula von der Lugen – with her vociferous announcement of a crushing new sanctions package: Russian ships banned from EU ports; road transportation companies from Russia and Belarus prohibited from entering the EU; no more coal imports (over 4.4 billion euros a year).

In practice, that translates into Washington shaking down its wealthiest western clients/puppets. Russia, of course, is too powerful to directly challenge militarily, and the US badly needs some of its key exports, especially minerals. So, the Americans will instead nudge the EU into imposing ever-increasing sanctions that will willfully collapse their national economies, while allowing the US to scoop everything up.

Cue to the coming catastrophic economic consequences felt by Europeans in their daily life (but not by the wealthiest five percent): inflation devouring salaries and savings; next winter energy bills packing a mean punch; products disappearing from supermarkets; holiday bookings almost frozen. France’s Le Petit Roi Emmanuel Macron – perhaps facing a nasty electoral surprise – has even announced: “food stamps like in WWII are possible.”

We have Germany facing the returning ghost of Weimar hyperinflation. BlackRock President Rob Kapito said, in Texas,“for the first time, this generation is going to go into a store and not be able to get what they want.” African farmers are unable to afford fertilizer at all this year, reducing agricultural production by an amount capable of feeding 100 million people.

Zoltan Poszar, former NY Fed and US Treasury guru, current Credit Suisse grand vizir, has been on a streak, stressing how commodity reserves – and, here, Russia is unrivaled – will be an essential feature of what he calls Bretton Woods III (although, what’s being designed by Russia, China, Iran and the Eurasia Economic Union is a post-Bretton Woods).

Poszar remarks that wars, historically, are won by those who have more food and energy supplies, in the past to power horses and soldiers; today to feed soldiers and fuel tanks and fighter jets. China, incidentally, has amassed large stocks of virtually everything.

Poszar notes how our current Bretton Woods II system has a deflationary impulse (globalization, open trade, just-in-time supply chains) while Bretton Woods 3 will provide an inflationary impulse (de-globalization, autarky, hoarding of raw materials) of supply chains and extra military spending to be able to protect what will remain of seaborne trade.

The implications are of course overwhelming. What’s implicit, ominously, is that this state of affairs may even lead to WWIII.

Rublegas or American LNG?

The Russian roundtable Valdai Club has conducted an essential expert discussion on what we at The Cradle have defined as  Rublegas – the real geoeconomic game-changer at the heart of the post-petrodollar era. Alexander Losev, a member of the Russian Council for Foreign and Defense Policy, offered the contours of the Big Picture. But it was up to Alexey Gromov, Chief Energy Director of the Institute of Energy and Finance, to come up with crucial nitty-gritty.

Russia, so far, was selling 155 billion cubic meters of gas to Europe each year. The EU rhetorically promises to get rid of it by 2027, and reduce supply by the end of 2022 by 100 billion cubic meters. Gromov asked “how,” and remarked, “any expert has no answer. Most of Russia’s natural gas is shipped over pipelines. This cannot simply be replaced by Liquified Natural Gas (LNG).”

The risible European answer has been “start saving,” as in “prepare to be worse off” and “reduce the temperature in households.” Gromov noted how, in Russia, “22 to 25 degrees in winter is the norm. Europe is promoting 16 degrees as ‘healthy’, and wearing sweaters at night.”

The EU won’t be able to get the gas it needs from Norway or Algeria (which is privileging domestic consumption). Azerbaijan would be able to provide at best 10 billion cubic meters a year, but “that will take 2 or 3 years” to happen.

Gromov stressed how “there’s no surplus in the market today for US and Qatar LNG,” and how prices for Asian customers are always higher. The bottom line is that “by the end of 2022, Europe won’t be able to significantly reduce” what it buys from Russia: “they might cut by 50 billion cubic meters, maximum.” And prices in the spot market will be higher – at least $1,300 per cubic meter.

An important development is that “Russia changed the logistical supply chains to Asia already.” That applies for gas and oil as well:  “You can impose sanctions if there’s a surplus in the market. Now there’s a shortage of at least 1.5 million barrels of oil a day. We’ll be sending our supplies to Asia – with a discount.” As it stands, Asia is already paying a premium, from 3 to 5 dollars more per barrel of oil.

On oil shipments, Gromov also commented on the key issue of insurance: “Insurance premiums are higher. Before Ukraine, it was all based on the Free on Board (FOB) system. Now buyers are saying ‘we don’t want to take the risk of taking your cargo to our ports.’ So they are applying the Cost, Insurance and Freight (CIF) system, where the seller has to insure and transport the cargo. That of course impacts revenues.”

An absolutely key issue for Russia is how to make the transition to China as its key gas customer. It’s all about the Power of Siberia 2, a new 2600-km pipeline originating in the Russian Bovanenkovo and Kharasavey gas fields in Yamal, in northwest Siberia – which will reach full capacity only in 2024. And, first, the interconnector through Mongolia must be built – “we need 3 years to build this pipeline” – so everything will be in place only around 2025.

On the Yamal pipeline, “most of the gas goes to Asia. If the Europeans don’t buy anymore we can redirect.” And then there’s the Arctic LNG 2 project – which is even larger than Yamal: “the first phase should be finished soon, it’s 80 percent ready.” An extra problem may be posed by the Russian “Unfriendlies” in Asia: Japan and South Korea. LNG infrastructure produced in Russia still depends on foreign technologies.

That’s what leads Gromov to note that, “the model of mobilization-based economy is not so good.” But that’s what Russia needs to deal with at least in the short to medium term.

The positives are that the new paradigm will allow “more cooperation within the BRICS (the emerging economies of Brazil, Russia, India, China and South Africa that have been meeting annually since 2009);” the expansion of the International North South Transportation Corridor (INSTC); and more interaction and integration with “Pakistan, India, Afghanistan and Iran.”

Only in terms of Iran and Russia, swaps in the Caspian Sea are already in the works, as Iran produces more than it needs, and is set to increase cooperation with Russia in the framework of their strengthened strategic partnership.

Hypersonic geoeconomics

It was up to Chinese energy expert Fu Chengyu to offer a concise explanation of why the EU drive of replacing Russian gas with American LNG is, well, a pipe dream. Essentially the US offer is “too limited and too costly.”

Fu Chengyu showed how a lengthy, tricky process depends on four contracts: between the gas developer and the LNG company; between the LNG company and the buyer company; between the LNG buyer and the cargo company (which builds vessels); and between the buyer and the end user.

“Each contract,” he pointed out, “takes a long time to finish. Without all these signed contracts, no party will invest – be it investment on infrastructure or gas field development.” So actual delivery of American LNG to Europe assumes all these interconnected resources are available – and moving like clockwork.

Fu Chengyu’s verdict is stark: this EU obsession on ditching Russian gas will provoke “an impact on global economic growth, and recession. They are pushing their own people – and the world. In the energy sector, we will all be harmed.”

It was quite enlightening to juxtapose the coming geoeconomic turbulence – the EU obsession in bypassing Russian gas and the onset of Rublegas – with the real reasons behind Operation Z in Ukraine, completely obscured by western media and analysts.

A US Deep State old pro, now retired, and quite familiar with the inner workings of the old OSS, the CIA precursor, all the way to the neocon dementia of today, provided some sobering insights:

“The whole Ukraine issue is over hypersonic missiles that can reach Moscow in less than four minutes. The US wants them there, in Poland, Romania, Baltic States, Sweden, Finland. This is in direct violation of the agreements in 1991 that NATO will not expand in Eastern Europe. The US does not have hypersonic missiles now but should – in a year or two. This is an existential threat to Russia. So they had to go into the Ukraine to stop this.  Next will be Poland and Romania where launchers have been built in Romania and are being built in Poland.”

From a completely different geopolitical perspective, what’s really telling is that his analysis happens to dovetail with Zoltan Poszar’s geoeconomics: “The US and NATO are totally belligerent. This presents a real danger to Russia. The idea that nuclear war is unthinkable is a myth. If you look at the firebombing of Tokyo against Hiroshima and Nagasaki, more people died in Tokyo than Hiroshima and Nagasaki. These cities were rebuilt. The radiation goes away and life can restart. The difference between firebombing and nuclear bombing is only efficiency. NATO provocations are so extreme, Russia had to place their nuclear missiles on standby alert. This is a gravely serious matter. But the US ignored it.”

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


‘Rublegas:’ the world’s new resource-based reserve currency

The Russian ruble is sitting pretty right now, having regained its pre-sanctions value and set to become a major commodity currency.

April 01 2022

Photo Credit: The Cradle

Rublegas is the commodity currency du jour and it isn’t nearly as complicated as NATO pretends. If Europe wants gas, all it needs to do is send its Euros to a Russian account inside Russia.

By Pepe Escobar

Saddam, Gaddafi, Iran, Venezuela – they all tried but couldn’t do it. But Russia is on a different level altogether.

The beauty of the game-changing, gas-for-rubles, geoeconomic jujitsu applied by Moscow is its stark simplicity.

Russian President Vladimir Putin’s presidential decree on new payment terms for energy products, predictably, was misunderstood by the collective west. The Russian government is not exactly demanding straightforward payment for gas in rubles. What Moscow wants is to be paid at Gazprombank in Russia, in its currency of choice, and not at a Gazprom account in any banking institution in western capitals.

That’s the essence of less-is-more sophistication. Gazprombank will sell the foreign currency – dollars or euros – deposited by their customers on the Moscow Stock Exchange and credit it to different accounts in rubles within Gazprombank.

What this means in practice is that foreign currency should be sent directly to Russia, and not accumulated in a foreign bank – where it can easily be held hostage, or frozen, for that matter.

All these transactions from now on should be transferred to a Russian jurisdiction – thus eliminating the risk of payments being interrupted or outright blocked.

It’s no wonder the subservient European Union (EU) apparatus – actively engaged in destroying their own national economies on behalf of Washington’s interests – is intellectually unequipped to understand the complex matter of exchanging euros into rubles.

Gazprom made things easier this Friday, sending official notifications to its counterparts in the west and Japan.

Putin himself was forced to explain in writing to German Chancellor Olaf Scholz how it all works.

Once again, very simple: Customers open an account with Gazprombank in Russia. Payments are made in foreign currency – dollars or euros – converted into rubles according to the current exchange rate, and transferred to different Gazprom accounts.

Thus it is 100 percent guaranteed that Gazprom will be paid.

That’s in stark contrast to what the United States was forcing the Europeans to do: pay for Russian gas in Gazprom accounts in Europe, which would then be instantly frozen. These accounts would only be unblocked with the end of Operation Z, Russia’s military ops in Ukraine.

Yet the Americans want the war to go on indefinitely, to “bog down” Moscow as if this was Afghanistan in the 1980s, and have strictly forbidden the Ukrainian Comedian in front of a green screen somewhere – certainly not Kiev – to accept any ceasefire or peace deal.

So Gazprom accounts in Europe would continue to be frozen.

As Scholz was still trying to understand the obvious, his economic minions went berserk, floating the idea of nationalizing Gazprom’s subsidiaries – Gazprom Germania and Wingas – in case Russia decides to halt the gas flow.

This is ridiculous. It’s as if Berlin functionaries believe that Gazprom subsidiaries produce natural gas in centrally heated offices across Germany.

The new rubles-for-gas mechanism does not in any way violate existing contracts. Yet, as Putin warned, existing contracts may indeed be stopped: “If such [ruble] payments are not made, we will consider this to be the buyers’ failure to perform commitments with all ensuing implications.”

Kremlin spokesman Dmitri Peskov was adamant that the mechanism will not be reversed under the current, dire circumstances. Still that does not mean that the gas flow would be instantly cut off. Payment in rubles will be expected from ‘The Unfriendlies’ – a list of hostile states that includes mostly the US, Canada, Japan and the EU – in the second half of April and early May.

For the overwhelming majority of the Global South, the overarching Big Picture is crystal clear: an Atlanticist oligarchy is refusing to buy the Russian gas essential to the wellbeing of the population of Europe, while fully engaged in the weaponization of toxic inflation rates against the same population.

Beyond Rublegas

This gas-for-rubles mechanism – call it Rublegas – is just the first concrete building block in the construction of an alternative financial/monetary system, in tandem with many other mechanisms: ruble-rupee trade; the Saudi petroyuan; the Iran-Russia SWIFT- bypassing mechanism; and the most important of all, the China-Eurasia Economic Union (EAEU) design of a comprehensive financial/monetary system, with the first draft to be presented in the next few days.

And all of the above is directly linked to the stunning emergence of the ruble as a new, resource-based reserve currency.

After the predictable initial stages of denial, the EU – actually, Germany – must face reality. The EU depends on steady supplies of Russian gas (40 percent) and oil (25 percent). The sanction hysteria has already engineered certified blowback.

Natural gas accounts for 50 percent of the needs of Germany’s chemical and pharmaceutical industries. There’s no feasible replacement, be it from Algeria, Norway, Qatar or Turkmenistan. Germany is the EU’s industrial powerhouse. Only Russian gas is capable of keeping the German – and European – industrial base humming and at very affordable prices in case of long-term contracts.

Disrupt this set up and you have horrifying turbulence across the EU and beyond.

The inimitable Andrei Martyanov has summed it up this way: “Only two things define the world: the actual physical economy, and military power, which is its first derivative. Everything else are derivatives but you cannot live on derivatives.”

The American turbo-capitalist casino believes its own derivative “narrative” – which has nothing to do with the real economy. The EU will eventually be forced by reality to move from denial to acceptance. Meanwhile, the Global South will be fast adapting to the new paradigm: the Davos Great Reset has been shattered by the Russian Reset.

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

Meet the New, Resource-Based Global Reserve Currency

April 01, 2022

A new reality is being formed:

the unipolar world is irrevocably becoming a thing of the past,

a multipolar one is taking shape.

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

It was something to behold. Dmitri Medvedev, former Russian President, unrepentant Atlanticist, current deputy chairman of the Russian Security Council, decided to go totally unplugged in an outburst matching the combat star turn of Mr. Khinzal that delivered palpable shock and awe all across NATOstan.

Medvedev said “hellish” Western sanctions not only have failed to cripple Russia, but are instead “returning to the West like a boomerang.” Confidence in reserve currencies is “fading like the morning mist”, and ditching the US dollar and the euro is not unrealistic anymore: “The era of regional currencies is coming.”

After all, he added, “no matter if they want it or not, they’ll have to negotiate a new financial order (…) And the decisive voice will then be with those countries that have a strong and advanced economy, healthy public finances and a reliable monetary system.”

Medvedev relayed his succinct analysis even before D Day – as in the deadline this Thursday established by President Putin after which payments for Russian gas by “unfriendly nations” will only be accepted in rubles.

The G7, predictably, had struck a (collective) pose: we won’t pay. “We” means the 4 that are not large Russian gas importers. “We”, moreover, means the Empire of Lies dictating the rules. As for the 3 that will be in dire straits, not only they are major importers but also happen to be WWII losers – Germany, Italy and Japan, still de facto occupied territories. History does have a habit of playing perverted tricks.

Denial didn’t last long. Germany was the first to break – even before industrialists from Ruhr to Bavaria staged a mass revolt. Scholz, the puny Chancellor, called Putin, who had to explain the obvious:  payments are being converted into rubles because the EU froze Russia’s foreign exchange reserves – in a crass violation of international law.

With Taoist patience, Putin also expressed hope this would not represent a deterioration in contract terms for European importers. Russian and German experts should sit down together and discuss the new terms.

Moscow is working on a set of documents defining the new deal. Essentially, that spells out no rubles, no gas. Contracts become null and void once you violate trust. The US and the EU broke legally biding agreements with unilateral sanctions and on top of it confiscated foreign reserves of a – nuclear – G20 nation.

The unilateral sanctions made dollars and euros worthless to Russia. Hysteria fits won’t cut it: this will be resolved – but under Russia’s terms. Period. The Foreign Ministry had already warned that refusal to pay for gas in rubles would lead to a serious global crisis of non-payments and serial global-level bankruptcies, a hellish chain reaction of blocked transactions, freezing of collateral assets and closures of credit lines.

What will happen next is partially predictable. EU companies will receive the new set of rules. They will have time to examine the documents and make a decision. Those that say “no” will be automatically excluded from receiving direct Russian gas shipments – all politico-economic consequences included.

There will be some compromise, of course. For instance, quite a few EU nations will accept to use rubles and increase their gas acquisitions so they may resell the surplus to their neighbors and make a profit. And some may also decide to buy gas on the go on energy exchanges.

So Russia is not imposing an ultimatum on anybody. The whole thing will take time – a rolling process. With some sideway action as well. The Duma is contemplating the extension of payment in rubles to other essential products – such as oil, metals, timber, wheat. It will depend on the collective voracity of the EU chihuahuas. Everyone knows that their non-stop hysteria may translate into a colossal rupture of supply chains across the West.

Bye bye oligarchs

While the Atlanticist ruling classes have gone totally berserk but still remain focused on fighting to the last European to extract any remaining, palpable EU wealth, Russia is playing it cool. Moscow has been quite lenient in fact, brandishing the specter of no gas in Spring rather than Winter.

The Russian Central Bank nationalized foreign exchange earnings of all major exporters. There was no default. The ruble keeps rising – and is now back to roughly the same level before Operation Z.  Russia remains self-sufficient, food-wise. American hysteria over “isolated” Russia is laughable. Every actor that matters across Eurasia – not to mention the other 4 BRICS and virtually the whole Global South – did not demonize and/or sanction Russia.

As an extra bonus, arguably the last oligarch capable of influence in Moscow, Anatoly Chubais, is gone. Call it another momentous historical trickery: Western sanction hysteria de facto dismembered Russian oligarchy – Putin’s pet project since 2000. What that implies is the strengthening of the Russian state and the consolidation of Russian society.

We still don’t have all the facts, but a case can be made that after years of careful evaluation Putin opted to really go for broke and break the West’s back – using that trifecta (imminent blitzkrieg on Donbass; US bioweapon labs; Ukraine working on nuclear weapons)  as the casus belli.

The freezing of foreign reserves had to have been forecasted, especially because the Russian Central Bank had been increasing its reserves of US Treasuries since November last year. Then there’s the serious possibility of Moscow being able to access “secret” offshore foreign reserves – a complex matrix built with Chinese insider help.

The sudden switch from dollars/euros to rubles was hardcore, Olympic-level geoeconomic judo. Putin enticed the collective West to unleash its demented hysteria sanction attack – and turned it against the opponent with a single, swift move.

And here we all are now trying to absorb so many in-synch game-changing developments following the weaponization of dollar assets:  rupee-ruble with India, the Saudi petroyuan, co-badged Mir-UnionPay cards issued by Russian banks, the Russia-Iran SWIFT alternative, the EAEU-China project of an independent monetary/financial system.

Not to mention the master coup by the Russian Central Bank, pegging 1 gram of gold to 5,000 rubles – which is already around $60, and climbing.

Coupled with No Rubles No Gas, what we have here is energy de facto pegged to gold. The EU Chihuahuas and the Japanese colony will need to buy a lot of rubles in gold or buy a lot of gold to have their gas. And it gets better. Russia may re-peg the ruble to gold in the near future. Could go to 2,000 rubles, 1,000 rubles, even 500 rubles for a gram of gold.

Time to be sovereign

The Holy Grail in the evolving discussions about a multipolar world, since the BRICS summits in the 2000s featuring Putin, Hu Jintao and Lula, has always been how to bypass dollar hegemony. It’s now right in front of the whole Global South, as a benign apparition bearing a Cheshire cat’s smile: the golden ruble, or ruble backed by oil, gas, minerals, commodity exports.

The Russian Central Bank, unlike the Fed, does not practice QE and won’t export toxic inflation to the rest of the planet. The Russian Navy not only secures all Russian sea lines, but Russian nuclear-powered submarines are capable of popping up all over the planet unannounced.

Russia is far, far ahead already implementing the concept of “continental naval power”. December 2015, in the Syrian theater, was the strategic game-changer. The Black Sea-based submarine 4th division is the star of the show.

Russian naval fleets may now employ Kalibr missiles across a space comprehending Eastern Europe, West Asia and Central Asia. The Caspian Sea and the Black Sea, linked by the Don-Volga canal, offer a space of maneuver comparable to the Eastern Mediterranean and the Persian Gulf combined. 6,000 km-long. And you don’t even need to access warm waters.

That covers around 30 nations: the traditional Russian sphere of influence; historical borders of the Russian empire; and current political/energy rivalry spheres.

No wonder the Beltway is berserk.

Russia guarantees shipping across Asia, the Arctic and Europe, in tandem with the Eurasia-wide BRI railway network.

And last but not least, don’t mess with a Nuclear Bear.

Essentially, this is what hardcore power politics is all about. Medvedev was not bragging when he said the era of a single reserve currency is over. The advent of a resource-based global reserve currency means, in a nutshell, that 13% of the planet will not dominate the other 87% anymore.

It’s NATOstan vs. Eurasia redux. Cold War 2.0, 3.0, 4.0 and even 5.0. It doesn’t matter. All the previous Non-Aligned Movement (NAM) nations see which way the geopolitical and geo-economic winds are blowing: the time to assert their real sovereignty is at hand as the “rules-based international order” bites the dust.

Welcome to the birth of the new world system. Foreign Minister Sergei Lavrov, in China, after meeting several counterparts from across Eurasia, could not have outlined it better:

“A new reality is being formed: the unipolar world is irrevocably becoming a thing of the past, a multipolar one is taking shape. It’s an objective process. It’s unstoppable. In this reality, more than one power will “rule” – it will be necessary to negotiate between all the key states that today have a decisive influence on the world economy and politics. At the same time, realizing their special situation, these countries ensure compliance with the basic principles of the UN Charter, including the fundamental one – the sovereign equality of states. No one on this Earth should be seen as a minor player. Everyone is equal and sovereign.”

How Mariupol will become a key hub of Eurasian integration

Mariupol was battered by Ukraine’s right-wing Azov battalion well before Moscow launched its military ops. In Russian hands, this strategic steelworks port can transform into a hub of Eurasian connectivity.

March 29 2022

Mariupol sits on the strategic Sea of Azov at the tip of the Black Sea, and is the ‘Mecca’ of Europe’s steel industry. Its conquest by Russia can pave the way for a Eurasian railroad and connectivity surge.

By Pepe Escobar

Mariupol, the strategic Sea of Azov port, remains in the eye of the storm in Ukraine.

The NATO narrative is that Azovstal – one of Europe’s biggest iron and steel works – was nearly destroyed by the Russian Army and its allied Donetsk forces who “lay siege” to Mariupol.

The true story is that the neo-Nazi Azov batallion took scores of Mariupol civilians as human shields since the start of the Russian military operation in Ukraine, and retreated to Azovstal as a last stand. After an ultimatum delivered last week, they are now being completely exterminated by the Russian and Donetsk forces and Chechen Spetsnaz.

Azovstal, part of the Metinvest group controlled by Ukraine’s wealthiest oligarch, Rinat Akhmetov, is indeed one of the biggest metallurgic plants in Europe, self-described as a “high-performance integrated metallurgical enterprise that produces coke and sinter, steel as well as high-quality rolled products, bars and shapes.”

Amidst a flurry of testimonials detailing the horrors inflicted by the Azov neo-Nazis on Mariupol’s civilian population, a way more auspicious, invisible story bodes well for the immediate future.

Russia is the world’s fifth largest steel producer, apart from holding huge iron and coal deposits. Mariupol – a steel Mecca – used to source coal from Donbass, but under de facto neo-Nazi rule since the 2014 Maidan events, was turned into an importer. Iron, for instance, started to be supplied from Krivbas in Ukraine, over 200 kilometers away.

After Donetsk solidifies itself as an independent republic or, via referendum, chooses to become part of the Russian Federation, this situation is bound to change.

Azovstal is invested in a broad product line of very useful stuff: structural steel, rail for railroads, hardened steel for chains, mining equipment, rolled steel used in factory apparatus, trucks and railroad cars. Parts of the factory complex are quite modern while some, decades old, are badly in need of upgrading, which Russian industry can certainly provide.

Strategically, this is a huge complex, right at the Sea of Azov, which is now, for all practical purposes, incorporated into the Donetsk People’s Republic, and close to the Black Sea. That implies a short trip to the Eastern Mediterranean, including many potential customers in West Asia. And crossing Suez and reaching the Indian Ocean, are customers all across South and Southeast Asia.

So the Donetsk People’s Republic, possibly part of the future Novorossiya, and even part of Russia, will be in control of a lot of steel-making capacity for southern Europe, West Asia, and beyond.

One of the inevitable consequences is that it will be able to supply a real freight railroad construction boom in Russia, China and the Central Asian ‘stans.’ Railroad construction happens to be the privileged connectivity mode for Beijing’s ambitious Belt and Road Initiative (BRI). And, crucially, of the increasingly turbo-charged International North South Transportation Corridor (INSTC).

So, mid-term, Mariupol should expect to become one of the key hubs of a boom in north-south routes – INSTC across Russia and linking with the ‘stans’ – as well as major BRI upgrades east-west and sub-BRI corridors.

Interlocked Eurasia

The INSTC’s main players are Russia, Iran and India – which are now, post-NATO sanctions, in advanced interconnection mode, complete with devising mechanisms to bypass the US dollar in their trade. Azerbaijan is another important INSTC player, yet more volatile because it privileges Turkey’s connectivity designs in the Caucasus.

The INSTC network will also be progressively interconnecting with Pakistan – and that means the China-Pakistan Economic Corridor (CPEC), a key BRI hub, which is slowly but surely expanding to Afghanistan. Foreign Minister Wang Yi’s impromptu visit to Kabul late last week was to advance the incorporation of Afghanistan to the New Silk Roads.

All that is happening as Moscow – extremely close to New Delhi – is simultaneously expanding trade relations with Islamabad. All three, crucially, are Shanghai Cooperation Organization (SCO) members.

So the grand North-South design spells out fluent connectivity from the Russian mainland to the Caucasus (Azerbaijan), to West Asia (Iran) all the way to South Asia (India and Pakistan). None of these key players have demonized or sanctioned Russia despite ongoing US pressures to do so.

Strategically, that represents the Russian multipolar concept of Greater Eurasian Partnership in action in terms of trade and connectivity – in parallel and complimentary with BRI because India, eager to install a rupee-ruble mechanism to buy energy, in this case is an absolutely crucial Russia partner, matching China’s reported $400 billion strategic deal with Iran. In practice, the Greater Eurasia Partnership will facilitate smoother connectivity between Russia, Iran, Pakistan and India.

The NATO universe, meanwhile, is congenitally incapable of even recognizing the complexity of the alignment, not to mention analyze its implications. What we have is the interlocking of BRI, INTSC and the Greater Eurasia Partnership on the ground – all notions that are regarded as anathema in the Washington Beltway.

All that of course is being designed amidst a game-changing geoeconomic moment, as Russia, starting this Thursday, will only accept payment for its gas in rubles from “unfriendly” nations.

Parallel to the Greater Eurasia Partnership, BRI, since it was launched in 2013, is also progressively weaving a complex, integrated Eurasian network of partnerships: financial/economic, connectivity, physical infrastructure building, economic/trade corridors. BRI’s role as a co-shaper of institutions of global governance, including normative foundations, has also been crucial, much to the despair of the NATO alliance.

Time to de-westernize

Yet only now the Global South, especially, will start to observe the full spectrum of the China-Russia play across the Eurasian sphere. Moscow and Beijing are deeply involved in a joint drive to de-westernize globalist governance, if not shatter it altogether.

Russia from now on will be even more meticulous in its institution-building, coalescing the Eurasia Economic Union (EAEU), the SCO and the Collective Security Treaty Organization (CSTO) – a Eurasian military alliance of select post-Soviet states – in a geopolitical context of irreversible institutional and normative divide between Russia and the West.

At the same time, the Greater Eurasia Partnership will be solidifying Russia as the ultimate Eurasian bridge, creating a common space across Eurasia which could even ignore vassalized Europe.

Meanwhile in real life, BRI, as much as the INSTC, will be increasingly plugged into the Black Sea (hello, Mariupol). And BRI itself may even be prone to re-evaluation in its emphasis of linking western China to western Europe’s shrinking industrial base.

There will be no point in privileging the northern BRI corridors – China-Mongolia-Russia via the Trans-Siberian, and the Eurasian land bridge via Kazakhstan – when you have Europe descending into medieval dementia.

BRI’s renewed focus will be on gaining access to irreplaceable commodities – and that means Russia – as well as securing essential supplies for Chinese production. Commodity-rich nations, such as Kazakhstan and many players in Africa, shall become the top future markets for China.

In a pre-Covid loop across Central Asia, one constantly heard that China builds plants and high-speed railways while Europe at best writes white papers. It can always get worse.

The EU as occupied American territory is now descending, fast, from center of global power to the status of inconsequential peripheral player, a mere struggling market in the far periphery of China’s “community of shared destiny.”

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

Make Nazism Great Again

March 24, 2022

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

The supreme target is regime change in Russia, Ukraine is just a pawn in the game – or worse, mere cannon fodder.

All eyes are on Mariupol. As of Wednesday night, over 70% of residential areas were under control of Donetsk and Russian forces, while Russian Marines, Donetsk’s 107th batallion and Chechen Spetsnaz, led by the charismatic Adam Delimkhanov, had entered the Azov-Stal plant – the HQ of the neo-Nazi Azov batallion.

Azov was sent a last ultimatum: surrender until midnight – or else, as in a take no prisoners highway to hell.

That implies a major game-changer in the Ukrainian battlefield; Mariupol is finally about to be thoroughly denazified – as the Azov contingent long entrenched in the city and using civilians as human shields were their most hardened fighting force.

Meanwhile, echoes from the Empire of Lies all but gave the whole game away. There’s no intention whatsoever in Washington to facilitate a peace plan in Ukraine – and that explains Comedian Zelensky’s non-stop stalling tactics. The supreme target is regime change in Russia, and for that Totalen Krieg against Russia and all things Russian is warranted. Ukraine is just a pawn in the game – or worse, mere cannon fodder.

This also means that the 14,000 deaths in Donbass for the past 8 years should be directly attributed to the Exceptionalists. As for Ukrainian neo-Nazis of all stripes, they are as expendable as “moderate rebels” in Syria, be they al-Qaeda or Daesh-linked. Those that may eventually survive can always join the budding CIA-sponsored Neo-Nazi Inc. – the tawdry remix of the 1980s Jihad Inc. in Afghanistan. They will be properly “Kalibrated”.

A quick neo-Nazi recap

By now only the brain dead across NATOstan – and there are hordes – are not aware of Maidan in 2014. Yet few know that it was then Ukrainian Minister of Interior Arsen Avakov, a former governor of Kharkov, who gave the green light for a 12,000 paramilitary outfit to materialize out of Sect 82 soccer hooligans who supported Dynamo Kiev. That was the birth of the Azov batallion, in May 2014, led by Andriy Biletsky, a.k.a. the White Fuhrer, and former leader of the neo-nazi gang Patriots of Ukraine.

Together with NATO stay-behind agent Dmitro Yarosh, Biletsky founded Pravy Sektor, financed by Ukrainian mafia godfather and Jewish billionaire Ihor Kolomoysky (later the benefactor of the meta-conversion of Zelensky from mediocre comedian to mediocre President.)

Pravy Sektor happened to be rabidly anti-EU – tell that to Ursula von der Lugen – and politically obsessed with linking Central Europe and the Baltics in a new, tawdry Intermarium. Crucially, Pravy Sektor and other nazi gangs were duly trained by NATO instructors.

Biletsky and Yarosh are of course disciples of notorious WWII-era Nazi collaborator Stepan Bandera, for whom pure Ukrainians are proto-Germanic or Scandinavian, and Slavs are untermenschen.

Azov ended up absorbing nearly all neo-Nazi groups in Ukraine and were dispatched to fight against Donbass – with their acolytes making more money than regular soldiers. Biletsky and another neo-Nazi leader, Oleh Petrenko, were elected to the Rada. The White Führer stood on his own. Petrenko decided to support then President Poroshenko. Soon the Azov battalion was incorporated as the Azov Regiment to the Ukrainian National Guard.

They went on a foreign mercenary recruiting drive – with people coming from Western Europe, Scandinavia and even South America.

That was strictly forbidden by the Minsk Agreements guaranteed by France and Germany (and now de facto defunct). Azov set up training camps for teenagers and soon reached 10,000 members. Erik “Blackwater” Prince, in 2020, struck a deal with the Ukrainian military that would enable his renamed outfit, Academi, to supervise Azov.

It was none other than sinister Maidan cookie distributor Vicky “F**k the EU” Nuland who suggested to Zelensky – both of them, by the way, Ukrainian Jews – to appoint avowed Nazi Yarosh as an adviser to the Commander-in-Chief of the Ukrainian Armed Forces, Gen Valerii Zaluzhnyi. The target: organize a blitzkrieg on Donbass and Crimea – the same blitzkrieg that SVR, Russian foreign intel, concluded would be launched on February 22, thus propelling the launch of Operation Z.

All of the above, in fact just a quick recap, shows that in Ukraine there’s no difference whatsoever between white neo-Nazis and brown-colored al-Qaeda/ISIS/Daesh, as much as neo-Nazis are just as “Christian” as takfiri Salafi-jihadis are “Muslim”.

When Putin denounced a “bunch of neo-Nazis” in power in Kiev, the Comedian replied that it was impossible because he was Jewish. Nonsense. Zelensky and his patron Kolomoysky, for all practical purposes, are Zio-Nazis.

Even as branches of the United States government admitted to neo-Nazis entrenched in the Kiev apparatus, the Exceptionalist machine made the daily shelling of Donbass for 8 years simply disappear. These thousands of civilian victims never existed.

U.S. mainstream media even ventured the odd piece or report on Azov and Aidar neo-Nazis. But then a neo-Orwellian narrative was set in stone: there are no Nazis in Ukraine. CIA offshoot NED even started deleting records about training members of Aidar. Recently a crappy news network duly promoted a video of a NATO-trained and weaponized Azov commander – complete with Nazi iconography.

Why “denazification” makes sense

The Banderastan ideology harks back to when this part of Ukraine was in fact controlled by the Austro-Hungarian empire, the Russian empire and Poland. Stepan Bandera was born in Austro-Hungary in 1909, near Ivano-Frankovsk, in the – then autonomous – Kingdom of Galicia.

WWI dismembered European empires into frequently non-viable small entities. In western Ukraine – an imperial intersection – that inevitably led to the proliferation of extremely intolerant ideologies.

Banderastan ideologues profited from the Nazi arrival in 1941 to try to proclaim an independent territory. But Berlin not only blocked it but sent them to concentration camps. In 1944 though the Nazis changed tactics: they liberated the Banderanistas and manipulated them into anti-Russian hate, thus creating a destabilization force in the Ukrainian USSR.

So Nazism is not exactly the same as Banderastan fanatics: they are in fact competing ideologies. What happened since Maidan is that the CIA kept a laser focus on inciting Russian hatred by whatever fringe groups it could instrumentalize. So Ukraine is not a case of “white nationalism” – to put it mildly – but of anti-Russian Ukrainian nationalism, for all practical purposes manifested via Nazi-style salutes and Nazi-style symbols.

So when Putin and the Russian leadership refer to Ukrainian Nazism, that may not be 100% correct, conceptually, but it strikes a chord with every Russian.

Russians viscerally reject Nazism – considering that virtually every Russian family has at least one ancestor killed during the Great Patriotic War. From the perspective of wartime psychology, it makes total sense to talk of “Ukro-nazism” or, straight to the point, a “denazification” campaign.

How the Anglos loved the Nazis

The United States government openly cheerleading neo-Nazis in Ukraine is hardly a novelty, considering how it supported Hitler alongside England in 1933 for balance of power reasons.

In 1933, Roosevelt lent Hitler one billion gold dollars while England lent him two billion gold dollars. That should be multiplied 200 times to arrive at today’s fiat dollars. The Anglo-Americans wanted to build up Germany as a bulwark against Russia. In 1941 Roosevelt wrote to Hitler that if he invaded Russia the U.S. would side with Russia, and wrote Stalin that if Stalin invaded Germany the U.S. would back Germany. Talk about a graphic illustration of Mackinderesque balance of power.

The Brits had become very concerned with the rise of Russian power under Stalin while observing that Germany was on its knees with 50% unemployment in 1933, if one counted unregistered itinerant Germans.

Even Lloyd George had misgivings about the Versailles Treaty, unbearably weakening Germany after its surrender in WWI. The purpose of WWI, in Lloyd George’s worldview, was to destroy Russia and Germany together. Germany was threatening England with the Kaiser building a fleet to take over the oceans, while the Tsar was too close to India for comfort. For a while Britannia won – and continued to rule the waves.

Then building up Germany to fight Russia became the number one priority – complete with rewriting of History. The uniting of Austrian Germans and Sudetenland Germans with Germany, for instance, was totally approved by the Brits.

But then came the Polish problem. When Germany invaded Poland, France and Britain stood on the sidelines. That placed Germany on the border of Russia, and Germany and Russia divided up Poland. That’s exactly what Britain and France wanted. Britain and France had promised Poland that they would invade Germany from the west while Poland fought Germany from the east.

In the end, the Poles were double-crossed. Churchill even praised Russia for invading Poland. Hitler was advised by MI6 that England and France would not invade Poland – as part of their plan for a German-Russian war. Hitler had been supported financially since the 1920s by MI6 for his favorable words about England in Mein Kampf. MI6 de facto encouraged Hitler to invade Russia.

Fast forward to 2022, and here we go again – as farce, with the Anglo-Americans “encouraging” Germany under feeble Scholz to put itself back together militarily, with 100 billion euros (that the Germans don’t have), and setting up in thesis a revamped European force to later go to war against Russia.

Cue to the Russophobic hysteria in Anglo-American media about the Russia-China strategic partnership. The mortal Anglo-American fear is Mackinder/Mahan/Spykman/Kissinger/Brzezinski all rolled into one: Russia-China as peer competitor twins take over the Eurasian land mass – the Belt and Road Initiative meets the Greater Eurasia Partnership – and thus rule the planet, with the U.S. relegated to inconsequential island status, as much as the previous “Rule Britannia”.

England, France and later the Americans had prevented it when Germany aspired to do the same, controlling Eurasia side by side with Japan, from the English Channel to the Pacific. Now it’s a completely different ball game.

So Ukraine, with its pathetic neo-Nazi gangs, is just an – expendable – pawn in the desperate drive to stop something that is beyond anathema, from Washington’s perspective: a totally peaceful German-Russian-Chinese New Silk Road.

Russophobia, massively imprinted in the West’s DNA, never really went away. Cultivated by the Brits since Catherine the Great – and then with The Great Game. By the French since Napoleon. By the Germans because the Red Army liberated Berlin. By the Americans because Stalin forced to them the mapping of Europe – and then it went on and on and on throughout the Cold War.

We are at just the early stages of the final push by the dying Empire to attempt arresting the flow of History. They are being outsmarted, they are already outgunned by the top military power in the world, and they will be checkmated. Existentially, they are not equipped to kill the Bear – and that hurts. Cosmically.


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All That Glitters Is Not Necessarily Russian Gold

MARCH 17, 2022

PEPE ESCOBAR

The “rules-based international order” – as in “our way or the highway” – is unraveling much faster than anyone could have predicted.

The Eurasia Economic Union (EAEU) and China are starting to design a new monetary and financial system bypassing the U.S. dollar, supervised by Sergei Glazyev and intended to compete with the Bretton Woods system.

Saudi Arabia – perpetrator of bombing, famine and genocide in Yemen, weaponized by U.S., UK and EU – is advancing the coming of the petroyuan.

India – third largest importer of oil in the world – is about to sign a mega-contract to buy oil from Russia with a huge discount and using a ruble-rupee mechanism.

Riyadh’s oil exports amount to roughly $170 billion a year. China buys 17% of it, compared to 21% for Japan, 15% for the U.S., 12% for India and roughly 10% for the EU. The U.S. and its vassals – Japan, South Korea, EU – will remain within the petrodollar sphere. India, just like China, may not.

Sanction blowback is on the offense. Even a market/casino capitalism darling such as uber-nerd Credit Suisse strategist Zoltan Poznar, formerly with the NY Fed, IMF and Treasury Dept., has been forced to admit, in an analytical note: “If you think that the West can develop sanctions that will maximize the pain for Russia by minimizing the risks of financial stability and price stability for the West, then you can also trust unicorns.”

Unicorns are a trademark of the massive NATOstan psyops apparatus, lavishly illustrated by the staged, completely fake “summit” in Kiev between Comedian Ze and the Prime Ministers of Poland, Slovenia and the Czech Republic, thoroughly debunked by John Helmer and Polish sources.

Poznar, a realist, hinted in fact at the ritual burial of the financial chapter of the “rules-based international order” in place since the early Cold War years: “After the end of this war [in Ukraine], ‘money’ will ‎never be ‎the same.” Especially when the Hegemon demonstrates its “rules” by encroaching on other people’s money.

And that configures the central tenet of 21st century martial geopolitics as monetary/ideological. The world, especially the Global South, will have to decide whether “money” is represented by the virtual, turbo-charged casino privileged by the Americans or by real, tangible assets such as energy sources. A bipolar financial world – U.S. dollar vs. yuan – is at hand.

There’s no surefire evidence – yet. But the Kremlin may have certainly gamed that by using Russia’s foreign reserves as bait, likely to be frozen by sanctions, the end result could be the smashing of the petrodollar. After all the overwhelming majority of the Global South by now has fully understood that the backed-by-nothing U.S. dollar as “money” – according to Poznar – is absolutely untrustworthy.

If that’s the case, talk about a Putin ippon from hell.

It’s gold robbery time

As I outlined the emergence of the new paradigm, from the new monetary system to be designed by a cooperation between the EAEU and China to the advent of the petroyuan, a serious informed discussion erupted about a crucial part of the puzzle: the fate of the Russian gold reserves.

Doubts swirled around the Russian Central Bank’s arguably suicidal policy of keeping assets in foreign securities or in banks vulnerable to Western sanctions.

Of course there’s always the possibility Moscow calculated that nations holding Russian reserves – such as Germany and France – have assets in Russia that can be easily nationalized. And that the total debt of the state plus Russian companies even exceeds the amount of frozen reserves.

But what about the gold?

As of February 1, three weeks before the start of Operation Z, the Russian Central Bank held $630.2 billion in reserves. Almost half – $311.2 billion – were placed in foreign securities, and a quarter – $151.9 billion – on deposits with foreign commercial and Central Banks. Not exactly a brilliant strategy. As of June last year, strategic partner China held 13.8% of Russia’s reserves, in gold and foreign currency.

As for the physical gold, $132.2 billion – 21% of total reserves – remains in vaults in Moscow (two-thirds) and St. Petersburg (one-third).

So no Russian gold has been frozen? Well, it’s complicated.

The key problem is that more than 75% of Russian Central Bank reserves are in foreign currency. Half of these are securities, like government bonds: they never leave the nation that issued them. Roughly 25% of the reserves are linked to foreign banks, mostly private, as well as the BIS and the IMF.

Once again it’s essential to remember Sergei Glazyev in his groundbreaking essay Sanctions and Sovereignty: “It is necessary to complete the de-dollarization of our foreign exchange reserves, replacing the dollar, euro and pound with gold. In the current conditions of the expected explosive growth in the price of gold, its mass export abroad is akin to treason and it is high time for the regulator to stop it.”

This is a powerful indictment of the Russian Central Bank – which was borrowing against gold and exporting it. For all practical purposes, the Central Bank could be accused of perpetrating an inside job. And subsequently they were caught flat-footed by the devastating American sanctions.

As a Moscow analyst puts it, the Central Bank “had delivered some volumes of gold to London in 2020-2021. This decision was motivated by a high price of gold at that time (near $2000 per ounce) and could hardly be initiated by Putin. If so, this decision can be qualified as very stupid, or even part of a diversionist tactic (…) Most of the gold delivered to London was not stored but sold and transferred into foreign currency reserves (in euro or pounds) which were frozen later.”

No wonder a lot of people in Russia are livid. A quick flashback is in order. In June last year, Putin signed a law canceling requirements for the repatriation of foreign exchange earnings from gold exports. Five months later, Russia’s gold miners were exporting like crazy. A month later, the Duma wanted to know why the Central Bank had stopped buying gold. No wonder Russia media erupted with accusations of “an unprecedented [gold] robbery”.

Now it’s way more dramatic: RIA Novosti described the American-dictated freeze as – what else – a “robbery” and duly predicted global economic chaos. As for the Central Bank, it’s back on the gold buying business.

None of the above though explains some “missing” gold that de facto is not under the possession of the Russian Central Bank. And that’s where a somewhat shady character such as Herman Gref comes in.

Let’s check this out with State Duma deputy Mikhail Delyagin, who had a few things to say about the gold-exported-to-London bonanza:

“This process has been going on for the past year. Exported, according to some estimates, 600 tons. [Head of Russian Central Bank] Nabiullina said – whoever wants to sell gold to get cash, or if you mine gold and trade it, keep in mind that the state, in my person, will not buy gold from you at a market price. We will take it at a big discount. If you want to get honest money for it, please export it. The world center of gold trading is London. Accordingly, everyone began to export and sell gold there. Including Mr. [Herman] Gref. The head of the formally state-owned Sberbank sold a huge part of his gold reserves.”

Look here for fascinating details about Sberbank’s Gref shenanigans.

Watch for the gold-backed ruble

It may be a case of too little too late, but at least the Kremlin has now established a committee – with authority over the Central Bank nerds – to handle the serious stuff.

It boggles the mind that the Russian Central Bank does not answer to the Russian constitution as well as to the judicial system, but in fact is subordinated to the IMF. A case can be made that this cartel-designed financial system – implying zero sovereignty – simply cannot be tackled head on by any nation on the planet, and Putin has been trying to undermine it step by step. That includes, of course, keeping Elvira Nabiullina on the job even as she duly follows the Washington consensus to the letter.

And that brings us back to the ultra high stakes possibility that the Kremlin may have wanted from the start to go no holds barred, forcing the Atlanticists to reveal their true hand, and exposing their system in a “The King is Naked” spectacular for a worldwide audience.

And that’s where the EAEU/China new monetary/financial system comes in, under Glazyev supervision. We can certainly envision Russia, China and vast swathes of Eurasia progressively divorcing from casino capitalism; the ruble reconverted to a gold-backed currency; and Russia focused on self-sufficiency, productive domestic investment and trade connectivity with most of the Global South.

Way beyond its confiscated foreign reserves and tons of gold sold in London, what matters is that Russia remains the ultimate natural resource powerhouse. Shortages? A little austerity for a little while will take care of it: nothing as dramatic as the national impoverishment under the neoliberal 1990s. And extra boost would come from exporting natural resources at premium discount prices to other BRICS and most of Eurasia and the Global South.

The collective West has just fabricated a new, tawdry East-West divide. Russia is turning it upside down, to its own profit: after all the multipolar world is rising in the East.

The Empire of Lies won’t back down, because it does not have a Plan B. Plan A is to “cancel” Russia across the – Western – spectrum. So what? Russophobia, racism, 24/7 psyops, propaganda overdrive, cancel culture online mobs, that don’t mean a thing.

Facts matter: the Bear has enough nuclear/hypersonic hardware to shatter NATO in a few minutes before breakfast and teach a lesson to the collective West before pre-dinner cocktails. There will come a time when some exceptionalist with a decent IQ will finally understand the meaning of “indivisibility of security”.

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

← Say Hello to Russian Gold and Chinese P…

Say hello to Russian gold and Chinese petroyuan

The Russia-led Eurasia Economic Union and China just agreed to design the mechanism for an independent financial and monetary system that would bypass dollar transactions.

March 15 2022

By Pepe Escobar

Russia says half its gold assets were frozen – is this for real or a slick play by Moscow?

Photo Credit: The Cradle

It was a long time coming, but finally some key lineaments of the multipolar world’s new foundations are being revealed.

On Friday, after a videoconference meeting, the Eurasian Economic Union (EAEU) and China agreed to design the mechanism for an independent international monetary and financial system. The EAEU consists of Russia, Kazakhstan, Kyrgyzstan, Belarus and Armenia, is establishing free trade deals with other Eurasian nations, and is progressively interconnecting with the Chinese Belt and Road Initiative (BRI).

For all practical purposes, the idea comes from Sergei Glazyev, Russia’s foremost independent economist, a former adviser to President Vladimir Putin and the Minister for Integration and Macroeconomics of the Eurasia Economic Commission, the regulatory body of the EAEU.

Glazyev’s central role in devising the new Russian and Eurasian economic/financial strategy has been examined here. He saw the western financial squeeze on Moscow coming light-years before others.

Quite diplomatically, Glazyev attributed the fruition of the idea to “the common challenges and risks associated with the global economic slowdown and restrictive measures against the EAEU states and China.”

Translation: as China is as much a Eurasian power as Russia, and they need to coordinate their strategies to bypass the US unipolar system.

The Eurasian system will be based on “a new international currency,” most probably with the yuan as reference, calculated as an index of the national currencies of the participating countries, as well as commodity prices. The first draft will be already discussed by the end of the month.

The Eurasian system is bound to become a serious alternative to the US dollar, as the EAEU may attract not only nations that have joined BRI (Kazakhstan, for instance, is a member of both) but also the leading players in the Shanghai Cooperation Organization (SCO) as well as ASEAN. West Asian actors – Iran, Iraq, Syria, Lebanon – will be inevitably interested.

In the medium to long term, the spread of the new system will translate into the weakening of the Bretton Woods system, which even serious US market players/strategists admit is rotten from the inside. The US dollar and imperial hegemony are facing stormy seas.

Show me that frozen gold

Meanwhile, Russia has a serious problem to tackle. This past weekend, Finance Minister Anton Siluanov confirmed that half of Russia’s gold and foreign reserves have been frozen by unilateral sanctions. It boggles the mind that Russian financial experts have placed a great deal of the nation’s wealth where it can be easily accessed – and even confiscated – by the ‘Empire of Lies’ (copyright Putin).

At first, it was not exactly clear what Siluanov had meant. How could the Central Bank’s Elvira Nabiulina and her team let half of foreign reserves and even gold be stored in Western banks and/or vaults? Or is this some sneaky diversionist tactic by Siluanov?

No one is better equipped to answer these questions than the inestimable Michael Hudson, author of the recent revised edition of Super Imperialism: The Economic Strategy of the American Empire.

Hudson was quite frank: “When I first heard the word ‘frozen,’ I thought that this meant that Russia was not going to expend its precious gold reserves on supporting the ruble, trying to fight against a Soros-style raid from the west. But now the word ‘frozen’ seems to have meant that Russia had sent it abroad, outside of its control.”

“It looks like at least as of last June, all Russian gold was kept in Russia itself. At the same time, it would have been natural to have kept securities and bank deposits in the United States and Britain, because that is where most intervention in world foreign exchange markets occurs,” Hudson added.

Essentially, it’s all still up in the air: “My first reading assumed that Russia must be doing something smart. If it was smart to move gold abroad, perhaps it was doing what other central banks do: ‘lend” it to speculators, for an interest payment or fee. Until Russia tells the world where its gold was put, and why, we can’t fathom it. Was it in the Bank of England – even after England confiscated Venezuela’s gold? Was it in the New York Fed – even after the Fed confiscated Afghanistan’s reserves?”

So far, there has been no extra clarification either from Siluanov or Nabiulina. Scenarios swirl about a string of deportations to northern  Siberia for national treason. Hudson adds important elements to the puzzle:

“If [the reserves] are frozen, why is Russia paying interest on its foreign debt falling due? It can direct the “freezer’ to pay, to shift the blame for default. It can talk about Chase Manhattan’s freezing of Iran’s bank account from which Iran sought to pay interest on its dollar-denominated debt. It can insist that any payments by NATO countries be settled in advance by physical gold. Or it can land paratroopers on the Bank of England, and recover gold – sort of like Goldfinger at Fort Knox. What is important is for Russia to explain what happened and how it was attacked, as a warning to other countries.”

As a clincher, Hudson could not but wink at Glazyev: “Maybe Russia should appoint a non-pro-westerner at the Central Bank.”

The petrodollar game-changer

It’s tempting to read into Russian Foreign Minister Sergey Lavrov’s words at the diplomatic summit in Antalya last Thursday as a veiled admission that Moscow may not have been totally prepared for the heavy financial artillery deployed by the Americans:

“We will solve the problem – and the solution will be to no longer depend on our western partners, be it governments or companies that are acting as tools of western political aggression against Russia instead of pursuing the interests of their businesses. We will make sure that we never again find ourselves in a similar situation and that neither some Uncle Sam nor anybody else can make decisions aimed at destroying our economy. We will find a way to eliminate this dependence. We should have done it long ago.”

So, ‘long ago’ starts now. And one of its planks will be the Eurasian financial system. Meanwhile, ‘the market’ (as in, the American speculative casino) has ‘judged’ (according to its self-made oracles) that Russian gold reserves – the ones that stayed in Russia – cannot support the ruble.

That’s not the issue – on several levels. The self-made oracles, brainwashed for decades, believe that the Hegemon dictates what ‘the market’ does. That’s mere propaganda. The crucial fact is that in the new, emerging paradigm, NATO nations amount to at best 15 percent of the world’s population. Russia won’t be forced to practice autarky because it does not need to: most of the world – as we’ve seen represented in the hefty non-sanctioning nation list – is ready to do business with Moscow.

Iran has shown how to do it. Persian Gulf traders confirmed to The Cradle that Iran is selling no less than 3 million barrels of oil a day even now, with no signed JCPOA (Joint Comprehensive Plan of Action agreement, currently under negotiation in Vienna). Oil is re-labeled, smuggled, and transferred from tankers in the dead of night.

Another example: the Indian Oil Corporation (IOC), a huge refiner, just bought 3 million barrels of Russian Urals from trader Vitol for delivery in May. There are no sanctions on Russian oil – at least not yet.

Washington’s reductionist, Mackinderesque plan is to manipulate Ukraine as a disposable pawn to go scorched-earth on Russia, and then hit China. Essentially, divide-and-rule to smash not only one but two peer competitors in Eurasia who are advancing in lockstep as comprehensive strategic partners.

As Hudson sees it: “China is in the cross-hairs, and what happened to Russia is a dress rehearsal for what can happen to China. Best to break sooner than later under these conditions. Because the leverage is highest now.”

All the blather about “crashing Russian markets,” ending foreign investment, destroying the ruble, a “full trade embargo,” expelling Russia from “the community of nations,” and so forth – that’s for the zombified galleries. Iran has been dealing with the same thing for four decades, and survived.

Historical poetic justice, as Lavrov intimated, now happens to rule that Russia and Iran are about to sign a very important agreement, which may likely be an equivalent of the Iran-China strategic partnership. The three main nodes of Eurasia integration are perfecting their interaction on the go, and sooner rather than later, may be utilizing a new, independent monetary and financial system.

But there’s more poetic justice on the way, revolving around the ultimate game-changer. And it came much sooner than we all thought.

Saudi Arabia is considering accepting Chinese yuan – and not US dollars – for selling oil to China. Translation: Beijing told Riyadh this is the new groove. The end of the petrodollar is at hand – and that is the certified nail in the coffin of the indispensable Hegemon.

Meanwhile, there’s a mystery to be solved: where is that frozen Russian gold?

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

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