Incentives: Joe Biden and Vladimir Putin possible moves – Donbass crisis.

Incentives: Joe Biden and Vladimir Putin possible moves – Donbass crisis.

April 11, 2021

By David Sant for the Saker Blog

Several analysts have written articles about how Russia is likely to respond in the theater to an offensive by Ukraine to restart the Donbass War. My purpose in this article is to look at the psychology and incentives of Joe Biden and Vladimir Putin and the possible moves that each of them may make in response to the Donbass crisis.

The Nature of the Dispute

It is fairly well established that two primary motives seem to be driving the Atlanticist pressure on Russia and continuing eastward expansion of NATO. The larger issue is that Russia, Iran, and China seem to be increasingly resistant to the rule of the Atlanticist monopolar hegemony enforced by the US Military and NATO. As someone recently said, the American empire is a currency empire sustained by forcing all energy transactions to be priced in US Dollars, and controlling energy transit points. By moving away from using USD for oil and gas transactions, Russia, China, and Iran pose a mortal threat to the empire.

The secondary issue, the one driving the timing, is control of oil and gas pipelines. In short the USA wants Europe to use American-controlled gas and oil, which means Saudi and Qatari oil, and American LNG. They want to create pipelines and delivery routes for American-controlled energy, and close or prevent delivery routes for Russian energy. The three current flashpoints are Syria, Ukraine, and the route of the Nord Stream 2 pipeline, all three of which are current or potential pipeline routes.

Several years ago the US successfully pressured Bulgaria into cancelling the South Stream Pipeline through the Black Sea. However, US sanctions have been unable to deter Germany from allowing the Russians to complete the Nord Stream 2.

With the completion of the project only a few months away, the US seems determined to stop it at any cost. This appears to be the motive behind instigating the Ukrainian government to invade Donbass. If Russia defends Donbass, she will be demonized in the Western press, and this will be used to pressure Germany to cancel Nord Stream 2. From the American perspective, getting the Ukrainians to fight the Russians weakens both at no political cost to the US.

It is my opinion that the Biden Administration is making a major miscalculation by continuing this approach. For the past seven years, Russia has absorbed round after round of sanctions and provocations by the US government in Ukraine and Syria. The Biden regime seems to assume that if they instigate a war in Donbass now, that Russia will continue as they have before, to absorb the blow without striking back. I suggest that this time it will be different.

The History and Psychology of Biden and Putin

Vladimir Putin was handpicked by the Western handlers to replace Boris Yeltsin in 1999, largely because he was known to be reliable. However, Putin surprised those who appointed him by turning against the oligarchs and reigning in the chaos that was dismembering Russia after the collapse of the Soviet Union. Putin enforced the law and cracked down on corruption, including corruption by the Western interests that put him in power.

Displeased by this turn of events, the West, led by Bill Browder, has spent the past fifteen years demonizing Putin. For example, when Russia granted asylum to Edward Snowden in 2013, multiple US politicians used scripted talking points calling Mr. Putin “a schoolyard bully.” That analogy was rather inept, as Russia did not invite Snowden, but rather got stuck with him, as his passport was cancelled while in transit, making it impossible for him to board his flight out of Russia. Putin actually said that as a former intelligence officer himself, he did not view Snowden’s leak of classified information in a positive light.

The problem with demonizing one’s opponent is that it can lead to strategic errors if you make the mistake of believing your own propaganda. If we look at Mr. Putin’s past behavior we see four consistent characteristics.

First, he follows the rules. Whether it is the START treaty, the chemical weapons accord, or the Minsk Agreements, the Putin regime has consistently tried to keep the old treaties alive and to follow agreed upon UN procedures for conflict resolution.

Second, when Mr. Putin has taken steps to oppose the Atlanticist agenda, he has done so in a way that allowed his opponents to save face. When the US was preparing to invade Syria in 2013, Putin persuaded Assad to agree to eliminate his chemical weapon stockpile. This pulled the rug out from under the US invasion, but it did not make the US look bad.

When Russia entered Syria to fight ISIS, they did not publicly expose the fact that the US and Israel were the primary backers of ISIS. Putin went along with the ruse and said, if America is fighting ISIS we will fight ISIS too, and did so legally at the invitation of Syria. Russia’s work allowed Trump to take credit for defeating ISIS, even though it completely ruined eight years of CIA efforts to train and arm those terrorists.

Third, Mr. Putin keeps his word. When he draws a red line, he enforces it. He speaks quietly but it is wise to listen carefully to what he says. We have seen this in the way that Russia dealt with terrorist groups that agreed to deconfliction versus those that did not, as well as the ones that agreed and then went against it.

And, lastly, when all else has failed and the other party crosses the red line anyway, Putin punches fast, hard, and unexpectedly, and often in a different theater than where the provocation has occurred. We saw this when Russia destroyed the oil smuggling network that the US and Turkey had set up in Northeastern Syria. We saw it again when Russia saved Mr. Erdogan from a US-backed coup only thirty minutes before he probably would have been captured.

Joe Biden

Joe Biden loved to tell the story on the campaign trail about his interaction with a black gangster named “Corn Pop” when he was a lifeguard in college. They almost had a fight but Biden brought a chain with him, and they later became friends. The fact that he even tells this tale signals that Biden has no real experience against a serious enemy. Men with street credibility don’t need to tell stories. They are known and respected.

The reality of Biden’s career is that he has played second fiddle to stronger leaders and only appears to have gotten the presidential nomination because it was his turn and he was deemed to be controllable by his handlers. Biden obtained the presidency through a fraud seen so openly that he has one of the lowest presidential approval ratings in history.

Biden and Putin met for the first time alone in 2011 for talks in Russia. According to Mike McCormick, who was Biden’s stenographer, Biden was halfway through his talk when suddenly the microphone, cameras, and lights were turned off and Putin and all of the media walked out leaving Biden humiliated. Something similar happened to Biden in China a few months later.

This is probably what Biden was referring to when he recently said that Putin was “a killer” with “no soul.” That interaction tells us exactly what Putin thinks of Biden. He considers him to be a weakling with no substance.

Biden’s team is stacked with Russophobes who are motivated by the desire to finish what they began in Ukraine under Obama. They believe they can successfully use information war and dirty tricks to isolate Russia from Europe and control all the energy conduits. Whether due to hubris or ignorance, they do not believe Russia would dare to strike back at the real instigator of the war in Ukraine.

Biden’s response to a Russian strike would probably be a plaintive high pitched, “c’mon man!” However, if Kamala Harris is making the decisions the risk of escalating to a nuclear response is much higher. The problem is that both Biden and Harris were picked and installed by a “power behind the throne,” so it is unclear exactly who would be making the decision of how to respond.

The Imminent Danger of the Current Imbroglio

There is no doubt that the US intends to create a war in Ukraine before the Nord Stream 2 Pipeline can be finished. This will happen within months if not weeks. It is also clear that Zelensky is being placed under tremendous pressure to force Russia into defending Donbass.

Russia has drawn a red line around Donbass. Ukraine had agreed to a peaceful resolution through the Minsk Accords. But with US encouragement, Kiev violated everything they agreed to, making it now politically impossible to re-integrate Donbass into Ukraine.

If Zelensky invades Donbass, then not just Ukraine, but the USA and NATO will be viewed by Russia as having crossed an inviolable red line. Yes, Russia will be forced to defend Donbass, because Putin will not allow Russians to be subjected to genocide. Russia does not want to fight Ukrainians, whom despite the jokes, they view as their Russian brothers. They are frustrated and angry that the USA has forced them into this position.

For this reason, I believe that Mr. Putin will do something that the Biden regime is not expecting with similar psychological impact to the sudden turning off of the lights and cameras. He will find a way to inflict debilitating pain on the decision makers who have forced Russia into intervening in Ukraine.

In addition to defending Donbass, Russia may strike the USA in a different theater. But they will do so in a way that cannot be confused with a nuclear attack. Unlike the previous chess moves that allowed the US leadership to save face, this one will neutralize and publicly humiliate the USA and the Biden regime as a paper tiger.

The Narrow Window of Technological Supremacy

While the US was busy invading third world countries as part of the War on Terror, Russia was quietly developing their defense technologies. They have now achieved technological supremacy over the USA in three areas: air and missile defenses, hypersonic missiles, and electronic countermeasures (ECM).

In the area of air defenses the Russian S-400 is an extremely capable platform which the West has very little experience fighting against. Russia has the capability to impose a no fly zone within about 500 kilometers of its S-400 batteries, of which there are several from Crimea to Kaliningrad. Israel’s use of the F-35 to bomb Syria has given the Russians live data on NATO’s most advanced stealth fighter.

The S-500 space defense system is scheduled to enter service in 2021. Since the S-500 can defend against ICBMs it may affect the balance of power of mutual assured destruction (MAD).

The Zircon and Khinzal hypersonic missiles are currently in service and are the most effective anti-ship weapons in the Russian arsenal that we know of. Their standoff range enables strikes on enemy ships from 500 to 2,000 kilometers. This means that Russia has the ability to strike ships in the Mediteranean and North Sea using assets based on Russian soil, not even counting the assets based in Latakia, Syria. NATO forces currently have no defense against hypersonic missiles.

Russian ECM capabilities have been somewhat exaggerated by news stories about the 2014 encounter with the USS Donald Cook. The Donald Cook was allegedly shut down by ECM attack while an SU-24 overflew the vessel. However, more accurate sources noted that any ECM attack, if there even was one, would have been executed using ground-based equipment, not the Su-24 fighter. If this attack really happened, the US Navy has presumably hardened its vessels against ECM in the seven years since.

We do know that Russian ECM systems in Syria were able to disable the vast majority of Tomahawk Missiles fired at Syria in April 2017. Other than aircraft carriers, the primary American method of projecting power is Arleigh-Burke class destroyers such as the USS Donald Cook which carry about 50 Tomahawk missiles each. The 2017 exercise in Syria probably indicates that Russia is able to jam volleys of Tomahawk missiles with better than 90% success. The remaining 10% of the subsonic Tomahawks can be easily shot down by anti-aircraft batteries.

The question is whether the US Navy has found a way to harden the Tomahawk missiles against Russian ECM since 2017. If not, then given the much smaller size and number of missiles that can be carried by Navy attack aircraft, the US Navy’s primary weapon for ground attack has no teeth against Russian targets. Of course in any conflict, the first target of NATO’s “wild weasel” aircraft will be SAM radars and ECM equipment.

Conclusion – Biden has Created Strong Incentives for Russia to Strike First

The US is spending billions to catch up technologically, and the window of Russian supremacy may only last for two or three years at most. Russia can be expected to reach the peak technological advantage over NATO in late 2021 after the S-500 system has been fully deployed. However, the Donbass crisis may force Russia to act sooner than they are comfortable.

If Russia were to use the window of supremacy to attempt a debilitating strike on the US military the US Navy is the most likely target. Ships are the most exposed, are not located inside another country’s borders, and are also the primary means of projecting US power. However, I would not rule out a non-missile attack on DC. For example, there are many ways that the US power grid could be turned off without using missiles. The ensuing domestic chaos might prevent the US from responding.

This is a very dangerous situation for the world because it could easily escalate to World War III or nuclear war, depending on the Biden Administration’s reaction. Part of the problem is that it is not clear who is really in charge of the Whitehouse. A nuclear response to a devastating conventional weapons defeat would be a disaster for both sides.

Russia will only strike the USA if they believe they have no other choice. What they have learned from seven years of sanctions, attempted coups, fake poisonings, and other provocations is that the US will continue this behavior for as long as Russia continues to accept it, or until Russia is broken and conquered. In short, Biden’s team may have finally convinced Russia that they have no other choice.

President Biden has handed Putin the justification for a first strike by openly stating his intention to conduct a cyber attack on Russia “soon.” That is a public declaration of war. The fact that the Russian ambassador was recalled from Washington and has not been sent back should be a wakeup call to America that DC itself is on the potential target list.

For these reasons I believe that there is a high probability that Russia will strike first before NATO can fully put in place the forces for planned exercises for this Summer. The strike will probably be non-nuclear, focused against US forces only, and its purpose will be to delegitimize the US power in the eyes of the junior members of NATO, and to weaken or cripple the US ability to project power.

If China and Iran see Russia strike the US military, it would not be surprising if they also pile on using their own hypersonic missiles to destroy US Navy assets in the Persian Gulf and South China Sea.

The Biden regime’s underestimation of Russia and failure to heed Putin’s warnings have created conditions which make possible a sudden and humiliating defeat of the US Navy, which could effectively end the US ability to project power overseas.

However, wars are rarely short, and victories rarely decisive. For this reason it would be better for all parties to de-escalate the conflict immediately. Unfortunately, the Biden regime is the only one in a position to do that, and they have shown no intention of doing so.

Sitrep: The Unipolar moment is over; the Multipolar moment is here.

March 22, 2021

By Chris Faure for the Saker Blog

Shortly after Mr.Biden characterising Mr.Putin as a killer and more, Mr.Putin invited Biden for a public and live online  discussion, saying that it would be beneficial for both the N.American as well as the Russian people.

This morning we find this bluntly devastating shot across the bows from the Russian Foreign Affairs ministry.

The final sentence, not included in the image, reads as follows:  “Responsibility for this lies entirely with the United States.

Setting this in context, the contrast between Mr.Lavov’s ongoing visit to China, and the so-called ‘strategic’ meeting between the United States and China at the end of last week, cannot be more stark.

 #PhotoOfTheDay –  Sergey #Lavrov on his way to greet FM #WangYi in  China 
 #Lavrov: #China  is a truly strategic partner and a like-minded country for #Russia  Our cooperation on the international stage is having a stabilising effect on the global and regional situation.
#Lavrov: #Russia believes that our dialogue with #China based on trust and mutual respect should provide an example for other nations, including those that are trying to develop ties on different principles not based on equality.

At the very same time, Mr.Putin and Mr Shoigu are taking the air on the Taiga in Siberia.  I wonder if the western governments have figured out why now?

“ Vladimir #Putin is spending the weekend in #Siberia.  The President together with Defence Minister Sergei Shoigu enjoys walking in the #taiga forest and riding an all-terrain vehicle.  Also, Sergei Shoigu showed the President his workshop.”

http://en.kremlin.ru/events/president/news/65178

In the next few hours we will receive Mr.Lavrov’s translated speeches from his China visit.  Some of it is already published.  Take a look at what Mr.Lavrov described as ‘dynamic cooperation“:

“We regard the new era of Russian-Chinese relations, which you have mentioned, primarily in the context of the broader situation on the international stage. It is undergoing a very deep transformation and the strengthening of the new centres of economic growth, financial might and political influence. Regrettably, the objective trend for a rise of a truly multipolar democratic world is being hindered by some Western countries led by the United States, which would like to preserve their domination of the global economy and international politics at all costs and to force their will and their demands on each and all. In response to this, Russia and China are promoting a constructive unification agenda. We want the architecture of international relations to be fair, democratic, capable of ensuring stability and based on broad interaction of states and their integration associations, just as we are doing together with our Chinese friends by promoting integration in Eurasia.

China is a truly strategic partner and a like-minded country for us. Our cooperation on the international stage is having a stabilising effect on the global and regional situation. Russia believes that our dialogue with China based on trust and mutual respect should provide an example for other countries, including those that are trying to develop ties with Russia and China on different principles that are not based on equality. This is not acceptable to us or our Chinese friends. We will continue developing our foreign policy constructively and flexibly, showing readiness for compromise but exclusively on the basis of mutual respect and a balance of interests.”

There is however a twist in this lovely tale and it is the one of economic influence and we know now which direction both Russia and China (and a host of other countries) will take in the short term.  They will remove the sanctions weapon from the hands of the United States including Europe.  Let’s take a look at a few more of Mr.Lavrov’s comments.

“The US sanctions risks need to be alleviated by switching to alternative currencies and moving away from using the dollar, Russian Foreign Minister Sergey Lavrov said.”

“The minister said the US is aiming to limit the technological development of Russia and China, so the two countries need to strengthen their independence.”

“According to the Russian Foreign Minister, the US and other western countries are no longer capable of using classical diplomacy and only resort to one tool on the international arena: sanctions.”

“We must form the widest possible coalition of countries that will fundamentally oppose this illegal practice,” the Russian Foreign Minister concluded.”

As geopolitical watchers and analysts, we’re always looking for the signals that frequently just go up in smoke.   This time however the signals from Russia and China are not going up in smoke but being presented in pictures in photo essays, and in clear language.  From the last few days we can learn a few things:

  • China and Russia are friends and will remain friends and will work together where their interests coalesce.  Their interests coalesce right here in Lavrov’s words:  “….. architecture of international relations to be fair, democratic, capable of ensuring stability and based on broad interaction of states.”  If that statement confuses you, in short, it means right across our world.
  • Sanctions will be removed as a weapon.
  • The petrodollar is on its last legs.
  • The clock for the final battle is ringing.  The only weapons remaining that will be allowed to the failing hegemon will be NATO (which, according to many of our serious analysts, is a paper tiger) and the ability to use nuclear and conventional weapons.  I will not comment on that as I am not qualified in the field.   The ability of the current and failing hegemon to do damage economically, is being curtailed.   We can look forward to a different economic reset, with countries taking their power back using their own currencies and other alternatives.   (This is not the reset from the WEF).  Then we will see what happens to the sphere of weapons because they may become a last resort.

(On a humorous note, it looks like the Russian Foreign Affairs ministry has resorted to photos with captions, hoping they can reach the failing hegemon with pictures, because there is such a great problem to reach them with diplomatic words.  The growth of the adult coloring book industry in the West may have been the deciding factor lol. )

عام التحوّل العظيم…

باريس – نضال حمادة

يواجه الغرب عاصفة كاملة. لقد فشل في مواجهة الوباء وفشل نظاميّ للديمقراطية الليبرالية. وأيضاً فشل اقتصاداتها الغارقة في ركود عميق، بينما تتقدّم الصين في السباق. والآن، كما نرى، تواجه الولايات المتحدة أسوأ أزمة سياسية لها منذ الحرب الأهلية.

لقد جادلت بأنّ عام 2020 سيُنظر إليه على أنه عام التحوّل العظيم، عندما ترى غالبية سكان العالم الصين كقائد عالمي جديد. سيؤدّي انهيار النظام السياسي الأميركي إلى تسريع تكريس هذه الزعامة بشكل كبير.

لقد تمّ التقليل من شأن طبيعة الأزمة السياسية الأميركية إلى حدّ كبير، وأسبابها عميقة للغاية. فالبلاد منقسمة إلى نصفين، مستقطبة بشكل ميؤوس منه ونظام حكومتها مشلول. السؤال الأساسي هو: ما هي الأسباب الكامنة وراء هذا الوضع؟

تشهد أميركا حالة من التدهور منذ الثمانينيات، وبشكل كبير منذ عام 2008. على مدى أربعة عقود، عانى نصف السكان من هبوط أو ركود في مستويات المعيشة. لقد وصل عدم المساواة إلى مستويات الثلاثينيات من القرن الماضي إنْ لم يكن قبل ذلك. انتهى الحلم الأميركي.

طوال تاريخها تقريباً، كانت أميركا في صعود. لم يعرف عنها أيّ شيء مختلف. لقد انتهى هذا العصر. من المتوقع أن تصبح أميركا أقلّ أهمية بكثير. يتمّ استبدالها بسرعة باعتبارها القوة الأولى في العالم من قبل الصين.

المؤسّسة الغربية غير قادرة على قبول ما لا يمكن وصفه إلا بنهاية الغرب كما عرفناه. إنّهم يتشبّثون بالماضي وينكرون الحاضر ويعيشون في خوف من مستقبل مختلف تمامًا. نحن نشهد نقلة نوعية عميقة.

كان من الممكن أن يكون التراجع أسرع لو لم تلجأ أميركا إلى تحويل الدولار إلى دولار بترودولار، والذي بدوره أبقى المطابع مستمرة وتمويل النزعة العسكرية وكلّ شيء بينهما من دون هذا النوع من التضخم الذي من شأنه أن يشلّ أيّ بلد آخر.

When Wall Street flies with Icarus’ wings

When Wall Street flies with Icarus’ wings

October 08, 2020

by Jean-Luc Baslé for The Saker Blog

Wall Street is forever rising. The S&P500 index rose to 3,581 on September 2nd, 2020 – the highest level it has ever reached since its creation. This makes no sense. Wall Street is a reflection of the state of the economy which is in recession since February[1], the worst recession since 1929. How can share prices rise when the economy is falling? To answer this question, let’s analyse the economic policy of the United States these past few years, taking Federal Reserve Chair Jerome Powell’s speech of August 27th, 2020 as our starting point. Going back in time, we see that American leaders ignored the fundamental laws of economics. We note that foreign leaders, such as the European Central Bank governors, followed the same path. We conclude that stock prices do not reach the sky, and that the United States is caught in a bind from which the only way it can extricate itself is through a dollar depreciation. This bodes ill for the American Empire. The dollar is one of its main pillars.

Jerome Powell questions the validity of quantitative easing

Depending on their editorial stand, the media understood Powell’s speech as a return to inflation, giving greater attention to unemployment. But this summary ignores the essence of the message which questions the validity of quantitative easing – a policy followed by the Federal Reserve since November 2008. This is what Powell said: “With interest rates generally running closer to their effective lower bound even in good times, the Fed has less scope to support the economy during an economic downturn by simply cutting the federal funds rate.” In short: pushed to its limit, quantitative easing loses its capacity to alter employment and inflation. Quite logically, Jerome Powell and the Federal Open Market Policy (FOMC) call for a softening of the rules governing inflation and employment: “appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time”, and “a strong labor market, particularly for many in low-and moderate-income communities”.[2] This was understood as a return to inflation which it is not. It is an attempt to rescue quantitative easing while waiting for a return to more traditional economic policies.

By dropping surreptitiously quantitative easing, Jerome Powell is sending a message to Congress: economic policy cannot rest solely on monetary policy. Congress has at its disposal another tool: the budget. Over the past thirty years, priority has been given to monetary policy for several reasons. For conveniency reasons: monetary policy is essentially defined by one man, the Federal Reserve Chairman with the FOMC congruence. Budgetary policy, on the other hand, is defined by Congress and the President. It takes time for the two to agree, especially if Congress is split between a Democrat and a Republican majority. For efficiency reasons: changes in monetary policy are felt quite rapidly in the economy: six months to a year. It takes a lot longer (one to two years) for changes in the budget to be felt. For practicality reasons: budgetary measures imply taxation or indebtedness. Taxation is not very unpopular with the electorate, and indebtedness, if overused, leads to higher interest rates and slower economic growth. For all these reasons and the more theoretical ones set out by Milton Friedman and the monetarists, monetary policy became the policy of choice for the last thirty years, with quantitative easing being its most advanced form.

Priority being given to monetary policy with the budget playing second fiddle, the budget deficit should have come down and, with time, turned into a surplus. It did not happen. Worse, it has grown over the last twenty years to reach -4.6% in 2019. The initial figure expected for 2020 (-4.6%) will be substantially larger due to the Covid-19 virus. The $2,200 billion CARES Act approved by Congress in March to provide much needed relief to individuals, families and businesses, will translate into a much higher deficit, and a much higher level of debt.

Quantitative easing and the economy

Excessive money creation by central banks is anathema to financial markets since it is synonymous to inflation, higher interest rates, slower growth and the collapse of the stock market. It must be prohibited at all cost. Yet, that’s what quantitative easing is all about, and quantitative easing saved Wall Street and the economy after the 2008 subprime crisis. How can this be? In the fall of 2008, banks’ balance sheets were loaded with corporate bonds whose market value were well below their face value. To avoid a collapse of the market, the Federal Reserve bought the bonds, in effect replacing junk bonds with cash on banks’ balance sheets. The Fed’s bailout commitment totaled $29 trillion.[3] In view of this amount, it is no wonder that the program worked… to Wall Street’s satisfaction. Trust returned, the economy took off, and shares regained and exceeded their previous values. All is well and good, except the Federal Reserve exceeded its mandate. Its job is to provide the liquidity the economy needs to grow and achieve full employment without generating inflation. Under normal circumstances, the banks whose equity was washed out by bad investments, due to senior management’s poor decisions, should have been allowed to fail. To avoid a collapse of the economy, the government would have bought the banks’ shares at their market value, fired the management, and re-introduced the banks on the stock market once their business was back to normal. But these were no “normal circumstances”. Neither Congress which oversees the Federal Reserve policy, nor Barack Obama who was anxious to move past the crisis, blamed the Federal Reserve for outstepping its legal framework. As for Wall Street, it had every reason to rejoice. Not only was it saved from total collapse, but within five years the market value of its stocks, as measured by the S&P500, exceeded its pre-crisis value. It has more than doubled (graph 1).

The Federal Reserve’s quantitative easing did not result in a depreciation of the dollar, as could have been expected. In fact, the subprime crisis strengthened its value somewhat, as it was perceived by foreign investors as a safe haven to protect their wealth in a tumultuous environment. This strength of the dollar and the relative stability of foreign exchange market is also due to the interconnexion of world’s economies. The subprime crisis first emerged in the United States but spread rapidly around the world. Faced with a potentially damaging economic crisis, world leaders of the largest twenty economies – the G20 – met in Washington DC on November 14-15, 2008, i.e. only two months after Lehman Brothers’ bankruptcy. Asian and European central banks agreed to espouse the Federal Reserve’s quantitative easing policy. Money creation around the world being essentially the same in relative terms, currencies retain their value in relation to each other, as shown by graph 2 (note: exchange rates are expressed as an index, and the value of the pound sterling and the euro have been inversed to make them comparable to the yen and yuan).

Money creation saved Wall Street without depreciating the dollar, but what about employment? The United States’ performance is excellent. The December 2019 unemployment rate is 3.5% – a rate lower than all other advanced economies with the exception of Germany and Japan. The picture is less rosy if one looks at it from a different angle: the length of time it takes to return to full employment. It took 15 months after the 1973 recession, 30 months after 1990, 46 after 2001 and 75 months after 2008, i.e. over six years (graph 3). Quantitative easing which served Wall Street so well, did little for Main Street. Of course, as noted by Jerome Powell, there are other factors to be considered besides monetary policy when studying labor issues. Nonetheless, the conclusion is inescapable: quantitative easing worked better for Wall Street than it did for Main Street.

What about inflation? Ever since Federal Reserve Chairman Paul Volcker put a brutal end to stagflation[4] in letting the overnight rate go over 21% in June 1981, inflation has been subdued. Quantitative easing which is an inordinate increase of money in the economy should have, according to the quantity of money theory, led to inflation. It did not. The large quantity of money injected in the economy by the Federal Reserve had no impact on the price level. Graph 4 compares the velocity of money[5] with the Consumer Price Index – the velocity (blue line) is inversed to underline its exceptional rise in the last few years. Full employment did not lead to higher prices either. Jerome Powell observes that “the historically strong labor market did not trigger a significant rise in inflation”, as the Phillips Curve[6] would predict. He then notes that “inflation that is persistently too low can pose serious risks to the economy”. Clearly, the United States is in a peculiar situation where neither money creation nor full employment translates into higher prices, as economic theories tell us. Several hypotheses may explain this abnormality.

The fairly rapid opening up of the American market[7] in the early 1990s, followed by the creation of the World Trade Organization in 1994, shaped a new environment in which the procurement of a given product was no longer restricted to the home country. Bilateral trade relations among advanced nations became global to include developing nations, such as China which joined the WTO in 2001. Competition among manufacturers became global, pushing prices down. Corporations offshored their production to take advantage of lower wages in developing nations. This weakened the negotiating power of trade unions who were faced with an unpalatable deal: accept lower wages or lose jobs to the Chinese. The digital revolution also played a role in bringing costs down with many firms “rightsizing” their labor force thanks to the adoption of the personal computer. Finally, Ronald Reagan’s decision to fire 11,000 air controllers in 1981 had a tremendous impact on middle income employees who realized status did not protect them anymore: they could lose their jobs as easily as manual workers could. These events put an end to what was known as cost-push inflation – an overall increase in prices due to higher labor and raw material costs.

Increased energy efficiency, as measured by the ratio of oil consumption to GDP[8], also helped contain inflation. The ratio doubled over the last twenty years. While a barrel of oil produced $450,000 of economic wealth in 2000, it produced $920,000 in 2019. This is why the rapid rise in oil prices over the last fifteen years had little if any impact on the state of the world economy, as opposed to shocks inflicted by the 1973 and 1979 price hikes.

In summary, inflation remained subdued due to globalization, the Reagan and digital revolutions, and energy saving. These watershed events spare the United States a rise in price levels that quantitative easing would normally have brought up. Quantitative easing is not inflation-free, it benefited from exceptional conditions. With respect to employment, the Federal Reserve’s performance is dismal when compared to previous periods. But Wall Street has every reason to be satisfied with it.

The Federal Reserve’s monetary policy in the recent past.

The decoupling of quantitative easing and inflation partially explains why Jerome Powell is distancing himself from this much vaunted but, in truth, inefficient policy. Besides the dual, yet incompatible inflation-employment objective Congress assigned to Federal Reserve, he must also watch over the largest banks’ financial health to make sure it remains strong. In fact, this was the main role the Federal Reserve Act assigned to the Federal Reserve in 1913. This duty is crucial. Economic crises often arise from a bank failure, as was the case with Lehman Bros.’ bankruptcy in September 2008. From this standpoint, Jerome Powell deserves our praise for he averted two crises in the recent past even though one may argue about the reasons they were conducted.

The first rescue took place in September 2019. Without warning, interest rates on the “repo” market shot up to 10% in mid-day on September 17th., 2019.[9] This market is a corner stone in Wall Street’s architecture. If it fails, the whole structure crumbles. The Federal Reserve had to act promptly to calm the market down. This is what it did in injecting $41 billion into the market that very day. Interest rates plummeted. On September 18th, they had returned to their September 16th level. The cause of this ephemeral panic remains a mystery. But the fact that the Federal Reserve had to keep intervening for several months, leads one to conclude that structural causes might have been at work.

This incident was the prelude of a much worse crisis which was averted thanks to the combined effort of the Federal Reserve and Congress. On February 19, the S&P500 reached a new high: 3,386, then dropped abruptly reaching its lowest level in the year: 2,237 on March 23, i.e. a 30% fall in 36 days. This time, the Federal Reserve was slower in reacting. It’s only on March 11th, nearly a month after the stock market began to tumble, that it began injecting liquidity into the economy, propping up the stock market (graph 5). On March 13th, two Congressmen from the Democratic Party offered to help people who lost their job due to the pandemic. It took the form of The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act for short, which was unanimously approved by the Senate on March 25th and signed by Donald Trump on the 27th. It took only 15 days to ratify a law granting $2,200 billion, or about 10% of the gross domestic product – the largest amount ever approved in the history of the United States – to dodge an economic crisis in the making. Considering that by March 11, only 37 people had died from the virus while the S&P500 had already lost 19% of its value, one may question the politicians’ motivation. Was it the Covid-19 or was it Wall Street which led them to act decisively? Generous as it is to the unemployed, the CARES Act is equally generous to corporations which already benefited from the Federal Reserve’s action. Wall Street resumed its rise.

May the stock market rise to the sky? One is tempted to believe it when considering its performance. Could investors be the victim of an “irrational exuberance”? Not so, say some analysts who attribute the market rise to the “big tech” corporations (Google, Amazon, Facebook, Apple, Microsoft), also known under the acronym GAFAM. They account for about 20% of the market value and they are pooling up the market. But, excluding them from the S&P500 would mean excluding them – as well as other outperformers such as Tesla, Netflix, Nvidia, or Salesforce – from the American gross domestic product. One cannot dissect the market according to one’s view. The market is a reflection of the economy at large: the more profitable the corporations, the higher the value of their shares. Right? Wrong. Over the last few years, the stock market is disconnected from the economy. Net income has been flat since 2017 while share values gained 43% (graph 6). This makes no sense. The market is acting irrationally. It’s a matter of time before it corrects itself.

Returning to orthodoxy

In the 50’s and 60’s, the American government was a paragon of virtue. The budget was in quasi-equilibrium. There was little debt, no inflation, and the workforce was fully employed. Things have changed since then. The deficit is rising, the debt is growing ever-larger, and employment is not what it is purported to be. In the trio it makes up with the Federal Reserve and Wall Street, the federal government is the most important element for it defines the economic policy.

This brings us back to Jerome Powell’s speech. A lesser importance granted to monetary policy, as he posits, means a great one given to budgetary policy, assuming of course that the government has the latitude necessary to do so. This is not the case. The deficit is on a downward slope ever since the late 1960s, with the exception of a four-year gap from 1999 till 2002[10]. The federal debt rose from 40% of GDP in the early 1980s to 107% in December 2019. The combined Federal Reserve/CARES Act rescue package pushed it up to 137% as of June 30th – a level higher than at the end of World War II (119%). Giving a greater role to budgetary policy means either higher taxes or more debt, or both. Taxes have never been very popular with the electorate, and the federal debt reached a level beyond which the United States’ credit rating may fall and the value of the dollar may drop. Authorities are caught between a rock and a hard place: monetary policy lost its effectiveness at a time the budget deficit should be reined in.

With 29.7 million unemployed (including the 13.6 million “gig” workers with no insurance coverage), the situation could quickly become worrisome, politically and socially. Aware of the danger, members of Congress had hoped to prolong the CARES Act for the unemployed, but electoral rivalry with the upcoming presidential election quickly set in and any attempt to maintain some of the benefits of the CARES Act were doomed to failure. On August 8th, Donald Trump signed an Executive Order granting $300 a week to unemployed people – humanitarian and electoral reasons no doubt explain his decision. The Center for Control Disease and Prevention declared a moratorium forbidding tenant evictions until the end of the year, bringing some relief to the most vulnerable families. Praiseworthy as the decision might be, it carries a risk: bankruptcy for real estate owners who, deprived from rental revenues, may not be able to reimburse their bank loans. In turn, this may weaken the banks’ financial health and be the cause of a crisis.

The situation is becoming inextricable. The on-going deterioration of the economy increases the budget deficit and the public debt beyond reasonable levels while monetary policy has lost its effectiveness. The government’s two main levers to direct the country’s economic policy have become ineffectual. Due to the presidential election, no new measures are likely to be implemented between now and February or March – a time lapse during which the economy is likely to deteriorate further.

To prevent such an unwelcome development, Ms. Loretta Master, president of the Federal Reserve Bank of Cleveland suggested on September 23rd to credit every American’s bank account with “digital dollar” directly from the Federal Reserve. Her proposal was well received. Market analyst Wolf Richter calculates that a $3 trillion transfer would translate into a $28000 sum for a household of two adults. This would prop up consumer spending and pull the American economy out of recession. But it would also create inflation and depreciate the dollar. A digital dollar is a dollar. Ms. Master’s proposal is another form of money creation. The total of the Federal Reserve’s balance sheet which amounted to 40% of the gross domestic product in the 1960s, rose to 100% in December 2012. It now stands at 125%. Is the United States on its way to repeating the Wehrmacht Republic’s mistakes of the 1920s? What will happen to the dollar, if the Federal Reserve pursues its money creation policy? And what will happen to the United States’ credit rating?

Icarus’s wax is melting

Whatever measures are eventually agreed upon the public debt will rise. Who will finance it? About 70% of it is presently financed by the American public, federal agencies and the Federal Reserve. The remaining 30% is financed by foreigners. The percentage is dropping. In the summer of 2012, foreign investors held 34% of the public debt. The trend is likely to continue if we use gold prices. Gold is a yardstick of investors’ confidence. For several years, worried investors have been exchanging their dollar-denominated U.S. Treasury holdings for gold, pushing up its price. Graph 7 is most interesting in that it shows the investors’ change of mood. Following the 2008 subprime crisis, they put their financial assets into dollar and gold. Today, they are moving out of the dollar into gold. This is not a good sign for the dollar.

Meanwhile, the stock market is fumbling. After reaching its highest value ever on September 2nd (3,581), it is falling. Share values, like Icarus, do not rise to the sky. If the stock market fall continues which is most likely due to the state of the economy, the American recession will translate into a world recession, since the U.S. economy accounts for 15% of the world economy. In turn, the world recession will aggravate the American recession in a vicious circle analogous of the Great Depression. This could mean the demise of the American Empire.

Jean-Luc Baslé is a former Citigroup (New York) Vice President, Columbia University graduate, Princeton University graduate, 20 years in the United States, author of “The International Monetary System: Challenges and Perspectives” (1982), “L’euro survivra-t-il ?” (2016).

  1. National Bureau of Economic Research. 
  2. “New Economic Challenges and the Fed’s Monetary Policy Review”, Jerome H. Powell – August 27, 2020. 
  3. $29,000,000,000,000: a detailed look at the Fed’s bailout by funding facility and recipient. James Felkerson, Dec. 2001. 
  4. Stagflation is an unusual combination of inflation and recession (unemployment). 
  5. The velocity of money is the ratio of money to the gross domestic product. 
  6. Higher level of employment leads to higher wages and higher inflation. 
  7. In the 1960s, U.S. imports amounted to 5% of gross domestic product. They averaged 16.5% in the last decade. 
  8. Gross domestic product 
  9. A repurchase agreement “repo” is a short-term secured loan: one party (usually a financial institution) sells securities to another and agrees to repurchase them within a short period of time. 
  10. This was due to the “peace dividend”. 

The Quiet Imperialism

The Quiet Imperialism

September 05, 2020

By Francis Lee for the Saker Blog

Many if not most Americans have always been in denial about the imperial ambitions and practices of US foreign policy. There are honourable exceptions – Noam Chomsky, Tulsi Gabbard come immediately to mind. But on the whole the direction of US geopolitical strategy has been guided and implemented by a small cabal of geopolitical fanatics; these are ensconced in various state and non-state organizations such as the media and various think-tanks and have had a wholly negative effect on US foreign policy, both in practise and theory. The US’s global adventurism has been regarded by the US public, insofar that it concerns itself with such matters, as being conceived in good faith and benign in intent. Unfortunately, the facts don’t conform to the popular trust that American citizens put in their government, particularly the Deep State, National Security Agencies, the political elites, and the Military Industrial Complex, not to mention the mainstream media.

This popular narrative of America qua global good-guy was very beautifully illustrated in a novel by the British author Graham Greene. The novel The Quiet American was set against the background of the first Indo-China war, with one of the central characters, Alden Pyle, an ostensibly idealistic young American Aid worker, who presented himself as a proto third-way reformist opposed both to the excesses of French colonialism on the one hand, and Chinese Communism on the other. But in fact he was nothing of the sort, and his baleful motives are soon uncovered by the cynical, world-weary British journalist, Thomas Fowler. As it turned out Pyle had been working for the CIA all along. The novel itself has been made into two motion pictures. Both are well worth watching and instructive. The novel was of course an allegory on what was happening and what has always been happening in geopolitical national rivalries and machtpolitik.

Thus US imperialism is the theory and practise which dare not speak its name. In the third world, however, and increasingly in the developed world, the facts are plain to see for all but the ideologically purblind. The US, particularly since the neo-conservative ascendancy, is a rampaging imperial juggernaut, with a blatant empire-building agenda. The US imperial project was from 1945 onwards held in check by social democratic obstacles in western Europe, the existence of the Soviet and East Asian Communist bloc and national anti-colonialist movements in the south. But with the collapse of communism, the ongoing enervation and retreat of social democracy, and the stalling of the anti-colonial struggle in the south, the rapacious beast of American imperialism was off the leash.

Moreover, the US has made it perfectly clear that it will not tolerate the reconstitution of any economic or military power capable of challenging its global domination. (see The Wolfowitz Doctrine.) To this end it has arrogated to itself the right to wage ‘preventive wars’ against those who may sometime in the future threaten its global ambitions. The global system has been unipolar but now its dominance is being challenged by new adversaries, particularly Russia, China, and perhaps Iran and the Americans are determined to contain what they regard as a strategic challenge.

This project is assuredly not lacking in ambition. It aims at extending the ‘Monroe Doctrine’ to the whole planet; the establishment of a sort of US global suzerainty. This would be difficult for the US to accomplish alone – it therefore has to form alliances and spheres of influence with other (subaltern) partners in the developed world. Roughly speaking the geopolitical configuration for America’s global project is as follows.

The phase of the (present) global development of capitalism is characterised by the emergence of a collective imperialism. The entirety of the Americas, Europe west of the Polish frontier and Japan, to which we should add Australia and New Zealand, defines the area of this collective imperialism. It ‘’manages’’ the economic dimension of capitalist globalization and the political military dimension through NATO, whose responsibilities have been redefined so that in effect it can substitute itself for the United Nations.

This requires some skilful diplomatic balancing between the US and its junior partners – particularly within the EU, where conflict between certain European states and the US is always a possibility. This is clearly evident in the spat between Germany and the US with the contretemps over Nordstream-2 and the stationing of US troops in Germany. To this end the mobilization of various euro-quisling elites – the UK, Poland, and according to Donald Rumsfeld the ‘new’ (Eastern) Europe – are vital for America’s policy of divide and rule in this area. Moreover the globalization agenda (the economic prong in the US global offensive) has become the received wisdom in the EU. As for the Euro it has become a satellite currency of the dollar, although it is in fact a stronger currency since it is based upon a euro economy which runs persistent trade surpluses with the United States (as does most everybody else).

Thus the EU – with the possible exception of France – has tended to meekly follow in the wake of the US hegemon ensnared in an Atlanticist doctrine for which the raison d’etre – if there ever was one – definitively ended with the cold war. And the world pays a heavy price for this.

According to Samir Amin:

‘‘The US economy lives as a parasite off its partners in the global system, with virtually no national savings of its own. The world produces while North America consumes … The fact is that the bulk of the American deficit (on Federal and Current Account) is covered by capital inputs from Europe and Japan, China and the South, rich oil-producing and comprador classes from all regions in the Third World – to which should be added the debt service levy that is imposed on nearly every country in the periphery of the global system. The American superpower depends day to day on the flow of capital that sustains the parasitism of its economy and society.’’ (1)

This was written by Amin back in 2006, but the US’s drive has not really altered that much in the interim. If anything it has become even more bellicose in pursuit of its quest for world hegemony. However, today, we not only have a clash of interests with the Germans and the US over the above issues. And despite the nominally peaceful intentions between the US and its allies (vassals) eventually the rising nations find that pursuing their own interests hits the barriers of the prevailing international order. And the further the old powers try to sustain their outdated settlement, the more the ascending powers – both within Europe and without – are frustrated. The entire post-war system itself becomes a source of international tension.

NATO exemplifies this. Established as we saw in a different era to coordinate western military power since the Cold War 1, after the end of that war NATO has turned into a disruptive force. Pursuing an ‘open-ended and ill-conceived eastern expansion’ the EU has rekindled inter-state tensions instead of assuaging them. (2) This illustrates a broader trend; that conflicting attitudes to the entrenched institutional structures generate dissension triggered by outdated economic and strategic pressures. National differences are expressed and often inflamed through opposing or supporting the existing and outdated systems and rules.

It could be said that NATO is a locus classicus of a dysfunctional bureaucracy. It exists ‘in order to solve the problems which it created.’ Or as Schumpeter first noticed, that ‘’ … in Egypt a class of professional soldiers formed during the war against the Hyskos persisted even when those wars were over along with its warlike instincts and interests … ‘‘ He noted with a pithy summary of his viewpoint that ‘’Created by wars that required it, the machine now created the wars which were required.’’ NATO anyone!?

With regard to International Political Economy, It is not generally understood that the US with its chronic federal and trade deficits is actually on the brink of technical bankruptcy, particularly when long term commitments on Medicaid, Medicare and Pensions, and Social Security payments are factored into the calculations. According to research carried out by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve, Fed liabilities come to a staggering $70 trillion – this is roughly 5 times the size of the US GDP. However these figures are now out of date. Given the fact that sovereign (or government) debt currently stands at $24 trillion which in terms of DEBT-to-GDP ratio of 107% is bad enough. Then comes private DEBT-to-GDP which stands at 220% minus unfunded future liabilities. (See below).

Figure 1. Sovereign debt to GDP 107%

Figure 2. Private debt to GDP 220%

The TOTAL DEBT i.e. municipal, household, financial, corporate, cars and student fees/debts AND, unfunded future liabilities, social security, Medicare, and pensions, are pushing on to a figure of total debt of 2000% in the not too distant future. This according to a CNBC report by Jeff Cox, September 09, 2019. This whole process has more or less been on track since the demise of the Bretton Woods system in 1971. The date was significant since this was when the US defaulted on its gold IOUs handing its trading partners paper dollars, or near dollars such as US Treasuries (Bonds) which it insisted were as good as gold. As a result the holders of this US government paper have been subsidizing the US and its economy ever since. The ability to palm off its trading partners with green paper meant that the US has been able to buy stuff from the western world without actually paying for any of it. It gets better. The US has been able to buy foreign made goods with monies loaned to them by foreign governments! The ultimate free lunch! See below. Only one way up apparently! Bear in mind also that the figures shown only go up to 2014. It’s odds on that the debt has grown further in the ensuing time span.

Against this backdrop the foreign policy of the US becomes clear. Its purpose is loot pure and simple. The south must continue to be plundered for cheap inputs and raw materials and in order to do this comprador elites must be promoted who are friendly to US interests. Economic development of course cannot take place in this context as there will be an outflow of capital from South to North. Markets must be opened up to the rapacious incursions of US and other western capitals. Possible rivals – Russia, China – must be regarded as long-term enemies and will be divided and marginalised or possibly in 1970s geopolitical jargon ‘Finlandised’. And uppity allies in Europe – like France – must be slapped down and brought to heel.

Whether the Americans can pull this off is a moot point. It rather depends on whether and how the rest of the world will continue to take the green paper from the Fed/US-Treasury (they are now conjoint BTW similar to a pantomime horse).

When other countries and other private lenders borrow, in this instance from the US, they must consider the economic and financial strength and resilience of that economy. Let’s put ourselves into the position of a creditor. As follows.

  • US sovereign debt is greater than national GDP and is only going to get worse. That puts the US economy in what historically has been the danger zone for ruinous trouble of one kind or another: economic stagnation, default, or runaway inflation. As we have seen however it’s the TOTAL DEBT. Which makes the situation dramatically worse.
  • Manufacturing industry has been hollowed out by a strong dollar policy which makes US export costs rise leading to deindustrialisation.
  • The Economy has been left with little capacity for recovering from shocks – both internal and external. Despite the unprecedented money printing and deficit spending evoked by past – 2008 – and presently – 2020 – even greater and further shocks will arise which will only be comparable to the 1930s.
  • Zero or negative interest rates, courtesy of the Fed, which have resulted in a bonanza for corporations to juice up their stock-market capitalisation. Essentially by stealing money off of savers.
  • Investment markets can’t go anywhere without creating bubbles that eventually burst. 1. Dot.com bubble, 2000, 2. Property bubble, 2008, 3. Everything bubble 2020.

This seems to be the story of the 20/21 centuries with each crisis being bigger and deeper as the one before. Does this look like the picture of a healthy super-power? Or is it the picture of a vulnerable giant close to its historical inflexion point? I know where I would put my money.

But given the tsunami of dollar bills flooding the markets an engineered inflation or a Volcker style 20% hike in interest rates seems likely; my own view is that there will be an engineered inflation; in fact, it’s happening already. This means any persons, corporations or states holding US$s or dollar denominated assets, e.g. Treasury Bills is going to take a big hit.

Of course this US offensive, both political and economic, has and will continue to be met with stiff resistance. Most of this has been spontaneous and centered around the crisis in the Middle East, South East Asia, with the growing opposition to the reputedly Promethean gifts of globalisation.

Samir Amin identifies 4 aspects of a political programme which would give organizational coherence to this opposition. ‘’(i) A campaign against all American ‘preventive’ wars and for the closure of all foreign US bases, (ii) A campaign of right to access to the land, which is of crucial importance to the world’s 3 billion peasants, (iii) A campaign for the regulation of industrial outsourcing, and (iv) A cancellation of third world external debts.(v)’’ (3)

One could of course add more to this – capital controls, global minimum wage and labour standards … and so forth. This would only be a beginning, however. Amin himself looks forward to the reconstitution of the UN as a forum where the third world and smaller countries could find legitimate voice, as opposed to the dominant – i.e., US controlled – institutions of the present – the IMF, WTO, WORLD BANK, and NATO which are frankly little more than instruments of US/EU/NATO Triad collective imperialism.

Get ready for a long period of Sturm Und Drang.

(1) Beyond US Hegemony – Samir Amin – 2006

(2) Stephen Walt – 2018

(3) Amin Op.cit. 2006

What is China really doing with its digital Yuan?

Source

What is China really doing with its digital Yuan?

June 28, 2020

by Chris Faure for the Saker Blog

Reserve currency, backing of a currency and value of the financial systems that distribute a currency.

Its going to take years for the US dollar as reserve currency to fully reduce in importance and of course, the US should continue to use their currency as their own even when it changes into a normal currency. Yet there are financial technologies (FinTech) which may accelerate this process via leapfrogging and I would argue that from a Chinese perspective this is happening. (Leapfrogging is easiest understood by looking at an older example: slower developing countries without a well developed terrestrial telephone system, where these countries leapfrogged the building of a terrestrial system, and directly went to cellular telephone technological networks without loss of function.)

Let’s first take a look at some general concepts:

The fact of ownership of financial systems is very powerful. There is value in the currency that the financial system produces, and there is value in the system itself.

The value proposition is similar but differently done in cryptocurrencies and in digital currencies. The backing frequently lies in the system itself, and not as many think, in a hard asset such as gold. This is a large step to take in thinking for most people, as the idea generally still is that money has to be something that is tangible and real – like gold (or cowrie shells). But it is not such a big step to take if one considers that the act of money creation, production and distribution of currency itself is modernizing and is developing on the same trajectory that the rest of our technological and currently digital society is developing in.

As an example, compare the development of current money distribution systems and the new Financial Technologies (FinTech) with fully automated manufacturing plants for example, where the product coming off the production line is as a result of the technological system. Money is the same, it has to be manufactured, distributed or created or somehow brought into being and these systems are now modernizing, just the same as modern fully automated manufacturing.

The current financial systems belong to the west and banking systems technology is expensive, old, legacy, decrepit and not friendly to the ordinary person, not to mention very hard to maintain. Even the ubiquitous credit cards are now old technology and fast becoming deprecated technology and being replaced by wallets on cell phones that work like supermarket scanners.

It is often speculated that China will back their digital Yuan with gold. This is not an accurate speculation. The backing is the same as with other digital and cryptocurrencies, i.e., the work that the system provides to create the financial transactions in the financial ledger confirms that the transaction is secure and someone actually owns digital currency, they can pay for goods or sell goods and they can do it much easier and incredibly cheaper via a scan of a cell phone or other digital device.

The difference between China’s digital Yuan and common crytocurrencies is the ownership of the system. In modern independent cryptocurrencies the system (the technology) is owned by those that use the cryptocurrency – it is open source. Obviously for the digital Yuan ownership of the system lies with the Chinese State. The digital Yuan though retains the strength of other cryptocurrencies. It is secure transactions, tamper proof, immediate, inexpensive, easily distributed, can cross borders and all this by virtue of being a distributed blockchain system. The easiest to explain a blockchain is that it is self-policing because of technology of consensus algorithms that verify the efficacy of financial transactions. Blockchain very simply stated is blocks of financial transactions that are algorithmically created, are by definition encrypted, and chained together in such a way that nobody can meddle with any one of them.

To recap:

– The digital Yuan is not a cryptocurrency. It is a state issued digital electronic currency that happens to run on a blockchain (the FinTech).

– As the Chinese digital yuan is not and will not be backed by gold at least in our term (it is backed by the strength of the yuan as well as its system), we may well ask what the objective is of this currency.

Is it just a cute technological way of using money?

I would argue absolutely not.

Internationalization of the Yuan

Few realize the extent of the internationalization of the Yuan. As example, 20% of French trade with China is currently settled in Yuan and this is 55% of payments made between both countries. The Macron government is encouraging banks and companies to increase Yuan uptake.

I would argue that the digital yuan is a part of the 5th plank of the Belt and Road process of facilitating cross border investments and supply chain cooperation (perhaps not openly stated).  If one takes into consideration that belt and road is operating now in infrastructure development and investments in nearly 70 countries and international organizations – this is not such a difficult leap to make.

So how can that bold statement be supported? It may be hard for people in countries with old financial systems (the US would be one), to even imagine the new FinTech operating in many other countries. Where I live, I can go to the local corner store, and literally send cash money to someone on the other side of the country, and they will have it immediately. I don’t have to go to a bank, do a bank transfer, send a check, or interact with a bank or a type of Paypal at all. This is a service that the corner store offers at a very reasonable cost. I can also do this directly from my cell phone. We know that in China there is little use for hard currency, and most transactions take place on internal Chinese financial networks and cell phones for the average person, but business finance still flows through banks.

So, let’s start supporting that bold statement

  • The Chinese authorities added Crypto (cryptographic as well as cryptocurrency) to the School Curriculum – quite literally ‘educating the future’ in new FinTech.

https://cointelegraph.com/news/chinese-communist-party-adds-crypto-to-curriculum

  • In reality the distribution of the new Chinese Digital Yuan is proceeding apace. In size, the following is not a massive deal, but in construction of the agreement, this is probably the number one of the new Chinese Digital Yuan Deals and is pure modern FinTech.

China Baowu Group, the world’s largest iron and steel complex, completed a yuan-denominated, blockchain-technology-based transaction of more than 100 million yuan ($14 million) with Rio Tinto …, a move signaling the rising influence of Chinese currency in pricing major commodities.

Standard Chartered issued a blockchain-technology-powered letter of credit for the Baowu-Rio Tinto deal, which the bank said was the world’s first such certificate pegged with offshore yuan.

The use of blockchain technology – a digital public ledger of transactions that has seen increased usage in the global commodity trade – helped facilitate the trade and reduced costs for all parties involved in the transaction …”.

https://www.globaltimes.cn/content/1188131.shtml

So, what can we learn from this transaction?

This is not only a further distribution of the Yuan, but is a further distribution of the digital Yuan. While we do not know how this deal is constructed in detail, the use of the words blockchain-technology-powered letter of credit says it all. It looks like this deal will run completely on a blockchain, in the form commonly known as a smart contract, where each step of the deal and its payment schedule in digital currency are transactions on a blockhain. (Now try and skim off that transaction where the rules are hardcoded at the outset with technical principles of consensus pre-programmed in the smart contract and agreements signed directly on contract existent on the blockchain– those that know project management, will know the value of a self-documenting project).

  • the “Moodies

In addition China has become the ranker of record for private cryptocurrency projects.

The health of financial systems or countries are ranked by three major ranking agencies. These are S&P Global Ratings (S&P), Moody’s, and Fitch Group. S&P and Moody’s are based in the US, while Fitch is dual-headquartered in New York City and London, and is controlled by Hearst. These organizations hold the collective global market share of who can be considered good, and who can be considered bad in the global financial system. Not too healthy in my opinion as this is a disproportionate western control over the financial well-being of other countries.

So, as the proverbial quote from Buckminster Fuller states: “You never change things by fighting against the existing reality. To change something, build a new model that makes the old model obsolete.

The old banking and financial systems are indicative of the existing reality and are old, decrepit, ancient technology, needs a bunch of maintenance, and the worst is that they are of course owned by those that use them as weapons against others.

China is doing no less than building a new model in FinTech that will make the old model obsolete and in this way they are simply leapfrogging the current financial systems distributing the dollar with fast, lean and modern systems supporting the Financial Silk Road. They have made their own ranking system in new FinTech, i.e., cryptocurrencies. The June rankings are as follows:

Quite rightly the Asiatimes is asking .. Who is actually decoupling from Whom? And I can add, and using modern FinTech to do so with solutions appropriate contextually to our modern world.

My own expectation is that the notable private cryptocurrency systems (those that actually make it to the Chinese ranking system) will eventually be able to exchange smoothly and seamlessly with the Chinese Digital Yuan.

A quick look for the same trajectory, leapfrogging legacy systems, outside of FinTech

We see this creation of seamless new systems outside of hard FinTech as well. Here are three examples. The current hegemon in its common ‘break it’ style, made errors as it thinks if it breaks something, people will come back begging, to make a new plan. This is not happening any longer, and the world simply decouples and creates new systems, as we see from three seminal events and the hegemon further losing its power base.

– The US attacked the WTO on the basis of refusing to allow it to vote for and institute staff for the appeals body for trade disputes. Usually this would have taken many meetings to solve. This time, what happened is that China has joined 18 other members including the European Union, Canada, Australia, Singapore and Hong Kong in launching a temporary system for trade disputes at the World Trade Organization, with the agency’s appeal body having ceased to function in December after the United States blocked appointments of new judges to the top trade court.

The needed functionality is now still there, the US having excluded itself (actually shot itself in the foot), while the rest of the world moved forward saying we need this body, and we will have this body, with or without hegemon. The Multi-Party Interim Appeal Arbitration Arrangement (MPIA) was developed in just over three months, after the members announced at the World Economic Forum in January that they would seek to form a new body to work around the demise of the regular WTO panel.

From a combined statement by the European Union: The new system is designed to preserve the principle enshrined in international trade law that governments have the right to appeal in any dispute.

https://www.scmp.com/economy/global-economy/article/3082748/china-eu-join-19-member-temporary-global-trade-dispute

– Most readers of this blog will know how the US is trying to carve out for itself some way back to the JPCOA, the Iran agreement, after simply breaking this agreement. It is proving to be not so easy to walk this one back and so far, they have lost their power base. Do-overs are not so easy in terms of diplomacy, after one has squandered the world’s goodwill and Iran is receiving widespread help to overcome the results of any further sanctions.

It is no wonder then that the EU policy chief made this statement: US century ceding to Asian one, says EU foreign policy chief. https://tass.com/world/1160031

– The third event is the US stunt at the recent Vienna arms control talks. The US stealthily placed Chinese flags, took photos and posted media – then accused China of being a no-show, knowing full well that China declined to attend these talks and refuses to be roped into an agreement that is not in the least appropriate for it. Clear petulance is the hegemon’s only response to a visible decoupling of the world with the US and western cronies. They have nothing more left than petulance and literal pictures of false flagging to offer.

So, it is clear that both inside and outside of hard FinTech which this writing is about, the trajectory of recreating systems and simply leaving the US out, is alive and well.

A small note on Iran and Venezuela as part of the empire resistance countries. Iran is mining cryptocurrency and Venezuela floated theirs, namely the Petro. Unfortunately (and this is not the focus of this writing), they did not do that cleverly but the newest news is that the Venezuelan government is now beginning to trade in cryptocurrencies, and for example, accepting current private chain cryptos for payment for passports. Bear in mind I said that some private chain cryptos will eventually be exchanged with the digital Yuan, so, very soon now, if a government takes payment in a crypto, they will have digital Yuan if they decide to exchange – and they do not need anyone’s permission (Like a Central Bank).

What is the Chinese View

With ‘the moodies’ rating system, cryptography education in China, a clear project based on the digital yuan and blockchain technology and more to follow, it becomes clear that the Yuan and the digital Yuan is being moved into the global financial sphere, de facto without years of negotiation and agreements and trade type negotiations. My expectation then is that certain cryptography and cryptocurrencies will eventually be seamlessly exchanged on China’s blockchain(s) – and you will have a digital yuan wallet on your phone, or on your computer or even a credit card supporting and in this way, you and I could be right on the Belt and Road. In other words, if I want to use a cryptocurrency to pay for something, and I have digital Yuan or another crypto, I can simply, within my electronic wallet exchange for the right currency that I need. This is how China is distributing their Digital Yuan de facto.

What is the Russian view

Russia is still a little behind this revolution in FinTech. but with one fell swoop they can get rid of their central bank if they so choose. The Russian Central bank is following Western ways on the renewal of currency through their central bank. https://cointelegraph.com/news/russias-central-bank-seeks-to-ban-crypto-issuance-and-circulation.

Yet, the decoupling continues. It is interesting to wait to see if the 5 UN security council countries will in fact gather for the summit that Mr. Putin invited them to. My expectation is that if they don’t, Putin will run out of patience and choose others, perhaps the G20 or something new. The decoupling will continue.

We now have clear precedence set on the decoupling part of FinTech and other organizations. It is no longer a big deal to decouple from empire.

What is the Western view?

Forbes stated recently that the launch of the Digital Yuan could create serious problems for the U.S. banking system—potentially forcing the U.S. to digitalize the dollar to compete. The Federal Reserve has warned that central bank digital currencies might one day replace commercial banks, creating “a deposit monopolist” and playing “havoc” with the banking system. (This seemed to me somewhat like gobbeldy-gook and is meaningless – yet, they know something is happening.)

The West is 20 years behind this technology, because China decided to leapfrog and not follow the accepted development trajectory and as such has reconfigured the potentials for the entire planet.

It is high time and in the words of Michael Hudson: “So the United States, through the World Bank, has become I think the most dangerous, right-wing, evil organization in modern history — more evil than the IMF. That’s why it’s almost always been run by a Secretary of Defense. It has always been explicitly military. It’s the hard fist of American imperialism.”

The world is leapfrogging, and elegantly zig-zagging around current imperial financial systems, for a true birth of a new post capitalist post industrial order, without going to war for it.

نتائج حرب كورونا… هل تسرع أفول عصر الإمبراطورية الأميركية

حسن حردان

تزداد المؤشرات التي تؤكد أن نتائج حرب كورونا العالمية سوف تسرع من التحولات في العالم التي بدأت قبل ظهور جائحة كورونا، وتجلت في التغيّر الحاصل في موازين القوى العالمية، وتراجع وانحسار نظام الهيمنة الأميركي الأحادي القطب. ما هي المعطيات والوقائع التي تدلل على ذلك؟

أولاً، من المعروف أن نتائج الحرب العالمية الثانية أسفرت عن أفول الإمبراطورية البريطانية التي كانت الشمس لا تغيب عن مستعمراتها، وإسدال الستار على نظام دولي قديم، لمصلحة ولادة نظام عالمي جديد ثنائي القطب.. كتلة شرقية بقيادة الاتحاد السوفياتي، وكتلة غربية بقيادة الولايات المتحدة الأميركية، استمر هذا النظام العالمي حتى انتهاء الحرب الباردة وتفكك الاتحاد السوفياتي لمصلحة هيمنة الولايات المتحدة على النظام الدولي وولادة نظام القطب الأوحد.

ثانياً، كان لدى كبار الخبراء الاستراتيجيين قناعة بأن نظام القطب الأوحد لا يمكن أن يستمر على قاعدة الهيمنة الأميركية، لأن مثل هذا النظام يؤدي إلى استفزاز الدول الكبرى والإقليمية التي ستعمد إلى التكتل للدفاع عن مصالحها التي تتجاهلها الولايات المتحدة.. وهو ما حصل فعلا.. فبعد أن استعادت توازنها، سارعت روسيا بالتعاون مع الصين إلى تشكيل منظمة شنغهاي التي تضم إليهما، الهند، طاجيكستان، قيرغيزستان، كازاخستان وأوزبكستان، باكستان، فيما حصلت أربع دول اخرى على صفة مراقب فيها، وهي.. إيران، منغوليا، أفغانستان وبيلاروسيا.. وقد نجحت هذه المنظمة في تطوير العلاقات الاقتصادية فيما بين أعضائها وتشكيل قوة اقتصادية عالمية في مواجهة القوة الأميركية الغربية، وكان من أبرز ما سعت إليه المنظمة العمل على وضع حد لنظام الهيمنة الأحادي القطب، والدفع لإنشاء نظام دولي متعدد الأقطاب.. وكان من أهم القرارات التي اتخذتها المنظمة مؤخراً في هذا السياق، قرار اعتماد العملات المحلية الوطنية في التبادل التجاري والاستثمار الثنائي وإصدار سندات، بدلاً من الدولار الأميركي الأمر الذي اعتبر نهاية لعقود طويلة من الهيمنة الأميركية على العالم في التجارة والذهب والتعاملات النفطية.

ثالثاً، منذ عام 2001 وعلى إثر هجمات 11 أيلول التي استهدفت برجي التجارة العالمية في نيويورك، أقدمت واشنطن، وتحت عنوان محاربة الإرهاب، على شن الحرب على أفغانستان واحتلالها، ثم شنت الحرب على العراق واحتلته، لكن الهدف الحقيقي من وراء هذه الحرب السيطرة على أهم احتياطات النفط والغاز في العراق وآسيا الوسطى وطرق إمداد الطاقة من أجل التحكم بالقرار الاقتصادي العالمي ومحاصرة روسيا والصين وتقويض جهودهما لإقامة نظام دولي متعدد الأقطاب بديلاً عن نظام الهيمنة الأمريكي الاحادي.. غير أن الولايات المتحدة فشلت في تحقيق أهدافها المذكورة، نتيجة المقاومة الشعبية والمسلحة التي استنزفت قواتها المحتلة في العراق وافغانستان..وجعلت احتلالها مكلفاً مادياً وبشرياً، فاضطرت واشنطن إلى الانسحاب من العراق عام 2011، وتقليص عديد قواتها في أفغانستان إلى أن عقدت مؤخراً اتفاقاً مع حركة طالبان يقضي بسحب قواتها المتبقية من افغانستان.. في حين أن العدوان الصهيوني على لبنان عان 2006 للقضاء على المقاومة، وحروبها الإرهابية غير المباشرة التي شنتها ضد سورية والعراق فشلت هي الأخرى في محاولة التعويض عن الهزائم الأمريكية العسكرية، وإعادة تعويم مشروع الهيمنة الأميركي الاحادي في المنطقة والعالم.. وكانت النتيجة أن بدأت تولد من انتصارات سورية، وبدعم من حلفائها في محور المقاومة وروسيا، معادلات وموازين قوى جديدة، دولية واقليمية، في مواجهة القوة الأميركية..

رابعاً، في وقت كان العالم ينتظر أن تترجم معادلات وموازين القوى الدولية والإقليمية سياسياً، وأن تسلم الإدارة الأميركية الجديدة بهذه المعادلات، بعد وصول دونالد ترامب إلى البيت الأبيض، عادت واشنطن من جديد إلى مواصلة سياسة الهيمنة، بضغط من المحافظين الجدد واللوبي الصهيوني الأميركي في الولايات المتحدة، وذلك عبر استخدام اخر سلاح متبقي بجعبتها وهو سلاح الهيمنة على القرار المالي الدولي بوساطة الدولار، فلجأت إلى رفد الحصار الاقتصادي الذي تنفذه واشنطن ضد الدول التي ترفض هيمنتها، وضد حركات المقاومة، بحصار مالي يمنع اي تحويلات او تعاملات بالدولار مع إيران وسورية، وعن كل مؤسسة أو شخصية تتعامل او لها صلة بحركات المقاومة في فلسطين المحتلة ولبنان واليمن.. إلخ..

خامساً، راهنت إدارة العدوان في واشنطن على سلاح الحصار الاقتصادي والمالي لتحقيق ما عجزت فيه حروبها العسكرية المباشرة وحروبها الإرهابية بالوكالة، وعمدت إلى تغذية تحركات اجتماعية ومطلبية في لبنان والعراق في محاولة لتغيير المعادلات السياسية في البلدين بإقصاء قوى المقاومة وحلفائهم عن السلطة.. لكنها اصطدمت بموازين قوى وصمود قوى المقاومة، وترافق ذلك مع ظهور فايروس كورونا الذي اجتاح دول العالم دون استثناء، ما أدى إلى شلّ الاقتصاد العالمي وحركة المواصلات وبالتالي احداث ركود اقتصادي عالمي يذكر بأزمة 1929.. وقد أسفر ذلك عن خسائر اقتصادية بمئات المليارات من الدولارات وإفلاس الشركات، وعشرات ملايين العاطلين عن العمل، وزاد الطين بلة، انهيار اسعار النفط إلى نحو 20 دولار للبرميل، ما تسبب بتفاقم أزمات الدول التي تعتمد في مداخيلها بشكل أساسي على عائدات النفط مثل السعودية. وكان واضحاً أن الولايات المتحدة كانت الأكثر تضرراً اقتصادياً ومالياً واجتماعياً بسبب انتشار الفايروس فيها على نطاق واسع بسبب استهتار واستخفاف ترامب منذ البداية بخطر فايروس كورونا..

لقد فاقمت هذه الأزمات الناتجة عن جائحة كورونا، الأزمات التي تعاني منها أميركا أصلاً بفعل تكاليف حروبها الفاشلة في العراق وافغانستان، وأدت إلى تلاشي كل المكتسبات الاقتصادية التي حققها ترامب باعتماد سياسة تدعم الاقتصاد الأميركي في الداخل وابتزاز دول العالم، لا سيما السعودية بالحصول منها على مئات مليارات الدولارات التي اسهمت في إنعاش الاقتصاد الأميركي وتوفير فرص العمل للعاطلين.. وبات ترامب اليوم في وضع صعب عشية الانتخابات الرئاسية يعاني تراجع شعبيته، ويزيد من أزمته فقدانه إمكانية الحصول على المال من السعودية لأن الأخيرة باتت تعاني من عجز كبير في موازنتها، بعد انهيار أسعار النفط وتوقف مواسم الحج والعمرة بسبب كورونا، والتكاليف الباهظة لحرب اليمن.. وهو ما دفع الحكومة السعودية إلى البحث عن الاستدانة لمعالجة العجز في موازنتها والمبالغ نحو 50 بالمئة .. أمام هذا الواقع اضطر ترامب إلى العودة لإحياء شعاره الانتخابي أميركا أولاً، والعمل على تقليص نفقات بلاده في الخارج إن كان لدول أو منظمات دولية، ولأن ذلك لا يكفي لمواجهة الأزمة الناشئة عن حرب كورونا، قرر القيام بتقليص وجود القوات الأميركية في الخارج لخفض النفقات، وفي السياق سحب ترامب بطاريات باتريوت من السعودية، وقرر خفض مستوى التوتر مع إيران، والقول إن وجود قواته في سورية يقترب من الصفر، في وقت كشف النقاب عن اتصالات أميريكية مع روسيا بشأن الحل السياسي للأزمة..

انطلاقاً مما تقدم يمكن القول إن نتائج حرب كورونا سوف تؤدي إلى تسريع أفول عصر الإمبراطورية الأميركية، وإسدال الستار على نظام القطب الأوحد، لمصلحة التعجيل بولادة نظام عالمي متعدّد الأقطاب، لا سيما أن أميركا ظهرت في ظل مواجهة كورونا، دولة عاجزة عن التصدي للأزمة، وغير قادرة على لعب دور عالمي، فيما الصين تقدمت بدلاً منها ولعبت هذا الدور، وهي مرشحة لأن تخرج من هذه الحرب العالمية، الدولة الأقوى اقتصاديا والتي تملك القدرات على النهوض بالاقتصاد العالمي، في وقت تحتاج فيه أميركا للمساعدة، وهو الأمر الذي يذكر بما حصل بعد الحرب العالمية الثانية عندما خرجت أميركا من الحرب أقوى دولة على المستوى الاقتصادي وقامت بمساعدة أوروبا في إعادة إعمارها في إطار مشروع مارشال.. فالصين اليوم تحلّ مكان أميركا، وما يؤكد ذلك سرعة سيطرتها على فايروس كورونا، وعودة آلتها الإنتاجية للعمل وتسجيلها معدلات نمو 3.5 بالمئة في الشهرين الأخيرين، فيما اقتصاديات أميركا والغرب وغيرها من الدول تعاني من الركود والنمو السلبي بين 7 و9 في المئة تحت الصفر..

سعر الصرف والأحجية المعقدة إلى أين؟

ناصر قنديل

تجري المناقشة اللبنانية الداخلية ومعها النقاش الخارجي لواحدة من ركائز أي بحث اقتصادي ومالي للوضع اللبناني، يمثلها التعامل مع سعر صرف الدولار بتسويق مسلّمة تتحوّل بديهية، وهي أن تثبيت السعر المنخفض عافية، وأن سعر الصرف الموحّد هدف، وأن تحرير سوق الصرف مبدأ لا حياد عنه ولو أدى لسعر مرتفع وتضخم وانهيار القدرة الشرائية في سوق مدولرة. والسير من هذه المنطلقات سيوصلنا إلى نتيجة واحدة، وهي أن لبنان كي ينجح بتحرير كامل لسوق الصرف فعليه أن يتقبل ارتفاعاً مرعباً في سعر الدولار، يترتب عليه ارتفاع جنوني في الأسعار الإستهلاكية وتضاؤل كارثي في القدرة الشرائية وصولاً لحد المجاعة، إذ إن المبلغ المطلوب لسد الفجوة التقليدية بين مطلوبات وواردات الميزان التجاري تفوق الـ 17 مليار دولار سنوياً، ومترتباتها على سوق العرض والطلب في سوق الصرف، بسبب تراجع عائدات التحويلات المختلفة من غير التصدير، لا تقلّ عن عشرة مليارات دولار سنوياً. وهذا كان مصدر سعي مصرف لبنان منذ 2010 عندما بدأ عهد التحويلات يأفل مع تقدم زمن العقوبات من جهة، وتراجع الإقتصادات العالميّة والخليجيّة يفرض إيقاعه من جهة أخرى، فتراجعت عائدات السياحة والتحويلات من الخارج، واعتمد المصرف المركزي لجلب هذه الدولارات، على تشجيع الدولة على المزيد من الاستدانة بالعملات الصعبة، حتى صار المزيد من الدين مستحيلاً، بفعل تضخم كتلة الدين وحجم الفوائد، فصار البديل باللجوء إلى ما أسماه بالهندسات المالية لوضع اليد على دولارات القطاع المصرفي بإغراء شرائها بفائدة بلغت 100% بالليرة اللبنانية، وهي في النهاية ودائع المودعين، وقد «نجح» بتجفيفها.

الذي يجب أن يدركه اللبنانيون، والمسؤولون قبل المواطنين، هو أن الجمع بين تحرير سعر الصرف، ومعالجة الأزمات المالية والاقتصادية والمصرفية مستحيل، والانطلاق من فرضية البحث عن وصفة سحرية لتحرير السعر، والحفاظ على القدرة الشرائية وضبط الأسعار الاستهلاكية، هو جهد ووقت ضائعان، وحتى يستطيع لبنان فعل ذلك، يجب أن يضمن عودة تدفقات بقيمة 10 مليارات دولار سنوياً على الأقل، عن غير طريق الاستدانة، أي من عائدات التصدير والسياحة وتحويلات الاغتراب. وهذا يعني أن الشرطين الواجبين لتوفير ظروف مناسبة لهذه العودة، هما نهاية زمن العقوبات، وعودة الانتعاش للاقتصادات العالمية والخليجية، وبانتظار ذلك على لبنان إذا أراد شعبه والمسؤولون فيه، منع التأثيرات المدمّرة لسعر الصرف على الاستهلاك والقدرة الشرائيّة تقبل فكرة التعايش المؤقت، لسنوات، مع أكثر من سعر في سوق الصرف، وعدم إعتبار ذلك نقيصة، والاستعداد لتفاوض شرس مع صندوق النقد الدولي تحت هذا العنوان.

الأهم هو رسم معالم المرحلة الانتقالية، أي السنوات الخمس التي حددتها الحكومة كمدة معقولة لخطة النهوض، بحيث تغطي الموارد المتاحة والمتوفرة من العملات الصعبة حاجات الاستهلاك الرئيسية، بأسعار صرف لا تتيح اضطراباً في أسواق الاستهلاك وتآكلاً في القدرة الشرائيّة، وهذا يستدعي تقييد حكمي لشروط الحصول على الدولار اللازم لأعمال الاستيراد الخاصة بالسلع الضرورية والاستهلاكية، مقابل سوق حرة للصرف بسعر مختلف حكماً، وأعلى حكماً، تغطى منها حاجات استهلاكية كمالية. وهنا يجب أن تنفتح عقولنا على حقيقة أن السعر المرتفع في سوق الصرف الموازية أو الحرة، سيكون فرصة للاقتصاد. فهو حافز للتصدير وعنصر تراجع في الاستيراد بسبب ارتفاع هائل لأسعار السلع المستوردة بسعر صرف مرتفع، مقارنة بالقدرة الشرائيّة للبنانيين. وهذا سيتيح خلال سنوات انتظار نهاية زمن العقوبات وانتعاش الاقتصاد العالمي والخليجي، نهضة صناعية وزراعية تغطيان الجزء الأساسي من حاجات السوق المحلية، وتزيدان الدخل بالعملات الصعبة من عائدات التصدير المتزايد، وهذه النتيجة المتوخاة مشروطة بأمرين، الأول اعتبار العملات الصعبة العائدة من التصدير محررة بنسبة 75% سلفاً لصالح المصدّرين لإعادة الترسمل بالمواد الأولية وتطوير مواردهم لمزيد من التصدير، باعتبار الـ 25% الباقية مخصصة لتأمين استيراد المشتقات النفطية كأساس لتأمين الطاقة للصناعة شرط شراء دولارها بسعر سوق التحويلات من المصدرين أي 3000 ليرة مقابل 1500 لتسعير المشتقات النفطية والكهرباء يحصلون عليه. والثاني تحرك حكومي عاجل لتحديد السلع التي ينتجها أو كان ينتجها ويمكن أن يعود لإنتاجها، لبنانيون، لتوفير الحماية الفورية لها من منافسة المستوردات، وفي المقدمة تقف صناعة الألبان والأجبان والعصائر والمياه المعبأة ومواد وأوراق النظافة، والأحذية والألبسة، ولائحة طويلة تخفف فوراً ملياري دولار من فاتورة الاستيراد.

لدى تشريح فاتورة الاستيراد التي تشكل مصدر الطلب على الدولار، سنجد توزيعاً مذهلاً يكشف الكثير من الحقائق، حيث الفاتورة النفطية في المقدمة، وفقاً لسعر النفط تتحرك بين 3 و6 مليارات دولار، وفاتورة المواد المتصلة بالصناعة قرابة ملياري دولار بين مواد أولية ومستوردات ميكانيكية، والمستوردات الغذائية قرابة 3 مليارات دولار أغلبها قابل للاستبدال محلياً، والمستوردات الطبية بمليار ونصف مليار دولار تقريباً قابلة للتخفيض إلى النصف، والمواد الاستهلاكية الممكن تصنيفها كمالية من ألبسة وعطور ومجوهرات ومشروبات وسيارات بحدود خمسة مليارات دولار سنوياً، بالقياس لفترة 2004-2010، وحيث كان العجز في الميزان التجاري يدور حول رقم 7 مليارات دولار فقط، قفز إلى 17 ملياراً خلال عشر سنوات بصورة يفسر بعضها دخول النزوح السوري كعامل جديد على الاستهلاك وتراجع التصدير إلى سورية والعراق، من جهة أخرى، بنسبة ملياري دولار استهلاك إضافي وتراجع مليار دولار تصدير، وزيادة القدرة الاستهلاكية الداخلية الناجمة عن سلسلة الرتب والرواتب، بما يعادل 3-4 مليارات دولار مقابلة، ويكفي العمل للعودة إلى حالتنا عام 2010، ليعود العجز التجاري إلى 7 مليارات، وهذا يتصل بسعر النفط، وهو الآن أقل من عام 2010، وعودة النازحين السوريين، وفتح السوقين العراقي والسوري، ومع تراجع القدرة الشرائية بفعل تراجع كبير في سعر الصرف، يمكن توقع هبوط العجز في الميزان التجاري إلى أقل من 5 مليارات دولار بالتأكيد.

كان لبنان يعوّض عجز الميزان التجاري حتى عام 2010، ويحقق فائضاً، بالاستناد إلى دخل يعادل 10 -12 مليار دولار يأتي مناصفة من السياحة وتحويلات اللبنانيين، وبقي منه فقط قرابة مليار دولار من التحويلات العائدة للبنانيين في الخارج وتراجع السياحة حتى الصفر تقريباً، وبانتظار تعافي المصدّرين يبقى فارق الأربعة مليارات الباقي كضغط على ميزان المدفوعات، لتغطية مليار دولار ستبقى لاستيراد غير الأساسيات وتراجع نوعي في تحويلات العاملات المنزليات الأجنبيات حتى الاضمحلال، وملياري دولار للمشتقات النفطية، ومليار دولار للقطاع الدوائي، ومثلها بضع مئات ملايين الدولارات لتحويلات للطلاب اللبنانيين في الخارج هي مصادر قابلة للمعالجة، عبر تفاهم نفطي مع العراق يقوم على تشغيل خط كركوك البصرة النفطي، وإخضاع استيراد الأدوية والمواد الاستهلاكية لمعادلة تتيح الإفادة من دولار منخفض، بحيث يكون بصورة تختلف عما هو قائم اليوم بتمويل مصرف لبنان لاستيراد المشتقات النفطية والأدوية والقمح، معادلة جديدة اقتصادياً تجيب ضمناً على كيفية تخفيض الفاتورة من جهة ومنع ارتفاع الأسعار من جهة موازية.

الصيغة المطلوبة هي اعتماد سعر منخفض جداً لسعر الدولار بـ 1500 ليرة لإستيراد القمح والمشتقات النفطية أو النفط، والدواء، شرط حصر أغلبها بتفاهمات دولة لدولة، واعتماد إجازة استيراد مسبقة من الوزارة المختصة للتجار تحدد الكمية والقيمة لبيعهم الدولارات اللازمة من الصرافين، مقابل تأمينها من مصرف لبنان بسعر معادل (3000 ليرة)، من ضمن تحويلات اللبنانيين وربع عائدات التصدير، أي ما يعادل ملياري دولار سنوياً، فيما سيصحح الاقتصاد الكثير من نقاط الضعف بربط استيراد المواد الباقية بسعر دولار مرتفع (5000 ليرة) وعجز اللبنانيين من تحقيق الطلب عليها وعجز الكثير منها عن منافسة الإنتاج المحليّ الذي سينمو خصوصاً في القطاعات الغذائيّة وقطاع الألبسة والأحذية، بدليل ما كان عليه في سنوات سعر دولار مرتفع في أواخر الثمانينيات من القرن الماضي.

تحسين التبادل التجاريّ مع سورية والعراق يحتاج إلى استبدال العبقرية اللبنانية بالعودة للعبقرية الفرنسية التي أدركت مع عهد الانتداب الحاجة لتبادل تجاري بالليرة المحلية، فجعلتها واحدة، رغم إقامة دولتين ودستورين وحكومتين وجيشين ورئيسين، لكن مع إنشاء مصرف مركزي واحد وليرة واحدة، وهو ما يمكن استبداله اليوم بتعاون حاكميات المصارف المركزية في لبنان وسورية والعراق لإصدار تسعير يومي تبادليّ للعملات الوطنية من دون المرور بالعملات الأجنبية والسماح بالتداول بالعملات الوطنية في أسواق البلدان الثلاث، كما نحتاج إلى استبدال العبقرية اللبنانية في الاعتماد على استيراد المشتقات النفطية بالدولار، بالعبقرية البريطانية التي أقامت خط كركوك طرابلس وأنشات مصفاة طرابلس، بحيث يحصل لبنان على حاجاته من المشتقات النفطية لقاء تكرير ضعف حاجاته وبيعها لحساب العراق، وبيع ثلاثة أضعافها من النفط الخام لحساب العراق، ولبنان الموجود على البحر المتوسط قبالة أوروبا يوفر على العراق ثلاثة أرباع كلفة نقل النفط قياساً بعبور الناقلات من البصرة نحو هرمز فباب المندب وقناة السويس وصولاً للمتوسط، وضمن خطة سنة لتشغيل الخط والمصفاة، يمكن شراء النفط الرخيص بأسعار اليوم ووضع آلية لتقنين استهلاكه.

إن تأمين مستلزمات الاستيراد الضروري بأسعار للدولار بين حدي 1500 و3000 ليرة مشروطة بإجازات استيراد مسبقة من وزارات الاختصاص، وهي وزارة الصحة ووزارة الاقتصاد ووزارة الطاقة كل في مجالها، لن يتيح تأمين السلع الأساسية بسعر ثابت ومناسب للقدرة الشرائية للبنانيين فقط، بل سيضمن الرقابة على النوعية والتحكم بلوائح المواد والأصناف المستفيدة من هذه الميزة، والاطلاع على الأسعار الفعلية للاستيراد، وربط التجار بالحاجة لإجازة شراء الدولار المنخفض سيضمن تقيدهم بالأسعار التي يتم وضعها لبيع هذه المستوردات للمستهلك اللبناني تحت طائلة الحرمان من الإجازة التفضيلية، والاضطرار لشراء الدولار بسعر السوق الحرّة، والدخول في منافسة غير متكافئة مع منافسين يحتفظون بميزة الحصول على دولار منخفض السعر لتقيّدهم بتسعيرة الوزارات المختصة.

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Get Ready for the Next Game-Changer: the Digital Yuan

Source

May 06, 2020

Get Ready for the Next Game-Changer: the Digital Yuan

by Pepe Escobar – cross.posted with Strategic Culture Foundation

A new, radical paradigm shift is in progress. The U.S. economy may shrink as much as 40% in the first semester of 2020. China, already the world’s largest economy by PPP for a few years now, may soon become the world’s largest economy even in exchange rate terms.

The post-Planet Lockdown world – still a hazy mirage – may well need a post-Planet Lockdown currency. And that’s where a serious candidate steps into the fray: the fiat digital yuan.

Last month, the People’s Bank of China (PBOC) confirmed that a group of top banks started trials in electronic payment in four different Chinese regions using the new digital yuan. Yet there’s no timetable yet for the official launch of what is called the Digital Currency Electronic Payment (DCEP).

The man with the plan is PBOC governor Yi Gang. He has confirmed that apart from the trials in Suzhou, Xiong’an, Chengdu and Shenzhen, the PBOC is also testing hypothetical scenarios for the 2022 Winter Olympics.

While DCEP, according to Yi, “has made very good progress,” he insists the PBOC will be “cautious in terms of risk control, especially to study anti money-laundering and ‘know your customer’ requirements to incorporate in the design and system of DCEP.”

DCEP should be interpreted as the road map for China leading to an eventual, even more groundbreaking replacement of the U.S. dollar as the world’s reserve currency. China is already ahead in the digital currency sweepstakes: the sooner DCEP is launched the better to convince the world, especially the Global South, to tag along.

The PBOC is developing the system with four top state-owned banks as well as payment behemoths Tencent and Ant Financial.

mobile app developed by the Agricultural Bank of China (ABC) is already circulating on WeChat. This is in effect an interface linked to DCEP. Moreover, 19 restaurants and retail establishments including Starbucks, McDonald’s and Subway are part of the pilot testing.

China is advancing fast on the whole digital spectrum. A Blockchain Service Network (BSN) was launched not only for domestic but also for global trade purposes. A large committee is supervising BSN, including executives from the PBOC, Baidu and Tencent, according to the Ministry of Industry and Information Technology (MIIT).

Backed by gold

So what does this all mean?

Well connected banking sources in Hong Kong have told me Beijing is not interested for the yuan to replace the U.S. dollar – for all the interest across the Global South in bypassing it, especially now that the petrodollar is in a coma.

The official Beijing position is that the U.S. dollar should be replaced by an IMF-approved Special Drawing Rights (SDR) basket of currencies (dollar, euro, yuan, yen). That would eliminate the heavy burden of the yuan as the sole reserve currency.

But that may be just a diversionist tactic in an environment of all-out information war. A basket of currencies under the IMF still implies U.S. control – not exactly what China wants.

The meat of the matter is that a digital, sovereign yuan may be backed by gold. That’s not confirmed – yet. Gold could serve as a direct back up; to back bonds; or just lay there as collateral. What’s certain is that once Beijing announces a digital currency backed by gold, it will be like the U.S. dollar being struck by lightning.

Under this new framework, nations won’t need to export more to China than they import so they have enough yuan to trade. And Beijing won’t have to keep printing yuan electronically – and artificially, as in the case of the U.S. dollar – to meet trade demands.

The digital yuan will be effectively backed up by the massive amount of Made in China goods and services – and not by a transoceanic Empire of 800 Bases. And the value of the digital yuan will be decided by the market – as it happens with bitcoin.

This whole process has been years in the making, part of serious discussions started already in the late 2000s inside BRICS summit meetings, especially by Russia and China – the core strategic partnership inside the BRICS.

Considering multiple strategies to progressively bypass the U.S. dollar, starting with bilateral trade in their own currencies, Russia and China, for instance, set up a Russia-Chian RMB Cooperation Fund three years ago.

Beijing’s strategy is carefully calibrated, like playing go long-term. Apart from methodically stockpiling gold in massive quantities (just like Russia) for seven years now, Beijing has been campaigning for a wider use of SDR while making sure to not position the yuan as a strategic competitor.

But now the post-Planet Lockdown environment is shaping up as ideal for Beijing to make a move. Even before the onset of the Covid-19 crisis the predominant feeling among the leadership was that China is under a full spectrum attack by the United States government. Hybrid War already reaching fever pitch implies bilateral relations will only get worse, not better.

So when we have China as the world’s largest economy by both PPP and exchange rate; still the strongest growing major economy, barring the first semester of 2020; productive, innovative, efficient and on track to reach a higher technological level with the Made in China 2025 program; and capable of winning the “people’s war” against Covid-19 in record time, all the necessary elements seem to be in place.

But then, there’s soft power. Beijing needs to have the Global South on its side. The United States government knows it very well; no wonder the current hysteria is all about demonizing China as “guilty” on all – unproved – counts of fostering and lying about Covid-19.

An “impeding arrival”

A key advantage of a sovereign digital yuan is that Beijing does not need to float a paper yuan – which by the way is being sidelined all across China itself, as virtually everyone is switching to electronic payment.

The digital yuan, using blockchain technology, will automatically float – thus bypassing the U.S.-controlled global financialized casino.

The amount of sovereign digital currency is fixed. That in itself eliminates a plague: quantitative easing (QE), as in helicopter money. And that leaves the sovereign digital currency as the preferred medium for trade, with currency transfers unimpeded by geography and, the icing on the cake, without banks charging outrageous fees as intermediaries.

Of course there will be pushback. As in non-stop demonization of neo-Orwellian China for straying away from the whole purpose of bitcoin and cryptocurrencies – which is to have freedom from a centralized structure via decentralized ownership. There will be howls of horror at the PBOC potentially capable of seizing anyone’s digital funds or turning off a wallet if the owner displeases the CCP.

China is on it, but the U.S., UK, Russia and India are also on their way to launch their own crypto-currencies. For obvious reasons, the Bank of International Settlements (BIS), the Central Bank of Central Banks, is very much aware that the future is now. Their research with over 50 Central Banks is unmistakable: we are facing an “impeding arrival”. But who will take the Biggest Prize?

ZeroHedge, a response to Mr. Littlejohn & the future of dollar dominance

April 30, 2020

ZeroHedge, a response to Mr. Littlejohn & the future of dollar dominance

by Ramin Mazaheri for The Saker Blog

It was very pleasant and informative to read Mr. Gary Littlejohn’s April 19 article, Strengthening the US Dollar: Comments on Ramin Mazaheri. I am very happy that he agreed with my article No, the dollar will only strengthen post-corona, as usual: it’s a crisis, after all, which sought to temper the eager glee of those whom I call the “dollar demisers” with some historical facts and socialist-based analysis.

What it seems Mr. Littlejohn essentially did was combine my analysis with a very popular article from “high finance dissident” site ZeroHedge, “Down The Rabbit Hole” – The Eurodollar Market Is The Matrix Behind It All, penned by Michael Every of the Netherlands’ Rabobank, and then add his own considerable insights and commentary.

Mr. Littlejohn wrote such a fine article that I am happy to respond to both his and ZeroHedge’s articles.

He began, ”This supportive response aims to provide recent relevant evidence that many of the likely changes Mazaheri describes are already happening very quickly.”

Things are indeed happening very quickly, but they could also be arrested quicker than people think. My article was a counterweight to the idea that the US (and their Western allies, and their client/puppets) is somehow entirely out of control of this process – it is not. I hope that I have overestimated a prediction of 20-30 years more of dollar dominance, but my article demonstrated how from 2008-20 they have more than just weathered a Great Recession they primarily caused. There will be a true anti-dollar revolution, but nobody can accurately predict any revolution – who could have even predicted this Great Lockdown hysteria?

I’m very glad Mr. Littlejohn agrees with the class-based analysis that the 1% is indeed international – it is not some tinfoil-hat conspiracy claim. This fundamental tenet of socialist analysis seems odd in the West only because it is so rarely said – after all, hedge funds, billionaires and wannabe-billionaires decide the editorial policy of Western media.

But, above all, this remains a competition between two ideologies: capitalist-imperialist cultures (and their repressed client states) and socialist-inspired cultures. The latter culture acknowledges this openly – the former hide and denies it, famously declaring an ideological “end of history“. Both of these cultures remain supranational in scope and reach, even if capitalist-imperialists continue to falsely assume their global political dominance and persist with their “clash of civilisations” (which first came for the Muslims) with a book of self-flattering “universal values” at the tip of their spear.

What Westerners have started to realise – 2008 began this process and the looming 2020 crisis will accentuate it – is that the neoliberal empires they cheered on always intended to come for their 99% as well. For proof just look at Greece, the Yellow Vests and the decade-long austerity self-cannibalisation of the Eurozone. There are those who believe the upcoming explosion of this critical mass will cause the revolution implied by the fall of the dollar – this article will pose an alternative view; it’s a view which Westerners cannot even conceive of much less discuss because – of course – they have no enemies, There Is No Alternative, their ideology conquered even before their armies arrived, they are so willing to die for their own rightly-guided governments… right?

Mr. Littlejohn was right to marvel at the primacy of Western/international high finance in his discussion of the enormous consequences of the recent decisions by the Fed & ECB to purchase corporate bonds.

If we care about our nation, then we must ensure corporations and individuals (and in the US corporations are now legally treated as individuals, in a major 1%er victory) are legally and fiscally subservient to not only our nation’s laws but our nation’s moral values (i.e. the spirit of the law). Capitalist-imperialist ideologies do not have this type of patriotism: their patriotism, due to a system predicated on competition and not cooperation, cannot be displayed via this positive defense but only via a very negative attacking – be it Putin, Russia, Muslims, those on the other side of the political aisle, socialists, the Iraqis, the Vietnamese, the Algerians, etc.

Mr. Littlejohn writes of the corporate debt purchases: ”This seems to allow the development of a possible strategy that discriminates against foreign-owned companies (such as Chinese-owned Huawei) to be starved of Fed funds.

Indeed it does. But nations have a right to defend themselves (like with protectionism), after all; contrarily, national aggression (like with blockades) is the cardinal sin of international law. The new Fed-Treasury open alliance, with BlackRock as their bureaucratic arm, is a problem for the American citizen in that the priority is not the elevation of American corporations/individuals, but of Western/international high finance.

This lack of patriotism is rightly offensive to the many Tyler Durdens of ZeroHedge, but because they reject socialist analysis they don’t fully understand it nor can they proffer actual solutions instead of a useless, destructive Fight Club-esque rage.

ZeroHedge: the West does not rule the whole world, try as they might

It’s important to note the very fair criticism often made of “dissidents-but-not-really” like ZeroHedge: they have been wrong for years. They keep saying that capitalism is about to collapse because just look at this excellent data we culled and this fine analysis… and yet it has not collapsed. This doesn’t make ZeroHedge permanently wrong, necessarily – it could make them ahead of the curve. Mr. Littlejohn was quite right in relying on them as he did.

I also wonder if ZeroHedge would do any better if they were put in charge of the Western economy? ZeroHedge’s editorial line is resolutely Austrian/Chicago economics. They do not publish any articles advocating socialist reforms, but they do publish many anti-socialist diatribes which may or may not be reprinted from the 1930s. Indeed, I am always flattered when they do occasionally reprint some of my geopolitical articles, and I definitely find it very amusing because many of the comments are – and this is a direct quote: “This is the worst thing I have ever read on ZeroHedge!” LOL!!! Well, they are based around socialism, not Austrian/Chicago economic brutality, selfishness and egotism. But when it comes to economics ZeroHedge is not about providing balance and objectivity – they are trying to protect their investments.

But in most newspapers the best, objective hard news about foreign countries is actually found in the business section – they need some truth because they are trying to protect their investments. ZeroHedge is indeed indispensable during this economic crisis because of their excellent taste in culling key hard business news from around the world – we can never find such contrarian-yet-factual, everything-is-not-100%-rosy, up-to-the-minute hard news at any of the Mainstream Media business sections or websites. ZeroHedge knows what to look for regarding Western economic problems and it wants them fixed – they are trying to protect their investments.

One of the favourite sources of analysis for ZeroHedge is Rabobank. Perhaps it is because they are Dutch, and their “junior partner” status in the North European strangulation of Latin Europe gives them some pause regarding the ruthlessness of the Germanic-Austrian-Chicagoan mindset? Perhaps because it is a bank based not only around cooperatives but agriculture as well that they have a very un-New York City view on the desirability of empire? Or maybe not… anyway.

As Mr. Littlejohn wrote of their “Rabbit Hole” article: “It treats the global market for Dollars under a single label, namely Eurodollars, but if one adopts that approach then it tends to downplay the historical significance of the rise of the petrodollar….” Indeed to both assertions – calling the eurodollar the “matrix behind it all” is rather magical thinking – it would be nice if the flaws of capitalism-imperialism could be entirely sourced to this one issue but, alas…. I think Mr. Littlejohn may agree with me that Every overrates the exceptionalism and risk of eurodollars. It’s very name is misleading – “globodollars” would be more accurate than “westdollars”, as socialist countries have participated. Eurodollars are a key part of offshore banking money laundering – they are not some new development – and I will discuss later how they are still, in application and spirit, dollars.

Yet the Rabobank analysis of the future of dollar dominance by Every is useful and has great merit. Here is how Every sees the possible outcomes of this QE Infinity post-corona hysteria world:

“Indeed, look at the Eurodollar logically over the long term and there are only three ways such a system can ultimately resolve itself:

  1. The US walks away from the USD reserve currency burden, as Triffin said, or others lose faith in it to stand behind the deficits it needs to run to keep USD flowing appropriately;
  2. The US Federal Reserve takes over the global financial system little by little and/or in bursts; or
  3. The global financial system fragments as the US asserts primacy over parts of it, leaving the rest to make their own arrangements.”

Thus, the first possibility is for the US to abandon dollar dominance via essentially declaring bankruptcy/refusing to pay debts.

The third possibility is for the global financial system to collapse and for the US to assert primacy over parts of it. But this idea is inherently flawed: socialist-inspired systems would NOT fragment, due to the independent, anti-capitalist, anti-Western nature of their systems.

Argue all you want about how China, Iran, Cuba, Vietnam and others would be negatively impacted by the Great Depression II, but I will argue just as long about how all their laws, governmental economic control, and a culture of interventionism will allow socialist-inspired nations to weather this storm EXACTLY as they have weathered Hot War, Cold War and Western blockades. This report for PressTV I did from Havana on “How the Cuban blockade works” opens with a rare sight in Cuba: a billboard. It reads “The blockade: the longest-running genocide in human history.” What is Great Depression 2 compared to that, at least for Cubans?

So I would not be arguing small points, indeed: Cuba exists, Iran exists, China exists – all resist. Every fatally assumes that the West and the entire globe are synonymous – they absolutely are not!

Thus, option three’s critical mistake is seemingly caused by common Western arrogance: It is not “The global financial system fragments” but the “WESTERN financial system fragments”. Again, this is not a small difference between our analyses: the West does not run the entire globe, try as they might and as self-flattering as that has been for them to insist. Here is the new, corrected option #3:

The WESTERN financial system fragments as the US asserts primacy over parts of it, leaving the rest to make their own arrangements.

The West’s incestuous 1% will maintain their primacy over the West and their most-favoured puppets, i.e. no change, except for the obvious, looming degradation of THEIR financial system.

Yet Every seems to believe some clients will perhaps slip away from the US/West – really? When he writes “leaving the rest to make their own arrangements” he is completely vague, probably because he is used to equating “the West” with “the world”: how can a nation leave the world, after all? No wonder he is vague. What Every fails to see is that any nation making “arrangements” outside of the West’s orbit can only go over to a necessarily China-focused – which is to say, a socialist-inspired bloc-focused – arrangement which is indeed already in place.

How can it not be binary in this fashion?

Is Every saying that some nations will soon adopt the 1979 slogan of the Iranian Islamic Revolution – “Neither East nor West but the Islamic Republic of Iran”? That would be quite interesting and I would cheer very loudly… but I do not expect that many nations will reclaim their sovereignty in such an emphatic fashion in 2020. Every is predicting revolutions (and many of them), which is even riskier than predicting a date for a Covid-19 vaccine.

And why should we be optimistic, when all it takes is some bribes and just a couple thousand soldiers to hold a nation’s capital, transportation hubs and sources of natural wealth (as in all over West Africa with France) – why would the Western 1% just “leave the rest” alone? That would be terrible for the capitalist bottom line: if France stops getting African uranium for peanuts then the consumer costs of their nuclear-dependent energy system will skyrocket, to give a single example among many. Thus, any nation which says to the West that they want to “make their own arrangements” will either need strong patrons (i.e., the anti-Western socialist-inspired bloc), or 1979-Iran style determination for true independence.

Anyway, no nation is a (geopolitical) island – Iran’s turn away form the West necessarily implied a turn to the East, and today they are China’s most trusted non-Oriental ally. Every, in a historical nihilist fashion, negates the existence and reality that There Is An Alternative… sorry Westerners, this IS real and is not some mere fad.

While the US (which leads the Western 1%) may say, “You want your money? Come get it,” (option 1) they will definitely not abandon neo-colonialism (option 3), which is so very, very profitable.

Thus, we appear to be stuck with option 2 – “The US Federal Reserve takes over the global financial system little by little and/or in bursts;”.

But we are not: Every is entirely mistaken to present that as some sort of new development!

The Western central banker collusion which was the “solution” to the 2008 crisis was based around following the diktat of top US bankers regarding when to issue QE and when to enact ZIRP (Zero Interest Rate Policies). Discussing this evidence that the Fed has colluded with the central banks of their allies was the basis of my 10-part series on the Western “bankocracy” from last winter, but the idea that bankers collude is not at all a new development in socialist thought.

Therefore what will happen is his third option, but accurately modified: The global Western financial system fragments, as the West asserts primacy over as many puppets/clients as possible, but the persistent economic success of the socialist-inspired camp attracts fresh allies.”

Such a development is entirely in keeping with my original article’s thesis of continued, but not endless, dollar dominance. The competition between two ideologies has never ended: the fallout from the corona hysteria may indeed bust out capitalism-imperialism but it cannot & will not cause the socialist-inspired camp to suddenly quit just as their popularity and relative strength is about to peak; just as after 2008 China peaked so high that they were able to end the (allegedly) “unipolar” world.

So where do we go from here? Answer: a slow decline for the West, which – again – is NOT the entire globe

I will keep saying it because it is true: Even if we judge via their own capitalist metrics, China, Vietnam, Iran – these countries have soared over the past four decades while the real economy of the West has been trashed. Iran only began to have postwar hardship when the inhuman Western blockade ramped up with the EU, US, UN triple sanctions of 2011. Even Cuba has had more economic growth and stability since the end of the Special Period (the fall of the USSR) than the West! ZeroHedgers will protest, “But we said not THIS capitalism (the neoliberal form)”, but it’s not like they have remained anywhere but the powerless fringe and, anyway, that is not my problem.

So a “slow decline” is imprecise journalism – it is a continued decline. Maybe a drastic plummeting in dollar dominance is indeed around the corner, but anyone in April 2020 who says they can predict the future is lying.

So what was Every’s take on the most certain scenario? We should learn it because despite its flaws, caused by its unbalanced and blinkered pro-“capitalism with Western characteristics”, it’s a very fine article.

“In other words, the BIS (Bank for International Settlements) is making clear that somebody (i.e., the Fed) must ensure that Eurodollars are made available on [a] massive scale, not just to foreign central banks, but right down global USD supply chains. As they note, there are many practical issues associated with doing that – and huge downsides if we do not do so. Yet they overlook that there are huge geopolitical problems linked to this step too.

Notably, if the Fed does so then we move rapidly towards logical end-game #2 of the three possible Eurodollar outcomes we have listed previously, where the Fed de facto takes over the global financial system. Yet if the Fed does not do so then we move towards end-game #3, a partial Eurodollar collapse.”

Again it’s a fine analysis but hobbled by the same two flaws: Every does not realise that #2 (“where the Fed de facto takes over the global financial system Western financial system”) has already happened, although it certainly must increase in order to forestall #3; and he does not realise that the Fed will NOT take over the financial systems of the “socialist-inspired bloc” with any amount of QE due to the laws, culture and modern history of said bloc. I hope it’s clear where Every goes astray and why.

This is also not my problem, but: To preserve the Western system we should assume that the long, LONG-awaited downloaning of Western QE “right down global USD supply chains” has finally come. However, it has come too late, and it has only finally arrived on top of the economic disaster which is the suicidal (for the West’s lower classes) Great Lockdown, and it will be expressly designed to be just enough downloaning to forestall mass domestic revolt yet not enough to prohibit the endless increasing of the 1%’s market concentration.

QE Infinity (barring an absurd amount of downloaning, which is politically impossible and would amount to a debt jubilee) cannot forever forestall a dollar collapse, but the “dollar demisers” falsely believe that fiscal policy/money issuance is the only tool the Western elite has. The end-of-the-dollar-revolution will not occur after, as I wrote in my first article, rounds of QE are rotated among different allies, and – as needed – massive Western propaganda campaigns, very watered-down but socialist-inspired concessions to the 99%, debt moratoriums, military distractions and maybe even World War III. Maybe even World War IV, too, and this is why I don’t exaggerate against a culture which believes deeply in their “clash of civilisations”:

The Western 1% simply cannot get “in” the socialist-inspired bloc or the yuan – after all, the aristocratic class in Iran, Cuba, China and elsewhere was totally expelled (to the West) – think they won’t make the dollar their “last stand” and use all their tools? As always, the West underrates the totalitarian nature of their most successful sons and daughters, but Iranians, Cubans and others do not. Yes, the economic scale of the crisis in 2020 is (potentially) revolutionary, but anyone who says it has already gone beyond the capacity of the Western 1% to rein it in and keep profiting… all this accuracy-driven journalist can say is, “Maybe, it’s still early.”

At the heart of Every’s argument, ZeroHedge’s complaints, Austrian/Chicagoan indignation that a national economy is indeed the same as a household, and also the West’s many “dissidents but not really” is a common theme that capitalism will implode because they cannot keep “rolling the debt over”. This is essentially echoed by Trotskyism, which holds that capitalism will eventually crumble under the weight of its own contradictions. (It is also notable that all these Westerners also think that the West – which has no enemies, which has no competition, to which no credible alternative exists – can never be defeated, only implode. More arrogance, but I have digressed.)

But they can keep rolling it over.

Again, they can keep rolling it over.

Every believes that the “eurodollar” is so very risky and exceptional because, “They (are dollars which) are not under the US’ legal jurisdiction, nor are they subject to US rules and regulations.” What he has ignored is that the high-finance holders of these dollars and markers are still very, very much informal upholders of the US-led Western system: Every has ignored culture, psychology and history in favor of a purely legal view of these eurodollars, instead of how the owners of these eurodollars operate in practice.

The Caymans, Luxembourg, Switzerland, Hong Kong and Singapore (all in the top 13 for eurodollar-dependant nations) – we should be worried that these tax havens will disobey the US and jeopardise the system? We should believe that they are even being honest about their claimed dollar reserves? We should be worried that the 1% is going to start sending their dollars to the average person instead of into these tax havens, creating a liquidity crisis? Anyone who has their money in the Caymans is certainly a parasite on society – we should worry for them, or fear them creating a “moral hazard” reckoning-implosion of the Western financial system? If all these eurodollars in the Caymans disappeared the real global economy would be fine – some rich people would be forced to get by on what’s in their Swiss bank accounts. Eurodollars are a problem – they are often the imaginary credit used by the elite who manipulate the West’s imaginary FIRE/QE economy – but there are bigger fish to fry in April 2020.

However, at root the Eurodollar system is based on using the national currency of just one country, the US, as the global reserve currency. This means the world is beholden to a currency that it cannot create as needed,” – exactly: a large percentage of these tax-haven eurodollars are hoarded, immorally stolen dollars, but they are still dollars. Again, they are not being held by the types of people who can be called “revolutionaries” or “patriots” or “moralists”, LOL – they will not be used in international warfare against the West because they are part of a truly supranational 1% Western financial system. They are held by people who are very over-leveraged, true, but these are not people whom repo men visit, eh? Again – it’s still the dollar which is in charge, and the dollar is on the 1%’s side, not America’s side.

Every’s “nationalist” view – that the Caymans are about to make a geopolitical power play – lacks the wider, better perspective provided by the socialist lens: the Western 1% can indeed collude to create more dollars as they need, and they have since 2008. This group can, “keep USD flowing out or else a global Eurodollar liquidity crisis will inevitably occur”, which Every mistakenly fears. They can indeed keep “rolling it over” via QE Infinity – the fact that QE Infinity is a term which journalists finally devised came up after years of foolish waiting for QE to end shows that the Western 1% has a very sound, but immoral, grasp on reality.

Fundamental question: Why would the West stop rolling it over?

If you ask ZeroHedge they might say – with an oxymoronic “capitalist idealism”: because we can’t reward excessive greed nor failure. LOL….

But who among the West’s high-finance 0.01% will be the class traitor who calls in the marker which implodes the system? He or she would implode his or herself, as well. The West is so big it is not just one person who can implode it, anyway: there is no single marker with a “quadrillion” after the number.

And forget mass domestic protests (which will be banned for months and months in the few Western countries which actually have a protesting culture) because whoever heard of mass protests for “reformism” (which is all Western semi-dissidents propose)? That is nonsensical – mass protests either lead to revolution or they fizzle quickly in the “can’t we all just get along”, middle-class, political status quo-ism which defines the West’s eternally anti-socialist culture.

Thus there is no saviour – individual or national – to be had – there is only long, hard opposition via socialism, which is an entirely new system that has fixed the errors of the old capitalism-imperialism system. Therefore the only entity which could cause the system to explode – if we are being pragmatic – is a bloc led by China. Only they have they weight, combined with their allies, to ever break the dollar’s dominance. But they are not going to do that next Tuesday:

They are not economically strong enough, nor are their few allies, nor do they have enough allies, nor could they be aided within a Western society which has nearly no “5th columnists” but merely “semi-dissidents” whose greatest minor achievement is to not want more war/blockades with the socialist-inspired bloc (because it could blow up the planet, negatively affect the rainforest, trigger negative emotions, disrupt the avocado-toast supply chain, etc.). Look at where we are in April 2020: it is a radical, unheard of idea to be reading of any “socialist-inspired bloc” – how can we say that China today is anywhere as omnipresent and dominant as the USSR-led bloc was in, say, 1945, ’55, ’65, ’75 or ‘85? Many of you right now are denying this idea that in 2020 there is any possible “socialist-inspired bloc” – remember that your (likely) reactionary grandfathers and grandmothers had no such illusions of their total victory.

This relative weakness, this inability to provide an alternative to dollar dominance, is why Iranians will tell you: China is not going to “save” anyone except for China, because they are not strong enough. Iran was the first non-Oriental country to learn this fact, even if some in Iran haven’t learned it yet.

However, what China will do is work with you – they will create long-term plans with you (as China and Iran have done on the Belt and Road Initiative) if you prove your socialist and anti-imperialist bonafides. They will work with you even if you are imperialist-capitalists – it is the only way to gain strength and ultimately beat them.

Every, ZeroHedge, the countless Western Rabobanks – they believed the socialist-inspired bloc had been crushed; they are incredibly upset that the 2008 Great Recession and the phony QE “solution” has permitted China to rise and have the temerity to question their neoliberal, neo-imperial, greedy “universal values”. China is indeed now a threat to the West but it is not yet what the USSR was for decades – a concrete alternative which was willing to foot your bills (the USSR was the only empire where the centre bled for the periphery) while your national culture reforms itself away from imperialist ideals in order to (don’t you get this yet?) break the grip of international high finance on your people.

Thus, the dollar will not be beaten next Tuesday.

This is why corona hysteria will ultimately be manipulated by the Western 1% to strengthen the dollar, i.e. – their dollar and not America’s dollar. Barring reforms – and I have seen none which hyper-financialisation did not take advantage of since 2008 – 2008 will only largely repeat itself.

Indeed, it would take a revolution for a Western crisis to be unsuccessfully manipulated… but “semi-dissidents”, i.e. liberal reformists, hold out that mere false hope. They don’t see – like China, Iran, Cuba and others – that the Western 1% will do, like Mario Draghi of the ECB, whatever it takes to maintain their neoliberal empire.

The proof that this analysis is correct could not be more clearly illustrated than by World War I: a war started by international high finance to forestall the victory of socialism and to defend capitalism-imperialism despite its failure for their 99%.

Mr. Littlejohn grasps these historical concepts, and their political-moral implications, far more than the rabidly capitalist ZeroHedge and their preferred analysts.

Mr. Littlejohn and the dream of Eurasia, a concept which strikes down European exceptionalism

I disagree with Mr. Littlejohn where he gives his extension of Every’s three-outcome analysis:

Even a partial Eurodollar collapse would do serious damage to those countries (more than half) which have sought emergency IMF support, and so this new power gives the Fed enormous political leverage over most major economies and over multilateral agencies such as the IMF, the World Bank or even the European Union [EU]. Given that Trump sees the EU as a potential competitor to the USA, and given the low proportion of US Dollars that its major economies have in relation to their trading needs, the EU is very vulnerable to US economic pressure in the present circumstances.”

Indeed, the developing world who are Western clients and not socialist-inspired clients will have huge problems very shortly. The impact of the Great Lockdown hysteria on the developing world is another article I have been meaning to write, but it will be an extension of Part 3 from the “bankocracy” series: QE paid for a foreign buying spree: developing countries hurt the most.

However, while Trump (who looks even riskier post-corona to the 1% free-trade globalists than he did in November 2016, when they did all the could to prevent his election and his protectionist ideas) may personally see the EU as a competitor, the many people richer than him know that this is not the case – the US and EU will continue to collude. Ergo, not only does the Fed want that “enormous political leverage” but the European 1% wants the Fed to have it, too. The dollar needs to remain in charge for the Western financial system to profitably continue for Europe’s 1% – the structure of the Eurozone was penned by the US for precisely this reason, as was the Plaza Accord for the yen. (As I wrote in the final part of a 7-part series in 2017, which socialistically examined the QE crisis in the Eurozone, “With the Plaza Accord of 1985, Japan adopted the US-orchestrated neoliberal changes that were designed to suck the surpluses from Japan back into the United States.”)

Thus the Fed’s sidelining (outspending) of the IMF and World Bank (but not the ECB, as they can print money) should be viewed as what it is – increased market concentration which will profit the Western 1%, as predicted by Marx. Every’s analysis is so unblinkered-capitalist that he likely cannot see this Eurogroup-Fed alliance, but the fine analyst Alastair Crooke alludes to it; however, Crooke still fails to use the socialist class analysis lens and instead fundamentally looks at such global political changes via a slightly-wider but still outdated nationalist lens.

Europe’s 1% may publicly gripe against the Fed’s decisions but they cannot go against them without effectively declaring war on the dollar. The US, Eurozone, Japan, and Saudi economies, plus their clients, are all intertwined – happily, for their 1%. If they did declare war on the dollar they would only have two options:

  1. Join the socialist-inspired bloc – this means renouncing capitalist-imperialist culture, and that will never happen.
  2. Europe carves out a “Third Way”, in a drastic revolution to the binary ideological system which has raged for over a century. This revolution has been so very often discussed in Europe but it has never, ever happened precisely because Europeans are so very devoted to their capitalist-imperialist culture. They have proven that they don’t want a Third Way, should one even exist. Talk of a “Third Way” has proven to be merely a way for Europeans to arrogantly assert their alleged exceptionalism/chauvinism. At some point they will give up and embrace “Eurasia”, but that is a ways away.

I think Mr. Littlejohn need not worry about “if the Euro collapses as a currency in the coming depression” – the euro, the yen and the dollar will all strengthen in a crisis because that is when investors seek safe havens and these are three of the four biggest global economies in what is soon to be an increasingly economically-depressed global market. All three also collude to fix their currencies relative to each other, due to the interconnected nature of the Western 1%, so while they will jockey for position for export power it is only within agreed-upon limits as it is as a fundamentally-united trio, and also fundamentally (as of 2008) united against the yuan, the champion currency of the socialist-inspired bloc.

So, overall, I think perhaps Mr. Littlejohn underestimates the way the euro/EU can burst free of these bonds to become a sovereign counterweight to the dollar/US, and also that Europe will embrace a culturally-unwanted idea of Eurasia anytime soon. Crooke does a good job in his article of linking the actions of the Fed with what I wrote about in Part 3 of the 2017 series, The hopelessly corrupt structure of the Eurozone & the Eurogroup. I think we simply have to look at how then-Economy Minister Emmanuel Macron organised the takeover of national giant Alstom Energy for GE in 2015 to show that Europe’s leaders will prioritise the US 1% (who are richer and thus have more influence ) than the EU’s 1%. It’s not a “new” or “slow” decline for Europe, but a “continued” decline as well.

Europe does not want sovereignty, which is a modern concept; sovereignty has become “modern” because it has been wiped out by Western-led globalisation. The neoliberal (and thus also neo-imperial) empire which is the EU does not respect sovereignty but suppresses it, as Europe is obviously NOT modern.

It’s difficult to change the matrix which modern Western commentators place the world upon – nationalism, imperialism-as-inevitable, chauvinism against non-Western cultures, existentialism (the feeling of being trapped due to not perceiving any alternative) and the historical & political nihilism which is the legacy of WWII.

It’s thus a radical, unheard of concept which still easily upends Every’s analysis – the West is NOT the entire world. New York, London, Paris and Tokyo will grow even more powerful post-corona due to even-greater wealth/market concentration, but their Greeces, “Flyover Country” and their developing world clients will continue to be bled. And as Western inequality, dominance, militarism and market concentration re-doubles amid their supranational financial system chaos, a whole other bloc is poised to not just weather the storm but thrive amid the post-corona chaos precisely because they rejected the Western legal and cultural system.

It’s not that as if these entities didn’t all collude to try and stop China’s rise – WWII was only more murderous to the Soviets, after all – it’s that they could not. It’s not as if they didn’t beg the CCP to change their laws to allow foreign control of Chinese industries – it’s that China would not. The West finally gave up because the CCP made the Western 1% too much money while still retaining control and serving the Chinese people. It’s not as if the West hasn’t tried to get Iran to go “neoliberal” (LOL) and sell off the 90% of the non-Black Market, non-carpet economy which the Iranian government controls – it’s that they could not. It’s not as if the West hasn’t tried to break Cuba, North Korea and others – it’s that they could not.

You cannot stop an idea, especially a superior idea.

My original article was aimed at the hasty, gleeful “dollar demises” and sought to, as the French say, “put some water in your wine”. The West’s “double bubble economy + Great Lockdown hysteria” crisis now is indeed enormous, but it cannot possibly ruin the socialist-inspired bloc – only themselves because that is THEIR economy, not ours.

That is a very sober – and not immoderately gleeful – analysis from the socialist-inspired bloc.

Mr. Littlejohn is on the right track and hopeful that Europe will come around – who would argue with hope in right action? I would remind Mr. Every that there IS an alternative and that it is not new. I would remind ZeroHedge that socialism does not ban competition and that socialism WILL win the binary ideological struggle, as they have been doing since 1980 (as ZeroHedge keeps pointing out via their fine documenting of the West’s continued economic failures).

I thank Mr. Littlejohn for his time, consideration and efforts.

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Corona contrarianism? How about some corona common sense? Here is my list of articles published regarding the corona crisis, and I hope you will find them useful in your leftist struggle!

Capitalist-imperialist West stays home over corona – they grew a conscience? – March 22, 2020

Corona meds in every pot & a People’s QE: the Trumpian populism they hoped for? – March 23, 2020

A day’s diary from a US CEO during the Corona crisis (satire) March 23, 2020

MSNBC: Chicago price gouging up 9,000% & the sports-journalization of US media – March 25, 2020

Tough times need vanguard parties – are ‘social media users’ the West’s? – March 26, 2020

If Germany rejects Corona bonds they must quit the Eurozone – March 30, 2020

Landlord class: Waive or donate rent-profits now or fear the Cultural Revolution – March 31, 2020

Corona repeating 9/11 & Y2K hysterias? Both saw huge economic overreactions – April 1, 2020

(A Soviet?) Superman: Red Son – the new socialist film to watch on lockdown – April 2, 2020

Corona rewrites capitalist bust-chronology & proves: It’s the nation-state, stupid – April 3, 2020

Condensing the data leaves no doubt: Fear corona-economy more than the virus – April 5, 2020

‘We’re Going Wrong’: The West’s middling, middle-class corona response – April 10, 2020

Why does the UK have an ‘army’ of volunteers but the US has a shortage? – April 12, 2020

No buybacks allowed or dared? Then wave goodbye to Western stock market gains – April 13, 2020

Pity post-corona Millennials… if they don’t openly push socialism – April 14, 2020

No, the dollar will only strengthen post-corona, as usual: it’s a crisis, after all – April 16, 2020

Same 2008 QE playbook, but the Eurozone will kick off Western chaos not the US – April 18, 2020

We’re giving up our civil liberties. Fine, but to which type of state? – April 20, 2020

Coronavirus – Macron’s savior. A ‘united Europe’ – France’s murderer – April 22, 2020

Iran’s ‘resistance economy’: the post-corona wish of the West’s silent majority (1/2) – April 23, 2020

The same 12-year itch: Will banks loan down QE money this time? – April 26, 2020

The end of globalisation won’t be televised, despite the hopes of the Western 99% (2/2) – April 27, 2020

What would it take for proponents to say: ‘The Great Lockdown was wrong’? – April 28, 2020

Ramin Mazaheri is the chief correspondent in Paris for Press TV and has lived in France since 2009. He has been a daily newspaper reporter in the US, and has reported from Iran, Cuba, Egypt, Tunisia, South Korea and elsewhere. He is the author of the books ‘I’ll Ruin Everything You Are: Ending Western Propaganda on Red China’ and the upcoming ‘Socialism’s Ignored Success: Iranian Islamic Socialism’.

العالم إذ يجنّ

سعاده مصطفى أرشيد

فيما يعاني العالم من وباء كورونا الخبيث وتداعياته الاقتصادية وثم السياسية والاجتماعية، وفيما نصف سكان المعمورة يعيشون أجواء الحصار دون عمل وإنتاج، وكثير منهم دون دخل ثابت أو متقطع، ترى الحكومات والدول نفسها حائرة ومضطرة لابتداع صيغ تزاوج بين دوران عجلة الحياة بمناحيها المتعدّدة وبين هذا الفايروس المعادي الذي لا تستطيع حتى أكثر الدول بوليسية اعتقاله.

بعض دول العالم بصدد اتخاذ قرار بتخفيف القيود على حركة المواطنين وتتجه نحو السماح بعودة الحياة إلى شيء من طبيعتها. في الولايات المتحدة يرى ترامب بأنّ إغلاق البلاد لفترة طويلة يلحق أضراراً فادحة، ويشير إلى انه سيتمّ فتح البلاد تدريجياً قبل نهاية نيسان الحالي، فيما ألمانيا تنوي فتح بعض المحال التجارية في الرابع من أيار ثم إعاده الحياة الدراسية في المدارس والجامعات. أما إيطاليا وهي الأكثر إصابة فإنها ستتخذ قرارها بإجراء تخفيف على قيود حركة مواطنيها في مطلع أيار المقبل. في مشرقنا اتخذت بعض الحكومات إجراءات مشابهة، هذا في حين أنّ منظمة الصحة العالمية WHO تصيح بأنّ أيّ تخفيف لإجراءات الإغلاق والعزل هو خطأ فادح، ولكن صراخها يذهب ويتلاشى في البرية أمام حيرة الحكومات وعجزها.

من تداعيات جائحة الوباء، جائحة لا تقلّ هولاً وخطراً لا بل تزيد في آثارها على العالم بأسره وهي الجائحة الاقتصادية وانهيار أسعار البترول انهياراً فاق الخيال ولم يخطر على بال بشر وأدّى إلى انهيارات حادة في مؤشرات الاقتصاد وأسواق المال بتسارع عجيب.

في عام 1973 واثر حرب تشرين الأول أوقفت الدول العربية تصدير النفط الأمر الذي أدّى في غضون أيام قليلة إلى ارتفاع ثمن برميل النفط من 3 دولارات إلى 13 دولاراً. هذه الدولارات العشرة أربكت العالم ونقلت دول البترودولار العربية من حالة إلى حالة، اذ ترافق صعود أسعار البترول مع تعاظم مداخيلها وبالتالي تعاظم دورها السياسي والاقتصادي، وبدأت تأخذ مكانة تنافس بها قلب العالم العربي القديم المتمثل في سورية والعراق ومصر، وفي بعض الأحيان استطاعت أن تملي على بعض من هذه الدول مواقف وتمارس نفوذها المستمدّ من مساعداتها المالية السخية والمشروطة بالطبع. بحساب بسيط استطاع منتجو النفط رفع أسعار برميل نفطهم بنسبة 400% (من 3 دولارات إلى 13 دولاراً) خلال أيام عام 1973، لكنهم احتاجوا بعد ذلك إلى قرابة النصف قرن ليصل سعر البرميل إلى حدود 70 دولاراً، ولكن تداعيات الجائحتين أعادته إلى ما دون الصفر، فالآبار من الصعب إغلاقها، ومخازن النفط امتلأت ولم تعد تستوعب المزيد، وإمكانيه إتلاف فائض البترول تختلف عن إتلاف المحاصيل الزراعية التي قد تتحوّل إلى أعلاف أو أسمدة أما مادة النفط فهي مدمّرة للبيئة… إنه عالم مجنون، عالم يسير بلا قوانين ضابطة، وما كان مهماً بالأمس أصبح اليوم عديم الأهمية، وما كان يستدعي حشد الجيوش والأساطيل والجنود من أجله في أيام ماضية أصبح القتال من أجل الخلاص منه والابتعاد عنه هو العمل.

حتى قبل أيام قليلة افترضت الولايات المتحدة الأميركية أنّ ما يهمّها في بلادنا هو مناطق شرق الفرات، حيث ثروات بترولية ضخمة، وكانت الولايات المتحدة تدعم حلفاءها وصنائعها وعملاءها هناك بشكل سخيّ وبما يجعلهم قادرين على مناجزة الدولتين السورية والعراقية، فما هي قيمة شرق الفرات اليوم؟ وهل لا زال لأولئك الصنائع أو الحلفاء أهمية طالما أنّ البترول لم يعد يساوي شيئاً لا بل تحوّل إلى عبء على مالكه وعلى منتجه والمستثمر في مجاله، دولاً كانت أم شركات نفطية وشركات زيت صخري؟

داعش والنصرة والأكراد ومن لفّ لفّهم من جماعات تكفيرية وإرهابية أو انفصالية والتي تلقت دعماً سياسياً واسعاً، بعضها أتاها الدعم من دول البترودولار وبعضها من تركيا ودولة بترودولارية إضافة للولايات المتحدة وشريكتها الإقليمية (إسرائيل)، لكن هؤلاء لم يعودوا في السنوات الأخيرة يحتاجون إلى الدعم المالي، وذلك بعد أن سيطروا على آبار النفط وسرقوا إنتاجها ووجدوا أسواقاً لبيعه، فهل تستطيع تلك الجماعات الاستمرار في حربها، وليس للنفط من يشتريه؟

حرب اليمن، وهي جزء من حروب السعودية على إيران وعلى ما يعتبرونه التمدّد الإيراني، هذه الحرب التي طحنت رحاها ما يزيد على نصف تريليون دولار ذهبت عبثاًً ولم تحقق سوى الهزائم والخيبات. فهل من الممكن للسعودية أن تستمرّ في تمويل حربها هذه، السعودية التي رفعت سقف إنتاجها وخفّضت الأسعار في الأسابيع الماضية بهدف ضرب اقتصاديات إيران وفنزويلا وروسيا، حق عليها القول: من حفر حفرة لأخيه وقع فيها، خاصة أنّ أزمة الوباء قد أوقفت السياحة الدينية من حجّ وعمرة والتي كانت مصدر الدخل الثاني للخزينة السعودية بعد النفط، ولا تزال إمكانيات استنهاض سعر برميل النفط في عالم الغيب وغير منظورة في القريب. فالشتاء قد ولى والصيف قد أقبل الأمر الذي يضعف الطلب، ومصانع كثيرة عبر العالم توقفت عن الإنتاج أو أنها تعمل بشكل جزئي، ووسائط النقل الجوية والبحرية والأرضية لا تكاد تبارح مطاراتها وموانئها ومواقفها.

في رام الله اعتقدت حكومة د. اشتية أنّ اتصالاتها بالأوروبيّين والعرب وبنك التمويل الإسلامي وسواهم من المانحين ستؤتي ثمارها، ولكن بعد هذا الانهيار في الاقتصاديات العالمية فلا يظنّن احد بأنّ دعماً سيأتي. فالداعمون قد أصبحوا يحتاجون إلى من يدعمهم وفاقد الشيء لا يعطيه، ولن يكون أمام الفلسطيني والأردني واللبناني سوى الصدق والصبر وربط الأحزمة إلى أقصى قدر ممكن، وربما انتظار جائحة ثالثة شبيهة بالتي أعقبت تهجير الكويت 1990-1991، وذلك بعودة أعداد ضخمة من المغتربين في الخليج من فلسطينيين وأردنيين ولبنانيين إلى بلادهم.

في تل أبيب أعلن مساء الاثنين عن التوافق بين «الليكود» و«أبيض – أزرق» على تشكيل حكومة واسعة، ويذهب البعض للقول إنّ ما دفع لهذا الاتفاق هو الجائحة الاقتصادية، والتي تصيب دولة الاحتلال الثرية وذات الاقتصاد القوي، والتي يمثل الغاز جزءاً من مداخيلها الراهنة والمستقبلية. مطلوب من الحكومة هناك تخفيف الأضرار وإدارة الأزمة والاستفادة من حالة الانشغال الدولي والمحلي بضمّ الأغوار وأراضي المستوطنات وشمال البحر الميت وبرية الخليل في تموز المقبل.

في الموروث الديني حديث نبوي يقول: من بات آمناً في سربه، معافى في بدنه، مالكاً قوت يومه، فكأنما ملك الدنيا وما فيها. ماذا يملك الإنسان الذي تفتك الكورونا في بدنه، ويحول الانهيار الاقتصادي بينه وبين قوت يومه، وتهدّد التداعيات الاجتماعية والأمنية التي ستلي ما تقدّم بأمنه…. لقد فقد العالم عقله…


*سياسي فلسطيني مقيم في جنين ـ فلسطين المحتلة.

روسيا العُظمى ونهاية البترودولار؟

زياد حافظ

بينما يتخبّط الرئيس الأميركي دونالد ترامب لإعادة العظمة للولايات المتحدة تنفيذاً لشعاره الانتخابي استطاعت روسيا أن تثبّت أنها دولة عُظمى بامتياز. وهي ليست الوحيدة في العالم، فالصين شريكتها في ذلك، لكن أصبح من المشكوك في أمره أنّ الولايات المتحدة قد تبقى دولة عُظمى هذا إذا ما بقيت كدولة متحدة! فما أصاب الاتحاد السوفياتي قد يصيبها بشكل أسواء لأنها دولة تاريخها لا يمتدّ إلى أكثر من ثلاثة قرون بينما روسيا تاريخها أعرق منها على الأقلّ ببضعة قرون. كما أنّ التناقضات الداخلية السياسية والاقتصادية جعلت الولايات المتحدة أكثر هشاشة مما يعتقد معظم المراقبين فهي أصبحت في مرحلة التراجع. وقد شرحنا سابقاً لماذا الولايات المتحدة مهدّدة ليس بالأفول فقط بل بالزوال، على الأقلّ زوال شكلها الحالي. هدفنا في هذه المطالعة إبراز الدور المتصاعد لروسيا الذي يؤثّر بشكل مباشر في قلب موازين القوّة لصالح محور تقوده كل من روسيا والصين ومعهما الجمهورية الإسلامية في إيران ومحور المقاومة بشكل عام. يُضاف إلى ذلك المحور دول أميركا اللاتينية التي تصارع الهيمنة والبلطجة الأميركية ككوبا وفنزويلا ونيكارغوا في المرحلة الحالية وإلى حد ما المكسيك، وربما في المستقبل القريب كل من الأرجنتين والبرازيل وبوليفيا.

العزلة المتزايدة الأميركية يقابلها حضور دبلوماسي وسياسي روسي نافذ وحاسم في معظم الملفّات الساخنة. وأهمية هذا الحضور أنه جاء بعد تفكيك الاتحاد السوفياتي وبعد غزوة الاوليغارشية الروسية على مرافق الاقتصاد الروسي في حقبة بوريس يلتسين وبتشجيع أميركي واضح. غير أن روسيا استطاعت بقيادة فلاديمير بوتين استعادة مكانتها السياسية في العالم في فترة قصيرة نسبياً ما يدلّ على ضخامة الجهود التي بُذلت من قبل القيادة الروسية الجديدة بعد حقبة بوريس يلتسين. ففي آسيا، هي الشريكة الأولى للصين وصاحبة مشروع متكامل مع المشروع الصيني المعروف بالحزام والطريق الواحد. والمشروع الروسي هو مشروع الكتلة الاوراسية التي تمتد شرقاً من بحر الصين إلى الغرب في بحر المتوسط، كما أنها قد تصل إلى المحيط الأطلسي الشمالي والجنوبي فيما استطاعت التفاهم مع الاتحاد الأوروبي وإذا ما استطاعت التفاهم مع دول المغرب العربي الكبير.

أما على الصعيد العسكري فلم يخش الرئيس الروسي في خطاب موجّه للأمة في شهر آذار/مارس 2018 الكشف عن التطوّر النوعي الفائق في الإنتاج العسكري والكاسر للتوازن وذلك عبر عرض السلاح الجوّي الجديد من طائرات وصواريخ فائقة السرعة والتخفّي وعن أسلحة أخرى حيث تحتاج الولايات المتحدة على الأقل عشر سنوات للوصول إلى المستوى نفسه. وإذا ما اخذنا بعين الاعتبار تعليقات الخبراء في السلاح الروسي فإن الاسطول البحري الأميركي أصبح بمثابة خردة عائمة في البحار، حيث لا تستطيع وسائل الدفاع الأميركية رصد وردع الصواريخ الفائقة السرعة والمتخفية. المهم هنا أن السلاح الروسي الجديد المتفوّق نوعياً وقليل الكلفة في آن واحد يشكل مصدراً تنافسياً جاداً للولايات المتحدة في التسويق التسليحي ويدعم الدبلوماسية الروسية في الملفّات كما شهدنا في معالجتها للمعضلة التركية في المسرح السوري.

في الأيام الأخيرة أقدمت روسيا على قلب الطاولة على كل من الولايات المتحدة وبلاد الحرمين في موضوع النفط. وقرار روسيا بعدم الالتزام بقرارات منظّمة الاوبيك ورفض الابتزاز من قبل حكومة الرياض حول تثبيت استقرار سعر برميل النفط عبر تخفيض الإنتاج له دلالات في ظرف اقتصادي عالمي صعب وفي ظرف اضطراب كبير في الجزيرة العربية، خاصة في أعقاب الحرب الكونية على سورية التي تخرج سورية منها منتصرة وفي أعقاب العدوان العبثي التي تقوده بلاد الحرمين على اليمن حيث تخرج منها مهزومة ومجروحة وصاغرة وفي ظل صراع داخلي على العرش.

لم يأت القرار الروسي من الفراغ. فالقيادة الروسية مقتنعة أن الولايات المتحدة ليست في مزاج الوصول إلى تسوية أو حتى تفاهم على الملفّات الكبرى وأن حزب الحرب المسيطر في الولايات المتحدة يريد المواجهة وربما الحرب المفتوحة وإن لم تكن الجهوزية لها متوفرة. قرار روسيا جاء لتسديد ضربة موجعة جدّا للغرب بشكل عام وللولايات المتحدة بشكل خاص بعد أن عرقلت الأخيرة المشروع الغازي الروسي نورستريم 2 الذي هدفه تزويد أوروبا الغربية بالغاز. وكعب أخيل الأميركي هو قطاع النفط والأسواق المالية المثقلة بالديون. فعبر استهداف قطاع النفط الصخري الأميركي الذي له الدور الأكبر في زيادة الإنتاج النفطي الأميركي تقول روسيا لأميركا إنك في موقع ضعف ولا تستطيعين تحمّل نتائج استمرارك في محاربتنا. التدهور في أسعار النفط جاء في أعقاب التراجع الكبير في البورصات الأميركية المثقلة بالديون والعالميّة بسبب تداعيات فيروس الكورونا الذي ضرب الصين وأدّى إلى تباطؤ نموّها هذه السنة. وتبعات التباطؤ الصيني انعكست في تباطؤ اقتصادات العالم بسبب التأثير الكبير للاقتصاد الصيني على العالم واتّكال العالم على شبكات العرض الصناعيّة التي تملكها الصين والتي يحتاجها العالم وفي مقدّمته الولايات المتحدة. فالضعف في الأسواق المالية بسبب الكورونا كشف الضعف البنيويّ فيها بسبب الديون التي تفوق طاقة التسديد والاتّكالية في الإنتاج على دول خارج الغرب بشكل عام وخاصة الولايات المتحدة. فلا تستطيع الأسواق المالية أن تستمّر في النمو بعيدة عن نمو الاقتصاد الفعلي كما لا تستطيع الأسواق الاستمرار في معدلات النمو أضعاف المعدلات في الاقتصاد الفعلي.

تحاول الولايات المتحدة المكابرة والتنكّر للضربة الموجعة الموجّهة لها. فالرئيس الأميركي أمر إدارته بشراء كمّيات كبيرة من النفط من الشركات الأميركية المتضرّرة من الانهيار في أسعار برميل النفط وذلك لتغذية الاحتياط الاستراتيجي للنفط. كما أمر أن يكون سعر الشراء «جيّدا» دون أن يحدّد ما هو «جيد». هذا حلّ موقت وفي أحسن الأحوال يستنزف الخزينة الأميركية لأن الموضوع هو في مئات مليارات الدولار. فإذا أحد أصدقاء الرئيس الأميركي من رجال النفط خسر في يوم واحد فقط ما يقارب مليارين من الدولارات، فيمكن أن يتصوّر المرء مدى الخسارة لمجمل القطاع النفطي الأميركي وخاصة عند الشركات النفط الكبرى كشركة اكسون وكالتكس وسونوكو على سبيل المثال.

في هذه المواجهة الجديدة التي فرضتها روسيا على الولايات المتحدة احتمالات الانتصار الروسي أكثر من احتمالات الصمود الأميركي أو نظام بلاد الحرمين. أولا، فإن كلفة الإنتاج لبرميل النفط الروسي منخفضة وتنافس كلفة الإنتاج في الخليج وبلاد الحرمين بينما الكلفة مرتفعة جدّا للنفط الصخري في الولايات المتحدة. فمعظم الدراسات والتقارير تفيد أن تغطية تلك الكلفة في الولايات المتحدة تستدعي سعراً لبرميل النفط بحدود الثمانين دولاراً بينما السعر المتداول هذه الأيام هو بحدود 45 دولاراً مع احتمالات جدّية للهبوط حتى منتصف العشرينيات. هذا ما ضرب مصداقية والجدوى الاقتصادية لذلك الاقتصاد النفطي الذي تمّ تمويله بالديون ولكن على قاعدة معلومات ملفّقة وغير دقيقة. فإضافة إلى كلفة إنتاج تفوق الأسعار في السوق هناك دفق مالي سلبي (negative cashflow) حيث الواردات أقل من الكلفة. كما أن الطاقة المستثمرة لاستخراج النفط الصخري أكبر من الطاقة المستخرجة ناهيك عن التهديد الواضح والصريح للبيئة.

ثانياً، ليست للشركات الروسية المنتجة للنفط ديون خارجية وبالدولار بينما الشركات الأميركية التي تستخرج النفط الصخري مثقلة بالديون. ثالثاً، تبيع روسيا معظم نفطها بالروبل وبالعملات الوطنية للدول التي تشتري نفطها وبالتالي هي خارج الابتزاز الأميركي في ما يتعلّق بالدولار. والتسهيلات للدفع بالعملات الوطنية تساعد على تسويق النفط الروسي. رابعاً، برهنت روسيا أن التقلّبات في سعر صرف الروبل لن يؤثّر في موازنتها العامة، حيث استطاعت التكيّف مع التقلّبات. وبما أن الديون شبه معدومة عند الروس فالقدرة على قولا «لا» تصبح كبيرة بينما الحالة مختلفة جدّا عند منافسيها العرب والأميركيين. فحرّية التحرّك الروسي تُوظّف لمصلحة الاستراتيجية الروسية المتوسطة والطويلة المدى.

خامسا، استهداف القطاع النفطي الأميركي لم يكن ليحصل لولا الانكشاف القائم في الأسواق المالية. فقوّة الولايات المتحدة كانت في السيطرة على شرايين المال وشبكات التمويل والأسواق المالية بشكل عام. وبما أن تلك الأسواق شهدت انخفاضات حادة بسبب انتشار وباء الكورونا وكشف عدم جهوزية الولايات المتحدة والدول الأوروبية على مواجهة ذلك الوباء فباتت المنظومة المالية القائمة على سياسات نيوليبرالية مهدّدة. انخفاض سعر برميل النفط ينعكس على أسعار شركات النفط الكبيرة في الولايات المتحدة ما يجعلها تتحرّك للضغط على الإدارة الأميركية لتغيير سياستها باتجاه يرضي في آخر المطاف الحاجات الروسية. حتى الساعة لم ترضخ الإدارة لتلك المستجدّات وما زالت تعتقد أن بمقدورها تجاوز الأزمة. فقرار الرئيس الأميركي بشراء كمّيات كبيرة من النفط من الشركات الأميركية لتغذية الاحتياط الاستراتيجي قد يكون بمثابة حبّة بنادول بينما المطلوب جراحة عميقة في الجسم المالي.

ويتساءل البعض لماذا أدّى تفشّي وباء فيروس الكورونا إلى انخفاض حادّ في الأسواق المالية خاصة أن الإعلام الغربي بشكل عام والأميركي بشكل خاص ركّز على أن مصدره هو الصين بغض النظر عن الملابسات حوله والتي كشفتها الحكومة الصينية في تحميل المسؤولية إلى الولايات المتحدة. فتفشّي الوباء أدّى إلى شلّ الحركة الصناعية في الصين التي أصبحت المورد الأول في العالم للمواد الصناعية. فأي انخفاض في الإنتاج الصيني يعني تباطؤا في الحركة الاقتصادية في العالم. والأسواق المالية تعكس إلى حد كبير التوقّعات الاقتصادية ليس إلاّ لغرض المراهنة على المستقبل في المضاربات التي تشّكل العمود الفقري لعملها. فالاقتصاد والاقتراض المنفصم عن الاقتصاد الفعلي لا يستطيع أن يذهب بعيداً ومنفرداً عن الاقتصاد الفعلي وبالتالي تحوّل المناخ التفاؤلي في الأسواق المالية إلى مزاج تشاؤمي كبير ساهم في تعميقه سوء الإدارة الأميركية والشركات الكبرى في تقدير الموقف عبر الاستهتار والإنكار لخطورة تفشّي وباء الكورونا.

أخر الأخبار تفيد أن الإجراءات للاحتياط الاتحادي الذي يعمل بمثابة المصرف المركزي في تخفيض الفائدة إلى الصفر وضخ ما يوازي 700 مليار دولار لم تؤدّ إلى عودة التفاؤل إلى الأسواق المالية التي ما زالت تعاني من تقلّبات ضخمة وفي اتجاه انخفاض كبير. فعلى ما يبدو لم يرتَح السوق إلى الإجراءات المتخذة على صعيد مكافحة وباء فيروس الكورونا وتصحيح الاتجاه في الأسواق المالية.

لذلك الأزمة في الأسواق المالية مرشّحة للاستمرار بل حتى إلى التفاقم. هذا يعني ليس أفول حقبة البترودولار بل ربما سقوط النظام المالي الدولي. هذا ما تسعى إليه كل من روسيا والصين، حيث هيمنة الدولار لم تعد مبرّرة وحتى مقبولة. فالصفقات الكبيرة في النفط بين روسيا والصين والتعامل في عدد متزايد بالعملات الوطنية ينذر بأفول دور الدولار في العالم. كم لا نستبعد إعادة النظر في تسعير السلع الأساسية بالدولار. فالقهوة والقمح مثلا إضافة إلى البترول والغاز مسعّرة بالدولار. وهذا قد يتغيّر ما يعني أن الطلب على الدولار سينخفض بشكل ملموس ويعني نهاية نظام البترودولار. فهل يمكن أن نقول إن روسيا قامت بحركة في الشطرنج الدولي أدّى إلى كشّ ملك ثم إلى ملك مات؟ هذا ما ستكشفه الأسابيع المقبلة!

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*كاتب اقتصادي سياسي والأمين العام السابق للمؤتمر القومي العربي.

Trump’s Gamble in Iraq Backfires: Assassination of Soleimani has Huge Cost for America

Funeral of Iran top General Qasem Soleimani. (Photo: via AJE)

January 24, 2020

By Iqbal Jassat

Despite conflicting official statements by the Trump administration about the reason behind its decision to target Iran’s most celebrated military official, the U.S. is adamant that its assassination of Qasem Soleimani and refusal to leave Iraq is about “protecting Americans”. 

From versions advanced publicly by former CIA chief Pompeo now serving as Trump’s trigger-happy defense secretary, during his TV-road show, the world was told that Qasem Soleimani was killed because he posed an “imminent” threat. 

This “official” narrative was spun to convince Trump’s domestic audience that though the Democrats had ganged up against him, he remained concerned about America’s safety and thus eliminated “bad” persons. 

The targeted assassination of Qasem Soleimani and a senior Iraqi military leader Abu Mahdi al-Mohandis, has raised serious questions about Trump’s real motivation. Notwithstanding the so-called justification being a vague, unproven claim of “imminent” threat of violence against Americans, Trump himself shot it down by saying that it “doesn’t really matter” whether Soleimani and al-Mohandis posed an imminent threat. 

In other words, as Commander-in-chief of America, I, Donald Trump can authorize the killing of anyone, regardless of whether the person singled out for extra-judicial execution is a serving official of any country, and it matters not whether the person poses an imminent threat. 

Strangely, the facts advanced by Iraq’s parliament particularly by Prime Minister Adel Abdul-Mahdi regarding the reason for Qasem Soleimani’s visit to Baghdad on the fateful day he was assassinated, have either been downplayed or ignored. 

In addition, the Iraqi parliamentary session reveals how the emergence of China and development of strong ties to Baghdad may be shaping America’s new Mideast strategy.

Clearly one cannot ignore what has been described as one of the most overlooked yet relevant drivers behind Trump’s current policy with respect to Iraq: preventing China from expanding its foothold in the Middle East. 

Indeed, some commentators have argued that the timing of Soleimani’s assassination was directly related to his diplomatic role in Iraq and his push to help Iraq secure its oil independence.

Prime Minister Abdul-Mahdi’s insistence that America’s pressure on the Iraqi government arises from China’s growing ties especially in the oil sector, hasn’t received adequate media attention. While this may be due to much of the U.S. pressure being exerted on the caretaker government covertly and behind closed doors. 

Now that the Iraqi Prime Minister has lifted the lid on Trump’s bullying tactics, mainstream media has no reason to shy away from it. The evidence strongly suggests that America under Trump cannot countenance China’s presence nor Iran’s substantial influence in Iraq. 

The flip side is that both China and Iran are eager to free Iraq by ridding it of U.S. troops. Both have different means to do so which has the potential to saddle Trump with the prospect of exiting his army in ignominy. 

The Trump administration is thus faced with a huge dilemma: how to depart gracefully yet retain a presence? 

It knows that parliamentary approval to remove American forces along with all foreign troops means the end of the road. Challenging it as Pompeo is doing, is unsustainable and to defy Iraq is in effect defying international conventions. 

The martyrdom of Qasem Soleimani, Abu Mahdi al-Mohandis and a number of their colleagues on Iraqi soil, is the straw that proverbially broke the camel’s back. 

Far from attaining any of Trump’s stated objectives, the targeted killings have had results entirely unfavorable to his goals. 

Iran is firmly united behind its revolutionary leadership, while Trump is facing an impeachment trial in a country deeply divided. The notion of a superpower is in tatters while Iran’s regional status has grown immensely. 

China’s entry will have further ramifications for America. This as one commentator explained: “China has the means and the ability to dramatically undermine not only the U.S.’ control over Iraq’s oil sector but the entire petrodollar system on which the U.S.’ status as both a financial and military superpower directly depends”. 

– Iqbal Jassat is an Executive Member of the South Africa-based Media Review Network. He contributed this article to The Palestine Chronicle. Visit: www.mediareviewnet.com

The US is at war with Iraq, Libya, Syria, Iran, Russia, All to protect the Petrodollar

Source

The US dollar currently makes up 2/3rds of the worlds global reserve currency. This is because nearly every oil-exporting country in the world exclusively sells their oil in US dollars (the Petrodollar), so nations are forced to hoard large amounts of US dollars, allowing the US to print it almost to infinity without hyper-inflating their currency.

The US government has been doing everything it can to protect their petrodollar status around the globe. How did this all come about?

The Saudi Connection

In 1974, OPEC nations halted the sale of oil to the United States due to its support for Israel in the Yom Kippur War. This resulted in quadrupling oil prices, almost overnight. Inflation sky rocketed and the stock market crashed causing the US economy to nosedive.

US president Richard Nixon ended up fixing this dilemma by setting up an agreement with Saudi Arabia. The US would buy oil from Saudi Arabia, protect them militarily and even sell them military aid and equipment, helping the military industrial complex in the US. In return, the Saudis would buy billions of dollars worth of US Treasuries to help finance America’s spending habits.

History dictates how the US government and their ally’s have been protecting the wests financial dominance through this petrodollar ever since.

Iraq and the Euro

In 2001, Iraq switched from the petrodollar and began selling their oil in Euro’s. Soon after, sanctions were placed on them followed by an invasion with massive destruction to their infrastructure. The Bush administration galvanized support for the invasion with lies about supposed WMD’s that Saddam was going to use on either his own people or Israel.

This came a little more than a decade after the US assisted Saddam with chemical weapons and sophisticated military equipment as well as strategic supports so he could fight Iran.

Libya and the Golden Dinar

In 1996 and 2000 the leader of the oil rich Libya, Muhammar Gaddafi, had initially indicated the idea of a gold backed African currency. He found there to be many African and Muslim nations interested in the idea.

He began amassing large amounts of gold and silver, to the tune of 144 tons of gold and a similar amount of silver. That is half of what the UK possesses in gold, but Libya has 1/10th the population of the UK, so it was quite substantial.

In 2009, Muhammar Gaddafi was the president of the African Union. He proposed the African states shift to a new Golden Dinar that was actually made from physical gold. Many of these interested nations were using the French franc (CFA) circulating as a prime African currency.

A leaked Hillary Clinton email showed this to be a serious issue for the french and how they were worried it would do a tremendous amount of harm to their economy. The US also felt threatened to loose the petrodollar in this oil rich region.

The prospect of sovereign control by a growing number of African and Muslim oil states would have been disastrous for Wall Street and London bankers.

It would have meant huge liquidity in the trillions of dollars they no longer controlled as well as potential hyper inflation for the US dollar who had just quintupled their money supply to pay for 2 major invasions (Iraq and Afghanistan) and to offset their losses from the 2008 recession

The Zionist-Anglo-Saxon caliphate vs the BRICS

by Peter Koenig

Ever since the BRICS (Brazil, Russia, India, China and South Africa) expressed their unison through the formation of a joint Development Bank – Durban, South Africa on 27 March 2013 – the Zionist-Anglo-Saxon caliphate attempted to divide them. The BRICS constitute some 45% of the world population and close to 30% of global GDP. The BRICS idea is to issue a joint alternative currency, fully detached from the US dollar and its greed economy.

In the meantime a number of other countries would like to join the BRICS, including Argentina, Venezuela, Iran, Mongolia, Malaysia and others, which would result in about one third of the world’s economic output and half of the global inhabitants.

This gives the BRICS a profile of strength surpassing that of the United States and Europe together. China alone is not only already the world’s largest economy, China is also dominating the Asian market of some 4.2 billion people, 60% of the world populations and a combined GDP of about US$ 20 trillion, equivalent to about US$ 25 trillion, when comparing purchasing power with the dollar based US economy of about US$ 17 trillion. Asia registered an average growth rate of almost 8% over the past few years, compared to that of the western world, hovering around 1%.

There is no need for the BRICS to fear US interference – divide to rein – if they are able to solidify their union with solidarity – political and monetary solidarity, as well as common trade policies – and if they have the political will to decouple their economies from the dollar – which is key for the BRICS success.

Sir Obama – here also called the western caliphate – has multiple self-assumed capacities. He creates new caliphates at his service, like the ISIS, the Islamic State of Iraq and the Levant (Syria); then he bombs them making the world believe they are enemies, condones their beheading of western journalists and clandestinely funds their Middle East crusade for energy and world dominance, a crusade the ISIS are carrying out for the supreme caliphate in the White House.

Washington’s caliphate also has a small army of ‘martyr nations’ fighting (and suffering) for him, like the 28 members of the European Union, led (sic) by a like-minded group of Washington-submissive neoliberal Zionist- Christian puppets. They do what Washington says. Most of them are also pro-forma members of the White House caliphate-driven worldwide war machine, called NATO, and ape the war cries of (the) Fogh (of war) Rasmussen, who is Obama’s master puppet in Europe.

Of course, the caliphate is always ready with sanctions for those who don’t behave, especially sanctions which backfire on others. The latest sanctions on Russia follow a series of billion dollar propaganda of lies and outright falsehoods, demonizing Vladimir Putin and Russia. Interestingly the ‘sanctions’ imposed on Russia by Washington’s supreme warrior – and submissively carried out by his European minions, have been retaliated by Russia by blocking most of agro-trading with Europe, leaving European farmers with rotting vegetables and fruit – billion dollar losses, estimated at a multiple of the ‘sanctions’ costs to Russia.

Neoliberals are short-sighted. They are overwhelmed by greed, instant gratification, and a dream of Full Spectrum Dominance, meaning controlling the world’s resources, money and people. But their caliphate empire is doomed, since lies and deceptions work some of the time with some of the people, but not all the time with all of the people. In fact, the tide is shifting – which is the silver lining of the dark cloud shed by the monstrous, murderous western war machine. The larger of the European minions, Germany and France, and some of the newer ones, Poland, Hungary the Czech Republic, to name but a few, become doubting and hesitating on the way of sanctions. They start feeling the hurt.

The Zionist Anglo-Saxon caliphate needs conflicts and wars in order to survive. Its economy is based on producing weapons and on destruction. World peace would make it collapse.

To attain their objective, the western caliphate is using a thousands-of-year-old wisdom – dividing to rein. By a multi-billion dollar driven worldwide propaganda and lie campaign, Obama and his European bootlickers first confuse the people of nations and continents, distort their common sense, then they drive a wedge between them, between allies, neighbors, common cultures, families – turning friends into foes.

Remember, the dollar is fiat money, not worth the paper it’s printed on. It is produced at will and is called Quantitative Easing (QE), a conveniently confusing euphemism for creating debt held as monetary reserves by nations’ treasuries around the globe.

The same happens with funding of the eternal war machine. Printing money at will has become a pastime justifying wars, mass killings for conquering the world’s resources and people. It will last as long as the rest of the world permits it. It’s already a fading phenomenon. Ten to fifteen years ago close to 90% of the world’s reserves were denominated in US dollars. Today that figure has shrunk to about 60%.

Dividing to rein is precisely what the western caliphate intends to do with the BRICS. Starting with Brazil, Washington attempts through an ugly smear campaign to slander Brazil’s leader, Dilma Rousseff and to defame Brazil’s economy. The former is accused of corruption and nepotism and Brazil’s economy is admonished for runaway private debt that supposedly stands at 80% of GDP. However, the smear-campaigners do not explain that thanks to the increase in private debt Brazil’s GDP has grown by 30% in the last decade. They don’t explain either that Brazil’s foreign debt to GDP ratio stands at less than 57%, compared with that of the US of almost 101.5% and of Germany’s, 82%.

In short, Brazil is doing well. But the presstitute media propaganda masters have managed to lower President Rousseff’s popularity to the point where her re-election in the forthcoming ballot is questionable. Precisely what the Washington caliphate wants.

Imagine an economy-based real contest between the western caliphate and the BRICS. With a GDP of about 30% of the world’s economic output, covering almost 50% of the globe’s population, the BRICS have an average debt to GDP ratio of less than 45 % (2014 estimates) – Brazil (56.8%), Russia (13.4%) India (67.7%), China (22.4%), South Africa (46.1%) – compared to that of the US (101.5%) and of the Eurozone (92.6%).

It is clear that the BRICS have nothing to fear from the western caliphate – and its possible slew of sanctions. However – and this is key – the western Zionist-Anglo-Saxon empire controls the current western monetary system. The FED, Wall Street, the European Central Bank (ECB) and the IMF, an extension of the US Treasury and the FED, as well as the Bank for International Settlements (BIS), the central bank of central banks, the privately owned chief manipulator of gold and currencies – hold the western economies hostage. They finance the US /NATO war machine. The western Zionist-Anglo-Saxon controlled financial system has the same objective of Full Spectrum Dominance, as does the supreme caliphate and assassin-in-chief, Obama, who currently serves the western arms manufacturing and banking oligarchy.

It is therefore high time that the BRICS proceed to reality with their intended alternative currency, completely detached from the dollar and the Wall Street clearing system. The economic viability of such an alternative system stands about 2 to 3 times higher than that of the UD dollar.

An interim measure to stop the western bulldozer may be necessary. Russia and China and a number of other countries have already agreed to trade in their respective currencies and, in particular, to trade hydrocarbons in non-dollar denominated moneys, a measure that will considerably lower demand for the dollar, hence, further lower the dollars viability as a reserve currency. Russia and China are poised to issue a common currency, a basket of currencies that may be joined by other countries willing to detach themselves from the fangs of the western abusive monetary caliphate.

On 3 and 4 September, NATO, the military arm of the western caliphate met in Wales, UK – to discuss its raison d’être. By NATO’s own admission, this was the most important meeting since the collapse of the Soviet Union, attended by 60 heads of state, including the 28 NATO members. As expected the focus of the meeting was to demonize Russia, a key member of the BRICS, with lies and slanders that know hardly any competition in the world of deception. The final briefing report is so full of nonsense and unproven accusations – similar to those continuously aped by Fogh Rasmussen – that Russia doesn’t even need to counter them. The NATO declarations drown in their own lies and deceptions.

It is clear, after 65 years of existence and chaotic disasters all over the world, NATO needs a new identity, a new Cold War, or, better even, a new direct war with Russia – for ‘the security’ of Europe. Therefore, the caliphate Obama, in hopefully one of his last unabashed moves, is requesting that Europe ups its ante – that the European members contribute at least 2% of their GDP to NATO – and let the military industrial complex move more weapons into the European NATO bases. In other words, making Europe more vulnerable to Russian defense attacks, putting the peoples of Europe once again in the firing line. The European leaders (sic) seem to be oblivious to such dangers.

However, there is hope. As said by Pepe Escobar, “The real deal this September is not NATO. It’s the SCO’s summit. Expect the proverbial tectonic shifts of geopolitical plaques in the upcoming meeting of the Shanghai Cooperation Organization – a shift as far-reaching as when the Ottoman Empire failed at the gates of Vienna in 1683. On the initiative of Russia and China, at the SCO summit, India, Pakistan, Iran and Mongolia will be invited to become permanent members.” http://www.informationclearinghouse.info/article39599.htm

The SCO summit could be the first step towards a new world order – not the notorious “One World Order” proclaimed by the empire of the Zionist-Anglo-Saxon caliphate – but a new direction of the world, away from an usurious, abusive financial and monetary system, away from Washington’s objective of Full Spectrum Dominance – towards a new world of sovereign states.

Peter Koenig is an economist and former World Bank staff. He worked extensively around the world in the fields of environment and water resources. He writes regularly for Global Research, ICH, the Voice of Russia, now Ria Novosti, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe.

Obama’s ISIS strategy ‘dead in the water’

President’s ‘coalition’ plan can’t match jihadi firepower

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WASHINGTON – If President Barack Obama is looking for help from a coalition of Sunni-majority countries to resist the Islamic State, or ISIS, the consensus among regional analysts and military experts is that it won’t work.

author-imageF. MICHAEL MALOOF

Obama has been pushing at the recent NATO summit for the formation of a coalition to resist ISIS, but Great Britain has been stressing such a force should not be Western led. U.S. Secretary of State John Kerry and other administration officials have, in turn, been reaching out to nations across the Middle East.

Many of the key Sunni countries, such as Qatar, Saudi Arabia, Turkey and the United Arab Emirates, however, not only channel money to ISIS, but also have militaries inferior, particularly in command and control and tactical maneuvering, to ISIS’ capabilities – and its fanaticism and ferocity on the battlefield.

ISIS was able to score early battlefield successes against an Iraqi army that initially scattered upon being attacked, abandoning much of its modern – and expensive – Western military equipment for ISIS’ use.

This development came after the United States over a decade had spent hundreds of billions of dollars to train and equip the Iraqi army, only to have it evaporate on ISIS’ initial assaults into the country last June.

This acquisition of powerful military hardware, along with its takeover of oil wells and the robbing of banks approaching a billion dollars, allowed the Sunni jihadist group to incorporate vast amounts of territory, military bases and other strategic infrastructure facilities, which the Iraqi army now finds difficult, if not impossible, to retrieve.

Military experts point out that ISIS already has begun to adapt to air power attacks from the United States and even Syria, which has attacked ISIS positions around Raqqa, a Syrian city the ISIS announced as capital of its caliphate under which all like-minded extremist Sunnis are expected to live under strict Shariah law – or be killed.

While western airpower attacks have in some ways blunted ISIS’ advances in recent weeks, particularly around critical strategic locations such as dams in Iraq, ISIS is modifying its approach away from large convoys of vehicles that expose its positions to artillery fire.

ISIS has begun to downsize its forces to company and sometimes battalion-level operations, giving it even more flexibility and small-unit tactical capabilities, with mounting battlefield success. In effect, ISIS is adapting more to an asymmetrical warfare approach of unconventional warfare, or rapid-reaction guerrilla fighting, where hit-and-run tactics have proven successful in the past against standing armies.

Such an approach is opposite of how Arab countries typically operate, with large standing armies more difficult to maneuver at the tactical level. Arab armies also have a history of a lack of coordination when working with other Arab armies, especially in a unified command and control structure.

Despite its purchase of tens of billions of dollars in western military hardware, Saudi Arabia especially has displayed such obstacles in its fight against al-Qaida in neighboring Yemen. Capabilities of coordinated command and control and the ability to move armies swiftly require near constant military exercises to become proficient. However, there is no evidence such military exercises among Arab countries has taken place.

Unlike Arab armies, the ISIS leadership has diffused decision-making responsibilities to an emir, or prince, level, since caliph leader Abu Bakr al-Baghdadi and his close military advisors cannot micromanage highly dispersed units across a vast area.

“The emirs of the Islamic State there are imbued with sufficient decision-making responsibility, which, when combined with often considerable experience in small unit, indirect fire and infiltration tactics, allows them to maximize the ability and flexibility of their motorized light infantry outfits,” reports an analysis of the open intelligence group Stratfor.

This approach then allows the emir to make rapid autonomous tactical and operational decisions to take advantage of quickly changing battlefield developments.

“Instead of charging into the opponent’s carefully laid out field of fire, the Islamic State leader can probe the enemy lines for weakness,” the Stratfor analysis said. “Facing stiff resistance or coming up against an ambush, the Islamic State emir can orchestrate a rapid retreat only to wheel back and flank the enemy.”

Experts acknowledge that the inhibitions of Arab armies to work well within or in coordination with other Arab armies are not only historical but cultural.

“There are many factors – economic, ideological, technical – but perhaps the most important has to do with culture and certain societal attributes which inhibit Arabs from producing an effective military force,” asserts retired U.S. Army Col. Norvell De Atkine.

Having trained with Arab armies for years, Atkine said military decisions are made and delivered from higher ups but with very little lateral communication. While he made these and other observations initially in a 1999 Middle East Quarterly article, military experts tell WND these criticisms remain relevant to today’s Arab armies.

“This leads to a highly centralized system, with authority hardly ever delegated,” Atkine said. “Rarely does an officer make a critical decision on his own. Instead, he prefers the safe course of being identified as industrious, intelligent, loyal and compliant.

“Bringing attention to oneself as an innovator or someone prone to make unilateral decisions is a recipe for trouble,” he said. “As in civilian life, conformism is the overwhelming societal norm, the norm that stands up gets hammed down. Orders and information flow from top to bottom. They are not to be reinterpreted, amended or modified in any way.”

“In every society information is a means of making a living or wielding power, but Arabs husband information and hold it especially tightly,” Atkine said. “U.S. trainers have often been surprised over the years by the fact that information provided to key personnel does not get much further than them.

“Having learned to perform some complicated procedure,” Atkine said, “an Arab technician knows that he is invaluable so long as he is the only one in a unit to have that knowledge. Once he dispenses it to others, he no longer is the only font of knowledge and his power dissipates.”

In a study of Arab military effectiveness, former Central Intelligence Agency analyst and Middle East expert Kenneth Pollack of Washington-based Brookings Institution said, “Certain patterns of behavior fostered by the dominant Arab culture were the most important factors contributing to the limited military effectiveness of Arab armies and air forces from 1945 to 1991.”

He attributed these limitations to over-centralization, discouraging initiative, lack of flexibility, manipulation of information and the discouragement of leadership at the junior officer level.

Atkine referred to a comment from General George Patton on preparation which he said is absent with Arab armies.

In referring to the Roman General and later Emperor Julius Caesar, Patton said, “In the winter time … [he] so trained his legions in all that became soldiers and so habituated them to the proper performance of their duties, that when in the spring he committed them to battle against the Gauls, it was not necessary to give them orders, for they knew what to do and how to do it.”

Based on assessments from these and other military experts, this cannot be said of present-day Arab armies, thereby raising serious question on Obama’s Arab coalition strategy toward ISIS and how it will be carried out.

F. Michael Maloof, senior staff writer for WND/ G2Bulletin, is a former security policy analyst in the Office of the Secretary of Defense. He can be contacted at mmaloof@wnd.com.

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