Michael Hudson: Podcast with Michael Hudson, Steve Keen, Steve Grumbine

July 17, 2022

Posted with Michael Hudson’s permission

Grambine, Macro and Cheese, July 9 2022. https://realprogressives.org/podcast_episode/episode-180-the-end-of-dollar-diplomacy-with-steve-keen-and-michael-hudson/.

https://realprogressives.org/macro-n-cheese-podcast/
For those who would like to hear the recorded conversation

Michael Hudson [intro/music]

A central tenet of the World Bank from the beginning is to convince countries not to grow their own food, but to create plantation agriculture to prevent family-owned farming of food, to grow plantation export crops and they become dependent on the United States for their grain.

[00:00:22.610] – Steve Keen [intro/music]

If you look at just the shipping involved in international trade, it’s something of the order of 20%, I think, of our carbon production comes out of the entire mechanics of shipping goods around the planet. And we realize we’ve massively overshot the capacity of the biosphere to support our industrial sedentary civilization. So, one way to reduce that is by reducing international trade.

[00:01:35.130] – Geoff Ginter [intro/music]

Now, let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.

[00:01:43.110] – Steve Grumbine

All right. And this is Steve with Macro N Cheese. Another great episode for everyone today. I have two guests, two very good friends, and very happy to have them join me today. Professor Steve Keen and Michael Hudson. You can’t get two better guys than this. And we’re going to have a very action packed conversation.

We’re going to be talking about central banking, the IMF, World Trade Organization, World Bank. And we’re going to be looking at how the US uses the monetary system to bring about its imperial powers that it exerts on the world. And we’re going to look at some of the things that are happening with Russia and Ukraine right now that ship the US control over the global commerce and the behaviors of non US countries.

They’re starting to think for themselves and make some decisions, and we’re watching the facade crack a little bit. Steve Keen, who is the author of the book Debunking Economics and more recently The New Economics: A Manifesto, is joining me, as well as Michael Hudson, who has just recently written the book The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism. So, without further ado, Michael and Steven, welcome to the show, sirs.

[00:03:04.530] – Michael Hudson

Good to be here.

[00:03:05.800] – Steve Keen

Thank you indeed.

[00:03:06.960] – Grumbine

So the reason why I brought us together, you guys are both phenomenal on your own, but together, I think that we can maybe tackle this. As an MMT advocate, I find myself friends with an awful lot of people, and you gentlemen have been doing this for a long time, and I know that you have some pushback within the MMT community.

In particular, this concept of “imports are a benefit and exports are a cost.” This is a core MMT staple. And some of the concerns that came out as a result of the Covid crisis showed us the resource based failures of a global supply chain and how some of the aspects of our financial system and the shipping of real resources from areas that had high Covid, how it impacted our abilities to take care of life on life’s terms.

It also became quite clear that the US hegemony over the world using dollar diplomacy is starting to show cracks in the foundation as well, as we watch Russia thumb its nose at US sanctions. So, getting into this, Steve Keen, I know that you have taken some issue with Warren Mosler’s prescription that imports are a benefit and exports are a cost.

Taking Warren’s position on this, I believe Warren is saying exports are real goods and services we’re sending out, whereas imports we’re handing pieces of paper to people. And this is a win for the importing nation. And we’ve seen the power of the US dollar and the ability to basically create colonial outposts, colonized communities living and dying off of US dollars. So there’s a power dynamic as well. What is your pushback with Warren’s import/export model?

[00:05:03.270] – Keen

There are quite a few elements to it. First of all, the idea that exports are a cost and imports are a benefit. One term that I’ve seen one Modern Monetary Theory advocate used to explain is to say, the opportunity cost is all theirs. In other words, they have therefore gone by sending a good to us like an automobile to the buyer in return for currency.

They’re doing without the opportunity of the vehicle. And when you take a good look at the manufacturing side of things, the reality for most firms is they have diminishing marginal cost and excess capacity. So the standard thing when you’re competing in a domestic market is you have spare capacity you’re not using, but you can’t get enough demand domestically.

Now, I know MMT can say that should be handled by the government using additional spending power and creating the spending power to absorb the excess capacity. But they don’t at the moment. So what tends to happen instead is that countries will use export-oriented industrialization to use their additional capacity more effectively, which is what’s led to the industrialization of China and in many ways the de-industrialization of America.

Personally, I don’t think the opportunity cost is the right way to think about international trade at all. It’s a neoclassical way of thinking. It assumes neoclassical conditions about production which are empirically false. I don’t think anything in MMT should be based on bad foundations and I think that is a bad foundation.

Then when you see the discussions about monetary sovereignty and saying that countries who don’t have to issue debt in the currency which is not their own currency, they have monetary sovereignty, those who have to issue debt in a currency which is not their own don’t have monetary sovereignty. One way you end up in not having monetary sovereignty is running large balance of trade deficits and not being the reserve currency of the planet.

So I think the advice that exports are a cost and imports are a benefit doesn’t make sense for countries which have been running a trade deficit, are importing more than they’re exporting, so they’re using their own pieces of paper fundamentally, initially, but if they keep on doing it, they’ve got to start using American pieces of paper, and then they’re in deep trouble. So I just think it’s a nice slogan, but I think it’s a bad idea.

[00:07:20.250] – Grumbine

So it makes sense to me given the nature of the pandemic. You and I spoke, I guess it was almost two years ago, about supply chains and pandemics, and we talked at length about how the iPhone is made in some 37 different countries – and countries that were isolated due to the pandemic. It also impacted production in general. Right now I’m in Information Technology, and I work with Cisco, and Cisco being the backbone of the entire Internet globally.

They have lead times even today of up to a year for some of the equipment, partially because of semiconductor shortages. But this is a piggyback to that in that there is the accounting identities of trading paper for goods and services, but then there is the actual functional output of that. And for countries like the United States, we do have Most Favored Nation status in the sense that we are the primary world reserve currency.

And I think part of that has to do with the fact that the price gas and gas purchases are done through US dollars as well. But overall, I think that we have to be aware that we’re not being a very good partner on the planet in general. A lot of the power plays the United States uses to be able to get those goods and services into the US Is done through warfare and sanctions, as we’ve seen all around the world. We use them to great harm in the global South.

However, we saw Russia here recently thumb their nose at us and say, the only thing we’re really lacking is high tech products, and we got China that can hook us up with that. All you’ve done is accelerated our departure from a dollar denominated world, which I guess brings us to you, Michael. Your book talks extensively about this. Can you help piggyback off of what Steve said regarding the supply chains and the impact of that import/export dynamic with what’s going on right now with Russia, China and Ukraine?

[00:09:34.590] – Hudson

Well, MMT has not spent much time talking about the balance of payments. It’s basically a theory of the domestic economy. The problem of the whole discussion that just took place is that trade is not the most important element of the balance of payments. For the United States, the trade balance has been just about in balance for almost 50 years, 70 years, actually.

What’s in balance is America’s military spending abroad. That’s the deficit that is pumping dollars into the world economy. But now to get back to Steve’s point, realizing that we’re dealing with trade, only a small portion of the balance of payments, Steve’s point is, let’s ignore all the other elements of the balance of payments – the debt service and the capital accounts and others.

If you import more than you export, and you have to actually pay cash for the imports and get cash for the export, then you have to borrow money. And once you borrow money, because most trade is denominated in dollars, this means you have to borrow US dollars. You don’t buy imports with your own currency. Now, MMT is all about how sovereign governments can create their own money and create their own currency, but they can’t print their foreign currency.

That’s the problem with having more imports than exports. And once you begin to borrow dollars, you have to pay interest on it. And all of a sudden, they’re running a deficit, it’s going to reduce your foreign exchange rates. Well, let’s look at what’s going to happen this summer as an example. We know that energy prices, oil prices are going way up.

And President Biden just says they’re going to be with us for a very long time because his major contributors are the oil companies, and he’s promised them that he’s going to enable them to make super profits to help raise the Dow Jones average. And the other element is food. Well, America is going to make a killing on oil exports because the United States controls the world oil trade.

The United States is also a major agricultural exporter, and it’ll make a killing because NATO has imposed sanctions on Russia, preventing Russia from exporting oil and food – it’s the largest grain exporter – into the economy. So you’re going to have South America, Africa, and the global South countries all of a sudden running big deficits.

Well, at the same time, there’s an enormous deficit of debt service that they owe to finance all of the trade deficits that they’ve been running ever since they followed neoliberal ideals to open their markets to depend on foreign food and basically US manufacturers. The Federal Reserve has just begun to raise interest rates. And the result of raising interest rates has been the dollar is going way up against the Latin American currencies, the African currencies, the South African rand, the Brazilian currency.

So you’re going to have the global South being in an absolute currency squeeze this summer. What are they going to do? Well, President Putin has said, well, we’re going to offer an alternative in the form of the BRICS bank. Well, it’s true that a bank can’t create foreign currency. The BRICS bank can enable countries to run a deficit in two ways.

Number one, the bank can be fueled by each member giving, say, a trillion dollars or some kind of proportional currency to the bank. So currency swap agreements, just like the United States has been negotiating for the last 50 years. You can all have a currency swap. Also, the BRICS bank can create its version of Special Drawing Rights – IMF SDRs – or what John Maynard Keynes proposed in 1944: “bancors.”

It can create paper gold of its own and distribute to countries. Well, the problem is, Putin said, we’re willing to sell your grain and oil and to take your currency in exchange, but we don’t want to save your balance of payments simply so that now you can afford to pay the debt service that you owe to US dollar bond holders, bank holders, and the IMF and the World Bank that got you into the mess you’re in to begin with.

So the problem is the stability of insulating your trade from the foreign exchange going up and down requires a split of the world into two different economic zones: US/NATO, the white people’s economic zones, and let’s call it the nonwhite economic zones. And remember, the Ukraine say that Russians are not white and racially different. Basically, the Nazi ideology is that any country that’s not neoliberal is not white.

So you’re going to have the world splitting, and we’re really talking about how to create a monetary system for the world splitting. I want to get back to one other thing Steve said about the opportunity cost. If imports are a great advantage to the United States, is it worth having American corporations move to low wage labor abroad, shifting the production abroad so that America is deindustrialized?

Has that been an advantage? Or let’s look at it from Russia’s point of view. Until this last spring, Russia was importing food, cheese, raw materials. And because of the sanctions, Russia has had to all of a sudden develop import substitution. It’s producing its own cheese. It produced its own agriculture that’s thriving.

And President Putin has said that Russia is going to spend more and more of its oil export receipts on funding import-replacing industry. Well, that sounds like a good idea, because we’re really talking about independence. And the balance of payments ultimately determines a constraint on domestic policy. I think that’s what Steve was talking about for opportunity costs.

You can’t just look at the flows on a balance sheet: “Well, we’re getting something for nothing.” If you import more than you export, you’re running up foreign debt, and you’re becoming more and more dependent on foreign countries who are acting in their own interests, not your own interests. So you have to put this whole discussion in the political context.

[00:16:15.210] – Grumbine

So I would see this as a national security issue in that with these essentials – Fadhel Kaboub talks about the spectrum of sovereignty: energy sovereignty, food sovereignty, technological sovereignty, the ability to live without external supports. And each country has varying levels of that. And so each country would have to be looked at differently just based on what they’re even capable of producing.

I guess my question to you, as we think about countries in the global South that have had the kiss of the IMF on them and the debt peonage that they have been laboring under. In Africa, Sankara’s speech talking about “I can either pay you or I can feed my people.” You can see the role that US interests through the IMF have had to import their goods and services into our country.

They don’t have a choice. They are basically colonial states that have the US thumbprint on them. So the United States has exerted this imperial power in this geopolitical nightmare. We are watching them break away from that today.

[00:17:34.050] – Hudson

But you’re leaving one of the real villains in the piece, and that’s the World Bank.

[00:17:38.290] – Grumbine

Oh, yes.

[00:17:39.020] – Hudson

A central element of the World Bank from the beginning is to convince countries not to grow their own food, but to create plantation agriculture, to prevent family-owned farming of food, to grow plantation export crops, and to become dependent on the United States for their grain. Well, if imports are a benefit and imports mean that the United States can put a sanction on you and starve your people like the United States tried to do in China in the 1950s, do you really want to become import dependent on food?

Let’s compare the World Bank to the Chinese Belt and Road and the BRICS bank that’s proposed. The World Bank would only make foreign exchange loans. That meant it would only make loans to countries who would invest in infrastructure that would help its exports. Well, imagine how this works for agriculture.

If you were going to develop your agriculture in the global South countries, you’d do pretty much what the United States did in the 1930s that had the most rapid increase in productivity of any industry in the last few centuries. And that was because the government took the lead in agricultural extension services, seed testing, educating farmers as to seed variety, setting up local farm management organizations.

Before the time that Cargill and Archer Daniels Midland became the great intermediaries in promotion of domestic self-sufficiency for farms, the World Bank wouldn’t make any loans at all for this, even though the World Bank local commissions and reports all said that this is what they need. The World Bank was almost always headed by someone very close to the US Military, starting with John J. McCloy at the beginning and going through McNamara and all of the subsequent Pentagon people who were put in charge of the World Bank.

And above all, they wanted to continue to base America’s export boom in agriculture and to make other countries food dependent. And that is one of the things that has led them into debt. So if you have a country like Chile that has the richest land in the world because it has the richest supply of guano deposits in the world. It also has the most unequal land distribution in Latin America – latifundia and microfundia – not any kind of balanced food production.

So that all of Chile’s exports and copper, by specializing, have been overwhelmed by the costs of importing food that it could have grown all by itself. So the idea of free trade is shaped by what will the international organizations controlled by the US give credit for, ends up to create underdevelopment and dependency instead of development. And that developmental aspect is a different story from MMT money creation. And we’re talking about something else that is part of a much bigger system.

[00:20:43.410] – Grumbine

Steve, based on what Michael just said, I know that you are concerned with the environment and bringing production back home. And around the world, people that are not hip to the US empire are trying to convince countries to look at building bonds between each other to create trade zones that mitigate some of the US power over dominating their countries.

We’ve got a very tiny window to solve climate crisis as well. So all these things are converging at one time trying to deleverage US interests from the world interests and watching as the nonwhite countries are banding together and the white countries are banding together. And it seems like the opportunity to save ourselves from extinction is passing before our very eyes.

In the vein of what he just said, how do we marry some of the ideas that we have, the climate crisis with the geopolitical crisis that we’re battling here?

[00:21:49.110] – Keen

Well, the large part of it is that the focus of neoclassical economics has always been on specialization and doing it with so-called comparative advantage. And what that gives you is an incredibly fragile system, as we’ve seen with Covid, because if you actually distribute production across the planet and you have a long supply chain, then of course that can collapse in an instant with something like Covid coming along.

And equally, if you have a famine, if the major food baskets get wiped out by a famine or a war. We’ve got the war already. The famine may well come by a drought and a crop failure as well. Then suddenly you can’t feed your people and you have no domestic alternative. So I think we have to get away from the focus on efficiency and even in that sense, the gain of swapping paper for goods, which is part of the MMT slogan.

Start thinking: no, we need to be resilient and capable of handling a range of different disturbances which could come our way. And on that basis you need to have your production local.

[00:22:47.310] – Grumbine

So within that space mitigating some of the travel carbon footprint expenses that clearly solves one problem. But where you had smokestacks to create basic amounts of goods and services in one country, now you’re building smokestacks across the globe and I don’t see any meaningful effort to green technology to make those things happen.

I am curious what decentralizing production does in terms of the carbon footprint and how developing local supply chains will in turn impact our ability to stave off climate crisis.

[00:23:30.090] – Keen

Yeah, if you look at just the shipping involved in international trade. It’s something at the order of 20%, I think, of our carbon production comes out of the entire mechanics of shipping goods around the planet, and we realize we’ve massively overshot the capacity to support our industrial sedentary civilization. So one way you can reduce that is by reducing international trade.

I think that’s what’s going to start happening, partly because you have the example of Cisco. You suddenly wait a year to get a piece you used to wait two weeks for because of the breakdown of the supply chain. The same thing will become even, I think, even more extreme when climate change forces us to drastically reduce our production levels.

If you don’t have the domestic production capability, you’re going to lose the possibility of those goods. And in some cases, we have to drastically reduce our consumption of a range of goods. Automobiles is an obvious instance of that. But in others, we want to continue – and food production is one of those. Clearly, you want to produce your food locally.

So, again, I think we’ve been very blase about the physical side of production, and that’s what I would like MMT to start looking at. And in that context, I think it might change the attitude about imports and exports.

[00:24:57.730] – Intermission

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[00:25:49.010] – Grumbine

Michael, in the Russia example, where in one fell swoop they get cut off from the SWIFT system and the US is beating their chest, “We’ve got Putin on the run.” It doesn’t look like Putin is on the run at all right now.

[00:26:02.900] – Hudson

I’m glad you’re bringing up the NATO war against countries resisting neoliberalism, because you use the word “green.” And the European Greens basically are advocating two fuels of the future: coal and cutting down the forests. Germany, by blocking Russia’s gas, they are essentially replacing Russian gas and oil with Polish and Ukrainian coal – and digging down the forest.

I’ve walked very often through German villages, and most houses have whole stacks of cut-down lumber that they essentially burn in their fireplaces for heat. You’re having an enormous deforestation and replacement of gas with coal. And the Green Parties are the advocates for the major polluters in the world, and they’re the advocates for global warming.

And that’s because they’re part of the Cold War attack on Russia. And they say it’s worth having global warming as long as we can fight against countries that resist neoliberalism and resist the American European takeover. So you want to realize the politics – that the Greens of Europe are not friends of the environment.

Now, to get back to your question about the isolating of Russia. Isolating Russia hasn’t isolated it at all. It’s driven Russia together with China, in the first instance, and then China and Russia together have joined with India, Iran, Syria, they’re now joining with Brazil and Argentina all to create an alternative economic order and social order and political order.

And the political order is basically based on the main distinction between the non-neoliberals and the neoliberals, and that is: who will control the money supply. And China is the prime example. Instead of private banking creating the credit to create loans basically for financial reasons, China will create credit to spend into the economy the way that MMTers hope to see credit created.

Namely, spend to hire labor, to make new means of production, hopefully in an environmental way, as opposed to the commercial banks that look at “how do we make money in the short term?” Well, you make money in the short term by cutting down the forest of the Amazon. You don’t look at global warming.

And already you’ve had the heads of American oil companies and investment firms say “what do we care about global warming ten years in the future? We care about the next three months’ earning statement, and the next year. Ten years from now, the sea levels go up. We can deal with it then.” So you’re dealing with two different economic philosophies and as the world divides into these two different economies, this is an important element.

And as Steve just pointed out, neoliberal economics doesn’t take into account the environment because that’s long term. Economists call that exogenous, meaning it’s outside our tunnel vision. And the question is whether you’re going to look at the world economy as the overall system interconnected, which is what Steve and I do, or whether you’re going to say we’re going to just cut the financial sector apart and only look at the corporate and financial sector of how to make money quickly.

That’s really the difference. So obviously Russia was not really troubled very much by being cut off – or even by being isolated. What America is doing is driving Russia together with all of the countries that have refused to condemn it. And America basically is creating an iron curtain, locking these countries – isolating them from Europe and the United States – going their own way, which I don’t think Russia and China are unhappy to see occurring.

[00:29:54.480] – Grumbine

I completely agree with that. The idea that the US thinks they are going to knock these giants down and they’ve just said we’re going to invest in our own country. Instead of being a cooperative society, we see this as a combative society. We decided we have to fight them and create cold wars to isolate them so we can catch up.

But you nailed it with the concept of the private short-term thinking that private collateral, banking, loans, filling short-term needs because we can’t see out as far as those folks because they aren’t living and dying the same capitalist way that we do things here in the United States. They have invested in the public purpose.

China has got the ability to do just about everything. Do you think it’s going to take us getting our proverbial asses handed to us by the rest of the world to wake up? Do you think we’ll ever wake up? Or this is just the way it will always be, at least until tsunamis take us out?

[00:30:56.870] – Hudson

Who is the we? Who’s going to wake up? When you say we, it’s as if you mean American citizens in the population. But we are not the government who makes the policy. We are not the Davos Group and the campaign contributors. Their “we” are the oil industry, the big agricultural monopolies, the other monopolies, and Wall Street. That’s the finance, insurance and real estate sector [FIRE].

And they are going to just continue doing what they want. And you’ve seen from the recent Supreme Court rulings in the United States that the government is not permitted to enforce any climate preservation rules. That has been ruled unconstitutional unless Congress can pass environmental law. And in order for Congress to pass a law, as opposed to just an executive branch joining the environment, you have to have 60 out of 100 votes.

American dual politics doesn’t permit either party to get 60 votes unless there’s a landslide. And the only party that has a prospect of getting 60% would be the Republicans. So basically, even if the people wake up, the government people and their campaign contributors are just going to continue to make money to live in the short term. That’s what differentiates neoliberalism and socialism.

[00:32:17.630] – Grumbine

Very well stated. To me, I think of this as war. Murder. I don’t think of this as some polite gentleman’s disagreement. I see this as wanton death and destruction, all in the name of profit. How do we stop this? Can we stop this? Congress is bought and paid for. Our government, our Supreme Court doesn’t represent the people, and the President has proven to be a feckless neoliberal as well.

I see nothing to feel any sense of hope, and I’m not sure that hope is a requirement. It seems like the only alternative we have is in the street, is to become ungovernable, is to get rid of a government that is no longer representative of the people.

[00:33:04.010] – Hudson

[laughs]  Well, Steve’s gone to Thailand and I’m dealing mainly with China. That’s how we’ve coped. [laughter] Neither of us are going to be President of America.

[00:33:15.690] – Keen

No. The American political system is almost designed to stop anything being done. I was involved in the Australian election recently, as you probably remember. And though my party did extremely badly and money still was obviously vitally necessary to get a political profile, even in countries with good electoral systems, Australia does have a good electoral system, and America has got the best electoral system money can buy, and that’s a disaster.

It’s hard to get away from money enabling parties to have political position to be seen in the media. And that’s actually a great reason for MMT: create money for publicly financed election campaigns rather than having it out of private pockets. But given that, you have an electoral system where you don’t actually vote for anybody, the electoral college piece of nonsense, which itself is crazy.

Every state has got a different system, which is crazy. You don’t have the central bureaucracy handling the voting system, which is crazy. And you have gerrymandering because the boundaries are decided by local political groups, which is crazy. So the extent to which America needs to reform its political structure to approximate a democracy is ridiculous. And that’s partly why money interests can so easily dominate what happens in the American political sphere. And right-wing religious ideology as well.

[00:34:43.950] – Grumbine

Absolutely. The Calvinistic bullshit in this country is over the top. But there’s a tone policing aspect to this. I think there are people out there who don’t understand that this election system that we have in the United States isn’t getting us what we want or need. They think they just need to phone bank harder, vote harder.

Fact is, in my 53 years, I have not seen any meaningful legislation passed. I do not consider the ACA meaningful legislation. I’ve seen a lot of bad legislation pass that hurts us. And this is not really intended to be an America-centric show, except that America seems to be the big bully. It’s creating a lot of the problems. It’s got its own citizens in hell and it’s trying to create hell on earth for the rest of the world.

I spend a lot of time trying to get this information out the door. It’s very important information, but it’s only important in the sense that it’s good to know. I don’t see any of it amounting to a movement, a passing of legislation. We can tell people that if we don’t consider the economy in the world as a superorganism and degrowth, we don’t have anybody thinking this way.

[00:36:00.090] – Keen

There is actually – I don’t know the name of it, but I do know that there’s a political group in America which is campaigning to have Australia’s electoral system adopted by America. Have it include an electoral commission that determines borders between one electorate and another, a single centralized system that counts the votes rather than the crazy range of stuff you have at the state level.

And controls on the size of electorates so they can be no more than 20% larger or smaller than a target – and they should be 10%. And then preferential voting so you don’t just vote for one candidate, like if you vote for the Greens in America, you guarantee the Republicans win the election because the Green votes are taken away from the Democrat.

So have preferential voting, which means you can actually put the party you prefer first and know that the party that’s your fallback will actually get the vote if your first party doesn’t get up. So all these sorts of reforms. I know that there are people who are campaigning about it because the frustration that you’re expressing is very widely felt in America. But of course, try getting that through a Republican-dominated Congress. It ain’t going to be easy.

[00:37:01.170] – Grumbine

No. It does leave you wondering if this is not just political theater. I talked to Warren the other day and Warren asked the question to me. He said, “you ask, are they doing a good job? And I answer back, well, for whom?” Somebody’s doing okay right now. It just isn’t the regular people in society. Somebody’s doing great, though. And I don’t see a path. As much as I want to, I see no path forward.

I don’t want to feel this way, but I don’t see a path forward. Michael, with your international perspective, I guess my question to you, given the fact that you’re focusing on China and you see the US through the lens that we’ve just discussed, do you see an ending to this that is positive for the world, that gets us to a successful conclusion, meaning we survive? Do you see any hope whatsoever in changing that narrative? And if not, what’s next?

[00:38:01.530] – Hudson

There’s no path forward in the way that we’ve been talking about because the suggestions that Steve makes cannot be legislated by Congress. They are limited by the Constitution. And in order to do what Steve recommends – very good ideas – you would need a new Constitutional Convention. The right-wing, the polluters, the monopolists, the bankers, have been preparing for a Constitutional Convention for about 30 years, and it wouldn’t be very nice.

[00:38:32.370] – Grumbine

Yep.

[00:38:32.370] – Hudson

Our Constitution in America was written for the slave owners to permit any states to block any federal power because they worried that the federal power might try to free the slaves. Well, now that element of the Constitution, of state’s rights, is enabling the oil industry, the polluting industry, the banks, the credit card companies to essentially prevent any solution along any lines except those of the ultra right-wing.

But the problem goes beyond America and beyond Europe. Western civilization took a wrong track about 3000 years ago. The Near East and almost all of Asia had a tradition of canceling the debts when they threatened the economy. In Japan, you had revolutions, you had the Near East rulers canceling the debts. That’s what my books are about.

And you had essentially the jubilee years throughout the Near East. And this promotion of economic growth and in effect, prosperity, was always run by a central ruler. There had to be a ruler, the job of divine kingship or undivine kingship, throughout the Near East, Asia, all the way to China. And India. All of these cultures sought to prevent a commercial class and a financial class from emerging and taking over.

And the merchant class was realized as playing an important role, but it was not allowed to dominate society. But around the 8th century BC, when Syrian traders began to move into the Aegean and Mediterranean to Greece and Italy. There weren’t any kings. The west didn’t have kings. They had local chieftains who were a Mafia-type society.

And the result is that ever since Greece and Rome, you had a completely different set of laws and legal philosophy than what you had in the Near East and Asia. You had pro-creditor laws making what is called the security of contracts and the irreversibility of land being forfeited to creditors. And the result is you had creditors oligarchy evolving.

So when President Biden said the current war of NATO against Russia and China is a war of democracy against autocracy, what it means by democracy are Western civilization’s oligarchies. There haven’t been any democracies, really – maybe very briefly in Athens – but the Western cultures are all oligarchies. What he calls an autocracy is a government strong enough to prevent a financial oligarchy from developing and taking over the land and taking over politics and making its own laws for itself.

And it’s a civilizational difference. And both Steve and I have spent a lot of our time talking about how the Western economies cannot evolve further without a debt write-down, without writing down the debts that are of the 99%, they’re owed to the 1%, the oligarchy that’s controlling all of Western politics. Asia has a way to go a different way.

China doesn’t have a financial oligarchy because it treats money and credit as a public utility through the Bank of China. And so the Bank of China, as we said, makes loans to actually develop the economy. And that’s what Russia says it’s going to begin doing, not to create a financial class to make money at the expense of the 99%. So we’re dealing with a civilizational problem.

And the question is, which form of civilization? Can you rescue Western civilization from the wrong track? Well, only by creating an alternative on the right track and leaving Western civilization and say, well, you’re missing out on the development. Do you want to continue in poverty or are you going to have a revolution?

[00:42:31.650] – Grumbine

You’ve seen yellow and blue profile pictures for everybody totally sympathetic to Ukraine. And our government saying “we are not going to abandon them no matter what.” Biden has signaled that we have unlimited money to give to Ukraine, and he can’t possibly write down $2 trillion in student debt. This weird split dichotomy of truth and lies passes right by the average person.

With what you just stated, which side is going to win? Sadly, the bad guys seem to always win. I rarely see the good guys win. Who is “the good guys”? In full disclosure, I’m a socialist. We don’t even have a left party in the United States. There’s no appetite for that kind of thing in the United States. And those of us that want it are the minority. How do you envision this playing out?

[00:43:26.670] – Hudson

I thought I just said it: a different civilization going its own way.

[00:43:31.740] – Grumbine

Well, what you said was the question of good and evil, basically, which one is going to win? I’m asking you, how do you see it playing out? Because the US can’t continue doing what it’s doing and grow. You need the debt jubilee. We’ve chosen not to. Asia has those systems built and they have choices. So the question I’m proposing, given that, do you see any chance of the US coming to grips with itself? Or do you see this being a one-way trip to destitution?

[00:44:03.570] – Hudson

The latter.

[00:44:05.010] – Grumbine

Fair enough.

[00:44:05.830] – Hudson

That’s all I can say. There is no sign at all of a change. The fact that Steve and I can be on your show – we are not published in the major magazines anymore. We’re not on the major network shows. What you call the bad guys always call themselves the good guys. What you call evil calls itself good. So the question is, what kind of good guys you’re going to have?

The good guys that want to blow up the world and impoverish society, which is what neoliberalism says are the good guys or the good guys for the 99%, which America says are autocracies that we have to fight?

[00:44:41.830] – Grumbine

Yeah.

[00:44:42.670] – Keen

I think I might put a bit of a perspective. People often say, “what’s your alternative?” And what they really mean is “what’s your alternative that I’m going to like?” And I think there is an alternative, but as people feel, “I don’t like it” then other people won’t like it as well. And that is that given the scale of the environmental crisis we’re facing and the fact that it’s coming far sooner than we’re being led to believe, because courtesy of believing their classical economists on it.

When it hits, the countries that are most likely to survive will hold together are those that the West calls authoritarian. And the defining feature of those cultures when you’ve actually been inside them, is that, yes, there is a very strong state and yes, it tends to get its own way and people do what they’re told to some extent, but it’s because at the same time they know they’ve benefited from that state.

So back in China, when you talk to people in China, they will be critical of the Communist Party and say at the same time, the industrialization since then has been incredible and their lives have improved radically over that period of time. I know people who were literally in Mao suits in 1969 who are having a very comfortable retirement when they faced far worst terms back under the old strictly communist regime.

But what you have with a country like that is if China decides it has to radically ramp up renewable energy resources, also install nuclear if necessary, it’s going to do it and not face the opposition the German Greens give to new nuclear power stations, for example. So the capacity to have a top down society is more likely to be then you’re going to survive the crisis that comes forward from climate change.

I can’t see countries that call themselves democracies succeeding in that situation because they will not be able to agree on the level of cutback that’s necessary and who it gets imposed upon. We’re a more centralized society. We’re more successful at doing that and more likely to hold together during the downturn the climate will cause.

[00:46:40.110] – Hudson

You need a strong enough government to check the power of an oligarchy and to prevent a creditor landowner oligarchy from developing. And libertarians, while pretending to be for liberty, they’re for a centrally planned economy, but a centrally planned economy by the oligarchy, by the financial sector, and by the real estate owners. So every economy is planned. And the question is, who’s going to do the planning?

[00:47:05.190] – Grumbine

Yes. And with that in mind, I want to read to you some stuff that came out of this NATO 2022 Strategic Concept – just so that people understand exactly how bad it is. Document defines Russia as the most significant and direct threat to the allies’ security while addressing China for the first time and the challenges that Beijing poses towards allies’ security interests and values.

Documents also state that climate change is a defining challenge of our time. Strategic Concept is updated roughly every decade as NATO’s second most important document. It reaffirms the values of the alliance, provides a collective assessment of security challenges, and guides the alliance’s political and military activities. Previous version was adopted at the NATO Lisbon Summit in 2010.

Point I’m making is they’re bringing more countries in and now setting up China and Russia as the bad guys. This has been going on for a long time, I guess Reaganism with the Cold War. And you brought it up, I think it’s worth mentioning, towards the end of the Chinese Revolution and the US efforts back then to do these same things to China then.

All these institutions, World Bank, IMF, the Peace Corps, all these different NGOs, these were brought out as a direct counter to Russia’s communism and a fear that communism would spread to the global South to prevent them from getting in bed with the Russians. But our country, the United States in this case, has been instrumental in setting up these shadow organizations to prevent any kind of socialism or people-led initiatives around the world.

And it seems like this is going to become the next war. If it’s not going to be just another Cold War, it’s definitely going to be some war because they are lining up the Axis and allies already. I guess. Take us out on this note.

[00:49:13.290] – Keen

I think I take it over a different angle and say that the global politics we’ve had over the last 80-100 years, actually, since the dominance of America, which we pretty much say from the end of the Second World War, has been completely oblivious to the impact we’re having on the planet. The biosphere itself. And the biggest political player on the planet is the biosphere.

And that’s going to start determining what the wars are in future. And I don’t think any country in the world is prepared for that battle. China has maybe probably the most effective capacity to respond to the challenges that are coming this way, but there’s no way America or Russia or anywhere in Europe are aware of the threats they face.

This is a warfare against an implacable foe which we’ve created by destroying the sustainability of the biosphere, by expanding human industry to three to four times the scale that the planet could actually support. That’s the real war that is coming our way.

[00:50:08.600] – Hudson

And Steve, you mentioned how global shipping and trade adds to the global warming. Obviously, the military spending is a huge, huge factor. So the Americans and the Green Parties of Europe are on the wrong side of history. They are doing just the opposite of preserving de-development. They are the advocates of more and more global warming. So literally, you have a group, a bloc, wanting to destroy the environment and a bloc trying to protect itself from the Western destruction.

[00:50:40.830] – Grumbine

Yeah, very scary. And then we’ve got a lot of folks that think that they’re going to appeal to their greater sense of reason to get them to suddenly stop all this, vote their way to a Green New Deal, and it’s all just going to go away. Gentlemen, thank you so much for this time. I really appreciate it. It’s rare to have two such phenomenal guests at once, so I really do appreciate this immensely. Michael, tell us where we can find more about your work.

[00:51:07.230] – Hudson

Well, on my website, michael-hudson.com, and on my Patreon account. Steve also has a Patreon account. He got me onto Patreon. And the books that I describe what we’re talking about are available on Amazon. The Destiny of Civilization and Super Imperialism.

[00:51:27.450] – Grumbine

Very good. Steve, I know we got you on Patreon, but tell us a little bit about your books and where we can find more of your work.

[00:51:33.710] – Keen

Okay, well, again, my main recent book is The New Economics: A Manifesto, and that’s published by Polity press. So you can get it through Polity or you can get it through Amazon. There’s more than one way to get a hold of it. And the main thing I’m doing is developing the software package to enable us to think about the economy the way we should think about it, which is dynamically, non equilibrium, monetary and so on.

And that’s Minsky, which people can find at SourceForge, the open source software package site, SourceForge. Search for SourceForge and Minsky together and you’ll find it. But those are my main two things. I’ve also opened up a substack account recently – profstevekeen.substack.com – mainly because Patreon loses a lot of customers by stuffing up their credit cards. So Patreon, Substack and Minsky.

[00:52:18.030] – Grumbine

Very good. All right. And with that, my name is Steve Grumbine. My special guests, Steve Keen and Michael Hudson. This is the podcast Macro N Cheese. We’re out of here.

Is US/NATO (with WEF help) pushing for a Global South famine?

June 06, 2022

By Michael Hudson and posted with the author’s permission

Is the proxy war in Ukraine turning out to be only a lead-up to something larger, involving world famine and a foreign-exchange crisis for food- and oil-deficit countries?

Many more people are likely to die of famine and economic disruption than on the Ukrainian battlefield. It thus is appropriate to ask whether what appeared to be the Ukraine proxy war is part of a larger strategy to lock in U.S. control over international trade and payments. We are seeing a financially weaponized power grab by the U.S. Dollar Area over the Global South as well as over Western Europe. Without dollar credit from the United States and its IMF subsidiary, how can countries stay afloat? How hard will the U.S. act to block them from de-dollarizing, opting out of the U.S. economic orbit?

U.S. Cold War strategy is not alone in thinking how to benefit from provoking a famine, oil and balance-of-payments crisis. Klaus Schwab’s World Economic Forum worries that the world is overpopulated – at least with the “wrong kind” of people. As Microsoft philanthropist (the customary euphemism for rentier monopolist) Bill Gates has explained: “Population growth in Africa is a challenge.” His lobbying foundation’s 2018 “Goalkeepers” report warned: “According to U.N. data, Africa is expected to account for more than half of the world’s population growth between 2015 and 2050. Its population is projected to double by 2050,” with “more than 40 percent of world’s extremely poor people … in just two countries: Democratic Republic of the Congo and Nigeria.”[1]

Gates advocates cutting this projected population increase by 30 percent by improving access to birth control and expanding education to “enable more girls and women to stay in school longer, have children later.” But how can that be afforded with this summer’s looming food and oil squeeze on government budgets?

South Americans and some Asian countries are subject to the same jump in import prices resulting from NATO’s demands to isolate Russia. JPMorgan Chase head Jamie Dimon recently warned attendees at a Wall Street investor conference that the sanctions will cause a global “economic hurricane.”[2] He echoed the warning by IMF Managing Director Kristalina Georgieva in April that, “To put it simply: we are facing a crisis on top of a crisis.” Pointing out that the Covid pandemic has been capped by inflation as the war in Ukraine has made matters “much worse, and threatens to further increase inequality” she concluded that: “The economic consequences from the war spread fast and far, to neighbors and beyond, hitting hardest the world’s most vulnerable people. Hundreds of millions of families were already struggling with lower incomes and higher energy and food prices.”[3]

The Biden administration blames Russia for “unprovoked aggression.” But it is his administration’s pressure on NATO and other Dollar Area satellites that has blocked Russian exports of grain, oil and gas. But many oil- and food-deficit countries see themselves as the primary victims of “collateral damage” caused by US/NATO pressure.

Is world famine and balance-of-payments crisis a deliberate US/NATO policy?

On June 3, African Union Chairperson Macky Sall, President of Senegal, went to Moscow to plan how to avoid a disruption in Africa’s food and oil trade by refusing to become pawns in the US/NATO sanctions. So far in 2022, President Putin noted: “Our trade is growing. In the first months of this year it grew by 34 percent.”[4] But Senegal’s President Sall worried that: “Anti-Russia sanctions have made this situation worse and now we do not have access to grain from Russia, primarily to wheat. And, most importantly, we do not have access to fertilizer.”

U.S. diplomats are forcing countries to choose whether, in George W. Bush’s words, “you are either for us or against us.” The litmus test is whether they are willing to force their populations to starve and shut down their economies for lack of food and oil by stopping trade with the world’s Eurasian core of China, Russia, India, Iran and their neighbors.

Mainstream Western media describe the logic behind these sanctions as promoting a regime change in Russia. The hope was that blocking it from selling its oil and gas, food or other exports would drive down the ruble’s exchange rate and “make Russia scream” (as the U.S. tried to do to Allende’s Chile to set the stage for is backing of the Pinochet military coup). Exclusion from the SWIFT bank-clearing system was supposed to disrupt Russia’s payment system and sales, while seizing Russia’s $300 billion om foreign-currency reserves held in the West was expected to collapse the ruble, preventing Russian consumers from buying the Western goods to which they had become accustomed. The idea (and it seems so silly in retrospect) was that Russia’s population would rise in rebellion to protest against how much more Western luxury imports cost. But the ruble soared rather than sunk, and Russia quickly replaced SWIFT with its own system linked to that of China. And Russia’s population began to turn away from the West’s aggressive enmity.

Evidently some major dimensions are missing from the U.S. national-security think-tank models. But when it comes to global famine, was a more covert and even lager strategy at work? It is now looking like the major aim of the U.S. war in Ukraine all along was merely to serve as a catalyst, an excuse to impose sanctions that would disrupt the world’s food and energy trade, and to manage this crisis in a way that would afford U.S. diplomats an opportunity to confront Global South countries with the choice “Your loyalty and neoliberal dependency or your life – and, in the process, to “thin out” the world’s non-white populations that so worried Mr. Dimon and the WEF?

There must have been the following calculation: Russia accounts for 40% of the world’s grain trade and 25 percent of the world fertilizer market (45 percent if Belarus is included). Any scenario would have included a calculation that if so large a volume of grain and fertilizer was withdrawn from the market, prices would soar, just as they have done for oil and gas.

Adding to the disruption in the balance-of-payments of countries having to import these commodities, the price is rising for buying dollars to pay their foreign bondholders and banks for debts falling due. The Federal Reserve’s tightening of interest rates has caused a rising premium for U.S. dollars over euros, sterling and Global South currencies.

It is inconceivable that the consequences of this on countries outside of Europe and the United States were not taken into account, because the global economy is an interconnected system. Most disruptions are in the 2 to 5 percent range, but today’s US/NATO sanctions are so far off the historical track that price increases will soar substantially above the historic range. Nothing like this has happened in recent times.

This suggests that what appeared in February to be a war between Ukrainians and Russia is really a trigger intended to restructure the world economy – and to do so in a way to lock U.S. control over the Global South. Geopolitically, the proxy war in Ukraine has been a handy excuse for America’s to counter China’s Belt and Road Initiative (BRI).

The choice confronting Global South countries: to starve by paying their foreign bondholders and bankers, or to announce, as a basic principle of international law: “As sovereign countries, we put our survival above the aim of enriching foreign creditors who have made loans that have gone bad as a result of their choice to wage a new Cold War. As for the destructive neoliberal advice that the IMF and World Bank have given us, their austerity plans were destructive instead of helpful. Therefore, their loans have gone bad. As such, they have become odious.”

NATO policy has given Global South countries no choice but to reject its attempt to establish a U.S. food stranglehold on the Global South by blocking any competition from Russia, thereby monopolizing the world’s grain and energy trade. The major grain exporter was the heavily subsidized U.S. farm sector, followed by Europe’s highly subsidized Common Agricultural Policy (CAP). These were the main grain exporters before Russia entered the picture. The US/NATO demand is to roll back the clock to restore dependency on the Dollar Area and its eurozone satellites.

The implicit Russian and Chinese counterplan

What is needed for the world’s non-US/NATO population to survive is a new world trade and financial system. The alternative is world famine for much of the world. More people will die of the sanctions than have died on the Ukrainian battlefield. Financial and trade sanctions are as destructive as military attack. So the Global South is morally justified in putting its sovereign interests above those of the wielders of international financial and trade weaponry.

First, reject the sanctions and reorient trade to Russia, China, India, Iran and their fellow members of the Shanghai Cooperation Organization (SCO). The problem is how to pay for imports from these countries, especially if U.S. diplomats extend sanctions against such commerce.

There is no way that Global South countries can pay for oil, fertilizer and food from these countries and also pay the dollar debts that are the legacy of U.S.-sponsored neoliberal trade policy subject to U.S. and eurozone protectionism. Therefore, the second need is to declare a debt moratorium – in effect, a repudiation – of the debts that represent loans gone bad. This act would be analogous to the 1931 suspension of German reparations and Inter-Ally debts owed to the United States. Quite simply, today’s Global South debts cannot be paid without subjecting debtor countries to famine and austerity.

A third corollary that follows from these economic imperatives is to replace the World Bank and its pro-U.S. policies of trade dependency and underdevelopment with a genuine Bank for Economic Acceleration. Along with this institution is a fourth corollary in the form of the new bank’s sibling: a replacement for the IMF free of austerity junk economics and subsidy of America’s client oligarchies coupled with currency raids on countries resisting U.S. privatization and financialization takeovers.

The fifth requirement is for countries to protect themselves by joining a military alliance as an alternative to NATO, to avoid being turned into another Afghanistan, another Libya, another Iraq or Syria or Ukraine.

The main deterrent to this strategy is not U.S. power, for it has shown itself to be a paper tiger. The problem is one of economic consciousness and will.

  1. “Bill Gates has a warning about population growth,” World Economic Forum/Reuters, September 19, 2018. https://www.weforum.org/agenda/2018/09/africas-rapid-population-growth-puts-poverty-progress-at-risk-says-gates
  2. Lananh Nguyen, “‘It’s a hurricane.’ Bank chiefs warn of a weakening economy,” The New York Times, June 1, 2022. 
  3. Kristalina Georgieva, IMF Managing Director, “Facing Crisis Upon Crisis: How the World Can RespondApril 14, 2022. https://www.imf.org/en/News/Articles/2022/04/14/sp041422-curtain-raiser-sm2022. 
  4. “Putin meets with African Union Chairperson at Sochi, June 3, 2022.” President Sall was accompanied by Moussa Faki Mahamat, Chairperson of the African Union Commission. http://en.kremlin.ru/events/president/news/68564. For a elated discussion on the sanctions see https://www.nakedcapitalism.com/2022/06/sanctions-now-weapons-of-mass-starvation.html

The Sanctioned Ones: How Iran-Russia are setting new rules

While China, keen to ward off US sanctions as long as possible, is lagging, its RIC partners Iran and Russia are doing the legwork to break the west’s global financial grip.

May 31 2022

Iran and Russia are taking the lead in establishing alternative financial networks to bypass western sanctionsPhoto Credit: The Cradle

By Pepe Escobar

The first Eurasia Economic Forum, held last week in Bishkek, Kyrgyzstan, should be regarded as a milestone in setting the parameters for the geoeconomic integration of the Eurasian heartland.

Sergei Glazyev, Russia’s Minister in Charge of Integration and Macroeconomics of the Eurasia Economic Union (EAEU), is coordinating the drive to design an alternative monetary-financial system – a de facto post-Bretton Woods III – in cooperation with China.

According to Glazyev, the forum “discussed the model of a new global settlement currency pegged to baskets of national currencies and commodities. The introduction of this currency instrument in Eurasia will entail the collapse of the dollar system and the final undermining of the US military and political power. It is necessary to start negotiations on signing an appropriate international treaty within the framework of the SCO.”

Glazyev described the initiative to upend the western global financial system in more detail during an exclusive interview with The Cradle in April.

It’s particularly relevant to understand how Glazyev interconnects the EAEU’s drive with the increasing geopolitical and geoeconomic role of the Shanghai Cooperation Organization (SCO), which unites at the same table key Eurasian powers: China, Russia, India, Pakistan, Kazakhstan and Iran.

That connects directly with Russian President Vladimir Putin, at the meeting of the Supreme Eurasian Economic Council, supporting the extension of a temporary free trade agreement between the EAEU and Iran, which is the newest (and only West Asian) full member of the SCO. Putin said this should go ahead despite the “confrontation by the collective West.”

The EAEU, inaugurated in 2015 with five full members – Russia, Kazakhstan, Kyrgyzstan, Belarus and Armenia – represents a market of 184 million people and a collective GDP of over $5 trillion. The next step with Iran will be to implement a full free trade agreement, possibly before the end of the year, according to Iranian deputy trade minister Alireza Peymanpak. Egypt, Indonesia and the UAE are also candidates to strike deals with the EAEU.

Iran, which has for over four decades now been forced to find creative solutions to bypass serial, imperial sanction packages, may have a conceptual lesson or two to teach Russia. Barter arrangements are gaining ground: Tehran is offering spare parts and gas turbines to Moscow’s power plants in exchange for much needed zinc, aluminum, lead and steel for its metal and mining industries, according to Iranian trade and industries minister Reza Fatemi Amin.

And more barter on a wide range of commodities is ahead, as discussed during a recent visit to Tehran by Russian Deputy Prime Minister Alexander Novak.

The other ‘RIC’

Slowly but surely, the new RIC (Russia-Iran-China) – as opposed to the old RIC in BRICS (Russia-India-China) – is attempting to integrate their financial systems. Iran is a matter of national security strategy for China, as an energy provider and essential partner of the Belt and Road Initiative (BRI) in West Asia.

Russia-China, though, is a much more complex matter. Extremely fearful of provoking US sanctions, Chinese banks are refraining – at least for the moment – to increase their deals with Russian banks, which brings us to the case of UnionPay:

The Chinese bank card provider – increasingly popular, especially across Asia – declined from partnering with Sberbank even before Russia’s largest bank was excluded by the EU and the US from the global bank messaging platform SWIFT. UnionPay also canceled plans with other Russian banks to issue UnionPay cards linked with the Russian Mir payment system, profiting from the exit of Visa and Mastercard from the Russian market.

This is still a careful balancing act for China. Earlier this year at the Boao Forum in Asia, President Xi Jinping was adamant in opposing the “wanton use of unilateral sanctions.” And over 80 percent of Chinese companies already established in Russia appeared to continue their business as usual.

Yet in practical terms, there are serious problems. The Bank of China and the Industrial and Commercial Bank of China (ICBC) have restricted financing for Russian commodities. Even the Asian Infrastructure Investment Bank (AIIB), absolutely essential for sustainable development projects, linked or not with BRI, decided to freeze all lending to Russia and Belarus in early March to “safeguard” its “financial integrity.”

On the financial front, cautious Chinese banks, with enormous western exposure, are always balancing the fact that nearly 80 percent of global cross-border transactions are still in dollars and euros, and only two percent in yuan. So the Russian market is not exactly a priority.

In parallel, the Russia-Iran front is quite lively. They are turbo-charging mutual settlements in their national currencies to “the highest possible level,” as highlighted by Deputy Prime Minister Alexander Novak: “We discussed together with central banks the spread and operation of the financial messaging system, as well as the connection of Mir and [Iranian] Shetab payment cards.”

As it stands, the Mir card is still not accepted in Iran, but that’s about to change – just as in Turkey, which this summer will start accepting Mir card payments from legions of Russian tourists. What this means in practice is that Russia and Iran will be connecting their banks to the System for Transfer of Financial Messages (SPFS), the Russian equivalent to SWIFT. The Chinese will obviously be examining how seamlessly the transition works.

Now compare all of the above with the prospect that soon there won’t be any SWIFT at all, as Mastercard CEO Michael Miebach let slip in Davos.

Miebach was participating in a panel on Central Bank Digital Currencies, discussing cross-border payments, when he suggested that SWIFT might soon be a thing of the past. No question about it: Moscow is eyeing crypto and digital currencies already, and Beijing is dead set on setting up the digital yuan to work around SWIFT and its linked CHIPS (Clearing House Interbank Payment System).

The Sanctioned Ones, now moving fast

The Russia-Iran front has been fast evolving since January this year, when Iranian President Ebrahim Raisi, on a visit to Moscow, handed a draft agreement to Putin on strategic cooperation for the next 20 years, building on “the very good experience of cooperation between Iran and Russia in Syria in combating terrorism,” and expanding to “economy, politics, culture, science, technology, defense, and military spheres, as well as security and space issues.”

Raisi also explicitly thanked Putin “for facilitating Tehran’s entry into the SCO.”

Iranian Oil Minister Javad Ouji went straight to the point in his meeting with Novak in Tehran last week: “Our countries are under strict sanctions, and we have the potential to neutralize them through the development of bilateral relations…We have created joint committees on banking, energy, transport, agriculture issues, as well as the issue of creation of nuclear power plants.”

And that brings us once again to the seemingly eternal soap opera of the Vienna-based Joint Comprehensive Plan of Action (JCPOA) talks, with Russian Deputy Foreign Minister Sergey Ryabkov now signaling the final draft “is at a high degree of readiness for adoption. There are some political problems, which are not related to the finalization of the text.”

Cutting through the proverbial fog of US swamp spin, Ryabkov stressed how “in terms of our interests, including in the context of peaceful nuclear cooperation with Iran, the text is quite satisfactory…there is nothing to ‘fine-tune’.” So when the Americans say that the deal is “out of reach,” Raybkov added, it means that they “broadcast the results of their internal discussions.”

The bottom line is that on the JCPOA, Tehran and Moscow are in sync: “We are what they call on edge, and it could happen very quickly if the political decision is made.”

Expanding on their synchronicity, Tehran even proposed to host negotiations between Moscow and Kiev over the Ukraine conflict – following the Turkish example. By now though, after Ankara’s failure, it is clear that Washington decision makers want no negotiation, but an endless war to the last Ukrainian.

Iranian Foreign Minister Hossein Amir-Abdollahian remains in sync with his counterpart Sergei Lavrov. At Davos, he said the Ukraine drama was caused by “the US and NATO’s provocative actions…they “provoked the Kremlin into this.” That’s essentially what Beijing has been discreetly implying.

All of the above shows some of the trials and tribulations of Eurasia integration, and the long and winding road to an EAEU-SCO new monetary system. But first things first: there’s got to be some action on the Mir-UnionPay front. When that news breaks, the die will be cast.

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

Vladimir Putin addressed the plenary session of the 1st Eurasian Economic Forum

May 26, 2022

First Eurasian Economic Forum

Also attending the meeting were Prime Minister of Armenia Nikol Pashinyan, President of Kazakhstan Kassym-Zhomart Tokayev, President of Kyrgyzstan Sadyr Japarov, Prime Minister of Belarus Roman Golovchenko, and Chairman of the Board of the Eurasian Economic Commission Mikhail Myasnikovich. The forum moderator was Alexander Shokhin, President of the Russian Union of Industrialists and Entrepreneurs, member of the Presidium of the EAEU Business Council.

The purpose of the Eurasian Economic Forum, established by a decision of the Supreme Eurasian Economic Council and timed to coincide with a meeting of the SEEC, is to further deepen economic cooperation between the EAEU member states.

The EEF 2022 in Bishkek, themed Eurasian Economic Integration in the Era of Global Shifts: New Investment Opportunities, will focus on promising areas for the strategic development of integration. The participants will discuss ways to deepen industrial, energy, transport, financial, and digital cooperation.

* * *

Address at the plenary session of the 1st Eurasian Economic Forum.

President of Russia Vladimir Putin: I am grateful for this opportunity to address you, to speak on the issues which you [Alexander Shokhin] have raised and which, as you suggested, should be addressed in greater detail.

First of all, I would like to thank President of Kyrgyzstan Sadyr Japarov and his team for organising this event. I can see many people in the audience, including businesspeople and government officials. I am sure that the media will take a keen interest in the forum.

This is what I would like to begin with when answering your question. The development of Eurasian integration has no connection whatsoever to current developments or market conditions. We established this organisation many years ago. In fact, we established it at the initiative of the First President of Kazakhstan [Nursultan Nazarbayev].

I remember very well the main conversation we had on that issue, on that subject, when he said, “You must choose what is more important to you: working more actively and more closely with your direct neighbours and natural partners, or prioritising, for example, admission to the World Trade Organisation.” It was in this connection that we had to make decisions.

And although we were interested in joining the WTO and in developing relations accordingly with our Western partners, as you said and as I continue to say, we nevertheless regarded as our main priority the development of relations with our direct and natural neighbours within the common economic framework of the Soviet Union. This is my first point.

The second. Already at that time, we started developing ties – I will speak about this later – within the framework of the Greater Eurasian Partnership. Our motivation was not the political situation but global economic trends, because the centre of economic development is gradually – we are aware of this, and our businesspeople are aware of this – is gradually moving, continues to move into the Asia-Pacific Region.

Of course, we understand the tremendous advantages of high technology in advanced economies. This is obvious. We are not going to shut ourselves off from it. There are attempts to oust us from this area a little but this is simply unrealistic in the modern world. It is impossible. If we do not separate ourselves by putting up a wall, nobody will be able to isolate such a country as Russia.

Speaking not only about Russia, but also about our partners in the EAEU and the world in general, this task is completely unfeasible. Moreover, those who are trying to fulfil it harm themselves the most. No matter how sustainable the economies of the countries pursuing this shortsighted policy are, the current state of the global economy shows that our position is right and justified, even in terms of macroeconomic indicators.

These advanced economies have not had such inflation for the past 40 years; unemployment is growing, logistics chains are breaking and global crises are growing in such sensitive areas as food. This is no joke. It is a serious factor affecting the entire system of economic and political relations.

Meanwhile, these sanctions and bans are aimed at constraining and weakening the countries that are pursuing an independent policy, and they ate not limited to Russia or even China. I do not doubt for a second that there are many countries that want to and will pursue an independent policy and their number is growing. No world policeman will be able to stop this global process. There will not be enough power for this and the desire to do so will evaporate due to a host of domestic problems in those countries. I hope they will eventually realise that this policy has no prospects whatsoever.

Violating rules and norms in international finances and trade is counterproductive. In simple words, it will only lead to problems for those who are doing it. Theft of foreign assets has never done any good to anyone, primarily those who are engaged in these unseemly deeds. As it has transpired now, neglect for the political and security interests of other countries leads to chaos and economic upheavals with global repercussions.

Western countries are sure that any persona non grata who has their own point of view and is ready to defend it can be deleted from the world economy, politics, culture and sports. In fact, this is nonsense, and, as I said, it is impossible to make this happen.

We can see it. Mr Shokhin, as a representative of our business, you certainly face problems, especially in the field of supply chains and transport, but nevertheless, everything can be adjusted, everything can be built in a new way. Not without losses at a certain stage, but it leads to the fact that we really become stronger in some ways. In any case, we are definitely acquiring new skills and are starting to focus our economic, financial, and administrative resources on breakthrough areas.

True, not all the import substitution goals were achieved in previous years. But it is impossible to achieve everything: life is faster than administrative decisions, it develops faster. But there is no problem. We have done everything necessary in key areas that ensure our sovereignty.

Let us move on. After all, import substitution is not a pill for every ill, and we are not going to deal exclusively with import substitution. We are just going to develop. But we will continue to arrange import substitution in those areas where we are forced to do so. Yes, maybe with some mixed results, but definitely we will only become stronger thanks to this, especially in the field of high technologies.

Look, after the CoCom lists – I have already spoken about this many times – after what you said about our work, for instance, within the same former G8 and so on, restrictions still remained. In the most sensitive areas, everything was still closed. In fact, fundamentally – I want to emphasise this – nothing has changed fundamentally.

These issues related to large-block assemblies and so on, it took so much effort to increase localisation within the country, in our economy, in the real sectors of the economy, in industry. And even then we did not agree on key issues in many respects.

Actually, import substitution was necessary

to create not just assembly shops, but also engineering centres and research centres. This is inevitable for any country that wants to increase its economic, financial and ultimately political sovereignty. It is inevitable.

This is why we have been doing it, and not because the current state of affairs demands it from us, but simply because life itself demanded this, and we were active.

And, of course, we will work actively within the framework of the Eurasian Economic Union and within the CIS in general, we will work with the regions of Asia, Latin America and Africa. But I assure you, and you can see it yourselves, many of our companies from Europe, our partners from Europe, have announced that they are leaving. You know, sometimes when we look at those who are leaving, we ask ourselves: isn’t it a good thing that they have left? We will take up their niches: our business and our production – they have matured, and they will safely take root on the ground that our partners have prepared. Nothing will change.

And those who want to bring in some luxury goods, they will be able to do so. Well, it will be a little more expensive for them, but these are people who are already driving Mercedes S 600, and will continue to do so. I assure you, they will bring them from anywhere, from any country. That is not what is important for us. What is important for the country, for its development – I have already said this and I will repeat it – are the engineering centres and research centres that are the basis of our own development. This is what we must think about and what we must work on both within the EAEU and in a broad sense with our partners – those who want to cooperate with us.

We have a very good base that we inherited from the old days, we only need to support it and to invest resources there. As for those areas, in which we did not invest appropriate resources before, including, say, administrative resources, relying on the fact that everything can be bought by selling oil and gas, life itself has now forced us to invest there.

And thank God that this has happened. I do not see any problem here with the fact that we have not completed something in the field of import substitution. We will not do it just because the current economic situation forces us to do so, but only because it is in the interests of our country.

The Eurasian Economic Union has developed a roadmap for industrialisation, with over 180 projects with a total investment of over $300 billion. A programme for agricultural development has been prepared, including more than 170 projects worth $16 billion.

Russia has something to offer here, and businesspeople are well aware of this. We have grown to be highly competitive at the global level, in the global markets. Russia remains – if we speak about agriculture – the largest exporter of wheat, number one in the world. Until recently, we were buying it – now we are selling it, number one in the world. True, countries such as the United States or China produce even more, but they also consume more. But Russia has become number one in international trade.

Our high-tech industries are growing successfully, too. And we would like to continue growing together with our EAEU partners. We can and should restore our collaborative competencies.

I have discussed this with my colleagues, with the President of Kazakhstan and the Prime Minister of Armenia – not because some of Russia’s IT workers have moved to Armenia, not at all. They are free to relocate and work anywhere, and God bless them. But again, it is a certain challenge for us: it means we must create better conditions.

We have opportunities to work with the Republic of Belarus in a number of areas of cooperation, and we will definitely do this, because the Republic of Belarus has retained certain expertise that is very important for us, including in microelectronics. President Lukashenko and I just met in Sochi and talked about it, and even agreed to set aside funding for those projects in Belarus. The products that these enterprises, these industries will make will enjoy demand in Russia. This is a very interesting and promising area.

The EAEU countries have laid the foundation for a common digital landscape, including a unified products traceability system. Various platform solutions are being developed, for example, the Work without Borders search system. The project is very important for all our countries. Despite all the crises and challenges caused by the current political situation, labour migrants continue to send almost as much money home from Russia as before. Moreover, some countries are receiving even more money now, as my colleagues from the CIS have told me.

The practice of payments in national currencies is expanding, which is very important. Notably, their share in the mutual trade of the Union’s countries has already reached 75 percent. We will continue to work on interlinking our national payment systems and bank cards.

We believe it is important to expedite the dialogue on internal international financial and payment mechanisms, such as transitioning from SWIFT to direct correspondent contacts between the banks of the friendly countries, including through the Russian Central Bank’s financial messaging system. We also propose strengthening cooperation with key lending and financial centres in the Asia-Pacific Region.

New topics related to Eurasian integration include developing cooperation in green technology, environmental protection and energy saving. We expect to receive support and proactive suggestions from the business community.

Colleagues,

In the current international conditions when, unfortunately, traditional trade and economic links and supply chains are being disrupted, Russia’s initiative to form a Greater Eurasian Partnership– an initiative we have been discussing for many years – is gaining a special meaning.

We are thankful to the leaders of the EAEU countries for supporting this proposal from the very beginning. BRICS members such as China and India as well as several other countries also supported creating a Greater Eurasian Partnership. The Shanghai Cooperation Organisation, ASEAN and other organisations have shown interest in this initiative.

Here, I would like to mention several specific ideas pertaining to the comprehensive development of the Greater Eurasian Partnership.

First, it is reasonable to develop shared institutions for specific growth points, including creating a Eurasian export centre and trade houses, expediting the establishment of a Eurasian reinsurance company, examining the issue of developing special trans-border economic zones, probably even with supranational authority.

The second point. It is important to step up the EAEU’s cooperation with foreign partners and inform them about the benefits and advantages of working with the EAEU and of our key projects and plans. My colleagues know that interest in our association is growing. In this context, the EAEU Business Council could play a significant role. It is already successfully developing ties beyond our union. Its business dialogue system may become an example for a potential business cooperation platform in Greater Eurasia.

That said, as I have already noted, it would be desirable to support the freedom of business initiative, the creative activity of business, of our investors. I suggest creating additional, better incentives for this purpose and investing more in Eurasian projects. Naturally, the companies representing national businesses of the EAEU countries must receive priority support.

My third point. It is time to draft a comprehensive strategy for developing large-scale Eurasian partnership. It must reflect the key international challenges facing us, determine future goals and contain instruments and mechanisms for achieving them. We must consider further steps in developing our system of trade and investment agreements, in part, with the participation of the SCO, ASEAN and BRICS member countries.

In fact, we may draft new agreements that will develop and supplement WTO rules. In this context, it is important to pay attention not only to tariffs but also to the removal of non-tariff barriers. This may produce considerable results without subjecting our national economies to risks.

In conclusion, I would like to say the following. It would be no exaggeration to say that Greater Eurasia is a big civilisational project. The main idea is to create a common space for equitable cooperation for regional organisations. The Greater Eurasian Partnership is designed to change the political and economic architecture and guarantee stability and prosperity on the entire continent – naturally, taking account of the diverse development models, cultures and traditions of all nations. I am confident, and this is obvious anyway, that this centre would attract a big audience.

I would like to wish success and productive cooperation to all participants of the Eurasian Economic Forum.

Thank you for your attention. Thank you.

The Secret American Plan to Make Russia Great Again

May 24, 2022

Source

By Dmitry Orlov

It is generally a good idea to avoid ascribing nefarious intent to actions explained by mere stupidity. But this is a case where mere stupidity cannot possibly explain the long, steady procession of foreign policy errors spanning three decades, all of them specifically aimed at strengthening Russia. It is not possible to argue that a surplus of hubris, ignorance, greed and political opportunism and a deficit of competent foreign policy analysts can produce such a result, for that would be essentially the same as arguing that some monkeys armed with drills, mills and lathes can produce a Swiss watch. But the only alternative would be to claim that there is a network of Kremlin’s agents ensconced deep within the bowels of the American Deep State and that they are all working in concert to advance Russia’s interests while meticulously maintaining plausible deniability all the while and at all levels of the operation.

Ostensibly, the plan was to weaken and destroy Russia; but then, following the Soviet collapse, Russia was weakening and destroying itself very well all by itself, no intervention needed. What’s more, every US effort to weaken and destroy Russia has made it stronger; had there existed even a most rudimentary feedback mechanism, so vast a discrepancy between policy goals and policy results would have been detected and adjustments would have been made. Superficially, this may be explained by the nature of America’s sham-democracy, where each administration can blame its failures on mistakes made by the previous administration, but the Deep State remains in power throughout, and it would simply be forced to admit to itself that there is a problem with the plan to weaken and destroy Russia after a few cycles of this unfolding fiasco. The fact that it hasn’t detected any such problem brings us full circle, back to the suspicion that there are Putin’s agents toiling tirelessly deep within the Deep State.

But that’s pure conspiracy theory and we shouldn’t want to go anywhere near that. Suffice to say, there is at present no adequate explanation for what happened. After the Soviet collapse, very little was needed to speed along the collapse of Russia itself. But none of these steps have been taken, and the steps that were taken (with the ostensible goal of weakening and destroying Russia) have done the exact opposite. Why? Below are listed 10 of the most successful initiatives of what appear to be a US Deep State MRGA campaign. If you have an alternative explanation, I’d like to hear it.

1. If Russia were immediately accepted into the World Trade Organization (which it wanted to join) it would have been swamped with cheap imports, destroying all of Russian industry and agriculture. Russia would simply sell oil, gas, timber, diamonds and its other resources and buy whatever is needed. Instead, the US and other WTO members spent 18 years negotiating Russia’s entry into the organization. By the time it joined, in 2006, very little time remained before the financial collapse of 2008, after which time the WTO hasn’t been too much of a factor.

2. If Russia were immediately granted visa-free travel to the West (as it wanted) most working-age Russians would have readily diffused out of Russia, leaving behind a population of orphans and the elderly, much as has happened with contemporary Ukraine. After losing much of its productive population, Russia would not have posed any sort of economic or military threat. Instead, Russia was never granted visa-free travel and instead faced restrictions that have only increased over time. By now most Russians have internalized the idea that they are simply not wanted in the West and that they should seek their fortune back home.

3. After the Soviet collapse, Russia itself collapsed into a loose mosaic of regional centers. Many of them (Tatarstan, Bashkortostan, Urals Republic, Chechnya) entertained notions of secession. Left untouched, Russia would have devolved into a loose confederation with no ability to formulate joint foreign policy. Instead, resources and mercenaries were pumped into Chechnya, turning it into an existential threat to Moscow’s authority and forcing it to become militarily assertive. The fact that Chechen volunteers are now fighting on the Russian side in the Ukraine underscores the failure of America’s Chechnya policy.

4. If, following the Soviet collapse, NATO simply recognized that the threat it was intended to counter no longer existed and either dissolved or simply became quiescent, Russia would never have thought it necessary to rearm itself. Indeed, Russia was happily cutting up its ships and missiles for scrap metal. Instead, NATO saw it fit to bomb Yugoslavia (for a made-up humanitarian reason) and then to relentlessly expand eastward. These actions have communicated most adequately the message that it wasn’t the USSR, and Communism, that the West opposed but Russia itself. And while, by the time the 1990s rolled around, not too many Russians were eager to fight and die for the greater glory of communism, rising to the defense of Motherland is an entirely different story.

5. If Russia’s near-abroad were simply left alone, Russia would never have considered venturing outside of its already vast and underpopulated territory. But then came a provocation: acting with US sanction, Georgian forces attacked Russian peacekeepers in South Osettia during the Beijing Olympics of 2008, forcing Russia to react. The fact that Russia could demilitarize Georgia in just a few days was a major confidence boost and taught it that NATO and NATO-trained forces are soft and squishy and not much of a problem. Russian territory expanded to include South Ossetia, with Abkhazia thrown in as an added bonus, paving the way for further territorial expansion (Crimea, Donbass, Kherson… Nikolaev, Odessa…).

6. If the US left alone Syria, a close Russian ally for close to a century, Russia would not have expanded into the Mediterranean region. As it is, Syrian government invited Russia to help it turn the tide in its war against US-supported ISIS and Russia destroyed ISIS with the help of a rather small contingent of air-and-space forces at just one airbase. The action in Syria has showcased modern Russian weapons systems and has led to a 20-year backlog in weapons orders from around the world. What’s more, Russia’s allies around the world know that if the US/NATO, or their mercenaries, give them any trouble, all they have to do is whistle and Moscow will rush in with their precision bombs and neatly stack the corpses.

7. After the 2014 Kiev putsch and the re-accession of Crimea, US/Western sanctions were immensely helpful in helping jump-start a large-scale program of import replacement, rejuvenating both Russian industry and agriculture. Russia is now largely self-sufficient in food and a major food exporter. Its position as the world’s main breadbasket will be further improved by the addition of Eastern and Southern Ukrainian “black earth” regions of uniquely fertile land. The sanctions were accompanied by speculative attacks on the ruble which drove its value down from 30 to the dollar to 60 (where it stands today) making Russian products much more competitive internationally and stimulating foreign trade.

8. The endless hollow threats to block Russia from using the SWIFT interbank messaging system have prompted Russia to create its own payment system, which is now integrated with China’s. The arrest of the $300 billion Russian sovereign wealth fund that was held on deposit in Western banks, along with freezing the funds of Russian oligarchs, have taught Russians not to trust Western banks and to avoid keeping their money abroad. All of these hostile actions in the finance space have paved the way for a rather measured response that has instantly made the ruble the most valuable and stable currency on the planet, leaving the dollar and the euro vulnerable to hyperinflation.

9. The eight-year war waged by the Ukrainian army, with unquestioning US/NATO support, against the Russian civilian population in the Donbass, has produced a very specific understanding throughout Russia’s population: that the West wants to exterminate it. When the Ukrainians then declared that they want to build nuclear bombs, and when it was discovered that Pentagons bioweapons labs in the Ukraine were working on creating pathogens specifically targeting Russians, and when, finally, it became clear that it was not just the Ukrainians but all of NATO was behind it, that the Ukrainians-plus-NATO were poised to launch an all-out attack, Russia pre-empted it by launching its own Special Operation. Cynical as this may seem, the previous eight-year shelling of buildings full of old people, women and children, shown live on Russia’s nightly news but steadfastly ignored in the West, was instrumental in producing approval ratings for the Special Operation that has reached 76%, with similar ratings for Putin, his government and even many of the regional governments. Now that, Western arms shipments notwithstanding, the Ukrainian military is being whittled away at a rate that will finish it off in approximately 20 days (the calculated “Day Z”), Russia is poised to emerge as an outright victor in World War III which, just like the Cold War, which it had lost, was barely even fought. This will restore Russia’s military’s mystique of being perpetually victorious.

10. Finally, Russia should be grateful for the lavish funds provided over the years by the US and the collective West in support of free speech and freedom of the press in Russia, by which is meant pro-Western propaganda. First, it did help liberate Russia’s media space, to a point that now Russia is much more open to freedom of self-expression than any of the European countries or the US, with barely a hint of corporate censorship or cancel culture that are rampant in the West. Second, so ham-handed and overbearingly dumb was the Western propaganda onslaught that the Russians, after processing it for some years, now openly laugh at the pro-Western narrative, and opinion research agencies report Russian support for pro-Western policies only in trace amounts. The process was helped by the sheer ludicrousness of various developments in the West: cancel culture, MeToo, LGBT, child sex change operations, promotion of pedophilia and all the rest, which produced a wave of revulsion. This 180º reversal, from overwhelmingly pro-Western opinions of the early 1990s to the current situation, are a crowning achievement of the entire three-decade-long Deep State campaign to Make Russia Great Again (MRGA).

I do not wish to argue that the existence of MRGA within the US Deep State is demonstrably, provably true. But I urge you to follow Arthur Conan Doyle’s famous dictum that “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth” and let me know what you come up with.

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Megalopolis x Russia: Total War

May 07, 2022

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

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

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

Holderlin, Hyperion’s Fate Song

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

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

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

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

Mastering the Five Seas  

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

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

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

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

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

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

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

Moving “at the speed of war”

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

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

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

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

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

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

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

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

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

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

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

The Fall

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

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

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

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

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

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

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

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

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

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

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

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

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

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

New pure-bred ´Schrödinger-seizable´ euros

May 02, 2022

Source

by Jorge Vilches

The EU had already promoted and achieved all-around chaos regarding very simple yet absolutely essential trading terms urgently to be agreed with the Russian Federation. As if that were not enough, now adding fuel to the fire EU member countries continue to dangerously play their traditional fiddles while declaring that “ some contracts are holier than others, didn´t you know ? ” This daring criterion also means getting back to square one with an ever larger and riskier conflict while everybody´s patience is running thin. If Europe does not reverse course within a very limited time frame it will needlessly smash itself head-on against a very harsh reality. Once triggered, the subsequent uncontrolled demolition cannot rewind no matter how many desperate “emergency meetings” EU officials call for.

Ref # 1 https://www.aljazeera.com/economy/2022/4/27/eu-warns-companies-not-to-buy-russian-gas-in-rubles

Ref # 2 https://www.euronews.com/my-europe/2022/04/28/eu-countries-paying-for-russian-gas-in-roubles-may-face-legal-action-warns-dombrovskis

ground-breaking EU criterion

The EU has now come up with a ground-breaking legal criterion that international jurisprudence should rapidly adhere to and possibly improve. Thus it could include it in Treaties and other important legislation and, in view of its apparent virtues, even apply it ex-post-facto such as in this case. By the way, with this new international flat-Earth public policy, the EU would be the only party entitled to unilaterally uphold some contracts and not others per its own wishes and convenience as if it were a God-given right. Not anybody else, no way. So Europe, supposedly the cradle of Western civilization, is now trying hard to earn “The Joker” award disregarding the livelihood of at least 800 million human beings plus serious negative impact upon the rest of the world. Granted, history will not be kind with EU leaders.

800 million Europeans

Obviously, in view of the above, the interruption of Russian imports – including very specific, exclusive, and unreplaceable grades of Russian natural gas, oil, and coal – is now definetly in the cards for some or all European countries. This will necessarily impact beyond belief a still clueless population which continues to play the role of vassal puppets to Anglo-Saxon malignant dictates without actually following how they are being had.

Ref #3 https://www.news18.com/news/explainers/explained-what-would-paying-for-natural-gas-in-rubles-instead-of-dollars-euros-mean-4921046.html

C:\Users\Jorge Vilches\Desktop\index.jpg

Fool me once, shame on you,…

Four weeks ago, in view of the massive seizure of its legitimate funds, Russia was left with the only option of requiring Rubles as payment for its exports as such currency is exclusively under Russia´s purview and thus cannot be freezed and/or seized by any stakeholder, EU included. And negotiations were making very definite progress along such lines up until the past week. A month ago, the only real problem was for EU countries to find Rubles other than by selling their “theoretical” gold bullion vaulted in the UK and the US which many claim is either non-existent or highly encumbered with many dozens of claimees standing in line. So the alternative viable solution wisely found up until last week was to convert euros into Rubles at Russia´s Gazprombank as it had not been sanctioned – at least not yet – as possibly the EU had foreseen its role for the proposed solution at hand. So Vladimir Putin, President of Russia, took the trouble to personally explain the exact simple two-step payment procedure by phone conversation with German Chancellor Olaf Scholz. By the way, the procedure is so simple and so straight-forward that even tie-wearing boomers can understand it.

back to square 1

But now European governments and energy companies are proudly rejecting the idea of paying in Rubles on the basis that gas import contracts clearly specify that the allowed currencies to be used for payment are only euros or dollars, not Rubles. Accordingly, they argue that one side of the deal – in this case the Russian Federation – cannot change such contractual obligation by its own decision (!). The EU now says “This is an absolutely clear circumvention of the EU sanctions.” “Opening a Ruble account at Gazprombank in and by itself may breach the EU sanctions…”

Ref # 4 https://www.aljazeera.com/news/2022/4/28/europe-struggles-for-clarity-on-russias-roubles-for-gas-demand

a deal is a deal…

“No way to now require Rubles, it´s contractual, see ?” It does not matter that Russia´s fully contractual foreign currency accounts in euros & dollars were seized by the EU to the tune of $ 300+ billion dollars. No, that contract is to be discussed another day. This is ´different´ you see, and thus “The Czech Republic will not give in to Russia. Other countries that accept paying in Rubles are making a mistake. It is a violation of sanctions. It is legally dangerous.” Danish energy group Orsted also won´t pay for Russian gas with Rubles. “We refuse to accept unilateral demands (!!) from Russia and Gazprom”. Ref # 5 https://www.rt.com/business/554743-eu-nations-reject-gas-terms/

…but some contracts are holier than others (no ?)

So, as Europe badly needs natural gas, the corresponding Russian supply contracts need to be complied with, as specified, with euros or dollars – but not with Rubles. While the Minsk Agreements, duly brokered and endorsed by the same European counterparts, do not have to be complied with, what for ? Neither should Europe comply with the most elementary property rights and contractual banking rules regarding Russian funds in euros and dollars illegally seized by the EU. The Western world has unilaterally declared that contractual property rights are no longer valid so now bank accounts anywhere – or other assets — are freezable, seizable and forefeiturable. Weaponizing Swift access and use is also contractually unacceptable, yet Western powers decide upon it freely dismissing the illegality.

the Schrödinger euros – “The Saker”

Last week, “The Saker” published what turned out to be a highly visible article entitled the Schrödinger euros which explained the situation simply and clearly up until that date, exposing how deceitful the EU payment-in-euros proposal was. So much so that Russia could only offer the euros-converted-to-Rubles payment alternative to avoid confiscation yet again. Many of the comments therein were highly pertinent and definitely knowledgeable, particularly JD´s most valuable input. One valid conclusion arrived at such commentariat debate was that thru the euro-converted-to-Rubles payment mechanism, into the future Russia would still run the very serious risk of a possible seizure, freezing, arresting and/or confiscation of remnant euros — not yet converted into Rubles — already paid to and duly received by the Russian side. This would include euros or dollars not converted into Rubles — or other currencies — and still held by Russia or third parties (China, India, or whoever) as a result of Russian payments or investments. Thus, remnant unconverted euros or dollars, per their Schrödinger-seizable nature, would eventually be a “hot potato” liability in whoever hands they were held, Russian or otherwise. Beware of these ´Schrödinger-seizable´ euros…

Ref # 6 https://thesaker.is/the-schrodinger-euros/ Depending upon circumstances and the specific point in time that such possible risk could become real, the sums of euros – or dollars — involved could be humongous and even exceeding the $300+ billion of Russian funds currently frozen & seized. Let´s recall that these transferred euros would not be physical and, therefore, practically untraceable bills. Instead, these are very distinct digital liabilities of European banks which can be nullified at will through revocation or claw-back anytime in the future either applied on Russian holders and/or third parties at whichever domain or legal monetary jurisdiction these euros may lie at…

Other unconverted currencies received by Russia in payment for its exports – such as US dollars – from whoever else in the world also run the same possible seizability, something which would also be applicable to other countries…

In sum, the EU´s financial criteria have been transformed into a random and unpredictable quantum mechanics casino

  • The EU badly needs to keep importing Russian produce for years to come.
  • Russia is willing to sell such produce if they get effectively paid, no charity possible.
  • Russia doesn´t accept euros or dollars as they would be just as seizable as the now frozen legitimate Russian funds that have been rendered unusable per unilateral sanction applied by the EU.
  • Russia proposed to be paid by conversion of the euros received into effective Rubles under the purview of the Russian Central Bank. Once the Rubles are duly credited the delivery of Russian produce could proceed, not before. This means that the contractual obligation is only satisfied when the euro-conversion transaction into Rubles is concluded at Gazprombank.
  • The EU now objects to that and says that actually the EU payment should be considered as duly fulfilled the instant that euros are transferred and not a millisecond later. This means that Russia would be obliged to comply with the contracts whatever or whenever happens with the conversion into Rubles of the euros received.

pure-bred pedigreed ´Schrödinger-seizable´ euros

So now the EU would accept to pay for Russian imports only with pure-bred pedigreed ´Schrödinger-seizable´ euros not bastardized into Russian Rubles as such are “not contractual” and thus against the “rules-based EU”. Meaning that per the EU the payment contractual obligation would be fulfilled the instant that such pure-bred euros are transferred to Gazprombank without the need to consider any aspect of the subsequent bastardizing conversion into Rubles. The EU only cares about and acknowledges pure-bred pedigreed ´Schrödinger-seizable´ euros. Thus Russia would be obliged to deliver the goods the instant it receives such “contractual” euros at Gazprombank.

Per Al Jazeera, EU spokesman Mr. Eric Mamer stated the official EU commission position: “ If the contract stipulates that payments should be made in euros or in dollars, then the company’s obligation ends once it has made such payment in euros or dollars,” Mamer said. “If the payment takes place in Rubles, then we are no longer talking about the agreed contract terms and we are circumventing the sanctions. What we cannot accept is that companies are obliged to open a second account and that between the first and second account the euros are under full control of Russian authorities and the Russian Central Bank who says that the payment would only be complete when it is finally converted into Rubles. This is an absolutely clear circumvention of the sanctions. Opening a Ruble account at Gazprombank in and by itself may breach the EU sanctions… “

Ref# 7 https://www.aljazeera.com/news/2022/4/28/europe-struggles-for-clarity-on-russias-roubles-for-gas-demand

So, before making any payments, EU buyers would have to get from their Russian counterparts a full agreement in writing specifying that the payment contractual obligation would be fully completed and satisfied as described above. The subsequent conversion of such euros — or dollars — into Rubles after the euro transfer has been duly credited is something under the entire responsibility and risk of the Russian authorities. Such a written statement would have to be duly approved and signed beforehand by pertinent officials from the EU and the Russian Federation. This means that, according to the EU, the instant that such Schrödinger euros or dollars were deposited – and therefore subject to seizure per the many sanctions already approved and effectively applied to Russia, or even possible future sanctions to be thought of against Russia or others – the contract has been fulfilled and Russia is obliged to deliver the goods.

… fool me twice, shame on me

So, in view of current and possible future EU sanctions, attitude and seizures, as the President of Russia Vladimir Putin clearly explained to the German Chancellor Olaf Scholz, to put it nicely the Russians beg to differ. Accordingly,

Step (1) is the transfer of euros to a Gazprombank account.

Step (2) is the conversion of such euros into Rubles per Gazprombank´s operational criteria including timing, rate conversion factors, and fees.

And only after such step (2) of euro conversion into Rubles is duly and satisfactorily concluded would the transaction be considered as completed and fulfilled.

Ref # 8 https://www.zerohedge.com/energy/trump-was-right-putins-gas-strategy-gives-germany-only-bad-worse-choices

brace for impact

After Russia´s funds were seized, the way to pay for Russian produce remains unchanged from day 1:

  1. payment in Rubles thru the euro conversion mechanism proposed by Russia per the above mechanics.
  2. payment in Rubles thru the sale of gold bullion in the terms that Russia has offered from day one.

“ So the EU better be prepared to continue paying (many) billions of euros each week to Russia, supporting the Ruble and subsidizing its military in the process. It’s not just a short-term problem, either. If Germany manages over time (many years ?) to find adequate replacements for Russian natural gas, oil and coal, it will be at (tremendously) much higher prices. The era of cheap-Russian natural gas fueling the German economy is over. German energy-intensive companies, like its chemical giants, could not compete in the global market. Germany will face painful choices about the future of its industrial economy”. So without very specific and unreplaceable exclusive Russian grades of natural gas and oil and coal the huge German industrial giants run the very serious risk of shutting down continuous year-round processes which would mean irreparable harm + negative impact on the German economy and the rest of the world. Ref # 9 https://www.zerohedge.com/energy/trump-was-right-putins-gas-strategy-gives-germany-only-bad-worse-choices

The European conventional military dependence on Russian fuels is beyond overwhelming, close to checkmate.

The gold card

Regarding option (B) payment in Rubles thru the sale of gold bullion, I recommend two most pertinent “The Saker” recent articles, namely

Ref # 10 http://thesaker.is/bretton-woods-iii-the-new-big-bang-suicidal-europe-saved-by-gold/?

Ref # 11 http://thesaker.is/natos-internal-gold-war/

RE-published ]

Schrödinger gas for Schrödinger euros ?

As stated before, last week “The Saker” published what turned out to be a highly visible article namely the Schrödinger euros which explained the situation simply and clearly up until that date, including the “Schrödinger” details exposing how deceitful the EU payment in euros proposal was. Ref # 3 https://thesaker.is/the-schrodinger-euros/

As has happened on other occasions, the above “The Saker” article was also RE-published in different specialized blogs such as Zero Hedge wherein commentariati posted comments and analysis of their own. In this occasion, “not-me—it-was-the-dog” posted an interestingly creative comment which paraphrases highly pertinent aspects with refined sarcasm, namely

“… In exchange for so-called Schrödinger Euros, now Vladimir Putin ´the merciless´ has decreed the creation of Schrödinger NatGas, whereby GazPorn would thus “print” cubic meters of natgas with a keyboard 100% for free and then transfer such gas over to the European purchaser’s storage tanks in the EU albeit now under “frozen” status.

So Russia never gets to use such euros – which actually never see the light of day – and accordingly are not inflationary in any and every sense of the term as nobody else can use them either, and Europe never gets to burn such gas – which actually never sees the light of pilot – and accordingly does not contribute to global warming!

Thus, by not entering into any economy at all in no way, shape, or form the EU and Russia can exchange lots of nothing for free, and Greta will squirm with delight. Easy see ?

A West-mandated Russian “default”: who wins and who loses ?

April 23, 2022

Source

By Jorge Vilches

Russia is currently “defaulting” or — in the best of cases — on a very direct and firm path to an inevitable “default”.

Or at least this seems to be what the Western press and international rating agencies are pushing and rooting for, same as specialized academia, think-tanks, the political-financial-military establishment… and pretty much the whole Western Hemisphere including the US and Europe + South Korea, Japan, Australia and New Zealand. And it can reasonably be assumed that the above is most probably due to the fact that Western governments have officially and unequivocally dictated that it is not only “fair” but also wise to

(1) freeze and/or eventually “arrest” Russia´s reserve currency stockpiles held in international banking accounts

(2) force Russia to pay its international financial obligations from abundantly solvent banks within Russia

(3) declare that Russian payments in rubles instead of US dollars or euros or yens or GBP are not valid

(4) declare Russia to be “defaulting” on its obligations by not following the above mandates

(5) in case of doubt, Western governments remind us that Russia´s mandated “default” will necessarily be contested in UK Courts… which of course will always decide fully against Russia… undoubtedly and conveniently leaving aside whatever could be left of the once-traditional British “fair play” of yore.

And the West does not beat around the bush regarding this official policy with US Treasury Secretary Janet Yellen and US Federal Reserve Chairman Jerome Powell walking out of the recent G-20 meeting as soon as the mike was switched over to the Russian representative. The staged move was also well coordinated with multiple “unfriendly” finance ministers and central bank governors while others present virtually shut off their cameras immediately after the Russian official uttered his first word. And leaving no room for any doubt, White House Press Secretary Jen Saki tweeted in no uncertain terms that “We support her (Janet Yellen´s) steps, and it’s an indication of the fact that President Putin and Russia have become pariahs on the global stage”. By the way, with some notable exceptions, for the same “Ukranian reasons” many of the above have openly proposed to kick Russia out of the G-20 group ASAP.

So, to make a long story short, for all practical purposes Russia will necessarily “default” soon enough per the Western strategy of “we won’t let you pay but you must pay”… or thereabouts.

[ Ref #1 https://www.reuters.com/world/delegate-protests-over-russia-upstage-g20-meeting-2022-04-19/ ]

[ Ref #2 https://www.rt.com/news/554236-g20-summit-boycott-russia/%20%20- ]

Of course, Russia says that (a) the above is false argumentation for an “artificial default” of sorts tailored-made to unnecessarily hurt Russia yet again and (b) it´d be business as usual had the West not frozen Russia´s international banking accounts. Russia adds that the West´s blocking of payments is the real default at hand, leaving on record that the freeze on Russian funds and private companies and individual assets is simple “theft” per Russian Foreign Minister Sergei Lavrov´s view of the unprecedented dictats which no one could have foreseen from supposedly civilized and world-leading countries in the 21st. century. [ Ref # 3 https://interfax.com/newsroom/top-stories/75126/ ]

  • In passing, all-important China thinks pretty much along the same Russian lines by leaving on record that “Arbitrary freezes of foreign exchange reserves of other countries constitute a violation of sovereignty and is tantamount to weaponizing economic interdependence”.The Chinese ambassador to the UN, Mr. Zhang Jun, made such remarks at a UN Security Council meeting on Ukraine thus clearly “blasting arbitrary seizures of countries’ assets” (sic).

[ Ref #4 https://www.rt.com/business/554226-china-west-freezing-assets-violation/ ]

So then, actually the real problem that still remains is to analyze the possible consequences of Russia´s 99.99% certain “default” and most specifically if it could possibly lead to yet another Western World self-shooting spree as has happened with other fully-backfiring sanctions temporarily “swept under the rug” so to speak. Accordingly, let´s ask two basic and always ever-important questions since time immemorial, i.e.,

Cui bono ? (who benefits ?) and cui nocere ? (who loses ?)

To find some answers, let´s take a closer look at some of the consequences of the West-mandated Russian “default

  • 1. Absent Russia

Russia currently exports many hundreds of key produce 101% essential for Western countries as we know them today. All hell will break lose the instant Russia trades less or stops trading altogether with – and getting funding from — the 20% of the Western world… while openly trading and funding itself with the remaining 80% without using the dollar/euro financial system but their new Bretton Woods III arrangement instead. As a matter of fact, the US has already banned Russian ships while other Western “unfriendlies” would follow.

[ Ref # 5 https://www.rt.com/russia/554281-us-bans-ships/ ] Meanwhile, Russia´s economic and financial plans

continue steady under Elvira Nabiullina´s very recent renewal as central bank governor for another 5 years.

  • 2. Inflation

The knee-jerk reaction to the above will be further unmitigated money printing with readily visible impact on the Western world while middle-class incomes collapse behind the very thin productive veneer of Western consumer economies. Additionally, think supply-less price increases with Covid impact + Russia sanctions + China´s reaction regarding supply chain disruptions as addressed by the BIS General Manager, the Central Bank of central banks, Dr. Agustín Carstens [ Ref # 6 https://www.bis.org/speeches/sp220405.htm ]

Plus guru David Stockman´s perspective in ”having the US Federal Reserve decades-long experiment in egregious, inflationary money-pumping splattering ignominiously all over the Eccles Building (sic)

[ Ref # 7 https://internationalman.com/articles/david-stockman-on-inflationary-hell-thats-about-to-break-loose/ ] …

  • 3. Non-payment

Investors in Russian defaulted debt (think Western companies & banks) will not get paid a single cent on Russian debt instruments per sé… nor possibly neither from their Credit Default Swap (CDS) hedge they most probably bought for CYA “insurance” purposes. Furthermore, investors would need to make their claims also against the blocking banks thus definetly facing an utterly complex yet most probably unsuccessfull legal road with corresponding expenses. All the while Russia will no longer accept seizable / freezable dollars or euros for its much-needed produce … only rubles or gold bullion from the many Western “unfriendlies”…

[ Ref # 8 https://fortune.com/2022/04/21/russia-debt-credit-default-swap-ruble-payment-sanctions-ukraine/ ]

  • 4. Bye bye SWIFT

Russia has already replaced the SWIFT payment messaging system by its own equivalent SPFS which apparently works just as smooth as 52 foreign organizations from 12 countries have joined.

[ Ref # 9 https://www.rt.com/business/554221-russia-payment-system-members-secret/ ]

  • 5. IPR rights

Russia will take full advantage and make full use of patents, models, intellectual property rights, designs, etc. with no compensation per Presidential Decree No 299, 6 March 2022

[ Ref # 9 https://www.lexology.com/library/detail.aspx?g=39ef25c3-1bf0-4029-bac2-de0ac11965da ]

  • 6. Property rights

The Western financial world has openly declared that property rights are no longer valid so, for example, dollar and euro and other bank accounts anywhere – or other assets — are vulnerable to freeze / seizure.

  • 7. Ukraine claims

Tatiana Orlova — lead emerging markets economist at Oxfo9d Economics — points out that another problem for bondholders and creditors at large is that Ukraine may lay a claim to Russian assets in international courts (a.k.a. UK courts…) to pay for the rebuilding of the country.

[Ref#10 https://www.businessinsider.com/russia-debt-default-us-could-seize-assets-resolution-ukraine-sanctions-2022-4 ]

  • 8. Corporate debt defaults

Tatiana Orlova has also warned about a probable “avalanche” of Russian corporate debt defaults given that the US is taking a hard line and banning American banks from processing payments. There were roughly $98 billion of Russian corporate foreign-currency bonds originally outstanding as the war began in February, according to JPMorgan while Western governments have already frozen at least 50% of the $600+ billion Russian stockpile of foreign reserves.

  • 9. Massive migrations

Europe better react ´efficiently´ (?) to a sudden exposure of many millions of unprecedented & unexpected migrants for which it is not anywhere closely prepared for either politically or economically… if it could ever be.

  • 10. Oil & gas & coal

Not having the “right” Russian grade fuels which EU refineries, power plants and equipment specifically need means seriously upending all manufacturing and production, food, heating, power availability, A/C, tourism, etc. etc. with freezing cold and severe scarcities in Europe for too long a period for even to consider finding valid alternatives, if any exist, in a coming logistical nightmare. Let alone achieving self-sufficiency with relatively climate-friendly fuels all year round. So Europe wants to angrily divorce Russia while conveniently forgetting the many offspring it has to feed. Some pundits are entertaining the idea of $500 dollar oil… meaning that Russia could export less fuels than today but – counter-intuitively — still collect much more.

  • 11. Reserve currency blues

Obviously affecting not only the US dollar de-dollarization process but also the euro, the GBP and the yen.

The idea being that these reserve currencies – with Russia absent – will necessarily lead to implosion as their

underlying economies & finances will keep performing ever worse with no reasonable future in sight.

[ Ref. # 11 https://www.bloomberg.com/opinion/articles/2022-04-20/euro-weakness-may-lead-to-a-currency-

crisis-if-the-ecb-doesn-t-act-soon ] Case in point: “Israel Dumps The Dollar For China’s Renminbi

[ Ref #12 https://quoththeraven.substack.com/p/king-dollars-demise-israel-dumps?s=w ]… same as Saudi Arabia.

  • 12. US mission impossible

US finances rely on foreigners constantly lending the US huge amounts of ever-growing money non-stop. Full credit to David Goldman´s article per Ref. # 13 below. In sum, since 2008 alone, at negative effective rates the US has borrowed $18 trillion from foreigners… who now might not renew at least some of such loans. Furthermore, foreigners keep about $16 trillion in overseas bank deposits to finance international transactions. And while struggling with highly adverse conditions in the US economy, simultaneously the Federal Reserve also has to be perceived as un-winding a $9 Trillion dollar balance sheet. The US stock market now trades at nearly thirty times earnings with foreigners also having enormous exposure to it and real estate markets also. Please I encourage reading the full Goldman article at Ref # 13 https://americanmind.org/memo/fatal-dependency/

On the other hand, since the get-go Europe´s ECB has found itself constantly defying the laws of gravity. But Europeans have been doing this for decades – Target 2 et al shenanigans included — until they reach the end of the road where the proverbial can-kicking theater stops dead in its tracks with no further gimmicks left.

So, who wins and who loses ? As always, the answer is not perfectly clear-cut although some general guidelines can be inferred albeit depending upon how events unfold. Of course, Europe at large is a very clear loser that at this point in some respects should be considered a US Protectorate. Russia has started a whole new ball game with so far them losing 1 goal to 0 but with the great advantage that (a) this game has just started and (b) it´s played with Russia´s ball — so to speak — which they might take away if they ever wanted to… in which case the score would not matter.

So who wins ? The short answer is, despite enormous difficulties to overcome, in many important senses probably the new Russia-led Bretton Woods III economy & financial system, including China and the BRICS. So who loses ? Again, the short answer seems to be the Western economies & their financial systems at large, most particularly Europe. The post-Brexit UK may find some tricks to enable a temporary better outcome, but not for long as the Brits need a healthy European economy to survive while the Global Britannia project never left the Last Night of the Proms.

What´s probably 100% safe to assume is that Western strategists and its establishment elites — the Davos crowd included — have all acted and reacted to Ukraine events in a very childish & visceral manner and have not thought out the consequences of their respective decisions far enough and well enough. In other words, as cognitive psychology would have it, in traditional Anglian style Europe has unexplainably cut its nose off to spite its face. Go figure…

‘Close NATO’: Demonstrators protest US imperialism in NY

April 03, 2022

Source: Agencies + Al Mayadeen Ne

By Al Mayadeen Net 

US citizens took to the streets of New York to demonstrate against the United States and NATO in light of Russia’s special military operation in Ukraine.

Demonstrators protesting in the center of New York against NATO and the United States’ actions in Ukraine

Demonstrators gathered in the heart of New York on Saturday and held a rally in support of Russia and the People’s Republics of Donetsk and Lugansk, in light of the mounting Western aggressions against the three even before the start of the war in Ukraine.

Under the banner of anti-fascism and anti-US imperialism, the demonstrators chanted for Russia and its actions and decision to counter Nazism in Ukraine and stand up to NATO’s eastward expansion.

“Close NATO”, “No war on Russia and Donbass,” and “Stop the terror of neo-Nazis in Ukraine” were among the banners held during the protest, with participants stressing the need to dissolve the Western alliance.

“No war for oil or profits, hands-off Russia,” one demonstrator chanted, calling on his country to stop financing wars and instead help its own citizens with housing and healthcare.

“I am here to stand against fascism and Ukraine and the USA all around the world,” another demonstrator stressed, accusing the Kiev regime of trying to “fight to the last Ukrainian, and they do not care for the health or wellbeing of the Ukrainian people.

Another demonstrator outlined the West’s spreading of disinformation against Russia and around Ukraine, saying the American people were “being bombarded with lies and misinformation and lack of context of what is happening in Ukraine right now.”

He also went on to underline the fact that the Western media was leaving their people in the dark regarding Ukraine’s war against the people of Donbass for the past eight years, which it had been waging using US and NATO weapons. He also highlighted that Russia had been asked to intervene by the people of Donbass to “help stop the war, not start a new war.”

“After pushing Ukraine to invade Donbass again, the [US] is trying to portray Russia as the aggressor and hitting the country with sanctions [and] threatening a world war with the buildup of NATO forces. We are out here today to say no to that,” he concluded.

The US and its allies have rolled out comprehensive sanctions, including restrictions on the Russian central bank, export control measures, SWIFT cutoff for select banks, and closure of airspace to all Russian flights. Many of their companies have suspended their Russian operations.

Meet the New, Resource-Based Global Reserve Currency

April 01, 2022

A new reality is being formed:

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

a multipolar one is taking shape.

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

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

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

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

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

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

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

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

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

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

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

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

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

Bye bye oligarchs

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

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

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

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

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

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

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

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

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

Time to be sovereign

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

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

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

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

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

No wonder the Beltway is berserk.

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

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

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

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

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

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

Michael Hudson: Interview with Margaret Flowers, WBAI, March 29, 2022

March 30, 2022

Michael Hudson interviewed by Margaret flowers, Clearing the Fog, March 29, 2022. https://popularresistance.org/michael-hudson-us-dollar-hegemony-ended-abruptly-last-wednesday/

Posted with Dr Hudson’s permission

Margaret Flowers: You’re listening to Clearing the FOG, speaking truth to expose the forces of greed, with Margaret Flowers. And now I turn to my guest, Michael Hudson. Michael is the president of the Institute for the Study of Long-term, Economic Trends, ISLET. He’s a Wall Street financial analyst and a distinguished research professor of Economics at the University of Missouri, in Kansas City. He’s also the author of numerous books and recently updated his book, “Super Imperialism: The economic strategy of American Empire.” Thank you for taking time to speak with me today, Michael.

Michael Hudson: Well, thanks for having me on Margaret.

MF: You’ve talked a lot and written a lot about dollar hegemony and what’s happening now with de-dollarization. Can you start out by explaining to my listeners what dollar hegemony is and how it has benefited the wealthy class in the United States?

MH: Dollar hegemony seems to be the position that has just ended as of this week very abruptly. Dollar hegemony was when America’s war in Vietnam and the military spending of the 1960s and 70s drove the United States off gold. The entire US balance of payments deficit was military spending, and it began to run down the gold supply. So, in 1971, President Nixon took the dollar off gold. Well, everybody thought America has been controlling the world economy since World War I by having most of the gold and by being the creditor to the world. And they thought what is going to happen now that the United States is running a deficit, instead of being a creditor.

Well, what happened was that, as I’ve described in Super Imperialism, when the United States went off gold, foreign central banks didn’t have anything to buy with their dollars that were flowing into their countries – again, mainly from the US military deficit but also from the investment takeovers. And they found that these dollars came in, the only thing they could do would be to recycle them to the United States. And what do central banks hold? They don’t buy property, usually, back then they didn’t. They buy Treasury bonds. And so, the United States would be spending dollars abroad and foreign central banks didn’t really have anything to do but send it right back to buy treasury bonds to finance not only the balance of payments deficit, but also the budget deficit that was largely military in character. So, dollar hegemony was the system where foreign central banks keep their monetary and international savings reserves in dollars and the dollars are used to finance the military bases around the world, almost eight hundred military bases surrounding them. So, basically central banks have to keep their savings by weaponizing them, by militarizing them, by lending them to the United States, to keep spending abroad.

This gave America a free ride. Imagine if you went to the grocery store and you just paid by giving them an IOU. And then the next week you want to buy more groceries and you give them another IOU. And they say, wait a minute, you have an IOU before and you say, well just use the IOU to pay the milk company that delivers, or the farmers that deliver. You can use this as your money and just you’ll as a customer, keep writing IOU’s and you never have to pay anything because your IOU is other people’s money. Well, that’s what dollar hegemony was, and it was a free ride. And it all ended last Wednesday when the United States grabbed Russia’s reserves having grabbed Afghanistan’s foreign reserves and Venezuela’s foreign reserves and those of other countries.

And all of a sudden, this means that other countries can no longer safely hold their reserves by sending their money back, depositing them in US banks or buying US Treasury Securities, or having other US investments because they could simply be grabbed as happened to Russia. So, all of a sudden this last week, you’re seeing the world economy fracture into two parts, a dollarized part and other countries that do not follow the neoliberal policies that the United States insists that its allies follow. We’re seeing the birth of a new dual World economy.

MF: Wow, there’s a lot to unpack there. So, are we seeing then other countries starting to disinvest in US dollars? You’ve written about how the treasury bonds that these central banks buy up have been basically funding our domestic economy. Are they starting to shed those bonds or what’s happening?

MH: No, they haven’t been funding our domestic economy because the Federal Reserve can create its own money to fund the domestic economy. We don’t need to borrow from foreign countries to fund our economy. We can print it ourselves. What the dollar hegemony does is fund the balance of payments deficit. It funds our spending in other economies, our spending abroad. It doesn’t help our economy, but it does help us get a free ride from other countries. The more dollars we spend in making a military base, all these military expenditures get turned over to the local Central Bank that turns and sends them back to the Federal Reserve or deposits them in US bank accounts. So, it’s the international free ride we get, not a domestic free ride.

MF: Okay. So are we seeing countries now, since this past week, starting to move their assets back to repatriate them because I know for Afghanistan, a big problem is that most of the government’s money was outside of the country and that has been used as a weapon against Afghanistan by seizing those assets and not allowing the Central Bank of Afghanistan to have them. Are we starting to see other countries repatriating their money and gold?

MH: Well, figures are only available at the end of each month, reported at the end of each month and then there’s a two-month delay, so we don’t have any idea what’s happening. But I’ve been talking to people all over the world in the last few days and the consensus is that everybody is now deciding the only place, certainly if you’re China or Russia or Kazakhstan or you’re in the Eurasian orbit, South Asia, East Asia, you realize, wait a minute, if all we have to do is something like Allende did in Chile or all we have to do is refuse to sell off our industry to American investors and they can treat us like they’ve treated Venezuela. So you can imagine that everybody’s watching this and there’s an expectation that as a result of the war in Ukraine, that’s really America’s NATO war, that this is going to create a balance-of-payments crisis throughout the whole Global South as their energy prices go up, oil prices soar, food prices are going to soar and this is going to make it impossible for them to pay their foreign debts unless they go without food and energy. Obviously, this is a political crisis. That is, the only result can be to split the world in two.

MF: You’ve been writing about this happening. You’ve written that the de-dollarization has been happening relatively quickly in recent years. So, are we now we’re now just seeing the end result of that? I mean, people said it could happen quickly. Is that exactly what we’re seeing right now?

MH: Yes, and nobody expected that it would happen this quickly. Nobody expected that it would be the United States itself that ends de-dollarization. People thought that, well, most of the sales of my book describing this super imperialism were bought by the Defense Department and they looked at it as a how -to-do-it book. And I was brought down to the White House and the Defense Department to explain to them how imperialism works.

I had expected that maybe China, Russia, and other countries would say, “We don’t want to give America free rides.” And yet it was the United States itself that broke all of this, by grabbing Russia’s reserves right after it grabbed Afghanistan’s and Venezuela’s reserves.

Nothing like this has happened in modern history, even in the 19th century wars. In the Crimean War in the mid-19th century, Russia, England and Germany, everybody kept paying the debts to the countries they were fighting against because the idea is that debts were sacrosanct. And now, all of a sudden, not only are debts are not sacrosanct, but countries can just grab foreign savings. I guess the problem began after the Shah of Iran fell and the United States grabbed Iran’s money and refused to let it pay its bond holders and started the whole war against Iran for trying to take control of its own oil resources. So, all of a sudden, the United States grabbing this has ended what everybody thought was an immutable morality.

MF: So that was in 1979 that the Shah fell in Iran and, and over the last number of decades, the United States has been increasingly using economic warfare against countries through what people call sanctions, but they’re actually, illegal unilateral coercive measures, has that been kind of driving and setting the stage for what is happening today?

MH: Yes, the International Monetary Fund has operated, basically, as an arm of the Defense Department. It’s been bailing out dictatorships, bailing out Ukraine, lending money to countries whose client oligarchies America wants to support, and not lending any money to countries that America doesn’t want to support, like Venezuela. So, its job is basically to promote neoliberal policies, and to insist that other countries balance their payments by undergoing a class war against labor.

The conditionality that the IMF insists upon for foreign borrowing is that countries devalue their currency and lower their wage rates and pass anti-labor legislation. Well, when you lower the currency’s exchange rate, what do you really lower? Food prices are set in dollars internationally, raw materials prices are, and prices for machinery and many goods. The only economic variable devalued is domestic labor (and domestic rents). The IMF has been using this kind of junk-economic free-trade policy as a means of keeping the wage rates in the Global South down. You could say it’s a financialization of an ultimately military conflict to promote neoliberal ideology.

MF: And you mentioned the lowering wages and things like that. And this is actually done because it’s favorable to US investors and US business, right? I mean, the World Bank actually has an index, the cost of doing business index, that helps inform large corporations about laws that countries pass that make them more favorable to businesses to come in.

MH: It’s even worse than that. The central aim of the World Bank is to prevent other countries from growing their own food. That is the prime directive. It will only make loans for countries to earn foreign currency and it has insisted ever since about 1950 that countries that borrow from it must shift their agriculture to plantation export crops to grow tropical crops that cannot be grown in the United States for environmental and weather reasons. And the countries must not grow their own food and must not undertake Land Reform or small family-based farming. So, it insisted on foreign-owned agribusiness in large plantation agriculture. And what that means is that countries that have borrowed for agricultural loans have not been loans to produce their own food. It’s been to compete with each other producing tropical export crops while being increasingly dependent on the United States for their food supplies, and for their grain. And that’s part of the corner they painted them into that is going to be creating such a world famine this summer.

MF: I definitely want to get into that as well as the energy situation and the climate crisis, but before we do that, I just want you to comment quickly on how this has also been driving countries to seek alternatives. The United States removed Russia from the SWIFT system, which is the international mechanism for doing trading and finance. It threatened China if they didn’t denounce what was happening with Russia and Ukraine to kick them out of the SWIFT system. So, this hubris of the United States is also kind of driving countries away to seek other alternatives, right?

MH: That’s the whole point. Well, fortunately they’ve been threatening to kick Russia out of SWIFT for the last two years. And so, Russia and China have been putting in place an alternative system. So, they almost pretty smoothly are shifting over to using their own currency with each other instead of using the dollar. And that’s part of what has ended the dollar standard and ended dollar hegemony.

If the way you have dollar hegemony is to have other countries deposit your money in your banks and handle their oil trade with each other by financing it in dollars, but all of a sudden you grab all their dollars and you don’t let them use US banks to pay for their oil and their trade with each other, then they’re going to shift to a different system. And that’s exactly what has ended the dollar hegemony, as you just pointed out.

MF: So, let’s get a little bit into where things are headed with this new situation, a rapidly changing situation. It may be hard to say what’s happening, but you talked about a food crisis this summer. Can you talk a little bit about more about that and does the conflict in Ukraine feed into that?

MH: Well, as President Putin and Lavrov have said, the fighting in Ukraine isn’t really over Ukraine at all. It’s a fight over what shape the world will take and whether the world will be unipolar or, as it now appears, multipolar. The US, for the last year before it began to escalate attacks on the Russian-speaking Ukraine, was trying to block Europe from, and especially Germany, from buying Russia gas and oil.

There are three pillars of American foreign policy that base American power. The first pillar is the oil industry. That’s the most powerful industry next to banking in the United States. And United States throughout the 20th century, along with Britain and France, have controlled the world oil trade.

That has benefited the United States in two ways. Number one, we are a major oil exporter because we have a big oil and gas industry. But, number two, our US companies control the foreign oil trade. So that if some country, say Chile or Venezuela, does something that the United States doesn’t like, like growing their own food or pursuing a socialist policy, the United States can simply cut off their oil and sanction them. Without oil, they don’t have energy to drive the cars or power their factories or drive their GDP.

So, the American war in Ukraine is really a war against Germany. Russia is not the enemy. Germany and Europe are the enemy and the United States made it very clear. This is a war to lock in our allies so they cannot trade with Russia. They cannot buy Russian oil. They must be dependent on American oil for which they will have to pay three or four times as much. They will have to be dependent on American liquefied natural gas for fertilizer. If they don’t buy American gas for fertilizer, and we don’t let them buy from Russia, then they cannot put fertilizer on the land and the crop yield will fall by about 50% without fertilizer.

So, the, the war in Ukraine was to make Russia look so bad by defending itself against the attacks by the Ukrainian right wing in the Russian-speaking areas that the US has said, look at how bad Russia is. You’ve got to forego buying oil and gas or grain or titanium or palladium or anything else from Russia.

And so, the effect of this war has been to lock the NATO countries into dependency on the United States because the great fear of the United States in the last few years is that as America is de-industrializing, these countries are looking to the part of the world that’s growing, China, Central Asia, Russia, South Asia. And the United States feared losing control of its satellites mainly in NATO, but also in South America. So, it sanctioned and blocked their ability to buy non-US energy. They’re blocking their ability to buy non-US food, blocking their ability to invest in or use their surplus to get prosperous by investing in China, Russia, or Eurasia.

So, this is basically a war of America to lock in its allies. Well, the result is that oil prices, now that you can’t get Russian oil, are going to go way, way up, and that is going to create a crisis for many of the Global South countries that are oil deficit countries. The fertilizer companies in Germany have already been closing down because they say, without Russian gas, we make our fertilizer out of gas, and if we can’t get Russian gas, we can’t produce the fertilizer that. So, world fertilizer prices are going way up.

Russia is the largest grain exporter. And now that grain exports are being blocked by the sanctions, the question is, what are North Africa and the Near East going to do that have been depending very largely on Russian grain exports? Their food prices are going to go way up.

You can imagine just from seeing what’s happening in the United States when gas prices go up here, food prices go up here, not only does it put a squeeze on individual family budgets, but throughout the world, it puts the squeeze on the balance of payments of other countries. And so, they’re desperate. How are they going to pay the higher prices unless they borrow even more money from US banks? And of course, that’s another arm of US policy. The US banks hope to make a killing in making loans at rising interest rates to third world countries.

And of course, arms exports. NATO in the last few days has agreed to make American arms exports to increase their purchase of arms. So, the stock market has been soaring in the last few days. They say this, the world famine, the world crisis is a bonanza for Wall Street. The oil company stocks are going way up, the military, industrial stocks, Boeing Raytheon way up, the bank stocks. This is America’s great power grab, and it realizes, when it can create a crisis and tell the Global South or poor countries your money or your life. This is how most of the great property grabs and conquests have been made throughout history.

MF: And just this week at the NATO meetings, President Biden basically said food prices are going to go up in the United States and Europe as a result of what’s happening. And that’s just the price we have to pay.

MH: Well, what he should have said, this is the price they have to pay us. That’s how the stock market took it. When he said this is the price we have to pay, this is the price consumers have to pay to the American oil companies, to the American Agricultural food distribution companies. It’s the price other countries have to pay to the United States.

This is to say to the rest of the world, you know, we’ve got you completely, I don’t know how to put it, what phrase to use, but you don’t have any choice, your money or your life. We’ve got you trapped. And he’s crowing over the fact that this resulting inflation is exactly what was intended by the war in Ukraine that has led to the isolation of Russia and other countries following a non-US policy.

MF: But more and more countries in Latin America, in Africa, are turning to countries like China for partnerships, for investment. Do you see a point coming where there is just this real shunning of the United States and turning to these alternatives?

MH: That is exactly what’s going to happen. What’s going to happen is, China’s investment is very different from US investment. US and European investment will give financial investments to countries at interest that the whole country is liable for to repay. China’s investment is taking place by means of the Belt and Road Initiative and direct capital investment in developing ports, infrastructure and railways. And instead of having a general financial claim against these countries, China has an equity claim, a property claim backed by the physical means of production that it puts in place.

Well, this summer, when countries say they cannot afford to pay their foreign debts, the United States has as a backup plan, okay, let’s write down everybody’s debts, government debts, to each other so that governments can pay the private bond holders and the banks. And they’re going to try to, essentially the US will forgive its debts so that Latin America can pay Chase Manhattan Bank and Citibank and the bondholders. And China is going to say, wait a minute, we don’t have any financial claim against these countries. We didn’t lend them dollars. We didn’t lend them our foreign currency at all. We built assets there and the assets are still in place. There’s no problem there.

So, the question is, whose debts are going to be written down to whom? And all of this is going to lead to, as you can imagine, destabilization. The United States is probably going to try to push regime change on countries that try to trade with China as it’s already threatened China with. And the more sanctions the United States imposes on Latin America, Africa and the Near East and South Asia, they will be creating a crisis, but the crisis will lead the rest of the world to treat the United States in the same way that Russia and China are treating the United States as just the enemy threatening the entire world with their neoliberal power grab. So, the United States in a way is isolating itself from the rest of the world by declaring war on it.

MF: And I think that’s not going to be good for us here at home in the United States. You’ve talked about the way that the current economy has been structured. You’ve also raised a lot of concern about the climate crisis. And of course, we have the recent IPCC report basically saying that we’re way behind in taking action to even adapt to the climate crisis or the warming that we’re going to be experiencing. So now in this new situation, how do you see that impacting the climate crisis?

MH: Here’s what Biden said, in effect: “We’re way behind in the pace of global warming.” American policy is based on increasing and accelerating global warming. That has been a central point of US policy ever since I joined the Hudson Institute in the 1970s. The United States is opposing any attempt at trying to prevent global warming because you can imagine what would happen if other countries go to solar energy and renewable energy. That will reduce their dependency on the US oil industry. If you look at American policy, it is being run basically by the oil industry to establish dependence of other countries on oil. Then obviously the last thing the United States is ever going to do is prevent global warming. So, if we’re behind in global warming, it’s that the sea level is not rising fast enough. The world is not getting hot fast enough not to lock in foreign reliance on America’s oil.

And I think you’ve seen what in the last few weeks, what President Biden has said, the fuel of the future is coal and oil. Right now, he’s in Poland. I think he’s suggesting that Polish coal, which is one of its major products, should be used in Europe instead of Russian gas. So, American foreign policy is based on the accelerated use of coal and oil, not renewable energy.

Now, that’s why I think the environmental movement should become an anti-war movement and the movement against this neoliberal dollar hegemony. You’re not going to avoid global warming unless you stop the dominance of American foreign policy by the oil industry.

MF: I think we’ve been seeing that shift over the last few years where the climate movement is starting to understand we can’t address this crisis without addressing the US military. So just in the last minutes that I have with you, what do you have to say to the listeners about where this is going for us materially as people living in the United States, a country that has been showing itself to be a failing state? The Covid-19 pandemic, I think, has really exposed that in so many ways, the financial insecurity that people are facing, housing, education, health care, all of the failures of the government to meet the basic needs of the people. How do you think that’s going to change with this new situation?

MH: Well, the United States has been getting a free ride internationally. So, much of the prosperity here has been the result of our not having to pay for our own military spending, not having to pay for many of the foreign investments that we’ve got that supply the US with low priced foreign raw materials. All that is being ended by President Biden’s policy, which, of course, the Republicans support just as much as the Democrats.

So, there’s really a political movement that is ending up impoverishing, I’d say, 99% of Americans. While the Federal Reserve saves the stock and bond market for the 1%, there’s going to be a huge squeeze that’s going to force, I think, most American families into debt leading to probably a close down of a lot of businesses just as you had the Covid crisis closing down a lot of businesses. You’re going to have the rising fuel prices, the rising food prices utterly force families into default and an inability to be self-supporting without either running into debt or selling their homes and becoming renters.

MF: And that’s a whole other problem with the buying up of the housing in the United States by these investment corporations so that they can then control those rent prices. It sounds like difficult days are ahead.

MH: Yes. Well, and nobody can really ,it’s really Uncharted Territory because nobody thought there was an alternative. The economic view was as Margaret Thatcher said, “There is no alternative.” Well, now, America’s forced the world to find its own alternative.

MF: Well, thank you for sharing that wisdom with me. I encourage people to continue to follow you and read your books and follow your writing. Where’s the best place to find you?

MH: I have a website: Michael-Hudson.com. And I’m on Patreon. I post my articles on the website and on Patreon.

MF: Well, thank you so much for taking time to speak with me today, and for the important work that you’re doing.

MH: Well, I’m awfully glad we had to talk about this, Margaret.

النتائج المرتقبة للأزمة الأوكرانية…

 الإثنين 28 آذار 2022

 زياد حافظ

العملية العسكرية الواسعة التي تقوم بها روسيا في أوكرانيا لها تداعيات مفصلية على صعيد التوازنات الدولية والإقليمية كما أنها تعيد رسم الخرائط السياسية والاقتصادية والثقافية. النتائج الأولية لتلك العملية، التي لم تنته عند إعداد هذه المقاربة تدلّ بوضوح على التغييرات التي رُصدت منذ عدّة سنوات ولكنها لم تكن ظاهرة للجميع. فالغرب في أفول متسرّع والامبراطورية الأميركية في حال تفكّك تنذر بانهيارات داخلية تضع وجود الولايات المتحدة قاب قوسين على الأقل بالنسبة للشكل التي نعرفها.

فالنتائج على الصعيد السياسة والاقتصاد، دوليا وإقليميا، انعكست على التحالفات القائمة وعلى بروز تحالفات جديدة. فعلى صعيد التحالفات القائمة نرى التصدّع داخل أوروبا الغربية بين الدول ومؤسسة الاتحاد الأوروبي، كما نرى تصدّعا بين الدول الأوروبية البارزة كألمانيا وفرنسا مثلا مع الولايات المتحدة رغم التحليلات التي تفيد أن قبضة الولايات المتحدة ازدادت بسبب العملية العسكرية الروسية وضرورة تأمين “وحدة الصف”. فهذه “الوحدة” التي كانت هشّة قبل الأزمة زادت في هشاشتها رغم المظاهر. فدول مثل المانيا وفرنسا أصبحت في واجهة المتلقي للعقوبات التي تفرضها الولايات المتحدة على روسيا سواء على الصعيد الصناعي أو الطاقة أو المال. والسردية الإعلامية ضدّ روسيا في الدول الأوروبية لن تصمد أمام الواقع الاقتصادي الجديد الذي تفرضه سياسة العقوبات التي بدأت مفاعيلها ترتدّ على الدول الأوروبية على صعيد ارتفاع أسعار السلع بشكل عام والطاقة بشكل خاص. فأوروبا تستورد حوالي الثلثين من حاجاتها الغازية والنفطية من روسيا حيث لألمانيا حصة الأسد (40 بالمائة من حاجاتها الغازية تأتي من روسيا).

أما على صعيد التحالفات الجديدة فنرى تقارباً لم يكن متوقّعاً بين الهند والصين وخاصة بعد التهديدات التي أطلقتها مؤخراً إدارة بايدن تجاه الهند. وفي أميركا الجنوبية هناك توجه واضح نحو تقارب مع كلّ من روسيا والصين. أما في أفريقيا، فالدول الأفريقية بدأت تقدّر النموذج الروسي الصيني في العلاقات الدولية المبني على القانون الدولي ومبدأ “رابح رابح” للجميع. تجلّى ذلك بعدم الموافقة على المشاركة في العقوبات التي تريد فرضها الولايات المتحدة والاتحاد الأوروبي على روسيا. أما التصعيد الأميركي المتمثل بمعاقبة كل من يخالف قرارها ويستمر في التعامل معها فكان الردّ الروسي ومعه دول الكتلة الاوراسية بعرض نظام مالي خارج الدولار. ما زلنا في بداية الطريق لنظام مدفوعات جديد خارج الدولار ولكن النتيجة الفورية هي تخفيف وطأة التهديدات الأميركية بعزل الدول “المتمرّدة” عن منظومة السويفت.

هنا لا بدّ لنا من الإشارة إلى أنّ المواجهة القائمة في أوكرانيا هي في الحقيقة مواجهة كونية تأخذ عدة أشكال متكاملة وليست متناقضة. فهي مواجهة بين الرأس المالية الصناعية المتحالفة مع الاشتراكية ((روسيا والصين ومن يتماهى معهما) والرأس المالية التي تتعاطى فقط في المال (الغرب). وهي أيضا بين العولمة المالية (الغرب) والعولمة المبنية على الهويات القومية والخصوصيات. وهي مواجهة بين رؤية للنظام العالمي المبني على “القيم والأحكام” (الغرب) ورؤية مبنية على القانون الدولي (روسيا، الصين ودول الجنوب الإجمالي). هي مواجهة بين الاقتصاد الفعلي الإنتاجي والاقتصاد الافتراضي المالي الريعي. هذه بعض من المواجهات في السياق الفعلي للصراع القائم والتي كل واحدة منها تستحق مقاربة منفصلة قد نقدمها في مرحلة لاحقة.

الغرب لا يعتبر روسيا منه

وفي خطاب في غاية الأهمية الذي القاه الرئيس الروسي في 16 آذار/ مارس أعلن فيه القطيعة الرسمية مع الغرب بشكل عام على الصعيد الاقتصادي والسياسي. أشار الرئيس الروسي في خطابه إلى القرصنة التي مارسها الغرب تجاه الموجودات والأصول المالية الروسية ما قطع شريان الثقة بالمؤسسات والقوانين الغربية. وشّجع المستثمرين الروس في الغرب على العودة إلى روسيا والعمل في روسيا لأن الغرب سيسرق أموالهم كما فعلت الولايات المتحدة والمملكة المتحدة بحق الأموال الإيرانية والفنزويلية والليبية ما يدلّ على الاستسهال في سرقة من يعتبرونهم دونهم حضاريا. الغرب لا يعتبر روسيا من الغرب بل جزءاً من الشرق البغيض. حروب البلوبونيز اليونانية الفارسية في العصور القديمة قبل الميلاد وحملات الفرنجة على بلاد الشرق واستعمار كل هذه الدول من قبل الغرب دلائل تؤكّد على العنصرية المتجذّرة وانعدام معايير الاخلاق عند النخب الحاكمة الغربية.

هذه القطيعة مع الغرب بشكل عام ومع أوروبا الغربية بشكل خاص تعني أن سلامة الاقتصادي الأوروبي مهدّدة بشكل بنيوي سينعكس بشكل تلقائي على الاستقرار الاجتماعي والسياسي في تلك البلدان. فإذا كان تجميد الأصول المالية والاحتياطي الروسي الموجود في الغرب مظهرا من “مظاهر القوّة” فإن ذلك يعكس أيضا سذاجة الغرب الذي وقع ضحية لتلك العنجهية. فلا يمكننا أن نقرأ ونفهم ما حصل إلاّ من منظور لاعب الشطرنج الماهر الذي يضحّي عن قصد وتعمّد لبيدق في افتتاح اللعبة ليحقق مكسباً استراتيجياً في السيطرة على وسط طاولة الشطرنج. هذا ما يُعرف ب “مناورة الملكة” أو (queen gambit). فالرئيس الروسي وفريقه خطّطا للعملية العسكرية على الأقل منذ 2014 وبالتالي كانا يدركان أن الغرب سيقدم على مصادرة الأموال كما حصل مع إيران عندما قامت الثورة الإسلامية، وكما صادرت أموال ليبيا، وفي ما بعد أموال فنزويلا ومؤخرا أموال أفغانستان. تسرّعت حكومات الغرب بوضع اليد على الأصول الروسية ولكن بالتالي قالت لمعظم العالم أن الأموال المودعة في المصارف الغربية أموال تقوم بقرصنتها متى شاءت. هذا سيسهّل إقامة منظومة مدفوعات مالية دولية جديدة خارج إطار سيطرة الغرب بشكل عام والولايات المتحدة بشكل خاص. كما تنذر بأفول الدولار الحتمي حيث الدول قد تتوقف عن طلب الدولار لتلبية حاجات التجارة الخارجية كما تمهّد لتسعير السلع الاستراتيجية بأسعار غير الدولار أو غير مستندة إلى الدولار. هذا ما قصدناه في مقال سابق أنّ الولايات المتحدة حقّقت مكاسب تكتيكية ظرفية ولكن في المقابل تكبّدت بخسارة استراتيجية قد تنذر بزوال إمبراطورتيها الافتراضية تمهيداً ربما لزوالها كدولة أو كيان سياسي. الدرس الأساسي لتلك المناورة هو اعتبار الدولار (الاحتياط النقدي المعمول به منذ السبعينات) لا قيمة له بينما الأساس هو الغاز والنفط!

في هذا السياق لا بد من الإشارة إلى التقدّم في الإجراءات بين دول آسيا الوسطى وروسيا والصين حول إنشاء نظام مدفوعات خارج إطار الدولار. ففي المؤتمر الذي عقد مؤخرا في مطلع شهر آذار/ مارس 2022 في مدينة يريفان في أرمينيا بين مسؤولين من الدول الخمسة للمجموعة الاوراسية (روسيا، بيلاروسيا، أرمينيا، كير غستان، طاجكستان) إضافة إلى دولة كازاخستان تم الاتفاق على إنشاء المؤسسات المالية للمدفوعات على أن تقدّم مسودات هيكلية والنظام الداخلي خلال شهرين. وهذا النظام قد يعتمد العملات الوطنية لدول آسيا مستندة إلى اليوان الصيني. أما على الصعيد الداخلي الروسي فالتعامل بالروبل المستند إلى الذهب سيعيد السياسات النقدية التي كانت تستند إلى نظام التبادل المرتكز على الذهب ولا يخضع لتقلّبات الأسواق المالية والمضاربة. الفكرة الأساسية هنا هي ضرورة ربط العملات بالاقتصاد العيني وليس بالاقتصاد الافتراضي الذي فرضته الولايات المتحدة على العالم خلال العقود الخمسة الماضية.

ما يعزّز التوجّه إلى إيجاد منظومة مالية مختلفة عن تلك التي تعتمد الدولار قرار الرئيس الروسي تجاه الدول “غير الصديقة” بعدم قبول دفع مستحقات مشترياتها من الغاز والنفط بعملة غير الروبل الروسي. هذا قرار كبير وإنْ كان محصوراً بالدول غير الصديقة لأنه ترجمة عملية لرفض التعامل بالدولار. والقرار الروسي يلغي تلقائياً أهداف الهجوم على الروبل بغية خلق اضطرابات داخلية لأنّ القرار يعني ارتفاع الطلب على الروبل وانخفاض الطلب على الدولار. فهذا قرار استراتيجي يعني ان المواجهة مع الدولار أصبحت مفتوحة وانّ موجة العزوف عن الدولار في التجارة العالمية (de-dollarization) يعني نهاية هيمنة الولايات المتحدة على الاقتصاد العالمي، بل أيضاً على السياسة الدولية بفقدانها سلاحها الأساسي أيّ الدولار.

القطيعة مع الغرب ليست سياسية واقتصادية فحسب بل باتت ثقافية. فالعنصرية التي طغت على السردية الغربية لأحداث أوكرانيا اسقطت جميع الأقنعة التي كان تُخفي (لمن لم يكن يريد أن يرى ذلك) ادّعاءات الغرب بـ “الديمقراطية” و “حقوق الإنسان” و “حكم القانون والمؤسسات” و “التنوير” و “الحداثة” و “معاداة العنصرية” وسائر الأوهام والأكاذيب التي تسوّقها النخب الغربية وفقاً لمصالحها الضيّقة. فحتى المواطن الأميركي صُدم من عنصرية مراسلي المحطات الأميركية التي كانت تراسل من “ارض الميدان” في تصنيف المهاجرين والنازحين الاوكرانيين كناس أصحاب العيون الزرقاء والشعر الأشقر والبشرة البيضاء! أيجوز ذلك في دول متحضّرة ليست كالعراق أو أفغانستان أو سورية!؟

لن تكون أوكرانيا كما عرفها العالم

الإجراءات الغربية تجاه روسيا لها تداعيات كبيرة على جميع الأطراف المتصارعة وعلى مجمل العالم. المتضرّر الأكبر هو أوكرانيا حيث مستقبلها أصبح فعلياً قاب قوسين. فعندما تسكت المدافع لن تكون أوكرانيا كما عرفها العالم بل ربما مجموعة من الأقاليم منها تحت السيطرة الروسية، ومنها تحت السيطرة البولونية، ومنها تحت السيطرة المجرية والرومانية. أما أوكرانيا بحدّ ذاتها فقد لا تتجاوز ما يوازي 30 بالمائة من المساحة الحالية وستكون معزولة عن البحر الأسود.

المتضرر الثاني هو أوروبا الغربية بشكل عام وألمانيا بشكل خاص. فأوروبا بحاجة إلى روسيا بينما الأخيرة ليست بحاجة إليها. ليس هناك ما يمكن أن تعطيه أوروبا الغربية لروسيا بينما تحتاج أوروبا للطاقة التي توردها إليها روسيا إضافة إلى المعادن الأساسية للصناعات الغربية وإضافة إلى الحبوب التي تنتجها روسيا وأوكرانيا. أما المانيا فتستورد حوالي 40 بالمائة من احتياجاتها من الغاز الروسي بعد أن أقفلت محطّات انتاج الطاقة النووية. فأصبح اقتصادها مرتبطا بالغاز الروسي. وتجميد خط الشمال 2 (نورستريم 2) سيجعلها تستورد طاقة من الغاز السائل بكلفة تفوق عشر أضعاف أو أكثر وبعد أن تكون بنت محطات تفريغ وتخزين الغاز المستورد من الولايات المتحدة أو قطر وإيجاد الأساطيل التي تستطيع نقل هذه الطاقة بالكميات المطلوبة. وهذا لن يحصل قبل عدة سنوات وبكلفة مرتفعة. أضافة إلى كل ذلك فالشركات اتي كانت معنية بتشغيل نورستريم 2 ستنقلب على الدولة الألمانية وتطالبها بتعويضات تقدر بأكثر من 20 مليار يورو. أما الشريك الروسي غازبروم فقد استطاع التعويض عن خسارة عدم تشغيل نورستريم 2 عبر ارتفاع أسعار الغاز في العالم. وعلى صعيد آخر فإن ارتفاع كلفة الطاقة ستؤثر بشكل مباشر على القدرة التنافسية الصناعية الألمانية وخاصة تجاه الصين والعديد من الدول النامية ما يمكن أن يدخلها في عصر ما بعد التصنيع وتصبح دولة ضعيفة وهزيلة كما أصبحت المملكة المتحدة وفرنسا والولايات المتحدة. فالاقتصاد الافتراضي الريعي لا يمكن أن يصمد أمام قوة اندفاع الاقتصاد العيني المنتج الذي تتمتع به دول كالصين والهند والبرازيل وماليزيا وحتى الجمهورية الإسلامية في إيران وغدا دول المشرق العربي والمغربي.

ارتفاع أسعار الطاقة سيؤدّي إلى ارتفاع أسعار المواد والسلع في كل أنحاء العالم وخاصة في أوروبا والولايات المتحدة. فإضافة إلى ضعف النمو في الإنتاج بسبب جائحة الكورونا جاء النقص في المواد وخاصة المواد الغذائية وأضيف إليها رفع كلفة الطاقة. فبالحد الأدنى ستدخل أوروبا الغربية مرحلة انكماش اقتصادي كبير قد يصل إلى مستوى كساد ويتلازم معه في المرحلة الاولي تضخم في الأسعار الاستهلاكية والإنتاجية مما يخلق حلقة مفرغة من انخفاض الإنتاج إلى انخفاض في الدخل إلى انخفاض في الاستهلاك إلى انخفاض في الإنتاج وكذلك دواليك. أما على صعيد الدول النامية، وخاصة في أفريقيا، فإن العقوبات المفروضة على روسيا ستخلق أزمة غذاء حيث 25 دولة تستورد حوالي ثلث حاجياتها من الحبوب من روسيا. ودولة بنين تستورد مائة بالمائة من احتياجاتها في القمح والحبوب من روسيا. وفي هذا السياق الدول العربية لن تكون بمنأى عن تداعيات الازمة الغذائية. فدول كمصر واليمن وسوريا ولبنان تستورد الحبوب من روسيا وأوكرانيا. فانقطاع التوريد من روسيا وأوكرانيا سيخلق أزمة اجتماعية إضافية على الازمات التي تمر بها كل هذه الدول وخاصة اليمن ولبنان.

لذلك يمكن القول ان العقوبات المفروضة على روسيا ستؤدّي إلى زعزعة الاستقرار في أوروبا الغربية وإلى أزمات عميقة في الاقتصاد العالمي ناهيك عن التداعيات الاجتماعيات في دول العالم الخاضع لسياسة العقوبات. وهذه الزعزعة والازمة الاقتصادية التي ستتفاقم سيكون لها ارتدادات سياسية كبيرة يكون الغرب الخاسر الأكبر. فالولايات المتحدة بدلا من أن توحد العالم ضد روسيا توحد العالم ضدّها. والتحالفات القديمة والقائمة في الغرب بدأت تشهد تصدّعات بينها ومع الولايات المتحدة.

والولايات المتحدة بنفسها ليست بمنأى عن تداعيات الفشل في المواجهة في أوكرانيا. فالتحالف الذي أوصل بايدن إلى البيت الأبيض يشهد تصدّعا لأن الرئيس الأميركي لا يميل إلى التصعيد في المواجهة التي يعرف أنها خاسرة. ويساند الرئيس الأميركي البنتاغون. لكن بالمقابل تحالف المحافظين الجدد والمتدخلين الليبراليين والاعلام وأجهزة المخابرات يريد التصعيد. وهو غاضب من بايدن. لذلك قامت صحيفة “نيويورك تايمز” بنشر خبر يؤكّد صحّة المعلومات عن حاسوب هنتر بايدن، نجل الرئيس الأميركي، المليء بمعلومات تفضح فساد عائلة بايدن في أوكرانيا. وهذا الحاسوب تمّ التستّر عنه خلال الحملة الانتخابية الرئاسية في 2020 لأنّ المعلومات قد تلغي فرص فوز بايدن في الانتخابات. والسؤال الذي يطرح لماذا أقدمت الصحيفة الأميركية على نشر هذا الخبر؟ هناك من يعتقد ان التأكيد على صحة المعلومات الفاضحة قد تشكّل إنذاراً أخيراً لبايدن ليلتزم بما هو مُقرّر. من جهة أخرى أعلنت صحيفة “الغارديان” البريطانية عن نشر كتاب في 3 أيار/ مايو بعنوان “لن يمر ذلك: ترامب، بايدن، والمعركة لمستقبل أميركا” للكاتبين الصحافيين من “نيويورك تايمز” جوناتان مارتن والكس بيرنز يشير إلى أنّ زوجة بايدن لم تكن ترغب بوجود كمالا هاريس كنائب رئيس. أيّ هناك موجة متنامية في الإعلام المهيمن يوحى بأنه فقد ثقته ببايدن. وبما أنّ وضع الحزب والإدارة حرج للغاية فاحتمالات الفوضى الداخلية كبيرة جدا مما يؤثّر على أداء الإدارة في مواجهة مختلف القضايا والأزمات التي افتعلتها.

 أما على الصعيد العربي، فبدأت تظهر تباشير المراجعات السياسية الكبرى عند حلفاء الولايات المتحدة حيث نظرية ملكية الولايات المتحدة لـ 99 بالمائة من الأوراق بدأت تترنح كيف لا نقول تسقط بشكل نهائي عند العديد من الدول وفي مقدمتها دول الخليج ومصر.

من ضمن إرهاصات في التحولات العربية “تمرّد” بعض دول الخليج على القرار الأميركي بالخروج عن قرارات أوبك + التي تضم روسيا. كما ان عدم اخذ مكالمات الرئيس الأميركي لكل من ولي عهد بلاد الحرمين وولي عهد دولة الإمارات العربية المتحدة لم يكن ممكنا تصوّرها منذ ما قبل اندلاع الأزمة الأوكرانية. أضف إلى كل ذلك تصريحات بعض المسؤولين حول تخفيف الاستثمارات في الولايات المتحدة والقبول بالتعامل بعملات غير الدولار في تسعير بعض السلع الاستراتيجية يهدّد مكانة الدولار كعملة احتياط وحيدة أو حتى رئيسية في النظام العالمي.

أنّ كلّ تلك التحوّلات المفصلية في العالم لم تكن لتحصل لولا محور المقاومة وخاصة صمود سورية واليمن وإفشال المشروع الأميركي في العراق وتنامي مقاومة الشعب الفلسطيني. فلا يعتقدّن أحد أنّ الدور العربي كان غائبا بل هو الذي أتاح الفرصة لكلّ من الصين وروسيا والجمهورية الإسلامية في إيران لبناء قدراتها بينما محور المقاومة كان يتصدّى ويُفشّل المشروع الأميركي الصهيوني. فالسيطرة على آسيا هي الشرط الضروري للسيطرة على العالم والمشرق العربي هو البوّابة لها. فمن يتحكم بتلك البوّابة يستطيع أن يسيطر على آسيا. محور المقاومة أفشل المحاولات الأميركية الصهيونية وهو الذي سيكون بيضة القبّان في التوازنات الدولية الجديدة إذا ما أحسن التعاطي مع المعطيات الجديدة على الصعيد المحّلي في كل مكوّن من مكوّنات المحور.

*باحث وكاتب اقتصادي سياسي والأمين العام السابق للمؤتمر القومي العربي وعضو الهيئة التأسيسية للمنتدى الاقتصادي والاجتماعي

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«العولمة السعيدة» لا تمنع حرباً: العالم على عتبة الانشطار

  الثلاثاء 22 آذار 2022

روسيا تُركّز ضرباتها: تحضيرات لحسم «الدونباس» أحمد الحاج علي

وليد شرارة

أدّت الحروب بين القوى الكبرى، في العصور الغابرة والحديثة، دوراً مركزياً في صياغة العالم، أو إعادة صياغته، على المستويات الجيوسياسية والجيو ــــ اقتصادية، وفقاً لرؤى المنتصرين فيها ومصالحهم. وإذا حصرنا اهتمامنا بفترة ما بعد الحرب العالمية الثانية، فإن مآلات هذه الأخيرة، وموازين القوى التي كرّستها، هي التي أنتجت “النظام الدولي الليبرالي” ــــ وهو الاسم الكودي للهيمنة الأميركية على عدد من بقاع المعمورة ــــ، من جهة، وأتاحت تشكيل المعسكر الاشتراكي وانتصار حركات التحرّر الوطني في بقاع أخرى، من جهةٍ ثانية. الأمر نفسه ينطبق على المرحلة التي تلت نهاية الحرب الباردة، بعد انهيار الاتحاد السوفياتي، وما تخلّلها من مساعٍ لتوسيع نطاق الهيمنة الأميركية نحو مناطق جديدة، وتأبيدها على الصعيد الدولي.

«إحياء الناتو» ضدّ موسكو وبكين

لم يكن “الناتو” في “حالة موت سريري”، كما قال الرئيس الفرنسي، إيمانويل ماكرون، في لحظة انفعال، رداً على تهديدات متكرّرة من نظيره الأميركي آنذاك، دونالد ترامب، بالانسحاب من الحلف، بذريعة عدم مضاعفة أعضائه الأوروبيين إنفاقهم العسكري السنوي. علاوة على ذلك، فإن الإهانات المستمرّة التي وجّهها ترامب للمسؤولين الأوروبيين خلال عهده، وتلويحه بإمكانية توقّف الولايات المتحدة عن “حماية” بلدانهم، حدت ببعض هؤلاء إلى استعادة معزوفة الدفاع الأوروبي المشترك والمستقلّ، على المستوى الخطابي لا أكثر. فالتعاون العسكري الأورو ــــ أميركي في إطار “الناتو”، لم يتراجع يوماً، وخاصّة في دول جبهته الشرقية مع روسيا، حيث ازداد عديد قواته المنتشرة في بولندا وبلدان البلطيق، وكذلك المناورات التي تجريها. ولا بدّ من الإشارة أيضاً إلى أن الاتحاد الأوروبي ودوله كان لهم دور رئيسيّ في افتعال الأزمة في أوكرانيا، عندما ساهموا، في أواخر عام 2013، في التحريض على رئيسها آنذاك، فيكتور يانوكوفيتش ــــ الذي رفض توقيع اتفاقية التجارة والشراكة مع الاتحاد ــــ، ودعموا القوى التي أطاحته في أواخر شباط 2014.

فسخ الشراكة وتفكّك العولمة

أولى الدعوات إلى إعادة النظر بالعولمة الاقتصادية، وما نجم عنها من مفاعيل “سلبية” بالنسبة إلى الاقتصاد الأميركي، أطلقها الرئيس الأميركي السابق، دونالد ترامب، الذي شنّ حرباً تجارية على الصين، وحضّ على فسخ الشراكة معها. المواقف الرافضة لسياساته وتوجهاته ــــ آنذاك ــــ لم تصدر فقط من بكين، بل كذلك من أوساط الشركات الأميركية والغربية الكبرى، ووسائل الإعلام اللصيقة بها، كمجلة “إيكونوميست” وصحيفة “فايننشال تايمز”. اللافت، اليوم، هو أن الدعوات إلى إخضاع المصالح الاقتصادية، ومبدأ حرية التجارة “المقدّس” للاعتبارات الاستراتيجية، أضحى يصدر من هذه الأبواق، حتى ولو لم تشجّع على فسخ شراكة شاملة.

كان بإمكان دول أوروبا، عندما حشد بوتين قواته على حدود أوكرانيا، التجاوب مع مطلبه بتحييدها

ففي عددها الأخير، وعنوان غلافه “النظام الدولي البديل”، رأت”ذي إيكونوميست”، أن “المواجهة مع روسيا كشفت تناقضاً متنامياً بين حرية التجارة والحرية كمبدأ”. ففي مقال بعنوان “تجارة مع العدو”، اعترفت الأسبوعية “الرصينة” بأن “العدوانية العسكرية لبوتين تثير أسئلة مزعجة حول العولمة بالنسبة إلى أنصار حرية التجارة مثل الإيكونوميست. هل يصحّ أن تقيم مجتمعات مفتوحة علاقات اقتصادية مع أخرى مستبدّة، كالصين وروسيا، تنتهك حقوق الإنسان وتهدّد الأمن، وتصبح أكثر خطورة كلّما ازدادت ثراءً؟ الإجابة سهلة من حيث المبدأ: على الديموقراطيات أن تطوّر مبادلاتها التجارية دون المساس بأمنها القومي. عملياً، الموازنة بين الأمرَين مهمّة بالغة الصعوبة. حرب روسيا تظهر ضرورة إعادة صياغة جراحية لشبكات الإنتاج والتوريد لمنع الدول المستبدّه من التنكيل بتلك الليبرالية… الاجتياح الروسي أكد للغرب خطورة التجارة مع الخصوم. الاعتبار الأوّل أخلاقي. عقود شراء نفط الأورال وقمح البحر الأسود موّلت القمع الذي يمارسه بوتين وإنفاقه العسكري المتعاظم. الاعتبار الآخر أمني، يرتبط بإدمان أوروبا وصناعاتها على غاز روسيا، وما تصدّره من معادن وأسمدة. هذه التبعية تزيد من قوّة الأنظمة المستبدّة، وتُضعِف عزم الديموقراطيات، وتضعها في موقع شديد الهشاشة في حالة الحرب”.

إخراج روسيا من النظام المالي الدولي، عبر إقصائها من نظام “سويفت”، والسعي إلى إيجاد مصادر بديلة منها للغاز والنفط بالنسبة إلى أوروبا، وحزمة العقوبات المفروضة عليها، والتي يجري التلويح بها حيال الصين وأيّ دولة أخرى تتعاون معها لـ”التحايل” على الأخيرة، ما هي سوى خطوات أولى في مجابهة مرشّحة للتصعيد، بالتوازي مع استعار تلك الدائرة في الميدان العسكري. وبما أن القوى الغربية ترى أن هذه المجابهة المصيرية هي مع محور روسي ــــ صيني، وليس مع روسيا وحدها، وأن الصين هي الخصم الأخطر والمستفيد الأوّل منها، فإن الاعتبارات الاستراتيجية ستطغى على تلك الاقتصادية في التعامل معها. بطبيعة الحال، فإن ضخامة المصالح المشتركة مع بكين، وحجم الأضرار الذي سينجم عن عملية فكّ ارتباط معها، سيدفع قوى اقتصادية وازنة في الغرب إلى الاعتراض عليه، غير أن الاستراتيجية العليا لدول تحاول وقف تراجع هيمنتها، في مقابل أخرى صاعدة بسرعة هائلة، لا تنسجم مع المصالح الخاصّة لبعض الشركات. في مثل هذا السياق، فإن وجود مصالح مشتركة حتى بين الدول نفسها لا يحول دون الحرب في ما بينها، وعلى من يشكّ في ذلك أن يقرأ، أو يعيد قراءة، كتاب المفكر السياسي الأميركي غراهام أليسون، “فخ توسيديد”، ليتحرّر من بقايا خرافات “العولمة السعيدة” وأوهامها.

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A world at war

13 Mar 2021

Source: Al Mayadeen Net

Alastair Crooke 

External actors removed from the frenzy that is largely focused in Europe must be shaking their heads in disbelief at Europe’s zeal to join in this ‘war’. Was it deliberately provoked? Is there an escalation ‘in the works’ somewhere? 

A World at War

What constitutes the most important geostrategic event of the week? Well, it was India insisting to remove the US dollar in trade with Russia and replacing it with the local currency (whilst the US reacts by threatening India with separate sanctions). The list of ‘recalcitrants’ is lengthening: China too has been threatened by US sanctions for not joining in sanctioning Russia. Other states, including Turkey, Brazil (a skeptical Bolsonaro) and Gulf States are boycotting the ‘war on Russia’. In effect, it is mostly Europe who has gone the ‘whole hog’ on the lines of French Finance minister Le Maire’s comments in “waging an all-out economic and financial war on Russia. We will cause the collapse of the Russian economy”. The rest of the world remains notably ‘cool’ and aloof.

I recall being told by a senior British panjandrum in 2006 — well before its actual outset — that war with Iraq had already been decided, and it would transform the Middle East (to the US advantage). When I demurred, I was told either ‘get with it’, or be removed (in the event I was exiled).  

I recall this incident because it seems to me that something rather similar must have been said to Olaf Scholz in Washington in the run-up to his February meeting with Putin in Moscow: Something like, we’re going to cause the collapse of the Russian economy, which will likely see President Putin evicted from office in the turmoil that would ensue. ‘Get with it’. 

Scholz did just that — and more — ultimately sacrificing Nord Stream 2, promising a big spike in Germany’s military size, and even endorsing sending weapons to conflict zones (such as Ukraine).

Boris Johnson already was using the Ukraine conflict to try to reclaim a ‘world role’ for a post-Brexit Britain; and possibly Scholz decided to make a ‘virtue of necessity’ — similarly to fulfill a wish to see Germany again becoming a “forceful” participant in global politics by jettisoning the German guilt-complex from WWII and becoming “combat ready” — all of which Scholz’ party aspires to – predating Ukraine.

In any event, Europe has embraced an all-out economic war on Russia with un-customary zeal. The West has taken its economic war on Russia to new heights, never before experienced: Russian Central Bank foreign reserves were seized; its financial institutions frozen out of external capital markets, certain Russian banks expelled from SWIFT, and the Rouble suffered a concerted ‘sell’ operation mounted out of New York (as in 2014).

However, it is not the detail that matters. Not even the means by which Russia avoided its preordained economic demise (early wargaming war prospects). No, its salience lies with a state’s foreign reserves being expropriated; its institutions paralyzed; and its currency assaulted — at ‘the flick of a switch’.

Then, just as suddenly, Europe re-erected an Iron Curtain (but this time against Russia) via a PSYOPS media narrative, which when superimposed upon emotion-jerking imagery, has evoked a moral outrage which insists on certain retaliation.  

President Putin becomes the cold, inhuman irrational antithesis to the rational liberal order, necessitating a moral crusade – perhaps even a military one – to confront such inhumanity. All this sprung into a Europe-wide frenzy, at the ‘flick of a switch’.

And – at the ‘flick of a switch’ – Russian discourse and perspectives are canceled across the western information space: Singularity and unity of messaging is Brussels’ goal.

Again, it is the context that matters. In one sense, the tragedy in Ukraine is a distraction: The point – not lost on the rest of the world – is how this all ‘was switched on’ against a major power in a day. It could just as easily happen to them, they realize.

That’s why India’s decision to trade in Rupees and Roubles is a harbinger of things to come. In throwing the ‘kitchen sink’ at Russia, the West has starkly highlighted the risks to the rest of the world that are inherent through participation in this Western-led ‘rules-based global order’.

And in triggering through media management the outrage which demands certain punitive retaliation, and outlawing alternative views, they send a shiver through many non-western leaderships — whose civilizational and value distinctions clearly mean nothing to the West. We will see many of these countries increasingly ‘abandon ship’.

Finally, external actors removed from the frenzy that is largely focused in Europe must be shaking their heads in disbelief at Europe’s zeal to join in this ‘war’. Was it deliberately provoked? Is there an escalation ‘in the works’ somewhere? 

A ‘world at war’ – whether kinetic or the full-monty financial – will be a disaster for Europe. War is inflationary. War is contractionary (and inflationary too).  It acts as a tax on any big importer such as Europe. Energy and commodities prices are currently higher – relatively – than any year since 1915. Wheat prices (25% of global supplies are sourced from Ukraine and Russia) are at their highest since 2008. Everything is going up vertically. The whole production chain for food is under pressure from every side. 

Why did Europe say ‘yes’?

The opinions mentioned in this article do not necessarily reflect the opinion of Al mayadeen, but rather express the opinion of its writer exclusively.

Snapshot

March 10, 2022

Source

By Fred Reed

Everybody and his goat are talking about the Ukraine. Why not me? You might ask, But Fred, what do you know about it? To which I would respond, Look, this is journalism. You don’t need to know anything, just wing it, preferably using words you can spell. Admittedly this is more of a limitation than it used to be. Anyway, here goes:

Why did Russia invade the Ukraine? Contrary to American media, the invasion was not unprovoked. Since the collapse of the Soviet Union in 1991, America has been pushing NATO, which is a US sepoy operation, ever closer to Russian borders in what, to anyone who took fifth-grade geography, is an obvious program of military encirclement. Of the five countries other than Russia littoral to the Black Sea, three, Turkey, Romania, and Bulgaria, are now in NATO. America has been moving toward bringing in the Ukraine and Georgia. After Georgia would have come Azerbaijan, putting American forces on the Caspian with access to Iran and Kazakhstan. This is calculated aggression over the long term, obvious to the—what? Ten percent? Fifteen percent?—of Americans who know what the Caucasus is.

Putin has said, over and over, that Russia could not allow hostile military forces on its border any more than the US would allow Chinese military bases in Mexico and China or missile forces in Cuba. Washington kept pushing. Russia said, no more. In short, America brought on the war.

Among people who follow such things, there are two ways of looking at the invasion. First, that Washington thought Putin was bluffing, and he wasn’t. Second, that America intentionally forced Russia to choose between allowing NATO into the Ukraine, a major success for Washington’s world empire; or fighting, also a success for Washington as it would cause the results it has caused.

From the latter understanding, America pulled off, at least at first glance, an astonishing geopolitical victory over Russia. Nordstream II blocked, crippling sanctions placed on Russia, many of its banks kicked out of SWIFT, economic integration of Europe and Asia slowed or reversed, Germany to spend 113 billion on rearming (largely meaning buying American costume-jewelry weaponry), Europe forced to buy expensive American LNG, and Europe made dependent on America for energy. All this in a few days without loss of a single American soldier. This presumably at least in part engineered by Virginia Newland who, though she looks like a fireplug with leprosy, seems effectively Machiavellian.

Next victim, China. Divide and conquer. Or at least that’s the theory. At the same time reinstate the JCPOA and use economic baubles to try to pry Iran away from Beijing.

Here we need some context. Everything Washington does internationally aims at maintaining America’s largely military near-hegemony over the world. This involves several elements:

First, military dominance. This includes the many hundreds of bases around the world, naval supremacy, and the huge military expenditure. Thy latter will be maintained at any cost to domestic needs, and apparently it is going to be increased.

Second, control of the world’s supply of energy. Washington is trying to starve Venezuela, with its vast reserves of petroleum, into submission. Submission means letting American-dominated oil majors exploit the country’s oil. Washington is doing the same with Iran and its enormous reserves. It has troops in Kuwait and Saudi Arabia, has confiscated Syria’s oil lands, crushed Libya, and so on. Keeping the European vassals from buying more Russian gas through Nordstream II is part of this energy control and an important part.

Third, and crucial, keep Eurasia—note the “EU”—from coalescing into a vast continent-spanning trade zone, which is exactly what China contemplates in its BRI, Belt and Road initiative. This is too much subject for a few paragraphs, but some thoughts: China is a manufacturing juggernaut in explosive growth. Economic power is the basis of all power. China has the advantage of inner lines of communication: it can build rail, fiber optics, highway,s and pipelines in Asia, where America has little access. China has money because it has a for-profit economy, and America doesn’t. The pull of China’s gigantic market and manufactures was beginning to loosen America’s control of Europe. Eurasian integration had to be stopped.

Fourth, the dollar. Washington controls the dollar, the IMF, SWIFT, and in general the international financial system. It uses this control brutally as a weapon to impose sanctions, crippling the economies of such countries as Venezuela, Iran, Cuba, North Korea, and now Russia. Seeing this intimidates other countries. Washington may have gone too often to this well. Having made England, its chief bootlicker, confiscate Venezuela’s gold reserves, and now freezing Russia’s reserves, Washington has served notice that no country is secure from this treatment. Here I speculate freely, but this may prove America’s worst mistake since 1619 as it may greatly accelerate the search for other payment systems—CIPS from China, SPFS from Russia, and the upcoming digital yuan. Washington, methinks, is betting the farm.

So much for the world. Meanwhile, America seems to be sinking into irreversible decadence that muss eventually—I would say soon—affect its international position. As the world’s economic and, laggingly, technological center of gravity moves east to Asia, an internally collapsing America will be less able to maintain the empire. Consider:

Washington’s printing of money, equivalent to the debasing of the coinage characteristic of failing societies, has resulted in high inflation and a potentially catastrophic national debt. This will cause political perturbation as voters seek to find which of the two essentially identical parties will not behave like the other one. Unrest will grow. Trust abroad in the dollar will decrease.

America suffers from a massive and growing trade deficit, largely with China, about which nothing can be done, certainly not soon, because America no longer makes things it needs. Manufacturing cannot be brought back, excep perhaps in niche markets like semiconductors, because the US no longer has the necessary engineers and trained work force, and American labor costs more than Chinese, so reshoring would increase inflation. The importation of cheap Chinese products keeps inflation down,.

The heavy flow of national wealth into Wall Street and the military in addition to offshoring has led to real poverty in Appalachia, the Rust Belt, and the rural Deep South. This has produced some 100,000 opioid deaths annually in despairing populations. Simultaneously large and growing homeless aggregations appear in LA, Seattle, San Francisco, Austin, St. Louis, on and on, estimated at 60,000 in LA and 50,000 in New York, making the subways dangerous. Bush world conditions presumably do not make for political stability, as neither does the governmental inattention to them.

Crime is out of control, not a sign of a healthy polity. Some 700 homicides annually in Chicago, 300 in Baltimore, and similar numbers elsewhere are now routine, almost all of the killers and killed being black. To countries like Japan and South Korea this must seem barbaric. The situation is not First World.

America’s racial problem is grave. The southern border is open, the southwestern states either majority Latino or soon to be. This is not as bad as it could be as the races seem to get along, but it imposes heavy economic and other costs. At the same time across the country cities have huge black ghettos with appalling semiliteracy, no prospects for the young, all of this apparently irremediable. Racial attacks on whites and Asians grow in number and so, almost everywhere, do racial killings, mostly by blacks. Governments at all levels fear blacks who they know will burn cities if provoked, which leads tax bases to flee from cities, making things worse.

This adds to potentially explosive resentment. There is a substantial White Nationalist movement, that wants no non-whites in America (a bit late for this), Republican Chambers of Commerce, that want more illegal Latinos for the cheap labor but won’t say so, and the high-tech sector, which wants more East Asian and Indian immigrants on which America, with a failing educational system, increasingly depends.

Overall, government is weak, unable to prevent crime, riots, and looting. Washington does not control, but is controlled, being a storefront operation for special interests. Elections do not change policy but only the division of the spoils. Presidents perform their three essential duties, protecting Wall Street, Israel, and the military budget, but not much else.

Schooling is being dumbed down in stark contrast with China. Excellence everywhere is discouraged in the name of equity. Native white talent dwindles in the elite schools, from high-end high schools through CalTech, as Asian majorities predominate. Measures of talent, such as SATs and Medcats, are dropped or downplayed. English grammar and arithmetic are dropped as racist. None of this seems likely to improve America’s future competitiveness.

Finally, the media are controlled. This allows Washington freedom of action abroad as enough of the public will believe anything they are told by television (The Russians are coming, the Chinese are coming, the Iranians are coming, the Guatemalans….) Internally censorship may keep the lid on, for now anyway, by keeping enough of the population from knowing what is going on. By preventing discussion of problems, or their mention, it assures that nothing will be done. I suspect this is having the effect of winding a spring.

Where is all of this leading?

Biden is playing as if this were 1960 and the US enjoyed rock solid military and economic superiority and the population were firmly behind him. This is the world he remembers, being an aging cold warrior. He seems to believe that he consequently can do what he pleases with no repercussions for America. This may be true, or true enough. Perhaps he believes that Russia will collapse in domestic rebellion or simply surrender to the US. It is not how I would bet.

But—and this is sheer speculation—it is not clear what would happen if Russia cut off gas and petroleum and wheat and such things as neon gas from Europe. The West is accustomed to bombing remote countries, not to going without. Would Russia collapse under privation before Europe decided it wanted to trade with Moscow after all?

If Biden and the hawks decide to play hardball with China, they may realize that America is an economic dependency of Beijing. If—again, very hypothetically—China cut off all trade with America, the US economy would die instantly. Almost everything on American shelves is made in China. An American public already very unhappy would explode, which it is on the point of doing for various reasons. Reflect on the Floyd riots. China would be hurt, but it has other markets and a nationalistic population more united than the American.

Them’s my thoughts, probably worth what you pay for them.

How Russia Will Counterpunch the U.S./EU Declaration of War

March 04, 2022

VT: The article below is source from Strategic Culture, deigned by the FBI to be a Russian influence operation

By Pepe Escobar,

Only self-sufficiency affords total independence. And the Big Picture has also been keenly understood by the Global South.

One of the key underlying themes of the Russia/Ukraine/NATO matrix is that the Empire of Lies (copyright Putin) has been rattled to the core by the combined ability of Russian hypersonic missiles and a defensive shield capable of blocking incoming nuclear missiles from the West, thereby ending Mutually Assured Destruction (M.A.D.)

This has led the Americans to nearly risk a hot war to be able to place hypersonic missiles that they still don’t have on Ukraine’s western borders, and so be within three minutes of Moscow. For that, of course, they need Ukraine, as well as Poland and Romania in Eastern Europe.

In Ukraine, the Americans are determined to fight to the last European soul – if that’s what it takes. This may be the last roll of the (nuclear) dice. Thus the next-to-last gasp at coercing Russia into submission by using the remaining, workable American weapon of mass destruction: SWIFT.

Yet this weapon can be easily neutralized by rapid adoption of self-sufficiency.

With essential input by the inestimable Michael Hudson I have outlined possibilities for Russia to weather the sanction storm. That didn’t even consider the full extent of Russia’s “black box defense”

– and counter-attack – as outlined by John Helmer in his introduction to an essay that heralds no less then The Return of Sergei Glaziev.

Glaziev, predictably detested across Atlanticist circles, was a key economic adviser to President Putin and is now the Minister for Integration and Macroeconomics of the Eurasia Economic Union (EAEU). He has always been a fierce critic of the Russian Central Bank and the oligarch gang closely linked to Anglo-American finance.

His latest essay, Sanctions and Sovereignty, originally published by expert.ru and translated by Helmer, deserves serious scrutiny.

This is one of the key takeaways:

“Russian losses of potential GDP, since 2014, amount to about 50 trillion rubles. But only 10% of them can be explained by sanctions, while 80% of them were the result of monetary policy. The United States benefits from anti-Russian sanctions, replacing the export of Russian hydrocarbons to the EU as well as China; replacing the import of European goods by Russia. We could completely offset the negative consequences of financial sanctions if the Bank of Russia fulfilled its constitutional duty to ensure a stable ruble exchange rate, and not the recommendations of Washington financial organizations.”

De-offshore or bust

Glaziev essentially recommends:

– A “real de-offshorization of the economy”.

– “Measures to tighten currency regulation in order to stop the export of capital and expand targeted lending to enterprises in need of financing investments”.

– “Taxation of currency speculation and transactions in dollars and euros on the domestic market”.

– “Serious investment in R&D in order to accelerate the development of our own technological base in the areas affected by sanctions – first of all the defense industry, energy, transport and communications.”

And last but not least, “the de-dollarization of our foreign exchange reserves, replacing the dollar, euro and pound with gold.”

The Russian Central Bank seems to be listening. Most of these measures are already in place. And there are signs that Putin and the government are finally ready to grab the Russian oligarchy by the balls and force them to share risks and losses at an extremely difficult for the nation. Goodbye to stockpiling funds taken out of Russia offshore and in Londongrad.

Glaziev is the real deal. In December 2014 I was at a conference in Rome, and Glaziev joined us on the phone. Reviewing a subsequent column I wrote at the time, between Rome and Beijing, I was stunned: it’s as if Glaziev was saying these things literally today.

Allow me to quote two paragraphs:

“At the symposium, held in a divinely frescoed former 15th century Dominican refectory now part of the Italian parliament’s library, Sergey Glaziev, on the phone from Moscow, gave a stark reading of Cold War 2.0. There’s no real “government” in Kiev; the U.S. ambassador is in charge. An anti-Russia doctrine has been hatched in Washington to foment war in Europe – and European politicians are its collaborators. Washington wants a war in Europe because it is losing the competition with China.”

“Glaziev addressed the sanctions dementia: Russia is trying simultaneously to reorganize the politics of the International Monetary Fund, fight capital flight and minimize the effect of banks closing credit lines for many businessmen. Yet the end result of sanctions, he says, is that Europe will be the ultimate losers economically; bureaucracy in Europe has lost economic focus as American geopoliticians have taken over.”

Gotta pay the “tax on independence”

A consensus seems to be emerging in Moscow that the Russian economy will stabilize quickly, as there will be a shortage of personnel for industry and a lot of extra hands will be required. Hence no unemployment. There may be shortages, but no inflation. Sales of – Western – luxury goods have already been curtailed. Imported products will be placed under price controls. All the necessary rubles will be available though price controls – as happened in the U.S. in WWII.

A wave of nationalization of assets may be ahead. ExxonMobil announced it will withdraw from the $4 billion Sakhalin-1 project (they had bailed out on Sakhalin-2, deemed too expensive), producing 200,000 barrels of oil a day, after BP and Norway’s Equinor announced they were withdrawing from projects with Rosneft. BP was actually dreaming of taking all of Rosneft’s participation.

According to Prime Minister Mikhail Mishustin, the Kremlin is now blocking asset sales by foreign investors looking to divest. In parallel, Rosneft, for instance, is bound to raise capital from China and India, who are already minority investors in several projects, and buy them out 100%: an excellent opportunity for Russian business.

What could be construed as the Mother of All Counter-Sanctions has not yet been announced. Deputy Chairman of the Security Council Dmitry Medvedev himself hinted all options are on the table.

Foreign Minister Sergey Lavrov, channeling the patience of 10,000 Taoist monks, still expecting the current hysteria to fade away, describes the sanctions as “some kind of a tax on independence”,

with countries barring their companies from working in Russia under “huge pressure.”

Lethal counterpunches though are not excluded. Apart from completely de-dollarizing – as Glaviev recommends – Russia may ban the export of titanium, rare earth, nuclear fuel and, already in effect, rocket engines.

Very toxic moves would include seizing all foreign assets of hostile nations; freeze all loan repayments to Western banks and place the funds in a frozen account in a Russian bank; completely ban all hostile foreign media, foreign media ownership, assorted NGOs and CIA fronts; and supply friendly nations with state of the art weapons, intel sharing and joint training and exercises.

What’s certain is that a new architecture of payment systems – as discussed by Michael Hudson and others – uniting the Russian SPFS and the Chinese CHIPS, may soon be offered to scores of nations across Eurasia and the Global South – several among them already under sanctions, such as Iran, Venezuela, Cuba, Nicaragua, Bolivia, Syria, Iraq, Lebanon, the DPRK.

Slowly but surely, we are already on the way to the emergence of a sizeable Global South bloc immune to American financial warfare.

The RIC in BRICS – Russia, India and China – are already increasing trade in their own currencies. If we look at the list of nations at the UN that voted against Russia or abstained from condemning Operation Z in Ukraine, plus those that did not sanction Russia, we have at least 70% of the whole Global South.

So once again is the West – plus satrapies/colonies such as Japan and Singapore in Asia – against the Rest: Eurasia, Southeast Asia, Africa, Latin America.

The coming European collapse

Michael Hudson told me, “the U.S. and Western Europe expected a Froelicher Krieg (“happy war”). Germany and other countries haven’t begun to feel the pain of gas and mineral and food deprivation. THAT’S going to be the real game. The aim would be to break Europe away from U.S. control via NATO. This will involve “meddling” by creating a New World Order political movement and party, like Communism was a century ago. You could call it a new Great Awakening.”

A possible Great Awakening certainly will not involve the NATOstan sphere anytime soon. The collective West is rather in serious Great Decoupling mode, its entire economy weaponized with the aim, expressed in the open, of destroying Russia and even – the perennial wet dream – provoking regime change.

Sergey Naryshkin, the head of the SVR, succinctly described it:

“Masks have dropped. The West is not just trying to enclose Russia with a new ‘Iron Curtain’. We are talking about attempts to destroy our state – its ‘abolition’, as it is now customary to say in the ‘tolerant’ liberal-fascist environment. Since the United States and its allies have neither the opportunity nor the spirit to try to do this in an open and honest military-political confrontation, sneaky attempts are being made to establish an economic, informational and humanitarian “blockade”’.

Arguably the apex of Western hysteria is the onset of a 2022 Neo-Nazi Jihad: a 20,000-strong mercenary army being assembled in Poland under CIA supervision. The bulk comes from private military companies such as Blackwater/Academi and DynCorp. Their cover: “return of Ukrainians from the French Foreign Legion.” This Afghan remix comes straight from the only playbook the CIA knows.

Back in reality, facts on the ground will eventually lead entire economies in the West to become roadkill – with chaos in the commodities sphere leading to skyrocketing energy and food costs. As an example, up to 60% of German and 70% of Italian manufacturing industries may be forced to shut down for good – with catastrophic social consequences.

The unelected, uber-Kafkaesque EU machine in Brussels has chosen to commit a triple hara-kiri by grandstanding as abject vassals of the Empire, destroying any remaining French and German sovereignty impulses and imposing alienation from Russia-China.

Meanwhile, Russia will be showing the way: only self-sufficiency affords total independence. And the Big Picture has also been keenly understood by the Global South: one day someone had to stand up and say, “That’s Enough”. With maximum raw power to back it up.

Western sanctions policy is birthing a rival economic world-system

3 Mar 2022

Source: Al Mayadeen

Samuel Geddes 

From the huge reserve it accumulated over the years to alternative currency transfer methods, Russia has many tools to counter the ‘barrage’ of Western sanctions, but will they be effective?

Russia has seen this moment coming for years, hence its US$630 billion central bank reserve of which only 16 percent is held in US dollars

The addition of Russia to the ranks of Iran, Venezuela, Yemen and others enduring “maximum pressure” campaigns will only further the creation of financial and economic mechanisms that bypass the US dollar and the global architecture that supports it. 

From the opening salvo of a full-scale war between Russia and Ukraine last week, it was inevitable that we would reach this point. Under American pressure, the European Union has agreed to expel the central bank of Russia from the SWIFT messaging system, the so-called “plumbing of the global financial system”. The measure, along with massive export restrictions from western states, is specifically designed to cripple the Russian economy, preventing it from paying for its imports and more crucially, receiving payment for its exports.

Moscow now joins just a handful of states worldwide to be subjected to such totalizing economic warfare. The most prominent example is the Islamic Republic of Iran, which has endured massive sanctions since its inception in 1979, escalating to the point of economic siege in 2012 and again in 2018. Venezuela, under the leadership of Hugo Chavez and now Nicholas Maduro has gone from being one of the largest oil exporters to the United States to the victim of a siege that has led to a massive refugee crisis throughout South America and outright theft of its national gold reserves by the Bank of London.

Far more effective attempts at economic strangulation are currently being carried out against Yemen, where the Ansar Allah movement had the temerity to overthrow a western and GCC-backed president. That country’s death count is rapidly approaching 400,000 of whom the overwhelming majority are civilian victims of famine and disease resulting from a total land, sea, and air blockade of the country enforced by the GCC states as well as the western powers directing them from afar.

Afghanistan’s near 40 million population is also being viciously punished for NATO’s defeat at the hands of its Taliban rulers. Nearly the entire population lives in absolute poverty and is unable to survive because the American government froze the central bank’s assets and has seen fit to release only half of the approximately US$8 billion. The other half Washington has seen fit to keep for itself, to compensate the families of 9/11 victims, whose losses the Afghan people have manifestly nothing to do with. In the case of the latter two countries, almost no other country has even recognized them as legitimate states entitled to sovereign equality and membership of the United Nations. 

Now, these nations are joined by the largest state on earth and one of its most critical suppliers of raw materials, from feed grains to strategic metals and fertilizers. 

The initial impacts of the sanctions regime are likely to be socially devastating on Russia but like the countries in whose company it now finds itself, it will quickly find a way to circumvent these economic hurdles and find new markets for its goods. It could also conceivably become far more self-sufficient in higher-end value-added goods, as it will now be forced to substitute imports of western technology. 

Russia has seen this moment coming for years, hence its US$630 billion central bank reserve of which only 16 percent is held in US dollars. What is likely to make up a growing proportion of that reserve will be the Chinese yuan. Beijing has dropped all limits to its importation of Russian wheat, signaling that the PRC may be willing to provide Russia a guaranteed market for most, if not all of the commodities it will now be unable to sell freely on the global market. Chinese non-compliance with the US and EU-mandated sanctions may augur a more terminal split with the west. 

Should China opt for a final economic decoupling from its decades-long partners, the East Asian giant would likely choose to serve as a guaranteed market for similarly besieged states, Iran, Yemen, Afghanistan, and Venezuela. Its likely means of doing so have been intimated in just the last few days. The Cross-Border International Payments System (CIPS) is Beijing’s In-house version of the western SWIFT system, albeit in its infancy and far less wide-reaching. What it would do is significantly expand the use of the yuan as a means of payment-settling, particularly for energy imports. Given its insatiable demand for energy, the Chinese economy, waning pandemics-permitting, could finally propel the widespread adoption of a non-western global currency. Bilateral trade between Russia and China, now well over US$100 billion annually has already been largely “de-dollarized” with the US currency being used to settle less than 23 percent of payments between the two nations.

A parallel financial-plumbing system built to service a growing list of states could significantly internationalize and speed up this trend. 

Russia could instead expand the use of its own domestic payment system, the System For Transfer of Financial Messages (SPFS), created in 2014, to facilitate international transfers. This would be especially effective in the former states of the Soviet Union, in the Caucasus and Central Asia. Several or all of these isolated states might construct their own indigenous payment systems that could be mutually compatible. As direct fuel shipments and technical assistance from Iran to Venezuela over recent years have demonstrated, the weaponization of the US dollar and the international financial system is serving more to unite disparate nations in sanction-proofing their economies than in toppling their political systems. 

Planners in Washington are almost certainly aware of this and while the bountiful natural resources of the Russians are now lost to them, it may just be the cost of having Europe now entirely beholden to the US for its economic survival, as well as the South American, Middle Eastern and East Asian former Russian markets the west has secured for itself. 

While the west’s expanded economic market share will keep the dollar, euro, and the pound afloat in the immediate post-COVID world, this will only delay the inevitable. NATO belligerence has now set in motion the forces that will eventually produce a successor to the current world-reserve currency, and the very existence of a parallel financial universe will show that other worlds than that ruled by the euro or the dollar, are possible.       

The opinions mentioned in this article do not necessarily reflect the opinion of Al mayadeen, but rather express the opinion of its writer exclusively.

The “relatively civilized” people should ally themselves with the “uncivilized” ones

March 04, 2022

Source

By Aram Mirzaei

The Western psyops is truly at its full capacity right now. As the Saker has reported himself for many days now, they’ve targeted Russia everywhere and in every way possible. They’ve completely taken control of the narrative and are basically on a witch hunt for those deemed “deviant”. The Western media is rampant with “reporting” and “analyses” where all these “experts” are competing in the ‘trash-talking Russia” challenge. Some say Putin has gone mad and has “lost touch with reality”, while others claim that he has a master plan to conquer all of the former Eastern Bloc countries. But in the end they all agree that he is evil, that he should be killed and/or overthrown. The other day, I saw two journalists interviewing a man who had volunteered to travel to Ukraine to fight Russians, as they were wishing him “all the best.” You’d think this is a joke if you didn’t live through it yourself.

A friend of mine from a European country told me the other day: “I feel like a criminal these days, carrying a deep dark secret, because I’ve committed something worse than murder… I support Russia! In this extremely Russophobic country, the pharmacies have run out of iodine pills, because people have stocked up on them, expecting a nuclear strike by “big bad Putin” any day now. People are hurrying to the ATMs for cash and preparing shelters for WWIII.” This is how the West and its powerful media have created fear among the Western people.

We’re being bombarded day and night by lies, lies and more lies about the ongoing conflict. The Saker is correct in his argument that Russia has been defeated in the information war. There are probably differing opinions on why this happened and one could argue that Moscow was probably a bit surprised to see the extent of the psyop. Foreign Minister Lavrov himself said that “Russia was ready for Western sanctions but that it did not expect the West to target its athletes, journalists and representatives of the cultural sector.”

He isn’t exactly lying here. Never in my life have I seen such hatred spewed on a mass level, as if the entire world has gone crazy. Such a coordinated campaign cannot have been executed without thorough planning, which I believe they’ve been doing for months, if not years.
In any case, the Western media have been quick to proclaim that the “international community” has condemned Russia for its “invasion” of Ukraine. We all know by now that the “international community” includes only the “civilized” and perhaps some “relatively civilized” countries. I’ll come back to the term “relatively civilized” later.

So what about the average person in the West then? I can mostly speak about the country I currently reside in, but so far, judging from what I’ve seen, the “civilized” Westerners have unequivocally condemned and showed their hatred for president Putin and Russia, because, of course, they take a moral stance against “unacceptable Russian imperialism.” Such things belong to the “20th century” and “countries these days don’t just invade other countries”. The other day, I heard co-workers say that they don’t fear soaring gas and oil prices due to the sanctions, because they’d “rather go back to horse and chariot, than miss out on the chance to put those damn Russians in their place.”

This is the hatred that they have against Russia, a people they consider to be “relatively civilized”, just like they consider Ukrainians to be the same. This is why Moscow’s policy of appeasement is useless. It is Moscow that should take lessons from history and look at Munich 1938, not the Westerners, as some silly pundits claim. They should also take lesson from the Islamic Republic’s tough stance against the West, despite being a much smaller country than Russia, and vastly behind in terms of economic, military, industrial and technological advancements and achievements.

The Islamic Republic has never even had the chance to be part of SWIFT system, a tool that the Westerners have used against Russia recently, supposedly a “disaster for Russian economy” now that they have “kicked Russia out.” Iran has been forced to do trades through the black market and the use of cash in suitcases and bags for decades! This is what “maximum pressure” forced Tehran into. Why shouldn’t Russia survive this? It is after all “relatively civilized” compared to the “uncivilized” Muslim Iranians.

The phrase “relatively civilized” was, as most people know, recently used in an interview by a correspondent of one of the American media channels. Note the words “the Ukrainians are relatively civilized”, which simply means that in the eyes of the Americans, Ukrainians are still “relatively civilized” and not fully “civilized”.
This means that Iraqis are Afghans dying is not strange, because they’re not civilized anyway. The “stupid Muslims” in Iraq, Syria and Yemen whose blood don’t matter and killing them en masse is permissible because they are subhuman.

The Western people (save for a very small minority) do not give a damn about the fact that the US occupies Syria and Iraq, that it has waged illegal wars across West Asia and Afghanistan, and slaughtered millions in their path. Washington is partaking in a starvation campaign against millions of Yemenis, does anyone care about that?

Did anyone sanction the US when it invaded Iraq illegally? Even with facts about the total fabrication of evidence for Iraq’s WMD possession, facts that are acknowledged by Western governments and pundits today, and yet nobody says a thing. Did anyone cancel, let alone even condemn the US when it downed an Iranian passenger flight, killing some 300 people and then gave medals to those troops who fired the missile?

For God’s sakes, at least the Iranians had the decency to apologize when they accidentally downed the Ukrainian-bound passenger flight in 2020. They didn’t humiliate the victims by giving the troops medals, instead, they actually charged them with criminal neglect and incompetence. But Iranians are the “uncivilized” people here, of course.

In my opinion, Moscow has tried too hard the diplomatic way, over the Donbass conflict. I’m sure the people in Moscow already know this, but negotiations with the West is useless. If anything the failure of the JCPOA and Washington’s shameless withdrawal should be a lesson for Moscow, that Washington and its band of dogs are liars, they are unreliable and won’t stand by their words and promises. The West has proven time and time again that it only understands the language of force.

I believe as several other analysts have already stated, that Washington’s goals have been to draw Russia into a war, which it succeeded in doing, and the second goal has been to kick Russia out of Europe-Washington has been pretty successful with this endeavour too, for now.

So Moscow must now look to those who will not view Russia and Russians as “relatively civilized.” The “uncivilized” world, save for those affected by the brain disease that exposure to Western media results in, mostly support Moscow’s operation in Ukraine. They recognize Moscow’s legitimate security concerns over NATO’s expansion to Russia’s borders. Moscow’s challenge and resistance to the US empire is important for the countries or the “uncivilized” world too, because it offers them a way out of the West’s stranglehold over them. Moscow has used its military might for fighting terrorists, first in Chechnya, then Syria and now in Ukraine, helping the people achieve freedom from Western backed terrorists. This has not just passed by the “uncivil” peoples of the world.

Many countries in the so called Global South have refused to condemn and sanction Russia. Not even NATO member Turkey, or Brazil’s anglophile president went through with the sanctions. Tehran and Beijing (both super uncivilized) have blamed the West for the crisis and  Iranian Supreme Leader Ayatollah Seyyed Ali Khamenei has personally mentioned Washington’s cancerous role in the conflict, describing Washington as “both creating crises and feeding off of them.”

So what can we learn from this conflict? Moscow, and hopefully Tehran as well as Beijing should learn that just like in Ukraine, where there are those who believe that its a privilege to be called “Westerner” and “European”, there are such people in all three of these countries as well. The governments of Russia, Iran and China must now figure out ways to block these psyops from affecting their own peoples, or elschine they’ll be facing the same threats. One such way is to counter the “Western unity” by showing “Eastern unity” in this time of crisis. They must show the world that Western sanctions don’t affect them, and that the “international community” is nothing but the US empire of lies and its vassals.

Let’s hope that this truly was Russia’s final review of relations with the West and that Moscow now fully turns to the “uncivilized” East.

Follow the money: how Russia will bypass western economic warfare

March 01, 2022

By Pepe Escobar

The Cradle

The US and EU are over-reaching on Russian sanctions. The end result could be the de-dollarization of the global economy and massive commodity shortages worldwide.

So a congregation of NATO’s top brass ensconced in their echo chambers target the Russian Central Bank with sanctions and expect what? Cookies?

What they got instead was Russia’s deterrence forces bumped up to “a special regime of duty” – which means the Northern and Pacific fleets, the Long-Range Aviation Command, strategic bombers and the entire Russian nuclear apparatus on maximum alert.

One Pentagon general very quickly did the basic math on that, and mere minutes later, a Ukrainian delegation was dispatched to conduct negotiations with Russia in an undisclosed location in Gomel, Belarus.

Meanwhile, in the vassal realms, the German government was busy “setting limits to warmongers like Putin” – quite a rich undertaking considering that Berlin never set any such limits for western warmongers who bombed Yugoslavia, invaded Iraq, or destroyed Libya in complete violation of international law.

While openly proclaiming their desire to “stop the development of Russian industry,” damage its economy, and “ruin Russia” – echoing American edicts on Iraq, Iran, Syria, Libya, Cuba, Venezuela and others in the Global South – the Germans could not possibly recognize a new categorical imperative.

They were finally liberated from their WWII culpability complex by none other than Russian President Vladimir Putin. Germany is finally free to support and weaponize neo-Nazis out in the open all over again – now of the Ukrainian Azov battalion variety.

To get the hang of how these NATO sanctions will “ruin Russia,” I asked for the succinct analysis of one of the most competent economic minds on the planet, Michael Hudson, author, among others, of a revised edition of the must-read Super-Imperialism: The Economic Strategy of American Empire.

Hudson remarked how he is “simply numbed over the near-atomic escalation of the US.” On the confiscation of Russian foreign reserves and cut-off from SWIFT, the main point is “it will take some time for Russia to put in a new system, with China. The result will end dollarization for good, as countries threatened with ‘democracy’ or displaying diplomatic independence will be afraid to use US banks.”

This, Hudson says, leads us to “the great question: whether Europe and the Dollar Bloc can buy Russian raw materials – cobalt, palladium, etc, and whether China will join Russia in a minerals boycott.”

Hudson is adamant that “Russia’s Central Bank, of course, has foreign bank assets in order to intervene in exchange markets to defend its currency from fluctuations. The ruble has plunged. There will be new exchange rates. Yet it’s up to Russia to decide whether to sell its wheat to West Asia, that needs it; or to stop selling gas to Europe via Ukraine, now that the US can grab it.”

About the possible introduction of a new Russia-China payment system bypassing SWIFT, and combining the Russian SPFS (System for Transfer of Financial Messages) with the Chinese CIPS (Cross-Border Interbank Payment System), Hudson has no doubts “the Russian-China system will be implemented. The Global South will seek to join and at the same time keep SWIFT – moving their reserves into the new system.”

I’m going to de-dollarize myself

So the US itself, in another massive strategic blunder, will speed up de-dollarization. As the managing director of Bocom International Hong Hao told the Global Times, with energy trade between Europe and Russia de-dollarized, “that will be the beginning of the disintegration of dollar hegemony.”

It’s a refrain the US administration was quietly hearing last week from some of its own largest multinational banks, including notables like JPMorgan and Citigroup.

Bloomberg article sums up their collective fears:

“Booting Russia from the critical global system – which handles 42 million messages a day and serves as a lifeline to some of the world’s biggest financial institutions – could backfire, sending inflation higher, pushing Russia closer to China, and shielding financial transactions from scrutiny by the west. It might also encourage the development of a SWIFT alternative that could eventually damage the supremacy of the US dollar.”

Those with IQs over 50 in the European Union (EU) must have understood that Russia simply could not be totally excluded from SWIFT, but maybe only a few of its banks: after all, European traders depend on Russian energy.

From Moscow’s point of view, that’s a minor issue. A number of Russian banks are already connected to China’s CIPS system. For instance, if someone wants to buy Russian oil and gas with CIPS, payment must be in the Chinese yuan currency. CIPS is independent of SWIFT.

Additionally, Moscow already linked its SPFS payment system not only to China but also to India and member nations of the Eurasia Economic Union (EAEU). SPFS already links to approximately 400 banks.

With more Russian companies using SPFS and CIPS, even before they merge, and other maneuvers to bypass SWIFT, such as barter trade – largely used by sanctioned Iran – and agent banks, Russia could make up for at least 50 percent in trade losses.

The key fact is that the flight from the US-dominated western financial system is now irreversible across Eurasia – and that will proceed in tandem with the internationalization of the yuan.

Russia has its own bag of tricks

Meanwhile, we’re not even talking yet about Russian retaliation for these sanctions. Former President Dmitry Medvedev already gave a hint: everything, from exiting all nuclear arms deals with the US to freezing the assets of western companies in Russia, is on the table.

So what does the “Empire of Lies” want? (Putin terminology, on Monday’s meeting in Moscow to discuss the response to sanctions.)

In an essay published this morning, deliciously titled America Defeats Germany for the Third Time in a Century: the MIC, OGAM and FIRE conquer NATO, Michael Hudson makes a series of crucial points, starting with how “NATO has become Europe’s foreign policy-making body, even to the point of dominating domestic economic interests.”

He outlines the three oligarchies in control of US foreign policy:

First is the military-industrial complex, which Ray McGovern memorably coined as MICIMATT (military industrial Congressional intelligence media academia think tank).

Hudson defines their economy base as “monopoly rent, obtained above all from its arms sales to NATO, to West Asian oil exporters and to other countries with a balance-of-payments surplus.”

Second is the oil and gas sector, joined by mining (OGAM). Their aim is “to maximize the price of energy and raw materials so as to maximize natural resource rent. Monopolizing the Dollar Area’s oil market and isolating it from Russian oil and gas has been a major US priority for over a year now, as the Nord Stream 2 pipeline from Russia to Germany threatened to link the western European and Russian economies together.”

Third is the “symbiotic” Finance, Insurance and Real Estate (FIRE) sector, which Hudson defines as “the counterpart to Europe’s old post-feudal landed aristocracy living by land rents.”

As he describes these three rentier sectors that completely dominate post-industrial finance capitalism at the heart of the western system, Hudson notes how “Wall Street always has been closely merged with the oil and gas industry (namely, the Citigroup and Chase Manhattan banking conglomerates).”

Hudson shows how “the most pressing US strategic aim of NATO confrontation with Russia is soaring oil and gas prices. In addition to creating profits and stock market gains for US companies, higher energy prices will take much of the steam out of the German economy.”

He warns how food prices will rise “headed by wheat.” (Russia and Ukraine account for 25 percent of world wheat exports.) From a Global South perspective, that’s a disaster: “This will squeeze many West Asian and Global South food-deficient countries, worsening their balance of payments and threatening foreign debt defaults.”

As for blocking Russian raw materials exports, “this threatens to cause breaks in supply chains for key materials, including cobalt, palladium, nickel, aluminum.”

And that leads us, once again, to the heart of the matter: “The long-term dream of the US new Cold Warriors is to break up Russia, or at least to restore its managerial kleptocracy seeking to cash in their privatizations in western stock markets.”

That’s not going to happen. Hudson clearly sees how “the most enormous unintended consequence of US foreign policy has been to drive Russia and China together, along with Iran, Central Asia and countries along the Belt and Road initiative.”

Let’s confiscate some technology

Now compare all of the above with the perspective of a central European business tycoon with vast interests, east and west, and who treasures his discretion.

In an email exchange, the business tycoon posed serious questions about the Russian Central Bank support for its national currency, the ruble, “which according to US planning is being destroyed by the west through sanctions and currency wolf packs who are exposing themselves by selling rubles short. There is really almost no amount of money that can beat the dollar manipulators against the ruble. A 20 percent interest rate will kill the Russian economy unnecessarily.”

The businessman argues that the chief effect of the rate hike “would be to support imports that should not be imported. The fall of the ruble is thus favorable to Russia in terms of self-sufficiency. As import prices rise, these goods should start to be produced domestically. I would just let the ruble fall to find its own level which will for a while be lower than natural forces would permit as the US will be driving it lower through sanctions and short selling manipulation in this form of economic war against Russia.”

But that seems to tell only part of the story. Arguably, the lethal weapon in Russia’s arsenal of responses has been identified by the head of the Center for Economic Research of the Institute of Globalization and Social Movements (IGSO), Vasily Koltashov: the key is to confiscate technology – as in Russia ceasing to recognize US rights to patents.

In what he qualifies as “liberating American intellectual property,” Koltashov calls for passing a Russian law on “friendly and unfriendly states. If a country turns out to be on the unfriendly list, then we can start copying its technologies in pharmaceuticals, industry, manufacturing, electronics, medicine. It can be anything – from simple details to chemical compositions.” This would require amendments to the Russian constitution.

Koltashov maintains that “one of the foundations of success of American industry was copying of foreign patents for inventions.” Now, Russia could use “China’s extensive know-how with its latest technological production processes for copying western products: the release of American intellectual property will cause damage to the United States to the amount of $10 trillion, only in the first stage. It will be a disaster for them.”

As it stands, the strategic stupidity of the EU beggars belief. China is ready to grab all Russian natural resources – with Europe left as a pitiful hostage of the oceans and of wild speculators. It looks like a total EU-Russia split is ahead – with little trade left and zero diplomacy.

Now listen to the sound of champagne popping all across the MICIMATT.

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

America Defeats Germany for the Third Time in a Century: The MIC, OGAM and FIRE Sectors Conquer NATO

February 28, 2022

Source

By Michael Hudson

My old boss Herman Kahn, with whom I worked at the Hudson Institute in the 1970s, had a set speech that he would give at public meetings. He said that back in high school in Los Angeles, his teachers would say what most liberals were saying in the 1940s and 50s: “Wars never solved anything.” It was as if they never changed anything – and therefore shouldn’t be fought.

Herman disagreed, and made lists of all sorts of things that wars had solved in world history, or at least changed. He was right, and of course that is the aim of both sides in today’s New Cold War confrontation in Ukraine.

The question to ask is what today’s New Cold War is trying to change or “solve.” To answer this question, it helps to ask who initiates the war. There always are two sides – the attacker and the attacked. The attacker intends certain consequences, and the attacked looks for unintended consequences of which they can take advantage. In this case, both sides have their dueling sets of intended consequences and special interests.

The active military force and aggression since 1991 has been the United States. Rejecting mutual disarmament of the Warsaw Pact countries and NATO, there was no “peace dividend.” Instead, the U.S. policy executed by the Clinton and subsequent administrations to wage a new military expansion via NATO has paid a 30-year dividend in the form of shifting the foreign policy of Western Europe and other American allies out of their domestic political sphere into their own U.S.-oriented “national security” blob (the word for special interests that must not be named). NATO has become Europe’s foreign-policy-making body, even to the point of dominating domestic economic interests.

The recent prodding of Russia by expanding Ukrainian anti-Russian ethnic violence by Ukraine’s neo-Nazi post-2014 Maiden regime was aimed at (and has succeeded in forcing a showdown in response the fear by U.S. interests that they are losing their economic and political hold on their NATO allies and other Dollar Area satellites as these countries have seen their major opportunities for gain to lie in increasing trade and investment with China and Russia.

To understand just what U.S. aims and interests are threatened, it is necessary to understand U.S. politics and “the blob,” that is, the government central planning that cannot be explained by looking at ostensibly democratic politics. This is not the politics of U.S. senators and representatives representing their congressional voting districts or states.

America’s three oligarchies in control of U.S. foreign policy

It is more realistic to view U.S. economic and foreign policy in terms of the military-industrial complex, the oil and gas (and mining) complex, and the banking and real estate complex than in terms of the political policy of Republicans and Democrats. The key senators and congressional representatives do not represent their states and districts as much as the economic and financial interests of their major political campaign contributors. A Venn diagram would show that in today’s post-Citizens United world, U.S. politicians represent their campaign contributors, not voters. And these contributors fall basically into three main blocs.

Three main oligarchic groups that have bought control of the Senate and Congress to put their own policy makers in the State Department and Defense Department. First is the Military-Industrial Complex (MIC) – arms manufacturers such as Raytheon, Boeing and Lockheed-Martin, have broadly diversified their factories and employment in nearly every state, and especially in the Congressional districts where key Congressional committee heads are elected. Their economic base is monopoly rent, obtained above all from their arms sales to NATO, to Near Eastern oil exporters and to other countries with a balance-of-payments surplus. Stocks for these companies soared immediately upon news of the Russian attack, leading a two-day stock-market surge as investors recognized that war in a world of cost-plus “Pentagon capitalism” (as Seymour Melman described it) will provide a guaranteed national-security umbrella for monopoly profits for war industries. Senators and Congressional representatives from California and Washington traditionally have represented the MIC, along with the solid pro-military South. The past week’s military escalation promises soaring arms sales to NATO and other U.S. allies, enriching the actual constituents of these politicians. Germany quickly agreed to raise is arms spending to over 2% of GDP.

The second major oligarchic bloc is the rent-extracting oil and gas sector, joined by mining (OGAM), riding America’s special tax favoritism granted to companies emptying natural resources out of the ground and putting them mostly into the atmosphere, oceans and water supply. Like the banking and real estate sector seeking to maximize economic rent and maximizing capital gains for housing and other assets,, the aim of this OGAM sector is to maximize the price of its energy and raw materials so as to maximize its natural-resource rent. Monopolizing the Dollar Area’s oil market and isolating it from Russian oil and gas has been a major U.S. priority for over a year now, as the Nord Stream 2 pipeline threatened to link the Western European and Russian economies more tightly together.

If oil, gas and mining operations are not situated in every U.S. voting district, at least their investors are. Senators from Texas and other Western oil-producing and mining states are the leading OGAM lobbyists, and the State Department has a heavy oil-sector influence providing a national-security umbrella for the sector’s special tax breaks. The ancillary political aim is to ignore and reject environmental drives to replace oil, gas and coal with alternative sources of energy. The Biden administration accordingly has backed the expansion of offshore drilling, supported the Canadian pipeline to the world’s dirtiest petroleum source in the Athabasca tar sands, and celebrated the revival of U.S. fracking.

The foreign-policy extension is to prevent foreign countries not leaving control of their oil, gas and mining to U.S. OGAM companies from competing in world markets with U.S. suppliers. Isolating Russia (and Iran) from Western markets will reduce the supply of oil and gas, pushing up prices and corporate profits accordingly.

The third major oligarchic group is the symbiotic Finance, Insurance and Real Estate (FIRE) sector, which is the modern finance-capitalist successor to Europe’s old post-feudal landed aristocracy living by land rents. With most housing in today’s world having become owner-occupied (although with sharply rising rates of absentee landlordship since the post-2008 wave of Obama Evictions), land rent is paid largely to the banking sector in the form of mortgage interest and debt amortization (on rising debt/equity ratios as bank lending inflates housing prices). About 80 percent of U.S. and British bank loans are to the real estate sector, inflating land prices to create capital gains – which are effectively tax-exempt for absentee owners.

This Wall Street-centered banking and real estate bloc is even more broadly based on a district-by-district basis than the MIC. Its New York senator from Wall Street, Chuck Schumer, heads the Senate, long supported by Delaware’s former Senator from the credit-card industry Joe Biden, and Connecticut’s senators from the insurance sector centered in that state. Domestically, the aim of this sector is to maximize land rent and the “capital’ gains resulting from rising land rent. Internationally, the FIRE sector’s aim is to privatize foreign economies (above all to secure the privilege of credit creation in U.S. hands), so as to turn government infrastructure and public utilities into rent-seeking monopolies to provide basic services (such as health care, education, transportation, communications and information technology) at maximum prices instead of at subsidized prices to reduce the cost of living and doing business. And Wall Street always has been closely merged with the oil and gas industry (viz. the Rockefeller-dominated Citigroup and Chase Manhattan banking conglomerates).

The FIRE, MIC and OGAM sectors are the three rentier sectors that dominate today’s post-industrial finance capitalism. Their mutual fortunes have soared as MIC and OGAM stocks have increased. And moves to exclude Russia from the Western financial system (and partially now from SWIFT), coupled with the adverse effects of isolating European economies from Russian energy, promise to spur an inflow into dollarized financial securities

As mentioned at the outset, it is more helpful to view U.S. economic and foreign policy in terms of the complexes based on these three rentier sectors than in terms of the political policy of Republicans and Democrats. The key senators and congressional representatives are not representing their states and districts as much as the economic and financial interests of their major donors. That is why neither manufacturing nor agriculture play the dominant role in U.S. foreign policy today. The convergence of the policy aims of America’s three dominant rentier groups overwhelms the interests of labor and even of industrial capital beyond the MIC. That convergence is the defining characteristic of today’s post-industrial finance capitalism. It is basically a reversion to economic rent-seeking, which is independent of the politics of labor and industrial capital.

The dynamic that needs to be traced today is why this oligarchic blob has found its interest in prodding Russia into what Russia evidently viewed as a do-or-die stance to resist the increasingly violent attacks on Ukraine’s eastern Russian-speaking provinces of Luhansk and Donetsk, along with the broader Western threats against Russia.

The rentier “blob’s” expected consequences of the New Cold War

As President Biden explained, the current U.S.-orchestrated military escalation (“Prodding the Bear”) is not really about Ukraine. Biden promised at the outset that no U.S. troops would be involved. But he has been demanding for over a year that Germany prevent the Nord Stream 2 pipeline from supplying its industry and housing with low-priced gas and turn to the much higher-priced U.S. suppliers.

U.S. officials first tried to stop construction of the pipeline from being completed. Firms aiding in its construction were sanctioned, but finally Russia itself completed the pipeline. U.S. pressure then turned on the traditionally pliant German politicians, claiming that Germany and the rest of Europe faced a National Security threat from Russia turning off the gas, presumably to extract some political or economic concessions. No specific Russian demands could be thought up, and so their nature was left obscure and blob-like. Germany refused to authorize Nord Stream 2 from officially going into operation.

A major aim of today’s New Cold War is to monopolize the market for U.S. shipments of liquified natural gas (LNG). Already under Donald Trump’s administration, Angela Merkel was bullied into promising to spend $1 billion building new port facilities for U.S. tanker ships to unload natural gas for German use. The Democratic election victory in November 2020, followed by Ms. Merkel’s retirement from Germany’s political scene, led to cancellation of this port investment, leaving Germany really without much alternative to importing Russian gas to heat its homes, power its electric utilities, and to provide raw material for its fertilizer industry and hence the maintenance of its farm productivity.

So the most pressing U.S. strategic aim of NATO confrontation with Russia is soaring oil and gas prices, above all to the detriment of Germany. In addition to creating profits and stock-market gains for U.S. oil companies, higher energy prices will take much of the steam out of the German economy. That looms as the third time in a century that the United States has defeated Germany – each time increasing its control over a German economy increasingly dependent on the United States for imports and policy leadership, with NATO being the effective check against any domestic nationalist resistance.

Higher gasoline, heating and other energy prices also will hurt U.S. consumers and those of other nations (especially Global South energy-deficit economies) and leave less of the U.S. family budget for spending on domestic goods and services. This could squeeze marginalized homeowners and investors, leading to further concentration of absentee ownership of housing and commercial property in the United States, along with buyouts of distressed real estate owners in other countries faced with soaring heating and energy costs. But that is deemed collateral damage by the post-industrial blob.

Food prices also will rise, headed by wheat. (Russia and Ukraine account for 25 percent of world wheat exports.) This will squeeze many Near Eastern and Global South food-deficit countries, worsening their balance of payments and threatening foreign debt defaults.

Russian raw-materials exports may be blocked by Russia in response to the currency and SWIFT sanctions. This threatens to cause breaks in supply chains for key materials, including cobalt, palladium, nickel and aluminum (the production of which consumes much electricity as its major cost – which will make that metal more expensive). If China decides to see itself as the next nation being threatened and joins Russia in a common protest against the U.S. trade and financial warfare, the Western economies are in for a serious shock.

The long-term dream of U.S. New Cold Warriors is to break up Russia, or at least to restore its Yeltsin/Harvard Boys managerial kleptocracy, with oligarchs seeking to cash in their privatizations in Western stock markets. OGAM still dreams of buying majority control of Yukos and Gazprom. Wall Street would love to recreate a Russian stock market boom. And MIC investors are happily anticipating the prospect of selling more weapons to help bring all this about.

Russia’s intentions to benefit from America’s unintended consequences

What does Russia want? Most immediately, to remove the neo-Nazi anti-Russian core that the Maidan massacre and coup put in place in 2014. Ukraine is to be neutralized, which to Russia means basically pro-Russian, dominated by Donetsk, Luhansk and Crimea. The aim is to prevent Ukraine from becoming a staging ground of U.S.-orchestrated anti-Russian moves a la Chechnya and Georgia.

Russia’s longer-term aim is to pry Europe away from NATO and U.S. dominance – and in the process, create with China a new multipolar world order centered on an economically integrated Eurasia. The aim is to dissolve NATO altogether, and then to promote the broad disarmament and denuclearization policies that Russia has been pushing for. Not only will this cut back foreign purchases of U.S. arms, but it may end up leading to sanctions against future U.S. military adventurism. That would leave America with less ability to fund its military operations as de-dollarization accelerates.

Now that it should be obvious to any informed observer that (1) NATO’s purpose is aggression, not defense, and (2) there is no further territory for it to conquer from the remains of the old Soviet Union, what does Europe get out of continued membership? It is obvious that Russia never again will invade Europe. It has nothing to gain – and had nothing to gain by fighting Ukraine, except to roll back NATO’s proxy expansion into that country and the NATO-backed attacks on Novorossiya.

Will European nationalist leaders (the left is largely pro-US) ask why their countries should pay for U.S. arms that only put them in danger, pay higher prices for U.S. LNG and energy, pay more for grain and Russian-produced raw materials, all while losing the option of making export sales and profits on peaceful investment in Russia – and perhaps losing China as well?

The U.S. confiscation of Russian monetary reserves, following the recent theft of Afghanistan’s reserves (and England’s seizure of Venezuela’s gold stocks held there) threatens every country’s adherence to the Dollar Standard, and hence the dollar’s role as the vehicle for foreign-exchange savings by the world’s central banks. This will accelerate the international de-dollarization process already started by Russia and China relying on mutual holdings of each other’s currencies.

Over the longer term, Russia is likely to join China in forming an alternative to the U.S.-dominated IMF and World Bank. Russia’s announcement that it wants to arrest the Ukrainian Nazis and hold a war crimes trial seems to imply an alternative to the Hague court will be established following Russia’s military victory in Ukraine. Only a new international court could try war criminals extending from Ukraine’s neo-Nazi leadership all the way up to U.S. officials responsible for crimes against humanity as defined by the Nuremberg laws.

Did the American blob actually think through the consequences of NATO’s war?

It is almost black humor to look at U.S. attempts to convince China that it should join the United States in denouncing Russia’s moves into Ukraine. The most enormous unintended consequence of U.S. foreign policy has been to drive Russia and China together, along with Iran, Central Asia and other countries along the Belt and Road initiative.

Russia dreamed of creating a new world order, but it was U.S. adventurism that has driven the world into an entirely new order – one that looks to be dominated by China as the default winner now that the European economy is essentially torn apart and America is left with what it has grabbed from Russia and Afghanistan, but without the ability to gain future support.

And everything that I have written above may already be obsolete as Russia and the U.S. have gone on atomic alert. My only hope is that Putin and Biden can agree that if Russia hydrogen bombs Britain and Brussels, that there will be a devil’s (not gentleman’s) agreement not to bomb each other.

With such talk I’m brought back to my discussions with Herman Kahn 50 years ago. He became quite unpopular for writing Thinking about the Unthinkable, meaning atomic war. As he was parodied in Dr. Strangelove, he did indeed say that there would indeed be survivors. But he added that for himself, he hoped to be right under the atom bomb, because it was not a world in which he wanted to survive.

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