Varoufakis vs. The Troika…
“Will the United States, Germany, the rest of the European Union, the European Central Bank, and the International Monetary Fund – collectively constituting the International Mafia – allow the new Greek leaders of the Syriza party to dictate the conditions of Greece’s rescue and salvation? The answer at the moment is a decided “No”.
— William Blum, The Greek Tragedy, Veracity Voice
“The Greek economy is finished…. There is no power, no force within the Greek economy, within Greek society that can avert – it’s like – imagine if we were in Ohio in 1931 and we were to ask: What can Ohio politicians do to get Ohio out of the Great Depression? The answer is nothing.”
— Yanis Varoufakis, Greek Finance Minister
A disagreement over the terms of a deal to provide a bailout extension for Greece, has set the stage for a final clash between the Eurogroup and members of the Greek ruling party, Syriza. Although the agreement was approved on Tuesday when a list of reforms were submitted by Greek finance minister Yanis Varoufakis to the Eurogroup, Varoufakis believes that changes to the original program give him greater flexibility to implement policies that will end austerity, reduce the ailing country’s primary budget surplus, and ease the humanitarian crisis that has persisted for 6 years. Regrettably, no one at the ECB, the European Commission or the IMF shares Varoufakis’s views on the subject. The so called “troika” thinks that Greece has signed on to essentially the same program that was in place before the negotiations, give or take a few cosmetic changes in the language. And because the program is the same, they think Varoufakis should stick with the same policies as his predecessor and ignore mounting public opposition to austerity. Given the irreconcilable differences between the two parties, there’s bound to be a violent confrontation in the near future that will lead to heated recriminations and, eventually, a Grexit.
To illustrate the widening chasm between Varoufakis and the members of the Eurogroup, consider the fact that, going into the negotiations, Varoufakis was determined to end the bailouts and secure a “bridge” loan that would shield Greece from default for a six month period of adjustment after which basic changes to the current austerity regime would be re-negotiated. While the Eurogroup agreed to change the term “program” to “agreement” and “troika” to “institutions”, in the minds of the EU finance minsters, the substance of the original deal, which was laid out in the hated Memorandum of Understanding, remained the same. Take a look at this excerpt from a letter from ECB president Mario Draghi and Eurogroup president Jeroen Dijsselbloem and you’ll see how this is playing out:
“I assume that it is clear, that the basis of concluding the current review, and also any future arrangements, will be the existing commitments in the current Memorandum of Understanding and The Memorandum of Economic and Financial Policies (MEFP). In this context we note that the commitments outlined by the authorities differ from existing programme commitments in a number of areas. In such cases, we will have to assess during the review whether measures which are not accepted by the authorities are replaced with measures of equal or better quality in terms of achieving the objectives of the programme.” (Naked Capitalism)
What Draghi is saying is that Varoufakis’s changes will be put under a microscope to see if they conform with the memorandum which Varoufakis believes no longer applies. The way this will work on a practical basis, is that additional money will only be meted out incrementally depending on compliance with, you guessed it, the old agreement. In other words, Varoufakis will not have a 4 month grace period to experiment with his pro-growth, anti-austerity economic policies. He’ll be expected to toe the line from Day 1.
Varoufakis either doesn’t understand what he signed or thinks he can implement his own plan without too much interference from the Eurogroup. Either way, there’s probably going to be a confrontation given the vast disparity in the way the agreement is being interpreted. In a Tuesday interview with CNBC, Varoufakis said that the new deal is fundamentally different than the previous agreement. He said:
“Some people have been insisting that the program that we’ve been under must surely be the program that we shall remain under simply refuse to understand that this has changed. So they keep insisting that that program is still on-going. Let me give you a very simple number. The program that we challenged compelled to the Greek government to extract 4.5% of the primary surplus every year in a depressed economy. We’ve changed that. Now surely that is not dismissed as simply a non-event and it’s business as usual, so it’s not business as usual we have a fresh start and now what matters is to use the opportunity of that fresh start in order to build something good on top of it. And we will endeavor to do this.” (“CNBC Exclusive Interview: Greek Finance Minister, Yanis Varoufakis“, CNBC)
See? He sincerely believes that the old deal is history. But the troika, the Eurogroup, and the majority of people who have analyzed the new arrangement, disagree. They think everything is the same (which explains why critics on the right and left have repudiated the deal as a “climb-down, a capitulation and a sellout.)
In an interview with Nikos Hatzinikolaou on REAL FM, Greece, Varoufakis rejected the Memorandum while claiming that the new agreement represents “a huge success’ in ending the “recessionary measures” that are needlessly prolonging Greece’s Great Depression. Here’s what he said:
Varoufakis: “The current government (Syriza) wants to say things with their name. I will explain it to you in very simple terms, Mr. Hatzinikolaou. As long as our debt is what it is, as long as Greece was bounded within this iron cage of primary surpluses that were impossible to achieve without killing whatever is left in the private sector, and as long we have a negative sign in investments (essentially, real investments), it was impossible to achieve this exit.
What we are trying to do – and have succeeded in doing so; it was a huge success, I’d say – is to create a four-month bridge during which we achieve the following:
First, the cancelation of the recessionary measures and the implementation of a transitional program we ourselves have made, one the Greek society will be able to withstand. This will help us negotiate during this four-month period a new contract between us and our partners with the goal of solving this system of three equations with three unknowns.
Hatzinikolaou: Thus, we are talking about a new Memorandum? ….
Varoufakis: OK. Let us be careful with the words. What does the Memorandum mean? … Let me remind you of what it comprises. It comprises the logic of continuous domestic [or internal] devaluation, of huge primary surpluses in an economy that does not have a real credit system, where investments are negative, and at the same time where we have a series of measures that empower this recession. This is the MoU. It is the automation, the a-politicization, and the subjection to the crisis.” (“The juicy interview of Greek Finance Minister, Yanis Varoufakis“, Greek Analyst)
Varoufakis appears to be saying that, in his view, the new agreement constitutes a rejection of the memorandum and, thus, is a de facto repudiation of austerity. The question is whether Varoufakis is stretching the facts to give himself greater latitude to relieve Greece’s humanitarian crisis and to put Greece back on a sound path to growth. While those are worthy goals, they are not likely to win the Eurogroup’s support. Check out this excerpt from a letter from the IMF to Dijsselbloem concerning the vagueness of Varoufakis’s reform package:
“In quite a few areas, however, including perhaps the most important ones, the letter is not conveying clear assurances that the Government intends to undertake the reforms envisaged in the Memorandum on Economic and Financial Policies. We note in particular that there are neither clear commitments to design the envisaged comprehensive pension and VAT policy reforms, nor unequivocal undertakings to continue already-agreed policies for opening up closed sectors, for administrative reforms, for privatization, and for labor market reforms. As you know, we consider such commitments and undertakings to be critical for Greece’s ability to meet the basic objectives of its Fund-supported program, which is why these are the areas subject to most of the structural benchmarks agreed with the Fund.” (Excerpt IMF letter posted at Naked capitalism)
Repeat: “We consider such commitments and undertakings to be critical for Greece’s ability to meet the basic objectives of its Fund-supported program.” In other words, Greece should not expect to get its loan extension unless it follows the troika’s explicit orders on pensions, VAT (sales taxes), government cutbacks, privatization and labor market reforms.
So, what is Varoufakis’s approach to these benchmarks?
Let’s take a look at pension reform. In an interview with CNBC’s Julia Chatterley on Tuesday, Chatterley asked Varoufakis point blank, “So you’re ruling out pension cuts?”
Varoufakis: “Of course over the next four months there will be no such thing.” (CNBC)
How about raising the VAT tax?
Same thing. And in the interview on REAL FM Varoufakis covered the other policies that the troika sees as “critical”. Listen to this exchange:
Hatzinikolaou: My fundamental question about the e-mail is whether or not it entails layoffs in the public sector …, if it entails pension reductions … if it entails wage reductions?
Varoufakis: I will answer to all these questions, since these are very specific questions, and it is best that we speak forthrightly. My answer to all of these questions is NO, in NO WAY.”
Let’s summarize: No pension cuts, no higher VAT taxes, no lower wages for public workers, and no layoffs. While I admire what Varoufakis is suggesting, I can’t figure out how he’s going to convince the troika to give him more money. Apparently, he thinks that streamlining the government and aggressively pursuing tax cheats will do the trick. Or maybe he has something else up his sleeve, like ignoring the terms of the agreement long enough to generate growth in the economy, lower unemployment, and create an improved environment for foreign investment. He might think that that will force the troika to acknowledge that austerity has failed and that pro-growth Keynesian strategies actually produce positive results. Of course, that’s just a guess on my part. It’s impossible to know for sure.
Here’s more of the interview with CNBC:
Varoufakis: “The reason why we have this 4 month period is to re-establish bonds of trust between us and our European partners as well as the IMF in order to build a new, we call it, contract between us and our partners so as to put an end to this spiral, the debt inflationary spiral; reform Greece; and make sure that CNBC doesn’t care about Greece anymore, because we don’t want to be in the headlines for all the wrong reasons.” (“CNBC Exclusive Interview: Greek Finance Minister, Yanis Varoufakis“, CNBC)
The “bonds of trust” are going to put to the test if Varoufakis doesn’t comply with the troika’s diktats, that’s for sure.
Varoufakis assumes that the troika doesn’t understand the impact of its belt-tightening policies. He seems to think that the punishment that’s being inflicted on Greece is just the unfortunate byproduct of debt reduction policy and not a deliberate attempt to crush the unions, roll back progressive reforms, decimate the welfare state, and reduce the country to a condition of “permanent colonial dependency.” But that viewpoint is shockingly naïve, after all, the IMF has been in the looting biz for a long time and has a pretty good grasp of the effects its toxic policies. They know what they’re doing, just like know that austerity is just a refinement of the “shock doctrine” which is the traditional way the elites exploit crises by imposing harsh, economy-demolishing reforms that only benefit themselves and their class. The men who conjure up these thieving schemes aren’t likely to be hoodwinked by Varoufakis’s vague reforms. They’re going to force Varoufakis to jump through all their respective hoops before he gets one dime of their precious money. Here’s Varoufakis again:
“There is going to be a great deal of toing and froing between us and the institutions and our partners but what we have established through stubborn refusal to succumb to the notion that elections change nothing over the past couple of months or weeks I should say is the notion that this government deserves to have a degree of room for policy-making that allows us to reform Greece and to carry the great multitude out there with us. This is the government for the first time in Greece that has the people behind it and it would be a terrible waste not just for us but for our partners to allow this wave of support to dissipate through non-action.” (CNBC)
Does Varoufakis really think he can pull this off? Does he really think he can out-fox the slimy, authoritarian brigands and leg-breakers who run these extortionist institutions and who will use every means possible to extract the last drop of blood from their victim be he an aspiring, but penniless student at the university or a destitute pensioner huddling homeless and frozen in an abandoned doorway in downtown Athens?
This isn’t going to end well. Varoufakis had one card to play–the threat of leaving the Euro–and he failed to play it. Now his leverage is gone and the roof is about to cave in. Just wait and see.
The troika isn’t going to convene another dreary round of negotiations to rehash the same old nonsense. Those days are over. They’re simply going to withhold the money, curtail liquidity assistance, and torpedo the Greek banking system. Kaboom! That’s the way this thing is going to go down. The mood among the EZ finance ministers has soured considerably since the last meeting. They want to put this whole thing behind them. They’re sick of it. They want closure. They’re not going to quibble over issues they’ve already gone over and clarified a million times. Varoufakis will either have to get with the program or face the consequences. That’s the way it works in Mafia-land; you either pay the piper or you find yourself in the East River in cement booties.
Who knows: maybe this is what Varoufakis wanted from the beginning, a ferocious clash ending in banishment, a Grexit. Well, he won’t have to wait long now.
Some things not to forget, which the new Greek leaders have not…
American historian D.F. Fleming, writing of the post-World War II period in his eminent history of the Cold War, stated that “Greece was the first of the liberated states to be openly and forcibly compelled to accept the political system of the occupying Great Power. It was Churchill who acted first and Stalin who followed his example, in Bulgaria and then in Rumania, though with less bloodshed.”
The British intervened in Greece while World War II was still raging. His Majesty’s Army waged war against ELAS, the left-wing guerrillas who had played a major role in forcing the Nazi occupiers to flee. Shortly after the war ended, the United States joined the Brits in this great anti-communist crusade, intervening in what was now a civil war, taking the side of the neo-fascists against the Greek left. The neo-fascists won and instituted a highly brutal regime, for which the CIA created a suitably repressive internal security agency (KYP in Greek).
In 1964, the liberal George Papandreou came to power, but in April 1967 a military coup took place, just before elections which appeared certain to bring Papandreou back as prime minister. The coup had been a joint effort of the Royal Court, the Greek military, the KYP, the CIA, and the American military stationed in Greece, and was followed immediately by the traditional martial law, censorship, arrests, beatings, and killings, the victims totaling some 8,000 in the first month. This was accompanied by the equally traditional declaration that this was all being done to save the nation from a “communist takeover”. Torture, inflicted in the most gruesome of ways, often with equipment supplied by the United States, became routine.
George Papandreou was not any kind of radical. He was a liberal anti-communist type. But his son Andreas, the heir-apparent, while only a little to the left of his father, had not disguised his wish to take Greece out of the Cold War, and had questioned remaining in NATO, or at least as a satellite of the United States.
Andreas Papandreou was arrested at the time of the coup and held in prison for eight months. Shortly after his release, he and his wife Margaret visited the American ambassador, Phillips Talbot, in Athens. Papandreou later related the following:
I asked Talbot whether America could have intervened the night of the coup, to prevent the death of democracy in Greece. He denied that they could have done anything about it. Then Margaret asked a critical question: What if the coup had been a Communist or a Leftist coup? Talbot answered without hesitation. Then, of course, they would have intervened, and they would have crushed the coup.
Another charming chapter in US-Greek relations occurred in 2001, when Goldman Sachs, the Wall Street Goliath Lowlife, secretly helped Greece keep billions of dollars of debt off their balance sheet through the use of complex financial instruments like credit default swaps. This allowed Greece to meet the baseline requirements to enter the Eurozone in the first place. But it also helped create a debt bubble that would later explode and bring about the current economic crisis that’s drowning the entire continent. Goldman Sachs, however, using its insider knowledge of its Greek client, protected itself from this debt bubble by betting against Greek bonds, expecting that they would eventually fail.
Will the United States, Germany, the rest of the European Union, the European Central Bank, and the International Monetary Fund – collectively constituting the International Mafia – allow the new Greek leaders of the Syriza party to dictate the conditions of Greece’s rescue and salvation? The answer at the moment is a decided “No”. The fact that Syriza leaders, for some time, have made no secret of their affinity for Russia is reason enough to seal their fate. They should have known how the Cold War works.
I believe Syriza is sincere, and I’m rooting for them, but they may have overestimated their own strength, while forgetting how the Mafia came to occupy its position; it didn’t derive from a lot of compromise with left-wing upstarts. Greece may have no choice, eventually, but to default on its debts and leave the Eurozone. The hunger and unemployment of the Greek people may leave them no alternative.
The Twilight Zone of the US State Department
“You are traveling through another dimension, a dimension not only of sight and sound but of mind. A journey into a wondrous land whose boundaries are that of imagination. Your next stop … the Twilight Zone.” (American Television series, 1959-1965)
State Department Daily Press Briefing, February 13, 2015. Department Spokesperson Jen Psaki, questioned by Matthew Lee of The Associated Press.
Lee: President Maduro [of Venezuela] last night went on the air and said that they had arrested multiple people who were allegedly behind a coup that was backed by the United States. What is your response?
Psaki: These latest accusations, like all previous such accusations, are ludicrous. As a matter of longstanding policy, the United States does not support political transitions by non-constitutional means. Political transitions must be democratic, constitutional, peaceful, and legal. We have seen many times that the Venezuelan Government tries to distract from its own actions by blaming the United States or other members of the international community for events inside Venezuela. These efforts reflect a lack of seriousness on the part of the Venezuelan Government to deal with the grave situation it faces.
Lee: Sorry. The US has – whoa, whoa, whoa – the US has a longstanding practice of not promoting – What did you say? How longstanding is that? I would – in particular in South and Latin America, that is not a longstanding practice.
Psaki: Well, my point here, Matt, without getting into history –
Lee: Not in this case.
Psaki: – is that we do not support, we have no involvement with, and these are ludicrous accusations.
Lee: In this specific case.
Lee: But if you go back not that long ago, during your lifetime, even – (laughter)
Psaki: The last 21 years. (Laughter.)
Lee: Well done. Touché. But I mean, does “longstanding” mean 10 years in this case? I mean, what is –
Psaki: Matt, my intention was to speak to the specific reports.
Lee: I understand, but you said it’s a longstanding US practice, and I’m not so sure – it depends on what your definition of “longstanding” is.
Psaki: We will – okay.
Lee: Recently in Kyiv, whatever we say about Ukraine, whatever, the change of government at the beginning of last year was unconstitutional, and you supported it. The constitution was –
Psaki: That is also ludicrous, I would say.
Lee: – not observed.
Psaki: That is not accurate, nor is it with the history of the facts that happened at the time.
Lee: The history of the facts. How was it constitutional?
Psaki: Well, I don’t think I need to go through the history here, but since you gave me the opportunity –- as you know, the former leader of Ukraine left of his own accord.
Leaving the Twilight Zone … The former Ukrainian leader ran for his life from those who had staged the coup, including a mob of vicious US-supported neo-Nazis.
If you know how to contact Ms. Psaki, tell her to have a look at my list of more than 50 governments the United States has attempted to overthrow since the end of the Second World War. None of the attempts were democratic, constitutional, peaceful, or legal; well, a few were non-violent.
The ideology of the American media is that it believes that it doesn’t have any ideology
So NBC’s evening news anchor, Brian Williams, has been caught telling untruths about various events in recent years. What could be worse for a reporter? How about not knowing what’s going on in the world? In your own country? At your own employer? As a case in point I give you Williams’ rival, Scott Pelley, evening news anchor at CBS.
In August 2002, Iraqi Deputy Prime Minister Tariq Aziz told American newscaster Dan Rather on CBS: “We do not possess any nuclear or biological or chemical weapons.”
In December, Aziz stated to Ted Koppel on ABC: “The fact is that we don’t have weapons of mass destruction. We don’t have chemical, biological, or nuclear weaponry.”
Iraqi leader Saddam Hussein himself told CBS’s Rather in February 2003: “These missiles have been destroyed. There are no missiles that are contrary to the prescription of the United Nations [as to range] in Iraq. They are no longer there.”
Moreover, Gen. Hussein Kamel, former head of Iraq’s secret weapons program, and a son-in-law of Saddam Hussein, told the UN in 1995 that Iraq had destroyed its banned missiles and chemical and biological weapons soon after the Persian Gulf War of 1991.
There are yet other examples of Iraqi officials telling the world, before the 2003 American invasion, that the WMD were non-existent.
Enter Scott Pelley. In January 2008, as a CBS reporter, Pelley interviewed FBI agent George Piro, who had interviewed Saddam Hussein before he was executed:
PELLEY: And what did he tell you about how his weapons of mass destruction had been destroyed?
PIRO: He told me that most of the WMD had been destroyed by the U.N. inspectors in the ’90s, and those that hadn’t been destroyed by the inspectors were unilaterally destroyed by Iraq.
PELLEY: He had ordered them destroyed?
PELLEY: So why keep the secret? Why put your nation at risk? Why put your own life at risk to maintain this charade?
For a journalist there might actually be something as bad as not knowing what’s going on in his area of news coverage, even on his own station. After Brian Williams’ fall from grace, his former boss at NBC, Bob Wright, defended Williams by pointing to his favorable coverage of the military, saying: “He has been the strongest supporter of the military of any of the news players. He never comes back with negative stories, he wouldn’t question if we’re spending too much.”
I think it’s safe to say that members of the American mainstream media are not embarrassed by such a “compliment”.
In his acceptance speech for the 2005 Nobel Prize for Literature, Harold Pinter made the following observation:
Everyone knows what happened in the Soviet Union and throughout Eastern Europe during the post-war period: the systematic brutality, the widespread atrocities, the ruthless suppression of independent thought. All this has been fully documented and verified.
But my contention here is that the US crimes in the same period have only been superficially recorded, let alone documented, let alone acknowledged, let alone recognized as crimes at all.
It never happened. Nothing ever happened. Even while it was happening it wasn’t happening. It didn’t matter. It was of no interest. The crimes of the United States have been systematic, constant, vicious, remorseless, but very few people have actually talked about them. You have to hand it to America. It has exercised a quite clinical manipulation of power worldwide while masquerading as a force for universal good. It’s a brilliant, even witty, highly successful act of hypnosis.
Cuba made simple
“The trade embargo can be fully lifted only through legislation – unless Cuba forms a democracy, in which case the president can lift it.”
Aha! So that’s the problem, according to a Washington Post columnist – Cuba is not a democracy! That would explain why the United States does not maintain an embargo against Saudi Arabia, Honduras, Guatemala, Egypt and other distinguished pillars of freedom. The mainstream media routinely refer to Cuba as a dictatorship. Why is it not uncommon even for people on the left to do the same? I think that many of the latter do so in the belief that to say otherwise runs the risk of not being taken seriously, largely a vestige of the Cold War when Communists all over the world were ridiculed for blindly following Moscow’s party line. But what does Cuba do or lack that makes it a dictatorship?
No “free press”? Apart from the question of how free Western media is, if that’s to be the standard, what would happen if Cuba announced that from now on anyone in the country could own any kind of media? How long would it be before CIA money – secret and unlimited CIA money financing all kinds of fronts in Cuba – would own or control almost all the media worth owning or controlling?
Is it “free elections” that Cuba lacks? They regularly have elections at municipal, regional and national levels. (They do not have direct election of the president, but neither do Germany or the United Kingdom and many other countries). Money plays virtually no role in these elections; neither does party politics, including the Communist Party, since candidates run as individuals. Again, what is the standard by which Cuban elections are to be judged? Is it that they don’t have the Koch Brothers to pour in a billion dollars? Most Americans, if they gave it any thought, might find it difficult to even imagine what a free and democratic election, without great concentrations of corporate money, would look like, or how it would operate. Would Ralph Nader finally be able to get on all 50 state ballots, take part in national television debates, and be able to match the two monopoly parties in media advertising? If that were the case, I think he’d probably win; which is why it’s not the case.
Or perhaps what Cuba lacks is our marvelous “electoral college” system, where the presidential candidate with the most votes is not necessarily the winner. If we really think this system is a good example of democracy why don’t we use it for local and state elections as well?
Is Cuba not a democracy because it arrests dissidents? Many thousands of anti-war and other protesters have been arrested in the United States in recent years, as in every period in American history. During the Occupy Movement two years ago more than 7,000 people were arrested, many beaten by police and mistreated while in custody. And remember: The United States is to the Cuban government like al Qaeda is to Washington, only much more powerful and much closer; virtually without exception, Cuban dissidents have been financed by and aided in other ways by the United States.
Would Washington ignore a group of Americans receiving funds from al Qaeda and engaging in repeated meetings with known members of that organization? In recent years the United States has arrested a great many people in the US and abroad solely on the basis of alleged ties to al Qaeda, with a lot less evidence to go by than Cuba has had with its dissidents’ ties to the United States. Virtually all of Cuba’s “political prisoners” are such dissidents. While others may call Cuba’s security policies dictatorship, I call it self-defense.
The Ministry of Propaganda has a new Commissar
Last month Andrew Lack became chief executive of the Broadcasting Board of Governors, which oversees US government-supported international news media such as Voice of America, Radio Free Europe/Radio Liberty, the Middle East Broadcasting Networks and Radio Free Asia. In a New York Times interview, Mr. Lack was moved to allow the following to escape his mouth: “We are facing a number of challenges from entities like Russia Today which is out there pushing a point of view, the Islamic State in the Middle East and groups like Boko Haram.”
So … this former president of NBC News conflates Russia Today (RT) with the two most despicable groups of “human beings” on the planet. Do mainstream media executives sometimes wonder why so many of their audience has drifted to alternative media, like, for example, RT?
Those of you who have not yet discovered RT, I suggest you go to RT.com to see whether it’s available in your city. And there are no commercials.
It should be noted that the Times interviewer, Ron Nixon, expressed no surprise at Lack’s remark.
- William Blum, Killing Hope: U.S. Military and C.I.A. Interventions Since World War II, chapters 3 and 35
- “Greek Debt Crisis: How Goldman Sachs Helped Greece to Mask its True Debt”, Spiegel Online (Germany), February 8, 2010. Google “Goldman Sachs” Greece for other references.
- U.S. Department of State Daily Press Briefing, February 13, 2015
- Overthrowing other people’s governments: The Master List
- CBS Evening News, August 20, 2002
- ABC Nightline, December 4, 2002
- “60 Minutes II”, February 26, 2003
- Washington Post, March 1, 2003
- “60 Minutes”, January 27, 2008
- Democracy Now!, February 12, 2015, Wright statement made February 10
- Al Kamen, Washington Post, February 18, 2015
- Huffington Post, May 3, 2012
- New York Times, January 21, 2015
This month, former Mayor of New York City, Rudy Giuliani said, “I do not believe, and I know this is a horrible thing to say, but I do not believe that that President Obama loves America,” said Giuliani at a New York dinner. “He doesn’t love you. And he doesn’t love me. He wasn’t brought up the way you were brought up and I was brought up through love of this country.”
As a red-blooded American who loves my country, I second Giuliani’s assessment of Barack Hussein Obama. We do not know Obama. We question his origins, his fraudulent Social Security number, his forged-backdated Selective Service number, his hidden college records, his foreign beneficiaries as to money for Columbia and Harvard, his mediocre grades that led to those top colleges accepting him, and his whereabouts during his formative years. He spent millions of dollars to seal his high school records, his college records, his passport and more. No one steps forth to talk about any high school or college classrooms he shared with them. He’s a ghost on the American landscape, but he’s in charge of leading our country.
We know that he wrote a book, Audacity of Hope, where on page 261, he said, “I will stand with the Muslims should the political winds shift in an ugly direction.”
That single statement illustrates his deepest Islamic religious cognitive choices that violate every single aspect of the American Way of Life and our Constitution. His Koran’s ultimate prime directive seeks to destroy free thought, freethinking, free choice of religion, free choice of governance and women’s rights. In other words, according to his quoted words, he loves the holy call of the music of Islam over the Stars and Stripes, our Pledge of Allegiance and our national anthem.
His father(s), whether it was Barack Hussein Obama, Sr. or Frank Marshal Davis, whom he resembles without question or his stepfather, LoLo Soetoro, all devoted themselves to Islam, proving itself to be the most violent-barbaric religion on the planet.
Lolo Soetoro lawfully adopted and changed Obama’s name to Barry Soetoro as an official Indonesian citizen. When Obama applied for scholarships to Columbia University, he used his Indonesian citizenship to gain scholarships. That single fact alone makes Obama ineligible to serve as an American president.
Nobody knows the reality of Obama’s childhood because every single legal record remains locked up in sealed records. At some point, history will uncover the mystery of Barack Obama. It won’t be pretty.
In the meantime, in six years, he subverted the American worker by not enforcing our immigration laws at the border or internally by arresting employees of illegal aliens. He knowingly assisted and continues to assist illegal aliens jumping our borders and already working within our country in violation of our laws.
He broke our U.S. Constitution numerous times ending lately in overstepping his Constitutional authority by granting a counterfeit amnesty for 20 million illegal aliens.
He continually lied to the American public via the Benghazi cover-up where he personally failed to act, which led to four Americans being killed by Muslims. Ironically, Obama hired eight Muslims in his immediate circle to help him with Islamic prime directives to dismantle America’s dominate religious base: Christianity. Obama remains intent on turning our country into an Islamic refugee holding pen—that sooner or later will erupt in major violence, much like in Europe.
In fact, Obama scoffs at Christians when he defends Muslims for their barbaric violence, which manifested in Paris, France in January and this month of a Jordanian pilot being burned to death in a cage with cameras rolling.
And yet, Barack Hussein Obama chastises our country in favor of the violence of Islam: “Lest we get on our high horse and think this is unique to some other place, remember that during the Crusades and the Inquisition, people committed terrible deeds in the name of Christ. In our home country, slavery and Jim Crow all too often was justified in the name of Christ.” Fact: Europeans fought the Muslims in the Crusades. Fact: Muslim women remain slaves in their own countries with no rights.
He covered-up, along with his U.S. Attorney General Eric Holder, the “Fast and Furious” gun trafficking at our borders that killed more of our border patrol officers. The cover-up continues as of this date.
While in office, he understood that African-Americans suffer job losses and depressed wages at the hands of endless legal and illegal immigration—yet does nothing to solve the problem. A mind numbing 1 in 4 Black American males cannot secure a job. A stunning 73 percent of African-American “out of wedlock” children face life with a single mother living on welfare, which equates to complete disintegration of Black American families. Instead of taking action favoring our suffering African-American millions living in poverty, Obama plays more golf and takes more vacations than any other president. He follows the Black Caucus in Congress that plays a similar game of doing nothing for Black constituents across America.
While in office, Obama watched food stamp recipients jump from 36 million in 2008 to 48 million in February, 2015. In other words, he hasn’t and won’t do anything to bring jobs to those Americans, but he will engage illegal acts against our Constitution in favor of 20 million illegal aliens and their employers.
Obama never served in our U.S. military. He doesn’t know a platoon from a company. He never worked a job in his life, thus doesn’t know what American workers must endure.
Whatever Obama loves, it’s not America or Americans. His words, his “Islamic gang sign” that he features prominently in his trips around the world shows that he loathes America and Americans. I for one, as a red-blooded American, would like to see Barack Hussein Obama brought up on charges of failure to defend our country, our way of life and our citizens. I would like to see him tried, convicted and impeached.
“Though it’s happening to a stricken country, on the edge of Europe, the choices presented to Greece are being understood throughout Europe… Obey or leave.”
— Paul Mason, Channel 4 News Blog
It’s not easy to negotiate with a gun to your head. Nevertheless, that’s the situation Greek finance minister Yanis Varoufakis found himself in on Friday preceding a crucial meeting with the Eurogroup. According to one report, the objective of the last-ditch confab “was to prepare a consensus text that would be the basis for the discussion” with the EU’s finance ministers. That might sound innocent enough, but it doesn’t come close to explaining the real purpose of the meeting which was far more sinister. Check out this blurb from Costas Efimeros at the Press Project:
“According to a Greek official who doesn’t want to be named, the Greek delegation were yesterday subject to outright blackmail. Our ‘partners’ informed us that if Eurogroup doesn’t result in an agreement, on Tuesday the Greek government will be forced to implement capital controls. It seemed that they had taken the decision to strangle the Greek economy by cutting off funding to the banks through the ELA system. Furthermore, it seemed that the big Greek banks already knew this. Leaks from the ECB, after all, had suggested that they were preparing for a GREXIT.” (“Europe trashed democracy“, Costas Efimeros, The Press Project)
It’s nice to know that EU leaders ascribe to the same basic moral code as Don Corleone, isn’t it?
The fact is, a slow motion bank run has been underway in Greece for more than a month draining roughly 40 billion euros from the Greek banking system. If a deal hadn’t been struck on Friday, the ECB would have pulled the plug on its liquidity assistance program and blown the whole system to kingdom come. That’s how the Eurocrats planned to say goodbye to their long-struggling member, Greece, by giving them a sharp jolt to the groin before razing their economy to the ground. That tells you everything you need to know about the Eurogroup.
If Greece got the boot on Friday, it’s humanitarian crisis would have deepened overnight while the blow to the capital markets would have paved the way for another financial crisis. Fortunately, the catastrophe was averted mainly because Varoufakis was able to cobble together a viable plan for meeting the Eurogroup’s basic requirements while creating significant opportunities to ease conditions in Greece. Don’t get me wrong; this isn’t a perfect deal by any stretch, but it is the best deal that could have been reached given the circumstances and the unbridled hostility from German finance minister Wolfgang Schaeuble who was eager to scuttle the whole project and throw Greece to the wolves. Varoufakis managed to out maneuver the irascible Schaeuble and get some of what he wanted, but only through stiff-necked resolve and significant compromise. As a result, Greece is still a member of the Eurozone, but just barely. A rejection of its reform package today (Monday) could push the beleaguered country out of the 19-member Union for good.
Keep in mind, the Eurogroup made it perfectly clear from the beginning that they weren’t going to restructure Greece’s debts or end the austerity program. The issues weren’t even on the table. So, those who think that Varoufakis should have given the Eurogroup an ultimatum (“Reduce our debts or we’ll leave.”) simply don’t understand the nature of the negotiations. Varoufakis was forced to operate within very strict parameters. Given those limitations, he nabbed a very respectable deal. Even so, it’s only natural for people to feel let-down, especially since Syriza had promised much more than they could deliver. But that doesn’t mean Varoufakis is a traitor or a sellout. Not at all. It merely means that Syriza’s belief that it could end austerity but keep Greece in the Eurozone proved to be unfounded. In fact, German opposition has made it nearly impossible. The larger point is this: Syriza had no mandate to spearhead a Grexit. That is not what the people voted for or what they want. Varoufakis’s was asked to do the impossible, square the circle. In that regard, he failed. But still, the deal he hammered out should mitigate Greece’s slump to some extent, although one should not expect a full-blown economic recovery, not without a healthy dose of fiscal stimulus which is nowhere in sight.
Varoufakis managed to change the terms of the deal which is now referred to as the “existing arrangement” rather than a “program”. According to Norbert Haring, this new “arrangement”…”is not a “technical” extension of the “program” any more, but an extension of the funding arrangement, plus vague conditionality.” (“Was it worth it? Concessions to Greece relative to the rejected draft of 16 February“, Nobert Haring)
It all sounds very tedious and legalistic, but the change is significant. You see, the real fight between Varoufakis and the Eurogroup was over this precise issue, that is, changing the inflexible, ironclad austerity “program” into a looser “arrangement” where polices can be altered via–what Varoufakis dubbed –“constructive ambiguity.” Varoufakis objective is to create enough gray area for Greece to regain sovereign control over its own economic policies. Constructive ambiguity will help to achieve that, provided the reforms meet the Eurogroup’s fiscal targets.
Here’s more from Haring’s post: “There is no mention any more of “successful conclusion of the program”, nor of “program” in the text. Instead a successful conclusion of the review of the “conditions in the current arrangement” is the new condition. This allows the Greek government to continue to say that the old program cannot be successful. It also allows for changes in the program, as “conditions of the arrangement” is deliberately more vague.” (“Was it worth it? Concessions to Greece relative to the rejected draft of 16 February”, Nobert Haring)
This isn’t just legal claptrap. It’s a critical change in the way the policy is implemented. Once again, Varoufakis has loosened the financial straitjacket in which Greece finds itself, which can only be seen as progress.
The new deal also allows Greece to decide its own reform package rather than the troika dictating what government expenses to cut or which publicly owned assets to sell. Here’s another excerpt from Haring’s post: “Most important change of the whole document: Addition of “The institutions will, for the 2015 primary surplus target, take the economic circumstances in 2015 into account.” Excessive, self-defeating austerity is off. Only the target for 2015 is mentioned, because everything further out would have to be part of a new arrangement, still to be negotiated.”
So Varoufakis has achieved his goal of reducing austerity. Not only is there greater flexibility operationally but, also, Greece will control the levers of decision-making in the “field of tax policy, privatisation, labour market reforms, financial sector, and pensions”. Naturally, the lower the primary surplus, the more fiscal stimulus is available for economic growth. (Running a surplus during a depression is absolute madness, but this is the lousy hand Varoufakis was dealt.)
Haring’s final comments are a good summary of Varoufakis’s achievement:
“Was it worth the hassle to reject the draft of 16 February, just to accept the statement four days later? For Athens it most certainly was. It got the promise that no self-defeating, excessive austerity would be asked of it any more, the assurance that it could devise its own economic and social policies, as long as they did not impact negatively on the interests of its partners, rather than having to execute and leaving in place all the measures accepted by the former government and strongly rejected by the people. These are huge improvements for Athens, with no significant counterbalancing downside compared to 16 February.” (“Was it worth it? Concessions to Greece relative to the rejected draft of 16 February”, Nobert Haring)
Clearly, this is a good deal for Greece, but let’s not go overboard; the basic situation still stinks to high heaven, mainly because the Eurogroup would rather lecture and punish than give a struggling member a helping hand. Had the Eurozone evolved into a viable political union that distributed fiscal transfers to the weaker states on the periphery, Greece would have emerged from its recession years ago. Instead, the fiasco drags on endlessly punctuated by infrequent outbursts from EU leaders who vehemently defend belt-tightening measures that have only made matters worse. If anything, this experience should help the Greek people decide whether there’s a future for them and their children in the Eurozone or not. Dealing with authoritarian boneheads (The Eurogroup) may eventually prove to be more trouble than its worth. (A Grexit looks better by the day!)
As for Varoufakis, well, he passed the finance minister’s test with flying colors. He distinguished himself as a capable horse trader and managed to squeeze more concessions out of the EU’s austerity-obsessed representatives than anyone thought possible. The man proved that he’s neither a “sell out” or a “traitor”.(as some claim.) Quite the contrary, he kept his word and did exactly what the Greek people asked of him.
At the very least, he deserves credit for a valiant effort.
The “Exceptional” U.S. Suffers Crushing Defeat in Debaltsevo…
“There’s no city left. It’s destroyed.”
— Anonymous Ukrainian soldier following the battle of Debaltsevo
In less than a year, the United States has toppled the democratically-elected government of Ukraine, installed a Washington-backed stooge in Kiev, launched a bloody and costly war of annihilation on Russian-speaking people in the East, thrust the economy into a downward death spiral, and reduced the nation to an anarchic, failed state destined to endure a vicious fratricidal civil war for as far as the eye can see.
Last week, Washington suffered its greatest military defeat in more than a decade when Ukraine’s US-backed army was soundly routed in the major railway hub of Debaltsevo. Roughly, 8,000 Ukrainian regulars along with untold numbers of tanks and armored units were surrounded in what-came-to-be-known-as “the cauldron.” The army of the Donetsk Peoples Republic led by DPR commander Alexander Zakharchenko, encircled the invading army and gradually tightened the cordon, eventually killing or capturing most of the troops within the pocket. The Ukrainian Armed Forces suffered major casualties ranging between 3,000 to 3,500 while a vast amount of lethal military hardware was left behind.
According to Zakharchenko, “The amount of equipment Ukrainian units have lost here is beyond description.”
Additionally, the US-backed proxy-army saw many of its crack troops and top-notch units destroyed in the fighting leaving Kiev unable to continue the war without assistance from allies in the US or Europe. The full impact of the defeat will not be known until angry troops returning from the front amass on the streets of the Capital and demand Petro Poroshenko’s resignation. The Ukrainian President is responsible for the massacre at Debaltsevo. He was fully aware that his army faced encirclement but ordered them to remain in order to satisfy powerful right-wing elements in his government. The disaster is even more terrible due to the fact that it was entirely avoidable and achieved no strategic purpose at all. Extreme hubris frequently impacts outcomes on the battlefield. This was the case at Debaltsevo.
The debacle ensures that the bumbling president’s days are numbered. It’s nearly certain that he will either be replaced or hanged sometime in weeks ahead. He has already flown his family to safety out of the country, and there’s growing speculation that both Washington and the far-right nationalists who occupy the Security Services will insist on his removal. That paves the way for a second Ukrainian coup in less than a year, a grim reminder of the tragic failings of US policy in Ukraine. Check out this blurb from a post at the Vineyard of the Saker:
“Looks like the Nazi death squads are on the march again, this time they are looking at Kiev. Thirteen death-squad (aka “volunteer battalion”) leaders have now declared that they are forming their own military command under the command of the notorious Semen Semenchenko. Officially, they are not in any way opposed to the current regime, so said Semenchenko, but in reality their rank and file members are pretty clear about what they want to do: organize a third Maidan and toss out Poroshenko.
What makes these 21st century version of the SA so dangerous for Poroshenko it that he, unlike Hitler, does not have a 21st century version of the SS to eliminate them all overnight. In fact, according to many reports the entire southern part of the rump-Ukraine is now “Kolomoiski-land” fully under the control of the oligarch who finances these death-squads. Add to this the fact that most of the Rada is composed of the very same battalion commanders and assorted Nazi freaks, and you will why Poroshenko is now very much in danger……
The sad reality is that there is simply nobody in the Ukraine capable of disarming these so-called “volunteer battalions”. There are now thousands of uniformed Nazi freaks roaming around with guns who can now impose their law of the jungle on everybody. It sure looks like the future of Banderastan will be something like a mix of Somalia and Mad Max – a failed state, a comprehensively destroyed economy, a collapsed social order and the law of armed gangs of thugs.” (The Vineyard of the Saker)
If Poroshenko is doomed to be the scapegoat in the Debaltsevo cock-up, it’s only because he followed the foolhardy advice of his Washington paymasters. Had he listened to his military advisors instead, he probably would have withdrawn his troops earlier and spared himself a Gadhafi-like demise. Now, that’s probably no longer possible.
Poroshenko’s desperation has led to an appeal to western allies and the United Nations for the deployment of a peacekeeping mission in Ukraine. The request is an admission of defeat and has no chance of being implemented, mainly because it violates the terms of the recent peace agreement (Minsk 2.0), but, also, because voting members on the Security Council (Russia and China) are certain to veto the idea. Clearly, Poroshenko, who is increasingly embattled and reviled, is grasping at straws hoping to avoid the same violent end he ruthlessly inflicted on so many of his countrymen. Here is a brief summary of recent events from the World Socialist Web Site:
“The debacle suffered by the Kiev regime exposes the utterly reckless and frankly stupid character of the policy pursued by Washington and its EU allies in Ukraine….
The initial attempts of the Kiev regime and its CIA backers to subjugate east Ukraine by sheer military terror, relying on fascist militias and select units of the Ukraine army that it considered to be reliable, have failed….
Nevertheless, Washington is pressing Kiev to prepare for a renewed offensive and is still discussing directly arming the Ukrainian army against Russia with US weapons….
In west Ukraine, the population is evading or resisting draft orders to obtain more cannon fodder for the east Ukraine war. At the same time, Ukraine’s economy, cut off from its main industrial base in east Ukraine and its export markets in Russia, is collapsing.
“The country is at war that they cannot afford to fight. There is no economy any longer….Gerald Celente of Trends Journal told Russia Today. “That $160 billion loss of trade with Russia has destroyed the economy, when it was already in a severe recession. It went from very bad to worse than depression levels.”
(“US-backed Kiev regime faces military debacle in east Ukraine war“, Alex Lantier, World Socialist Web Site
Washington has largely won the information war, having persuaded Congress and the American people that US policy in Ukraine is “just”, but on the ground, where it counts, Washington has encountered one catastrophic failure after another. This process will undoubtedly persist until the costs are too exorbitant to bear.
As the NATO juggernaut directed by a U.S. NeoCon foreign policy marches towards a nuclear confrontation with Russia, the American public is being manipulated to accept that Foggy Bottom knows best. Even under the placid Obama regime, the chicken hawks are able to restart a new cold war that is getting hotter by the moment. The singular opportunity to forge a lasting peace after the fall of the Soviet Union has been squandered by the globalists, who lust after their only superpower status. Well, the time is approaching for payback. Only God can prevent the annihilation from WWIII, since Dr. Strangelove has the code for the nukes and the culture that permeates military planning actually believes that a nuclear war can be won.
This is the context that underpins the cry for citizens to demonstrate their trusting patriotism in an ongoing internationalist regime that seeks a permanent empire.
When George Washington spoke of patriotism as “It may be laid down as a primary position, and the basis of our system, that every Citizen who enjoys the protection of a Free Government, owes not only a proportion of his property, but even of his personal services to the defense of it”, it is unimaginable that he would see current administrations as the embodiment of a Free Government, or that citizens have a moral obligation to defend an aggressive interventionist imperia that is endangering the survival of the entire planet.
Honest Conservatives reject Neo Conservatism as a perversion of true national interests. The irony that an internationalist like Teddy Roosevelt would be lionized as a great patriot is attributed to his strong persona, while ignoring the consequences of his entanglement policies. His carrying of a “Big Stick” set the stage for the 21th century of using a blunt club.
What exactly is patriotic about sending generations of youth, to be used as cannon fodder, for the sole purpose and benefit of global elites, who really rule our country? When TR says: “Patriotism means to stand by the country” has become a meaningless viewpoint, since the control of the government is in foreign hands that have destroyed all semblance of what once existed as OUR Country.
Popular public polls always provide higher support for the President than for legislators in Congress. Because of no small measure, the House and Senate have abdicated their constitutional duties in foreign policy since the Korean War. Leaving to the executive branch the full weight of determining relations with foreign nations has allowed the decisive influence to be concentrated in the State Department establishment.
While the military-industrial-security-complex and the intelligent community agencies are the dominant power behind the globalist policy, the treasonous elites and foreign Banksters who control the strings are the only benefactors after the body count is compiled.
Under this set of circumstances, what actual duty does a loyal American have to do the bidding of a corrupt and illegitimate government? Do you believe that George Washington fought the Revolution to allow the City of London to rule over the foreign policies of our own country?
Even though the last two centuries have decidedly been influenced if not totally compromised by foreign agents, especially those among the Rothschild central banking cabal, the final responsibility for the loss of our country lies with the American people.
Americans have seldom exemplified a burning desire to understand the truth. Most are content to believe that their leaders are good men and women and have the best interests of the nation as their goal. The fact that such a myth bears little resemblance with reality never gets through to the flag flying households that proudly display their Love It or Leave It bumper stickers.
Their uncritical and all consuming Patriotism is a false and destructive sentiment. By allowing the mass media manipulation and distorted historical lessons to be accepted as mainstream culture, the forces of global dominance are able to achieve their worldwide governance.
Now this assessment is disturbing to many people and the bearer of the message risks becoming ostracized from polite society. Yet, such a reaction does not refute the accuracy of the argument.
What can or should a responsible citizen do to prevent the systematic betrayal of our country and the even more important, what can be done to stop the madness of NATO’s belligerency? The Russian Federation under Putin is not the same threat of the Soviet Union of Lenin or Stalin.
The practice of civil disobedience is most closely associated with fringe or radical dissenters. Ever since the demonstrations of burning draft cards and wearing the stars and stripes as bandanas of the Viet Nam era, the silent and moral majority became distrustful of protests. Nonetheless, the public display of discontent has influenced the body politick more than voting between bi-partisan clones of the same established order.
Every rational person instinctively understands that money interests exert the primacy influence over public policy. Laws are administered and enforced according to the legal judiciary that operates, not as an arbitrator or adjudicator for justice, but as a protector of the patrician system.
Defiance has a charm about the image that movies exemplify, but little support when it comes down to popular engagement. The Henry David Thoreau of Philosophy may be discussed in conversation, but is seldom practiced in ordinary life decision. People have surrendered their courage to confront governmental abuses. As the docility of personality becomes the normal standard for the “Political Correct” culture, government is emboldened to discard the public opinion that differs with official policy.
Taking to the street is seen in Europe frequently, even if it not reported on the nightly news. In the Brian Williams version of embellishment, the civilian receptor of perpetual war propaganda is blinded by the non news in order to accept the phony narrative. As the latest “Wag the Dog” episode of this year’s “War on Terror” play for the crowd, the ISIL miniseries gets overshadowed in the rating with the Ukraine designer conflict.
Those who believe the sirens sounds from the triplets – Jen Psaki, Marie Harf and “Big NeoCon Mama” Victoria Nuland over at the State Department, are the most pathetic patriot impostors imaginable. Lost in the spin is that the State Department was an eager participant behind the Ukraine coup d’etat.
However, public apathy persists that the notion of spontaneous civil disobedience combustion is totally absent from public consciousness. With the susceptibility of simulated patriotic appeals, the swayable dullards will demand retaliation after the next cover-up deception is triggered.
In a social order where it is impossible to throw out the bums in elections and courts will not follow the constitution, the lonely protestor has few options. Civil disobedience may not be popular in a psychologically induced environment, but denial is never a positive choice when tyranny is the official mode of rule.
With the announcement that Israeli’s Benjamin Netanyahu’s March 3 speech to Congress, the stakes are dramatically raised to eliminate Syria and Iran as a threat to the greater Zionist state and worse yet, to marginalize Russia and demonize Putin as a devil incarnate.
When the media cheerleaders do their usual genuflections for Bibi’s call to arms, the rest of us are being used as bargaining chips to force a total capitulation or face nuclear destruction. If this is not an overwhelming reason to call for our own government to stand down, what would be? Threats from Israel that they will use their nukes against anyone who defies their demands, illustrates, who the real belligerent is in the region.
The upside down nature of the authentic patriotism and what passes as a blank check for brinkmanship madness should be clear to even the least informed. Still, the inevitable responses to those, who demonstrate or employ protest with civil disobedience, are put up as enemies of the state.
These are times for sober reflection. Dispel the manufactured and false flag crisis and concentrate on the bona fide threats that reside within our own shores. Fifth column subversives have assumed key position within the government. Their loyalty to causes or countries other than our own is a core factor in the insecurity that prevails.
If civil disobedience is not your cup of tea, start digging your bomb shelter. The odds that our Congressional Representatives will grow a backbone are remote. Presidents view themselves as the most powerful and supreme leader of the world as opposed to an American servant.
Dissent is the true patriotism when it is focused on eliminating despotism and restoring our foreign policy in keeping with George Washington’s Farewell Address. If you really love your country, put an end to the gunboat armadas of the TR mentality and follow the lead of the father of your country.
Americans need to mature and grow-up. The dangerous world we live in was created largely because of the militarized intervention of the imperial U.S. Empire. Drawing lines in the sands of the Middle East is only superseded in pushing Russia to accept Ukraine to become a NATO member.
Ironman Varoufakis’s Revolutionary Plan for Europe…
“The ongoing dispute between the German and Greek governments is nothing less than a democratic revolution against German hegemony and the attempt of the Germans and their paladins in the EU to dictate Greek domestic policy.”
–Mathew D. Rose, It’s a revolution, Stupid! Naked Capitalism
“Germany is eating itself over Greece. It is eroding its moral authority, and seems prepared to destroy the eurozone’s integrity just to make a point.”
–Paul Mason, Germany v Greece is a fight to the death, a cultural and economic clash of wills, Guardian
If you haven’t been following developments in the Greek-EU standoff, you’re really missing out. This might be the best story of the year. And what makes it so riveting, is that no one thought that little Greece could face off with the powerful leaders of the EU and make them blink. But that’s exactly what’s happened. On Monday, members of the Eurogroup met with Greece’s finance minister, Yanis Varoufakis, to decide whether they would accept Greece’s terms for an extension of the current loan agreement. There were no real changes to the agreement. The only difference was semantics, that is, the loan would not be seen as a bailout but as “a transitional stage to a new contract for growth for Greece”. In other words, a bridge to a different program altogether.
In retrospect, Varoufakis’s strategy was pure genius, mainly because it knocked the EU finance ministers off balance and threw the process into turmoil. After all, how could they vote “thumbs down” on loan package that they had previously approved just because the language was slightly different? But if they voted “thumbs up”, then what?
Well, then they would be acknowledging (and, tacitly, approving) Greece’s determination to make the program less punitive in the future. That means they’d be paving the way for an end to austerity and a rethink on loan repayment. They’d also be conceding that Greece’s democratically-elected government had the right to alter the policies of the Eurogroup. How could they let that happen?
But, then again, how could they vote it down, after all, it was basically the same deal. As Varoufakis pointed out in a press conference on Monday:
“We agree to the terms of our loan agreements to all our creditors”. And we have “agreed to do nothing to derail the existing budget framework during the interim period.”
See? It’s the same deal.
This is the conundrum the Eurogroup faced on Monday, but instead of dealing with it head-on, as you would expect any mature person to do, they punted. They put off the loan extension decision for another day and called it quits. Now maybe that was the smart thing to do, but the optics sure looked terrible. It looked like Varoufakis stared them down and sent them fleeing like scared schoolchildren.
Now, remember, Monday was the absolute, drop-dead deadline for deciding whether the Eurogroup would approve or reject the new terms for Greece’s loan extension. That means the Eurogroup’s task could not have been more straightforward. All they had to do was vote yes or no. That’s it.
Instead, they called ‘Time Out’ and kicked the can a little further down the road. It was not a particularly proud moment for the European Union. But what’s even worse, is the subterfuge that preceded the meetings; that’s what cast doubt on the character of the people running EU negotiations. Here’s the scoop: About 15 minutes before the confab began, Varoufakis was given a draft communique outlining the provisions of the proposed loan extension. He was pleasantly surprised to find that the document met all his requirements and, so, he was prepared to sign it. Unfortunately, the document was switched shortly before the negotiations began with one that backtracked on all the crucial points.
I’m not making this up. The freaking Eurogroup tried to pull the old switcheroo on Varoufakis to get him to sign something that was different than the original. Can you believe it? And it’s only because Varoufakis studiously combed through the new memo that he was able to notice the discrepancy and jam on the brakes. As it happens, the final copy was just a rehash of the same agreement that Varoufakis has rejected from the onset. The only difference was the underhanded way the Eurogroup tried to slip it by him.
Now you tell me: Would you consider people who do something like that “trustworthy”?
Of course not. This is how people behave when they don’t care about integrity or credibility, when all that matters is winning. If the Eurogroup can trick the Greeks into signing something that’s different than what they think they’re signing; then tough luck for the Greeks. “Caveat emptor”. Buyer beware. The Eurogroup has no problem with that kind of shabby double-dealing. That’s just how they play the game.
But their trickery and bullying hasn’t worked, mainly because Varoufakis is too smart for them. And he’s too charismatic and talented too, which is a problem for the EU bigwigs who resent the fact that this upstart Marxist academic has captured the imaginations of people around the world upsetting their little plan to perpetuate Greece’s 6-year long Depression. They never anticipated that public opinion would shift so dramatically against them, nor had they imagined that all of Europe would be focused laserlike on the shady and autocratic workings of the feckless Eurogroup. That’s not what they wanted. What they wanted was carte blanche to impose their medieval policies on the profligate Greeks, just like the good old days after Lehman Brothers tanked. After all, that’s how a “anti-democratic imperialist project” like the EU is supposed to work, right?
Right, except now Varoufakis and his Marxist troopers have thrown a wrench in the Eurogroup’s plans and put the future in doubt. The tide has turned sharply towards reason, solidarity and compassion instead of repression, exploitation and cruelty. In just a few weeks, the entire playing field has changed, and Greece appears to be getting the upper hand. Who would have known?
If you look at the way that Varoufakis has handled the Eurogroup, you have to admire the subtlety, but effectiveness of his strategy. In any battle, one must draw attention to the righteousness of their cause while exposing the flaws in the character of their adversary. The incident on Monday certainly achieved both. While David never really slayed Goliath, Goliath is certainly in retreat. And that’s alot better than anyone expected.
As for the “cause”, well, that speaks for itself. The Greek bailout was never reasonable because the plan wasn’t designed to create a path for Greece to grow its way out of debt and deflation. No. It was basically a public relations smokescreen used to conceal what was really going on behind the scenes, which was a massive giveaway to the banks and bondholders. Everyone knows this. Check this out from Naked Capitalism:
“According to the Jubilee Debt Campaign, 92% of €240 billion Greece has received since the May 2010 bailout went to Greek and European financial institutions.” (Naked Capitalism)
Yep, it was all just one big welfare payment to the moocher class. Meanwhile, the Greeks got zilch. And, yet, the Eurogroup wants them to continue with this same program?
As far as Greece’s finances are concerned, they’ve gotten progressively worse every year the bailout has dragged on. For example, Greece’s debt-to-GDP ratio has gone from 115 percent in 2010 more than 170 percent today. The country is headed in the wrong direction, which is what makes Varoufakis’s remedies so compelling. It’s because everyone knows that ‘if you are already in a hole, stop digging’. That’s the logic behind Varoufakis’s position; he simply wants to “stop digging.” But that can’t be done by borrowing more money to repay debts that only get bigger with each new bailout. And it can’t be done by implementing excruciating belt-tightening measures that increase unemployment and shrink the economy. It can only be done by reducing one’s debts and initiating programs that help to grow the economy back to health. This isn’t rocket science, but it is anathema to the retrograde ideology of the European Union which is one part bonehead economics and one part German sanctimony. Put the two together and you come up with a pre-Keynesian dystopia where one of the wealthiest regions in the world inches ever-closer to anarchy and ruin for the sole purpose of proving that contractionary expansion actually works. Well, guess what? It doesn’t, and we now have six years of evidence to prove it.
It’s worth noting that the Eurogroup hasn’t budged one inch from its original position. In other words, there really haven’t been any negotiations, not in any meaningful sense of the word. What there has been is one group of pompous blowhards reiterating the same discredited mantra over and over again, even though austerity has been thoroughly denounced by every reputable economist on the planet. Of course that doesn’t matter to the ex-Goldman swindlers at the ECB or their hairshirt counterparts in Berlin. What they want is to extract every last drop of blood from their Greek victims. That’s their game. And, of course, ultimately what they want to do is annihilate the entire EU welfare state; crush the unions, eviscerate pensions, wages and health care, and privatize everything they can get their greasy hands on. That’s the real objective. Greece’s exorbitant debts are just a means to an end, just a way to decimate the middle class in one fell swoop.
Keep in mind, the EU just narrowly avoided a triple-dip recession in the third quarter, which would have been their third slump in less than six years. How do you like that track record? It just illustrates the stunning mismanagement of the Union’s economic affairs and the incompetence of the bureaucrats making the decisions. Even so, these same leaders have no qualms about telling Greece to step in line and follow their diktats to the letter.
Can you believe the arrogance?
Fortunately, Greece has broken from the herd and set out on a new course. They’ve disposed of the mealy-mouth, sellout politicians who used to run the country and put the A-Team in their place. And, boy, are they happy with the results. Syriza’s public approval ratings are through the roof while Varoufakis has become the most admired man in Europe. The question is whether this new troupe of committed leftists can deliver the goods or not. So far, there’s reason for hope, that is, if we can agree about what Varoufakis’s strategy really is.
In earlier writings, Varoufakis said that he wants a New Deal for Greece. He said:
“Unless we have a new deal for Europe, Greece is not going to get a chance….It’s a necessary condition that the eurozone finds a rational plan for itself…. until and unless the eurozone finds a rational plan for stopping this train wreck throughout the European Union, throughout the eurozone, Greece has no chance at all.” Naked Capitalism)
Okay, so Varoufakis wants to stay in the EU, but he wants a change in policy. (Reducing the debts, ending austerity, and boosting fiscal stimulus.) But he also has more ambitious plans of which no one in Brussels, Frankfurt or Berlin seems to be aware. He wants to change the prevailing culture of the Eurozone; gradually, incrementally, but persistently. He wants a Europe that is more democratic and more responsive to the needs of the member states, but he also wants a Europe that is more united via institutions and programs that will strengthen the union. He believes that success will only be achieved if concrete steps are taken “to unify the banking system”, mutualize debt (“the Federal Government having its own debt over and above states.”) …”And thirdly we need an investment policy which runs throughout the Eurozone… a recycling mechanism for the whole thing. Unless we have these things,… I’m afraid there is absolutely nothing to avert the continuation of this slow motion derailment.” (Naked Capitalism)
So, there you have it. Nationalize the banking system, create a Euro-wide bond market, and establish mechanisms for fiscal transfers to the weaker states like we do in the US via welfare, food stamps, gov contracts, subsidies etc. to create some balance between the very rich and productive states like California and New York and the poorer states like South Dakota and Oklahoma. That’s what it’s going to take to create a viable United States of Europe and escape these frustratingly recurrent crises. Varoufakis knows this, but of course he’s not pushing for this. Not yet at least.
Instead, he’s decided to take it slowly, one step at a time. Incremental change, that’s the ticket. Just keep plugging away and building support until the edifice cracks and democracy appears.
That’s Varoufakis’s plan in a nutshell: Revolution from within. Just don’t tell anyone in Berlin.
You’re not paranoid if you think the world feels more unstable — it is. There’s a dangerous confluence of political, economic, and military phenomena that is producing a very hazardous international situation. Heightened national tensions that lead to regional confrontations have become normal as economic and political winds constantly shift in the direction of instability and conflict.
At the center of each maelstrom is the U.S. Government, and instead of acting as a promoter of peace and stability the Obama administration has been a catalyst of confrontation and war.
Whether it be the Middle East, Asia, Russia’s border, or the world economy, the actions of the Obama administration have leaned towards various forms of provocation and aggression — economic sanctions, threats, funneling arms, etc. This dynamic makes an eventual regional conflict inevitable, beyond the one already occurring in Syria/Iraq, where a U.S.-led proxy war against Syria and Iran is dangerously close to a full-out regional war.
The U.S. public is dangerously ignorant about the significance of these various regional conflicts. To the extent that they’re even reported, the “news” has excelled at blaming others and sharpening conflict, rather than shedding light or presenting peaceful alternatives.
An especially combustible zone is the Ukraine, where the U.S. is engaged in what is becoming a full-fledged proxy war with Russia. The Obama administration’s decisive role in the Ukrainian conflict has received only a sliver of space from the U.S. media, even after an audio of Obama’s Under Secretary of State was leaked, exposing the U.S.’ direct leadership role in a coup that overthrew Ukraine’s democratically elected government.
Obama’s allied boots on the ground in the Ukrainian coup were open fascists — the Svoboda and “Right Sector” — whose ideological hero, Stepan Bandera, was one of Hitler’s most reliable fascist allies during World War II.
The Obama administration has given crucial military and economic support to the anti-Russian Ukrainian government, and provided this fascist-friendly government with various forms of military assistance, and now is considering giving more “lethal” military aid to a government that cemented its coup power via questionable elections during the start of a civil war.
Former USSR president and media darling, Mikhail Gorbachev, is now disregarded by the U.S. media, since his words no longer promote U.S. foreign policy objectives. Gorbachev recently said:
“If we call a spade a spade, America has pulled us into a new cold war, trying to openly implement its general idea of triumphalism. Where will it take us all? The [new] cold war is already on. What’s next? Unfortunately, I cannot say firmly that the cold war will not lead to the hot one. I’m afraid that they might take the risk.”
This “new cold war” is warming quickly, since the U.S.-Russian proxy war in Ukraine shares a large chunk of Russia’s border, and like all wars borders are ignored when convenient. Gorbachev fears that the 5,000 dead Ukrainians and 1.5 million refugees may just be the detonator for a larger war between two fully nuclear countries. Meanwhile, the U.S. media completely ignores this very real threat, giving valuable political cover to Obama’s reckless actions.
Equally crazy is Obama’s longstanding policy in the Middle East, where his “no troops on the ground” mantra has led to non-stop drone bombing and a massive proxy war in Syria, which every nation in the region has directly contributed to. The 200,000 dead and millions of refugees have boiled political tensions across the region, and Obama’s dedication to regime change in Syria is partially due to his dedication to the two biggest pariah nations in the world — Saudi Arabia and Israel.
When Israel recently bombed Syria again — a now regular occurrence — an Iranian general and Hezbollah leader were killed in the attack, which was labeled an assassination. Soon after, it was finally revealed that in 2008 the U.S. and Israel organized a terrorist attack in Lebanon that killed a Hezbollah leader. Both events push the Syrian conflict to the tipping point of regional war, and Obama’s silence over Israel’s repeated bombings against Syria only encourage an extremely dangerous regional conflagration.
Equally reckless is that Obama’s Syrian proxy war relied on thousands of Islamic extremists from neighboring countries. Obama’s funding, training, and tolerating these extremists created the ideal conditions for a group like ISIS to rise from obscurity into a regional colossus.
To date the Obama administration has proposed no peace plan for Syria outside of “regime change.” When the Russian government recently organized a major peace conference to address the Syrian war, the U.S.-led Syrian National Coalition boycotted the talks, and Obama put no public pressure on his allies to attend, when he should have been publicly demanding it. Once the peace conference started neither Obama nor the U.S. media cared much to talk about the happenings, since continued fighting is the priority.
One shouldn’t forget Obama’s Africa policies, where his “successful” bombing campaign-turned regime change in Libya has ruined a country that previously had the highest standard of living on the continent. After Obama waged an illegal, aggressive war and assassinated the Libyan president, Muammar Gaddafi, Hillary Clinton said — while giggling — “we came, we saw, he died.”
Libya’s weapons were looted and are now, according to the U.N., being funneled throughout the Middle East and Africa, destabilizing neighboring countries and empowering the Islamic extremists that Obama allied with against Gaddafi (similar to the ones he allied with against Syria’s president).
When it comes to the global economy Obama has been launching financial weapons of mass destruction against his enemies. The economic sanctions against Iran, Russia, N. Korea, Venezuela, Syria, etc., are of course an act of war. This kind of war is described in the book, “Treasury’s War,” by former Under Secretary of the U.S. Treasury, Juan Zarate, who glamorizes this “new” form of war that the U.S. has a monopoly over, given the U.S. dollar’s preeminence as the global reserve currency.
Another lethal non-military weapon Obama has recklessly used is his helping crash the price of oil. The U.S. media publicly discussed the anti-Russian motive behind Obama intervening in the oil markets, by selling the “strategic oil reserves” held by the U.S. government — intended to be used at times of severe shortages. But Obama started unloading the strategic reserves at a time when there was already increasing global supply. The oil price floor fell out when Obama persuaded Saudi Arabia to ramp up production, flooding the market with cheap oil.
And whereas the Obama administration has kept mum about the Saudi’s accomplice role in crashing the oil market, the Saudis themselves have been pretty open about using their oil weapon, which they’re using to force Russia to drop support for Syria’s President Bashar al-Assad. The New York Times reported:
“Saudi Arabia has been trying to pressure President Vladimir Putin of Russia to abandon his support for President Bashar al-Assad of Syria, using its dominance of the global oil markets at a time when the Russian government is reeling from the effects of plummeting oil prices.”
Russia’s economy is consequently in free fall, with Iran, Venezuela and every other oil-producing nation suffering massive economic consequences. All of this is barely mentioned in the complicit U.S. media, content with shrugging its shoulders over the subsequent political chaos that directly affects hundreds of millions of people globally, and threatens to boomerang back on the U.S. in the form of unemployment and economic disruption.
All of the above policies have directly created havoc internationally. And today’s world is more inter-connected than ever; the chaos in the oil markets has already caused layoffs in the U.S., and threatens a larger economic conflagration. Obama’s policies in Libya, Syria, Iraq, and Afghanistan have greatly increased the likelihood of another terror attack in the U.S.
In a world of increasing danger and threats of war, the Obama administration has been completely unable to champion any serious peace proposal. His main contribution to global affairs has been chaos and death — either by proxy (Syria and Ukraine), drones (Pakistan, Yemen, Somalia, etc.) dollars, gun trafficking, sanctions, or direct military intervention (Afghanistan and Libya).
Even the pathetic “peace process” Obama faked with Israel-Palestine was revealed as farce the second Israel decided to re-destroy the Gaza Strip: Obama gave crucial support to Israel in committing its numerous war crimes.
Obama is aided and abetted in his reckless actions by a media that cheer-leads the government’s every move, except when it encourages a more “aggressive” approach. In this way the above realities of U.S. foreign policy — and the very real dangers they present — are completely obscured from the American public. And when the next inevitable military combustion occurs, the public may be disorientated just long enough to fall victim to scapegoating and fear mongering that can lead to a bi-partisan military “solution.”
The West presents Putin as a bloodthirsty warmonger with grand imperial ambitions. The reality is that Putin wants a stable, federalized Ukraine—anything else would be too costly for Russia
In February, it is a long way to the spring, lamented Joseph Brodsky, the poet. Indeed, snow still falls heavily in Moscow and Kie
Tired by the siege and by intermittent shelling, the rebels disregarded the snow and took the strategic Donetsk airport. This airport with its Stalin-built tunnels, a symbol of solid Soviet defence work, presented a huge challenge for the under-equipped militia. Its many-leveled underground facilities were built to sustain a nuclear attack; still, the rebels, after months of fighting, flushed the enemy out and took it.
In a bigger offensive, they trapped Kiev’s troops in the Debaltsevo pocket, and Kiev is already suing for a cease-fire. The rebels hope to dislodge the enemy from their lands altogether; as now they hold only about one third of Donbass; but Russia’s president is still groping for the brakes. He prefers a bad peace to a good war. For him, the Ukraine is important, but not a sine qua non, the only problem in the world. This attitude he shares with the American leader. There is a big difference: Russia wants peaceful Ukraine, Americans prefer one at war.
Russia would prefer to see Ukraine united, federal, peaceful and prosperous. The alternative of splitting Donbass is not very tempting: Donbass is strongly connected to the rest of Ukraine, and it is not easy to sever its ties. The war already has sent millions of refugees from Donbass and from the rump of Ukraine to Russia, overloading its systems. Putin can’t cut loose and forget about Donbass – his people would not allow him anyway. A cautious man, he does not want to get into an open-ended war. So he has to navigate towards some sort of peace.
I had a meeting with a well-informed and highly-placed Russian source w
- Russia supported the West-brokered agreement of February 21, 2014, but the US still pushed for the next day (February 22) coup, or “had brokered a deal to transition power in Ukraine” , in Obama’s words.
- After the coup, the South-East Ukraine did not submit to the new Kiev regime and seceded. Still, Moscow asked the Donbass rebels to refrain from carrying out their May referendum. (They disregarded Putin’s appeal).
- Moscow recognised the results of sham May elections carried out by Kiev regime after the coup, and recognised Poroshenko as the president of the whole Ukraine – though there were no elections in the South East and opposition parties were banned from participating.
- Moscow did not officially recognise the results of November elections in Donbass, to the chagrin of many Russian nationalists.
These steps were quite unpopular in Russian society, but Putin made them to promote a peaceful solution for Ukraine. Some war-like Donbass leaders were convinced to retire. In vain: Putin’s actions and intentions were disregarded by the US and EC. They encouraged the ‘war party’ in Kiev. “They never found a fault with Kiev, whatever they do”, said the source.
Peace in Ukraine can be reached through federalisation, my source told me. That’s why the two most important parameters of the Minsk accords (between Kiev and Donetsk) were those we never hear about: constitutional and socio-economic reforms. Russia wants to secure the territorial integrity of the Ukraine (minus Crimea) but it can be achieved only through federalisation of Ukraine with a degree of autonomy being given to its regions. Its west and east speak different languages, worship different heroes, have different aspirations. They could manage together, just, if the Ukraine were a federal state, like the US or Switzerland or India.
In Minsk, the sides agreed to establish a joint commission for constitutional reforms, but the Kiev regime reneged on it. Instead, they created a small and secretive constitutional
As for integration, it was agreed in Minsk to reintegrate Donbass within Ukraine. This was disappointing for Donbass (they would prefer to join Russia), but they accepted it, – while Kiev laid siege to Donbass, cut off its banks, ceased buying Donbass coal, and stopped paying pensions. Kiev troops daily shell Donetsk, a city of a million inhabitants (in peaceful times!). Instead of amnesty for rebels, as agreed in Minsk, there are more government troops pouring eastwards.
The Russians did not give up on Minsk accords. The Minsk agreements could bring peace, but they have to be implemented. Perhaps president Poroshenko of Kiev would like to, but Kievwar party with its western support will unseat Poroshenko if he goes too far. Paradoxically, the only way to force him to peace is through war, – though Russia would prefer the West to put pressure on its clients in Kiev. The rebels and their Russian supporters used warfare to force him to sign the Minsk accords: their offensive against Mariupol on the Sea of Azov was hugely successful, and Poroshenko preferred to go to Minsk in order to keep Mariupol. Since then, Kiev and Donetsk had a few cease-fires, they exchanged POWs, but Kiev refuses to implement the constitutional and socio-economic demands of Minsk accord.
It does not make sense to agree to a cease-fire, if Kiev only uses it to regroup and attack again. The Cease-fire should lead to constitutional reform, said my source, a reform negotiated in an open and transparent dialogue of the regions and Kiev. Without reform, Donbass (or Novorussia) will go to war. So the Debaltsevo operation can be considered a way to force Poroshenko to sue for peace.
Russia does not intend to take part in the war, or in peace negotiations, said the source. The Russians are adamant to stay out, while the Americans are equally adamant to present Russia as a side to conflict.
Meanwhile, the Russian-American relations were moved forty years back to the Jackson-Vanik amendment of 1974 by the Ukraine Freedom Support Act of 2014. US Secretary of State John Kerry considered this act an unfortunate development, but a temporary one. The Russians are not that optimistic: for them, the Act codified anti-Russian sanctions. The US has tried to turn other states against Russia, with some success. In one sweep the German Kanzlerin Angela Merkel eliminated all organisations, structures and ties built between Germany and Russia over many years. Every visit of Joe Biden causes a conflagration.
The Russians are upset with the story of the Malaysian Boeing. In every high-level encounter with the Americans, they are reminded of the hysterical accusations and claims that the liner was downed by the rebels using Russian missiles. Six months have passed since the tragedy; still the Americans have not presented a single shred of evidence of Russian and/or rebel involvement. They have not presented photos from their satellites, nor records of their AWACS aircraft hovering over Eastern Europe. My source told me that the American high-ranking officials do not insist anymore that Russians/rebels are involved, but they stubbornly refuse to apologise for their previous baseless accusations. They never say they are sorry.
Still, the Americans want to play the ball. They insist that they do not seek Russian ‘surrender’, that they find the confrontation costly and unwelcome; meanwhile, the US needs Russian support for dealing with Iran’s nuclear programme, the removal of Syrian chemical weapons, and the Palestinian problem. The Russians retort they have heard it all during the Libyan affair and aren’t impressed.
Differences of opinion between Russia and the US are considerable. But there is one common feature: from Syria to Donbass, Russians endorse peace, Americans push for war. Now the Russians have invited opposition figures and government representatives from Syria for talks in Moscow. They came, talked, went away and will come again. They could probably settle but the US representatives say that they will never accept Assad’s presidency and will fight to the last Syrian for his dismissal. It is not that Americans are bloodthirsty; war makes sense for them: every war on the globe supports the US dollar and invigorates Dow Jones, as capital seeks safe haven and finds it in the US.
They do not think about the fate of Syrians who flee to Jordan—or of Ukrainians who escape to Russia in ever increasing numbers. What a shame for two wonderful countries! Syria was peaceful and prosperous, the diamond of the Middle East until ruined by the US-supported Islamists; the Ukraine was the wealthiest part of the former Soviet bloc, until being ruined by the US-supported far-right and oligarchs. Joseph Brodsky bitterly predicted in 1994, as the Ukraine declared its independence from Russia, that the shifty Ukrainians will still evoke Russian
“I want to appeal to the Ukrainian people, to the mothers, the fathers, the sisters and the grandparents. Stop sending your sons and brothers to this pointless, merciless slaughter. The interests of the Ukrainian government are not your interests. I beg of you: Come to your senses. You do not have to water Donbass fields with Ukrainian blood. It’s not worth it.”
— Alexander Zakharchenko, Prime Minister of the Donetsk People’s Republic
Washington needs a war in Ukraine to achieve its strategic objectives. This point cannot be overstated.
The US wants to push NATO to Russia’s western border. It wants a land-bridge to Asia to spread US military bases across the continent. It wants to control the pipeline corridors from Russia to Europe to monitor Moscow’s revenues and to ensure that gas continues to be denominated in dollars. And it wants a weaker, unstable Russia that is more prone to regime change, fragmentation and, ultimately, foreign control. These objectives cannot be achieved peacefully, indeed, if the fighting stopped tomorrow, the sanctions would be lifted shortly after, and the Russian economy would begin to recover. How would that benefit Washington?
It wouldn’t. It would undermine Washington’s broader plan to integrate China and Russia into the prevailing economic system, the dollar system. Powerbrokers in the US realize that the present system must either expand or collapse. Either China and Russia are brought to heel and persuaded to accept a subordinate role in the US-led global order or Washington’s tenure as global hegemon will come to an end.
This is why hostilities in East Ukraine have escalated and will continue to escalate. This is why the U.S. Congress approved a bill for tougher sanctions on Russia’s energy sector and lethal aid for Ukraine’s military. This is why Washington has sent military trainers to Ukraine and is preparing to provide $3 billion in “anti-armor missiles, reconnaissance drones, armored Humvees, and radars that can determine the location of enemy rocket and artillery fire.” All of Washington’s actions are designed with one purpose in mind, to intensify the fighting and escalate the conflict. The heavy losses sustained by Ukraine’s inexperienced army and the terrible suffering of the civilians in Lugansk and Donetsk are of no interest to US war-planners. Their job is to make sure that peace is avoided at all cost because peace would derail US plans to pivot to Asia and remain the world’s only superpower. Here’s an except from an article in the WSWS:
“The ultimate aim of the US and its allies is to reduce Russia to an impoverished and semi-colonial status. Such a strategy, historically associated with Carter administration National Security Advisor Zbigniew Brzezinski, is again being openly promoted.
In a speech last year at the Wilson Center, Brzezinski called on Washington to provide Kiev with “weapons designed particularly to permit the Ukrainians to engage in effective urban warfare of resistance.” In line with the policies now recommended in the report by the Brookings Institution and other think tanks calling for US arms to the Kiev regime, Brzezinski called for providing “anti-tank weapons…weapons capable for use in urban short-range fighting.”
While the strategy outlined by Brzezinski is politically criminal—trapping Russia in an ethnic urban war in Ukraine that would threaten the deaths of millions, if not billions of people—it is fully aligned with the policies he has promoted against Russia for decades.” (“The US arming of Ukraine and the danger of World War III“, World Socialist Web Site)
Non-lethal military aid will inevitably lead to lethal military aid, sophisticated weaponry, no-fly zones, covert assistance, foreign contractors, Special ops, and boots on the ground. We’ve seen it all before. There is no popular opposition to the war in the US, no thriving antiwar movement that can shut down cities, order a general strike or disrupt the status quo. So there’s no way to stop the persistent drive to war. The media and the political class have given Obama carte blanche, the authority to prosecute the conflict as he sees fit. That increases the probability of a broader war by this summer following the spring thaw.
While the possibility of a nuclear conflagration cannot be excluded, it won’t effect US plans for the near future. No one thinks that Putin will launch a nuclear war to protect the Donbass, so the deterrent value of the weapons is lost.
And Washington isn’t worried about the costs either. Despite botched military interventions in Afghanistan, Iraq, Libya and half a dozen other countries around the world; US stocks are still soaring, foreign investment in US Treasuries is at record levels,, the US economy is growing at a faster pace than any of its global competitors, and the dollar has risen an eye-watering 13 percent against a basket of foreign currencies since last June. America has paid nothing for decimating vast swathes of the planet and killing more than a million people. Why would they stop now?
They won’t, which is why the fighting in Ukraine is going to escalate. Check this out from the WSWS:
“On Monday, the New York Times announced that the Obama administration is moving to directly arm the Ukrainian army and the fascistic militias supporting the NATO-backed regime in Kiev, after its recent setbacks in the offensive against pro-Russian separatist forces in east Ukraine.
The article cites a joint report issued Monday by the Brookings Institution, the Atlantic Council, and the Chicago Council on Global Affairs and delivered to President Obama, advising the White House and NATO on the best way to escalate the war in Ukraine….
According to the Times, US officials are rapidly shifting to support the report’s proposals. NATO military commander in Europe General Philip M. Breedlove, Defense Secretary Chuck Hagel, US Secretary of State John Kerry, and Chairman of the Joint Chiefs of Staff General Martin Dempsey all supported discussions on directly arming Kiev. National Security Advisor Susan Rice is reconsidering her opposition to arming Kiev, paving the way for Obama’s approval.” (“Washington moves toward arming Ukrainian regime“, World Socialist Web Site)
See what’s going on? The die is already cast. There will be a war with Russia because that’s what the political establishment wants. It’s that simple. And while previous provocations failed to lure Putin into the Ukrainian cauldron, this new surge of violence–a spring offensive– is bound to do the trick. Putin is not going to sit on his hands while proxies armed with US weapons and US logistical support pound the Donbass to Fallujah-type rubble. He’ll do what any responsible leader would do. He’ll protect his people. That means war. (See the vast damage that Obama’s proxy war has done to E. Ukraine here: “An overview of the socio – humanitarian situation on the territory of Donetsk People’s Republic as a consequence of military action from 17 to 23 January 2015“)
Asymmetrical Warfare: Falling Oil Prices
Keep in mind, that the Russian economy has already been battered by economic sanctions, oil price manipulation, and a vicious attack of the ruble. Until this week, the mainstream media dismissed the idea that the Saudis were deliberately pushing down oil prices to hurt Russia. They said the Saudis were merely trying to retain “market share” by maintaining current production levels and letting prices fall naturally. But it was all bunkum as the New York Times finally admitted on Tuesday in an article titled: “Saudi Oil Is Seen as Lever to Pry Russian Support From Syria’s Assad”. Here’s a clip from the article:
“Saudi Arabia has been trying to pressure President Vladimir V. Putin of Russia to abandon his support for President Bashar al-Assad of Syria, using its dominance of the global oil markets at a time when the Russian government is reeling from the effects of plummeting oil prices…
Saudi officials say — and they have told the United States — that they think they have some leverage over Mr. Putin because of their ability to reduce the supply of oil and possibly drive up prices….Any weakening of Russian support for Mr. Assad could be one of the first signs that the recent tumult in the oil market is having an impact on global statecraft…..
Saudi Arabia’s leverage depends on how seriously Moscow views its declining oil revenue. “If they are hurting so bad that they need the oil deal right away, the Saudis are in a good position to make them pay a geopolitical price as well,” said F. Gregory Gause III, a Middle East specialist at Texas A&M’s Bush School of Government and Public Service (“Saudi Oil Is Seen as Lever to Pry Russian Support From Syria’s Assad“, New York Times)
The Saudis “think they have some leverage over Mr. Putin because of their ability” to manipulate prices?
That says it all, doesn’t it?
What’s interesting about this article is the way it conflicts with previous pieces in the Times. For example, just two weeks ago, in an article titled “Who Will Rule the Oil Market?” the author failed to see any political motive behind the Saudi’s action. According to the narrative, the Saudis were just afraid that “they would lose market share permanently” if they cut production and kept prices high. Now the Times has done a 180 and joined the so called conspiracy nuts who said that prices were manipulated for political reasons. In fact, the sudden price plunge had nothing to do with deflationary pressures, supply-demand dynamics, or any other mumbo-jumbo market forces. It was 100 percent politics.
The attack on the ruble was also politically motivated, although the details are much more sketchy. There’s an interesting interview with Alistair Crooke that’s worth a read for those who are curious about how the Pentagon’s “full spectrum dominance” applies to financial warfare. According to Crooke:
“…with Ukraine, we have entered a new era: We have a substantial, geostrategic conflict taking place, but it’s effectively a geo-financial war between the US and Russia. We have the collapse in the oil prices; we have the currency wars; we have the contrived “shorting” — selling short — of the ruble. We have a geo-financial war, and what we are seeing as a consequence of this geo-financial war is that first of all, it has brought about a close alliance between Russia and China.
China understands that Russia constitutes the first domino; if Russia is to fall, China will be next. These two states are together moving to create a parallel financial system, disentangled from the Western financial system. ……
For some time, the international order was structured around the United Nations and the corpus of international law, but more and more the West has tended to bypass the UN as an institution designed to maintain the international order, and instead relies on economic sanctions to pressure some countries. We have a dollar-based financial system, and through instrumentalizing America’s position as controller of all dollar transactions, the US has been able to bypass the old tools of diplomacy and the UN — in order to further its aims.
But increasingly, this monopoly over the reserve currency has become the unilateral tool of the United States — displacing multilateral action at the UN. The US claims jurisdiction over any dollar-denominated transaction that takes place anywhere in the world. And most business and trading transactions in the world are denominated in dollars. This essentially constitutes the financialization of the global order: The International Order depends more on control by the US Treasury and Federal Reserve than on the UN as before.” (“Turkey might become hostage to ISIL just like Pakistan did“, Today’s Zaman)
Financial warfare, asymmetrical warfare, Forth Generation warfare, space warfare, information warfare, nuclear warfare, laser, chemical, and biological warfare. The US has expanded its arsenal well beyond the traditional range of conventional weaponry. The goal, of course, is to preserve the post-1991 world order (The dissolution up of the Soviet Union) and maintain full spectrum dominance. The emergence of a multi-polar world order spearheaded by Moscow poses the greatest single threat to Washington’s plans for continued domination. The first significant clash between these two competing world views will likely take place sometime this summer in East Ukraine. God help us.
NOTE: The Novorussia Armed Forces (NAF) currently have 8,000 Ukrainian regulars surrounded in Debaltsevo, East Ukraine. This is a very big deal although the media has been (predictably) keeping the story out of the headlines.
Evacuation corridors have been opened to allow civilians to leave the area. Fighting could break out at anytime. At present, it looks like a good part of the Kiev’s Nazi army could be destroyed in one fell swoop. This is why Merkel and Hollande have taken an emergency flight to Moscow to talk with Putin. They are not interested in peace. They merely want to save their proxy army from annihilation.
I expect Putin may intervene on behalf of the Ukrainian soldiers, but I think commander Zakharchenko will resist. If he lets these troops go now, what assurance does he have that they won’t be back in a month or so with high-powered weaponry provided by our war-mongering congress and White House?
Tell me; what choice does Zakharchenko really have? If his comrades are killed in future combat because he let Kiev’s army escape, who can he blame but himself?
There are no good choices.
Check here for updates: Ukraine SITREP: *Extremely* dangerous situation in Debaltsevo
The resounding victory of Alexis Tsipras in the Greek election was certainly a referendum that rejected the austerity demands placed on Greece by the European Union. The Wall Street Journal says the following, in Syriza Win in Greek Election Sets Up New Europe Clash.
“A Syriza victory marks an astonishing upset of Europe’s political order, which decades ago settled into an orthodox centrism while many in Syriza describe themselves as Marxists. It emboldens the challenges of other radical parties, from the right-wing National Front in France to the newly formed left-wing Podemos party in Spain, and it sets Greece on a collision course with Germany and its other eurozone rescuers.”
What informed political onlooker did not see this coming? The EU acts as if it was a Holy Roman Empire using some very unholy demands and requirements. Since Greece has a laid back culture, the notion that imposing a rigorous German work ethic on the Mediterranean city-states is about as shortsighted as allowing a popular vote in the cradle of Democracy. If the EU wants to be the seat of the Banksters New World Order, rectifying this oversight needs to be part of any additional rollovers of the debt.
The NYT reports on the German reaction to this election, in Greece Chooses Anti-Austerity Party in Major Shift.
“While Greece sees itself as being punished by creditors’ demands, Germany and a host of European officials have argued that Greece and other troubled nations in the eurozone must clean up the high debts and deficits at the root of Europe’s crisis . They say Athens has failed to make enough progress on structural reforms seen as necessary to stabilize the economy, and they are pressing Greece to raise billions of euros through more budgetary cutbacks and taxes.”
Sounds like NATO Panzer tanks may need to surround the Acropolis. At issue is the next round of payments and exactly how far Tsipras’ new coalition government will push back.
From the socialist French press, Greek radical-left leader vows to end ‘humiliation and pain’, the precedent dispute provides a look at the agenda that will be fought over.
“Greece’s bailout deal with the eurozone is due to end on February 28 and Tsipras’s immediate challenge will be to settle doubts over the next installment of more than 7 billion euros in international aid. EU finance ministers are due to discuss the issue in Brussels on Monday.
Tsipras has promised to renegotiate agreements with the European Commission, European Central Bank and International Monetary Fund “troika” and write off much of Greece’s 320-billion-euro debt, which at more than 175 percent of gross domestic product, is the world’s second highest after Japan.”
The imposed neocolonialism from Brussels technocrats on Greece after the 2008 financial bubble is A True Greek Tragedy – Odyssey of the EU, concluded that “This tragedy is an existential test. Appreciate the absurdity of compliance with the New World Order, and apply comic relief, to those who follow commends of the EU Poseidon ship of state.”
At stake is the ability of the EU to continue their centralization dictates in the face of public resistance. The victory of SYRIZA provides encouragement for similar movements from Spain, Portugal to Italy. However, such self-government enthusiasm flies in the face of the institutional power of the blue-blood aristocracy of financial elites, who in the past have never hesitated waging, war to suppress independence sentiments.
The term Grexit is introduced to forewarn the op-out of the EU option. Further explanation is elaborated in Greece lightning: six things you need to know about Syriza’s victory.
- Background – the Greek economy
- Yesterday’s election – and why Syriza wants to stay in the EU
- But Germany is more relaxed about a ‘Grex
- It’s now a question of how far Germany will budge
- The Eurozone is (probably) strong enough to withstand Grexit
- But still, Grexit would be a risk that no one actively wants to take
Hugo Dixon: Grexit still unlikely after Syriza win takes another viewpoint. His outlook is based on the assumption that “no head of government in the other euro countries wants Greece to leave”, so some kind of accommodation will be offered to appease the factions that resist their inordinate debt burden.
“So there might be a way of cutting a deal. The snag is that doing so would involve a massive somersault – or what Greeks call a “kolotoumba”. Many of Tsipras’ backers would then accuse him of betraying their cause. It is still far from clear whether he is prepared to do that.
But if the Syriza leader is not prepared to compromise, Greece will default and will have to impose capital controls to stop the banks collapsing. If the people then forced the government to backtrack, there would be one final chance to stay in the euro. Otherwise, the drachma would beckon.”
Oh the horror of a country leaving the European Union and chucking the EURO. The factual consequences of Greece exiting the EU should not be gauged solely in economic terms. The limits upon which the Bilderberg oligarchy will tolerate liberation dissent become the decisive price and test of brute power in this battle for autonomy.
The Greek version of socialism is surely no model for economic prosperity. Nonetheless, the systematic fleecing of Greek assets by the vultures preying on the misery from the 2008 crash has yet to be put back in balance.
The viability of EU Bonds Rollover Debt with a Chinese Bailout makes the case why the EU is vulnerable to the mountains of their own obligations. The most likely outcome from the election of Alexis Tsipras is that a rescheduling rather than a reduction in the amount of indebtedness will take place. The EU Rothschild band of thieves knows no forgiveness, when it comes to collecting on their phony debt created currency loans.
The brave Spartans saved civilization at Thermopylae. It is doubtful that type of campaign can be fought again by today’s Greeks.
In the ridiculous charade that passes for the foreign exchange currency markets, the ease upon which a 39% spike in the Swiss Franc to the EU has most financial journalist puzzled. A flagship of establishment journalism like the Washington Post provides a quaint explanation in Why Switzerland’s currency is going historically crazy. The Swiss intend to keep their exchange rate at 1.2 Swiss francs per euro caused unsustainable negative competiveness in Swiss exports to EU customers. How many times have you heard that same old song? Corporatist media consistently spins a yarn that suppressing one’s own currency is good for business.
Rely on viewpoints from reliable sources like The Economic Collapse. Their insight should be obvious to anyone with an ounce of common sense left. “The euro is falling apart, and the Swiss did not want to be married to it any longer. Unfortunately, when any marriage ends the pain can be enormous.”
Peter Schiff, who is a major precious metal dealer, is getting a boost in this latest development. The article Switzerland Surrenders the Currency War, but America Still Racing to the Bottom published in the Libertarian and Austrian Economic site, Lewrockwell.com provides an expected response.
“The Swiss are going to be able to get a better deal on all the products that they import from Europe and from other countries, so they won’t have to export as much to pay for their imports. So that’s positive for the Swiss. I would be worried about the Europeans who are now going to have to spend more money to buy Swiss products. They’re the ones that hurt, as are Americans. Swiss products are now going to be more expensive for Americans, but American products… are going to be cheaper for the Swiss. So the Swiss win because they have a stronger currency, and Europeans and Americans lose because we have a weaker currency… “
These conclusions are so basic and correct that when mainline economists preach their financial orthodoxy, the idiocy of the “Free Trade” hoax screams out for a sense of monetary sanity.
Not to spoil the cheers for the Swiss, an important component must be factored in. When the Swiss Voters Reject Initiative on Central-Bank Gold, the hard money advocates expressed great disappointment.
“Swiss voters overwhelmingly rejected an initiative on Sunday that would have forced the country’s central bank to hold one-fifth of its assets in gold, a move that would have eroded its ability to conduct monetary policy.
Critics of the initiative feared that the SNB’s commitment to the cap would have been challenged because the central bank would have been forced to buy gold every time it intervened in the currency market.”
This result seems to reinforce that the gnomes of central banking were once again in control of their gold hoards and refused to share any of its value with the holders of the Swiss Franc.
So how can one account, after rejecting the plebiscite on adopting making the Swiss Franc as a real hard money value currency that the exchange rates raise so sharply?
Fundamentals and measures that favor and protect the wealth of a national currency are not applied as standards, when central Banksters play the money float game. In order to understand why the Swiss Franc surged, one must examine the sickness within the EU and the extreme pressure on the EURO coming from desperate measures to keep the single European currency afloat.
The panic begins as the ECB Stimulation: The Trap Closes. Last week the EU Court of Justice advocate general ruled that the central bank could purchase sovereign debt.
“It referred to an existing ECB program called Outright Monetary Transactions — which isn’t quite QE but which does involve purchases of government bonds. The court won’t rule for another four to six months, but it’s likely to follow the advocate general’s guidance. That’s good enough for Draghi to act now.
Many in Europe, especially in Germany, remain opposed. They see QE as a ruse by which the richer members of the currency bloc will end up paying for the fiscal misadventures of their neighbors.”
Let the race begin and only the quickest will be left sitting tight, when the music stops playing. It seems that Steen Jakobsen writing in Endgame for central bankers agrees.
“Many central banks will envy the SNB (Swiss National Bank) for its move last week, as it at least tries to regain some control of its future, but the conclusion remains: central banks have as a group lost credibility and when the ECB starts QE this week the beginning of the end for central banks is completed. They are running out of time – that’s the real real bottom line: the SNB ran out of time, the ECB runs out of time this week, and the Fed, Bank of Japan and the Bank of England ran out of time in 2014.
What comes now is a new reality – the SNB move was true paradigm shift – we can no longer look at central banks, the markets and extend-and-pretend in the same light as we did last Wednesday (the day before the SNB pounced).”
Now for the kicker . . . When a solid financial adviser acknowledges in their financial letter, like Chris Hunter, Editor-in-Chief, Bonner & Partners – Did the Swiss Just Burst the “Central Bank Bubble”?, that the crown prince of collectivist economics condemns the Swiss; you know they were correct in ditching their peg ratio to the EURO.
“We usually don’t see eye to eye with economist Paul Krugman. But he’s hit the nail on the head about the “Swiss shock.” From his New York Times column: “The SNB’s wimp-out will make life harder for monetary policy in other countries, because it will leave markets skeptical about whether other supposed commitments to keep up unconventional policy will similarly prove time-limited.”
How evil those Swiss must be to actually defend their currency and their own wealth. As the EU implodes, the smart money will sit out the coming grand depression, provided by your friendly central banks, in the charm of the Swiss Alps.
The edifice of world post-1991 order is collapsing right now before our eyes. President Putin’s decision to give a miss to the Auschwitz pilgrimage, right after his absence in Paris at the Charlie festival, gave it the last shove. It was good clean fun to troll Russia, as long as it stayed the course. Not anymore. Russia broke the rules.
Until now, Russia, like a country bumpkin in Eton, tried to belong. It attended the gathering of the grandees where it was shunned, paid its dues to European bodies that condemned it, patiently suffered ceaseless hectoring of the great powers and irritating baiting of East European small-timers alike. But something broke down. The lad does not want to belong anymore; he picked up his stuff and went home – just when they needed him to knee in Auschwitz.
Auschwitz gathering is an annual Canossa of Western leaders where they bewail their historic failure to protect the Jews and swear their perennial obedience to them. This is a more important religious rite of our times, the One Ring to rule them all, established in 2001, when the Judeo-American empire had reached the pinnacle of its power. The Russian leader had duly attended the events. This year, they will have to do without him. Israeli ministers already have expressed their deep dissatisfaction for this was Russia’s Red Army that saved the Jews in Auschwitz, after all. Russia’s absence will turn the Holocaust memorial day into a parochial, West-only, event. Worse, Russia’s place will be taken by Ukraine, ruled by unrepentant heirs to Hitler’s Bandera.
This comes after the French ‘Charlie’ demo, also spurned by Russia. The West hinted that Russia’s sins would be forgiven, up to a point, if she joined, first the demo, and later, the planned anti-terrorist coalition, but Russia did not take the bait. This was a visible change, for previously, Russian leaders eagerly participated in joint events and voted for West-sponsored resolutions. In 2001, Putin fully supported George Bush’s War on Terrorism in the UN and on the ground. As recently as 2011, Russia agreed with sanctions against North Korea and Iran. As for coming for a demonstration, the Russians could always be relied upon. This time, the Russians did not come, except for the token presence of the foreign minister Mr. Lavrov. This indomitable successor of Mr. Nyet left the event almost immediately and went – to pray in the Russian church, in a counter-demonstration, of sorts, against Charlie. By going to the church, he declared that he is not Charlie.
For the Charlie Hebdo magazine was (and probably is) explicitly anti-Christian as well as anti-Muslim. One finds on its pages some very obnoxious cartoons offending the Virgin and Christ, as well as the pope and the Church. (They never offend Jews, somehow).
A Russian blogger who’s been exposed to this magazine for the first time, wrote on his page: I am ashamed that the bastards were dealt with by Muslims, not by Christians. This was quite a common feeling in Moscow these days. The Russians could not believe that such smut could be published and defended as a right of free speech. People planned a demo against the Charlie, but City Hall forbade it.
Remember, a few years ago, the Pussy Riot have profaned the St Saviour of Moscow like Femen did in some great European cathedrals, from Notre Dame de Paris to Strasbourg. The Russian government did not wait for vigilante justice to be meted upon the viragos, but sent them for up to two years of prison. At the same time, the Russian criminal law has been changed to include ‘sacrilege’ among ordinary crimes, by general consent. The Russians do feel about their faith more strongly than the EC rulers prescribe.
In Charlie’s France, Hollande’s regime frogmarched the unwilling people into a quite unnecessary gay marriage law, notwithstanding one-million-strong protest demonstrations by Catholics. Femen despoiling the churches were never punished; but a church warden who tried to prevent that, was heavily fined. France has a long anti-Christian tradition, usually described as “laic”, and its grand anti-Church coalition of Atheists, Huguenots and Jews coalesced in Dreyfus Affair days. Thus Lavrov’s escape to the church was a counter-demonstration, saying: Russia is for Christ, and Russia is not against Muslims.
While the present western regime is anti-Christian and anti-Muslim, it is pro-Jewish to an extent that defies a rational explanation. France had sent thousands of soldiers and policemen to defend Jewish institutions, though this defence antagonises their neighbours. While Charlie are glorified for insulting Christians and Muslims, Dieudonné has been sent to jail (just for a day, but with great fanfare) for annoying Jews. Actually, Charlie Hebdo dismissed a journalist for one sentence allegedly disrespectful for Jews. This unfairness is a source of aggravation: Muslims were laughed out of court when they complained against particularly vile Charlie’s cartoons, but Jews almost always win when they go to the court against their denigrators. (Full disclosure: I was also sued by LICRA, the French Jewish body, while my French publisher was devastated by their legal attacks).
The Russians don’t comprehend the Western infatuation with Jews, for Russian Jews have been well assimilated and integrated in general society. The narrative of Holocaust is not popular in Russia for one simple reason: so many Russians from every ethnic background lost their lives in the war, that there is no reason to single out Jews as supreme victims. Millions died at the siege of Leningrad; Belarus lost a quarter of its population. More importantly, Russians feel no guilt regarding Jews: they treated them fairly and saved them from the Nazis. For them, the Holocaust is a Western narrative, as foreign as JeSuisCharlie. With drifting of Russia out of Western consensus, there is no reason to maintain it.
This does not mean the Jews are discriminated against. The Jews of Russia are doing very well, thank you, without Holocaust worship: they occupy the highest positions in the Forbes list of Russia’s rich, with a combined capital of $122 billion, while all rich ethnic Russians own only $165 billion, according to the Jewish-owned source. Jews run the most celebrated media shows in prime time on the state TV; they publish newspapers; they have full and unlimited access to Putin and his ministers; they usually have their way when they want to get a plot of land for their communal purposes. And anti-Semitic propaganda is punishable by law – like anti-Christian or anti-Muslim abuse, but even more severely. Still, it is impossible to imagine a Russian journalist getting sack like CNN anchor Jim Clancy or BBC’s Tim Willcox for upsetting a Jew or speaking against Israel.
Russia preserves its plurality, diversity and freedom of opinion. The pro-Western Russian media –Novaya Gazeta of oligarch Lebedev, the owner of the British newspaper Independent – carries the JeSuis slogan and speaks of the Holocaust, as well as demands to restore Crimea to the Ukraine. But the vast majority of Russians do support their President, and his civilizational choice. He expressed it when he went to midnight Christmas mass in a small village church in far-away province, together with orphans and refugees from the Ukraine. And he expressed it by refusing to go to Auschwitz.
Neither willingly nor easily did Russia break ranks. Putin tried to take Western baiting in his stride: be it Olympic games, Syria confrontation, gender politics, Georgian border, even Crimea-related sanctions. The open economic warfare was a game-changer. Russia felt attacked by falling oil prices, by rouble trouble, by credit downgrading. These developments are considered an act of hostility, rather than the result of “the hidden hand of the market”.
Russians love conspiracia, as James Bond used to say. They do not believe in chance, coincidence nor natural occurrences, and are likely to consider a falling meteorite or an earthquake – a result of hostile American action, let alone a fall in the rouble/dollar exchange rate. They could be right, too, though it is hard to prove.
Regarding oil price fall, the jury is out. Some say this action by Saudis is aimed at American fracking companies, or alternatively it’s a Saudi-American plot against Russia. However, the price of oil is not formed by supply-demand, but by financial instruments, futures and derivatives. This virtual demand-and-supply is much bigger than the real one. When hedge funds stopped to buy oil futures, price downturn became unavoidable, but were the funds directed by politicians, or did they act so as Quantitative Easing ended?
The steep fall of the rouble could be connected to oil price downturn, but not necessarily so. The rouble is not involved in oil price forming. It could be an action by a very big financial institution. Soros broke the back of British pound in 1991; Korean won, Thai bath and Malaysian ringgit suffered similar fate in 1998. In each case, the attacked country lost about 40% of its GDP. It is possible that Russia was attacked by financial weapons directed from New York.
The European punitive sanctions forbade long-term cheap credit to Russian companies. The Russian state does not need loans, but Russian companies do. Combination of these factors put a squeeze on Russian pockets. The rating agencies kept downgrading Russian rating to almost junk level, for political reasons, I was told. As they were deprived of credit, state companies began to hoard dollars to pay later their debts, and they refrained from converting their huge profits to roubles, as they did until now. The rouble fell drastically, probably much lower than it had to.
This is not pinpoint sanctions aimed at Putin’s friends. This is a full-blown war. If the initiators expected Russians to be mad at Putin, they miscalculated. The Russian public is angry with the American organisers of the economical warfare, not with its own government. The pro-Western opposition tried to demonstrate against Putin, but very few people joined them.
Ordinary Russians kept a stiff upper lip. They did not notice the sanctions until the rouble staggered, and even then they shopped like mad rather than protested. In the face of shrinking money, they did not buy salt and sugar, as their grandparents would have. Their battle cry against hogging was “Do not take more than two Lexus cars per family, leave something for others!”
Perhaps, the invisible financiers went too far. Instead of being cowed, the Russians are preparing for a real long war, as they and their ancestors have historically fought – and won. It is not like they have a choice: though Americans insist Russia should join their War-on-Terrorism-II, they do not intend to relinquish sanctions.
The Russians do not know how to deal with a financial attack. Without capital restrictions, Russia will be cleaned out. Russian Central bank and Treasury people are strict monetarists, capital restrictions are anathema for them. Putin, being a liberal himself, apparently trusts them. Capital flight has taken huge proportions. Unless Russia uses the measures successfully tried by Mohammad Mahathir of Malaysia, it will continue. At present, however, we do not see sign of change.
This could be the incentive for Putin to advance in Ukraine. If the Russians do not know how to shuffle futures and derivatives, they are expert in armour movements and tank battles. Kiev regime is also spoiling for a fight, apparently pushed by the American neocons. It is possible that the US will get more than what it bargained for in the Ukraine.
One can be certain that Russians will not support the Middle Eastern crusade of NATO, as this military action was prepared at the Charlie demo in Paris. It is far from clear who killed the cartoonists, but Paris and Washington intend to use it for reigniting war in the Middle East. This time, Russia will be in opposition, and probably will use it as an opportunity to change the uncomfortable standoff in the Ukraine. Thus supporters of peace in the Middle East have a good reason to back Russia.
It is futile to make any but short-term predictions on world affairs: there are just too many variables in the equation, too many unknown-unknowns. The escalation of the Ukrainian crisis and the rise in U.S.-Russian tensions could have been forecast a year ago, in general terms at least, but the explosive rise of ISIS could not.
It is nevertheless possible and often useful to outline the contours of probable developments on the basis of existing structural vectors and recent dynamics. “Time is not heterogeneous,” Raymond Aron correctly noted half a century ago, when writing on Max Weber’s approach to historical causality. If time is homogenous, then – in theory at least – “the possibility of causal explanation is the same for the past and for the future.” In practice, we can expect two key developments to make an impact on the global scene in 2015:
- The government in Kiev and its handlers in Washington will not settle for a long-term frozen conflict in the east of the country. Armed, trained and equipped by NATO, Ukrainian forces are likely to launch a major military assault against Donetsk and Lugansk in late spring – I’d put the odds at 3:1. If the attack is successful, the regime would use it to compensate for the adverse effects at home of the ongoing economic and financial collapse, while the U.S. would show the world that Putin is not invincible. If Russia intervenes openly to prevent the two self-proclaimed republics’ collapse, Putin would finally enter the trap which he has been avoiding ever since the massacre in Odessa eight months ago. If the Novorossiyan forces defeat the attackers, thus repeating the feat of last August – obviously the least desirable scenario from Washington’s and Kiev’s point of view – there is still the fallback option of another Minsk-like ceasefire agreement, which leaves the military option open for 2016.
- Russia’s pivot to Asia will gather momentum, reflecting Moscow’s strategic decision to abandon the elusive quest for a neo-Gaullist long-term partnership with the EU. That decision was made symbolically public in Ankara last November with the abandonment of the South Stream pipeline project. China and Russia are long-term economic, political and – increasingly – military partners now. Putin’s recent visits to Modi in India and Erdogan in Turkey indicate his ongoing efforts to build a massive Eurasian bloc and his growing indifference to the Brussels connection. This means the end of the “Europe from the English Channel to Vladivostok” idea, but my notion of a Northern Alliance never had a chance with the Duopoly so firmly in charge. The implications are serious for the Beltway global hegemonists, primarily because progressive de-dollarization of financial transactions among those countries has the potential to bring the Empire down without a shot being fired. That is a long-term, rather than immediate danger, however.
Those two issues matter the most in geopolitical terms. On other fronts, in the Greater Middle East the Islamic State will not be defeated, Bashar will continue to hold on, Egypt will remain stable and peaceful under Sisi, and there will be no progress in Israel-Palestine; everything else is up in the air. The Eurozone will struggle on, just, but recent oil price collapse means deflation and continued sluggish growth in 2015. We can expect oil prices to bounce back somewhat, settling at or near $70 per barrel for a long while. Russia is and will continue to be badly hit, but this may prompt her long-overdue economic diversification. The most vulnerable exporter is Venezuela, where social and political unrest against the Maduro government – aided and abetted by the NED et al – is a distinct possibility. (Nigeria is in the same boat, but sub-Saharan Africa is irrelevant to the rest of the world.)
The only thing I am willing to predict with some certainty is that 2015 will be worse than 2014 and better than 2016.
Putin’s Next Move Is Crucial…
The plunge of the Russian currency this week is the drastic outcome of policies implemented by the major imperialist powers to force Russia to submit to American and European imperialism’s neo-colonial restructuring of Eurasia. Punishing the Putin regime’s interference with their plans for regime change in countries such as Ukraine and Syria, the NATO powers are financially strangling Russia.” Alex Lantier, Imperialism and the ruble crisis, WSWS
“The struggle for world domination has assumed titanic proportions. The phases of this struggle are played out upon the bones of the weak and backward nations.” Leon Trotsky, 1929
Russian President Vladimir Putin suffered a stunning defeat on Tuesday when a US-backed plan to push down oil prices sent the ruble into freefall. Russia’s currency plunged 10 percent on Monday followed by an 11 percent drop on Tuesday reducing the ruble’s value by more than half in less than a year. The jarring slide was assisted by western sympathizers at Russia’s Central Bank who, earlier in the day, boosted interest rates from 10.5 percent to 17 percent to slow the decline. But the higher rates only intensified the outflow of capital which put the ruble into a tailspin forcing international banks to remove pricing and liquidity from the currency leading to the suspension of trade. According to Russia Today:
“Russian Federation Council Chair Valentina Matviyenko has ordered a vote on a parliamentary investigation into the recent activities of the Central Bank and its alleged role in the worst-ever plunge of the ruble rate…
“I suggest to start a parliamentary investigation into activities of the Central Bank that has allowed violations of the citizens’ Constitutional rights, including the right for property,” the RIA Novosti quoted Tarlo as saying on Wednesday.
The senator added that according to the law, protecting financial stability in the country is the main task of the Central Bank and its senior management. However, the bank’s actions, in particular the recent raising of the key interest rate to 17 percent, have so far yielded the opposite results.” (Upper House plans probe into Central Bank role in ruble crash, RT)
The prospect that there may be collaborators and fifth columnists at Russia’s Central Bank should surprise no one. The RCB is an independent organization that serves the interests of global capital and regional oligarchs the same as central banks everywhere. This is a group that believes that humanity’s greatest achievement is the free flow of privately-owned capital to markets around the world where it can extract maximum value off the sweat of working people. Why would Russia be any different in that regard?
It isn’t. The actions of the Central Bank have cost the Russian people dearly, and yet, even now the main concern of RCB elites is their own survival and the preservation of the banking system. An article that appeared at Zero Hedge on Wednesday illustrates this point. After ruble trading was suspended, the RCB released a document with “7 new measures” all of which were aimed at protecting the banking system via moratoria on securities losses, breaks on interest rates, additional liquidity provisioning, easier credit and accounting standards, and this gem at the end:
“In order to maintain the stability of the banking sector in the face of increased interest rate and credit risks of a slowdown of the Russian economy the Bank of Russia and the Government of the Russian Federation prepare measures to recapitalize credit institutions in 2015.” (Russian Central Bank Releases 7 Measures It Will Take To Stabilize The Financial Sector, Zero Hedge)
Sound familiar? It should. You see, the Russian Central Bank works a lot like the Fed. At the first sign of trouble they build a nice, big rowboat for themselves and their dodgy bank buddies and leave everyone else to drown. That’s what these bullet points are all about. Save the banks, and to hell the people who suffer from their exploitative policies.
Here’s more from RT:
“Earlier this week a group of State Duma MPs from the Communist Party sent an official address to Putin asking him to sack (Central Bank head, Elvira) Nabiullina, and all senior managers of the Central Bank as their current policies are causing the rapid devaluation of ruble and impoverishment of the majority of the Russian population.
In their letter, the Communists also recalled Putin’s address to the Federal Assembly in which he said that control over inflation must not be in the way of the steady economic growth.
“They listen to your orders and then do the opposite,” the lawmakers complained.” (RT)
In other words, the RCB enforces its own “austerity” policy in Russia just as central bankers do everywhere. There’s nothing conspiratorial about this. CBs are owned and controlled by the big money guys which is why their policies invariably serve the interests of the rich. They might not call it “trickle down” or “structural adjustment” (as they do in the US), but it amounts to the same thing, the inexorable shifting of wealth from working class people to the parasitic plutocrats who control the system and its political agents. Same old, same old.
Even so, the media has pinned the blame for Tuesday’s ruble fiasco on Putin who, of course, has nothing to do with monetary policy. That said, the ruble rout helps to draw attention to the fact that Moscow is clearly losing its war with the US and needs to radically adjust its approach if it hopes to succeed. First of all, Putin might be a great chess player, but he’s got a lot to learn about finance. He also needs a crash-course in asymmetrical warfare if he wants to defend the country from more of Washington’s stealth attacks.
In the last 10 months, the United States has executed a near-perfect takedown of the Russian economy. Following a sloppy State Department-backed coup in Kiev, Washington has consolidated its power in the Capital, removed dissident elements in the government, deployed the CIA to oversee operations, launched a number of attacks on rebel forces in the east, transferred ownership of Ukraine’s vital pipeline system to US puppets and foreign corporations, created a tollbooth separating Moscow from the lucrative EU market, foiled a Russian plan to build an alternate pipeline to southern Europe (South Stream), built up its military assets in the Balkans and Black Sea and, finally–the cherry on the cake–initiated a daring sneak attack on Russia’s currency by employing its Saudi-proxy to flood the market with oil, push prices off a cliff, and trigger a run on the ruble which slashed its value by more than half forcing retail currency platforms to stop trading the battered ruble until prices stabilized.
Like we said, Putin might be a great chess player, but in his battle with the US, he’s getting his clock cleaned. So far, he’s been no match for the maniacal focus and relentless savagery of the Washington powerbrokers. Yes, he’s formed critical alliances across Asia and the world. He’s also created competing institutions (like the BRICS bank) that could break the imperial grip on global finance. And, he’s also expounded a vision of a new world in which “one center of power” does not dictate the rules to everyone else. That’s all great, but he’s losing the war, and that’s what counts. Washington doesn’t care about peoples’ dreams or aspirations. What they care about is ruling the world with an iron fist, which is precisely what they intend to do for the next century or so unless someone stops them. Putin’s actions, however admirable, have not yet changed that basic dynamic. In fact, this latest debacle (authored by the RCB) is a severe setback for the country and could impact Russia’s ability to defend itself against US-NATO aggression.
So what does Putin need to do to reverse the current trend?
The first order of business should be a fundamental change in approach followed by a quick switch from defense to offense. There should be no doubt by now, that Washington is going for the jugular. The attack on the ruble provides clear evidence that the US will not be satisfied until Russia has been decimated and reduced to “a permanent state of colonial dependency.” (Chomsky) The United States has launched a full-blown economic war on Russia and yet the Kremlin is still acting like Washington’s punching bag. You can’t win a war like that. You have to take the initiative; take chances, be bold, think outside the box. That’s what Washington is doing. The rout of the ruble is perhaps the most astonishingly-successful asymmetrical attack in recent memory. It involved tremendous risks and costs on the part of the perpetrators. For example, the lower oil prices have ravaged important domestic industries, created widespread financial instability, and sent markets across the planet into a nosedive. Even so, Washington persevered with its audacious strategy, undeterred by the vast collateral damage, never losing sight of its ultimate objective; to deprive Moscow of crucial oil revenues, to crash the ruble, and to open up Central Asia for imperial expansion and US military bases. (The pivot to Asia)
This is how the US plays the game, by keeping its “eyes on the prize” at all times, and by rolling roughshod over anyone or anything that gets in its way. That is why the US is the world’s only superpower, because the voracious oligarchs who run the country will stop at nothing to get what they want.
Does Putin have the grit to match that kind of venomous determination? Has he even adjusted to the fact that WW3 will be unlike any conflict in the past, that jihadi-proxies and Neo Nazi-proxies will be employed as shock troops for the empire clearing the way for US special forces and foot soldiers who will hold ground and establish the new order? Does he even realize that Barbarossa 2 is already underway, but that the Panzer divisions and 2 million German regulars have been replaced with high-powered computers, covert ops, color-coded revolutions, currency crises, capital flight, cyber attacks and relentless propaganda. That’s 4th Generation (4-G) warfare in a nutshell. And, guess what? The US attack on the ruble has shown that it is the undisputed master of this new kind of warfare. More important, Washington has just prevailed in a battle that could prove to be a critical turning point if Putin doesn’t get his act together and retaliate.
You mean nukes?
Heck no. But, by the same token, you can’t expect to win a confrontation with the US by rerouting gas pipelines to Turkey or by forming stronger coalitions with other BRICS countries or by ditching the dollar. Because none of that stuff makes a damn bit of difference when your currency is in the toilet and the US is making every effort to grind your face into the pavement.
There’s an expression is football that goes something like this: The best defense is a good offense. You can’t win by sitting on the sidelines and hoping your team doesn’t lose. You must engage your adversary at every opportunity never giving ground without a fight. And when an opening appears where you can take the advantage, you must act promptly and decisively never looking back and never checking your motives. That’s how you win.
Washington only thinks in terms winning. It expects to win, and will do whatever is necessary to win. In fact, the whole system has been re-geared for one, sole purpose; to beat the holy hell out of anyone who gets out of line. That’s what we do, and we’ve gotten pretty good at it. So, if you want to compete at that level, you’ve got to have “game”. You’re going to have to step up and prove that you can run with the big kids.
And that’s what makes Putin’s next move so important, crucial really. Because whatever he does will send a message to Washington that he’s either up to the challenge or he’s not. Which is why he needs to come out swinging and do something completely unexpected. The element of surprise, that’s the ticket. And we’re not talking about military action either. That just plays to Uncle Sam’s strong hand. Putin doesn’t need another Vietnam. He needs a coherent gameplan. He needs a winning strategy. He needs to takes risks, put it all on the line and roll the freaking dice. You can’t lock horns with the US and play it safe. That’s a losing strategy. This is smash-mouth, steelcage smackdown, a scorched-earth event where winner takes all. You have to be ready to rumble.
Putin needs to think asymmetrically. What would Obama do if he was in Putin’s shoes?
You know what he’d do: He’d send military support to Assad. He’d arm rebel factions in Saudi Arabia, Somalia, Nigeria and elsewhere. He’d strengthen ties with Venezuela, Bolivia, Ecuador providing them with military, intelligence and logistical support. He’d deploy his NGOs and Think Tank cronies to foment revolution wherever leaders refused to follow Moscow’s directives. He would work tirelessly to build the economic, political, media, and military institutions he needed to impose his own self-serving version of snatch-and-grab capitalism on every nation on every continent in the world. That’s what Obama would do, because that’s what his puppetmasters would demand of him.
But Putin must be more discreet, because his resources are more limited. But he still has options, like the markets, for example. Let’s say Putin announces that creditors in the EU (particularly banks) won’t be paid until the ruble recovers. How does that sound?
Putin: “We’re really sorry about the inconvenience, but we won’t be able to make those onerous principle payments for a while. Please accept our humble apologies.” End of statement.
Moments later: Global stocks plunge 350 points on the prospect of a Russian default and its impact on the woefully-undercapitalized EU banking system.
Get the picture? That’s what you call an asymmetrical attack. The idea was even hinted at in a piece on Bloomberg News. Here’s an excerpt from the article:
“Sergei Markov, a pro-Putin academic, wrote in a column on Vzglyad.ru. “Since the reasons for the ruble’s fall are political, the response should be political, too. For example, a law that would ban Russian companies from repaying debts to Western counterparties if the ruble has dropped more than 50 percent in the last year. That will immediately lower the pressure on the ruble, many countries have done this, Malaysia is one example. It’s in great economic shape now.” (Is Russia ready to impose capital controls? Chicago Tribune)
Here’s more background from RT:
“Major banks across Europe, as well as the UK, US, and Japan, are at major risk should the Russian economy default, according to a new study by Capital Economics. The ING Group in the Netherlands, Raiffeisen Bank in Austria, Societe General in France, UniCredit in Italy, and Commerzbank in Germany, have all faced significant losses in the wake of the ruble crisis…
Overall Societe General, known as Rosbank in the Russian market, has the most exposure at US$31 billion, or €25 billion, according to Citigroup Inc. analysts. This is equivalent to 62 percent of the Paris-based bank’s tangible equity, Bloomberg News reported.
Following the drop, Raiffeisen, which has €15 billion at risk in Russia, saw its stocks plummeted more than 10 percent. Raiffeisen also has significant exposure in Ukraine, which is facing a similar currency sell-off as Russia.” (Russia crisis leaves banks around the world exposed by the billions, RT)
So Putin defaults which nudges the EU banking system down the stairwell. So what? What does that prove?
It proves that Russia has the tools to defend itself. It proves that Putin can disrupt the status quo and spread the pain a bit more equitably. “Spreading the pain” is a tool the US uses quite frequently in its dealings with other countries. Maybe Putin should take a bite of that same apple, eh?
Another option would be to implement capital controls to avoid ruble-dollar conversion and further capital flight. The beauty of capital controls is that they take power away from the big money guys who run the world and hand it back to elected officials. Leaders like Putin are then in a position to say, “Hey, we’re going to take a little break from the dollar system for while until we get caught up. I hope you’ll understand our situation.”
Capital controls are an extremely effective of avoiding capital flight and minimizing the impact of a currency crisis. Here’s a short summary of how these measures helped Malaysia muddle through in 1998:
“When the Asian financial crisis hit, Malaysia’s position looked a lot like Russia’s today: It had big foreign reserves and a low short-term debt level, but relatively high general indebtedness if households and corporations were factored in. At first, to bolster the ringgit, Deputy Prime Minister Anwar Ibrahim pushed through a market-based policy with a flexible exchange rate, rising interest rates and cuts in government spending. It didn’t work: Consumption and investment went down, and pessimism prevailed, exerting downward pressure on the exchange rate.
So, in June 1998, Prime Minister Mahathir Mohammad… appointed a different economic point man, Daim Zainuddin. In September, on Daim’s urging, Malaysia introduced capital controls. It banned offshore operations in ringgit and forbade foreign investors to repatriate profits for a year. Analysts at the time were sharply critical of the measures, and Malaysia’s reputation in the global financial markets inevitably suffered.
According to Kaplan and Rodrik, however, the capital controls were ultimately effective. The government was able to lower interest rates, the economy recovered, the controls were relaxed ahead of time, and by May 1999 Malaysia was back on the international capital markets with a $1 billion bond issue.” (Is Russia ready to impose capital controls, Chicago Tribune)
Sure they were effective, but they piss off the slacker class of oligarchs who think the whole system should be centered on their “inalienable right” to move capital from one spot to another so they can rake-off hefty profits at everyone else’s expense. Capital controls push those creeps to the back of the line so the state can do what it needs to do to preserve the failing economy from the attack of speculators. Here’s a clip from a speech Joseph Stiglitz gave in 2014 at the Atlanta Fed’s 2014 Financial Markets Conference. He said:
“When countries do not impose capital controls and allow exchange rates to vary freely, this can give rise to high levels of exchange rate volatility. The consequence can be high levels of economic volatility, imposing great costs on workers and firms throughout the economy. Even if they can lay off some of the risk, there is a cost to doing so. The very existence of this volatility affects the structure of the economy and overall economic performance.”
That sums it up pretty well. Without capital controls, the deep-pocket Wall Street banks and speculators can simply vacuum the money out of an economy leaving the country broken and penniless. This nihilistic decimation of emerging markets via capital flight is what the kleptocracy breezily refers to as “free markets”, the unwavering plundering of civilization to fatten the coffers of the swinish few at the top of the foodchain. That’s got to stop.
Putin needs to put his foot down now; stop the outflow of cash, stop the conversion of rubles to dollars, force investors to recycle their money into the domestic economy, indict the central bank governors and trundle them off to the hoosegow, and reassert the power of the people over the markets. If he doesn’t, then the speculators will continue to peck away until Russia’s reserves are drained-dry and the country is pushed back into another long-term slump. Who wants that?
And don’t think that Putin’s only problem is Washington either, because it isn’t. He’s got an even bigger headache in his own country with the morons who still buy the hogwash that “the market knows best.” These are the fantasists, the corporate toadies, and the fifth columnists, some of whom hold very high office. Here’s a clip I picked up at the Vineyard of the Saker under the heading “Medvedev declares: more of the same”:
(Russian Prime Minister) “Medvedev has just called a government meeting with most of the directors of top Russian corporations and the director of the Russian Central Bank. He immediately announced that he will not introduce any harsh regulatory measures and that he will let the market forces correct the situation. As for the former Minister of Finance, the one so much beloved in the West, Alexei Kudrin, he expressed his full support for the latest increase in interest rates.”
This is lunacy. The US has just turned Russia’s currency into worthless fishwrap, and bonehead Medvedev wants to play nice and return to “business as usual”??
No thanks. Maybe Medvedev wants to be a slave to the market, but I’ll bet Putin is smarter than that.
Putin’s not going to roll over and play dead for these vipers. He’s got to much on the ball for that. He’s going to beat them at their own game, fair and square. He’s going to implement capital controls, restructure the economy away from the west, and aggressively look for ways to deter Washington from spreading its heinous resource war to Central Asia and beyond.
He’s not going to give an inch. You’ll see.
Shale Leads The Way…
Crude oil prices dipped lower on Wednesday pushing down yields on US Treasuries and sending stocks down sharply. The 30-year UST slipped to a Depression era 2.83 percent while all three major US indices plunged into the red. The Dow Jones Industrial Average (DJIA) led the retreat losing a hefty 268 points before the session ended. The proximate cause of Wednesday’s bloodbath was news that OPEC had reduced its estimate of how much oil it would need to produce in 2015 to meet weakening global demand. According to USA Today:
“OPEC lowered its projection for 2015 production to 28.9 million barrels a day, or about 300,000 fewer than previously forecast, and a 12-year low…. That’s about 1.15 million barrels a day less than the cartel pumped last month, when OPEC left unchanged its 30 million barrel daily production quota…
The steep decline in crude price raises fears that small exploration and production companies could go out of business if the prices fall too low. And that, in turn, could cause turmoil among those who are lending to them: Junk-bond purchasers and smaller banks.” (USA Today)
Lower oil prices do not necessarily boost consumption or strengthen growth. Quite the contrary. Weaker demand is a sign that deflationary pressures are building and stagnation is becoming more entrenched. Also, the 42 percent price-drop in benchmark U.S. crude since its peak in June, is pushing highly-leveraged energy companies closer to the brink. If these companies cannot roll over their debts, (due to the lower prices) then many will default which will negatively impact the broader market. Here’s a brief summary from analyst Wolf Richter:
“The price of oil has plunged …and junk bonds in the US energy sector are getting hammered, after a phenomenal boom that peaked this year. Energy companies sold $50 billion in junk bonds through October, 14% of all junk bonds issued! But junk-rated energy companies trying to raise new money to service old debt or to fund costly fracking or off-shore drilling operations are suddenly hitting resistance.
And the erstwhile booming leveraged loans, the ugly sisters of junk bonds, are causing the Fed to have conniptions. Even Fed Chair Yellen singled them out because they involve banks and represent risks to the financial system. Regulators are investigating them and are trying to curtail them through “macroprudential” means, such as cracking down on banks, rather than through monetary means, such as raising rates. And what the Fed has been worrying about is already happening in the energy sector: leveraged loans are getting mauled. And it’s just the beginning…
“If oil can stabilize, the scope for contagion is limited,” Edward Marrinan, macro credit strategist at RBS Securities, told Bloomberg. “But if we see a further fall in prices, there will have to be a reaction in the broader market as problems will spill out and more segments of the high-yield space will feel the pain.”…Unless a miracle happens that will goose the price of oil pronto, there will be defaults, and they will reverberate beyond the oil patch.” (Oil and Gas Bloodbath Spreads to Junk Bonds, Leveraged Loans. Defaults Next, Wolf Ricter, Wolf Street)
The Fed’s low rates and QE pushed down yields on corporate debt as investors gorged on junk thinking the Fed “had their back”. That made it easier for fly-by-night energy companies to borrow tons of money at historic low rates even though their business model might have been pretty shaky. Now that oil is cratering, investors are getting skittish which has pushed up rates making it harder for companies to refinance their debtload. That means a number of these companies going to go bust, which will create losses for the investors and pension funds that bought their debt in the form of financially-engineered products. The question is, is there enough of this financially-engineered gunk piled up on bank balance sheets to start the dominoes tumbling through the system like they did in 2008?
That question was partially answered on Wednesday following OPEC’s dismal forecast which roiled stocks and send yields on risk-free US Treasuries into a nosedive. Investors ditched their stocks in a mad dash for the exits thinking that the worst is yet to come. USTs provide a haven for nervous investors looking for a safe place to hunker down while the storm passes.
Economist Jack Rasmus has an excellent piece at Counterpunch which explains why investors are so jittery. Here’s a clip from his article titled “The Economic Consequences of Global Oil Deflation”:
“Oil deflation may lead to widespread bankruptcies and defaults for various non-financial companies, which will in turn precipitate financial instability events in banks tied to those companies. The collapse of financial assets associated with oil could also have a further ‘chain effect’ on other forms of financial assets, thus spreading the financial instability to other credit markets.” (The Economic Consequences of Global Oil Deflation, Jack Rasmus, CounterPunch)
Falling oil prices typically drag other commodities prices down with them. This, in turn, hurts emerging markets that depend heavily on the sale of raw materials. Already these fragile economies are showing signs of stress from rising inflation and capital flight. In a country like Japan, however, one might think the effect would be positive since the lower yen has made imported oil more expensive. But that’s not the case. Falling oil prices increase deflationary pressures forcing the Bank of Japan to implement more extreme measures to reverse the trend and try to stimulate growth. What new and destabilizing policy will Japan’s Central Bank employ in its effort to dig its way out of recession? And the same question can be asked of Europe too, which has already endured three bouts of recession in the last five years. Here’s Rasmus again on oil deflation and global financial instability:
“Oil is not only a physical commodity bought, sold and traded on global markets; it has also become an important financial asset since the USA and the world began liberalized trading of oil commodity futures…
Just as declines in oil spills over to declines of other physical commodities…price deflation can also ‘spill over’ to other financial assets, causing their decline as well, in a ‘chain like’ effect.
That chain like effect is not dissimilar to what happened with the housing crash in 2006-08. At that time the deep contraction in the global housing sector ( a physical asset) not only ‘spilled over’ to other sectors of the real economy, but to mortgage bonds…and derivatives based upon those bonds, also crashed. The effect was to ‘spill over’ to other forms of financial assets that set off a chain reaction of financial asset deflation.
The same ‘financial asset chain effect’ could arise if oil prices continued to decline below USD$60 a barrel. That would represent a nearly 50 percent deflation in oil prices that could potentially set in motion a more generalized global financial instability event, possibly associated with a collapse of the corporate junk bond market in the USA that has fueled much of USA shale production.” (CounterPunch)
This is precisely the scenario we think will unfold in the months ahead. What Rasmus is talking about is “contagion”, the lethal spill-over from one asset class to another due to deteriorating conditions in the financial markets and too much leverage. When debts can no longer be serviced, defaults follow sucking liquidity from the system which leads to a sudden (and excruciating) repricing event. Rasmus believes that a sharp cutback in Shale gas and oil production could ignite a crash in junk bonds that will pave the way for more bank closures. Here’s what he says:
“The shake out in Shale that is coming will not occur smoothly. It will mean widespread business defaults in the sector. And since much of the drilling has been financed with risky high yield corporate ‘junk’ bonds, the shale shake out could translate into a financial crash of the US corporate junk bond market, which is now very over-extended, leading to regional bank busts in turn.” (CP)
The financial markets are a big bubble just waiting to burst. If Shale doesn’t do the trick, then something else will. It’s just a matter of time.
Rasmus also believes that the current oil-glut is politically motivated. Washington’s powerbrokers persuaded the Saudis to flood the market with petroleum to push down prices and crush oil-dependent Moscow. The US wants a weak and divided Russia that will comply with US plans to increase its military bases in Central Asia and allow NATO to be deployed to its western borders. Here’s Rasmus again:
“Saudi Arabia and its neocon friends in the USA are targeting both Iran and Russia with their new policy of driving down the price of oil. The impact of oil deflation is already severely affecting the Russian and Iranian economies. In other words, this policy of promoting global oil price deflation finds favor with significant political interests in the USA, who want to generate a deeper disruption of Russian and Iranian economies for reasons of global political objectives. It will not be the first time that oil is used as a global political weapon, nor the last.” (CP)
Washington’s strategy is seriously risky. There’s a good chance the plan could backfire and send stocks into freefall wiping out trillions in a flash. Then all the Fed’s work would amount to nothing.
Karma’s a bitch.