Category Archives: Energy

Sit back and watch Europe commit suicide

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

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

By Pepe Escobar

Source: The Cradle

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

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

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

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

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

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

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

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

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

Rublegas or American LNG?

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

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

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

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

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

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

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

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

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

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

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

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

Hypersonic geoeconomics

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

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

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

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

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

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

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

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

World War III Has Already Started, And It’s An Economic War

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By Brandon Smith

Source: Alt-Market.us

In an article I published in April of 2018, titled World War III Will Be An Economic War, I outlined a number of factors that portend a large scale conflict between East and West and why this war would be mainly economic in nature. I investigated how this conflict would actually benefit globalists and globalist institutions seeking to bring down multiple nations’ economies while hiding the engineered crisis behind a wall of geopolitical chaos and noise.

The goal? To convince the masses that national sovereignty is a plague that only leads to widespread death, and that the “solution” is a one-world system – conveniently managed by the globalists, of course. That is to say, more centralization is always offered as the solution to every problem.

Furthermore, the war itself acts as cover for the inflationary collapse that our central bank and government has created. We are already seeing fraud propagandists like White House Press Secretary Jen Psaki attempting to mislead the public into believing all our current inflation problems stem from the Ukraine war. This claim requires some impressive mental gymnastics and an epic level of ignorance, but Psaki seems to have no shame about her role as a soulless Goebbels-like figure.

One issue which I used to get a lot of arguments over was the idea that countries like Russia and China would end up so closely aligned. People claimed there were too many disparities and that the countries would ultimately turn on each other in the middle of a financial crisis.

Well, it’s four years later and now we’re going to see if that is true or not. So far, it looks like I was correct.

My position has long been that certain nations have been preparing for a collapse of the U.S. dollar as the world reserve currency (the primary currency used in the majority of trade around the world). My belief is that America’s top economic position is actually an incredible weakness; the dollar’s hegemony is not a strength, but an Achilles heel. If the dollar was to lose reserve status, the whole of the U.S. economy and parts of the global economy would implode, leaving behind only those who prepared – those who saw the writing on the wall and planned ahead.

The Dollar Crash Coalition

There are four nations that have been actively positioning for the crash of the dollar and they include: China, Russia, India, Brazil (five if you count the limited involvement of part South Africa). These countries are also known as the BRICS. The BRICS are rarely mentioned in the mainstream media anymore, but there was a time around a decade ago when they were discussed regularly.

My fascination with the BRICS back then was primarily due to their odd trade behaviors. Specifically, their bilateral agreements which cut out the dollar as the reserve currency, and the fact that they were stockpiling tons upon tons of gold.

It was as if they had some kind of inside information that an economic conflict or disaster was coming, and they were getting ready to decouple from the dollar and the global supply chain.

Today, as the Ukraine war rages, there is constant hype about the union of nations opposed to Russia’s invasion to the point that the narrative has become bizarre. There is an incredible level of cultism in the mainstream media right now encouraging a mindless mob response. They have been trying to drum up something very similar to a behavioral vortex that many of us in conservative circles have seen thousands of times in the past few years: Western media is weaponizing cancel culture against Russia.

It’s not just a general admonition of the Kremlin or of Putin, that would be normal. Rather, it’s an outright dismissal of anything remotely related to Russia, from bar owning dummies throwing away all their vodka (even though most of it is not made in Russia), to the International Cat Federation banning certain cats from competitions because they are Russian bred.

This is pure childish insanity, but again, we’ve seen this before with cancel culture in the US.

The thinking is utterly collectivist and goes a little something like this:

“We shall shun them from the hive and isolate them. We will erase their existence and rewrite their identity and history. Then we will punish them by taking away their ability to survive economically until they submit and conform to the directives of the gatekeepers, who shall remain nameless.”

That said, as most conservatives know, cancel culture is a failed strategy. Despite the international push to cancel Russia and media claims that Russia is now “completely isolated and alone,” the narrative is apparently designed more to con the masses, not intimidate the Kremlin. They are, in fact, not isolated at all. And, guess which countries are staunchly refusing to support actions and sanctions against the Ukraine invasion?

That’s right, the other members of the BRICS.

China has outright refused to accommodate any sanctions and is directly working with Russia to alleviate trade issues. As I’ve been pointing out for ten years, they’ve been preparing for this moment. Hell, if the rest of the world doesn’t want Russian exports and oil, China will certainly buy them.

India is eerily silent on Ukraine, despite endless pressure from the U.S.

Both Brazil and South Africa have taken neutral stances on Ukraine and continue to trade with Russia. It would appear that the cancellation of Russia has already failed before it really began.

The narrative only serves a purpose in that it gives the western public two false impressions:

  1. It makes the people think that cancel culture on an international scale is working and that Russia will soon fold when the opposite is true.
  2. It tricks people into thinking that all the risk is on the Russian side when, in reality, most of the risk is on the western side. This will make the inevitable economic disaster all the more frightening when it occurs.

Personally, I don’t have any affinity for either side of the Ukraine conflict. I feel empathy for the Ukrainian people, but certainly not the Ukrainian government and their globalist partners. I also have no love for Putin and his many friends in the globalist World Economic Forum.

That said, even if you think one side is right and the other side is wrong, one cannot deny that the cancel culture mentality of the west is going to lead to an epic disaster. What people don’t seem to understand is that this calamity will hurt the U.S. and Europe just as much as it hurts Russia, if not more so.

The Economic Weaponry Of Fortress Asia

The close economic relationship between Russia and China is fast building towards a “Fortress Asia” which guarantees a certain amount of insulation from global instability.

Russia exports a surprising number of raw materials that many countries rely on, from fertilizers to industrial metals like nickel and aluminum. But, their biggest export by far is energy in the form of oil and natural gas. Europe in particular is utterly dependent on Russia for between 40% to 50% of its heating and electricity. Cuts to Russian energy exports would devastate Europe in a year’s time and it’s unlikely other exporters would be able to fill the void in the near term, at least not without huge price increases.

According to the IEA, Russia is the third largest oil producer in the world behind Saudi Arabia and the U.S. and it is the largest exporter to global markets. Sanctions on Russian oil would mean a massive shift in supply and multiple markets rushing to fill the gap.

Just the threat of cuts to Russian oil  caused large overnight price spikes in gasoline in the U.S. and Europe. Brent crude prices skyrocketed from $90 a barrel to $130 a barrel in a matter of a couple weeks.

I don’t think it will stop there, either. I expect crude prices to climb into the $200 per barrel range and gas prices to jump to around $7 a gallon before increased U.S. shale pumping helps balance out the supply (and this is a best case scenario). Some of the price will be due to speculation, but ultimately without Russian oil prices will remain high even if the war in Ukraine ends.

And here is where we get to a key aspect of this scenario which I don’t think many people are taking into account. It does not matter if Russia pulls out of Ukraine, and it certainly doesn’t matter if Ukraine surrenders. The economic side of the war will continue, and it will only escalate.

Retaliation In Economic Warfare

Beyond oil and energy the combined influence of the BRICS has the power to dramatically disrupt the U.S. dollar’s world reserve status. China alone holds trillions in dollars and U.S. treasuries which it can dump on the market anytime it pleases. China is the world’s largest exporter and most nations including the U.S. rely on Chinese manufacturing. This is why China’s draconian Covid shutdowns have caused a constant strain on the global supply chain. Around 20% of imports to the US come from China, including over 97% of our antibiotics.

The BRICS in combination control a vast swath of the export and manufacturing markets. They don’t even need to dump the dollar in trade, all they have to do is say they prefer a basket of currencies like the International Monetary Fund (IMF)’s Special Drawing Rights. The dollar’s value would collapse, and that would be in the midst of already rising inflation.

Another interesting development from the economic war is the increasing calls for crypto and digital currency solutions. I would note that it’s not just the BRICS who are refusing to go against Russia; there is also the matter of globalist institutions like the IMF and the Bank for International Settlements (BIS). Not surprisingly, Russia’s membership in these world banking platforms remains secure. Russia continues to hold billions in IMF SDRs. Both institutions have been calling for the implementation of a global digital currency system (which obviously they would control).

If the world economic war continues at its current trajectory, it is only a matter of time before trade sanctions turn into currency attacks. This is where the U.S. will be hurt the most.

It is perhaps not so coincidental that the globalists have staged themselves to benefit. With no world reserve currency established and an inflationary crisis raging, they will attempt to swoop in to “save the day” and assert that they have the perfect solution: A global digital currency system based on blockchain technology but tied to the IMF’s SDR basket system and administered by them.

In other words, with all the inflation present in national currencies, the IMF will offer the public a digital currency or cryptocurrency that promises them more stability. The inflationary crisis in confidence will be used to push people into a digital system which has no privacy and can be used to control them by denying them access on a whim, much like how the Chinese social credit system operates.

Ukraine is only the first domino in a long chain that is meant to lead to a one-world economic system centralized into the hands of the money elites.

There are ways to disrupt it, and the plan may not succeed at all, but there’s no avoiding the economic pain that will be caused in the meantime. All that we can do is accept that World War III is upon us and the weapons will be economic rather than nuclear.

Status of Perpetual War on Humanity by the Empire of Lies

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By Stephen Lendman

Source: StephenLendman.org

US history includes forever war on humanity in pursuit of its hegemonic aims.

The same goes for its decadent Western allies.

Russia and most other countries prioritize peace, stability, cooperative relations with other countries and compliance with the rule of law — notions the empire of lies and its subservient satellites abhor and don’t tolerate.

Commenting on Russia’s denunciation of the decadent Council of Europe (CoE), Russia’s Foreign Ministry spokeswoman Maria Zakharova said the following on Thursday:

Hostile to Russia CoE regimes are destroying “humanitarian and legal space in Europe.”

Things are fast “approaching a point of no return.”

“Russia will not accept subversive actions taken by the West to replace international law.”

Hegemon USA and “its satellites are trampling (it) underfoot, with a ‘rules-based order’ on the rule of law.

Russia wants no part of it and is walking away to higher ground.

Separately, Zakharova slammed the US for longstanding “persecution and discrimination of Russian compatriots in the US, including in everyday life, on ethnic, cultural, linguistic (or other) grounds.”

Its war on Russia by other means includes false charges against Russian nationals in the US and abroad, bullying other countries to extradite targeted individuals to the US.

Once on its territory, longterm imprisonment without due process follows, including torture and other human rights abuses.

Despotic regimes across the board operate this way.

Hegemon USA ranks with the worst of the worst.

Separately, Sergey Lavrov slammed the BoJo regime’s imitation foreign secretary Truss, an embarrassment to the position she holds, saying:

She lied accusing Russia of intending to attack Baltic countries and Moldova.

“It’s not us that are talking about it.”

It’s “Liz Truss, (an infamous figure known) for her aphorisms.”

Her Russophobia is “quite exemplary of (decadent) English culture, politics and diplomacy.”

“That’s because the British wrote the fake testament of Peter the Great in exactly the same way.” 

“This basically goes along the same lines.”

On possible talks between Vladimir Putin and US-installed puppet Zelensky, Lavrov said Russia rejects talks for the sake of holding them alone.

Its leadership and officials across the board “seek to formalize agreements” that advance positive interests, notably by resolving issues.

Talks between preeminent world leader Putin and US-controlled Zelensky would be farcical and unproductive at best, an embarrassment to Russia at worst by dealing with a powerless figure controlled by his master in Washington.

Separately on Thursday, Russian Defense Ministry’s spokesman General Konashenkov updated the results of Russia special military operation so far, saying:

“Strikes against Ukrainian military infrastructure are continuing.” 

“Since the launch of the operation, Russian forces have incapacitated 2,911 military facilities in Ukraine.”

Its campaign destroyed 98 planes, 110 unmanned aerial vehicles, 144 anti-aircraft missile defense systems, 86 radar stations, 1,007 tanks and other armored combat vehicles, 109 multiple rocket launchers, 374 field artillery and mortars, and 793 special military vehicles.”

It’s just a matter of time before Ukraine’s war machine is a spent force.

As more US/Western weapons pour into Ukraine, they’ll be destroyed.

Perhaps a good many weapons will end up outside the country in hostile hands, posing a major threat to other countries.

Nations that “pump up Ukraine with weapons must also understand that they are responsible for their actions,” said Lavrov. 

“(C)ountries in favor of sending mercenaries to Ukraine to fight in the spirit of traditions, which ultra-radicals and other military battalions installed in a daily-life of Ukrainians,” may end up dealing with them on their own territory.

In similar fashion to hostile US/Western actions against Russia, Zelensky signed a decree to confiscate Russian property in Ukraine.

A Final Comment

Lavrov stressed the following about Russia’s special military operation:

It was launched because the “situation (in Ukraine) poses threats to 

Russia’s security” by waging forever war on Donbass on its border.

“Despite our years-long warnings, reminders, calls and proposals, no one listened to us.”

Vladimir Putin spoke “on this topic more than once and in meticulous detail.”

“And new facts that are now being exposed on liberated territories, in particular in the Donetsk and Lugansk regions, indicate that (a large-scale cross-border) attack on these republics was plotted.” 

“It was planned thoroughly and was scheduled for this month.”

Russia has no plans to occupy Ukrainian territory.

Its aims are to demilitarize and deNazify the country, wanting it returned to independent status free from foreign control, to prevent it from developing dirty or conventional nukes, — to restore peace and stability to central Europe.

Separately on Thursday, Russia’s Finance Minister Anton Siluanov slammed the US-dominated West for “default(ing) on its financial obligations to Russia, (for) fr(eezing) our gold and foreign exchange reserves, (for waging full-scale) financial and economic war,” adding:

US/Western regimes “are trying to create a shortage of everyday imported goods in our country.”

“They are forcing the closure of successfully operating enterprises with foreign capital.”

Do its ruling regimes have humanity-destroying nuclear war in mind?

In response to what’s going on, Siluanov said stabilization of Russia’s financial system is a top priority.

A number of steps are being taken, including to prevent capital from leaving the country and establishment of “special procedures for servicing external debt.”

Some actions have already been taken.

“(T)he outflow of funds is stabilizing.”

“Cash withdrawals have practically stopped.”

Russia’s balance of payments “is improving.”

Public sector conditions are under control.

Salaries, benefits and pensions are being paid.

“Non-oil and gas revenues are expected to decline.”

“This is offset by an increase in oil and gas revenues.” 

They’ll be used “to reduce borrowing and public debt in the current environment, and finance priority spending.”

At this time, about 310 foreign companies, suspended, terminated or are limiting their operations in Russia.

Vladimir Putin expressed support for nationalizing assets they left behind to protect employment of their staff under new management.

Separately on phony Western and Kiev accusation of bombing a Mariupol hospital by Russian forces, its Defense Ministry spokesman General Konashenkov said the following:

Russian aircraft performed “absolutely no tasks” in the Mariupol area.

“Analysis of statements made by…the Kiev nationalist regime, photographic materials from the hospital leaves no doubt.” 

“The (fabricated) ‘airstrike’ (claim) is a completely orchestrated provocation to maintain anti-Russian hype for the Western audience.”

“A high-explosive aviation munition simply would not have left anything from the outer walls of the building.”

The facility’s “staff and patients were dispersed by the nationalists.”

“Due to the favorable tactical location close to the city center, the hospital building was converted into a stronghold of the Azov nationalist battalion.”

Its Nazified forces attacked Russian medical personnel and vehicles — “deliberately ambushing” them.

The American Empire self-destructs.

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By Michael Hudson

Source: Michael-Hudson.com

But nobody thought that it would happen this fast.

Empires often follow the course of a Greek tragedy, bringing about precisely the fate that they sought to avoid. That certainly is the case with the American Empire as it dismantles itself in not-so-slow motion.

The basic assumption of economic and diplomatic forecasting is that every country will act in its own self-interest. Such reasoning is of no help in today’s world. Observers across the political spectrum are using phrases like “shooting themselves in their own foot” to describe U.S. diplomatic confrontation with Russia and allies alike.

For more than a generation the most prominent U.S. diplomats have warned about what they thought would represent the ultimate external threat: an alliance of Russia and China dominating Eurasia. America’s economic sanctions and military confrontation has driven them together, and is driving other countries into their emerging Eurasian orbit.

American economic and financial power was expected to avert this fate. During the half-century since the United States went off gold in 1971, the world’s central banks have operated on the Dollar Standard, holding their international monetary reserves in the form of U.S. Treasury securities, U.S. bank deposits and U.S. stocks and bonds. The resulting Treasury-bill Standard has enabled America to finance its foreign military spending and investment takeover of other countries simply by creating dollar IOUs. U.S. balance-of-payments deficits end up in the central banks of payments-surplus countries as their reserves, while Global South debtors need dollars to pay their bondholders and conduct their foreign trade.

This monetary privilege – dollar seignorage – has enabled U.S. diplomacy to impose neoliberal policies on the rest of the world, without having to use much military force of its own except to grab Near Eastern oil.

The recent escalation U.S. sanctions blocking Europe, Asia and other countries from trade and investment with Russia, Iran and China has imposed enormous opportunity costs – the cost of lost opportunities – on U.S. allies. And the recent confiscation of the gold and foreign reserves of Venezuela, Afghanistan and now Russia, along the targeted grabbing of bank accounts of wealthy foreigners (hoping to win their hearts and minds, along with recovery of their sequestered accounts), has ended the idea that dollar holdings or those in its sterling and euro NATO satellites are a safe investment haven when world economic conditions become shaky.

So I am somewhat chagrined as I watch the speed at which this U.S.-centered financialized system has de-dollarized over the span of just a year or two. The basic theme of my Super Imperialism has been how, for the past fifty years, the U.S. Treasury-bill standard has channeled foreign savings to U.S. financial markets and banks, giving Dollar Diplomacy a free ride. I thought that de-dollarization would be led by China and Russia moving to take control of their economies to avoid the kind of financial polarization that is imposing austerity on the United States. But U.S. officials are forcing them to overcome whatever hesitancy they had to de-dollarize.

I had expected that the end of the dollarized imperial economy would come about by other countries breaking away. But that is not what has happened. U.S. diplomats have chosen to end international dollarization themselves, while helping Russia build up its own means of self-reliant agricultural and industrial production. This global fracture process actually has been going on for some years now, starting with the sanctions blocking America’s NATO allies and other economic satellites from trading with Russia.For Russia, these sanctions had the same effect that protective tariffs would have had.

Russia had remained too enthralled by free-market ideology to take steps to protect its own agriculture or industry. The United States provided the help that was needed by imposing domestic self-reliance on Russia (via sanctions). When the Baltic states lost the Russian market for cheese and other farm products, Russia quickly created its own cheese and dairy sector – while becoming the world’s leading grain exporter.

Russia is discovering (or is on the verge of discovering) that it does not need U.S. dollars as backing for the ruble’s exchange rate. Its central bank can create the rubles needed to pay domestic wages and finance capital formation. The U.S. confiscations thus may finally lead Russia to end neoliberal monetary philosophy, as Sergei Glaziev has long been advocating in favor of MMT.

The same dynamic undercutting ostensible U.S aims has occurred with U.S. sanctions against the leading Russian billionaires. The neoliberal shock therapy and privatizations of the 1990s left Russian kleptocrats with only one way to cash out on the assets they had grabbed from the public domain. That was to incorporate their takings and sell their shares in London and New York. Domestic savings had been wiped out, and U.S. advisors persuaded Russia’s central bank not to create its own ruble money.

The result was that Russia’s national oil, gas and mineral patrimony was not used to finance a rationalization of Russian industry and housing. Instead of the revenue from privatization being invested to create new Russian means of protection, it was burned up on nouveau-riche acquisitions of luxury British real estate, yachts and other global flight-capital assets. But the effect of making the Russian dollar, sterling and euro holdings hostage has been to make the City of London too risky a venue in which to hold their assets. By imposing sanctions on the richest Russians closest to Putin, U.S. officials hoped to induce them to oppose his breakaway from the West, and thus to serve effectively as NATO agents-of-influence. But for Russian billionaires, their own country is starting to look safest.

For many decades now, the Federal Reserve and Treasury have fought against gold recovering its role in international reserves. But how will India and Saudi Arabia view their dollar holdings as Biden and Blinken try to strong-arm them into following the U.S. “rules-based order” instead of their own national self-interest? The recent U.S. dictates have left little alternative but to start protecting their own political autonomy by converting dollar and euro holdings into gold as an asset free of political liability of being held hostage to the increasingly costly and disruptive U.S. demands.

U.S. diplomacy has rubbed Europe’s nose in its abject subservience by telling its governments to have their companies dump the Russian assets for pennies on the dollar after Russia’s foreign reserves were blocked and the ruble’s exchange rate plunged. Blackstone, Goldman Sachs and other U.S. investors moved quickly to buy up what Shell Oil and other foreign companies were unloading.

Nobody thought that the postwar 1945-2020 world order would give way this fast. A truly new international economic order is emerging, although it is not yet clear just what form it will take. But “prodding the Bear” with the U.S./NATO confrontation with Russia has passed critical-mass level. It no longer is just about Ukraine. That is merely the trigger, a catalyst for driving much of the world away from the US/NATO orbit.

The next showdown may come within Europe itself. Nationalist politicians could seek to lead a break-away from the over-reaching U.S. power-grab over its European and other Allies, trying in vain to keep them dependent on U.S.-based trade and investment. The price of their continuing obedience is to impose cost-inflation on their industry while relinquishing their democratic electoral politics in subordination to America’s NATO proconsuls.

These consequences cannot really be deemed “unintended.” Too many observers have pointed out exactly what would happen – headed by President Putin and Foreign Secretary Lavrov explaining just what their response would be if NATO insisted in backing them into a corner while attacking Eastern Ukrainian Russian-speakers and moving heavy weaponry to Russia’s Western border. The consequences were anticipated. The neocons in control of U.S. foreign policy simply didn’t care. Recognizing its concerns was deemed to make one a Putinversteher.

European officials did not feel uncomfortable in telling the world about their worries that Donald Trump was crazy and upsetting the apple cart of international diplomacy. But they seem to have been blindsided at the Biden Administration’s resurgence of visceral Russia-hatred by Secretary of State Blinken and Victoria Nuland-Kagan. Trump’s mode of expression and mannerisms may have been uncouth, but America’s neocon gang has much more globally threatening confrontation obsessions. For them, it was a question of whose reality would emerge victorious: the “reality” that they believed they could make, or economic reality outside of U.S. control.

What foreign countries have not done for themselves – replacing the IMF, World Bank and other arms of U.S. diplomacy – American politicians are forcing them to do. Instead of European, Near Eastern and Global South countries breaking away out of their own calculation of their long-term economic interests, America is driving them away, as it has done with Russia and China. More politicians are seeking voter support by asking whether they would be better served by new monetary arrangements to replace dollarized trade, investment and even foreign debt service.

The energy and food price squeeze is hitting Global South countries especially hard, coinciding with their own Covid-19 problems and the looming dollarized debt service coming due. Something must give. How long will these countries impose austerity to pay foreign bondholders?

How will the U.S. and European economies cope in the face of their sanctions against imports of Russian gas and oil, cobalt, aluminum, palladium and other basic materials? American diplomats have made a list of raw materials that their economy desperately needs and which therefore are exempt from the trade sanctions being imposed. This provides Mr. Putin a handy list of pressure points to use in reshaping world diplomacy, in the process helping European and other countries break away from the Iron Curtain that America has imposed to lock its satellites into dependence on high-priced U.S. supplies.

But the final breakaway from NATO’s adventurism must come from within the United States itself. As this year’s midterm elections approach, politicians will find a fertile ground in showing U.S. voters that the price inflation led by gasoline and energy is a policy byproduct of the Biden administration blocking Russian oil and gas exports. Gas is needed not only for heating and energy production, but to make fertilizer, of which there already is a world shortage. This is exacerbated by blocking Russian and Ukrainian grain exports, sending U.S. and European food prices soaring.

Trying to force Russia to respond militarily and thereby looking bad to the rest of the world is turning out to be a stunt aimed simply at demonstrating Europe’s need to contribute more to NATO, buy more U.S. military hardware and lock itself deeper into trade and monetary dependence on the United States. The instability that this has caused is turning out to have the effect of making the United States look as threatening as Russia.

Duplicitous Biden Regime Mission to Venezuela

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By Stephen Lendman

Source: StephenLendman.org

Last weekend, a Biden regime delegation met with 

Venezuelan President Nicolas Maduro and other Bolivarian officials in Caracas.

The aim of the first diplomatic contact between both nations since the Trump regime closed the US Caracas embassy in 2019, officially broke with Venezuela’s legitimate government, and illegally designed Juan Guido as president flopped.

More on this below.

Hegemon USA has been a mortal enemy of Bolivarian social democracy since Hugo Chavez took office as president in February 1999, following his December 1998 election — a near-generation ago.

Count the ways.

1. The aborted two-day April 2002 attempt to oust Chavez. Failure to get Venezuelan military support and popular resistance foiled it.

2. The 2002 – 03 general strike and oil management lockout, causing severe economic disruption and billions of dollars in losses.

3. The August 2004 national recall referendum, Hugo Chavez winning overwhelmingly with a 59% majority, thwarting the US-orchestrated attempt to remove him.

4. US sanctions war on Venezuela, begun by the Bush/Cheney regime in 2006 — for so-called non-cooperation in combatting international terrorism that hegemon USA fosters. 

War on the Bolivarian Republic by other means continued under the Obama/Biden regime.

Greatly escalated by Trump regime hardliners, high-level Venezuelan officials and the country’s enterprises were targeted.

US policy tried to block Venezuelan access to financial markets, as well as maximally reduce its oil exports.

Annually since 2006, the State Department falsely accused Venezuela of not “cooperating fully with US anti-terrorism efforts” – pursuant to Section 40A of the Arms Export Control Act (22 USC 2781).

5. In 2005, the Bush/Cheney regime falsely accused the Bolivarian Republic of non-cooperation against narco-trafficking that the US actively supports worldwide, notably the CIA.

Annually since then, Washington falsely claimed Venezuela hadn’t fulfilled its obligations under international narcotics agreements. 

6. In 2008, the Bush/Cheney regime imposed asset freezes and prohibitions on financial transactions, targeting designated Venezuelan nationals and enterprises.

7. The Obama/Biden regime killed Hugo Chavez.

US dark forces poisoned or infected him with deadly cancer causing substances, a coup by other means, eliminating him — while Chavismo has remained resilient.

8. The Obama/Biden regime’s March 2015 executive order falsely declared Venezuela to be an “unusual and extraordinary threat to the national security and foreign policy of the US.” 

At the time, a fake ‘national emergency’ was declared to “confront” a nonexistent threat.

9. Violent made-in-the-USA street protests staged to destabilize the country with regime change in mind were responsible for scores of deaths and hundreds of injuries.

10. The August 2017 CIA-orchestrated terrorist attack on Fort Paramacay in Carabobo state was another foiled coup attempt.

11. The August 2018 attack on Maduro by drones armed with C-4 explosives attempted to kill him.

12. Trump regime hardliners waged war on Venezuela by other means, including propaganda, economic, financial, and electricity war, along with other attacks on the country’s infrastructure.

The aim was to inflict maximum harm on ordinary Venezuelans, falsely believing they’d blame Maduro for US criminal actions.

Chavez knew that the US marked him for elimination. Fidel Castro warned him to be wary and careful. 

Maduro is targeted in similar fashion. He and other senior Venezuelan officials remain vulnerable to removal by coup d’etat or assassination.

It’s just a matter of time before another regime change attempt occurs — to replace Venezuelan social democracy with US-controlled fascist tyranny. 

Biden regime officials showing up in Caracas last weekend made unacceptable demands.

Reportedly they unacceptably called for a new presidential election.

There’s none scheduled until 2024 for a six-year term beginning on January 10, 2025.

In 2018, Maduro won another six-year term overwhelmingly by a two-thirds majority.

His main adversary, Chavista turncoat Henri Falcon, fared much poorer than predicted with around 21% of the vote. 

Other unacceptable Biden regime demands reportedly included the following:

Greater US/Western foreign private investment in Venezuela — mainly for maximum control of the country’s vast oil reserves, the world’s largest, including its heavy oil.

Maduro splitting from Russia by siding with the US-dominated West against Vladimir Putin’s demilitarization and deNazification of Ukraine.

In return, Biden regime official offered hollow promises to be breached at hegemon USA’s discretion.

Maduro and Vice President Delcy Rodriguez demanded sanctions relief and return of confiscated Venezuelan assets, mainly oil related.

For most of the past 23 years, US regimes waged war on Venezuela by other means — because of its independence and democratic governance the way it should be.

Venezuelans have the real thing — in stark contrast to fantasy versions throughout the West.

Russia is a valued Venezuelan ally.

According to Russia’s Foreign Ministry, Vladimir Putin and Maduro spoke by phone last week.

Venezuela’s leader expressed “firm support” for the Russian Federation.

Condemning US-dominated NATO’s destabilization activities, Maduro stressed his intention to maintain political and economic relations with Russia.

Follow the Money – How Russia Will Bypass Western Economic Warfare

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(Image by orangebuddhas from flickr)
 

By Pepe Escobar

Source: OpEdNews.com

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

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

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

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

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

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

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

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

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

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

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

I’m going to de-dollarize myself

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

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

A Bloomberg article sums up their collective fears:

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

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

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

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

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

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

Russia has its own bag of tricks

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

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

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

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

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

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

Second is the oil and gas sector, joined by mining (OGAM). Their aim is “to maximize the price of energy and raw materials so as to maximize natural resource rent.

Monopolizing the Dollar Area’s oil market and isolating it from Russian oil and gas has been a major US priority for over a year now, as the Nord Stream 2 pipeline from Russia to Germany threatened to link the western European and Russian economies together.”

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

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

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

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

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

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

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

Let’s confiscate some technology

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

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

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

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

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

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

As it stands, the strategic stupidity of the EU beggars belief. China is ready to grab all Russian natural resources with Europe left as a pitiful hostage of the oceans and of wild speculators.

It looks like a total EU-Russia split is ahead – with little trade left and zero diplomacy.

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

Creating New Enemies

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SHANGHAI, CHINA – MAY 20: Russian President Vladimir Putin (L) and Chinese President Xi Jingping (R) attend a welcoming ceremony on May 20, 2014 in Shanghai, China. Putin is on a two day visit to China (Photo by Sasha Mordovets/Getty Images)

By Philip Giraldi

Source: The Unz Review

It should come as no surprise that many observers, from various political perspectives, are beginning to note that there is something seriously disconnected in the fumbling foreign policy of the United States. The evacuation failure in Afghanistan shattered the already waning self-confidence of the American political elite and the continuing on-again off-again negotiations that were by design intended to go nowhere with Iran and Russia provide no evidence that anyone in the White House is really focused on protecting American interests. Now we have an actual shooting war in Ukraine as a result, a conflict that might easily escalate if Washington continues to send the wrong signals to Moscow.

To cite only one example of how outside influences distort policy, in a phone call on February 9th, Israeli Prime Minister Naftali Bennett advised President Joe Biden not to enter into any non-proliferation agreement with Iran. Biden was non-committal even though it is an actual American interest to come to an agreement, but instead he indicated that as far as the US is concerned, Israel could exercise “freedom of action” when dealing with the Iranians. With that concession has ended in all probability the only possible diplomatic success that the Administration might have been able to point to.

The Biden Administration’s by default global security policy is currently reduced to what some critics have described as “encirclement and containment.” That is why an overstretched US military is being tasked with creating ever more bases worldwide in an effort to counter perceived “enemies” who often are only exercising their own national sovereignty and right to security within their own zones of influence. Ironically, when nations balk at submitting to Washington’s control, they are frequently described as “aggressors” and “anti-democratic,” the language that has most particularly been used relating to Russia. The Biden policy, such as it actually exists, appears to be a throwback to the playing field in 1991-2 when the Soviet empire collapsed. It is all about maintaining the old American dream of complete global dominance coupled with liberal interventionism, but this time around the US lacks both the resources and the national will to continue in the effort. Hopefully the White House will understand that to do nothing is better than to make empty threats.

Meanwhile, as the situation continues to erode, it is becoming more and more obvious that the twin crises that have been developing over Ukraine and Taiwan are “Made in Washington” and are somewhat inexplicable as the US does not have a compelling national interest that would justify threats to “leave on the table” military options as a possible response. The Administration has yet again responded to Russian moves by initiating devastating sanctions. But Russia also has unconventional weapons in its arsenal. It can, for starters, shift focus away from Ukraine by intervening much more actively in support of Syria and Iran in the Middle East, disrupting feeble American attempts to manage that region to benefit Israel.

According to economists, Russia has also been effectively sanction-proofing its economy and is capable of selective reverse-sanctioning of countries that support an American initiative with any enthusiasm. Such a response would likely hurt the Europeans much more than it would damage the leadership in the Kremlin. Barring Russian gas from Europe by shutting down Nord Stream 2 would, for example, permit increased sales to China and elsewhere in Asia and would inflict more pain on the Europeans than on Moscow. Shipping US supplied liquid gas to Europe would, for example, cost more than twice the going rate being offered by the Kremlin and would also be less reliable. The European NATO members are clearly nervous and not fully behind the US agenda on Ukraine, largely because there is the legitimate concern that any and possibly all options being considered by Washington could easily produce missteps that would escalate into a nuclear exchange that would be catastrophic for all parties involved.

Apart from the real immediate danger to be derived from the fighting currently taking place in Ukraine, the real long-term damage is strategic. The Joe Biden Administration has adroitly maneuvered itself into a corner while America’s two principal adversaries Russia and China have drawn closer together to form something like a defensive as well as economic relationship that will be dedicated to reducing and eventually eliminating Washington’s assumed role as the global hegemon and rules enforcer.

In a recent article in the New Yorker foreign affairs commentator Robin Wright, who might reasonably described as a “hawk,” declares the new development to be “Russia and China Unveil[ing] a Pact Against America and the West.” And she is not alone in ringing the alarm bell, with former Donald Trump National Security Council (NSC) Russia watcher Anita Hill warning that the Kremlin’s intention is to force the United States out of Europe while former NSC Ukrainian expert Alexander Vindman is advising that military force be used to deter Russia now before it is too late.

Wright provides the most serious analysis of the new developments. She argues that “Vladimir Putin and Xi Jinping, the two most powerful autocrats, challenge the current political and military order.” She describes how, in a meeting between the two leaders before the Beijing Olympics, they cited an “agreement that also challenges the United States as a global power, NATO as a cornerstone of international security, and liberal democracy as a model for the world.” They pledged that there would be “No ‘forbidden’ areas of cooperation” and a written statement that was subsequently produced declared that “Russia and China stand against attempts by external forces to undermine security and stability in their common adjacent regions, intend to counter interference by outside forces in the internal affairs of sovereign countries under any pretext, oppose color revolutions, and will increase cooperation.” Wright notes that there is considerable strength behind the agreement, “As two nuclear-armed countries that span Europe and Asia, the more muscular alignment between Russia and China could be a game changer militarily and diplomatically.” One might add that China now has the world’s largest economy and Russia has a highly developed military deploying new hypersonic missiles that would give it the advantage in any conflict with NATO and the US. Both Russia and China, if attacked, would also benefit because they would be fighting close to their bases on interior lines.

And, of course, not everyone agrees that nudging the United States out of its self-proclaimed hegemonic role would be a bad thing. Former British diplomat Alastair Crooke argues that there will be perpetual state of crisis in the international order until a new system emerges from the status quo that ended the Cold War, and it would be minus the United States as the semi-official transnational rules maker and arbiter. He observes that “The crux of Russia’s complaints about its eroding security have little to do with Ukraine per se but are rooted in the Washington hawks’ obsession with Russia, and their desire to cut Putin (and Russia) down to size – an aim which has been the hallmark of US policy since the Yeltsin years. The Victoria Nuland clique could never accept Russia rising to become a significant power in Europe – possibly eclipsing the US control over Europe.”

What is happening in Europe and Asia should all come down to a very simple realization about the limits of power: America has no business in risking a nuclear war with Russia over Ukraine or with China over Taiwan. The United States has been fighting much of the world for over two decades, impoverishing itself and killing millions in avoidable wars starting with Iraq and Afghanistan. The US government is cynically exploiting memories of old Cold War enemy Russia to create a false narrative that goes something like this: “If we don’t stop them over there, they will be in New Jersey next week.” It is all nonsense. And besides, who made the US the sole arbiter of international relations? It is past time Americans started asking what kind of international order is it that lets the United States determine what other nations can and cannot do.

Worst of all, the bloodshed in Ukraine has all been unnecessary. A little real diplomacy with honest negotiators weighing up real interests could easily have come to acceptable solutions for all parties involved. It is indeed ironic that the burning desire to go to war with Russia demonstrated in the New York Times and Washington Post as well as on Capitol Hill has in fact created a real formidable enemy, tying Russia and China together in an alliance due to their frustration at dealing with a Biden Administration that never seems to know what it is doing or where it wants to go.

Europe Is Killing Itself With Its Russian Sanctions

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By Paul Craig Roberts

Source: PaulCraigRoberts.org

The sharp rise in natural gas price in Europe is entirely due to Western hysteria and stupidity. According to the EU’s own data, Europe is dependent on Russia for 46% of its natural gas. In the face of such extraordinary dependency on Russian energy, the moronic European “leaders” are falling all over themselves imposing impotent sanctions on Russia.  The idiotic German Chancellor actually punished the German people for Russia’s recognition of the Donbass republics by “cancelling” the Nord 2 pipeline.  This foolish act was a prime reason for the hysteria that has caused a sharp rise in prices.  The price rise helps Russia–if she continues to supply Europe with energy.  It hurts Europe and whoever financed the Nord 2 pipeline. If the pipeline sits not operating, it cannot produce a revenue stream to service the capital invested in the pipeline.  I do not know who financed the pipeline. If it was Germany, then the chancellor’s sanctions on Russia have twice injured the Germans.

The EU’s 46% dependency on Russian natural gas is independent of the Nord 2 pipeline, the opening of which has been on hold due to Washington’s pressure on Germany. Therefore, the rise in gas price is not due to a reduction of supply, but due to speculation that Russia will reduce or cut off supply. Europe is served by other pipelines.  What if Russia responds to the EU’s “sanctions” by closing the pipelines that deliver 46% of Europe’s natural gas?  What would Europe’s fate be?

Russia has accepted sanctions without replying in kind.  Perhaps it is time for Russia to impose sanctions to teach the West a lesson.

In my opinion there is no reason for Russia to deplete its own energy resources by sharing them with its European enemies.  Perhaps the Russian government’s idea was that energy sales would be a source of foreign exchange earnings and that providing Europe with energy was in the interest of good relations with the West.

Now that the West has demonstrated that the West has no interest in good relations with Russia there is no point in the Russian energy sales.  As I pointed out ( https://www.paulcraigroberts.org/2022/02/22/russia-and-china-should-go-their-own-way/ ) Russia has no need for foreign exchange.  The Russian central bank can finance Russian economic development with no need of foreign involvement.  Russia’s holdings of instruments denominated in dollars or euros would just be confiscated by sanctions.

To summarize:  Europe brought the high energy price on itself with its thoughtless sanctions; the high prices benefit Russia and hurt Europe; Russia should consider turning off all natural gas to Europe and conserve its energy source for its own and China’s development.

Europe is nothing but a thorn in Russia’s side, a collection of Washington’s puppets.  Russia owes Europe nothing.