The IMF Changes its Rules to Isolate China and Russia

Posted on February 15, 2016 by Reid Mukai

By Michael Hudson

A nightmare scenario of U.S. geopolitical strategists is coming true: foreign independence from U.S.-centered financial and diplomatic control. China and Russia are investing in neighboring economies on terms that cement Eurasian integration on the basis of financing in their own currencies and favoring their own exports. They also have created the Shanghai Cooperation Organization (SCO) as an alternative military alliance to NATO.[1] And the Asian Infrastructure Investment Bank (AIIB) threatens to replace the IMF and World Bank tandem in which the United States holds unique veto power.

More than just a disparity of voting rights in the IMF and World Bank is at stake. At issue is a philosophy of development. U.S. and other foreign investment in infrastructure (or buyouts and takeovers on credit) adds interest rates and other financial charges to the cost structure, while charging prices as high as the market can bear (think of Carlos Slim’s telephone monopoly in Mexico, or the high costs of America’s health care system), and making their profits and monopoly rents tax-exempt by paying them out as interest.

By contrast, government-owned infrastructure provides basic services at low cost, on a subsidized basis, or freely. That is what has made the United States, Germany and other industrial lead nations so competitive over the past few centuries. But this positive role of government is no longer possible under World Bank/IMF policy. The U.S. promotion of neoliberalism and austerity is a major reason propelling China, Russia and other nations out of the U.S. diplomatic and banking orbit.

On December 3, 2015, Prime Minister Putin proposed that Russia “and other Eurasian Economic Union countries should kick-off consultations with members of the SCO and the Association of Southeast Asian Nations (ASEAN) on a possible economic partnership.”[2] Russia also is seeking to build pipelines to Europe through friendly secular countries instead of Sunni jihadist U.S.-backed countries locked into America’s increasingly confrontational orbit.

Russian finance minister Anton Siluanov points out that when Russia’s 2013 loan to Ukraine was made, at the request of Ukraine’s elected government, Ukraine’s “international reserves were barely enough to cover three months’ imports, and no other creditor was prepared to lend on terms acceptable to Kiev. Yet Russia provided $3 billion of much-needed funding at a 5 per cent interest rate, when Ukraine’s bonds were yielding nearly 12 per cent.”[3]

What especially annoys U.S. financial strategists is that this loan by Russia’s National Wealth Fund was protected by IMF lending practice, which at that time ensured collectability by withholding credit from countries in default of foreign official debts, or at least not bargaining in good faith to pay. To cap matters, the bonds are registered under London’s creditor-oriented rules and courts.

Most worrisome to U.S. strategists is that China and Russia are denominating their trade and investment in their own currencies instead of dollars. After U.S. officials threatened to derange Russia’s banking linkages by cutting it off from the SWIFT interbank clearing system, China accelerated its creation of the alternative China International Payments System (CIPS), and its own credit card system to protect Eurasian economies from the threats made by U.S. unilateralists.

Russia and China are simply doing what the United States has long done: using trade and credit linkages to cement their diplomacy. This tectonic geopolitical shift is a Copernican threat to New Cold War ideology: Instead of the world economy revolving around the United States (the Ptolemaic idea of America as “the indispensible nation”), it may revolve around Eurasia. As long as global financial control remains grounded in Washington at the offices of the IMF and World Bank, such a shift in the center of gravity will be fought with all the power of an American Century (and would-be American Millennium) inquisition.

Any inquisition needs a court system and enforcement vehicles. So does resistance to such a system. That is what today’s global financial, legal and trade maneuvering is all about. And that is why today’s world system is in the process of breaking apart. Differences in economic philosophy call for different institutions.

To U.S. neocons the specter of AIIB government-to-government investment creates fear of nations minting their own money and holding each other’s debt in their international reserves instead of borrowing dollars, paying interest in dollars and subordinating their financial planning to the U.S. Treasury and IMF. Foreign governments would have less need to finance their budget deficits by selling off key infrastructure. And instead of dismantling public spending, a broad Eurasian economic union would do what the United States itself practices, and seek self-sufficiency in banking and monetary policy.

Imagine the following scenario five years from now. China will have spent half a decade building high-speed railroads, ports, power systems and other construction for Asian and African countries, enabling them to grow and export more. These exports will be coming online to repay the infrastructure loans. Also, suppose that Russia has been supplying the oil and gas energy for these projects on credit.

To avert this prospect, suppose an American diplomat makes the following proposal to the leaders of countries in debt to China, Russia and the AIIB: “Now that you’ve got your increased production in place, why repay? We’ll make you rich if you stiff our adversaries and turn back to the West. We and our European allies will support your assigning your nations’ public infrastructure to yourselves and your supporters at insider prices, and then give these assets market value by selling shares in New York and London. Then, you can keep the money and spend it in the West.”

How can China or Russia collect in such a situation? They can sue. But what court in the West will accept their jurisdiction?

That is the kind of scenario U.S. State Department and Treasury officials have been discussing for more than a year. Implementing it became more pressing in light of Ukraine’s $3 billion debt to Russia falling due by December 20, 2015. Ukraine’s U.S.-backed regime has announced its intention to default. To support their position, the IMF has just changed its rules to remove a critical lever on which Russia and other governments have long relied to ensure payment of their loans.

The IMF’s role as enforcer of inter-government debts
When it comes to enforcing nations to pay inter-government debts, the IMF is able to withhold not only its own credit but also that of governments and global bank consortia participating when debtor countries need “stabilization” loans (the neoliberal euphemism for imposing austerity and destabilizing debtor economies, as in Greece this year). Countries that do not privatize their infrastructure and sell it to Western buyers are threatened with sanctions, backed by U.S.-sponsored “regime change” and “democracy promotion” Maidan-style. The Fund’s creditor leverage has been that if a nation is in financial arrears to any government, it cannot qualify for an IMF loan – and hence, for packages involving other governments. That is how the dollarized global financial system has worked for half a century. But until now, the beneficiaries have been U.S. and NATO lenders, not been China or Russia.

The focus on a mixed public/private economy sets the AIIB at odds with the Trans-Pacific Partnership’s aim of relinquishing government planning power to the financial and corporate sector, and the neoliberal aim of blocking governments from creating their own money and implementing their own financial, economic and environmental regulation. Chief Nomura economist Richard Koo, explained the logic of viewing the AIIB as a threat to the U.S.-controlled IMF: “If the IMF’s rival is heavily under China’s influence, countries receiving its support will rebuild their economies under what is effectively Chinese guidance, increasing the likelihood they will fall directly or indirectly under that country’s influence.”[4]

This was the setting on December 8, when Chief IMF Spokesman Gerry Rice announced: “The IMF’s Executive Board met today and agreed to change the current policy on non-toleration of arrears to official creditors.” Russian Finance Minister Anton Siluanov accused the IMF decision of being “hasty and biased.”[5] But it had been discussed all year long, calculating a range of scenarios for a sea change in international law. Anders Aslund, senior fellow at the NATO-oriented Atlantic Council, points out:

The IMF staff started contemplating a rule change in the spring of 2013 because nontraditional creditors, such as China, had started providing developing countries with large loans. One issue was that these loans were issued on conditions out of line with IMF practice. China wasn’t a member of the Paris Club, where loan restructuring is usually discussed, so it was time to update the rules.
The IMF intended to adopt a new policy in the spring of 2016, but the dispute over Russia’s $3 billion loan to Ukraine has accelerated an otherwise slow decision-making process.[6]

The target was not only Russia and its ability to collect on its sovereign loan to Ukraine, but China even more, in its prospective role as creditor to African countries and prospective AIIB borrowers, planning for a New Silk Road to integrate a Eurasian economy independent of U.S. financial and trade control. The Wall Street Journal concurred that the main motive for changing the rules was the threat that China would provide an alternative to IMF lending and its demands for crushing austerity. “IMF-watchers said the fund was originally thinking of ensuring China wouldn’t be able to foil IMF lending to member countries seeking bailouts as Beijing ramped up loans to developing economies around the world.”[7] So U.S. officials walked into the IMF headquarters in Washington with the legal equivalent of suicide vests. Their aim was a last-ditch attempt to block trade and financial agreements organized outside of U.S. control and that of the IMF and World Bank.

The plan is simple enough. Trade follows finance, and the creditor usually calls the tune. That is how the United States has used the Dollar Standard to steer Third World trade and investment since World War II along lines benefiting the U.S. economy. The cement of trade credit and bank lending is the ability of creditors to collect on the international debts being negotiated. That is why the United States and other creditor nations have used the IMF as an intermediary to act as “honest broker” for loan consortia. (“Honest broker” means being subject to U.S. veto power.) To enforce its financial leverage, the IMF has long followed the rule that it will not sponsor any loan agreement or refinancing for governments that are in default of debts owed to other governments. However, as the afore-mentioned Aslund explains, the IMF could easily

change its practice of not lending into [countries in official] arrears … because it is not incorporated into the IMF Articles of Agreement, that is, the IMF statutes. The IMF Executive Board can decide to change this policy with a simple board majority. The IMF has lent to Afghanistan, Georgia, and Iraq in the midst of war, and Russia has no veto right, holding only 2.39 percent of the votes in the IMF. When the IMF has lent to Georgia and Ukraine, the other members of its Executive Board have overruled Russia.[8]

After the rules change, Aslund later noted, “the IMF can continue to give Ukraine loans regardless of what Ukraine does about its credit from Russia, which falls due on December 20.[9]

The IMF rule that no country can borrow if it is in default to a foreign government was created in the post-1945 world. Since then, the U.S. Government, Treasury and/or U.S. bank consortia have been party to nearly every major loan agreement. But inasmuch as Ukraine’s official debt to Russia’s National Wealth Fund was not to the U.S. Government, the IMF announced its rules change simply as a “clarification.” What its rule really meant was that it would not provide credit to countries in arrears to the U.S. government, not that of Russia or China.

It remains up to the IMF board – and in the end, its managing director – whether or not to deem a country creditworthy. The U.S. representative can block any foreign leaders not beholden to the United States. Mikhail Delyagin, Director of the Institute of Globalization Problems, explained the double standard at work: “The Fund will give Kiev a new loan tranche on one condition: that Ukraine should not pay Russia a dollar under its $3 billion debt. … they will oblige Ukraine to pay only to western creditors for political reasons.”[10]

The post-2010 loan packages to Greece are a case in point. The IMF staff saw that Greece could not possibly pay the sums needed to bail out French, German and other foreign banks and bondholders. Many Board members agreed, and have gone public with their whistle blowing. Their protests didn’t matter. President Barack Obama and Treasury Secretary Tim Geithner pointed out that U.S. banks had written credit default swaps betting that Greece could pay, and would lose money if there were a debt writedown). Dominique Strauss-Kahn backed the hard line US- European Central Bank position. So did Christine Lagarde in 2015, overriding staff protests.[11]

Regarding Ukraine, IMF executive board member Otaviano Canuto, representing Brazil, noted that the logic that “conditions on IMF lending to a country that fell behind on payments [was to] make sure it kept negotiating in good faith to reach agreement with creditors.”[12] Dropping this condition, he said, would open the door for other countries to insist on a similar waiver and avoid making serious and sincere efforts to reach payment agreement with creditor governments.

A more binding IMF rule is Article I of its 1944-45 founding charter, prohibiting the Fund from lending to a member state engaged in civil war or at war with another member state, or for military purposes in general. But when IMF head Lagarde made the last loan to Ukraine, in spring 2015, she merely expressed a vapid token hope there might be peace. Withholding IMF credit could have been a lever to force peace and adherence to the Minsk agreements, but U.S. diplomatic pressure led that opportunity to be rejected. President Porochenko immediately announced that he would step up the civil war with the Russian-speaking population in the eastern Donbass region.

The most important IMF condition being violated is that continued warfare with the East prevents a realistic prospect of Ukraine paying back new loans. The Donbas is where most Ukrainian exports were made, mainly to Russia. That market is being lost by the junta’s belligerence toward Russia. This should have blocked Ukraine from receiving IMF aid. Aslund himself points to the internal contradiction at work: Ukraine has achieved budget balance because the inflation and steep currency depreciation has drastically eroded its pension costs. But the resulting decline in the purchasing power of pension benefits has led to growing opposition to Ukraine’s post-Maidan junta. So how can the IMF’s austerity budget be followed without a political backlash? “Leading representatives from President Petro Poroshenko’s Bloc are insisting on massive tax cuts, but no more expenditure cuts; that would cause a vast budget deficit that the IMF assesses at 9-10 percent of GDP, that could not possibly be financed.”[13]

By welcoming and financing Ukraine instead of treating as an outcast, the IMF thus is breaking four of its rules:

Not to lend to a country that has no visible means to pay back the loan. This breaks the “No More Argentinas” rule, adopted after the IMF’s disastrous 2001 loan.
Not to lend to a country that repudiates its debt to official creditors. This goes against the IMF’s role as enforcer for the global creditor cartel.
Not to lend to a borrower at war – and indeed, to one that is destroying its export capacity and hence its balance-of-payments ability to pay back the loan.
Finally, not to lend to a country that is not likely to carry out the IMF’s austerity “conditionalities,” at least without crushing democratic opposition in a totalitarian manner.

The upshot – and new basic guideline for IMF lending – is to split the world into pro-U.S. economies going neoliberal, and economies maintaining public investment in infrastructure n and what used to be viewed as progressive capitalism. Russia and China may lend as much as they want to other governments, but there is no global vehicle to help secure their ability to be paid back under international law. Having refused to roll back its own (and ECB) claims on Greece, the IMF is willing to see countries not on the list approved by U.S. neocons repudiate their official debts to Russia or China. Changing its rules to clear the path for making loans to Ukraine is rightly seen as an escalation of America’s New Cold War against Russia and China.

Timing is everything in such ploys. Georgetown University Law professor and Treasury consultant Anna Gelpern warned that before the “IMF staff and executive board [had] enough time to change the policy on arrears to official creditors,” Russia might use “its notorious debt/GDP clause to accelerate the bonds at any time before December, or simply gum up the process of reforming the IMF’s arrears policy.”[14] According to this clause, if Ukraine’s foreign debt rose above 60 percent of GDP, Russia’s government would have the right to demand immediate payment. But President Putin, no doubt anticipating the bitter fight to come over its attempts to collect on its loan, refrained from exercising this option. He is playing the long game, bending over backward to behave in a way that cannot be criticized as “odious.”

A more immediate reason deterring the United States from pressing earlier to change IMF rules was the need to use the old set of rules against Greece before changing them for Ukraine. A waiver for Ukraine would have provided a precedent for Greece to ask for a similar waiver on paying the “troika” – the European Central Bank (ECB), EU commission and the IMF itself – for the post-2010 loans that have pushed it into a worse depression than the 1930s. Only after Greece capitulated to eurozone austerity was the path clear for U.S. officials to change the IMF rules to isolate Russia. But their victory has come at the cost of changing the IMF’s rules and those of the global financial system irreversibly. Other countries henceforth may reject conditionalities, as Ukraine has done, as well as asking for write-downs on foreign official debts.

That was the great fear of neoliberal U.S. and Eurozone strategists last summer, after all. The reason for smashing Greece’s economy was to deter Podemos in Spain and similar movements in Italy and Portugal from pursuing national prosperity instead of eurozone austerity. “Imagine the Greek government had insisted that EU institutions accept the same haircut as the country’s private creditors,” Russian finance minister Anton Siluanov asked. “The reaction in European capitals would have been frosty. Yet this is the position now taken by Kiev with respect to Ukraine’s $3 billion eurobond held by Russia.”[15]

The consequences of America’s tactics to make a financial hit on Russia while its balance of payments is down (as a result of collapsing oil and gas prices) go far beyond just the IMF. These tactics are driving other countries to defend their own economies in the legal and political spheres, in ways that are breaking apart the post-1945 global order.

Countering Russia’s ability to collect in Britain’s law courts
Over the past year the U.S. Treasury and State Departments have discussed ploys to block Russia from collecting by suing in the London Court of International Arbitration, under whose rules Russia’s bonds issued to Ukraine are registered. Reviewing the excuses Ukraine might use to avoid paying Russia, Prof. Gelpern noted that it might declare the debt “odious,” made under duress or corruptly. In a paper for the Peterson Institute of International Economics (the banking lobby in Washington) she suggested that Britain should deny Russia the use of its courts as a means of reinforcing the financial, energy and trade sanctions passed after Crimea voted to join Russia as protection against the ethnic cleansing from the Right Sector, Azov Battalion and other paramilitary groups descending on the region.[16]

A kindred ploy might be for Ukraine to countersue Russia for reparations for “invading” it and taking Crimea. Such a claim would seem to have little chance of success (without showing the court to be an arm of NATO politics), but it might delay Russia’ ability to collect by tying the loan up in a long nuisance lawsuit. But the British court would lose credibility if it permits frivolous legal claims (called barratry in English) such as President Poroshenko and Prime Minister Yatsenyuk have threatened.

To claim that Ukraine’s debt to Russia was “odious” or otherwise illegitimate, “President Petro Poroshenko said the money was intended to ensure Yanukovych’s loyalty to Moscow, and called the payment a ‘bribe,’ according to an interview with Bloomberg in June this year.”[17] The legal and moral problem with such arguments is that they would apply equally to IMF and U.S. loans. They would open the floodgates for other countries to repudiate debts taken on by dictatorships supported by IMF and U.S. lenders.

As Foreign Minister Sergei Lavrov noted, the IMF’s change of rules, “designed to suit Ukraine only, could plant a time bomb under all other IMF programs.” The new rules showed the extent to which the IMF is subordinate to U.S. aggressive New Cold Warriors: “since Ukraine is politically important – and it is only important because it is opposed to Russia – the IMF is ready to do for Ukraine everything it has not done for anyone else.”[18]

In a similar vein, Andrei Klimov, deputy chairman of the Committee for International Affairs at the Federation Council (the upper house of Russia’s parliament) accused the United States of playing “the role of the main violin in the IMF while the role of the second violin is played by the European Union, [the] two basic sponsors of the Maidan – the … coup d’état in Ukraine in 2014.”[19]

Putin’s counter-strategy and the blowback on U.S.-European relations
Having anticipated that Ukraine would seek excuses to not pay Russia, President Putin refrained from exercising Russia’s right to demand immediate payment when Ukraine’s foreign debt rose above 60 percent of GDP. In November he even offered to defer any payment at all this year, stretching payments out to “$1 billion next year, $1 billion in 2017, and $1 billion in 2018,” if “the United States government, the European Union, or one of the big international financial institutions” guaranteed payment.[20] Based on their assurances “that Ukraine’s solvency will grow,” he added, they should be willing to put their money where their mouth was. If they did not provide guarantees, Putin pointed out, “this means that they do not believe in the Ukrainian economy’s future.”

Implicit was that if the West continued encouraging Ukraine to fight against the East, its government would not be in a position to pay. The Minsk agreement was expiring and Ukraine was receiving new arms support from the United States, Canada and other NATO members to intensify hostilities against Donbas and Crimea.

But the IMF, European Union and United States refused to back up the Fund’s optimistic forecast of Ukraine’s ability to pay in the face of its continued civil war against the East. Foreign Minister Lavrov concluded that, “By having refused to guarantee Ukraine’s debt as part of Russia’s proposal to restructure it, the United States effectively admitted the absence of prospects of restoring its solvency.”[21]

In an exasperated tone, Prime Minister Dmitry Medvedev said on Russian television: “I have a feeling that they won’t give us the money back because they are crooks … and our Western partners not only refuse to help, but they also make it difficult for us.” Accusing that “the international financial system is unjustly structured,” he nonetheless promised to “go to court. We’ll push for default on the loan and we’ll push for default on all Ukrainian debts,” based on the fact that the loan

was a request from the Ukrainian Government to the Russian Government. If two governments reach an agreement this is obviously a sovereign loan…. Surprisingly, however, international financial organisations started saying that this is not exactly a sovereign loan. This is utter bull. Evidently, it’s just an absolutely brazen, cynical lie. … This seriously erodes trust in IMF decisions. I believe that now there will be a lot of pleas from different borrower states to the IMF to grant them the same terms as Ukraine. How will the IMF possibly refuse them?[22]

And there the matter stands. On December 16, 2015, the IMF’s Executive Board ruled that “the bond should be treated as official debt, rather than a commercial bond.”[23] Forbes quipped: “Russia apparently is not always blowing smoke. Sometimes they’re actually telling it like it is.”[24]

Reflecting the degree of hatred fanned by U.S. diplomacy, U.S.-backed Ukrainian Finance Minister Natalie A. Jaresko expressed an arrogant confidence that the IMF would back the Ukrainian cabinet’s announcement on Friday, December 18, of its intention to default on the debt to Russia falling due two days later. “If we were to repay this bond in full, it would mean we failed to meet the terms of the I.M.F. and the obligations we made under our restructuring.”[25]

Adding his own bluster, Prime Minister Arseny Yatsenyuk announced his intention to tie up Russia’s claim for payment by filing a multibillion-dollar counter claim “over Russia’s occupation of Crimea and intervention in east Ukraine.” To cap matters, he added that “several hundred million dollars of debt owed by two state enterprises to Russian banks would also not be paid.”[26] This makes trade between Ukraine and Russia impossible to continue. Evidently Ukraine’s authorities had received assurance from IMF and U.S. officials that no real “good faith” bargaining would be required to gain ongoing support. Ukraine’s Parliament did not even find it necessary to enact the new tax code and budget conditionalities that the IMF loan had demanded.

The world is now at war financially, and all that seems to matter is whether, as U.S. Defense Secretary Donald Rumsfeld had put matters, “you are for us or against us.” As President Putin remarked at the 70th session of the UN General Assembly regarding America’s support of Al Qaeda, Al Nusra and other allegedly “moderate” ISIS allies in Syria: “I cannot help asking those who have caused this situation: Do you realize now what you have done? … I am afraid the question will hang in the air, because policies based on self-confidence and belief in one’s exceptionality and impunity have never been abandoned.”[27]

The blowback
America’s unilateralist geopolitics are tearing up the world’s economic linkages that were put in place in the heady days after World War II, when Europe and other countries were so disillusioned that they believed the United States was acting out of idealism rather than national self-interest. Today the question is how long Western Europe will be willing to forego its trade and investment interests by accepting U.S.-sponsored sanctions against Russia, Iran and other economies. Germany, Italy and France already are feeling the strains.

The oil and pipeline war designed to bypass Russian energy exports is flooding Europe with refugees, as well as spreading terrorism. Although the leading issue in America’s Republican presidential debate on December 15, 2015, was safety from Islamic jihadists, no candidate thought to explain the source of this terrorism in America’s alliance with Wahabist Saudi Arabia and Qatar, and hence with Al Qaeda and ISIS/Daish as a means of destabilizing secular regimes in Libya, Iraq, Syria, and earlier in Afghanistan. Going back to the original sin of CIA hubris – overthrowing the secular Iranian Prime Minister leader Mohammad Mosaddegh in 1953 – U.S. foreign policy has been based on the assumption that secular regimes tend to be nationalist and resist privatization and neoliberal austerity.

Based on this assumption, U.S. Cold Warriors have aligned themselves against democratic regimes seeking to promote their own prosperity and resist neoliberalism in favor of maintaining their own traditional mixed public/private economies. That is the back-story of the U.S. fight to control the rest of the world. Tearing apart the IMF’s rules is only the most recent chapter. Arena by arena, the core values of what used to be American and European social democratic ideology are being uprooted by the tactics being used to hurt Russia, China and their prospective Eurasian allies.

The Enlightenment’s ideals were of secular democracy and the rule of international law applied equally to all nations, classical free market theory (of markets free from unearned income and rent extraction by special interests), and public investment in infrastructure to hold down the cost of living and doing business. These are all now to be sacrificed to a militant U.S. unilateralism. Putting their “indispensable nation” above the rule of law and parity of national interests (the 1648 Westphalia treaty, not to mention the Geneva Convention and Nuremburg laws), U.S. neocons proclaim that America’s destiny is to prevent foreign secular democracy from acting in ways other than in submission to U.S. diplomacy. Behind this lie the special U.S. financial and corporate interests that control American foreign policy.

This is not how the Enlightenment was supposed to turn out. Industrial capitalism a century ago was expected to evolve into an economy of abundance worldwide. Instead, we have American Pentagon capitalism, with financial bubbles deteriorating into a polarized rentier economy and a resurgence of old-fashioned imperialism. If and when a break comes, it will not be marginal but a seismic geopolitical shift.

The Dollar Bloc’s Financial Curtain
By treating Ukraine’s repudiation of its official debt to Russia’s National Wealth Fund as the new norm, the IMF has blessed its default. President Putin and foreign minister Lavrov have said that they will sue in British courts. The open question is whether any court exist in the West not under the thumb of U.S. veto?

America’s New Cold War maneuvering has shown that the two Bretton Woods institutions are unreformable. It is easier to create new institutions such as the AIIB than to retrofit the IMF and World Bank, NATO and behind it, the dollar standard – all burdened with the legacy of their vested interests.

U.S. geostrategists evidently thought that excluding Russia, China and other Eurasian countries from the U.S.-based financial and trade system would isolate them in a similar economic box to Cuba, Iran and other sanctioned adversaries. The idea was to force countries to choose between being impoverished by such exclusion, or acquiescing in U.S. neoliberal drives to financialize their economies under U.S. control.

What is lacking here is the idea of critical mass. The United States may arm-twist Europe to impose trade and financial sanctions on Russia, and may use the IMF and World Bank to exclude countries not under U.S. hegemony from participating in dollarized global trade and finance. But this diplomatic action is producing an equal and opposite reaction. That is the Newtonian law of geopolitics. It is propelling other countries to survive by avoiding demands to impose austerity on their government budgets and labor, by creating their own international financial organization as an alternative to the IMF, and by juxtaposing their own “aid” lending to that of the U.S.-centered World Bank.

This blowback requires an international court to handle disputes free from U.S. arm-twisting. The Eurasian Economic Union accordingly has created its own court to adjudicate disputes. This may provide an alternative to Judge Griesa’s New York federal kangaroo court ruling in favor of vulture funds derailing Argentina’s debt settlements and excluding that country from world financial markets.

The more nakedly self-serving U.S. policy is – from backing radical fundamentalist outgrowths of Al Qaeda throughout the Near East to right-wing nationalists in Ukraine and the Baltics – then the greater the pressure will grow for the Shanghai Cooperation Organization, AIIB and related institutions to break free of the post-1945 Bretton Woods system run by the U.S. State, Defense and Treasury Departments and their NATO superstructure of coercive military bases. As Paul Craig Roberts recently summarized the dynamic, we are back with George Orwell’s 1984 global fracture between Oceania (the United States, Britain and its northern European NATO allies as the sea and air power) vs. Eurasia as the consolidated land power.

Footnotes:

[1] The SCO was created in 2001 in Shanghai by the leaders of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. India and Pakistan are scheduled to join, along with Iran, Afghanistan and Belarus as observers, and other east and Central Asian countries as “dialogue partners.”

[2] “Putin Seeks Alliance to Rival TPP,” RT.com (December 04 2015). The Eurasian Economic Union was created in 2014 by Russia, Belarus and Kazakhstan, soon joined by Kyrgyzstan and Armenia. ASEAN was formed in 1967, originally by Indonesia, Malaysia the Philippines, Singapore and Thailand. It subsequently has been expanded. China and the AIIB are reaching out to replace World Bank. The U.S. refused to join the AIIB, opposing it from the outset.

[3] Anton Siluanov, “Russia wants fair rules on sovereign debt,” Financial Times, December 10, 2015.

[4] Richard Koo, “EU refuses to acknowledge mistakes made in Greek bailout,” Nomura, July 14, 2015.

[5] Ian Talley, “IMF Tweaks Lending Rules in Boost for Ukraine,” Wall Street Journal, December 9, 2015.

[6] Anders Aslund, “The IMF Outfoxes Putin: Policy Change Means Ukraine Can Receive More Loans,” Atlantic Council, December 8, 2015. On Johnson’s Russia List, December 9, 2015, #13. Aslund was a major defender of neoliberal shock treatment and austerity in Russia, and has held up Latvian austerity as a success story rather than a disaster.

[7] Ian Talley, op. cit.

[8] Anders Åslund, “Ukraine Must Not Pay Russia Back,” Atlantic Council, November 2, 2015 (from Johnson’s Russia List, November 3, 2015, #50).

[9] Anders Aslund, “The IMF Outfoxes Putin,” op. cit.

[10] Quoted in Tamara Zamyantina, “IMF’s dilemma: to help or not to help Ukraine, if Kiev defaults,” TASS, translated on Johnson’s Russia List, December 9, 2015, #9.

[11] I provide a narrative of the Greek disaster in Killing the Host (2015).

[12] Reuters, “IMF rule change keeps Ukraine support; Russia complains,” December 8, 2015.

[13] Anders Aslund, “The IMF Outfoxes Putin,” op. cit.

[14] Anna Gelpern, “Russia’s Bond: It’s Official! (… and Private … and Anything Else It Wants to Be …),” Credit Slips, April 17, 2015.

[15] Anton Siluanov, “Russia wants fair rules on sovereign debt,” Financial Times, op. cit.. He added: “Russia’s financing was not made for commercial gain. Just as America and Britain regularly do, it provided assistance to a country whose policies it supported. The US is now supporting the current Ukrainian government through its USAID guarantee programme.”

[16] John Helmer, “IMF Makes Ukraine War-Fighting Loan, Allows US to Fund Military Operations Against Russia, May Repay Gazprom Bill,” Naked Capitalism, March 16, 2015 (from his site Dances with Bears).

[17] “Ukraine Rebuffs Putin’s Offer to Restructure Russian Debt,” Moscow Times, November 20, 2015, from Johnson’s Russia List, November 20, 2015, #32.

[18] “Lavrov: U.S. admits lack of prospects of restoring Ukrainian solvency,” Interfax, November 7, 2015, translated on Johnson’s Russia List, December 7, 2015, #38.

[19] Quoted by Tamara Zamyantina, “IMF’s dilemma,” op. cit.

[20] Vladimir Putin, “Responses to journalists’ questions following the G20 summit,” Kremlin.ru, November 16, 2015. From Johnson’s Russia List, November 17, 2015, #7.

“Lavrov: U.S. admits lack of prospects of restoring Ukrainian solvency,” November 7, 2015, translated on Johnson’s Russia List, December 7, 2015, #38.[21]

“In Conversation with Dmitry Medvedev: Interview with five television channels,” Government.ru, December 9, 2015, from Johnson’s Russia List, December 10, 2015, #2[22]

[23] Andrew Mayeda, “IMF Says Ukraine Bond Owned by Russia Is Official Sovereign Debt,” Bloomberg, December 17, 2015.

[24] Kenneth Rapoza, “IMF Says Russia Right About Ukraine $3 Billion Loan,” Forbes.com, December 16, 2015. The article added: “the Russian government confirmed to Euroclear, at the request of the Ukrainian authorities at the time, that the Eurobond was fully owned by the Russian government.”

[25] Andrew E. Kramer, “Ukraine Halts Repayments on $3.5 Billion It Owes Russia,” The New York Times, December 19, 2015.

[26] Roman Olearchyk, “Ukraine tensions with Russia mount after debt moratorium,” Financial Times, December 19, 2015.

[27] “Violence instead of democracy: Putin slams ‘policies of exceptionalism and impunity’ in UN speech,” http://www.rt.com, September 29, 2015. From Johnson’s Russia List, September 29, 2015, #2.

The West Is Reduced To Looting Itself

Posted on February 2, 2016 by Reid Mukai

By Paul Craig Roberts

Source: PaulCraigRoberts.org

I, Michael Hudson, John Perkins, and a few others have reported the multi-pronged looting of peoples by Western economic institutions, principally the big New York Banks with the aid of the International Monetary Fund (IMF).

Third World countries were and are looted by being inticed into development plans for electrification or some such purpose. The gullible and trusting governments are told that they can make their countries rich by taking out foreign loans to implement a Western-presented development plan, with the result being sufficient tax revenues from economic development to service the foreign loan.

Seldom, if ever, does this happen. What happens is that the plan results in the country becoming indebted to the limit and beyond of its foreign currency earnings. When the country is unable to service the development loan, the creditors send the IMF to tell the indebted government that the IMF will protect the government’s credit rating by lending it the money to pay its bank creditors. However, the conditions are that the government take necessary austerity measures so that the government can repay the IMF. These measures are to curtail public services and the government sector, reduce public pensions, and sell national resources to foreigners. The money saved by reduced social benefits and raised by selling off the country’s assets to foreigners serves to repay the IMF.

This is the way the West has historically looted Third World countries. If a country’s president is reluctant to enter into such a deal, he is simply paid bribes, as the Greek governments were, to go along with the looting of the country the president pretends to represent.

When this method of looting became exhausted, the West bought up agricultural lands and pushed a policy on Third World countries of abandoning food self-sufficiency and producing one or two crops for export earnings. This policy makes Third World populations dependent on food imports from the West. Typically the export earnings are drained off by corrupt governments or by foreign purchasers who pay little while the foreigners selling food charge much. Thus, self-sufficiency is transformed into indebtedness.

With the entire Third World now exploited to the limits possible, the West has turned to looting its own. Ireland has been looted, and the looting of Greece and Portugal is so severe that it has forced large numbers of young women into prostitution. But this doesn’t bother the Western conscience.

Previously, when a sovereign country found itself with more debt than could be serviced, creditors had to write down the debt to an amount that the country could service. In the 21st century, as I relate in my book, The Failure of Laissez Faire Capitalism, this traditional rule was abandoned.

The new rule is that the people of a country, even a country whose top offiials accepted bribes in order to indebt the country to foreigners, must have their pensions, employment, and social services slashed and valuable national resources such as municipal water systems, ports, the national lottery, and protected national lands, such as the protected Greek islands, sold to foreigners, who have the freedom to raise water prices, deny the Greek government the revenues from the national lottery, and sell the protected national heritage of Greece to real estate developers.

What has happened to Greece and Portugal is underway in Spain and Italy. The peoples are powerless because their governments do not represent them. Not only are their governments receiving bribes, the members of the governments are brainwashed that their countries must be in the European Union. Otherwise, they are bypassed by history. The oppressed and suffering peoples themselves are brainwashed in the same way. For example, in Greece the government elected to prevent the looting of Greece was powerless, because the Greek people are brainwashed that no matter the cost to them, they must be in the EU.

The combination of propaganda, financial power, stupidity and bribes means that there is no hope for European peoples.

The same is true in the United States, Canada, Australia, and the UK. In the US tens of millions of US citizens have quietly accepted the absence of any interest income on their savings for seven years. Instead of raising questions and protesting, Americans have accepted without thought the propaganda that their existence depends upon the success of a handful of artificially created mega-banks that are “too big to fail.” Millions of Americans are convinced that it is better for them to draw down their savings than for a corrupt bank to fail.

To keep Western peoples confused about the real threat that they face, the people are told that there are terrorists behind every tree, every passport, under every bed, and that all will be killed unless the government’s overarching power is unquestioned. So far this has worked perfectly, with one false flag after another reinforcing the faked terror attacks that serve to prevent any awareness that this a hoax for accumulating all income and wealth in a few hands.

Not content with their supremacy over “democratic peoples,” the One Percent has come forward with the Trans-Atlanta and Trans-Pacific partnerships. Allegedly these are “free trade deals” that will benefit everyone. In truth, these are carefully hidden, secret, deals that give private businesses control over the laws of sovereign governments.

For example, it has come to light that under the Trans-Atlantic partnership the National Health Service in the UK could be ruled in the private tribunals set up under the partnership as an impediment to private medical insurance and sued for damages by private firms and even forced into abolishment.

The corrupt UK government under Washington’s vassal David Cameron has blocked access to legal documents that show the impact of the Trans-Atlantic partnership on Britain’s National Health Service. http://www.globalresearch.ca/cameron-desperate-to-stop-scandal-as-secret-plans-to-sell-the-national-health-service-are-discovered/5504306

For any citizen of any Western country who is so stupid or brainwashed as not to have caught on, the entire thrust of “their” government’s policy is to turn every aspect of their lives over to grasping private interests.

In the UK the postal service was sold at a nominal price to politically connected private interests. In the US the Republicans, and perhaps the Democrats, intend to privatize Medicare and Social Security, just as they have privatized many aspects of the military and the prison system. Public functions are targets for private profit-making.

One of the reasons for the escalation in the cost of the US military budget is its privatization. The privatization of the US prison system has resulted in huge numbers of innocent people being sent to prison, where they are forced to work for Apple Computer, IT services, clothing companies that manufacture for the US military, and a large number of other private businesses. The prison laborers are paid as low as 69 cents per hour, below the Chinese wage.

This is America today. Corrupt police. Corrupt prosecutors. Corrupt judges. But maximum profits for US Capitalism from prison labor. Free market economists glorified private prisons, alleging that they would be more efficient. And indeed they are efficient in providing the profits of slave labor for capitalists.

Here is a news report on UK Prime Minister Cameron denying information about the effect of the Trans-Atlantic partnership on Britains’ National Health.
http://www.theguardian.com/business/2016/jan/26/anger-government-blocks-ttip-legal-documents-nhs-health-service

The UK Guardian, which often has to prostitute itself in order to maintain a bit of independence, describes the anger that the British people feel toward the government’s secrecy about an issue so fundamental to the well being of the British people. Yet, the British continue to vote for political parties that have betrayed the British people.

All over Europe, the corrupt Washington-contolled governments have distracted people from their sellout by “their” governments by focusing their attention on immigrants, whose presence is a consequence of the European governments representing Washington’s interests and not the interest of their own peoples.

Somthing dire has happened to the intelligence and awareness of Western peoples who seem no longer capable of comprehending the machinations of “their” governments.

Accountable government in the West is history. Nothing but failure and collapse awaits Western civilization.

“Breaking the Fear Factor”: Opposing War, Financial Fraud and State Terrorism, Dismantling Propaganda

Posted on September 4, 2015 by Reid Mukai

By Peter Koenig

Source: Global Research

We are living in a (western) world dominated by neoliberal dictators, criminals and crooks. And many of us, impregnated with the human idiocy, as so well described by Andre Vltcheck (The West Spreads Intellectual Idiocy) are every day deeper and deeper immersed into fear – fear of action, fear of what’s next – fear of losing our comfort zone. The western propaganda machine paid for by the corporate and financial oligarchy through the presstitute media is constantly indoctrinating the little we have left of our free-thinking brains.

Fear is everywhere. People who are afraid can easily be manipulated. People who are afraid obey. The system needs people who don’t resist. Renegades are potential drone targets. The Big Constant that pervades our western world with ambitions to also infiltrate Asia – is terrorism. Man-made terrorism – or better – elite-made terrorism; George Orwell would have called it Big Brother-made terrorism; terrorism with a particular purpose: spreading fear and submission.

On Friday, 21 August 2015, on a train from Amsterdam to Paris, according to the New York Times, “a heavily armed gunman opened fire aboard a packed high-speed train, traveling from Amsterdam to Paris [….] wounding several passengers before he was tackled and subdued” by two American military servicemen (on leave), who were helped by a third American. According to French officials, they “averted a mass killing.”- The gunman was armed with an automatic pistol, an AK47 and a knife (NYT annotation: AK47 is Al Qaeda’s preferred weapon). The Americans were coincidentally and suitably near to subdue the shooting 26 year-old Moroccan, a convenient Arab, who was taken into custody when the train stopped in Arras, France, just beyond the French-Belgian border. No doubt, he will be squeezed for confession. He may try to escape – and then may be shot death. Amen.

The French anti-terrorist unit took immediately charge of the investigation. The unit is known to work in utmost secrecy. Whatever news comes out of it is most likely ‘cooked’ to suit the system.

The NYT proclaims that the three Americans saved the train from a massacre. Nobody was killed. Just one of the American heroes was injured. Hollande thanked Obama for the brave Americans’ exemplary behavior and for preventing a train carnage. Propaganda all over. In America we trust – is dogma number one; dogma number two is – there is no save place on earth.

Fear everywhere, but America is there to help. Danger lingers at every corner. A terrorist may be just next door. Just give yourself up to Big Brother and he won’t let you down.

The first step towards sub-doing fear is asking yourself: Who invented and fabricated terrorism in the first place? In countries and entire regions ravaged by Washington incited wars and conflicts, terrorism is the expression of hopelessness, of wrath – of fighting back, when there is nothing left to lose. Look at the Middle East. A battlefield of nations destroyed by years of war – people living in ruins, in miserable squalor; some escape – and become the endless and EU loathed stream of refugees. According to the UN High Commissioner, there are more than 50 million refugees worldwide.

People take-up arms in self-defense. The west calls them terrorists. A term popularized by the media. A term that instills fear. – Imagine a world where the Judeo-Christian aggressors would suddenly see the light and stop spreading wars and conflicts and subjugating the world – peace would break out and settle in – terrorism, one of the key reasons for fear, would have no purpose to persist – fear would die, trust and solidarity would grow. The empires worst enemy: solidarity, friendship, and trust among people.

All wars and conflicts are multi-purpose. They boost the elite-dominated war industry; in the US more than 50% of GDP; they help dominate and subjugate people, exploit their resources, and are trailblazing a path towards Full Spectrum Dominance – world hegemony. They also help one of the ‘elite’s’ key objective – depopulating the world, so the elite may live longer with the ever scarcer resources of our gradually depleted planet. Reducing world population is a key objective of the Bilderberg Society – voiced by Henry Kissinger already in the 1960s. Recently I overheard one buddy telling another: I hate wars; but the only good thing about wars is – they reduce world population.

That is the horrendous level of immorality and greed to which humanity has sunk. – We the over-fed west may not get enough in an ‘overpopulated world’ (sic), therefore let’s reduce the human stock by killing off the under-people.

According to FAO – the UN Food and Agriculture Organization – with the current available agricultural technology Mother Earth could aliment at least 12 billion people, almost double of today’s world population. Fear and greed decimate our rational thinking. The me-me-me of abject western consumerism – and the fear of losing it – overwhelms our innate sense of human solidarity.

Remember the infamous Christmas Day 2009 ‘underwear bomber’ on a Northwest Airliner approaching Detroit wanting to detonate a plastic bomb sewed into his undies? He was suitably identified as a Nigerian Al Qaeda fighter and also conveniently and par hazard filmed by a passenger in the back row — This was such an amateurish attempt to spread fear, that after a short while even the media didn’t want to lose their ‘credibility’ (sic) and shut up.

Is there ever a thought among the fearful that such terrorists might be ‘planted’ by those who are served by the fear they cause?

A former CIA official recently admitted that virtually all so-called terror acts in the US and most of those in other parts of the world since (and including – added by me) 9/11 are false flags. With every false flag, the system can tighten its grip on the population under the pretext of ‘protection and security’. The populace literally asks for it – please protect us, please come to our houses, put them upside down and see whether there are terrorists hiding in our closets… that’s how the Boston people reacted after the April 2013 false-flag Marathon bombing.

Since 9/11 US citizens have lost more than 90% of their civil rights; first through the Patriot Act, then by subsequent extensions of police ‘protective measures’. Most US citizens are not even aware of the power they gave up to the police which has now the authority to invade people’s homes at will, without search warrant or explanation and then find anything justifying the arrest and indefinite confinement without trial of an inconvenient person. The ‘suspects’ are mostly Muslims. These days it’s easy selling to the brainwashed western world a Muslim as a criminal or terrorist.

Yet, the Boston Marathon false flag was of such low grade that anybody with a little bit of reason left, could recognize that the bombs were detonated by special forces with the mere purpose of implanting the notion that even a relatively progressive thinking university town like Boston is in danger of terrorism. Therefore let’s control the people, let’s not this ‘intellectual Boston crowd’ choose its own ways, abandoning the sinking ship. All sheep must be kept together in false solidarity, of course.

The two Chechnyan brothers were pre-identified, they had no clue what may eventually happen to them. They conveniently had a police record, maybe fabricated, to also hurt Russia, hitting two flies with the same stone. The Chechnyan ‘malfeasance’ could easily be sold to the public. One of the two alleged suspects was killed – and silenced – in an artificially created ‘shootout’. The other one is in solidarity confinement and is not allowed to talk, not even in court – condemned to die – soon to be silenced too.

Public events henceforth project fear. – People, please stand up against police and state-sponsored violence and terrorism! – Analyze for yourselves! Don’t believe the lies spread by the mainstream media. Yes, it takes a little effort, seeking out the truth and reading the news on internet – Global Research, Information Clearing House, Sputnik News, VNN, RT, TeleSUR, PressTV, CounterPunch, New Easter Outlook, The Saker – and many more – but it is one of the few chances you have to see the light and stand up for your rights – and get rid of fear.

The Boston false flag bombing, was followed by a similar horror event in Paris, in January this year. The Hebdo Charlie and related supermarket assault killed 17 people. It was opportunely planned at a notoriously anti-Muslim cartoon magazine, executed by CIA-Mossad forces in full connivance with the French secret service

(see http://www.globalresearch.ca/paris-charlie-the-shock-doctrine-par-excellence/5424960).

Two plus one ‘suspects’ with previous police records, were pre-identified. One of them ‘forgets or loses’ casually his ID in the get-away car – the only link the police has to the ‘terrorists’ – they find two, kill them at sight – so they won’t talk anymore. – The third related alleged assassin of a Jewish supermarket at the outskirts of Paris awaited the same fate: death by a police barrage of bullets. A blurred amateur video (maybe by now taken off internet) shows how a hand-cuffed individual is thrown before the wolves outside of the supermarket, to be riddled mercilessly with bullets. Nobody to talk. The truth remains ugly propaganda – propaganda for the system – a system that prevails over and feeds on terrorism. Millions of people, dulled by the event, walked the streets of European cities, solemnly parading placards lettered with “I am Charlie” — millions of people submitted – and still do – to a miserable lie – spreading and perpetuating fear.

Hollande had a justification to tighten the grip around France and within Paris – police everywhere, reducing civil liberties just a tad more – orders from the Washington masters. Being a nominal ‘socialist’ (sic), the emperor doesn’t quite trust him – as he may resent having been forced by the White House to abrogate his country’s lucrative sale of two Mistral type amphibious assault ships to Russia. To dampen any lingering sympathy for Russian President Putin, Hollande had to be reined in; and the spineless French leader (sic) did indeed cave in.

Fear is everywhere. European politicians are all afraid they may be in the crosshairs of the CIA or Pentagon or other US mercenary hit men if they don’t behave. A couple of days ago it was reported that Hollande is now also planning preventive drone assassinations, mimicking his brother-in-crime, Peace Nobel Laureate, Barack Obama. Imagine! – How far can you sink to lick – ehhh – the naked toes of the naked emperor. How far has our western civilization sunk in only the last 30 years – the onset of neoliberalism!

Fear commands everyone – almost. Fear is the public enemy number One – but it can be overcome – with courage, an open mind and foremost an awakened consciousness.

People feel reasonably happy. They feel protected. They gladly trade their civil rights for police and military protection. Terrorism is horrible and it is so unpredictable. It lurks everywhere. And nobody dares to question these bloody fabricated horror events. Nobody dares ask: what motivates the terrorists? How come their number has increased exponentially in the last 15 years? Terror sows more terror. Fear disseminates more fear. More fear facilitates more oppression and manipulation of people – and eventually more terrorism.

Take the massive flood of refugees engulfing Europe. The EU laments the ‘refugee crisis; seemingly not realizing that they helped making it. The Eurocrats cannot deal with the overwhelming influx of refugees. They use the bought media to make people afraid of them. The refugees come from these Arab countries the west is fighting for ‘freedom and democracy’. They are dark-skinned, poor and no-good. They steal our jobs, food and women. The human touch and solidarity of westerners has been annihilated long ago – by the neoliberal doctrine – that knows no mercy, only profit and power. Western powers don’t want these poor homeless beggars within their frontiers. What to do with them? They are a costly nuisance. Most of them are Muslims anyway. There is no space for them.

Would it ever occur to one of those high-flying, arrogant never elected Maastricht politicians to ask ‘why is this onslaught of refugees increasing by the day?’ – They may find the answer in front of their nose, in case they still have some left-over ticking brains. We, Europeans, in full complicity with war-mongering hegemonic Washington have helped destroy their countries, their economies, their jobs, torn apart their families, killed their children, have bombed their very homes to ashes – now they come to seek help from us. These poor people have no choice but asking their hangmen for a bit of mercy, for some crumbs of bread, for some rudimentary shelter. The raped seeks alms from the rapist. It’s the Stockholm syndrome. – Its fear from dying. Maybe the criminals who almost killed them have some humanity left, a bit of mercy – please.

What makes them tick – these criminal hegemonic politicians? Why are they so inhumanly selfish, greedy and violent? The public at large is afraid to even ask. Asking could produce answers that may derange one’s comfort zone. Better don’t ask and follow the rules. Let fear continue to rule.

The NYT also reports, “Stock prices around the world continued to plunge on Friday, threatening to end one of the longest bull runs in the history of the United States stock market.” Fear of losing money is spread. Such ‘market’ fluctuations, as most of us know, have little to do with ‘markets’, be it share or money markets. Money is fabricated by a mouse-click of a bank dishing out debt. Markets are manipulated by banks and political powers for monetary profit and political gains – and to sow fear – fear that something horrendously drastic may happen, may affect our fragile economy – and may foremost affect our stolen well-being. Yes, stolen. Our western riches have been stolen during hundreds of years of abject, murderous colonization of the southern hemisphere. And we continue colonizing them with our modern weapon – MONEY. When banks spread fear, it is to steal the money, pension funds, social systems from us, their faithful clients. Stealing from abroad is not enough.

Rather than fearfully shutting up – wake up! Dare stand up fellow citizen – against the white collar onslaught of fraud and exploitation, against corruption of our elitist neoliberal system! Get rid of those deceiving politicians – the scum of greed and power. Expose them. Neutralize them.

The US as well as the European Commission just enacted laws, allowing banks, effective immediately – to ‘rescue’ themselves by so-called ‘bail-ins’ – meaning, a bank that has overstretched and over-speculated itself into bankruptcy may literally save itself by stealing the money from its depositors and shareholders. – Why does such an edict – not really a law because those who designed the rule are unelected Eurocrats – not prompt an immediate run on the banks? – Why does nobody even protest? – Because people don’t know? Maybe. But Fear – sheer fear from being punished for ‘disobedience’ – is a better explanation.

Instead, our fear makes us trust that such ‘bail-ins’ will always happen to others. We so easily forget what happened only two years ago, in March 2013 to the people of Cyprus, when their deposits were decimated by the infamous ‘haircut’, administered by the highly indebted Cypriot banks, by order of the BCE, with full complicity of the Cypriot elites, who first transferred their fortunes abroad. It was like a trial run. How much would the populace swallow without (too much) protesting? – It worked. The rule is now institutionalized – and nobody says beep. – For fear that worse may follow? – Or for sheer comfort of not moving our butts.

The famous late Howard Zinn said civil disobedience is our – as in ‘we the people’ – strongest weapon against corporate and state injustice and abuse. Today’s version of this wisdom might be for the 99.99% of us, the people, to organize and infiltrate the reigning criminal system and breaking it down from within. Much like did and do the State Department funded Washington-based thinktanks (sic) – initiating the deadly and destructive ‘Arab Spring’, intruding and subverting the European Parliament with bought proxies and fake NGOs – and what they attempt to do in Russia and China, albeit unsuccessfully.

—

Back to the NYT article on the plunge of the US stock exchange. Finger-pointing of the guilty is of the order. The fear factor has to be substantiated and enhanced by fault of an ‘outsider’ – in this case China – which according to the NYT has ‘unexpectedly’ devalued its currency, a sign of a troubled economy and a bleak outlook for the economy of other large ‘developing countries’.

Let’s fear the Evil East. – No good may come from the east. The NYT has of course no explanation of truth. Namely that the Chinese Yuan had been artificially over-valued under pressure of the US, and kept within a 2% band of fluctuation by the Chinese authorities. This was also in line with China’s huge dollar reserves, some 1.6 trillion dollars. Relaxation of the fluctuation – letting the rate slide naturally to an expected 3% margin, would not only make China more competitive, but might enhance the currency’s international standing to eventually becoming a new currency in the IMF’s basket constituting the SDRs, or Special Drawing Rights. The SDR is an international virtual money that may be lent to countries which so desire, hence, better balancing the currency exchange risk of the loan. The current SDR basket is composed of only four ‘world’ currencies; the US dollar, the British Pound, the Euro and the Japanese Yen.

If the Yuan can keep its own by floating against other major currencies, chances are it may be admitted by the west-dominated IMF as the fifth currency to the SDR basket, thereby opening the door for the Chinese Yuan to become a major official world reserve currency. Washington may not like it, but may have little choice preventing the currency of the world’s strongest economy to become an officially admitted reserve currency.

—

Fear may also be the main reason for the Greek Tsipras Government 180 degree U-turn after the 62% NO vote on July 5 – No to austerity, No to more strangulation by the infamous troika – European Central Bank (ECB), European Commission (EC) and the International Monetary Fund (IMF). Not Germany, not the troika, are Greece’s strongest enemies; fear is. The Syriza government was pressured, blackmailed, coerced – and possibly even corrupted – into accepting an even more nefarious austerity package than the one against which Greeks voted with an overwhelming NO. If indeed enacted, the new debt commitment of € 86 billion will drive Greece’s debt to GDP ratio way above 200 % – and not one euro will flow into Greece’s economy, her social system, fighting unemployment, bringing back public hospitals, schools, water and electricity.

The Syriza Tsipras Government has committed an illegal act against Greece’s own Constitution which puts the people above parliament and above the executive – as a true democracy should. Tsipras’ anti-democratic act could be undone any time by a simple decision of the Supreme Court. According to international standards, Greece’s accumulated debt is fully illegal and could be erased by a mouse click, the same way it was created. Any contract – in this case debt – concluded under duress, coercion, corruption and / or blackmail does not stand up before an international court of law. This must have been known to the Tsipras government. Yet, Tsipras and his inner circle went to Brussels to ‘negotiate’ ignoring this chance. Instead they sold out their country to the banksters, let themselves be humiliated, ridiculed in the face of their own people, let alone the rest of the world.

Fear was most likely the engine for Tsipras’ behavior. Many of his Syriza colleagues left the government coalition. Ministers who didn’t agree with his politics were fired. He preferred succumbing to fear – fear of the potential wrath that might emanate from the corrupt and criminal EU; from greedy Germany whose neoliberalism is rapidly taking on the colors of Nazism. – German supremacy over Europe – again? – Maybe there were death-threats involved, who knows. It is common practice when power and resources are at stake.

However, a true leader has no fear. He or she stands tall with the moral and ethical obligation to defend the interests of the people who elected him or her. As did Hugo Chavez, Fidel Castro, Rafael Correa, Evo Morales, Cristina Kirchner, Lula, Dilma Rousseff and many more.

Traveling recently all over Greece fear was visible everywhere. When asked, why their inaction in the face of this shameful treason of their PM – no protests, the streets remained calm – the answer was almost uniformly – we are afraid. Afraid of what? Of the police; they shoot at us with rubber bullets, with water cannons – and we don’t know when the military will intervene.

In Delphi, the very town where democracy was born some 2,500 years ago, a shop owner confessed, democracy is dead, not only in Greece – but in Europe, in the world. With this backdrop, a new military takeover was according to him not far-fetched. The Tsipras betrayal was a boon for the rightwing, the Nazi-like ‘Golden Dawn’ – a perfect backing for a new military regime.

After the 1967 US-supported so-called Coup of the Colonels, Greece suffered seven years of a most repressive right wing military dictatorship, where full obedience was of the order, where people disappeared, where the communist party was forbidden and communists were prosecuted and killed, where anything resembling left-wing literature was censured, during which miniskirts, pop-music, long hair, the peace sign and the like were prohibited. This repressive regime has deeply marked the Greek population. They are afraid it may return. They are aware of their country’s vulnerability due to its importance for Washington, hosting the southern-most strategic NATO base. Any deviation of the Washington made and EC imposed rule may bring back the military horror – reminiscent of Costa Cavras’ 1969 extraordinary docudrama “Z”.

Now, the Tsipras Government has resigned – for fear of the domestic consequences of its actions? – A new interim government is to be prepared before the announced 20 September election. Will the radical break-away Syriza faction, the new Unity Party, be able to form a viable coalition and gather the necessary trust to win the coming September elections?

Will Greece after all be able to break the paralyzing streak of fear?

Will Greece set the new standard of fearlessness for the rest of Europe to follow? – Will Greece dare to go the only practical way – exit the unviable euro – go back to her drachma and revamp their economy with public banking for the benefit of the Greek people? – I trust Greece will dare take back her sovereignty, breaking the all-permeating Fear Factor and become a flagship of courage for Europe and for the world.

Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He writes regularly for Global Research, ICH, RT, Sputnik News, TeleSur, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance .

NATO and the West Just Became Irrelevant

Posted on August 4, 2015 by Reid Mukai

By F. William Engdahl

Source: New Eastern Outlook

The dual summits that took place in Russia’s Ufa beginning 9 July were anything but routine. In fact it may be seen by future historians as a signal event that marked the definitive decline of the global hegemony of European civilization including North America. This is no small event in human history. It’s the most significant shift in relative global economic relations since the Fourth Crusade in 1204 when the Republic of Venice emerged as a world power following their brutal, disgraceful capture and sacking of Constantinople, marking the demise of the Byzantine Empire.

First a look at what transpired. Russia was host to two overlapping summits of emerging alternative organizations, the annual meeting of the BRICS nations as well as the annual meeting of the Shanghai Cooperation Organization. The larger significance has been all but entirely blacked out by western mainstream media such as the New York Times.

First we look at the results from the BRICS meeting where Brazil, Russia, India, China and South Africa are the five member states. The BRICS formally put their New Development Bank (NDB) into operation. It has world headquarters in Shanghai, China’s banking and financial center with a branch in South Africa to serve the African region.

It is explicitly operating as an alternative to the post-1945 domination of the IMF and World Bank, the heart of Washington’s Dollar System. It has member contributions of $50 billion for infrastructure projects mainly, but not exclusively, in the BRICS states. As well it has created a $100 billion financial defense fund, a so-called Contingent Reserves Arrangement, in event of speculative attacks such as were launched by Washington with the Soros Quantum Fund in 1997 to destroy the independent Asian Tiger economies.

The NDB bank is in business one year after the last BRICS summit agreed to its creation, and the meeting announced that first approved infrastructure projects will begin at the beginning of 2016. That’s an impressive testament to the mutual will to create an alternative to the IMF and World Bank, both of the latter controlled by Washington where they are headquartered. Notably BRICS agreed for the first time to institute formal cooperation with the leaders of the Eurasian Economic Union of Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan.

As well they agreed to meet the leaders of the Shanghai Cooperation Organization (SCO)–Russia, China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan.

SCO adds major security dimension

For its part, the nations of the SCO–Shanghai Cooperation Organization–in addition to formally admitting both India and Pakistan, agreed to increase its role combating terrorism in the region. The SCO was established in 2001 originally to settle border conflicts between China, Russia, Uzbekistan, Kyrgyzstan and Kazakhstan in the years after the dissolution of the Soviet Union. It is now undergoing an organic metamorphosis into something quite different and, in combination with China’s One Belt, One Road New Economic Silk Road high-speed rail network crisscrossing Russia and all Eurasia, potentially the kernel of an economic region whose growth over the next century and more can pale anything the debt-bloated OECD economies of the west are capable of.

This year the SCO members admitted Pakistan and India as full members, a move that undercuts some seventy years of Anglo-American geopolitics on the Indian Subcontinent by bringing the two bitter enemies into a forum dedicated to resolving border conflicts diplomatically. The Ufa BRICS declaration also stressed the importance of reaffirming the UN Charter and condemned unilateral military intervention, a clear reference to guess who?

That enlargement to include India and Pakistan into the Eurasian SCO has huge implications for China’s New Economic Silk Road high-speed rail infrastructure network across all Eurasia as well as potential gas and oil pipeline routes in the region. Significantly, for an Obama Administration that wants to pit Iran against Russia and China with the signing of the latest nuclear Geneva 6-power deal, Iranian President Hassan Rouhani attended the BRICS/SCO summits and held private talks with Russian President Vladimir Putin. Tehran will likely join the Shanghai Cooperation Organization after the embargo is withdrawn, perhaps as early as 2016, something that will give the SCO a major presence in the Middle East geographically.

With the planned lifting now of US economic sanctions on Iran, this could mean a huge economic deepening of the Eurasian economic space from Shanghai to St. Petersburg to Teheran and beyond, the nightmare scenario of US geopolitical actors like Zbigniew Brzezinski or Henry Kissinger.

Notably, the BRICS final declaration also pledged greater cooperation on combating terrorism and dealing with security problems of member states. This overlaps the Russia-initiated Collective Security Treaty Organization (CSTO), created in 1992 after the collapse of the Soviet Union to provide some semblance of security from rampant CIA monkey business using veterans of the CIA’s Afghani Mujahideen to “stir up” (to use Brzezinski’s term for it) the peoples of former Soviet states with large Muslim populations across Central Asia, especially Azerbaijan and the Caucasus.

Today, the CSTO is emerging as a far more serious organization and a means by which Russia can legitimately provide direct security expertise to weaker states inside the Eurasian Economic Union such as Kyrgyzstan or Armenia, both of whom have been targets of new US-sponsored Color Revolutions to spread chaos across the emerging Eurasian economic space.

What is notable about the joint BRICS-SCO-Eurasian Economic Union summit hosted by Russia’s Putin in Ufa, a city of some one million at the foot of the Ural mountain range near to Kazakhstan, is not only the degree of harmonizing that is taking place among the three vast organizations. It is also the fact that Russia uniquely is a member of all three, facilitating the harmonization of the three in terms of strategic goals. Moreover the member states have everything and everyone necessary to be fully independent of the dollar world and the dying EU with its misbegotten Euro sham.

As The Saker pointed out in a recent perceptive piece, “the full list of BRICS/SCO members will now look like this: Brazil , China , India , Kazakhstan , Kyrgyzstan , Pakistan , Russia , South Africa , Tajikistan and Uzbekistan. The BRICS/SCO will thus include 2 Permanent UN Security Council, 4 countries with nuclear weapons (only 3 NATO countries have nukes!), it’s members account for a full third of the world’s land area: they produce 16 trillion dollars in GDP and have a population of 3 billion people or half of the global world population.”

A new architecture of Eurasia is being formed, something which, were they of a mind to, the nations of the EU, above all Germany, France, Italy, could hugely benefit from cooperating with. Yet, what is the response of Washington and her “vassals” in European NATO, to use the term of Brzezinski?

The NATO Washington response

The response of Washington and NATO to all this is a bleak, pathetic contrast to put it mildly.

The new Obama nominee to become US Joint Chiefs of Staff chairman, Marine Corps General Joseph Dunford, declared Russia to be America’s greatest threat in his Congressional testimony some days ago. Conveniently forgetting all about the “existential threat” from ISIS, an organization US and Israeli intelligence brought into being to spread their chaos, Dunford declared, “If you want to talk about a nation that could pose an existential threat to the United States, I’d have to point to Russia.” The alarming thing is there was scarcely a peep of protest aside from blog remarks by retired Congressman Ron Paul and a few others. The tom-toms of bellicosity are pounding louder along the Potomac these days.

The war rage in Washington goes deeper than just one general. The Pentagon just released its Military Strategy of the United States, 2015. There the focus has clearly shifted away from “non-state actors” such as ISIS as being the greatest threat to the US and refocuses on “state actors” that are “challenging international norms.” The Pentagon strategy document goes on to name Russia, China, Iran, North Korea as the greatest threats. What they do not admit is the “threat” is to the continued sole Superpower hegemony of a United States that insists its will is the only valid one as self-appointed guardian of “democracy” and “human rights,” their New World Order as George Bush senior termed it in 1991.

On the economic front, what is emerging across the vast expanse of Eurasia is the greatest infrastructure investment in real physical infrastructure, which in turn will create new markets where today the remote regions of Siberia or Mongolia remain virtually untouched. By contrast, Obama’s Washington, a once-hegemon that has lost its soul, can only offer the US-dominated secret free trade pact, Trans-Pacific Partnership (TPP), for Asian states absent China, as a way to contain china economically, and the Trans-Atlantic Trade and Investment Partnership (TTIP) that offers the same geopolitical dead end for the economies of the EU. Both trade proposals are a desperate attempt by Washington strategists and their corporate backers in agribusiness such as Monsanto or the pharmaceutical industry to dominate world trade and finance.

Just as an individual can lose themselves through a trauma, so it’s possible for entire nations, even nations as large and apparently mighty as the United States of America, to lose its soul. Once a nation loses its soul, it loses its ability to do good, to be good. That tragically describes America today. The process has been a slow-motion rot from within, much as the Roman Empire in the Third and Fourth centuries AD. The rot has proceeded over decades.

There were many seminal events we as a people let pass without acting. One such over the past century or more was the US Congress’ surrender of the Constitutional responsibility to control the issue of money, handing it over to a private cabal of Wall Street bankers who named it the Federal Reserve. Another was the perfidy of our turning on our wartime allies in Russia and making them the “new Hitler,” so that Nelson Rockefeller’s national security state, complete with a CIA, could be built to justify the devaluation of the essence of the US Constitution. Another was the decision, well, perhaps you can fill in the blanks there are so many, each seemingly minor, but as a cumulative totality toxic to genuine respect for human life and individual freedom. Then, following the events of September 11,2001 we as a nation, crippled by our fear, stood by silently as the Bill of Rights went into the paper shredder of George W. Bush with the misnamed Patriots Act and other police state laws.

Once a people as once-wonderful as the American people lose all that that made them good, it takes a conscious decision and determination to regain that goodness. The first essential step is to become conscious of what is bad in us as a people today. David Rockefeller or George H.W. Bush or Bill Gates or Hillary Clinton or Jeb Bush did not do this. We did, and they merely took the use out of our action. There we must begin if we wish to take ourselves seriously again as a nation and as a people. Seeing ourselves as “victims” regardless of what or whoever is a dead end, literally.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”.

Putin Leads BRICS Uprising

Posted on July 15, 2015 by Reid Mukai

By Mike Whitney

Source: Counterpunch

There’s been a virtual blackout of news from this year’s seventh annual BRICS summit in Ufa, Russia. None of the mainstream media organizations are covering the meetings or making any attempt to explain what’s going on. As a result, the American people remain largely in the dark about a powerful coalition of nations that are putting in place an alternate system that will greatly reduce US influence in the world and end the current era of superpower rule.

Let’s cut to the chase: Leaders of the BRICS (Brazil, Russia, India, China and South Africa) realize that global security cannot be entrusted to a country that sees war as a acceptable means for achieving its geopolitical objectives. They also realize that they won’t be able to achieve financial stability as long as Washington dictates the rules, issues the de facto “international” currency, and controls the main levers of global financial power. This is why the BRICS have decided to chart a different course, to gradually break free from the existing Bretton Woods system, and to create parallel system that better serves their own interests. Logically, they have focused on the foundation blocks which support the current US-led system, that is, the institutions from which the United States derives its extraordinary power; the dollar, the US Treasury market, and the IMF. Replace these, the thinking goes, and the indispensable nation becomes just another country struggling to get by. This is from the Asia Times:

“Leaders of the BRICS… launched the New Development Bank, which has taken three years of negotiations to bring to fruition. With about $50 billion in starting capital, the bank is expected to start issuing debt to fund infrastructure projects next year. They also launched a foreign-exchange currency fund of $100 billion.

The two new endeavors are statements that the five largest emerging markets are both looking out for each other and, simultaneously, moving away from the western financing institutions of the World Bank and International Monetary Fund.

“The BRICS states intend to actively use their own resources and internal resources for development,” Putin said, according to Reuters. “The New (Development) Bank will help finance joint, large-scale projects in transport and energy infrastructure, industrial development.”…..Birthing the two initiatives in Russia had been Putin’s top priorities.”

(“Russia’s Putin scores points at Ufa BRICS summit“, Asia Times)

Can you see what’s going on? Putin has figured out the empire’s vulnerabilities and he’s going straight for the jugular. He’s saying: ‘We’re going to issue our own debt, we’re going to run our own system, we’re going to fund our own projects, and we’re going to do it all in our own currency. Kaboom. The only thing you’re going to be doing, is managing your own accelerating economic decline. Have a good day.’ Isn’t that the gist of what he’s saying?

So can you see, dear reader, why none of this is appearing on the pages of US newspapers or on US television. Washington would rather you didn’t know how they’ve bungled everything by alienating the fastest growing countries in the world.

The Ufa conference is a watershed moment. While the Pentagon is rapidly moving troops and military hardware to Russia’s borders, and one bigwig after another is bloviating about the “Russian threat”; the BRICS have moved out of Washington’s orbit altogether. They are following the leadership of men who, frankly speaking, are acting exactly like US leaders acted when the US was on the upswing. These are guys who “think big”; who want to connect continents with high-speed rail, lift living standards across the board, and transform themselves into manufacturing dynamos. What do America’s leaders dream about: Drone warfare? Balancing the budget? Banning the Confederate flag?

It’s a joke. No one in Washington has a plan for the future. It’s all just political opportunism and posturing. Check this out from The Hindu:

“China and Russia have described BRICS, the Shanghai Cooperation Organisation (SCO) and the Eurasian Economic Union (EAEU) as the core of a new international order…

Russian President Vladimir Putin said… “There is no doubt — we have all necessary premises to expand the horizons of mutually beneficial cooperation, to join together our raw material resources, human capital and huge consumer markets for a powerful economic spurt.”

Russia’s Tass news agency also quoted Mr. Putin as saying that the Eurasian continent had vast transit potential. He pointed to “the construction of new efficient transport and logistics chains, in particular, the implementation of the initiative of the Silk Road economic belt and the development of transportation in the eastern part of Russia and Siberia. This may link the rapidly growing markets in Asia and Europe’s economies, mature, rich in industrial and technological achievements. At the same time, this will allow our countries to become more commercially viable in the competition for investors, for creating new jobs, for advanced enterprises,” he observed.”….

The summit also acknowledged “the potential for expanding the use of our national currencies in transactions between the BRICS countries.” (“BRICS, SCO, EAEU can define new world order: China, Russia“, The Hindu)

The dollar is toast. The IMF is toast. The US debt market (US Treasuries) is toast. The institutions that support US power are crumbling before our very eyes. The BRICS have had enough; enough war, enough Wall Street, enough meddling and hypocrisy and austerity and lecturing. This is farewell. Sure, it will take time, but Ufa marks a fundamental change in thinking, a fundamental change in approach, and a fundamental change in strategic orientation.

The BRICS are not coming back, they’re gone for good, just as Washington’s “pivot to Asia” is gone for good. There’s just too much resistance. Washington has simply overplayed its hand, worn out its welcome. People are sick of us.

Can you blame them?

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.

Genetically Modified Organisms (GMO): Profit, Power and Geopolitics

Posted on January 1, 2015 by Reid Mukai

By Colin Todhunter

Source: GlobalResearch.ca

Genetically modified organisms (GMOs) are not essential for feeding the world [1,2], but if they were to lead to increased productivity, did not harm the environment and did not negatively impact biodiversity and human health, would we be wise to embrace them anyhow?

The fact is that GMO technology would still be owned and controlled by certain very powerful interests. In their hands, this technology is first and foremost an instrument of corporate power, a tool to ensure profit. Beyond that, it is intended to serve US global geopolitical interests. Indeed, agriculture has for a long time been central to US foreign policy.

“American foreign policy has almost always been based on agricultural exports, not on industrial exports as people might think. It’s by agriculture and control of the food supply that American diplomacy has been able to control most of the Third World. The World Bank’s geopolitical lending strategy has been to turn countries into food deficit areas by convincing them to grow cash crops – plantation export crops – not to feed themselves with their own food crops.” Professor Michael Hudson [3].

The Project for a New American Century and the Wolfowitz Doctrine show that US foreign policy is about power, control and ensuring global supremacy at any cost [4,5]. Part of the plan for attaining world domination rests on the US controlling agriculture and hijacking food sovereignty and nations’ food security.

In his book ‘Seeds of Destruction’, William Engdahl traces how the oil-rich Rockefeller family translated its massive wealth into political clout and set out to capture agriculture in the US and then globally via the ‘green revolution’ [6]. Along with its big-dam, water-intensive infrastructure requirements, this form of agriculture made farmers dependent on corporate-controlled petroproducts and entrapped them and nations into dollar dependency and debt. GMOs represent more of the same due to the patenting and the increasing monopolization of seeds by a handful of mainly US companies, such as Monsanto, DuPont and Bayer.

In India, Monsanto has sucked millions from agriculture in recent years via royalties, and farmers have been compelled to spend beyond their means to purchase seeds and chemical inputs [7]. A combination of debt, economic liberalization and a shift to (GMO) cash crops (cotton) has caused hundreds of thousands of farmers to experience economic distress, while corporations have extracted huge profits [8]. Over 270,000 farmers in India have committed suicide since the mid to late nineties [9].

In South America, there are similar stories of farmers and indigenous peoples being forced from their lands and experiencing violent repression as GMOs and industrial-scale farming take hold [10]. It is similar in Africa, where Monsanto and The Gates Foundation are seeking to further transform small-scale farming into a corporate controlled model. They call it ‘investing’ in agriculture as if this were an act of benevolence.

Agriculture is the bedrock of many societies, yet it is being recast for the benefit of rich agritech, retail and food processing concerns. Small farms are under immense pressure and food security is being undermined, not least because the small farm produces most of the world’s food [11]. Whether through land grabs and takeovers, the production of (non-food) cash crops for export, greater chemical inputs or seed patenting and the eradication of seed sharing among farmers, profits are guaranteed for agritech corporations and institutional land investors.

The recasting of agriculture in the image of big agribusiness continues across the globe despite researchers saying that this chemical-intensive, high-energy consuming model means Britain only has 100 harvests left because of soil degradation [12]. In Punjab, the ‘green revolution’ model of industrial scale, corporate dominated agriculture has led to a crisis in terms of severe water shortages, increasing human cancers and falling productivity [13]. There is a global agrarian crisis. The increasingly dominant corporate-driven model is unsustainable.

More ecological forms of agriculture are being called for that, through intelligent crop management and decreased use of chemical inputs, would be able to not only feed the world but also work sustainably with the natural environment. Numerous official reports and scientific studies have suggested that such policies would be more appropriate, especially for poorer countries [14-16].

When on occasion the chemical-industrial model indicates that it does deliver better yields than more traditional methods (a generalization and often overstated [17]), even this is a misrepresentation. Better yields but only with massive chemical inputs from corporations and huge damage to health and the environment as well as ever more resource-driven conflicts to grab the oil that fuels this model. Like the erroneous belief that economic ‘growth’ (GDP) is stimulated just because there becomes greater levels of cash flows in an economy (and corporate profits are boosted), the notion of improved agricultural ‘productivity’ also stems from a set of narrowly defined criteria.

The dominant notions that underpin economic ‘growth’, modern agriculture and ‘development’ are based on a series of assumption that betray a mindset steeped in arrogance and contempt: the planet should be cast in an urban-centic, ethnocentric model whereby the rural is to be looked down on, nature must be dominated, farmers are a problem to be removed from the land and traditional ways are backward and in need of remedy.

“People are perceived as ‘poor’ if they eat food they have grown rather than commercially distributed junk foods sold by global agri-business. They are seen as poor if they live in self-built housing made from ecologically well-adapted materials like bamboo and mud rather than in cinder block or cement houses. They are seen as poor if they wear garments manufactured from handmade natural fibres rather than synthetics.” Vandana Shiva [18]

Western corporations are to implement the remedy by determining policies at the World Trade Organization, IMF and World Bank (with help from compliant politicians and officials) in order to depopulate rural areas and drive folk to live in cities to then strive for a totally unsustainable, undeliverable, environment-destroying, conflict-driving, consumerist version of the American Dream [19,20].

It is interesting (and disturbing) to note that ‘developing’ nations account for more than 80% of world population, but consume only about a third of the world’s energy. US citizens constitute 5% of the world’s population, but consume 24% of the world’s energy. On average, one American consumes as much energy as two Japanese, six Mexicans, 13 Chinese, 31 Indians, 128 Bangladeshis, 307 Tanzanians and 370 Ethiopians [21].

Despite the environmental and social devastation caused, the outcome is regarded as successful just because business interests that benefit from this point to a growth in GDP. Chopping down an entire forest that people had made a living sustainably from for centuries and selling the timber, selling more poisons to spray on soil or selling pharmaceuticals to address the health impacts of the petrochemical food production model would indeed increase GDP, wouldn’t it? It’s all good for business. And what is good for business is good for everyone else, or so the lie goes.

“Corporations as the dominant institution shaped by capitalist patriarchy thrive on eco-apartheid. They thrive on the Cartesian legacy of dualism which puts nature against humans. It defines nature as female and passively subjugated. Corporatocentrism is thus also androcentric – a patriarchal construction. The false universalism of man as conqueror and owner of the Earth has led to the technological hubris of geo-engineering, genetic engineering, and nuclear energy. It has led to the ethical outrage of owning life forms through patents, water through privatization, the air through carbon trading. It is leading to appropriation of the biodiversity that serves the poor.” [22]

The ‘green revolution’ and now GMOs are ultimately not concerned with feeding the world, securing well-rounded nutritious diets or ensuring health and environmental safety. (In fact, India now imports foods that it used to grow but no longer does [23]; in Africa too, local diets are becoming less diverse and less healthy [24].) Such notions are based on propaganda or stem from well-meaning sentiments that have been pressed into the service of corporate interests.

Biotechnological innovations have always had a role to play in improving agriculture, but the post-1945 model of agriculture has been driven by powerful corporations like Monsanto, which are firmly linked to Pentagon and Wall Street interests [25]. Motivated by self-interest but wrapped up in trendy PR about ‘feeding the world’ or imposing austerity to ensure prosperity, the publicly stated intentions of the US state-corporate cabal should never be taken at face value [26,27].

In India, Monsanto and Walmart had a major role in drawing up the Knowledge Initiative on Agriculture [28]. Monsanto now funds research in public institutions and its presence and influence compromises what should in fact be independent decision and policy making bodies [29,30]. Monsanto is a driving force behind what could eventually lead to the restructuring and subjugation of India by the US [31]. The IMF and Monsanto are also working to ensure Ukraine’s subservience to US geopolitical aims via the capture of land and agriculture [32]. The capture of agriculture (and societies) by rich interests is a global phenomenon.

Only the completely naive would believe that rich institutional investors in land and big agribusiness and its backers in the US State Department have humanity’s interests at heart. At the very least, their collective aim is profit. Beyond that and to facilitate it, the need to secure US global hegemony is paramount.

The science surrounding GMOs is becoming increasingly politicized and bogged down in detailed arguments about whose methodologies, results, conclusions and science show what and why. The bigger picture however is often in danger of being overlooked. GMO is not just about ‘science’. As an issue, GMO and the chemical-industrial model it is linked to is ultimately a geopolitical one driven by power and profit.

Notes

1] This report indicates the root causes for global food shortages: http://www.cban.ca/Resources/Topics/Feeding-the-World/Will-GM-Crops-Feed-the-World

2] Citing official reports and data sources, references in this article indicate agricultural productivity in India was better in 1760 and 1890 and that India does not require chemical-industrial agriculture let alone GMOs: http://www.globalresearch.ca/india-genetically-modified-seeds-agricultural-productivity-and-political-fraud/5328227

3] http://michael-hudson.com/2014/10/think-tank-memories/

4] http://www.informationclearinghouse.info/article1665.htm

5] http://www.informationclearinghouse.info/article40093.htm

6] Arun Shrivastava reviews and summarizes Engdahl’s book here: http://www.globalresearch.ca/seeds-of-destruction-the-hidden-agenda-of-genetic-manipulation-2/9379

7] http://www.countercurrents.org/shiva180614.htm

8] Based on the findings of a report by researchers at Cambridge University in the UK: http://www.cam.ac.uk/research/news/new-evidence-of-suicide-epidemic-among-indias-marginalised-farmers

9] Official figure quoted by the BBC as of 2013: http://www.bbc.co.uk/news/magazine-21077458

10]http://www.theecologist.org/News/news_analysis/2267255/gm_crops_are_driving_genocide_and_ecocide_keep_them_out_of_the_eu.html

11] Official report released by GRAIN: http://www.grain.org/article/entries/4929-hungry-for-land-small-farmers-feed-the-world-with-less-than-a-quarter-of-all-farmland

12] Farmers Weekly quotes a report by researchers at the University of Sheffield in the UK: http://www.fwi.co.uk/news/only-100-harvests-left-in-uk-farm-soils-scientists-warn.htm

13] Newspaper report quoting official statistics and research findings: http://www.deccanherald.com/content/337124/punjab-india039s-grain-bowl-now.html

14] Official UN report: http://unctad.org/en/PublicationsLibrary/tdr2013_en.pdf

15]http://www.srfood.org/en/official-reports# and http://www.plantpartners.org/agroecology-reports.html

16] http://www.tandfonline.com/doi/full/10.1080/14735903.2013.806408#tabModule

17] http://phys.org/news/2014-12-crops-industrial-agriculture.html

18] http://www.organicconsumers.org/btc/shiva112305.cfm

19] Food policy analyst Devinder Sharma outlines the motives of Western corporations in India: http://www.bhoomimagazine.org/article/cash-food-will-strike-very-foundation-economy

20] Arundhati Roy discusses the erroneous notion of ‘progress’ being applied in India and the conflict and violence that has followed: http://www.guernicamag.com/features/we-call-this-progress/

21] http://public.wsu.edu/~mreed/380American%20Consumption.htm

22] http://www.spaziofilosofico.it/numero-07/2959/economy-revisited-will-green-be-the-colour-of-money-or-life/

23] Vandana Shiva describes how the ‘green revolution’ and ‘free trade’ have turned India into a net importer of foods it used to be self sufficient in: http://www.aljazeera.com/indepth/opinion/2013/09/201398122228705617.html

24] Article describing the plight of agriculture in Africa: http://www.globalresearch.ca/behind-the-mask-of-altruism-imperialism-monsanto-and-the-gates-foundation-in-africa/5408242

25] http://www.globalresearch.ca/monsantos-gmo-food-and-its-dark-connections-to-the-military-industrial-complex/5389708

26] Article providing factual historical insight into Monsanto and its wrongdoings: http://www.globalresearch.ca/the-complete-history-of-monsanto-the-worlds-most-evil-corporation/5387964

27] Analysis of Wall Street’s fraudulent practices in recent times and the complicity of the entire political and economic system: http://www.wsws.org/en/articles/2012/03/pers-m15.html

28]http://www.democracynow.org/2006/12/13/vandana_shiva_on_farmer_suicides_the

29] http://dissidentvoice.org/2009/07/monsanto-a-contemporary-east-india-company-and-corporate-knowledge-in-india/

30] http://www.thehindu.com/opinion/lead/nip-this-in-the-bud/article5012989.ece

31] http://www.countercurrents.org/todhunter031114.htm

32] http://www.oaklandinstitute.org/food-security-hostage-wall-street-and-us-global-hegemony

Fighting Back Against Western Sanction

Posted on August 26, 2014 by Reid Mukai

By Ulson Gunnar

Source: NEO

While the impact of sanctions leveled against Russia is being debated, one fact is perfectly clear; the dangerous interdependence cultivated by the concept of “globalization” leaves nations vulnerable amid a global order dominated by hegemonic special interests that use such interdependence as a weapon.

Two rounds of sanctions have been leveled against Russia targeting Russian banking, arms manufacturing, and oil industries. Even as the sanctions are marketed to the world as Russia “paying a price” for its role in “destabilizing” Ukraine, Russia has been busy cultivating ties and expanding markets that are increasingly found outside the West’s spheres of influence and therefore, beyond the reach of these sanctions. Russia is also looking inward to diversify its markets and seek socioeconomic independence.

Instead of viewing the sanctions as an impassable obstacle requiring capitulation to Wall Street and London, Russia has viewed them as a challenge to sever reliance on unstable markets. More so, Russia’s quest for alternative markets is a means of applying its own form of pressure back upon the West. While the West attempts to portray the sanctions as “cutting off Russia,” the restrictions do at least as much to isolate the West itself.

Multipolar World Vs Western Hegemony

In a unipolar world, supranational geopolitical blocs like the EU (European Union), the African Union, ASEAN (Association of Southeast Asian Nations), and regional free trade agreements serve to consolidate and open up the collective socioeconomic potential of the planet to those at the top of this international order. Currently, this constitutes the special interests on Wall Street, in the city of London, and among the special interests converging in Brussels. Interdependence is intentionally cultivated among the various members of individual blocs and between supranational blocs themselves. This ensures that leverage is constantly maintained over each individual national entity, making individual nations incapable of sidestepping collective initiatives of the blocs they are a part of.

In the European Union, this can be clearly seen as individual nations benefiting from ties with Moscow are attempting with limited success to rebel against broader EU sanctions against Russian industries.

The use of sanctions across several supranational blocs, including North America, the EU, and to a lesser extent, the West’s proxies in nations like East Asia’s Japan, had at one point critically threatened those nations targeted by them. Nations like Iran or Cuba who have suffered under Western sanctions for decades are clearly behind because of them. Behind, but not out.

As technology enables each individual nation to procure wealth on its own it once depended on trade with other nations for, the impact of sanctions is diminishing. The impact of sanctions is also undermined by a growing alternative international order outside of the West’s unipolar paradigm. BRICS, the nations of Brazil, Russia, India, China, and South Africa, constitute the leading edge of the rise of the developing world. No longer satisfied with subservience to the Wall Street-London global order, nor eager to find themselves entangled beneath another global empire led by another global superpower, these nations are attempting to redefine international relations in more traditional, multilateral terms.

Becoming self-sufficient economically while redefining international ties in a less interdependent manner, appears to be the defining aspect of the emerging multipolar world BRICS is attempting to create. The creation of international trade outside the traditional framework of the IMF, the World Trade Organization, and other institutions created by the West, for the West, has gradually eroded the impact of sanctions, penalties, and monopolies empowered by Western domination over international finance and global trade.

More to Do

While Russia seems to be taking Western sanctions in stride, the fact that the United States and Europe are targeting Russia in the first place is a warning to all members of BRICS as well as to developing nations around the world. In the capitals of nations residing outside the Wall Street-London international order, the possibility that any one of them could be next should be at the center of economic planning and the future of their respective foreign policy.

Creating alternative markets outside this international order could be a short-term stop gap. In Russia’s case, growing ties with China in terms of energy exports ensures a lasting alternative market for Russian natural gas that is set only to grow in the future as the West attempts to cutoff and isolate both Moscow and Beijing.

Seeking to create economic opportunities and progress domestically could be a more long-term and lasting solution. Russia’s decision to ban the import of food products from nations targeting it with recent sanctions gives BRICS an opportunity to expand in the void left by European, American, and Australian agricultural industries. It also gives an opportunity for Russian producers to expand their operations domestically. In the immediate aftermath of Russia banning imports from the West, stocks in Russia’s agricultural industry soared. While such spikes are more due to speculation than an actual jump in value, the fact that these producers now have an incentive to expand may create long-term value to justify investor confidence today.

But rather than waiting for sanctions to begin disrupting the socioeconomic status quo of a nation residing outside Western hegemony, a disruption the sanctions are designed specifically to create, why shouldn’t BRICS and other developing nations begin the process of developing their domestic markets and alternative international trading regimes beforehand?

If Russia, the largest nation geographically, the ninth most populous, and with one of the most formidable conventional and nuclear military forces on Earth, can be targeted for sanctions aimed to cripple its economy, then any nation can be targeted. Russia, with its resources and leadership is able to cope and adapt to these sanctions and even perhaps come out stronger in spite of them. Other nations might not weather such adversity so gracefully. Across BRICS and other nations in the developing world, a concerted effort must be made to move away from the interdependence of globalization and back toward greater multilateral trade regimes and greater domestic economic self-sufficiency.

Ulson Gunnar is a New York-based geopolitical analyst and writer especially for the online magazine “New Eastern Outlook”

Two for Tuesday

Posted on June 24, 2014 by Reid Mukai

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