Tag Archives: Richard Nixon

Global Planned Financial Tsunami Has Just Begun

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By F. William Engdahl

Source: Global Research

Since the creation of the US Federal Reserve over a century ago, every major financial market collapse has been deliberately triggered for political motives by the central bank. The situation is no different today, as clearly the US Fed is acting with its interest rate weapon to crash what is the greatest speculative financial bubble in human history, a bubble it created. Global crash events always begin on the periphery, such as with the 1931 Austrian Creditanstalt or the Lehman Bros. failure in September 2008. The June 15 decision by the Fed to impose the largest single rate hike in almost 30 years as financial markets are already in a meltdown, now guarantees a global depression and worse.

The extent of the “cheap credit” bubble that the Fed, the ECB and Bank of Japan have engineered with buying up of bonds and maintaining unprecedented near-zero or even negative interest rates for now 14 years, is beyond imagination. Financial media cover it over with daily nonsense reporting , while the world economy is being readied, not for so-called “stagflation” or recession. What is coming now in the coming months, barring a dramatic policy reversal, is the worst economic depression in history to date. Thank you, globalization and Davos.

Globalization

The political pressures behind globalization and the creation of the World Trade Organization out of the Bretton Woods GATT trade rules with the 1994 Marrakesh Agreement, ensured that the advanced industrial manufacturing of the West, most especially the USA, could flee offshore, “outsource” to create production in extreme low wage countries. No country offered more benefit in the late 1990s than China. China joined WHO in 2001 and from then on the capital flows into China manufacture from the West have been staggering. So too has been the buildup of China dollar debt. Now that global world financial structure based on record debt is all beginning to come apart.

When Washington deliberately allowed the September 2008 Lehman Bros financial collapse, the Chinese leadership responded with panic and commissioned unprecedented credit to local governments to build infrastructure. Some of it was partly useful, such as a network of high-speed railways. Some of it was plainly wasteful, such as construction of empty “ghost cities.” For the rest of the world, the unprecedented China demand for construction steel, coal, oil, copper and such was welcome, as fears of a global depression receded. But the actions by the US Fed and ECB after 2008, and of their respective governments, did nothing to address the systemic financial abuse of the world’s major private banks on Wall Street and Europe , as well as Hong Kong.

The August 1971 Nixon decision to decouple the US dollar, the world reserve currency, from gold, opened the floodgates to global money flows. Ever more permissive laws favoring uncontrolled financial speculation in the US and abroad were imposed at every turn, from Clinton’s repeal of Glass-Steagall at the behest of Wall Street in November 1999. That allowed creation of mega-banks so large that the government declared them “too big to fail.” That was a hoax, but the population believed it and bailed them out with hundreds of billions in taxpayer money.

Since the crisis of 2008 the Fed and other major global central banks have created unprecedented credit, so-called “helicopter money,” to bailout the major financial institutions. The health of the real economy was not a goal. In the case of the Fed, Bank of Japan, ECB and Bank of England, a combined $25 trillion was injected into the banking system via “quantitative easing” purchase of bonds, as well as dodgy assets like mortgage-backed securities over the past 14 years.

Quantitative madness

Here is where it began to go really bad. The largest Wall Street banks such as JP MorganChase, Wells Fargo, Citigroup or in London HSBC or Barclays, lent billions to their major corporate clients. The borrowers in turn used the liquidity, not to invest in new manufacturing or mining technology, but rather to inflate the value of their company stocks, so-called stock buy-backs, termed “maximizing shareholder value.”

BlackRock, Fidelity, banks and other investors loved the free ride. From the onset of Fed easing in 2008 to July 2020, some $5 trillions had been invested in such stock buybacks, creating the greatest stock market rally in history. Everything became financialized in the process. Corporations paid out $3.8 trillion in dividends in the period from 2010 to 2019. Companies like Tesla which had never earned a profit, became more valuable than Ford and GM combined. Cryptocurrencies such as Bitcoin reached market cap valuation over $1 trillion by late 2021. With Fed money flowing freely, banks and investment funds invested in high-risk, high profit areas like junk bonds or emerging market debt in places like Turkey, Indonesia or, yes, China.

The post-2008 era of Quantitative Easing and zero Fed interest rates led to absurd US Government debt expansion. Since January 2020 the Fed, Bank of England, European Central Bank and Bank of Japan have injected a combined $9 trillion in near zero rate credit into the world banking system. Since a Fed policy change in September 2019, it enabled Washington to increase public debt by a staggering $10 trillion in less than 3 years. Then the Fed again covertly bailed out Wall Street by buying $120 billion per month of US Treasury bonds and Mortgage-Backed Securities creating a huge bond bubble.

A reckless Biden Administration began doling out trillions in so-called stimulus money to combat needless lockdowns of the economy. US Federal debt went from a manageable 35% of GDP in 1980 to more than 129% of GDP today. Only the Fed Quantitative Easing, buying of trillions of US government and mortgage debt and the near zero rates made that possible. Now the Fed has begun to unwind that and withdraw liquidity from the economy with QT or tightening, plus rate hikes. This is deliberate. It is not about a stumbling Fed mis-judging inflation.

Energy drives the collapse

Sadly, the Fed and other central bankers lie. Raising interest rates is not to cure inflation. It is to force a global reset in control over the world’s assets, it’s wealth, whether real estate, farmland, commodity production, industry, even water. The Fed knows very well that Inflation is only beginning to rip across the global economy. What is unique is that now Green Energy mandates across the industrial world are driving this inflation crisis for the first time, something deliberately ignored by Washington or Brussels or Berlin.

The global shortages of fertilizers, soaring prices of natural gas, and grain supply losses from global draught or exploding costs of fertilizers and fuel or the war in Ukraine, guarantee that, at latest this September-October harvest time, we will undergo a global additional food and energy price explosion. Those shortages all are a result of deliberate policies.

Moreover, far worse inflation is certain, due to the pathological insistence of the world’s leading industrial economies led by the Biden Administration’s anti-hydrocarbon agenda. That agenda is typified by the astonishing nonsense of the US Energy Secretary stating, “buy E-autos instead” as the answer to exploding gasoline prices.

Similarly, the European Union has decided to phase out Russian oil and gas with no viable substitute as its leading economy, Germany, moves to shut its last nuclear reactor and close more coal plants. Germany and other EU economies as a result will see power blackouts this winter and natural gas prices will continue to soar. In the second week of June in Germany gas prices rose another 60% alone. Both the Green-controlled German government and the Green Agenda “Fit for 55” by the EU Commission continue to push unreliable and costly wind and solar at the expense of far cheaper and reliable hydrocarbons, insuring an unprecedented energy-led inflation.

Fed has pulled the plug

With the 0.75% Fed rate hike, largest in almost 30 years, and promise of more to come, the US central bank has now guaranteed a collapse of not merely the US debt bubble, but also much of the post-2008 global debt of $303 trillion. Rising interest rates after almost 15 years mean collapsing bond values. Bonds, not stocks, are the heart of the global financial system.

US mortgage rates have now doubled in just 5 months to above 6%, and home sales were already plunging before the latest rate hike. US corporations took on record debt owing to the years of ultra-low rates. Some 70% of that debt is rated just above “junk” status. That corporate non-financial debt totaled $9 trillion in 2006. Today it exceeds $18 trillion. Now a large number of those marginal companies will not be able to rollover the old debt with new, and bankruptcies will follow in coming months. The cosmetics giant Revlon just declared bankruptcy.

The highly-speculative, unregulated Crypto market, led by Bitcoin, is collapsing as investors realize there is no bailout there. Last November the Crypto world had a $3 trillion valuation. Today it is less than half, and with more collapse underway. Even before the latest Fed rate hike the stock value of the US megabanks had lost some $300 billion. Now with stock market further panic selling guaranteed as a global economic collapse grows, those banks are pre-programmed for a new severe bank crisis over the coming months.

As US economist Doug Noland recently noted, “Today, there’s a massive “periphery” loaded with “subprime” junk bonds, leveraged loans, buy-now-pay-later, auto, credit card, housing, and solar securitizations, franchise loans, private Credit, crypto Credit, DeFi, and on and on. A massive infrastructure has evolved over this long cycle to spur consumption for tens of millions, while financing thousands of uneconomic enterprises. The “periphery” has become systemic like never before. And things have started to Break.”

The Federal Government will now find its interest cost of carrying a record $30 trillion in Federal debt far more costly. Unlike the 1930s Great Depression when Federal debt was near nothing, today the Government, especially since the Biden budget measures, is at the limits. The US is becoming a Third World economy. If the Fed no longer buys trillions of US debt, who will? China? Japan? Not likely.

Deleveraging the bubble

With the Fed now imposing a Quantitative Tightening, withdrawing tens of billions in bonds and other assets monthly, as well as raising key interest rates, financial markets have begun a deleveraging. It will likely be jerky, as key players like BlackRock and Fidelity seek to control the meltdown for their purposes. But the direction is clear.

By late last year investors had borrowed almost $1 trillion in margin debt to buy stocks. That was in a rising market. Now the opposite holds, and margin borrowers are forced to give more collateral or sell their stocks to avoid default. That feeds the coming meltdown. With collapse of both stocks and bonds in coming months, go the private retirement savings of tens of millions of Americans in programs like 401-k. Credit card auto loans and other consumer debt in the USA has ballooned in the past decade to a record $4.3 trillion at end of 2021. Now interest rates on that debt, especially credit card, will jump from an already high 16%. Defaults on those credit loans will skyrocket.

Outside the US what we will see now, as the Swiss National Bank, Bank of England and even ECB are forced to follow the Fed raising rates, is the global snowballing of defaults, bankruptcies, amid a soaring inflation which the central bank interest rates have no power to control. About 27% of global nonfinancial corporate debt is held by Chinese companies, estimated at $23 trillion. Another $32 trillion corporate debt is held by US and EU companies. Now China is in the midst of its worst economic crisis since 30 years and little sign of recovery. With the USA, China’s largest customer, going into an economic depression, China’s crisis can only worsen. That will not be good for the world economy.

Italy, with a national debt of $3.2 trillion, has a debt-to-GDP of 150%. Only ECB negative interest rates have kept that from exploding in a new banking crisis. Now that explosion is pre-programmed despite soothing words from Lagarde of the ECB. Japan, with a 260% debt level is the worst of all industrial nations, and is in a trap of zero rates with more than $7.5 trillion public debt. The yen is now falling seriously, and destabilizing all of Asia.

The heart of the world financial system, contrary to popular belief, is not stock markets. It is bond markets—government, corporate and agency bonds. This bond market has been losing value as inflation has soared and interest rates have risen since 2021 in the USA and EU. Globally this comprises some $250 trillion in asset value a sum that, with every fed interest rise , loses more value. The last time we had such a major reverse in bond values was forty years ago in the Paul Volcker era with 20% interest rates to “squeeze out inflation.”

As bond prices fall, the value of bank capital falls. The most exposed to such a loss of value are major French banks along with Deutsche Bank in the EU, along with the largest Japanese banks. US banks like JP MorganChase are believed to be only slightly less exposed to a major bond crash. Much of their risk is hidden in off-balance sheet derivatives and such. However, unlike in 2008, today central banks can’t rerun another decade of zero interest rates and QE. This time, as insiders like ex-Bank of England head Mark Carney noted three years ago, the crisis will be used to force the world to accept a new Central Bank Digital Currency, a world where all money will be centrally issued and controlled. This is also what Davos WEF people mean by their Great Reset. It will not be good. A Global Planned Financial Tsunami Has Just Begun.

The War in Ukraine Marks the End of the American Century. “What’s Left is a Steaming Pile of Dollar Denominated Debt”

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By Mike Whitney

Source: Global Research

“The ferocity of the confrontation in Ukraine shows that we’re talking about much more than the fate of the regime in Kiev. The architecture of the entire world order is at stake.” Sergei Naryshkin, Director of Russia’s Foreign Intelligence.

***

Here’s your ‘reserve currency’ thought for the day: Every US dollar is a check written on an account that is overdrawn by 30 trillion dollars.

It’s true. The “full faith and credit” of the US Treasury is largely a myth held together by an institutional framework that rests on a foundation of pure sand. In fact, the USD is not worth the paper it is printed on; it is an IOU flailing in an ocean of red ink.

The only thing keeping the USD from vanishing into the ether, is the trust of credulous people who continue to accept it as legal tender.

But why do people remain confident in the dollar when its flaws are known to all? After all, America’s $30 trillion National Debt is hardly a secret, nor is the additional $9 trillion that’s piled up on the Fed’s balance sheet. That is a stealth debt of which the American people are completely unaware, but they are responsible for all the same.

In order to answer that question, we need to look at how the system actually works and how the dollar is propped up by the numerous institutions that were created following WW2. These institutions provide an environment for conducting history’s longest and most flagrant swindle, the exchange of high-ticket manufactured goods, raw materials and hard-labor for slips of green paper with dead presidents on them.

One can only marvel at the genius of the elites who concocted this scam and then imposed it wholesale on the masses without a peep of protest. Of course, the system is accompanied by various enforcement mechanisms that swiftly remove anyone who tries to either break free from the dollar or, God help us, create an alternate system altogether. (Saddam Hussein and Muammar Qaddafi come to mind.) But the fact is– aside from the institutional framework and the ruthless extermination of dollar opponents– there’s no reason why humanity should remain yoked to a currency that is buried beneath a mountain of debt and whose real value is virtually unknowable.

It wasn’t always like this. There was a time when the dollar was the strongest currency in the world and deserved its spot at the top of the heap. Following WW1, the US was “the owner of the majority of the world’s gold” which was why an international delegation “decided that the world’s currencies would no longer be linked to gold but could be pegged to the U.S. dollar, “because the greenback was, itself, linked to gold.” Here’s more from an article at Investopedia:

“The arrangement came to be known as the Bretton Woods Agreement. It established the authority of central banks, which would maintain fixed exchange rates between their currencies and the dollar. In turn, the United States would redeem U.S. dollars for gold on demand….

The U.S dollar was officially crowned the world’s reserve currency and was backed by the world’s largest gold reserves thanks to the Bretton Woods Agreement. Instead of gold reserves, other countries accumulated reserves of U.S. dollars. Needing a place to store their dollars, countries began buying U.S. Treasury securities, which they considered to be a safe store of money.

The demand for Treasury securities, coupled with the deficit spending needed to finance the Vietnam War and the Great Society domestic programs, caused the United States to flood the market with paper money….

The demand for gold was such that President Richard Nixon was forced to intervene and de-link the dollar from gold, which led to the floating exchange rates that exist today. Although there have been periods of stagflation, which is defined as high inflation and high unemployment, the U.S. dollar has remained the world’s reserve currency.” (“How the U.S. Dollar Became the World’s Reserve Currency”, Investopedia)

But now the gold is gone and what’s left is a steaming pile of debt. So, how on earth has the dollar managed to preserve its status as the world’s preeminent currency?

Proponents of the dollar system, will tell you it has something to do with “the size and strength of the U.S. economy and the dominance of the U.S. financial markets.” But that’s nonsense.

The truth is, reserve currency status has nothing to do with “the size and strength” of America’s post-industrial, service-oriented, bubble-driven, third-world-sh**hole economy. Nor does it have anything to do with the alleged safety of US Treasuries” which– next to the dollar– is the biggest Ponzi flim-flam of all time.

The real reason the dollar has remained the world’s premier currency is because of the cartelization of Central Banking.

The Western Central Banks are a de facto monopoly run by a small cabal of inter-breeding bottom-feeders who coordinate and collude on monetary policy in order to preserve their maniacal death-grip on the financial markets and the global economy. It’s a Monetary Mafia and– as George Carlin famously said: “You and I are not in it. You and I are not in the big club.” Bottom line: It is the relentless manipulation of interest rates, forward guidance and Quantitative Easing (QE) that has kept the dollar in its lofty but undeserved spot.

But all that is about to change due entirely to Biden’s reckless foreign policy which is forcing critical players in the global economy to create their own rival system. This is a real tragedy for the West that has enjoyed a century of nonstop wealth extraction from the developing world.

Now– due to the economic sanctions on Russia– an entirely new order is emerging in which the dollar will be substituted for national currencies (processed through an independent financial settlement system) in bilateral trade deals until– later this year– Russia launches an exchange-traded commodities-backed currency that will be used by trading partners in Asia and Africa.

Washington’s theft of Russia’s foreign reserves in April turbo-charged the current process which was further accelerated by banning of Russia from foreign markets. In short, US economic sanctions and boycotts have expanded the non-dollar zone by many orders of magnitude and forced the creation of a new monetary order.

How dumb is that? For decades the US has been running a scam in which it exchanges its fishwrap currency for things of genuine value. (oil, manufactured goods and labor) But now the Biden troupe has scrapped that system altogether and divided the world into warring camps.

But, why?

To punish Russia, is that it?

Yes, that’s it.

But, if that’s the case, then shouldn’t we try to figure out whether the sanctions actually work or not before we recklessly change the system?

Too late for that. The war on Russia has begun and the early results are already pouring in. Just look at the way we’ve destroyed Russia’s currency, the ruble. It’s shocking! Here’s the scoop from an article at CBS:

“The Russian ruble is the best-performing currency in the world this year….

Two months after the ruble’s value fell to less than a U.S. penny amid the swiftest, toughest economic sanctions in modern history, Russia’s currency has mounted a stunning turnaround. The ruble has jumped 40% against the dollar since January.

Normally, a country facing international sanctions and a major military conflict would see investors fleeing and a steady outflow of capital, causing its currency to drop….

The ruble’s resiliency means that Russia is partly insulated from the punishing economic penalties imposed by Western nations after its invasion of Ukraine…” (“Russia’s ruble is the strongest currency in the world this year“, CBS News)

Huh? You mean the attack on the ruble didn’t work after all?

Sure looks that way. But that doesn’t mean the sanctions are a failure. Oh, no. Just at look at the effect they’ve had on Russian commodities. Export receipts are way-down, right? Here’s more from CBS:

“Commodity prices are currently sky-high, and even though there is a drop in the volume of Russian exports due to embargoes and sanctioning, the increase in commodity prices more than compensates for these drops,” said Tatiana Orlova, lead emerging markets economist at Oxford Economics.

Russia is pulling in nearly $20 billion a month from energy exports. Since the end of March, many foreign buyers have complied with a demand to pay for energy in rubles, pushing up the currency’s value.” (“Russia’s ruble is the strongest currency in the world this year“, CBS News)

You’re kidding me? You mean the ruble is surging and Putin is raking in more dough on commodities than ever before?

Yep, and it’s the same deal with Russia’s trade surplus. Take a look at this excerpt from an article in The Economist:

“Russia’s exports… have held up surprisingly well, including those directed to the West. Sanctions permit the sale of oil and gas to most of the world to continue uninterrupted. And a spike in energy prices has boosted revenues further.

As a result, analysts expect Russia’s trade surplus to hit record highs in the coming months. The IIF reckons that in 2022 the current-account surplus, which includes trade and some financial flows, could come in at $250bn (15% of last year’s GDP), more than double the $120bn recorded in 2021. That sanctions have boosted Russia’s trade surplus, and thus helped finance the war, is disappointing, says Mr Vistesen. Ms Ribakova reckons that the efficacy of financial sanctions may have reached its limits. A decision to tighten trade sanctions must come next.

But such measures could take time to take effect. Even if the EU enacts its proposal to ban Russian oil, the embargo would be phased in so slowly that the bloc’s oil imports from Russia would fall by just 19% this year, says Liam Peach of Capital Economics, a consultancy. The full impact of these sanctions would be felt only at the start of 2023—by which point Mr Putin will have amassed billions to fund his war.” ( “Russia is on track for a record trade surplus”, The Economist)

Let me get this straight: The sanctions are actually hurting the US and helping Russia, so the experts think we should impose more sanctions? Is that it?

Precisely. Now that we have shot ourselves in the foot, the experts think it would be wise to shoot the other one too.

Am I the only one who is struck by the insanity of this policy? Check out this clip from an article at RT:

“Russia could earn a record $100 billion from gas sales to European countries in 2022 due to the sharp rise in energy prices, French newspaper Les Echos reported this week, citing Citibank analysts.

According to the paper, the projected income from gas sales will be almost twice as much as last year. The analysis does not take into account profits from the sale of other Russian commodities, such as oil, coal, and other minerals.

Les Echos reports that, despite sanctions and warnings of a sweeping embargo on Russian energy, the 27 EU countries continue to send roughly $200 million per day to Gazprom.”(“Russian gas revenues projected to hit new highs”, RT)

So the revenues from gas and oil sales are literally flooding Moscow’s coffers like never before. Meanwhile, energy prices in the EU and America have skyrocketed to 40-year highs.

Can you see how counterproductive this policy is?

The EU is sinking into recession, supply lines have been severely disrupted, food shortages are steadily emerging, and gas and oil prices are through-the-roof. By every objective standard, the sanctions have not only failed, but backfired spectacularly. Can’t the Biden people see the damage they’re doing? Are they completely divorced from reality?

Imagine if the Ukrainians use Biden’s new artillery battery (HIMARS) to shell cities in Russia? Then what?

Then Putin takes off the gloves and shuts off the flow of hydrocarbons to Europe immediately. That’s what’s going to happen if Washington continues to escalate. You can bet on it. If Russia’s “Special Military Operation” suddenly becomes a war, the lights across Europe will go dark, homes will begin to freeze, factories will go silent, and the continent will slide headlong into a protracted and painful depression.

Does anyone in Washington think about these things or are they all so drunk on their own press clippings they’ve completely lost touch with reality?

Here’s more from an article at RT:

“Even as the collective West continues to insist – against all observable reality – that the conflict in Ukraine is going well for Kiev, major media outlets are becoming increasingly uneasy with the situation on the economic front. More and more observers are admitting that the embargoes imposed by the US and its allies aren’t crushing the Russian economy, as originally intended, but rather their own.…

“Russia is winning the economic war,” the Guardian’s economics editor Larry Elliott declared on Thursday. “It is now three months since the west launched its economic war against Russia, and it is not going according to plan. On the contrary, things are going very badly indeed,” he wrote…

In a May 30 essay, Guardian columnist Simon Jenkins also said that the embargo had failed…

As Jenkins points out, the sanctions have actually raised the price of Russian exports such as oil and grain – thus enriching, rather than impoverishing, Moscow while leaving Europeans short of gas and Africans running out of food.” (“As sanctions fail to work and Russia’s advance continues, Western media changes its tune on Ukraine”, RT)

Did you catch that part about “Russia winning the economic war”? What do you think that means in practical terms?

Does it mean that Washington’s failed attempt to maintain its global hegemony by “weakening” Russia is actually putting enormous strains on the Transatlantic Alliance and NATO that will trigger a re-calibration of relations leading to a defiant rejection of the “rules-based system.”

Is that what it means? Is Europe going to split with Washington and leave America to sink beneath its $30 trillion ocean of red ink?

Yes, that’s exactly what it means.

Uncle Sam’s 30 Year Bender

Proponents of Washington’s proxy-war have no idea of the magnitude of their mistake or how much damage they are inflicting on their own country. The Ukraine debacle is the culmination of 30 years of bloody interventions that have brought us to a tipping point where the nation’s fortunes are about to take a dramatic turn-for-the-worse. As the dollar-zone shrinks, standards of living will plunge, unemployment will soar, and the economy will go into a downward-death spiral.

Washington has greatly underestimated its vulnerability to catastrophic geopolitical blowback that is about to bring the New American Century to a swift and excruciating end.

A wise leader would do everything in his power to pull us back from the brink.

The end of Western domination

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By Thierry Meyssan

Source: VoltaireNet.org

The Western sanctions against Russia, decided unilaterally by Washington, are presented as a just punishment for the aggression against Ukraine. But, without mentioning their illegality under international law, everyone can see that they do not reach their target. In practice, the United States is isolating the West in the hope of maintaining its hegemony over its allies.

The United States, which was a late participant in the World Wars and suffered no losses on its territory, emerged victorious from the world conflicts. Inheriting the European empires, it developed a system of domination that made it the “world’s policeman. However, their hegemony was fragile and could not resist the development of large nations. As early as 2012, political scientists began to describe the “Thucydides trap” by analogy with the Greek strategist’s explanation of the wars between Sparta and Athens. According to them, China’s rise to power also made a confrontation with the United States inevitable. Noting that, if China had become the first world economic power, Russia had become the first military power, Washington decided to fight them one after the other.

It is in this context that the war in Ukraine took place. Washington presents it as “Russian aggression”, adopts sanctions and forces its allies to take them too. The first thing that comes to mind is that the United States, knowing that it is militarily inferior but economically superior, decided to choose its battlefield. However, an analysis of the forces involved and the measures taken belies this reading of events.

THE WORLD ECONOMIC SYSTEM

The global economic system was created by the Bretton Woods Agreement in 1944. They aimed to establish a framework for capitalism beyond the crisis of 1929, for which Nazism had not been the solution. The United States imposed its currency as a gold-convertible benchmark. Neither the Soviet Union nor China participated in the conference.

In 1971, President Richard Nixon decided to unofficially end the dollar’s parity with gold. This allowed him to finance the war in Vietnam. In practical terms, there were no longer any fixed exchange rates. The measure was not formalized until after the war, in 1976. It was also at this time that China formed an alliance with the Anglo-Saxon multinationals. The European Community (the forerunner of the European Union) adapted by regulating the now-floating exchange rates in 1972 (the “currency snake”), and then by creating the euro.

From 1981 onwards, the United States began to let its debt slip away. It went from 40% of its GDP to 130% today. They tried to globalize the world economy, i.e. to impose their rules on the solvent countries and to destroy the state structures of the remaining countries (the Rumsfeld/Cebrowski strategy). To pay their debt, they printed dollars, spied on the companies of their allies and stole all the reserves of two big oil states, Iraq and Libya. Nobody dared to say anything, but from 2003 onwards, the US economic system was no longer what it claimed to be. Officially they were still liberal, but everyone could see that they were no longer producing their own food and necessities, and that they were living on rapine.

The US economy, which was one third of the world economy when the USSR dissolved, is now only one tenth.

Many states anticipated the end of the Bretton Woods rules and thought about a new deal. In 2009, Brazil, Russia, India and China, soon joined by South Africa for Africa, created the BRICS. These countries have set up financial institutions which, unlike the IMF and the World Bank, do not make their loans conditional on structural reforms or political commitments to align with Washington. They prefer to invest on a leasing basis, with the host country becoming the owner of the investment when it is profitable.

In 2010, Belarus, Kazakhstan and Russia, soon joined by Armenia, founded the Eurasian Economic Union. These border countries established a free trade zone with Egypt, China, Iran, Serbia, Singapore and Vietnam. They could be joined by South Korea, India, Turkey and Syria.
In 2013, China began its vast “New Silk Roads” project. The following year, when its GDP surpassed that of the United States at purchasing power parity, Beijing created the Asian Infrastructure Investment Bank (AIIB), and in 2020, it regulated foreign capital.

In 2021, the European Union devised its Global Gateway to compete with China and impose its political model. But this demand was seen as colonial overreach by many countries and was rejected en masse.

Gradually, the Russian and Chinese blocs have come closer together thanks to the joint project of the Great Eurasian Global Partnership (2016) within the framework of the Shanghai Cooperation Organization. The aim is to develop the whole space by creating balanced communication channels on the ideological bases defined by Kazakh Sultan Nazerbayev: inclusiveness, sovereign equality, respect for cultural and socio-political identity, openness and readiness to integrate other ensembles.

Washington’s attempt to destroy this emerging entity has no chance of success. It is striking that :
the economic attack began not with the invasion of Ukraine, but two days before.
it is primarily directed against Russian banks, Russian billionaires and the Russian gas industry and not at all against the new Eurasian communication system. Finally, it aims at excluding Russia from international organizations, but does not concern the states that refuse to condemn Russia. Therefore it will push them into the arms of Beijing.

In other words, the US is not isolating Russia, but it is isolating the West (10% of humanity) from the rest of the world (90% of humanity).

THE PROCESS OF SEPARATING THE WEST FROM THE REST OF THE WORLD

 0. The very day after Moscow recognized the independence of the Donetsk and Lugansk People’s Republics (February 21, 2022), the United States launched an economic attack on Russia (February 22). The European Union followed suit the day after (February 23). Vnesheconombank and Promsvyazbank were excluded from the global financial system.

Vnesheconombank (VEB.RF) is a regional development bank. It could have helped the Donbass. Promsvyazbank (PSB) invests mainly in the defense sector. It could have played a role under the Mutual Assistance Treaty.

 1. As Russia started a special military operation in Ukraine (February 24), the United States extended the exclusion of the first two banks from the global financial system to all Russian banks (February 25). The European Union followed suit (February 25).

 2. In order to prevent as many states as possible from joining Russia, Washington extended the trade bans to Belarus. The European Union began to deny Russian banks access to the SWIFT system as previously instructed by the United States, extended sanctions to Belarus and censored the Russian state media, Russia Today and Sputnik (March 2)

 3. Washington began to target wealthy Russian citizens (erroneously called “oligarchs”) with bad relations with the Kremlin (March 3) and to ban imports of Russian energy sources (March 8). The European Union followed suit, but resisted a ban on the import of much-needed Russian gas (March 9).

 4. Washington extended financial sanctions in the IMF and World Bank, expanded the list of oligarchs and bannned the export of luxury goods to Russia (March 11). The European Union followed suit (March 15).

 5. Washington ensuref that members of the Duma and oligarchs no longer have any rights in the West; that Russia would no longer be able to use its assets in the USA to pay its debts to the USA; and that it would no longer be able to use its gold to pay its debts abroad (24 March). The European Union followed in these prohibitions. It pronounced a ban on the import of Russian coal and oil, but still no ban on gas.

The table below summarizes the communications from the White House and Brussels.

United StatesEuropean Union
«United States Imposes First Tranche of Swift and Severe Costs on Russia» (Feb. 22)EU adopts sanctions package in response to recognition of areas of Ukraine’s Donetsk and Luhansk oblasts not controlled by the government (Feb. 23)
«United States and Allies and Partners Impose Additional Costs on Russia» (Feb. 24)First set of EU sanctions (February 25)
«The United States Continues to Impose Costs on Russia and Belarus for Putin’s War of Choice» (March 2)Second set of EU sanctions (March 2)
«The United States Continues to Target Russian Oligarchs Enabling Putin’s War of Choice» (March 3)«United States Bans Imports of Russian Oil, Liquefied Natural Gas, and Coal» (March 8)Third set of EU sanctions (March 9)
«United States, European Union, and G7 to Announce Further Economic Costs on Russia» (March 11)Fourth set of sanctions (March 15)
«United States and Allies and Partners Impose Additional Costs on Russia» (Mar. 24)«United States, G7 and EU Impose Severe and Immediate Costs on Russia» (Apr 6)Fifth round of EU sanctions

THE REST OF THE WORLD’S RESPONSE

It is an extremely surprising phenomenon to observe: the U.S. has managed to sway a majority of states to its side, but these states are the least populous in the world. It is as if they have no means of putting pressure on countries capable of independence.

Due to the unilateral actions of the Anglo-Saxons and the European Union, the world is being divided into two heterogeneous spaces. The era of economic globalization is over. The economic and financial bridges are being broken one by one.

Reacting swiftly, Russia has convinced its BRICS partners to stop trading in dollars and to eventually create a common virtual currency for their exchanges. Until then, they will proceed in gold. This currency should be based on a basket of BRICS currencies, weighted according to the GDP of each member state, and on a basket of commodities listed on the stock exchange. This system should be much more stable than the current one.

Above all, Russia and China appear to be much more respectful of their partners than the West. They never demand structural reforms, neither economic nor political. The Ukrainian affair shows that Moscow does not seek to take power in Kiev and occupy Ukraine, but to push back NATO and fight the Banderites (the “neo-Nazis” according to Kremlin terminology). Nothing but very legitimate, even if the method is brutal.

In practice, we are witnessing the end of four centuries of domination by Westerners and their empires. It is a confrontation between different ways of thinking.
 Westerners now think only in terms of weeks. With this short-sightedness, they may have the impression that the United States is right and the Russians wrong. On the contrary, the rest of the world thinks in decades, even centuries. In this case, there is no doubt that the Russians are right and the West as a whole is wrong.
 Moreover, the West rejects international law. They attacked Yugoslavia and Libya without the authorization of the Security Council and lied to attack Afghanistan and Iraq. They only accept the rules they make. On the contrary, the other states aspire to a multipolar world in which each actor would think according to their own culture. They are aware that only international law would make it possible to preserve peace in the world as they dream of it.

Rather than confronting Russia and China, the United States has chosen to withdraw into its empire: to isolate the West in order to maintain its hegemony.

Since 2001, all world leaders have viewed the West, and particularly the United States, as wounded predators. They do not dare to confront them and look for ways to accompany them gently to the cemetery. No one ever imagined that they would isolate themselves to die.

Translation
Roger Lagassé

This article is a follow-up to :
 1. “Russia wants to force the US to respect the UN Charter,” January 4, 2022.
 2. “Washington pursues RAND plan in Kazakhstan, then Transnistria,” January 11, 2022.
 3. “Washington refuses to hear Russia and China,” January 18, 2022.
 4. “Washington and London, deafened“, February 1, 2022.
 5. “Washington and London try to preserve their domination over Europe“, February 8, 2022.
 6. “Two interpretations of the Ukrainian affair”, 16 February 2022.
 7. “Washington sounds the alarm, while its allies withdraw”, 22 February 2022.
 8. “Russia declares war on the Straussians”, by Thierry Meyssan, Voltaire Network, 5 March 2022.
 9. “A gang of drug addicts and neo-nazis”, 5 March 2022.
 10 “Israel stunned by Ukrainian neo-Nazis”, 8 March 2022.
 11. “Ukraine: the great manipulation“, March 22, 2022.
 12. “The New World Order being prepared under the pretext of war in Ukraine“, 29 March 2022.
 13. “The war propaganda changes its shape”, 5 April 2022.
 14. “The alliance of MI6, the CIA and the banditry“, 12 April 2022.

Why the Drug War Has Been a Forty-Year Lynching

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By Bob Fitrakis and Harvey Wasserman

Source: FreePress.org

The Drug War has been a forty-year lynching….
…the corporate/GOP response to the peace and civil rights movements.

It’s used the Drug Enforcement Administration and other policing operations as a high-tech Ku Klux Klan, meant to gut America’s communities of youth and color.

It has never been about suppressing drugs. Quite the opposite.

And now that it may be winding down, the focus on suppressing minority votes will shift even stronger to electronic election theft.

The Drug War was officially born June 17, 1971, (http://www.drugpolicy.org/new-solutions-drug-policy/brief-history-drug-war) when Richard Nixon pronounced drugs to be “Public Enemy Number One.” In a nation wracked by poverty, racial tension, injustice, civil strife, ecological disaster, corporate domination, a hated Vietnam War and much more, drugs seemed an odd choice.
In fact, the Drug War’s primary target was black and young voters.

It was the second, secret leg of Nixon’s “Southern Strategy” meant to bring the former Confederacy into the Republican Party.

Part One was about the white vote.

America’s original party of race and slavery (https://zinnedproject.org/materials/a-peoples-history-of-the-united-states-updated-and-expanded-edition/)was Andrew Jackson’s Democrats (born 1828).

After the Civil War the Party’s terror wing, the KKK, made sure former slaves and their descendants “stayed in their place.”

A century of lynchings (at least 3200 of them) (http://www.yale.edu/ynhti/curriculum/units/1979/2/79.02.04.x.html)efficiently suppressed the southern black community.

In the 1930s Franklin Roosevelt’s New Deal social programs began to attract black voters to the Democratic Party. John Kennedy and Lyndon Johnson’s support for civil and voting rights legislation, plus the 24th Amendment ending the poll tax, sealed the deal. Today blacks, who once largely supported the Party of Lincoln,  vote 90% or more Democrat (http://blackdemographics.com/culture/black-politics/).

But the Democrats’ lean to civil rights angered southern whites. Though overt racist language was no longer acceptable in the 1970s, Nixon’s Republicans clearly signaled an open door to the former Confederacy (https://www.thenation.com/article/why-todays-gop-crackup-is-the-final-unraveling-of-nixons-southern-strategy/).

But recruiting angry southern whites would not be enough for the Republicans to take the south. In many southern states more than 40% of potential voters were black. If they were allowed to vote, and if their votes were actually counted, all the reconstructed Democrat Party would need to hold the south would be a sliver of moderate white support.

That’s where the Drug War came in.

Reliable exact national arrest numbers from 1970 through 1979 are hard to come by.

But according to Michelle Alexander’s superb, transformative The New Jim Crow, and according to research by Marc Mauer and Ryan King of the Sentencing Project, more than 31,000,000 Americans were arrested for drugs between 1980 and 2007 (http://newjimcrow.com).

Further federal uniform crime report statistics compiled by www.freepress.org indicate that, between 2008 and 2014, another 9,166,000 were arrested for drug possession.
Taken together, than means well over 40,000,000 American citizens have been arrested for drugs in the four decades since Nixon’s announcement.
It is a staggering number: more than 10% of the entire United States, nearly four times the current population of Ohio, far in excess of more than 100 countries worldwide.
A number that has gutted the African-American community.  A national terror campaign far beyond the reach of even the old KKK.
Justice Department statistics indicate than half of those arrests have been for simple possession of marijuana.
According to US Bureau of Justice statistics, between 1980 and 2013, while blacks were 12% of the population, blacks constituted 30% of those arrested for drug law violations and nearly 40% of those incarcerated in all U.S. prisons.  Thus some 20,000,000 African-American men have been sent to prison for non-violent “crimes” in the past forty years.
If the Hispanic population is added in, as much as 60% of drug arrests are of racial or ethnic minorities.
On the 40th anniversary of the Drug War in 2010, the Associated Press used public records to calculate that the taxpayer cost of arresting and imprisoning all these human beings has been in excess of $1,000,000,000.
Sending them all to college would have been far cheaper.  It also would have allowed them to enhance and transform their communities.
Instead, they were taken from their families.  Their children were robbed of their parents.  They were assaulted by the prison culture, stripped of their right to vote and stopped from leading the kind of lives that might have moved the nation in a very different direction.
Nixon also hated hippies and the peace movement. So in addition to disenfranchising 20,000,000 African-Americans, the Drug War has imprisoned additional millions of young white and Hispanic pot smokers.
Thus the DEA has been the ultra-violent vanguard of the corporate culture war.
In 1983 Ronald Reagan took the Drug War to a new level.  Using profits from his illegal arms sales to Iran, he illegally funded the Contra thugs who were fighting Nicaragua’s duly elected Sandinista government.
The Contras were drug dealers who shipped large quantities of cocaine into the US—-primarily in the Los Angeles area—-where it was mostly converted to crack.
That served a double function for the GOP.
First, it decimated the inner city.
Then Reagan’s “Just Say No” assault—-based on the drugs his Contra allies were injecting into our body politic—-imposed penalties on crack far more severe than those aimed at the powdered cocaine used in the white community.
In 1970 the US prison population was roughly 300,000 people.  Today it’s more than 2.2 million, the largest in world history by both absolute number and percentage of the general population.  There are more people in prison in the US than in China, which has five times the population (http://www.bjs.gov/index.cfm?ty=tp&tid=11).

According to the Sentencing Project, one in seventeen white males has been incarcerated, one in six Latinos, and one in three blacks.
By all accounts the Drug War has had little impact on drug consumption in the US, except to make it more profitable for drug dealers (http://www.bjs.gov/index.cfm?ty=tp&tid=11).  It’s spawned a multi-billion-dollar industry in prison construction, policing, prison guards, lawyers, judges and more, all of them invested in prolonging the drug war despite its negative impacts on public health.

For them, the stream of ruined lives of non-violent offenders is just another form of cash flow.
Like the Klan since the Civil War, the Drug War has accomplished its primary political goal of suppressing the black vote and assaulting the African-American community.
It’s shifted control of the South from the Democrats back to the Republican Party. By slashing voter eligibility and suppressing black turnout, the Drug War crusade has helped the GOP take full control of both houses of the US Congress and a majority of state governments across the US.
But the repressive impacts hit everyone, and ultimately enhance the power of the corporate state.
Toward that end, the southern corporate Democrat Bill Clinton’s two terms as a Drug Warrior further broadened the official attack on grassroots America. Clinton was determined to make sure nobody appeared tougher on “crime.”  He escalated the decimation of our democracy far beyond mere party politics, deepening the assault on the black community, and the basic rights of all Americans for the benefit of his Wall Street funders.  Obama has been barely marginally better.
In political terms, the Nixon-Reagan GOP remains the Drug War’s prime beneficiary. Today’s Republicans are poised to continue dominating our electoral process through the use of rigged electronic registration rolls and voting machines. That’s a core reality we all must face.
But no matter which party controls the White House or Congress, by prosecuting a behavior engaged in by tens of millions of Americans, the Drug War lets the corporate state arrest (and seize assets from) virtually anyone it wants at any time. It has empowered a de facto corporate police state beyond public control.

Regardless of race, we all suffer from the fear, repression and random assaults of a drug-fueled repressive police force with no real accountability.
In the interim, the Drug War is not now and never has been about drugs.
Legalizing pot is just the beginning of our recovery process.
Until we end the Drug War as a whole, America will never know democracy, peace or justice.
____________________
THE SIXTH JIM CROW: ELECTRONIC ELECTION THEFT & THE 2016 SELECTION will be released by Bob Fitrakis & Harvey Wasserman by January, 2016. Their CITIZEN KASICH will follow soon thereafter. Bob’s FITRAKIS FILES are at www.freepress.org; Harvey’s ORGANIC SPIRAL OF US HISTORY will appear in 2016.

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