Category Archives: Geopolitics

China’s Oil Trade Retaliation is Iran’s Gain, by Tom Luongo

Starting a trade war is like dropping a bomb, you never know what’s going to blow up. From Tom Luongo at tomluongo.me:

I’ve told you that once you start down the Trade War path forever will it dominate your destiny.

Well here we are.  Trump slaps big tariffs on aluminum and steel in a bid to leverage Gary Cohn’s ICE Wall plan to control the metals and oils futures markets.   I’m not sure how much of this stuff I believe but it is clear that the futures price for most strategically important commodities are divorced from the real world.

Alistair Crooke also noted the importance of Trump’s ‘energy dominance’ policy recently, which I suggest strongly you read.

But today’s edition of “As the Trade War Churns” is about China and their willingness to shift their energy purchases away from U.S. producers.  Irina Slav at Oilprice.com has the good bits.

The latest escalation in the tariff exchange, however, is a little bit different than all the others so far. It’s different because it came after Beijing said it intends to slap tariffs on U.S. oil, gas, and coal imports.

China’s was a retaliatory move to impose tariffs on US$50 billion worth of U.S. goods, which followed Trump’s earlier announcement that another US$50 billion in goods would be subjected to a 25-percent tariff starting July 6.

It’s unclear as to what form this will take but there’s also this report from the New York Times which talks about the China/U.S. energy trade.

Things could get worse if the United States and China ratchet up their actions [counter-tariffs]. Mr. Trump has already promised more tariffs in response to China’s retaliation. China, in turn, is likely to back away from an agreement to buy $70 billion worth of American agricultural and energy products — a deal that was conditional on the United States lifting its threat of tariffs.

“China’s proportionate and targeted tariffs on U.S. imports are meant to send a strong signal that it will not capitulate to U.S. demands,” said Eswar Prasad, a professor of international trade at Cornell University. “It will be challenging for both sides to find a way to de-escalate these tensions.”

But as Ms. Slav points out, China has enjoyed taking advantage of the glut of U.S. oil as shale drillers flood the market with cheap oil.  The West Texas Intermediate/Brent Spread has widened out to more than $10 at times.

WTIC-Brent-Spread

By slapping counter tariffs on U.S. oil, that would more than overcome the current WTIC/Brent spread and send Chinese refiners looking for new markets.

Hey, do you know whose oil is sold at a discount to Brent on a regular basis?

Iran’s.  That’s whose.

To continue reading: China’s Oil Trade Retaliation is Iran’s Gain

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Italy challenges the Western order, by Frank Sellers

Italy doesn’t like its debt, its immigrants, or the EU, and thinks perhaps Europe’s ought to loosen up towards Russia. This is all contrary to the EU playbook. From Frank Sellers at theduran.com:

With a massive influx of immigrants from across Africa and the Middle East, and growing poverty, Italy voted in a populist government representing policies which would seem to virtually overturn the postwar European order.

The austerity measures which have been imposed upon the Italian people have pushed more and more of them down into poverty, with the poverty rate doubling over the course of the past decade.

Relative to migration, Italy is one of the Southern European countries taking the brunt of the migrants who are flooding into Europe by the thousands, helped along by various NGOs which seek to alter the demographic makeup and economic and political order of Europe under the guise of humanitarianism.

The present economic metrics tend to perceive the profits of multinational corporations as a gauge of the health of the economy, rather than the economic situation on the ground level, faced by the Italian citizen. All of these and more are things which this new government has a view towards radically changing.

To combat Austerity, which may be tossed out the window, the option on the table is to review treaties to which Italy is partied which impose or advise them. Rather than gutting the population for the money which the government needs in order to cover obligations to multinational financial interests, a proposal was broached of launching a universal basic income, reduction in the pension age, as well as a flat tax system.

And while the migrant policy is still evolving, it has had a view towards repatriating the migrants which are already within Italy’s borders. Italy has already flexed its will on the migrants issue over refusing a ship full of migrants port in Italy, forcing it to set sail for Spain.

Foreign policy aims at softening the approach towards Russia by eliminating sanctions and by putting the focus on improving relations, benefitting Italy both by allowing a resumption of trade, and the perspective of Russia’s will and capacity to help get a handle on the situation in the Middle East, which is part of what prompts the migration issue, due to the region’s instability.

What this could mean is that an already strained relationship between Italy and the EU could be put to the test, or altered in a significant manner if these proposals are put into play after the fashion in which they were introduced during the elections cycle.

To continue reading: Italy challenges the Western order

The Eagle, the Dragon, and the Bear, by Robert Gore

Does Trump recognize the limits of US power?

Trump’s new world order comes straight from The Godfather. There are three global powers: the US, Russia, and China. None of these powers can militarily defeat either of the other two, and even an alliance among two of them would have trouble defeating the third.

Like Don Corleone, Trump is dividing up the larger territory into smaller, great-power controlled sub-territories. He is tacitly recognizing Russia and China’s dominance in their own spheres of influence, and holding them to account in their territories. The implicit agreement among the three is apparently that each power will, in their, “sphere of influence…enforce peace.”

Trump’s New World Order,” SLL 3/20/18

In one week President Trump confirmed that his first concern is the United States, that he has what may be a workable vision for its place in the world, and he loathes globalism and the globalists. A good measure of his efficacy is the outrage he generates. By that measure, that week was his finest hour…so far.

Europe won’t have a seat at Trump’s great-power table. Its welfare states are addicted to their handouts, deeply in debt, rely on uneven trade arrangements with the US, and have below-replacement birth rates. They are cowed by Soros-sponsored propaganda—Immigration is the answer!—and haven’t shut off the immigrant invasion. Refusing to spend on their own militaries, they’ve used what they save on defense to subsidize welfare spending and state bureaucracies.

They’re ignoring a lesson from history: nations that rely on other nations for their defense generally come to regret it. Instead, they’re wedded to the globalist acronyms: NATO, EU and UN. They have frittered away their power and their glory—Europe’s heritage and civilization—opting for overrun masquerading as assimilation by dogmatic and implacable foes.

Trump is all about power and despises weakness. There isn’t always strength in numbers. A confederation of weaklings doesn’t equal strength, especially when the weaklings’ premises and principles are fundamentally wrong. Strongest of the weaklings is Germany, a trade powerhouse but a US military vassal. It’s hard to say if Trump’s dislike of Angela Merkel is business—she’s one of the world’s most visible and vociferous proponent of globalism, or personal—it’s always her way or the highway. Probably both, and it looks like Germany may finally be rejecting her way on immigration.

Trump clearly relished snubbing her and her G-6 buddies, particularly boy toys Trudeau and Macron, who may actually believe his bone-crushing handshakes intimidated Trump. When you’re paying for a continent’s defense and you’re giving them a better deal on trade than they’re giving you, that’s leverage, and Trump knows it. He’s not intimidated.

US Atlanticists have used that leverage to cement Europe into the US’s confederated empire. That Trump is willing to blow off Europe suggests that he may be blowing off empire. America’s imperialists equate backing away from empire with “decline,” but such a sea change would be the exact opposite. Empires require more energy and resources to maintain than can be extracted from them. They are inevitably a road to ruin.

Nothing is as geopolitically telling as Trump leaving Europe’s most “important” heads of state early to meet with the leader of one of Asia’s most impoverished backwaters. Europe’s time has passed, the future belongs to Asia. Barack Obama’s “pivot” to Asia may look like the same recognition, but it was not. That pivot was designed to encircle China diplomatically, economically, and militarily. That thinking persists among much of the US military, but Trump may have something different in mind.

China has its problems. Much of its economy, especially its financial sector, is state-directed, despite the capitalistic gloss. There will be a reckoning from its debt binge. The repressive social credit system typifies the government’s immoral objective: keeping China’s people compliant but productive drones. However, enforced docility and innovation—the foundation of progress—mix as readily as oil and water, and theft of others’ innovations can’t fill the void.

Notwithstanding its issues, China is a major power and is not going to be encircled or regime changed by the US. The Belt and Road Initiative (BRI) it cosponsors and finances with Russia is the centerpiece of a basket of initiatives designed to further those countries’ influence and leadership within Eurasia and among emerging market countries. BRI is an apt symbol of the movement towards multipolarity, with competition shifting from the military to the economic and commercial sphere.

Trump tacitly accepts Russian and Chinese dominance in Eurasia. However, Trump doesn’t give without receiving; he’s going to extract concessions. Number one on the list is North Korea and its nuclear weapons. We’ll probably never know what has gone on behind the scenes between Kim Jong Un, Xi Jinping, and perhaps Vladimir Putin, but Kim may have received an offer he couldn’t refuse. Both China and Russia would be well-served by a Korean peninsula free of nuclear weapons and US troops. Whatever transpired, Kim came around. Trump ameliorated any potential humiliation, journeying to Kim’s neck of the woods, laying on an inspirational movie video, and flattering the North Korean leader and his country. Kim the farsighted leader may be able to reach a deal; Kim the browbeaten puppet couldn’t. If he tried, he’d probably be deposed, always a danger for dictators.

As global competition moves from military to economic, Trump is also going to make sure he tilts, as much as possible, the rules of that competition back towards the US. There are the existing trade arrangements with Europe, Canada, and Mexico that he’s willing to blow up, presumably to obtain better arrangements.

China is in a league of its own when it comes to gaming trade, and it’s getting the Trump treatment as well. Much of the Chinese “advantage” stems from Chinese overcapacity, fueled by below market interest rates in China and around the globe. Trump can’t do much about that “advantage.” The low-interest regime will eventually crash and burn, but it’s going to take a depression to clear overcapacity in China and elsewhere.

Innovation and intellectual property are America’s one indisputable comparative economic advantage. It will be a tough nut, but Trump is bent on curbing China’s acquisitions, by fair means and foul, of US know how. If he succeeds it will slow, but not stop, the Chinese economic juggernaut. It has millions of smart, well-educated, industrious people who will continue to fuel indigenous innovation (notwithstanding state-enforced docility).

Three realities confronted Trump when he assumed office. The US empire is unsustainable, so too is the trajectory of its spending and debt, and the government is fundamentally corrupt. It would be foolish to bet Trump doesn’t understand these issues and the linkages between them.

“Trump’s New World Order”

If Trump has recognized that first reality and is implementing Don Corleone’s spheres of influence concept, he may get some breathing room to address the intractable second and third realities: the trajectory of US spending and debt, and the fundamentally corrupt government. On the debt, all the breathing room in the world isn’t going to save him. The US keeps adding to principal, which is compounding at rising rates. Cutting imperial expenditures would help some, although transfer payments are the biggest enchilada. To make even the first step on the thousand mile journey to solvency, however, the US government will have to run a bona fide surplus for many years. That prospect is not on the horizon.

As for corruption, thousands of articles by bloggers and commentators, including SLL, may have less instructional value for the populace at large than one simple demonstration: most of America’s rulers and its captive media are speaking out against a peace initiative, not on the merits of the initiative itself, but because Donald Trump was one of its initiators. That tells those Americans who are paying attention all they need to know about their rulers and their captive media. Whether they do anything about it is another question.

You Should Be Laughing At Them!

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Outrage, by Raúl Ilargi Meijer

It seems like everybody is outraged by something out there, but all the outrage is invariably selective. From Raúl Ilargi Meijer at theautomaticearth.com:

Yes, you have every right to be outraged at the disgraceful treatment of children on America’s borders. But that does not give you the right to NOT be outraged by what America has done and is today still doing to children in, just to name a few places, Syria, Libya and Yemen. Be outraged, but don’t make it an echo chamber issue. Because if you do, you, too, are in a cage.

So if you see the wives of former presidents speak out about the child separation policies, ask yourself where they get the moral authority to speak out on such issues, after their husbands have bombed the crap out of many countries, killing many many children in the process. And don’t let’s get started about Hillary Clinton when she was Secretary of State.

Presently in Yemen, 20 million people depend on humanitarian aid, and the US are helping Saudi Arabia et al bomb the only port left through which that aid can reach them, to smithereens. 8.5 million Yemenis are already starving, and some 3 million of them are children. Where is your outrage over that?

Where is the outrage over the American and international treatment of Julian Assange, who has been in the Ecuador embassy in London for six years today? Where is it?

Don’t get coaxed into selective outrage by your news media, who like nothing better than to tell you what to be outraged by, and what not. If you allow that to happen, you have lost your freedom and your independence. Ask why they tell you a certain story at the moment they tell it. Ask why they tell it the way they do.

Yes, it has come to this. Every single story you read or hear needs to be scrutinized. Because there’s an agenda behind all of them, left, right or middle. And because the media have figured out that constantly driving you from one selective outrage to another is very profitable for them. Critical thought is not.

Yes, there are sociopaths in the Trump administration. But that’s nothing new. There have been sociopaths in every administration. It’s how our political systems work. Sh*t floats to the top.

To continue reading: Outrage

Bringing Julian Assange Home, by John Pilger

By all means bring Julian Assange home, to Australia. Does Australian Prime Minister Malcolm Turnbull have the balls, or is he just another US eunuch? From John Pilger at global research.ca:

The persecution of Julian Assange must end. Or it will end in tragedy.

The Australian government and prime minister Malcolm Turnbull have an historic opportunity to decide which it will be.

They can remain silent, for which history will be unforgiving. Or they can act in the interests of justice and humanity and bring this remarkable Australian citizen home.

Assange does not ask for special treatment. The government has clear diplomatic and moral obligations to protect Australian citizens abroad from gross injustice: in JulianE’s case, from a gross miscarriage of justice and the extreme danger that await him should he walk out of the Ecuadorean embassy in London unprotected.

We know from the Chelsea Manning case what he can expect if a US extradition warrant is successful — a United Nations Special Rapporteur called it torture.

I know Julian Assange well; I regard him as a close friend, a person of extraordinary resilience and courage. I have watched a tsunami of lies and smear engulf him, endlessly, vindictively, perfidiously; and I know why they smear him.

In 2008, a plan to destroy both WikiLeaks and Assange was laid out in a top secret document dated 8 March, 2008. The authors were the Cyber Counter-intelligence Assessments Branch of the US Defence Department. They described in detail how important it was to destroy the “feeling of trust” that is WikiLeaks’ “centre of gravity”.

This would be achieved, they wrote, with threats of “exposure [and] criminal prosecution” and a unrelenting assault on reputation. The aim was to silence and criminalise WikiLeaks and its editor and publisher. It was as if they planned a war on a single human being and on the very principle of freedom of speech.

Their main weapon would be personal smear. Their shock troops would be enlisted in the media — those who are meant to keep the record straight and tell us the truth.

The irony is that no one told these journalists what to do. I call them Vichy journalists — after the Vichy government that served and enabled the German occupation of wartime France.

Last October, the Australian Broadcasting Corporation journalist Sarah Ferguson interviewed Hillary Clinton, over whom she fawned as “the icon for your generation”.

This was the same Clinton who threatened to “obliterate totally” Iran and, who, as US secretary of State in 2011, was one of the instigators of the invasion and destruction of Libya as a modern state, with the loss of 40,000 lives. Like the invasion of Iraq, it was based on lies.

To continue reading: Bringing Julian Assange Home

Trump Wants To Free America From “Fool Trade” And Flip The Tables On The EU, by Andrew Korybko

Trump is suggesting that Europe pay more for its own defense, and have the same terms of trade with the US that the US has with Europe. From Andrew Korybko at orientalreview.org:

Trump promised to replace what he termed as “fool trade” with fair trade when it comes to America’s economic partnerships, especially those with NAFTA and the EU.

Tweeting from Singapore after the failed G7 Summit in Canada, the President wrote that “Fair Trade is now to be called Fool Trade if it is not Reciprocal”, before explaining how Canada and Germany “rip off” the US through their own protectionist tariffs and insufficient contributions to NATO, respectively. Trump’s sour that their leaders attacked him for his “Make America Great Again” steel and aluminum tariffs while hypocritically ignoring their own lopsided economic relations with the US, and he believes that now is the time to make right for what he truly believes are the historic wrongs that his predecessors committed in voluntarily handicapping American power. Proverbially speaking, the President conceptualizes America as Gulliver the “giant” tied down by a bunch of Lilliputian dwarves, albeit having previously put itself in this submissive position out of some sort of ideological masochistic-sadism that Trump wants to free it from.

The Cold War-era quid pro quo of the US providing costly security assistance to its NATO allies in order to enable them to concentrate more fully on building their utopian welfare states is no longer relevant because of the changing nature of geopolitics and the rise of asymmetrical threats, though Clinton, Bush, and Obama perpetuated this state of affairs because it advanced the Liberal-Globalist model that all three of them were pursuing at the expense of average Americans. Having entered into office because of the desperation that millions of regular folks in Middle America are experiencing as a result of the domestically catastrophic consequences of globalization on the American Heartland and especially the Midwest, Trump feels obligated to do something about this massive self-inflicted economic wound that’s bleeding hundreds of billions of dollars from the country each year for voluntary reasons that are impossible for this businessman to fathom.

Trump hits back at G7

To continue reading: Trump Wants To Free America From “Fool Trade” And Flip The Tables On The EU

Mattis: Putin Is Trying To “Undermine America’s Moral Authority”, by Caitlin Johnstone

The US is running low on moral authority; there’s not much for Putin or anyone else to undermine. From Caitlin Johnstone at caitlinjohnstone.com:

At a graduation ceremony for the US Naval War College (barf), US Secretary of Defense James Mattis asserted that Russian President Vladimir Putin “aims to diminish the appeal of the western democratic model and attempts to undermine America’s moral authority,” and that “his actions are designed not to challenge our arms at this point but to undercut and compromise our belief in our ideals.”

This would be the same James Mattis who’s been overseeing the war crimes committed by America’s armed forces during their illegal occupation of Syria. This would be the same United States of America that was born of the genocide of indigenous tribes and the labor of African slaves, which slaughtered millions in Korea, Vietnam, Cambodia, Iraq, Libya and Syria for no legitimate reason, which is partnered with Ukrainian Nazis, jihadist factions in Syria and Iranian terror cultists, which supports 73 percent of the world’s dictators, which interferes constantly in the electoral processes of other countries as a matter of policy, which stages coups around the world, which has encircled the globe with military bases, whose FBI still targets black civil rights activists for persecution to this very day, which routinely enters into undeclared wars of aggression against noncompliant governments to advance plutocratic interests, which remains the only country ever to use nuclear weapons on human beings after doing so completely needlessly in Japan, and which is functionally a corporatist oligarchy with no meaningful “democratic model” in place at all.

A casual glance at facts and history makes it instantly clear that the United States has no “moral authority” of any kind whatsoever, and is arguably the hub of the most pernicious and dangerous force ever assembled in human history. But the establishment Russia narrative really is that cartoonishly ridiculous: you really do have to believe that the US government is 100 percent pure good and the Russian government is 100 percent pure evil to prevent the whole narrative from falling to pieces. If you accept the idea that the exchange is anything close to 50/50, with Russia giving back more or less what it’s getting and simply protecting its own interests from the interests of geopolitical rivals, it no longer makes any sense to view Putin as a leader who poses a unique threat to the world. If you accept the idea that the west is actually being far more aggressive and antagonistic toward Russia than Russia is being toward the west, it gets even more laughable.

To continue reading: Mattis: Putin Is Trying To “Undermine America’s Moral Authority”