Category Archives: Trade

The Next “Crisis”, by Eric Peters

A real crisis comes when Russia refuses dollars for its oil. From Eric Peters at ericpetersautos.com:

Now that Putin Bad! Ukraine Good! has sidelined Ronamonomania, a new “crisis” is needed to deal with a real one. Rather than “rearing his head” – per Sarah Palin – Putin may do something a lot more damaging to the people who gave us Ronamonomania and who are desperately trying to get us to forget it, via Putin Bad! Ukraine Good!

Ready?

Putin could decide to offer up Russian oil – of which there is a lot – for maybe a few bucks more than the $10 or so per barrel it costs to extract. With payment accepted in anything except American dollars.

If you think we’re in a “crisis” now, just wait.

This may be precisely why one of the American political psychopaths who gave us Ronamonomania – Oregon Senator Jeff Merkley – urges a “climate crisis” be declared and that the world “transition” to “renewable energy.” (The video is available on Breitbart; see here.)

He means expensive energy – under the control of political and corporate psychopaths such as himself. “Green” – he means red – energy. Rationed energy. No power for you. Of course plenty for him.

The latter being another way to elaborate the World Economic Forum’s slogan about us owning nothing – with WEF’ers owning everything – and us not happy about it.

Speaking of which…

Who are these WEF people? Did anyone elect them to anything? Or did money – the dangling thereof, by Klaus Schwab, who invented the WEF and styled it in such a way as to give people the impression it’s some sort of elected group of “global leaders” (as opposed to plutocrat-vultures) select them, by the dangling thereof? Knowing that those who rose to the bait were precisely the sorts of grifters on-the-make that would be useful to an uber psychopath such as himself?

Back to the crisis . . . the real one.

It’s not Russian troops marching into a former Russian province. It is the leader of Russia selling oil cheaply and for gold or some other currency that has value, unlike the American “dollar” – the pieces of paper that are almost not worth the paper they’re printed on.

Americans are forced to use these pieces of paper to buy whatever oil the hair-plugged febe who fronts the U.S. government permits them to buy – assuming they can afford to buy it. But the rest of the world – or large parts of it – is not so constrained. And there’s nothing – shy of letting the nukes fly – that the old hair-plugged febe who fronts for the U.S. government (which has become another front of the WEF) can do about it, in that event.

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If You Want to Build Back Better, Reshore Our Entire Supply Chain, by Charles Hugh Smith

When governments the world over started screwing up economies with Covid totalitarianism and the fiat debt extravaganza, they destroyed fragile supply changes. Companies are already working to resource from domestic suppliers. From Charles Hugh Smith at oftwominds.com:

It is entirely accurate to say that the U.S. is addicted to waste and distant sources of essentials.

The downside of dependency is in the air. The U.S. has allowed itself to become dependent on other nations for essentials, a policy that I view as an insanity fueled by greed.

The problem with dependency is the cost can’t be calculated until it’s too late. Restoring independence is a massive, costly undertaking, but if you wait until the cost of dependency is clear to all, it’s too late to escape the collapse triggered by the cut-off of essentials from other nations.

The happy story of “free trade” (there is no such thing) is that everybody wins. The reality is everyone loses except corporate profiteers. The problem with deciding on the wunnerfulness of “free trade” by looking at the price tag is that all the real costs of dependency and profiteering are not in the price on the tag: the “market” doesn’t include those costs because that would reveal “free trade” as a catastrophically bad deal for the people whose nation becomes dependent on others for their essentials.

Missing from the “low, low price” on the tag:

1. The degradation of quality and durability due to planned obsolescence and reliance on shoddy components.

2. The environmental degradation in the developing-world autocracies which welcomed the poisoning of their water, soil and air as “growth.”

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Could Economic Warfare Backfire on the US? By Michael Maharrey

The US is sanctioning one of the largest exporters of oil, a host of other important raw materials, and agricultural products, all of which much of the rest of the world is dependent upon in varying degrees. What could go wrong? From Michael Maharrey at schiffgold.com:

Economic sanctions serve as a powerful foreign policy tool for the US government. But could this ultimately backfire on the US?

Over the last several years, many countries have made a concerted effort to limit dependence on the US dollar. The economic warfare waged against Russia reveals exactly why.

The US hit Russia with a round of economic sanctions after Russian President Vladimir Putin recognized two breakaway republics in Ukraine and announced he would send troops into those regions. President Biden announced additional sanctions after Russia invaded Ukraine.

Peter Schiff recently explained how US sanctions against Russia could harm the US economy in the short-run and cause even more inflation. But there are also possible long-term consequences for using the dollar as a tool for war. It could accelerate de-dollarization globally and even threaten the dollar’s role as the world’s reserve currency.

The US is a global superpower and maintains an aggressive foreign policy. But the US doesn’t only project power across the globe through its massive military. It also weaponizes the US dollar, using its economic dominance and its privilege as the issuer of the global reserve currency in a carrot-stick tool of foreign policy.

The US government showers billions of dollars in foreign aid to “friends.” On the other hand, “enemies” can find themselves locked out of SWIFT, the global financial system that the US effectively controls using the dollar.

This is the nuclear option when it comes to economic warfare.

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Follow the money: how Russia will bypass western economic warfare, by Pepe Escobar

Western economic sanctions are a blow to Russia, but one that it can withstand. From Pepe Escobar at thecradle.co:

The US and EU are over-reaching on Russian sanctions. The end result could be the de-dollarization of the global economy and massive commodity shortages worldwide.

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

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

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

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

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

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

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

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The Dollar: A Victim of Its Own Success, by James Rickards

Many nations are chafing at the U.S. dollar standard and are devising ways around it. From James Rickards at dailyreckoning.com:

America’s most powerful weapon of war does not shoot, fly or explode. It’s not a submarine, plane, tank or laser. America’s most powerful strategic weapon today is the dollar.

The U.S. uses the dollar strategically to reward friends and punish enemies. The use of the dollar as a weapon is not limited to trade wars and currency wars, although the dollar is used tactically in those disputes. The dollar is much more powerful than that.

The dollar can be used for regime change by creating hyperinflation, bank runs and domestic dissent in countries targeted by the U.S. The U.S. can depose the governments of its adversaries, or at least blunt their policies without firing a shot.

Consider the following. The dollar constitutes about 60% of global reserves, 80% of global payments and almost 100% of global oil transactions. European banks that make dollar-denominated loans to customers have to borrow dollars to fund those liabilities.

Being based in Switzerland or Germany does not allow you to escape from the dollar’s dominance.

The U.S. not only controls the dollar itself. It controls the dollar payments system. This consists of the Treasury’s digital ledger of holders of U.S. debt, the Fedwire payments system among U.S. Fed member banks and the Clearing House Association (successor to the New York Clearing House and proprietor of CHIPS, the Clearing House Interbank Payments System) composed of the largest U.S. banks.

A dollar payment going from a bank in Shanghai to another bank in Sydney runs through one of these U.S.-controlled payments systems. In short, the dollar is the oxygen supply for world commerce and the U.S. can cut off your oxygen whenever it wants.

The list of ways in which the dollar can be weaponized is extensive. The U.S. uses the dollar to force its enemies into fronts, crude barter or the black market if they want to do business.

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How Ukraine fits into the global jigsaw, by Alasdair Macleod

This is the best overall analysis I’ve seen of the Ukraine situation. From Alasdair Macleod at goldmoney.com:

  • Ukraine is part of a far bigger geopolitical picture. Russia and China want US hegemonic influence in the Eurasian continent marginalised. Following defeats for US foreign policy in Syria and Afghanistan and following Brexit, Putin is driving a wedge between America and the non-Anglo-Saxon EU.
  • Due to global monetary expansion, rising energy prices are benefiting Russia, which can afford to squeeze Germany and other EU states dependent on Russian natural gas. The squeeze will only stop when America backs off.
  • Being keenly aware that its dominant role in NATO is under threat, America has been trying to escalate the Ukraine crisis to suck Russia into an untenable occupation. Putin won’t fall for it.
  • The danger for us all is not a boots-on-the-ground war — that’s likely to only involve the pre-emptive attacks on military installations Putin initiated last night — but a financial war for which Russia is fully prepared.
  • Both sides probably do not know how fragile the Eurozone banking system is, with both the ECB and its national central bank shareholders already having liabilities greater than their assets. In other words, rising interest rates have broken the euro system and an economic and financial catastrophe on its eastern flank will probably trigger its collapse.

The bigger picture is Mackinder’s World Island

The developing tension over Ukraine is part of a bigger picture — a struggle between America and the two Eurasian hegemons, Russia and China. The prize is ultimate control over Mackinder’s World Island.

Halford Mackinder is acknowledged as the founder of geopolitics: the study of factors such as geography, geology, economics, demography, politics, and foreign policy and their interaction. His original paper was entitled “The Geographical Pivot of History”, presented at the Royal Geographical Society in 1905 in which he first formulated his Heartland Theory, which extended geopolitical analysis to encompass the entire globe.

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Nord Stream: The Geo-politics of Keeping Germany ‘Down’, Russia ‘Out’, and Instability in Ukraine

The Ukraine situation shines  the spotlight on a critical issue: who decides European nations’ foreign policies, the nations themselves or the U.S. government. From Alastair Crooke at strategic-culture.org:

It seems reasonable to expect we will have this crisis with us – in its various forms – for at least the next two years, Alastair Crooke writes.

Macron in a remarkably frank interview with a French Journal put his finger on the main structural problems facing the EU: He lambasted the fact that the EU Council (and other EU states) had vetoed the earlier French-German proposal for a Russia-EU summit. The consequences to this omission, he said starkly, was that: ‘Others’ were talking to the Russians on the behalf of the EU. It’s not hard to surmise that he is implying that U.S. ‘interests’ (whether directly or via NATO ventriloquism) were the ones doing the talking. And that ‘Europe’ had lost its voice.

This is not simply a case of wounded amour propre by the French Jupiterian leader. It is rather, that some West European leaders (ie. the Carolingian Axis), belatedly have awoken to the realisation that the whole fake artifice of the ‘imminent Russian invasion’ of Ukraine is about corralling European states back into bloc (NATO) discipline. Macron – to give him his due – showed by his remarks at the Moscow press conference that he understood that silence at this crucial moment could define Europe for the next decades – leaving it bereft of the autonomy (let alone any modicum of sovereignty) that Macron so much wants for Europe.

The account of Macron’s press conference after his long tête-à-tête with Putin represents the contortionism of a French President unable to explicitly diss the dominant Anglo-American narrative on Ukraine, whilst saying – in barely coded language – that he was at one with Russia on all its complaints about the failed European security architecture, and the real risks of its toxicity for Russia that could lead to war in Europe.

Macron explicitly said that new security arrangements in Europe are absolutely needed. (In spite of his care not to poke the U.S. in the eye, he was clearly signalling a non-NATO ‘new’ arrangement). He also flatly contradicted the Washington narrative, saying that he did not believe Russia had an intent to invade Ukraine. Adding that in respect to NATO expansion, mistakes had been made.

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Sanctions Set America on the Path to War, Claiming Lives with No Benefit, by Kyle Anzalone and Will Porter

If Cubans had just been allowed to freely trade with the U.S. the Castro would have been memories within the space of a few years. Instead, sixty years of sanctions have locked Cuba into a early 1960s time warp and Cuba remains defiantly Cuba. From Kyle Anzalone and Will Porter at libertarianinstitute.org:

sign warning that economic sanctions are ahead

Sanctions have quickly become the foreign policy establishment’s favorite tool. Blacklisting governments opposed to the empire’s agenda allows for politicians to look tough on ‘evil regimes’ while stopping short of the type of warfare that is largely opposed by the American people.

US leaders present sanctions as a low-cost option to punish bad actors and give oppressed people a chance to rise up. However, the results are almost always the opposite.

The Cuban embargo presents the best empirical evidence of the failure of sanctions. Though the blockade just celebrated its 60th anniversary, the Castro government remains in power, serving only to increase the country’s poverty, not its freedom. While Joe Biden campaigned on rolling back the Donald Trump-era restrictions on trade and travel to Cuba, he has so far failed to live up to that promise and is likely to pass the blockade onto his successor.

Further, Cuba presents a perfect example of the hypocritical demands Washington attaches to its sanctions. As the US says Cuba must free its people to access the world economy, it continues to run a lawless torture prison on the island, largely filled with innocent Muslims.

Since the Kennedy presidency, sanctions have been wielded against a long list of countries. The US is currently waging ‘maximum pressure’ campaigns against Iran, Venezuela, North Korea, and Syria, a blockade against Yemen and Cuba, a trade war with China, and additional penalties on various people in Russia, Asia, the Middle East, Latin America, and Africa for assorted infractions of the US-enforced “rules-based international order.” Those policies have seldom had the intended result.

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Turmoil Will Continue Until a Modified Global Order Emerges, by Alastair Crooke

Whatever the U.S. government does with Ukraine, it will end up strengthening the Russia-China partnership and their domination of Eurasia. From Alastair Crooke at strategic-culture.org:

Ukraine has morphed – unexpectedly – from the Washington perspective from an ‘useful distraction’ to becoming Biden’s dilemma.

“What will we do if the West does not listen to reason?”, noted Sergei Lavrov. “Well, the President of Russia has already said ‘what’ [it will do]”. “If our attempts to come to terms on mutually acceptable principles of ensuring security in Europe fail to produce the desired result, we will take response measures. Asked directly what these measures might be, he [Putin] said: they could come in all shapes and sizes”. Russia had previously announced that absent a satisfactory western response, then Russia would lay aside the language of diplomacy – and resort to unspecified “military-technical” measures – incrementally ratchetting pain on NATO and the U.S.

It is unlikely that Moscow ever entertained any grand illusions about their ‘non-ultimatum’ ultimatum. The documents were never intended ‘to lure’ the West into ad aeternam negotiations. The point is that Moscow had already decided to break in a fundamental way with the West. What is afoot is today is the manifestation of that earlier decision.

The crux of Russia’s complaints about its eroding security have little to do with Ukraine per se but are rooted in the Washington hawks’ obsession with Russia, and their desire to cut Putin (and Russia) down to size – an aim which has been the hallmark of U.S. policy since the Yeltsin years. The Victoria Nuland clique could never accept Russia rising to become a significant power in Europe – possibly eclipsing the U.S.’ control over Europe.

If they were not intended as a basis for negotiations, what then were Russia’s treaty drafts about? It seems that they were about Russia and China coming down off the fence. This is much more important than many appreciate. It marks the beginning of a period of rising tensions (and maybe clashes), until a modified Global Order emerges.

The ‘non-ultimatums’ primarily were intended to draw out, and make explicit in the public sphere, America’s refusal to concede the validity to Moscow’s point that its own security interests are of no lesser significance than those of Ukraine and Georgia; that one state’s security interests cannot be augmented at the expense of another (i.e. the indivisibility of security).

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America’s Real Adversaries Are Its European and Other Allies, by Michael Hudson

The U.S. government does not want to see Europe drawn into the Russian-Chinese Eurasian orbit. From Michael Hudson at unz.com:

The U.S. aim is to keep them from trading with China and Russia

The Iron Curtain of the 1940s and ‘50s was ostensibly designed to isolate Russia from Western Europe – to keep out Communist ideology and military penetration. Today’s sanctions regime is aimed inward, to prevent America’s NATO and other Western allies from opening up more trade and investment with Russia and China. The aim is not so much to isolate Russia and China as to hold these allies firmly within America’s own economic orbit. Allies are to forego the benefits of importing Russian gas and Chinese products, buying much higher-priced U.S. LNG and other exports, capped by more U.S. arms.

The sanctions that U.S. diplomats are insisting that their allies impose against trade with Russia and China are aimed ostensibly at deterring a military buildup. But such a buildup cannot really be the main Russian and Chinese concern. They have much more to gain by offering mutual economic benefits to the West. So the underlying question is whether Europe will find its advantage in replacing U.S. exports with Russian and Chinese supplies and the associated mutual economic linkages.

What worries American diplomats is that Germany, other NATO nations and countries along the Belt and Road route understand the gains that can be made by opening up peaceful trade and investment. If there is no Russian or Chinese plan to invade or bomb them, what is the need for NATO? What is the need for such heavy purchases of U.S. military hardware by America’s affluent allies? And if there is no inherently adversarial relationship, why do foreign countries need to sacrifice their own trade and financial interests by relying exclusively on U.S. exporters and investors?

These are the concerns that have prompted French President Macron to call forth the ghost of Charles de Gaulle and urge Europe to turn away from what he calls NATO’s “brain-dead” Cold War and break with the pro-U.S. trade arrangements that are imposing rising costs on Europe while denying it potential gains from trade with Eurasia. Even Germany is balking at demands that it freeze by this coming March by going without Russian gas.

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