Tag Archives: China

Making History: China and Russia are Transforming Enemies into Friends, by Federico Pieraccini

This is the third and last of an excellent series on the Chinese-Russian alliance transforming Eurasia. There are links to the previous two articles in the first paragraph. From Federico Pieraccini at strategic-culture.org:

In the previous articles, the military and economic means by which the United States initially aimed for global hegemony were addressed, detailing how the US became the (declining) superpower it is today. In both analyses I highlighted how the threat of US military power is no longer credible, and how sanctions and the strong-arming behavior of corporate giants and international bodies (IMF, World Bank, BIS, etc) have ceased their effectiveness. This has made the United States increasingly irrelevant, leaving in the process a vacuum to be filled by emerging powers like China and Russia, which effectively ushers in a new world order based on multipolarity. In this third and final part of the series, I will dive into the specific events that show how the military, economic and diplomatic combination of Iran, Russia and China have forged, by known as well as less-known means, an alternative world order to the unipolar American one.

Russia, China and Iran have in recent years drawn enormous benefit from the declining military and economic power of the United States, further propelled by a general mistrust of Washington’s diplomatic and political abilities, both with Obama and now with Trump. The two previous articles showed that Moscow, Beijing and Tehran, even as they addressed different situations, shared similar interests and came to coordinate their military, economic and diplomatic strategy.

The success of the Euro-Asian triptych is based on the essential principle of transforming enemies into neutral players, neutral players into allies, and further improving relations with allied nations. In order for this project to be realized, economic, military and diplomatic efforts are variously employed, depending on the country and the general regional context. The flexibility shown by Moscow and Beijing in negotiations has delivered historic deals, not only in the energy sector but also in the military sphere and also in education and poverty reduction, as seen in Africa.

Saudi Arabia, Turkey and Syria are three countries that, when analysed individually, reveal this precise strategy of Russia, China and Iran. Particular attention is focused on the Middle East for several reasons. It is the region where America’s declining military power, unable to achieve its geopolitical objectives in Syria, meets with the progressive loss of Washington’s economic influence, highlighted by the increasingly precarious position of the petrodollar that is about to be challenged by petroyuan deals between Saudi Arabia and China.

To continue reading: Making History: China and Russia are Transforming Enemies into Friends

 

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Washington: The Bleeder of the ‘Free World’, by Finian Cunningham

What does the “leader” of the free world do when nobody wants to follow its lead? From Finian Cunningham at strategic-culture.com:

Among the many self-flattering epithets it gives itself, the US has always claimed to be the “leader of the free world”. It’s a rather patronizing notion that America views itself as a selfless protector and benefactor of its European allies and others. This fairytale depiction of the world is coming to a rude awakening as American power buffets against the reality of a multi-polar world.

Less a world leader and more like a blood-sucking leech on international relations.

We got a clear view of the contradiction in America’s narcissistic mythology with US President Donald Trump’s announcement that he was disavowing the multinational nuclear accord with Iran last Friday.

Trump didn’t axe American participation in the deal just yet, but he has put it on notice that he or the US Congress may terminate the accord over the next two months. How’s that for high-handed arrogance?

However, there was near-unanimous push back around the world to Trump’s disparagement of the Joint Comprehensive Plan of Action (JCPOA), which was originally signed in July 2015 by the US, Russia, China, European Union and Iran. All the signatories uniformly rebuked Trump’s attempt to undermine the deal, which is supposed to lift international economic sanctions off Iran in return for curbs on Iran’s nuclear program.

While Trump accused Iran of “multiple violations” of the accord, all the other stakeholders asserted satisfaction that Iran has in fact fully implemented its obligations to restrict uranium enrichment and weaponization of its nuclear program. The UN watchdog, the International Atomic Energy Agency, also responded to Trump’s claims by reaffirming that eight consecutive monitoring reports have found Iran to be fully compliant with the JCPOA.

Britain, France and Germany, as well as Russia and China, have firmly said that the nuclear deal – which took two years to negotiate during Barack Obama’s tenure in the White House – is not for renegotiation. A point which was reiterated too by Iranian President Hassan Rouhani.

To continue reading: Washington: The Bleeder of the ‘Free World’

The True Danger of the North Korea Crisis: It Could Cost America Its Allies, by Robert Kelly

Would the US wage a war that might kill millions of South Koreans or Japanese without consulting South Korea or Japan? It would be a colossal mistake, but the US government has made a lot of colossal foreign policy mistakes lately. From Robert Perry at strategic-culture.org:

If Washington takes action without consulting its allies, the alliances themselves could fray

Tough North Korea rhetoric from the U.S. administration continues. Major South Korean media increasingly talk as if U.S. air strikes are likely, and theexpert community seems increasingly resigned to them as well. Despite constant criticism of his incendiary language, President Donald Trump continues to suggest that major action against North Korea is imminent—most recently by suggesting that we are now in a period of ‘calm before the storm.’

I have argued in these pages that such strikes would be an enormous risk. We do not know what the North’s redlines for retaliation against such a strike are. We do not know if the strikes would so unnerve the North’s elites that war was next, that they would respond with enormous force, possibly including nuclear weapons. An expert study of this scenario suggests appalling casualty numbers. We also do not know what China’s thresholds are for intervention. China is treaty-bound to help North Korea if it is attacked. It may not, but if a U.S. air strike against North Korea spirals into a major conflict, then the likelihood of Chinese intervention rises.

It is also worth noting that even if the Chinese and North Koreans do not respond to air strikes, North Korea will almost certainly deploy human shields as soon as the bombs start to fall. And the North has so many targets that the United States would like to hit, that any ‘air strike’ would look a lot more like a major air campaign and not a quick ‘surgical strike,’ as in Syria earlier this year. An air campaign against sites with human shields means a high civilian death toll. The North Koreans will not make this easy for us at all.

White House officials, most importantly Secretary of Defense James Mattis, continue to suggest that diplomacy is the preferred outcome. And there are options to continue to buy us time against the North Korean nuclear and missile programs: missile defense, sanctions, continuing to cajole China to push North Korea harder and so on. Nevertheless, the pressure to something dramatic regarding North Korea is rising. If war is inevitable — it is not, but for the sake of the argument—it is better to fight now, before they have more weapons, and before those weapons can more evidently strike the continental United States. Even Kim Young-sam, South Korea’s president at the time of the 1994 nuclear crisis, has retrospectively regretted his decision not to strike then.

To continue reading: The True Danger of the North Korea Crisis: It Could Cost America Its Allies

Only China Can Restore Stability in The Global Economy, by Raúl Ilargi Meijer

There are many candidates, but the Chinese real estate bubble may be the biggest bubble out there. From Raúl Ilargi Meijer at theautomaticearth.com:

For those of you who don’t know Andy Xie, he’s an MIT-educated former IMF economist and was once Morgan Stanley’s chief Asia-Pacific economist. Xie is known for a bearish view of China, and not Beijing’s favorite person. He’s now an ‘independent’ economist based in Shanghai. He gained respect for multiple bubble predictions, including the 1997 Asian crisis and the 2008 US subprime crisis.

Andy Xie posted an article in the South China Morning Post a few days ago that warrants attention. Quite a lot of it, actually. In it, he mentions some pretty stunning numbers and predictions. Perhaps most significant are:

“only China can restore stability in the global economy”

and

“The festering political tension [in the West] could boil over. Radical politicians aiming for class struggle may rise to the top. The US midterm elections in 2018 and presidential election in 2020 are the events that could upend the applecart.”

Here are some highlights.

The bubble economy is set to burst, and US elections may well be the trigger

Central banks continue to focus on consumption inflation, not asset inflation, in their decisions. Their attitude has supported one bubble after another. These bubbles have led to rising inequality and made mass consumer inflation less likely. Since the 2008 financial crisis, asset inflation has fully recovered, and then some.

The US household net worth is 34% above the peak in 2007, versus 30% for nominal GDP. China’s property value may have surpassed the total in the rest of the world combined. The world is stuck in a vicious cycle of asset bubbles, low consumer inflation, stagnant productivity and low wage growth.

Let that sink in. If Xie is right, and I would put my money on that, despite all the housing bubbles elsewhere in the world, the Chinese, who make a lot less money than westerners, have pushed up the ‘value’ of Chinese residential real estate so massively that their homes are now ‘worth’ more than all other houses on the planet. Xie returns to this point later in the article, and says: “In tier-one cities, property costs are likely to be between 50 and 100 years of household income. At the peak of Japan’s property bubble, it was about 20 in Tokyo.

To continue reading: Only China Can Restore Stability in The Global Economy

Challenging the Dollar: China and Russia’s Plan from Petroyuan to Gold, by Federico Pieraccini

The second in a three part series about the fall of the dollar as the world’s reserve currency and the decline of the American empire (Part One link). From Federico Pieraccini at strategic-culture.org:

As seen in my previous article, US military power is on the decline, and the effects are palpable. In a world full of conflicts brought on by Washington, the economic and financial shifts that are occurring are for many countries a long-awaited and welcome development.

If we were to identify what uniquely fuels American imperialism and its aspirations for global hegemony, the role of the US dollar would figure prominently. An exploration of the depth of the dollar’s effects on the world economy is therefore necessary in order to understand the consequential geopolitical developments that have occurred over the last few decades.

The reason the dollar plays such an important role in the world economy is due to the following three major factors: the petrodollar; the dollar as world reserve currency; and Nixon’s decision in 1971 to no longer make the dollar convertible into gold. As is easy to guess, the petrodollar strongly influenced the composition of the SDR basket, making the dollar the world reserve currency, spelling grave implications for the global economy due to Nixon’s decision to eliminate the dollar’s convertibility into gold. Most of the problems for the rest of the world began from a combination of these three factors.

Dollar-Petrodollar-Gold

The largest geo-economic change in the last fifty years was arguably implemented in 1973 with the agreement between OPEC, Saudi Arabia and the United States to sell oil exclusively in dollars.

Specifically, Nixon arranged with Saudi King Faisal for Saudis to only accept dollars as a payment for oil and related investments, recycling billions of excess dollars into US treasury bills and other dollar-based financial resources. In exchange, Saudi Arabia and other OPEC countries came under American military protection. It reminds one of a mafia-style arrangement: the Saudis are obliged to conduct business in US dollars according to terms and conditions set by the US with little argument, and in exchange they receive generous protection.

To continue reading: Challenging the Dollar: China and Russia’s Plan from Petroyuan to Gold

 

Humor is Where You Find It, by Robert Gore

Looking for a good laugh? Consider the United States.

Football is a tedious game that fills three-and-a-half hours of airtime with 30 minutes of action, commercials, commentary, instant replays, more instant replays, closeups of pretty cheerleaders, and halftime pageantry. The players are paid great gobs of money but run the risk of rendering themselves concussive basket cases. The super rich owners hold up municipalities for taxpayer-funded stadiums while keeping the TV, ticket, merchandising, and concessions revenues. They’ve also climbed into bed with the federal government, accepting taxpayer money for promoting patriotism. Among other things, this requires players, who until 2009 could stay in the locker room while the National Anthem was played, to be on the field, presumably standing at respectful attention.

Presumably—aye, there’s the rub. Last season, quarterback Colin Kaepernick expressed his disagreement with certain governmental policies and practices by kneeling during the Star Spangled Banner. Since then, other players have done the same, to the consternation of many fans, including President Trump. Ratings and attendance are tanking and the crony socialist owners are caught between the rock of their payrolls’ politics and the hard place of their fans’ disgust. To borrow from Oscar Wilde, one must have a heart of stone to ponder their plight without laughing. It couldn’t have happened to a nicer group of guys and gals.

Last year’s losing presidential candidate has written a book blaming virtually everyone for her loss…except the one person who was responsible. A cottage industry has sprung up to feed this self-exculpatory fantasy, affixing on Russia as the author of Hillary’s woes. Russia “hacked” DNC computers, except technically they couldn’t have been hacked, they were downloaded, an inside job. The materials Russia couldn’t have hacked were given by someone, presumably whoever downloaded them, to WikiLeaks, which disclosed them. Doing so, it committed the cardinal sin in contemporary American governance: disclosing the truth. In classic Clinton fashion, Hillary and team never contested the authenticity or veracity of the disclosures, instead concocting the Russian story.

Efforts to keep this fabrication going are a source of endless amusement. There have been evidence-free “assessments” from the intelligence agencies, a special counsel probing the tax returns of a Trump campaign manager who served all of two months, and now there are stories that “Russian-aligned” groups and RT bought a drop-in-the-bucket worth of ads on Facebook and Twitter during a campaign in which billions of dollars were spent on advertising, not counting the unpaid “donations” to Hillary from the mainstream media, pollsters, Google, and Facebook.

The purveyors of the Russian concoction are those desperately lonely schmucks who take the ugliest girls in the bar home at closing time because they’re the only ones left. The concoction is all they have. Let’s hope they have the decency to hate themselves in the morning.

America is like that high school all-everything—sports star, class president, valedictorian—who can’t accept that at the university, she’s just another student. For a brief shining moment after World War II it had an uncontested empire, but empires are notoriously hard to hang on to. Seventy years later the US has a string of “inconclusive” (never “losing”) wars, a lot of promises to its own citizens that aren’t going to be kept, and an empire that’s slipping away. Its chief adversaries—Russia, China, and Iran—are going about their business, consolidating economic and political power in the Eurasian center of the world.

They’ve been helped immeasurably by the comedy of errors that has been US policy in Syria. The same people who championed disastrous regime changes in Iraq and Libya set their sights on Bashar al-Assad, Syria’s duly elected leader. That this entailed crawling into bed with ISIS, an offshoot of al Qaeda, the outfit that reportedly attacked the twin towers and the Pentagon, seemed not to bother anyone. Neither did the fact that while we were supporting ISIS’s rebellion in Syria, we were also supporting the Iraqi government’s effort to quell ISIS’s rebellion in Iraq. Why is it that the butt of all the jokes often ends up picking up the tab? The US wasted tons of blood and treasury, accomplished none of its stated goals, and was humiliated when, at the request of Assad, Russia, Iran, and Hezbollah came in and routed ISIS. You can’t make this stuff up.

Even the US’s supposed friends can’t stifle their schadenfreude, having been under its domination for so long. Derisive joy is tempered by justified concern: in its arrogance and desperation to maintain its untenable position, those zany Americans might blow up the world. The president recently stood before the United Nations, an organization ostensibly devoted to peace, and said he’d destroy North Korea. Maybe it was all just posturing and hyperbole in good fun, but the North Koreans, and their next-door neighbors China and Russia, weren’t laughing.

The US has become an infantile nation. Not playing well with others, it demands the world conform to its dictates…or else. That or else is basically holding its breath until it turns blue, as it self-destructively plunges further into debt and wreaks havoc globally, instilling fear and hate, prompting vengeance. Fealty to a failing government and its symbols has become the sine qua non of a ritual, insecure patriotism. Real patriotism, loyalty to America’s founding ideals, demands opposing at every turn the government’s mindless, unprincipled, and voracious quest for power, treasure, and empire. If the flag and the National Anthem mean anything at all, they stand for the proposition that liberty must be defended and fought for, particularly against that which has always been its chief nemesis—government. Now, they only serve as sad markers of how much has been lost.

AMERICA AT ITS GREATEST


AMAZON

KINDLE

NOOK

Cracks in Dollar Are Getting Larger, by Jim Rickards

Slowly but surely, the world is moving away from the dollar as the reserve currency. From Jim Rickards at dailyreckoning.com:

Many Daily Reckoning readers are familiar with the original petrodollar deal the U.S made with Saudi Arabia.

It was set up by Henry Kissinger and Saudi princes in 1974 to prop up the U.S. dollar. At the time, confidence in the dollar was on shaky ground because President Nixon had ended gold convertibility of dollars in 1971.

Saudi Arabia was receiving dollars for their oil shipments, but they could no longer convert the dollars to gold at a guaranteed price directly with the U.S. Treasury. The Saudis were secretly dumping dollars and buying gold on the London market. This was putting pressure on the bullion banks receiving the dollar.

Confidence in the dollar began to crack. Henry Kissinger and Treasury Secretary William Simon worked out a plan. If the Saudis would price oil in dollars, U.S. banks would hold the dollar deposits for the Saudis.

These dollars would be “recycled” to developing economy borrowers, who in turn would buy manufactured goods from the U.S. and Europe. This would help the global economy and help the U.S. maintain price stability. The Saudis would get more customers and a stable dollar, and the U.S. would force the world to accept dollars because everyone would need the dollars to buy oil.

Behind this “deal” was a not so subtle threat to invade Saudi Arabia and take the oil by force. I personally discussed these invasion plans in the White House with Kissinger’s deputy, Helmut Sonnenfeldt, at the time. The petrodollar plan worked brilliantly and the invasion never happened.

Now, 43 years later, the wheels are coming off. The world is losing confidence in the dollar again. China just announced that any oil-exporter that accepts yuan for oil can convert the oil to gold on the Shanghai Gold Exchange and hedge the hard currency value of the gold on the Shanghai Futures Exchange.

The deal has several parts, which together spell dollar doom. The first part is that China will buy oil from Russia and Iran in exchange for yuan.

The yuan is not a major reserve currency, so it’s not an especially attractive asset for Russia or Iran to hold. China solves that problem by offering to convert yuan into gold on a spot basis on the Shanghai Gold Exchange.

This straight-through processing of oil-to-yuan-to-gold eliminates the role of the dollar.

To continue reading: Cracks in Dollar Are Getting Larger