Sanctions -- The Weapon Of Fools

Russia and China mock divide and rule

US President Barack Obama (left) and Chinese President Xi Jinping (right) and Russian President Vladimir Putin (middle) arrive at the APEC Summit on November 11, 2014 in Beijing, China.

By PEPE ESCOBAR

The Roman Empire did it. The British Empire copied it in style. The Empire of Chaos has always done it. They all do it. Divide et impera. Divide and rule – or divide and conquer. It’s nasty, brutish and effective. Not forever though, like diamonds, because empires do crumble.

A room with a view to the Pantheon may be a celebration of Venus – but also a glimpse on the works of Mars. I had been in Rome essentially for a symposium – Global WARning – organized by a very committed, talented group led by a former member of European Parliament, Giulietto Chiesa. Three days later, as the run on the rouble was unleashed, Chiesa was arrested and expelled from Estonia as persona non grata, yet another graphic illustration of the anti-Russia hysteria gripping the Baltic nations and the Orwellian grip NATO has on Europe’s weak links. [1] Dissent is simply not allowed.

At the symposium, held in a divinely frescoed former 15th century Dominican refectory now part of the Italian parliament’s library, Sergey Glazyev, on the phone from Moscow, gave a stark reading of Cold War 2.0. There’s no real “government” in Kiev; the US ambassador is in charge. An anti-Russia doctrine has been hatched in Washington to foment war in Europe – and European politicians are its collaborators. Washington wants a war in Europe because it is losing the competition with China.

Glazyev addressed the sanctions dementia: Russia is trying simultaneously to reorganize the politics of the International Monetary Fund, fight capital flight and minimize the effect of banks closing credit lines for many businessmen. Yet the end result of sanctions, he says, is that Europe will be the ultimate losers economically; bureaucracy in Europe has lost economic focus as American geopoliticians have taken over.

Only three days before the run on the rouble, I asked Rosneft’s Mikhail Leontyev (Press-Secretary – Director of the Information and Advertisement Department) about the growing rumors of the Russian government getting ready to apply currency controls. At the time, no one knew an attack on rouble would be so swift, and conceived as a checkmate to destroy the Russian economy. After sublime espressos at the Tazza d’Oro, right by the Pantheon, Leontyev told me that currency controls were indeed a possibility. But not yet.

What he did emphasize was this was outright financial war, helped by a fifth column in the Russian establishment. The only equal component in this asymmetrical war was nuclear forces. And yet Russia would not surrender. Leontyev characterized Europe not as a historical subject but as an object: “The European project is an American project.” And “democracy” had become fiction.

The run on the rouble came and went like a devastating economic hurricane. Yet you don’t threat a checkmate against a skilled chess player unless your firepower is stronger than Jupiter’s lightning bolt. Moscow survived. Gazprom heeded the request of President Vladimir Putin and will sell its US dollar reserves on the domestic market. German Foreign Minister Frank-Walter Steinmeier went on the record against the EU further “turning the screw” as in more counterproductive sanctions against Moscow. And at his annual press conference, Putin emphasized how Russia would weather the storm. Yet I was especially intrigued by what he did not say. [2]

As Mars took over, in a frenetic acceleration of history, I retreated to my Pantheon room trying to channel Seneca; from euthymia – interior serenity – to that state of imperturbability the Stoics defined as aponia. Still, it’s hard to cultivate euthymia when Cold War 2.0 rages.

Show me your imperturbable missile

Russia could always deploy an economic “nuclear” option, declaring a moratorium on its foreign debt. Then, if Western banks seized Russian assets, Moscow could seize every Western investment in Russia. In any event, the Pentagon and NATO’s aim of a shooting war in the European theater would not happen; unless Washington was foolish enough to start it.

Still, that remains a serious possibility, with the Empire of Chaos accusing Russia of violating the Intermediate-Range escobarchaosNuclear Forces Treaty (INF) even as it prepares to force Europe in 2015 to accept the deployment of US nuclear cruise missiles.

Russia could outmaneuver Western financial markets by cutting them off from its wealth of oil and natural gas. The markets would inevitably collapse – uncontrolled chaos for the Empire of Chaos (or “controlled chaos”, in Putin’s own words).

Imagine the crumbling of the quadrillion-plus of derivatives. It would take years for the “West” to replace Russian oil and natural gas, but the EU’s economy would be instantly devastated.

Just this lightning-bolt Western attack on the rouble – and oil prices – using the crushing power of Wall Street firms had already shaken European banks exposed to Russia to the core; their credit default swaps soared. Imagine those banks collapsing in a Lehman Brothers-style house of cards if Russia decided to default – thus unleashing a chain reaction. Think about a non-nuclear MAD (Mutually Assured Destruction) – in fact warless. Still, Russia is self-sufficient in all kinds of energy, mineral wealth and agriculture. Europe isn’t. This could become the lethal result of war by sanctions.

Essentially, the Empire of Chaos is bluffing, using Europe as pawns. The Empire of Chaos is as lousy at chess as it is at history. What it excels in is in upping the ante to force Russia to back down. Russia won’t back down.

Darkness dawns at the break of chaos

Paraphrasing Bob Dylan in When I Paint My Masterpiece, I left Rome and landed in Beijing. Today’s Marco Polos travel Air China; in 10 years, they will be zooming up in reverse, taking high-speed rail from Shanghai to Berlin. [3]

From a room in imperial Rome to a room in a peaceful hutong – a lateral reminiscence of imperial China. In Rome, the barbarians swarm inside the gates, softly pillaging the crumbs of such a rich heritage, and that includes the local Mafia. In Beijing, the barbarians   are kept under strict surveillance; of course there’s a Panopticon element to it, essential to assure internal social peace. The leadership of the Chinese Communist Party (CCP) – ever since the earth-shattering reforms by the Little Helmsman Deng Xiaoping – is perfectly conscious that its Mandate of Heaven is directly conditioned by the perfect fine-tuning of nationalism and what we could term “neoliberalism with Chinese characteristics”.

In a different vein of the “soft beds of the East” seducing Marcus Aurelius, the silky splendors of chic Beijing offer a glimpse of an extremely self-assured emerging power. After all, Europe is nothing but a catalogue of multiple sclerosis and Japan is under its sixth recession in 20 years.

To top it off, in 2014 President Xi Jinping has deployed unprecedented diplomatic/geostrategic frenzy – ultimately tied to the long-term project of slowly but surely keeping on erasing US supremacy in Asia and rearranging the global chessboard. What Xi said in Shanghai in May encapsulates the project; “It’s time for Asians to manage the affairs of Asia.” At the APEC meeting in November, he doubled down, promoting an “Asia-Pacific dream”.

Meanwhile, frenzy is the norm. Apart from the two monster, US$725 billion gas deals – Power of Siberia and Altai pipeline – and a recent New Silk Road-related offensive in Eastern Europe, [4] virtually no one in the West remembers that in September Chinese Prime Minister Li Keiqiang signed no fewer than 38 trade deals with the Russians, including a swap deal and a fiscal deal, which imply total economic interplay.

A case can be made that the geopolitical shift towards Russia-China integration is arguably the greatest strategic maneuver of the last 100 years. Xi’s ultimate master plan is unambiguous: a Russia-China-Germany trade/commerce alliance. German business/industry wants it badly, although German politicians still haven’t got the message. Xi – and Putin – are building a new economic reality on the Eurasian ground, crammed with crucial political, economic and strategic ramifications.

Of course, this will be an extremely rocky road. It has not leaked to Western corporate media yet, but independent-minded academics in Europe (yes, they do exist, almost like a secret society) are increasingly alarmed there is no alternative model to the chaotic, entropic hardcore neoliberalism/casino capitalism racket promoted by the Masters of the Universe.

Even if Eurasian integration prevails in the long run, and Wall Street becomes a sort of local stock exchange, the Chinese and the emerging multipolar world still seem to be locked into the existing neoliberal model.

And yet, as much as Lao Tzu, already an octogenarian, gave the young Confucius an intellectual slap on the face, the “West” could do with a wake-up call. Divide et impera? It’s not working. And it’s bound to fail miserably.

As it stands, what we do know is that 2015 will be a hair-raising year in myriad aspects. Because from Europe to Asia, from the ruins of the Roman empire to the re-emerging Middle Kingdom, we all still remain under the sign of a fearful, dangerous, rampantly irrational Empire of Chaos.

This article originally appeared on Asia Times Online.

AT/GJH

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[Mirrored from PressTV]

--Joe

Cold War - Hot War - Obama's Brilliant Advisors

[UPDATE III :: Tuesday, May 6, 2014] - The Crisis in Ukraine - What can be done

by FLOYD RUDMIN - Tromsø, Norway."The crisis in Ukraine is serious.  At some point soon, reality needs to become the priority.  No more name-calling.  No more blaming.  If there are any adults in the room, they need to stand up.  The crisis in Ukraine is going critical, and that is a fact.

[UPDATE II :: Saturday, April, 19, 2014] - On Nazis, Jews & Ukraine ‘de-escalation’

"For all of what passes for Western ‘intelligentsia’ carping on Putin as a Stalin remix, the ‘sick Russian bear’ and stupidities of the same ilk, a strategy lesson is evolving. The Kremlin does have a vision, the will and the means to pursue it, perseverance, and a carefully calibrated method. Sun Tzu would approve it. Don’t provoke; wait. Be patient, but not inactive. Accrue your potential. Then retake the initiative. Strike only when the right convergence presents itself. And then the ‘tactician’ on the other side, already blinded because he does not respect you, will be left clueless, wondering what hit him."

 - Works for me.

[UPDATE :: Thursday, April, 17, 2012] - Kiev: Military operation in Ukraine southeast to go on despite Geneva agreement]

Stephen Cohen: A New Cold War Is Already Underway

“For the first time in my lifetime, since the Cuban Missile Crisis, hot war with Russia is imaginable,” Nation contributing editor Stephen Cohen told Democracy Now’s Amy Goodman on Thursday. Cohen, a Russia historian and expert on US-Russia relations, slammed the Obama administration for suggesting that the crisis in Ukraine was exclusively due to “Putin’s meddling,” and warned against a build-up of NATO forces near Russia’s borders. In an effort to end the crisis, Russia, Ukraine, the US and the European Union will begin talks today in Geneva. “Putin will compromise at these negotiations,” Cohen warned, “but he will not back off if confronted militarily.”
—Sam Adler-Bell — The Nation

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Here is the complete interview on Democracy Now:

"We Are Not Beginning a New Cold War, We are Well into It": Stephen Cohen on Russia-Ukraine Crisis

As negotiations over the crisis in Ukraine begin in Geneva, tension is rising in the Ukrainian east after security forces killed three pro-Russian protesters, wounded 13 and took 63 captive in the city of Mariupol. Ukrainian officials said the pro-Russian separatists had attempted to storm a military base. The killings came just after the unraveling of a Ukrainian operation to retake government buildings from pro-Russian separatists. Earlier today, Russian President Vladimir Putin accused the authorities in Kiev of plunging the country into an "abyss" and refused to rule out sending forces into Ukraine. Meanwhile, NATO Secretary General Anders Fogh Rasmussen has announced a series of steps to reinforce its presence in eastern Europe. "We will have more planes in the air, more ships on the water and more readiness on the land," Rasmussen said. We are joined by Stephen Cohen, professor emeritus of Russian studies and politics at New York University and Princeton University. "We are not at the beginning of a new Cold War, we are well into it," Cohen says, "which alerts us to the fact 'hot war' is imaginable now. It’s unlikely, but it’s conceivable — and if it’s conceivable, something has to be done about it."

Read the complete interview here.

Welcome to the Real World, America

[UPDATE :: April 1, 2014]  The West’s Looting of Ukraine Has Begun

by PAUL CRAIG ROBERTS
It is now apparent that the “Maiden protests” in Kiev were in actuality a Washington organized coup against the elected democratic government. The purpose of the coup is to put NATO military bases on Ukraine’s border with Russia and to impose an IMF austerity program that serves as cover for Western financial interests to loot the country.  The sincere idealistic protesters who took to the streets without being paid were the gullible dupes of the plot to destroy their country.
Read the rest of the article.

This article is mirrored completely from CounterPunch. It shows the real war and it's possible consequences.

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WEEKEND EDITION MARCH 28-30, 2014

Economic Sanctions Could Trigger a Global Depression

Ukraine’s Crisis

by GILBERT MERCIER

The referendum in Crimea on March 16, 2014 will probably attach the peninsula to the Russian federation. While it is unlikely that NATO will intervene and seek a direct military confrontation with Russia, the United States and the European Union are already cooking some broad and unwise economic sanctions with which to punish Russia. Russia, for its part, has at its disposal some mighty economic weapons with which to retaliate, as needed. The economic pain from this tit for tat of sanctions will be, in particular, inflicted on the EU. Because of the interconnections between all economies and financial markets, mutual economic sanctions could drive a still fragile world economy to a financial crash. The West, acting as if it solely and arrogantly represents the international community, has formulated a hazardous policy to isolate Russia. This ill-advised strategy is extremely shortsighted on all levels. Unlike Iran, Russia is fully integrated into the global economy.

A Test for BRICS

The Ukraine crisis is a major test of BRICS‘ geopolitical validity as an economic group, political  force and potential military alliance. China, Russia’s biggest partner in BRICS, has been strangely muted about Ukraine and the Crimea referendum, urging for “restraint on all sides” and pushing for a political solution. During the emergency meeting of the United Nations Security Council on March 15, 2014, on a resolution to declare Crimea’s referendum illegal, China did not side with Russia by using its veto power but instead abstained from voting. China’s abstention does not fare well for the future of BRICS, as it plays into the strategy of the US and its EU partner to isolate Russia. China, by its abstention from the UN vote, and India, Brazil and South Africa, by their subdued responses, have already played into the hands of the US and its European allies. Will China and other BRICS members step in forcefully to stop the madness of multilateral economic sanctions?

Dumping US Treasury Bonds

Russia, to prevent the announced freeze of its assets in the US, has already acted on the looming sanctions by liquidating more than $100 billion of its holdings in US Treasury Bonds. The bonds, which represent about 80 percent of Russia’s holding in US T-Bonds, were transferred out of the US Central Bank. The withdrawal was revealed by the US central bank when it announced that its holdings in T-Bonds dropped by $105 billion for the week ending March 12, 2014, from $2.96 trillion to $2.85 trillion. This abrupt sale is three times higher than any weekly sale was at the peak of the 2008 financial crisis.

Of all countries, China has the means to diffuse the potential economic crisis by also threatening to dump US T-Bonds. China owns an estimated $1.3 trillion in US Treasury Bonds and is the number one investor amongst foreign governments. Other BRICS members such Brazil and India own respectively $250 billion and $64 billion in T-Bonds. Consequently, the threat by BRICS members of a coordinated fire sale would represent more than $1.6 trillion in T-Bonds. This would be a powerful enough “financial weapon of mass destruction,” to quote Warren Buffet,  to crash Wall Street, the US dollar, and by a ripple effect, the European financial markets.

Economic Sanctions’ Global Boomerang Effect

China has rightly warned that drastic economic sanctions against Russia, and Russia’s subsequent retaliation could make the global economy “spiral into chaos.” Sanctions on Russian exports would greatly expose the EU. Europe imports 30 percents of its gas from the Russian state-owned company Gazprom. Russia is also Europe’s biggest customer. The EU is, by far, Russia’s leading trade partner and accounts for about 50 percent of all Russian exports and imports. In 2014, EU-Russia overall trade stands at around 360 billion Euros per year. Russia’s total export to the EU, which is principally raw materials such as gas and oil, stands at around 230 billion Euros, while Russia’s imports from the EU amount to around 130 billion Euros of mainly manufactured products as well as foodstuff. The EU is also the largest investor in the Russian economy and accounts for 75 percent of all foreign investments in Russia.

In case of Western economic sanctions, Russian lawmakers have announced that they would pass a bill to freeze the assets of European and American companies that operate in Russia. On the other side, more than 100 Russian businessmen and politicians are allegedly targeted by the EU for a freeze of their European assets. Besides Alexey Miller, head of the state-owned Gazprom, the CEO of Rosneft, Igor Sechin, is also apparently on the sanction hit list. Rosneft is the largest listed oil company in the world and, as such, has partners worldwide, including in the West. For example, the US-based company Exxon-Mobil has a $500 million oil-exploration project with Rosneft in Siberia, and Exxon-Mobil is already in partnership with the Russian giant oil company to exploit Black Sea oil reserves.

Global zero sum game or is it  fracking stupid? The US’ booming fracking business and its lobbyists in Washington view Ukraine’s crisis as an opportunity to expand into new markets. They argue that the US can provide Europe with all its gas needs and, by doing so, make obsolete Russia’s main economic weapon of shutting off EU’s main gas supply. Needless to say, this would harm the Russian economy by cutting off one of  its key sources of revenue, which amounts to $230 billion a year of export to the EU.

On paper and in theory, the plan to supply the EU with natural gas from fracking sounds manageable. Fortunately, for the sake of the environment, this idea to provide Europe with gas proudly made in the USA is a pie in the sky. Fracking has been singled out as perhaps the most damaging way to extract energy, due to its pollution of water, release of the extremely strong greenhouse gas methane, and potential to cause earthquakes. Realistically, it would take at least three years to sort out the issues of transport, storage and distribution of the US-derived natural gas for Europe. Europeans have a choice: either stick to Gazprom’s cheap and reliable gas or rely on Uncle Sam’s pipe dream for their energy needs. Military escalation is unlikely once Crimea decides to join the Russian federation: NATO doesn’t have the stomach for it. On the other hand, economic sanctions and the Russian retaliations are a recipe for disaster. This game of sanctions is a global zero sum game that could make the 2008 crash look for all of us like a walk in the park.

Gilbert Mercier is the Editor in Chief of News Junkie Post, where this essay originally appeared.

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Obama talks tough [Source]. BBC News - Update :: March 29, 2014

Two more articles from a different perspective worth reading:
1)  Boycott the USA!
2)  Obama plunging world into Armageddon

--Joe

Do as I Say Not as I Do

Ralph Nadar wrote this on Counterpunch. Read for some perspective on Barack Obama, the Ultimate Hypocrite.

Hollow Advice
Obama to Putin: Do as I Say Not as I Do
by RALPH NADER
Dear President Obama:

As you ponder your potential moves regarding President Vladimir V. Putin’s annexation of Crimea (a large majority of its 2 million people are ethnic Russians), it is important to remember that whatever moral leverage you may have had in the court of world opinion has been sacrificed by the precedents set by previous American presidents who did not do what you say Mr. Putin should do – obey international law.