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Defending Dollar Imperialism

OWoN: Whitney lays it out as clearly as it can be said. However, the ship of fools set sail without a phone. Defending the dollar is indefensible.




Defending Dollar Imperialism


Ukraine War Driven by Gas-Dollar Link

Counterpunch
By Mike Whitney
1 December 2014

Stephanie Pomboy, MacroMavens

The Fed’s ‘need’ to take on an even more active role as foreigners further slow the purchases of our paper is to put the pedal to the metal on the currency debasement race now being run in the developed world — a race which is speeding us all toward the end of the present currency regime.

Russian President Vladimir Putin

No matter what our Western counterparts tell us, we can see what’s going on. NATO is blatantly building up its forces in Eastern Europe, including the Black Sea and the Baltic Sea areas. Its operational and combat training activities are gaining in scale.

If there was a way the United States could achieve its long-term strategic objectives and, at the same time, avoid a war with Russia, it would so. Unfortunately, that is not an option, which is why there’s going to be a clash between the two nuclear-armed adversaries sometime in the near future.

Let me explain: The Obama administration is trying to rebalance US policy in a way that shifts the focus of attention from the Middle East to Asia, which is expected to be the fastest growing region in the coming century. This policy-change is called the “pivot” to Asia. In order to benefit from Asia’s surge of growth, the US plans to beef up its presence on the continent, expand its military bases, strengthen bilateral alliances and trade agreements, and assume the role of regional security kingpin. The not-so-secret purpose of the policy is China “containment”, that is, Washington wants to preserve its position as the world’s only superpower by controlling China’s explosive growth. (The US wants a weak, divided China that will do what it’s told.)

In order to achieve its goals in Asia, the US needs to push NATO further eastward, tighten its encirclement of Russia, and control the flow of oil and gas from east to west. These are the necessary preconditions for establishing US hegemonic rule over the continent. And this is why the Obama administration is so invested in Kiev’s blundering junta-government; it’s because Washington needs Poroshenko’s neo Nazi shock troops to draw Russia into a conflagration in Ukraine that will drain its resources, discredit Putin in the eyes of his EU trading partners, and create the pretext for deploying NATO to Russia’s western border.

The idea that Obama’s proxy army in Ukraine is defending the country’s sovereignty is pure bunkum. What’s going on below the surface is the US is trying to stave off irreversible economic decline and an ever-shrinking share of global GDP through military force. What we’re seeing in Ukraine today, is a 21st century version of the Great Game implemented by political fantasists and Koolaid drinkers who think they can turn the clock back to the post WW2 heyday of the US Empire when the world was America’s oyster. Thankfully, that period is over.

Keep in mind, the glorious US military has spent the last 13 years fighting sheep herders in flip-flops in Afghanistan in a conflict that, at best, could be characterized as a stalemate. And now the White House wants to take on Russia?

Can you appreciate the insanity of the policy?

This is why Secretary of Defense Chuck Hagel was sacked last week, because he wasn’t sufficiently eager to pursue this madcap policy of escalating the wars in Afghanistan, Iraq, Syria and Ukraine. Everyone knows it’s true, the administration hasn’t even tried to deny it. They’d rather stick with foam-at-the-mouth buffoons, like Susan Rice and Samantha Powers, then a decorated veteran who has more credibility and intelligence in his little finger than Obama’s whole National Security team put together.

So now Obama is completely surrounded by rabid warmongering imbeciles, all of whom ascribe to the same fairytale that the US is going to dust-off Russia, remove Assad, redraw the map of the Middle East, control the flow of gas and oil from the ME to markets in the EU, and establish myriad beachheads across Asia where they can keep a tight grip on China’s growth.

Tell me, dear reader, doesn’t that strike you as a bit improbable?

But, of course, the Obama claque think it’s all within their grasp, because, well, because that’s what they’ve been told to think, and because that’s what the US has to do if it wants to maintain its exalted position as the world’s lone superpower when its economic significance in the world is steadily declining. You see, here’s the thing: The exceptional nation is becoming more unexceptional all the time, and that’s what has the political class worried, because they see the handwriting on the wall, and the writing says, “Enjoy it while it lasts, buddy, cuz you ain’t gonna be numero uno much longer.”

And the US has allies in this wacky crusade too, notably Israel and Saudi Arabia. The Saudis have been particularly helpful lately by flooding the market with oil to push down prices and crush the Russian economy. (On Friday, Benchmark crude oil prices plummeted to a four-year low, with Brent crude sinking to $69.11 a barrel.) The Obama administration is using the classic one-two punch of economic sanctions and plunging oil revenues to bully Moscow into withdrawing from Crimea so Washington can move its nuclear arsenal to within spitting distance of Moscow. Here’s a bit of background from the Guardian:

“Think about how the Obama administration sees the state of the world. It wants Tehran to come to heel over its nuclear programme. It wants Vladimir Putin to back off in eastern Ukraine. But after recent experiences in Iraq and Afghanistan, the White House has no desire to put American boots on the ground. Instead, with the help of its Saudi ally, Washington is trying to drive down the oil price by flooding an already weak market with crude. As the Russians and the Iranians are heavily dependent on oil exports, the assumption is that they will become easier to deal with.

John Kerry, the US secretary of state, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.”

(Stakes are high as US plays the oil card against Iran and Russia, Larry Eliot, Guardian)

And here’s more from Salon’s Patrick L. Smith at Salon:

“Less than a week after the Minsk Protocol was signed, Kerry made a little-noted trip to Jeddah to see King Abdullah at his summer residence. When it was reported at all, this was put across as part of Kerry’s campaign to secure Arab support in the fight against the Islamic State.

Stop right there. That is not all there was to the visit, my trustworthy sources tell me. The other half of the visit had to do with Washington’s unabated desire to ruin the Russian economy. To do this, Kerry told the Saudis 1) to raise production and 2) to cut its crude price. Keep in mind these pertinent numbers: The Saudis produce a barrel of oil for less than $30 as break-even in the national budget; the Russians need $105.

Shortly after Kerry’s visit, the Saudis began increasing production, sure enough — by more than 100,000 barrels daily during the rest of September, more apparently to come…

Think about this. Winter is coming, there are serious production outages now in Iraq, Nigeria, Venezuela and Libya, other OPEC members are screaming for relief, and the Saudis make back-to-back moves certain to push falling prices still lower? You do the math, with Kerry’s unreported itinerary in mind, and to help you along I offer this from an extremely well-positioned source in the commodities markets: “There are very big hands pushing oil into global supply now,” this source wrote in an e-mail note the other day.”

(What Really Happened in Beijing: Putin, Obama, Xi And The Back Story The Media Won’t Tell You, Patrick L. Smith, Salon)

The Obama team managed to persuade our good buddies the Saudis to flood the market with oil, drive down prices, and put the Russian economy into a nosedive. At the same time, the US has intensified its economic sanctions, done everything in its power to sabotage Gazprom’s South Stream pipeline (that would bypass Ukraine and deliver natural gas to Europe via a southern route), and cajole the Ukrainian parliament into auctioning off 49 percent of the leasing rights and underground storage facilities to privately-owned foreign corporations.

How do you like that? So the US has launched a full-blown economic war against Russia that’s been completely omitted in the western media. Are you surprised?

Washington is determined to block further Russo-EU economic integration in order to collapse the Russian economy and put foreign capital in control of regional energy distribution. It’s all about the pivot. The big money guys figure the US has to pivot to Asia to be a player in the next century. All of these unprovoked attacks on Moscow are based on that one lunatic strategy.

But aren’t people in the EU going to be angry when they can’t get the energy they need (at the prices they want) to run their businesses and heat their homes?

Washington doesn’t think so. Washington thinks its allies in the Middle East can meet the EU’s energy needs without any difficulty. Check out this clip from an article by analyst F. William Engdahl:

“…details are emerging of a new secret and quite stupid Saudi-US deal on Syria and the so-called IS. It involves oil and gas control of the entire region and the weakening of Russia and Iran by Saudi Arabian flooding the world market with cheap oil. ….

On September 11, US Secretary of State Kerry met Saudi King Abdullah at his palace on the Red Sea. The King invited former head of Saudi intelligence, Prince Bandar to attend. There a deal was hammered out which saw Saudi support for the Syrian airstrikes against ISIS on condition Washington backed the Saudis in toppling Assad, a firm ally of Russia and de facto of Iran and an obstacle to Saudi and UAE plans to control the emerging EU natural gas market and destroy Russia’s lucrative EU trade. A report in the Wall Street Journal noted there had been “months of behind-the-scenes work by the US and Arab leaders, who agreed on the need to cooperate against Islamic State, but not how or when.

The process gave the Saudis leverage to extract a fresh US commitment to beef up training for rebels fighting Mr. Assad, whose demise the Saudis still see as a top priority.”

(The Secret Stupid Saudi-US Deal on Syria, F. William Engdahl, BFP)

So the wars in Ukraine and Syria are not really separate conflicts at all. They’re both part of the same global resource war the US has been prosecuting for the last decade and a half. The US plans to cut off the flow of Russian gas and replace it with gas from Qatar which will flow through Syria and onto the EU market after Assad is toppled.

Here’s what’s going on: Syria’s troubles began shortly after it announced that it was going to be part of an “Islamic pipeline” that would transfer natural gas from the South Pars gas field off the coast of Iran across Iraq and Syria, eventually connecting to Greece and the lucrative EU market. According to author Dmitri Minin:

“A gas pipeline from Iran would be highly profitable for Syria. Europe would gain from it as well, but clearly someone in the West didn’t like it. The West’s gas-supplying allies in the Persian Gulf weren’t happy with it either, nor was would-be no. 1 gas transporter Turkey, as it would then be out of the game.”

(The Geopolitics of Gas and the Syrian Crisis: Syrian “Opposition” Armed to Thwart Construction of Iran-Iraq-Syria Gas Pipeline, Dmitri Minin, Global Research)

Two months after Assad signed the deal with Iraq and Iran, the rebellion broke out in Syria. That’s quite a coincidence, don’t you think? Funny how frequently those kinds of things happen when foreign leaders don’t march to Washington’s tune.

Here’s more from Minin:

“Qatar is doing all it can to thwart the construction of the pipeline, including arming the opposition fighters in Syria, many of whom come from Saudi Arabia, Pakistan and Libya…

The Arabic newspaper Al-Akhbar cites information according to which there is a plan approved by the U.S. government to create a new pipeline for transporting gas from Qatar to Europe involving Turkey and Israel…

This new pipeline is to begin in Qatar, cross Saudi territory and then the territory of Jordan, thus bypassing Shiite Iraq, and reach Syria. Near Homs the pipeline is to branch in three directions: to Latakia, Tripoli in northern Lebanon, and Turkey. Homs, where there are also hydrocarbon reserves, is the project’s main crossroads, and it is not surprising… that the fiercest fighting is taking place. Here the fate of Syria is being decided. The parts of Syrian territory where detachments of rebels are operating with the support of the U.S., Qatar and Turkey, that is, the north, Homs and the environs of Damascus, coincide with the route that the pipeline is to follow to Turkey and Tripoli, Lebanon. A comparison of a map of armed hostilities and a map of the Qatar pipeline route indicates a link between armed activities and the desire to control these Syrian territories. Qatar’s allies are trying to accomplish three goals: to break Russia’s gas monopoly in Europe; to free Turkey from its dependence on Iranian gas; and to give Israel the chance to export its gas to Europe by land at less cost.”

How do you like that; another coincidence: “The fiercest fighting (in Syria) is taking place” where there’s massive “hydrocarbon reserves” and along the planned pipeline route.

So the conflict in Syria isn’t really about terrorism at all. It’s about natural gas, competing pipelines and access to markets in the EU. It’s about money and power. The whole ISIS-thing is a big hoax to conceal what’s really going on, which is a global war for resources, more blood for oil.

But how does the US benefit from all of this, after all, won’t the gas revenues go to Qatar and the transit countries rather than the US?

Yep, they sure will. But the gas will also be denominated in dollars which will shore up demand for USDs thus perpetuating the petrodollar recycling system which creates a vast market for US debt and which helps to keep US stocks and bonds in the nosebleed section. And that’s what this is all about, preserving dollar supremacy by forcing nations to hold excessive amounts of USDs to use in their energy transactions and to service their dollar-denominated debts.

As long as Washington can control the world’s energy supplies and force the world to trade in dollars, it can spend well in excess of what it produces and not be held to account. It’s like having a credit card you never have to pay off.

That’s a racket Uncle Sam is prepared to defend with everything he’s got, even nukes.

Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.

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4 comments :

  1. The World War Is Coming Closer: Tomorrow the US Congress Will Vote to Go to War With Russia
    http://jhaines6.wordpress.com/2014/12/02/the-world-war-is-coming-closer-tomorrow-the-us-congress-will-vote-to-go-to-war-with-russia/

    Tomorrow the US congress will vote on Resolution 758 which, if approved, will allow the criminal Obama regime to start a war against Russia without asking the Congress for any further permission. In other words, tomorrow this most important legislative institution of the USA will vote on its own abolition and will endow “Bombama” with unlimited imperial power, even to destroy this country in order to establish the NWO – no more and no less.

    In order to comprehend how advanced the preparations for a new world war between the two major nuclear powers are, read the today’s passionate plea of Rep. Dennis John Kucinich, who is a former U.S. representative from Ohio, serving from 1997 to 2013 and also a candidate for the democratic nomination for president of the United States in the 2004 and 2008 presidential elections, to reject Resolution 758. As an outspoken pacifist he knows what is at stake.

    This open letter of Dennis J. Kucinich to the American people fits perfectly into the new Portal of Truth, which we opened last month and will reap the fruits this month.

    ________________________

    “green light” to war on russia, legislation in us congress: say no to war with russia under h. res. 758 “russian aggression”

    Rep. Dennis John Kucinich, December 2, 2014

    US Congress

    US – Russia relations have deteriorated severely in the past decade and they are about to get worse, if the House passes H. Res. 758.

    ReplyDelete
  2. Mystery Gold Buyer Took On & Crushed All Paper Shorts
    As we head into the tail end of 2014, today an acclaimed money manager spoke with King World News about the historic trading in the gold, silver, and oil markets. Stephen Leeb also discussed a mystery buyer who propped up the gold market and took on and eventually crushed all paper shorts after Sunday’s vote in Switzerland.
    Leeb: “What caught my attention was the trading in the gold market on Sunday evening (early Asian trading). This trading followed the huge fall in oil and oil stocks on Friday. It also followed the no vote in Switzerland. But after gold’s initial decline on Sunday evening, gold just straight-lined for what seemed like 6 hours. Some entity was in there buying every ounce of gold that was being offered for sale....
    “And that entity continued to buy every ounce of gold available until the gold market then began to reverse course and rally in a huge way. This rally was happening even with what seemed like every possible negative news item in place. So the gold market surprised many people.
    And in the midst of the plunge in oil prices, China has ramped up their purchases and is storing the excess crude anywhere they can. China has also begun doing military drills with Iran and they strengthening their relationship with Saudi Arabia.
    At the same time, India’s leader, Modi, has decided to invest in Russia’s energy industry. This is a huge slap in the face of the United States for Modi to be negotiating with Russia. So what you are seeing here, Eric, is a coalescing of the East. And for what it’s worth, China is getting what it wants. They are getting a strong Eastern bloc and a Silk Road, plus Germany, together.
    What the Chinese now have to demonstrate is that they can protect Saudi Arabia. This has been America’s strong suit -- their military and their ability to protect the flow of Saudi oil. I mentioned earlier about the Chinese and Iranians conducting joint military exercises. Well, the Saudis must feel, with ISIS staring at them, that China, Russia, and Iran, will be able to protect them. That’s a really big deal because it allows the Saudis to turn their back on the United States and side with China.
    The other thing that China has to demonstrate is that their monetary system is transparent. So China has announced they are going to start insuring yuan deposits in their banks. All of this is making the Saudis look at Russia and China and the way they are conducting their energy trading in yuan, not dollars. Soon the Saudis will look to trade their energy with China for yuan or a combination of yuan and gold. Once China reveals how much gold they really have, they will sew up total hegemony in the East.
    There is very little doubt that this is the game being played. This is why you are not seeing gold crumble right now, because it’s looking ahead to a point of inflection. And I strongly believe that it was the Chinese who were the mystery entity buying every single ounce of gold available in early Asian trading on Monday. The Chinese want the gold. So we are now on the cusp of very big things happening and all of it will be to the benefit of gold."

    © 2014 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.

    http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/12/3_Mystery_Gold_Buyer_Took_On_%26_Crushed_All_Paper_Shorts.html


    ReplyDelete
  3. $178 Billion In Government Kickbacks: Meet The World’s Biggest Organized Crime Syndicate
    http://www.zerohedge.com/news/2014-12-03/178-billion-government-kickbacks-meet-worlds-biggest-organized-crime-syndicate

    Once upon a time it was the Sicilian, or Russian, or Japanese, or Chinese mob that were some of the biggest sources of funding for corrupt government officials (incidentally, most of them). After all, the government is smart enough to realize that it is more lucrative to “cooperate” with the world’s biggest criminal syndicates than to wipe them out and cut off a major source of funding (of course, when it comes to populist optics and reelection, there is always an easy low-level perp walk every week or so to keep the peasants in place… and Diebold). So while the underlying symbiotic principle between the government and the world’s biggest criminal enterprise remains the same, the counterparty has changed.

    So who, in simple numeric terms, is the world’s biggest organized crime syndicate?

    The answer, courtesy of a new report by the Boston Consulting Group, which shows the transfer of some $178 billion in litigation costs into the pockets of government appartchiks in the past 6 years, is clear.

    Banks.

    Sure enough: when one is a criminal syndicate, the largest in world history, paying litigation kickbacks in the hundreds of billions to the government is just the cost of “doing business.”

    And here is the absolute punchline: the Sicilian, or Russian, or Japanese, or Chinese, or any other mob, they all had one or more members thrown in jail for good measure.

    Just how many bankers have ended up in prison in the past 6 years?

    This may be a trick question.

    https://www.bcgperspectives.com/Images/Building_the_Transparent_Bank_Dec_2014_tcm80-177814.pdf

    ReplyDelete
  4. How Pennsylvania Is Selling Residency To Chinese “Investors” For $500k Each

    Submitted by Tyler Durden on 12/02/2014 22:30 -0500

    http://www.zerohedge.com/news/2014-12-02/how-pennsylvania-selling-residency-chinese-investors-500k-each

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,

    A major theme here at Liberty Blitzkrieg over the past year has been the creative ways in which corrupt Chinese oligarchs and government officials are maneuvering their way into the United States. To be clear, I am not anti-immigration by any stretch of the imagination. My mother was an immigrant. This is about being against corrupt and morally compromised individuals being welcomed here with open arms just because they have cash. We have enough domestic criminal oligarchs as it stands. These people have collectively captured the American political and economic system and control it to their own ends. Do we really need to import more of these types from abroad?

    Did you know that there exists a federal Immigrant Investor Program that grants “EB-5″ immigration visas to foreigners who provide at least $500,000 to U.S. projects that create 10 or more American jobs? I wasn’t familiar with this, but apparently the good folks at the Pennsylvania Turnpike Commission are well aware of it, and are using it to raise $200 million.

    Here’s what I’d like to know. Who are these investors and who vets them? It is a known fact that corrupt Chinese officials and businessmen are scrambling to get themselves and their money out of their homeland as the government cracks down on corruption. How many of them are going to use this program to get into the U.S., and what will be the long-term impact to our society? Important questions that must be asked, but most likely aren’t being taken seriously.

    From Philly.com:

    Chinese investors have begun signing up to spend $500,000 each to help pay for a long-awaited connection between the Pennsylvania Turnpike and I-95.

    In exchange, the investors hope to get permanent residency in the United States for themselves and their families.

    The heavily indebted Turnpike Commission is borrowing the $200 million from foreign investors under the federal Immigrant Investor Program that grants “EB-5″ immigration visas to foreigners who provide at least $500,000 to U.S. projects that create 10 or more American jobs.

    The foreign investors and their families will get a quick path to legal residence in the United States, though they may lose money on their investment.

    The brokers and lawyers will collect millions in commissions and fees, with each of the 400 investors paying $50,000 to the dealmakers and $15,000 to the lawyers.

    ReplyDelete

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