China

Brazil & the Bloodied BRICS

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Published on The Doomstead Diner on February 12, 2017

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Just going back a few years, the "BRICS" were all the rage as the next great Superpower conglomeration.  BRICS stood for Brazil, Russia, India, China & South Africa.

3 of them Brazil, India and South Africa also fit in the category of "Emerging Markets", and EMs were where all the Hot Money was flowing for investment during the period, seeking high yields and return on investment.

What could be more perfect, right?  Great resource availability and populations willing to work at low wages to supply industrial products to the world!  Not to mention Russia & China as large military powers with the capability of making a good fight with the FSoA if challenged!  Even if they don't have the aircraft carriers the FSoA has, they have Nuke ICBMs, and they have cruise missiles capable of sending any FSoA Carrier Group to the bottom of Davey Jones Locker.  The Chinese field a 1 Million Man Standing Army.  Lotta potential Boots on the Ground there!

So a lot of betting went down that this group of Nation-States was going to make a serious challenge to the European and Anglo-Amerikan hegemony over the industrial economy, not to mention the Bankstering system which runs it. Even to this day, you have some pundits like Pepe Escobar claiming the Chinese are going to build a "New Silk Road" that will bring the BRICS to ascendancy as the inheritors of the failed policies of the Western Europeans and Anglo-Amerikans.

Unfortunately, something went wrong along the way here, and precisely the opposite has occured or is occuring as I write this article.  What fucked up in the BRICS master plan?

To begin with, it was a typical financialized bubble.  Beyond that, you have countries here with Goobermints that are corrupt beyond belief, it's possible they are all more corrupt than the FSoA Goobermint, although of course that is hard to imagine.  To top it all off, you have the issue that even if said countries have energy resources left like Brazil and Russia do, you have populations that cannot afford to buy those energy resources and retire the debts incurred by the extractors of the energy.

http://www.usfunds.com/media/images/frank-talk-images/2016_ft/Jul-Dec/overnight-indian-prime-minister-narendra-modi-killed-90-nations-currency-12-2016.jpg India already jumped off the cliff with the demonetization of the biggest Rupee notes by His Modiness, which sent the entire economy into a tailspin.  Not to mention the fact it further impoverished already impoverished people, and as bad as their farmer suicide problem was before this, one has to figure it has been worse since.  A VAST number of Indians have no bank account, or even Goobermint ID.  For them, it's entirely a Cash Economy, and no Cash, no Economy.

This of course does not even touch on the Climate and Environment problems the Indians have, or their Energy problems or population overshoot problems.  Then they have the constant battle with the Pakistanis, so overall the place is a complete fucking mess.  They may even start exchanging Nukes with the Pakis, since they both got 'em

Moving down to South Africa, they probably have the worst problems with drought of any of the BRICS, although Brazil is not doing too well with this problem either.  Besides that is the perpetual racial divide problem of South Africa and the fact that its entire economy is a mineral resource extraction economy, and globally nobody is paying much for resources, because the Konsumers of the resources are running out of money to buy them with.  Well, except for the filthy rich who are still buying some Diamonds at Tiffany's, but unfortunately there aren't enough filthy rich to fund an entire economy this way.  Tiffany's isn't doing too good either, they just fired their CEO.

Doing slightly better than these two locations are the Middle Kingdom of China and Mother Russia, but not by all that much plus Newz doesn't really escape well from either Nation-State, so you can't be entirely sure of WTF is going on there.  In Mother Russia, one of Vlad the Impaler's political opponents recently went to the Great Beyond, apparently resultant from Poisoning.  Another one, Alexander Navalny who was a Blogger so I like him 🙂 was convicted of some kind of felony so is no longer eligible to run against Vlad to run Mother Russia. He was probably the only opponent of Vlad who stood some chance of beating him, at least in popular voting.  The Ruskies do have some cheap Oil left though, and their population is not too large given the land mass available there.  On the other hand they have NATO troops massing on their borders, not a good sign.

Of all the BRICS, the Chinese have weathered the storm the best so far, but by no means does this presage a rosy future for them.  In fact the Chinese are TOAST, and are in worse shape than everyone in the BRICS except perhaps the Indians.  Reason of course is Population Overshoot, but by no means is that their only problem.  They've blown a Credit Bubble that makes the one Da Fed blew up look like Child's Balloon next to the Hindenburg.  Forget about not drinking the water, half of it is not even fit for human contact!  You can't walk outside in Beijing without at least a surgical mask on, but really you need a full blown activated charcoal gas mask or better yet a SCUBA tank.  This is not a recipe for a bright future for the Chinese.

However, of all the BRICS, the one in the WORST shape right now and is clearly exeriencing a FAST COLLAPSE is Brazil.  Their economy is in complete collapse, corruption is systemic and now they are losing control of the social structure as well.

In the state of Espirito Santo which borders on the state of Rio de Janeiro which is home to the city of Rio, Corcovado (the big Christ statue on the mountain) and numerous Favelas (slums), the Military Police recently went on strike because…they weren't getting PAID!  Big fucking surprise, who is going to work at anything if you don't get your paycheck at the end of the week?

Problem for these cops of course is that just like under Amerikan Law, Strikes of "publicly essential personnel" are ILLEGAL!  So even if you're not getting paid, you're supposed to KEEP WORKING!  Does this sound like SLAVERY to you?  It does to me.

Since these cops are MILITARY cops, one suspects they can't even quit either until whenever their enlistment in the military runs out.  Not that they would quit anyhow, because in all likelihood there are no other jobs for them to take in the neighborhood.  So they got a bit creative here on this one, and instead of the cops themselves not showing up for work, their families went out and blockaded the stations, so the cops could not go out on patrol.  Of course, they had the option of possibly Arresting their own families for "obstruction of justice", but who is going to go out and arrest their own wives, kids, fathers and mothers, or shoot them?  Not gonna happen.

https://i.guim.co.uk/img/media/cee9e57924da473fc287876b61e1fe4a7691ecd1/0_163_5000_3000/master/5000.jpg?w=300&q=55&auto=format&usm=12&fit=max&s=6dca5670e4f694a61b2948765d4f87b9 So in the wake of this absence of cops on the streets of Vitoria (the capital of Espirito Santo), the population at large took the opportunity to go an a rampage of looting, raping and killing.  There is of course a large population of people living the criminal life in Brazil, because there are no opportunties for them in the "legitimate" world.  They deal drugs, they steal, they kill people.  It's like Chicago on Steroids and much larger.  Its not like everyone is a criminal, but without a police presence, it's "Criminals Gone Wild".

So Da Goobernator of Espirito Santo asks for help from Da Federal Gobermint, and they promise to do "watever it takes" to restore order and send in the Military to replace the cops on the streets.  Except how many do they send in?  A Big 200 soldiers to police a city of 2M people!  That is 1 for every 10,000.  Even only 1% of those 10K are criminals, that is still a 100:1 ratio!  However, in this situation it's probably more than 1%, since many normally law abiding type citizens will take the opportunity to go loot the local grocery or Iphone store.

Normally, they put out on the street 1800 cops, so to do the same job you would need around the same number of soldiers.  So now you have to pay the soldiers instead of the cops, and Da Federal Goobermint of Brazil is in no better position to do that than the states are, they are BROKE also!

Even if they could field enough paid soldiers to go in there to restore order, Vitoria and Espirito Santo as a whole is a relatively small state in Brazil.  What happens when the same thing occurs in Rio De Janeiro or Sao Paolo or Brasilia?  Sao Paolo has something like 20M people now, that by itself is an order of magnitude larger than Vitoria.  What is to stop this from spreading to Sao Paolo?  They are broke too, and besides that running short on water and the money to run their sewage treatment plants, garbage collection etc.  It's not just cops not getting their paychecks, just about all the public workers are seeing wages withheld because Da Goobermint doesn't have the money to pay them.

Unlike the FSoA (also broke), the Brazilleiros cannot just issue infinite debt and have it recognized as worth anything.  They have gone through NUMEROUS periods of Hyperinflation, and they are trying to avoid that problem with "austerity", but austerity means people either are paid to little to live on or not paid at all.  Jobs are cut, pensions are cut and you get a downhill spiral as people have no money to spend in the economy.  They can't afford to buy enough food to feed their kids.  At this point, they get desperate, and take desperate measures.  That is what the cops in Espirito Santo are doing.

http://media.gettyimages.com/photos/man-walks-on-dry-cracked-earth-where-water-usually-stands-at-the-picture-id467643149 The problem here of course is that like many other resource based economies, the Brazilleiros are running short on resources people around the globe can afford to buy at the prices they cost to extract.  There are some big oil fields in deep water off the coast of Brazil, but their own state company of Petrobras is broke, and oil majors like Exxon Mobil and Royal Dutch Shell are not going to put up debt money to drill these fields, because there is no profit in it.  These companies are already bleeding red ink on properties they are drilling here in the FSoA, and beyond that there is an oil GLUT due to collapsing demand around the world.  So the Brazilians will not be saved by the Oil underneath the ocean floor surrounding them.

It's only a matter of time before the chaos in Espirito Santo spreads to the rest of Brazil.  How much time?  Then from there it spreads to other SA countries dependent on resource exports, and the chaos grows.  Then it makes it to Mexico, then it migrates across the border to the FSoA.  How long will that take?  Timeline, Timeline, Timeline.  Like Location, Location, Location in the world of Real Estate, that's always the question, not what the final outcome is.

China – Taiwan

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Published on The Doomstead Diner on January 28, 2017

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Taiwan has always been part of China, going back several millennia. Even the Taiwanese agree with that – only they believe THEY rule all of China, which is patently ridiculous. The split came about as a result of the Chinese Civil War in 1949, when Mao's communist forces took all of the mainland and Chiang Kai-shek's forces fled to Taiwan. No peace treaty was ever signed, and the UN now recognises the People's Republic of China as the true owners of the island.

The US then stuck its nose into Chinese business (as usual) and backed the hated Kuomintang government, Truman ordered the 7th fleet into the Taiwan Strait, which is only 77 Nautical miles wide, and nothing to do with the US, but enough for "Freedom of Navigation" rules to apply, even though the US has never signed the Law of the Sea treaty.

The CIA then organised a detachment of 12,000 soldiers to move to Burma and launch attacks on the southern Chinese border from there, despite protests from the Burmese Government. This officially lasted 4 years, and when the UN ordered them to leave, they officially did, but unofficially half stayed there as a terrorist "freedom fighting" force.

In 1958 the US supplied Taiwan with fighter jets, anti-aircraft missiles and amphibious assault ships, in response to a PRC assault on those tiny islands in the strait.

In 1971 Nixon/Kissinger found it expedient to befriend China, which involved dumping ROC (Taiwan) from the UN (and its seat on the Security Council) and putting the PRC in its place. To get agreement with PRC, US had to accept having no State-to-State contact with Taiwan, though weaponising the island continues. In 2014, the US sold Taiwan 2 ex-US frigates, anti-tank missiles, Assault Amphibious Vehicles, and FIM-92 Stinger surface-to-air missiles, and in 2015 $1.83 billion worth of arms. Obama – the Peace maker, pivoting to Asia.

This was all part of the 1970s US response to US Peak Oil – off-shoring industries to cheap labour countries with no unions and no workplace health and safety regulations, effectively slave labour.

Now with China beating the US at its own game economically, Trump is saying "enough of free trade, let's scrap all our FTAs and put up trade barriers instead". China rubs its hands with glee, and steps up work on trade agreements. This will certainly backfire on the US.

Some people obviously have completely the wrong idea about what happened at Tiananmen Square – the result of only reading western media reports based on no US reporters there when it happened. Sound familiar ? The students, and separately protesting unionists, killed loads of Chinese soldiers, who had been wearing white gloves – indicating they were on ceremonial duties. Was "tank man" killed on the spot? – no.

The following day, "the gloves were off", and the Square was cleared of protesters. Only then did the western press get wind that something had happened, and made their stories up to show the Chinese Government in a bad light. In Australia, PM Bob Hawke actually cried while announcing that Chinese students in Australia didn't have to go back to such a brutal country, while backing scabs to break the airline pilots strike.

Totally fucking insane propaganda exercise.

This is what the students did to the soldiers in the name of Freedom and Democracy:

What did the students think they were doing? – defeating the entire PLA, to make the Government fall?
How angry do you think the PLA was when it came to clearing the Square?
What do you think the US military would do under the same circumstances?

Kent State

Vietnam

US Soldiers (commonly referred to as "our boys") will shoot student protesters dead, and will drive people out of their homes and burn them to the ground with all of their possessions. That's what they are capable of.

"The State is a body of armed men" and don't you forget it.
 

Trophic Cascades

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Published on Peak Surfer on December 11, 2016

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"Chinese youth are starting to wish they had not been lured into where they find themselves. It is best for all our sakes to encourage that impulse."

  We were expecting 25 students but got 40, and on some days it even goes up to 50. Initially our hosts wanted to have a Permaculture Design Course but after we told them such an undertaking would require 2 weeks, including 72 hours of classroom time, and multiple co-instructors, they asked instead for a week-long introduction to the Ecological Key, part of the Ecovillage Design one-month curriculum offered by the Global Ecovillage Network and Gaia Education Associates. We helped author that module so we agreed, but then they needed to cut it to 6 days to factor in the national independence holiday and also asked if we could do an introduction to natural building as part of the course.

Reluctantly, we agreed, since it was only introductory workshop in any event, but then we had our expensive Japanese finishing trowel confiscated by airline security and lost our shiitake mushroom plug spawn to agricultural inspection in Beijing. Undeterred, we pushed on, arriving a day early to sleep off jet lag and get oriented to the venue.

An able team of young Xu Ling villagers and volunteers rushed about cleaning up an old hall in the center of town, laying in bulk food for the cooks, re-wiring everything and setting up wifi, a PA system with bluetooth microphones, and a big projection screen.

As we walked the steep stone steps of the village we saw essentially a ghost town. Eighty large family houses stood empty, abandoned to the elements. Skinny dogs picked through the central garbage bins, scattering plastics and bits of foil into the bubbling mountain brooks that wove through and under the ancient stone stairways. Chickens and ducks, apparently the only domestic animals raised for food here, wandered the streets and picked through scraps the dogs missed, or raided the kernels of corn laid out on cement terraces to dry.

The old townspeople looked favorably towards the arrival of young ecovillagers but knew all too well that they were gardening greenhorns, unused to the seasonal ebbs and flows, city kids with city addictions, so they tried not to get too involved with them, not expecting they would last long. How many winter mass starvations had they witnessed in their long and difficult lives?

The students begin to arrive, coming in from all four corners of the Middle Kingdom. We have a Mongolian student who shaves his head and wears the traditional topknot. We have several from the mountainous Southwest, along the Tibetan plateau, and some from North of Beijing where there are ecovillages being born on splendid and historic royal estates and former monastery grounds. The government is committed to assuring their success by giving them some of the best land in that part of China. Among the students are architects, ecovillage designers, professors, gardeners, post-grad ag students, city recycling activists and engineers. They come because either they support this back-to-the-land movement or they are getting serious about joining it.

Here in Xu Ling the land is not bad, just in need of TLC. The elderly farmers descend to their terraces every day and work them over with hoes and sickles. They bare the ground, again and again, a practice that destroys whatever microbiome is close to the surface and that somehow survived the heavy use of artificial fertilizers, pesticides and herbicides, federally subsidized and liberally applied. The health clinic, still bearing slogans from the Cultural Revolution, is shuttered and padlocked and people go to distant hospitals to die so it would be difficult to look at the chemical fallout of this style of agriculture in an epidemiological way.

After a day of introductions and a village tour, we tackle the harder subjects. We don’t have a subtitled version of the late Albert Bartlett’s famous lecture, so we recapitulate with the assist of our able translators. We put up the equations for doubling times on the board and tell the story of the mathematician who introduced the game of chess to the emperor. This tale resonates well with the daytime TV soaps in most parts of China — a mix of KungFu and Mandarin intrigue. The emperor was very pleased with the mathematician and asked what he would like in reward. “Oh nothing much, sire, only a few grains of rice will do. Just place one on the first square of the board, and then two on the next, four on the next, and so on, until you have covered the board.” The emperor thought him a very foolish man, thinking he had been prepared to offer great treasures but instead the man wanted only a few grains of rice.

“Well, just how much rice is that?” Bartlett had asked his college mathematics class. The answer was, once you got to the 64th square, it was more than 400 times the global rice harvest this year, and perhaps more rice than had ever been grown in all of human history.

Our Chinese students ponder this, as we begin to describe the exponential function in terms of various percent growth rates and doubling times. We point to a few commonly understood rates like coal mining or fish catch. Then we introduce the bacteria-in-a-bottle analogy and the point is hammered home. If you have a bacterium in a bottle and it doubles every minute and at the stroke of midnight the bottle is full, then at what point is the bottle half full? Answer: one-minute to midnight. And we ask, as did Bartlett, when the bottle was 7/8 blue sky, “just yearning for development,” how much time was left? Answer: 3 minutes. Did the bacteria realize they had a problem? Probably not. But suppose by the time the bottle was 1/4 full (2 minutes to midnight) they did, and sent out astronauts in search of more bottles, and were extraordinarily lucky and in the final minute those bacteria astronauts came back with three new bottles. How much time would they have now? Answer: 2 minutes. To go another minute they would need 4 more bottles, and so on.

One hardly needs to hammer home this analogy with the pollution problems being experienced throughout China, or the global Ponzinomic pyramid of financial debt from deadbeat creditors that is knocking at their door.

Stoneleigh and Ilargi tell us:

China property prices rose at the fastest pace on record in September, fueling fears of a market bubble in the world’s second-largest economy. Property prices climbed 11.2% on-year in September in 70 major cities while prices were up 2.1% from August, according to Reuters calculations using data from the National Bureau of Statistics. In August, prices rose 9.2% from a year ago. Home prices in the second-tier city of Hefei recorded the largest on-year gain at 46.8%, compared with on-year gains of 40.3% in August. Top August performer Xiamen posted an on-year rise of 46.5% against an increase of 43.8% in August. Prices in Shenzhen, Shanghai and Beijing rose 34.1%, 32.7% and 27.8% on an annual basis respectively, according to Reuters.


Since 7% annual growth gives a 10-year doubling time, property values in Xiamen are currently doubling every 20 months. Want to invest?

We discuss with the class the concept of anti-fragility, as opposed to robust or resilient investments. Anti-fragile investments do well when things go south. Ecovillages are a good example. If you lose your net worth, you still have food security. If you produce a surplus in hard times, the world is your oyster. That leads to a discussion of organic gardening and soils.

After lunch we construct a compost pile near the kitchen. Our host community had been mixing organic wastes with the plastics and other non-renewables and just trucking it all down the mountain to the city landfill. We give our usual talk on epigenetic coevolution and quantum entanglement — we are our microbial selves — much to the consternation of a whole team of translators trying to keep up. We talk about the spiderwebs of biomes, fermentation, sick buildings, and end the day screening a subtitled version of The Man Who Planted Trees.

It was a lot to digest, but these kids are no dummies. They asked tough questions. They sat on the edge of their chairs. They got it.

When we think of the stereotypes of Red China that pass for most USAnians as good reasons to vote Republican, we had best remember that this giant over there is largely our doing now. They are starting to wish they had not been lured into where they find themselves. It is best for all our sakes to encourage that.

The fourth day began with a mixed blessing. Walking back uphill from breakfast — indistinguishable, really, from the other two meals of the day — and pining for a Starbucks double espresso, we heard the shouts of a farmer down in the terraces below. He was pointing up to the village, shouting, and running. We watched in amazement as this man in at least his sixties sprinted up the steep stone steps, his conical bamboo hat bobbing behind his head as he shouted and pointed. Turning our gaze to where he was pointing, we saw the column of black smoke rising from the center of the village while around us other elderly villagers were rushing uphill, some passing by us at a dead run up the steps, carrying empty pails and plastic dish basins.

When we reached the fire, huffing and puffing and feeling pain in our knees, the students were already there, organizing themselves into a long chain to pass buckets from one of the many streams or taps to positions surrounding the building. It was clear that the first building, which had been storing winter firewood, was a lost proposition, as flames extending up through the roof now reached twice the height of the building. The attention of our makeshift fire brigade, led by our young cadre of engineers and architects, shifted focus to the adjacent home, and started dousing the outer walls and roof of that with all the water that could be brought to bear. When the Hangzhou fire department arrived, after about 45 minutes, the students and villagers already had it under control.

This was a blessing in unexpected ways, because it allowed the old resident villagers to feel the strength of our youthful ecovillage spirit. Where they had been running in ones and twos back and forth to the spring, we had set up a bucket brigade and delivered a lot of water where it was needed in a hurry. We responded rapidly and self-organized efficiently. It also let us feel our strength as a group in a pretty profound way, even though most had only met three days earlier. Lastly, it gave a good reality check to city kids accustomed to having things like fire departments they could speed dial on their smart phones.

Rather than jump back into the planned lesson, we chose to take an hour or two and let the adrenaline subside. We went around the circle and let everyone release what they wanted to say. It was a good chance to talk about planning for catastrophe, a standard element in any permaculture curriculum. We looked at how we had responded, what could have been better, and what was missing in the village’s own response.

We closed with a short think and listen in groups of three: what do you fear about the world your grandchildren will inherit? The results were unexpected.

Normally, when we do this virtually anywhere else in the world, the greatest concern is always climate change. Not one of the fourteen or more groups even mentioned that.

We had our work cut out.

Ripe persimmons and chestnuts
leaves starting to fall
summer heat lingers too long

— Xu Ling Village, Zhejiang, October 2, 2016

A Mountain of Gold

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Published on Peak Surfer on December 4, 2016

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"The Chinese ecovillage movement is mostly retrofuturist, showing deference, if not nostalgia, for lost culture."

  It is Wednesday September 28 and we are sitting on the plane in Nashville waiting to take off for Hangzhou via Detroit and Beijing. This China trip is merely a warm-up for our Fall itinerary that has us traversing four continents in four weeks, including six ocean crossings. It is almost like a presidential campaign whistlestop tour, except they never utter a word about the thermometer in the room and everywhere we land we are making our pitch for reversing climate change by the redesign of the built environment. It is understandable that politicians won’t touch this subject. We are shredding the mystique of the land use patterns, collectively called civilization, that have served humans so poorly for the past eight millennia.

We spent August in Tennessee developing the lesson plans for the introductory workshops that will train a couple dozen soil activists in the People’s Republic and we are feeling pretty good about this stage of the trip now.

Then, in the run-up to blast off, we were tagged teamed by John Dennis Liu and Daniel Wahl, who wrangled us into cancelling scheduled events for late October and going straight from China to London for a meeting to assist British Commonwealth countries to prepare a new plan for COP-22 in Marrakech, one that will raise international ambition and stake out “plausibly impossible” but attainable goals to push the envelope of the Paris Agreement and the UN multilateral process. On October 28-29, a design charette, dubbed Regenerative Development to Reverse Climate Change, will give us the opportunity to make our elevator pitch to a very receptive audience of big wigs.

Now it is September 29 and we have left Hangzhou airport and driven 3 hours up winding roads into the mountains at night, eventually arriving at the Xu Ling village where our workshops will be held. Quail are singing to each other in the terraces, frogs croak from the creeks, and from the forested mountains there is the sound of a distant owl. Three hundred years before Lao Tsu, this small village was home to a sage named Wu Xixu, later to become the first Premier of the country. The mountain pass above the village is a relatively low one, so for thousands of years the main stone road between Shanghai on the coast and inland Nanjing, capital city for many empires, ran through here. When the pass was blocked in winter, porters would use a cave passage that crossed from Zhejiang to the adjacent province under the mountains.

As we rose the morning of October 1st we jotted a quick Suessian limerick:

There was a young man named Wu
Who came from the village of Xu
They thought him so fair
They made him Premier
This fellow they called Wu from Xu

XuLing village is at 29 North so having 29C days in October is not unusual, kind of like Mississippi or Alabama. They get snow in winter but they also have thatch palm and heliconia trees. The valley is a South-facing parabolic with mountains backing it to the North. The upper slopes of the valley are very steep but varied with different woods and bamboos. There is plenty of water; it flows through stone channels everywhere. Some of the trees we see are more than 1000 years old.

The stonework is of varying age; the oldest being most mostly massive freestack and then smaller, cut freestack, then fine mortared walls, then mud brick and cinderblock. Mud brick is illegal now — an overworked resource that has left ugly scars in many places. Cement brick and block is mandatory. Not even fired brick is permitted unless it is imported.

As we meet some of the villagers and students who have arrived for our workshops we observe that Chinese clothing is very westernized. Shoes are almost always state-of-the-art Nikes, Converses, Adidas and T-shirt slogans are usually in English even if the wearer doesn’t speak a word and may have no idea what it means. But surprisingly, many have done at least a year at a US university. Sometimes the ensemble of hair, glasses, clothes and iPhone 7 is so western you think the kid is USAnian except that when you ask them something they can’t comprehend a word. In contrast, there are kids who’ve learned almost perfect English just by watching internet movies and TV and prefer to affect old-style Chinese dress and hair styles, even the round glasses from a century earlier.

This contrast between the old and the new will be a recurrent theme of our month here. While many Chinese youth are enamored of consumer culture and willing to make great sacrifices to attain it, the Chinese ecovillage movement is mostly retrofuturist, showing deference, if not nostalgia, for lost culture. They seek as much a return to villageness as a breath of cleaner air and sip of cleaner water.

They are bucking a big trend, but lately they have been finding support in unusual quarters. Eleven years ago, the current President of China, then Governor and Party Committee Secretary of Zhejiang, went on a State visit to the rural villages to assess the needs of the people. What he discovered was a brewing catastrophe.

Globalization has been drawing people from the country to the cities for many decades, and until recently government policies encouraged it in order to fill the need for a gargantuan factory labor force. It recognized that this policy meant sacrificing agricultural capacity, but like most developing countries, was willing to make that trade-off because it figured that it could import food with its newly favorable trade balance, and a whole lot more.

What Xi Jinping saw nearly broke his heart. Long a champion of “Chinese values” and the “Chinese Dream,” Xi had hoped to revive Taoist practices of harmony in culture and nature. "He who rules by virtue is like the North Star," he said at a meeting of officials last year, quoting Confucius. "It maintains its place, and the multitude of stars pay homage.”

What he saw in the rural countryside was that all the teenagers, young people and middle-aged had left. There were only the very elderly — the grandparents — and the very young — the grandchildren — being supported by a combination of welfare services and remittances from distant families working in the cities. The terraces, on land too steep to use machinery, were in disrepair, overgrown with weeds and emergent forest. Buildings were crumbling and stray dogs roamed the streets. Food production had plummeted. The old hand tools were rusted and broken. The forests on the hillsides had been raided by timber companies and now mudslides wrecked the streams and threatened the villages.

The villagers said to Xi, “Look what we have lost!” They wanted back the forests and wildlife that made this a good place to live. Thus was born the two mountain theory.

Back in Shanghai, Xi gave a speech calling for two mountains. The first was development, including basic services to make peoples’ lives better. The second he called his “mountain of gold” — return of nature. Pure forests and pure water was what he called the real gold of China.

This was 11 years ago. In 2013 he became General Secretary of the Communist Party of China, President of the People's Republic of China, and the Chairman of the Central Military Commission, the most powerful consolidation of power since before the Tiananmen Square protests of 1989.

We are told that one reason the Sunshine Ecovillage Network has been successful in winning official support for its plan for rural revitalization in China, with a goal of 100 ecovillages by 2021, is that it chose to launch here in Zhejiang province, where the two mountains were first revealed to Xi Jinping.

This is first in a continuing series. 

Why the New Silk Roads Terrify Washington

gc2smFrom the keyboard of Pepe Escobar
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greatwarfreda1

Originally published in RT on July 5, 2016

 


Almost six years ago, President Putin proposed to Germany 'the creation of a harmonious economic community stretching from Lisbon to Vladivostok.'

This idea represented an immense trade emporium uniting Russia and the EU, or, in Putin’s words, “a unified continental market with a capacity worth trillions of dollars.”

In a nutshell: Eurasia integration.

Washington panicked. The record shows how Putin’s vision – although extremely seductive to German industrialists – was eventually derailed by Washington’s controlled demolition of Ukraine.

Three years ago, in Kazakhstan and then Indonesia, President Xi Jinping expanded on Putin’s vision, proposing One Belt, One Road (OBOR), a.k.a. the New Silk Roads, enhancing the geoeconomic integration of Asia-Pacific via a vast network of highways, high-speed rail, pipelines, ports and fiber-optic cables.

In a nutshell: an even more ambitious version of Eurasia integration, benefiting two-thirds of the world population, economy and trade. The difference is that it now comes with immense financial muscle backing it up, via a Silk Road Fund, the Asian Infrastructure Investment Bank (AIIB), the BRICS’s New Development Bank (NDB), and an all-out commercial offensive all across Eurasia, and the official entry of the yuan in the IMF’s Special Drawing Rights; that is, the christening of the yuan as a key currency worth holding by every single emerging market central bank.

At the recent G20 in Huangzhou, President Xi clearly demonstrated how OBOR is absolutely central to the Chinese vision of how globalization should proceed. Beijing is betting that the overwhelming majority of nations across Eurasia would rather invest in, and profit from, a “win-win” economic development project than be bogged down in a lose-lose strategic game between the US and China.

And that, for the Empire of Chaos, is absolute anathema. How to possibly accept that China is winning the 21st century / New Great Game in Eurasia by building the New Silk Roads?

And don't forget the Silk Road in Syria

Few in the West have noticed, as reported by RT, that the G20 was preceded by an Eastern Economic Forum in Vladivostok. Essentially, that was yet another de facto celebration of Eurasia integration, featuring Russia, China, Japan and South Korea.

And that integration plank will soon merge with the Russia-led Eurasia Economic Union – which in itself is a sort of Russian New Silk Road.

All these roads lead to total connectivity. Take for instance cargo trains that are now regularly linking Guangzhou, the key hub in southeast China, to the logistics center in  Vorsino industrial park near Kaluga. The trip now takes just two weeks – saving no less than a full month if compared with shipping, and around 80 percent of the cost if compared with air cargo.

That’s yet another New Silk Road-style connection between China and Europe via Russia. Still another, vastly more ambitious, will be the high-speed rail expansion of the Transiberian; the Siberian Silk Road.

Then take the closer integration of China and Kazakhstan – which is also a member of the EEU. The duty-free Trans-Eurasia railway is already in effect, from Chongqing in Sichuan across Kazakhstan, Russia, Belarus and Poland all the way to Duisburg in Germany. Beijing and Astana are developing a joint free trade zone at Horgos. And in parallel, a $135 million China-Mongolia Cross-Border Economic Cooperation Zone started to be built last month.

Kazakhstan is even flirting with the ambitious idea of a Eurasian Canal from the Caspian to the Black Sea and then further on to the Mediterranean. Sooner or later Chinese construction companies will come up with a feasibility study.

A virtually invisible Washington agenda in Syria – inbuilt in the Pentagon obsession to not allow any ceasefire to work, or to prevent the fall of its “moderate rebels” in Aleppo – is to break up yet another New Silk Road hub. China has been commercially connected to Syria since the original Silk Road, which snaked through Palmyra and Damascus. Before the Syrian “Arab Spring”, Syrian businessmen were a vital presence in Yiwu, south of Shanghai, the largest wholesale center for small-sized consumer goods in the world, where they would go to buy all sorts of products in bulk to resell in the Levant.

The “American lake”

Neocon/neoliberalcon Washington is totally paralyzed in terms of formulating a response – or at least a counter-proposal – to Eurasia integration. A few solid IQs at least may understand that China’s “threat” to the US is all about economic might. Take Washington’s deep hostility towards the China-driven AIIB (Asia Infrastructure Investment Bank). Yet no amount of hardcore US lobbying prevented allies such as Germany, Britain, Australia and South Korea from joining in.

Then we had the mad dash to approve TPP – the China-excluding, NATO-on-trade arm of the pivot to Asia that was meant to be the cherry of the mostly flat Obama global economic policy cake. Yet the TPP as it stands is practically dead.

What the current geopolitical juncture spells out is the US Navy willing to go no holds barred to stop China from strategically dominating the Pacific, while TPP is deployed as a weapon to stop China dominating Asia-Pacific economically.

With the pivot to Asia configured as a tool to “deter Chinese aggression”, exceptionalists have graphically demonstrated how they are incapable of admitting the whole game is about post-ideological supply chain geopolitics. The US does not need to contain China; what it needs, badly, is key industrial, financial, commercial connection to crucial nodes across Asia to (re)build its economy.

Those were the days, in March 1949, when MacArthur could gloat, “the Pacific is now an Anglo-Saxon lake”. Even after the end of the Cold War the Pacific was a de facto American lake; the US violated Chinese naval and aerial space at will.

Now instead we have the US Army War College and the whole Think Tankland losing sleep over sophisticated Chinese missiles capable of denying US Navy access to the South China Sea. An American lake? No more.

The heart of the matter is that China has made an outstanding bet on infrastructure building – which translates into first-class connectivity to everyone – as the real global 21st century commons, way more important than “security”. After all a large part of global infrastructure still needs to be built. While China turbo-charges its role as the top global infrastructure exporter – from high-speed rail to low-cost telecom – the “indispensable” nation is stuck with a “pivoting”, perplexed, bloated military obsessed with containment.

Divide and rule those “hostile” rivals

Well, things haven’t changed much since Dr. Zbig “Grand Chessboard” Brzezinski dreaming in the late 1990s of a Chinese fragmentation from within, all the way to Obama’s 2015 National Security Strategy, which is no more than futile rhetorical nostalgia about containing Russia, China and Iran.

Thus the basket of attached myths such as “freedom of navigation” – Washington’s euphemism for perennially controlling the sea lanes that constitute China’s supply chain – as well as an apotheosis of“China aggression” incessantly merging with “Russia aggression”; after all, the Eurasia integration-driven Beijing-Moscow strategic partnership must be severed at all costs.

Why? Because US global hegemony must always be perceived as an irremovable force of nature, like death and taxes (Apple in Ireland excluded).

Twenty-four years after the Pentagon’s Defense Planning Guide, the same mindset prevails; “Our first objective is to prevent the reemergence of a new rival…to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power. These regions include Western Europe, East Asia, the territory of the former Soviet Union and southwest Asia”.

Oops. Now even Dr. Zbig “Grand Chessboard” Brzezinski is terrified. How to contain these bloody silky roads with Pentagon“existential threats” China and Russia right at the heart of the action? Divide and Rule – what else?

For a confused Brzezinski, the US should“fashion a policy in which at least one of the two potentially threatening states becomes a partner in the quest for regional and then wider global stability, and thus in containing the least predictable but potentially the most likely rival to overreach. Currently, the more likely to overreach is Russia, but in the longer run it could be China.”

Have a pleasant nightmare.

 


PepePepe Escobar  is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia Times Online. Born in Brazil, he's been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Even before 9/11 he specialized in covering the arc from the Middle East to Central and East Asia, with an emphasis on Big Power geopolitics and energy wars. He is the author of "Globalistan" (2007), "Red Zone Blues" (2007), "Obama does Globalistan" (2009) "Empire of Chaos" (2014),and "2030" (2015), all published by Nimble Books. 

The Whole Game is About Containing Russia-China

gc2smFrom the keyboard of Pepe Escobar
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Russia China

Originally published in Sputnik on August 29, 2016

 


The next BRICS summit, in Goa, is less than two months away. Compared to only two years ago, the geopolitical tectonic plates have moved with astonishing speed. Most BRICS nations are mired in deep crisis; Brazil’s endles political/economic/institutional debacle may yield the Kafkaesque impeachment of President Dilma Rousseff.

BRICS is in a coma. What's surviving is RC: the Russia/China strategic partnership. Yet even the partnership seems to be in trouble — with Russia still attacked by myriad metastases of Hybrid War. The — Exceptionalist — Hegemon remains powerful, and the opposition is dazed and confused. 

Or is it?  Slowly but surely — see for instance the possibility of an ATM (Ankara-Tehran-Moscow) coalition in the making — global power continues to insist on shifting East. That goes beyond Russia's pivoting to Asia; Germany's industrialists are just waiting for the right political conjunction, before the end of the decade, to also pivot to Asia, conforming a BMB (Berlin-Moscow-Beijing) coalition.

Germany already rules over Europe. The only way for a global trade power to solidify its reach is to go East. NATO member Germany, with a GDP that outstrips the UK, Canada, Australia and New Zealand, is not even allowed to share information with the "Five Eyes" secret cabal.  

President Putin, years ago, was keen on a Lisbon-to-Vladivostok emporium. He may eventually be rewarded — delayed gratification?— by BMB, a trade/economic union that, combined with the Chinese-driven One Belt, One Road (OBOR), will eventually dwarf and effectively replace the dwindling post-WWII Anglo-Saxon crafted/controlled international order.

This inexorable movement East underscores all the interconnections — and evolving connectivity — related to the New Silk Roads, the Shanghai Cooperation Organization (SCO), the BRICS's New Development Bank (NDB), the Asian Infrastructure Investment Bank (AIIB), the Eurasia Economic Union (EEU). The crux of RC, the Russia-China strategic partnership, is to make the multipolar, post-Atlantic world happen. Or, updating Ezra Pound, to Make It New.

Containing RC

Russia's pivot to Asia is of course only part of the story. The core of Russia's industries, infrastructure, population is in the west of the country, closer to Europe. BMB would allow a double pivot — simultaneously to Europe and Asia; or Russia exploiting to the max its Eurasian character. Not accidently this is absolute anathema for Washington. Thus the predictable, ongoing no holds barred exceptionalist strategy of preventing by all means necessary closer Russia-Germany cooperation.  

In parallel, pivoting to Asia is also essential because that's where the overwhelming majority of Russia's future customers — energy and otherwise — are located. It will be a long, winding process to educate Russian public opinion about the incalculable value for the nation of Siberia and the Russian Far East. Yet that has already started. And it will be in full fruition by the middle of the next decade, when all the interpolated New Silk Roads will be online.   "Containment" of RC will continue to be the name of the exceptionalist game — whatever happens on November 8. As far as the industrial-military-security-surveillance-corporate media complex is concerned, there will be no reset.

Proxies will be used — from failed state Ukraine to Japan in the East China Sea, as well as any volunteering Southeast Asian faction in the South China Sea.

Still the Hegemon will be in trouble to contain both sides of RC simultaneously. NATO does not help; its trade arm, TPP, may even collapse in the high seas before arriving on shore. No TPP — a certainty in case Donald Trump is elected in November — means the end of US economic hegemony over Asia. Hillary Clinton knows it; and it's no accident President Obama is desperate to have TPP approved during a short window of opportunity, the lame-duck session of Congress from November 9 to January 3.

Against China, the Hegemon alliance in fact hinges on Australia, India and Japan. Forget about instrumentalizing BRICS member India — which will never fall into the trap of a war against China (not to mention Russia, with which India traditionally enjoys very good relations.)   

Japan's imperial instincts were reawakened by Shinzo Abe. Yet hopeless economic stagnation persists. Moreover, Tokyo has been prohibited by the US Treasury Dept. to continue unleashing quantitative easing. Moscow sees as a long-term objective to progressively draw Japan away from the US orbit and into Eurasia integration. 

Dr. Zbig Does Desolation Row

The Pentagon is terrified that RC is now a military partnership as well.

Compared to Russia's superior high-tech weaponry, NATO is a kindergarten mess; not to mention that soon Russian territory will be inviolable to any Star Wars-derived scheme. China will soon have all the submarines and "carrier-killer" missiles necessary to make life for the US Navy hell in case the Pentagon harbors funny ideas. And then there are the regional details — from Russia's permanent air base in Syria to military cooperation with Iran and, eventually, disgruntled NATO member Turkey. 

No wonder such exceptionalist luminary ideologues as Dr. Zbig "Grand Chessboard" Brzezinski — foreign policy mentor to President Obama — are supremely dejected.

When Brzezinski looks at progressive Eurasia integration, he simply cannot fail to detect how those "three grand imperatives of imperial geostrategy" he outlined in The Grand Chessboard are simply dissolving; "to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together."

Those GCC vassals — starting with the House of Saud — are now terrified about their own security; same with the hysteric Baltics. Tributaries are not pliant anymore — and that includes an array of Europeans. The "barbarians" coming together are in fact old civilizations — China, Persia, Russia — fed up with upstart-controlled unipolarity.  

Unsurprisingly, to "contain" RC, defined as "potentially threatening" (the Pentagon considers the threats are existential) Brzezinski suggests — what else — Divide and Rule; as in "containing the least predictable but potentially the most likely to overreach." Still he doesn't know which is which; "Currently, the more likely to overreach is Russia, but in the longer run it could be China."     

Hillary "Queen of War" Clinton of course does not subscribe to Brzezinski's "could be" school. After all she's the official, Robert Kagan-endorsed, neocon presidential candidate. She's more in tune with this sort of wacky "analysis". 

 

So one should definitely expect Hillary's "project" to be all-out hegemony expansion all across Eurasia. Syria and Iran will be targets. Even another war on the Korean Peninsula could be on the cards. But against North Korea, a nuclear power? Exceptionalistan only attacks those who can't defend themselves. Besides, RC could easily prevent war by offering some strategic carrots to the Kim family. 

In many aspects, not much has changed from 24 years ago when, only three months after the dissolution of the USSR, the Pentagon's Defense Planning Guidance proclaimed.

"Our first objective is to prevent the reemergence of a new rival…This requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power. These regions include Western Europe, East Asia, the territory of the former Soviet Union and southwest Asia."


Talk about a prescient road map of what's happening right now; the "rival", "hostile" power is actually two powers involved in a strategic partnership: RC.   Compounding this Pentagon nightmare, the endgame keeps drawing near; the next manifestations and reverberations of the never-ending 2008 financial crisis may eventually torpedo the fundamentals of the global "order" — as in the petrodollar racket/tributary scam. There will be blood. Hillary Clinton smells it already — from Syria to Iran to the South China Sea. The question is whether she — and virtually the whole Beltway establishment behind her — will be mad enough to provoke RC and buy a one-way ticket to post-MAD (Mutual Assured Destruction) territory.  


PepePepe Escobar  is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia Times Online. Born in Brazil, he's been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Even before 9/11 he specialized in covering the arc from the Middle East to Central and East Asia, with an emphasis on Big Power geopolitics and energy wars. He is the author of "Globalistan" (2007), "Red Zone Blues" (2007), "Obama does Globalistan" (2009) "Empire of Chaos" (2014),and "2030" (2015), all published by Nimble Books. 

Hot off Brexit, Vladimir Putin goes to China

gc2smFrom the keyboard of Pepe Escobar
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Putin Xi

Originally published in RT on June 24, 2016

 


As the whole planet attempts to digest the implications of Brexit, the real heart of 21st century action once again shifts to Beijing, where President Vladimir Putin on Saturday pays a visit to Chinese President Xi Jinping.

Business will include clinching a $6.2 billion high-speed rail deal; increased supply of Russian wheat to China – by building a Trans-Baikal grain terminal; and steps towards deeper military cooperation. They are already cooperating on an engine that will power the new Russia-China airliner.

Everything connected to the Russia-China partnership spells out Eurasia integration. It starts with the New Silk Roads, a.k.a. One Belt, One Road (OBOR), which will progressively interplay with the Eurasia Economic Union (EEU), as Putin emphasized at the St. Petersburg forum. It involves the expansion of the Shanghai Cooperation Organization (SCO); the immediate future of BRICS, including the New Development Bank (NDB); projects to be financed by the Asian Infrastructure Investment Bank (AIIB); and Russia-China coordination inside the G20.

OBOR and the EEU naturally merge as Eurasia will be slowly but surely fashioned into a massive emporium – an interlocking trade and infrastructure network stretching from Russia’s Far East and the Chinese east coast to Western Europe, including the Middle East and Africa on the way.

Geopolitically, the expansion of OBOR-EEU is Eurasia’s response to the lame duck Obama administration-peddled Trans-Pacific Partnership (TPP), which excludes both Russia and China. Xi Jinping has visited Central Asia and Eastern Europe recently – from Serbia to Uzbekistan – selling OBOR. Moscow, considering its influence over Balkan states, will add extra support.

One just needs to look at some numbers to gauge the power of the multi-pronged Chinese offensive. Beijing is rolling out up to $100 billion to the NDB; between $50 billion and $100 billion to the AIIB; $40 billion to the Silk Road Fund; $40 billion to the China-Pakistan Economic Corridor (CPEC). These multilateral financial investments will roll out in stages – and can be easily paid out of the yearly surplus in cash of Beijing's myriad current operations.

Additionally, Beijing has as much as a $4 trillion pile of cash to be used at the discretion of Xi and the collective leadership. This is the reality – not the usual US ‘Think Tankland’ blabbering about China’s imminent implosion. Compare it with the Fed printing so many new US dollars, about $60 billion a month, as the US would have a really hard time committing to any possible financial investment (apart from war) in the $100 billion range.

Supply chain geopolitics, anyone?

Beijing and Moscow inevitably would have come to the conclusion that their strategic partnership creates leverage and thus increases its value as it translates into multi-vector supply chain geopolitics.

‘Pipelineistan’ – with those humongous 2014 Siberian deals – is an essential node of the whole package, as Russia will ensure the supply of natural gas to China bypassing the dreaded Strait of Malacca, which Beijing well knows the US Navy could easily block at will. The interpenetration also translates, for instance, into Gazprom offering CNPC a stake in the monster Vankor gas field.

Moscow for its part does not need to rely exclusively on the West for foreign investment – on top of it controlled/sanctioned by Washington. Chinese investment will be key, as under OBOR-EEU synergy, Russia should be well on its way of developing its full potential as a global supplier of energy and agriculture and a privileged transit corridor across the whole of Eurasia.

Russia may even profit from climate change. Few may know that Russia – with permafrost fast retreating – is warming up faster than any other nation. That opens the vista of new fertile soils that could allow poultry and fish to be exported to – where else – China. Not to mention torrential amounts of freshwater. Chinese companies are buying large stakes in Russian fertilizer companies such as Uralkali as well as becoming partners of Singapore-based companies to go all out into food processing in Russia.

Contrary to what US ‘Think Tankland’ never ceases to parrot, the Russia-China strategic partnership goes way beyond a mere supply-demand alliance of convenience. Were the Kremlin to take the fateful decision, Chinese companies could certainly rebuild creaking parts of Russian infrastructure in only a few years.


PepePepe Escobar  is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia Times Online. Born in Brazil, he's been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Even before 9/11 he specialized in covering the arc from the Middle East to Central and East Asia, with an emphasis on Big Power geopolitics and energy wars. He is the author of "Globalistan" (2007), "Red Zone Blues" (2007), "Obama does Globalistan" (2009) "Empire of Chaos" (2014),and "2030" (2015), all published by Nimble Books. 

The Pentagon’s Great Wall of Impotence

gc2smFrom the keyboard of Pepe Escobar
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gunboat

Originally published in RT on June 7, 2016

 


No one ever lost money betting on the Pentagon refraining from exceptionalist rhetoric.

Once again the current Pentagon supremo, certified neocon Ash Carter, did not disappoint at the Shangri-La Dialogue – the annual, must-go regional security forum in Singapore attended by top defense ministers, scholars and business executives from across Asia.

Context is key. The Shangri-La Dialogue is organized by the London-based International Institute for Strategic Studies (IISS), which is essentially a pro-Anglo-American think tank. And it takes place in the privileged aircraft carrier of imperial geostrategic interests in South East Asia: Singapore.  

As expressed by neocon Carter, Pentagon rhetoric – faithful to its own estimation of China as the second biggest “existential threat” to the US (Russia is first) – revolves around the same themes; US military might and superiority is bound to last forever; we are the “main underwriter of Asian security” for, well, forever; and China better behave in the South China Sea – or else.

This is all embedded in the much ballyhooed but so far anemic“pivoting to Asia” advanced by the lame duck Obama administration – but bound to go on overdrive in the event Hillary Clinton becomes the next tenant of 1600 Pennsylvania Avenue.  

Real threats are predictably embedded in the rhetoric. According toCarter, if Beijing reclaims land in the Scarborough Shoal in the South China Sea, “it will result in actions being taken by the both United States and … by others in the region.”

What’s left for China, in Pentagonese, is just to be a member of a hazy “principled security network” for Asia – which will also help protect the East against “Russia’s worrying actions”. Carter mentioned "principled" no less than 37 times in his speech. “Principled” cheerleaders so far include Japan, India, the Philippines, Vietnam and Australia.

So here’s an instant translation: we do a NATO in Asia; we control it; you will answer to us; and then we encircle you – and Russia – for good. If China says no, that’s simple. Carter proclaimed Beijing will erect a "Great Wall of self-isolation" in the South China Sea.

If this is the best Pentagon planners have to counteract the Russia-China strategic partnership, they’d better go back to the classroom. In elementary school.  

Navigate in freedom, dear vassals

Predictably, the South China Sea was quite big at Shangri-La. The South China Sea, the throughway of trillions of US dollars in annual trade, doubles as home to a wealth of unexplored oil and gas. Stagnated and increasingly irrelevant Japan, via its Defense Minister Gen. Nakatani, even advanced the Japanese would help Southeast Asian nations build their “security capabilities” to deal with what he called “unilateral” and “coercive” Chinese actions in the South China Sea. Cynics could not help to draw similarities with Imperial Japan’s Greater East Asia Co-Prosperity Sphere.

The Beijing delegation kept its cool – to a point. Rear Admiral Guan Youfei stressed, “The US action to take sides is not agreed by many countries.” Youfei – the head of the Chinese office of international military cooperation – did not refrain though from condemning a “Cold War mentality” by the usual suspects.

As for Japan, China’s Foreign Ministry detailed that “countries outside the region should stick to their promises and not make thoughtless remarks about issues of territorial sovereignty.” Japan has absolutely nothing to do with the South China Sea.

Beijing’s reclamation work on reefs in the South China Sea naturally put it in direct conflict with Vietnam, the Philippines, Malaysia and Brunei. So US meddling – under the convenient cover of “freedom of navigation” – had to be inevitable.“Freedom of navigation” operations are a silly intimidation game in which a US Navy ship or plane passes by a Chinese-claimed island in the South China Sea.

It was up to Admiral Sun Jianguo, Deputy Chief of the Joint Staff Department of China's Central Military Commission, to cut to the chase, stressing "the provocation of certain countries" and adding that "selfish interests" have led to the South China Sea issue becoming "overheated". He slammed the Pentagon for double standards and “irresponsible behavior”. And he slammed the Philippines for taking the conflict to a dubious UN arbitration court after breaching a bilateral agreement with China; "We do not make trouble but we have no fear of trouble."

U.S. Secretary of Defence Ash Carter meets with South Korea's Minister of Defence Han Minkoo (R) and Japan's Minister of Defence Gen Nakatani for a trilateral at the IISS Shangri-La Dialogue in Singapore June 4, 2016. © Reuters

U.S. Secretary of Defence Ash Carter meets with South Korea's Minister of Defence Han Minkoo (R) and Japan's Minister of Defence Gen Nakatani for a trilateral at the IISS Shangri-La Dialogue in Singapore June 4, 2016. © Reuters

The Chinese position prefers dialogue and cooperation – and Jianguo re-stressed it, calling for ASEAN to make a move. In fact China has already reached what is called a four-point consensus with Brunei, Cambodia and Laos on the South China Sea two months ago. The Philippines are a much harder nut to crack – as the Pentagon is taking no prisoners to lead Manila “from behind”.

Even Vietnam, via Deputy Defense Minister Nguyen Chi Vinh, made it clear – in the same plenary session as Admiral Jianguo – that Vietnam prefers solutions via the UN Convention on the Law of the Sea as well as negotiation between China and ASEAN.

Bend over to our rules – or else

After Shangri-La’s rhetorical excesses, the action moved to Beijing, the site of the 8th China-US Strategic and Development Dialogue. That’s the annual talkfest launched in 2009 by Obama and then Chinese President Hu Jintao.

Chinese Vice Foreign Minister Zheng Zeguang painted a rosy picture, stressing the exchange of “candid, in-depth views on important and sensitive issues of shared concern.” Chinese Ambassador to the US Cui Tiankai once again needed to point out that the relationship is just "too important" to be "hijacked" by the South China Sea. And yet this is exactly the Pentagon’s agenda.

Beijing though won’t be derailed. As State Councilor Yang Jiechi put it, ASEAN-China dialogue is progressing via what Beijing calls the “dual-track” approach, according to which disputes are negotiated between the parties directly involved. That implies no Washington interference.

Beyond what is discussed either at Shangri-La or at the China-US dialogue, the Big Picture is clear. ‘Exceptionalistan’ planners have molded a narrative where China is being forced to make a choice; either you bend over to “our” rules – as in the current unipolar geostrategic game – or else.

Well, Beijing has already made its own choice; and that entails a multipolar world of sovereign nations with no primus inter pares. The Beijing leadership under Xi Jinping clearly sees how the so-called international “order”, actually disorder, is a rigged system set up at the end of WWII.

Wily Chinese diplomacy – and trade – knows how to use the system to advance Chinese national interests. That’s how modern China became the “savior” of global turbo-capitalism. But that does not mean a resurgent China will forever comply with these extraneous “rules” – not to mention the morality lessons. Beijing knows ‘Exceptionalistan’ would not agree even to divide the spoils in a geopolitical spheres-of-influence arrangement. Plan A in Washington is containment – with possibly dangerous ramifications. There is no Plan B.

The bottom line – thinly disguised by the somewhat polite responses to Pentagon threats – is that Beijing simply won’t accept anymore a geopolitical disorder that it did not create. The Chinese could not give a damn to the New World Order (NWO) dreamed up by selected ‘Masters of the Universe’. Beijing is engaged in building a new, multipolar order. No wonder – alongside with strategic partner Russia – they are and will continue to be the Pentagon’s top twin threat.


PepePepe Escobar is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia Times Online. Born in Brazil, he's been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Even before 9/11 he specialized in covering the arc from the Middle East to Central and East Asia, with an emphasis on Big Power geopolitics and energy wars. He is the author of "Globalistan" (2007), "Red Zone Blues" (2007), "Obama does Globalistan" (2009) and "Empire of Chaos" (2014), all published by Nimble Books. His latest book is "2030", also by Nimble Books.

Is China a House of Cards?

Xi Jinpenggc2smFrom the keyboard of Pepe Escobar
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Xi Jinpeng

Originally published in Sputnik on May 17, 2016

 


Let’s start by examining what the Dragon himself – President Xi Jinping – has to say about China being largely derided in influential Beltway circles as a House of Cards.

Xi has forcefully dismissed the notion that a House of Cards power struggle has been raging at the rarified heights of the Chinese Communist Party (CCP). Yet at the same time he’s adamant; “conspirators”, “careerists”, “cabals” and “cliques” are attempting to undermine the CCP from within.

Thus, with ironic/poetic justice, a 42-part series on corruption in China – titled In the Name of the People and financed by the Middle Kingdom’s top law enforcement agency – is bound to go live before the end of 2016, featuring a CCP stalwart as the bad guy (that’s a first). Call him the Chinese Frank Underwood.

This means that what Xi is saying – and acting — live will be mirrored on hundreds of millions of Chinese screens, pitting conflicting factions within the 88 million-member CCP. Xi’s war on corruption has produced a rash of severely disgruntled CCP officials – to put it mildly.

Xi not only is the Commander-in-Chief in the fight against corruption; he’s now Commander-in-Chief of China’s joint battle command center as well. He monitors a [Central Military Commission] Chairman Responsibility System as well as the central guard corps, which monitors the security of all other CCP heavyweights.

Add to these Xi’s status as CCP’s general secretary, chairman of the Central Military Commission, president of the national security commission and head of the top group for reform of the Chinese system, and a Harvard academic who refers to him as “the chairman of everything” does not seem to be that far off the mark. 

Yet even this awesome concentration of power does not mean that Xi is an unassailable deity. On the key drama – the state of the economy – it has emerged that in a recent interview by the People’s Daily with an anonymous “authoritative person”, printed on the front page and exposing deep economic divergence among the CCP leadership, the “authoritative person” in question was none other than Xi. 

He had to take to the key media read by anyone who’s anyone in China to press his point on how to fix China’s debt-ridden economy; low growth is OK, and the new normal; as for blind credit expansion/monetary easing, that’s not OK. Xi, once again, is adamant; it’s now or never to start a painful restructuring of the Chinese system.   

Beware the “nests of foreign spies”

Xi Jinping does wield astonishing power. There can’t be any other way. Imagine the man on top of a civilization-state of 5,000 years who needs, among myriad other crucial issues, to; tweak/manage an economic system that was successful for over 30 years but now needs to be upgraded; shift the system from export-led demand to domestic consumption; manage the aspirations – and broken dreams – of a vast working class including millions of newly unemployed; reorganize monster state-owned enterprises (SOEs); find ways to get rid of Himalayas of bad bank loans and “nonperforming” investments; downsize and at the same time vitally upgrade the Chinese military.

And if that was not enough, Beijing has to be fully alert 24/7 about all those non-stop Pentagon provocations – actual and rhetorical – centered in the South China Sea. 

Two Terminal High Altitude Area Defense (THAAD) interceptors are launched during a successful intercept test.

© FLICKR/ U.S. MISSILE DEFENSE AGENCY

You’ve got to be alert. Full time. All the time. And be alert at “foreign hostile forces” or, more plainly, “nests of foreign spies” who want you to be mired in chaos. Thus the new law on NGOs operating in China. There are too many — over 7,000. And the (hidden) agenda for quite a few – from NED to the Soros gang — is to try to promote pure, unadulterated color revolution, as difficult as that may be in ultra-regimented China.

Yet it worked in Brazil – a BRICS weak link. The CCP leadership has carefully – and silently – understood the Brazilian lesson, and is fully aware that Exceptionalistan would stop at nothing to slow down China’s already spectacular global reach. So if you’re a NGO operating in China, from now on you need to find an official Chinese sponsor and register with local police. 

Back to the Chinese economy, the mantra across multiple, powerful Beltway factions is that a crash is imminent. Once again; the House of Cards theme. 

China’s total debt is now a whopping 280% of GDP. That includes the 115% that apply to SOEs’ debts; in Japan, for instance, that SOE figure is only 31%. Yet what really matters is that only a maximum of 25% of Chinese SOEs’ debts will need to be restructured. 

Xi’s strategy is that the Goddess of the Market will turbo-charge those SOEs, not kill them. So forget about the CPP handing out control of the Chinese economy to companies that the CCP itself does not control. No wonder what’s left for US Big Capital’s spokespersons is to carp about a House of Cards.

All eyes on 2021

It’s never enough to remind everyone that absolutely everything that’s happening in China now is subordinated to Xi’s official target of achieving “a moderately prosperous society” (xiaokang shehui) by the 100th anniversary of the CCP’s founding, in 2021.

That’s a mere five years from now. More long term, 2049, is the target of achieving a “socialist modernized society” (shehuizhuyi xiandaihua shehui) with a $30,000 GDP per capita; that should tie in with the celebration of the 100th anniversary of the founding of the People’s Republic of China (PRC). 

Chinese People's Liberation Army cadets shout as they take part in a bayonet drills at the PLA's Armoured Forces Engineering Academy Base, on the outskirts of Beijing, China, July 22, 2014

Beijing’s army of planners estimate that this overwhelming target is achievable if the Middle Kingdom is able to produce over 30% of global GDP by 2049; for comparison, that’s about 1 and ½ times more than the proportion currently produced by the US (and considering that the US does not manufacture much apart from weapons and infotech.) 

As breathtaking as this vision may be, it’s always reduced by the same old catastrophist Western “experts” to variations of Xi being the new Mao Zedong. That’s so pedestrian. The men – and the historical contexts – are radically diverse. Mao decided on a few core issues by himself – and left the rest to his underlings. The Little Helmsman Deng Xiaoping was a man of consensus. Xi decides by himself on virtually everything – but he does pay attention to some selected advisers. Examples include the Ministry of Trade, which first came up with the concept that developed into the New Silk Roads, and Liu He, the advisor who conceptualized Xi’s current economic strategy. 

The fact that Xi is now designated as the “core” (hexin) of the Beijing leadership is not such a big (Maoist) deal. The word in Beijing is that an assembly line of editors is now compiling a book of Xi thought (sixiang) that would make him as crucial as Mao as a contributor to Sino-Marxist theory. So what? Xi is a man in a rush, on a roll and with a mission – and 2021 is just around the corner. House of Cards? No; this looks more like a case of Xi landing a Full House on the table.  


PepePepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).and "Empire of Chaos" (Nimble Books, 2014). His latest book is "2030", also by Nimble Books, out in December 2015. He currently lives between Paris and Bangkok. Follow him on Facebook: https://www.facebook.com/pepe.escobar.77377

Hillarism

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Published on Peak Surfer on April 24, 2016

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"The Irish Water crisis, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness, offshore tax-avoidance havens, the collapse of ecosystems, Occupy Hong Kong, Australian greedy banks, and the rise of Donald Trump link to a single bad gene in our political DNA."

 


It is the political silly season, although these days it never seems to be otherwise. Delma Rouseff, Brazil’s heroic anti-establishment, anti-corruption President, has been impeached by the lower house on (dubious) charges of corruption, but the former, Brazilian President Luiz Inácio Lula da Silva called it more accurately a "coup d’état.”

Iceland’s Prime Minister Sigmundur David Gunnlaugsson resigned after it was revealed he owned an offshore company with his wife to channel millions of kroner. British Prime Minister David Cameron admitted he owned shares in a Bahamas-based trust up until 2010. In Malta, protesters demanded the resignation of Prime Minister Joseph Muscat for the same tax-avoidance activities.

Scores of countries will hold national elections in 2016. In January, Portugal elected Marcelo Rebelo de Sousa, former leader of the Social Democratic Party and supported by the Social Democratic Party and the CDS – People's Party. Portugal, which rationalized recreational drug policy in 2001, tilted left.

Ireland, which has a gender neutral election law, requiring any election to be supported by at least 30% male and 30% female voters, in February elected a right-leaning Dáil Éireann (parliament). Sadly the coalition is still too fractious to choose a Taoiseach (prime minister)

In 2013 Ireland consolidated separate county and local water authorities into a single national utility, which proceeded to install meters everywhere and raise rates. In 2014 and 2015 local protests blocked meter installers. Four percent of Ireland's population showed up at one demonstration in Dublin. Irish Water is a wedge between Fianna Fáil and Fine Gael, so no prime minister for Ireland.

Legislative elections for 450 Duma seats will be held in Russia on 18 September. Polls April 10th give Dmitry Medvedev’s conservative United Russia 46%, Vladimir Zhirinovsky’s right-wing anti-communist Liberal Democratic Party 11%, Gennady Zyuganov’s left-wing Communist Party 9%, A Just Russia People's Freedom Party 5% and the remainder to 10 other parties, including the Greens led by Oleg Mitvol.

In Peru, the first round on April 10th narrowed the field to Keiko Fujimori, daughter of former President Alberto Fujimori, of the Popular Force party, and Pedro Pablo Kuczynski candidate of the Peruvians for Change party. Fujimori has a healthy lead and the second round of voting comes June 5th. Peru is interesting if for no other reason than the names of its political parties (as translated): 

Popular Force
Peruvians for Change
Broad Front
Alliance for Progress
Popular Alliance
Popular Action
Direct Democracy
Possible Peru
Hope Front
Order Party
Developing Peru
Everybody for Peru

These names seem like something you might read on post-its on the wall of the “creatives” room in an ad agency.

In Australia, Prime Minister Malcolm Turnbull said last November: "I would say around September–October is when you should expect the next election to be.” However, when parties predictably deadlocked over bills to reinstate the Australian Building and Construction Commission, a bone of contention for the opposition Labor Party, Turnbull this week announced he would dissolve Parliament on May 3 and call for new elections July 2. Turnbull himself is well known to Australians and his party the clear frontrunner. But lately he has been losing ground to Labor leader Bill Shorten in the polls. Labor needs to win 21 seats to take power, a swing of 4.3%. BBC reports:

“Mr Turnbull will attempt to paint Mr Shorten as a union lackey who cannot manage the economy; Mr Shorten will say Mr Turnbull is an out-of-touch protector of greedy banks leading a divided party that stands for nothing.”

The Philippines just concluded its presidential debate cycle and is headed to national elections May 9th. At the top of the ballot is the election for successor to Philippine President Benigno Aquino III. The leading candidate is the current VP Jejomar Binay. His opponents include Senator Miriam Defensor Santiago (People's Reform Party) who is suffering from stage 4 lung cancer. Called "the Iron Lady of Asia,” she was the widely expected winner of the 1992 Philippine Presidential Elections, but lost after an inexplicably unscheduled power outage during the counting of votes. The Supreme Court of the Philippines recently declared optical scanner counting devices “corrupt” and forced precincts to return to hand counts.

Santiago announced her candidacy for president in the launch of her book, Stupid is Forever, on October 13, 2015.

Other candidates include Rodrigo “Courage and Compassion” Duterte (PDP–Laban), Grace "Government with a Heart” Poe (Independent) and Mar "Continue the Straight Path” Roxas (Liberal).

While the People’s Republic of China will not be holding national elections this year, what is brewing at the grass roots in Hong Kong is QI — quite interesting.  Wikipedia reports:

The emergence of new political groups led by young activists is set to shake up the political landscape of Hong Kong. Hong Kong Indigenous, a pro-independence localist group, faired well in the February New Territories East by-election by receiving more than 66,000 votes, coming third after pan-democratic Civic Party and pro-Beijing DAB, gaining about 15 percent of the total votes. A day after the election, localist groups including Wong Yuk-man's Proletariat Political Institute, Wong Yeung-tat's Civic Passion and Chin Wan's Hong Kong Resurgence Order announced a plan to field candidates in all five geographical constituencies.

On 10 April 2016. six post-Occupy organisations, Youngspiration, East Kowloon Community, Tin Shui Wai New Force, Cheung Sha Wan Community Establishment Power, Tsz Wan Shan Constructive Power and Tuen Mun Community, political groups formed after the Umbrella Revolution, formed an electoral alliance planned to field candidates in four of the five geographical constituencies with the agenda to put forward a referendum on Hong Kong's self-determination. Hong Kong Indigenous and another new pro-independence Hong Kong National Party also stated that they will run in the upcoming election.

On the same day on 10 April 2016, the student leaders in the Umbrella Revolution, Joshua Wong, Oscar Lai and Agnes Chow of Scholarism and Nathan Law of the Hong Kong Federation of Students (HKFS) also formed a new party Demosisto which was inspired by Taiwan's New Power Party which was formed by the Sunflower Movement leaders and fared well in the 2016 Taiwanese legislative election. The new party calls for referendum on Hong Kong's future after 2047 when the One Country, Two Systems is supposed to expire. The party aimed at fielding candidates in Hong Kong Island and Kowloon East, facing competitions from other new political groups while posing challenge to the traditional pan-democracy camp.

Finally, turning to the USA: With Bernie Sanders’ inability to unset the Hillary Clinton base in New York (Manhattan 66% – 33%; Westchester County 67% – 32%) on Tuesday, it looks more and more like a Clinton victory at the convention is a lead pipe cinch. Who knows? She might even have the team to out-Diebold the Trump machine. In Brooklyn, tens of thousands of voters discovered too late that they were ineligible to vote. The New York City Elections Board confirmed that more than 125,000 Brooklyn voters had been scrubbed from the voter rolls and the NY Attorney General's office is on the case. Clinton can now win less than half of the remaining primaries and still gain the required number of delegates.

Can she throw some kind of a aikido move on the Trump steamroller? We don’t yet know who controls the machines, but it is a pretty good bet it ain’t the Donald.

This past week George Monbiot penned one of the best essays of his career, although it was actually a teaser for his new book, How Did We Get into This Mess? published by Verso for £12.99.

In naming Neoliberalism as the root of all our problems, Monbiot linked the Irish Water crisis, the slow collapse of public health and education, rigged Philippine elections, resurgent child poverty, the epidemic of loneliness, offshore tax-avoidance havens, the collapse of ecosystems, Occupy Hong Kong, Australian greedy banks, and the rise of Donald Trump to a single bad gene in our political DNA.

Monbiot writes:

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

When George W. Bush attributed the rise of Islamic jihadis to “they hate our freedom,” what he was doing was reinforcing the neoliberal meme. As Monbiot puts it:

Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.

Hillary Clinton likes to tell audiences that because of the Affordable Care Act, "We now have driven costs down to the lowest they've been in 50 years.” Actually, health spending in the United States is higher than it's ever been, so the statement on its face is inaccurate. The U.S. spends more per capita than every other country in the OECD; and twice as much per capita as the system in France, with considerably worse average outcomes.

Monbiot writes:

The privatisation or marketisation of public services such as energy, water, trains, health, education, roads and prisons has enabled corporations to set up tollbooths in front of essential assets and charge rent, either to citizens or to government, for their use. Rent is another term for unearned income.

Unearned income is what buys elections, and not just in the United States.

What the history of both Keynesianism and neoliberalism show is that it’s not enough to oppose a broken system. A coherent alternative has to be proposed. And that is what none of the elections in 2016 seem to be doing.

The New Silk Roads and the Rise of the ‘Chinese Dream’

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Originally published in Counterpunch on February 26, 2016

 


Beijing is advancing a Chinese-led globalization that will challenge U.S. hegemony both regionally and globally.

Earlier last week, the first Chinese commercial train, with 32 containers, arrived in Tehran after a less than 14-day journey from the massive warehouse of Yiwu in Zhejiang, eastern China, crossing Kazakhstan and Turkmenistan.

This is a 10,400 km-long trip. Crucially, it’s also no less than 30 days shorter compared to the sea route from Shanghai to Bandar Abbas. And we’re not even talking about high-speed rail yet – which in a few years will be installed all along from eastern China to Iran and onward to Turkey and, crucially, Western Europe, enabling 500-plus container trains to crisscross Eurasia in a flash.

When Mohsen Pour Seyed Aghaei, president of Iran Railways, remarked that, “countries along the Silk Road are striving to revive the ancient network of trade routes,” he was barely touching the surface in what is an earth-shattering process.

Chinese President Xi Jinping visited Iran only last month – the first global leader to do so after nuclear sanctions were lifted. Then the heirs to the former Silk Road powers – imperial Persia and imperial China – duly signed agreements to boost bilateral trade to $600 billion over the next decade.

And that is just the beginning.

Trade Wars and Air/Sea Battles

To frame the earth-shattering process in a strategic perspective, from the Chinese point of view, it’s enlightening to revert to a very important speech delivered last summer by General Qiao Liang at the University of Defense, China’s top military school. It’s as if Liang’s formulations would be coming from the mouth of the dragon – Xi – himself.

Beijing’s leadership assesses that the U.S. won’t get into a war against China within the next 10 years. Pay attention to the time frame: 2025 is when Xi expects China to have turned into a “moderately prosperous” society as part of the renewed Chinese Dream. And Xi for his part would have fulfilled his mandate – arguably basking in glory once enjoyed only by the Little Helmsman Deng Xiaoping.

The secret for the next 10 years, as General Liang framed it, is for China to overhaul its economy (a work in progress) and internationalize the yuan. That also implies striking an Asian-wide free trade pact – which is obviously not the Chinese-deprived American TPP (Trans-Pacific Partnership), but the Chinese-driven RCEP.

General Liang directly connects the internationalization of the yuan to something way beyond the New Silk Roads, or One Belt, One Road, according to the official Chinese denomination. He talks in terms of a Northeast Asia free trade agreement, but in fact what’s in play, and what China aims at, is the trans-Asia free trade agreement.

As a consequence, a “ripple effect” will divide the world:

“If only a third of the global money is in the hands of the dollar, how can the U.S. currency maintain its leadership? Could a hollowed out United States, left without monetary leadership, still be a global leader?”

So the decline of the U.S. dollar is the key issue, according to the Beijing leadership, of China’s “recent troubles” under which loom “the shadow of the United States.”

Enter the U.S. “pivot to Asia.” Beijing clearly interprets its goal as “to balance out the momentum of China’s rising power today.” And that leads to the discussion of the former AirSea Battle concept (it has now “evolved” into another mongrel), which General Liang qualifies as an “intractable dilemma” for the U.S.

“The strategy primarily reflects the fact that the U.S. military today is weakening,” said Liang. “U.S. troops used to think that it could use airstrikes and the Navy against China. Now the U.S. finds neither the Air Force nor the Navy by themselves can gain advantages against China.”

Only this previous paragraph would be enough to put in perspective the whole, tumultuous cat and mouse game of Chinese advances and American bullying across the South China Sea. Beijing is very much aware that Washington cannot “offset some advantages the Chinese military has established, such as the ability to destroy space systems or attack aircraft carriers. The United States must then come up with 10 years of development and a more advanced combat system to offset China’s advantages. This means that Americans may schedule a war for 10 years later.”

Have War, Will Plan

So, no major war up to 2025, which leaves Xi and the Chinese Communist Party (CCP) leadership free to advance like a juggernaut. Observers who follow the moves in Beijing in real time qualify it as “breathtaking “ or “a sight to behold.” The Beltway remains mostly clueless.

At the onset of the Chinese Year of the Monkey, the CCP under Xi’s orders released a sensational cartoon hip hop video that went mega-viral. Talk about Chinese soft power; that’s how Xi’s platform for his 10-year term, up to 2023, was announced to the masses.

Enter the Four Comprehensives: 1) to develop a “moderately prosperous society” (translated into a GDP per capita of US$10,000); 2) Keep deepening reforms (especially of the economic model); 3) Govern by the rule of law (that’s tricky; but essentially means the law as interpreted by the CCP); 4) Eliminate corruption from the CCP (a long work in progress).

None of this, of course, implies following a Western model; on the contrary, it shows off Beijing counteracting Western soft power on every domain.

And then, inevitably, all roads, sooner or later, lead to One Belt, One Road. And yet General Liang sees it as way beyond a globalization process, “the truly American globalization,” which he qualifies as “the globalization of dollars.” He – and the Beijing leadership – do not see the China-driven One Belt, One Road as “an integration into the global economic system. To say that the dollar will continue its globalization and integration is a misunderstanding. As a rising great power, One Belt, One Road is the initial stage of China globalization.”

Radically ambitious does not even begin to describe it. So as much as One Belt, One Road is the external vector of the Chinese Dream, bent on integrating the whole of Eurasia on a trade and commerce “win-win” basis, it is also “by far the best strategy China can put forward. It is a hedge strategy against the eastward move of the U.S.”

There we have it – mirroring what I have been writing since One Belt, One Road was launched. This is China’s “hedge strategy of turning its back to the U.S. eastward shift: You push in one direction; I go in the opposite direction. Didn’t you pressure me to it? I go west, neither to avoid you nor because I am afraid, but to very cleverly defuse the pressure you gave me on the east.” Welcome to China pivoting West.

Feel Free to Encircle Yourself

General Liang, predictably, prefers to concentrate on the military, not commercial aspects. And he could not spell it out more clearly.

“Given that China’s sea power is still weak, the first choice of One Belt, One Road should be to compete on land,” he said. Liang frames the top terrain of competition as the “belt” – overland New Silk Road routes; and that leads to worrying, still unanswered questions about the Chinese army “expeditionary capabilities.”

General Liang does not expand on this competition – arguably with the U.S. – along the New Silk Road belt. What he believes to be certain though, is “that in choosing China as its rival, America chose the wrong opponent and the wrong direction. Because in the future, the real challenge to the United States is not China; it is the United States itself, and the United States will bury itself.”

And how will that happen? Because of financial capitalism; it’s as if Gen. Liang has been reading Michael Hudson and Paul Craig Roberts (as he certainly does). He notes how “through the virtual economy, the United States has already eaten up all the profits of capitalism.”

And what about that “burial”? Well, it will be orchestrated by “the Internet, big data, and the cloud” as they are “pushed to the extreme” and will “gain a life of their own and oppose the government of the U.S.”

Who would have thought it? It’s as if the Chinese don’t even have to play go anymore. They just need to let the adversary encircle itself.


PepePepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

The Last Cowboy

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Published on the Economic Undertow on February 1, 2016

There was an abundance of snow last week, too much as it turned out …

Snow 1 copy

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There was an abundance of snow all over, too much for some, just enough for others.

Oregon 1

Untitled screen shot from FBI video of the shooting of LaVoy Finicum, (Oregonian). No snow and Finicum drives right around the Fed roadblock. No snow and the attempt to apprehend LaVoy & Co. at a roadblock is postponed indefinitely.

LaVoy might have known there is no place to run, all the roads lead to … what Kunstler calls; ‘the geography of nowhere’. It’s now the geography of everywhere.

Plainly obvious is the high level of calculation on the Federal side regarding to their ‘management’ of cowboy-style ‘rancher militants’. The FBI wants to end the Malheur National Wildlife Refuge siege without bloodshed, at the same time, gunning down one of the militants on TV sends a message to wannabe insurrectionists — as well as to the country at large — as to what sort of game is being played. Intimidation works, it keeps honest people honest. It keeps those who would never dream of taking part in an insurrection from taking part in an in … oh well, you know.

So far, our homegrown militants have satisfied themselves with making nasty noises and fetishistic gestures; at the symbolic level there are few if any consequences. Actual violence is risky; it takes on a life of its own and spirals quickly out of control. Meanwhile, ending one round of outrage becomes the starting point for the next as the underlying problems are never addressed, (Washington Post):

‘Rolling rally’ in Oregon marks killing of wildlife refuge occupier LaVoy Finicum

Heeding calls for daily protests after Tuesday’s shooting death of a man who had been occupying a nearby national wildlife refuge, a “rolling rally” of dozens of vehicles clogged the streets of this tiny rural town Saturday evening.

The cars and trucks, many of them the oversized, rugged models favored in this rough desert terrain, roared around town bearing U.S. flags, Confederate flags and passengers brimming with rage.

“I feel we are living in a very corrupt government. Right now people are getting pulled out of their car, getting guns pointed at their heads, and they killed an innocent man,” said Judi Rodgers, a local resident of Harney County, who came carrying a sign that read, “Welcome to Nazi Germany.”

 

 

 

 

 

Look at it this way … your way of life is falling apart at the seams and you search for answers/someone to blame. We are at the end of a long period of resource plunder, the marginal resource has already been consumed and spat out as waste. People are nevertheless 100% invested in a very high level of resource access. For any particular group to maintain high level access, others must lose it or be denied: pensioners, Venezuelans, Syrians, ranchers, Hapless Negroes, frackers, etc. Any way you look at it, denial of resources is a very ugly process.

Here is the problem: “The cars and trucks, many of them the oversized, rugged models favored in this rough desert terrain, roared around town … “ multiply these vehicles by the number of cities and towns and suburbs across the US and around the world, plus all the other fossil-fuel powered junk; millions of folks roaring around for no purpose other than to waste time and resources, to pretend to be doing something useful, to make vacuous symbolic gestures regarding their self-perceived ‘status’. For some folks … for most … ultimately for all of us … this is the last roar.

Seismic changes of the kind we are experiencing right now — from resource squander to high order conservation — do not come quietly. The shift from European Roman Catholic theocracy to secular nation-states required 100+ years of all-out warfare in the 16th and 17th centuries including the English Revolution, the Spanish war to expel the Moors and the 30 Years War which involved almost all Europeans and killed off about 20% of them.

… the sort of thing we can look forward to avoiding!

Economist Brad DeLong has another idea: he writes at Project Syndicate the (second) largest problem the West faces right is how to manage our incredible abundance (or surplus). At first glance it is hard to tell whether DeLong is being cute or if he has stumbled upon Debtonomics and the First Law by accident.

The debtonomy’s purpose is to direct surplus- related costs away from the holder onto third parties so that he (the holder) can enjoy his gains. Debtonomy evolved to manage The First Law, which states the costs associated with any surplus increase along with it until at some point they exceed its worth. Very much abundance = very much larger abundance-related costs.

DeLong doesn’t aim too high … he merely points out a vanishingly small percentage of the West’s workforce is engaged in food production, that the specter of famine has been banished; that the bulk of those engaged in food processing aim to make food more pleasurable and convenient; that the remaining percentage strives to remedy the consequences of over-eating. Interestingly enough, discussing agricultural labor productivity is as far as DeLong goes with his ‘abundance’ thesis. He veers off into the presumed consequences of increased labor productivity in general, assuming this sort of thing will carry forward unchanged into the distant future …

But job number two– developing economic theories to guide societies in an age of abundance – is no less complicated. Some of the problems that are likely to emerge are already becoming obvious. Today, many people derive their self-esteem from their jobs. As labor becomes a less important part of the economy, and working-age men, in particular, become a smaller proportion of the workforce, problems related to social inclusion are bound to become both more chronic and more acute.

 

 

 

 

 

 

Such a trend could have consequences extending far beyond the personal or the emotional, creating a population that is, to borrow a phrase from the Nobel-laureate economists George Akerlof and Robert Shiller, easily ‘phished for phools’. In other words, they will be targeted by those who do not have their well-being as their primary goal – scammers like Bernie Madoff, corporate interests like McDonalds or tobacco companies, the guru of the month, or cash-strapped governments running exploitative lotteries.

 

 

 

 

 

Look at it this way … your way of life is falling apart at the seams and you search for answers/someone to blame. We are at the end of a long period of resource plunder … send in the dancing girls!

Black_Lives_Matter_protest

Otto Yamamoto, ‘Black Lives Matter Protest Distraction’

One has to wonder about economists. It would make sense for DeLong to discuss manufacturing ‘abundance’ (over-capacity) in China and elsewhere (which turns out to have little to do with labor productivity) or the mass of plastic waste, found everywhere in the world or carbon emissions, worthless junk or the toxic chemicals that are inundating us.

Because of stupendous material outflows, the resources needed on input side of industrial processes are becoming increasingly short. That this is so is both self-evident and undeniable (except to economists). Excluding some renewable inputs, we started long ago with everything and are feverishly, frantically squandering our way toward nothing.

“Everything” = resources before we begin extracting them, as for example, petroleum before 1858.

‘Nothing’ = a few years later, after we have extracted everything we can get our hands on.

Within the everything-to-nothing regime we are about half way to the bottom. ‘Abundance’ as such only makes sense out of context, where finished products appear by magic out of thin air, crafted by elves from climate gases. As a component of debtonomics’ self-fooling process, the worth (see below) of inputs is discounted, otherwise output cannot be affordably financed. At the same time, resources are considered to have no value at all, how can it be otherwise? If resources had value they would be hoarded, as they would be precious. One does not throw a Picasso into the furnace in order to keep warm even if it’s freezing. But feeding the fires is what we do with our resources … without a care in the world! We burn them because we lie to ourselves, because we are able to do so effortlessly by conflating value and worth as if they are the same (no)thing.

From this starting point of self-deception, corruption by inches takes on a life of its own until it engulfs everything in sight. The Bernie Madoffs, the corporate interests, the (finance) gurus of the month and various governments … where has J. Bradford DeLong been? The modern economy is basically a form of organized crime. Industrial firms are morphed into hedge funds intent on increasing their own worth by way of debt-financed share buy-backs and mergers, by the issuance of dubious ‘securities’ and shifting of liabilities off their balance sheets. Markets as such have ceased to be, they have become cockpits of manipulation and insider trading. Regulators are bought and sold like Ottoman galley slaves. Politicians are sock puppets for finance interests. Wrong-doers walk the streets unpunished: if there is abundance of anything it is malfeasance and fraud and deceit. Even our cowboys are fake!

DeLong plugs behavioral economists like George Akerlof, Robert Shiller, Richard Thaler, and Matthew Rabin but they don’t really need it. He does not seem to grasp the scale of crimes, far beyond the deception of individual investors. Our 21st century looting is both transnational and opaque. The thefts are always presented as ‘making the economy grow,’ implying a ‘helping hand for the little guy’. The beneficiaries are invariably tycoons and finance-level criminals, (Marketwatch):

China’s Central Bank Makes Massive Cash Infusion

China’s central bank is putting the largest amount of cash into the financial system in nearly three years, using a weekly market operation to pre-empt a holiday-induced funding squeeze and offset rapid capital outflows.

The People’s Bank of China offered 340 billion yuan ($51.89 billion) of short-term loans, known as reverse repurchase agreements, to commercial banks in a routine money market operation Thursday.

The central bank provided 440 billion yuan via similar tools Tuesday, the first leg of its twice-a-week liquidity-management exercises.

Given the maturity of 190 billion yuan of previously issued loans, the PBOC’s net cash injection this week totals 590 billion yuan, the biggest of its kind since early February 2013, when it reached 662 billion yuan.

 

 

 

 

 

This is a crime but it is invisible. Liquidity provision is nothing more than central bank financing the theft of stolen funds. Nobody asks how theft occurs or who is behind it: certainly not the ordinary Chinese manufacturing worker. Finance managers and government administrators don’t even recognize the crime (except where blame can be fixed on ‘malcontents’). Instead, funds outflow is offered as nothing more than an unfortunate consequence of well intended government policy, bad luck … an (over) abundance of snow!

Liquidity provision shifts (pillages) buying power away from customers toward Big Business and finance. Bosses grab the money and leave the country, using it to buy expensive flats and houses … anywhere besides China, where the ordinary workers are left holding the bag.

At the same time, the provision is self-defeating because the decreasing availability of credit undermines the customer bid for products. Prices fall leading to supplier insolvency which ricochets through finance reducing credit-worthiness overall. The outcome is increased outflow of foreign exchange from the country and currency depreciation in a vicious cycle.

The central bank infusions are intended to defend the currency, yet by itself the defense signals to speculators and arbitrageurs the currency is over-priced. The specs turn around and short the currency in overseas markets where central bank cannot reach, (Wall Street Journal):

Currency War: U.S. Hedge Funds Mount New Attacks on China’s Yuan

 

 

 

 

 

 

Some of the biggest names in the hedge-fund industry are piling up bets against China’s currency, setting up a showdown between Wall Street and the leaders of the world’s second-largest economy.

Kyle Bass’s Hayman Capital Management has sold off the bulk of its investments in stocks, commodities and bonds so it can focus on shorting Asian currencies, including the yuan and the Hong Kong dollar.

Billionaire trader Stanley Druckenmiller and hedge-fund manager David Tepper have staked out positions of their own against the currency, also known as the renminbi, according to people familiar with the matter. David Einhorn’s Greenlight Capital Inc. holds options on the yuan depreciating.

Expectations for a weaker yuan have led to an exodus of capital by Chinese residents and foreign investors. Though it still boasts the largest holding of foreign reserves at $3.3 trillion, China has experienced huge outflows in recent months. Hedge funds are gambling that China will let its currency weaken further in a bid to halt a flood of money leaving the country and jump-start economic growth …

 

 

 

 

 

… and help the little guy!

When a country’s currency is depreciated it is as if a robber goes from house to house stealing a percentage of the goods and money inside. If the depreciation is ten percent, that is the amount of the robbery- times every house in the country! Hedge fund barons avoid the time-consuming mess and hard labor of sledgehammering their way into thousands of houses, they simply switch on their Bloomberg terminals and push a few buttons (this is called risk-taking). Meanwhile, the victims have no idea what has hit them, they don’t even comprehend they have been robbed!

There are more finance crimes, always more; “I feel we are living in a very corrupt government,” says Judi Rodgers, the understatement of the millennium. Our entire economy is based upon pillaging under a veneer of high minded, well intentioned propaganda. We never give anything back, we never have! we never even bothered to learn- or consider how. The militants in Oregon and elsewhere are not interested in improving public lands for the ‘good of the country’, neither are frackers or miners or other despoliators. The hedge fund barons and Wall Street bankers Kyle Bass or Stanley Druckenmiller — or the Chinese central banker Zhou Xiaochuan for that matter — they don’t aim to increase the prosperity of the working man or anyone else, anywhere else; no one but themselves. They grab what they can of the loot and demand more; lest the devil take the hindmost which he invariably does. This is what it comes to: five hundred years of labor-efficient pillaging and the customers cannot afford to retire the barons’ debts. So much for abundance, our businesses are busted.

Busted, insolvent, ruined: our tycoons, our businesses, our workers our banks, our cowboys. So it goes, to the logical conclusion, will the last cowboy out the door please turn off the lights.

DEBTONOMICS NOTE:

The ‘worth’ of something is the financial, monetary measurement of a good (or service) relative to another good or service. Worth = price or rate of exchange.

‘Value’ is the intrinsic character of a good (or person, organization, idea or service) outside of its price, a determination over time of its usefulness to the furtherance of civil society.

Worth is a quantitative measure, value has no arbitrary measure but is rather a matter of quality.

Top photo = Steve Ludlum © Copyright 2015.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Iran- the New China?

iran_china_afp.jpg_1718483346 gc2smOff the keyboard of Pepe Escobar
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iran_china_afp.jpg_1718483346 Iranian President Hassan Rouhani and Chinese President Xi Jinping | Photo: AFP

Originally published in TeleSur on January 29, 2016


If Iran successfully engages in a Chinese-style economic development program it would further enhance its geopolitical status and significance.

It’s currently quite a toss-up when it comes to naming the hardest working man in geopolitical business: Chinese President Xi Jinping or Iranian President Hassan Rouhani.

Their paths cross last week in Tehran in spectacular fashion as Xi and Rouhani clinched a crucial strategic partnership. The two nations agreed to increase bilateral trade to $600 billion over the next decade. Geostrategically, as I pointed out, that was a master class.

Beijing regards Iran, not only in Southwest Asia but across Eurasia, as the essential hub for countering Washington’s much-advertised “pivot to Asia,” centered on U.S. naval hegemony. No wonder Xi made it clear that Iran is to be accepted as a full member of the Shanghai Cooperation Organization (SCO) as early as this year.

A strategic partnership implies Beijing’s full support for the Iranian economic/political/diplomatic renaissance across the arc spanning the Persian Gulf to the Caspian – and beyond. The arc also happens to span all the crucial New Silk Road maritime and land routes that are vitally important for the global projection of the Xi-coined Chinese dream.

And then, only a few days later, Rouhani was in Rome in a warm closed door meeting with Pope Francis after clinching $17 billion in multiple deals.

This frantic post-sanction activity only enhances, in perspective, the absurdity of the Washington-manufactured Iranian nuclear crisis. Geopolitical realism, from Europe to Asia, cannot ignore a nation placed in the intersection of the Arab, Turk, Indian and Russian worlds, underscored by its role as privileged entry and exit point to the vast Caucasus-Central-Asia ensemble, which also includes Afghanistan.

Geostrategically, as the ultimate Eurasian crossroads, Iran is unbeatable, linking the Middle East, Caucasus, Central Asia, Indian subcontinent and Persian Gulf; between three seas – Caspian, Persian Gulf and Sea of Oman; relatively close to the Mediterranean and Europe; and on the doorstep of Asia.

Xi did not have to talk explicit politics in Tehran as he was suffice to clinch deal after deal to impress his point. The long-term trend, inevitably, is for China’s One Belt, One Road vision to bridge the gap toward a Sino-Russian leadership across Eurasia, which translates practically into the progressive sidelining of the British-American imperial continuum. Meanwhile, Italy and France, during Rouhani’s European tour, kept themselves busy playing catch-up.  

When Khamenei Becomes Deng

The frantic post-sanction Iranian scene at least punctures the previous, relentless Western demonization and lays out the bases for   economic development in just about every sphere. The Islamic Republic of Iran has faced a tremendous handicap for the past 36 years – something that would have broken any less-resourceful society.  

Sanctions over the past 10 years cost Iran at least 480 billion euros; that’s roughly one full year of Iranian GDP. In a world not ruled by the usual suspects of financial oligarchy, Tehran would have grounds to take Washington to court with a vengeance.  

As for the “Iranian aggression” meme – which, by the way, still persists – that’s a lousy imperial joke. Iran spends 3,9 percent of GDP on defense; compare it with 10.3 percent for the House of Saud oil hacienda. In total, Iran spends seven times less on defense compared to the Gulf petro-monarchies, which cannot subsist without their mostly U.S., British and French weaponizing.  

The road ahead for Iran will be bumpy. Serious problems include corruption, bureaucratic incompetence, and economic sectors reserved to special interests or barred from foreign investment. Sections of the power elite – like the bonyads (religious foundations) and the pasdaran (the IRGC) are not exactly prone to relinquish their grip on vital sectors of the national economy. The economic opening of Iran will inevitably accelerate the social transformation of the country.  

What happens next will largely depend on the crucial, upcoming February elections – which will yield a new Majlis (Parliament), and a new Assembly of Experts in charge of choosing the next Supreme Leader.

Iran is a unique geopolitical case – where a republic derives its legitimacy, simultaneously, from Islam and universal suffrage. This may not be your classic Western parliamentary democracy, but at the same time it’s not some sort of crude authoritarianism of Saudi Arabia. A quite complex system of checks and balances is in place, involving the presidency, the Parliament, the Council of Guardians, the Assembly of Experts and different bodies such as the Discernment Council and the National Security Council.

Supreme Leader Ayatollah Khamenei has made it very clear he will pay close attention to cultural, political and security consequences of an economic opening that could enfeeble the revolutionary ideology of the Islamic Republic. What’s certain is that the Supreme Leader – as an arbiter – will preserve the careful balance of political forces in Iran.  

This means, in practice, that Team Rouhani won’t be allowed to draw unlimited political capital from the economic opening, while at the same time the social and cultural transformation of the country won’t be synonymous to a Western cultural invasion.

The Vienna nuclear deal clinched last summer was no less than a seismic geopolitical event in Iran. Internally, it sealed a consensus between the Tehran state machine and the majority of the population, which wanted Iran to become a “normal” nation again.

Now comes the hard part. The most probable scenario spells out an Islamic Republic of Iran engaged in a Chinese-style economic development program. Sort of a Persian “get rich is glorious” remix, under strict political control.

This begs the question: are we ready for the new Supreme Leader role as the Iranian Deng Xiaoping?


Pepe Escobar is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia Times Online, where he wrote the column The Roving Eye from 2000 to 2014. Born in Brazil, he's been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Even before 9/11 he specialized in covering the arc from the Middle East to Central and East Asia, with an emphasis on Big Power geopolitics and energy wars. He is the author of "Globalistan" (2007), "Red Zone Blues" (2007), "Obama does Globalistan" (2009) and "Empire of Chaos" (2014), all published by Nimble Books. His latest book is "2030", also by Nimble Books, out in December 2015. He currently lives between Paris and Bangkok. Follow him on Facebook: https://www.facebook.com/pepe.escobar.77377

Ground Control to Captain Zhou Xiaochuan

china collapsegc2smFrom the keyboard of James Howard Kunstler
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Originally Published on Clusterfuck Nation February 1, 2016


Why would anybody suppose that the Peoples Bank of China might want to tell the truth about anything that was within their power to lie about? Especially the soundness of any loan portfolio vested unto the grasp of its tentacles? Of course, most of what China has done in speeding toward the wall of financial crack-up, it learned from watching US bankers slime their way into Too Big To Fail nirvana — most particularly the array of swindles, dodges, and frauds constructed in the half-light of shadow banking to hedge the sudden, catastrophic appearance of reality-based price discovery.

When so many loans end up networked as collateral in some kind of bet against previous bets against other previous bets, you can be sure that cascading contagion will follow. And so that is exactly what’s happening as China’s rocket ride into Modernity falls back to earth. Like most historical fiascos, it seemed like a good idea at the time: take a nation of about a billion people living in the equivalent of the Twelfth Century, introduce the magic of money printing, spend a gazillion of it on CAT and Kubota earth-moving machines, build the biggest cement industry the world has ever seen, purchase whole factory set-ups, and flood the rest of the world with stuff. Then the trouble starts when you try to defeat the business cycles associated with over-production and saturated markets.

Poor China and poor us. Escape velocity has failed. Which raises the question: escape from what, exactly? Answer: the implacable limits of life on earth. The metaphor for all this, of course, is the old journey-into-space idea, which still persists in the salesmanship of Elon Musk, the ragged remnants of NASA, and even the nightmares of Stephen Hawking. Get off this messed-up home planet and light out of the territories, say Mars. Of course, this is a vain and stupid idea, since we already have a planet engineered to perfection for all the life systems associated with the human project. We just can’t respect its limits.

So now, that dynamic duo, Nature and Reality, the actual owners of the planet, have showed up to read the riot act to the renters throwing a wild party. The fourth and perhaps ultimate financial crisis of the last twenty years begins to express itself in terms that only the raptors and vultures can see from on high. George Soros, Kyle Bass, and the other flocking shadow banking scavengers prepare to short the living shit out of the old Middle Kingdom. The immortal words of G.W. Bush ring in their ears: “This sucker is going down,” and they are sure to win big by betting on the obvious. Trouble is, this sucker could go down so much further than they imagined, that whatever fortunes they gain from its descent will be foiled by the destruction of the very economic system needed for them to enjoy their gains.

For instance, when banking systems go down, governments usually follow, and when governments go down, societies often unravel. It doesn’t take a great effort of imagination to see China’s one party politburo leadership machine lose the respect of its governed masses, and then its control of events, followed by a Great Struggle among the regions and factions to restore some kind of order. And when the smoke clears there will a whole lot of nearly worthless concrete and steel, and a vast loss of notional wealth, and China will be lucky to land back in some approximation of the Twelfth Century.

It must be interesting for China to watch the horrifying disintegration of America’s political party structure currently on view, with the mad bull called Trump rampaging across the land and the designated inevitable Mz It’s-My-Turn hijacking her collective for the greater glory of Goldman Sachs. The last time China got the vapors politically — the so-called Cultural Revolution of the 1960s — the country went batshit crazy. Surely some of the ruling party remembers that with requisite terror.

Or maybe this is China and the USA’s Thelma and Louise moment. Pedal to the metal, they drive into the abyss of history holding hands. Remember, audiences loved that!

 


James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

Empire of Chaos preparing for more fireworks in 2016

f18 superhornetgc2smOff the keyboard of Pepe Escobar
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f18 superhornet

Originally published in Ron December 24, 2016

 


In his seminal 'Fall of Rome: And the End of Civilization,' Bryan Ward-Perkins writes, "Romans before the fall were as certain as we are today that their world would continue forever… They were wrong. We would be wise not to repeat their complacency.”
 

The Empire of Chaos, today, is not about complacency. It’s about hubris – and fear. Ever since the start of the Cold War the crucial question has been who would control the great trading networks of Eurasia – or the “heartland”, according to Sir Halford John Mackinder (1861–1947), the father of geopolitics.

We could say that for the Empire of Chaos, the game really started with the CIA-backed coup in Iran in 1953, when the US finally encountered, face to face, that famed Eurasia crisscrossed for centuries by the Silk Road(s), and set out to conquer them all.

Only six decades later, it’s clear there won’t be an American Silk Road in the 21st century, but rather, just like its ancient predecessor, a Chinese one. Beijing’s push for what it calls “One Belt, One Road” is inbuilt in the 21st century conflict between the declining empire and Eurasia integration. Key subplots include perennial NATO expansion and the empire’s obsession in creating a war zone out of the South China Sea.

As the Beijing-Moscow strategic partnership analyses it, the oligarchic elites who really run the Empire of Chaos are bent on the encirclement of Eurasia – considering they may be largely excluded from an integration process based on trade, commerce and advanced communication links.

Beijing and Moscow clearly identify provocation after provocation, coupled with relentless demonization. But they won’t be trapped, as they’re both playing a very long game.

Russian President Vladimir Putin diplomatically insists on treating the West as “partners”. But he knows, and those in the know in China also know, these are not really “partners”. Not after NATO’s 78-day bombing of Belgrade in 1999. Not after the purposeful bombing of the Chinese Embassy. Not after non-stop NATO expansionism. Not after a second Kosovo in the form of an illegal coup in Kiev. Not after the crashing of the oil price by Gulf petrodollar US clients. Not after the Wall Street-engineered crashing of the ruble. Not after US and EU sanctions. Not after the smashing of Chinese A shares by US proxies on Wall Street. Not after non-stop saber rattling in the South China Sea. Not after the shooting down of the Su-24.

It’s only a thread away

A quick rewind to the run-up towards the downing of the Su-24 is enlightening. Obama met Putin. Immediately afterwards Putin met Khamenei. Sultan Erdogan had to be alarmed; a serious Russian-Iranian alliance was graphically announced in Teheran. That was only a day before the downing of the Su-24.

France’s Hollande met Obama. But then Hollande met Putin. Erdogan was under the illusion he fabricated the perfect pretext for a NATO war, to be launched following Article 5 of the NATO Charter. Not by accident failed state Ukraine was the only country to endorse – in haste – the downing of the Su-24. Yet NATO itself recoiled – somewhat in horror; the empire was not ready for nuclear war.

At least not yet. Napoleon knew history turns on a slender thread. As much as Cold War 2.0 remains in effect we were, and will remain, just a thread away from nuclear war.

Whatever happens in the so-called Syrian peace process the proxy war between Washington and Moscow will continue. Hubristic US Think-Tank Land  can’t see it any other way.

For Exceptionalist neocons and neoliberalcons alike, the only digestible endgame is a partition of Syria. The Erdogan system would gobble up the north. Israel would gobble up the oil-rich Golan Heights. And House of Saud proxies would gobble up the eastern desert.

Russia literally bombed all these elaborate plans to ashes because the next step after partition would feature Ankara, Riyadh – and a “leading from behind” Washington – pushing a Jihadi Highway all the way north to the Caucasus as well as Central Asia and Xinjiang (there are already at least 300 Uyghurs fighting for ISIS/ISIL/Daesh.) When all else fails, nothing like a Jihadi Highway plunged as a dagger in the body of Eurasia integration.

In the Chinese front, whatever “creative” provocations the Empire of Chaos may come up with, they won’t derail Beijing’s aims in the South China Sea – that vast basin crammed with unexplored oil and gas wealth and prime naval highway to and from China. Beijing is inevitably configuring itself by 2020 as a formidable haiyang qiangguo – a naval power.

Washington may supply $250 million in military “aid” to Vietnam, Philippines, Indonesia and Malaysia for the next two years, but that’s mostly irrelevant. Whatever “creative” imperial ideas would have to take into account, for instance, the DF-21D “carrier killer” ballistic missile, with a 2,500 km range and capable of carrying a nuclear warhead.

On the economic front, Washington-Beijing will remain prime proxy war territory. Washington pushes the TPP – or NATO on trade pivoting to Asia? It’s still a Sisyphean task, because the 12 member nations need to ratify it, not least the US featuring an extremely hostile Congress.

Against this American one-trick pony, Xi Jinping, for his part, is deploying a complex three-pronged strategy; China’s own counterpunch to the TPP, the Free Trade Area of the Asia-Pacific (FTAAP); the immensely ambitious “One Belt, One Road”; and the means to finance a tsunami of projects, the Asian Infrastructure Investment Bank (AIIB) – the Chinese counter-punch to the World Bank and the US-Japan-controlled Asian Development Bank (ADB)

For Southeast Asia, for instance, the numbers tell the story. Last year, China was the top ASEAN partner, to the tune of $367 billion. This will grow exponentially with One Belt, One Road – which will absorb $200 billion in Chinese investment up to 2018.

Heart of Darkness – revisited

Prospects for Europe are nothing but bleak. French-Iranian researcher Farhad Khosrokhavar has been one of the few who identified the crux of the problem. A jihadi reserve army across Europe will continue to feed on batallions of excluded youth in poor inner cities. There is no evidence EU neoliberalcons will be fostering sound socio-economic policies to extract these alienated masses from the ghettos, employing new forms of socialization.

So the escape route will continue to be a virus-like version of Salafi-jihadism, sold by wily, PR-savvy profiteers as a symbol of resistance; the only counter-ideology available on the market. Khosrokhavar defined it as the neo-umma – an “effervescent community that never existed historically”, but now openly inviting any young European, Muslim or otherwise, afflicted by an identity crisis.

In parallel, on our way into a full 15 years of the endless neocon war against independent states in the Middle East, the Pentagon will be turbo-charging an unlimited expansion of some of its existing bases – from Djibouti in the Horn of Africa to Irbil in Iraqi Kurdistan – into “hubs”.

From sub-Saharan Africa to Southwest Asia, expect a hub boom, all of them merrily hosting Special Forces; the operation was described by Pentagon supremo Ash “Empire of Whining” Carter as “essential”“Because we cannot predict the future, these regional nodes – from Moron, Spain to Jalalabad, Afghanistan – will provide forward presence to respond to a range of crises, terrorist and other kinds. These will enable unilateral crisis response, counter-terror operations, or strikes on high-value targets.”

It’s all here: unilateral Exceptionalistan in action against anyone who dares to defy imperial diktats.

From Ukraine to Syria, and all across MENA (Middle East and North Africa), the proxy war between Washington and Moscow, with higher and higher stakes, won’t abate. Imperial despair over the irreversible Chinese ascent also won’t abate. As the New Great Game picks up speed, and Russia supplies Eurasian powers Iran, China and India with missile defense systems beyond anything the West has, get used to the new normal; Cold War 2.0 between Washington and Beijing-Moscow.

I leave you with Joseph Conrad, writing in Heart of Darkness: "There is a taint of death, a flavor or mortality in lies….To tear treasure out of the bowels of the land was their desire, with no more moral purpose at the back of it than there is in burglars breaking into a safe….We could not understand because we were too far and could not remember, because we were traveling in the night of first ages, of those ages that are gone, leaving hardly a sign – and no memories…”


PepePepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

A Week that will Live in Infamy: Week 1, 2016

That-Was-The-Week-That-W-That-Was-The-Week-473964gc2reddit-logoOff the keyboard, microphone and video editor of RE

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Published on the Doomstead Diner on January 10, 2016

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Transcript available Inside the Diner

clusterfuckWeek 1 of 2016 turned out incredibly eventful in the World of Collapse, and as a result I shelved my usual text based Sunday Brunch article in favor of a RANT on the ongoing CLUSTERFUCK.  Carnage like we had in the last week simply cannot be adequately treated in an text based blog.  The article I did have planned for Sunday Brunch I will publish sometime this week or maybe next weekend, a response to some issues brought up in the lead off Weather Gone Wild  episode.

The financial end of Collapse appears to be rapidly accelerating now, and may be at the point Central Bank interventions cannot contain the problem, which as I reinforce regularly is not really a monetary problem at all, but rather a resource depletion & population overshoot problem.  Printing more fiat, extending more credit to the uber-rich, flipping to Gold as currency, none of these things can work to resolve resource depletion and population overshoot.  Only depopulation can resolve those problems, which is why all the wars are breaking out over the resources.  No aggregate population willingly depopulates, although increasing suicide rates within populations are a common outcome.  This has been the case in Greece, and is also now apparent in Alberta in Canada as the Tar Sands play goes bust.  Wars diminish population and continue until some sort of balance is achieved with the resources in the environment.  Given the current level of resource depletion relative to population size, you can expect the wars to continue onward here for quite some time to come, although the profile may change in terms of international conflicts vs civil wars and high tech battles vs trebuchets and atl-atls over time.

In any event, Week 1 of 2016 saw a major escalation on all levels, particularly the financial one, which as it continues inexorably toward final collapse will drive all the rest of the civilization structures toward collapse as well.  Insulating yourself against these oncoming calamities as best you can remains the priority for individuals and small communities as collapse plays itself out.

Also, in case you missed it, here's the recap from 2015 moving into this Clusterfuck

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RANK BAD SCIENCE

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Published on the The Slog on January 3, 2016

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Uncontrollable Shanghai panics, wealth that won’t trickle down & consumers who can’t consume.

From San Diego to Shanghai, measurable human behaviour is teaching anyone who’ll listen that you can’t base an economic system on skitty narcissists

The collapse of the Shanghai index in China was artificially halted this morning as Beijing’s automatic closedown system came into effect to stop a 7% slump. Commentators are fingering poor economic data for the near-tank, but I don’t buy that. I think three other factors are at work.

The first is that traders have been trade-starved and had time to absorb just how bad things are economically and geopolitically; the second is the Saudi Arabia vs Iran relations meltdown which, if it gets any hotter, does threaten to affect energy supplies. And yes, I know that in a global slump when nobody wants oil anyway that doesn’t make sense, but my view for decades has been that bourses very rarely make sense. Exchanges don’t like instability, and the Middle East now is starting to look like underwater rugby without the ball. The Eurostoxx, Dax and FTSE are all well off, and I’d say its that situation among Muslim sects and energy gangsters that lies behind it.

But looking only at China, I’d say that the third (for me, anthropological) factor is that this new circuit breaker – including a trading suspension clause – only came in this morning: I suspect a lot of traders decided to get out of positions before it was too late. In other words – like most State interventions – it was self-defeating…designed to patch a crack in the dam, it evoked a major attack from 617 Squadron.

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The Chinese are still novices at this game, but I’ve been saying for years now that neoliberalism in general and an overdependence on bourse-raised funds for business are about the best way dreamed up thus far to destroy genuinely entrepreneurial capitalism forever. Having said that, a new study has just emerged adding grist to the commonsense arguments against neolib growth mania and its privileged megamillionaires.

Far from being put out by some obscure Hard Left University in Venezuela, the study is a major feature in the current issue of Time Magazine. Written up with engaging prose by Maia Szalavitz  (a neuroscience journalist), it adds greatly to the arsenal trying in vain to bomb the nonsense put out by the Greedies.

When Scott Fitzgerald told Hemingway and others that “the rich are different”, Irish author Mary Colum responded by saying “Yes they are, they’ve got more money”. But in the ninety years since then, lots of us have wondered whether they got rich because they’re different….or they got rich and then became different”.

Ms Szalavitz tackles the question head on in the best way – by bringing to light cleverly designed fieldwork to monitor the attitudes and behavioural patterns of the rich. This work and that of others is particularly germain to the myth of ‘trickle-down wealth’, in that recent studies suggest wealthier people are more likely to cut people up in traffic, and behave unethically in simulated business and charity scenarios.

Further, last year, statistics on charitable giving revealed that the poor donate a far higher percentage of their meagre incomes to charity than the rich do. Far from giving them a sense of duty to give back and help, the new study suggests, the rich feel they deserve the level of privilege they enjoy. In fact, five separate experiments led researchers to record much higher levels of both narcissism and entitlement among those of a higher income and social class.

I turns out not to be clinical narcissism disorder (from which I’m sure Julian Assange suffers) because this gets in the way of success, given such people positively repel cooperation rather than attracting it. But it does suggest a kind of overweening confidence which becomes more insufferable still once they’re rich….and once their offspring have in turn chosen to decide they must be special too. It is pretty clear I think that Cameron, Osborne, Hunt, Hannan and Fallon all display this outcome to a tee. And so too, of course, do Tony Blair and Harriet Harman.

Ultimately, it all comes back to my Page One pet-hate: privilege. The attitude and behaviour it engenders I would describe as “Well, I’m here so I must be good….and people treat me as somehow special, so obviously I am”. This can apply equally to the Lord Snooties of this world as it does to the Dianne Abbotts. Wealth, rank, special treatment, private education and the ability to jump every queue while evading any law merely solidify the delusion. See also Rupert Murdoch, Rebekah Brooks, Piers Morgan, and Boris Johnson.

The good news is that, when forced by the piercing of their bubble to listen to those with other lives, developing narcissists do very rapidly begin to behave rather more sensibly: Szalavitz concludes:

‘Psychologists emphasize, however, that being able to see the world from other people’s perspectives — empathy — is critical to fighting narcissism…..The wealthier certain segments of society become, then the more vulnerable communities may be to selfish tendencies — and the less charity the least among us can expect’.

In other words, Friedmanism, Reaganism, Thatcherism and Camerlot’s Big Society are complete and utter bunk. But – and it’s a very big but indeed, not say a pain in the butt – this change in their behaviour from uncaring materialist self-styled Superman isn’t going to “just happen”. Only the likes of Peter Jukes hammering away at Newscorp, Jan Cunliffe fighting to bury the law of Joint Enterprise, Nicholas Wilson refusing to drown the HSBC’s bottomless ocean of lies, and WASPI’s refusal to accept that they should pay for the elite’s broken promises will make a difference.

Doing nothing will still be the default position for most citizens. If that continues, it will be too late to do something….because by then, the trail of violence will be globally viral: and the real extremists will take charge.

There is no such thing as NVE – non-violent extremism. But there desperately needs to be a lot more NVRR – non-violent radical realism.

Joint digital action and the abandonment of ideological tribalism is absolutely central to achieving this: Socialists and crypto-Marxists still stuck in ‘One More Heave’ mode need to get real, do their psephological sums, and join others of decently socialised bent.

Only then can we make life peacefully impossible for those who act as paymasters to the Greedies….and bring down a Government still supported by only a quarter of those entitled to vote.

The Consumers who can’t consume: How neoliberalism destroys its own food supply

 

 

 

 

Will Chess, Not Battleship, Be the Game of the Future in Eurasia?

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Originally published in Tom Dispatch on November 22, 2015

Silk Roads, Night Trains, and the Third Industrial Revolution in China


The U.S. is transfixed by its multibillion-dollar electoral circus. The European Union is paralyzed by austerity, fear of refugees, and now all-out jihad in the streets of Paris. So the West might be excused if it’s barely caught the echoes of a Chinese version of Roy Orbison’s “All I Have to Do Is Dream.” And that new Chinese dream even comes with a road map.

The crooner is President Xi Jinping and that road map is the ambitious, recently unveiled 13th Five-Year-Plan, or in the pop-video version, the Shisanwu. After years of explosive economic expansion, it sanctifies the country’s lower “new normal” gross domestic product growth rate of 6.5% a year through at least 2020.

It also sanctifies an updated economic formula for the country: out with a model based on low-wage manufacturing of export goods and in with the shock of the new, namely, a Chinese version of the third industrial revolution. And while China’s leadership is focused on creating a middle-class future powered by a consumer economy, its president is telling whoever is willing to listen that, despite the fears of the Obama administration and of some of the country’s neighbors, there’s no reason for war ever to be on the agenda for the U.S. and China.

Given the alarm in Washington about what is touted as a Beijing quietly pursuing expansionism in the South China Sea, Xi has been remarkably blunt on the subject of late. Neither Beijing nor Washington, he insists, should be caught in the Thucydides trap, the belief that a rising power and the ruling imperial power of the planet are condemned to go to war with each other sooner or later.

It was only two months ago in Seattle that Xi told a group of digital economy heavyweights, “There is no such thing as the so-called Thucydides trap in the world. But should major countries time and again make the mistakes of strategic miscalculation, they might create such traps for themselves.”

A case can be made — and Xi’s ready to make it — that Washington, which, from Afghanistan to Iraq, Libya to Syria, has gained something of a reputation for “strategic miscalculation” in the twenty-first century, might be doing it again.  After all, U.S. military strategy documents and top Pentagon figures have quite publicly started to label China (like Russia) as an official “threat.”

To grasp why Washington is starting to think of China that way, however, you need to take your eyes off the South China Sea for a moment, turn off Donald Trump, Ben Carson, and the rest of the posse, and consider the real game-changer — or “threat” — that’s rattling Beltway nerves in Washington when it comes to the new Great Game in Eurasia.

Xi’s Bedside Reading

Swarms of Chinese tourists iPhoning away and buying everything in sight in major Western capitals already prefigure a Eurasian future closely tied to and anchored by a Chinese economy turbo-charging toward that third industrial revolution. If all goes according to plan, it will harness everything from total connectivity and efficient high-tech infrastructure to the expansion of green, clean energy hubs. Solar plants in the Gobi desert, anyone?

Yes, Xi is a reader of economic and social theorist Jeremy Rifkin, who first conceived of a possible third industrial revolution powered by both the Internet and renewable energy sources.

It turns out that the Chinese leadership has no problem with the idea of harnessing cutting-edge Western soft power for its own purposes. In fact, they seem convinced that no possible tool should be overlooked when it comes to moving the country on to the next stage in the process that China’s Little Helmsman, former leader Deng Xiaoping, decades ago designated as the era in which “to get rich is glorious."

It helps when you have $4 trillion in foreign currency reserves and massive surpluses of steel and cement.  That’s the sort of thing that allows you to go “nation-building” on a pan-Eurasian scale. Hence, Xi’s idea of creating the kind of infrastructure that could, in the end, connect China to Central Asia, the Middle East, and Western Europe.  It’s what the Chinese call “One Belt, One Road”; that is, the junction of the Silk Road Economic Belt and the Twenty-First Century Maritime Silk Road.

Since Xi announced his One Belt, One Road policy in Kazakhstan in 2013, PricewaterhouseCoopers in Hong Kong estimates that the state has ploughed more than $250 billion into Silk Road-oriented projects ranging from railways to power plants. Meanwhile, every significant Chinese business player is on board, from telecom equipment giant Huawei to e-commerce monster Alibaba (fresh from its Singles Day online blockbuster). The Bank of China has already provided a $50 billion credit line for myriad Silk Road-related projects. China’s top cement-maker Anhui Conch is building at least six monster cement plants in Indonesia, Vietnam, and Laos. Work aimed at tying the Asian part of Eurasia together is proceeding at a striking pace.  For instance, the China-Laos, China-Thailand, and Jakarta-Bandung railways — contracts worth over $20 billion — are to be completed by Chinese companies before 2020.

With business booming, right now the third industrial revolution in China looks ever more like a mad scramble toward a new form of modernity.

A Eurasian “War on Terror”

The One Belt, One Road plan for Eurasia reaches far beyond the Rudyard Kipling-coined nineteenth century phrase “the Great Game,” which in its day was meant to describe the British-Russian tournament of shadows for the control of Central Asia. At the heart of the twenty-first century’s Great Game lies China’s currency, the yuan, which may, by November 30th, join the International Monetary Fund’s Special Drawing Rights reserve-currency basket. If so, this will in practice mean the total integration of the yuan, and so of Beijing, into global financial markets, as an extra basket of countries will add it to their foreign exchange holdings and subsequent currency shifts may amount to the equivalent of trillions of U.S. dollars.

Couple the One Belt, One Road project with the recently founded, China-ledAsian Infrastructure Investment Bank and Beijing’s Silk Road Infrastructure Fund ($40 billion committed to it so far).  Mix in an internationalized yuan and you have the groundwork for Chinese companies to turbo-charge their way into a pan-Eurasian (and even African) building spree of roads, high-speed rail lines, fiber-optic networks, ports, pipelines, and power grids.

According to the Washington-dominated Asian Development Bank (ADB), there is, at present, a monstrous gap of $800 billion in the funding of Asian infrastructure development to 2020 and it’s yearning to be filled. Beijing is now stepping right into what promises to be a paradigm-breaking binge of economic development.

And don’t forget about the bonuses that could conceivably follow such developments. After all, in China’s stunningly ambitious plans at least, its Eurasian project will end up covering no less than 65 countries on three continents, potentially affecting 4.4 billion people.  If it succeeds even in part, it could take the gloss off al-Qaeda- and ISIS-style Wahhabi-influenced jihadism not only in China’s Xinjiang Province, but also in Pakistan, Afghanistan, and Central Asia. Imagine it as a new kind of Eurasian war on terror whose “weapons” would be trade and development. After all, Beijing’s planners expect the country’s annual trade volume with belt-and-road partners to surpass $2.5 trillion by 2025.

At the same time, another kind of binding geography — what I’ve long called Pipelineistan, the vast network of energy pipelines crisscrossing the region, bringing its oil and natural gas supplies to China — is coming into being.  It’s already spreading across Pakistan and Myanmar, and China is planning to double down on this attempt to reinforce its escape-from-the-Straits-of-Malacca strategy. (That bottleneck is still a transit point for 75% of Chinese oil imports.) Beijing prefers a world in which most of those energy imports are not water-borne and so at the mercy of the U.S. Navy. More than 50% of China’s natural gas already comes overland from two Central Asian "stans" (Kazakhstan and Turkmenistan) and that percentage will only increase once pipelines to bring Siberian natural gas to China come online before the end of the decade.

Of course, the concept behind all this, which might be sloganized as “to go west (and south) is glorious” could induce a tectonic shift in Eurasian relations at every level, but that depends on how it comes to be viewed by the nations involved and by Washington.

Leaving economics aside for a moment, the success of the whole enterprise will require superhuman PR skills from Beijing, something not always in evidence. And there are many other problems to face (or duck): these include Beijing’s Han superiority complex, not always exactly a hit among either minority ethnic groups or neighboring states, as well as an economic push that is often seen by China’s ethnic minorities as benefiting only the Han Chinese. Mix in a rising tide of nationalist feeling, the expansion of the Chinese military (including its navy), conflict in its southern seas, and a growing security obsession in Beijing. Add to that a foreign policy minefield, which will work against maintaining a carefully calibrated respect for the sovereignty of neighbors. Throw in the Obama administration’s “pivot” to Asia and its urge both to form anti-Chinese alliances of “containment” and to beef up its own naval and air power in waters close to China.  And finally don’t forget red tape and bureaucracy, a Central Asian staple. All of this adds up to a formidable package of obstacles to Xi’s Chinese dream and a new Eurasia.

All Aboard the Night Train

The Silk Road revival started out as a modest idea floated in China’s Ministry of Commerce. The initial goal was nothing more than getting extra “contracts for Chinese construction companies overseas.” How far the country has traveled since then.  Starting from zero in 2003, China has ended up building no less than 16,000 kilometers of high-speed rail tracks in these years — more than the rest of the planet combined.

And that’s just the beginning. Beijing is now negotiating with 30 countries to build another 5,000 kilometers of high-speed rail at a total investment of $157 billion. Cost is, of course, king; a made-in-China high-speed network (top speed: 350 kilometers an hour) costs around $17 million to $21 million per kilometer. Comparable European costs: $25 million to $39 million per kilometer. So no wonder the Chinese are bidding for an $18 billion project linking London with northern England, and another linking Los Angeles to Las Vegas, while outbidding German companies to lay tracks in Russia.

On another front, even though it’s not directly part of China’s new Silk Road planning, don’t forget about the Iran-India-Afghanistan Agreement on Transit and International Transportation Cooperation. This India-Iran project to develop roads, railways, and ports is particularly focused on the Iranian port of Chabahar, which is to be linked by new roads and railways to the Afghan capital Kabul and then to parts of Central Asia.

Why Chabahar? Because this is India’s preferred transit corridor to Central Asia and Russia, as the Khyber Pass in the Afghan-Pakistani borderlands, the country’s traditional linking point for this, remains too volatile. Built by Iran, the transit corridor from Chabahar to Milak on the Iran-Afghanistan border is now ready. By rail, Chabahar will then be connected to the Uzbek border at Termez, which translates into Indian products reaching Central Asia and Russia.

Think of this as the Southern Silk Road, linking South Asia with Central Asia, and in the end, if all goes according to plan, West Asia with China. It is part of a wildly ambitious plan for a North-South Transport Corridor, an India-Iran-Russia joint project launched in 2002 and focused on the development of inter-Asian trade. 

Of course, you won’t be surprised to know that, even here, China is deeply involved. Chinese companies have already built a high-speed rail line from the Iranian capital Tehran to Mashhad, near the Afghan border. China also financed a metro rail line from Imam Khomeini Airport to downtown Tehran. And it wants to use Chabahar as part of the so-called Iron Silk Road that is someday slated to cross Iran and extend all the way to Turkey. To top it off, China is already investing in the upgrading of Turkish ports.

Who Lost Eurasia?

For Chinese leaders, the One Belt, One Road plan — an “economic partnership map with multiple rings interconnected with one another” — is seen as an escape route from the Washington Consensus and the dollar-centered global financial system that goes with it. And while “guns” are being drawn, the “battlefield” of the future, as the Chinese see it, is essentially a global economic one.

On one side are the mega-economic pacts being touted by Washington — the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership — that would split Eurasia in two. On the other, there is the urge for a new pan-Eurasian integration program that would be focused on China, and feature Russia, Kazakhstan, Iran, and India as major players. Last May, Russia and China closed a deal to coordinate the Russian-led Eurasian Economic Union (EEU) with new Silk Road projects. As part of their developing strategic partnership, Russia is already China’s number one oil supplier.

With Ukraine’s fate still in the balance, there is, at present, little room for the sort of serious business dialogue between the European Union (EU) and the EEU that might someday fuse Europe and Russia into the Chinese vision of full-scale, continent-wide Eurasian integration. And yet German business types, in particular, remain focused on and fascinated by the limitless possibilities of the New Silk Road concept and the way it might profitably link the continent.

If you’re looking for a future first sign of détente on this score, keep an eye on any EU moves to engage economically with the Shanghai Cooperation Organization.  Its membership at present: China, Russia, and four "stans" (Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan). India and Pakistan are to become members in 2016, and Iran once U.N. sanctions are completely lifted. A monster second step (no time soon) would be for this dialogue to become the springboard for the building of a trans-European “one-belt” zone.  That could only happen after there was a genuine settlement in Ukraine and EU sanctions on Russia had been lifted. Think of it as the long and winding road towards what Russian President Vladimir Putin tried to sell the Germans in 2010: a Eurasian free-trade zone extending from Vladivostok to Lisbon.

Any such moves will, of course, only happen over Washington’s dead body.  At the moment, inside the Beltway, sentiment ranges from gloating over the economic “death” of the BRICS nations (Brazil, Russia, India, China, and South Africa), most of which are facing daunting economic dislocations even as their political, diplomatic, and strategic integration proceeds apace, to fear or even downright anticipation of World War III and the Russian “threat.”

No one in Washington wants to “lose” Eurasia to China and its new Silk Roads. On what former National Security Adviser Zbigniew Brzezinski calls “the grand chessboard,” Beltway elites and the punditocracy that follows them will never resign themselves to seeing the U.S. relegated to the role of “offshore balancer,” while China dominates an integrating Eurasia.  Hence, those two trade pacts and that “pivot,” the heightened U.S. naval presence in Asian waters, the new urge to “contain” China, and the demonization of both Putin’s Russia and the Chinese military threat.

Thucydides, Eat Your Heart Out

Which brings us full circle to Xi’s crush on Jeremy Rifkin. Make no mistake about it: whatever Washington may want, China is indeed the rising power in Eurasia and a larger-than-life economic magnet. From London to Berlin, there are signs in the EU that, despite so many decades of trans-Atlantic allegiance, there is also something too attractive to ignore about what China has to offer. There is already a push towards the configuration of a European-wide digital economy closely linked with China. The aim would be a Rifkin-esque digitally integrated economic space spanning Eurasia, which in turn would be an essential building block for that post-carbon third industrial revolution.

The G-20 this year was in Antalya, Turkey, and it was a fractious affair dominated by Islamic State jihadism in the streets of Paris. The G-20 in 2016 will be in Hangzhou, China, which also happens to be the hometown of Jack Ma and the headquarters for Alibaba. You can’t get more third industrial revolution than that. 

One year is an eternity in geopolitics. But what if, in 2016, Hangzhou did indeed offer a vision of the future, of silk roads galore and night trains from Central Asia to Duisburg, Germany, a future arguably dominated by Xi’s vision.  He is, at least, keen on enshrining the G-20 as a multipolar global mechanism for coordinating a common development framework. Within it, Washington and Beijing might sometimes actually work together in a world in which chess, not Battleship, would be the game of the century.

Thucydides, eat your heart out.


PepePepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

Baltic Dry Index hits All-Time Low

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Publishes on The Economic Collapse on November 19, 2015

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I was absolutely stunned to learn that the Baltic Dry Shipping Index had plummeted to a new all-time record low of 504 at one point on Thursday.  I have written a number of articles lately about the dramatic slowdown in global trade, but I didn’t realize that things had gotten quite this bad already.  Not even during the darkest moments of the last financial crisis did the Baltic Dry Shipping Index drop this low.  Something doesn’t seem to be adding up, because the mainstream media keeps telling us that the global economy is doing just fine.  In fact, the Federal Reserve is so confident in our “economic recovery” that they are getting ready to raise interest rates.  Of course the truth is that there is no “economic recovery” on the horizon.  In fact, as I wrote about yesterday, there are signs all around us that are indicating that we are heading directly into another major economic crisis.  This staggering decline of the Baltic Dry Shipping Index is just another confirmation of what is directly ahead of us.

Overall, the Baltic Dry Index is down more than 60 percent over the past 12 months.  Global demand for shipping is absolutely collapsing, and yet very few “experts” seem alarmed by this.  If you are not familiar with the Baltic Dry Shipping Index, the following is a pretty good definition from Investopedia

A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea. The Baltic Exchange directly contacts shipping brokers to assess price levels for a given route, product to transport and time to delivery (speed).

The Baltic Dry Index is a composite of three sub-indexes that measure different sizes of dry bulk carriers (merchant ships) – Capesize, Supramax and Panamax. Multiple geographic routes are evaluated for each index to give depth to the index’s composite measurement.

It is also known as the “Dry Bulk Index”.

Much of the decline of the Baltic Dry Shipping Index is being blamed on China.  The following comes from a Bloomberg report that was posted on Thursday…

The cost of shipping commodities fell to a record, amid signs that Chinese demand growth for iron ore and coal is slowing, hurting the industry’s biggest source of cargoes.

The Baltic Dry Index, a measure of shipping rates for everything from coal to ore to grains, fell to 504 points on Thursday, the lowest data from the London-based Baltic Exchange going back to 1985. Among the causes of shipowners’ pain is slowing economic growth in China, which is translating into weakening demand for imported iron ore that’s used to make the steel.

So many of the exact same patterns that we witnessed back in 2008 are playing out once again in front of our very eyes.  Below, I have shared a chart that was posted by Zero Hedge, and it shows how the Baltic Dry Shipping Index absolutely collapsed in 2008 as we headed into a major financial crisis.  Well, now the Index is collapsing again, and it is already lower than it was at any point back in 2008…

Baltic Dry Index - Zero Hedge

The evidence continues to mount that we are steamrolling toward a deflationary economic slowdown that is worldwide in scope.

Just look at the price of U.S. oil.  It just keeps on falling, and as I write this article it is sitting at $40.40.

The price of oil collapsed just before the financial crisis of 2008, and the same pattern is happening again.

And look at what is happening to commodities. The Thomson Reuters/CoreCommodity CRB Commodity Index has plummeted to the lowest level that we have seen since the last recession. It is now down more than 30 percent over the past 12 months, and it continues to fall.

So don’t be fooled by the temporary “stock market recovery” that we have witnessed.  The underlying economic fundamentals continue to decline.  We are entering a global deflationary recession, and the stock market will get the memo at some point just like we saw in 2008.

At this moment, global financial markets are teetering on the brink, and all it is going to take is some kind of major trigger event to send them tumbling over the edge.

And such an event may be coming sooner than you may think.

We live at a time when global terrorism is surging, relationships between nations are deteriorating and our planet is shaking in wild and unpredictable ways.

It wouldn’t take much to push the financial world into full-blown panic mode.  A major regional war in the Middle East, a terror attack that kills thousands, or an earthquake or volcanic eruption that affects a large U.S. city are all potential examples of “black swan events” which could fit the bill.

The global financial system has never been more primed for another 2008-style crisis.  Thanks to the fragility of the system, it could literally happen any day now.

So keep your eyes open – within weeks our world could be completely and totally different.

Top 10 Drought Locations

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Publishes on the Doomstead Diner on November 17, 2015

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Top 10 Drought Locations

Syria

Drought is a major reason for the  Refugee Crisis in Syria, besides the ongoing Bombing and war over the Oil Resource.

South Africa

Drought is destabilizing the South African Goobermint, and heightening already strained race relations between Blacks & Whites

Brazil

Sao Paolo is the epicenter with a population of 20M, but Rio de Janeiro also has drought problems.  Slash & Burn deforestation of the Amazon Rain Forest exacerbates the problems.

California

Lake Mead is under stress, CA groundwater subsides a few more feet each year and nobody has a clue what to do if 40M Califonicators are forced to migrate.

Eastern Europe

Eastern Europe has water issues and also is on the main migration routes from MENA countries.  Their already overstressed Water resource come under more stress as a result.  A double-whammy.

Australia

Oz sheep ranching is collapsing, and they also are under Refugee stress from South East Asia.  In the best of times, Oz is mainly desert in the interior, mostly only coastal areas are inhabitable.

New Guinea

Despite periodic flooding events, New Guinea has some of the worst drought problems around.  Destination of choice for those migrants? Oz of course.

India

India depends on Monsoons and the runoff from the Humalayas for its water supply, and they have to share the water with Pakistanis as well. All are stress points, and 100s of 1000s of Indian Farmers have committed suicide over the last decade.

Western Russia/Ukraine

Another cause of the onoing and escalating war in Ukraine, traditionally the "Breadbasket" for Mother Russia.

Puerto Rico/Jamaica

Relatively small populations, but the migration issues and economic issues for the FSoA make them sigmificant problems.

Globally, the number of places wit Drought Stress increases daily.  This forces migrations, and then areas not under drought stress become overtaxed in consumption and in waste.  Remember that in most Big Shities, water is used for disposing of Human Waster, and most migrants at least at first end up in Big Shities.

From the Global Drought Information Website:

Current Conditions

By the end of September 2015, drought conditions intensified in many locations.  El Nino is present and is currently being characterized as a strong event, similar in strength to the 1997-1998 event.  It is expected to impact the weather at least through the coming winter. In Europe, drought conditions continued to impact the majority of the continent.  Some improvement was seen in the center of the continent while drought intensified in Eastern Europe. In the Czech Republic, the hop harvest is expected to drop 34% this year due to the drought.  In Asia, drought is present from western Asia, through central and eastern Russia and in Southeast Asia and the Indian sub-continent. Some areas in southern India are too dry to plow. In Africa, drought remains entrenched across the equatorial region and through much of the South. South Africa has declared a drought disaster for Free State and North West Provinces.  In North America, the El Nino has brought some relief to the southwestern US while conditions in the Southeast and through Mexico and across the Caribbean remained dry.  The Dominican Republic and Jamaica have already experienced significant crop losses. In South America, drought remains entrenched in Brazil and has intensified through the central Amazon Basin.  In Oceana, drought has intensified throughout much of the region north of Australia while drought conditions in Australia have continued unabated. Papua New Guinea has released relief supplies for those most affected by the current drough

Sense a problem here?  MANY places are both in serious drought conditions AND they were already food importers even in the good times.  The FSoA continues to be a major food exporter, but that is entirely dependent both on the water supply flowing to CA and to the Ogallala Acquifer in the grain belt of the midwest.  Globally, we are only one bad season away from an overall food deficit.  Once the buffer is gone, the starvation begins.  It may not happen next year, but each year we inch closer to this critical point.

Where will drought problems hit first and hardest?  When will the real crunch time come?  Take the Collapse Drought Survey TM and give us your opinion.

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Final post on Matthew 13:1-58 (continued from the [url=http://renewablerevolution.createaforum.com/general-discussion/the-wis...

    Michael Peña (Ant-Man, Crash) and Lizzy Caplan (Now You See Me 2, Allied) star in Extinction, a sci-fi thriller in which a man must save his family from an otherworldly phenomenon. Directed by Ben Young (Hounds of Love), the film is written by Eric...

Over 30 percent of all weather-related deaths in the U.S. are attributable to high temps., heat stroke or sunstrokeIn May of this year, a hot spell broiled Boston. In June, extreme temperatures grounded Phoenix’s planes. Last week, Seattle suff...

schwit1 shares an article from the U.S. Naval Institute's Proceedings magazine. It includes this warning from the Coast Guard's chief of fisheries law enforcement:Nearly two decades into the 21st Century, it has become clear the world has limited reso...

"Any organization that disagrees with Trump, gets cut. Business committees, arts, and now science."Even as reports from federal agencies demonstrate that the global climate scenario is becoming increasingly alarming, President Donald Trump has ...

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Knarf’s Knewz

    Michael Peña (Ant-Man, Crash) and Lizzy Caplan [...]

Over 30 percent of all weather-related deaths in t [...]

schwit1 shares an article from the U.S. Naval Inst [...]

VICTORVILLE, CA - Once a fighter jet training base [...]

Diner Newz Feeds

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Got bandwidth and time. So you get nooze!Doomstead [...]

Just one more before I go. This space is likely to [...]

Not to beat a dead horse, but Lee had already free [...]

Doomstead Diner Daily 8/18[html] [...]

 Pakistan just planted one billion trees to tackle [...]

http://www.youtube.com/v/EueGY2zjGBw[embed=640,412 [...]

    Michael Peña (Ant-Man, Crash) and Lizzy Caplan [...]

Over 30 percent of all weather-related deaths in t [...]

schwit1 shares an article from the U.S. Naval Inst [...]

VICTORVILLE, CA - Once a fighter jet training base [...]

Quote from: azozeo on August 14, 2017, 05:17:04 PM [...]

http://www.activistpost.com/2017/04/gold-manipulat [...]

Quote from: Golden Oxen on August 06, 2017, 04:57: [...]

There are unintelligible messages from Karpatok an [...]

Quote from: K-Dog on July 20, 2017, 01:36:05 PMOil [...]

Quote from: luciddreams on August 05, 2017, 06:29: [...]

Quote from: RE on August 05, 2017, 01:00:20 AMThe [...]

I have taken a lot of abuse on my opinion of what [...]

The database has been upchucking a lot of old post [...]

We got another treat to old posting from the Diner [...]

Alternate Perspectives

  • Two Ice Floes
  • Jumping Jack Flash
  • From Filmers to Farmers

This and That - Vol. 1 Lines in the Sand By Cognitive Dissonance   When I was younger I would get in [...]

We Are All Going To Die! By Cognitive Dissonance   This one is short and sweet folks. The subject al [...]

Have You a Positive Personal Practice? (Part Two) By Cognitive Dissonance   My apologies for how tar [...]

Have You a Positive Personal Practice? By Cognitive Dissonance   Those who dive deeply into unmaskin [...]

Dark Homes By Cognitive Dissonance   While we closed on the purchase of our mountain cabin in March [...]

Event Update For 2017-08-18http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2017-08-17http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2017-08-16http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2017-08-15http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2017-08-14http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

With a bit of ice on the floor depositers could almost ride the seeds right on in (photo by Global C [...]

Well, at least it was made sure that the Svalbard Global Seed Vault looks real pretty (photo courtes [...]

Now it's data that makes the world go round? It's comfortably accepted by many that what w [...]

I left off last week's post – "Money Doesn't Grow on Trees, Industrial-Scale Renewabl [...]

When you wish upon a star the Blue Fairy sends Tinker Bell, who plants a magic seed, which grows int [...]

Daily Doom Photo

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Sustainability

  • Peak Surfer
  • SUN
  • Transition Voice

Planting A Personal Forest"If you appreciate the effort it takes for a single individual to become carbon-neutral, you ca [...]

A Personal Forest"Every year on New Years Day I write down my annual electric meter reading, chart the milage of [...]

Is God Serious?"How ironic is it that having cornered some seemingly unique absence of reality, adherents cann [...]

The Gospel of Chief Seattle: Written For Television"No bright star hovers about the horizon. Sad-voiced winds moan in the distance. Some grim Neme [...]

Can Foodies Save the Planet?"Facing all of these grave threats, humans collectively have chosen to go insane."Having a [...]

The folks at Windward have been doing great work at living sustainably for many years now.  Part of [...]

 The Daily SUN☌ Building a Better Tomorrow by Sustaining Universal Needs April 3, 2017 Powering Down [...]

Off the keyboard of Bob Montgomery Follow us on Twitter @doomstead666 Friend us on Facebook Publishe [...]

Visit SUN on Facebook Here [...]

In the echo-sphere of political punditry consensus forms rapidly, gels, and then, in short order
cal [...]

Discussions with figures from Noam Chomsky and Peter Senge to Thich Nhat Hanh and the Dalai Lama off [...]

Lefty Greenies have some laudable ideas. Why is it then that they don't bother to really build [...]

Democracy and politics would be messy business even if all participants were saints. But America doe [...]

A new book argues that, in order to survive climate change and peak oil, the global money economy ne [...]

Top Commentariats

  • Our Finite World
  • Economic Undertow

Artleads- Dozens???? Wouldn’t that be more like thousands? Good thing there are over 6k different sp [...]

Dennis Coyne thinks yes If Dennis thinks it then it must be true. That is good enough for me. No rea [...]

To me both seem equally obnoxious. Are you insane? One is an comedian and intellectual. And the othe [...]

You can fight for social justice and save the planet all while you poop! LOL Genius! [...]

Welcome to new day, added 's' to 'http' so everyone should feel more secure ... [...]

Just to be clear about all the different administrations mentioned; All the while not one thing that [...]

Clintons job was to keep the party going, BJs under the desk for all! Bushs job was to tell jokes an [...]

Hey Steve, why don't you look into becoming REs neighbor. After the great power down, you can l [...]

Think Vermont. All you need is a wood stove and an internet connection. I'll bet you have a lot [...]

RE Economics

Going Cashless

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Simplifying the Final Countdown

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Bond Market Collapse and the Banning of Cash

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Do Central Bankers Recognize there is NO GROWTH?

Discuss this article @ the ECONOMICS TABLE inside the...

Singularity of the Dollar

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Kurrency Kollapse: To Print or Not To Print?

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SWISSIE CAPITULATION!

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Of Heat Sinks & Debt Sinks: A Thermodynamic View of Money

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Merry Doomy Christmas

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Peak Customers: The Final Liquidation Sale

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Collapse Fiction

Useful Links

Technical Journals

In this paper, we study the use of wheat land fallow production systems as a climate change adaptati [...]

Ambulance services are in operation around the world and yet, until recently, ambulance data has onl [...]

In this investigation, a numerical model expressing advection and diffusion effects is used to exami [...]