IMF

My question to Christine Lagarde, Eurogroup 25th June 2015

Off the keyboard of Yanis Varoufakis

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Published on Yanis Varoufakis Blog on August 17, 2015

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Greece’s Third MoU (Memorandum of Understading) annotated by Yanis Varoufakis

The Third Greek MoU is now enshrined in Greek Law. Written in troika-speak it is almost impossible to decypher by those not speaking this unappetising language. Click here for the complete MoU text annotated liberally by yours truly – in pdf form. It is best read in conjunction with my annotated version of the EuroSummit Agreement of 12th July.

My question to Christine Lagarde, Eurogroup 25th June 2015 – as narrated by Landon Thomas in the NYT

yanis-varoufakisDuring the 25th June 2015 Eurogroup, the institutions presented me, in the form of an effective utlimatum, with a comprehensive staff level agreement and funding plan (which I considered financially non-viable). It was the deal that Prime Minister Tsipras decided, on the following day, to put to the Greek people in the form of the now infamous referendum. During that Eurogroup meeting, I posed a question to Christine Lagarde: “Is it the view of the IMF that Greece’s debt is sustainable under the proposed agreement?” Ms Lagarde, when her turn came to speak, tried to skrt the issue but, in the end, conceded that Greece’s public debt “had to be looked at again”. At that point, the Eurogroup President Dijsselbloem interrupted the proceedings and addressed me with the express threat that, if the Greek government insisted on discussing a debt restructure, there would be no deal. I shall have a lot more to say on this and related matters in due course. For now, here is how Landon Thomas Jr narrates this story in his recent NYT piece.

 

For Landon’s complete article click here. Relevant extracts are copied below

In January of this year, the anti-austerity party of Alexis Tspiras came to power. By April, negotiations over debt repayment had stalled, the government was hemorrhaging cash, and the economy was at a standstill.

On Easter Sunday, Yanis Varoufakis, who had become Greece’s finance minister, flew to Washington to meet with Mr. Thomsen and Christine Lagarde, who became the I.M.F.’s chief in late 2013, and threatened to stop payment on more than a billion dollars in loans that were soon coming due.

Relations between fund officials and the Greeks had reached their nadir. Mr. Tsipras said that the fund had “criminal responsibility” for the crisis, and Mr. Varoufakis was telling people that Mr. Thomsen’s work in Greece would go down in history as the I.M.F.’s greatest failure.

Yet having run the numbers, the fund now accepted the central argument being made by Mr. Varoufakis: Greece was bankrupt and needed debt relief from Europe to survive.

The fund was also feeling the pressure from the non-European members of its board who questioned the huge commitment to Greece (currently about $15 billion) relative to the small size of its economy.

Ms. Lagarde and David Lipton, her top deputy, became more insistent, pressing European nations that economic reforms alone were not enough and that a debt restructuring would be needed as well.

In late April, Mr. Thomsen took up the issue once more at a critical meeting of European finance ministers in Riga, Latvia.

Two months later, Ms. Lagarde found herself at the Brussels meeting of European finance ministers, with the country’s future in the eurozone hanging in the balance.

The Europeans were pressuring Mr. Varoufakis to agree to an austerity-loaded debt deal that he was resisting.

I have a question for Christine, he said. Can the I.M.F. formally state in this meeting that this proposal we are being asked to sign will make the Greek debt sustainable?

She could not. And when Jeroen Dijsselbloem, the Dutch finance minister and lead negotiator for Europe, cut off all discussion of debt relief, the die was cast.

Back at I.M.F. headquarters in Washington, the decision was unanimous: It would go public with its assessment that Greece’s debt situation was hopeless.

‘Old Wine in a New Bottle’

The 19 countries of the euro area make up the I.M.F.’s largest shareholder base, but as the world’s financial watchdog, the fund also represents 169 other nations.

If the I.M.F. wants to be seen as an international, as opposed to a European, monetary fund, it must prove that it can speak with an independent voice. And if that means arguing that Europe, its senior partner in these talks, needs to take a loss on its loans — well, so be it.

Many have commended the fund for going public with its views. But the release of its debt reports has not yet had any practical effect.

The latest bailout is heavy on austerity measures like privatization of power companies and seaports, reduced pensions and tax increases in shipping and tourism, and says nothing about debt relief.

“This is old wine in a new bottle,” said Meghan E. Greene, chief economist at Manulife in Boston. “I see very little chance that the bailout will succeed — it’s too much like the other ones.”

Would it have made a difference if the fund had officially broken with Europe in the spring, when it began to conclude that the Greek debt had become unmanageable?

Probably not, says Susan Schadler, a former I.M.F. economist and author of a widely read paper on the fund’s Greece saga.

But she argues that by not forcing creditors to take a loss back in 2010, the pain has been borne almost exclusively by the Greeks themselves, and not by bond investors.

“The fund should have pushed for a restructuring then,” she said. “That, after all, is its job — to assess the risks and say whether or not the debt is sustainable.”

Greek Pudding

From the keyboard of James Howard Kunstler
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Originally Published on Clusterfuck Nation July 13, 2015
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The proof of the pudding is in the eating, the old saw goes. This one, alas, is a mélange of several old shit sandwiches bound in a liaison of subterfuge and seasoned with political absurdities. Having been fooled in this bistro before, citizen-patrons leave the table resigned to yet another bout of food poisoning as the music of universal upchuck rings across the European Union from Helsinki to Lisbon

What is on display more brightly and clearly than ever, though, is the utter fakery of international banking. The players have lost faith in their own shenanigans. They simply go through the motions now awaiting the political fallout, which is to say the revolt of the people who can still do arithmetic. So, now Greece can supposedly expect another $90Billion-equivalent in new loans on top of the $350Billion-equivalent already racked up. That’s rich. The loan repayment schedule must look like a map of Middle Earth.

Most perplexing — especially for those on summer hiatus in which time seems to be suspended — is the fact that the rescue package will take weeks, perhaps months, to gin up while Greece is right now so utterly paralyzed in bankruptcy that no goods can move, no bills can be paid, and the economy cannot deliver the necessities of daily life. The old refrain, “your check is in the mail” may not be so reassuring to folks who haven’t eaten for three days. Personally, I would expect the gasoline bombs to be flying around Syntagma Square before the middle of the week.

Has anyone noticed the eerie paucity of news emanating from the other hard-luck nations of the EU, namely Spain, Portugal, Italy, and Ireland? The money hole that these deadbeats are in makes Greece look like a dimple in the sand. What, I wonder, is the message to them from the Greek negotiation melodrama? (Lend more money to real estate developers to build more houses and condos that will never be sold? That’ll work!) No, the entire EU debt fiasco harks back to the original meaning of “ring around the rosie” — a theme song of the Black Death. The eventual implosion of the European Union, and the banking system hugging its face vampire squid style, will be the financial equivalent of the Black Death. Kingdoms will fall and social systems will be turned upside down.

The agonizing wait for that outcome is obviously fraying the nerves of all concerned to the degree that all their exertions seem like little more than tragic and pointless exercises in futility — for instance, the terms arrived at in last weekend’s negotiations. Nobody has a shred of faith that they can or will be carried out. In effect, what they’ve done is put together a Potemkin framework allowing them to go just give up for a month or so and go on vacation.

That would, of course, set things up for a mighty financial convulsion in the autumn — history’s favorite season for ruin — when all the ministers and their factotums venture back to the dismal realities they left fermenting at the office. Of all the many things apt to happen, we can count at least on the current Greek government falling and a failure of Greece to make any gesture of repayment in their just-negotiated loan schedule. That would leave the “Troika” (the EU, the ECB, and the IMF) with zero credibility and initiate the epochal widespread repudiation of the entire EU loan structure — in short, the collapse of Europe.

That wouldn’t necessarily be the end of the world, but it would be the end of nearly seventy-year period of peace, prosperity, and stability. The sorting-out would be epic. The standard of living across Europe would sink to the level of the 1830s. The fundamentals of banking and currency would have to be rebuilt from ashes. More nations will break up into smaller units. Western intellectual life would suffer immense shock as all the certainties of the Enlightenment project seemed to go up in a vapor of insolvency and political upheaval. You have to even wonder whether Europe could defend itself against an onrushing Jihad.

But these are admittedly gloomy thoughts for a morning so early in summer. Myself, I’m going to shop for an outfit to wear to Diddy’s annual party in the Hamptons. Coonskin caps may be oddly coming back in style as people all over America try to emulate Donald Trump and the furry creature that lives on the top of his head. Something tells me that the ladies will not be buying many Hillary-style pantsuits. Wouldn’t it be cunning if Diddy’s caterer came up with something like miniature Greek Pudding bites? That would bring a real frisson to the doings, something to chat about besides the marketing genius of Kim Kardashian.

 

 

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.

Greece Votes NO – Let The Chaos Begin…

Off the keyboard of Michael Snyder

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Published on The Economic Collapse on July 5, 2015

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The result of the referendum in Greece is a great victory for freedom, but it is also threatens to unleash unprecedented economic chaos all across Europe.  With almost all of the votes counted, it is being reported that approximately 61 percent of Greeks have voted “no” and only about 39 percent of Greeks have voted “yes”.  This is a much larger margin of victory for the “no” side than almost everyone was anticipating, and it represents a stunning rejection of European austerity.  Massive celebrations have erupted on the streets of Athens and other major Greek cities, but the euphoria may not last long.  Greek Prime Minister Alexis Tsipras is promising that Greece will be able to stay in the euro, but that gives EU bureaucrats and the IMF a tremendous amount of power, because at this point the Greek government is flat broke.  Without more money from the EU and the IMF, the Greek government will not be able to pay its bills and virtually all Greek banks will inevitably collapse.  Meanwhile, the rest of Europe is about to experience a tremendous amount of pain as financial markets respond to the results of this referendum.  The euro is already plummeting, and most analysts expect European bond yields to soar and European stocks to drop substantially when trading opens on Monday morning.

Personally, I love the fact that the Greek people decided not to buckle under the pressure being imposed on them by the EU and the IMF.  But amidst all of the celebration, the cold, hard reality of the matter is that your options are extremely limited when you are out of money.

How is the Greek government going to pay its bills without any money?

How are the insolvent Greek banks going to operate without any money?

How is the Greek economy going to function without any money?

Now that the Greek people have overwhelmingly rejected the demands of the creditors, it will be very interesting to see what the EU and the IMF do.  Prior to the referendum, European leaders were insisting that a “no” vote would put an end to negotiations and would force Greece to leave the euro.

Now that the results are in, are they going to change their tune?  Because the ball is definitely in their court

“This does two things: it legitimises the stance of the Greek government and it leaves the ball in Europe’s court,” ANZ Bank analysts said in a note.

Europe either folds or Greece goes bankrupt; over to you Merkel.”

So would they actually let Greece go bankrupt?

It is going to be fascinating to watch what happens over the next few days.  Right now, Greek banks are on life support.  If the European Central Bank decides to pull the plug, they would essentially destroy the entire Greek banking system.  The only thing that can keep Greek banks alive and kicking is more intervention from the ECB.  The following comes from the New York Times

Now that Greek voters have said no to the economic demands of its international creditors, the fate of the country’s struggling banks is in the hands of the European Central Bank.

Greece’s banks, closed since last Monday because they are perilously low on cash, have been kept alive in recent weeks by emergency loans from the European Central Bank. On Monday, the central bank’s policy makers plan to convene to determine how much longer they are willing to prop up the Greek banks, now that the country has essentially said no to the unpopular dictates of the other eurozone countries.

Of much greater concern to the rest of the world is how financial markets are going to respond to all of this.  As I write this article, things already appear to be unraveling.  The following comes from CNBC

Germany’s Dax is indicated sharply lower from Friday’s close at around 4 percent, while the euro was down 2 percent against the yen as the news emerged. U.S. stocks are expected to open around 1 percent lower Monday, according to recent stock futures data.

What could be most important for those worried about contagion from the Greek crisis is how Portuguese, Spanish and Italian government bonds perform in Monday morning trade.

If these peripheral euro zone countries, often lumped in with Greece, suffer a sharp spike in yields, this could cause alarm about whether Greece leaving the currency might cause further contagion to other weaker euro zone economies.

This could potentially become a “trigger event” that unleashes a wave of financial panic all over Europe.  And once financial panic begins, it is very difficult to end.

If the EU and the IMF want to avoid a crisis, they could just give in to the new Greek government.  But that would be politically risky for certain high profile European leaders.  For instance, Angela Merkel would face a huge backlash back home if she conceded to the new Greek government now.  And other German leaders are already calling the referendum result a “disaster”

German politicians branded the result a ‘disaster’, with the country’s economy minister Sigmar Gabriel Sigmar accusing Tsipras of ‘tearing down the last bridges on which Greece and Europe could have moved towards a compromise’.

He added: ‘Tsipras and his government are leading the Greek people on a path of bitter abandonment and hopelessness.’

And the president of the European Parliament, a German, told a German radio station over the weekend that a “no” vote would almost certainly mean that the Greeks will be forced out of the euro

If after the referendum, the majority is a ‘no,’ they will have to introduce another currency because the euro will no longer be available for a means of payment,” Martin Schulz, European Parliament president, said on German radio.

That is pretty strong language, eh?

Here is yet another quote from Schulz

Without new money, salaries won’t be paid, the health system will stop functioning, the power network and public transport will break down, and they won’t be able to import vital goods because nobody can pay,” he said.

So at this point it is all up to the EU and the IMF, and in particular the focus will be on the Germans.

What will they decide to do?

Will they give in, or will they force the Greeks to leave the euro?

If the Greeks do transition from the euro to a new currency, it will be a process that takes months (if not longer).  You just can’t change ATMs, computer systems, cash registers, etc. overnight.  So a move to the drachma  would not be as simple as many are suggesting…

British firms like De La Rue, which prints 150 currencies worldwide, are believed to have been contacted with a view to providing such services.

It’s done in great secrecy to prevent currency speculation. The other big problem is the logistical challenges of switching a currency. All ATMs, computers and other machinery of commerce that bears the euro symbol will have to be adjusted. It could, and would, take months.

And if Greece does leave, it will be a massive shock for global financial markets.  Faith in the European project will be shattered, the euro will drop like a rock, bond yields all over the continent will rise to unsustainable levels and major banks all over Europe will fail.

I think that the following quote from Romano Prodi sums things up quite well

Romano Prodi, former chief of the European Commission and Italy’s ex-premier, said it is the EU’s own survival that is now at stake as the botched handling of the Greek crisis escalates into a catastrophe. “If the EU cannot resolve a small problem the size of Greece, what is the point of Europe?

Meanwhile, we should all keep in mind that a financial crisis has already erupted over in Asia as well.  Chinese stocks have lost 30 percent of their value in just the last three weeks.  In fact, the amount of “paper wealth” wiped out in China over the past three weeks is approximately equivalent to “10 times Greece’s gross domestic product”

A dizzying three-week plunge in Chinese equities has wiped out $2.36 trillion in market value — equivalent to about 10 times Greece’s gross domestic product last year.

The great financial collapse of 2015 is well underway, and it should be a very interesting week for global markets.

But no matter what happens this week, we all need to keep in mind that this is just the tip of the iceberg.

A “perfect storm” is on the way, and we all need to get prepared for it while we still can.

 

History in Free Verse

From the keyboard of James Howard Kunstler
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Originally Published on Clusterfuck Nation June 22, 2015
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History might not rhyme, exactly, but it’s not bad for free verse. Greece is this century’s Serbia — a tiny, picturesque backwater nation blundering haplessly into the center stage of geopolitics. And the European Union is, whaddaya know, Germany in drag, on financial steroids.

Nobody knows what will happen next in the struggle to wring some kind of debt repayment promises out of poor Greece. Without “restructuring” — a virtual national bankruptcy proceeding — there can be no plausible promises of repayment. Both sides seem to have exhausted their abilities to juke their way out. The European Union and its wing-men at the European Central Bank (ECB) and the International Monetary Fund (IMF) can only pretend to kick that fabled can down the road because it has turned into a cement-filled 50-gallon drum. The Greek government can only pretend to further dismantle its civil service and pension systems lest angry citizens toss it out and replace it with a new government, perhaps an ugly and pugnacious one made up of Golden Dawn party Nazis.

In the background, Spain, Portugal, Italy, Ireland, and perhaps even France wait without peeping to see if Greece is allowed to restructure, because you can be sure they will demand the same privilege to debt relief. But that’s hardly possible because the ECB has been engineering a shift of debt-holding away from the big corporate banks  — which made all the stupid loans — to the taxpayers of their member states, especially Germany, which stands to be the biggest bag-holder when a contagion of serial default seeps across the continent.

This implies, of course, that along the way to that outcome something sickening happens to the price of all the bonds that the debt is embodied in. Namely, its value craters for the simple reason that the threat of non-payment makes interest rates shoot up to reflect the actualization of risk. That would certainly set off the booby-trap of derivative interest rate swaps and credit default swaps that have been laid into history’s greatest financial minefield. Thus, the big banks that were supposedly shielded by the ECB shell game of Hide the Debt Pea Somewhere Else, will blow up in a daisy-chain of unpayable obligations.

The net effect of all that will be the disappearance of nominal wealth — it crosses an event horizon into a black hole never to be seen again. The continent discovers it is a lot poorer than it thought. Fifty years of financial engineering comes to the grief it deserves for promoting the idea that it’s possible to get something for nothing.

The same thing more or less awaits the USA, China, and Japan. For the USA in particular the signs of bankruptcy have been starkly visible for a long time outside the bubble regions of New York, Washington, and San Francisco. You see it in the amazing decrepitude of the built environment — the cities and towns left for dead, the struggling suburban strip malls tenanted if at all by wig shops and check-cashing operations, the rusted bridges, pot-holed highways, the Third World style train service. Most sickeningly you see it in a population of formerly earnest, hard-working, basically-educated people with hopes and dreams transformed into a hopeless moiling underclass of tattooed savages dressed in baby clothes devoting their leisure hours (i.e. all their time) to drug-seeking and the erasure of sexual boundaries.

That shocking social and political bankruptcy has, so far, acted as the sinkhole for all America’s financial degeneracy and the entropy it generates. The financial class (the 1 percent who own 40-plus percent of the financialized economy) must think it’s immune to the consequences of its activities, namely racketeering of one kind or another — criminal misconduct and accounting fraud in the service of money-grubbing. They must truly believe that risk has been offloaded into the ring-fenced concentration camps of capital: the derivatives pools. But risk, like rust, never sleeps and can’t be so easily contained. The obstreperous claims of debt only die down with the acknowledged disappearance of wealth, as when a bottom-feeding collection agency attempts to collect a few cents on the dollar of a car loan gone bad.

The US Federal Reserve, like the European Central Bank, sits atop a vault of bonds representing a colossal aggregate promise to repay debt that can never be repaid. Their loss of value will come to be seen for what it is: the disappearance of national wealth. We’ll have our moment, too, when the 50-gallon can full of cement can’t be kicked down the road another inch. It might come when Europe sets the example for a loss of faith in a system run to crime and rot.

 

 

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.

Germany’s future lies East

Off the keyboard of Pepe Escobar
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THE ROVING EYE

Reuters / Ueslei Marcelino

Reuters / Ueslei Marcelino 

Originally published in Asia Times on March 3, 2015
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What the BRICS plus Germany are really up to?

Winston Churchill once said, “I feel lonely without a war.” He also badly missed the loss of empire. Churchill’s successor – the ‘Empire of Chaos’ – now faces the same quandary. Some wars – as in Ukraine, by proxy – are not going so well.

And the loss of empire increasingly manifests itself in myriad moves by selected players aiming towards a multipolar world.

So no wonder US ‘Think Tankland’ is going bonkers, releasing wacky CIA-tinted “forecasts” where Russia is bound to disintegrate, and China is turning into a communist dictatorship. So much (imperial) wishful thinking, so little time to prolong hegemony.

The acronym that all these “forecasts” dare not reveal is BRICS (Brazil, Russia, India, China, and South Africa). BRICS is worse than the plague as far as the ‘Masters of the Universe’ that really control the current – rigged – world system are concerned. True, the BRICS are facing multiple problems. Brazil at the moment is totally paralyzed; a long, complex, self-defeating process, now coupled with intimations of regime change by local ‘Empire of Chaos’ minions. It will take time, but Brazil will rebound.

That leaves the “RIC” – Russia, India and China – in BRICS as the key drivers of change. For all their interlocking discrepancies, they all agree they don’t need to challenge the hegemon directly while aiming for a new multipolar order.

The BRICS New Development Bank (NDB) – a key alternative to the IMF enabling developing nations to get rid of the US dollar as a reserve currency – will be operative by the end of this year. The NDB will finance infrastructure and sustainable development projects not only in the BRICS nations but other developing nations. Forget about the Western-controlled World Bank, whose capital and lending capacity are never increased by the so-called Western “powers.” The NDB will be an open institution. BRICS nations will keep 55 percent of the voting power, and outside their domain no country will be allowed more than 7 percent of votes. But crucially, developing nations may also become partners and receive loans.

Russia's President Vladimir Putin delivers a speech as he attends the VI BRICS Summit in Fortaleza July 15, 2014.(Reuters / Paulo Whitaker )

Russia’s President Vladimir Putin delivers a speech as he attends the VI BRICS Summit in Fortaleza July 15, 2014.(Reuters / Paulo Whitaker )

Damn those communists

A tripartite entente cordiale is also in the making. Indian Prime Minister Narendra Modi will be in China next May – and ‘Chindia’ will certainly engage in a breakthrough concerning their bitter territorial disputes. As much as Delhi has a lot to benefit from China’s massive capital investment and exports, Beijing wants to profit from India’s vast market and technology savvy. In parallel, Beijing has already volunteered economic help to Russia – if Moscow asks for it – on top of their evolving strategic partnership.

The US “pivoting to Asia” – launched at the Pentagon – is all dressed up with no place to go. Bullying Southeast Asia, South Asia and, for that matter, East Asia as a whole into becoming mere ‘Empire of Chaos’ vassals – and on top of it confronting China – was always a non-starter. Not to mention believing in the fairy tale of a remilitarized Japan able to “contain” China.

Isolating the “communist dictatorship” won’t fly. Just watch, for instance, the imminent high-speed rail link between Kunming, in Yunnan province, and Singapore, traversing a key chunk of a Southeast Asia which for Washington would never qualify to be more than a bunch of client states. The emerging 21st century Asia is all about interconnection; and the inexorable sun in this galaxy is China.

As China has embarked in an extremely complex tweaking of its economic development model, as I outlined here, China’s monopoly of low-end manufacturing – its previous industrial base – is migrating across the developing world, especially around the Indian Ocean basin. Good news for the Global South – and that includes everyone from African nations such as Kenya and Tanzania to parts of Southeast Asia and Latin America.

Of course the ‘Empire of Chaos’, business-wise, won’t be thrown out of Asia. But its days as an Asian hegemon, or a geopolitical Mob offering “protection”, are over.

The Chinese remix of Go West, Young Man – in fact go everywhere – started as early as 1999. Of the top 10 biggest container ports in the world, no less than 7 are in China (the others are Singapore, Rotterdam, and Pusan in South Korea). As far as the 12th Chinese 5-year plan – whose last year is 2015 – is concerned, most of the goals of the seven technology areas China wanted to be in the leading positions have been achieved, and in some cases even superseded.

The Bank of China will increasingly let the yuan move more freely against the US dollar. It will be dumping a lot of US dollars every once in a while. The 20-year old US dollar peg will gradually fade. The biggest trading nation on the planet, and the second largest economy simply cannot be anchored to a single currency. And Beijing knows very well how a dollar peg magnifies any external shocks to the Chinese economy.

Sykes-Picot is us

A parallel process in Southwest Asia will also be developing; the dismantling of the nation-state in the Middle East – as in remixing the Sykes-Picot agreement of a hundred years ago. What a stark contrast to the return of the nation-state in Europe.

There have been rumblings that the remixed Sykes is Obama and the remixed Picot is Putin. Not really. It’s the ‘Empire of Chaos’ that is actually acting as the new Sykes-Picot, directly and indirectly reconfiguring the “Greater Middle East.” Former NATO capo Gen. Wesley Clark has recently “revealed” what everyone already knew; the ISIS/ISIL/Daesh fake Caliphate is financed by “close allies of the United States,” as in Saudi Arabia, Qatar, Turkey and Israel. Compare that with Israeli Defense Minister Moshe Yaalon admitting that ISIS “does not represent a threat to Israeli interests.” Daesh does the unraveling of Sykes-Picot for the US.

The ‘Empire of Chaos’ actively sought the disintegration of Iraq, Syria and especially Libya. And now, leading the House of Saud, “our” bastard in charge King Salman is none other than the former, choice jihad recruiter for Abdul Rasul Sayyaf, the Afghan Salafist who was the brains behind both Osama bin Laden and alleged 9/11 mastermind Khalid Sheikh Mohammad.

This is classic ‘Empire of Chaos’ in motion (exceptionalists don’t do nation building, just nation splintering). And there will be plenty of nasty, nation-shattering sequels, from the Central Asian stans to Xinjiang in China, not to mention festering, Ukraine, a.k.a Nulandistan.

Parts of Af-Pak could well turn into a branch of ISIS/ISIL/Daesh right on the borders of Russia, India, China, and Iran. From an ‘Empire of Chaos’ perspective, this potential bloodbath in the “Eurasian Balkans” – to quote eminent Russophobe Dr. Zbig “Grand Chessboard” Brzezinski – is the famous “offer you can’t refuse.”

Russia and China, meanwhile, will keep betting on Eurasian integration; strengthening the Shanghai Cooperation Organization (SCO) and their own internal coordination inside the BRICS; and using plenty of intel resources to go after The Caliph’s goons.

And as much as the Obama administration may be desperate for a final nuclear deal with Iran, Russia and China got to Tehran first. China’s Foreign Minister Wang Yi was in Tehran two weeks ago; stressing Iran is one of China’s “foreign policy priorities” and of great “strategic importance.” Sooner rather than later Iran will be a member of the SCO. China already does plenty of roaring trade with Iran, and so does Russia, selling weapons and building nuclear plants.

Germany's Chancellor Angela Merkel.(Reuters / Eric Vidal)

Germany’s Chancellor Angela Merkel.(Reuters / Eric Vidal)

Berlin-Moscow-Beijing?

And then there’s the German question.

Germany now exports 50 percent of its GDP. It used to be only 24 percent in 1990. For the past 10 years, half of German growth depended on exports. Translation: this is a giant economy that badly needs global markets to keep expanding. An ailing EU, by definition, does not fit the bill.

German exports are changing their recipient address. Only 40 percent – and going down – now goes to the EU; the real growth is in Asia. So Germany, in practice, is moving away from the eurozone. That does not entail Germany breaking up the euro; that would be interpreted as a nasty betrayal of the much-lauded “European project.”

What the trade picture unveils is the reason for Germany’s hardball with Greece: either you surrender, completely, or you leave the euro. What Germany wants is to keep a partnership with France and dominate Eastern Europe as an economic satellite, relying on Poland. So expect Greece, Spain, Portugal and Italy to face a German wall of intransigence. So much for European “integration,” it works as long as Germany dictates all the rules.

The spanner in the works is that the double fiasco Greece + Ukraine has been exposing. Berlin as an extremely flawed European hegemon – and that’s quite an understatement. Berlin suddenly woke up to the real, nightmarish possibility of a full blown, American-instigated war in Europe’s eastern borderlands against Russia. No wonder Angela Merkel had to fly to Moscow in a hurry.

Moscow – diplomatically – was the winner. And Russia won again when Turkey – fed up with trying to join the EU and being constantly blocked by, who else, Germany and France – decided to pivot to Eurasia for good, ignoring NATO and amplifying relations with both Russia and China.

That happened in the framework of a major ‘Pipelineistan’ game-changer. After Moscow cleverly negotiated the realignment of South Stream towards Turk Stream, right up to the Greek border, Putin and Greek Prime Minister Tsipras also agreed to a pipeline extension from the Turkish border across Greece to southern Europe. So Gazprom will be firmly implanted not only in Turkey but also Greece, which in itself will become mightily strategic in European ‘Pipelineistan’.

So Germany, sooner or later, must answer a categorical imperative – how to keep running massive trade surpluses while dumping their euro trade partners. The only possible answer is more trade with Russia, China and East Asia. It will take quite a while, and there will be many bumps on the road, but a Berlin-Moscow-Beijing trade/commercial axis – or the “RC” in BRICS meet Germany – is all but inevitable.

And no, you won’t read that in any wacky US ‘Think Tankland’ “forecast.”

 

Pepe 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).

Memo to Varoufakis

Off the keyboard of John Ward

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Published on The Slog on February 26, 2015

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Memo to Varoufakis: Game theory is fine, but this isn’t a game.

Yanis Varoufakis was caught in the headlights last Friday: he should stop denying it

https://hat4uk.files.wordpress.com/2015/02/varoufheadlinghts.pngThe anti-‘deal’ leaks from the ECB, Berlin, the IMF and Brussels have been in full flow since Tuesday evening. It’s all terribly predictable: a clever process of suggesting that – purely out the goodness of their hearts – Troika2 is going to cut Greece some slack….even though T2 has – to tot up the list to date – ‘grave doubts’, ‘major reservations’, ‘worries about the lack of detail’, and ‘concerns about achievability’. There is slack rope, and there is enough rope to hang oneself.

The stench of hypocrisy in all this is vomit-inducing: Greece is being set up to fail, and in the meantime the ECB will continue its covert policy of creating bank cash-flow problems…ensuring that Syriza comes across as a Skid Row lush dependent upon never-ending welfare.

From Yanis Varoufakis, the Master of Game Theory, there has been little since the sign-off beyond rationalisation. In an interview with the Irish Times’s Damian Mac Con Uladh today, Mr Varoufakis gives us:

“Good compromises don’t always satisfy everyone, and leave in a sense everyone somewhat dissatisfied. But the mandate from our party, our government and my prime minister was very straightforward. To get a deal done. So, compromise. The question is if we have compromised our basic principle. And the answer is a big, fat no….Our mandate was to struggle against this black and white, this either/or, and to create a third way….It’s a triumph for democracy and marks the end of automated austerity….Anything is better than confining us to an austerity hole where we shrink every day.”

Compare and contrast that entirely reasonable attitude with this BBC interview on February 3rd:

“”Europe in its infinite wisdom decided to deal with this bankruptcy by loading the largest loan in human history on the weakest of shoulders… What we’ve been having ever since is a kind of fiscal waterboarding that has turned this nation into a debt colony….[the Troika is] a committee built on rotten foundations…Greek democracy has chosen to stop going gently into the night. Greek democracy resolved to rage against the dying of the light….We are going to destroy the basis upon which they have built for decade after decade a system, a network that viciously sucks the energy and the economic power from everybody else in society.”

I’m being ironic: I vastly prefer the second (earlier) Varoufakis to the new relaunch. Today’s Irish Times interview shows Damian Mac Con Uladh giving Yanis an unbelievable easy ride on the subject of a fat, hairy mammoth in the room: the now well-documented way in which the Greek Finance Minister was ambushed by the Euromafia at 4.30 pm last Friday.

I recognise perfectly well that I’m breaking from the optimist pack, but then I do understand the sociopathy of that Mafia better than most Greeks. To be blunt, I think Varoufakis underestimated it; and last Friday, the breathtaking, bullying illegality of their input caught him napping.

I do not believe Syriza has bought time, I think it has sold principles. I’m sure Yanis knows all the tricks of Game Theory, but this is not a game. He is dealing with (as are we all sooner or later) a nasty and yet hopelessly splintered EU oligarchy of far greater venom than any existing in Greece. The division on the opposing side is what he missed.

It’s easy to define, and even easier to evidence: the Germans are fed up of the French, and losing faith in the Americans. That’s a very serious split, because the man with the most unaccountable power in the eurozone is Mario Draghi….who works for Wall Street. The French, meanwhile, bitterly resent the idea that a nasty piece of work like Wolfgang Schäuble will be eyeballing them during March…and if and when FiskalUnion ever comes to pass, telling them what they can and can’t spend 24/7. The idea that Paris has the remotest desire to acquiesce in that arrangement is ridiculous. Apart from anything else, it would hand millions of votes to both Marine Le Pen and Nigel Farage.

On top of that we have a general trend in Southern Europe towards euroscepticism: the continuing growth of Podemos in Spain, and europhobic Berlusconi attitudes in Italy. These can only be encouraged by a flat refusal by Greece to deal with the idiots who caused the problem in the first place.

This is the perspective from Syriza that I find flawed: the much bigger picture. Last week, Varoufakis focused on it, and then lost the plot on Friday. He was a refusenik, but now he’s a pragmatist.

The post I wrote earlier this week laying out the story behind this was taken down by the Blue Meanies. I am therefore eternally grateful to the half-dozen Sloggers who still had it open and used page capture to return the piece to its rightful owner. It is reproduced below for anyone who missed it first time around.

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GREECE CRISIS OPINION: TROIKA RISES FROM THE DEAD AS DRAGHI LEADS THE CHARGE, AND VAROUFAKIS EMPLOYS BRAVE FACE

Conflicting rumours surround the Syriza reform programme approval process tonight, but whatever emerges from this farcical trading of angels on a pinhead, I’m increasingly concerned as details of the humiliation process programme ‘deal’ accepted by Yanis Varoufakis last Friday come to light. I don’t actually think the five-point italic hand-tying target codicils matter a damn to be honest, because they’re all unachievable anyway.

Far more relevant is what EC behaviour has been found acceptable to the Greek Government.

Did you know, for instance, that both the Gang of Four revisions, the Friday ambush, and the ELA threats/leaks to Greek banks were driven by Draghi?

Did you know that – in a direct sideswipe at rehiring Ministerial cleaners – there is a blanket ban under the agreement on any more public sector hiring?

Did you know that, just to rub in really hard that how they think the Greeks shit on their shoes, eurogroup told Varoufakis Friday that they were “handing over the judgement process to the organisation formally known as the Troika” – Draghi’s exact words. This was a direct hit on Syriza’s refusal to deal with the Troika. “Eurogroup will leave the details to this institution, who will present their view to eurogroup” he added.

Varafoukakis told CNN this evening that it was eurogroup who wanted more time to think, not the Troika. That is very, very economical with the truth – and not how other Syriza officials see it. The Troika has made it clear to eurogroup there are things they don’t like. As Naked Capitalism reported yesterday, ‘The Greek government is required to submit a list of reforms to the Troika by the end of day Monday. If it is not approved, the Eurogroup will meet on Tuesday.’

Guess what? Earlier this evening, Greek Channel NERIT announced that the eurogroup has asked Greece to submit a revised reforms list for its meeting Tuesday morning. The Guardian carries the same story.

I’m sorry, but at the minute Yanis Varoufakis isn’t coming out of this very well. For now, I support him to the hilt: but he is either going to resist the EC/ECB/creditors Troika or he isn’t. I know perfectly well that there are many among Athenian opinion-leaders who disagree with me about this. So perhaps – to illustrate the point – I might be allowed to relate an infamous Churchillian anecdote.

In the mid 1920s, WSC found himself seated next to a lady of liberal leanings at supper. Glad to have this arch anti-Communist to herself, the socialite took him to task about strike breaking, dissembling newspaper articles about the working class, and several other genuinely unpleasant dimensions of Churchill’s curate’s egg of a personality.

As ever when in the presence of what he regarded as uppity suffragettes, Winston was cutting and dismissive, telling the woman she should stick to worrying about her children and suitable marriages for her daughters – while remaining grateful for the fact that Britain had unwisely given her the vote.

“Mr Churchill,” said the shocked supper companion, “If I were married to you, I would put poison in your wine”.

“Madam,” Churchill lisped, “if I were married to you, I would drink it”.

Think of this as the “Drop dead” period of Syriza/EU insult exchanging immediately following the election.

Back in 1927, this not entirely auspicious exchange rapidly deteriorated, such that by the time pudding arrived, the lady concerned had reached the end of whatever short tether she possessed.

“Mr Churchill,” she said loudly, “You are the last person in the world I would ever marry”.

“Madam,” WSC responded, “A small part of marriage involves procreation in the bedroom. In order to show you what my real intentions are, under what circumstance would you consent to sleep with me?” The mortified woman hesitated, and then replied.

“There is no amount of money on Earth that would so persuade me”.

“Not even,” asked Winston, “£10 million?”. She laughed out loud.

“Don’t be ridiculous, that’s more than the Poor Relief budget. No woman is worth that”.

“Very well then,” said the future war leader, “Shall we say £500?”

“That is an insult,” she responded, “what do you take me for – a common prostitute?”

“Madam,” said Winston Churchill, “We have already established your profession. At this stage, we are merely haggling about the price”.

Fast forward to 2015: that’s what has been going on since Friday afternoon between Syriza and the Troika.

I don’t buy the “lose the battle, win the war” argument. While the Troika, Wall Street, US economic colonisation, EU fascism and banking sociopathy are indeed the enemy, this is a peace time exchange, not all-out war – yet. A strategic retreat is one thing: preparedness to cling to the driftwood of credibility is merely appeasement.

I’m now informed – in the last twenty minutes by a well-placed Syriza source – that fully eight Greek Cabinet members are opposed to acceptance of the deal. For myself, I feel cheated and made to look stupid by the hidden facts and cynical spin that followed Friday’s little re-enactment of the 1938 Munich crisis. But my feelings don’t matter a jot: let  The Slog’s Saturday post stand as a testament to rushed judgement. More to the point is the reality that an opportunity to call the Troika bluff has been blown.

If Yanis Varoufakis wants to regain his dignity – and keep Syriza together – he needs to think very carefully about what Prime Minister Tsipras should be asked to accept tomorrow…and then sell to his Party. For what will it benefit a man if he buys time, yet sells his soul?

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Eurosummit Breakdown

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Published on The Slog on February 17, 2015

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Who did what and why?

As one Troika dies, another is born

Practically every Western press title and news bulletin this morning uses the word ‘defiant’ in relation to Greece’s rejection of the New Troika’s terms, and it isn’t a compliment.

The Greek contingent rejected the ‘deal’ because it wasn’t a deal, it was just the same old same old. But up until 90 minutes before closure, it had been something else. Allegedly drafted and then pushed hard by French finance minister Pierre Muscovici, the first draft (a copy of which Varoufakis still has) offered Greece more time, few targets, and then an attempt at economic growth.

It was taken off the table by yet another Troika – in most cases, remotely: Mariano Rajoy, Wolfgang Schäuble, and of course (no drum roll required) Mario Draghi. During the final day, Spanish PM Rajoy (for purely selfish political reasons, it would appear) scrambled around desperately trying to get the hawks to play more of a vulture role. His ginger-group plus the EC/ECB/Berlin/Frankfurt axis canned the original draft, and insisted on a return to all the original demands.

Then some of them briefed the press pack with pernicious spin about Greece messing them about, moving goalposts etc and being (this week’s insult of choice) “anti-European and irresponsible”. The truth is that, some time around 10.45 am CET, Varoufakis was lining himself up to sign the draft. Getting back to the realities:

– Greece cannot be allowed concessions, because Podemos would immediately demand the same (Rajoy)

– Greece’s load cannot be reduced, because then they might pay it back (Draghi)

– Greece’s flagrantly spendthrift behaviour must not be rewarded, and more austerity is the only answer (Schäuble).

So then – as many of us always suspected – the deal was scuppered by a hardline, corrupt, anti-libertarian Spaniard, a banker whose career is followed by clouds, and who retains his loyalty to Wall Street, and the residue of a tragically failed assassination attempt upon Germany’s top spook.

The only vaguely satisfying things to emerge from this charade are first, that once again the quintessence of controlling fascism that lies at the EU’s heart has been revealed; and second, the Western MSM really do not have a clue about how to handle the Greek attitude.

Four days ago, I wrote in reply to Merkel’s assertion that “Europe’s success is that it will always find a compromise”:

‘The small issue I have with this bollocks is that the movement by either side so far is tiny – in fact, barely above homoaeopathic…. In just 36 hours we have gone from “Drop Dead” to “Let’s compromise”. But where can it go from here? In my view, nowhere: the two sides are incompatible unless one or the other radically invents itself. Neither of them will do that.”

Sure enough, the Brussels Brigade reverted to type with black arts and making up new rules as they went along. And as they promised, Syriza refused to renege on its election commitments.

Watch those markets crash as the bond yields spike. The euro is dead, the EU dream has become a nightmare, and the fundamental attitude split between Berlin and Paris  is once again there for all to see.

Stay tuned.

Greek Souvlaki Kabuki Roller Coaster

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Aired on the Doomstead Diner on February 11, 2015

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The Game Continues…

Snippet:

 

…Going into the weekend, the chairman of the Eurozone FinMins Jeroen DieselBOOM laid down the LAW with the Greeks, basically giving them about 10 days to either CAPITULATE or be thrown under the bus and pitched out of the Eurozone, though nobody is quite clear on how legal that is to do.

There was a decent amount of speculation in the aftermath of that that it would cause the Greeks to fold up their tent and come begging for more money, but the exact opposite occurred here, which is that by Sunday both Tspiras and Souvlakis were issuing out even MORE uncompromizing Tweets, basically threatening to bring down the entire Eurozone with them if they are flushed down the toilet.

The Clowns and Jokers in Brussel Sprouts have their Poker Face on, bluffing that the economic cascade from a Grexit can be “contained” and the rest of Europe will do just fine without Feta Cheese, so best of luck there fellas! LOL…

 

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In case you missed it, here is the last installment of Greek Kabuki…

Syriza Hits the Ground Running

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Published on The Slog on January 26, 2015

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GREECE ANALYSIS: SYRIZA HITS GROUND RUNNING AS TSIPRAS BROKERS ANEL COALITION DEAL TO SEAL MAJORITY RULE

 Prime Minister Tsipras faces a cold dawn of Monday reality

In a rapid (and smart) move that demonstrates both energy and planning, Alexis Tsipras is this morning 95% of the way into a Coalition with ANEL – better known in the West as the Independent Greeks. This is an anti-euro Party of right-wing Greek nationalists.

In going for this option, Tsipras shows that – unlike most on the Left – he can unite against a common enemy. I also suspect that his advisers see this as one dimension in an overall strategy designed to calm down bank depositors and bond markets. But shrewd or not, the new Prime Minister is going to face several waves of attack from those hostile to his election – both inside and outside Greece.

The first thing to set off screaming headlines will be the effect on the euro. Overnight, the single currency plunged down to 1.12 against the Dollar – before the weekend it was around 1.15. We should expect to see a further weakening during the day.

A second and highly likely immediate threat is a spike in Greek bond yields – pushing Greece’s borrowing costs through the roof. This will add urgency to the blatant destabilising strategy of the ECB’s Mario Draghi, who for spurious reasons announced last Thursday that Greece would be locked out of the QE programme.

A third issue is the bank withdrawals that preceded Syriza’s stunning victory yesterday. Here too, threats have been forthcoming from both Brussels and Frankfurt to cut off ELA (emergency liquidity assistance) to four big banks in Greece.

Last but not least is the worryingly high poll achieved by the Greek Nazi Party, Golden Dawn – which now becomes the third largest Party in the country with 17 seats. They will, I have no doubt, use that bloc to disrupt as much Parliamentary business as possible…and plot with the hard Right to take over should things look to be spiralling out of control.

A weak euro is technically good for Greek exports, but Syriza will of course be blamed for “beating the euro to death on its sickbed” and the pro-Euro professional classes will weigh in heavily on that angle. So then, apart from Europe-wide opprobrium, soaring borrowing costs, the chance of a Putsch and imminent bank collapses, there’s nothing at all for the new Prime Minister to worry about.

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But there is also another side to this. My own hunch is that the Greek voter really did three things in the election: first, vote for a radical change of strategy; two, kick Samaras out with the biggest boot available; and three, decide to give the new generation a chance. I looked up Tsipras’s date of birth last night, and he is of course the leader of that generation who never knew life under the Colonels’ Junta. He is also surrounded by people with zero respect for tradition: Varoufakis has already promised to “completely demolish the Greek oligarchy” as a matter of priority. Corruption in high places has been a Greek given forever; rooting it out would get approval from all but the fatties who support Samaras.

Secondly, the Greeks ignored all the EC/ECB/IMF/Juncker/Schäuble veiled threats and scaremongering. That bullying will now, without any doubt, be stepped up. I predict it will backfire, and further unite the country. Because in the light of the previous paragraph, it will play very badly against the prevailing atmosphere of ‘give them a chance’ and Troika-hatred.

I have made my view clear about Draghi: he has already decided for his own reasons to Grexit Athens from the equation: he’ll be delighted to get the euro down to Dollar parity, and supremely confident in his ability to mess up any plans Syriza have. I expressed the view strongly early last year that Tspiras should never have dropped his opposition to the euro, but it now looks to have been a wise idea: without doing that, he would never have been elected with such power – and with it he can (quite justifiably) evade blame for its collapse…he can play the Good European.

It’s too early to call this kind of stuff. But it’s good to know where the touchlines are. All we need to do now is find the ball.

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As for the poppycock streaming nonstop from Brussels-am-Berlin about the ‘zero effect’ Syriza’s success and Grexit is having or might have on the euro – indeed, the EU itself – it is beneath contempt. It will spike ALL Clubmed bond prices, keep liquidity away from Europe, confirm the europhobia in Italy, and encourage the growing Left support in Spain…where they have the added problem of Sovereign fragmentation.

In other areas too, the knock-on effect will have geopolitical consequences. Moscow will I’m sure see this development (and what must inevitably follow) as likely to move Greece more into its orbit: and you can be sure that Viktor Orban in Hungary (and Polish voters) will welcome further opposition to the juggernaut. Orban is one of the few, I think, who has not only grasped that the Brussels Bus is actually being driven by Washington, but is also prepared to talk about it openly.

In the UK, it can only spur on the UKip camp. But Nigel Farage blotted his copybook very badly last night by referring to the Syriza win as “a cry for help”. What a profoundly pompous and patronising twerp he is.

Greek Souvlaki Redux

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Aired on the Doomstead Diner on January 7, 2015

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http://www.bongonews.com/StoryImages/deep_throat_2005-06-03.JPG…Back in 2012 when we opened the Diner for Bizness, one of the major Collapse stories of the day was the implosion of the Greek economy, the subsequent and continuing Bailouts by the IMF, and endless discussion across the blogosphereof whether the Greeks would Default, exit or be booted out from the Euro monetary union, etcetera.

3 years later here, after any number of rounds of bailouts (I have lost count), once again the Greeks are BACK in the Newz, since it looks increasingly likely that Alex Tsipras, Head of the Greek Syriza pretty far left party will wrest control from the quisling New Democracy Partyof Antonis Samaras which has followed the diktats of the hated “memorandum” forcing what is referred to in Newzspeak as “Austerity” down the throat of the Greek Population, Linda Lovelace style…

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Great Mysteries of 2014…

Off the keyboard of John Ward

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Published on The Slog on December 31, 2014

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…Who is Annie Leat, where would we be without Noz, what’s in store for Greece & Hungary, and is anyone in charge any more at the Daily Telegraph?

As the year draws to a close, it seems to me that something really must be done about Annie Leat. Whatever podcast I hear or Youtube rant I watch, over and over I’m told that Annie Leat is running the US, the UK, the EU, Islamism, banking, Australian mining, China, the Premier League, the world’s media and even Russia. Quite how she and Putin manage to get on is beyond me: but surely the main mystery is how she shuttles around diplomatically, and yet so discreetly.

Did you know, for example, that not one photograph of Annie Leat exists? Well, it’s true: Google Annie Leat images, and this is a sample of what comes up:

annieleatMs Leat has carefully ensured that all we get is tantalising shots of picture books, jewellery, handbags and bums, but not her face. This proves beyond any reasonable doubt the enormous power she wields. She runs the world….and yet nobody knows anything about her.

All we know is that Annie Leat is, by nature, very small. She may even be sub-atomic, which would account for no picture of her existing. Either way, for one tiny person to be running everything and yet be too small to be seen let alone accountable is a disgrace. We simply must get to the bottom of this mystery and sort it out: I have a hunch the Hadron Collider might somehow be involved, but I couldn’t be certain about it.

holly2We have awoken this morning here to bright, clear sun for the last day of the year….and seven degrees of frost. It is a twinkly white winterland, punctuated by some informally arranged line-washing which has the consistency of cardboard. These items are testimony to the memory-wiping powers of alcohol, things having got slightly out of hand last night following an uproarious dinner. The entire meal was purchased from one of a chain of Underclass Survival shops here called Noz.

95% of the merchandise and food in Noz is profoundly awful, it being gathered from three sources: end of series stock the manufacturers dump, things salvaged from retail bankruptcies, and naughty grey imports from Italy, Germany and Spain. But the small niche of things left over is a treasure chest of astonishingly cheap, high quality bits and bobs of household good, socks, underwear, food and drink.

One learns the tricks of Noz as one goes along: never buy spray paint there, as the paint inside is petrified; never buy wine over seven years old as it’s off; and avoid the Christmas lights at all costs. Most of the rest of the rubbish there makes the sort of statement in a home that would shout loudly, “This person is devoid of any taste or discernment” – and thus for readers of The Slog, no further guidance is necessary.

So I took my two house-guests here for a browse round Noz, and they were smitten immediately. It’s like being an antiques dealer, and going into a daily jumble sale….knowing that most of the customers don’t know which way is up…so you can’t fail to find a bargain. Last night’s meal was calamari tapas with olives followed by penne alla Neapolitana….the sum total cost of which was €4.90. The wine, predictably, was off. But other items washed the Noznoh down rather well.

The upside is, we all came away with enough cool place-settings and dish cloths to last into the next decade. And the downside is some aluminiumesque clothing wafting about on the washing line.

holly2Meanwhile, the attack of the Euro-American axis on Greece and Hungary continues to build. The latest member of the Telegraph to go mad on neolibscalin is Jeremy Warner, who headlined his piece yesterday, ‘This Greek tragedy could end in utter ruin’. Poor old Jezzer has never been good on the grammar thing, which explains the unusual use of a future imperfect tense there, when the present tense would more than suffice.

It is of course all about who the utterly ruined might be when the Greeks finally stand up for themselves, and in Warners Wacky World of Wonder, the answer is unashamedly “Other people – for instance, me”. As for the Greeks themselves, most of the ones doing any useful work (before the second German scorched Earth policy in seventy years pauperised them) have nothing left anyway: unemployed and taxed into financial oblivion – with the important food and welfare infrastructure reduced to mocking bribery – you only have to talk to any intelligent impoverished Athenian shopkeeper or Mani olive-grower to grasp that they already have nothing. As the man said, “People with nothing left have nothing to lose”.

The outcome whereby a Party as Left (albeit social-democratic) as Syriza was forecast to hold twice as many seats as any other offering in the next Parliament would have been unthinkable ten years ago. The idea of the Independent Greeks and Golden Dawn polling so many votes would’ve been dismissed as ridiculous doom-theory. But this is what Brussels-am-Berlin (with suitable prods from American business and finance) have fashioned from a country whose original debt was, in European terms, piddling.

Consider: there are roughly 13 million people living in Greece. In 2010 (Autumn) the sovereign debt stood at €303bn….about the size of two UK annual NHS budgets. Because the moneylenders demanded the full kilo of flesh – and nobody stood in their way – between 2010 (end) and 2014 (Spring) some €240bn of taxpayers’ money – most of it notional paper – was made available from EC rescue funds and the IMF. But such was the escalating weight of the flesh being carved up between a dozen Wall St banks, the debt-to-gdp ratio of 127% in 2009 has reached 174% today…for two reasons: usurious bailout charges, and a gdp that has collapsed like no other since Nazi Germany in 1945. By 2012, The Hellenic Republic of Greece owed €304bn, and today the debt is in the region of €312bn.

Now the question to ask here – one would think would one not? – is, given the Greek sovereign debt in money remains very much the same, whatever happened to the €240bn of taxpayers’ money (now closer to €300bn) that was ploughed in as ‘aid’ to Greece?

And the answer, largely, is that it morphed into bonuses for hedge funds, banking firms and grubby vultures who bought bond crap for 10c on the Dollar. So five years on, the Greeks have the same hole in their boat, European taxpayers are €300bn worse off (US taxpayers a little bit worse off) and Wall Street €300bn better off. The technical name for this is Fractional Reserve Banking. Or more colloquially, hypocritical fraud.

Equally fraudulent was the way Goldman Sachs charged a fortune to the pre-Papandreou (right wing) Greek Government in order to give them the lowdown on how to hide their debt problems from the EC and the ECB in the years leading up to 2008. The delegation that did so was led by Gary Cohn, and as a result of the scam, Goldman came under what has been described as “intense scrutiny for creating or pitching products used by Greece to obscure billions in debt from the budget overseers in Brussels”. You see, when you’re Goldman Sachs, things rarely get beyond intense scrutiny, or “setting monies aside” without admitting guilt. But when you’re 13 million people in a sovereign State, you get to pick shit out of garbage cans, lose all your money and your job, and have your taxes doubled.

Strange as it may seem, none of these factors are mentioned in today’s Warner column. He opines:

‘So desperate has their position become that Greeks may be about to vote for economic and political suicide rather than tolerate any more of the medicine prescribed to them by Berlin and Brussels….On present polling, this could result in a government led by the radical Left-wing Syriza party, which is intent on rejecting the austerity and structural reform of the EU and the IMF, as well as seeking another write-down of Greece’s national debt.’

There’s no real explanation about why escaping from certain economic death and political civil war is suicidal, or where in its manifesto Syriza says it’s intent on rejecting reform: reform, in fact, is exactly what its leader Alexis Tsipras intends…which is why the corrupt and fat-headed Greek professional classes don’t want Syriza to win. And there simply isn’t any evidence at all to support the ludicrous claim that the EC/IMF axis of atrocious forecasting (not a single one right in five years) was about reform: as we have seen above, it is about protecting Wall Street and making an example of a defenceless People….over 93% of whom had nothing to do with over-borrowing in the first place.

There’s little the EC-US-IMF-Wall Street loons would like better than to dump Hungary into the same Chateau D’If in which Greece sits rotting away; but following the attack on the Ruble, the times they are a-changin’. This week the Hungarian Parliament’s Speaker Laszlo Köver told his People that:

“The US undermines European governments. East-Central European states affected by this should stand together, and we need to find allies elsewhere…The recent events cannot be distinguished from when [the US] monitored the conversations of the leading politician of the Western European alliance, Angela Merkel. They boasted that they “invested” millions of dollars in changes in Ukraine. The United States’ interferes where it sees ‘unconventional’ views…this will affect not only Hungary but all of Europe….it is apparent that a world political power struggle is under way, and at stake is the chance of European nation-state sovereignty and true democracy…”

Not far behind Hungary in realising this will be, I’m sure Poland….and then Slovakia, and then Greece. But on Planet Warner, Alexis Tsipras is taking shape as a bogeyman to rival Putin:

‘By threatening unilaterally to default on Greece’s debts, Syriza’s leader, Alexis Tsipras, is in essence engaging in a high-stakes game of poker: give us what we want, or we’ll trigger a new eurozone crisis.Sadly, the most likely outcome of this strategy is utter ruin: this would certainly be the case for Greece, which would find its bluff very rapidly called…’

For unspeakable tosh from start to finish, you’d have to look long and hard across the spectrum of half-baked economists to find quite such a pure example of it than the above. And it is ‘journalism’ like this that is turning off the traditional Telegraph reader at a rate of knots: in 2004, when the Barclay Twins bought the Torygraph Group, the main paper enjoyed a circulation of 920,000. In 2013 it was 550,000. By March 2014 it was 520,000. Losing 2,000 readers a month thereafter, last Month saw it dip 4,300. The Telegraph is dying in a no-man’s-land between Government toady and braindead tabloid. It’s not hard to grasp why.

Ruble Run Insanity

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Aired on the Doomstead Diner on December 18, 2014

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Run, Ruble, Run…

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Snippet:

…In the matter of a couple of days here, the financial INSANITY game being played has gone from senile dementia to psychotic, and instead of gradually deteriorating to the point the various players in the game can’t remember who they are, instead they are all out there on the financial markets suffering all the classic sypmtoms of schizophrenia, Delusions, Hallucinations, Disoraganized Thinking and Speech and assorted other Negative Symptoms. For example, the person appears to lack emotion, such as not making eye contact, not changing facial expressions, speaking without inflection or monotone, or not adding hand or head movements that normally provide the emotional emphasis in speech. Does this sound like Super Mario Dragon making a speech or WHAT? LOL.

The rapid Insanity escalation hasn’t occurred in the Yen Basket Case or the Euro Fruit Loops, no instead it SNAPPED with the Ruskie Rouble. In the last 24 hours or so, first all trading was halted in the Rouble, and then shortly after that the Ruskie Credit Card was cut off from virtually ALL liquidity from the Western Banking system, which essentially renders the Ruble worthless outside of Mother Russia. If you have a pile of Rubles in your Swiss Bank Account, they are about as good now as Confederate Dollars, anywhere outside of Mother Russia anyhow…

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Note: For non-native speakers of English and Diners who prefer to read rather than listen, the transcript of this Rant will be available HERE on Saturday.  Remind me if I forget to publish it.

ANOTHER Greek BAILOUT!

Off the keyboard of John Ward

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Published on The Slog on December 3, 2014

tsipras14COMETH THE HOUR, IS HE THE MAN?

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GREECE: Slog vindicated again as Athens calls for new €10bn bailout

It does strike me as very odd (as I’ve written many times before) than an old pro-am hack like me, hunkered down in the south west of France, seems able to understand the real Greek debt situation…..but most experts don’t. Or do, but don’t write about it – I’m never entirely sure.

Last January, I posted a long piece – “Mind the Gap” – pointing out with the use of simple maths that, without further bailout monies, Greece would default in May 2014; and even if they got that money, they’d be in trouble again during the Autumn and early winter.

So it proved. With the European elections as a handy distraction, I was nevertheless able to confirm on March 27th that the Samaras Coalition would be given €8.5bn toavoid default in May. The Wall Street Journal  ran a piece soon afterwards agreeing with the view. After some deliberate obfuscation, on 10th May Athens got the money it needed to make a dent in over €11bn of bond maturaties that became due.

The previous year, Angela Merkel had gone into the German elections and lied her fat head off about the Volk not being asked for any more money, and how the future was bright. She plodded home with ease, since when –  in general eurozone and specific Greek terms – things have gone from very bad to a whole lot worse.

Now Mish’s Global Analysis (which reblogged my January piece) reveals that, yes indeed, Athens needs more money. To be more exact, €10bn. Back in January, I said it would be €5.6bn….but then other targets were missed as the economy got worse and worse; and last week in Paris, the Troika up and mentioned that there were €2.5bn of cuts that the Greeks hadn’t fulfilled. So as I say, now it’s worse than ever.

One side of the devalued coin in this farcical saga is that – even allowing for the fact that Homo Kalamatus Antonikis Samaras has an olive stone where his brain should be – he has lied three times on national Greek television about the reality of the situation. So not surprisingly, Alexis Tsipras’s Party Syriza is now comfortably leading in the polls…..and with the Assembly vote for a new President coming up, Samaras possibly lacks the support required to carry the day. Technically, under the Greek constitution this is a resigning issue, and so we’ll get elections early next year rather than in 2016.

For Brussels, this has all the makings of the sort of nightmare in which a loose nuclear cannon is careering all over the eurozone and fomenting revolt. But sadly, Tsipras has toned down his rhetoric: today he claims that the loan package will have to be renegotiated, but he doesn’t want to dump the euro. Economically this is idiocy, but the Syriza leader knows he can only win the election by appearing ‘reasonable’…ie, he is – as David Cameron would say – a non-violent extremist.

I confess to being disappointed by Tsipras, and here’s why. If you look at the numbers involved in ‘saving’ Greece, then the four bailouts represent probably the most expensive face-saving exercise in history. To protect a potential original loss in the region of €40bn, the Troika threw confetti money at a debt write-off roughly equivalent to Cameron’s HS2 folly. As of this latest bailout, it will have poured €240bn of confetti money onto a debt conflagration that is raging like a Greek forest fire in August.

Do the Sprouts feel humble about this? They do not: “Greece is not in a position to negotiate“, they told the media last week. That is about as Betty Swollocks as Brussels fantasy gets: Although it has a huge debt, Greece at last has a current account surplus. If it renounces the debt, it could reverse the austerity nonsense, leave the euro and be quids in. Which is why I think Tsipras, if he does win the election, needs to play some serious hardball.

I posted at the weekend that 2 euros in 3 being ‘repaid’ by Greece are funny money. The truth is that – with most of the vultures having had their kilo of flesh – the ECB could write off two-thirds of the debt without losing any real money at all. Better that, I would’ve thought, than a defaulting defector with Italy now looming over the same horizon.

In licking the creditors like this, Tsipras is sending a signal to say he’ll be happy with a compromise. He says he wants “a €chunk” of the debt “forgiven”, whereas I think he should shout “fraud” and shoot for the Moon. It’s actually Brussels-am-Berlin that’s in no position to press too hard with the jackboot on this one.

Petrodollar Politics

Off the keyboard of John Ward

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Published on The Slog on October 2, 2014

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HOW THE US IS OILING THE WHEELS OF RUSSIAN INSTABILITY

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Why the oil price drop and the Dollar’s rise look more like manipulation than coincidence

https://hat4uk.files.wordpress.com/2014/10/putinpressure.pngTwo odd things appear to be happening in tandem at the moment: the $US is rising, and the price of oil is falling.

I say odd, but there are plenty of available explanations for these parallel events. Forbes, for example, says there is a growing feeling among US monetarists that a cheapened Dollar increases the likelihood of its decline in power as both a reserve and oil-based transaction (‘petrodollar’) currency. MBN suggests that investors’ expectations that the Fed will raise interest rates are driving the desire to be early on the bandwagon. They also add that ‘wobbly growth data coming out of China, Japanese consumer demand that has dried up since its sales tax hike in April, and a Eurozone GDP standstill’ are other key factors in its rising value. The FT (as the Pinkun would) says it’s all down to US growth, and the coming recovery there. And one or two pundits think the Hong Kong democracy riots have caused a move out of the Yuan.

I’m unconvinced. First, monetarist academics never moved a single currency market in the entire history of such things. Second, the US debt is growing, and its deficit is far from under control. Third, there are events lying ahead in the not-too-distant future (the petrorouble for one) that do not inspire confidence in the Buck’s long-term viability. Third, wobbly or not, the Chinese growth rate remains at around 7%….and following its energy deal with Moscow, in a near-to-pole position. Fourth, the euro has been a basket case for four years, but it didn’t push the Dollar up before. Fifth, US ‘growth’ is a mirage that includes QE, drugs, hookers, and very probably State bankruptcies as evidence of ‘growth’….along with payroll data that, for those with half a brain, has been discredited for some considerable time. Sixth, there has never, ever been a US recovery without firm data supporting a rising property market: for once, S&P, the Economist and Business Week are all firmly of the view that recent climbs in US house values have fizzled out and gone into reverse.

As for the price of oil, here too at first sight the two reasons being offered look sound. We are in a global slump, and so demand has fallen off. Second, there’s a glut of the stuff: although the Saudi production cuts to stop price falls went through, more oil from Iran, Iraq, and Nigeria has come onstream plus record increases in U.S. oil production via the shale boom.

But once again I’m unconvinced. The smart money knows that, in real terms – and minus neoliberal spin-bollocks – we’ve been in a global depression for at least two years…and heading for one during the preceding three years. But the oil price collapse is a very recent phenomenon: crude prices have declined almost $21 (18%) from the 2014 peak of $115/barrel on June 19.

What’s more, than are many examples of volatile oil dips and highs unrelated to supply. Here’s one:

crudepriceObviously, the plunge of 2008/9 is directly linked to Bank Bailout on Wall Street. But from 2008-10 it zooms back up again, and blips down again in 2012. Production remains remarkable steady throughout the saga.

And as for the ‘shale boom’….well, oilcos are backing away from shale in the US: diminishing returns per well are forcing them to.

Let’s go back to earlier this year, and events either side of the month of June.

On 27th February, pro-Kremlin armed men seized government buildings in the Crimean province of Ukraine. Five days later, a convoy of Russian troops made for the regional capital of Crimea. By March 6th, Crimea’s parliament voted unanimously in favour of joining Russia – and the city council of Sevastopol in Crimea announced it was to become Russian immediately. On March 18th, President Putin signed a treaty absorbing Crimea into Russia – the first expansion by the Kremlin since World War II.

On May 21st, US Vice President Joe Biden ominously remarked that the US “must be resolute in imposing costs on Russia for its actions in Ukraine.

Then, on June 16, the Kremlin halted all gas deliveries to the Ukraine. And on June 19th, NATO claimed to have evidence of a renewed Russian military build up along the border with Ukraine.

Also on June 19th, the oil-price begins its tumble. Eleven days later, the euro starts its rapid decline versus the $US:

dollardropAt the same moment, the Ruble goes into an even steeper decline against the $US, suggesting perhaps a concerted attack:

rubledroptWhy does this make life tough for the Russians? Well before we start, think on this: Oil and gas produce about a half of Russia’s federal government revenues.

1. In any deal involving oil anywhere in the World, the recipients must pay in Dollars under the ‘petrodollar’ system. If the Dollar is gaining value rapidly, then that makes oil more expensive….less attractive to the punter – but with no additional margin for the Kremlin.

2. However, if the oil price drops like a stone, then the real value of the Kremlin’s profit falls and that reduces Russian GDP.

Do both together, and you have a fist closing around Putin’s balls. Further,

3. One thing Vladimir Putin has done consistently to maintain his populist power is import massively as and when things screw up…grain harvests, vegetable blights and so forth. A rising oil price made funding this relatively easy. After the Ukraine situation blew up, he retaliated against US/EU/UK sanctions by banning food imports. Now he finds himself with falling oil revenue, and falling oil margins….and thus popularity ‘bought’ by importing, as and when it resumes, will be horrendously expensive.

It looks to me like the US is doing to Russia what it did to Iran: using its reserve currency and petrodollar status to exert pressure. Russia’s central bank has not been slow to spot this: only yesterday, Reuters noted that:

‘…Russia’s central bank said [today] it is working on measures to support the economy should oil prices fall by as much as a third or more, showing growing concern as the ruble slides….’ 

I would also contend, in closing, that the IMF is an obvious creature of the US. It too is applying pressure by implying strongly that Russia’s economic outlook is not stable: the Fund halved its Russian growth forecast for 2015 to just 0.5% a few days ago.

That strikes me as an unintelligent forecast given the increasing likelihood of the petroruble’s creation…which in and of itself is, of course, a weapon designed to dilute American power.

One final point, slightly off-topic. Given the likelihood of oil’s drop continuing (manipulated or otherwise market-influenced) why on earth does Britain need fracking to produce affordable oil? Surely, buying both spot and futures now would obviate the investment, chaos, and water-threat required to commence this ecologically idiotic – and dead-end – form of getting at oil?

Connected at The Slog: Which is better, fracking…or moving past oil?

Eurobanksters Pray for Jesus

Off the microphone of RE

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Aired on the Doomstead Diner on July 13, 2014

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Snippet:

…Back today to real Diner MEAT, the Economic Kabuki ongoing across the globe as the Jokers & Clowns in charge scramble to keep all their Balls in the Air here, rather than being strung up by them. Even Master Juggler Ray Jason could not keep so many Testicles in the air at the same time.

The latest Testicle to come crashing to earth is in Portugal, Banco Espirito Santo is now on the rocks since its parent company defaulted on some debt payments. Espirito Santo translates to Spirit of the Saint, and these folks can only hope that Jesus drops down from Heaven and multiplies the Deposits in their bank like Fishies and Loaves of Bread….

http://4.bp.blogspot.com/-HQXq-3B_U0w/UB3Z-S37cDI/AAAAAAAABF4/sUgjIYpQy-o/s1600/Jesus+Feeds+the+5000.jpg

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RE

IMF Hit Men

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Aired on the Doomstead Diner on June 17, 2014

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Who has the better Tan?

George Hamilton                              Christine LaGarde

http://images.buddytv.com/btv_2_100266621_1_434_593_0_/george-hamilton-phot.jpghttp://bindocelebrity.com/wp-content/uploads/2013/12/Christine-Lagarde-3.jpg

Snippet:

http://2.bp.blogspot.com/-ERKB4SSMDJM/Tc_6E_8KjbI/AAAAAAAABkk/GlWvUreWRBs/s1600/confessions-of-an-economic-hit-man.jpgNewz for today is that Christine LaGarde, winner of the George Hamilton award for Best Suntan and current head of the IMF can see the day coming where the IMF will move it’s headquarters to Beijing, because the IMF Charter has it they are supposed to set up their main Shop in whatever country is funding them with the most Funny Money. Apparently Christine is suffering a high degree of Sun Stroke and is trying to jawbone the Chinese into funding the IMF, which is basically dead broke with everybody else in this Kabuki.

The IMF is one of several institutions set up by the Illuminati in the aftermath of WWII to manage the flow of Funny Money out to the Little People of the World. You have the World Bank also, and then of course the Big Daddy of them all, the Bank for International Settlements in Basel Switzerland, better known as the “Central Bank of Central Banks”. These folks determine the quantity of money available, and who gets it. It is ALL debt money, everybody has to BORROW it, including the TBTF banks and Tycoons too. Then it gets pitched around in Markets which are always thoroughly manipulated, as on corporation battles another, one country battles another and one tycoon battles another in the great game of Capitalism, which in essence is gambling on debt OTHER people will get the bill for..

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Whose Client State?

Off the keyboard of James Howard Kunstler

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neoslavery_anthonyfreda_web
Originally Published on Clusterfuck Nation  May 12, 2014
My country can cry all it likes about yesterday’s referendum vote in eastern Ukraine, but we set the process in motion by sponsoring the overthrow of an elected Kiev government that was tilting toward Russia and away from NATO overtures. The president elected in 2010, Viktor Yanukovych, might have been a grifter and a scoundrel, but so was his opponent, the billionaire gas oligarch Yulia Tymoshenko. The main lesson that US authorities have consistently failed to learn in more than a decade of central Asian misadventures: when you set events in motion in distant lands, events, not policy planners at the State Department, end up in the driver’s seat.

And so now they’ve had the referendum vote and the result is about 87 percent of the voters in eastern Ukraine would prefer to align politically with Russia rather than the failing Ukraine state governed out of Kiev. It’s easy to understand why. First, there’s the ethnic divide at the Dnieper River: majority Russian-speakers to the east. Second, the Kiev government, as per above, shows all the signs of a failing state — that is, a state that can’t manage any basic responsibilities starting with covering the costs of maintaining infrastructure and institutions. The Kiev government is broke. Of course, so are most other nations these days, but unlike, say, the USA or France, Ukraine doesn’t have an important enough currency or powerful enough central bank to play the kind of accounting games that allow bigger nations to pretend they’re solvent.

Kiev owes $3.5 billion to Russia for past-due gas bills and Moscow has asked Kiev to pre-pay for June deliveries. This is about the same thing that any local gas company in the USA would demand from a deadbeat customer. The International Monetary Fund has offered to advance a loan of $3 billion, of which Kiev claims it could afford to fork over $2.6 billion to Russia (presumably needing the rest to run the country, pay police salaries, et cetera). Ukraine is in a sad and desperate situation for sure, but is Russia just supposed to supply it with free gas indefinitely? As wonderful as life is in the USA, the last time I checked most of us are expected to pay our heating bills. How long, exactly, does the IMF propose to pay Ukraine’s monthly gas bill? In September, the question is liable to get more urgent — but by then the current situation could degenerate into civil war.

The USA and its NATO allies would apparently like to have Ukraine become a client state, but they’re not altogether willing to pay for it. This kind of raises the basic question: if Russia ultimately has to foot the bill for Ukraine, whose client state is it? And who is geographically next door to Ukraine? And whose national histories are intimately mingled?

I’m not persuaded that Russia and its president, Mr. Putin, are thrilled about the dissolution of Ukraine. Conceivably, they would have been satisfied with a politically stable, independent Ukraine and reliable long-term leases on the Black Sea ports. Russia is barely scraping by financially on an oil, gas, and mineral based economy that allows them to import the bulk of their manufactured goods. They don’t need the aggravation of a basket-case neighbor to support, but it has pretty much come to that. At least, it appears that Russia will support the Russian-speaking region east of the Dnieper.

My guess is that the Kiev-centered western Ukraine can’t support itself as a modern state, that is, with the high living standards of a techno-industrial culture. It just doesn’t have the fossil fuel juice. It’s at the mercies of others for that. In recent years, Ukraine has even maintained an independent space program (which is more than one can say of the USA). It will be looked back on with nostalgic amazement. Like other regions of the world, Ukraine’s destiny is to go medieval, to become a truly post-industrial agriculture-based society with a lower population and lower living standards. It is one the world’s leading grain-growing regions, a huge advantage for the kind of future the whole world faces — if it can avoid becoming a stomping ground in the elephant’s graveyard of collapsing industrial anachronisms.

Ukraine can pretend to be a ward of the West for only a little while longer. The juice and the money just isn’t there, though. Probably sooner than later, the IMF will stop paying its gas bills. Within the same time-frame, the IMF may have to turn its attention to the floundering states of western Europe. That floundering will worsen rapidly if those nations can’t get gas from Russia. You can bet that Europe will think twice before tagging along with America on anymore cockamamie sanctions. Meanwhile, the USA is passing up the chance to care for a more appropriate client state: itself. Why on earth should the USA be lending billions of dollars to Ukraine when we don’t have decent train service between New York City and Chicago?

 

***

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.

 

The Anti-Empire Report #128

From the Keyboard of William Blum

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 Obama Putin chess

Published originally in The Anti-Empire Report May 9, 2014

“The Russians are coming … again … and they’re still ten feet tall!”

So, what do we have here? In Libya, in Syria, and elsewhere the United States has been on the same side as the al-Qaeda types. But not in Ukraine. That’s the good news. The bad news is that in Ukraine the United States is on the same side as the neo-Nazi types, who – taking time off from parading around with their swastika-like symbols and calling for the death of Jews, Russians and Communists – on May 2 burned down a trade-union building in Odessa, killing scores of people and sending hundreds to hospital; many of the victims were beaten or shot when they tried to flee the flames and smoke; ambulances were blocked from reaching the wounded. Try and find an American mainstream media entity that has made a serious attempt to capture the horror.

And how did this latest example of American foreign-policy exceptionalism come to be? One starting point that can be considered is what former Secretary of Defense and CIA Director Robert Gates says in his recently published memoir: “When the Soviet Union was collapsing in late 1991, [Defense Secretary Dick Cheney] wanted to see the dismemberment not only of the Soviet Union and the Russian empire but of Russia itself, so it could never again be a threat to the rest of the world.” That can serve as an early marker for the new cold war while the corpse of the old one was still warm. Soon thereafter, NATO began to surround Russia with military bases, missile sites, and NATO members, while yearning for perhaps the most important part needed to complete the circle – Ukraine.

In February of this year, US State Department officials, undiplomatically, joined anti-government protesters in the capital city of Kiev, handing out encouragement and food, from which emanated the infamous leaked audio tape between the US ambassador to Ukraine, Geoffrey Pyatt, and the State Department’s Victoria Nuland, former US ambassador to NATO and former State Department spokesperson for Hillary Clinton. Their conversation dealt with who should be running the new Ukraine government after the government of Viktor Yanukovich was overthrown; their most favored for this position being one Arseniy Yatsenuk.

My dear, and recently departed, Washington friend, John Judge, liked to say that if you want to call him a “conspiracy theorist” you have to call others “coincidence theorists”. Thus it was by the most remarkable of coincidences that Arseniy Yatsenuk did indeed become the new prime minister. He could very soon be found in private meetings and public press conferences with the president of the United States and the Secretary-General of NATO, as well as meeting with the soon-to-be new owners of Ukraine, the World Bank and the International Monetary Fund, preparing to impose their standard financial shock therapy. The current protestors in Ukraine don’t need PHDs in economics to know what this portends. They know about the impoverishment of Greece, Spain, et al. They also despise the new regime for its overthrow of their democratically-elected government, whatever its shortcomings. But the American media obscures these motivations by almost always referring to them simply as “pro-Russian”.

An exception, albeit rather unemphasized, was the April 17 Washington Post which reported from Donetsk that many of the eastern Ukrainians whom the author interviewed said the unrest in their region was driven by fear of “economic hardship” and the IMF austerity plan that will make their lives even harder: “At a most dangerous and delicate time, just as it battles Moscow for hearts and minds across the east, the pro-Western government is set to initiate a shock therapy of economic measures to meet the demands of an emergency bailout from the International Monetary Fund.”

Arseniy Yatsenuk, it should be noted, has something called the Arseniy Yatsenuk Foundation. If you go to the foundation’s website you will see the logos of the foundation’s “partners”. Among these partners we find NATO, the National Endowment for Democracy, the US State Department, Chatham House (Royal Institute of International Affairs in the UK), the German Marshall Fund (a think tank founded by the German government in honor of the US Marshall Plan), as well as a couple of international banks. Is any comment needed?

Getting away with supporting al-Qaeda and Nazi types may be giving US officials the idea that they can say or do anything they want in their foreign policy. In a May 2 press conference, President Obama, referring to Ukraine and the NATO Treaty, said: “We’re united in our unwavering Article 5 commitment to the security of our NATO allies”. (Article 5 states: “The Parties agree that an armed attack against one or more of them … shall be considered an attack against them all.”) Did the president forget that Ukraine is not (yet) a member of NATO? And in the same press conference, the president referred to the “duly elected government in Kyiv (Kiev)”, when in fact it had come to power via a coup and then proceeded to establish a new regime in which the vice-premier, minister of defense, minister of agriculture, and minister of environment, all belonged to far-right neo-Nazi parties.

The pure awfulness of the Ukrainian right-wingers can scarcely be exaggerated. In early March, the leader of Pravy Sektor (Right Sector) called upon his comrades, the infamous Chechnyan terrorists, to carry out further terrorist actions in Russia.

There may be one important difference between the old Cold War and the new one. The American people, as well as the world, can not be as easily brainwashed as they were during the earlier period.

Over the course of a decade, in doing the research for my first books and articles on US foreign policy, one of the oddities to me of the Cold War was how often the Soviet Union seemed to know what the United States was really up to, even if the American people didn’t. Every once in a while in the 1950s to 70s a careful reader would notice a two- or three-inch story in the New York Times on the bottom of some distant inside page, reporting that Pravda or Izvestia had claimed that a recent coup or political assassination in Africa or Asia or Latin America had been the work of the CIA; the Times might add that a US State Department official had labeled the story as “absurd”. And that was that; no further details were provided; and none were needed, for how many American readers gave it a second thought? It was just more commie propaganda. Who did they think they were fooling? This ignorance/complicity on the part of the mainstream media allowed the United States to get away with all manner of international crimes and mischief.

It was only in the 1980s when I began to do the serious research that resulted in my first book, which later became Killing Hope, that I was able to fill in the details and realize that the United States had indeed masterminded that particular coup or assassination, and many other coups and assassinations, not to mention countless bombings, chemical and biological warfare, perversion of elections, drug dealings, kidnapings, and much more that had not appeared in the American mainstream media or schoolbooks. (And a significant portion of which was apparently unknown to the Soviets as well.)

But there have been countless revelations about US crimes in the past two decades. Many Americans and much of the rest of the planet have become educated. They’re much more skeptical of American proclamations and the fawning media.

President Obama recently declared: “The strong condemnation that it’s received from around the world indicates the degree to which Russia is on the wrong side of history on this.” Marvelous … coming from the man who partners with jihadists and Nazis and has waged war against seven nations. In the past half century is there any country whose foreign policy has received more bitter condemnation than the United States? If the United States is not on the wrong side of history, it may be only in the history books published by the United States.

Barack Obama, like virtually all Americans, likely believes that the Soviet Union, with perhaps the sole exception of the Second World War, was consistently on the wrong side of history in its foreign policy as well as at home. Yet, in a survey conducted by an independent Russian polling center this past January, and reported in the Washington Post in April, 86 percent of respondents older than 55 expressed regret for the Soviet Union’s collapse; 37 percent of those aged 25 to 39 did so. (Similar poll results have been reported regularly since the demise of the Soviet Union. This is from USA Today in 1999: “When the Berlin Wall crumbled, East Germans imagined a life of freedom where consumer goods were abundant and hardships would fade. Ten years later, a remarkable 51% say they were happier with communism.”)

Or as the new Russian proverb put it: “Everything the Communists said about Communism was a lie, but everything they said about capitalism turned out to be the truth.”

A week before the above Post report in April the newspaper printed an article about happiness around the world, which contains the following charming lines: “Worldwide polls show that life seems better to older people – except in Russia.” … “Essentially, life under President Vladimir Putin is one continuous downward spiral into despair.” … “What’s going on in Russia is deep unhappiness.” … “In Russia, the only thing to look forward to is death’s sweet embrace.”

No, I don’t think it was meant to be any kind of satire. It appears to be a scientific study, complete with graphs, but it reads like something straight out of the 1950s.

The views Americans hold of themselves and other societies are not necessarily more distorted than the views found amongst people elsewhere in the world, but the Americans’ distortion can lead to much more harm. Most Americans and members of Congress have convinced themselves that the US/NATO encirclement of Russia is benign – we are, after all, the Good Guys – and they don’t understand why Russia can’t see this.

The first Cold War, from Washington’s point of view, was often designated as one of “containment”, referring to the US policy of preventing the spread of communism around the world, trying to block the very idea of communism or socialism. There’s still some leftover from that – see Venezuela and Cuba, for example – but the new Cold War can be seen more in terms of a military strategy. Washington thinks in terms of who could pose a barrier to the ever-expanding empire adding to its bases and other military necessities.

Whatever the rationale, it’s imperative that the United States suppress any lingering desire to bring Ukraine (and Georgia) into the NATO alliance. Nothing is more likely to bring large numbers of Russian boots onto the Ukrainian ground than the idea that Washington wants to have NATO troops right on the Russian border and in spitting distance of the country’s historic Black Sea naval base in Crimea.

The myth of Soviet expansionism

One still comes across references in the mainstream media to Russian “expansionism” and “the Soviet empire”, in addition to that old favorite “the evil empire”. These terms stem largely from erstwhile Soviet control of Eastern European states. But was the creation of these satellites following World War II an act of imperialism or expansionism? Or did the decisive impetus lie elsewhere?

Within the space of less than 25 years, Western powers had invaded Russia three times – the two world wars and the “Intervention” of 1918-20 – inflicting some 40 million casualties in the two wars alone. To carry out these invasions, the West had used Eastern Europe as a highway. Should it be any cause for wonder that after World War II the Soviets wanted to close this highway down? In almost any other context, Americans would have no problem in seeing this as an act of self defense. But in the context of the Cold War such thinking could not find a home in mainstream discourse.

The Baltic states of the Soviet Union – Estonia, Latvia, and Lithuania – were not part of the highway and were frequently in the news because of their demands for more autonomy from Moscow, a story “natural” for the American media. These articles invariably reminded the reader that the “once independent” Baltic states were invaded in 1939 by the Soviet Union, incorporated as republics of the USSR, and had been “occupied” ever since. Another case of brutal Russian imperialism. Period. History etched in stone.

The three countries, it happens, were part of the Russian empire from 1721 up to the Russian Revolution of 1917, in the midst of World War I. When the war ended in November 1918, and the Germans had been defeated, the victorious Allied nations (US, Great Britain, France, et al.) permitted/encouraged the German forces to remain in the Baltics for a full year to crush the spread of Bolshevism there; this, with ample military assistance from the Allied nations. In each of the three republics, the Germans installed collaborators in power who declared their independence from the new Bolshevik state which, by this time, was so devastated by the World War, the revolution, and the civil war prolonged by the Allies’ intervention, that it had no choice but to accept the fait accompli. The rest of the fledgling Soviet Union had to be saved.

To at least win some propaganda points from this unfortunate state of affairs, the Soviets announced that they were relinquishing the Baltic republics “voluntarily” in line with their principles of anti-imperialism and self-determination. But is should not be surprising that the Soviets continued to regard the Baltics as a rightful part of their nation or that they waited until they were powerful enough to reclaim the territory.

Then we had Afghanistan. Surely this was an imperialist grab. But the Soviet Union had lived next door to Afghanistan for more than 60 years without gobbling it up. And when the Russians invaded in 1979, the key motivation was the United States involvement in a movement, largely Islamic, to topple the Afghan government, which was friendly to Moscow. The Soviets could not have been expected to tolerate a pro-US, anti-communist government on its border any more than the United States could have been expected to tolerate a pro-Soviet, communist government in Mexico.

Moreover, if the rebel movement took power it likely would have set up a fundamentalist Islamic government, which would have been in a position to proselytize the numerous Muslims in the Soviet border republics.

Notes

  1. See RT.com (formerly Russia Today) for many stories, images and videos
  2. Robert Gates, Duty (2014), p.97
  3. If this site has gone missing again, a saved version can be found here.
  4. Voice of Russia radio station, Moscow, April 18, 2014; also see Answer Coalition, “Who’s who in Ukraine’s new [semi-fascist] government”, March 11, 2014
  5. RT.com, news report March 5, 2014
  6. CBS News, March 3, 2014
  7. Washington Post, April 11, 2014
  8. USA Today (Virginia), Oct. 11, 1999, page 1
  9. Washington Post print edition, April 2, 2014; online here

Any part of this report may be disseminated without permission, provided attribution to William Blum as author and a link to this website are given.

William Blum is an author, historian, and renowned critic of U.S. foreign policy. He is the author of Killing Hope: U.S. Military and CIA Interventions Since World War II and Rogue State: A Guide to the World’s Only Superpower, among others.

Any part of this report may be disseminated without permission, provided attribution to William Blum as author and a link to this website are given.

 

Ukraine Re-Redux-Frostbite Falls Daily Rant #34-5/8/2014

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Aired on the Doomstead Diner on May 9, 2014

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Snippet:

It is basically official now, Ukraine is at WAR with Russia. This is sort of like a Jockey getting in a fistfight with an NFL Linebacker, except of course it’s not REALLY Ukraine here at War with the Ruskies, it is NATO. The Ukrainians just serve as a proxy here, and it’s their blood that get spilled on the streets. The Politicians and Banksters running the show are sitting comfortably in places like Brussels and Moscow.

http://images.rapgenius.com/90be4182c2d77d470c5a5f4cc3793ada.576x324x1.jpghttp://www.paulickreport.com/wp-content/uploads/2013/02/Talamo-Joseph-1000th21893-650x463.jpg

Who is the Instigator here? Is it the Ruskies trying to acquire more territory? Is it NATO trying to control more resources? The Blame Game goes back and forth from both sides, but the reality is that both sides are just reacting to the resource depletion problem. Ukraine happens to be located in the middle of this problem as a transit point between energy being extracted in Russia and energy being burned in Europe…

For the rest, LISTEN TO THE RANT!

Listeners who enjoyed this rant will probably also enjoy the following Rants as well:

Frostbite Falls Daily Rant Update

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Published on the Doomstead Diner on March 30, 2014

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Frostbite Falls Daily Rant #21: Ukraine, IMF & Russia Circle Jerk

Bonus Tracks: Peak Stupidity, Doom All Around You & Amerikan Hologram



Recently I added a new feature to the Doomstead Diner, an Audio “Daily Rant” available for download on MP3, or which you can listen to straight off the Diner Soundcloud account.  The Widget for the most recent Daily Rant also appears on the Diner Blog Homepage on the upper right of the Menu Bar.  I wrote a prior Plug Post for the Rant, The Frostbite Falls Daily Rant RETURNS back at the end of February when I got rolling with this, so this article is an update on progress after one month of Ranting via mp3 and the Magic of the Internet.

The name Frostbite Falls Daily Rant comes from the title of a regular blog I used to write on Jim Quinn’s The Burning Platform.  At the time I wasn’t consumed doing many other Doom related internet tasks, so I was cranking out 3000 word tomes every other day or so, becoming somewhat notorious for being long winded on TBP.  LOL.

Anyhow, since starting the Diner, my actual writing time is somewhat less, so I publish just once a week now in my Sunday Brunch article.  Just about daily though there is something to rant about on some level of collapse, so since we began our Collapse Cafe Podcasts and Vidcasts I’ve become a bit more conversant with this technology and decided to just do a monologue whenever I have something to rant about.  “Daily” is a bit of a misnomer, since really I only have time to do one of them every 2-3 days or so, but it is more often than Weekly.  “Bi-Weekly Rant” doesn’t have quite the ring to it that Daily Rant does though, so the name remains “Daily”.  Close enough.

So far I’ve recorded around 20 of these Rants, they run anywhere from 5-10 minutes each, nice small packages of Doom to download to your Iphone and listen to on the way to work sitting in traffic on the Schuykill Expressway or while you do your gardening in the backyard.  Doomers are so BUSY these days prepping up for Civilization Collapse they often don’t have time to sit down and read 3000 word polemics.  LOL.

The topics generally center around the latest in Economic or Geopolitical Doom, which these days revolves mainly around the nonsense going on down in Ukraine, but also China of course, the Student Loan debacle, right up to Doom All Around You which you can easily find Locally as well as Overseas..

Generally speaking I’m not publishing the Transcripts for the Daily Rants, but below here is the Transcript for today’s, which is more musing on the latest shenanigans coming from Ukraine, Russia and the IMF Brussel Sprouts.  It loses something when in text format, so for most of them they will only be available as Audio.  Apologies to those who prefer reading to listening, and if you really prefer to read it contact me on the Diner and I’ll send you transcripts in email.

Although in the modern day incarnation I turned into a Blogger, I originally come from Pirate Radio, the 1970s version of Free Speech via Electronic Media of the day, before the Internet existed.  So for me, I like the Audio format as a bit of a Nostalgia Trip into my youth.  Beyond that, the fact is most of the population these days does not like to READ to acquire information, they have been conditioned to get information through the electronic media of Radio and Television.  Since my objective is to reach as many people as possible with the TRUTH about our collapsing Industrial Civilization and Economy, it only makes sense to offer at least some of the information up in this format.  Most detailed information still comes via text and in debate and discussion Inside the Diner, but my hope is that the Audio Rants will make the whole thing more accessible to more people.  SAVE AS MANY AS YOU CAN, as one of my tag lines goes.

In any event, the update here after 1 month is that the FFDR and Collapse Cafe are doing spectacularly well, getting around 2000-3000 Listens/Month and doing absolute WONDERS for the Alexa Ranking on the Diner, now climbing the Doom Charts rapidly, #1 With a BULLET!

Coming next week, we will have Livestreams and Vidcasts coming from our Convocation down in Texas, and we welcome listeners (and readers) to drop in and chat with us as we drop in on the net with the Techno-Gimmickry.  You’ll find the announcements inside the Diner HERE

Meanwhile, Keep the Faith, Prep Up and DON’T QUIT yet, because it ain’t OVAH till the Fat Lady Sings.

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Transcript for the Frostbite Falls Daily Rant March 30, 2013

Ukaine IMF Bribery & Russian Military Muscle

Greetings Doomfans, and welcome to another edition of the Frostbite Falls Daily Rant here on the Doomstead Diner.

After taking a few days off from geopolitics to cover Energy Myths popularized by the MSM and Industry Shills and the Peak Stupidy that infuses our current Civilization, it’s time to return to the breaking Hotspot of the military and economic measures and counter-measures being employed in the Ruskie-NATO battle over Ukraine. Money, Energy, Rolling Tanks and the winning personality of KGB Capo di Tutti Capis Vlad the Impaler all conspire to make this the best Kabuki theatre ongoing in the collapse world today.

Who will WIN this fabulous PRIZE of a nation in debt up to it’s eyeballs and curently as governable as a nest of hornets? Vlad the Impaler has Crimea River now pretty well sewed up on the Military level, but the Illuminati apparatchiks at the IMF just forked over $18B in new loans to keep the Western Ukrainians floating another day and in the Eurotrash Camp.

My favorite Brit Prep School Bottom Butt Boy and Illuminati Shill Ambrose Evans-Pritchard has been on a Propaganda TEAR the last few days, excoriating Vlad as being a dumbass who did not have all his ducks in a row with China, and who won’t be able to stand up to the economic sledgehammer the Brussel Sprouts will drop on him here while he continues to flex Military Muscle and tries to dominate the energy market that way.

It’s definitely true here that if the Chinese do not back up Vlad but rather do an end around to acquire energy elsewhere, Vlad is pretty much in a world of shit economically. Also true is that if energy prices fall too much Vlad can’t sell at a profit, nor can he raise money from the international credit markets if they are putting the thumbscrews down this way.

Which brings us round to the Magical way in which the Brussel Sprouts are currently buying Western Ukraine loyalty, which is by fronting them up another $18B in credit to keep going, since they are basically tapped out and can’t pay any bills.

Will the average J6P Ukrainian see any of this $18B in funny money? Of course not. This money is all earmarked to go straight from the IMF Ledger onto the ledgers of various Ruskie Banks and Oligarchs in order to keep THEM solvent and not go belly up on loans they owe to the Western TBTF banks. So while on the one hand this ploy is designed to force Vlad into a corner, at the same time it is a bailout of Ruskie Banking!

You have to ask yourself, WTF did the IMF come up with $18B to fork over to Ukrainian Gangstas and Neo-Nazis? Did lots of folks drop by the the IMF bank on the corner of Main Street and 1st Avenue and deposit money so the IMF would have money to loan to the Ukrainians? Of course not, since the IMF doesn’t have retail offices for Depositors, the way they get money is to borrow it from the CBs of countries like the FsoA and Germany. Where did they get the money? The countries themselves are broke and insolvent, so WTF does this new money come from? You start to see the circle jerk involved here, where credit can be issued out infinitely long as you are Friendly to the folks who create the credit. The problems only come when said credit doesn’t buy anything, basically because there is nothing to buy. Well, not nothing really, just less than the amount of stuff necessary to supply EVERYONE with cheap energy and cheap GMO foods.

Since they know they can’t supply everyone, the credit is issued out in dribs and drabs here to most peripheral countries, and only with massive restrictions on how it gets disbursed out. In the case of Ukraine, the $18B in funny money will do exactly jack shit to improve their economy, all this does is keep some Ruskie Banks from going belly up. The Ukraine economy itself goes further belly up, IMF Austerity measures choke the local population into desperate poverty, so they get pissed off at whoever is propped up into power by whichever side.

Far as Oligarchs are concerned on either side of this divide is concerned, all any of them care about is to keep moving gas and oil from the Ruskie side where it gets dragged up from the ground at ever increasing cost to then sell it to Eurotrash who have ever less credit available to buy it with.

This dynamic doesn’t change no matter WHO supplies the energy here in the end, the Ruskies or the Saudis or the Iranians, basically the Eurotrash cannot afford to buy it from any of them. The only way they get more money to buy it comes from funny money from the IMF, irredeemable debt that will never be paid back. You only get said credit if you present an obstacle to keeping the whole system going, or if you are Too Big To Fail, like the FsoA and Germany.

Fail they all will though, and it will be quite something to behold when they do.

And that is all the Doom, this time until Next Time, here on the Doomstead Diner.

Seeya Later Doomers.

Knarf plays the Doomer Blues

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