Vince answered a question at Quora.
 
https://www.quora.com/Do-Americans-see-and-accept-the-connection-between-wars-abroad-and-prosperity-at-home/answer/Vince-Dhimos
 
Do Americans see and accept the connection between wars abroad and prosperity at home?
 
Vince Dhimos, Editor-in-Chief at New Silk Strategies (2016-present)
 
Answered 2m ago
 
Generally speaking, Americans haven’t the slightest inkling as to the connection between military spending and the rapid decline of the US economy.
 
I have a friend who once ran an investment fund. He escaped communist Hungary and was greatly assisted by a US Jewish group. As a result, he became wealthy.
 
This investor once told me that war brings prosperity. When I asked him how this happens — ie, by what mechanism — he said he didn’t know but that all his friends assured him it was true.
 
The fact is, war only costs blood and treasure and does not help the economy one iota.
 
So why do Americans think the economy is just fine and dandy? Because they don’t understand what the US debt is doing behind the scenes. Cancer can be growing in the body for months to years before its symptoms start to show up, and by then it can be too late. The US debt is a cancer and slowly but surely, it is destroying the economy.
 
The most ominous sign is that US Treasury notes are no longer selling. Major countries that once bought the bonds are selling them off. After all, the interest rates are paltry. As a result, the Treasury must print money — it’s called quantitative easing — and buy its own bonds. History teaches what happens when countries just print money with no backing. Remember the Weimar Republic? Zimbabwe? If the answer is no, then you are a big part of the problem. The US is a so-called democracy (really not though: https://www.quora.com/Is-China-a...) and when the people are unaware of history and economics, then these problems are never resolved. The ignorance is systemic and is encouraged by the Establishment. I have been listening to the televised campaign debates for years and have never once heard the moderator ask a candidate what he or she would do about the US debt. The question is off limits. Nor are the candidates asked about the “defence” spending and wars that worsen the debt. Thus the cover-up is complete and the unknowing populace can be herded like cattle.
 
Here is just one of many analyses of why the US is in grave danger from the debt:
 
CHART: How the U.S. Economy Could Be Destroyed by Trillions of Dollars in Debt
 
1 view
 
Relevant:
 
TRUMP COSTS AMERICANS A TRILLION A YEAR
http://www.newsilkstrategies.com/economics-and-finance/trump-costs-americans-a-trillion-dollars-a-year
 
 
THE US IS HEADED FOR “FINANCIAL ARMAGEDDON”
http://www.newsilkstrategies.com/economics-and-finance/the-us-is-headed-for-financial-armageddon
 
 
 
 

Below is our translation of an article from RIA Novosti with comments and notes in brackets by Vince Dhimos.
 
https://ria.ru/20191108/1560680119.html
 
Trump costs Americans a trillion dollars a year
 
October 8, 2019
 
MOSCOW, Nov 8 - RIA Novosti, Alexander Lesnykh. The US national debt broke the mark of 23 trillion dollars. Under Donald Trump, borrowing is growing at a record pace — more than a trillion a year. Why this happens and what it will lead to is reported by RIA Novosti.
 
Payday loans
 
During the presidential race, Donald Trump repeatedly accused the Democrats and Barack Obama personally of building up public debt. However, once in the White House, he only made the situation worse.
 
For about three years, the US Treasury issued bonds for $3.2 trillion, and the public debt per citizen, including the elderly and infants, increased by nine thousand dollars, to $69.7 thousand.
 
One of the main reasons for this is seen by economists as a sharp increase in social spending, partly thanks to the retirement of baby boomers (the so-called birth spike in the middle of the last century). This is, by the way, the generation to which Bill Clinton, George W. Bush the younger and Donald Trump himself belong.
 
[The author does not mention the elephant in the room: overspending on arms acquisitions. Of course, it does not pay Russia to discourage this because they have no interest in keeping the US from further bankrupting itself. Nor does it pay to focus on the errors of Trump because, for all his flaws, the Democrats are more Russophobic]
 
Spending borrowed money on social payments, the American government painted itself into a corner: budget spending on servicing the public debt reached $600 billion. This is more than allocated to education, transport, housing and agriculture combined. At the end of October, US Treasury Secretary Stephen Mnuchin announced that the budget deficit had almost reached a trillion dollars, an increase of 20% compared with fiscal year 2018.
 
Priority Failure
 
To understand how destructive the 23 trillion state debt is for the American economy, we need to recall history.
 
The idea of ​​borrowing to spend on the country owes to the first US Treasury Secretary, Alexander Hamilton. Three centuries ago, he proposed directing the funds raised through the issuance of government bonds to the development of the country's production and infrastructure. Together with the economic growth program he wrote, this served as the basis for the emergence of entire industries and allowed the United States to become a world leader, leaving the Old World far behind.
 
Using borrowed funds for virtually the opposite purpose, Obama and Trump achieved the opposite economic effect. In the past 12 years, every dollar in GDP growth has cost Washington $1.85 in public debt. And if now the debt burden is approaching 80% of GDP, then, according to Congress, by 2029 it will grow to 92%, and by the middle of the century it will be one and a half times the cost of everything produced in a year in the country.
 
Just print it
 
It is often said that Washington can at any moment reduce its public debt to zero by simply printing enough dollars. Trump himself thinks so - it is known that a year ago he discussed this option with the director of the National Economic Council, investment banker Gary Cohn.
 
"Cohn was shocked that Trump failed to understand even the simplest things," writes journalist Bob Woodward, a witness to that conversation.
 
Indeed, the Federal Reserve can turn on the printing press and release an additional 23 trillion dollars into free circulation, distributing them to securities holders. But at that point, hyperinflation is inevitable, which will destroy all the savings of citizens, and the importation of goods will become simply unprofitable. However, the American authorities seem to have no other options, since the demand for treasury notes is rapidly falling.
Indeed, the Federal Reserve can turn on the printing press and release an additional 23 trillion dollars into free circulation, distributing them to securities holders. But then hyperinflation is inevitable, which will destroy all the savings of citizens, and the import of goods will become simply unprofitable. However, the American authorities seem to have no other options, since the demand for treasury is rapidly falling.
 
Most of the credit for this belongs to the central banks of China, India, Russia, Turkey and several European countries, getting rid of US bonds and shifting funds into a more liquid asset. In September, Germany joined this group. The Bundesbank, the world's third largest gold reserves, resumed purchasing precious metals for the first time in 20 years and acquired 95 thousand ounces.
 
The sale of treasuries caused a so-called inversion whereby the yield on short-term securities became higher than on long-term ones, as occurred during the global crisis of 2008. Most economists consider this a sure sign of an impending recession, from which everyone who did not manage to exchange US debt securities for rapidly rising gold will suffer.
 
In order to prevent a debt collapse, the Fed is forced to re-launch the program of "quantitative easing" [money printing]: in early October, the head of this department, Jerome Powell, said that at least until the end of the second quarter of next year, the state would buy short-term treasury bonds on the market. In total, 510 billion dollars will be spent on this "technical" operation.

 
Our translation of an article from RIA Novosti appears below with commentary by Vince Dhimos.
 
To summarize, the US sent an as-yet unknown official to the South Asia summit, where Trump himself was to appear. The unknown official immediately started harping on the peripheral issue of China’s incursions into disputed parts of the Pacific instead of talking about bread and butter trade issues. Another US official at the summit tried to sell the group on the idea of a new organization that would include both Asia Pacific and parts of South Asia that hardly fit in with that region. Both officials were trying to lead their audience to accept a US-led agenda that would tend to separate them from China, even though China is their main trading partner In other words, politics as usual from the US delegation, with trade taking a back seat.
 
The author makes it clear that the group members were no on board with making the US their main partner to the exclusion of China. The see this as just more US bullying.
 
BEGIN TRANSLATION
 
Here’s what the next US failure in Asia look like
 
November 6, 2019
 
A classic example of a diplomatic failure is when the head of the American delegation at an international meeting expects to see ten heads of foreign states and governments in front of him, but they don’t show up.
 
The thing is, three responded to the call, including the country's prime minister, the polite host of the meeting (Thailand), and the leaders of Vietnam and Laos, while seven - Singapore, Malaysia, Indonesia, Brunei, Cambodia, Myanmar and the Philippines - sent ministers instead.
 
It’s not just American protocol arrogance to think that if you represent the United States, presidents and prime ministers should come running to you, even if you yourself are just the unknown national security adviser to the President, Robert O’Brien. Although this story speaks of the general decline of American diplomacy, it is not the only one.
 
However, the absence of the majority of the audience is explained by the fact that the attendees probably knew what the American would be talking about (usually diplomats agree on the main parameters of serious meetings in advance). And they knew, among other things, that O’Brien would invite all ten of the leaders of Southeast Asian countries to a “special summit” with President Donald Trump to Washington next year.
 
 And this is again a rude breach of protocol. The fact is, Trump himself was supposed to come to Thailand (where the action took place), to an event called the East Asian Summit. Either that or send in his place the second person in the administration, vice president Michael Pence. Other guests did this - Russia, China, South Korea, and so on (the summit's hosts are the very ten countries of Southeast Asia that are members of the ASEAN group). Instead, a person arrives with an as-yet unclear influence in the US administration, to say, translated from the diplomatic, the following: we don’t want to deal with you here; come to us instead, if at all.
 
But protocol is, after all, only a form of politeness. What about the content and meaning of US policy in the region? And this content was very clearly stated by O’Brien himself for his snubbed audience. In fact, his speech came down to attacks on China over territorial disputes with neighbours in the South China Sea, but these accusations had annoyed participants in ASEAN meetings under the previous administration.
 
But behind the silly story under the heading "superpower gets a whack on the nose" there is a general picture of the failure of all American policies in Asia as a whole. The fact is, in Thailand itself, even at its summit consisting of ten ASEAN countries (on the eve of the East Asian summit), the leaders only talked about what to do in the unacceptable situation of the growing confrontation between the United States and China. The ideal situation for ASEAN is trade with both partners, rather than trying to deal with one so as not to anger the other. And many leaders of “The Ten” at their summit pointed out that it was not China that started this fight. In general, to demand of ASEAN that it break with China and join exclusively with the United States is a very bad policy, but it is precisely what the United States is pursuing.
 
In addition, the United States is also torpedoing the idea for which the ASEAN leaders actually gathered in Thailand — ie, ​​a Regional Comprehensive Economic Partnership (RCEP). This is a trade block of long standing that includes China but does not include the USA. SEA countries need it, among other things, to show: here are our valuable partners, and America will not undermine relations with them.
 
Here’s how American diplomacy is trying to undermine the idea of ​​RCEP: by blurring (on paper) the very concept of the Pacific region with its cooperation and proposing instead a certain "Indo-Pacific region." That is, by including India and the rest of South Asia where this South Asia hardly fits.
 
Another member of the American delegation, Secretary of Commerce Wilbur Ross, also spoke in Thailand and showered the audience with spectacular statistics showing how important America is to the newly-minted “dual” region. US trade with it has grown to two trillion dollars last year, more than with Europe; investments are up to 1.6 trillion dollars, and all this is "more than with China."
 
In a similar situation, British scientist and writer Andrew Lang said of one of the enemies: "he uses statistics like a drunk uses a street lamp - for support, and not as a source of light."
 
And the light in this case is shed on a simple situation: India and others find it difficult to fit into the Pacific region. And now the main upshot of the series of summits in Thailand is that India still cannot enter the RCEP, although the other 15 participants are leaving the door open for it. Nonetheless, they will sign an agreement on RCEP with each other next year in any case.
 
At the same time, everyone in Asia knows that India is not acting so as to please the United States while harming an agreement that involves China. It’s just that its economy cannot withstand too-rapid integration with another region; it requires a long period of protection.
 
Thus, this same awkward American diplomacy is also committing falsification, assigning credit to itself that it does not deserve. And all the rest of Asia sees it.
 
Further, those gathered in Bangkok actively discussed the details of the "intermediate" economic agreement between the US and China, which were supposed to be signed in Chile at the summit of another, albeit similar, APEC organization, but the summit was cancelled. But it turns out that the agreement means at best a truce in trade and all other confrontations, but in general, the fight that is odious to the Pacific region and undermines its economy will continue. And at that point, will there be much use for the “special summit” of the USA and ASEAN next year?
END TRANSLATION

The following is our translation of an analysis by Ivan Danilov from RIA Novosti with commentary by Vince Dhimos.
 
Some readers may wonder what Danilov means by this:
 
“...fortunately, this time Russia is much less vulnerable to external shocks.”
 
He no doubt is referring to the fact that Russia is much less exposed to the dollar, having sold off most of its Treasuries and bought up tons of gold. The dollar has been losing its value at breakneck speed while gold prices keep rising. China has also been buying huge amounts of gold (although, due to its exports to the West, it has not been prudent for it to ditch its dollar reserves to the extent that Russia has).
 
US headed for "financial Armageddon"
 
October 24, 2019
 
Ivan Danilov
 
Over the past few months, London has become not only the capital of a fun-filled political carnival called Brexit and street clashes between environmental radicals and the working class, whom the radicals denied access to commuter trains in the name of combating global warming.
 
Quite unexpectedly, London has become the capital of a negative attitude toward the future of the global financial system – and the proposition of ​​its urgent reform. Even more unexpected is that the ideological epicentre of this nascent “movement to save the global financial system” was the Bank of England - one of the oldest central banks on the planet and the pillar of the current financial system, which representatives of this respectable organization now propose either reforming or dismantling.
 
The former head of the Bank of England, Baron Mervyn King, speaking at the IMF symposium, announced that the United States will face a “financial Armageddon” if the Federal Reserve does not have enough capacity to cope with a situation similar to the “toxic mortgage debt crisis” of 2008-2009.
 
Moreover, Her Majesty’s ex-banker described in the harshest terms the prospects of Western democracies if the financial system cannot cope with another global crisis. The British Guardian quotes the most striking passages from the "apocalypse from King": "Another economic and financial crisis could destroy the legitimacy of the democratic market system," he said. "By adhering to the new officially approved theory of monetary policy and pretending that we made the banking system safe, we are sleepwalking into this crisis."
 
It is significant that the current head of the Bank of England, Mark Carney, is not far behind his predecessor and is also trying to prove to his financial establishment colleagues that their actions will lead to disastrous consequences.
 
It seems that upon taking office, the head of the main financial structure of the United Kingdom either is suddenly gaining access to some information that’s turning him into a consistent pessimist and terrifying him, or, conversely, the position itself gives him the right and tribune to start telling the unpleasant truth.
 
Just two months ago, Carney was included in all the reports of Western news agencies for his statements about the risks of war and the global crisis caused by the global policy of low interest rates, as well as the need to dismantle the dollar financial system in order to save the world economy.
 
Reuters then wrote: “Carney warned that very low equilibrium interest rates have in the past coincided with wars, financial crises and dramatic changes in the banking system. As a first step in rebuilding the global financial system, IMF members could triple the Fund’s resources to three trillion dollars. The United States is the best alternative for countries that protect themselves (from economic difficulties. – author’s note) by accumulating huge amounts of debt. "Although such concerted efforts can improve the functioning of the current system’s threads, eventually a multipolar global economy will require a new IMS (international monetary system) to realize their full potential,” said Carney."
 
The statements of the leading British bankers can be attributed to the specific psychological atmosphere of London, which is really toxically affected by the massive political insanity associated with Brexit and the street fighting against global warming. However, voices that warn of the risks of the global economy are being heard not only from London. Well-known American consulting company McKinsey & Co previously “sent to the cemetery” 35% of the world's banks, saying that they will not be able to survive the next global recession.
 
At the same time, the chief economist of the analytical service of the Moody's rating agency just points out that the risks of the global crisis are now very high: "According to Mark Zandi, chief economist of Moody's Analytics, in the near future there is an extremely high probability that a recession could hit the global economy and politicians probably won’t be able to change this scenario."
 
However, a global recession may seem too abstract a risk. Meanwhile, the IMF and Bloomberg business news agency journalists found a specific risk that painfully resembles the “toxic bomb” that exploded under the global financial system in 2008-2009. The situation is so serious that the right-wing, politically correct and progressive columnist of the American agency Bloomberg wondered: “What's worse: climate change or securities secured by corporate loans (CLOs)?” The answer is disappointing: "With all due respect to Greta Thunberg, the corporate debt time bomb looks like a more inevitable threat. ... Of particular concern is the lending market for high-debt companies, which has already exceeded $ 1.2 trillion, and there are signs that that investors are becoming anxious."
 
To put it as crudely and simplistically as possible, it turns out that the last time loans were issued to American unemployed, beggars and speculators who had little chance of repaying them, the banks earned money by bundling these toxic loans into derivative financial instruments with increased profitability and selling them to investors around the world. The inevitable upshot of this story led to holes in the balance sheet of many banks (which did not manage to sell everything), as well as a chain reaction of defaults and bankruptcies and a reduction in economic activity, which, in turn, caused a global recession that affected China, Russia and other exporting countries.
 
Now history is repeating itself in much the same way. Only loans are no longer issued to hopeless individuals, but to the same hopeless corporate borrowers. If this financial bomb detonates, the effect will be either the same as in 2008, or worse, since the world economy has not fully recovered from the previous crisis. Mervyn King is right: the Western world is sleep walking toward a recurrence of the crisis.
 
Unfortunately, there is practically no chance that British bankers will be heeded in the high offices of Washington and Brussels, but, fortunately, this time Russia is much less vulnerable to external shocks. However, whether the American economy can withstand such a shock is a big question.

The following article by investment guru Bill Bonner may not be in line with the opinion of New Silk Strategies. However, it probably is. Foreword by Vince Dhimos.
 
Bill underscores what I keep saying: neither party has even the slightest desire to grow the US economy, or even less, to make America great again. But you can’t blame any president for the mess the world is in. Presidents don’t make the important decisions, the Establishment does, and there is no such thing as a government of the people, by the people and for the people. I have posted a list here of the goon squad that runs the US.
 
What I like about Bill Bonner is that he is honest and not beholden to any political party or ideology. That may make it tough for him to get his own show on CNN or Fox News but it will endear him to the 1% who think for themselves and see the imminent derailment of America. To the Establishment, seeing it is not the sin, saying you see it is unpardonable. Just ask Julian Assange.
 
QUOTE:
 
Ms. Warren pretends to be smart, well-informed, and sophisticated. She believes she is on top of the issues, at home in university coffee shops, and at ease with the cognoscenti, literati, and transgenderati.
 
https://bonnerandpartners.com/in-the-next-crisis-both-warren-and-trump-will-push-towards-more-inflation/
 
In the Next Crisis, Both Warren and Trump Will Push Towards More Inflation
 
By Bill Bonner October 7, 2019
 
YOUGHAL, IRELAND – We saw last week that we are doomed. So, we continue our jolly inspection of what doom will look like.
 
In short, we are in an Inflate-or-Die trap. No one wants to face the music and admit that the economy has been phonied up with fake money, unpayable debt, and falsified prices. Nobody wants to go through the pain and humiliation of rehab.
 
So what’s the alternative? Inflation – more debt, more phony prices, and more fake money.
 
Debt Effect
 
For the last 30 years, the Federal Reserve added money via underpriced short-term loans. Speculators, banks, and insiders took the money and used it to run up stock and bond prices.
 
The rich got much richer; the poor stayed poor. Almost no one complained, because they were told that the “wealth effect” was making us all better off.
 
Donald Trump even believes that the stock market is the measure of his success.
 
What is really at work, though, is the old fashioned “debt effect.” Businesses, consumers, and the government go further and further into debt, borrowing at ultra-low rates from the future in order to live high on the hog in the present.
 
But there are limits. Time, for example. You can’t stretch it. You can’t fake it. You can’t counterfeit it.
 
During the first 80 years of the last century, total debt averaged about 1.5 times GDP. That’s another way of saying we learned that we could afford to borrow a day and a half’s future output for every day of output in the present. And not more.
 
But then, after 1980, total debt increased to over $73 trillion – or 3.5 times GDP.
 
That extra debt – more than $40 trillion above and beyond the traditional 1.5/1 relationship, representing $1.7 billion hours of future work at today’s average wage – is a debt that can’t be collected…
 
And no one has any intention of paying it off.
 
Real Numbskull
 
Now, we are approaching a new stage.
 
With Biden tainted by Ukraine… and Bernie by age and infirmity… Elizabeth Warren is the likely Democrat nominee.
 
History always seems to bring forth the leaders it needs. Another way to put this is our old dictum: People always seem to think what they need to think when they need to think it.
 
When a nation is young and growing, people want little government. They are busy with their own lives… building their own businesses… and creating their own prosperity. Leaders generally stay out of the way, believing that a government governs best when it governs least.
 
But then, when the nation is big enough to throw its weight around, it turns to Roosevelts, Wilsons, and Johnsons, who are willing to stretch… enter wars of no importance… and undertake guns-and-butter spending programs that undermine the real economy.
 
Later, on the rocky downslope of empire, people just want to hold on to what they’ve got. And the nation needs a leader worthy of a Fin de Bubble catastrophe.
 
It needs a real numbskull – like Dubya, Trump, or Warren – who, with no sense of history or humility, will drive the nation into bankruptcy and despair.
 
Stairway to Hell
 
Ms. Warren pretends to be smart, well-informed, and sophisticated. She believes she is on top of the issues, at home in university coffee shops, and at ease with the cognoscenti, literati, and transgenderati.
 
Mr. Trump, on the other hand, is a pro-wrestling fan… a tough, street-smart hustler who doesn’t pay his bills, doesn’t read books, and doesn’t think he needs to study issues in depth. He trusts TV and his instincts, knows how to work a crowd, and thinks you win by making someone else lose.
 
But when push comes to shove in the next crisis, both Warren and Trump will push in the same direction: towards more inflation.
 
Mr. Trump has already taken the lead in what we believe will be the next step down on the dank, dark stairway to Hell. He increased federal spending by $185 billion per year. That’s four times more than the Clintons and twice as much as Obama.
 
The money went right into the Swamp – particularly the Northern Virginia, military-industrial lowlands.
 
Meanwhile, the combination of spending increases and tax cuts caused an explosion in U.S. debt. In the third quarter of this year, for example, the feds added debt at a rate of more than $2 trillion per year.
 
Keynesian Meddling
​
This is happening at the tail end of a boom – that is, just when it’s not supposed to happen.
 
Here at the Diary, we have no truck with Keynesian meddling. But if you’re trying to offset the business cycle, you have to at least try to do it right, increasing spending in a slump… and decreasing spending in a boom.
 
The Trump team did it backwards. It cut taxes and increased spending while the going was still good. Which raises the question: What will it do when the going is not good?
 
That is what we’re going to find out. And here, Dear Reader, this is one tiny part of the future where we think we can see what is coming down the pike.
 
Imagine that the next crisis arrives… with stocks cut in half and unemployment headed towards 10%.
 
Imagine trillions of dollars’ worth of corporate bond defaults and a big rush to sign up for food stamps and unemployment comp.
 
Imagine all the lonely eyes turning to the White House: “Help us… Heal us…”
 
And then, imagine what Team Trump or Team Warren will do. Will they follow in the footsteps of Team Harding, which in the 1920-21 crisis raised interest rates and cut spending? (The downturn was over in 18 months.)
 
Modern Illusions
 
Oh… stop it… Dear Reader… the thought is so bizarre, so out of sync with modern illusions… so staggeringly obvious, correct, and true… it’s triggering our circuit breakers… The lights are flickering…
 
No candidate – neither Republican nor Democrat – is proposing to return to honest money, market-set price signals, and balanced budgets. Those artifacts of an earlier nation (when America really was great) have long been discarded.
 
Now, we have a president who thinks he knows better than the market where interest rates should be…
 
…and a leading lady on the Democrat side who thinks the whole economy can be marshalled to correct the world’s injustices… as she sees them.
 
Forgive student debt, tax the rich, raise Social Security benefits, enact Medicare for All, enter a $2 trillion Green Manufacturing deal… etc. etc. – and that is just the beginning. She has 48 plans, including:
 
Ultra-Millionaire Tax, Leveling the Playing Field for America’s Family Farmers, A New Farm Economy, Our Military Can Help Lead the Fight in Combating Climate Change, Affordable Higher Education for All, A New Approach to Trade, Empowering Workers Through Accountable Capitalism, Tackling the Climate Crisis Head-On, Comprehensive Debt Relief to Puerto Rico, 100% Clean Energy for America, Fighting for an Accessible & Inclusive America, Expanding Social Security, Accelerating the Transition to Clean Energy, Leading in Green Manufacturing, Health Care Is a Basic Human Right, Defend & Create American Jobs, Safe and Affordable Housing, Universal Child Care, among others…
 
Whew!
 
Some say Ms. Warren is “unelectable.” But they said that about Mr. Trump too. Too bad they weren’t right about both.

Below is our translation of an article from RIA Novosti with commentary by Vince Dhimos.
 
Before noting who the author was, I knew this article had to be by Ivan Danilov, the most insightful writer on the RIA staff.
 
As you read the article you might have the uneasy feeling that the Chinese economy is doomed by the draconian measures threatened by the Trump administration. However, if you are following closely the moves of the administration and the counter-moves of the Chinese, you will note that China always has an answer. One of the first was to slap heavy tariffs on soybean imports from the US. Then the Chinese broke their promise to Trump and stopped buying US LNG.
 
But a look at the massive Chinese projects that are unfolding before our Western eyes, shows that dedollarization was the goal all along. The Belt and Road initiative laid the groundwork by facilitating trade between China and the rest of the world. Yuan clearing centres set up by China all over Europe and Asia facilitated the exchange. The AIIB (Asian Infrastructure Investment Bank) made it attractive for trading partners to use the yuan in their trade. The Shanghai gold exchange enabled traders around the world to acquire physical gold in yuan (in contrast to Western paper gold exchanges, whose customers never see the metal. Is it even there?). The Shanghai crude futures market is setting a new oil benchmark and again, is trading in yuan. The futures are convertible into gold, an option only Shanghai’s traders, including global ones, have available. All of these offerings could have been initiated in the West, but Western pols and central bankers prefer the printing press to real economics. This is why they are losing ground. You’d think the US would wake up and realize that China now holds some potentially winning cards and that if they were smart, they’d join them instead of fighting them.
 
Trump and friends can huff and puff and invent new sanctions and declare all the trade wars they want. But East is East and West is West and, so far the impression is that Kipling was right: never the twain shall meet.
 
QUOTE:
 
“... China’s obvious reciprocal move will be a massive listing on European exchanges, as well as issuing bonds in euros, francs or yuan, which, in turn, will only accelerate the process of de-dollarizing the global financial system and creating a global financial infrastructure that is not dependent on Washington’s whims.”
 
...
 
“It’s even better: our Chinese partners saw the seriousness of the intentions of American opponents and realized that the latter could make good this threat at any time, which means it’s time to work more actively on the dedollarization of world finances, which will certainly be a positive development from the standpoint of Russian economic interests.”
 
Finally, I would remind the reader that the anti-China shenanigans are not about Trump. The US Establishment is solidly behind him, including Democratic pols like Sen. Chuck Schumer, who said of the trade wars: “Trump hit the nail on the head.”
 
But none of the pols cheering on the trade wars are economists. Real economists have been warning that trade wars have no winners.
 
America is preparing a terrible punishment for China
 
Sept 30, 2019
 
Ivan Danilov
 
The Donald Trump administration is preparing a nightmarish financial execution for Beijing, one rumour of which led to a drop in stock prices of leading Chinese companies and a decrease in their total capitalization by billions of dollars. But after the panic calmed down a bit, experts all over the world are wondering if the United States will suffer more than China if Washington really takes an extraordinary measure and cuts off access of Chinese companies and borrowers to their stock markets.
 
The Reuters news agency explains the essence of the White House’s plans: “three sources familiar with the situation said Friday that President Donald Trump’s administration is considering delisting Chinese companies from US stock exchanges, which would lead to a radical escalation of trade tension between the US and China. According to two sources, the move would be part of a broader effort to curb US investment in Chinese companies.”
 
The result of the information feed was not long in coming: the shares of Chinese companies that are traded in the United States began to fall. For example, the shares of e-commerce giant Alibaba (the owner of the well-known AliExpress service) fell by more than five percent, erasing over $20 billion of market capitalization in one day.
 
Similar drops were recorded in the shares of other well-known companies: JD.com securities fell almost six percent, Baidu - 3.67%. But the point here is not so much in the tens of billions of dollars of lost market capitalization, but in the fact that if the aggressive plans, are realized, as reported by the sources of the American agencies Reuters and Bloomberg, the United States is actually going to do the same with the Chinese economy as they tried to do with the Russian one after 2014. Moreover, without the introduction of any analogue of the "Crimean sanctions," but just like that. Although, perhaps, some restrictions "for suppressing democratic protests in Hong Kong" will be used as a political cover.
 
It must be emphasized that the media are writing about involves a double blow to Chinese business and the economy as a whole. We are talking about the intention to deprive the company of the opportunity to borrow money (through the issuance of bonds) from American investors and raise equity (through IPO or listing) on ​ state stock exchanges. This really resembles the anti-Russian measures of past years. The difference is that there was an attempt to strangle Russian corporations via difficulties in accessing foreign bank loans and offering bonds, but they are attacking the Chinese using bonds and shares on exchanges in the USA, because this is one of their main methods of attracting foreign currency funds.
 
In addition to forced delisting, plans are reported for limiting regulatory investment in American companies, funds (especially pension funds), and other investors in Chinese firms. This is necessary so that, for example, an investment fund, deprived of the opportunity to buy shares of fast-growing and attractive companies on the New York Stock Exchange, will not open a stock account in Hong Kong or Frankfurt and will not buy forbidden shares there.
 
This drastic measure is probably connected with a serious scandal (which went unnoticed in the mainstream media) that erupted after it turned out that the American state pension fund responsible for paying military and veteran pensions, it turns out, is investing money in Chinese companies. Moreover, at least three of these companies are under official US sanctions.
 
Many investments of this kind are related to the specifics of modern financial markets. The most popular class of investment funds is so-called passive funds, which do not select instruments for investment themselves, but invest solely in accordance with the composition of special indices - such “baskets” of stocks or bonds that meet certain criteria.
 
There are several reputable companies in the world – compilers of indexes (index providers), which are guided by funds that manage a trillion dollars in total. As soon as one of them (MSCI, S&P Dow Jones Indices, FTSE and so on) includes some securities in its indices, investment funds immediately buy them, because they are obliged to do this on the basis of their own statutory documents.
 
As a result, as soon as Chinese stocks or bonds of specific companies become quite attractive and liquid, they are included in indices, and overseas (and international) investment funds are obliged to buy them, which cannot but make the Donald Trump administration angry. It is to block this mechanism that official Washington (according to media reports) is developing regulatory restrictions on US portfolio investment in Chinese securities. They are likely to apply to investment funds and to companies that compile investment indices.
 
The most common estimate of the total capitalization of 156 Chinese companies trading on US exchanges is $ 1.2 trillion. And according to the former head of the macroeconomic analysis department at Societe General Bank Lawrence MacDonald, the total “lost demand” in the even the the relevant securities are excluded from the Bloomberg Barclays Credit Index and MSCI will be $ 1.6 trillion over four years.
 
It may seem that the Trump team has found another vulnerable point in the Chinese economy, which will be extremely painful if struck, without any special risks for the United States. However, this is not entirely true, for the damage will be far from one-sided.
 
American (and European) investors choose Chinese financial instruments not out of love for Beijing or because they have to. In the context of negative interest rates in the European Union and ultra-low rates in the USA (Trump is also demanding the introduction of negative dollar rates), you can find high-yield investments, especially for pension funds, in the most risky corners of Western financial markets (hence the popularity of so-called junk bonds among investors from companies with low credit ratings and dubious prospects for yields), or in markets such as China or Russia. It was not for nothing that shares of Chinese companies were in the portfolio of the pension fund of the US military, and Russian bonds were found in the portfolio of the pension fund of civil servants in California
 
This means that forced patriotism by the Trump administration is unlikely to meet investor understanding. They will seek (and find) options to circumvent the relevant restrictions. Among the simplest ways are simply to buy stocks or investment units of specially created European or Asian (but not Chinese) buffer companies or buffer funds that actually harbour Chinese securities within them, like in a Russian matryoshka doll.
 
Moreover, China’s obvious reciprocal move will be a massive listing on European exchanges, as well as issuing bonds in euros, francs or yuan, which, in turn, will only accelerate the process of de-dollarizing the global financial system and creating a global financial infrastructure that is not dependent on Washington’s whims.
 
Probably precisely because of the US Treasury’s awareness of the gravity of the above consequences, it decided to officially declare that such radical measures are not planned “so far.”
 
What’s even better, our Chinese partners saw the seriousness of the American opponents’ intentions and realized that the latter could make good this threat at any time, which means it’s time to work more actively on the dedollarization of world finances, which will certainly be a positive development from the standpoint of Russian economic interests.

I will ascend above the heights of the clouds; I will be like the most High.
                                                                                                                                Isaiah 14:14
 
Our translation below is from RIA Novosti, with commentary by Vince Dhimos.
 
Shale oil supporters said that America could become the no. 1 oil producer in the world. Turns out they were right. Trump said shale oil could reduce US unemployment. Turns out he was right too. The catch is that this shale pipe dream has hit a wall of solid rock. Thanks to shale's built-in geological features, ie, the need for fracking and the low shelf life of shale wells, it inherently fails to make money for its investors – like investing in Treasuries, who relied on the rocket science of quantitative easing. Investors in both are therefore pulling out. And the government, which tried giving shale investors tax breaks, even tax credits, will ultimately have to admit it’s simply been betting on the wrong horse.
 
American elites have a systemic problem: They believe in the zero-sum game wherein hurting your competitor is somehow tantamount to success. By contrast, China believes in the win-win game wherein making others rich gives you rich clients, and only rich clients can make you rich in turn. Pretty elementary, but US politicians and economic ideologues prefer Rube Goldberg solutions. Tant pis pour eux.
 
The insistence on win-win is why President Xi has long been talking about lifting the Third World out of poverty. China’s non-stop growth – despite a cruel trade war – signals that he has always held the winning hand.
 
If the US had invested in the Chinese AIIB and the Belt and Road, they would be on the winning team. But like the Medieval Crusaders, who couldn't bring themselves to share the Middle East with the other two Abrahamic religions, the proud hegemon could not lower himself to be part of a team. He had to be the boss, all or nothing. It was his choice.

We had warned early, here and  here, that this tragic fate of the shale oil industry was inevitable, and that no government intervention could prevent it. But Washington and Wall Street have an unbending preference for political solutions over science-based solutions. 
​
 
BEGIN TRANSLATION
 
The flip side of the boom: a wave of bankruptcies swept the American shale
 
May 18, 2019
 
MOSCOW, May 18 - RIA Novosti, Natalya Dembinskaya. The worst fears of US shale companies seem to be coming true: Weatherford, one of the leading providers of well drilling services, is preparing for bankruptcy proceedings. The next few smaller players are Halcon Resources and Alta Mesa Resources. Why expensive oil is not helping shale oil companies - RIA Novosti reports.
 
No money
 
Oil production in the United States has reached a record 11.5 million barrels per day, thanks in large part to oil shale. But, as Bloomberg notes, the shale boom is only masking the problems of this market.
 
To maintain high production rates, operators need to drill more and more wells, and this requires enormous costs. But there is nowhere to get the money: tired of unprofitable projects, investors are losing interest in shale drillers. Last year, Wall Street invested half as much in the industry as in 2016.
 
“Thousands of shale wells drilled over the past five years pump less oil and gas than their owners promised investors,” The Wall Street Journal notes. “It makes you wonder: is shale drilling promising and profitable, as one would expect from the hopes of turning the USA into an oil superpower?”
 
As a result, the industry is flooded with a wave of bankruptcies. Weatherford International, an American oilfield services company, one of the leading providers of drilling services, said last week that it was preparing to sue for bankruptcy. And the leadership of two other oil and gas industry players, Halcon Resources and Alta Mesa Resources, questioned the ability of their companies to continue operations.
 
California Resources, an oil and natural gas exploration and production company, also had problems. Its bonds are traded with a yield typical of junk papers - ten percentage points higher than US Treasury bonds. Bristow Group, PHI, Jones Energy and Rex Energy are also burdened with debts and likewise face bankruptcy.
 
"These non-viable companies are revealing the flip side of the boom. Manufacturers with high costs and poor balance sheets do not really attract investors, who are more interested in making a profit than investing in the development of shale production, be it through debt or equity," says Bloomberg.
 
Expensive oil won’t save the day
 
Faced with a lack of investment, by the end of last year, shale producers entered an austerity regime, cutting the budget for the current year - for the first time in several years. Major miners, Centennial Resource Development, Diamondback Energy, and Parsley Energy, reduced planned spending by about 15 percent. Cost reductions were announced by more than a dozen oil companies.
 
The hopes of the industry were largely associated with the restoration of oil prices. Since December, WTI and Brent have risen in price by almost 40 percent - up to $60 and $70 per barrel, respectively.
 
However, observers note, this is not saving shale drillers. As Bloomberg Intelligence analyst Spencer Cutter points out, despite $60-70 oil, bankruptcy in the US energy sector will “increase” by the end of the year. [And that despite Trump’s illegal sanctions on anyone buying Iranian or Venezuelan oil!]
 
Total losses
 
In the period of 2010-2014, the development of technology and high oil prices led to an explosive increase in investments in oil production in shale fields. But in 2015, black gold fell sharply, and the shale industry had to fight for survival. About a hundred manufacturers went bankrupt, owing a total of more than $70 billion.
 
Now the situation is repeating itself: shale drillers are cutting costs and growing debt (Weatherford's bankruptcy alone will add about eight billion dollars to total debt), and no new investments are expected in the sector.
 
For investors, shale companies turned out to be a "black sheep," according to FactSet, an international company specializing in the financial data market. Since 2007, the stock index of US oil shale producers has dropped 31 percent, even as the S&P 500 rose 80 percent.
 
Analysts point out that for ten years, the industry has not met expectations. According to Evercore ISI, a consulting firm, energy companies spent $280 billion more than they earned on oil and gas during this period.
 
Today, the proceeds from the sale of a quarter of shale oil produced in the United States are entirely used to pay interest on corporate borrowings. With the total debt of oil shale companies, the situation is even worse: it exceeded $300 billion, and nine billion barrels of oil must be produced to pay it off. This is almost as much as the shale oil extracted during the entire lifetime of the industry (about ten billion barrels).
 
Technology won't help
 
Experts also note that shale companies have been experimenting with various drilling methods for many years.
 
As oil scientist David Hughes explained to OilPrice, improving drilling methods has reduced costs and improved well efficiency, but has not led to a significant increase in oil production. "Technological progress does not change the fundamental characteristics of shale oil production, but only accelerates the life cycle from boom to recession," says Hughes.
 
Thus, in the shale industry, a drop in production is inevitable amidst a constant increase in costs. "It is a mistake to assume that oil shale production will grow forever on the basis of continuously improving technology: in the end, only geology determines the cost and amount of resources that can be extracted," the scientist warned.

 
In the following you will find our translation of another article from RIA Novosti with commentary by Vince Dhimos. I found a crude, completely unedited Google Translate rendition of this article on the internet, but could not bring myself to link to the atrocity.
 
America has long fallen off the cliff, using purely financial methods to cure economic ills. Somebody needs to tell the US elites that finance and economics are two separate animals. In a sense, Trump actually had the right idea when he focused on domestic oil and gas extraction as a way to make America stronger, though unfortunately, shale energy – which makes up the bulk of the US oil and gas industry – is an inherently unprofitable venture mostly because it requires an extravagantly expensive extraction method involving fracking and the well lives are so short that new wells must be drilled constantly, alas, before the previous well can provide substantial profits for the investors. Trump didn’t see fit to to due diligence and research the subject before foisting this economic solution on his country. So now the US is the biggest oil exporter in the world and offers more jobs than ever but the oil producers have nothing to show for it and are unlikely to keep investing.
 
As for the debt, that is an economic problem, but like the rest of the government and the Fed, Trump and the deep Establishment are using a purely financial tool, namely, devaluation of the dollar. And you think you are poor now? This solution is sort of like trying to repair an iPhone with a monkey wrench. It is very sad to watch the bunglers in government trying to solve problems with ideological means. After all, the notion that a broken economy can be fixed by bankers is nothing more than a fixed, immutable typically American ideology and, as wise people know, ideologies do not fix problems, they create them.
 
BEGIN TRANSLATION
 
The real US debt is 18 times more than everyone thought. What will happen now?
 
Sept 11, 2019
 
Ivan Danilov
 
The well-known American financial company AllianceBernstein conducted a study that revealed the true size of American public debt, and the results of this study shocked the relevant media. The US financial television channel CNBC has released special material on this subject under the heading "The real level of US debt can be 2,000% (of the size of the American. - Approx. Ed.) of the economy, the Wall Street report said."
 
The AllianceBernstein assessment attracts attention not only due to figures that the US media have called “shocking,” but also because this “debt diagnosis” was made by a very well-known financial institution. AllianceBernstein was founded by renowned economist and billionaire Zalman Haim Bernstein, and it now manages $586 billion of assets, which gives its forecasts serious extra weight.
 
Further, after a careful reading of the calculations and recommendations of these American financiers, it seems that the publication of this study is an element in preparing the public consciousness for the fact that “Bolivar can’t carry double” [see end of this paragraph for explanation] and that in order to save the American economy, it will be necessary to cut social support programs and other elements of a welfare society. Irony of Fate: Zalman Haim Bernstein himself spent several years of his life participating in the implementation of the Marshall Plan, a scheme of American investment in Western Europe to develop Western European economies and strengthen American influence in Europe in the context of competition with the USSR. But that was in the past, and today the company, founded by one of the participants in the Marshall Plan, is actively hinting that to save the American economy from debt gangrene, a scalpel or even a chainsaw will be needed, and it’s not the debt to the holders of American bonds that should be cut, but the American social guarantees. [The expression “Bolivar can’t carry double” comes from O’Henry’s short story “The Roads We Take.” Context: an attempt to mount 2 men on one horse named Bolivar]
 
CNBC reporters explain how AllianceBernstein calculated the real US government debt and why it is important: "AllianceBernstein developed a methodology for calculating (and received.  Ed.) the result, ie, 1832 percent (of GDP. Ed.), to be precise, -- including not only traditional levels of government debt, such as bonds, but also financial debt in all its diversity, as well as future obligations for so-called (social) payment programs, such as Social Security, Medicare and state pensions. After this all comes together, a frightening picture emerges, but this picture requires nuances to understand. It is very important to realize that not all debt obligations are “carved in stone,” and it is important to know where the space for freedom of manoeuvre is found, especially in government programmes, which may be changed either by law or by accounting. "
 
Usually, with regard to the level of US government debt, a figure of $22.5 trillion is quoted, which is equivalent to about 106 percent of GDP. Supporters of the opinion that there is no problem with the US sovereign debt and no crisis looms, go even further and emphasize that the debt obligations that the US Treasury has to other state agencies and funds should be subtracted from this amount, and then we can talk about a debt of only 16.7 trillion dollars, or 78 percent of US GDP. The problem is that this view proceeds from the bizarre assumption that the obligations of the US Treasury to state institutions that pay pensions or medical care or various benefits need not be met, and those government bonds that are on the balance sheet of these institutions, and thanks to which they financed, can simply be "written off" with a stroke of the pen without any consequences.
 
AllianceBernstein chief economist Philipp Carlsson-Szlezak does not make such exceptions and takes into account all US obligations as a state, regardless of their form, when calculating the total debt of the United States, and therefore the picture is much worse – the total public debt (in all forms) works out to an incredible 388 trillion dollars.
 
However, the author of the study immediately rushes to reassure readers. "Although the picture is terrible, such figures do not prove that we are doomed or that a debt crisis is inevitable," writes Philipp Carlsson-Szlezak. And immediately he offers a potent solution: "A default on US treasury bonds would be catastrophic for the global economy – while changes in (social - Ed.) policy (albeit painful for those whose future payments are reduced) would hardly register on the economic horizon." [Notice how the super rich protect themselves and each other in the long run. This tendency of the elites to save their own skins at the expense of the rest is one very important reason why the income gap between rich and poor has grown like a cancer for the last 30 years, as shown here.]
 
Thus, in order to save investors in American treasury bonds, it is proposed to sacrifice American citizens, their benefits and pensions, which would allow us to comply with formal decencies and not undermine the investment community's confidence in American government bonds.
 
It should be noted that from a practical standpoint, this proposal contains one rational and one irrational consideration. The rational one is that a default on US bonds would indeed be a disaster for the American and even global financial markets, not to mention the fact that in this scenario the foreign exchange reserves of many central banks, a significant part of which are invested in US government bonds (Treasuries), will turn to dust overnight. It is logical that representatives of the financial sector of the American, and indeed the world economy will strongly resist this scenario.
 
By the way, even if Washington chooses default, Russia will be among the few countries not to suffer direct financial damage, because the Russian treasury portfolio has been sold in advance because of sanctions risks, although this will not free us from indirect the consequences of a hypothetical American default, from which the entire world financial system will suffer. But the irrational part of the AllianceBernstein proposal lies in the implicit belief that the deprivation of funding for social programs will not lead to dire political and economic consequences. No American politician, regardless of party or ideological affiliation, will agree to such a suicidal decision. The question arises: what then to do with these hundreds of trillions of dollars of debt? The answer can be found in the statements of President Donald Trump, who even before the election victory said that the US economy is one big "financial bubble" that constantly requires a weakening dollar. [I wrote about this here].  If the dollar is devalued greatly, it will be possible to pay off debts very easily, and though will not save the world financial system from crisis, and the American economy from deep depression, it will be possible to pretend that "Uncle Sam" always fulfils his social obligations and uprightly pays his debts. Judging by how actively China and Russia are both buying gold, there are enough people in the world who want to insure themselves against the consequences of this particular method to solve the American debt problem.
 
END TRANSLATION

Economists tell us that no one ever wins a trade war, but it is safe to say that some of the losers lose more than others.
 
Today, Xinhua reports:
 
“Continuing the steady growth momentum, China's foreign trade of goods exceeded 20 trillion yuan (about 2.8 trillion U.S. dollars) from January to August, up 3.6 percent year on year, according to the latest figures by China's General Administration of Customs.” [my highlighting]
 
Meanwhile, the US Bureau of Economic Analysis reports:
 
Year-to-date, the goods and services deficit increased $28.2 billion, or 8.2 percent, from the same period in 2018. Exports decreased $3.4 billion or 0.2 percent. Imports increased $24.9 billion or 1.4 percent.
 
While there is some good news in the month-to-month data, the year-to-year data shows that, although no one ever wins a trade war, China is suffering less so far than the US, which most likely goes to show that 1) The Trump tariffs have not deterred Americans from buying necessary imports from China, and 2) China trades with many countries other than the US.
 
Xinhua also reports:

“China's trade with the Belt and Road countries totaled 5.83 trillion yuan for the January-August period, up 9.9 percent year on year.”
 
TASS reports:

“China's exports to Russia grew by 11.5% in the first month of 2019 and exceeded $4.3 billion.”
 
The US deficit increased less in June over May but much of this owed to shale oil and gas exports, and that has a major drawback. The fact is, most shale oil investors have been losing their shirts and many have gotten out of the market, as we detailed here.
 
It is therefore hard to imagine that US shale oil will continue to fuel a further increase in US energy exports. And energy is the sector that Trump was counting on to make America great again.
 
This leaves a big question mark dangling above the euphoria over America’s future.

I keep reminding that no one ever got rich by making someone else poor. If the US had focused on developing massive projects of the magnitude of those developed by China and Russia, it could have made substantial contributions to its own economy and paid off a significant portion of its staggering debt. Instead it fritters away time and energy trying, in vain, to throw a spanner in the works of these two countries’ projects.  If the US public had an inkling of the true big picture, they’d throw out the lot of their politicians, but instead, they practically worship many of them. They will pay the price for their naiveté.
 
I have not seen any commentary with this kind of focus anywhere in the West.
 
https://ria.ru/20190905/1558290478.html
 
The ships have arrived: The West is trying to block the Northern Sea Route
 
5 Sept 2019
 
MOSCOW, Sep 5 - RIA Novosti, Alexander Lesnykh. In mid-August, one of the world's largest container carriers, the French company CMA CGM announced the abandonment of the Northern Sea Route. A little later, Norwegian Prime Minister Ine Marie Eriksen Søreide expressed concern about the environmental and economic aspects of this route and said an audit will be confucted. Is the West capable of blocking Russia’s strategic project? RIA Novosti reports.
 
Quiet and smooth
The large-capacity tanker Prospect Koroleva, owned by the Russian Sovcomflot, set sail from Murmansk on August 26 and delivered a cargo of crude oil to China in just a week.
 
“We were sailing at a speed of almost 13 knots, when I stood on the bridge and caught myself thinking: if you don’t look through the porthole, you can’t say that the ship is moving - there is no vibration, no noise, no exhaust from the pipe. There’s a clear sea behind us, a clear sky above us - and silence," shares the impressions of the captain of the voyage, ice adviser Vasily Ermakov.
 
Russian President Vladimir Putin and Indian Prime Minister Narendra Modi during a joint visit to the Zvezda shipbuilding complex in the city of Bolshoy Kamen.
 
There is nothing unusual in the transit of oil along the Northern Sea Route – it’s happened before. But before this voyage, not a single vessel had travelled the entire route exclusively on ecologically clean gas fuel.
 
The sailors of Sovcomflot have proven that the future of global commodity transport lies in the Arctic transport artery in Russian waters. According to Oleg Shishkin, the captain of Prospect Korolev, the passage through the NSR is almost a month shorter than the traditional route through the Suez Canal. And LNG reduces daily fuel consumption by 20% and carbon dioxide emissions into the atmosphere by almost a third.
 
The development of the NSR as a transport artery connecting Europe and Southeast Asia is one of the country's most important infrastructure tasks. The fact that in the coming years interest in the route will only increase is shown by the statistics of cargo shipments. At the end of August, the head of the directorate of the Northern Sea Route of the Rosatom state corporation Vyacheslav Ruksha announced that this year the cargo flow of the Northern Sea Route will grow by 45% - from 20 to 29 million tons.
 
According to the May decree of Vladimir Putin, cargo shipments through the NSR by 2024 should reach 50 million tons per year. Ruksha notes that everything necessary for this is being done:
Under construction are the Arctic LNG - 2 liquefied natural gas complex, owned by Novatek (about 18 million tons of fuel per year), the VostokUgol cargo base in Taimyr, capable of shipping 20 million tons coal annually, and the oil companies of the Payakhskoye field, which will ensure the export of more than five million tons of oil.
 
European approach
 
Like any other Russian project aimed at developing international trade, the Northern Sea Route has its share of opponents abroad. In mid-August, according to Figaro, one of the world's largest container carriers, the French concern CMA CGM, has abandoned the Arctic routes, primarily the Northern Sea Route. Representatives of the company cited "concern for the environment," which greatly surprised the expert community.
 
"The logic is strange - if the ship goes the short way, it means less fuel is burned," explains Alexei Bezborodov, director general of the Infranews research agency, to RIA Novosti, recalling that CMA CGM will transfer all of its ships to environmentally friendly LNG in the coming years.
 
However, the French actions will not affect the cargo flow through the Northern Sea Route - after all, no one was counting on this company. And once the NSR becomes as familiar a route as that through the Suez Canal, the CMA CGM will still have to launch freight transport on Arctic waters - otherwise competitors will pass them by. For example, Danish Maersk, whose head back in June said that the company was exploring the possibilities of seasonal service on the Northern Sea Route.
 
Norway is against the NSR. A week ago, Prime Minister Ine Marie Eriksen Søreide said that official Oslo is concerned about the environmental and economic aspects of the NSR, adding that it needs to check the route for compliance with European standards.
 
In response, Vladimir Isupov, senior adviser to the Russian Embassy in Oslo, indicated that the infrastructure project is being developed exclusively in Russian territorial waters and Norway is only an outside observer.
 
The root of the problem
 
Many experts believe that the European assaults on the NSR are the result of Washington’s pressure. The fact is that the cheap and fast delivery of Russian liquefied natural gas via the Northern Sea Route to the countries of Southeast Asia puts an end to the Americans' desire to gain a foothold in this promising market. [Selling LNG to Asia, particularly China, was a pet dream of Donald Trump, who was generally focused on boosting the US economy with shale oil – now seen as a losing bet by most investors]
 
The fears of Washington strategists are more than justified: according to the International LNG Importers Group (GIIGNL), last year Russia shipped almost 13 million tons of LNG to the region, while the United States sent only 10.7 million.
 
For Washington, the situation is aggravated by the fact that Russia will provide liquefied gas not only to China, with whom Trump has quarrelled helplessly, but also to Japan, a key American partner in the region. Hiroshige Sako, the Minister of Economy, Trade and Industry, recognized the reality of this prospect ahead of the Eastern Economic Forum.
 
"A round table is planned within the framework of the forum at which representatives of business in Japan and Russia will discuss the development of the economy of the Far East, including routes along the Arctic Ocean, which is closely connected with the Arctic LNG-2 project," the Japanese official noted.
 
Arctic Tramway
To ensure the growth of cargo flow along the Northern Sea Route, Russia is actively developing an atomic icebreaker fleet, which has no analogues in the world. Not later than May of next year, the Baltic Shipyard will launch the lead nuclear icebreaker of project 22220 Arctic. Two more such ships will be commissioned in 2021-2022.
 
In the long term – by 2030 – Rosatom plans to organize year-round navigation along the NSR. The government intends to allocate almost 130 billion rubles for the construction of the unique atomic icebreaker Leader with a capacity of 120 megawatts (for comparison, the capacity of the Arctic power plant is half that).
 
And last Wednesday, the Zvezda shipbuilding complex and the Korean company Samsung Heavy Industries Co. Ltd, as part of the V Eastern Economic Forum, announced the establishment of a joint venture to manage the construction processes on the Zvezda tankers for the Yamal-LNG project.
 
Vyacheslav Ruksha from Rosatom is sure that in a few years, cargo ships along the Northern Sea Route will be "running like trams."
 
The dog barks and the caravan goes