In the following is our translation of an article from RIA Novosti with commentary and notes [in brackets] by Vince Dhimos.
The main difference between analyses by the Russian Ivan Danilov and US financial analysts is that Danilov looks at the larger picture including non-aligned countries, whose opinion is invariably ignored by US state-aligned media. Actually, it could have been worse. Trump had wanted to bail out the already perpetually failing oil companies, which, thanks to the refusal of Russia and OPEC to cut production – which had been done heretofore solely to prop up US shale oil drillers – have had their bottoms drop out completely.
Danilov’s last paragraph is a warning:
“China is seriously considering the scenario where dollars (and US bonds from China's foreign exchange reserves) will need to be dropped immediately, because Washington’s actions will lead to global inflation and a catastrophic devaluation of the American currency itself. We can assume that Beijing was sending a public warning to Washington. But it is unlikely to raise anyone’s awareness.”
Remember that the reason for the Fed´s perpetual printing spree (quantitative easing) is that buyers can no longer be found for US Treasury notes and the Fed is obliged to buy its own bonds back. But if China ditches its reserves of Treasuries, this will make it even harder for the Fed to cope. And then, what if the unthinkable happens and Saudi ditches its reserves and buys gold instead? Some analysts have already observed that Saudi’s refusal to continue the oil production cuts signals the end of the petrodollar. But ditching its dollar reserves would be the icing on the cake! The reason I mention this possibility is MBS’s stated suspicion that the US is behind a recently uncovered palace coup plot. Suppose MBS, in a rage at Washington, decides to drop the dollar and then undertake a rapprochement with Iran? Peace might break out in a nation that relies on war for its livelihood!
The explosion of the American "rescue bomb": what will happen now?
March 25, 2020
On Monday, the US Federal Reserve System (that is, the US Central Bank) took unprecedented measures to support financial markets: it was announced that now the redemption of the government bond market will occur without any restrictions, in the volumes "that will be required."
A delayed, but powerful effect of this announcement was observed on financial markets around the world on Tuesday – indeed prices were rising for everything, including the currencies of developing countries, gold, oil, as well as stocks of companies.
The psychological effect that the American authorities have achieved is also hard to overestimate, and it will be much more long-term than any direct impact on the prices of some assets. The term "Fed Reserve" has long been established in the financial markets - and it is used in cases where the US Central Bank applies some urgent, unusual, and possibly extremely dangerous measures of financial impact on the markets and the economy as a whole.
As an example of an emotional reaction to what happened on Monday, you can take an assessment from an article in the Australian Financial Review, the leading financial publication in the Southern Hemisphere, which begins with the thesis: "Forget the bazooka. The Federal Reserve has resorted to nuclear weapons." The decision to undertake endless quantitative easing (endless redemption of US government bonds from the market. - author) by the world's largest Central Bank is a decisive moment not only in this crisis, but also in the history of central banks, which indicates the seriousness of the falling (economic) activity affecting the global economy and the financial system that supports it. "
Theoretically, after this statement by the Federal Reserve, the rise in prices on trading floors should have started almost immediately, but on the day the decision was made, everything went wrong, because the actions of the regulator were actively (and effectively) prevented by American politicians. The fact is that congressmen and senators decided that now is a very good moment to quarrel among themselves about the details of the legislative package of measures to support the American economy, and failed at its expected adoption. Players in the financial markets of the whole world came to the logical conclusion that no measures of the Federal Reserve will save the American economy if it is governed by such intellectually peculiar policies, and under global conditions, the fall of the US economy means a severe crisis around the world.
On Tuesday, markets were growing by and large – due in part to hopes that either Trump or the famous American "deep state" could nevertheless put things in order or at least create some kind of consensus. It is worth noting that the venerable senators and congressmen quarrelled and failed to vote not because they wanted to do better, but because each party tried to sneak subsidies for its corporate sponsors or socially associated groups into the bill on the pretext of fighting the crisis. Matt Stoller, director of research at the American Economic Liberties Project, compiled an incomplete list of such proposals, which were discussed both officially and informally.
Speeding up payments and removing budget control over payments to contractors of the Pentagon, five billion dollars grant for space projects of billionaires Elon Musk and Jeff Bezos [Musk’s net worth: 26.9 billion, Bezos’ net worth 113.9 billion], $150 billion for hotels, $145 billion for restaurant owners, one trillion dollars credit guarantees for the International Council of Shopping Centers [a real estate group], a tax deduction for subscriptions to fitness clubs and the purchase of sports equipment, a facilitated process for issuance of visas for migrant workers in meat processing companies, five billion dollars of subsidies to producers of beer, 500 million for confectionery manufacturers, etc.
As a Washington lobbyist rightly remarked:
“A crisis can be a blessing. Every time a crisis arises and Washington is involved in that crisis, it’s an opportunity for guys like me.” This is important, because discussions of this kind accurately reflect the essence of the situation and where and to whom the bulk of the very money will go that the Federal Reserve prints and throws into the market in its "use of the nuclear option."
Sooner or later, lobbyists, senators, financial bosses, shareholders of large companies and congressmen will somehow agree among themselves, adopt the relevant actions, and this will allow us to efficiently inject money into the American (and - indirectly - global) economy, which will have a positive effect on the confidence of global financial markets in a bright future. But those who are used to planning not for months but for years — and in this case we are talking about our Beijing partners — are not delighted with Washington’s monetary initiative and its consequences, which will fully manifest after the shock of the epidemic passes. The official mouthpiece of China, the state-owned Global Times has published an editorial that clearly sets out a vision of what will happen next and what China has to do to deal with the consequences:
"In fact, the US reaction in the form of printing money has become an inevitable trend and (this printing) comes from the economy. The US dollar is the world's reserve currency and the main currency of world trade. And it is because of the financial hegemony of the dollar that the world will have to take on the consequences of large-scale US quantitative easing (that is, the Fed’s redemption of US bonds for US dollars printed from thin air. - author). As a result, serious global inflation is on the way. Rising commodity prices will soon spread to all products around the world, which will lead to higher asset prices, and the impact of this growth will ultimately be felt in the real economy. As one of the largest lenders of US debt, China must be vigilant about the impact of printing money in the United States with proper precautions regarding the structure of Chinese foreign exchange reserves."
It is worth separately translating the final phrase from the diplomatic English in which the Global Times column is written, into plain Russian [or English, in translation]: China is seriously considering the scenario where dollars (and US bonds from China's foreign exchange reserves) will need to be dropped immediately, because Washington’s actions will lead to global inflation and a catastrophic devaluation of the American currency itself. We can assume that Beijing was sending a public warning to Washington. But it is unlikely that it will raise anyone’s awareness.
END OF TRANSLATION
Syrian war news
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Syrian, Russian military reinforcements head to Idlib with heavy weapons: video
By News Desk -2020-03-25
BEIRUT, LEBANON (5:20 P.M.) – The Syrian Arab Army (SAA) is preparing to launch a large-scale offensive in the Idlib Governorate amid the refusal of the militant groups to withdraw from the designated safe zone that was established by the Moscow Agreement on March 5th.
According to a military source in northwestern Syria, the Syrian and Russian military forces have sent more reinforcements to the Idlib Governorate this week, with the latter’s personnel consisting mostly of advisers.
The Russian military gave the Turkish forces until the end of March to clear the safe zone along the M-4 Highway (Aleppo-Latakia Highway); however, they have failed to remove these militants from the area.
This was one of the stipulations of the Moscow Agreement, which Turkey helped establish in order to implement a ceasefire in the Idlib Governorate.
A convoy of Russian military equipment was filmed heading towards the Idlib Governorate this week, as the Syrian Arab Army (SAA) prepares to resume their offensive against the militant forces in the region.
UNFORTUNATE ADVENTURES OF TURKISH ARMY IN IDLIB
Two Turkish soldiers were injured and two vehicles damaged in Syria’s southern Idlib on March 24. Their military convoy was targeted by a roadside bomb explosion near the village of Sfuhun. Turkish troops based at the al-Barah observation post were conducting a patrol along the contact line between the Syrian Army and Idlib armed groups.
This became the second attack on Turkish forces in Greater Idlib in less than 7 days. On March 19, two Turkish soldiers were killed and several others injured, when an IED exploded near their convoy near the village of Muhamabal.
Pro-militant propaganda claims that the attacks were carried out by the ‘criminal Assad regime’ in an attempt to destabilize the situation. Turkish media outlets pay scant attention to the situation reporting about some unidentified radicals. The open secret is that Turkish forces have become the target of attacks by groups that Ankara has been supporting with its opposition of the anti-terrorist operations of the Syrian Army. Hayat Tahrir al-Sham, Houras al-Din, the Turkistan Islamic Party and similar organizations see the creation of a buffer zone along the M4 as a grave threat to their interests and survival. Therefore they are sabotaging the deal by blocking the highway and fuelling military tensions in the region. In the near future, they may even stage a large false-flag attack on Turkish forces near the contact line planning to blame the ‘Assad regime’ for it and thus relaunch military hostilities between the Turkish Army and the Syrian Armed Forces.
Violations of the ceasefire regime by Idlib radicals are also increasing. Recently, ATGM, mortar attacks and artillery shelling were reported near Kafr Nubl, Saraqib, Kansafra and Kabinah. Turkish-backed groups claim that this week they destroyed a Syrian Army battle tank and bulldozer north of Saraqib.
Members of Turkish-backed Faylaq al-Madj raided the village of Sukariya, near the town of Tell Abyad, in northeastern Syria. They attacked locals wounding dozens of them and looting their property. Earlier in March, members of Turkish-backed militant groups protested in the area of Operation Peace Spring because there had been a significant delay of salaries from Ankara. Turkish sources claim that Turkey is actively working to put an end to looting and attacks on locals. Nonetheless, such incidents continue to erupt on a regular basis.
Several explosions were reported near positions of the Syrian Army and Iranian-backed forces at al-Bukamal. Local sources claim that they were a result of actions by ISIS cells. Over the past months, al-Bukamal became a target of dozens of Israeli and US strikes. ISIS terrorists are likely trying to exploit this.
Turkish military sends large convoy to southern Idlib amid Syrian Army build-up
By News Desk -2020-03-26
BEIRUT, LEBANON (3:45 P.M.) – The Turkish military sent a large convoy to the southern countryside of the Idlib Governorate on Thursday amid reports of a Syrian Arab Army (SAA) build-up in the Jabal Al-Zawiya region.
According to reports from the Idlib countryside, the Turkish military convoy entered northwestern Syria from the neighboring Hatay Province; they would make their way to one of their observation posts.
The Turkish military was said to have reached the town of Al-Mastoumah in the southern countryside of Idlib after entering the country earlier in the day.
At the same time, the Syrian Arab Army is still building up its forces in the Jabal Al-Zawiya region, as they continue to send troops and military equipment to the front-lines in southern Idlib.
The Syrian Arab Army is awaiting the green light from the Russian Armed Forces to resume this offensive, which could happen during the first week of April.
The Russian military has given their Turkish counterparts until the end of March to force their allied militants to withdraw from the designated safe zone along the M-4 Highway (Aleppo-Latakia Highway).
Rockets land near US embassy in Baghdad: video
By News Desk -2020-03-26
At least three rockets fell near the US Embassy in Iraq, in the Green Zone of Baghdad, Iraqi media reported on Thursday.
According to the Al-Arabiya broadcaster, the rockets fell near the US embassy, and no damage or casualties were reported, a source told Baghdad Today.
Aleph 🕯️ א
Replying to @no_itsmyturn
Update: No casualties.
Aleph 🕯️ א
Another video /#Baghdad Green Zone #Iraq 🇮🇶
No official statement on the reports has been made.
The Green Zone suffers from regular rocket attacks as it houses government facilities and foreign embassies. On 17 March, three rockets fell in the zone, two in al-Jadriya and a third in the Tigris River, according to Iraqi officials.
Col. Myles Caggins, a spokesperson for the Pentagon’s Operation Inherent Resolve, noted at the time that the rockets landed roughly 2 kilometers from the American embassy, according to the Associated Press.
US warship armed with Tomahawk missiles enters Taiwan Strait amid row with China
China blasted the US over the move to sale a warship through the Taiwan Strait, accusing Washington “dangerous” behaviour.
“US moves have seriously interfered in China’s internal affairs, severely harmed peace and stability in the Taiwan Strait and poisoned Sino-US military ties,” Chinese Defence Ministry spokesman Ren Guoqiang said. Criticizing the US’s “continued negative actions” in Taiwan, Ren warned that US actions were “extremely dangerous.”
Earlier, the US Seventh Fleet reported that the USS McCampbell, an Arleigh Burke-class missile destroyer equipped with Tomahawk cruise missiles, carried out a “routine” freedom of navigation mission through the sensitive 180 km-wide Taiwan Strait.
Anthony Junco, a Navy spokesman, said the ship carried out a “routine Taiwan Strait transit March 25 (local time) in accordance with international law.” The ship’s transit, Junco said, “demonstrates the US commitment to a free and open Indo-Pacific.”
The spokesman added that the Navy would “continue to fly, sail and operate anywhere international law allows.” Taiwan’s military, meanwhile, said it monitored the US destroyer’s movement as it sailed north through the strait.
Second Transit Since January
This was the second time the US has sailed a warship through the Strait since January, when the US Navy demonstratively sent a ship to the area following elections in Taiwan. China said at the time that it ‘closely monitored’ that passage.
Taiwan staged massive naval, air force and army drills this week, a week after the island’s military reported intercepting and driving away multiple People’s Liberation Army Air Force jets after they crossed the median line of the Taiwan Strait. Taipei has called the actions of the Chinese military a “provocation.”
Beijing considers Taiwan a part of its territory, and maintains its right to one day reunite the island with the mainland. Taiwan split from mainland China in during the Chinese Civil War in 1949.
The United States, Taiwan’s biggest protector and ally, has regularly sent vessels through the Strait, and has sold the country advanced weaponry, even while de jure recognizing the People’s Republic as the sole sovereign Chinese state.
Beijing has repeatedly warned Washington against interfering in Taiwan’s internal affairs, and has demanded that the US cancel any official and military contacts with the island, on pain of sanctions against US companies.
US SANCTIONS ON RUSSIA FOR OIL PRICE SLUMP WILL SHUT DOWN NARRATIVE OF TRUMP-PUTIN BROMANCE
In the following you will find our translation of an article from rueconomics.ru with comments and notes [in brackets] by Vince Dhimos.
This report puts paid to the “Russian likes Trump” allegations. In fact, the Russian refusal to continue the OPEC production cuts, which triggered an oil price crash, shows that Russia is in a mood to punish Trump for his sanctions, notably those that stopped the Nord Stream 2 pipeline to Germany. If there ever was a Putin-Trump bromance, it is over and this leaves the Democrats without a platform, which had always consisted chiefly of allegations that Russia was supporting Trump. They will now have to debate over voter-relevant issues. Do they remember how?
US threatens Russian sanctions in attempt to avoid bankruptcy of oil shale workers in Texas
March 20, 2020
US threats to impose sanctions against Russia due to falling oil prices show that America is extremely dissatisfied with the current situation. This opinion of the FBA "Economics Today" was voiced by a leading expert of the National Energy Security Fund, a teacher at the Financial University under the Government of the Russian Federation, Stanislav Mitrakhovich.
The American publication The Wall Street Journal, citing White House officials, said: Donald Trump’s administration is considering introducing new sanctions against Russia. The purpose of such measures is to "stabilize the oil market." At the same time, it is not specified what restrictive measures will be aimed at and what step on the part of Moscow might provoke them.
The newspaper also believes: Washington wants to force Riyadh to return to previous volumes of oil production, which were observed before the OPEC + deal was broken. The US Administration intends to call on the Saudis. The day before this the trump said that "in due time" he is going to join in a discussion of the situation around the differences between Russia and Saudi Arabia on oil. And he suggested that low hydrocarbon prices are "destructive" to the Russian economy.
“Sanctions are an element of general pressure on Russia, an attempt to force Moscow to restrict foreign policy activity,” the analyst notes. “Over the past 6 years, we have observed that restrictions are imposed on Moscow for any reason, but the effectiveness of these measures is extremely low – Russia does not change its political course and it’s not following the West’s lead, and the United States can both tighten restrictions already imposed and come up with something new.
For example, the Russian Federation can be cut off from the international interbank payment system SWIFT or another industry can be shut off to buyers. Extreme measures could be the seizure of Russian assets, or company accounts abroad. We have seen for years that the US sometimes doesn’t even bother to find a reason for new restrictions. And now there is indeed a reason, and quite a serious one – Russia is not just affecting the world oil price per barrel, but is clearly not going to succumb to pressure in this matter.
American dominance in the world took a long time to establish, but now it is gradually dwindling away, but this process is not rapid. If in the 1970s the United States produced half of the world's GDP, while now it is only a quarter. So the influence of US sanctions is already limited, and the White House is forced to calculate each time how its restrictions will affect the allies and the US economy. The imposition of sanctions due to oil prices looks arrogant, but such a scenario cannot be ruled out."
Price per barrel affects US elections
The OPEC+ deal was concluded several years ago by an oil producing cartel with a number of non-member countries. All parties to the agreement committed to reduce production to maintain an acceptable barrel price level. The United States chose not to enter into the deal and actually increased its production, receiving profits from the self-restraint of other market participants. But this situation allowed the cost of a barrel of Brent to be kept at a stable level of $60-70.
After April 1, OPEC+ will ceases to function, since Saudi Arabia in early March demanded that Russia reduce production by an additional 300 million barrels per day, which would generally limit the Russian Federation to 600 million barrels. Moscow categorically refused, which brought down world exchanges. Today, Brent is trading around $30. At the same time, Urals oil, the proceeds of the sale of which form the budget of the Russian Federation, has fallen in price, according to Argus Media, to $18.4 per barrel. This is the lowest level since 2002.
“When the OPEC+ deal was cancelled, we saw Trump getting excited about it, saying that gas prices in the US would go down. [Trump was clearly bluffing. This is his standard reaction to price drops – he also said this when Saudi started overproducing after the Senate issued a statement blaming him for Kashoggi’s murder. He knew that if these prices held, US shale oil companies, his pride and joy and the source of most of the touted new jobs, could be ruined. In fact, there has been a steady string of bankruptcies in the shale sector since day 1]. Some of the economy wins – for example, carriers. But it soon became clear that the elation was premature. Low barrel prices and oversupply oil in the world market hit another sector of the American economy - oil production, more precisely - the shale industry.
And in the fall, the presidential election will be held in the United States – the most important political event in the country. And if some Americans are satisfied with Trump’s actions, then a whole industry is left without work and income – and this is a huge number of voters. And the White House is clearly worried about this situation. The problem is real – shale companies in Texas are on the verge of ruin.
So Trump’s policy now resembles a toss of the dice – he either calls the collapse of OPEC+ a good event for America, or he is suddenly going to bring back these agreements in some form by trying to force Moscow and Riyadh to abide by them. Russia has already proved that talking with it via threats, ultimatums and restrictions is senseless. It is hard to say what the Trump administration will actually do,” concludes Stanislav Mitrakhovich.
END OF TRANSLATION
Latest news from Al Masdar.
US is ready to undermine Idlib agreement: Russia
By News Desk
March 29, 2020
Russian Foreign Ministry spokeswoman Maria Zakharova told reporters on Friday that the US, which is frustrated over the Moscow-Ankara accord on the Idlib settlement, uses any pretext to promote anti-Russian hysteria.
She said that the Ministry has paid attention to “the intensification of contacts between American politicians and the quasi-humanitarian organisation White Helmets operating in Syria”.
“Such contacts usually end up with big problems in the region in the form of provocations and provocative actions. On 17 March, US Deputy Secretary of State Stephen Biegun met the White Helmets leader despite restrictions on contacts with foreigners introduced by the State Department in connection with the spread of the coronavirus,” Zakharova said.
She also recalled that on 11 March, the White Helmets leader delivered a speech in the US Senate, in what was preceded by the group’s representatives meeting the US Special Representative for Syria near the Turkish-Syrian border.
According to her, these meetings took place against the backdrop of Washington’s new anti-Russian information campaign over the situation in the Idlib de-escalation zone.
“Of course, it is surprising that the White Helmets, which position themselves exclusively as a humanitarian organisation, are again at the centre of the West’s information manipulations that are aimed at distorting the real situation in Idlib […]. It seems that the possible implementation of the Russian-Turkish agreements, and the very idea of the Idlib de-escalation zone, causes such irritation in Washington that they are ready to use any excuse to unleash anti-Russian hysteria and undermine Syrian political settlement”, Zakharova emphasised.
NSS comment: The government has warned that the virus-related shutdowns could last 18 months at least. If this is so, then Trump may refrain from counter-attacks for that long. The Iraqi militias could force the US out of Iraq at this rate.
Trump refrained from launching larger attack in Iraq over coronavirus
By News Desk
President Trump is seen showing little expression with his arms crossed in the image
NBC News has cited several unnamed US sources as saying on Thursday that the coronavirus pandemic prompted President Donald Trump last week to refrain from ordering a more aggressive response to an Iraqi paramilitary group’s recent attack on American troops in Iraq. The US sees Kataib Hezbollah as an Iranian proxy.
According to the sources, Trump told his senior national security advisers that such a retaliation could tarnish the US’s image now that Iran is grappling with COVID-19, which has already claimed the lives of more than 1,000 people in the Islamic Republic.
“The president has a pretty good sense of what type of action to take in response to these attacks”, one of the sources said, referring to the US military’s retaliatory steps as “proportional”.
The sources warned of Washington’s “proactive” actions aimed at preventing another attack, adding, “we recognise that there’s an ongoing threat; we don’t always have to be counterpunching”.
National security adviser Robert O’Brien, for his part, told Fox Business on Monday that the White House’s “eye is not off the ball” due to the COVID-19 pandemic.
“While we are focused on corona at home […] we are keeping an eye on those who would do us harm. If anyone thinks America is less determined, they are making a big mistake”, he pointed out.
The remarks come after the US Department of Defence confirmed in a statement last week that American forces had conducted “defensive precision strikes” against five Kataib Hezbollah weapons storage facilities to “significantly degrade their ability to conduct future attacks against Operation Inherent Resolve (OIR) coalition forces”. Kataib Hezbollah is an Iraqi Shia paramilitary group.
ALSO READ New video shows suspected US warplanes attacking Iraqi and Iranian forces in Syria
“These strikes were defensive, proportional, and in direct response to the threat posed by Iranian-backed Shia militia groups (SMG) who continue to attack bases hosting OIR coalition forces”, the statement said.
The strike followed a Kataib Hezbollah firing a number of rockets at Camp Taji, an Iraqi base north of Baghdad where US and coalition troops are stationed. At least two US servicemen were killed and 14 other people wounded in the 11 March attack.
‘MODERATE REBELS’ BITE HAND THAT FEEDS THEM. 2 TURKISH SOLDIERS KILLED IN IDLIB
Syria entered the second half of the week with a new spike of tensions in Greater Idlib. This escalation has been widely expected because militant groups are sabotaging key parts of the Russian-Turkish agreement on de-escalation in the area.
Radicals kept their positions along the M4 highway, where a security zone was set to be created, and blocked planned joint Russian-Turkish patrols there. On March 19, they expanded their strategy with direct actions against Turkish and Russian forces. At least two improvised explosive devices exploded en route of the Turkish military column near the village of Muhamabal. 2 Turkish soldiers were killed and several others were injured. Opposition sources initially reported that Horas al-Din, one of multiple al-Qaeda-affiliated organizations in Idlib, was behind the attack. Nonetheless, Horas al-Din itself denied responsibility for the incident. There is no surprise that the group indirectly receiving support from Turkey denied such a move. Later, pro-militant media adapted their version of events blaming ISIS cells and even Assad agents. The March 19 developments demonstrated that Ankara does not fully control terrorist organizations that it is protecting from the Syrian Army in an attempt to solidify own influence in the region. Therefore, in some conditions, Turkish-backed terrorists become a threat to Turkey and its forces themselves.
The Turkish leadership fully understand that the ceasefire will not survive too long without the neutralization of terrorists. So, the Turkish Army continues its military buildup in the area. Turkish forces set up new positions near Ram Hamadan and al-Jinah. Additionally, three Turkish convoys, consisting of dozens battle tanks, armored vehicles, rocket launchers and howitzers crossed the Turkish border with the Syrian province of Idlib. Turkish units also conducted a modest attempt to de-block the M4 highway by removing earth mounds left by militants.
The situation on the frontline is also escalating. Late on March 19, the Syrian Army repelled an attack on its positions near Hizareen. Syrian state media claimed that militants suffered heavy casualties in the clashes. Wa Harid al-Muminin, a coalition of small al-Qaeda-linked groups, claimed responsibility for the attack. It released own statement saying that 15 “regime troops” were killed.
Meanwhile, the Syrian Army and the National Defense Forces started reinforcing their positions in southern Idlib and northern Lattakia with fresh troops and military equipment. Pro-government sources claim that Jisr al-Shughur, the town controlled by the Turkistan Islamic Party, will become the target of the army offensive, if the ceasefire collapses.
Vince Dhimos answered a question at Quora.
WHY HAVE THE US AND EUROPEAN NATIONS FAILED SO MISERABLY IN RUSSIA?
Vince Dhimos, Editor-in-Chief at New Silk Strategies (2016-present)
I recommend reading fellow Quoran Hersh Bortman’s analysis below. Then I would add the following.
This question is complex because there are different sanctions. The first batch was imposed by the US congress in 2014 to punish Russia for the referendum in Crimea and for allowing the peninsula to accede to the RF. The referendum was held, BTW, in accordance with UN and generally accepted international standards and was not illegal. Further it was not an annexation in that the RF did not take Crimea by force. It was, more correctly expressed, an accession.
I think the underlying problem with US actions is that they ignore international and national laws. In the long run, the US dooms itself in so doing.
The Russian people understood that they were being mistreated unjustly and they pulled together. Russia decided to impose countersanctions on Europe, which as usual, acted like the perfect US lapdog and imposed similar sanctions on Russia. To retaliate, Russia immediately embargoed farm products that had until then been imported from Europe, and then went to work growing their own food. Paradoxically, these sanctions wound up saving Russians money in the long run, and also boosted their farm output and profits. It turned out to be a boon. In fact, for fear of further sanctions, Russia boosted industrial production in all fields in a policy of import substitution. It also sold off the bulk of its US Treasuries. Meanwhile, Europe, lost money through the sanctions and, thanks to the ill treatment by the US, developed a SWIFT work-around called Instex, which enables it to directly make and receive payments to and from countries like Iran that are blacklisted by the US.
To save myself time, let me just jump to the latest sanctions, imposed on the Russian Nord Stream 2 pipeline to Germany.
The US was acting here like a bull in a china closet, ignoring all the potential consequences and, in fact, the “conservative” US was throwing aside all traditional conservative principles of fair business and trade. They slapped third party sanctions on all companies participating in this pipeline project, notably the Swiss-Dutch Allseas, which was using two specially adapted ships to lay the pipe under water. Allseas was, of course, intimidated into quitting, although the project was already at least 2/3 finished. But this didn’t stop Russia, which already had such a specially equipped ship.
Russsia says it will complete the project sometime this year, a few months behind schedule. But it will lose billions in lost revenues.
So what did Germany and the EU think about this? They were furious at the US because they need the cheap Russian gas. And they easily saw through this naked attempt to unfairly coerce Europe to buy the way overpriced US LNG – which the EU has already said it doesn’t need.
This predictably drove Europe closer to Russia’s court, prompting European governments to consult with Putin. Merkel, for example, flew to Moscow for a tête à tête, ostensibly to discuss the Middle East. But it was a stinging slap at Trump for his belligerent attitude toward an ally.
Likewise, French president Emmanuel Macron has taken bold steps toward “improving conditions of security and stability” jointly with Russia. (Emmanuel Macron’s Russian roulette — the tone of this article is typical sneering Russophobia but it is a display of naked fear).
At around the time the US imposed third party sanctions on the Russian pipeline project, the US was reminded of Russian success when the Russian pipeline Power of Siberia started operation supplying gas to China.
But the icing on the cake was when Russia took advantage of the COVID-19 crisis to abruptly announce that it would not be going along with OPEC+1’s oil production cuts designed to artificially prop up US shale oil sales. US shale is now in serious trouble.
I think this was Russia saying “consider that our sanction on you.”
Vince answered a question at Quora.
Q: HAS THE WAR BETWEEN RUSSIA AND SAUDI ARABIA OVER CRUDE OIL SHAKEN [sic]? WHAT WILL HAPPEN NOW?
Vince Dhimos, Editor-in-Chief at New Silk Strategies (2016-present)
I am reasonably certain that there never was a conflict between Russia and Saudi. In fact I suspect that they both wanted low oil prices and Putin volunteered to take the fall. After all, as soon as Russia backed away from its agreed-upon obligation to continue with the cuts, Saudi followed suit and started pumping full throttle.
And after all, both countries had their possible motives, good ones too. Perhaps they were waiting for such a black swan event as COVID-19 to stomp the US economy good and hard.
Russia has been badly abused by the West ever since about 2014 when it allowed Crimea to accede to the RF. Then when Russia entered the Syrian war in Sept 2015 and immediately made significant gains against terror, this embarrassed the US, which was forced to stop pretending and actually fight terror. As a result, the US trumped up “chemical weapons” charges against Assad as a pretext to make Russia look bad and provide a phony excuse to attack Assad’s forces (though Russia intervened with negotiations between the sides and saved the da). And then, of course, the US slapped sanctions on Russia for helping defeat their terrorists.
So that gave Russia a solid motive to want to smack down the US oil business. But they bided their time. Putin is famous for his patience.
But what about Saudi you say? They have a solid reason as well. Recently a coup plot was uncovered there and MBS declared it was supported by the US. I suspect Putin may have whispered this rumour to MBS and they then mutually decided to call off the oil production cuts that had been in place for a long time as support for US shale oil. Both countries had been extremely nice to the US but hegemons aren’t nice back because they think they don’t have to be.
Shale oil has a high break-even price — a minimum of $50/ barrel, and Putin had been honouring Saudi’s request to cut production to keep the oil prices up. But since the rumour of US support for the palace coup plot surfaced, MBS no doubt decided he had had enough and would no longer help prop up the US economy. And now it’s come to this and Trump is desperate and is blaming Saudi and Russia for sabotaging the US oil business. He ought to know that voters want results, not excuses. In fact, Trump has said on more than one occasion that he likes winners and hates losers. Will he start hating himself now? And what will happen to the Democrat accusation that the Russians support Trump? Will the Republicans blame the Russians if Trump loses? How can the Russians be supporting both parties simultaneously?
Remember that Russia has been the subject of anti-Russian smears in US politics and sanctions for years. Probably the meanest and most uncouth thing any diplomat ever said came from Nikki Haley, Trump’s misfit ambassador to the UN, who famously said: We don’t trust Russia and we don’t trust Putin and we never will. And: We will slap them [Russia] as needed.
Ok, Nikki. You had your fun and you figured the US is powerful enough it don’t need no stinkin’ diplomacy, not even for its diplomats. What went around came around. Diplomatic protocol is for preventing countries from hating you. But if you want to shoot from the hip and say reckless things, go right ahead. Just remember: When you live in a glass house, better not throw stones.
The American glass house was the enormous dependence on shale oil and gas, which, unfortunately require very high market prices to stay afloat — because shale oil requires the very expensive process of fracking for its extraction. Thus even with the wind at their backs, US shale drillers were going bankrupt on a regular basis. A little humility from the presidency would have gone a long way under these circumstances.
But you reap what you sow. Shale oil required a break-even price of $50 a barrel. The price is now around 40 and still dropping. April oil futures are reportedly selling at below 30!
Barring a miracle, nothing will save US oil (and gas) now. And energy was the industry that Trump pointed to as the creator of all those new jobs.
Kremlin residents have been overheard saying “it couldn’t have happened to a nicer guy.”ar.
I told readers before that Russia holds the key that can make or break the US economy. No one ever talks about this and the “news” from the msm, including the “financial news,” always seems to miss this point. After all, there is no such thing as real financial news in the Western world. 99% of what we are told is propraganda aimed at buoying up the markets, which have already been in bubble mode and about to pop on news of a possible black swan event. The black swan is here and it is called COVID-19, the Chinese coronavirus.
But Russia just threw the world a hard ball and the possibility I pointed out back in June 2019 is now breathing down our necks. Did you expect this? What does your favourite news source say?
Here was the article in question:
HOW RUSSIA COULD BRING DOWN THE US ECONOMY (but probably won’t)
Allow me to quote myself from the above-linked article:
Theoretically, Russia could put the screws to Washington simply by controlling oil prices. If Russia started pumping oil as fast as it could, this would drive down the oil price to below the limit required by the US shale oil operators that Trump is counting on to make America great again for the zillionth time (I’ve lost count of all the times it was great again before). It could pretty much wreck the US economy.
Russian-language financial news outlets are finally talking about Russia’s potential impact on US shale oil. Notably, rueconomics.ru just today ran the headline (my translation): Russia’s position on OPEC+1 will be a serious blow to US shale oil (Позиция России по ОПЕК+ станет серьезным ударом для сланцевой нефти США). “Serious blow” is way understated. It could easily be a fatal blow. After all, it was the shale oi "miracle" that added new jobs that Trump touted as his chef d'oeuvre. Digging more deeply, note that Saudi crown prince MBS is launching a crackdown on a would-be palace coup, blaming royal family members of plotting with Americans to depose him. The Reuters report on this has everything to do with our story. In view of MBS’s suspicion of US involvement, I suspect that MBS, not Russia, is behind the opening of the floodgates. After all, it is entirely possible that the Saudis talked Putin into announcing his refusal to go along with the OPEC oil sale cutbacks. This would avenge MBS of the US for its supposed role in the coup attempt. But Russia would also certainly have a motive for slapping back at the US for its years-long ill treatment of Russia.
I also keep saying that the US made a terrible bet on shale energy because oil and gas from shale is very expensive to extract (requiring fracking) and requires a high sale price, making the price at the pump higher than you the consumer would like. BTW, msm and political-class propaganda to the contrary, the high consumer prices mandated by shale drillers are not a sign of a healthy economy, quite the opposite. With the dollar inflating, you want affordable prices to offset inflation (BTW, that was China’s role until recently). I also keep saying the proper time for the US to extract shale energy would be during a future worldwide oil shortage when a higher price would be sustainable and when the US would need this energy for security. But no, we are using up these reserves at a time when there is so little profit in shale that companies are going bankrupt on a regular basis! According to an analyst quoted by Reuters, US shale oil drillers need a WTI (West Texas Intermediate, the accepted benchmark) price of $50 minimum to stay in business. Keep this number in mind.
So now comes the really bad news and Russia is the fly in the ointment. CNBC announced just 2 days ago:
“International benchmark Brent crude traded at $45.46 a barrel Friday afternoon, down over 8%, while U.S. West Texas Intermediate sank to $41.93, also around 8% lower.”
Ok, so even more shale drillers will go bankrupt now and nothing can save them – partly because the epidemic (of suspicious origin) is disrupting Chinese manufacturing, making China use less oil, and partly because of this OPEC+1 refusal to continue the cuts – at exactly the worst possible time. So what does this have to do with Russia? The article goes on to say that OPEC is seriously weighing opening the floodgates and no longer abiding by the old iron-clad rule of making production cuts of between 1.5 million to 1.7 million barrels a day in order to keep the prices reasonably high, primarily for the sake of their shale drilling pals across the sea.
The reason for these tentative plans? Russia. We speak of OPEC+1, where the 1 is Russia, which never agreed formally to join OPEC but has agreed to various deals such as notably these cuts. But now that a black swan event has occurred, ie, the COVID-19 pandemic, Russia is balking and will not agree to any cuts at all -- which is why Saudi says it will no longer sustain the agreed production cuts. At least that is the story so far.
What an awful thing for Russia to do to its US partner, right?
Well consider how nice the US has been to Russia all along.
– US ambassador to the UN Nikki Haley famously said “We don't trust Russia; we don't trust Putin; we never will. They're never going to be our friend. That's just a fact.” And “we'll slap them when needed.” Now these words were uttered in public by the highest ranking ambassador in the US serving at an international body. No other US diplomat had ever said anything this crude about any other country at any time in history, not even about Mussolini, Hitler, Stalin or Mao during the terms of these men in office. And yet there is a good reason for restraint by diplomats. Because quite often, what goes around comes around. Diplomats – who usually have some training in diplomacy or at least some degree of common sense – are expected to use diplomatic language even when they are angry or dislike the country they are dealing with because leaders of nations have ways of hitting back at the US. But Nikki turns on her mouth before her brain. And the most telling thing about Nikki’s inappropriate remarks was that hardly any US official called her on this grotesque breach of protocol. They acted as if they agreed with these racist statements (ok, Russians are not a race, but they are an ethnicity and she was saying the US will never trust an entire ethnicity. Suppose she’d said that about Jews? And Putin was listening. He is slow to anger but never forgets).
– The US ambassador to Germany, Richard Grenell, has repeatedly and insistently tried to strong-arm that country to refrain from buying Russian natural gas, even though it had bought this gas since Soviet times and has always relied on this cheap energy source. Russia had never applied palpable political pressure on Germany using this commercial relationship as a lever, since Russia needed the income as much as Germany needed the energy. Thus Grenell’s argument that consuming Russian gas would threaten Germany’s “energy security” was just part of a naked attempt to use political pressure to force Germany to buy US LNG at premium prices that would really threaten Germany’s energy security. In fact, in the unlikely event that Russia had sought to use the gas prices to blackmail Germany, the country could have easily set up a hub for LNG, including US LNG – although realistically, thanks to this US bullying and to the high US prices, the US would probably not be its supplier of choice. It is noteworthy that fairness in business and trade is a cardinal principle of the German business culture. Once a trading partner is identified as cheating or, especially, extortion – which is exactly how the Germans interpret the US actions – they will normally discontinue relations with that partner.
– Making good Grenell’s threats, the US slapped third-party sanctions on the companies involved in the Russian Nord Stream 2 gas pipeline project intended to deliver Russian gas to Germany, ultimately bringing the project to a halt. Fortunately for Russia, it possesses one ship capable of laying submerged pipe, with which to replace the two ships of the sanctioned Swiss-Dutch Allseas company. The completion will be delayed by several months inflicting losses of billions of dollars for Russia.
– The US has been busy for years interfering in the affairs of states of the former Soviet Union in order to weaken the economic and political relations between Russia and its traditional partners. Ukraine was the prime target. Because Russia refused to go quietly into the night on these issues, and has allegedly supported the self-defence of 2 renegade republics in Donbass (which was subjected to genocidal attacks on its citizens), the US heaped sanctions on Russia, and has done so since 2014. Recently, the US has imposed sanctions on Russia, Iran and Syria for alleged “war crimes,” though this is a case of a war criminal that slaughtered civilians in Nagasaki, Hiroshima, Dresden, Korea, Vietnam, Iraq, Afghanistan, Libya, Syria and others, introduced terrorists into the Middle East and supported them for over a decade, trying to assert a moral authority that it clearly does not possess over states that have never been proven – only alleged by this war criminal – to have perpetrated crimes – without proof.
Putin now has the chance for retaliation. What will he do? Will the US start to treat Russia as a respected peer or will it continue the anti-Russian harassment as it sinks into economic oblivion? It’s all up to Washington.
News from Isreali newspaper Haaretz on the COVID-19 epidemic.
Analysis Israel vs. U.S.: Coronavirus Crisis Shows Importance of Public Healthcare System
“The idea that people suspected of having the coronavirus must pay for testing and any treatment is nearly inconceivable to Israelis, but that’s what Americans face”
Our translation of an article from zen.yandex.ru follows, with a foreword and notes [in brackets] by Vince Dhimos.
The US will use bluff and bluster to pretend to fight Russia over the Arctic, but it is all a game. The US got in too late, while Russia was busy developing a northern sea route along the Russian coast that will save a significant proportion of the travel distance and hence time that was once needed using the Suez Canal route. Shipping companies will save money and pay handsome profits to the Russians to use the cheaper route. Likewise, the US dallied in its so-called war and terror in Syria while Russia saved Syria from destruction, and the US, to save face, pretended Syria was using chemical weapons and fired Tomahawks that did nothing but make permanent enemies out the the Syrians; Russia, China and Iran will now profit from rebuilding Syria; and the US starved the Iranians and Venezuelans with sanctions as Russia and China bought Venezuelan oil and the US appointed a puppet no one had ever heard of as “interim president.” But the UN didn’t buy into the scheme and Guaido is still pounding the pavement. The US could have traded with Maduro and made a nice profit off the oil, but the profits now go to Russia and China even as US shale drillers, who miscalculated, keep going bust; It could have gotten in on the lucrative oil trade with Iran but it chose to be enemies and China and Russia are the winners there as well while Iraq tries to free itself of the monkey on its back. All US losses are clearly Washington's own fault but it will keep whining that someone else ate its lunch and will keep threatening and bluffing and pretending to be a tough guy until the Fed’s printing presses grind to a halt.
What did the United States forget in the Arctic?
Recently, the United States has sharply increased interest in the Arctic territories, as confirmed by the "Arctic Doctrine" recently submitted by the US Department of Defence. [This is mostly just another of the Pentagon’s empty statements aimed at justifying its existence. It will do nothing meaningful in the Arctic]. It is aimed not only at expanding Washington’s influence, but also at creating conditions for weakening Russia's geopolitical role in the Arctic. Given the intentions of the Americans, it can be assumed that in the coming years the Arctic will become the scene of international confrontation.
What makes this region so attractive? At present, taking into account changes in climatic conditions in the Arctic due to global warming and melting glaciers, the Northern Sea Route (hereinafter NSR) - the shortest sea route between Europe and East Asia - is becoming more accessible to development. This route skirts the Russian coast, and there is a high probability that in a couple of years Russia will take possession of the new international artery - an excellent alternative to the Suez Canal, through which about 10% of all world shipping is currently carried out.
Moreover, the Arctic is a region where a huge amount of gas and oil reserves, as well as minerals is concentrated. It produces 25% of global gas and a tenth of global oil. In addition, some believe that it is the Russian Arctic that contains almost all reserves of Arctic gas and up to 80% of the oil reserves of the Far North, which prompts Russia to conduct a more detailed study of the region.
And what, in turn, do the United States have in the Arctic? Only the state of Alaska, which is entirely dependent on oil and gas production (whose reserves are not high) and which has been experiencing budget deficits in recent years amid falling oil prices, giving the state one of the lowest GDP levels in the country. Hence the sharp decline in oil companies’ interest in the US Arctic shelf.
The prospects for the development of the NSR and the presence of an enormous amount of useful resources concentrated in the Russian Arctic possessions are not available to Washington. For these reasons, the former US Navy Secretary Richard W. Spencer last year decided to build up US military power in the Arctic by creating new naval bases in the Bering Sea region and expanding the US military presence in Alaska. Now the Pentagon is developing a strategy of "internationalization" of the Arctic space and simultaneously trying to concentrate a large number of troops and armaments in the Arctic region. In particular, the United States is trying to get Russia to allow American warships to sail along the NSR, or in other words, along the Russian coast.
In addition, the US is actively attracting its NATO allies to the "Arctic" problem, using the territories of Canada, Norway and Denmark to strengthen its military presence in the North. Moreover, in an attempt to prevent Russia from appropriating the Arctic, Washington is setting up various obstacles. For example, concerns about the environmental situation in the northern seas are used as preventive measures: Russia's actions in developing them allegedly pose a source of environmental risks for Northern Europe. The desire of the United States and its allies to stop Russia in the Arctic is evidenced by the requirement of the Norwegian Foreign Minister to immediately check the Russian Northern Sea Route for compliance with European environmental standards.
Russia is not afraid of the already provocative tactics of the West, because the Russian Federation’s desire for environmental safety in the Arctic is confirmed by undeniable facts. For example, the Russian large-capacity tanker Prospect Koroleva (from Sovcomflot) was the first in the world to traverse the entire NSR using environmentally friendly fuel, ie, liquefied gas. In total, this company has six such vessels, while continuing to improve and replenish their fleet. As part of its concern for the region’s ecology, Russia also plans to completely abandon “dirty fuel” and will use nuclear fuel in its fleet. According to the president of the United Shipbuilding Corporation JSC Alexei Rakhmanov, “since 2020, the International Maritime Organization has reduced the permissible sulphur content in marine fuel from 3.5 to 0.5 percent. Demand for ships with power plants using liquefied natural gas (hereinafter LNG) will increase. But there is another alternative, ie, nuclear fuel vessels which have zero emissions. This is especially true, for example, of the Northern Sea Route. ”
Another reason the United States can’t oust Russia from the Arctic region is the fact that we have allies with whom Washington hasn’t got the warmest relations. These include Iceland, which is closely monitoring the development of the NSR project and is considering the possibility of building an international port there for large vessels. The South Korean authorities have also expressed a desire to cooperate with Russia on the development of the Northern Sea Route. At the Korean shipyards, 15 icebreaker tankers are currently being built to transport LNG along the Arctic route. Another Russian trade and economic partner, China, is extremely interested in importing Russian LNG and is investing heavily in the construction and development of oil and gas infrastructure in the Russian Far North. [And this at a time when the US is desperately trying to sell its expensive LNG to China].
Russia has an iron grip on the Arctic, continuing the development of infrastructure, including military, in the region (recall the unique military base “Arctic Shamrock”). Nevertheless, the US Armed Forces are already developing hypersonic weapons of destruction, which the Americans can further use for forcible seizure of Arctic territories. Therefore, in order to strengthen Russian positions in the Arctic, the Russian Defense Ministry decided to deploy ten Rezonans-N radar systems in northern Russia capable of detecting hypersonic targets. At present, two Rezonans radar systems are already on combat duty in the Russian Arctic; the third radar station on the Novaya Zemlya archipelago is prepared to enter service. After all ten stations are located in the Arctic zone, the northeastern-missile hazardous area will be completely covered by hypersonic hunters.
Whatever methods the US uses to expand its influence in the Arctic, whether it be military intervention or the manipulation of international law, they are unlikely to succeed in this area The Arctic is an object of long-standing interest in Russia; Russians have been developing this region since the beginning of the 11th century. This is one of the most unexplored lands, with a potential that in the future can give serious impetus to the economic development of our country. Therefore, Russia will continue to increase the defence capability of its Arctic territories in order to protect them from encroachment by others.
Vince Dhimos answered a question at Quora.
Before we get into the question and answer, note the utter naïveté of this questioner, apparently an American. He has been reading and hearing in the msm about the US campaign to destroy China’s economy and apparently firmly believes that President Trump has supreme power over all the countries in the world to bring down China or do whatever else he wants. This indoctrinated Westerner is so ethnocentrically oriented that he or she apparently has no idea of the massive push-back in the rest of the world to the US attempt to dominate world opinion and world trade and politics. If America wakes up before November from this opiate slumber that we are witnessing here at Quora, and realizes that Trump has had almost zero influence on people outside the US, or has in fact had the opposite influence to that desired, a surprise may await it. Trump is keenly aware of his constituents’ mentality and to their hopes and desires and he gives the little dears what they want. But he seems to be blissfully oblivious to how people elsewhere think and how they perceive his policies. This was evidenced by the administration’s belief that killing Gen Soleimani would help turn the Iranians against their own government. Instead, as any person with half a brain might have expected, it rallied the Iranians – even many fence sitters who may have sympathized with the West – around their government, as the world learned when multimillions turned out in Teheran to mourn their beloved general cut down in his prime by a senseless and illegal strike in Iraq. What the West failed to understand is that Iranians, even those opposed to the Ayatollahs, did not see Soleimani as part of their flawed government. They saw him as a hero. America killed the wrong guy.
Q: WILL EUROPE JOIN FORCES WITH AMERICA AGAINST CHINA?
The response of the UK to US threats is indicative of how things will play out. The UK decided, against US wishes, to go ahead and let Huawei help with the 5G rollout but pared down the Chinese role a bit to please the Empire. There will be similar somewhat timid but nonetheless defiant reactions around Europe to the unprecedented US bullying they have been subjected to since 2016.
For example, Germany has resisted US demands and obstinately refused to back down from its purchase of Russian gas from the Nord Stream 2 pipeline once it is completed, and Italy is openly cooperating with the Chinese Belt and Road Initiative (BRI) – a project that is anathema to the xenophobic US administration. Ex US ambassador to Germany Richard Grenell wore out his welcome in Germany warning and threatening the Germans not to buy Russian gas, insisting this was a threat to its “energy security,” but the Europeans correctly assessed that the US was just shamelessly trying to use unfair methods to sell its overpriced gas there. Finally, in view of Grenell’s failure to successfully bully Germany, Trump kicked Grenell upstairs, naming him the new Director of National Intelligence. Funny how people working in “intelligence” have so little of it.
While Europe pretends to sort of comply with Washington’s demands, down underneath it is seething with anger at the US tyrant and chafing to free itself from Washington’s unfair trade restrictions and attempts to kill European industry (Airbus, which Washington wants to ban altogether, is the best example). BTW, it ought to be clear by now that we are dealing not just with Trump’s restrictions and trade wars. The US Establishment, including the Democrat Party top brass, is generally with Trump on this policy. Contrary to popular US opinion, there is really no major Deep State-vs-Trump divide on issues of vital interest to the Establishment – only on piddling issues like the “Russian meddling” myth.
In another example of European push back, France and China agreed to a joint cooperation action plan for strengthening French ties with China, including promoting dialogue and mutual trust; bilateral agreements on the environment; interconnectivity, including cooperation between the EU’s Europe-Asia connectivity strategy and China’s Belt and Road Initiative (Trump is vehemently opposed to this concept and wants to kill the BRI in a frantic – downright racist-looking — effort to strangle the Chinese economy. The Establishment is not opposed to Trump on this); protection of bilateral trade and cross-investment; and others.
European leaders are now talking about building strong multilateralism. The use of that word in a recent joint statement (EU and China want to build) between China on the one hand and French President Macon, German Chancellor Merkel and European Commission President Jean-Claude Juncker, on the other, is brazen because multilateralism is nothing but a variant of multipolarity, the concept popularized by Russian President Putin in his famous 2007 speech at the Munich Security Conference . Putin was referring to the emerging concept of a multipolar world to counter the influence of the monopolar (or unipolar) world dominated by the US. The use of the word multilateralism in a statement co-drafted by European leaders is a clear sign that Europe is quietly declaring its independence of Washington and moving toward Russia’s (and also China’s) multipolar world where the sovereignties of nations are respected. Quite unlike the current US Neo-colonial mentality. And quite the opposite of “taking the oil” in Syria or keeping troops in Iraq against the will of the Iraqis. By the US’s actions – trying to strong-arm Europe to stop dealing with Iran, to pull out of the Iran Deal, to refuse Russian gas in favour of US LNG, to halt the laying of the Nord Stream 2 gas pipeline from Russia to Germany, and cut China out of the UK’s 5G rollout, etc – Washington has inadvertently rallied Europe in its efforts to free itself from the US yoke. Thus the US is unwittingly acting in the interests of those it is trying in vain to dominate and is inadvertently ushering in Putin and Xi’s multipolar (or multilateral) world.
Below you will find our translation of an article from RIA Novosti on the difficulties the US empire is having keeping Venezuela in line, with commentary and notes [in brackets] by Vince Dhimos.
For us, it is all déjà vu. Back in 2017, New Silk Strategies was predicting that the euro would be used to edge out the dollar. Sure enough, the European Instex system was later devised to use non-dollar currencies, notably the euro, as a means of bypassing US sanctions.
In June 2019 we wrote an article entitled “US bullying fuels the wordwide anti-dollar movement,” showing that as the US steps up its use of the US dollar as a bludgeon, other countries are finding ingenious ways of sidestepping its economic restrictions. As usual, we were prescient.
Robert Robb recently wrote in April 2019 for azcentral:
“One day, other countries will devise ways to conduct international trade independent of the U.S. banking system. Indiscriminate use of access to it as a weapon will hasten that day.”
By then Russian, Chinese and European efforts were well underway to bring down the dollar. As mentioned above, Europe had already designed a SWIFT alternative that it called Instex, for use in circumventing US detection of transactions in euros and other local currencies. The under-the-table transactions between Venezuela and the Russian oil giant Rosneft, as described below, are another such attempt, and despite the US’s pin-prick sanctions on the partners involved, this has not succeeded in slowing down the Venezuelan oil trade. We remind the reader that none of these transactions is illegal. The US has no authority to write international law, despite all the noise suggesting otherwise.
American media: "How Putin outwitted us in Venezuela"
American experts and journalists are sparing no efforts to figure out the reasons for the US defeat in Venezuela: the failure of the "Venezuelan president" Juan Guaido, recognized by the State Department, turned out to be a very painful blow to Washington's pride. The defeat “in the backyard of the United States” – and many overseas [meaning mostly American] experts perceive this to be the whole of South America – is doubly painful. The main culprit in the American troubles in Caracas has already been identified, but the journalists of the leading US business publication, The Wall Street Journal, went further and discovered something terrible: it turns out that a whole coalition of countries has worked against Washington’s plans in Venezuela, and some of them are, at least formally, faithful allies of the United States.
The diagnosis from financial journalists looks like a verdict on the foreign policy developed by Washington Hawks.
"How Putin outwitted Trump in Venezuela. The Trump administration underestimated the support President Nicolas Maduro would receive from Russia and Cuba, as well as from US allies," wrote analysts who carefully studied how the legitimate power of Venezuela was able to withstand stifling economic sanctions and diplomatic pressure from the western world.
In addition to the faithfulness to Venezuelan security officials, unexpected for Washington, which we have already written about and American experts have repeatedly complained about, the formula for saving Caracas from a colour revolution and economic collapse, according to the Wall Street Journal, suggests several key ingredients: Russian assistance in organizing oil exports to bypass sanctions, Cuban assistance in organizing the work of special services, Turkish willingness to work as a financial intermediary, and the desire of two American allies in Asia to buy Venezuelan oil despite the sanctions and the State Department’s anger.
It is difficult to determine where the real analysis of financial and commodity flows ends and where the virulent anti-Russian and other propaganda begins, but we can say with confidence that in the mainstream segment of the overseas [US] information field, a version will now be adopted that everyone, except perhaps the faithful London bankers who "froze" the Venezuelan gold reserves, is working against Washington. The most interesting thing is that the Venezuelan crisis is not a "matter of life and death" for a notional Turkey or India, which means that the Americans could come to the conclusion that their efforts in the South American direction are subjected to decisive sabotage by the allies not because they do not have another way out, but because they no longer harbour their previous fear of the “world hegemon.”
The Wall Street Journal provides a fairly impressive list of (unproven) allegations against a wide range of geopolitical players.
"According to an analysis by The Wall Street Journal based on the Import Genius database, nearly half of the crude oil exported from Venezuela to India nine months after the imposition of US sanctions was acquired by an Indian joint venture with Russian oil giant Rosneft.
According to Venezuelan trade reports, the United Arab Emirates has imported about one billion dollars in gold from Venezuela since the introduction of the “gold sanctions” at the end of 2018. U.S. intelligence officials say the actual amounts are much higher based on evidence that Venezuelan gold is leaving the country disguised as gold from Colombia, Uganda and other countries.
"The Turkish Embassy in Washington denies any trade in oil or gold with Venezuela, carried out in violation of US sanctions." These allegations do not reflect the facts, but are mere assumptions and rumours," the representative of the embassy said. The Russian Embassy in Washington declined to comment. The embassy cited past Foreign Ministry statements criticizing the US for interfering in the affairs of Venezuela. Officials from India and the UAE are not responding to requests for comment."
It would seem that for all the Americans’ problems a simple solution is emerging: impose sanctions against all countries and companies that prevent the US from “strangling” Venezuela, and then Washington will succeed. Experts from the State Department and Donald Trump’s administration, it appears, strongly doubt the effectiveness of the “sanctions bludgeon,” which no longer works as a foreign magic wand. Despite the fact that there are indeed supporters in Washington of the most severe sanctions against all Venezuelan partners (and this is not surprising), opponents of this approach note that without the support of the European Union, which refuses to impose similar restrictions, nothing will work. Moreover, attempts to put pressure on American allies who are buying Venezuelan oil and acting as financial intermediaries for Caracas behind the State Department’s back, will result in harm to American interests in other regions, for example, in Iran and the Middle East as a whole. From these discussions of high-level sources of The Wall Street Journal, a rather amusing picture emerges: the State Department can still put pressure on a notional India so that it does not buy oil from Iran, but it is no longer possible to make sure the notional India does not buy oil from both Iran and Venezuela. Similar problems arise with other countries, which are considered to be quite loyal partners of Washington. At this point their loyalty is mostly declarative.
It is not for nothing that one of the Venezuelan dissidents, who now works as an analyst in one of the foreign [US] think tanks, complains to journalists that "changing the regime without using military force is difficult," and although Trump has repeatedly hinted at the possibility of a forceful solution to this South American problem, the chances of really starting military intervention are relatively small. There are too many image-building and even military difficulties (such as guerrilla warfare in the Venezuelan jungle, for example) that will doom any attempts to solve the problem in this way.
However, an analysis of The Wall Street Journal provides reasons for optimism. But only for optimism on the part of US adversaries. Amazingly, the best financial and political analysts of the American media field do not notice perhaps the most important aspect of the failure of the pro-American coup in Caracas – and it is very likely that Washington politicians are also not ready to admit their main problem. The technologies of manipulating politics and public opinion with the help of social networks were so effective in terms of organizing colour revolutions that gradually dominance in the media field and social networks became a key and, by and large, sufficient condition for overthrowing any government that does not suit Washington. In the Venezuelan case, this looks especially clear. From the standpoint of media and social networks, Juan Guaidó is doing great, and his selfies and videos against the backdrop of a rally of thousands of supporters, published by Reuters, look really impressive, but there is a nuance that no one hides and which for some reason does not bother anyone: this rally and these shootings took place in Madrid, and not in Caracas. This is a very strange sort of political victory.
At the same time, Bloomberg reports (citing its own sources) that the Caracas government is preparing the sale of oil production projects to foreign companies that are ready to work in Venezuela, that is, companies from Russia, Italy and Argentina. If this is really accomplished, it all of Washington’s efforts and investments in the colour revolution in order to gain control over Venezuelan oil will prove to have led to a paradoxical and most humiliating result for the United States: The Americans won’t get any oil, but the Department of State can rejoice at a very expensive and absolutely useless a set of selfies and thousands of likes for the fake "Venezuelan president."
If this continues further, the planet’s “anti-democratic dictators” will simply laugh at future attempts by the Americans at colour revolutions.
Vince Dhimos answered a question at the Spanish-language sector of Quora.
My translation of the question and my answer are as follows, with text added after publication shown [in brackets].
WHAT IS GENERALLY WEAKENING THE US?
The root cause of US weakening can be summed up in one word: incompetence.
And this incompetence underscores the crucial difference between Western democracy, which emphasizes political and ideological solutions to problems, and Eastern democracy, which uses a direct approach, solving problems by allowing only competent experts in the fields in question (military affairs, economics, diplomacy) to solve crucial problems affecting the nation and its people.
This morning I received, coincidentally, news of two examples of how the US is being weakened by incompetence.
One example is the news that the US trade deficit with China is bigger than when Trump took office. It has shrunk a bit since the previous year, and Trump claims that this is proof that his trade war is effective. This is utter nonsense. His tariffs on imports from China are making consumer goods more expensive for Americans and are contributing to inflation. Further, the Chinese retaliatory tariffs on imports from the US are still hurting farmers.
Trump, who has no training in macroeconomics, has made the disastrous decision to start a trade war, although no competent economist has approved this decision. He made the decision based on the anti-China prejudices of his electorate. Neither Trump nor his electorate have any competence in the area of macroeconomics and international trade.
Another example is the fact that the Pentagon is eliminating one of two programs for development of hypersonic missiles. This is especially critical at this time because Russia now has several hypersonic missiles in its arsenal and, according to high-ranking General John Hyten, the US does not have anything that can match them. Further, at the same time, the US is now investing in the construction of 2 new aircraft carriers for the Navy.
The irony of this is that, even as Russia is deploying hypersonic missiles that cannot be intercepted and can easily destroy aircraft carriers, which the Russians call "floating coffins," the US is investing in targets for these missiles! [The Pentagon’s procurement system is based on political considerations that have nothing whatsoever to do with national defence, as we showed here].
Another example is the US oil and gas industry, which is investing heavily in shale extraction at the instigation of the Trump administration. Trump and the conservatives who voted for him believed implicitly that the US could and should be the largest oil producer in the world. They were right that this was possible, but none of these people had any in-depth knowledge of the industry they were promoting. While it is true that the shale oil industry has caused a major increase in employment, the problem is that the investors in shale oil and gas are not making a profit and the leading companies in the industry are going bankrupt or are abandoning their shale projects because the world energy prices are too low for profit making. [We posted on this here and here].
In Russia, decisions about how much oil and gas to extract and how to do this are made not by ignorant politicians and their fan club but by experts who understand the economics of the business. The failure in this industry is due to the fact that Western democracy simply is not efficient or competent. Thus, while the US can be the largest oil producer in the world, it cannot make a profit, and consequently, it is gradually being forced to abandon the shale energy industry.
If the Russians had been making the decisions about energy extraction in the US, they would have put their shale extraction projects on hold until such time as the world energy prices were high enough to sustain the shale projects. That future moment would have been the opportune time because it would be a time of crisis in US energy and the US could have benefitted from energy independence. But because the US invested early in shale oil and gas, much of the US reserves will be depleted in the future time of need.
Another example is the repo market crisis. The repo market is dedicated to high-interest short-term business loans. The Federal Reserve’s short-sighted policies – ie, low interest rates and abundant credit – have created a crisis in businesses that require quick loans for business investments. Since the interest rates set by the Fed are very low (and must be because of prior bad Fed policies), banks have no incentive to lend much money and business has trouble finding loans. As a result, the Federal Reserve is forced to print massive amounts of dollars. But this is fraught with the risk of inflation, or even hyperinflation, of the kind we see in Argentina or Venezuela. Further, there is no way out of this situation because the Fed’s policies have eliminated all alternatives. Slowly, the US economy is parasitizing itself.
Another example is the bullying of other countries, including US allies. The best example of this is the US third-country sanctions on the Russian gas pipeline project Nord Stream 2. This is a naked attempt by the US to force Europe to buy its high-priced gas and to stop buying cheap Russian gas. Europe is furious at the US for this unfair trade practice. It is also angry that the US has tried to cut off European trade with Iran. As a result of these heavy-handed practices, many countries, including Russia, China, other BRICS countries, India, Turkey, the EU and others are working very hard to unseat the US dollar as the dominant world reserve currency and are using local currencies instead of dollars in their trade settlements.
The above examples are not nearly exhaustive but they serve to show how incompetence – not Russia or China – is the main enemy of the US.
None of the foolish policies that are weakening the US could have emerged in an Eastern democracy like Russia because they are all examples of total incompetence in the respective fields, ie, economics, military affairs, diplomacy, etc, and in Russia, for example, the decision makers are technically competent and their methods are based on solutions to problems, not on garnering votes for candidates.
Western democracy simply cannot compete with the other two world powers. Some would say that China is not a democracy, but actually, in the broad sense, it is, because in the broad sense, democracy is government with the consent of the people, and the Chinese people are generally content with the way their government operates. After all, it has generated growth of over 7% annually for several decades. The only impediment to this growth is, ironically, the US “democracy,” which now seeks to destroy it.
Vince Dhimos answered a question at Quora.
Why does the US care about the Middle East so much?
Vince Dhimos, Editor-in-Chief at New Silk Strategies (2016-present)
Almost all of the answers and comments to this question so far insist on the old argument that the US interest is in securing the oil or the like.
In terms of energy interests, it is not about securing anything. It is all about keeping the energy prices up so that the US shale oil boondoggle can become profitable. The scary truth is that shale energy — which accounts for most of the touted new jobs — is going broke and needs higher prices to survive. I’m not making this up: As Oil Prices Drop And Money Dries Up, Is The U.S. Shale Boom Going Bust?. Shale energy is going bankrupt. (Just do a search with the terms: us shale going bankrupt).
So, instead of “securing” Middle East reserves, besides demanding that OPEC produce less, the US is trying to block oil producers like Venezuela, Syria and Iran (Iraq could be targeted next) from producing to keep oil scarce and expensive. If you are an American, that is YOUR government hurting your pocketbook deliberately to prop up a pipe dream that is failing. Look, all OPEC + 1 (where the 1 is Russia) would have to do to bring down this scam would be to pull out all the stops and start selling as much oil as they can. The US shale business would be bankrupt in a few months and that would be the end of the dream. And you could afford to buy petrol again.
And that would benefit US energy security because the current rush to pump up all the oil and gas from shale, which requires environmentally harmful and prohibitively expensive fracking, is being depleted even though there is no crisis. If oil prices shoot up sometime in the future, creating a real crisis for the US, then after all the shale energy is depleted by this foolish furious rush to deplete reserves now (to make America look great again), there will be few reserves left for that future crisis! Thus the current oil rush is slow suicide for the US. And it is happening because US officials are politicians seeking votes, not the welfare of their citizens. And they discovered long ago that the best way to garner votes is with scams and frauds bolstered by powerful propaganda and powerful but empty statements by big-mouthed demagogues. It’s a quick solution to their political problem and a quick way to bring down a country. Because democracy does not solve problems, it creates them.
But aside from this scam, the US is not at all interested in supporting the interests of the Middle East. It is only concerned with the interests of Israel and Saudi Arabia, for the reasons I enumerated in another Quora answer:
Finally, this failure of US shale oil is a plausible explanation for Trump’s blustery statement “we’re going to take the oil” in Syria. Syrian oil does not require expensive fracking and its sale can be profitable. The only thing Trump forgot is that the US oil companies he is counting on to go and help themselves to this ill-gotten oil do not take risks in unstable regions with a risk of harm to personnel and facilities. You know, the kind that happened at Saudi Aramco.
And they steer clear of legal messes where they could be sued for theft. It's easy for a rogue government with unlimited military might to steal resources, but private companies need to obey the law.