COVID-19 EXPOSES BANKRUPT POLICIES OF THE “EXCEPTIONAL NATION”
Vince Dhimos answered 3 similar questions at Quora.
To summarize the essence of my answers below, The US and its satellites have been increasingly forced to fall back on props – makeshift supports for its economy and propaganda monopoly. The real economy in the US is disappearing. The choice of shale oil and gas as a mainstay was a huge mistake by incompetent leadership, since shale requires expensive processes, namely, fracking and frequent re-drilling (because the wells have short lives amounting to a fraction of those of conventional wells). Consequently, the shale companies have been going bankrupt on a routine basis (Google “Crude Oil Prices Today | OilPrice.com shale bankruptcy” and you will be convinced in a hurry). Further, the dizzying rise in stock prices touted by Trump as signs of economic health are in fact symptoms of a bubble that is now bursting thanks to the COVID-19 pandemic. Trump’s boasting about the rising stocks and the “new jobs” – almost all of which come from the tenuous shale oil sector – is a tentative economic prop. The fact is, even his boasting about the new OPEC+ deal is a temporary prop because, according to some analysts, shale oil has a break-even price in the range of around $45 to 55 and the most optimistic forecasts tell us we are not about to see anywhere near these prices in the foreseeable future. Even after the world returns to something like normal physical health, the current oil glut will depress prices to well below these levels. To make matters worse, Europe and Asia are turning away from US LNG in favour of Russian natural gas. Even Russian LNG is priced much lower than US LNG. Russian energy minister Alexander Novak said that US LNG is around 40% more expensive than Russian pipeline-delivered gas (after all, the gas is also from shale and requires fracking). Another of the many props used by the US to artificially and sleazily boost sales of US LNG based on political, non-market principles, was the sanctions against Russian pipeline project Nord Stream 2, which would have completely stopped the project (it won’t because Russia has a ship, the Akademik Chersky, that can lay the pipes underwater, though at a slower rate).
Meanwhile, Russia’s economy is not built on temporary props but on traditional fundamental market principles, with a higher rate of manufacturing than the US service-based and financialized economy. https://www.quora.com/Is-Russia-stronger-than-the-US/answer/Vince-Dhimos
Both China and Russia also have rainy-day savings for emergencies like COVID-19, while the US, with its debt-based economy, has absolutely nothing to fall back on.
The point I am trying to make here and in my three answers to Quora questions (see links below) is that the current pandemic has highlighted the contrast between the Eastern economies, ie, chiefly Russia and China, on the one hand and the US-led economies on the other and has also effectively knocked the props out from under the US-style economy, enabling Russia to put the US in its place and quickly force it to the mat, just as Putin has always done with his judo opponents.
The pandemic was the perfect time for this judo move and he executed it with his trademark lightning speed, shocking his OPEC partners at their last meeting by informing them he would not be complying with the latest set of production cuts.
In so doing, he triggered an impetuous reaction on the part of the very emotional Saudi crown prince, who immediately shot himself in the foot by drastically overproducing Saudi oil and even offering deep discounts to his customers, plunging some world oil prices to below $20/barrel, even though Saudi has a break-even price of over $80 – compared to the Russian break-even price less than half that.
But unlike the bumbling MBS, Putin knew exactly what he was doing. With this judo move, he was forcing the US to do something it has always arrogantly refused to do, namely, make oil production cuts of its own as part of the OPEC effort, which it had always loftily commanded from Washington. Thus Putin forced the US to the (virtual) negotiating table. Putin knows that Trump does not have the legal power to intervene in oil prices or production quantities, but he also knows that Trump can pull strings with powerful state oil organizations like the Texas Railroad Commission and its commissioner Ryan Sitton, who was obliged to oblige Donald’s request to cut production.
With his deft move, Putin was able to wrest control over a US government policy and force the US to obey orders of OPEC for the first time in US history! And this is just the beginning. When Russia offered to send 2 planeloads of medical aid to the US, Washington – which in the past would have snubbed the offer – was in no position to resist.
This aid and the msm coverage thereof, plus Putin’s geopolitical coup with the oil production cuts, was a huge propaganda triumph for Russia. But it was just the beginning. The US will emerge with two black eyes from the economic wreckage of the pandemic and neither Trump nor any agent of Washington will be able to throw out their chests and grandstand, quite to the contrary. Humility is the wave of the future for the US, and Americans will learn it. Because they know that Putin is buoying up the oil market single-handedly. No more “Exceptional Nation.” Already US lawmakers, keenly aware of Putin’s clout, are attacking Saudi and ignoring Russia. Perhaps unwittingly, they are thereby weakening another of the US’s props, ie, the petrodollar agreement under which the Saudis commit to using only US dollars in the settlement of their oil trade and as the sole reserve currency. This deal has a shelf life and MBS is very angry at Washington for smearing him in the press and in the halls of congress. His brief temper tantrum in oil overproduction shows he is minded to rebel. And China has been goading Saudi for years to use the petroyuan as the currency of choice in its oil trade. Now Saudi has nothing to lose.
I never make predictions, but the most likely scenario will be a US foreign policy discretely dictated behind the scenes by Russia and China. Why? Because Russia and China, both of which have strong real economies, have dealt wisely with the pandemic while the US is still finding its footing. They will be the only hope of the West. They will be the new props.
As severe as the initial shock of Covid-19 has been-is economic paralysis sure to follow, as are the possibility of government defaults, severe economic crises in the developing world, and collapses in government revenue in oil-producing countries.?
Vince Dhimos, Editor-in-Chief at New Silk Strategies (2016-present)
Yes, you just answered this question yourself. But the US is in a particularly precarious position because ever since the 2008 world financial crisis, it has grown fat and lazy, relying on the Fed’s issuance of unbacked dollars (“printing”) to carry it through. I suspect that sometime during this current crisis, the Fed will become impotent to keep up the deception of being rich when it is really poor. The Chinese are exerting a lot of pressure on Saudi to trade in petroyuan instead of US dollars, and when that happens, the US will lose another important prop for its Ponzi scheme.
The countries not aligned with the US, which have had to pay their bills and live within their means, will probably emerge from the crisis stronger, while the pampered US government will simply be unable to cope.
I had posted at Quora a comparison of the stable, frugal Russian economy compared to the fat, lazy, debt-ridden US.
It was intended as a wake-up call, of which there have been many in the independent press.
The US and its satellites did not wake up in time.
Here is that comparison:
I think the two planeloads of aid received by the US from Russia amidst the crisis, and the humility learned by Washington when Russia straightened out the mess in OPEC+ are early harbingers of a coming East-West reversal that will take a lot of people by surprise.
Why do so many countries have anti-American sentiment, although they are given foreign aid?
Vince Dhimos, Editor-in-Chief at New Silk Strategies (2016-present)
The foreign aid is not for the people, it is for the powerful and corrupt leaders, and there is precious little US aid in comparison to Chinese aid.
The aid that African countries receive from China is more generous and is aimed at lifting them out of poverty.
But because China is successful at winning hearts and minds, it is targeted by the Washington regime and treated like an enemy. Russia too is looked down upon by Western countries, for the same reason.
Examples abound in the age of COVID-19.
The EU got snarly with China because it gave aid to Italy, the country hardest hit in Europe by the virus. Yet Italian officials reminded the EU leadership that they had not given Italy this kind of aid or nearly this much of it. It was jealousy and frustration at the EU’s own failure. In fact, the salient feature of the EU’s policies was that it focused on keeping the borders of the member countries open, and in a time of pandemic, this was seen as reckless and cost lives.
The US also suffers from a similar insanity.
For years, US politicians like Steve Bannon on the extreme right have been campaigning to stop the Belt and Road Initiative. However, the US had no way of competing because it was not this generous with the Third World. Meanwhile this BRI is seen by countries that accept it as a kind of invitation for all countries to join hands in solving common problems — in contrast to the US’s focus on war and regime change and on a predatory capitalism that exacerbates poverty in the poor countries.
And this is precisely the problem with US politicians and think tanks, who are afraid that China will win too many hearts and minds. It is hard to imagine why people would object to good deeds, but that is exactly the position Washington takes these days. And strangely, the US culture is also generally against cooperation with other countries, preferring to see their country as a bully, so that even grassroots Americans pile on and oppose China, without being able to articulate any rationale behind their sentiment, which strangely resembles racism.
When Russia sent two huge planeloads of medical aid to the US, there was criticism among politicians and msm alike. The US clearly benefitted and lives were saved, but this unwholesome hatred and distrust of the other persisted. It had become a permanent feature of US culture, which was trained like Pavlov’s dogs to prefer the bludgeon to the helping hand.
In the long run, it won’t matter because the Russian and Chinese way is still winning minds and hearts everywhere while the US is still imposing sanctions on the poor in numerous countries making it difficult for them to survive the pandemic. And this pandemic will ultimately have a positive effect in highlighting the utter absurdity of the US policy of deliberately starving ordinary people and denying them the ability to acquire medicine. And of waging war and regime change actions in a time of great human need.
Trump divided trillions of dollars among mostly the rich and Big Business but not one penny went to help poor people suffering from COVID-19. to defray their medical expenses The US is being seen as the stingiest, most petty country on earth, and therein — in this changed perception of the “Exceptional Country” — lies the positive contribution of the pandemic. The flaws were hidden before, but they are exposed to the sunshine now for all to see.
Previously, the utter pettiness of US foreign policy could be swept under the rug because Americans still had jobs and most were still eating. But there is still no end in sight for the pandemic, and if hunger rears its head in the US, the propaganda machine will be hard put to hide the misery, and the Fed’s printing press may grind to a halt or give rise to hyperinflation.
Countries no aligned with the US may be more successful in dealing with the pandemic and if so, they will win the war that the US has declared on them without firing a shot. The US will be reformed from without.
Is the USA going to lose its status as world superpower because of the pandemic?
Vince Dhimos, Editor-in-Chief at New Silk Strategies (2016-present)
Answered just now
I agree with Lance Chambers that the US will lose its superpower status without any help from the virus, but I think the virus is a powerful catalyst that will speed up the process. The US is in fact the sick man of the world, not any kind of a leader at all, and its only hope for survival will be help from two countries that avoided the obvious economic mistakes it has made. This will be the toughest lesson it has ever had but also the most useful one.
I just now posted 2 answers explaining what is in store for the “Exceptional Nation .” You can read them by clicking on the links below:
Vince Dhimos's answer to As severe as the initial shock of Covid-19 has been-is economic paralysis sure to follow, as are the possibility of government defaults, severe economic crises in the developing world, and collapses in government revenue in oil-producing countries.?
Vince Dhimos's answer to Why do so many countries have anti-American sentiment, although they are given foreign aid?
Syrian Army attacks jihadist gathering point in northern Latakia
By News Desk 2020-04-11
BEIRUT, LEBANON (2:20 P.M.) – The Syrian Arab Army (SAA) heavily targeted a jihadist gathering point in northern Latakia on Saturday after the militants were seen grouping near the Turkish border.
According to reports from the Latakia Governorate, the Syrian Arab Army launched several artillery shells and missiles towards the positions of the Turkestan Islamic Party (TIP) and Hay’at Tahrir Al-Sham (HTS) in the Al-Haddadeh area.
The reports said the Syrian Army was able to score direct hits on the jihadist positions after reconnaissance flights observed the militant movements around the northern Latakia front.
Despite the ceasefire in the Idlib Governorate, the Latakia front remains a hot zone for militant activity, especially hardline groups like HTS and TIP.
While little ground has been captured between the warring parties in Latakia, this front was one of the deadliest axes in all of Syria last year.