By now you probably realize that NSS has assigned itself the task of filling in the gaps left wide open by the msm, which mostly just tells you things that make the Exceptional Nation look exceptional and keeps investors blinded about the pitfalls of reckless government spending, reckless dollar printing by the Fed, reckless US entry into wars, sanctions and narratives about countries that displease the Beast in Washington. Most Americans realize there is something sinister going on all around them, but few have a clue about what that is and about what agents are behind it. Which explains the popularity of whacky conspiracy theories and the personality cult around Donald Trump. The many gaps in Western knowledge about the BRI is one such gap that begs to be filled lest the US blunder into an even bigger commercial confrontation with China that it can only lose ignominiously. We assiduously avoid reading whacky theories, sticking mostly to the reports available in the press – but paying strict attention to the foreign press as well, particularly the non-English reports.
Vince Dhimos answered a question at Quora reflecting the shallowness of Americans’ thinking engendered by the msm’
IS RUSSIA BENEFITTING FROM DRIVING A WEDGE BETWEEN CHINA AND THE US, E.G., RUSSIA HAS MORE PROJECTS IN CHINA’S BRI INITIATIVE THAN ANY OTHER NATION
Fellow Quoran Aleksandr Golikov correctly answered the question about driving a wedge between China and the US, so I will only address the BRI and how it is affecting us all, including Russia.
Yes it does seem that Russia has perhaps the most invested in the BRI. The msm report a number of rail and metro projects in Moscow, a proposed $32.4 billion high-speed rail project from Moscow to Kazan, and a $9 billion 2,000 km highway through Russia from Shanghai to Hamburg. and as part of the BRI. The Chinese company CNODC accounts for 20% of the total investment in the Novatek LNG 2 project in northern Russia. Further, in June of 2019, two Russian companies and 2 Chinese companies signed a four way deal to launch shipping on the new Arctic shipping route.
But don’t let Russia’s outsized share fool you. There are plenty of investments elsewhere. A total of 167 countries and international organizations have invested in the BRI by now. Thanks to the trade wars, China has shifted its focus to countries along its BRI routes and have seen their trade surge by $1.34 trillion while Russia-China trade has risen 4.7% yoy in 2019. Meanwhile, the US only succeeded in increasing its own trade deficit that year.
Some will be surprised to note that US ally Japan is investing $110 billion in infrastructure projects in Asia under the BRI. Meanwhile, Europe has also expressed interest in the co-construction of BRI projects. http://en.people.cn/n3/2019/0322/c90000-9559397.html.
Further, within the BRI, South Korea, Japan and China have been in talks to establish a free trade zone. There is also interest in all of North Korea’s neighbours in building projects in North Korea once the sanctions against that country are lifted. https://www.oboreurope.com/en/pyongyang-new-silk-roads/
Thus, the US-launched trade wars have been but a mosquito bite for China so far but have hurt the US. The world is just waiting for Washington to grow up. If Washington had a lick of sense, it would stop the cold war right now and immediately invest in a BRI project of its own. How about a joint venture for a petrochemical plant and a Pan-American oil and gas shipping route in cooperation with Venezuela, China, Russia and Iran?
Vince Dhimos answered a question at Quora.
What do Americans typically get wrong about the economy of China?
Almost everything, and the abysmal ignorance of the US public is vital support for Trump’s policies. Ignorance is a key commodity for US presidents and other politicians because an intelligent public would sink their careers. Remember that as you read on.
The article linked below answers much of your question:
The US public typically thinks exports are the main component of the Chinese economy. Not so, and the percentage of the Chinese economy depending on exports is dropping fast. Exports accounted for 37% of China’s economy in 2007 but only 20% in 2016. Nowadays China’s biggest customer for goods made in China is China.
Americans generally think the US accounted for a vital share of these exports. In fact, the US accounted for only 16.8% of China’s exports in 2019. But since exports are only 20% of the Chinese economy, then even if the US completely stopped buying Chinese exports, China would survive.
The US public typically thinks this 16.8% is all Chinese-made. But due to the components in these exports that were made in other countries, the supposed 47% US trade deficit with China is really only 28%. Still substantial but much less than assumed.
Many Americans forget that the US exports substantial quantities to China and, as mentioned in the above point, some of the components in goods imported from China come from the US. So when Trump boasts of “decoupling” the US and Chinese economies, he is just deceiving his largely gullible voter base. Decoupling would be like removing threads from a delicate woven fabric. If you remove a certain percentage, the fabric gets weak. If you remove still more, the fabric disintegrates. The US economy is already greatly weakened by the pandemic and the Fed’s rampant money printing in response thereto. There is a great risk that if a new wave of the pandemic occurs later, eg, in the fall, as experts predict, the Fed would be obliged to print still more unbacked dollars. Further at some point, China could start ditching its Treasuries (in fact, it has already started and its published commentators predict more to follow). Once investors start seeing both the rampant issuance of dollars coupled with the Chinese sale of Treasuries, many will lose faith in the dollar and the dollar could eventually lose value, causing hyperinflation and a loss of the dollar as the world’s no. 1 reserve currency. Some billionaires are already turning away from dollar-denominated stocks. Thus, what Trump hoped to do to China, he may have in fact done to his own country.
The US grassroots are generally unaware that Silicon Valley is more dependent on China for technology than other sectors, and tech workers, who understand the interconnectedness, are already begging Trump not to tamper in this area. The US stands to lose more than China.
Many Americans also forget that China immediately responds to US restrictions – ie, tariffs, sanctions, threats to cut China off from the US financial system, and recently, banning the sale of Chinese stocks -- by imposing restrictions of its own. US soybean farmers were the first victims and many went bankrupt. When Australia – a puppet of Washington – started echoing US anti-China rhetoric, Beijing immediately threatened to stop buying a half-billion dollars’ worth of Australian barley. There is no immediately identifiable alternative market for the soy and the barley, and this trade may well be lost forever.
Finally, in their enthusiastic drive to “bring back American jobs,” US Americans tend to forget the most important factor of all, ie, commodity prices and their effect on inflation. Many forget that one of the main reasons for the granting of Most Favoured Nation status to China in 1979 coincided with an 11.35% inflation rate that year, which must have been on the minds of the lawmakers, who realized that China, with its low labour costs, could help ease the prices paid by US consumers. China helped solve the inflation issue for the next 40 years, thereby greatly boosting the US economy, but by now, under Trump’s influence, many Americans have forgotten about this. And they still forget that China is the country best equipped to help the US fight inflation. Trump is grateful for their forgetfulness and for their willingness to swallow every word that tumbles off his tongue.
The US also ignores the fact that China has the numbers of experts in tool making and other aspects of manufacturing necessary to supply the US and the world with cheap high-quality products. No other country has this potential. With 5.4 million recent STEM graduates as of 2016, vs 568,000 in the US, it would take the US at least 4 years to make up even a fraction of the shortfall, but the US administration is not even talking about this because it has no effect on voter decisions. And yet, most Trump supporters probably naively assume that Trump will just dissolve the trade relationship with China and the US and replace the Chinese manufacturing capacity almost immediately. What Americans don’t know is their biggest threat.
Even before the pandemic, Trump’s war on the Chinese economy was already a major threat to the world economy. But now with the pandemic added to it, and in view of the enormous gap between what Americans expect and what they don’t know, this threat is magnified several-fold.
All of the above leads to the conclusion that, in US-style “democracy,” the politicians trusted to solve problems are focused almost solely on getting votes, often by making unfulfillable promises and fantasy-based statements, including allegations intended to create enemies which the government then pretends to fight – thereby making the voters more psychologically dependent on them, and not on solving pressing problems, especially economic ones. This vote-focused system stands in stark contrast to the workings of non-US-aligned countries like Russia and China, where the focus is not on declarations catering to public expectations and hopes – which are typically unfounded in the US – or on the generation of friction with imaginary enemies, but on actual performance that solves the problems facing the citizens. The media in the West are therefore tasked with supporting the fantasy narratives put out by the government and obfuscating the objective truth about their and the world’s situation. It’s a difference of day and night.
In the US and its satellites, ignorance of the public is actually a prerequisite for politicians focused on re-election, while in non-aligned countries, with stronger but less “democratic” governments, an educated public is desired and the state-owned media have a strong incentive to tell the truth, particularly with regard to the differences between their state and the US-led West, because the truth favours them.
Below is our translation of an article from RIA Novosti with this foreword and notes [in brackets] by Vince Dhimos. Economists understand that it was China that brought the world back to its feet after the 2008-9 Great Recession, and despite the anti-China hate campaign currently emanating from the White House, economists are expecting China to again fuel the recovery.
Of course, the US financial press, as an obedient lapdog of the White House, must not state this all too openly lest it sully the Washington political machine. Which is why I resort to analyses from Russia, where economists are free to speak their minds.
A little salt for Washington’s wounds:
“... according to the results of the year, China will grow by 2.6%. And this is a sensation – which of the major economies in the world even dreams of positive growth these days?”
Note the author’s upbeat and friendly attitude toward China. This is an important observation because the US has been trying desperately lately to drive a wedge between Russia and China, by going easy on Russia and viciously smearing China in the Western press. It should have been obvious to the US manipulators that there is not a snowball’s chance in hell that Russia and China could be driven apart with such barbarian tactics. The worse the US treats China, the more sympathy it garners in Moscow. Hurt my brother, hurt me. These two brotherly nations will support each other through thick and thin. It is time for a major foreign policy overhaul in Washington.
The Chinese locomotive of the world economy is cautiously picking up speed
Why is the annual spring session of the Chinese parliament a more and more important event for the world, and especially now? At least for two reasons. First: at the session it will become clear whether the Chinese economy will again, as in 2009-10, be the engine of global growth, that is, help other countries overcome the viral crisis. And the second: everyone is interested in discussing how ready China is for further confrontation with the United States at least until the presidential elections in November – that is, it is simply a matter of military spending.
Big and small sensations on these topics have been expected from last Friday (when the session solemnly opened) until the very end of the event, that is, until the end of next week. But already in advance, the world media have meticulously analysed all the opinions and leaks from China itself and the surrounding area: in the end, we are talking about the health of the world's first economy. (The parliament is traditionally occupied primarily with the economy; foreign policy declarations are in second place there.) [By contrast with the US, Russia freely calls China the number one economy because it understands the difference between an economy up to its eyeballs in debt and on life support (thanks to the Fed’s dollar printing press) and a real economy that still makes things to sell and export.]
Speaking of health and pandemics, Beijing propaganda emphasized the very fact of the opening of the session. For obvious reasons, it was detained for 78 days. But now several thousand parliamentarians have flocked to Beijing, if we count the delegates of the All-China Assembly of People's Representatives together with colleagues from the analogue of our Public Chamber – the People’s Political Consultative Council. They sit sometimes in masks, but live and side by side: it is clear that there is a demonstration of the country's return to normal.
Although this is already in order, zoom-diplomacy is falling away. For example, no one stopped preparing for the joint SCO (Shanghai Cooperation Organization) and BRICS summits in our Northern capital in July (communication will be completely natural), while Donald Trump wants to organize the equally live G7 meeting at his home in the USA.
As for China's economic growth: in the first quarter, GDP fell by 6.8% and industrial production by 8.4%. However, the economy is reviving explosively (everyone is eager to work). Estimates of private expert economists (for example, China International Capital Corporation): according to the results of the year, China will grow by 2.6%. And this is a sensation – which of the major economies in the world even dreams of positive growth these days?
But there was an even greater sensation. On the first day of the session the head of the Chinese government, Li Keqiang, announced in his report: this year we have decided to completely abandon the announcement of target figures (in terms of GDP). Because the risks and challenges, both external and internal, are of an unprecedented scale.
This is the first time in decades that this has happened. This can be interpreted in different ways. The challenges are both pressure from the United States and the need to understand what is generally happening with the economy after quarantine damages. In general, the point now is not to set records, but to stabilize. But if the records (the 2.6%) are still there, then a new sensation will be born.
However, the prime minister very clearly outlined the parameters of the stabilization. It is necessary to create nine million jobs in cities in order to keep unemployment no higher than six percent. And yet, a long-standing goal is confirmed: to overcome extreme poverty in 2020. This refers to the village, the remaining one thousand depressed villages. Apparently, this plan was recognized as realistic.
The role of the locomotive of world development can be manifested in different ways. China may well allow itself to increase imports. Exports to countries like the United States (waging a full-scale economic war with China) will fall, but they would fall anyway – who expects any achievements from the United States or Europe today? In addition, there are no obstacles to the development of high-tech projects with countries in the framework of the "Belt and Way" project, which includes Russia. In addition, China is lucky – oil and gas prices so far are conducive to growth.
Any amount of growth is possible if you pour a lot of money into the economy. But here, the financiers of the world are watching China especially intently: too much money means inflation and various events with the renminbi. But the fact that precisely this year the new rules for foreign financial investors have gone into effect, removing the limits on the volume of investments from them – which turns out to be timely, because new money will come to the country. Not from the USA – it’s not necessary, the world is big.
In terms of finance, the guidelines are set as follows: a deficit of 141 billion US dollars, no more than 3.6% of GDP. Domestic loans for the same amount. Encouraging banks to reduce business debt by 353 billion. Inflation is no more than 3.5%. Few countries in the world are capable of keeping their systems in this order this year.
Military spending is a separate and interesting topic. On the one hand, the military suffered additional burdens and expenses to combat the pandemic (and the army even took part in this). And this despite the fact that American military activity in the South China Sea has quadrupled over the year. On the other hand, in a difficult year, military spending can be cut back and all efforts can be dedicated to restoring the civilian sphere.
In recent years, these expenditures in China have grown along with the the overall growth of the economy, but have never gone beyond two percent of GDP. So, now they should grow only slightly, if at all. In any case, officially and in dollar terms, last year they amounted to 177.6 billion (second place in the world), vs 732 billion, and 3.4% of GDP in the US. Does China bury military spending in other budget items? At any rate, even independent estimates, such as those of the Stockholm International Peace Research Institute, set a figure of 261 billion. To the US level.
Although plans to get four aircraft carrier groups by 2050 instead of the current two have not been cancelled, details will become clearer during the session.
In the meantime, the bottom line is the belief that it is in this difficult year that poverty will be lifted in China. The outside world, following the course of the Beijing parliamentary sessions, understands that this is also an indicator of the country's internal strength. [Yes, and which of the countries that constantly malign China has raised a pinky to help the poor?]
* * *
Vince Dhimos posted an answer at Quora relating to the US’s current anti-China propaganda war:
WHILE THE US IS PARANOID ABOUT CHINA SURPASSING THE US ECONOMY, ARE PEOPLE AWARE OF INDIA’S AMBITIOUS AND STRATEGIC TAKEOVER OF US CORPORATIONS, ELIMINATING US JOBS AND MAKING THE US A SERVANT OF INDIA?
While the US is paranoid about China surpass the US economy, are the people aware of India's real ambitious and strategical taking over of the US corporations, eliminating US jobs and making US the servant for India tycoons?
Vince Dhimos Editor-in-Chief at New Silk Strategies (2016–present)
Because the US has created an alternate universe all its own in which it lives and it drags its satellites into this universe. The goal is, as stated by Caitlin Johnston:
The United States treats China as if it were Nazi Germany. This fall towards the third world war must be stopped before it is too late - World Affairs | News1 English
Point 1: We are in the midst of a slow-moving World War III between the centralized power alliance from the United States and the nations that have resisted their absorption.
The second point is that this is to be accomplished by propaganda. Your question says it’s paranoia, but the driver here is a fear on Trump’s part that he may not be re-elected. The anti-China hysteria is over re-election.
India is one of the countries targeted by Washington as potential allies in this war and they are being encouraged to participate in it. But the US knows it must make concessions, and one of the concessions is allowing India to absorb US corporations and profit from them.
Trump pretends that he cares about returning jobs to the US but he is, as usual, lying. He lies about everything. Just listen to one of his speeches if you don’t believe it. There is not an ounce of truth in him. If he cared about restoring jobs to America, he would not be giving these jobs to India, but his goal is not to get back US jobs, it is to form a quick ready-made coalition to help wage the propaganda war on China.
You may think this sounds outlandish. It is.
The latest in this war is the narrative that China is supposedly harvesting the organs of executed Falun Gong members. This story was fed to the news media by a group called the China Tribunal, which is linked to Falun Gong, which was founded by a megalomaniac by the name of Li Hongzhi, who claims to be able to perform miracles but refuses to do them and says he is the saviour of humanity. Obviously, this man has a severe mental problem. He has concocted fantastic stories before that turned out to be lies. But his group worships him and they are stoking these lies. The unscrupulous elites in Washington and their sock puppets in the media regurgitate these stories to smear China. [see http://www.newsilkstrategies.com/international-relations/western-media-regurgitate-as-gospel-horror-stories-about-china-fed-to-them-by-a-pathological-liar]
India is lucky for the moment because it enjoys the indulgence of the US. But woe to India once the US no longer needs it as an ally against China or in the event China pulls out of the economic crisis and comes roaring back to life even as the US lies prostrate. If India – perhaps along with China – rises to an economic level exceeding that of the US, it will be treated just as shabbily then as China is now.
The US keeps threatening to enforce its embargo on Venezuela and has warned Iran. But what can it do. It knows that if it tries to capture or turn back an Iranian vessel, Iran has the option to fire missiles at its bases, as it did in Iraq, where there was no US response. Washington also knows Russia and China are allies of Iran. China, for example, is relying heavily on the Iranian role in the BRI. If the US goes too far, an armed conflict could occur and that could sink Trump’s chances in November.
First Iranian tanker to reach Venezuela in next 24 hours: report
By News Desk
BEIRUT, LEBANON (5:30 P.M.) – Iranian state television reported on Saturday that five tankers are heading to Venezuela, loaded with 1.053 thousand barrels of fuel.
They pointed out that the first tanker is scheduled to arrive in Venezuela on Sunday, while the remaining four are still sailing in the Atlantic Ocean.
The fuel tankers, which have been identified as the Petunia, Faxon, Fortune, Forest, and Clavel, all entered the Atlantic Ocean’s waters earlier this week after crossing the Strait of Gibraltar.
According to data from maritime tracking services, the Fortune was last monitored in the Atlantic Ocean off the coast of Morocco on May 16th, and it is expected to reach its destination tomorrow.
The Petrunia, Faxon, and Clavel were also last detected in the same area on May 18 and May 19 and today May 23 respectively, and are expected to reach their destination on May 25, May 29 and June 2.
As for Forest, it is expected to reach its destination on May 25.
The ship tracking sites did not specify the destination of these carriers, but Iran made it known that these vessels were heading to the South American nation.
This issue raised international interest, especially in light of the incident of the British detention of an Iranian tanker at the Strait of Gibraltar last year.
The government of Venezuela has pledged to provide Iranian tankers with the required protection in its territorial waters, in anticipation of possible steps by the United States that imposed severe sanctions on both Tehran and Caracas.
US provoking conflict between China and India: analyst
By News Desk -2020-05-230
BEIRUT, LEBANON (9:00 P.M.) – The U.S. is pushing for a conflict between China and India after a recent confrontation between the two world powers along the Line of Contact between the them.
Quoting the Southern Asia expert, Andrei Volodin, Sputnik News reported that the latter pointed out how the recent statements by the U.S. Ambassador to India has been seen as an attempt by Washington to increase the tensions between the two countries.
“The statement (by the American ambassador) is just one example. Moreover, this statement obviously fits into the Trump administration’s current general strategy to discredit China as the ‘source’ of the coronavirus pandemic. The U.S., which is conducting an anti-Chinese campaign, is now trying to involve the maximum number of not only their satellites in Western Europe, but also the maximum number of Asian states. Asian countries, in general, react quite neutrally to these attempts”.
The expert said the U.S. support for India in the border conflict with China could provoke it to take unilateral action. In the context of the epidemiological crisis, even the Indian military believes that it’s necessary to focus as much as possible on the economy and development.
They are ready to come to terms with the fact that Prime Minister Narendra Modi is redistributing forces and assets in favour of the civilian sector.
“In addition, the experience of the 1962 war and subsequent conflicts between China and India is not in India’s favour”, Andrei Volodin said.
China’s restraint and its ability to achieve mutual understanding with India frustrate Washington’s strategic goal of them coming into conflict, as Delhi appreciates its independence and is unlikely to want Washington to use it as a tool to contain Beijing, Wang Peng from the People’s University of China said, commenting on the US diplomat’s statements:
“The Indo-Pacific Strategy is the key strategy among the Trump administration’s global foreign policy aims. In June 2017, there was a standoff between China and India in Doklam, and in November of the same year, the United States introduced the concept of the Indo-Pacific Strategy at the APEC meeting in Vietnam. There were only a few months between those events. It is no coincidence that many analysts believe that the Sino-Indian confrontation could have affected the development of Trump’s strategy. The US has never stopped trying to form a political ‘square’ consisting of the United States, Japan, India, and Australia to deter China”.
“Meanwhile, China maintains restraint and seeks mutual understanding with the Indian side; therefore the United States cannot achieve its strategic goals. The Trump administration relies heavily on provoking disputes and increased tension between certain countries and China to achieve its own goals, which allows the United States to make these countries even more strategically dependent. However, the problem is that the US strategy is contrary to India’s national interests and cultural traditions. India really appreciates its independence and doesn’t want to be used as a tool”.
The provocative nature of Alice Well’s statement is obvious given the difficult situation in the northwest section of the Line of Actual Control between China and India. In fact, her words can even be regarded as US support for India’s territorial claims against China, which could make the situation on the Sino-Indian border even more explosive. This month there have already been two, albeit minor, clashes involving dozens of military personnel from both sides.
Additional defensive structures are also being constructed on both sides of the Line of Actual Control in Ladakh, which also increases the tension. The other day, the Chinese military reported that India had built fortifications to deliberately foment conflict and unilaterally modify the existing border control system. The Global Times reported, citing a source in the PLA, that it had successfully restored the status quo in the Galwan Valley.
For its part, the Indian Express reported on 20 May that tensions along the Sino-Indian border in Ladakh near lake Pangong Tso had increased. According to the Indian newspaper, the Chinese military had tripled the number of patrol boats in the area to match the number of Indian craft in the waters off the western shore of the lake.
Vince Dhimos answered a question at Quora.
If China has the Belt and Road Initiative, why is the US not doing anything? This is obviously a very good idea.
Vince Dhimos -- Editor-in-Chief at New Silk Strategies (2016–present)
Yes, it is obviously a good idea.
But in US “democracy” today, the government does not solve problems or build good relations with other nations. Its ONLY motivation is purely political. The question it asks is: if I do this, will I get more votes?
Russia and China are not motivated by this kind of thinking.
The US thinking in international economics is zero-sum. Thus, if we hurt their economy, this helps our economy. It is irrational but that is how they think. Using this kind of “logic,” Steve Bannon, the psychopathic former adviser to President Trump, once said “we need to screw up the BRI” (China’s Belt and Road Initiative). Even US Democrats like Chuck Schumer agree!
In their sick minds, hurting the Chinese economy automatically boosts the US economy. How? They don’t say. They don’t have to. Their spew garners votes.
Given this kind of thinking in the US vs the win-win approach of the Chinese – and also the Russians, who do you suppose will win in the long run?
Saudi Arabia rejects Israel’s plan to annex West Bank
By News Desk
BEIRUT, LEBANON (6:45 P.M.) – The Saudi Ministry of Foreign Affairs expressed the Kingdom’s rejection of Israel’s plans and measures to annex lands in the West Bank and impose Israeli sovereignty over them.
The Ministry stressed that the Kingdom condemns any unilateral actions, and any violations of international legitimacy decisions, and all that may undermine the chances of resuming the peace process to achieve security and stability in the region.
The Saudi Foreign Ministry reaffirmed the Kingdom’s steadfast stance “towards the brotherly Palestinian people and its permanent standing at its side and supporting its options by establishing an independent Palestinian state, with East Jerusalem as its capital.”
They also affirmed the Kingdom’s support for the efforts calling for advancing negotiations in accordance with the international legitimacy decisions, to reach a just and comprehensive solution that meets the aspirations of the Palestinian people.
It is noteworthy that the deal proposed by U.S. President Donald Trump for a settlement between the Palestinians and Israel gives the latter the right to annex lands from the occupied West Bank.
Source: Saudi Press Agency
Vince Dhimos answered a question at Quora.
WHY CAN NOT USA BUY OUT OTHER COUNTRIES AS IT PRINTS DOLLARS FREELY? THERE MIGHT BE COLLATERAL DIFFICULTIES IN MAINTAINING IT BUT I DON’T THINK THE DOLLAR DROPS THIS WAY AS THE EXCESS MONEY IS USED TO BUY FOREIGN AND NOT TO REDESTRIBUTE IT TO THE MARKET.
What will result in the growth of public debt of the USA and Europe. Is it possible to build up debts without consequences.
US financial media are keeping the true economic picture hidden, which is why I turn to Russian analysis.
Following is my translation of an economic analysis from here https://zen.yandex.ru/media/id/5d5f39b11e8e3f00adf4d4ea/k-chemu-privedet-rost-gosdolga-ssha-i-evropy-neujeli-mojno-narascivat-dolgi-bez-posledstvii-5eb16ed66c15632218124aca?&utm_campaign=dbr
May 5, 2020
There is a belief that public debt can be increased indefinitely without consequences. This is actually not the case. I will briefly tell you why
2007: Senator Obama criticizes George W. Bush for growing government debt by 4.5 trillion. over 8 years
2016: Trump accused Barack Obama of increasing the public debt by 9 trillion dollars over 8 years and promised that he will get rid of public debt
Following this logic, the next president should accuse Trump of building up public debt by 18 trillion. Rights?
2020: Trump justifies high public debt and its growth of 9 trillion over 4 years.
Well, yes, each new president scolds the previous one and doubles the public debt over the next 8 years.
The media write that low interest rates make public debt risk-free. Let's look at the dependence of economic growth on public debt
dependence of US GDP growth on public debt (for chart, see orig)
Bond yields are approaching zero, public debt is growing faster every year, and the pace of economic growth is lower.
Fact: a couple of years ago, each new dollar of debt added 0.4 dollars to GDP, vs only $ 0.25 now, and this trend will continue
The economy grew rapidly until 1980, when it did not begin to actively build up public debt, which after that led to 40 years of deflationary pressure, lower interest rates and a slowdown in economic growth.
Throughout the world, countries have accumulated 78 trillion in debts, 20% of which have a negative interest rate.
If large debts and a low prime rate equal economic growth, then why do neither Japan nor Europe show anything but growth in public debt?
Japan’s GDP by years (see orig)
0-1% growth is called stagnation, but this is actually a de facto decrease, because global average growth is 3.5%. It is as if countries were participating in a marathon, where the average speed of the athletes is 35 km, and but you are at 5 km and you are glad that you are at least not moving backward. Your competitors are overtaking you and this is a decline, not stagnation. It’s just that the share of developed countries with great debt will decline year after year in the global economy, just as has been happening continuously for centuries.
Japan's similar situation to Europe and the USA (see orig)
And accounting for imaginary income from illegal activities in GDP and other manipulation of statistics does not help. An increase of 0% is a decline. The United States under Trump had increases of 2% or even 3%, but this is a temporary effect of a change in the tax system and the squeezing of "allies."
Countries are caught in a liquidity trap. A contraction in the money supply will lead to an even greater economic downturn, and a further reduction in the prime rate down to negative values will not lead to economic growth. If the economy does not grow even with super-cheap loans, then it is impossible to do without a deep purge of inefficient enterprises and a decline in living standards, but you can only delay this and accumulate the consequences.
In a crisis, currencies like the yen, the dollar and the euro, as well as the bonds of these countries are very much in demand so new debt does not cause a surge in inflation, but when the crisis ends, investors will go back to emerging markets and drop reliable securities and to avoid high inflation, the prime rate will have to be raised, bankrupting many businesses, which fail to show good results even with super cheap loans.
Debt build-up only disguises the consequences of economic problems and without a deep purge of inefficient sectors of the economy and lower living standards, these is no way out of the crisis.
China regularly bankrupts inefficient companies, which is why Western media like to complain about problems in the Chinese economy, but this is just the right choice.
I think a severe crisis is coming in the next +three years and this crisis will be much more severe than 2008. And yes, it’s not a crisis yet, but only the consequences of an epidemic that they are hiding with debt as before.
Professing themselves to be wise, they became fools...
Below is our translation of an article from rueconomics.ru with a foreword and notes [in brackets] by Vince Dhimos.
The inability of most grassroots Americans to see the whole picture of the US Establishment’s actions and intentions will be the downfall of the US.
Many Trump supporters blindly believe that Trump is pro-Russia but anti-China.
I get many messages from Trump supporters indoctrinated by MAGA propaganda, who say they admire Putin but that they don’t trust China. Some acquaintances of mine who lead “peace” organizations say essentially the same thing, praising Putin but smearing Xi. These people are hopelessly naive to think that Putin would ever betray Xi Jinping because of some foolish suggestion of theirs or their government’s. Look, if you want to be friendly toward Russia, then you have to be aware that Russia’s main hope in the world is China, nothing else. Only China and Russia have the clout and the economic and military power to oppose the war-mongering US-led West, and they both know it. To think that some puny little peace activist or some oversized US official could possibly sway one of them to turn against the other is utter brainlessness.
Of course many MAGA enthusiasts remember that Trump had said in his campaign that he thought he could “get along with Putin,” and they foolishly figured that Trump is a friend of Russia and that the whole “Deep State” wants the poor man to be punished for his supposed friendliness toward Putin. They are partly right because certain prominent Democrats have tried to have Trump impeached on silly charges, but these hyperliberals are not deeply enough embedded in the Establishment to understand the nuances of US foreign policy. Further, these hyperpatriots on the far right have apparently slept through all the anti-Russian sanctions that Trump promoted, and all the flashing lights spelling out that, despite the show of friendliness toward Putin, he is fully engaged in the Establishment’s game of trying to drive a wedge between Russia and China. Of course, Trump and his cronies in Big Government miss the clear signals that this policy of theirs is a non-starter and that Russia and China will not only always be close partners – de facto allies – in their opposition to the US and its sleazy tricks, and the more virulent the anti-China campaign becomes, the tighter their bond will become. This is because Russia and China are a whole lot smarter than the Washington misfits give them credit for.
Since Congress first opened up trade with China in the 80s, the ulterior motive of the biggest Neocons and Neoliberals was to use China as a tool to keep these two countries from forming an alliance that might throw a spanner into Washington's plans for world domination. It never worked out, especially after Putin stepped into the picture. Yet they keep hatching their childish plots to propagandize Russia into abandoning its partnership with China. The very existence of these obvious ploys to weaken their friendship is a major factor that drives them together, but that never occurs to the Washington game players, who never bother to follow Sun-Tzu’s advice to know the enemy.
Just last week, a rumour surfaced in both Israeli and US media that supposedly Putin was ready to turn his back on Assad. It was a brainless attempt to sow chaos by making Assad think Putin was about to ditch him, and was the umpteenth time this kind of fake news had been tried, to no avail, of course. Just a few days ago, Russian officials pointed out that the Russian who started this rumour was not a Russian official and that the rumour was not true.
Now comes Mike Pompeo offering an olive branch to Russia, obviously in an attempt to ensnare Russia into a plot to weaken China. Nobody is falling for it in Russia or China, but that won’t prevent Pompeo from thinking he is a genius for dreaming up this cute little plot.
US friendly gesture is no doubt Trump's trick to drag Russia into the anti-China game
21:25 May 17, 2020
The friendship of Russia and the United States, according to Mike Pompeo, will end in unpleasant surprises for Moscow from Washington, said FBA Economika Segodnya (rueconomics.ru) Doctor of Economics and chief researcher at the US and Canada Institute of the Russian Academy of Sciences Vladimir Vasiliev.
US will try to lure Russia into forming a coalition against China
United States Secretary of State Mike Pompeo in an interview with Washington Examiner said the fight against the coronavirus pandemic and terrorism is an area in which successful collaboration between Moscow and Washington is possible.
“I adhere to a rather pessimistic view of the prospects for Russian-American relations. As soon as the United States of America makes some kind of conciliatory gestures, later negative actions take place that sharply worsen bilateral relations.
Therefore, such statements can be called a harbinger of the unfriendly steps that Washington is preparing for us. It’s difficult to say which specific area it may affect,” comments Vasiliev.
The expert believes that the mention of the successful cooperation between Russia and the United States in preventing terrorist attacks was made by Mike Pompeo as a standard statement.
The US Secretary of State emphasized during the interview that he had been working with Russia since the time he was director of the CIA. He recalled that Moscow helped Washington save American lives by providing information, and the United States, in turn, helped Russia prevent the terrorist attack planned in St. Petersburg.
America gathers a coalition
The expert suggested that Mike Pompeo's statement is primarily related to American policy regarding the Chinese side.
“Turning to the topic of coronavirus under conditions when Pompeo is considered Washington’s main mouthpiece in the anti-Chinese course seems very suspicious. The United States of America is interested in using the Russian factor to pressure China,” the expert assures.
It is noteworthy that in his interview, Mike Pompeo openly declared Washington’s intention to force the world to unite in order to impose on China the costs incurred by states due to the pandemic. Pompeo also expressed hope that a union of countries would emerge that understands that the only way to get the world out of the coronavirus crisis is to rid it of the risks allegedly emanating from China.
Pompeo gave the interview after a trip to Israel, where he put pressure on the US ally to weaken its relationship with China. Among other states that Washington would like to bring around to its idea of confronting the PRC, the US Secretary of State named India, Japan, Australia, and Brazil.
“The United States of America is forming an international position, and the statements of some states testify to this. I think that European countries will also join.
In other words, Washington has begun to form a coalition of states, which together with it will put pressure on the Chinese side in order to persuade the authorities to conduct an investigation into the emergence of coronavirus infection,” the expert believes. [Australia was one of the countries whose fawning leadership opted to fall into step with Washington. As soon as Australian sanctions on China were announced, China immediately banned Australian beef exports, causing an outcry among beef growers down under.]
Vladimir Vasiliev believes that America thinks only the Russian Federation can appeal to the Chinese leaders directly.
“Therefore, the White House will try to use Russia as a factor that could theoretically influence China’s position and persuade it to be more compliant with the West. Other states do not have such potentials.
Knowing the American approach, we can say that the principle of pressure permeates the actions of the United States to use Russia as a lever in relations with China. It is this motive that is embedded in the offer of friendship, voiced by Mike Pompeo,” the agency’s interlocutor is sure.
US is working on a strategy
Vladimir Vasiliev recalled that recently, the American side has been actively trying to pressure the World Health Organization to echo the White House’s opinion.
“The United States is gradually building its own tactics, as part of which they are also trying to probe the state of the Russian Federation, which is fighting the coronavirus epidemic. Thus, Washington intends to find out the state of our country’s economy, its epidemiological situation, and the extent to which the coronavirus has weakened Russia's position and made it compliant with the possible demands of America,” the expert explains. [At this point, Russian economists are saying that Russia’s position is strong thanks to its vast gold and foreign currency reserves, including yuan].
Marshall Billingsley, appointed by US President Donald Trump on April 10 as special representative for arms control, recalls Vasilyev, bluntly stated that the situation in the world has changed dramatically, and Russia's allegedly deteriorating economic situation opens up opportunities for the United States to strengthen the arms race.
“This logic is also observed in the statements of Mike Pompeo, who intends to launch a kind of mechanism and probe how much the pandemic has changed the Russian Federation’s posiiton.
The Americans do not share the views of Moscow, which supports China through its information activities. However, against the backdrop of United States actions, the question arises of how the Russian Federation will react and whether it decides to support the Western side to some extent instead of the Chinese side. The reaction of our country will show what role it will play in the information war that Washington has unleashed against Beijing.
However, I do not rule out that the friendly gesture by Mike Pompeo will be followed by a surprise or a gift in the form of a threat of new sanctions against Russia, ”the expert said.
by Alexandra Melnik
Below is a report from Al-Masdar that Egypt is in the process of acquiring Russia’s fastest and best fighter jet, Moscow’s answer to the US much-ballyhooed F-35, which is supposedly invisible to radar but which Russian radar can see just fine from 200 km away. Remember that the US sent $1.2 trillion to Lockheed Martin to design this bird, which Pentagon chief Patrick Shanahan has discreetly called “F—ed up.” We explained at NSS why the US is willing to send so much money to arms makers for so little, and it has nothing to do with keeping America safe.
The wonder jet F-35 has a top speed of about 1,200, less than half the top speed of the Russian Su-35.
But the obvious advantages of the Su-35 and the pitiful performance of the F-35 does not stand in the way of the Trump administration threatening countries showing an interest in purchasing the obviously superior Russian fighter and strong-arming allies into buying the US flying tin can.
Egypt defies US to acquire one of Russia’s most powerful weapons
By News Desk
BEIRUT, LEBANON (7:20 P.M.) – Egypt is facing potential sanctions from the U.S. after reports began to surface this week about the start of its acquisition of the Russian-made Su-35 fighter jet, which has threatened U.S. aircraft in the past.
It has become known that the deal is on the way to being implemented despite the threats from the United States to Egypt, which were made by Secretary of State Mike Pompeo.
According to experts, the appearance of the Russian Su-35 fighter in the Egyptian Army will lead to an imbalance in the region, as it is one of the most powerful combat aircraft in the world, and will ensure its superiority over the air forces in the region. [And let’s not forget, Israel is right there on the border and has purchased huge numbers of the overpriced F-35s, which can be easily defeated by the Su-35. Of course the US is concerned. If an Egyptian Su-35 were to shoot down an Israeli F-22 or F-35, both touted as “invisible,” just think what that would do to US arms sales! No wonder Pompeo is worried.]
The Russian newspaper “Rossiyskaya Gazeta” said that the analysis and hypothetical battles of the Su-35 against F-15 and F-22, showed that the Russian fighter was designed to defeat these two fighters, and in the near battle there are no opportunities for American fighters against the Russian fighter.
On Saturday, Russia’s TASS news agency quoted a military diplomatic source as saying that Russia had begun producing the latest generation of Su-35 fighters for Egypt, under a signed contract with Cairo.
A document published by the official website of the Russian government contracts and tenders revealed a tender related to the contract to supply some electrical connections and cables that will enter the manufacture of a new weapon for Egypt.
The document stated that the contract was concluded between Russia and the Egyptian side in 2018.
The Su-35 poses a threat to American fighters in an air battle. It belongs to the 4th generation and can compete with Western warplanes, including their 5th generation aircraft.
The Russian fighter weapons include air-to-air and surface-to-air missiles of all kinds, anti-ship missiles, and laser-guided bombs, as well as a 30-mm cannon equipped with 150 shells.
Vince Dhimos answered a question at Quora.
WHAT WILL BE THE ROLE OF THE BANKS IN REVIVING THE ECONOMY POST-CRISIS
To understand the machinations of the Federal Reserve Board and why they are tolerated by a once-free people, we need to look at history.
The US Constitution in Article 1, Section 8, Clause 5 plainly states that the Congress shall have the power to “coin money and set the value thereof...”
But way back in 1913, the US Congress betrayed this constitutional principle and the US people by empowering a group of bankers that they dubbed the Federal Reserve Board, which usurped this constitutional role reserved strictly to the Congress. It was the biggest sell-out of all times, and within less than 20 years, the policies written by this group of thieves had unleashed the biggest depression the world had ever seen thanks to an easy money policy that gave loans to stock market speculators with little or no collateral required. This scam was intended to boost the banking business, but was sold to the public as a means of making America great by boosting the stock market. It was the first example of the now-accepted principle of financializing the economy. Finance and economics used to be two separate disciplines, and by rights, they should remain separate, but the thieves of the Fed cunningly conflated the two, making it seem as if finance could make America prosper. The concept has grown wings since then, as Trump touts a dangerously ballooning stock market bubble as a sign of prosperity.
This was a direct result of turning over the constitutional power of the people via their elected Congress to a group that was unaccountable to Congress. The drafters of the Constitution were absolutely right to want the power over the monetary system kept safely under the control of Congress. But Congress gave away its power to a group intent on asserting its own interests.
The Federal Reserve Board is already responding to the pandemic by doing the only thing it knows how to do, issue unbacked dollars by the trillions, a patently irresponsible practice that creates more unpayable debt on top of already-unpayable debt. So far, it has issued an additional $3 trillion on top of the $22 trillion debt, which was already threatening the credibility of the US dollar. The Fed calls such printing sprees Quantitative Easing (QE).
The Fed’s policy is based on a belief in a hare-brained theory called Modern Monetary Theory (MMT), which postulates that it doesn’t matter how much unbacked currency a world power like the US issues because the rest of the world has placed its full faith and trust in the US and will never stop believing in it. This, of course, defies common sense and creates a distortion. But nature abhors a distortion and will always seek to eliminate it. Irresponsible money printing destroyed the Weimar Republic and Zimbabwe. Of course, those were not world powers, so the Fed says that these models are not relevant to our times. Based on this untested theory (MMT), the Fed fired off several QEs after the 2008–9 crisis, which crisis, by the way, was caused by the Fed’s own ineptitude when it pursued a reckless policy of issuing subprime mortgages, allowing customers to buy homes with little or no down payment at rates below the prime lending rate – for the ostensible purpose of helping the poor buy homes, but for the underlying purpose of allowing banks to profit from a scam. This lax lending policy was promoted both be GW Bush and by prominent Democrats.
The reason banks had traditionally required buyers to make down payments on properties was that home prices fluctuate, and if the buyer fails to make a down payment, then if the home loses value, the buyer can simply walk away from the mortgage and leave the bank holding a bad debt. The only recourse for a bank in the case of default is to foreclose and sell the home at auction. But if the home is no longer worth what it was sold for, and the buyer paid no down payment, the bank loses money. Thanks to this reckless easy money policy for home buyers, such default inevitably happened countless times across America and banks were left holding the bag. So the big bankers came up with the bright idea to bundle mortgages, including tranches of bad debt, tranches of moderately bad debt and some tranches of debts that were still collectible. The whole package was worthless, but the bankers managed to sell these stinky packages as “mortgage-backed securities.” Unsuspecting banks, mutual fund managers and individuals were lured into buying these MBSs and billions of dollars were lost. It was a scam and the unscrupulous sellers should have gone to jail. But bankers came up with a euphemism, ie, Too Big to Fail, meaning the banks that bought and sold these slimy mortgages, which would have failed and gone bankrupt in the good old days of honest banking, were bailed out by the Fed, which “lent” them trillions to keep them afloat in a practice dubbed “bailouts.” Some repaid the loans, others did not. This practice of bailing out businesses that made bad investments was added to the repertoire of “remedies” for various emergencies (like today’s pandemic) and has become accepted by the brainwashed grassroots and, of course, by elected officials in the highest echelons of government.
But it was a nail in the coffin of the free market, which had once been based on the righteous principle of sink or swim for businesses. No market is free once the government – or a quasi-government enterprise like the government-supported Fed– intervenes to favour incompetent investors. Traditional capitalism weeded out bad investors to keep the economy healthy. But now bad – or stupid – investors are rewarded in the new predatory capitalism or government-backed corporate capitalism that has become entrenched in America. (BTW, During WW II, this unsavoury blend of government and business was known as fascism).
This practice is, in the final analysis, a form of corruption because it robs from the taxpayer to support business malpractice by cronies. The people who granted subprime mortgages should have been held accountable, ie, should have been allowed to fail. The scumbags who bundled these bad mortgages with good mortgages to create worthless securities should have been held accountable as frauds under criminal law. Instead, they were rewarded with bailouts under the concept of “Too Big to Fail.” Thus criminal activity was legalized and rewarded by stealing the sustenance of the working class to pay big racketeers who had usurped the reins of government and quasi-government, ie, the Fed.
As for the concept of Modern Monetary Theory behind which perpetrators of quantitative easing are hiding, there are two facts that no one in the Fed or the US government wants you to talk about, and these are:
1—After the first volley of wild rampant trillion-dollar issuance following the outbreak of the 2008-9 Great Recession caused by the issuance of subprime mortgages and their irresponsible sale under the guise of aiding the poor, and the fraudulent issuance of MBSs as a “remedy,” there was talk in the mainstream financial media of a “recovery.” But in fact no real recovery ever happened. It was all talk. Thus, the pre-pandemic Trump economy, thought touted as prosperous, was in a state of unrecovered crisis.
2—After the QEs went into effect, and even before, due to the increased amount of Treasuries on the market, it became impossible to sell enough US Treasury bonds, the instruments that enabled the US government to operate. The bonds had always been bought by individuals, mutual funds and whole countries, like Saudi Arabia, Japan and China. The biggest “buyer” was the US tax payer, who unwillingly and often unwittingly “bought” the bonds using cash from the social security fund into which working individuals had paid. But now, with these sources depleted, the Fed had to establish a permanent practice of buying back its own bonds with money created from thin air. In plain language, this is fraud and intuition tells us it will ultimately fail.
Modern Monetary Theory did not take these 2 facts into account. Therefore the older models on which the theory was based are no longer relevant.
And worst of all, MMT did not account for the possibility of a Black Swan event such as the current pandemic. Eastern countries like Russia and China do not play such kiddy games with their currencies. Instead they resort to the traditional method of preparing for emergencies by keeping reserves on hand, mostly in precious metals.
The US is now in the most precarious position of its history and has no reserves to fall back on. What if MMT proves to be a house of cards, as I think it will? Money printing was the last resort. There are no other options available to the Fed.
Syrian army unleashes big attack in Southern Idlib
Fleeing ISIS terrorists resort to dressing like women to evade capture
Syrian army recaptures all territories lost in northwest Syria
Vince Dhimos answered a question at Quora.
HOW WILL THE US COME OUT OF THE COVID-19 CRISIS? CAN TRUMP GET THE ECONOMY BACK AND RUNNING IN FULL-FLEDGED [SIC]?
I had written a response that pretty much answers this question (see link below).
The expression “back and running” betrays a deep misunderstanding about the economy prior to the outbreak, which was not at all healthy by normal standards, despite the administration’s constant hype to the contrary.
Three items are ignored in the discussion, which is controlled by the US Establishment, a specialist in deception.
Here’s what you’re not supposed to know or even talk about:
1—One of the big pillars of the Trump economy was shale oil (and gas). This sector was never healthy. There were constant bankruptcies among shale producers even before the pandemic. Trump and other US politicians knew nothing about shale energy and thought that it could make America prosper, but it was trending in the opposite direction. Shale resources are a highly risky venture that has never been profitable, for two reasons: their production requires fracking, which adds an extra cost, and in addition, the well lives are extremely short requiring frequent drilling, which adds still more to the cost. Thus the break-even price per barrel ranges from at least $45–55, much higher than that of conventional wells of the Middle Eastern, North African and Russian type. Thus shale was doomed to fail from the start. The pandemic and the refusal of Russia to re-negotiate the production cuts mandated by OPEC (surreptitiously controlled in the background by Washington -- no, your financial pages didn't mention that) was the final nail in the coffin. There is no going back to that. The reason Russia, and later Saudi, refuse to continue the cuts stipulated in the expired agreement is that they saw as grossly unfair that Washington was demanding production cuts of the whole world but was refusing to cut its own production – precisely to prop up the unprofitable shale business. How could that be fair?
2—Trump had told Americans that the escalating stock prices were a signal of a booming economy. It was a lie. In fact this was a signal of a stock market bubble, which threatened to burst at any time – just like the stock bubble that burst in 1929, throwing the world economy into a tailspin. The bubble was caused in part by Big Business buying back its own stocks to keep up the pretence of profitability. The pandemic was the catalyst that started the process of popping the bubble.
3—The debt was already unwieldy, but the over-confident Fed and its captive journos kept telling the US people that debt doesn’t matter. This dubious proposition is based on a cockamamie untested theory called Modern Monetary Theory, which is being sress-tested by the pandemic, which in turn has prompted the Fed to issue another risky unpayable unbacked $3 trillion added to the already unpayable $22 trillion. Now the world will see whether debt matters or not for the US (see: https://www.quora.com/What-are-the-odds-of-hyperinflation-and-social-unrest-in-America-because-of-COVID-19/answer/Vince-Dhimos)
Yes, there are wars going on in Syria, Iraq. Libya and elsewhere, but the Western msm won't tell you the details because the truth spoils the US narrative. Al-Masdar and Souhtfront are some of the only sources. Naturally, Western media and social media are doing their best to censor and smear them. Ignore the background noise.
Heavy clashes breakout in northwest Hama as jihadists attack Syrian Army points
By News Desk -2020-05-120
BEIRUT, LEBANON (3:45 P.M.) – A series of clashes broke out on Tuesday when the jihadist rebels launched a new attack on the Syrian Arab Army’s (SAA) positions in the Al-Ghaab Plain region.
According to a field report from northwestern Syria, the jihadist rebels launched artillery shells towards the Syrian Arab Army’s defenses in the northern region of the Al-Ghaab Plain; this prompted the SAA to return fire.
The two sides reportedly exchanged machine and light gunfire, despite an ongoing ceasefire that was brokered by the Russian and Turkish authorities on March 5th in Moscow.
These latest clashes come a few days after the jihadist rebels of the Hurras Al-Deen group launched a powerful attack that killed over 30 Syrian Arab Army soldiers in the town of Al-Tanjara.
The jihadist assault on Al-Tanjara was the deadliest attack launched on the Syrian Army’s positions since the ceasefire was reached at the start of March.
Prior to the jihadist raid, the two sides only exchanged artillery and rocket fire, with most of these attacks taking place along the southern front-lines in Idlib.
For this reason, God sent them a strong delusion so that they should believe a lie.
2 Thessalonians 2:11
Vince Dhimos answered a question at Quora.
What would happen if the Chinese decided to abandon the dollar and work with India and other countries to establish the Yuan as an alternative or competing reserve currency?
Vince Dhimos, Editor-in-Chief at New Silk Strategies (2016-present)
China and Russia have been working for years to de-dollarize world trade, with mixed results. While most countries are sceptical about the yuan, there is some very serious thought in various parts of the world about ditching the dollar. And in fact, India is one of those countries that now used their own and other local currencies in international trade settlements. Iran has an iron-clad policy of zero dollar use in trade. The recent increased use of the dollar as a weapon to impose sanctions, even now that the affected populations need medicine and food more than ever, is highlighting the utter cruelty of the US regime and the need to dethrone the dollar at all costs. It’s not a game, it is a matter of life and death. This pandemic period has presented the world with a real opportunity to see through all the media lies and obfuscation and to contemplate what has suddenly happened to them and why. No one can argue with hunger pangs and no propaganda campaign, no matter how clever, can paper over hunger. Trump’s one-time allowance of only $1200 amidst a pandemic that could go on for years shows his utter disdain for the poor. Just as he has sanctioned millions of people abroad, he is now sanctioning the American poor in much the same way. The fate of the US dollar is in the hands of billionaire Federal Reserve bankers who clearly despise the poor and are printing up trillions mostly for distribution among people just like them who have never worked a day in their lives and have been sucking the life blood out of poor workers since the inception of the Fed in 1913. No one seemed to notice then or seems to notice even now that the US Constitution clearly states, in Article 1, Section 8, Clause 5: Congress shall have the power “To coin Money, [and] regulate the Value thereof, ..” but in 1913 Congress betrayed its voters and handed this fundamental constitutional power over to a pack of thieves who in less than 20 years ushered in a Great Depression through their foolish policy of easy money to stock market speculators. This was the first symptom of the government’s and the Fed’s predilection for financializing the economy, and this obsession with financialization is precisely why you’re hungry. Unlike Russia and China, which have reserves stashed away for such emergencies as COVID-19 or a depression, the US has full faith and trust in the printing press. Just as Trump today touts a dangerous stock market bubble as a sign of economic prosperity, they too thought that they could somehow make America prosperous by raising stock prices through the roof. The depression was a lesson for America but, like all such lessons, was never learned. Because America is collectively deluded. Neither the grassroots nor the elites have so far gotten any wiser for this experience, and the deluded people continued to trust the fox to guard the hen house. Contrast this dangerous aberration to Russia and China, where people recognize that finance and economics are two separate entities and no one would ever think of using raw finance to build the real economy. Because that is impossible, as we are seeing now with our own eyes and without the prism of delusional financial journalism.
Yet even that horrendous depression failed to wake up the masses, who instead of throwing out the thieves, looked to them for help to solve the crisis of their own making.
There will be no substantive change in America until the thieves are finally utterly overcome and thrown out.
This pandemic is the best opportunity to do this. For decades, financial “journalism” kept telling the public that the Fed would fix all the problems, even the 2008–9 Great Recession that they had helped create, again, with easy money, this time for mortgages. Still, the public trusted them when they fired up the printing presses and made counterfeit money to “solve” the crisis. And yet economists admit that the Great Recession never went away in all that time. But the public believed the propaganda and managed to convince themselves that the counterfeiting operation was a success.
But now here we are as a result. You can feel the hunger pangs, and hunger is stronger propaganda than any of the lies the liars in the msm can tell you. Perhaps this time around Americans will see the abject failure of their system, their Fed, their Congress, their “democracy.”
One of my interlocutors at Quora wrote that when the current scoundrel is thrown out in November, that will show the world the beauty of “democracy.”
I reminded him that this would be another exchange of one empty suit for another, and that this exchange of one scoundrel for another is in fact the essence of American democracy.
After all, Biden is not the anti-Trump many have awaited, far from it. Trump endangered the US economy with his brainless trade wars. Biden has accused Trump of not being “tough enough on China” and has promised to take this US-China confrontation a notch higher. So instead of reducing the dangerous tension that has reigned in the world since the beginning of the trade wars, he will do nothing but escalate it. Nothing could better illustrate the failure of the American system, which trades politics for problem solving.
Remember, folks, for all the legitimate misgivings the West may harbour toward that country, more than any other nation on earth, China has kept down inflation and provided us all with a decent standard of living for decades despite the gross missteps of our Western leaders, simply by harnessing their 5000 year old work ethic and brain power to produce things everyone can afford.
And now the thanks these incompetent Western leaders are showing China are nothing but sour grapes. Accusations, allegations, suspicions, threats. Racist hate. And the public is buying it on both sides of the political spectrum.
But all this ingratitude may be rewarded when the dollar fails utterly. And then it won’t matter if Americans can drop their delusion, they will be forced by circumstances to adopt a new way of life.
An analysis by a Russian expert that I translated and posted on Quora gives some insight into the future fate of the US dollar: https://www.quora.com/What-are-the-odds-of-hyperinflation-and-social-unrest-in-America-because-of-COVID-19/answer/Vince-Dhimos
Answer requested by Jeff Reno
In the following you will find our translation of an article from rueconomics.ru with commentary and notes [in brackets] by Vince Dhimos. I would like to point out a surprising takeaway from this analysis:
There are millions of people, mostly Democrats, who have an unshakable belief that the Russians support Donald Trump as president and will support his candidacy this year just as they supposedly did in 2016. However, as a daily reader of the Russian press, particularly the very serious site RIA Novosti, I have long seen article after article criticising Donald Trump’s bizarre, warlike, hostile, arrogant, reckless and senseless moves in economics and foreign policy. Generally speaking, regardless of where they may have stood in 2016, the Kremlin, which stands behind RIA Novosti and many other news sites, including rueconomics.ru, is just about fed up with the antics of Donald Trump. After all, he and his pals in Congress managed to shut down the arguably most potentially lucrative Russian exportation project Nord Stream 2, designed to deliver 55 billion cubic meters of natural gas per year to Germany. The loss incurred from this brazen interference in European affairs is hard to calculate but it represents a fairly large percentage of Russian revenues once the project is finally completed (Russia estimates it should be finished sometime this year or at the beginning of 2021), and it threatens the European economy by depriving the Germans of cheap gas needed to fuel their industries. Although in fairness, it must be said that for now, part of the gas stream to West Europe is already being supplied via Ukraine, Russia is eager to break economic ties with a hostile state that has been a thorn in the side for Russia since the Maidan coup. But news like this rarely reaches the average US news consumer. Only the relatively few Americans who read the financial pages will have heard of this pipeline project and its suspension due to grossly unjust US sanctions. Therefore, the Democrats can keep up their chorus about “Russian meddling” and keep bashing Russia for supposedly supporting a president that in reality, they are sick to death of. Because hardly anyone knows the truth.
US record debt is burying the dollar and Trump's presidential ambitions
May 07, 2020 Washington, United States
Despite the fact that the US public debt has reached a record level and will continue to grow, large-scale borrowing will not be able to seriously help the American economy. FBA Ekonomika Segodnya learned this from the head of the international economic organizations sector of the Centre for Economic Research, RISI Vyacheslav Kholodkov.
The US national debt has reached a new record level, having exceeded $25 trillion. In November, it reached the $23 trillion mark, but since February of this year it has begun to grow rapidly. The level has now reached the highest rate in history, and this is not the limit. In early May, the US Treasury announced plans to issue bonds for three trillion dollars over the next three months. That is, the size of borrowings for the third quarter is more than double the same indicator for the entire last year.
The sharp increase is associated with budget expenditures to combat the coronavirus pandemic. From July to September, total borrowing will amount to $677 billion. The Federal Reserve System (FRS) and its head Jerome Powell have already announced their readiness to buy back as many government securities on the secondary market as needed to overcome the effects of the crisis.
“These borrowings will have some impact on the American economy, as they are intended to be distributed to the population in one form or another – direct subsidies or social support,” Kholodkov notes. “But these financial injections can’t be considered a serious pillar of the economy – the impact will be small, because the situation in the USA is so difficult that it is already impossible to stop the negative processes with money.
For example, we are seeing a record level of unemployment which was not seen even during the Great Depression of 1928-1933. Borrowing will not fix it. In addition, we need to talk about the size of the public debt itself – it is, on the whole, unprecedented for the planet. Such a large debt will inevitably affect the status of the dollar in the world, as well as confidence in the US currency, which will inevitably be undermined."
The dollar is no longer omnipotent
In his day, US Treasury Secretary Timothy Geithner notified Congress on May 16, 2011 that the country's public debt had reached the maximum statutory level of $14 trillion. According to the official, he had to use "various accounting tricks" as measures to prevent default. In response, President Barack Obama said that if Congress does not increase the state debt limit by the morning of July 16, the United States may declare a technical default.
Congress people took this step, and since then it has been repeated periodically. In September 2017, the US government debt exceeded the $20 trillion mark. That day, President Donald Trump signed a law to temporarily raise the country's national debt threshold, which allowed unlimited federal loans. Thus, America accrued 10 trillion dollars in debt in just eight years. The previous 10 trillion took more than 100 years.
"After the Second World War, confidence in the dollar was unlimited, but in recent years its position as a global currency has been increasingly eroded. Investors no longer see it as a reliable financial instrument. The dollar is being squeezed off its pedestal by cryptocurrencies and gold, and countries are actively switching to trading in national currencies, as the abuse of sanctions toppled confidence in the dollar.
So far no one can tell at what point the process of abandoning the dollar will take on an avalanche-like character. Once this point is reached, investors will begin to massively ditch dollar assets, bringing down the US currency. While there is no viable replacement for the dollar, one will appear sooner or later. It will stay afloat only until the world community finds what the “buck” can be completely replaced with,” points out Kholodkov.
Trump had promised to reduce US debt
Despite the high debt, thanks to extremely low rates, the United States spends no more than $300 billion a year on interest payments on its securities. That means they can save up indefinitely. But if the rate on ten-year bonds rises from the current 2% to 4.5% (the basic forecast of Congress), then this will increase the cost of services to $ 800-900 billion a year in 7-10 years, and up to half of the tax revenues will be spent on government coupon payments.
Last summer, the US Congress warned that by 2049 public debt could reach the "unprecedented level" of 144% of the country's GDP. At that time it was stated that this meant "significant risks" for the American economy. It is noteworthy that this danger was taken into account by Trump during the 2016 election race. He promised to stop debt growth, and then lower the debt level. But today we learned that the White House is considering the possibility of not returning China's investments in US government bonds – Beijing holds $ 1.1 trillion in Treasuries.
“If the United States dares to withhold China’s money, it will accelerate the collapse of the dollar – China will withdraw its investments if possible, and all other players will follow suit. The consequences for the US currency and economy will be catastrophic. But so far this option is unlikely.
However, the situation in the American economy is very serious, and now Trump promises "rapid growth" and an "economic miracle" to America immediately after the quarantine has been lifted. These promises, in my opinion, should also be divided by at least three. After all, Trump has already failed all points of his election program, including a decrease in public debt.
Many have forgotten about Trump's tax reform, which also ended up being worthless. And now it is not necessary to say that the president will be able to radically change something by raising the state debt. But the situation may well affect Trump’s presidential ambitions, "concludes Vyacheslav Kholodkov.
Below is our translation of a report from Al-Maalomah, the media arm of the Iraqi Popular Mobilization Force.
I decided to post this translation because I was unable to find this report in any English-language, or even Russian-language sites.
You need to be aware that the PMF, though kept off the books, is actually recognized as a legitimate part of the Iraqi armed forces and does a large percentage of Iraq’s anti-terrorism operations. The Iraqi government must be careful not to trumpet this too loudly for fear of US reprisals, so they have not yet declared the PMF an official arm of their armed forces. But off the books, the PMU is appreciated and recognized for the anti-terror organization that it is. After all, after Soleimani was murdered by the Trump administration, the Iraqi people thronged to the centre of Baghdad in protest and the Iraqi parliament voted to oust not the Iranians but the American military!
However, the sleazy US media and political class have kept up a constant din of propaganda noise aimed at convincing the public that the PMU is controlled by Iran against the will of the Iraqis. This was their excuse for various attacks on PMF bases and, of course, for the killing of General Soleimani and a high-ranking Iraqi PMF official.
The PMF kills three “ISIS” members in a security operation in Salah al-Din
almaalomah / Baghdad ..
On Sunday, the deputy brigade commander of the 35th Brigade of the Popular Mobilisation Forces, Farhan Khudair Al-Deir, announced that three ISIS terrorist operatives had been killed and some of their arms, equipment and supplies were found in a security operation along the Tigris River in Salah al-Din Governorate.
Al-Deir said in an interview between Al-Maalomah and the PMF media, "The PMF carried out a security operation in the islands located in the Tigris River in response to the martyrs of Machkisha," noting that "the operation resulted in the death of three ISIS members."
Al-Deir added, "Some supplies of the terrorist organization were also found, as well as American-made weapons and foreign currencies in the possession of ISIS terrorist remnants."