US-Cuba Rapprochement: The Python Strikes

NORMAN POLLACK
THE EDITORIAL BOARD OF THE GREANVILLE POST AGREES WITH AND SUPPORTS THE AUTHOR’S POSITION.

No contrition in Obama’s words for decades of highhanded criminality against the island. The policy simply “didn’t work.”

Obama announcing the new deal with Cuba. Many—even on the left—hail it as a brave maneuver. Have hey forgotten that the empire is far from changing its DNA?

Obama announcing the new deal with Cuba. Many—even on the left—hail it as a brave maneuver and a piece of decisive statesmanship. Have they forgotten that the empire is far from changing its DNA?

[dropcap]I write in anger.[/dropcap] America smells blood, or rather New Investment, corporate swallowing of the total economy, a market for dumping surplus production, all with the added advantage—at the heart of its hatred for Cuba—of destroying an Alternative mode of society, culture, values, production, which, if allowed to exist, represents a moral-political-economic refutation of US global aggression, widening class differences of wealth and power, an ethos of self-indulgence and selfish individualism, all wrapped in stifling righteousness.

The python is America, deadly in its embrace—its proto-fascistic groundswell in Miami, its Congress largely the whores of the business-financial system, its president, seemingly in quest of peace when simultaneously straining toward the return to unilateral global hegemony by whatever means, from drone assassination to regime change to massive military spending to brinkmanship in a political-ideological confrontation with Russia and China.

To Cubans I ask, do you want this mammoth python slithering through your house? For more than a half-century we have seen Captive-Nations propaganda applied to Cuba, people starving, people in chains—what utter falsehood! Deprivation, yes, thanks to US strangulation—yet not enough to cripple the medical system, and more basic, not enough to destroy the spirit of a free people. My own visit a decade ago—no minders present—showed remarkable strides in education and quality-of-life issues I value: simple honesty, pleasure in family and nature, spirited argumentation, quiet chess-playing in the park. Cuba was everything America was not, hence the hatred on the US’s part. For Cuba to be allowed to live was like a subconscious explosive under the skin for Americans with our crazed materialism, our braggadocio, our deep-lying fear of difference. Cuban multiracialism alone undercuts America’s vested interest in translating race into a power-relationship. The 1950s cars, still running fine thank you, a reminder of the silly covetousness in feeling naked (alas conspicuous consumption) without the latest model changes. The Cuba I saw stood for harmony, not frenetic movement in besting one another. So, what does the rapprochement come down to? I fear the shattering of a nation’s identity.

***

Essentially, like Vietnam, the US has lost the battle. When Obama speaks of “an outdated approach that for decades has FAILED TO ADVANCE OUR INTERESTS” (my caps.), he is not criticizing the approach, e.g., the Bay of Pigs invasion of another country, continuous CIA schemes toward assassination and regime change, using Cuba as the poster-child for keeping up a rigid anticommunism particularly pernicious in US dealings in Latin America, but also handy with respect to Russia, China, and North Korea, but only that it did not work. As with every major policy decision, the US is not in the business of good Samaritan but, for once the unalloyed truth, he avows the advancement of American interests. Even the Chamber of Commerce is on board, not noted for selfless humanitarianism. The snakes will descend on the Island as though carried by a Plague. Meanwhile, Miami Cubans will do more than grouse—a volatile core of aggressors right up there with Ukraine’s Right Sector—a lumpen force ready in waiting to take over.

Raul Castro explaining the agreement to the Cuban people. He may have struck a Faustian bargain.

The New York Times editorial, “Mr. Obama’s Historic Move on Cuba,” (Dec. 18), perfectly illustrates the inner core of animus and destruction at the heart of so-called enlightenment. With friends like the US and The Times, the Cuban people hardly need enemies. The Times praises Obama’s “bold move [Dec. 17] that ends one of the most misguided chapters in American foreign policy.” Why misguided, save for losing out? The editorial lists a number of steps toward normalization (e.g., removing Cuba from “the State Department’s list of countries that sponsor terrorism”), which it claims “is a change in direction that has been strongly supported by this page.” Emphatically, not—see my NYT Comment below. In its magnanimity, the administration “is ushering in a transformational era for millions of Cubans who have suffered as a result of more than 50 years of hostility between the two nations.” I pause here to explain, it is not The Times that is important, but its typicality of authoritative subtle reasoning to damn the Cuban government and exonerate the American, for a half-century of unnecessary and cruel deprivation of the people—the millions who have suffered, no indication as to blame and accountability for this. No embargo, no blockade, no invasion, no attempt at international ostracism, nothing but the 50 years of hostility presumably to be laid at Fidel Castro’s feet. Obama “has courageously gone as far as he can,” in light of Helms-Burton’s 1996 sanctions regime—more punishing than that applied to Iran, at least until his latest tightening (mine).

Still, NYT persists in its indictment, even in the context of praising Raul Castro for beginning in 2008 “a process of economic reforms,” when it declares that “Cuba remains a repressive police state with a failed economy.” I beg to disagree on both counts, however severe the hardships faced by the people due to economic sanctions, because the first charge, “a repressive police state,” mouthed ad nauseam in American political and media circles, in addition to finding more suitable application among America’s “friends and allies,” is contradicted by the responsiveness of social and political institutions to the people’s needs. I saw police in khaki, unarmed, integrated as part of the community. I saw clinics in operation. I saw no begging, social tension, fear. The editorial doesn’t miss a dig. Raul also “lifted travel restrictions the government cruelly imposed on its citizens.” (As the shamus at the synagogue told me, visas were freely given to anyone wishing to go to Israel.)

Let’s get down to brass tacks. What do Obama, The Times, influential segments of the American business community like about rapprochement? Contrast what Raul Castro is saying, “’We must learn the art of coexisting with our differences in a civilized manner,’” with the editorial’s positive gushing in moving in for the kill: “The changes the Obama administration announced have the potential to empower Cuba’s growing entrepreneurial class by permitting commercial and financial transactions with the United States. The White House also intends to make it easier for American technology companies to upgrade the island’s primitive Internet systems, a step that could go a long way toward strengthening civil society.” Liberation, here we come. And for greater effectiveness in making over Cuba, the US will now have greater success “because other governments in the Western Hemisphere will no longer be able to treat Cuba as a victim of the United States’ pointlessly harsh policy.” At least the last point, unless drolly put, was allowed to slip out.

My New York Times Comment on the editorial, same date, follows:

The Times has a short editorial memory. Its correspondent at the time of the Revolution, Ruby Phillips, wrote from her luxury hotel room the most scurrilous attacks on Fidel Castro and praised the real dictator Batista. This bias persisted over decades. Now in this editorial more gratuitous slurs about dictatorship, repression etc. Pour venom on a people the US used every trick to destroy (invasion, embargo, blockade, sanctions).

No, Cubans do not live in oppression. Their medical system and medical education are superb. My visit to a synagogue was most instructive, to a country school, likewise. You demonize Fidel just as you demonize Putin, as though the Left (which may not even apply to Russia) is the work of the Devil.

And now? Obama has done what he always does: open the country to financial-commercial imperialism, send in the NGOs to destroy the political fabric of society, NYT chanting “liberalization” in the background. Hosannas to capitalism. Find a new Batista and shove him down the throats of the Cuban people.

I wish Cuba would reject US offers of “friendship” for what they are, the push, as with Latin American policy in general, to economic penetration and subjugation. Alternatives to the American Way are deemed INTOLERABLE. We destroyed Chile’s democracy, the same CIA so skilled in torture. We installed the Generals in Brazil. We despised Hugo and sought to undermine his leadership.

NYT never learns. Oppression of others is too sweet.

Postscript: Many on the Left have given Obama high marks for courage, bravery, etc., viewing US-Cuba relations as having made a significant breakthrough on the side of peace, social justice, anti-imperialism. Simon Romero and William Neuman’s NYT article, “’Brave’ Move Lifts Obama’s Standing With Latin America,” (Dec. 19), compiles a list of approving statements from the Latin American Left (Rousseff, Maduro, Ortega) greeting Obama’s move as a major breakthrough, a view even held by some CounterPunch contributors. My take is very different, the Python’s underbelly, smoothed out from so much slithering and gouging, is awakening to new tactics in devouring its victims. Here my second NYT Comment–prompted by dismay that the Left is either proving gullible or is satisfied by crumbs from the table of imperialism—now to the Romero-Neuman article, same date:

No contrition about a half-century of economic aggression against Cuba, assassination ventures, actual invasion, encirclement for the sole purpose of making a people suffer. No, Obama’s stated regret is that the policy did not work.

Now, Cuba’s destruction by other means–more sophisticated, and exceedingly more profitable. Hopefully, as I see it, Cuba will be watchful, and not allow itself to be ground down by American imperialism. The half-century called for much sacrifice, and to throw away the magnificent gains in medicine and education, and revert to a dumping ground for US industry and tourism, is sad to contemplate.

America hopes through this pseudo-recognition process to wipe away the memories of CIA covert actions, the murder of Allende, the generals’ dictatorship in Brazil, the death squads in Central America, a record of repression directly organized and financed by the US. When the celebrations on the Left cease, perhaps a sober second look will reveal how much the US has suckered everyone–and that our demand for unilateral global supremacy has not been abandoned.

ABOUT THE AUTHOR
Norman Pollack has written on Populism. His interests are social theory and the structural analysis of capitalism and fascism. He can be reached at pollackn@msu.edu.

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US stokes conflict with North Korea over Sony hacking

American propaganda continues to rise the temperature to justify warmongering against North Korea and China.

American propaganda misses no opportunity to justify warmongering against North Korea and China.

By Patrick Martin

[dropcap]T[/dropcap]he US government is preparing to retaliate against North Korea for its alleged role in the hacking attack on Sony Pictures, Obama administration officials said Thursday. While declining to go on the record placing responsibility on North Korea for the hacking—likely in part because they can produce no evidence—several top officials suggested that US cyberwarfare countermeasures were already in preparation.

White House press spokesman Josh Earnest said Thursday that he would not name North Korea as the perpetrator of the Sony hacking in advance of investigations by the FBI and Justice Department, but added that the cyberattack was an example of “destructive activity with malicious intent that was initiated by a sophisticated actor.” US officials considered the hacking a “serious national security matter” and “would be mindful of the fact that we need a proportional response,” he said.

The secretary of the Department of Homeland Security, Jeh Johnson, told a television interviewer Thursday morning that the administration was “actively considering a range of options that we’ll take in response to this attack.” He did not rule out military force, although Earnest’s reference to a “proportionate response” was portrayed by the US media as a threat of some form of electronic sabotage, rather than a direct military attack on North Korea.

The last two days have seen the transformation of the Sony incident from a corporate scandal—with the private information of tens of thousands of current and former employees dumped onto the Internet—into a far more sinister affair, involving US threats against both North Korea and China.

Obama mischaracterizing the hacking incident as an act of "terrorism." He alsp said Sony was an American corporation, whereas it is a Japanese multinational.

Obama mischaracterizing the hacking incident as an act of “terrorism.” He also said Sony was an American corporation, whereas it is a Japanese multinational.

Beginning November 24, anonymous hackers, calling themselves “Guardians of Peace,” have made several dumps of internal Sony information on the Internet, demanding the studio shelve its film The Interview, a comedy whose plot is based around the CIA hiring two American journalists (played by Seth Rogen and James Franco) to assassinate North Korean leader Kim Jong-un.

This week the affair escalated with vague threats of violence against theaters that showed the film, scheduled to open on December 25. On Wednesday morning, the four largest US theater chains cancelled the premieres, citing the threats, and Sony then withdrew the film from circulation entirely.

The US National Security Council then issued its first formal statement, not naming North Korea, but noting that the White House had offered Sony Pictures its support against the apparent cyberattack. The statement declared: “We know that criminals and foreign countries regularly seek to gain access to government and private sector networks—both in the United States and elsewhere … The US government is working tirelessly to bring the perpetrators of this attack to justice and we are considering a range of options in weighing a potential response.”

Obama administration officials made unattributed statements to the US media Wednesday asserting that North Korea was responsible for the attacks on Sony, setting off a media frenzy, including speculation about possible cyberwarfare or military responses against the regime in Pyongyang. This was accompanied by suggestions that Iran was a co-conspirator in the cyberattacks, in retaliation for US and Israeli cyberwarfare against Iran’s nuclear energy facilities.

No evidence of any kind has been produced, with press reports limited to suggestions that some of the code in the malware used to infect Sony’s corporate computer system had been written in Korean, and that the code resembled that used in previous cyberattacks in South Korea and Saudi Arabia.

The United States, moreover, is heavily invested in cyberwarfare measures, particularly targeting China. Earlier this year, NSA whistleblower Edward Snowden revealed extensive offensive cyberwarfare measures, including attacks on government and military targets.

There is evidence as well that the US is whipping up conflict with North Korea in several arenas simultaneously. The escalation of the Sony Pictures affair coincided with the issuance of a report Tuesday by a United Nations committee recommending that North Korean officials be referred to the International Criminal Court for human rights violations.

On Thursday, just as the White House spokesman was threatening a “proportionate response” to the Sony hacking, the UN General Assembly approved the referral of North Korea to the ICC, sending it on to the UN Security Council, where Russia and China are expected to block further action.

The role of Sony Pictures also deserves serious scrutiny. The studio has a documented close relationship with the CIA, having made the film Zero Dark Thirty in 2012, in direct collaboration with the agency, portraying CIA torture of prisoners as vital to the targeting of Osama bin Laden by a Navy Seals death squad the previous year. The film served as a sort of video rebuttal-in-advance of the Senate Intelligence Committee report on CIA torture, which was completed in the summer of 2012 but delayed for two years by the Obama White House, until it was made public, in heavily redacted form, last week.

The decision to make a film that climaxed in the assassination of Kim Jong-un was peculiar, to say the least. As the New York Times wrote, “To depict the killing of a sitting world leader, comically or otherwise, is virtually without precedent in major studio movies, film historians say.” If North Korea, Iran or Russia had produced a similar film about a plan to murder Obama, complete with grisly images of the president being obliterated by a missile (the final scene in The Interview ), the US government and media would have raised an uproar.

Moreover, given the Obama administration’s claim that the president has the right to order drone missile assassination of any individual on the planet, including US citizens, at his own discretion, the depiction of such an attack by a major American film studio could well be seen as a veiled threat. There is no doubt that there were elements in the American government, aware of the mounting crisis and isolation of the North Korean dictatorship, who fully expected the film to be interpreted in that way in Pyongyang.

According to a report carried by the official US broadcast service Voice of America, State Department spokeswoman Jennifer Psaki confirmed that the US diplomat who is coordinating the anti-China campaign, Daniel Russel, “had held a routine meeting with Sony executives to discuss foreign policy in Asia.” The online publication Daily Beast said it had seen emails indicating that at least two US officials had prescreened The Interview and gave it their blessing.

The investigation into the Sony hacking is being coordinated by the FBI and the Mandiant forensics unit of FireEye Inc. This is the same private company that was the source of a series of reports, published in the New York Timesand embraced by the Obama administration, alleging that a Chinese Army unit specializes in hacking US corporate and government computer systems.

The campaign against North Korea could be transformed relatively quickly into another element in the Obama administration’s ongoing effort to mobilize US military and security resources against China.

Patrick Martin is a senior political analyst with wsws.org.

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The Saker on Regime Change, Assault on Russia, Weakening of the Ruble—Part 3

CLICK ON IMAGES TO ENLARGE
….

[dropcap]L[/dropcap]Some will love it. Lew Rockwell went as far as to say that he would hand Elvira Nabiulina the award of “Central Banker of the Year”. Not everybody agrees. For example, Victor Gerashchenko, a former Chairman of the Central Bank, declared that if he had been in the position of Nabiulina today he would have “asked for a gun to shoot himself”.

I have to admit that I personally am dismayed by Putin’s apparent beliefs in market economics. I say ‘apparent’ because there might be things going on which I am not aware of. For example, while Putin speaks of “market forces” China seems to get heavily involved in the Russian economic crisis. For those interested in these developments, please check the following sources:

First, check out the latest CrossTalk: Dumping the Dollar.
Go West, Young Han.
Finally please read this article in Zero Hedge.

The Chinese friend who sent me the article in the People’s Daily made a particularly interesting comment. He wrote:

I think that he is spot-on here. It is very much in the Russian strategic interest to have China applying some “Yuan diplomacy” in the EU not only because China is a close ally, but mainly because China is “not the USA”. At this point in time, *anything* which can weaken the total control of the USA over its EU colonies is welcome. Any Yuan invested in the EU is one Dollar which is not.

This is just an example. Putin probably knows a lot of things which we don’t and he probably cannot say everything he thinks or plans. But my purely subjective impression is that Putin simply does not have the power needed to confront the Atlantic Integrationists head on. Mikhail Khazin, who knows a lot, recently even declared that there were Atlantic Integrationists in the “power ministries”. And since I am pretty sure that he was not referring to the Ministry of Defense that leaves either Internal Affairs or State Security. If true, that is not good. Either that, or Putin sincerely believes in liberal market-economics. I most definitely don’t believe in them at all.

There are, in my opinion, two major problems with Putin’s logic. First, Russia needs not less, but more regulation and more state control. At the very least, I really believe that the very institution of the Central Bank is a toxic one: it was created by the US-controlled Yeltsin regime to subordinate Russian politics (and politicians) to the international banking cartels and we see that it works perfectly. Putin can send bombers to the Gulf of Mexico, but he is unable to remove Nabiulina, nevermind take control of the Central Bank. Nikolai Starikov has even said that there is a joke going around now saying “Putin, send the troops into the Central Bank!”. That is how disgusted many Russians have become with this supra-national institution which is accountable to nobody. But there is even worse.

The choice of a free-market non-regulated “solution” basically leaves Russia fully enmeshed into the Anglo-American/NATO bloc controlled financial system. How can Russia free herself from the “Dollar yoke” while remaining fully part of the Dollar-dominated international system?!

I have to tell you that while I gratefully posted Peter Koenig’s excellent “Free Fall of the Ruble – A brilliant ploy of Russian economic Wizards? Whose chess game” this was one of those instances when I post something I find very interesting but which I do not agree with. I just don’t get the sense that Putin is about to pull some clever judo-move on the western plutocrats. I most sincerely hope that I am wrong here, but that is my gut-feeling.

Generally, Putin was clearly defensive when asked questions about the Central Bank and the Government. Especially in contrast to the absolutely magnificent way he handled the questions about the Ukraine, even when asked by a very hostile Ukrainian journalist. Again, as I so often say this, I am not a mind-reader or a prophet. I cannot tell you what Putin thinks or what he will do. But I think that many years of studying the man give me a pretty decent gut feeling about him and that gut feeling tells me that while he has a clear and strong vision on international politics in general, and especially about the Ukraine, he lacks such a vision for economic problems.

For the Ukraine his position is crystal clear: “Crimea is ours forever, we will not let you crush the Donbass, we want a united Ukraine in which the rights of all people and regions are respected and you will have to negotiate with the Novorussians who have a right of self determination” (which leaves open the possibility that while Russia might “prefer” a united Ukraine, the Novorussians have the right to decide otherwise). Clear, direct and, I would argue, perfectly reasonable. In contrast, in economics I get a sense of faith-based politics: “market forces will correct the current artificial situation and within 2 years the crisis will be over”. The problem with that is that the very same Putin ALSO says that the West is completely manipulating the markets and not allowing them to act. So what he is really saying is this: “the Empire does not have the means to artificially skew the markets for more than two years”. Oh really? I am not so sure of that at all. In my book the Empire has been skewing the markets for many years already (I would argue since 1971).

Bottom line, what I hear from Putin is “more of the same” and since I don’t like what I have seen so far, I can only add “only worse”.

Can this nightmare be averted?

[dropcap]S[/dropcap]till, the situation is not necessarily hopeless. While I think that Putin’s economic policies are wrong and while I believe that the Russian Central Bank is very much part of the problem and not the solution, this is not a black and white binary kind of choice: playing by the wrong rules or on the wrong field does not necessarily mean that you will lose, only that you have made the wrong initial choice. For one thing, you can make the argument that the Ruble is a much more credible currency than the Dollar. Second, I do agree that market forces are resisting the US distortion and that the integration of China and Russia will inevitably contribute to help the Russian economy. Third, the EU is already in recession and if that gets worse, and it will, this will start pulling down many US banks who are heavily linked to the EU market. Fourth, in objective terms, Russia is sitting on a tangible fortune of natural resources and she has full access to the gigantic Chinese market. In these conditions, it is going to be awfully hard for the Anglo-American/NATO bloc to “isolate” Russia. So, objectively, Putin is right about one thing: even if it does get worse before it gets better, it will inevitably get better.

So is Putin a genius chess player? That is not quite how I would put it. He definitely has a record of absolutely brilliant moves, but right now he is clearly struggling. I am like everybody else, I would like him to pull yet another brilliant “chess move” and stick it to the Empire but I don’t see how we could do that, at least not at this point in time.

What I saw today is a Putin clearly on the defensive who had to invest a lot of his personal capital of popularity and trust. He honestly admitted that things might get worse and that there is no quick fix to the current crisis. He did commit to a time frame of 2 years which is both very short and very long. It is plenty enough time to lose his popularity and very little time to turn around such a huge country like Russia.

The most poignant moment of the entire 3 hours came when Putin explained what was at stake today. He said:

Amazing words which fully confirm one of the most important facts of the current situation: the Anglo-American/NATO bloc Empire and Russia are at war, a war in which either the Russian Bear will be “stuffed and that’s all” or the Anglo-American/NATO bloc Empire will crumble. This is an existential war for both sides, for the Anglo-American/NATO bloc Empire and the Russian Civilizational Realm – one of them will defeat the other.

This is not the first time that Putin explains this, but this time I felt an urgency in his voice which I have not heard before. He was both warning the Russian people and asking for their support for him personally. My guess is that he will get it, I just don’t know for how long.

—The Saker

saker-CubaspyOPENER_r2_mobile_image_982w The forgotten lady who gave her life for Cuba

By The Saker

[dropcap]T[/dropcap]here is one specific aspect of the recent thaw between the US and Cuba which nobody has mentioned and that bothers me a lot.

Rolando Sarraff Trujillo

We have all heard about the Cuban 5, the last three of which were now freed and we heard about the Jewish American spy Alan Gross who has now returned to the USA. The media has also revealed the name of the top US mole in Cuba who had provided the USA with information about the Cuban 5 which led to their arrest: Rolando Sarraff Trujillo who is now in the USA. So all is well, and everybody is back home, right?

Wrong.

Amongst the people whom Trujillo’s betrayed was Ana Belen Montes, who was the top DIA analyst for Cuba and who, after observing from the inside the hypocrisy and outright evil of the US policy towards Cuba decided to betray the USA and become a spy for Cuba.

You could say that Ana Montes was Rolando Trujillo’s counterpart in the USA.

Except that Trujillo is free, while Montes still rots in jail.

And, apparently, the Cuban government made no effort to get her freed.

I don’t personally care much about moles primarily because most of them end up breaking an oath to their country, and that bothers me a lot. Unlike an intelligence agent, whether under diplomatic immunity or clandestine, a mole takes a formal oath to the country he/she betrays, something which intelligence agents don’t do. But if there is one thing which even the prosecution admitted in the case of Ana Belen Montes is that she acted purely on political/ideological grounds, because she believed in her heart that what she was doing was right. She got no money from the Cubans, she was not entrapped in some sordid sex scandal and she was no acting out of petty revenge or resentful ego problems, as so many traitors typically do.

She knew the risks better than anybody else, but she took them because she believed that this was the right, honorable, thing to do.

And now the Cubans have apparently turned away from her (while the US did get Trujillo free).

I cannot see any excuse for the Cuban government’s willingness to release Trujillo for anybody else but Montes. The plight of the Cuban 5 was not nearly as dramatic as Montes’ and Trujillo was directly responsible for her arrest. And yet the Cubans seem to have forgotten her.

David Rovics wrote an absolutely beautiful song for Ana Belen Montes and I hope that she will get to hear it one day. You can listen to it here:

I can only imagine how Montes feels today knowing that Trujillo is free while she is forgotten. And I don’t blame the USA for jailing her. But it bothers me a great deal that the Cubans have apparently turned away from a lady who gave her life for Cuba.—TS

Is that not the height of stupidity and self-delusion?

Listening to Obama’s speech about Cuba I was stunned by the following statements:

After all, these 50 years have shown that isolation has not worked. It’s time for a new approach. (…) I do not believe we can keep doing the same thing for over five decades and expect a different result. Moreover, it does not serve America’s interests, or the Cuban people, to try to push Cuba toward collapse. Even if that worked -– and it hasn’t for 50 years –- we know from hard-earned experience that countries are more likely to enjoy lasting transformation if their people are not subjected to chaos.

You get that? Obama admits that 50 years of sanctions and attempts to isolate a small island right off the coast of Florida has not worked. And then he announces that he will impose more sanctions on Russia, the biggest country on the planet, and that he will isolate Russia, even though Russia now has full access to the biggest economy on the planet?!

Is that not the height of stupidity and self-delusion?

The Saker

Crouching sanctions, hidden revenues

by Lev Igorevich

Dollars for borsch

There is a lot of speculation about the economic health of Russia in the light of tougher sanctions, falling oil prices and tumbling ruble. Concerns are raised whether Russia can afford its existence. However, those concerns are paper thin and are presented in more of a mocking spirit, because in most prediction acrobatics actual revenues of the Russian state are not considered at all.

Many sources, in their predictions for the Russian economy, are repeating the same mistake over and over again. Roughly speaking – assesments are made under the assumption that Russians pay dollars for their borsch. In reality, Russia sells borsch for dollars. This is an important point to consider, because Russia pays its public sector expenditures (education, healthcare, pensions, police, army etc) in rubles!

As we all knew (those who didn’t got it stamped in the face this year thanks to the good will of liberal media), Russian revenues are based on natural resources. Sales are conducted in FX (except for special agreements, some of which are still pending). So let’s take a look how the purse of Russian state is being filled.

For the purpose of this article, rough numbers were taken from Nasdaq WTI chart for oil and XE USD/RUB chart for FX. The example will be based on average gas prices for Germany in 2013, which was $366 (according to Bloomberg).

Oil Situation

As far as the Russian Treasury is concerned, income from the oil industry is just fine and is probably exceeding early 2014 estimates for next year’s budget. Even at tumbling oil prices, falling ruble is compensating more than enough – revenue rose roghly 12% year-over-year.

Year	Month	WTI Crude $	USD/RUB	RUB revenue
2013	1Y AVG	97	33	3201
2013	November	94	33	3102
2014	February	103	36	3708
2014	May	103	35	3605
2014	August	95	37	3515
2014	November	75	46	3450
2014	December	60	60	3600
Crisis Average		88	41	3 497

Gas situation

Let’s take a look at this year’s picture using the same ruble prices from the oil chart. It is easy to see that ruble revenue almost doubled by the end of the year and avareged 31% more in year-over-year income.

Year	Month	Gas³$	USD/RUB	RUB revenue
2013	1Y AVG	366	33	12078
2014	February	366	35	12810
2014	May	366	35	12810
2014	August	366	37	13542
2014	November	366	46	16836
2014	December	366	60	21960
2014	1Y AVG	366	43	15 592

Surprise, n***a!

On paper, Russia will have good fiscal numbers and a solid budget for 2015. This of course is just a cover image. Russia plans major investments for 2015 and onwards (with developments in the west, Russia needs “2020” to happen much quicker) and is most likely to tap its floating currency mechanisms for issuing more rubles for those investments.

I doubt that Russia will waste FX by selling them for rubles right off the bat if they can print the money against fresh FX holdings. The “big throw” will be reserved for later as we all know what happens to countries that dump dollars overnight. Last thing Russia (and China, too) needs right now is another color/umbrella revolution being sped up. Equally importantly, one must not forget that Russian and Chinese financial systems combined hold trillions of US treasuries (it’s insane to hold cash as bank deposits are guaranteed up to $250K, treasuries have no limit against bankruptcy) which they wouldn’t want to depreciate before a major swap and secure measures are in place. So unless the West comes in with guns, don’t hold your breath for the international ruble just yet. Instead, what Russia needs right now is a weak ruble that will force it to dump imports and start thinking about substitution and better yet realizing Russia’s natural potential.

The plan is to force Russians to think about long-term local business, not just quick-buck consumerism. Russia must get a rude awakening slap to reorient her economy toward competitive consumer and capital goods. She must make her business sector step up with its own goods and technologies, initiate a cross-sectoral build up and stop companies syphoning money off-shore where it gets pocketed by western “asset managers”.

Fate’s irony or enjoy your bath

Ironically, the weak ruble will also punish the EU for doing the dirty work for the US. Now everyone can see that while the US waves the stick the EU pays the price. The weak ruble will decrease tourism from Russia and exports to Russia. The EU’s agricultural sector is already sensing a light, but increasing pain. The tech industry shall follow if Russia is to prolong the embargo and weak ruble combo. Yes, a low ruble means less purchasing power abroad. Yet it also means competitive advantage for Russian goods in foreign markets and thus increased selling power – a signal for future development.

for “susceptibility to western sanctions”, “unexpected currency dive” and “expensive financing”. Switching staff by popular demand will remove a lot of questions internally and give that extra legitimacy externally. “The Moor has done his work, the Moor may go” at its finest. However, lowering the funds rate at the central bank will probably not give any rise to the ruble (because of foreign perception, not economic reality), but as previously laid out, that might be desirable all along – easier financing and boosted competitivness is what business always needs.

18.12.2014
Ukrainian crisis news—
Latest news of Ukraine, Russia, Europe, Germany, USA

And now a word from the Editors of The Greanville Post

FRIENDS AND FELLOW ACTIVISTS—

AS YOU KNOW, THERE’S A COLOSSAL INFORMATION WAR GOING ON, AND THE FATE OF THE WORLD LITERALLY HANGS ON THE OUTCOME.

THEIR LIES.
THEIR CONSTANT PROPAGANDA.

So, we request that you do something.
Reading is not enough. Action of some sort is needed.

Start with something simple: Share our posts.
If you don’t, how can we ever neutralize the power of the corporate media?

YOUR SUBSCRIPTIONS (SIGNUPS TO THE GREANVILLE POST BULLETIN, SEE BELOW) ARE COMPLETELY FREE, ALWAYS. AND WE DO NOT SELL OR RENT OUR EMAIL ADDRESS DATABASES—EVER. That’s a guarantee.

The Saker on Regime Change, Assault on Russia, Weakening of the Ruble—Part 2

Ruble Exchange Rate Fluctuations and the Economic War

SOURCE: Vineyard of the Saker

President Putin: At the center of a hurricane.

by Aleksei Kettunen
Translation to English: Petri Krohn

[dropcap]Russian ruble[/dropcap] exchange rate changes have all the ingredients of success detective story. On Monday, 15.12. 2014 ruble weakened to a record low since 1998: the dollar cost 64 rubles and 79 rubles to the euro. In recent years, the price of an euro has been hanging around 50 rubles, or 5 000 rubles withdrawn from an ATM for a night of adventures in St. Petersburg would cost around 100 euros.
Last night, the Russian Central Bank raised its base rate drastically from 10.5 per cent to 17 per cent to curb currency speculation. The price of an euro during the day momentarily exceeded the limit of 100 rubles or 80 rubles for a dollar. Now at the end of the market day the ruble has slightly appreciated: $ 1= 72.60 rubles and 1 euro = 90 rubles. The official rates of the Russian Central Bank before tomorrow’s market day are $ 1 = 61.15 rubles and 1 Euro = 76.15 rubles.

What is this about?

The economic sanctions imposed by the US and the EU prevent granting of loans to Russian companies with a payment period of more than 30 days. As Russian companies have been borrowing money from the West the entire post-Cold War period at a lower rate of interest and the penalties now prevent loan restructuring and follow-up funding, these companies must now get euros and dollars to take care of their loans, thereby creating more demand for foreign currency in the Russian market and thus weakening the ruble.

Also, the fall in the price of oil reduces Russia’s foreign exchange earnings, which in a situation of high demand for currency weakens the ruble.

The Eurasian Economic Union comes into force on January 1, 2015. Most likely at the same time the Russian ruble and foreign exchange markets will change drastically, and the Russian economy will take a distance to the dollar and the euro. Now the West is doing its best to weaken the ruble and thus destabilize the Russian economy and the political system before the end of the year. The maxima of the West is to prevent the emergence of the new economic union and closer cooperation within the BRICS. Taking into account the Christmas holidays, the West has little more than a week to succeed.

What are the Russian authorities doing?

Trying their best to defend the ruble and the Russian economy. Their actions are limited by two factors: first, in this battle Russia’s foreign currency reserves may be used only minimally (for which there are far better uses), and, secondly, the entire process must take place under the rules of the dollar-based global liberal economic model (because Russia will disconnect from the dollar system only later).

For the rest of the year the going will only get tougher. Even under the liberal economic model the Central Bank of Russia and the government have much stronger measures to stabilize and strengthen the ruble, which they probably will introduced as needed.

Russia will detach itself from the global dollar economy according to earlier plans .Until then it will continue defending the ruble. The West on its part will make every effort to weaken the ruble. What will be the end result? Time will tell – or the stars. I predict that next year will see a surprise!

What might this 2015 surprise be?

The Russian government has already informed Russian banks that the amounts of reserve currency deposits placed by various ministries in Russian banks will be drastically less than during previous years. These funds will instead be used to finance various domestic infrastructure projects. All this means that the Russian government obsessed with saving during all the 2000s and 2010s will become a big spender investing in strategical domestic projects. This will considerably strengthen Russian economy. Another factor will be the Eurasian Union.

The third factor is a combination of recent Russia-China, Russia-Iran and Russia-India megaprojects and financing from the New Development Bank NDB (formerly referred to as the BRICS Development Bank). Russian President, Government and Bank of Russia have consistently informed the market players that now is the time to concentrate on domestic markets and domestic financial resources. All this will probably mean the unlinking of Russian economy from dollar-dominated Western economy.

Enjoy the cliffhanger!

TUESDAY, DECEMBER 16, 2014

Listen to this Ukrainian Nazi, speaking in Russian with his fellow Ukrainians, explaining that there are no peaceful civilians in Donetsk but only collaborators with the enemy. As soon as he is done spewing his hatred he gets hit by an artillery shell. Call it ‘karma’ or remember the words of the 3rd Psalm “thou hast broken the teeth of the ungodly” but this guy sure got what he deserved. See for yourself:

LET US RECALL THAT WAHABISM IS A FUNDAMENTALIST CREED ACTIVELY SUPPORTED BY THE SAUDIS—Washington’s close buddies.

[dropcap]T[/dropcap]he horrible events in Pakistan immediately brought to my mind the barbaric attack by Wahabi Chechens against the school in Beslan. It is amazing for me to see that, apparently, attacking schools and taking children hostage is a God-pleasing action in the sick minds of the human reptiles known as Wahabis. They also love to slit throats, torture and, occasionally, eat livers. Truly, this ideology which we can call Wahabism or, probably even more accurately, Takfirism is satanic in its very core.

Ramzan Kadyrov is very wise when he refers to these militants as “shaitans” or devils. He is, I think, quite literally right. Unlike the Anglo “coalition of the willing”, the Russian and Syrian armed forces have done a superb job killing as many of these “shaitans” as possible, as have the truly Muslim Chechens. But one can only kill people, not ideologies. And Takfirism cannot be eliminated by Russian or Syrian guns. Takfirism can only be defeated by Islam. This is what Ramzan Kadyrov has done in Chechnia and this is what Hezbollah is trying to do in Lebanon and this is what Iran is trying to achieve in the Middle-East.

In this video, Hezbollah leader Sayyed Hassan Nasrallah explains the nature of Takfirism and the threat it poses to the Muslim world:

The result of the Russian Central Bank’s hike in interest rates turned out to be worse then my worst nightmares: it reversed the downward spiral of the Ruble for only about half an hour, then the Russian currency resumed its collapse. Rumor has it that the Central Bank might begin buying Rubles next, which I personally don’t see as useful at this point.

I have asked for expert opinions and I hope to get them soon. In the meantime, here is my own take on this which, caveat emptor, is backed by ZERO personal expertise in these matters. Still, for whatever it’s worth, my own speculations:

1) The Ruble is falling due to three completely separate reasons:
i) The recession in the West which triggers a drop in oil prices
ii) The Anglo-American bloc pressures on OPEC not to cut production
iii) The impact of western sanctions

2) None of the above are enough to explain what is happening. The real problem is the lack of credibility of the Russian Central Bank and the Kremlin. Thus the key factor in the fall of the Ruble is distrust of the Russian authorities.

3) This distrust is fully deserved. The head of the Central Bank is a notorious 5th columnist which Putin failed to fire, arrest or otherwise remove from that position. But there is worse:

4) Putin personally is not trusted either, at least not on economic matters. Dmitri Orlov put it very well:

First, yes, Putin is an economic liberal. I hate to admit it, but I am convinced of it. So while he is “socialist” in a sense of supporting a social state, which helps the poor, needy, sick or old, he also is a “market capitalist” in the sense that he believes that market forces should be left free to maximize the competitivity of an economy. This might be a result of seeing a (pseudo-) socialist system fail or because he sincerely admires the competitivity of US and other (pseudo-) capitalist economies, I don’t know. But there is no doubt in my mind that he is an economic liberal.

Second, it would be typical Putin to let the “Atlantic Integrationist” 5th column to fail so badly as to make their removal a political demand of the Russian people. The problem with that is that this strategy can take a huge toll on the Russian people and economy.

Right now the situation is so bad that the value of some high visibility Russian stocks has begun to plunge. As does the Ruble. As does the price of Bread.

I am not much of an economist, much less so a trader. But I have to agree with the markets here: the current Putin+Nabiulina combo is not one deserving trust and if I had to speculate, I would speculate against Russia right now.

Maybe I am naive or primitive but I see only one way to reverse this death spiral: not only to fire Nabiulina, but to fully nationalize the Central Bank, fire the totality of its current top management and to appoint a new team with Sergei Glaziev as its director with a rank of Minister of Finance. Then Russia must take the strategic decision to drop the current system of backing each printed Ruble with purchased US Dollars and instead back the Ruble with either energy or metals or a combo of real-word resources. My own vote would go for gold.

The Saker

APPENDIX IV

CrossTalk: US vs Russia

Dear friends and readers,

Today I am writing to you to appeal for your help. By now it must be clear to everybody that what is taking place today is not just some “Cold War v2” or some “East-West tensions”, but a full-scale total war between not only Russia and the USA, but between the entire Anglo-American-led NATO Empire and the Resistance (lead by Russia and the BRICS). Make no mistake, this is not about the Ukraine or, even less so, about the Donbass. This is about regime change in Moscow. Ask yourself a simple question: what will happen to China, Iran, Latin America and the rest of the planet if the Anglo-American-led NATO bloc is successful and a Yeltsin/Proshenko/Hollande/Abbot/etc-like figure takes over the Kremlin? I am not saying that Russia today “is” the Resistance, but I am saying that Russia is absolutely indispensable for the Resistance. If Russia loses this war, the Empire wins the planet. And if Russia wins, that will be the end of the Empire. That is really that simple.

So far this war has been a 1% shooting war, 30% financial war and 69% information war. But what is crucial is this: these ratios can change. Look at the devastation this 1% war caused in the Donbass and imagine what a full-scale 100% shooting continental war would do to our planet! In fact, if we lose the information war the probability of these ratios changing for the worse is very high. In other words, to avoid a continental shooting war we have to win the information war.

We all know that Russians are experts at shooting, adequate at finances and absolutely terrible at public relations. I would argue that the volunteer blogosphere has done much more to explain the Russian point of view than the entire state-funded Russian media. But with the informational battle heating up, we need help, a lot of help.

In this war, the single best “weapon” we have is direct translations from Russian into English. Documents, speeches and official statements, of course, but also videos, commentaries, documents from the vibrant Russian blogosphere. If the Russians knew anything at all about PR they would hire a firm with the sole task of translating this kind of material into English. Such a firm could employ no more than 50 full time translators plus assisting personnel. It would cost the Russian state budget pennies. But they won’t do it because they just don’t “get it”.

We will have to do it. Pro bono.

Because, above all, we don’t want to be bystanders.

And we don’t want a continental war.

So, I literally beg all of you who can translate from Russian into English, even if you are not professionals or if your English is not perfect (we have editors who will gladly help: please contact the Russian Saker Team whose appeal I am publishing below in English and Russian. Please offer your assistance, even just for a few hours a week, to translate the huge amount of most important information we have in Russian into English (because English is the lingua franca of our planet). Please help us stop an Empire gone crazy and hell bent on starting a shooting war with Russia.

Specifically, I ask you to do two things:

1. Contact the Russian Saker Team at editor@vineyardsaker.ru and offer them your services
2. Spread this appeal to any and all contacts you have who might help or even know somebody who could help.

Please don’t be a bystander.

The Saker

——-
Words from the European Saker—

Shaking hands across the ocean

We, the volunteers of the Russian Diaspora, spontaneously organized ourselves into a group to help our historic Homeland of Russia. Our site is the Russian version of the parent English blog “The Vineyard of the Saker”, which analyzes the current pressing issues in the world. The blog owner, The Saker, has extensive experience in military analysis, which is very popular in the English-speaking blogosphere.

Multiple language volunteer groups have decided to bring the Saker’s blog to their readership. As of today, in addition to Russian, we have French, German, Serbian, Italian, Spanish (Latin American) and Oceania (Pacific) versions. This is truly an unprecedented case of volunteers from around the world spontaneously uniting to organize an opposition to the mainstream Western media’s reporting of world’s events.

The realization that we have been bluntly manipulated by certain global interests that are mindlessly pushing the world towards war and destruction, prompted us to join our voices to the growing world protest against the propaganda of violence and hatred. Exposing the thick wall of Western lies and trying to tell people the truth from the other side is the civic duty of every honest person.

We say NO to violence and wars around the world; we stand for peaceful coexistence, economic and cultural cooperation between our nations; and, we extend the hand of friendship to all nations, brothers and sisters all over the world!

We will be together only through the realization that we share common values and interests: the right to freedom, self-development, labour and education, the right to love and raise our children, the right to the TRUTH and LIFE.

The purpose of the unbridled Western propaganda is contrary to these rights and to befuddle our consciousness and identity, to divide us, to force us to hate each other, so we can be more easily crushed one by one.

If you support our call and want to help, please join our volunteers. We need people with various language skills to translate our material.

Please contact us at editor@vineyardsaker.ru.

And now a word from the Editors of The Greanville Post

FRIENDS AND FELLOW ACTIVISTS—

AS YOU KNOW, THERE’S A COLOSSAL INFORMATION WAR GOING ON, AND THE FATE OF THE WORLD LITERALLY HANGS ON THE OUTCOME.

THEIR LIES.
THEIR CONSTANT PROPAGANDA.

So, we request that you do something.
Reading is not enough. Action of some sort is needed.

Start with something simple: Share our posts.
If you don’t, how can we ever neutralize the power of the corporate media?

YOUR SUBSCRIPTIONS (SIGNUPS TO THE GREANVILLE POST BULLETIN, SEE BELOW) ARE COMPLETELY FREE, ALWAYS. AND WE DO NOT SELL OR RENT OUR EMAIL ADDRESS DATABASES—EVER. That’s a guarantee.