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.

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 In recent years, the price of an euro has been hanging around 50 rubles, or 5 000 rubles withdrawn from an ATM for a night of adventures in St. Petersburg would cost around 100 euros.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.


russiaDesklogo1-350x81

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


 

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.

OUR TRUTH.

HUGE ISSUES ARE BEING DECIDED: Nuclear war, whether we’ll live in democracy or tyranny, dignity or destitution, planetary salvation or doom…
It’s a battle of communications we can’t afford to lose. 


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?

And if you took the time to read this article, and found it worth SHARING, then why not sign up with our special bulletin to be included in our future distributions? And please tell others about The Greanville Post. 


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The Oil Coup

by MIKE WHITNEY
THE INDISPENSABLE DAILY READ

Kerry plotting with medieval monarch, King Abdullah, of Saudi Arabia.

Kerry plotting with medieval monarch, King Abdullah, of Saudi Arabia. In their quality as privileged puppet state, it’s not an issue that the Saudis are behind a great deal of “extremism” and “jihadism” in the world, and that the kingdom beheads people routinely.

“John Kerry, the US Secretary of State, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.” (Stakes are high as US plays the oil card against Iran and Russia, Larry Eliot, Guardian)

[dropcap]U.S. powerbrokers[/dropcap] have put the country at risk of another financial crisis to intensify their economic war on Moscow and to move ahead with their plan to “pivot to Asia”.



CLICK ON IMAGES TO ENLARGE

Here’s what’s happening: Washington has persuaded the Saudis to flood the market with oil to push down prices, decimate Russia’s economy, and reduce Moscow’s resistance to further NATO encirclement and the spreading of US military bases across Central Asia. The US-Saudi scheme has slashed oil prices by nearly a half since they hit their peak in June. The sharp decline in prices has burst the bubble in high-yield debt which has increased the turbulence in the credit markets while pushing global equities into a tailspin. Even so, the roiled markets and spreading contagion have not deterred Washington from pursuing its reckless plan, a plan which uses Riyadh’s stooge-regime to prosecute Washington’s global resource war. Here’s a brief summary from an article by F. William Engdahl titled “The Secret Stupid Saudi-US Deal on Syria”:

“The details are emerging of a new secret and quite stupid Saudi-US deal on Syria and the so-called IS. It involves oil and gas control of the entire region and the weakening of Russia and Iran by Saudi Arabian flooding the world market with cheap oil. Details were concluded in the September meeting by US Secretary of State John Kerry and the Saudi King…

..the kingdom of Saudi Arabia, has been flooding the market with deep discounted oil, triggering a price war within OPEC… The Saudis are targeting sales to Asia for the discounts and in particular, its major Asian customer, China where it is reportedly offering its crude for a mere $50 to $60 a barrel rather than the earlier price of around $100. That Saudi financial discounting operation in turn is by all appearance being coordinated with a US Treasury financial warfare operation, via its Office of Terrorism and Financial Intelligence, in cooperation with a handful of inside players on Wall Street who control oil derivatives trading. The result is a market panic that is gaining momentum daily. China is quite happy to buy the cheap oil, but her close allies, Russia and Iran, are being hit severely…

According to Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center, the dramatic price collapse is being deliberately caused by the Saudis, OPEC’s largest producer. The public reason claimed is to gain new markets in a global market of weakening oil demand. The real reason, according to Abanmy, is to put pressure on Iran on her nuclear program, and on Russia to end her support for Bashar al-Assad in Syria….More than 50% of Russian state revenue comes from its export sales of oil and gas. The US-Saudi oil price manipulation is aimed at destabilizing several strong opponents of US globalist policies. Targets include Iran and Syria, both allies of Russia in opposing a US sole Superpower. The principal target, however, is Putin’s Russia, the single greatest threat today to that Superpower hegemony. (The Secret Stupid Saudi-US Deal on Syria, F. William Engdahl, BFP)

The US must achieve its objectives in Central Asia or forfeit its top-spot as the world’s only superpower. This is why US policymakers have embarked on such a risky venture. There’s simply no other way to sustain the status quo which allows the US to impose its own coercive dollar system on the world, a system in which the US exchanges paper currency produced-at-will by the Central Bank for valuable raw materials, manufactured products and hard labor. Washington is prepared to defend this extortionist petrodollar recycling system to the end, even if it means nuclear war.


SAUDI-US-DIPLOMACY

How Flooding the Market Adds to Instability

The destructive and destabilizing knock-on effects of this lunatic plan are visible everywhere. Plummeting oil prices are making it harder for energy companies to get the funding they need to roll over their debt or maintain current operations. Companies borrow based on the size of their reserves, but when prices tumble by nearly 50 percent–as they have in the last six months– the value of those reserves falls sharply which cuts off access to the market leaving CEO’s with the dismal prospect of either selling assets at firesale prices or facing default. If the problem could be contained within the sector, there’d be no reason for concern. But what worries Wall Street is that a surge in energy company failures could ripple through the financial system and wallop the banks. Despite six years of zero rates and monetary easing, the nation’s biggest banks are still perilously undercapitalized, which means that a wave of unexpected bankruptcies could be all it takes to collapse the weaker institutions and tip the system back into crisis. Here’s an excerpt from a post at Automatic Earth titled “Will Oil Kill the Zombies?”:

“If prices fall any further, it would seem that most of the entire shale edifice must of necessity crumble to the ground. And that will cause an absolute earthquake in the financial world, because someone supplied the loans the whole thing leans on. An enormous amount of investors have been chasing high yield, including many institutional investors, and they’re about to get burned something bad….. if oil keeps going the way it has lately, the Fed may instead have to think about bailing out the big Wall Street banks once again.” (Will Oil Kill the Zombies?, Raúl Ilargi Meijer, Automatic Earth)

The problem with falling oil prices is not just mounting deflation or droopy profits; it’s the fact that every part of the industry–exploration, development and production — is propped atop a mountain of red ink (junk bonds). When that debt can no longer be serviced or increased, then the primary lenders (counterparties and financial institutions) sustain heavy losses which domino through the entire system. Take a look at this from Marketwatch:

“There’s ‘no question’ that for energy companies with a riskier debt profile the high-yield debt market “is essentially shut down at this stage,” and there are signs that further pain could hit the sector, ” senior fixed-income strategist at U.S. Bank Wealth Management, Dan Heckman told Marketwatch. “We are getting to the point that it is becoming very concerning.” (Marketwatch)

When energy companies lose access to the market and are unable to borrow at low rates, it’s only a matter of time before they trundle off to extinction.

On Friday, the International Energy Agency (IEA) renewed pressure on prices by lowering its estimate for global demand for oil in 2015. The announcement immediately sent stocks into a nosedive. The Dow Jones Industrial Average (DJIA) lost 315 points by the end of the day, while, according to Bloomberg, more than “$1 trillion was erased from the value of global equities in the week”.

The world is awash in cheap petroleum which is wreaking havoc on domestic shale producers that need prices of roughly $70 per barrel to break-even. With West Texas Intermediate (WTI) presently headed south of 60 bucks–and no bottom in sight–these smaller producers are sure to get clobbered. Pension funds, private equity, banks, and other investors who gambled on these dodgy energy-related junk bonds are going to get their heads handed to them in the months ahead.

The troubles in the oil patch are mainly attributable to the Fed’s easy money policies. By dropping rates to zero and flooding the markets with liquidity, the Fed made it possible for every Tom, Dick and Harry to borrow in the bond market regardless of the quality of the debt. No one figured that the bottom would drop out leaving an entire sector high and dry. Everyone thought the all-powerful Fed could print its way out of any mess. After last week’s bloodbath, however, they’re not nearly as confident. Here’s how Bloomberg sums it up:

“The danger of stimulus-induced bubbles is starting to play out in the market for energy-company debt….Since early 2010, energy producers have raised $550 billion of new bonds and loans as the Federal Reserve held borrowing costs near zero, according to Deutsche Bank AG. With oil prices plunging, investors are questioning the ability of some issuers to meet their debt obligations…

The Fed’s decision to keep benchmark interest rates at record lows for six years has encouraged investors to funnel cash into speculative-grade securities to generate returns, raising concern that risks were being overlooked. A report from Moody’s Investors Service this week found that investor protections in corporate debt are at an all-time low, while average yields on junk bonds were recently lower than what investment-grade companies were paying before the credit crisis.” (Fed Bubble Bursts in $550 Billion of Energy Debt: Credit Markets, Bloomberg)

The Fed’s role in this debacle couldn’t be clearer. Investors piled into these dodgy debt-instruments because they thought Bernanke had their back and would intervene at the first sign of trouble. Now that the bubble has burst and the losses are piling up, the Fed is nowhere to be seen.

In the last week, falling oil prices have started to impact the credit markets where investors are ditching debt on anything that looks at all shaky. The signs of contagion are already apparent and likely to get worse. Investors fear that if they don’t hit the “sell” button now, they won’t be able to find a buyer later. In other words, liquidity is drying up fast which is accelerating the rate of decline. Naturally, this has affected US Treasuries which are still seen as “risk free”. As investors increasingly load up on USTs, long-term yields have been pounded into the ground like a tentpeg. As of Friday, the benchmark 10-year Treasury checked in at a miniscule 2.08 percent, the kind of reading one would expect in the middle of a Depression.

The Saudi-led insurgency has reversed the direction of the market, put global stocks into a nosedive and triggered a panic in the credit markets. And while the financial system edges closer to a full-blown crisis every day, policymakers in Washington have remained resolutely silent on the issue, never uttering as much as a peep of protest for a Saudi policy that can only be described as a deliberate act of financial terrorism.

Why is that? Why have Obama and Co. kept their mouths shut while oil prices have plunged, domestic industries have been demolished, and stocks have gone off a cliff? Could it be that they’re actually in cahoots with the Saudis and that it’s all a big game designed to annihilate enemies of the glorious New World Order?

It certainly looks that way.


ABOUT THE AUTHOR

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.

SOURCE: COUNTERPUNCH




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.

OUR TRUTH.

HUGE ISSUES ARE BEING DECIDED: Nuclear war, whether we’ll live in democracy or tyranny, dignity or destitution, planetary salvation or doom…
It’s a battle of communications we can’t afford to lose. 


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?

And if you took the time to read this article, and found it worth SHARING, then why not sign up with our special bulletin to be included in our future distributions? And please tell others about The Greanville Post. 


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 oil coup, the assault on the Ruble, regime change in Russia and related matters

THURSDAY, DECEMBER 18, 2014

Russian consumers have been visibly shaken by the sudden fall of the Ruble, rushing to buy all sorts of things, from staples to durables, but the resolution of the crisis remains

Russian consumers have been visibly shaken by the sudden fall of the Ruble, as might be expected, rushing to buy all sorts of things, from staples to durables, but the resolution of the crisis, caused by deliberate political moves remains political first and financial second. (Getty)

Free Fall of the Ruble – A brilliant ploy of Russian economic Wizards? Whose chess game? 

by Peter Koenig 

[dropcap]T[/dropcap]he world is still hell-bent for hydrocarbon-based energy. Russia is the world’s largest producer of energy. Russia has recently announced that in the future she will no longer trade energy in US dollars, but in rubles and currencies of the trading partners. In fact, this rule will apply to all trading. Russia and China are detaching their economies from that of the West. To confirm this decision, in July 2014 Russia’s Gazprom concluded a 400 billion gas deal with China, and in November this year they signed an additional slightly smaller contract – all to be nominated in rubles and yuan. 

The remaining BRICS – Brazil, India and South Africa – plus the members of the Shanghai Cooperation Organization (SCO) – China, Russia, Kazakhstan, Tajikistan, Kirgizstan, Uzbekistan and considered for membership since September 2014 are also India, Pakistan, Afghanistan, Iran and Mongolia, with Turkey also waiting in the wings – will also trade in their local currencies, detached from the dollar-based western casino scheme. A host of other nations increasingly weary of the decay of the western financial system which they are locked into are just waiting for a new monetary scheme to emerge. So far their governments may have been afraid of the emperor’s wrath – but gradually they are seeing the light. They are sensing the sham and weakness behind Obama’s boisterous noise. They don’t want to be sucked into the black hole, when the casino goes down the drain.

To punish Russia for Ukraine, Obama is about to sign into law major new sanctions against Russia, following Congress’s unanimous passing of a recent motion to this effect. – That is what the MSM would like you to believe. It is amazing that ten months after the Washington instigated Maidan slaughter and coup where a Washington selected Nazi Government was put in place, the MSM still lies high about the origins of this government and the massacres it is committing in the eastern Ukraine Donbass area.

Congress’s unanimity – what Congress and what unanimity? – Out of 425 lawmakers, only 3 were present for the vote http://www.informationclearinghouse.info/article40489.htm. The others may have already taken off for their year-end recess, or simply were ‘ashamed’ or rather afraid to object to the bill. As a matter of fact, of the three who were present to vote, two at first objected. Only after a bit of arm-twisting and what not, they were willing to say yes. This is how the ‘unanimous’ vote came to be, as trumpeted by the MSM – unanimous by three votes! The public at large is duped again into believing what is not.

What new sanctions does this repeatedly propagated bill entail? – It addresses mostly Russian energy companies and defense industry with regard to sales to Syria, as well more anti-Russia propaganda and ‘democratization’ programs in Ukraine – and Russia; all countries with the objective for regime change.

How do these sanctions affect Russia, especially since all Russian energy sales are no longer dollar denominated? – Sheer propaganda. The naked emperor once more is calling an unsubstantiated bluff. To show his western stooges who is in power. It’s an ever weaker showoff.

Now – as a consequence of declining oil prices and of western ‘sanctions’ – of course, what else? – Russia’s economy is suffering and the ruble is in free fall. Since the beginning of the year it lost about 60%; last week alone 20%. As a result and after serious consideration, says MSM, the Russian Central Bank decided a few days ago to increase the interest of reference from 10.5% to 17% to make the ruble more attractive for foreign investors. It worked only for a few hours. Raising the interbank interest was Putin’s reply to Obama’s bluff – feeding at the same time western illusion about Russia’s decline.

The propaganda drums tell you Russia is helpless because the world has lost the last bit of confidence in President Putin – of course. Regime change is on the agenda. Mr. Putin must be blamed as the culprit, hoping to discredit him with his people. He is leading Russia into a deep recession; the worst since the collapse of the Soviet Union. The mainstream media show you interviews with average mainstreet Russians saying they have lost all their savings, their salaries and pensions are worth nothing anymore and they don’t know how to survive this coming calamity.

In reality, at least 80% of the Russian population stands solidly behind Vladimir Putin. He has brought them universal education, health care and fixed infrastructure that was decaying after the fall of the Soviet Union. President Putin is literally revered as a hero by the vast majority of Russians – including the country’s oligarchy.

In fact, nobody in the western economic system these days is dealing in rubles. In short-sighted connivance with Washington, the treasuries of the western vassals are releasing their ruble reserves – which Russia does not buy, thereby flooding the market. Russia not only has large dollar reserves, plus the ruble is backed by gold, a fact consistently omitted in the MSM. For now, Russia prefers to let the ruble plummet.

Under another ‘arrangement’ by bully Obama, Middle Eastern oil producing puppets like Saudi Arabia and the Gulf States are overproducing and flooding the market with petrol and gas, thereby driving the price down to the ostensible detriment of Russia and Venezuela, both countries where Washington vies for regime change. A double whammy thinks Washington, buying kudos with the stooges. The sheiks that control their energy output apparently have been promised enough goodies from Washington to bite the bullet and take their own losses.

Russia needs rubles. That’s her currency. That is the currency Russia needs for future trading – detached from the western monetary system.

When Russia deems that her currency has reached rock-bottom, she will buy back cheap rubles in the market with massive amounts of dollars. Russia may then flood the western market – with dollars, and by now we know what that does to a currency – and simultaneously buy back rubles from the West. A brilliant move to reestablish Russia’s currency in a new emerging monetary system – which Europe would be welcome to join, but willingly, no by Washington style arm-twisting.

Is this another precursor to war? A nuclear confrontation or Cold War II? – Precursor to a false flag attempting Moscow to fall into the trap? – Not necessarily. Russia is playing a clever chess game, diplomacy at its best. Instead of sabre rattling – Russia is coin rattling. It might lead to a western financial fiasco early in 2015 for the dollar and euro denominated economies. And the winner is…?


 

Peter Koenig is an economist and geopolitical analyst. He is also former World Bank staff and worked extensively around the world in the fields of environment and water resources. He writes regularly for Global Research, ICH, RT, the Voice of Russia (now Ria Novosti), The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. 

 



 

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Imperialism and the ruble crisis

Vowing never to let the West defang his proud nation, President Vladimir Putin promised Thursday to fix Russia's economic woes within two years by diversifying and voiced confidence that the plummeting ruble will soon recover.

Vowing never to let the West defang his proud nation, President Vladimir Putin promised Thursday to fix Russia’s economic woes within two years by diversifying and voiced confidence that the plummeting ruble will soon recover. (AP)

Alex Lantier

[dropcap]The plunge[/dropcap] of the Russian currency this week is the drastic outcome of policies implemented by the major imperialist powers to force Russia to submit to American and European imperialism’s neo-colonial restructuring of Eurasia. Punishing the Putin regime’s interference with their plans for regime change in countries such as Ukraine and Syria, the NATO powers are financially strangling Russia.

The sanctions imposed by the United States in response to Russian opposition to last February’s coup in Kiev has amounted to economic warfare. Over the past four months, the value of the Russian ruble has plunged by more than 50 percent. On Tuesday, as the ruble fell 10 percent against the dollar in one day, US President Barack Obama indicated he would sign a bill imposing even harsher sanctions on Russia and allowing Washington to directly arm the far-right, pro-NATO regime in Ukraine.


[learn_more caption=”No defanging of the Russian Bear!”]

As reported by AP/ABC News
(FORGIVE THE INEVITABLE INNUENDOS)

This year Putin held his televised extravaganza from a particularly strong vantage point: An Associated Press-NORC Center for Public Affairs Research poll released Thursday showed his approval rating among Russians stood at 81 percent ? a level far above the ratings for other world leaders.

Putin accompanied his message with trademark images of Russian pride, with video showing him surrounded by Sochi Olympic athletes, petting a baby tiger and greeting Russian cosmonauts. And his most stirring quotes evoked a famed Russian symbol ? the bear.

After Putin finished his performance, the Russian currency traded at 60 rubles to the dollar late Thursday, the same level as Wednesday. Still, the currency has lost about half its value since January.

To get his point across, he brought in the metaphorical Russian bear.

REGULAR TEXT RESUMES HERE

When Lieutenant-General Mikhail Mizintsev voiced the Russian Defense Ministry’s “concerns over the significant increase of NATO military activity near Russian borders,” Pentagon officials replied that NATO would keep building up its “air, land and sea presence” around Russia.

Yesterday, editorials appeared in several major newspapers warning that Russia’s currency crisis would not abate until Moscow bowed to the Kiev regime and abandoned support for separatists in eastern Ukraine. “The depth of the currency’s slide,” wrote London’s Financial Times, “reflects the growing belief in financial markets that Mr. Putin no longer runs Russia in its economic interests and is instead bent on pursuing illusory geopolitical goals.” NATO, it added, “should leave him in no doubt that de-escalation in Ukraine will reduce international pressure on the Russian economy. The hope must be that, even now, Mr. Putin is in a mood to change course.”


There is no national solution to the Russian crisis. The capitalist oligarchy itself is the greatest obstacle to the defense of the Russian working class against imperialism.


The New York Times wrote: “The sensible thing for Mr. Putin to do would be to withdraw from Ukraine. This would bring immediate relief from sanctions, and that would ease the current crisis and give officials room to start fixing the country’s economic problems. The question is whether this reckless leader has been sufficiently chastened to change course.”

Were Russia to accept the US-NATO diktat, its surrender would simply set the stage for further demands, whose ultimate outcome would be the actual breakup of the country.

The catastrophic consequences of the dissolution of the USSR in 1991 and the restoration of capitalism is all too clear. Russia, the size of its military and its oil reserves notwithstanding, is being forced to accept a position as a semi-colonial appendage of finance capital, to be crushed if it crosses its imperialist masters.

The banks are tightening the financial noose around Russia’s neck. Anders Aslund of the Petersen Institute for International Economics wrote that, since Washington imposed sanctions on Russia in July, “Russia has received no significant international financing—not even from Chinese state banks—because everybody is afraid of US financial regulators.”

Cut off from international credit, Russia is being strangled by the financial parasites on Wall Street and their European counterparts. By Aslund’s calculations, Russia—with liquid currency reserves of roughly $200 billion, a net capital outflow this year of $125 billion, and total foreign debts of $600 billion—could be brought to its knees in as little as two years.


russiaDesklogo1-350x81

While there are a host of global economic factors underlying the fall in oil prices, it is unquestionable that a major role in the commodity’s staggering plunge is Washington’s collaboration with OPEC and the Saudi monarchs in Riyadh to boost production and increase the glut on world oil markets.

As Obama traveled to Saudi Arabia after the outbreak of the Ukraine crisis last March, the Guardian wrote, “Angered by the Soviet invasion of Afghanistan in 1979, the Saudis turned on the oil taps, driving down the global price of crude until it reached $20 a barrel (in today’s prices) in the mid-1980s… [Today] the Saudis might be up for such a move—which would also boost global growth—in order to punish Putin over his support for the Assad regime in Syria. Has Washington floated this idea with Riyadh? It would be a surprise if it hasn’t.”

Since then, with OPEC declining to cut production despite an accelerating fall in prices, oil has dropped to under $60 a barrel.

These developments expose the absurdity of claims, advanced by innumerable middle-class pseudo left organizations, that Russia is an imperialist power. Such arguments simply ignore the historical context within which imperialism emerged and which persist in the existing structure of world finance and international geopolitics. The dissolution of the USSR represented a capitulation to imperialism, not the entry of the “new” Russia into the ranks of ruling imperialist powers.

As Trotsky explained in 1929:

“The struggle for world domination has assumed titanic proportions. The phases of this struggle are played out upon the bones of the weak and backward nations. A capitalist Russia could not now occupy even the third-rate position to which czarist Russia was predestined by the course of the world war. Russian capitalism today would be a dependent, semi-colonial capitalism without any prospects. Russia Number 2 would occupy a position somewhere between Russia Number 1 and India. The Soviet system, with its nationalized industry and monopoly of foreign trade, in spite of all its contradictions and difficulties, is a protective system for the economic and cultural independence of the country.”

In the final stages of the dissolution of the USSR, the Soviet bureaucracy and the academic intelligentsia haughtily dismissed the Marxist analysis of imperialism as it embraced Gorbachev’s “New Thinking.” In the event, the ensuing social retrogression and subordination to imperialism has substantiated Trotsky’s warnings. Ex-Soviet republics dissolved into ethnic civil war, from the Russian war in Chechnya to the current war in Ukraine. Industrial life collapsed and economic production fell by approximately 40 percent over the next decade, as state factories were bought up and looted by criminal business oligarchs and foreign banks at fire-sale prices.

While the economic collapse halted in the 2000s and Russian capitalism rebuilt itself around oil and gas exports, dominated by a clique of business oligarchs around President Vladimir Putin, the bankruptcy of Russian society was admitted to even by its rulers.

In his 2009 “Go Russia” speech, then-Russian President Dmitri Medvedev confessed: “Twenty years of tumultuous change has not spared our country from its humiliating dependence on raw materials. Our current economy still reflects the major flaw in the Soviet system: it largely ignores individual needs. With a few exceptions, domestic business does not invent nor create the necessary things and technology that people need. We sell things we have not produced, raw materials or imported goods. Finished products produced in Russia are largely plagued by their extremely low competitiveness.”

The ruble’s collapse and the aggressive policy of imperialism today are again bringing to the fore the bankruptcy of Russian capitalism. Prices in rubles for food and consumer goods are expected to skyrocket, impoverishing masses of people, since Russia still depends on imported manufactured goods and agricultural inputs for domestic food production.

As for Russia’s ruling clique, it is in a hopeless quandary. Russian Foreign Minister Sergei Lavrov said Tuesday that US sanctions aim to achieve regime change in Russia. Based on the experience of other oil-rich countries targeted for regime change by Washington, from Iraq to Libya, this means the Kremlin believes that NATO seeks the destruction of the Russian government, the murder of its top officials, and the plundering of Russian oil by Western corporations.

Even in this desperate situation, however, the Kremlin slavishly limits itself to policies that are acceptable to the Russian plutocracy, whose wealth is based on the plundering of state assets. They even seek to avoid such essential defensive measures as imposing currency controls or freezing payments to foreign banks.

Putin’s stoking up of Russian nationalism—as in his praise for czarist General Aleksei Brusilov’s “legendary” offensive at the beginning of World War I and his recent denunciation of the Bolsheviks as traitors to Imperial Russia—is utterly reactionary. If the Kremlin relies on its military strength and opts for confrontation with NATO, what looms is the risk of a nuclear war that would destroy the planet.

There is no national solution to the Russian crisis. The capitalist oligarchy itself is the greatest obstacle to the defense of the Russian working class against imperialism. The central task facing the working class in Russia is re-establishing its links with the traditions of the October Revolution.

There is no means to halt the plunder of Russia and the drive towards war except through the politically conscious intervention of the international working class, which is hostile to both imperialist militarism and the maneuvers of the Kremlin. This is why the International Committee of the Fourth International insists upon the necessity of building an international anti-war, anti-imperialist movement of the working class, fighting for world socialist revolution.


Alex Lantier is a senior member with wsws.org, information organ of the Social Equality Party, a Trotskyist formation. 



APPENDIX
Another view of the situation, by a Russian analyst, The Saker

TUESDAY, DECEMBER 16, 2014

The Russian Central Bank’s “counterattack” lasted 30 mins!

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 AngloZionist 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:

Orlov, as always, is spot on here. Let me explain, as this is crucial:

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 Brent.

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.

The Saker

 




 

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The Rise of German Imperialism and the Phony “Russian Threat”

JAMES PETRAS


Introduction: The principal Nazi ideological prop that secured massive financial and political support from Germany’s leading industrialists was the Communist and Soviet threat. The main Nazi military drive, absorbing two-thirds of its best troops, was directed eastward at conquering and destroying Russia.
The Obama-Merkel not so-odd couple. Their ruling circles are crazy enough to entertain visions of global hegemony at almost any cost. The Obama-Merkel not-so-odd couple. Their ruling circles are crazy enough to entertain visions of global hegemony at almost any cost, which implies a confrontation with Russia. That’s why Western media keeps demonizing Putin, and soon enough, the Russian nation, for the crime of defending itself.

[dropcap]The ‘Russian Threat’[/dropcap] justified Nazi Germany’s conquest and occupation of the Ukraine, the Balkans, Eastern Europe and the Baltic states, with the aid of a substantial proportion of local Nazi collaborators.

After Germany’s defeat, division and disarmament, and with the extension of Soviet power, the US reinstated the Nazi industrial and banking giants, officials and intelligence operatives. At first they were engaged in rebuilding their domestic economy and consolidating political power, in collaboration with the US military occupation forces.

By the late 1960’s Germany regained economic primacy in Europe and was at the forefront of European ‘integration’, in association with France and England. It soon came to dominate the principal decision – making institutions of the European Union(EU). The EU served as Germany’s instrument for conquest by stealth. Year by year, through ‘aid’ and low interest loans,the EU facilitated German capitalist’s market penetration and financial expansion, throughout south and central Europe. Germany set the agenda for Western Europe, gaining economic dominance while benefiting from US subversion and encirclement of Eastern Europe, Russia and the Baltic and Balkan states.


russiaDesklogo1
And the US is not only reviving German expansionism, it’s also remilitarizing Japan.



Germany’s Great Leap 
Forward: The Annexation of East Germany and the Demise of the USSR

Germany’s projection of power on a world scale would never have occurred if it had not annexed East Germany. Despite the West German claims of beneficence and ‘aid’ to the East, the Bonn regime secured several million skilled engineers, workers and technicians, the takeover of factories, productive farms and, most important, the Eastern European and Russian markets for industrial goods, worth billions of dollars. Germany was transformed from an emerging influential EU partner, into the most dynamic expansionist power in Europe, especially in the former Warsaw Pact economies.

The annexation of East Germany and the overthrow of the Communist governments in the East allowed German capitalists to dominate markets in the former Eastern bloc. As the major trading partner, it seized control of major industrial enterprises via corrupt privatizations decreed by the newly installed pro-capitalist client regimes. As the Czech Republic, Poland, Slovakia, Hungary, Bulgaria, and the Baltic States “privatized” and “de-nationalized” strategic economic, trade, media and social service sectors, ‘unified’ Germany was able to resume a privileged place. As Russia fell into the hands of gangsters, emerging oligarchs and political proxies of western capitalists, its entire industrial infrastructure was decimated and Russia was converted into a giant raw-material export region.

Adolf-HitlerSwastika

To maintain logical consistency, the Nazis expansionist ideology had to presume other peoples inferior. Thus the Jews were vermin; the Poles were just cattle, and the Russians were subhuman (untermensch)—all subject to slavery or extermination at will. —Eds.

Germany converted its trade relations with Russia from one between equals into a ‘colonial’ pattern: Germany exported high value industrial products and imported gas, oil and raw materials from Russia. (The snide joke is that Russia is now a Third World nation with nukes.—Eds)

German power expanded exponentially, with the annexation of the “other Germany”, the restoration of capitalism in Eastern Europe and the ascendancy of client regimes eager and willing to submit to a German dominated European Union and a US directed NATO military command.

German political-economic expansion via ‘popular uprisings’, controlled by local political clients, was soon accompanied by a US led military offensive – sparked by separatist movements. Germany intervened in Yugoslavia, aiding and abetting separatists in Slovenia and Croatia. It backed the US-NATO bombing of Serbia and supported the far-right, self-styled Kosovo Liberation Army ( KLA), engaged in a terrorist war in Kosovo. Belgrade was defeated and regime change led to a neo-liberal client state. The US built the largest military base in Europe in Kosovo. Montenegro and Macedonia became EU satellites.

While NATO expanded and enhanced the US military presence up to Russia’s borders, Germany became the continent’s pre-eminent economic power.

Germany and the New World Order

Third Way fraud Bill Clinton, typical exponent of the Democrats' thoroughly corporatized leadership.

Third Way plutocrat shill Bill Clinton, a typical exponent of the Democrats’ thoroughly corporatized leadership. A darling of the never-learn liberals, Clinton prosecuted one of the most savage and unnecessary wars in the Balkans, destroying Serbia’s sovereignty and socialized infrastructure.

While President Bush and Clinton were heralding a “new world order”, based on unipolar military supremacy, Germany advanced its new imperial order by exercising its political and economic levers. Each of the two power centers, Germany and the US, shared the common quest of rapidly incorporating the new capitalist regimes into their regional organizations –the European Union (EU) and NATO– and extending their reach globally. Given the reactionary origins and trajectory into vassalage of the Eastern, Baltic and Balkan regimes, and given their political fears of a popular reaction to the loss of employment, welfare and independence resulting from their implementation of savage neoliberal “shock policies”, the client rulers immediately “applied” for membership as subordinate members of the EU and NATO, trading sovereignty, markets and national ownership of the means of production for economic handouts and the ‘free’ movement of labor, an escape valve for the millions of newly unemployed workers. German and English capital got millions of skilled immigrant workers at below labor market wages, and unimpeded access to markets and resources. The US secured NATO military bases, and recruited military forces for its Middle East and South Asian imperial wars.


US-German military and economic dominance in Europe was premised on retaining Russia as a weak quasi vassal state, and on the continued economic growth of their economies beyond the initial pillage of the ex-communist economies.

Idiotic cartoon insinuating that Russia is a threat and is actually an aggressor to Obama.

Idiotic cartoon cliché insinuating that Russia is a threat to the civilized West, instead of the other way around.

For the US, uncontested military supremacy throughout Europe was the springboard for near-time imperial expansion in the Middle East, South Asia, Africa and Latin America. NATO was ‘internationalized’ into an offensive global military alliance: first in Somalia, Afghanistan then Iraq, Libya, Syria and the Ukraine.

The Rise of Russia, The Islamic Resistance and the New Cold War

During the ‘decade of infamy’ (1991-2000) extreme privatization measures by the client rulers in Russia on behalf of EU and US investors and gangster oligarchs, added up to vast pillage of the entire economy, public treasury and national patrimony. The image and reality of a giant prostrate vassal state unable to pursue an independent foreign policy, and incapable of providing the minimum semblance of a modern functioning economy and maintaining the rule of law, became the defining view of Russia by the EU and the USA. Post-communist Russia, a failed state by any measure, was dubbed a “liberal democracy” by every western capitalist politician and so it was repeated by all their mass media acolytes.

The fortuitous rise of Vladimir Putin and the gradual replacement of some of the most egregious ‘sell-out’ neo-liberal officials, and most important, the reconstruction of the Russian state with a proper budget and functioning national institutions, was immediately perceived as a threat to US military supremacy and German economic expansion. Russia’s transition from Western vassalage to regaining its status as a sovereign independent state set in motion, an aggressive counter-offensive by the US-EU. They financed a neo-liberal-oligarchy backed political opposition in an attempt to restore Russia to vassalage via street demonstrations and elections. Their efforts to oust Putin and re-establish Western vassal state failed. What worked in 19991 with Yeltsin’s power grab against Gorbachev was ineffective against Putin. The vast majority of Russians did not want a return to the decade of infamy.

Yea. He is a big problem. But to whom? Not to the people.

Yea. He is a big problem. But to whom? Not to ordinary people.

In the beginning of the new century, Putin and his team set new ground-rules, in which oligarchs could retain their illicit wealth and conglomerates, providing they didn’t use their economic levers to seize state power. Secondly, Putin revived and restored the scientific technical, military, industrial and cultural institutions and centralized trade and investment decisions within a wide circle of public and private decision makers not beholden to Western policymakers. Thirdly, he began to assess and rectify the breakdown of Russian security agencies particularly with regard to the threats emanating from Western sponsored ‘separatist’ movements in the Caucuses, especially, in Chechnya, and the onset of US backed ‘color revolutions’ in the Ukraine and Georgia.

At first, Putin optimistically assumed that, Russia being a capitalist state, and without any competing ideology, the normalization and stabilization of the Russian state would be welcomed by the US and the EU. He even envisioned that they would accept Russia as an economic, political, and even NATO partner. Putin even made overtures to join and co-operate with NATO and the EU. The West did not try to dissuade Putin of his illusions.

In fact they encouraged him, even as they escalated their backing for Putin’s internal opposition and prepared a series of imperial wars and sanctions in the Middle East, targeting traditional Russian allies in Iraq, Syria and Libya.

As the ‘internal’ subversive strategy failed to dislodge President Putin, and the Russian state prevailed over the neo-vassals, the demonization of Putin became constant and shrill. The West moved decisively to an ‘outsider strategy’, to isolate, encircle and undermine the Russian state by undermining allies, and trading partners.

US and Germany Confront Russia: Manufacturing the “Russian Threat”

Putin-Hitler

With infinite cynicism, the Western media, which has supported and continues to support a Neonazi regime in Ukraine, accuses Putin of being a Hitler.  And the Crimean election was cleaner and more democratic than anything seen in any US client state, not to mention meaningless, rigged elections in the US itself.

Russia was enticed to support US and NATO wars in Iraq, Afghanistan and Libya in exchange for the promise of deeper integration into Western markets. The US and EU accepted Russian co-operation, including military supply routes and bases, for their invasion and occupation of Afghanistan. The NATO powers secured Russian support of sanctions against Iran. They exploited Russia’s naïve support of a “no fly zone” over Libya to launch a full scale aerial war. The US financed so-called “color revolutions” in Georgia and the Ukraine overtly, a dress rehearsal for the putsch in 2014. Each violent seizure of power allowed NATO to impose anti-Russian rulers eager and willing to serve as vassal states to Germany and the US.

Germany spearheaded the European imperial advance in the Balkans and Moldavia, countries with strong economic ties to Russia. High German officials “visited” the Balkans to bolster their ties with vassal regimes in Slovenia, Bulgaria, Slovakia and Croatia. Under German direction, the European Union ordered the vassal Bulgarian regime of Boyko “the booby” Borisov to block the passage of the Russian owned South Stream pipeline to Serbia, Hungary, Slovenia and beyond. The Bulgarian state lost $400 million in annual revenue . . . Germany and the US bankrolled pro-NATO and EU client politicians in Moldavia – securing the election of Iurie Leanca as Prime Minister. As a result of Leanca’s slavish pursuit of EU vassalage, Moldavia lost $150 million in exports to Russia. Leanca’s pro-EU policies go counter to the views of most Moldavians – 57% see Russia as the country’s most important economic partner. Nearly 40% of the Moldavian working age population works in Russia and 25% of the Moldavians’ $8 billion GDP is accounted for by overseas remittances.

russianTanks-parade
The specter of a supposed reckless Russian militarism is used to stir up anti-Russian fears on clueless Western populations. 


German and the US empire-builders steamroll over dissenting voices in Hungary, Serbia and Slovenia, as well as Moldova and Bulgaria, whose economy and population suffer from the impositions of the blockade of the Russian gas and oil pipeline. But Germany’s all out economic warfare against Russia takes precedent over the interests of its vassal states: it’s theirs to sacrifice for the ‘Greater Good’ of the emerging German economic empire and the US – NATO military encirclement of Russia. The extremely crude dictates of German imperial interests articulated through the EU, and the willingness of Balkan and Baltic regimes to sacrifice fundamental economic interests, are the best indicators of the emerging German empire in Europe.

Parallel to Germany’s rabid anti-Russian economic campaign, the US via NATO is engaged in a vast military build-up along the length and breadth of Russia’s frontier. The US stooge, NATO Chief Jens Stoltenberg, boasts that over the current year, NATO has increased 5-fold the warplanes and bombers patrolling Russian maritime and land frontiers, carried out military exercises every two days and vastly increased the number of war ships in the Baltic and Black Sea.

Conclusion

What is absolutely clear is that the US and Germany want to return Russia to the vassalage status of the 1990’s. They do not want ‘normal relations’. From the moment Putin moved to restore the Russian state and economy, the Western powers have engaged in a series of political and military interventions, eliminating Russian allies, trading partners and independent states.

The emergence of extremist, visceral anti-Russian regimes in Poland, Latvia, Estonia and Lithuania served as the forward shield for NATO advancement and German economic encroachment. Hitler’s ‘dream’ of realizing the conquest of the East via unilateral military conquest has now under Prime Minister Merkel taken the form of conquest by stealth in Northern and Central Europe, by economic blackmail in the Balkans, and by violent putsches in the Ukraine and Georgia.

The German economic ruling class is divided between the dominant pro-US sector that is willing to sacrifice lucrative trade with Russia today in hopes of dominating and pillaging the entire economy in a post-Putin Russia (dominated by ‘reborn Yeltsin clones’); and a minority industrial sector, which wants to end sanctions and return to normal economic relations with Russia.

Germany is fearful that its client rulers in the East, especially in the Balkans are vulnerable to a popular upheaval due to the economic sacrifices they impose on the population. Hence, Germany is wholly in favor of the new NATO rapid deployment force, ostensibly designed to counter a non-existent “Russian threat” but in reality to prop up faltering vassal regimes.

The ‘Russian Threat’, the ideology driving the US and German offensive throughout Europe and the Caucuses, is a replay of the same doctrine which Hitler used to secure support from domestic industrial bankers, conservatives and right wing overseas collaborators among extremists in Ukraine, Hungary, Rumania and Bulgaria.

The US-EU seizure of power via vassal political clients backed by corrupt oligarchs and Nazi street fighters in Ukraine detonated the current crisis. The Ukraine power grab posed (and poses) a top security threat to the very existence of Russia as an independent state. After the Kiev take-over, NATO moved its stooge regime in Kiev forward to militarily eliminate the independent regions in the Southeast and seize the Crimea, thus totally eliminating Russia’s strategic position in the Black Sea.

Russia the victim of the NATO power grab was labelled the “aggressor”.  The entire officialdom and mass media echoed the Big Lie.

Two decades of US NATO military advances on Russia’s borders and German-EU economic expansion into Russian markets were obfuscated. Ukraine is the most important strategic military platform from which the US-NATO can launch an attack on the Russian heartland and the single largest market for Germany since the annexation of East Germany

The US and Germany see the Ukraine conquest as of extreme value in itself but also as the key to launching an all-out offensive to strangle Russia’s economy via sanctions and dumping oil and to militarily threaten Russia. The strategic goal is to reduce the Russian population to poverty and to re-activate the quasi-moribund opposition to overthrow the Putin government and return Russia to permanent vassalage.

The US and German imperial elite, looking beyond Russia, believe that if they control Russia, they can encircle, isolate and attack China from the West as well as the East.

Wild-eyed fanatics they are not. But as rabid proponents of a permanent war to end Russia’s presence in Europe and to undermine China’s emergence as a world power, they are willing to go to the brink of a nuclear war.

The ideological centerpiece of US-German imperial expansion and conquest in Europe and the Caucuses is the “Russian Threat”. It is the touchstone defining adversaries and allies. Countries that do not uphold sanctions are targeted. The mass media repeat the lie. The “Russian Threat” has become the war cry for cringing vassals – the phony justification for imposing frightful sacrifices to serve their imperial ‘padrones’ in Berlin and Washington – fearing the rebellion of the ‘sacrificed’ population. No doubt, under siege, Russia will be forced to make sacrifices. The oligarchs will flee westward; the liberals will crawl under their beds. But just as the Soviets turned the tide of war in Stalingrad, the Russian people, past the first two years of a bootstrap operation will survive, thrive and become once again a beacon of hope to all people looking to get from under the tyranny of US-NATO militarism and German-EU economic dictates.


ABOUT THE AUTHOR
Halifax, Nova ScotiaCanada who has published prolifically on Latin American and Middle Eastern political issues. Petras is a lifelong revolutionary intellectual and Marxist. He has published numerous books and articles on issues relating to domination, imperialism, underdevelopment and socialist transformation. He is one of the most respected Latin-Americanists in the US. 




 

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