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The Latest in the New Cold War - My Money’s on Putin by MIKE WHITNEY
by Mike Whitney
Email: fergiewhitney (nospam) msn.com
12 Aug 2014
“History shows that the United States has benefited politically and economically from wars in Europe. The huge outflow of capital from Europe following the First and Second World Wars, transformed the U.S. into a superpower … Today, faced with economic decline, the US is trying to precipitate another European war to achieve the same objective.”
– Sergey Glazyev, Russian politician and economist
“The discovery of the world’s largest, known gas reserves in the Persian Gulf, shared by Qatar and Iran, and new assessments which found 70 percent more gas in the Levantine in 2007, are key to understanding the dynamics of the conflicts we see today. After a completion of the PARS pipeline, from Iran, through Iraq and Syria to the Eastern Mediterranean coast, the European Union would receive more than an estimated 45 percent of the gas it consumes over the next 100 – 120 years from Russian and Iranian sources. Under non-conflict circumstances, this would warrant an increased integration of the European, Russian and Iranian energy sectors and national economies.”
– Christof Lehmann, Interview with Route Magazine
The United States failed operation in Syria, has led to an intensification of Washington’s proxy war in Ukraine. What the Obama administration hoped to achieve in Syria through its support of so called “moderate” Islamic militants was to topple the regime of Bashar al Assad, replace him with a US-backed puppet, and prevent the construction of the critical Iran-Iraq-Syria pipeline. That plan hasn’t succeeded nor will it in the near future, which means that the plan for the prospective pipeline will eventually go forward.
Why is that a problem?
It’s a problem because–according to Dr. Lehmann–”Together with the Russian gas… the EU would be able to cover some 50 percent of its requirements for natural gas via Iranian and Russian sources.” As the primary suppliers of critical resources to Europe, Moscow and Tehran would grow stronger both economically and politically which would significantly undermine the influence of the US and its allies in the region, particularly Qatar and Israel. This is why opponents of the pipeline developed a plan to sabotage the project by fomenting a civil war in Syria. Here’s Lehmann again:
“In 2007, Qatar sent USD 10 billion to Turkey´s Foreign Minister Davotoglu to prepare Turkey´s and Syria´s Muslim Brotherhood for the subversion of Syria. As we recently learned from former French Foreign Minister Dumas, it was also about that time, that actors in the United Kingdom began planning the subversion of Syria with the help of “rebels”’ (Christof Lehmann, Interview with Route Magazine)
In other words, the idea to arm, train and fund an army of jihadi militants, to oust al Assad and open up Syria to western interests, had its origins in an evolving energy picture that clearly tilted in the favor of US rivals in the region. (Note: We’re not sure why Lehmann leaves out Saudi Arabia, Kuwait or the other Gulf States that have also been implicated.)
Lehmann’s thesis is supported by other analysts including the Guardian’s Nafeez Ahmed who explains what was going on behind the scenes of the fake civil uprising in Syria. Here’s a clip from an article by Ahmed titled “Syria intervention plan fueled by oil interests, not chemical weapon concern”:
“In May 2007, a presidential finding revealed that Bush had authorised CIA operations against Iran. Anti-Syria operations were also in full swing around this time as part of this covert programme, according to Seymour Hersh in the New Yorker. A range of US government and intelligence sources told him that the Bush administration had “cooperated with Saudi Arabia’s government, which is Sunni, in clandestine operations” intended to weaken the Shi’ite Hezbollah in Lebanon. “The US has also taken part in clandestine operations aimed at Iran and its ally Syria,” wrote Hersh, “a byproduct” of which is “the bolstering of Sunni extremist groups” hostile to the United States and “sympathetic to al-Qaeda.” He noted that “the Saudi government, with Washington’s approval, would provide funds and logistical aid to weaken the government of President Bashir Assad, of Syria”…
According to former French foreign minister Roland Dumas, Britain had planned covert action in Syria as early as 2009: “I was in England two years before the violence in Syria on other business”, he told French television:
“I met with top British officials, who confessed to me that they were preparing something in Syria. This was in Britain not in America. Britain was preparing gunmen to invade Syria.”
… Leaked emails from the private intelligence firm Stratfor including notes from a meeting with Pentagon officials confirmed US-UK training of Syrian opposition forces since 2011 aimed at eliciting “collapse” of Assad’s regime “from within.”
So what was this unfolding strategy to undermine Syria and Iran all about? According to retired NATO Secretary General Wesley Clark, a memo from the Office of the US Secretary of Defense just a few weeks after 9/11 revealed plans to “attack and destroy the governments in 7 countries in five years”, starting with Iraq and moving on to “Syria, Lebanon, Libya, Somalia, Sudan and Iran.” In a subsequent interview, Clark argues that this strategy is fundamentally about control of the region’s vast oil and gas resources.”
(“Syria intervention plan fueled by oil interests, not chemical weapon concern“, The Guardian)
Apparently, Assad was approached by Qatar on the pipeline issue in 2009, but he refused to cooperate in order “to protect the interests of [his] Russian ally.” Had Assad fallen in line and agreed to Qatar’s offer, then the effort to remove him from office probably would have been called off. In any event, it was the developments in Syria that triggered the frenzied reaction in Ukraine. According to Lehmann:
“The war in Ukraine became predictable (unavoidable?) when the great Muslim Brotherhood Project in Syria failed during the summer of 2012. …In June and July 2012 some 20,000 NATO mercenaries who had been recruited and trained in Libya and then staged in the Jordanian border town Al-Mafraq, launched two massive campaigns aimed at seizing the Syrian city of Aleppo. Both campaigns failed and the ”Libyan Brigade” was literally wiped out by the Syrian Arab Army.
It was after this decisive defeat that Saudi Arabia began a massive campaign for the recruitment of jihadi fighters via the network of the Muslim Brotherhoods evil twin sister Al-Qaeda.
The International Crisis Group responded by publishing its report ”Tentative Jihad”. Washington had to make an attempt to distance itself ”politically” from the ”extremists”. Plan B, the chemical weapons plan was hedged but it became obvious that the war on Syria was not winnable anymore.” (“The Atlantic Axis and the Making of a War in Ukraine“, New eastern Outlook)
There were other factors that pushed the US towards a conflagration with Moscow in Ukraine, but the driving force was the fact that US rivals (Russia and Iran) stood to be the dominant players in an energy war that would increasingly erode Washington’s power. Further economic integration between Europe and Russia poses a direct threat to US plans to pivot to Asia, deploy NATO to Russia’s borders, and to continue to denominate global energy supplies in US dollars.
Lehmann notes that he had a conversation with “a top-NATO admiral from a northern European country” who clarified the situation in a terse, two-sentence summary of US foreign policy. He said:
“American colleagues at the Pentagon told me, unequivocally, that the US and UK never would allow European – Soviet relations to develop to such a degree that they would challenge the US/UK’s political, economic or military primacy and hegemony on the European continent. Such a development will be prevented by all necessary means, if necessary by provoking a war in central Europe”.
This is the crux of the issue. The United States is not going to allow any state or combination of states to challenge its dominance. Washington doesn’t want rivals. It wants to be the undisputed, global superpower, which is the point that Paul Wolfowitz articulated in an early draft of the US National Defense Strategy:
“Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”
So the Obama administration is going to do whatever it thinks is necessary to stop further EU-Russia economic integration and to preserve the petrodollar system. That system originated in 1974 when President Richard Nixon persuaded OPEC members to denominate their oil exclusively in dollars, and to recycle their surplus oil proceeds into U.S. Treasuries. The arrangement turned out to be a huge windfall for the US, which rakes in more than $1 billion per day via the process. This, in turn, allows the US to over-consume and run hefty deficits. Other nations must stockpile dollars to purchase the energy that runs their machinery, heats their homes and fuels their vehicles. Meanwhile, the US can breezily exchange paper currency, which it can print at no-expense to itself, for valuable imported goods that cost dearly in terms of labor and materials. These dollars then go into purchasing oil or natural gas, the profits of which are then recycled back into USTs or other dollar-denominated assets such as U.S. stocks, bonds, real estate, or ETFs. This is the virtuous circle that keeps the US in the top spot.
As one critic put it: “World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy.”
The petrodollar system helps to maintain the dollar’s monopoly pricing which, in turn, sustains the dollar as the world’s reserve currency. It creates excessive demand for dollars which allows the Fed to expand the nation’s credit by dramatically reducing the cost of financing. If oil and natural gas were no longer denominated in USDs, the value of the dollar would fall sharply, the bond market would collapse, and the US economy would slip into a long-term slump.
This is one of the reasons why the US invaded Iraq shortly after Saddam had switched over to the euro; because it considers any challenge to the petrodollar looting scam as a direct threat to US national security.
Moscow is aware of Washington’s Achilles’s heel and is making every effort to exploit that weakness by reducing its use of the dollar in its trade agreements. So far, Moscow has persuaded China and Iran to drop the dollar in their bilateral dealings, and they have found that other trading partners are eager to do the same. Recently, Russian economic ministers conducted a “de-dollarization” meeting in which a “currency switch executive order” was issued stating that “the government has the legal power to force Russian companies to trade a percentage of certain goods in rubles.”
Last week, according to RT:
“The Russian and Chinese central banks have agreed a draft currency swap agreement, which will allow them to increase trade in domestic currencies and cut the dependence on the US dollar in bilateral payments. “The draft document between the Central Bank of Russia and the People’s Bank of China on national currency swaps has been agreed by the parties…..The agreement will stimulate further development of direct trade in yuan and rubles on the domestic foreign exchange markets of Russia and China,” the Russian regulator said.
Currently, over 75 percent of payments in Russia-China trade settlements are made in US dollars, according to Rossiyskaya Gazeta newspaper.” (“De-Dollarization Accelerates – China/Russia Complete Currency Swap Agreement“, Zero Hedge)
The attack on the petrodollar recycling system is one of many asymmetrical strategies Moscow is presently employing to discourage US aggression, to defend its sovereignty, and to promote a multi-polar world order where the rule of law prevails. The Kremlin is also pushing for institutional changes that will help to level the playing field instead of creating an unfair advantage for the richer countries like the US. Naturally, replacing the IMF, whose exploitative loans and punitive policies, topped the list for most of the emerging market nations, particularly the BRICS (Brazil, Russia, India, China and South Africa) who, in July, agreed to create a $100 billion Development Bank that will “will counter the influence of Western-based lending institutions and the dollar. The new bank will provide money for infrastructure and development projects in BRICS countries, and unlike the IMF or World Bank, each nation has equal say, regardless of GDP size.
According to RT:
“The big launch of the BRICS bank is seen as a first step to break the dominance of the US dollar in global trade, as well as dollar-backed institutions such as the International Monetary Fund (IMF) and the World Bank, both US-based institutions BRICS countries have little influence within…
“This mechanism creates the foundation for an effective protection of our national economies from a crisis in financial markets,” Russian President Vladimir Putin said.”
(“BRICS establish $100bn bank and currency pool to cut out Western dominance“, RT)
It’s clear that Washington’s aggression in Ukraine has focused Moscow’s attention on retaliation. But rather than confront the US militarily, as Obama and Co. would prefer, Putin is taking aim at the vulnerabilities within the system. A BRICS Development Bank challenges the IMF’s dominant role as lender of last resort, a role that has enhanced the power of the wealthy countries and their industries. The new bank creates the basis for real institutional change, albeit, still within the pervasive capitalist framework.
Russian politician and economist, Sergei Glazyev, summarized Moscow’s approach to the US-Russia conflagration in an essay titled “US is militarizing Ukraine to invade Russia.” Here’s an excerpt:
“To stop the war, you need to terminate its driving forces. At this stage, the war unfolds mainly in the planes of economic, public relations and politics. All the power of US economic superiority is based on the financial pyramid of debt, and this has gone long beyond sustainability. Its major lenders are collapsing enough to deprive the US market of accumulated US dollars and Treasury bonds. Of course, the collapse of the US financial system will cause serious losses to all holders of US currency and securities. But first, these losses for Russia, Europe and China will be less than the losses caused by American geopolitics unleashing another world war. Secondly, the sooner the exit from the financial obligations of this American pyramid, the less will be the losses. Third, the collapse of the dollar Ponzi scheme gives an opportunity, finally, to reform the global financial system on the basis of equity and mutual benefit.”
Washington thinks “modern warfare” involves covert support for proxy armies comprised of Neo Nazis and Islamic extremists. Moscow thinks modern warfare means undermining the enemy’s ability to wage war through sustained attacks on it’s currency, its institutions, its bond market, and its ability to convince its allies that it is a responsible steward of the global economic system.
I’ll put my money on Russia.
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 (at) msn.com.
This work is in the public domain
UK media approaching ‘mea culpa’ moment on Russia
by Bryan MacDonald
(No verified email address)
12 Aug 2014
Click on image for a larger version
Bryan MacDonald is a journalist, writer, broadcaster and teacher. He wrote for Irish Independent and Daily Mail. He has also frequently appeared on RTE and Newstalk in Ireland as well as RT. http://rt.com/op-edge/179452-uk-media-confession-russia/
One of the more intriguing and appealing features of Catholicism is confession. This basically means that, in the eyes of Rome, any error or crime, no matter how profound, can be exorcised once a believer receives absolution from a priest.
The media has something similar, except it’s known as ‘mea culpa’ culture. Essentially, it allows them to print and broadcast any amount of utter codswallop and then later hold their hands up and admit: “We got it wrong.” A good example of this phenomenon is the case of The New York Times and Saddam Hussein’s non-existent “weapons of mass destruction.”
From around the summer of 2002 to the same time in 2003, the Big Apples’ paper-of-record gave the impression that the late Iraqi leader possessed a frightening arsenal of the stuff. Indeed, readers could have deduced that he had micro chemical weapons in his pockets, such was the torrent of disinformation. Of course, it later transpired that he didn’t have any WMD, anywhere, micro or otherwise. He also had nothing to do with the September 2001 attacks on New York despite the fact that 70 percent of Americans were so fooled by their media's mendacity that they believed he did.
This was, obviously, extremely dangerous nonsense because the NYT is perceived as a trusted organ of truth and its whoppers greatly assisted President George W Bush’s efforts to lead the USA to war on a completely false pretext. Sadly, the repercussions of that conflict are being felt again today as the unfortunate country slides into a horrible civil war, and President Obama dithers in the way only he can.
In July 2004, the NYT published a groveling apology and later parted ways with the reporter responsible. This was bit late for Saddam, who was by then in the custody of Iraq's new rulers, and also for the hundreds of thousands who suffered violent deaths in the illegal war.
Russia has been suffering from similar vilification and falsity in much of the Western mainstream press since the US and EU ignited a needless civil war in Ukraine. I’ve already covered in a previous dispatch how the UK media managed to charge, try and sentence President Putin within hours of the appalling MH17 disaster - “Putin’s missile” as the internationally little-known court of ‘The Sun’ in London adjudicated. Never mind that there was no evidence. In fact, nearly a month on and there’s still not a shred of proof connecting the rebels to the tragedy - much less the Kremlin. But don’t hold your breath waiting for a UK paper to lead with “Obama’s missile” splash when reporting on atrocities in Gaza - despite the fact that we know the USA arms Israel.
The language used in Ukraine is telling. Let’s just think about the term ‘pro-Russian separatists’, which is almost uniformly used to describe the rebels in eastern Ukraine. Given that they already held a referendum declaring themselves independent from Ukraine, and Moscow didn’t dive in to annex the territory, what exactly makes them ‘pro-Russian?’ Would ‘anti-Kiev rebels’ or ‘East Ukraine separatists’ not be more apt? Does the same Western media call the forces fighting the Syrian government ‘Pro-Saudi rebels’ or did they call the Croatian separatists in 1990s Yugoslavia ‘pro-German separatists?’ (Germany was the primary backer of Croat independence). No, they don’t and they didn’t. So why ‘pro-Russian separatists?’
When the media gets it wrong, they usually wait a few years (or even decades) before issuing the ‘mea culpa’, but it seems the UK media this week is beginning to realize that it backed the wrong horse in Ukraine and is in early apology mode. Let’s be very clear here - the three newspapers which form UK political opinion on external affairs are the The Daily Mail, The Daily Telegraph and The (Sunday and daily) Times. The Sun plays a huge role domestically, but not on extraneous matters as the red-top doesn't prioritize foreign coverage.
A polyclinic damaged during shelling of Donetsk by the Ukrainian military. (RIA Novosti)
A polyclinic damaged during shelling of Donetsk by the Ukrainian military. (RIA Novosti)
This weekend, The Telegraph (which is effectively the ruling Tory party’s in-house journal) admitted that the EU paid protestors at the Maidan rallies. This clashes with a previously widely-held UK media viewpoint that Russia was paying protestors on the other side of Ukraine’s divide. I have to admit, I sputtered into my cornflakes when I first read it but I can clearly see where this new stance is headed. The ‘mea culpa’ is beginning to form a head of steam in double-quick time.
"Scarcely reported here have been the billions of dollars and euros the West has been more or less secretly pouring into Ukraine to promote the cause: not just to prop up its bankrupt government and banking system, but to fund scores of bogus “pro-European” groups making up what the EU calls “civil society”.
“One of my readers heard from a Ukrainian woman working in Britain that her husband back home earns €200 a month as an electrician, but is paid another €200 a month, from a German bank, to join demonstrations such as the one last March when hundreds of thousands – many doubtless entirely sincere – turned out in Kiev to chant ‘Europe, Europe’ at Baroness Ashton, the EU’s visiting ‘foreign minister’,” wrote columnist Christopher Booker.
Booker went on to quote the author Richard North who has reported that the EU’s own ‘financial transparency’ website proves that 496 million euros has been given to these ‘pro-European’ groups, who have been presented by a generally pliant Western media as harmless NGO’s driven by people-power.
Meanwhile, over at The Daily Mail, the respected Peter Hitchens has also been drawing from North’s research, writing about “how astonishing the amounts the EU have given to Ukraine are.”
He continues: “Rebuilding schools and nurseries and providing school buses, all helpfully emblazoned with EU stars, paying for doctors and then rebuilding agricultural storage plants - it’s amazing that any one person could be found to vote against closer partnership with the EU after that.”
Of course, certain elements of the UK media are extremely anti-EU and it could plausibly suit them to disparage the Brussels’ monolith whatever the reason. However, I detect a trend as the stridently pro-Kiev rhetoric of the early Ukrainian civil-war is suddenly tempered by a realization that a large amount of apologies will one day be due.
It’s not just in the UK; the leading German business newspaper, Handelsblatt, also broke ranks at the weekend with the chief editor, Gabor Steingart, launching a stunning attack on NATO/EU policy in Ukraine under the headline “Der Irrweg des Westens/The aberration of the West”.
Regarding Russia being used as a bogeyman by the NATO press, he cautions: “Even the idea that economic pressure and political isolation would bring Russia to its knees was not really thought all the way through. Even if we could succeed: what good would Russia be on its knees?
“How can you want to live together in the European house with a humiliated people whose elected leadership is treated like a pariah and whose citizens you might have to support in the coming winter?”
Emphasizing that the current escalation harms German interests, Steingart continues, “There are no recorded cases in which countries under sanction apologized for their behavior and were obedient ever after. On the contrary: collective movements start in support of the sanctioned, as is the case today in Russia.
“The country was hardly ever more unified behind their president than now. This could almost lead you to think that the rabble-rousers of the West are on the payroll of the Russian secret service,” he adds.
I don’t think that the ‘rabble-rousers’ are Russian agents. Nor do I believe they are American or British proxies. They are merely media operators looking for a ‘bad guy’ and, in the absence of Bin Laden and Saddam, Russia seems to fit the bill right now.
Amid all this lunacy, there is also the re-emergence of aged ‘Cold Warriors’ who last had a day in the sun when the Soviet Union was coughing its dying breaths. After years of being ignored, they are back in (temporary) vogue and determined to make their voices heard, no matter how humungous a time-warp they are stuck in. Indeed, 86-year-old Zbigniew Brzezinski, last seen arming the mujahedeen in Afghanistan in the 1980's, has re-appeared like a scarier version of The Simpson's Mr Burns. His Afghan policy was so successful that it created Al Qaeda so what could possibly go wrong by following his advice on Russia?
Below them, there is a younger generation of ‘Russia experts’ who largely chose Russian or Slavic topics in their academic years, and have been lifelong non-entities as the region became a fringe topic in a West obsessed with problems in the Islamic world.
As a consequence of an abrupt (probably fleeting) interest in Ukraine, they have been brought in from the ether and are determined to milk the moment they’ve spent their adult lives building up to. Previously niche authors, published on obscure websites, suddenly find themselves called on to write big-time magazine cover stories demonizing Putin to fit the new ‘bogeyman’ narrative and they are delirious with the acclaim.
Others who, until recently, could not command the attention of a few drunks at a Washington or London bar for their Russian rantings are overcome with joy at being invited on CNN/Sky News/NBC etc. to discuss their favorite topic. Basically, they are all partying like it is 1989. One has even taken to re-tweeting messages calling him a 'rock-star' for his devotion to baloney – I have met a good few rock stars in my time and none of them droned on about Russian politics, I can assure you. If they had, they would have been bores, not rock stars and rock stars are, generally, far from boring, except maybe Bono.
However, last orders at their little shindig seems to be approaching as Western popular media edges towards its ‘mea culpa moment’ and editors realize that backing the wrong horse, no matter how generous the odds, has only ever made the punters poorer.
“And the whole damn place goes crazy twice
and it’s once for the devil and once for Christ
but the boss don’t like these dizzy heights
we’re busted in the blinding lights, busted in the blinding lights
of closing time.”
Leonard Cohen - Closing Time. https://www.youtube.com/watch?v=xq7zfqyZk7g