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Why the U.S. Seeks to Hem in Russia, China and Iran

Why the U.S. Seeks to Hem in Russia, China and Iran

America’s three principal adversaries signify the shape of the world to come: a post-Western world of coexistence. But neolibera and neocon ideology is unable to to accept global pluralism and multipolarity, argues Patrick Lawrence.


The Trump administration has brought U.S. foreign policy to the brink of crisis, if it has not already tipped into one. There is little room to argue otherwise. In Asia, Europe, and the Middle East, and in Washington’s ever-fraught relations with Russia, U.S. strategy, as reviewed in my previous column, amounts to little more than spoiling the efforts of others to negotiate peaceful solutions to war and dangerous standoffs in the interests of an orderly world.

The bitter reality is that U.S. foreign policy has no definable objective other than blocking the initiatives of others because they stand in the way of the further expansion of U.S. global interests. This impoverished strategy reflects Washington’s refusal to accept the passing of its relatively brief post–Cold War moment of unipolar power.

There is an error all too common in American public opinion. Personalizing Washington’s regression into the role of spoiler by assigning all blame to one man, now Donald Trump, deprives one of deeper understanding. This mistake was made during the steady attack on civil liberties after the Sept. 11 tragedies and then during the 2003 invasion of Iraq: namely that it was all  George W. Bush’s fault. It was not so simple then and is not now. The crisis of U.S. foreign policy—a series of radical missteps—are systemic. Having little to do with personalities, they pass from one administration to the next with little variance other than at the margins.

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How Much Longer Can The Saudis Suppress Oil Prices?

How Much Longer Can The Saudis Suppress Oil Prices?

Riyadh

When earlier this week reports emerged that Saudi Arabia is striving to keep oil prices in the range of US$70-80 per barrel in a bid to balance its need for higher prices with President Trump’s insistence that oil is kept within reasonable bounds, few must have been surprised.

OPEC’s leader and passionate supporter of Trump’s policy towards Iran had few useful moves in an environment featuring fast-rising prices and unhappy consumers from India to the States. It found itself between the rock of high prices, necessary for the Kingdom to pursue the widely advertised economic reforms under its Vision 2030 program, and the hard place of its closest ally’s own agenda, which unsurprisingly involved lower prices at the pump ahead of the midterm elections this November.

According to some, the hard place will disappear after the midterm elections. S&P Global Platts senior writer on oil Herman Wang is among them. In a recent analysis, Wang wrote that Trump’s pressure on Riyadh to keep a cap on prices could dissipate after the elections, potentially offering Saudi Arabia the freedom to adjust its production any way it sees fit to get to a more desirable price level.

Yet the extent of this freedom remains an open question: Wang notes that the midterm elections are a day after the entry into effect of the second round of U.S. sanctions against Iran, and additional supply will need to be provided to soften the blow. Trump has already authorized the sale of 11 million barrels from the Strategic Petroleum Reserve in November, but this will not be enough: S&P Platts analysts estimate the sanctions could take 1.4 million bpd of Iranian crude off the global market. Someone else will have to step in and pump more if prices are to stay within the current range.

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Top US Envoy Says “Lots Of Evidence” Assad Prepping Chemical Weapons; Russia Threatens Attack On US Base

While Syria seemed to have dropped from the Western media’s radar over the past months as the Syrian Army and its Russian and Iranian allies made rapid gains, multiple huge developments this week have returned the war to center stage in Washington and the dangerous rhetoric of escalation.

In just the last 24 hours alone, we’ve learned:

  • Trump has reportedly done a 180 shift, departing from his prior statements of “bring our troops home” made only months ago, and has approved “an indefinite military and diplomatic effort in Syria” according to a bombshell Washington Post report.
  • Russia has put the US military on notice, telling American commanders that Russian and Syrian forces are prepared to attack At Tanf — a key US garrison along the Syrian-Iraq border.
  • A top US Syria policy representative says there’s “lots of evidence” chemical weapons are being prepared by the Syrian Army for use in its impending Idlib ground assault.

Perhaps most alarming concerning all of the above is that the threatened US “response” and rhetoric over potential future use of chemical weapons in Idlib is dramatically escalating by the day.

On Thursday night Reuters reported:

There is “lots of evidence” that chemical weapons are being prepared by Syrian government forces in Idlib region in northwest Syria, the new US representative for Syria said on Thursday, warning any attack on the last big rebel enclave would be a “reckless escalation.”

“Any offensive is to us objectionable as a reckless escalation,” the envoy, Jim Jeffrey, told reporters. “There is lots of evidence that chemical weapons are being prepared.”

This comes days after US Ambassador to the UN Nikki Haley gave a similar warning, while also claiming to somehow predict the future, and assuring the world that “Assad is guilty” before anything actually happens.

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Israel Warns It Could Attack Iranian Military Assets In Iraq

In response to what could soon be a big headache for Israeli PM Netanyahu and US “military advisors” to Baghdad, Israeli Defense Minister Avigdor Liberman indicated on Monday that it could launch air strikes on suspected Iranian military assets in Iraq, as it has widely done in war-torn Syria, Reuters said.

Last week we reported that according to Reuters, Iran had transferred short-range ballistic missiles to allies in Iraq over the last several months. This revelation comes as tensions between Washington and Tehran are at their highest point in years as aggressive sanctions continue crippling Iran’s economy, and after threats and counter-threats over Tehran laying claim to the vital Strait of Hormuz oil waterway over the past weeks, through which one-third of the world’s oil passes.

Israel views Iran’s regional expansion as dangerous for its well-being, and has frequently launched air strikes in Syria to thwart any Iranian forces defending Damascus in the war.

“We are certainly monitoring everything that is happening in Syria and, regarding Iranian threats, we are not limiting ourselves just to Syrian territory. This also needs to be clear,” Lieberman told reporters Monday.

Explicitly asked if this included new operations in Iraq, Lieberman answered: “I’m saying we will handle any Iranian threat, no matter where it comes from. We are maintaining the right to act… and any threat or anything else that comes up is dealt with.”

Reuters said there was no response from the government of Iraq – which is technically at war with Israel – nor from the Pentagon, which oversees US military operations in the country.

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As Emerging Market Currencies Collapse, Gold is being Mobilized

As Emerging Market Currencies Collapse, Gold is being Mobilized

In recent weeks, global financial markets have been increasingly spooked by an intensifying crisis in emerging market currencies including those of Turkey and Argentina. Add to this the ongoing currency crisis in Venezuela and the currency problems of Iran. While all of these countries have economy specific reasons that explain at least some of their currency weakness, there are some common themes such as a stronger US dollar, high domestic inflation rates, economic mismanagement, reliance on foreign borrowing, and in some cases economic sanctions imposed by the US.

As one currency plummets, this intensifies emerging market risk across the entire asset class, and it’s not unreasonable at this time to at least speculate whether the contagion could spread. The Brazilian Real and South African Rand have come under pressure and in Asia, the Indonesian Rupiah and Indian Rupee are also now weakening against the US Dollar.

It is against this backdrop that physical gold is being increasingly mentioned within these emerging economies, with gold coming to the fore as it always does in times of crisis. It is for this reason that its interesting to take a look at a number of these currencies and examine how gold is playing the role of safe haven for these countries’ citizens as well as creating a challenge for these nations’ leaders and central banks.

Buying up Gold as the Turkish Lira Plunges

With ongoing currency and external debt problems, Turkey, with a population of 90 million, has played a central role in the current currency crisis and remains a catalyst for potential risk contagion across other troubled emerging market currencies.

Turkey’s currency woes come against a backdrop of a stronger US dollar, domestic inflation of 15%, increasing default risk, market skepticism about the independence of Turkey’s monetary policy, and a series of US sanctions against the Turkey economy.

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Economic Crisis Looms In Iran As Sanctions Bite

Economic Crisis Looms In Iran As Sanctions Bite

Tehran by night

In a little over two months, painful U.S. sanctions on Iran’s oil sector will take effect, but the Iranian economy is already showing signs of strain.

Iran’s currency, the rial, has fallen by more than half since the start of the year. There is now a thriving black market for U.S. dollars as the rial continues to plunge.

The turmoil has the government engaging in a bit of a circling firing squad. In July, the head of the central bank was sacked. In early August, the labor minister was ousted and just this past weekend the economy minister was removed.

The reshuffling and purging of top officials suggests that hardliners in Tehran are gaining ground against the government of President Hassan Rouhani, a moderate by comparison. “Rouhani’s failure to respond to the economic crisis with gut and grit has further isolated him,” Ali Vaez, the director of the Iran Project at the International Crisis Group, told the Wall Street Journal. “Even his erstwhile allies in the parliament are deserting what they believe is a sinking ship.”

But even though the economic indicators look poor, Rouhani’s real failure in the eyes of the hardliners has been political. That is, his government made the mistake of trusting the United States when it agreed to the 2015 nuclear deal. The Trump administration’s withdrawal from the pact earlier this year was proof in Tehran that opening up and negotiating with the U.S. on the nuclear program was a miscalculation. Rouhani has been in trouble since then, and the economic pain related to the re-implementation of U.S. sanctions is merely compounding the problem.

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Iran Sanctions, Emerging Markets And The End Of Dollar Dominance

Iran Sanctions, Emerging Markets And The End Of Dollar Dominance

trade war cover up for fed and dollar

The trade war is a rather strange and bewildering affair if you do not understand the underlying goal behind it. If you think that the goal is to balance the trade deficit and provide a more amicable deal for U.S. producers on the global market, then you are probably finding yourself either confused, or operating on blind faith that the details will work themselves out.

Case in point, the latest reports that the U.S. trade deficit is now on track to hit 10-year highs, after a 7% increase in June. This is the exact opposite of what was supposed to happen when tariffs were initiated. In fact, I recall much talk in alternative media circles claiming that the mere threat of tariffs would frighten foreign exporters into balancing trade on their own. Obviously this has not been the case.

Rumors of China committing to trade talks or “folding” under the pressure have been repeatedly proven false. Though stock markets seem to enjoy such headlines, tangible positive results are non-existent. While the world is mostly focused on China’s reactions, sanctions against other nations are continuing for reasons that are difficult to comprehend.

Sanctions against Russia have been tightened in the wake of the poisoning of Sergei and Yulia Skripal in the UK, even though we still have yet to see any concrete evidence that Russia had anything to do with the attack.

And, sanctions against Iran have been reintroduced on the accusation that the Iranian government is engaged in secret nuclear weapons development. And again, we still haven’t seen any hard evidence that this is true.

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“Thank God This Is Happening” Russia Says Time Has Come To Ditch The Dollar

With the US unveiling a new set of sanctions against Russia on Friday, Moscow said it would definitely respond to Washington’s latest sanctions and, in particular, it is accelerating efforts to abandon the American currency in trade transactions, said Russia’s Deputy Foreign Minister Sergei Ryabkov.

The time has come when we need to go from words to actions, and get rid of the dollar as a means of mutual settlements, and look for other alternatives,” he said in an interview with International Affairs magazine, quoted by RT.

“Thank God, this is happening, and we will speed up this work,” Ryabkov said, explaining the move would come in addition to other “retaliatory measures” as a response to a growing list of US sanctions.

Previously, Russian Energy Minister Aleksandr Novak said that a growing number of countries are interested in replacing the dollar as a medium in global oil trades and other transactions.

“There is a common understanding that we need to move towards the use of national currencies in our settlements. There is a need for this, as well as the wish of the parties,” Novak said.

According to the minister, it concerns both Turkey and Iran, with more countries likely to join the growing dedollarization wave.

“We are considering an option of payment in national currencies with them. This requires certain adjustments in the financial, economic, and banking sectors” to accomplish. Last week, we reported that the Kremlin was interested in trading with Ankara using the Russian ruble and the Turkish lira. India has also vowed to pay for Iranian oil in rupees.

Meanwhile, the world’s second-largest economy and Washington’s trade war nemesis, China, has been taking steps to challenge the greenback’s dominance with the launch of an oil futures contract backed by Chinese currency, the petro-yuan. China and Iran have already agreed to stop using the dollar in global trade as China has ramped up purchases of Iranian oil in defiance of US sanctions.

Iran Again Threatens Strike On US, Israel After Bolton Warns “Maximum Pressure” Coming

In what now seems like a weekly occurrence, Iran on Wednesday warned its military wouldn’t hesitate to strike American and Israeli targets should it be attacked by the United States after previous words from the US national security advisor warning that “maximum pressure” will be brought to bear against Tehran.

The words were issued during a public speech in Tehran by a senior cleric who works closely with Supreme Leader Ayatollah Ali Khamenei named Ahmad Khatami. He told a congregation during Eid praryers in Tehran, “The price of a war with Iran is very high for America.”

Khatami said, “They know if they harm this country and this state in the slightest way the United States and its main ally in the region, the Zionist regime (Israel), would be targeted.”

The fiery speech was in response to statements given earlier by US National Security Advisor John Bolton and Israeli Prime Minister Benjamin Netanyahu.

On Wednesday while speaking at a press conference in Jerusalem where he was meeting with Israeli officials, Bolton said, “Every time that Iran has brought missiles or other threatening weapons into Syria in recent months Israel has struck those targets,” and added, “I think that’s a legitimate act of self-defense on the part of Israel.”

Bolton seemed to boast about Israeli’s capability to act against Iran and its allies in Syria during a speech wherein he also warned Syrian President Bashar al-Assad that if he “uses chemical weapons we will respond very strongly and they really ought to think about this a long time.” Bolton was referencing the impending major Syrian and Russian military offensive against al-Qaeda held Idlib province in the country’s northwest.

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Russia and Iran Hate Us for Our Freedoms

Russia and Iran Hate Us for Our Freedoms

It’s easy to detect fake news. I don’t need a fact checker or a laboratory at a globalist think tank to clue me in. 

Here’s the latest fake news. 

Both Russia and Iran want to influence the midterm elections. 

It’s lunacy to believe this would make a difference, even if it were true. 

The story was posted at one of the more notorious fake news sites—The New York Times, the folks who sold you WMDs and the invasion of Iraq. 

Facebook passed this info on to the Gray Lady of Propaganda. 

Facebook said it had identified a new political influence campaign on its platform that appeared intended to disrupt the midterm elections. The social network found and took down 652 fake accounts and pages that were trying to sow discord around social issues… Some of the accounts in the new influence campaign originated in Iran and Russia, Facebook said.

This latest threat by people who hate us for our freedoms—as George W. Bush so pointedly phrased it—follows a similar claim last month. 

The campaign’s scale exceeded that of another influence operation that Facebook revealed last month, in which the company said it detected and removed 32 pages and fake accounts that had engaged in activity around divisive social issues ahead of the midterms.

Elections always arouse heated discussion on divisive issues and have done so since the founding of the (former) republic. Establishment Republicans and Democrats use the media as an influence tool and it is accepted as normal behavior. Billions are spent every election cycle to influence voters one way or the other. 

The revelations underscore how Facebook continues to be used as a weapon by others to try to influence the American electorate.

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Why The Saudis Are Still Dominating Oil Markets

Why The Saudis Are Still Dominating Oil Markets

Bab El Mandeb Strait Tanker

Saudi Arabia is still clearly in control of the oil market.

The narrative that decisively took hold over the oil market in August was one of cracks in emerging market demand, concerns over the health of the global economy and fears over the fallout from the U.S.-China trade war. Turkey’s currency crisis set off a slide in emerging market currencies, which will likely undercut demand this year. The IMF warned earlier this summer that the downside risks to the economy were growing, a rather prescient prediction. On the supply side of the equation, outages from Iran loom large.

But when it comes to physical barrels on the market, Saudi Arabia is still in the driver’s seat. “While fears of trade wars will continue to influence sentiment and shape price outcomes, it is the recent shifts in OPEC, and particularly its dominant player Saudi Arabia’s, output policy which has had the biggest impact on physical balances, prices and the term structure to date,” The Oxford Institute for Energy Studies (OIES) wrote in a new report.

For the first few months of this year, Saudi Arabia maintained that the oil market was moving towards “rebalancing” with inventories in steady decline, but that there was more work to do. Saudi officials repeatedly stuck with the line that the OPEC+ agreement would not be altered before the end of the year and that they would continue to focus on bringing down inventories.

But the Trump administration’s withdrawal from the Iran nuclear deal and the return of sanctions raised fears of a huge disruption in Iranian supply. Suddenly, the market looked very tight. Coming just a few weeks before the June OPEC+ meeting, the U.S.’ policy change was decisive.

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TRUTH is so precious that she should Always be attended by a Bodyguard of Lies

QUESTION: Do you support the unilateral withdrawal of the US from the Iran deal?

ANSWER: Iran has no intention of actually conforming with that agreement. But that is really a side issue. There is a significant displeasure with the religious government in Iran among its own people. No nation is ever 100% left or right. There will always be dissent against whatever government is in power. This rising discontent has appeared since the Arab Spring. The Iranian Revolution of 1979 will be followed by another counter-revolution probably in 2022. Iran has suppressed its people for far too long and it will rise up in yet another revolution. The government is at war in the Middle East against Saudi Arabia because of a political-religious philosophy. They seek to export their beliefs to others and that is the problem. If they would just adopt live-and-let-live policy things would be much calmer.

I do not support the USA sticking its nose into everything. This is the inherent problem when you have military establishments. As I have said before, the days of Empire Building are gone. China, Russia, and the USA have no desire to occupy each other. Both Erdogan and Iran are still clinging to this idea of reestablishing Empires. The major powers are engaged in proxy wars. It really makes no sense to intervene for it only inspires hatred.

Franklin Roosevelt lied to the people to get into World War II because the American people were isolationists. You have to understand that you MUST always separate the PEOPLE from the Government and its POLITICIANS.

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The Geopolitics of Energy

The Geopolitics of Energy

The Geopolitics of Energy

Some brief notes on the situation around the world with respect to the influence that energy has on political developments.

1. The Middle East

The Middle East continues to play a major role in the global energy scene. Notwithstanding changes that have occurred in the political situation of many countries in the area — i.e., Libya, Iraq, Qatar, and Iran — the Middle East still remains one of the most important providers of oil and natural gas in the world. This is why many global powers, namely the United States, China, and Russia, keep a close eye on developments there. Events in Iraq, Iran, and on the Arabian peninsula continue to ring alarm bells in major world capitals, since whatever happens there has severe repercussions on the price of energy. This in turn affects the economic welfare of many parts of the world and puts huge strains on the diplomatic efforts of major countries to design policies to deal with the resulting problems.

The antagonism between Saudi Arabia and Iran sets off a variety of political reverberations affecting the countries of the Persian Gulf, unsettling the situation between Turkey, Syria, and Iraq, and entangling Russia and the United States in the ensuring imbroglio.

The countries of North Africa, Egypt, and of course Israel/Palestine are part of the same puzzle that mixes energy and diplomacy at every step of the way.

2. The Russian Federation

Russia plays a crucial role in the politics of global energy. Russia is one of the world’s most important exporters of oil and natural gas. This means that apart from playing a pivotal role in the formation of world energy prices, its presence, behaviour, and diplomatic manoeuvring is of paramount importance when it comes to energy security and the possibility of preventing or causing peripheral animosities or establishing peace and stability.

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Iran Sanctions Could Backfire On U.S. Drillers

Iran Sanctions Could Backfire On U.S. Drillers

gas well

The United States is upping the ante in its effort to sanction Iran, and its efforts may further complicate its ongoing trade war with China and affect the flow of oil worldwide.

On August 16, the head of the new Iran Action Group, Brian Hook, announced that the U.S. would sanction any country that purchased oil from Iran after the November 4 deadline. China has shown no indication that it plans to cooperate with the U.S., and Hook did not rule out imposing secondary sanctions on China if it continues its purchases of Iranian oil.

While other importers of Iranian crude, including Japan and South Korea, had scaled back their purchases, China has actually increased its imports from Iran.

In August China announced a round of tariffs on U.S. goods, including some oil products, though it exempted U.S. crude from the list.

Nevertheless, Chinese imports of U.S. energy products has been on the decline. A ship-tracking report noted that not a single U.S. tanker has departed for China in August. Should the U.S.-Chinese trade war worsen, China may turn towards alternative sources of energy, including Russia or Iran. That would be a real blow to U.S. energy suppliers like Cheniere Energy Inc., which ships LNG to China.

China is the second-largest market for U.S. energy goods. In May it averaged 427,000 bpd of U.S. imports, surpassing Canada, which imported 289,000 bpd, according to the EIA.

Right now, Chinese importers like Unipec have adopted a “wait and see” attitude towards buying US crude, despite the fact that it was left off the Chinese government’s tariff list.

For China, the situation may involve choosing between Iran and the U.S. American energy products have been attractive for Chinese importers, but the geopolitical advantages of cozying up to Tehran may outweigh the economic benefits of sticking with U.S. crude.

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Iran and the Doomsday Machine

Iran and the Doomsday Machine

In Stanley Kubrick’s masterpiece, “Dr. Strangelove”, any mention of the Doomsday Machine was verboten. However, back in May 2018 the intrepid Pepe Escobar, who tends to ignore verboten warnings, presented some raw reality:

It’s also no secret among Persian Gulf traders that in the – hopefully unlikely – event of a US-Saudi-Israeli war in Southwest Asia against Iran, a real scenario war-gamed by the Pentagon would be “the destruction of oil wells in the GCC [Gulf Cooperation Council]. The Strait of Hormuz does not have to be blocked as destroying the oil wells would be far more effective.”

And what the potential loss of over 20% of the world’s oil supply would mean is terrifying; the implosion, with unforeseen consequences, of the quadrillion derivatives pyramid, and consequentially of the entire Western financial casino superstructure.

Call it a nuclear financial weapon of mass destruction chain reaction. Compared to that, the 2008 financial crisis would be little more than a walk in an ecologically friendly park.”

(Pepe Escobar. “Oil and gas geopolitics: No shelter from the storm.”

If we assume such a deterrent is one of the options why hasn’t Iran ever declared its own version of, “all options are on the table”?

There is no question that this alters the balance of power. Or, was it not necessary to bring it up and that’s why it was never presented as an option? If that is the case then why is Iran being pushed to the brink of war? Some have called Trumps’ actions an act of war. And if that is the case does Iran have the right to retaliate?

So far diplomatic efforts have been going well but this has not changed the minds of the major multinationals from leaving Iran.

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Olduvai IV: Courage
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Olduvai II: Exodus
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