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Shielding the World From US Chaos Is No Easy Task
Shielding the World From US Chaos Is No Easy Task
Donald Trump’s foreign policy relies heavily on putting to use to the tools available to the Empire: economic terrorism, threats of war, diplomatic pressure, trade wars, etc. But in resorting to tried-and-true imperialism, it is isolating itself internationally from traditional allies and raising tensions on the global chessboard to an unprecedented level.
Threats of war against Venezuela, North Korea, Syria and Iran are now repeated on a daily basis. Economic measures involving tariffs or duties, in many ways comparable to declarations of war, are now habitual, whether directed at friends or allies. Iran and Syria are under sanctions, while Pyongyang is even prevented from docking one of its ships in its ports, thereby finding itself de facto placed under US embargo, such as was threatened against Venezuela.
China and Russia are daily fighting to support the multipolar world through diplomatic, economic and sometimes military means, offering to Washington’s enemies some kind of shield with which to withstand the outrageous slings and arrows of the Trump administration. Beijing and Moscow carry out their resistance with an eye to their long-term objectives, given that in the short term their actions will inevitably invite the implacable hostility of Washington and her lackeys.
The fate of the new multipolar world order essentially depends on how well China and Russia will be able weather Washington’s storm. It is naturally in the interests of the rest of the world that the chaos of Washington’s unipolarity will be brought to a close in the least chaotic and destructive manner.
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Why it (sort of) makes sense for the US to impose tariffs
Why it (sort of) makes sense for the US to impose tariffs
Nearly everyone wonders, “Why is Donald Trump crazy enough to impose tariffs on imports from other countries? How could this possibly make sense?”
As long as the world economy is growing rapidly, it makes sense for countries to cooperate with each other. With the use of cooperation, scarce resources can become part of supply lines that allow the production of complex goods, such as computers, requiring materials from around the world. The downsides of cooperation include:
(a) The use of more oil to transport goods around the world;
(b) The more rapid exhaustion of resources of all kinds around the world; and
(c) Growing wage disparity as workers from high-wage countries compete more directly with workers from low-wages countries.
These issues can be tolerated as long as the world economy is growing fast enough. As the saying goes, “A rising tide raises all boats.”
In this post, I will explain what is going wrong and how Donald Trump’s actions fit in with the situation we are facing. Strangely enough, there is a physics aspect to what is happening, even though it is likely that Donald Trump and the voters who elected him would probably not recognize this. In fact, the world economy seems to be on the cusp of a shrinking-back event, with or without the tariffs. Adding tariffs is an indirect way of allowing the US to obtain a better position in the new, shrunken economy, if this is really possible.
The upcoming shrinking-back event is the result of too little energy consumption in relation to total world population. Most researchers have completely missed the possibility that energy limits could manifest themselves as excessive wage disparity. In fact, they have tended to assume that energy limits would manifest themselves as high energy prices, especially for oil.
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“No Talks, Only Resistance”: Iran’s Rouhani Slams Door On Trump’s “Call Me” Overture
“No Talks, Only Resistance”: Iran’s Rouhani Slams Door On Trump’s “Call Me” Overture
At a moment the US Navy conducted provocative military exercises in the Arabian Sea on Monday, Iran’s president responded to overtures by Trump that Tehran should “call me” with a firm line of, “No talks, only resistance.”
US military statements highlighted the Arabian Sea drills were specifically in response to heightened unspecified threats from Iran, and were led by the USS Abraham Lincoln Carrier Strike Group and the US Marine Corps to highlight American “lethality and agility to respond to threat” and to advance US security.
Iran’s President Hassan Rouhani, who oversaw the 2015 nuclear deal negotiations (JCPOA) with then president Obama, said he welcomed any US diplomatic overture but wouldn’t be coerced into new negotiations under economic sanctions and threat of military action.
“I favor talks and diplomacy but under current conditions, I do not accept it, as today’s situation is not suitable for talks and our choice is resistance only,” Rouhani said, according to Iran’s IRNA news agency.
“If we walked away from the JCPOA [Joint Comprehensive Plan of Action – the formal name of the nuclear deal] with the US provocative acts, then, in addition to the US, the UN and world would also impose sanctions on us,” he said.
It appears Trump has taken a “North Korea-style” approach to Iran that combines unpredictably aggressive threats and maneuvers – especially by other White House officials – with unexpected moments of reaching out a hand.
That tactic was certainly on display Monday when Trump expressed US willingness to meet any Iranian action against US interests with “great force” – yet followed it by saying it’s up to Iran to initiate conciliatory dialogue: “If they call, we will certainly negotiate, but this is going to be up to them,” he told reporters.
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Russia Announces Delivery Of More Supplies To Venezuela’s Military
Russia Announces Delivery Of More Supplies To Venezuela’s Military
Even after repeat threats issued to Moscow from President Trump himself — including recently saying bluntly “Russia has to get out” — the Russian military now appears so unconcerned by such warnings that it’s simply announcing its Maduro support actions ahead of time via state media.
Russian news agency TASS said Friday, citing a military-diplomatic source, that Russia plans to supply Venezuela’s army with more than 16,000 field rations. This after a large Russian state-run arms exporter published a contract related to the re-supply deal. In late March two Russian military planes landed outside Caracas and offloaded equipment and troops to assist the embattled Maduro regime, via the AFP
No doubt the very open publication of the supply deal is aimed at showing Washington that the Kremlin is not going anywhere in terms of its longtime military alliance with Caracas, which was controversially on full display last December when Russian two nuclear-capable “Blackjack” strategic bombers flew to Caracas, and departed soon after amid White House threats and demands.
Russia also likely now feels emboldened given the embarrassing Guaido opposition led failed coup attempt launched but just as quickly fizzling out at the end of April.
The White House, especially through statements of John Bolton and Secretary of State Mike Pompeo gave the full backing of the United States to the called for military uprising. Thus Moscow realizes the US simply doesn’t have leverage on the ground in Venezuela, and boldly announced the following late this week:
On Thursday, Rosoboronexport, Russia’s state-run arms exporter, placed information about purchases of 16,500 field rations to be supplied to Venezuela. The initial cost of the contract is 14.38 million rubles (222,091 US dollars).
“The rations will be supplied in the interests of the Venezuelan army,” the source said.
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Post-tariff considerations
Post-tariff considerations
President Trump has declared he will extend tariffs of 25% on all America’s imports of Chinese goods. China is responding with tariff increases of its own. The consequences of this action and reaction will be to kick-start higher monetary inflation in America and an economic slump. This article explains how an overdue credit crisis will be made considerably worse by trade protectionism. It could become the credit crisis to end all credit crises and undermine the whole fiat currency system.
Introduction
Following President Trump’s imposition of 25% tariffs on all Chinese imports, it is time to assesses the consequences. Already, we have seen a contraction in US-China trade of 20% in the first three months of 2019 compared with the same quarter last year, and also compared with the average outturn for the whole of 2018.[i] This contraction was worse than that which followed the Lehman crisis.
In assessing the extent of the impact of Trump’s tariffs on the US economy, we must take into account a number of inter-related factors. Clearly, higher prices to US consumers will hit Chinese imports, which explains why they have dropped 20% so far, and why they will likely drop even more. Interestingly, US exports to China fell by the same percentage, though they are about one quarter of China’s exports to the US.
These inter-related factors are, but not limited to:
- The effect of the new tariff increases on trade volumes
- The effect on US consumer prices
- The effect on US production costs of tariffs on imported Chinese components
- The consequences of retaliatory action on US exports to China
- The recessionary impact of all the above on GDP
- The consequences for the US budget deficit, allowing for likely tariff income to the US Treasury.
These are only first-order effects in what becomes an iterative process, and will be accompanied and followed by:
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China Calls For “People’s War” Against The US, Vows To “Fight For A New World”
China Calls For “People’s War” Against The US, Vows To “Fight For A New World”
While market mood has shifted diametrically from yesterday, with stocks sharply higher on Tuesday following what has widely been interpreted as conciliatory comments from both president Trump and various members of China’s ruling elite, one would be hard pressed to find any de-escalation amid the Chinese press commentaries written in the aftermath of the latest escalation in trade war between the US and China.
In a series of editorials and op-ed articles published Monday and Tuesday, Chinese state media slammed what it labeled the Trump administration’s “greed and arrogance“, called for a “people’s war” targeting the US “with precision” as China begins a “fight for a new world.”
“The most important thing is that in the China-US trade war, the US side fights for greed and arrogance … and morale will break at any point. The Chinese side is fighting back to protect its legitimate interests,” the nationalist, state-owned Global Times tabloid wrote .
Urging indirect boycott of US goods and services, the editorial slammed Trump and suggested a nation-wide uprising against the US aggression: “The trade war in the US is the creation of one person and one administration, but it affects that country’s entire population. In China, the entire country and all its people are being threatened. For us, this is a real ‘people’s war.'” Whether this means a renewed collapse in Chinese iPhone sales remains to be seen – for confirmation, watch for a new guidance cut from Apple in the coming days.
The Global Times also accused the Trump administration of misleading Americans about the victims of US tariffs. It singled out Larry Kudlow’s interview on “Fox News Sunday” in which Trump’s top economic advisor said that US consumers would also suffer from the trade war, contradicting Trump’s claim that China would foot the bill.
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Trump’s Vanity Will Destroy The Global Economy
Trump’s Vanity Will Destroy The Global Economy
Last year I asked the question “Will Trump torch the global economy on the bonfire of his vanity?”
A year later we have the answer. It’s a resounding, “Yes.”
I wrote after Trump pulled out of the JCPOA:
Donald Trump wants regime change in Iran. His cancellation of the JCPOA was a decision born of his myopia. He has surrounded himself with people who reinforce his view and manipulate him via his vanity.
And the price of implementing his current plan will be a global debt crisis which no one will escape. …
He wants to remake America and the world in his image while undoing anything President Obama touched…
We have a leaked (yeah, right) memo explaining this is the plan. Nothing Trump has done since he’s been in office has been contra to this goal; overthrowing the theocracy in Iran…
In fact, it has been a step-wise move in this direction with each decision he’s made.
Today Trump has pushed this plan to its extreme. He’s fomented a trade war with China and threatened sanctions on anyone doing any business will Iran outside its border, now including all strategic metals.
He’s threatened Lebanon with extinction and Iraq as well. His foreign policy mouthpieces are making pronouncements and twisting arms.
And none of this for the United States. He’s doing this for the basest of reasons. His ego. And, for him, that means doing everything to support his upcoming “Deal of the Century” between the Palestinian authorities and Israel. That it is the first step towards peace in the Middle East.
But it isn’t.
Israel leaked the terms of the Palestinian surrender yesterday. What was whispered to be a terrible plan is actually laughable if any of this is true.
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Uncertain Future for Monetary Policy as POTUS Publicly Calls for Rate Cut While Fed Holds Steady
Photo by The White House
Uncertain Future for Monetary Policy as POTUS Publicly Calls for Rate Cut While Fed Holds Steady
On Tuesday, POTUS took to Twitter and called for the Fed to cut rates by 1%, pointing to 3.2% GDP growth and “wonderfully low inflation.”
China is adding great stimulus to its economy while at the same time keeping interest rates low. Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low, and instituted a very big dose of quantitative tightening. We have the potential to go…
….up like a rocket if we did some lowering of rates, like one point, and some quantitative easing. Yes, we are doing very well at 3.2% GDP, but with our wonderfully low inflation, we could be setting major records &, at the same time, make our National Debt start to look small!
However, it’s hard to say if inflation is as “wonderfully low” as POTUS claims.
After all, official sources saw CPI inflation jump to 1.9%, with rapidly rising food prices reported as the leading cause. Plus, the “growing” economy POTUS alludes to appears to have topped out since January 2018 (see red arrow in the chart below – source):
Additionally, according to an official source, a 3.2% or higher GDP growth rate has happened on 3 differentoccasions before POTUS took office. The same source also reports that GDP Growth Rate in the United States averaged 3.22 percent from 1947 until 2019. So really, current GDP growth only appears to be on par with the average.
White House officials including POTUS and top economic advisor Larry Kudlow have recommended the Fed cut rates by half a point in the past. Despite all the information above, CNBC reports that, with his 1% cut recommendation, POTUS has “doubled down” on this approach.
…click on the above link to read the rest of the article…
Top U.S. Officials Gather To Discuss “Military Options” In Venezuela As Russia Warns Of “Grave Consequences” If America Invades
Top U.S. Officials Gather To Discuss “Military Options” In Venezuela As Russia Warns Of “Grave Consequences” If America Invades
On Wednesday afternoon, senior U.S. officials gathered at the White House to discuss possible military options for Venezuela. Meanwhile, the Russians are warning of grave consequences if the U.S. invades, and so the stage is being set for a potential showdown between the world’s two foremost military powers. Previously, administration officials had hoped that the Venezuelan people would rally around Juan Guaido to such a degree that it would not require military intervention to oust Venezuelan President Nicolas Maduro, but that hasn’t happened. In fact, Guaido’s big push to start a revolution in the streets over the past few days has ended up being a total flop. The following comes from Yahoo News…
Guaido had called for the “largest march” in Venezuela’s history and said on Twitter that “millions of Venezuelans” were in the streets in “this final phase” of his move to oust Maduro.
But by late afternoon, many of the protesters in the capital Caracas were drifting home.
Despite Guaido’s calls for the military to support him, the armed forces leadership has so far remained loyal to Maduro, who has been in power since 2013.
In the long-term, the situation in Venezuela isn’t going to change much if the U.S. is able to replace one socialist president (Maduro) with another socialist president (Guaido). Socialism always ends badly, and the people of Venezuela are going to have to decide for themselves that they don’t want socialism any longer.
But that isn’t what this is about. U.S. officials have decided that it is time to impose their will on the people of Venezuela, and they have determined that Maduro must go. If Guaido cannot create a successful internal revolution, then other options will be explored.
…click on the above link to read the rest of the article…
2 Aircraft Carriers Have Left Port – Are The USS Eisenhower And The USS Roosevelt Headed South Toward Venezuela?
2 Aircraft Carriers Have Left Port – Are The USS Eisenhower And The USS Roosevelt Headed South Toward Venezuela?
Juan Guaido has initiated a violent uprising in an attempt to overthrow Nicolas Maduro, and it appears that the U.S. may be preparing to intervene in the conflict militarily. The USNI News Fleet and Marine Tracker accurately tracks the current positions of U.S. naval assets, and according to them the USS Dwight D. Eisenhower has left port on the east coast and the USS Theodore Roosevelt has left port on the west coast. In both cases, each aircraft carrier was originally slated for “training” exercises, but now there is lots of speculation that they are both steaming south toward Venezuela. Since there has been no official confirmation from Washington, let me stress that once again that any talk about the potential destination of these carriers is just speculation. But considering what is taking place in Venezuela at this moment, it certainly would not surprise anyone if the waters off Venezuela is precisely where they are heading.
Earlier today, the Intel_Radar Twitter account created quite a stir with a series of seven tweets…
BREAKING: US Navy deploys two aircraft carriers, both southbound, one from each coast, amid Venezuela crisis. #Venezuela #Maduro #Guaido
Update 1 : Eisenhower left Virginia headed South, on the same day Roosevelt deployed out of San Diego headed for the Panama Canal. #Venezuela #Freedom #Guaido #Maduro #Cuba#USNavy
Update 2 : US Navy Nimitz-class aircraft carrier USS Dwight D. Eisenhower (MMSI:368962000|CS:NIKE) departed Norfolk ~2019-04-26, was off AIS for 4 days, and seems to be headed South, off the US East Coast. #Venezuela #Maduro #Guaido#Freedom #US_Navy
Update 3 : American Roll-on Roll-off Carrier (ARC) RoRo Integrity (IMO:8919934|MMSI:367063310) departed Mexico with a fake destination, “hiding their destination”.
…click on the above link to read the rest of the article…
American Wars Are off the Charts Under Donald Trump
American Wars Are off the Charts Under Donald Trump
He’s failed to deliver his promised withdrawals from Afghanistan and Syria, vetoed an order to get out of Yemen, and expanded the U.S. bombing of Somalia, all while eyeing Iran.
Here’s a statement it might be hard to disagree with: American war is off the charts. Still, I’d like to explain — but I’m nervous about doing so. I know perfectly well that the next word I plan to write will send most of you tumbling elsewhere in a universe in which “news” is the latest grotesque mass shooting; the craziest tweet from you-know-who; celebrities marching into court over college-admissions scandals; or even a boy, missing for years, who suddenly turns up only to morph into a 23-year-old impostor with a criminal record.
How can America’s wars in distant lands compete with that? Which is why I just can’t bring myself to write the next word. So promise me that, after you read it, you’ll hang in there for just a minute and give me a chance to explain.
Okay, here goes: Somalia.
A country in the horn of Africa, it once glued American eyeballs, but that was so last century, right? I mean, there was that bestselling book and that hit Hollywood movie directed by Ridley Scott (Blade Runner, Alien!) about the disaster early in Bill Clinton’s presidency that came to be known as Black Hawk Down (aka the battle of Mogadishu).
In the age of Donald Trump, wasn’t that a million presidencies ago? Honestly, can you even tell me anymore what in the world it was all about? I couldn’t have, not without looking it up again. A warlord, starvation, U.S. intervention, 18 dead American soldiers (and hundreds of dead Somalis, but that hardly mattered) in a country that was shattering.
…click on the above link to read the rest of the article…
Is Trump Trying to Goad Iran Into War with the US?
Is Trump Trying to Goad Iran Into War with the US?
On Monday President Trump designated Iran’s Islamic Revolutionary Guard Corps a foreign terrorist organization.
Mainstream media is playing it up as an escalation of economic pressures on the country.
The Wall Street Journal editorial board writes:
The designation should deepen Iran’s international isolation, another step in the maximum pressure campaign against the regime for its nuclear program. Anyone who provides material support to the group can now be prosecuted more easily and IRGC members are blocked from entering the U.S. IRGC officials will also risk arrest and extradition while traveling.
Don’t believe for a minute this is the half of it.
This is the first time ever that the United States government has named a part of another government as a foreign terrorist organization.
What does it mean?
Labeling any group a foreign terrorist organization allows that group to be targeted by the U.S. government by means of the Authorization for Use of Military Force.
Colonel W. Patrick Lang, a retired senior officer of U.S. Military Intelligence and U.S. Army Special Forces, writes:
The AUMF on terrorism has been used far and wide as a hunting license to attack any armed group that could even distantly be thought a terrorist enemy. The anti-terrorism AUMF makes such attacks legal under US law.
The official designation as “terrorist” of the IRGC which is a 125000 man army with its own navy and air force makes it legal for the US Armed Forces to attack the IRGC and its people wherever they are found and under any circumstances that may occur. It is a declaration of war.
Former Under-Secretary of State and lead Iran negotiator, Wendy Sherman, told Reuters she worried about implications for U.S. forces.
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What Monroe Doctrine?
What Monroe Doctrine?
Because there is a presidential election coming up next year, the Donald Trump Administration appears to be looking for a country that it can attack and destroy in order to prove its toughness and willingness to go all the way in support of alleged American interests. It is a version of the old neocon doctrine attributed to Michael Ledeen, the belief that every once in a while, it is necessary to pick out some crappy little country and throw it against the wall just to demonstrate that the United States means business.
“Meaning business” is a tactic whereby the adversary surrenders immediately in fear of the possible consequences, but there are a couple of problems with that thinking. The first is that an opponent who can resist will sometimes balk and create a continuing problem for the United States, which has a demonstrated inability to start and end wars in any coherent fashion.
This tendency to get caught in a quagmire in a situation that might have been resolved through diplomacy has been exacerbated by the current White House’s negotiating style, which is to both demand and expect submission on all points even before discussions begin. That was clearly the perception with North Korea, where National Security Advisor John Bolton insisted that Pyongyang had agreed to American demands over its nuclear program even though it hadn’t and would have been foolish to do so for fear of being treated down the road like Libya, which denuclearized but then was attacked and destroyed seven years later. The Bolton mis-perception, which was apparently bought into by Trump, led to a complete unraveling of what might actually have been accomplished if the negotiations had been serious and open to reasonable compromise right from the beginning.
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If Donald Trump is the King of Debt, these guys were the Kings of Inflation
If Donald Trump is the King of Debt, these guys were the Kings of Inflation
Maximilian Bern had saved up 100,000 German marks for what should have been a modest, but comfortable retirement.
But in 1923, he withdrew every last cent, and spent it all on one purchase: a subway ticket.
He rode around his city one last time before returning home, and locking himself in his home, where he died.
He didn’t kill himself. He starved to death… simply because he could no longer afford food. A single egg at the market would cost millions of marks, more than Maximilian Bern had saved over his entire life.
This was one of the most famous episodes of hyperinflation, certainly in modern history.
In the wake of World War One, Germany (known as the Weimar Republic) was completely broke.
The War to end all Wars had bankrupted them; and on top of losing the war, Germany was forced to make ‘reparation payments’ to the victors, including France, the UK, etc.
That took Germany’s overall war debt to impossible levels. So in a feeble attempt to keep the economy afloat and meet its war debt obligations, the German government printed massive amounts of paper money.
Prior to World War I, one US dollar was worth 4.2 German marks.
By 1923, a single US dollar was worth 4.2 TRILLION marks.
We’ve seen this in our own lifetime in places like Zimbabwe, and now Venezuela.
I remember the first time I went to Venezuela the official exchange rate was four bolivars to the US dollar—and the black market rate was eight to one.
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The Media, Mueller, the Big Con and the Democratization of Narrative
The Media, Mueller, the Big Con and the Democratization of Narrative
Falling for a con is painful. The first reaction is to deny being conned, of course. The second is to blame skeptics for being correct in their skepticism.
Here’s the fundamental “story” of the Mueller Investigation: elites don’t like “the little people” democratizing public narratives. The elites–who reckon theirright to rule is self-evident–want to set the narrative and the context, because that’s the foundation of power: once you get the citizenry to agree on your narrative and context, you secure two valuable things: 1) political legitimacy and 2) their obedience.
Elite anxiety over the “the little people” democratizing narratives is not a new phenomenon. Elites have demanded control of any media outlet that doesn’t parrot their line and have tried to declare skeptical inquiry sedition for generations, stretching back to the founding of the Republic.
The elite interest in controlling the narrative and context long predates the era of “fake news.” Please read this excerpt from the 1991 book The Radicalism of the American Revolution about the democratization of everyday life in post-Revolutionary War America (1790 – 1830):
“The result of all these assaults on elite opinion and celebrations of common ordinary judgment was a dispersion of authority and ultimately a diffusion of truth itself to a degree the world had never seen. With every ordinary person being told his ideas and tastes, on everything from medicine to art to government, were as good as, if not better than, those of “connoisseurs” and “speculative men” who had college degrees, it is not surprising that truth and knowledge became elusive and difficult to pin down.”
This democratization deeply unsettled the elites, who were accustomed to leading by setting the “acceptable” narrative and context. Democracy, they discovered to their chagrin, isn’t a force that one can bottle up and dispense in measured doses around election time; it spreads throughout every sphere of the society.
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