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It used to be done regularly and it worked: The West identified a country as its enemy, unleashed its professional propaganda against it, then administered a series of sanctions, starving and murdering children, the elderly and other vulnerable groups. If the country did not collapse within months or just couple of years, the bombing would begin.

And the nation, totally shaken, in pain, and in disarray, would collapse like a house of cards, once the first NATO boots hit its ground.

Such scenarios were re-enacted, again and again, from Yugoslavia to Iraq.

But suddenly, something significant has happened. This horrific lawlessness, this chaos stopped; was deterred.

The West keeps using the same tactics, it tries to terrorize independent-minded countries, to frighten people into submission, to overthrow what it defines as ‘regimes’, but its power, its monstrously destructive power has all of a sudden become ineffective.

It hits, and the attacked nation shakes, screams, sheds blood, but keeps standing, keeps proudly erect.

What we are experiencing is a great moment in human history. Imperialism has not yet been defeated, but it is losing its global grip on power.

Now we have to clearly understand ‘Why?’, so we can continue our struggle, with even greater determination, with even greater effectiveness.

First of all, by now we know that the West cannot fight. It can spend trillions on ‘defense’, it can build nuclear bombs, ‘smart missiles’ and strategic warplanes. But it is too cowardly, too spoiled to risk the lives of its soldiers.

It either kills remotely, or by using regional mercenaries. Whenever it becomes clear that the presence of its troops would be required, it backs up.

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Will Europe Ever Shake Its Dependence On Russian Energy?

August 26, 2019

Will Europe Ever Shake Its Dependence On Russian Energy?

Much of the current discourse over Europe’s economic “independence” has revolved around its increasingly-tense relationship with the Trump administration over foreign policy issues such as trade and Iran. This focus has sidelined another important development, however: portions of the European energy industry—a major pillar of the single market—are increasingly coming into Russian and Chinese hands.

In spite of impending American sanctions and widespread opposition including from within the European bloc, Nord Stream 2—Gazprom’s $11 billion natural gas pipeline running underneath the Baltic Sea between Russia and Germany— is nearing completion. Meanwhile, China has gone after energy prizes all over the union. As just one noteworthy example, state-owned utility China Three Gorges— already the largest shareholder in Energias de Portugal— mounted a colossal $10.8 billion bid to take over the entire Portuguese grid.

The uptick in Moscow and Beijing’s investments in nearly every aspect of Europe’s energy industry—from fossil fuels to renewables and power generation to energy infrastructure—have drawn criticism from both within the EU and abroad. Particular concerns have been raised over European unity and unfair competition. If unaddressed, these geopolitical and commercial implications could drive a wedge between the U.S. and Europe while sowing serious divisions within the single European market.

Can Europe trust Russian gas?

Longstanding geopolitical conflicts and Cold War-era rhetoric have fueled the uneasiness around Russian energy investment in Europe. In May, U.S. Energy Secretary Rick Perryproposed a sanctions bill which would target companies, including a number of European firms, involved in the Nord Stream 2 project in an effort to stall construction on the controversial pipeline. Although Gazprom has obtained authorization from Russia, Finland, Sweden and Germany, it has encountered resistance from Denmark, which has yet to grant permission for the pipeline to pass through its territory.

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US sanctions on Venezuela could lead to higher gas prices

February 5, 2019

US sanctions on Venezuela could lead to higher gas prices

john bolton steve mnuchin venezuela china map maduro

MANDEL NGAN/AFP/Getty Images

The Trump administration announced last week it would impose sanctions on Venezuela’s state-run oil industry.
That could lead to higher energy prices, especially in wake of the US withdrawal from the Joint Comprehensive Plan of Action.
Together with Iran sanctions, analysts say the new move against Venezuela has threatened to cut global supply by two million barrels per day.

A US crackdown on foreign oil exports could lead to higher prices at the pump.

The Trump administration said last week it would impose sanctions against Venezuela’s state-owned oil industry in an attempt to cripple the government of President Nicolas Maduro, who is facing global pressure to cede power to opposition leader Juan Guaidó.

The sanctions ban most Americans from doing business with PDVSA, the parent company of Citgo, blocking $7 billion in assets and leading to $11 billion in export losses for Venezuela over the next year. Because funds would be diverted away from the government and into a separate account, analysts say that will likely halt most Venezuelan shipments to the US.

While production levels there have dropped dramatically in recent years, American refiners will likely have a difficult time making up for imports compromised by sanctions. Shipping more than a half million barrels per day to the US, PDVSA has remained a major source of heavy crude supply.

Treasury Secretary Steven Mnuchin said he didn’t expect the sanctions to affect American fuel prices, suggesting Middle Eastern producers “will be happy to make up the supply.” But output has been falling in the countries that ship the US heavy crude, which differs from the shale that has helped send domestic stockpiles to record levels.

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Will Iran Sanctions Herald the Fall of the Imperial Dollar?

February 1, 2019

Will Iran Sanctions Herald the Fall of the Imperial Dollar?

When the Trump administration unilaterally pulled out of the Iran nuclear agreement in May 2018 and announced it would reimpose sanctions against Iran, the European Union (EU) declared its commitment to preserving the agreement and finding ways for its companies to circumvent U.S. sanctions. Now, eight months later, the Europeans finally announced the creation of INSTEX (Instrument In Support Of Trade Exchanges) as an alternative payment system so that European firms can do business with Iran. This mechanism might be too little and too late to salvage the Iran nuclear deal but it marks a milestone in an inevitable transition of epic proportions: the end of the global hegemony of the dollar.

INSTEX is a complicated mechanism registered in France and headed by a German banker, with shareholders from the three European countries that were signatories to the Iran nuclear deal: France, Germany and the UK. It will initially be used for non-sanctionable trade, such as medicine, food and medical devices, and is also likely to only attract smaller businesses, not large companies with significant exposure to U.S. markets.It has had an 8-month difficult birth because no one country wanted to claim maternity rights for fear of a U.S. backlash. Indeed, the U.S. threatened to devour it before it was born.

While other countries use economic sanctions as weapons in international disputes, the U.S. is the only country that imposes secondary sanctions on third country citizens and institutions. The U.S. government uses the role of the dollar as an international reserve currency and the central role of U.S. banks and institutions in the international financial system to present third country firms with an insidious either/or choice: cut off business ties with Iran (or Russia, North Korea, Turkey, etc.), or lose far more lucrative business with the U.S. and risk financial penalties in U.S. courts. For most companies, the choice is clear.

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EU, UK, Russia and China Join Together to Dodge US Sanctions on Iran

September 29, 2018

EU, UK, Russia and China Join Together to Dodge US Sanctions on Iran

The UN General Assembly (UNGA) in New York is a place where world leaders are able to hold important meetings behind closed doors. Russia, China, the UK, Germany, France, and the EU seized that opportunity on Sept. 24 to achieve a real milestone.

The EU, Russia, China, and Iran will create a special purpose vehicle (SPV), a “financially independent sovereign channel,” to bypass US sanctions against Tehran and breathe life into the Joint Comprehensive Plan of Action (JCPOA), which is in jeopardy. “Mindful of the urgency and the need for tangible results, the participants welcomed practical proposals to maintain and develop payment channels, notably the initiative to establish a Special Purpose Vehicle (SPV) to facilitate payments related to Iran’s exports, including oil,” they announced in a joint statement. The countries are still working out the technical details. If their plan succeeds, this will deliver a blow to the dollar and a boost to the euro.

The move is being made in order to save the 2015 Iran nuclear deal. According to Federica Mogherini, High Representative of the European Union for Foreign Affairs and Security Policy, the SPV will facilitate payments for Iran’s exports, such as oil, and imports so that companies can do business with Tehran as usual. The vehicle will be available not just to EU firms but to others as well. A round of US sanctions aimed at ending Iranian oil exports is to take effect on November 5. Iran is the world’s seventh-largest oil producer. Its oil sector accounts for 70% of the country’s exports. Tehran has warned the EU that it should find new ways of trading with Iran prior to that date, in order to preserve the JCPOA.

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‘It’s the Economy, Stupid’: What Really Drives US Sanctions Against Russia

September 29, 2018

‘It’s the Economy, Stupid’: What Really Drives US Sanctions Against Russia

The US Department of Commerce has imposed restrictions on 12 Russian corporations that are “acting contrary to the national security or foreign policy interests of the US.” The notice has been published in the Federal Register. US corporations are banned from exporting dual-use goods to the sanctioned companies.

A closer look at the list makes one wonder. The companies under fire have no relation to defense production and have no ties at all with the Russian Ministry of Defense. None of them have signed any contracts with the military. AeroComposite, part of Russia’s state-run United Aircraft Corporation, produces wings for the civilian MC-21 airliner, Aviadvigatel produces engines for military aviation, it has neither technology nor experience to get involved in defense projects, Divetechnoservice is a civilian diving equipment producer, Nilco Group deals in grain, oil products, steel, wood, port services, paper, electronic parts and cement.

It’s not the military the US aims at this time. The real target is Russian civil aviation, which is on the rise. It’s enough to remember that as soon as Aeroflot Company announced its plans to acquire 100 Superjet SSJ-100 airliners instead of American Boeings, the US Treasury said it was considering the possibility of introducing sanctions against the Russian company Sukhoi, allegedly because its combat planes may have been used in Syrian chemical attacks.

A closer look at the blacklist shows the US has sanctioned those who are involved in the production of civilian airliner Irkut MC-21. Aviadvigatel is to supply PD-14 and PD-35 engines, which cannot power combat planes. AeroComposite, a producer of composites, is responsible for the development and creation of the composite wing for the aircraft. The MC-21 will be the world’s first airliner with a capacity of more than 130 passengers to have composite-based wings. The estimated share of composites in the overall design is 40%. So far, the company has produced composite parts only for MC-21 and no other aircraft.

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One Minute to Midnight: Latest US Sanctions Propel Nations Towards Risk of War

August 25, 2018

One Minute to Midnight: Latest US Sanctions Propel Nations Towards Risk of War

The State Department’s announcement on August 8 that the US government was going to impose sweeping new economic sanctions on Russia over the still mysterious and unresolved Skripal Affair was a truly fateful one. The famous Doomsday Clock of The Bulletin of the Atomic Scientists should have immediately been moved forward to one minute to midnight on receipt of the news. (It already is set at only two minutes to the midnight that signifies catastrophic global thermonuclear war.)

For the lesson of history is a clear one: Such sanctions do far worse than prevent constructive dialogue and efforts to settle major differences of policy and interest between great nations. When they are seen as an existential threat to the very existence of that nation, they drive the targeted country’s government to consider all-out war.

That is exactly how the trans-oceanic total war between the United States and Japan – the very first and so far thankfully only war that has seen the use of nuclear weapons against cities and human populations – began. And it was the United States that triggered it.

Japan had been remorselessly expanding into China and across the Pacific Theater for a decade and its ferocious war of conquest against China was already four years old and had claimed millions of lives by the summer of 1941.

It was then that US code breakers learned of Japan’s plans also to occupy the French colonial territories of Indochina – today the nations of Vietnam, Laos and Cambodia.

In response therefore, and at the insistent urging of his assistant secretary of state for economic affairs Dean Acheson, President Franklin D. Roosevelt imposed a devastating embargo on the US export of raw materials that Japan could use for war.

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Oil Markets Are In For A Bumpy Ride

August 21, 2018

Oil Markets Are In For A Bumpy Ride

The always-volatile oil market is set for even more volatility over the next two years as investors and speculators try to make sense of the conflicting market forces determining the pace of demand growth and global oil supply.

Over the past month, the two key themes have been how much Iranian oil will come off the oil market from U.S. sanctions in November, and how much demand growth could suffer with the trade wars. More recently, another theme is the emerging markets turmoil following Turkey’s crisis. Throw in all the new and much stricter International Maritime Organization (IMO) regulations on sulfur fuel oil requirements from 2020 that are expected to upend the refining and shipping markets, and oil prices are set for wild swings, industry executives and analysts say.

The severe IMO restrictions on fuel oil’s sulfur content—aimed at reducing emissions—will drive increased demand for middle distillates such as diesel and marine gasoil, which in turn will push up demand for crude oil, Morgan Stanley analysts say. This would boost crude oil demand by additional 1.5 million bpd, potentially sending oil prices to $90 a barrel in 2020, according to Morgan Stanley.

But before the 2020 regulation, analysts and investors are closely watching two currently unfolding developments—the sanctions on Iran’s oil and possibly weakening global oil demand growth—the main bullish and bearish factors, respectively, in the market right now.

“With new sanctions coming into play and also the IMO 2020, we see there is more volatility and therefore more opportunities to trade. So, we see our customers taking, slowly but surely, positions for that to happen,” Eelco Hoekstra, chief executive at independent tank storage company Vopak, told CNBC on Friday.

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“All Bets Are Off” – Ruble, Lira Crushed By US Sanctions

August 9, 2018

“All Bets Are Off” – Ruble, Lira Crushed By US Sanctions

Emerging Market currencies are down broadly but the biggest losers (for now) are the Turkish Lira (record lows) and Russian Ruble (20-mo lows) as both suffer from US government actions.

The Ruble has broken down to its lowest since Nov 2016 (US election)…

The move comes after the U.S. said it was imposing the new restrictions to punish President Vladimir Putin’s government for the March 4 nerve-agent attack on former spy Sergei Skripal and his daughter in the U.K. As Blomberg reports, the threatened measures spooked investors, driving the ruble to the lowest levels since 2016 and pushing stocks like Aeroflot and VTB, which could be targeted by some of the new restrictions, down as much as 6 percent.

“It is clear that major sanctions actions are looming against Russia now either by the Administration, by Congress or both,” Tim Ash, a senior emerging-market strategist at Bluebay Asset Management LLC in London, said. “All bets are off.”

And The Lira is plumbing new record low depths…

As Bloomberg reports, the grip of bears on Turkish assets tightened as the nation’s souring relationship with the U.S. added to investor concern over authorities’ inability to put a lid on inflation, sending its currency to a fresh record low and driving up bond yields.

The development “raises the odds that the U.S. will double down on their sanctions” and adds to the “domestic challenges that plague lira-denominated assets,” analysts including Michael Every at Rabobank in London wrote in note to clients.

And for now, the great fall of China remains halted with offshore yuan still treading water…

How Much Iranian Oil Can Trump Disrupt?

May 11, 2018

How Much Iranian Oil Can Trump Disrupt?

Oil prices surged following President Trump’s withdrawal from the Iran nuclear deal. So, what happens next?

Trump did not offer any new justification for how Iran was violating the nuclear accord – the IAEA confirmed on May 9 that Iran is in compliance with its nuclear commitments – and offered no Plan B or even a coherent strategy on what comes next. For now, Washington is pursuing confrontation with Iran, and hoping that “maximum pressure” will force Iran to not only abandon any hint of a nuclear weapons program, but also agree to concessions on a range of non-nuclear issues. If history is any guide, there is little chance of this happening, so we are now on a course of escalating confrontation.

The U.S. will re-impose all nuclear related sanctions on Iran, which could begin to disrupt oil flows from the country. There will be a 90-day and 180-day wind down period before sanctions really start to bite, which puts the deadline at early November. However, there is a great deal of disagreement and uncertainty over how quickly and how severely the impact of U.S. confrontation will be.

The U.S. will not have the coalition that shut in 1 million barrels per day (mb/d) of Iranian oil exports prior to the 2015 agreement. The EU, China and Russia have said they are sticking with the deal. Still, U.S. sanctions will loom over private companies from those nations, which could keep them from doing business with Iran. The EU has vowed to protect its companies, and could even pursue trade retaliation if the U.S. Treasury moves to penalize European companies. However, U.S. sanctions will almost certainly deter large-scale investment in Iran’s oil and gas sector for years to come.

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Iran Bans Use Of US Dollars In Trade

March 1, 2018

Iran Bans Use Of US Dollars In Trade

In what may be a preemptive move against further US sanctions, Tehran announced that going forward, merchant purchase orders that are denominated in US Dollars would no longer be allowed to go through import procedures.

According to the state-owned IRNA news agency, the policy is in line with an official request by the Central Bank of Iran and is meant to address fluctuations in market rates of the US dollar. Quoted by IRNA, the central bank director of Foreign Exchange Rules and Policies Affairs, Mehdi Kasraeipour, said the move had “become effective from Wednesday by virtue of a letter sent to the Ministry of Industry, Mines and Trade.”

The central banker further explained that the decision “wouldn’t create major trouble” for traders because the share of the greenback in Iran’s trade activities is already negligible.

“It’s been for a long time that Iran’s banking sector cannot use the dollar as a result of the sanctions,” said Kasraeipour. As part of a trade embargo, US banks are banned from dealing with Iran.

“Considering that the use of the dollar is banned for Iran and traders are literally using alternative currencies in their transactions, there is no longer any reason to proceed with invoices that use the dollar as the base rate,” Kasraeipour added.

As part of the transition, Iranian merchants will need to inform their suppliers to change the base currency from the dollar to other currencies so that the related import documents could be processed at Iran’s entry points. It was unclear if cryptocurrencies are acceptable units, and whether Iran is developing its own version of the Venezuelan Petro.

Merchants will also need to specify whether they would proceed with their payments through banks or currency exchange shops.

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Analysis: Venezuela’s oil production plummets amid chaos and industry defections

January 10, 2018

Analysis: Venezuela’s oil production plummets amid chaos and industry defections

Staggering debt, crumbling equipment and infrastructure, and mass worker resignations, have set back Venezuela’s oil industry decades, with experts saying they see scant prospects of any turnaround.

Crude output of 1.70 million b/d lowest since strike in 2003: Platts survey
Lack of safety protocols could cause ‘catastrophic’ refinery accident: analyst
Traders say PDVSA’s moves in the market signal company distress

Venezuelan crude output plummeted in December to 1.70 million b/d, according to the latest S&P Global Platts OPEC survey released Monday.

The output level represented a decline of 100,000 b/d from November and a low not seen for more than 15 years, when a major strike from December 2002 to February 2003 hobbled production.

Not counting strike-affected months, Venezuela’s production was last this low in August 1989, more than 28 years ago.

Sources in the country say new PDVSA President Manuel Quevedo, a brigadier general in the National Guard who was also named the country’s oil minister in November, sacked several high-level company officials in a so-called corruption purge at the end of the year and these people have yet to be replaced.

PDVSA is also facing internal protests and widespread resignations of refinery personnel who fear a serious accident, since security protocols are not being followed, added the sources, who spoke on condition of anonymity.

Several market watchers have put Venezuela top of their geopolitical risk lists, with the economic crisis and PDVSA woes seen likely to continue, if not accelerate, amid threats of further US sanctions.

“The Venezuelan economy could collapse at any moment,” said Torbjorn Kjus, oil market analyst with Norway’s DNB Bank. “We could envisage scenarios spanning from outright civil war to a state coup, to a general strike or even just one more year of strangulating slow death for the economy. Neither of these outcomes bodes well for Venezuelan oil production.”
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Venezuela Bankrupt? Caracas Fails To Make Sept 15 Interest Payment

September 20, 2017

Venezuela Bankrupt? Caracas Fails To Make Sept 15 Interest Payment

Exactly one week ago, we wrote that a “Venezuelan default is only a matter of time”. We said that “while debt servicing has been a government priority, declining external liquidity and a deteriorating domestic situation (three-digit hyperinflation, shortages, and a political crisis between the government and the National Assembly) make it a daunting task. By 2020, the country must repay 30% of the external debt due to expire in the next 23 years.”

Among other things we warned that “default seems inevitable in the medium term due to the prolonged period of low oil prices and increased US sanctions. President Trump’s executive order of August 24, 2017, strengthened sanctions against PDVSA by prohibiting all transactions related to new debt with a maturity greater than 90 days and by forbidding Citgo from repatriating dividends in Venezuela.”

Well, the default may have come in far sooner than even we expected as moments ago Bloomberg reported that according to sources, intermediaries tasked with processing Venezuela’s $185 million interest payment due Sept. 15 haven’t received the cash to do so.

It adds that “several holders of bonds due in 2027 haven’t received a payment”, and that an “official at the public credit office in Caracas declined to comment on whether the funds have been transferred or when investors will receive them.”

Further suggesting that Venezuela may have indeed entered its 30 day grace period, the country’s National Office of Public Credit hasn’t made any public statements about transferring funds for the coupon. In the past, Bloomberg notes that the office has used its Twitter account to alert the market when the bond’s fiscal agent has been paid.

For now the bond market appears to not have noticed with Venezuela bond issues still trading at respectable levels.

…click on the above link to read the rest of the article…

Venezuela Headed For “Messiest Debt-Restructuring In History” Thanks To US Sanctions

September 1, 2017

Venezuela Headed For “Messiest Debt-Restructuring In History” Thanks To US Sanctions

After being effectively shut out from global financial markets – a situation that was made more precarious by US sanctions prohibiting purchases of Venezuelan debt (unless you’re buying them off Goldman Sachs, should the bank’s asset-management arm desire to liquidate its $3 billion “hunger bond” position) – Venezuela is drawing ever-nearer to what the Financial Times describes as potentially the “messiest debt restructuring in history.”

So far, Venezuela has managed to forestall a default by stripping assets from its state-owned oil company, Petroleos de Venezuela, commonly referred to as PVDSA, and shaking down local institutions of spare dollars – not to mention the explicit financial support of China and Russia. Recently, Rosneft, the largest Russian oil company, helped support its troubled ally, which enjoys the largest crude reserves in the world, by offering billions of dollars in advance payments for future crude supplies. Thanks to a deal brokered by deceased former President Hugo Chavez, Venezuela has for years been Rosneft’s largest foreign supplier of crude. Last year, the oil giant accepted a 49.9% stake in PVDSA’s US-based subsidiary, Citgo, as collateral for a $1.5 billion loan.

Venezuelan President Nicolas Maduro

However, thanks to the US sanctions, which prohibit purchases of newly issued debt and existing bonds that have so far not been sold outside of Caracas, the country will once again need to innovate or risk sliding into bankruptcy. Making matters all the more urgent, the country recently suffered a loss in US courts after a judge ruled that Canadian miner Crystallex can seize Venezuelan money held in a custody account at Bank of New York Mellon to cover a $1.4 billion judgment awarded by a World Bank tribunal.

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Exporting Fascism: US Imperialism in Latin America

January 26, 2015

Exporting Fascism: US Imperialism in Latin America

The US sanctions against Venezuela, signed into law by President Barack Obama on December 18, 2014, resulted from charges of protestors’ rights being violated by the socialist government of President Nicolás Maduro.

The sanctions allow the Obama administration to deny visas and freeze the assets of Venezuelan officials accused of violating the rights of anti-government groups. These groups, comprised mainly of the right-wing opposition, have been leading violent protests in Caracas since last February. US leaders blame the Venezuelan leadership, headed by the United Socialist Party of Venezuela, for the deaths of 43 people during such demonstrations, which included both government supporters and opponents.

This charge has been widely disputed as an attempt for the American Eagle of Imperialism to dig its talons into Venezuela. As reported by Al-Jazeera, “Despite the widely accepted and facile media narrative about the government’s culpability for the origins of the protests and the ensuing violence, there is convincing evidence that Venezuela’s right-wing antagonists bear much of the blame.”

It is no secret that right-wing antagonists in Venezuela have been receiving US support. In New Eastern Outlook, journalist Caleb Maupin reported, “The so-called ‘Venezuelan opposition,’ which includes many open admirers of fascist dictators Francisco Franco and Augusto Pinochet, has received over $100 million in funding from the United States over the last twelve years.”

…click on the above link to read the rest of the article…

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