Friday, January 9, 2015

US and is relationship challenges with Russia and China - A study of contrasts !



We Not On A Road To War, We've Already Arrived

If it looks like a war, acts like a war and smells like a war, it may just be a war.  The US has been waging economic, financial, trade, political and even kinetic war-by-proxy against Russia.  The only question is why?
From the perspective of Russians it seems clear that neocons are driving the US ship of state, and that they are simply not the sort of people with whom you negotiate in good faith or whom you trust.  The neocons believe they have the upper hand, they are part of the most powerful country on earth, and they never negotiate preferring to dictate.
The only problem is, the US is rapidly losing allies and friends the world over and it's not nearly as powerful as it used to be, thanks to a profound failure to invest in itself (education, infrastructure, etc)
In Part 2: Why No One Should Want This To Devolve Further, we analyze the most likely responses the West's bear-baiting will generate from Russia. The short story is this: in none of the outcomes will there be clear victors.
There is simply no good rationale for the geo-political risks being taken right now. Leaving us with the critical question: Why are we willing to let our leaders play nuclear "Russian roulette", for stakes we don't agree with ?

The Sanctions-Proof Superpower |


Despite the integration of China into the global economy, the leverage that other powers might impose on it will probably weaken in the years to come. Beijing’s explicit policy is to shift its economy away from dependence on exports and towards domestic demand — that is, purchasing by its own consumers. It will still need to import raw materials and other goods from other countries, but its own exports will no longer be such a crucial source of employment and growth.
As a result, China may be able to act with more impunity as it pursues the tracts of land and sea that its government believes are within its domain. From the Indian states on its western border to the Senkaku/Diaoyu Islands off its eastern coastline — to say nothing of Taiwan — these claims are numerous and controversial. In some cases, regional bullying by China would risk a military response by its neighbors and their allies. Were it to come to that, and with Washington’s economic response increasingly likely to be toothless, violence might be even harder to avoid.

SINOGRAPH Beijing chums up to Washington: China's political mindset on international politics is at a turning ...


On the political side, this change of heart underscores internally Xi's new clout in politics. He managed to shelve critics with different views on foreign policy. These differing views and the difficulty in finding a unified voice have been plaguing Chinese foreign policy for about two decades. In fact, the new position of Wang Yang can be seen as a result of internal party cleansing. According to a release by Xinhua News Agency on December 29 the Politburo of the Communist Party announced that, "within the party there will be absolutely no tolerance for factionalism and gangs; no way to use the party to pursue individual benefits or to form gangs and cliques." [3] 

Furthermore, this new stance of Xi, admitting the US influence and role in the world, in a way could be a late response to Obama's policies toward China in the year 2009. Then, immediately after the election, Obama seemed to offer China a sweeping opportunity for cooperation. The offer was received in a lukewarm fashion in Beijing, then plagued by deep rifts on crucial political choices. Now of course times and conditions are different, but Xi in more than one way seems to try to set the clock back. It is still too early to see how this will play out. The US now may be less ready to welcome a Chinese opening, and the world en large is far more confused than just six years ago. Moreover, nobody is clear, possibly not even the Chinese, what will be the meaning of the "constructive contributions" to the existing world order as mentioned by Wang Yang. 

And the challenge becomes extremely complicated once one grasps what Russia and China are attempting to achieve.....


It’s hard to know which country is going to suffer the most from falling oil prices. Up to now, of course, Russia, Iran and Venezuela have taken the biggest hit, but that will probably change as time goes on. What the Obama administration should be worried about is the second-order effects that will eventually show up in terms of higher unemployment, market volatility, and wobbly bank balance sheets. That’s where the real damage is going to crop up because that’s where red ink and bad loans can metastasize into a full-blown financial crisis. Check out this blurb from Nick Cunningham at and you’ll see what I mean:

  “According to an assessment from the Federal Reserve Bank of Dallas, an estimated 250,000 jobs across eight U.S. states could be lost in 2015 if oil prices don’t rise. More than 50 percent of those job losses would occur in Texas, which leads the nation in oil production.


“Carnage in oil markets,” you say?
Indeed. Many of the oil-drilling newcomers set up shop to take advantage of the low rates and easy money available in the bond market. Now that prices have crashed, investors are avoiding energy-related junk bonds like the plague which is making it impossible for the smaller companies to roll over their debt or attract fresh capital. When these companies start to default en masse, as they certainly will if prices don’t rebound, the blowback will be felt on bank balance sheets across the country creating the possibility of another financial meltdown. (Now we ARE talking about a financial crisis.)
The basic problem is that the banks have bundled a lot of their dodgy debt into financially-engineered products like Collateralized Loan Obligations (CLOs) and Collateralized Debt Obligations (CDOs) that will inevitably fail when borrowers are no longer able to service the loans. The rot can be concealed for a while, but eventually, if prices don’t recover, a significant number of these companies are going to go under which will push the perennially-undercapitalized banking system to the brink once again. That’s why Washington’s plan to push down oil prices (to hurt the Russian economy) might have made sense on a short-term basis (to shock Putin into submission) but as a long-term strategy, it’s nuts. And what’s even crazier, is that Obama has decided to double-down on the same wacky plan even though Putin hasn’t given an inch. Check this out from Reuters on Monday:
“The Obama administration has opened a new front in the global battle for oil market share, effectively clearing the way for the shipment of as much as a million barrels per day of ultra-light U.S. crude to the rest of the world…

So maybe the US-Saudi oil collusion theory isn’t so far fetched after all. Maybe Salon’s Patrick L. Smith was right when he said:
“Less than a week after the Minsk Protocol was signed, Kerry made a little-noted trip to Jeddah to see King Abdullah at his summer residence. When it was reported at all, this was put across as part of Kerry’s campaign to secure Arab support in the fight against the Islamic State.

Stop right there. That is not all there was to the visit, my trustworthy sources tell me. The other half of the visit had to do with Washington’s unabated desire to ruin the Russian economy. To do this, Kerry told the Saudis 1) to raise production and 2) to cut its crude price. Keep in mind these pertinent numbers: The Saudis produce a barrel of oil for less than $30 as break-even in the national budget; the Russians need $105.

Shortly after Kerry’s visit, the Saudis began increasing production, sure enough — by more than 100,000 barrels daily during the rest of September, more apparently to come…

Think about this. Winter is coming, there are serious production outages now in Iraq, Nigeria, Venezuela and Libya, other OPEC members are screaming for relief, and the Saudis make back-to-back moves certain to push falling prices still lower? You do the math, with Kerry’s unreported itinerary in mind, and to help you along I offer this from an extremely well-positioned source in the commodities markets: “There are very big hands pushing oil into global supply now,” this source wrote in an e-mail note the other day.” (“What Really Happened in Beijing: Putin, Obama, Xi And The Back Story The Media Won’t Tell You”, Patrick L. Smith, Salon)

Let’s cut to the chase: All these oil shenanigans are really aimed at just one man: Vladimir Putin. There are a number of reasons why Washington wants to get rid of Putin, the first of which is that the Russian president has become an obstacle to US plans to pivot to Asia. That’s the main issue. As long as Putin is calling the shots, there’s going to be growing resistance to NATO’s push eastward and Washington’s military expansion across Central Asia which could undermine US plans to encircle China and remain the world’s only superpower. Here’s an excerpt from Zbigniew Brzezinski’s The Grand Chessboard which helps to explain the importance Eurasia is in terms of Washington’s global ambitions:



White Paper: the China-Russia Double Helix

Today I sharing with you a document which I personally consider as absolutely crucial: an in-depth analysis of the China-Russia Strategic Alliance (RCSA) written by somebody who looks at it from the "Chinese side".   I want to tell you a few words about how this document came into existence.
I was talking with Larchmonter 445 about the development in Russia when I realized that a lot of his arguments centered around the relationship between China and Russia and when I probed him further I realized that he knew a lot about it.  Not only that, but he had come to the exact same conclusions about the RCSA as I had, but he came to the from the other, Chinese, side.  That's when I asked him to write a short analysis of this topics, and Larchmonter 445 agreed.  Except that is as a perfectionist workaholic and his short analysis ended up 25 pages long and with 39 footnotes!  As a result, what I can now share with you is a comprehensive survey of all the officially known components of the RCSA (you can bet that there are many more which I kept secret!).
I find Larchmonter 445's image of a double helix particularly appropriate because what we are witnessing here is the birth ofa new geopolitical "life form" so to speak, an informal alliance of two countries which goes much deeper than most regular alliances do: what we are seeing is the mutual agreement to establish a full-spectrum geostrategic symbiosisbetween two civilizational realms as both Russia and China are what used to be called 'empires' in the past but which today are what I call "civilizational realms": multi-ethnic, multi-national and multi-religious ex-empires whose influence extends beyond their current national borders and whose international strategic "weight" makes far more akin to continents then to countries.
Make no mistake, what we are seeing is something unprecedented in history and it is much more than just an "alliance".  After all, an alliance can easily be broken and country A can decide to switch from an alliance with country B to an alliance with country C.  In the case of the RCSA what we are seeing is something much more akin to the birth of Siamese twins: in a geopolitical tectonic shift, Russia and China have decided to be shared not just "at the hip", but with many "vital organs and systems" including energy and defense, of course, but also their economies and long term development policies.  Each symbiont will keep its own head and brain, but they will share "torsos".
I would argue that this is by far the single most important political development since the end of WWII and probably the most important one in this century: it is hard to overstate the implications of what this means and Obama's famous "pivot" to Asia is completely dwarfed and, really, rendered utterly irrelevant by this new reality: typically, while the Obama roared and barked, Putin and Xi Jinping quietly, but profoundly, changed the planetary equilibrium.  I wonder if somebody will dare tell the White House.
I had quite a few readers send me this essay/novel since it was posted on the Internet site back on December 22, which was the same day as the essay on Russia/China that appears in the previous story.  But at 25 pages, not only wasn't I about to read it, I certainly wasn't going to post it in this column.  However, after impassioned pleas from not one, but two readers, both of which begged me to reconsider and post it---almost like Oliver Cromwell in his letter to the Church of Scotland on 3 August 1650.  So I acquiesced---gave in without protest---and the rest, as they say, is history.
Whoever wrote this essay is either a certified genius, an insider, or a b.s. artist of biblical proportions.  My bet is on a combination of the first two, as it reads like an intelligence briefing---and not the executive version, either---as what he talks about is in news material that I've been reading and posting for a year or more.   I thank readers Tolling Jennings and "Wojtke from Warsaw" for both pointing out in a more-than-forthright manner, that this deserved to be an absolute must read---especially for serious students of the New Great Game---and indeed it does.  To do it justice will take well over an hour---but it's worth it!  There are four different download options.  I used the pdf one---but anyone of them will be OK, as they're all the same.
As one reader 'denk' said about this essay on the website:  "For the Cold War stalwarts among us [Including me. - Ed] there is something strange about rooting for someone other than the United States. There is something strange about rooting for the Russians to restore their empire. There is something strange about rooting for the Chinese over Taiwan. During the Second World War, the United States teamed up with the Soviet Union against Nazi Germany. As soon as the War was over, the United States switched alliances and teamed up with non-Nazi Germany against the Soviet Union. For many years we believed that only the United States could save us from Communism. Now that the Cold War is over, we need to be saved from the United States. I know it seems odd to be looking for allies among the Russians, the Europeans and the Chinese. But, as they say, politics makes strange bedfellows.  [Yes, dear reader, it does indeed! - Ed]