Monday, June 30, 2014

France BNP Paribas Fraud Cringe-Worthy Memos Show Blatant Fraud At BNP Paribas

Finance More: France BNP Paribas Fraud
Cringe-Worthy Memos Show Blatant Fraud At BNP Paribas

    Rob Wile

    Jun. 30, 2014, 6:15 PM

eiffel paris

REUTERS/Gonzalo Fuentes

The New York Department of Financial Services has released the greatest hits of French bank BNP Paribas' efforts to circumvent U.S. sanctions to conduct business on behalf of Iran, Sudan, and Cuba.

The bank was just fined a record $8.9 billion, and about a dozen employees will be dismissed.

In the NYDFS complaint, we first learn that BNP Paribas was well aware that it would have to commit fraud to get around the U.S. restrictions, but deemed the risk worth it, because other firms were also doing it.

Even the highest levels of the compliance division for the New York Branch recognized and accepted that amending, omitting and stripping was widespread among foreign banks transmitting funds through the U.S. When a settlement with U.S regulators and Dutch bank ABN AMRO was announced for violations of U.S. sanctions law, the Head of Ethics and Compliance North America wrote in an email to another employee, "the dirty little secret isn't so secret anymore, oui?"

AMRO settled for $500 million in 2010.

BNP employees also seem to have been fond of deploying exclamation marks to let colleagues know when the fix was in:

one payment message for a Sudanese party was stamped "URGENT," "ATTENTION EMBARGO" and cautioned,"! Transfer in$ without mentioning [Sudanese Bank] to the USA!!!"


BNP Paribas used policy directives, such as those contained in the February 2007 Operating Application for Filtering of Transactions under the Group Policy on Iran, to ensure that SWIFT MT 202 cover payment messages meant to be processed through New York from BNPP reflected only the identity of the "receiving institution (and not the [ultimate] Iranian beneficiary institution!)" (emphasis in the original).

All this made things quite awkward for the firm's compliance officers. Here's what it looked like on Cuban transactions...

BNPP was fully aware of the legal risks. In a January 2006 internal email, one employee at BNPP Paris asked a BNP Paribas compliance officer, "when we lend money to the Cubans, the loans are generally made out in [ d]ollars ... [ c ]ould we be reprimanded, and if so, based on what?" The compliance officer responded to that employee and others, including a senior manager at BNPP Paris: "These processing transactions obliges us to obscure information regarding the USD (BNPP NY) Clearer, and it is a position which BNPP is not comfortable with, and which, of course, offers a risk to its image and, potentially, a risk for reprisals from US authorities if this behavior was discovered ..."

And Sudanese ones.

...BNPP's senior compliance personnel agreed to continue the Sudanese business and rationalized the decision by stating that "the relationship with this body of counterparties is a historical one and the commercial stakes are significant. For these reasons, Compliance does not want to stand in the way of maintaining this activity for ECEP..."

You may recall that the Sudanese government was butchering its own people in Darfur during this period. Here is what BNP had to say about that:

Internal Bank memoranda regarding BNPP's Sudanese business that discussed the political environment and the "crisis in Darfur" also discussed the economic environment and the Sudanese oil industry's "financial dynamism."

The whole complaint is worth reading — it's not very long, and the fraud is pretty unsophisticated.

Read more:

John O'Sullivan: Fifty IPCC Experts Expose Washington Post Global Warming Lies

Fifty scientists who once worked for the UN's Intergovernmental Panel on Climate Change, the agency that created the myth of man-made global warming, have broken ranks and now condemn the IPCC’s junk science. Here is the list along with forceful statements from each of them that sets the record straight.

Climate Realists
Saturday, September 17th 2011
Co2sceptic (Site Admin)

article image
Mainstream media mouthpiece left shamefaced as fifty international climate experts break ranks to defy global warming cult and denounce junk science.

Washington Post op-ed writer Richard Cohen was last week caught lying while bad mouthing Texas governor, Rick Perry's presidential candidacy. Cohen, who would have his readers believe humans are dangerously warming the planet, jumped the shark to attack skeptic Perry over his stance on the man-made global warming issue (AGW). Cohen spouted the kooky claim that skeptic scientists “could hold their annual meeting in a phone booth, if there are any left.“

Sadly for Cohen the facts below prove he is just another mendacious mainstream propagandist of climate alarmism.

For instance, the shocking truth is that all 5 official data sets show global cooling since 2002 while a third of all stations sustain a long term cooling trend for their entire history.

Indeed, so infuriated over the blatant lies is Nobel Prize winning physicist, Dr. Ivar Giaever, that last week he resigned in disgust from the American Physics Society for their part in sustaining the now utterly debunked AGW propaganda.
The physics professor who scooped the Nobel Science Prize in 1973 sagely notes, "It is amazing how stable temperature has been over the last 150 years."

Professor Giaever and the rank and file of scientists are increasingly aware that the ‘consensus’ Cohen and his collaborators alludes to is little more than 77 of 10,000 scientists polled.

Surge in Government Climate Experts Going Skeptic

To further llustrate just how off base Cohen’s spin really is just observe the increasing number of experts who actually worked for the IPCC as contributors / editors / reviewers now turning against global warming junk science. (Hat Tip: The Galileo Movement).

Below, for Cohen and those other mainstream media deniers of climate realism, is a list of just 50 former IPCC experts whose voices your prejudiced ears refuse to hear

1. Dr Robert Balling: "The IPCC notes that "No significant acceleration in the rate of sea level rise during the 20th century has been detected." (This did not appear in the IPCC Summary for Policymakers).

2. Dr. Lucka Bogataj: "Rising levels of airborne carbon dioxide don't cause global temperatures to rise.... temperature changed first and some 700 years later a change in aerial content of carbon dioxide followed."

3. Dr John Christy: "Little known to the public is the fact that most of the scientists involved with the IPCC do not agree that global warming is occurring. Its findings have been consistently misrepresented and/or politicized with each succeeding report."

4. Dr Rosa Compagnucci: "Humans have only contributed a few tenths of a degree to warming on Earth. Solar activity is a key driver of climate."

5. Dr Richard Courtney: "The empirical evidence strongly indicates that the anthropogenic global warming hypothesis is wrong."

6. Dr Judith Curry: "I'm not going to just spout off and endorse the IPCC because I don't have confidence in the process."

7. Dr Robert Davis: "Global temperatures have not been changing as state of the art climate models predicted they would. Not a single mention of satellite temperature observations appears in the (IPCC) Summary for Policymakers."

8. Dr Willem de Lange: "In 1996, the IPCC listed me as one of approximately 3,000 "scientists" who agreed that there was a discernable human influence on climate. I didn't. There is no evidence to support the hypothesis that runaway catastrophic climate change is due to human activities."

9. Dr Chris de Freitas: "Government decision-makers should have heard by now that the basis for the longstanding claim that carbon dioxide is a major driver of global climate is being questioned; along with it the hitherto assumed need for costly measures to restrict carbon dioxide emissions. If they have not heard, it is because of the din of global warming hysteria that relies on the logical fallacy of 'argument from ignorance' and predictions of computer models."

10. Dr Oliver Frauenfeld: "Much more progress is necessary regarding our current understanding of climate and our abilities to model it."

11. Dr Peter Dietze: "Using a flawed eddy diffusion model, the IPCC has grossly underestimated the future oceanic carbon dioxide uptake."

12. Dr John Everett: "It is time for a reality check. The oceans and coastal zones have been far warmer and colder than is projected in the present scenarios of climate change. I have reviewed the IPCC and more recent scientific literature and believe that there is not a problem with increased acidification, even up to the unlikely levels in the most-used IPCC scenarios."

13. Dr Eigil Friis-Christensen: "The IPCC refused to consider the sun's effect on the Earth's climate as a topic worthy of investigation. The IPCC conceived its task only as investigating potential human causes of climate change."

14. Dr Lee Gerhard: "I never fully accepted or denied the anthropogenic global warming (AGW) concept until the furor started after [NASA's James] Hansen's wild claims in the late 1980's. I went to the [scientific] literature to study the basis of the claim, starting at first principles. My studies then led me to believe that the claims were false."

15. Dr Indur Goklany: "Climate change is unlikely to be the world's most important environmental problem of the 21st century. There is no signal in the mortality data to indicate increases in the overall frequencies or severities of extreme weather events, despite large increases in the population at risk."

16. Dr Vincent Gray: "The (IPCC) climate change statement is an orchestrated litany of lies."

17. Dr Kenneth Green: "We can expect the climate crisis industry to grow increasingly shrill, and increasingly hostile toward anyone who questions their authority."

18. Dr Mike Hulme: "Claims such as '2,500 of the world's leading scientists have reached a consensus that human activities are having a significant influence on the climate' are disingenuous ... The actual number of scientists who backed that claim was "only a few dozen."

19. Dr Kiminori Itoh: "There are many factors which cause climate change. Considering only greenhouse gases is nonsense and harmful. When people know what the truth is they will feel deceived by science and scientists."

20. Dr Yuri Izrael: "There is no proven link between human activity and global warming. I think the panic over global warming is totally unjustified. There is no serious threat to the climate."

21. Dr Steven Japar: "Temperature measurements show that the climate model-predicted mid-troposphere hot zone is non-existent. This is more than sufficient to invalidate global climate models and projections made with them."

22. Dr Georg Kaser: "This number (of receding glaciers reported by the IPCC) is not just a little bit wrong, but far out of any order of magnitude ... It is so wrong that it is not even worth discussing,"

23. Dr Aynsley Kellow: "I'm not holding my breath for criticism to be taken on board, which underscores a fault in the whole peer review process for the IPCC: there is no chance of a chapter [of the IPCC report] ever being rejected for publication, no matter how flawed it might be."

24. Dr Madhav Khandekar: "I have carefully analysed adverse impacts of climate change as projected by the IPCC and have discounted these claims as exaggerated and lacking any supporting evidence."

25. Dr Hans Labohm: "The alarmist passages in the (IPCC) Summary for Policymakers have been skewed through an elaborate and sophisticated process of spin-doctoring."

26. Dr. Andrew Lacis: "There is no scientific merit to be found in the Executive Summary. The presentation sounds like something put together by Greenpeace activists and their legal department."

27. Dr Chris Landsea: "I cannot in good faith continue to contribute to a process that I view as both being motivated by pre-conceived agendas and being scientifically unsound."

28. Dr Richard Lindzen: "The IPCC process is driven by politics rather than science. It uses summaries to misrepresent what scientists say and exploits public ignorance."

29. Dr Harry Lins: "Surface temperature changes over the past century have been episodic and modest and there has been no net global warming for over a decade now. The case for alarm regarding climate change is grossly overstated."

30. Dr Philip Lloyd: "I am doing a detailed assessment of the IPCC reports and the Summaries for Policy Makers, identifying the way in which the Summaries have distorted the science. I have found examples of a summary saying precisely the opposite of what the scientists said."

31. Dr Martin Manning: "Some government delegates influencing the IPCC Summary for Policymakers misrepresent or contradict the lead authors."

32. Stephen McIntyre: "The many references in the popular media to a "consensus of thousands of scientists" are both a great exaggeration and also misleading."

33. Dr Patrick Michaels: "The rates of warming, on multiple time scales have now invalidated the suite of IPCC climate models. No, the science is not settled."

34. Dr Nils-Axel Morner: "If you go around the globe, you find no sea level rise anywhere."

35. Dr Johannes Oerlemans: "The IPCC has become too political. Many scientists have not been able to resist the siren call of fame, research funding and meetings in exotic places that awaits them if they are willing to compromise scientific principles and integrity in support of the man-made global-warming doctrine."

36. Dr Roger Pielke: "All of my comments were ignored without even a rebuttal. At that point, I concluded that the IPCC Reports were actually intended to be advocacy documents designed to produce particular policy actions, but not as a true and honest assessment of the understanding of the climate system."

37. Dr Jan Pretel: "It's nonsense to drastically reduce emissions .... predicting about the distant future-100 years can't be predicted due to uncertainties."

38. Dr Paul Reiter: "As far as the science being 'settled,' I think that is an obscenity. The fact is the science is being distorted by people who are not scientists."

39. Dr Murray Salby: "I have an involuntary gag reflex whenever someone says the "science is settled. Anyone who thinks the science is settled on this topic is in fantasia."

40. Dr Tom Segalstad: "The IPCC global warming model is not supported by the scientific data."

41. Dr Fred Singer: "Isn't it remarkable that the Policymakers Summary of the IPCC report avoids mentioning the satellite data altogether, or even the existence of satellites--probably because the data show a (slight) cooling over the last 18 years, in direct contradiction to the calculations from climate models?"

42. Dr Hajo Smit: "There is clear cut solar-climate coupling and a very strong natural variability of climate on all historical time scales. Currently I hardly believe anymore that there is any relevant relationship between human CO2 emissions and climate change."

43. Dr Roy Spencer: "The IPCC is not a scientific organization and was formed to regulate carbon dioxide emissions. Claims of human-cause global warming are only a means to that goal."

44. Dr Richard Tol: "The IPCC attracted more people with political rather than academic motives. In AR4, green activists held key positions in the IPCC and they succeeded in excluding or neutralising opposite voices."

45. Dr Tom Tripp: "There is so much of a natural variability in weather it makes it difficult to come to a scientifically valid conclusion that global warming is man made."

46. Dr Robert Watson: "The (IPCC) mistakes all appear to have gone in the direction of making it seem like climate change is more serious by overstating the impact. That is worrying. The IPCC needs to look at this trend in the errors and ask why it happened."

47. Dr Gerd-Rainer Weber: "Most of the extremist views about climate change have little or no scientific basis."

48. Dr David Wojick: "The public is not well served by this constant drumbeat of alarms fed by computer models manipulated by advocates."

49. Dr Miklos Zagoni: "I am positively convinced that the anthropogenic global warming theory is wrong."

50. Dr. Eduardo Zorita: "Editors, reviewers and authors of alternative studies, analysis, interpretations, even based on the same data we have at our disposal, have been bullied and subtly blackmailed. By writing these lines... a few of my future studies will not see the light of publication."

Sunday, June 29, 2014

Armageddon, Act I

Armageddon, Act I

Paul Greenberg

6/28/2014 12:01:00 PM - Paul Greenberg
It started as a day like any other a hundred years ago, but before it was out, it would have ushered in a century of war, revolution, terror and mass murder like no other.
For today, June 28th, is a dark centennial. It's the 100th anniversary of the day the world ended, or at least the ever more progressive world that was almost taken for granted back then. For every day in every way we were getting better and better! Till it was only a matter of time till before we were the best! The future beckoned like a golden dream. A dream made of fool's gold.
Today, June 28th, is the unbelievable day the dream would start to turn into dust and ashes -- and blood. It happened in a provincial capital called Sarajevo in what was then the Austro-Hungarian empire -- the second largest in Europe after Russia, and another realm that, like yesterday, is no more.
The archduke Franz Ferdinand, heir presumptive to the Austro-Hungarian throne, was in town and all was festive. He and Duchess Sophie rode in an open car through streets that echoed with cheers -- and where a series of assassins, six in all, waited along their route to do the bidding of a Serbian terrorist organization, the Black Hand. (Al-Qaida was scarcely the first terrorist threat in history to set off a war.) One terrorist who threw a bomb missed, but another took deadly aim with a semi-automatic pistol, a Fabrique Nationale Model 1910, first hitting the archduke in the jugular, then the duchess in the abdomen. And the bloody deed was done. Both would be dead before they could be brought to the governor's residence for medical treatment.
It was a tragedy, but no one expected it would lead to war. There had been other notable assassinations in those years, and they weren't confined to Europe. See the assassination of an American president, William McKinley, at the turn of the century. But a war? Especially a world war? Unimaginable.
The news scarcely made an impression even in Austria. That night the usual crowds in Vienna listened to waltzes as they drank wine. It was just one more assassination. No one could have foreseen the worldwide cataclysm it would unleash. Yet as the days passed and negotiations sputtered, mobilizations replaced them, and one led to another as each took its place in the simmering chain of events, like assassins along a road, or sticks of dynamite planted in a row. And the unimaginable became the all too actual.
What was first called the Great War, for there had been no greater till then, proved only the first and lesser introduction to a whole century of war, revolution, terror and mass murder. As great a tragedy as the First World War was, it would be followed by an even more disastrous Second. And it would bring the old, and even then only perilously stable civilization of the preceding centuries to a terrible end. That terrible century marked the end of any illusion that man's progress is inevitable, automatic, a sure progression. Or it should have.
Now a new world disorder takes inchoate shape under leaders who won't lead. And as America withdraws from the world, the world still declines to withdraw from us. And there can be no more certainty about the results now than there was on June 28th a century ago.
The war that began a hundred years ago today brought with it a flight from any idea not just of meaningful progress but a flight from meaning itself. For men took refuge in nihilism, in non-meaning, (Sound familiar? See this era's craze for po-mo, or postmodernism.) Others took up one fanatical ideology or another in place of philosophy. And each claimed it was The Wave of the Future -- foreordained, sure, and violent. The war that began a hundred years ago today would give birth to monstrous mass movements like fascism and communism, which were so alike while proclaiming their difference and even mutual hostility.
The 20th century would see another, and by now familiar flight -- a flight from God. It was George Orwell who observed that the great difference between the years before and after the First War was a loss of everyday belief. And we still seem to be searching for some God-substitute. For man is the animal that prays, and as we lose faith in God, we still go a-whoring after strange gods, whichever Baal or Ashtaroth is in fashion these days: Power, Reason, The State, Art-and-Culture, Climate Control, pick your poison great or small.
The First World War would kill more than 9 million combatants, and leave twice as many wounded, maimed, never whole again. And that doesn't count the civilian casualties. Or the influenza pandemic that would sweep the world in its wake. Great empires would totter and fall -- like good Franz Joseph's Austro-Hungarian empire. The far-reaching Ottoman Empire would collapse, too, setting little nationalities or new little countries with artificial borders free to war against each other. The result: a spasm of worldwide violence that has not ended yet.
The First World War would prove only a preface to the even more deadly and destructive Second, and we still wander lost in a world we did indeed make. We search for a way to get back to June 27, 1914, the day before the world ended. But that world is beyond our reach now, gone forever, God help us.

The Global Meltdown Has Begun

The Global Meltdown Has Begun

The engineered economic and social breakdown is straight ahead
by | June 29, 2014

From the militarization of social science to government agencies announcing they plan to brain chip the public, the warning signs of a horrific dystopian future are now on the horizon.
Alex quotes prominent globalists who have predicted an authoritarian future when the Constitution is finally and irrevocably destroyed and generals who have bragged about the emergence of a North American Union, a continent-wide government with a singular and unelected political class and a unified military and police superstructure to enforce the will of a hereditary and corporate elite bent on weeding out humanity.
The unmistakable landmark of the nightmare that is upon us is an anemic and dysfunctional economy. Compounded by austerity and continuing social and political crises, wars, manufactured terror attacks and the deliberate destruction of the final engine of prosperity – the United States – the predatory elite will realize their perverse dream of total domination. That is, if we don’t stop them now.
It is up to Infowars and the alternative media to expose the ruse, from pushing the climate change hoax to confiscate more wealth to allowing the banksters to socializing their losses on the American people. Investigative media in the Mockingbird press is long dead, so it is up to us.

World of Resistance (WOR) Report

World of Resistance (WOR) Report

Part 1: The Global Awakening

by Andrew Gavin Marshall / November 21st, 2013

The world today is in the midst of the most monumental social, political and economic upheavals in human history – a state of continual protests, uprisings and what may be considered inevitable revolution on a global scale. Power that had been centralized for roughly 500 years among the Atlantic powers of Western Europe and North America is rapidly shifting to include the rise of the East, as China, India and others operating within established, institutional frameworks of power get wooed by the former Western imperial managers to become colluders in empire, instead of competition.

To add to this, global wealth and power is being centralized among a highly interconnected and transnational ruling class: a small global elite who own and operate the major banks, corporations, foundations, think tanks, universities and international organizations. It is this numerically minute group of plutocrats whom empire serves. Long established among the Western elites, this group of plutocrats is attempting to bring the oligarchies of other powerful and rising states firmly within its organizational and ideological structure.

Think of it as an established Mafia that helped build up a few other crime families in order to extend its influence – and which now has to contend with the increasing autonomy and competition that these strengthened crime families pose, as it attempts to bring them closer within the established ‘Family’ instead of risking an all-out Mafia war in which all parties would surely lose. The changing structures of global power, along with the ever-increasing unrest of populations around the world, has created perhaps the most challenging situation for any empire in human history.

Zbigniew Brzezinski has written and spoken for years on the issue, publishing in establishment journals and speaking at elite think tanks about what he calls the “Global Political Awakening.” Brzezinski is not a casual observer nor a resigned academic; he sits within the heart of the intellectual and institutional foundations of the American empire alongside other notable figures such as Henry Kissinger and Joseph Nye. Brzezinski was even recruited as a foreign policy adviser to the 2008 presidential campaign of Barack Obama, who referred to Brzezinski as “one of our most outstanding thinkers.”

Brzezinski wrote in 2005 that the United States needed to face “a centrally important new global reality: that the world’s population is experiencing a political awakening unprecedented in scope and intensity, with the result that the politics of populism are transforming the politics of power.” Thus, the “central challenge” for the U.S., noted Brzezinski, “is posed not by global terrorism, but rather by the intensifying turbulence caused by the phenomenon of global political awakening. That awakening is socially massive and politically radicalizing.”

In a 2004 speech to the elite-populated Carnegie Council, Brzezinski explained that the global awakening was partly “spurred by America’s impact on the world,” by virtue of the fact that America is able “to project itself outward” and “transform the world,” creating an “unsettling impact, because we are economically intrusive, [and] culturally seductive.” In other words, American imperialism is – by its very nature – creating its antithesis: the global awakening.

The awakening “is also fueled by globalization,” Brzezinski further explained, “which the United States propounds, favors and projects by virtue of being a globally outward-thrusting society.” The process of globalization, however, “also contributes to instability, and is beginning to create something altogether new: namely, some new ideological or doctrinal challenge which might fill the void created by the disappearance of communism.”

In other words, since the end of the Cold War, when Marxism and Communism represented the largest and most organized global ideological challenge to Western state-capitalist democracy, Brzezinski maintains there has been an ideological vacuum in terms of ideas opposing the present global order. The global awakening, however, is changing the circumstances. As he stated: “I see the beginnings, in writings and stirrings, of the making of a doctrine which combines anti-Americanism with anti-globalization, and the two could become a powerful force in a world that is very unequal and turbulent.”

Brzezinski noted in 2005 that, “the population of much of the developing world is politically stirring and in many places seething with unrest,” having become “acutely conscious of social injustice to an unprecedented degree, and often resentful of its perceived lack of political dignity.” A “community of shared perceptions” was being created by the spread of radio, television and Internet access, creating the potential for energies to be galvanized which “transcend sovereign borders and pose a challenge both to existing states as well as to the existing global hierarchy, on top of which America still perches.”

The youth of the Third World represent “a demographic revolution,” and being “particularly restless and resentful,” they also represent “a political time-bomb… creating a huge mass of impatient young people.” The “potential revolutionary spearhead” of the Third World youth was, in Brzezinski’s view, “likely to emerge from among the scores of millions of students” concentrated in the educational institutions of the developing world. Having largely originated from “the socially insecure lower middle class and inflamed by a sense of social outrage, these millions of students are revolutionaries-in-waiting… connected by the Internet… Their physical energy and emotional frustration is just waiting to be triggered by a cause, or a faith, or a hatred.”

In 2008, Brzezinski wrote in the New York Times that “global activism is generating a surge in the quest for cultural respect and economic opportunity in a world scarred by memories of colonial or imperial domination.” In his view, the necessary course of action “is to regain U.S. global legitimacy by spearheading a collective effort for a more inclusive system of global management.” Brzezinski noted, in a speech he gave that same year to Chatham House, that “in the current post-colonial era, it is too costly to undertake colonial wars” which is why the U.S. should attempt to avoid getting further “bogged down” in the Middle East and Central Asia, where America would be “engaged in a protracted post-imperial war in the post-colonial age, a war not easy to win against aroused populations.”

Later, in a 2010 speech to the Canadian International Council (CIC), an elite think tank based in Canada, Brzezinski explained the “total new reality” of the awakening of mankind, explaining that “most people know what is generally going on… in the world, and are consciously aware of global iniquities, inequalities, lack of respect, exploitation. Mankind is now politically awakened and stirring.”

In a 2012 speech at the European Forum for New Ideas (EFNI), Brzezinski stated that 20 years following the end of the Cold War, “a truly comprehensive American global domination is no longer possible [because] in recent decades, worldwide social change has experienced unprecedented historical acceleration, particularly because instant mass communications… cumulatively have been stimulating a universal awakening of mass political consciousness.”

“The resulting widespread rise in worldwide populist activism is proving inimical to external domination of the kind that prevailed in the age of colonialism and imperialism,” he continued. “Persistent and highly motivated populist resistance of politically awakened and historically resentful peoples to external control has proven to be increasingly difficult to suppress, as protracted guerrilla warfare in Vietnam, Algeria, or Afghanistan have amply demonstrated; and as the rising turmoil in both the Middle East and Southwest Asia are foreshadowing.” (“The Role of the West in the Complex Post-Hegemonic World,” Speech at the European Forum for New Ideas, 26 September 2012)

As Brzezinski explained to his fellow elites and imperialists in the United States and other powerful Western societies: “The worldwide yearning for human dignity is the central challenge inherent in the phenomenon of global political awakening.” As he stated at Chatham House in 2008, the world’s major powers, “new and old, also face a novel reality: while the lethality of their military might is greater than ever, their capacity to impose control over the politically awakened masses of the world is at a historic low. To put it bluntly: in earlier times, it was easier to control one million people than to physically kill one million people; today, it is infinitely easier to kill one million people than to control one million people.”

Institutional and imperial power structures have never been more globalized or concentrated in human history; yet, simultaneously, never have they been under more threat from an awakened humanity. We have unprecedented access to information and communication; never have we had a greater opportunity to transform the world for the better and to challenge – or make obsolete – the prevailing global power structures.

Yet, simultaneously, never has humanity – collectively – faced such a monumental challenge: a combination of a massive global economic crisis, growing levels of poverty and hunger, tens of millions dying from poverty-related causes every year, massive global land grabs, high-tech police states and surveillance societies, murder by remote control drone terror campaigns, a more distanced decision-making apparatus than perhaps ever before, and an ecological crisis of such proportions that it threatens the very survival of the human species, let alone all other life forms on Earth.

The World of Resistance (WOR) Report is a new series that aims to provide greater context and understanding about the causes, and the consequences, of social unrest, protests, riots, resistance, uprisings, rebellions and revolutions spreading across the globe. What form is the “global political awakening” taking in different regions, under different conditions, and with what differing degrees of success and failure?

This series aims to explore the evolution of the long road to world revolution so that we may better understand, and support, the causes of human and biological survival to ensure that people’s “central challenge” to elites – that is, the quest for “human dignity” – is made all the more impossible for 1% institutions and ideologies to undermine or repress.

•  This article was originally posted at

World of Resistance (WOR) Report
June 26, 2014
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by Andrew Gavin Marshall

In Part 1 of the World of Resistance (WoR) Report, I examined today’s global order – or disorder – through the eyes of Zbigniew Brzezinski, a former U.S. National Security Adviser and long-time influential figure in foreign policy circles. Brzezinski articulated what he refers to as humanity’s “global political awakening,” spurred by access to education, technology and communications among much of the world’s population.

Brzezinski has written and spoken extensively to elites at American and Western think tanks and journals, warning that this awakening poses the “central challenge” for the U.S. and other powerful countries, explaining that “most people know what is generally going on… in the world, and are consciously aware of global iniquities, inequalities, lack of respect, exploitation.” Mankind, Brzezinski said in a 2010 speech, “is now politically awakened and stirring.”

But Brzezinski is hardly the only figure warning elites and elite institutions about the characteristics and challenges of an awakened humanity. The subject of inequality – raised to the central stage by the Occupy movement – has become a fundamental feature in the global social, political and economic discussion, as people become increasingly aware of the facts underlying the stark division between the haves and have nots. While inequality is both a source and a result of the concentration of power in the hands of a few, it also represents the greatest threat to those very same power structures and interests.

As many, if not most, of us are by now aware, the global state-capitalist system is run by a relatively small handful of powerful institutions, groups and individuals who collectively control the vast majority of planetary wealth and resources. Banks, corporations, family dynasties and international financiers like the IMF and World Bank form a highly interconnected, interdependent network we now think of as the global oligarchy.

Thomas Pogge explained in the Georgia Journal of International and Comparative Law that in the 20 years following the end of the Cold War, there were roughly 360 million preventable poverty-related deaths – more than all of the deaths in all of the wars of the 20th century combined. By 2004, over 1 billion people remained “chronically undernourished” and nearly a billion lacked access to clean drinking water and shelter. Roughly 1.6 billion lacked access to electricity while 218 million children were working as cheap labour.

Pogge noted that almost half of humanity – roughly 3.5 billion people – lived on less than $2.50 a day, and that all of these people could be lifted out of poverty with an expenditure $500 billion, which is roughly two-thirds of the annual U.S. Pentagon budget.

Preceding the statistics that would get popularized with the Occupy movement, Pogge asserted that the top 1% owned approximately 40% of global wealth while the bottom 60% of humanity owned less than 2%. “We are now at the point where the world is easily rich enough in aggregate to abolish all poverty,” Pogge wrote. “We are simply choosing to prioritize other ends instead.”

Still today, every year, approximately 18 million people – half of whom are children under the age of five – die from poverty-related causes, all of which are preventable. Seen through this lens, poverty, and by definition, inequality, has become the greatest purveyor of violence, death and injustice on Earth.

Meanwhile, the international charity Oxfam noted that the 100 richest people in the world made a combined 2012 fortune of $240 billion – enough to lift the world’s poorest out of poverty four times over. In the previous 20 years, the world’s richest 1% increased their income by 60%, perpetuating a system of extreme wealth which is, according to an Oxfam executive, “economically inefficient, politically corrosive, socially divisive and environmentally destructive.”

Not only that, a former chief economist for McKinsey & Company published data in 2012 for the Tax Justice Network that reported the world’s super rich had hidden between $21 and $32 trillion in offshore tax havens – a trend that has been increasing in the past three decades to reveal that inequality is “much, much worse than official statistics show.”

In early 2014, Oxfam released a report revealing that the world’s 85 richest individuals had a combined wealth equal to the collective wealth of the world’s poorest 3.5 billion people – approximately $1.7 trillion. Meanwhile, the world’s top 1% own roughly half the world’s wealth, at $110 trillion. Oxfam noted: “This massive concentration of economic resources in the hands of fewer people presents a significant threat to inclusive political and economic systems… inevitably heightening social tensions and increasing the risk of societal breakdown.”


What Does All the Inequality Mean in Terms of Instability?

Where there is great inequality, there is great injustice and where there is great injustice, there is the inevitability of instability. This relationship, between inequality and instability, has not gone unnoticed by the world’s oligarchs and plutocratic institutions. The potential for “social unrest” has gotten especially high since the onset of the global financial and economic crisis that began in 2007 and 2008.

The head of the OECD warned in 2009 that the world’s leading economies would have to take quick action to resolve the global crisis or face a “fully blown social crisis with scarring effects on the vulnerable workers and low-income households.”

The major credit ratings agency Moody’s warned back in 2009 that the growing debts among nations would “test social cohesiveness” as investors demanded countries impose still more painful austerity measures, leading to growing “political and social tension” and “social unrest.” In February of that same year, the Director-General of the World Trade Organization (WTO) warned that following the economic crisis, many nations were “going to be confronted by unrest and inter-religious and inter-ethnic conflicts.”

Brzezinski himself said: “There’s going to be growing conflict between the classes and if people are unemployed and really hurting, hell, there could even be riots.” And meanwhile, the top-ranking U.S. military official and Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, commented that the global financial crisis was a greater security concern to the U.S. than either of the massive ground wars in Iraq or Afghanistan. “It’s a global crisis,” he said, and “as that impacts security issues, or feeds greater instability, I think it will impact our national security in ways that we quite haven’t figured out yet.”

Mullen’s point was reiterated by U.S. intelligence director Dennis Blair, who warned Congress that the global crisis was “the primary near-term security concern” for the U.S., adding that “the longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests.” Blair noted that as a result of the crisis, roughly 25% of the world’s nations had already experienced “low-level instability such as government changes.” If the crisis persisted beyond two years, Blair noted, there was a potential for “regime-threatening instability.” U.S. intelligence analysts were also fearful of a “backlash against U.S. efforts to promote free markets because the crisis was triggered by the United States.”

In November of 2008, the U.S. Army War College produced a document warning that the U.S. military must be prepared for the possibility of a “violent strategic dislocation inside the United States,” possibly caused by an “unforeseen economic collapse” and/or a “purposeful domestic resistance” and the “loss of functioning of political and legal order.” Under “extreme circumstances,” the document warned, “this might include the use of military force against hostile groups inside the United States.”

In 2009, the British spy agency MI5, along with the British Ministry of Defence, were preparing for the potential of civil unrest to explode in Britain’s streets as a result of the economic crisis, [noting] that there was a possibility the state would deploy British troops in major cities.

A December 2009 article in The Economist warned that increased unemployment and poverty along, with “exaggerated income inequalities” following the global economic crisis, made for a “brew that foments unrest.” In October of 2011, the International Labour Organization warned in a major report that the jobs crisis resulting from the global economic crisis “threatens a wave of widespread social unrest engulfing both rich and poor countries,” and pointed out that 45 of the 118 countries studied already saw rising risks of unrest, notably in the E.U., Arab world and Asia.

In June of 2013, the same ILO warned that the risks of social unrest including “strikes, work stoppages, street protests and demonstrations,” had increased in most countries around the world since the economic crisis began in 2008. The risk was “highest among the E.U.-27 countries,” it noted, with an increase from 34% in 2006-2007 to 46% in 2011-2012. The most vulnerable nations in the E.U. were listed as Cyprus, Czech Republic, Greece, Italy, Portugal, Slovenia and Spain, a fact “likely due to the policy responses to the ongoing sovereign debt crisis and their impact on people’s lives and perceptions of well-being.”

The E.U.’s “bleak economic scenario has created a fragile social environment as fewer people see opportunities for obtaining a good job and improving their standard of living,” warned the ILO, and advanced economies were “going to suffer a lost decade of jobs growth.”

An October 2013 report by the International Federation of Red Cross and Red Crescent Societies warned that the long-term consequences of austerity policies imposed by E.U. governments “will be felt for decades even if the economy turns for the better in the near future.” The report noted: “We see quiet desperation spreading among Europeans, resulting in depression, resignation and loss of hope… Many from the middle class have spiraled down to poverty.”

The study further reported “that the rate at which unemployment figures have risen in the past 24 months alone is an indication that the crisis is deepening, with severe personal costs as a consequence, and possible unrest and extremism as a risk. Combined with increasing living costs, this is a dangerous combination.”

In November 2013, The Economist reported: “From anti-austerity movements to middle-class revolts, in rich countries and in poor, social unrest has been on the rise around the world.” While there are various triggers – from economic distress (Greece and Spain) to revolts against dictatorships (the Arab Spring) to the growing aspirations of middle class populations (Turkey and Brazil), “they share some underlying features,” the magazine reported. The common feature, it noted, “is the 2008-09 financial crisis and its aftermath,” and an especially important factor sparking unrest in recent years was “an erosion of trust in governments and institutions: a crisis of democracy.”

A sister company of The Economist, the Economist Intelligence Unit (EIU), measured the risk of social unrest in 150 countries around the world, with an emphasis on countries with institutional and political weaknesses. The EIU noted that “recent developments have indeed revealed a deep sense of popular dissatisfaction with political elites and institutions in many emerging markets.” Indeed, the decline in trust has been accelerating across the developed world since the 1970s. The fall of Communist East European regimes in 1989 eroded that trust further, and the process sped up once again with the onset of the global financial crisis.

According to EIU estimates, roughly 43% (or 65) of the countries studied were considered to be at “high” or “very high” risk of social unrest in 2014. A further 54 countries were considered to be at “medium risk” and the remaining 31 were considered “low” or “very low.” Comparing the results to a similar study published five years previously, an additional 19 countries have been added to the “high risk” category.

Among the countries considered a “very high risk” for social unrest in 2014 were Argentina, Bahrain, Bangladesh, Bosnia, Egypt, Greece, Lebanon, Nigeria, Syria, Uzbekistan, Venezuela, Yemen and Zimbabwe. Among the countries in the “high risk” category were Algeria, Brazil, Cambodia, China, Cyprus, Ethiopia, Guatemala, Haiti, Honduras, Iran, Jordan, Laos, Mexico, Morocco, Nicaragua, Pakistan, Peru, the Philippines, Portugal, South Africa, Spain, Tunisia, Turkmenistan, Turkey and Ukraine.

It doesn’t take demonstrators filling the streets to tell us that inequality breeds instability. While many factors combine under different circumstances to lead to “social unrest,” inequality is almost always a common feature. Injustice, poor governance, corruption, poverty, exploitation, repression and corrosive power structures all support and are supported by underlying conditions of inequality. And as inequality is no longer a local, national or regional phenomenon but a global one, so too is the “threat” of instability that the world’s elite financial, media and think-tank institutions are now so busy warning about. So long as inequality increases, so will instability. Resistance, and even revolution, are the new global reality.

North Korea: Key to a China Nightmare?

RSIS presents the following commentary North Korea: Key to a China Nightmare? by Huiyun Feng. It is also available online at this link. (To print it, click on this link.). Kindly forward any comments or feedback to the Editor RSIS Commentaries, at Republication is allowed subject to prior permission from the Editor.

No. 121/2014 dated 27 June 2014
North Korea:
Key to a China Nightmare?

By Huiyun Feng

North Korea may not be a nightmare for China. Instead, it will provide an opportunity for China and the United States to work together in preventing a possible nuclear crisis on the Korean Peninsula. China should take a strong initiative to restart the Six Party Talks.
A COMMENTATOR in the Wall Street Journal, Andrew Browne, has predicted that a fourth North Korean nuclear test will lead to China’s nightmare, in that it will escalate China-Japan tensions by precipitating a new nuclear arms race in East Asia. This is not likely to materialise.
The North Korean domestic political scene is getting more opaque with the young leader Kim Jong-Un trying to consolidate power through extreme measures such as  executing even his own uncle. Domestic instability and regime insecurity will drive the leadership to take risks in the international scene.

Will China fear a nuclear arms race in East Asia?
During his power consolidation Kim Jong-Un’s legitimacy may be challenged by different factions, domestically from the military, political establishment, and even his own family clan, as well as by international actors such as the United States and South Korea. Therefore, Kim Jong-Un might use nuclear tests to boost his domestic standing and legitimacy, like his father and grandfather have done.

On the other hand, North Korea would not like to be left alone. Possible natural disasters and poor economic situations will only contribute to this scenario. Since the early 1990s, North Korea watchers have been predicting the collapse of the North Korean economy, had it not been for the aid and help from China. It only becomes more depressing and dangerous when winter comes. That is why China’s economic aid is vital for North Korea’s regime security.   

Will China fear a nuclear arms race in East Asia? The answer is “probably not”. Firstly, even if South Korea has nuclear power, given the proximity to the North, it will still face a security dilemma of Mutual Assured Destruction. Therefore, the most dangerous thing for South Korea is not a nuclear North, but a paranoid and irrational leader in the North.

While some politicians in Japan may want to go nuclear the Japanese government will have to face their anti-nuclear public. As Japan is the only country that suffered two nuclear bomb attacks, the lesson from history will be a fresh reminder for the leadership and the Japanese people. Given its democratic nature, even if there might be risk-taking leaders in the domestic political scene, public opinion will be a strong brake on irrational nationalism and patriotism.

More importantly, the US will not want to see a nuclear Japan or South Korea. On the one hand, as the American public still remembers Pearl Harbour, a nuclear-armed Japan will still be alarming in the US. On the other hand, the strategic rationale behind the US military presence in East Asia is to provide a security umbrella to its allies.

US-China cooperation over North Korea?
If both South Korea and Japan decide to build up their own nuclear deterrents for fear of North Korean nuclear attacks, then the American public will call for “Uncle Sam” to return home because of the shrinking military budget as well as unfinished wars elsewhere.

Therefore, North Korea’s nuclear gamble will not change the strategic balance of power in East Asia, which is still shaped by the larger interaction between the US and China.

The US- China relationship is going through a difficult time. Obama’s recent visit to Asia reconfirmed the US rebalancing in Asia. In the eyes of Chinese leaders, the US was behind the recent diplomatic flare-ups between China and its neighbours in both the East China Sea and South China Sea.

Furthermore, in late May the US Justice Department issued indictments against five Chinese People’s Liberation Army (PLA) officers for hacking into American companies in a bid for competitive advantage for Chinese companies. This public humiliation deteriorated US-China relations further.

Although it is still not clear why the Obama administration challenged China on the cyber-security issue, one consequence is to push China to the opposing side, probably with Russia, which has been giving the US a tough time in Ukraine. In order to avoid a new Cold War, the US needs to find a way to reconsolidate its relationship with China. North Korea may provide such an opportunity.

China should take initiative

North Korea’s provocations by either a nuclear test or a skirmish with the South will further strain the already fragile security environment in Northeast Asia. It is clear that no country can rein in North Korea alone, including China, which may have some limited influence over its leadership.

It is also clear that both China and the US share a common interest in maintaining peace in the region. Therefore, it is time for China and the US to work together to prevent a new nuclear crisis in the Korean Peninsula.

China should take a strong initiative to restart the Six Party Talks that have been stalled since 2009 when the North withdrew and later when the North sank the South Korean naval ship Cheonan and shelled Yeonpyeong Island. Although the Six Party Talks may not be able to prevent North Korea’s nuclear gamble and provocations, it will at least provide an opportunity for all major powers to re-focus on their common interest in the region.

It would be an illusion to believe that North Korea will collapse or give up its nuclear weapons overnight. Therefore, the real danger in the Korean Peninsula is not to know what North Korea wants, but to pretend that North Korea wants nothing since it will further push North Korea to go to extremes.

Another possible positive side effect is to help repair the damaged bilateral relations between China and the US. There will be no need for either China or the US to worry about North Korea’s new provocations so long as they can work together for the sake of regional security.

The writer is Associate Professor of Political Science at Utah State University and currently a visiting senior fellow with the China Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University.

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Insights on The Crisis. The Race Is On. Summary of A Howard MARKS Memo.

  Insights on The Crisis.
The Race Is On.
Summary of A Howard MARKS Memo.

In a memo which he is particularly proud of, The Race to the Bottom from February 2007, Howard Marks of Oaktree Capital provided a timely warning about the capital market behavior that ultimately led to the mortgage meltdown of 2007 and the crisis of 2008. He frankly confessed that he wasn't aware and didn't explicitly predict that the unwise lending practices that were exemplified in sub-prime mortgages would lead to a global financial crisis of multi-generational proportions. But in essence, he did detect carelessness-induced behavior, and he considered it worrisome.

Howard strongly believes that:

    most of the key phenomena in the investment world are inherently cyclical,
    these cycles repeat, reflecting consistent patterns of behavior, and
    the results of that behavior are predictable.

Howard Marks (hereafter referred to as “HM”): “Of all the cycles I write about, I feel the capital market cycle is among the most volatile, prone to some of the greatest extremes. It is also one of the most impactful for investors.

In short, sometimes the credit window is open to anyone in search of capital (meaning dumb deals get done), and sometimes it slams shut (meaning even deserving companies can't raise money).”
This summary is about the cycle's first half: the manic swing toward accommodativeness.
Competing to Provide Capital.

When the economy is doing well and companies' profits are rising, people become increasingly comfortable making loans and investing in equity. As the environment becomes more salutary, lenders and investors enjoy gains. This makes them want to do more; gives them the capital to do it with; and makes them more aggressive. Since this happens to all of them at the same time, the competition to lend and invest becomes increasingly heated.

When investors and lenders want to make investments in greater quantity, it's also inescapable that they become willing to accept lower quality. They don't just provide more money on the same old terms; they also become willing – even eager – to do so on weaker terms. In fact, one way they strive to win the opportunity to put money to work is by doing increasingly dangerous things.

This behavior was the subject of The Race to the Bottom. In it I said to buy a painting in an auction, you have to be willing to pay the highest price. To buy a company, a share of stock or a building – or to make a loan – you also have to pay the highest price. And when the competition is heated, the bidding goes higher. This doesn't always – or exclusively – result in a higher explicit price; for example, bonds rarely come to market at prices above par. Instead, paying the highest price may take the form of accepting a higher valuation parameter (e.g., a higher price/earnings ratio for a stock or a higher multiple of EBITDA for a buyout) or accepting a lower return (e.g., a lower yield for a bond or a lower capitalization rate for an office building).

Further, rather than paying more for the asset purchased, there are other ways for an investor or lender to get less for his money. This can come through tolerating a weaker deal structure or through an increase in risk. It's primarily these latter elements – rather than securities merely getting pricier – with which this memo is concerned.
History Rhymes.

In the pre-crisis years, as described in the 2007 memo, the race to the bottom manifested itself in a number of ways:

    There was widespread acceptance of financial engineering techniques, some newly minted, such as derivatives creation, securitization, tranching and selling onward; and SPACs (Special Purpose Acquisition Companies, or blind-pool acquisition vehicles). Further, the development of derivatives, in particular, vastly increased the ease with which risk could be shouldered (often without a complete understanding) as well as the amount of risk that could be garnered per dollar of capital committed.
    While not a novel development, there was an enormous upsurge in buyouts. These included the biggest deals ever; higher enterprise values as a multiple of cash flow; and increased leverage ratios.
    There was widespread structural deterioration. Examples included covenant-lite loans carrying few or none of the protective terms prudent lenders look for.
    Finally, there was simply a willingness to increase a company's leverage without adding any productive assets that can help service the new debt.

HM's 2007 memo included the following paragraph:

Today's financial market conditions are easily summed up: There's a global glut of liquidity, minimal interest in traditional investments, little apparent concern about risk, and skimpy prospective returns everywhere. Thus, as the price for accessing returns that are potentially adequate (but lower than those promised in the past), investors are readily accepting significant risk in the form of heightened leverage, untested derivatives and weak deal structures. The current cycle isn't unusual in its form, only its extent.

Now we're seeing another upswing in risky behavior. It began surprisingly soon after the crisis, spurred on by central bank policies that depressed the return on safe investments. It has gathered steam ever since, but not to anywhere near the same degree as in 2006-07.

    Wall Street has, thus far, been less creative in terms of financial engineering innovations.
    Likewise, derivatives are off the front page and seem to be created at a much slower pace.
    Buyout activity seems relatively subdued. Many smaller deals are taking place, however, including a large number of “flips” from one buyout fund to another, and leverage ratios have moved back up toward the highs of the last cycle.
    “Cov-lite” and PIK-toggle debt issuance is in full flower, as are triple-Cs, dividend recaps and stock buybacks.

It's highly informative to assess how the other characteristics of 2007 enumerated above compare with conditions today:

    global glut of liquidity,
    minimal interest in traditional,
    little apparent concern about risk,
    skimpy prospective returns everywhere.

As one amongst many examples from the media, a November 19, 2013 Bloomberg story included the following observation from a strategist: “The analysis at some point shifts from fundamentals to being purely based on the price action of the stock.”
When people start to posit that fundamentals don't matter and momentum will carry the day, it's an omen we must heed.

While the extent is nowhere as dramatic as in 2006-07 – and the psychology behind it isn't close to being as bullish or risk-blind – I certainly sense a significant increase in the acceptance of risk. The bottom line is that when risk aversion declines and the pursuit of return gathers steam, issuers can do things in the capital markets that are impossible in more prudent times.
Why Is Risk Bearing on the Rise,
and What Are the Implications?

Psychologically and attitudinally, I don't think the current capital market atmosphere bears much of a resemblance to that of 2006-07. Then I used words like “optimistic,” “ebullient” and “risk-oblivious” to describe the players. Returns on risky assets were running high, and a number of factors were cited as having eliminated risk:

    The Fed was considered capable of restoring growth come what may.
    A global “wall of liquidity” was coming toward us, derived from China's and the oil producers' excess reserves; it could be counted on to keep asset prices aloft.
    The Wall Street miracles of securitization, tranching, selling onward and derivatives creation had “sliced and diced” risk so finely – and directed it where it could most readily be borne – that risk really didn't require much thought.

In short, in those days, most people couldn't imagine a way to lose money.

I believe most strongly that the riskiest thing in the investment world is the belief that there's no risk. When that kind of sentiment prevails, investors will engage in otherwise-risky behavior. By doing so, they make the world a risky place. And that's what happened in those pre-crisis years. When The New York Times asked a dozen people for articles about the cause of the crisis, I wrote one titled “Too Much Trust; Too Little Worry.”.
Certainly a dearth of fear and a resulting high degree of risk taking accurately characterize the pre-crisis environment.
But that was then.
It's different today.

Insights on The Crisis.
The Race Is On.
Summary of A Howard MARKS Memo - part 2.

Today, unlike 2006-07, uncertainty is everywhere:

    Will the rate of economic growth in the U.S. get back to its prior norm? Will unemployment fall to the old “structural” level?
    Can America's elected officials possibly reach agreement on long-term solutions to the problems of deficits and debt? Or will the national debt expand unchecked?
    Will Europe improve in terms of GDP growth, competitiveness and fiscal governance? Will its leaders be able to reconcile the various nations' opposing priorities?
    Can Abenomics transform Japan's economy from lethargy to dynamism? The policies appear on paper to be the right ones, but will they work?
    Can China transition from a highly stimulated economy based on easy money, an excess of fixed investment and an overactive non-bank financial system, without producing a hard landing that keeps it from reaching its economic goals?

Looking at the world more thematically, a lot of questions surround the ability to manage economies and regulate growth:

    Can low interest rates and high levels of money creation return economic growth rates to previous levels? (To date, the evidence is mixed.)
    Can inflation be returned to a salutary level somewhat above that of today? Right now, insufficient inflation is the subject of complaints almost everywhere. Can the desired inflation rate be reinstated without going beyond, to undesirable levels?
    Programs like Quantitative Easing are novel inventions. How much do we know about how to end them, and about what the effects of doing so will be? Will it prove possible to wind down the stimulus – the word du jour is “taper” – without jeopardizing today's unsteady, non-dynamic recoveries? Can the central banks back off from interest rate suppression, bond buying and easy money policies without causing interest rates to rise enough to choke off growth?
    How will governments reconcile the opposing goals of stimulating growth (lower taxes, increased spending) and reining in deficits (increased taxes, less spending)?

As to investments:

    When the Fed stops buying bonds, will interest rates rise a little or a lot? Does that mean bonds are unattractive?
    Are U.S. stocks still attractive after having risen strongly over the last 18 months?
    Ditto for real estate following its post-crash recovery?
    Can private equity funds buy companies at attractive prices in an environment where few owners are motivated to sell?

Most people are aware of these uncertainties. Unlike the smugness, complacency and obliviousness of the pre-crisis years, today few people are as confident as they used to be about their ability to predict the future, or as certain that it will be rosy.
Nevertheless, many investors are accepting (or maybe pursuing) increased risk.

The reason, of course, is that they feel they have to.
The actions of the central banks to lower interest rates to stimulate economies have made this a low-return world. This has caused investors to move out on the risk curve in pursuit of the returns they want or need. Investors who used to get 6% from Treasuries have turned to high yield bonds for such a return, and so forth.

Movement up the risk curve brings cash inflows to riskier markets. Those cash inflows increase demand, cause prices to rise, enhance short-term returns, and contribute to the pro-risk behavior described above. Through this process, the race to the bottom is renewed.
In short, when investors take on added risks - whether because of increased optimism or because they're coerced to do so (as now) - they often forget to apply the caution they should. That's bad for them. But if we're not cognizant of the implications, it can also be bad for the rest of us.

Where does investment risk come from? Not, in my view, primarily from companies, securities – pieces of paper – or institutions such as exchanges.
No, in my view the greatest risk comes from prices that are too high relative to fundamentals. And how do prices get too high? Mainly because the actions of market participants take them there.

Among the many pendulums that swing in the investments world – such as between fear and greed, between depression and euphoria – one of the most important is the swing between risk aversion and risk tolerance.

Risk aversion is the essential element in sane markets.
People are supposed to prefer safety over uncertainty, all other things being equal. When investors are sufficiently risk averse, they'll

    approach risky investments with caution and skepticism,
    perform thorough due diligence, incorporating conservative assumptions, and
    demand healthy incremental return as compensation for accepting incremental risk.

This sort of behavior makes the market a relatively safe place.

But when investors drop their risk aversion and become risk-tolerant instead, they turn bold and trusting, fail to do as much due diligence, base their analysis on aggressive assumptions, and forget to demand adequate risk premiums as a reward for bearing increased risk. The result is a more dangerous world where asset prices are higher, prospective returns are lower, risk is elevated, the quality and safety of new issues deteriorates, and the premium for bearing risk is insufficient.

It's one of my first principles that we never know where we're going – given the unreliability of macro forecasting – but we ought to know where we are.
“Where we are” means what the temperature of the market is: Are investors risk-averse or risk-tolerant? Are they behaving cautiously or aggressively? And thus is the market a safe place or a risky one?

Certainly risk tolerance has been increasing of late; high returns on risky assets have encouraged more of the same; and the markets are becoming more heated. The bottom line varies from sector to sector, but I have no doubt that markets are riskier than at any other time since the depths of the crisis in late 2008 (for credit) or early 2009 (for equities), and they are becoming more so.

A rise in risk tolerance is something that should get your attention and focus your concentration. But for it to be highly worrisome, it has to be accompanied by extended valuations. I don't think we're there yet. I think most asset classes are priced fully – in many cases on the high side of fair – but not at bubble-type highs. Of course the exception is bonds in general, which the central banks are supporting at yields near all-time lows, meaning prices near all-time highs. But I don't find them scary (unless their duration is long), since – if the issuers prove to be money-good – they'll eventually pay off at par, erasing the interim mark-downs that will come when interest rates rise.

HM ends his memo with his favorite “Buffettism”:
... the less the prudence with which others conduct their affairs, the greater the prudence with which we should conduct our own affairs.

You just can't put it any better. When others are acting imprudently, making the world a riskier place, our caution level should rise in response. (It's equally true that when others become overly cautious and run from risk, assets get so cheap that we should turn aggressive.)

The trend is in the direction of increased risk, and there is no reason to think that trend will be arrested anytime soon. Risk is likely to reach extreme levels someday – it always does, eventually – and great caution will be called for.

Howard Mark's conclusion from the original 2007 “The Race to the Bottom” is still valid:
... there's a race to the bottom going on, reflecting a widespread reduction in the level of prudence on the part of investors and capital providers. No one can prove at this point that those who participate will be punished, or that their long-run performance won't exceed that of the naysayers. But that is the usual pattern.

November 26, 2013

Sergei Glazyev to EIR - "On Eurofascism"

Subject: Sergei Glazyev to EIR - "On Eurofascism"

The following is a Guest Commentary to EIR by Sergei Glazyev, on the return of fascism in Europe, as seen in the Ukraine coup by neo-nazi organizations backed by the US and NATO. Mr. Glazyev is a leading advisor to President Putin. We strongly encourage you to reprint this commentary wherever possible.
    Mr. Glazyev's book on the destruction of Russia during the 1990s by the western financial oligarchy, creating Russia's own "oligarchs" and looting the nation before Putin's rise to the presidency, titled "Genocide - Russia and the New World Order," was translated into English by EIR and is available on the EIR website (see  ).
        Russian Academician Sergei Glazyev was Minister of Foreign Economic Relations in Boris Yeltsin's first cabinet, but became the only member of the government to resign in protest of the economic looting of Russia in the name of "reform," and Yeltsin's abolition of the Parliament and the Constitution in 1993. Sergei Glazyev went on to head the State Duma Economic Policy Committee for Economic Policy, ran for President in 2004, and works as Secretary of the Customs Union of Russia, Belarus, and Kazakstan. Today he is an adviser to President Vladimir Putin on Eurasian economic integration.
    Following the commentary is a greeting sent by Mr. Glazyev to the Conference sponsored by the Schiller Institute on June 15, 2014, in New York City - the full conference can be seen at 
                                 Mike Billington
This guest commentary appears in the June 27, 2014 issue of Executive Intelligence Review.


On Eurofascism

by Sergei Glazyev
Sergei Glazyev is an Academician of the Russian Academy of Sciences, and Advisor to the President of the Russian Federation.
This guest commentary was written and made available to publications in the USA and Europe, before the June 7, 2014 inauguration of Petro Poroshenko as President of Ukraine. The version printed here incorporates, with the author’s permission, passages from his March 21, 2014 interview with Radio Radonezh, a Russian station. It is dated March 21-June 7, 2014. Subheads have been added.
Current events in Ukraine are guided by the evil spirit of fascism and Nazism, though it seemed to have dissipated long ago, after World War II. Seventy years after the war, the genie has escaped from the bottle once again, posing a threat not merely in the form of the insignia and rhetoric of Hitler’s henchmen, but also through an obsessive Drang nach Osten [drive toward the East—ed.] policy. The bottle has been uncorked, this time, by the Americans. Just as 76 years ago at Munich, when the British and the French gave Hitler their blessing for his eastward march, so in Kiev today, Washington, London, and Brussels are inciting Yarosh, Tyahnybok, and other Ukrainian Nazis to war with Russia. One is forced to ask, why do this in the 21st Century? And why is Europe, now united in the European Union, taking part in kindling a new war, as if suffering from a total lapse of historical memory?
Answering these questions requires, first of all, an accurate definition of what is happening. This, in turn, must start with identifying the key components of the events, based on facts. The facts are generally known: [former Ukrainian President Viktor] Yanukovych refused to sign the Association Agreement with the EU, which Ukraine had been under pressure to accept. After that, the United States and its NATO allies physically removed him from power by organizing a violent coup d’état in Kiev, and bringing to power a government that was illegitimate, but fully obedient to them. In this article, it will be called “the junta.”
The goal of this aggression was to gain acceptance of the Association Agreement, as is evidenced by the fact it was indeed, prematurely, signed by the EU leaders and the junta only a month after the latter had seized power. They reported (the document bearing their signatures has not yet been made public!) that only the political part of the agreement has been signed, the part that obligates Ukraine to follow the foreign and defense policy of the EU and to participate, under EU direction, in settling regional civil and military conflicts. With this step, adoption of the Agreement as a whole has become a mere technicality.
The ‘Euro-Occupation’ of Ukraine
In essence, the events in Ukraine mark the country’s forcible subordination to the European Union—what may be called “Euro-occupation.” The EU leaders, who insistently lecture us on obedience to the law and the principles of a law-based state, have themselves flouted the rule of law in this case, by signing an illegitimate treaty with an illegitimate government. Yanukovych was ousted because he refused to sign it. This refusal, moreover, needs to be understood in terms, not only of the Agreement’s content, but also the fact that he had no legal right to accept it, because the Association Agreement violates the Ukrainian Constitution, which makes no provision for the transfer of state sovereignty to another party.
According to the Ukrainian Constitution, an international agreement that conflicts with the Constitution may be signed only if the Constitution is amended beforehand. The U.S.- and EU-installed junta ignored this requirement. It follows that the U.S. and EU organized the overthrow of Ukraine’s legitimate government, in order to deprive the country of its political independence. The next step will be to impose their preferred economic and trade policies on Ukraine, through its accession to the economic part of the Agreement.
Furthermore, although the current Euro-occupation differs from the occupation of Ukraine in 1941, in that, so far, it has occurred without an invasion by foreign armies, its coercive nature is beyond any doubt. Just as the fascists stripped the population of occupied Ukraine of all civil rights, the modern junta and its American and European backers treat the opponents of Euro-integration as criminals, groundlessly accusing them of separatism and terrorism, imprisoning them, or even deploying Nazi guerrillas to shoot them.
As long as President Yanukovych was on track to sign the Association Agreement with the EU, he was the recipient of all kinds of praise and coaxing from high-ranking EU officials and politicians. The minute he refused, however, American agents of influence (as well as official U.S. representatives, such as the Ambassador to Ukraine, the Assistant Secretary of State, and representatives of the intelligence agencies), together with European politicians, began to castigate him and extol his political opponents. They provided massive informational, political, and financial aid to the Euromaidan protests, turning them into the staging ground for the coup d’état. Many of the protest actions, including criminal attacks against law enforcement personnel and government building seizures, accompanied by murders and beatings of a large number of people, were supported, organized, and planned with the participation of the American Embassy and European officials and politicians, who not only “interfered” in Ukraine’s domestic affairs, but carried out aggression against the country via the Nazi guerrillas they had cultivated.
The use of Nazis and religious fanatics to undermine political stability in various regions of the world is a favorite method of the American intelligence agencies. It has been employed against Russia in the Caucasus, in Central Asia, and now even in Eastern Europe. The Eastern Partnership program, which the U.S. encouraged the Poles and EU officials to initiate, was aimed against Russia from the outset, with the objective of breaking the former Soviet republics’ relations with Russia. This break was supposed to be finalized by contracting legal Association Agreements between each of these countries and the EU.
The ‘European Choice’
In order to provide political grounds for these agreements, a campaign was launched to fan Russophobia and spread a myth called “the European choice.” This mythical “European choice” was then artificially counterposed to the Eurasian integration process, with Western politicians and the media falsely depicting the latter as an attempt to restore the USSR.
The Eastern Partnership program has failed in every single former Soviet republic. Belarus had already made its own choice, creating a Union State with Russia. Kazakhstan, another key Eurasian country (though not formally an Eastern Partnership target), likewise chose its own path, forming the Customs Union with Russia and Belarus. Armenia and Kyrgyzstan have decided to join this process. The province of Gagauzia has spurned the adoption of Russophobia as a cornerstone of Moldovan policy; the Gagauz referendum, rejecting European integration in favor of the Customs Union, challenged the legitimacy of Chisinau’s “European choice.” Georgia, the only republic to have made a relatively legitimate decision in favor of Association with the EU, paid for its “European choice” with the loss of control over a part of its territory, where people did not want to live under Euro-occupation. The same scenario is now being imposed on Ukraine—loss of a part of its territory, where the citizens do not accept the leadership’s “European choice.”
The coercion of Ukraine to sign the EU Association Agreement became entangled with Russophobia, as a reaction of the Ukrainian public conscience, wounded by the decision of the people of Crimea to join the Russian Federation. Since the majority of Ukrainians still do not automatically think of themselves as divided from Russia, there has been a strong push to inculcate a perception of this episode as Russian aggression and the annexation of part of their territory. This is why Brzezinski talks about the “Finlandization” of Ukraine, as a way to anesthetize the brains of our political elite during the American operation to sever Ukraine’s ties with historical Russia. While under anesthesia, we Russians are supposed to accept a feeling of guilt for our mythical oppression of the Ukrainian people, while the latter are force-fed loathing for Russia, with which they have allegedly battled for ages over Little Russia and Novorossiya (Figure 1).[1]
Only a superficial observer, however, would see the current anti-Russian hysteria in the Ukrainian media, so striking in its frenzied Russophobia, as a spontaneous reaction to the Crimean drama. In reality, it is a piece of evidence that the war being waged against Russia is now entering an overt phase. For two decades, we were fairly tolerant of the manifestations of Nazi ideology in Ukraine, not taking it too seriously, in view of the apparent absence of clear preconditions for Nazism. The lack of such preconditions, however, was completely compensated by the persistent sowing of Russophobia through support for numerous nationalist organizations. The discrepancy between their ideology and historical accuracy does not bother the führers of these organizations. In return for a pittance from NATO member countries, they are completely unrestrained in painting Russia as the enemy image. The result is unconvincing, because of our common history, language and culture: Kiev is the mother of all Russian cities, the Kiev-Pechersk Lavra is a major holy site of the Orthodox world, and it was at the Kiev-Mohyla Academy that the modern Russian language took shape.
We cannot forget the historical importance of Little Russia (Ukraine) for us. We have never divided Russia and Ukraine, in our minds. I myself grew up in Ukraine; we never felt differentiated by ethnic origin, not at school, or in our neighborhood, or at work. We were together as one people, speaking the same language, sharing the same faith and understanding of the meaning of life. And all of us—Russians, Ukrainians, Jews, and other ethnic groups living in Zaporozhye and throughout most of Ukraine, with the exception of the far western part—knew that we were one people, although we were aware there were some Nazis out there in the forests of western Ukraine, who still didn’t understand that the war was over. Even in Soviet times, when I happened to visit Lviv, I was struck by people’s hostility to speaking in Russian. Since I am fluent in Ukrainian, it wasn’t a problem for me, but I couldn’t fail to notice: As long as you spoke with them in Ukrainian, that was all right, but if you switched to Russian, the tension was palpable.
Wild lies have been employed, playing on tragic episodes in our common history, such as the Revolution and the Civil War, as well as the Holodomor famine of the 1930s, which are falsely attributed solely to Russian tyranny. Russophobia, based on Nazism, is being made the cornerstone of Ukraine’s national identity.
‘Ukrainian Nazism’
This article is not concerned with exposing the objective absurdity of the Ukrainian Nazis’ hysterical Russophobia, but rather with establishing the reasons for its re-emergence in the 21st Century. This requires an awareness that such “Ukrainian Nazism” is an artificial construct, created by the age-old enemies of the Russian world. Ukrainian exclusionary nationalism and fascism, cultivated from abroad, has always been aimed at Moscow. At first it was promoted by Poland, which viewed Ukraine as its own borderland, and established its own vertical power structure to administer it. Then came Austria-Hungary, which invested large amounts of money over a long period of time, to encourage Ukrainian separatism.
During the German fascist occupation, these separatist tendencies were the ground in which the Bandera movement and the Polizei sprang up, aiding the German fascists in establishing their order in Ukraine, including though punitive operations and enslavement of the population. Their modern followers are now doing likewise: Under the guidance of their American instructors, guerrillas of the Banderite Right Sector are conducting punitive operations against the population in the Donbass, helping the U.S.-installed junta “cleanse” cities of supporters of greater integration with Russia, and assuming police functions for the establishment of a pro-American, anti-Russian order.
It is obvious that without steady American and European support, neither the coup d’état nor the existence of the Kiev junta would have been possible. Unfortunately, as the famous dictum goes, “history teaches us, that history teaches us nothing.” This is a catastrophe for Europe, which has more than once had to deal with instances of the proto-fascist model of government that has now taken shape in Ukraine. It involves, essentially, a symbiotic relationship between the fascists and big capital. A symbiosis of this type gave rise to Hitler, who was supported by major German capitalists, seduced by the opportunity, under the cover of national-socialist rhetoric, to make money from government orders and the militarization of the economy. This applied not only to German capitalists, but also Europeans and Americans. There were collaborators with the Hitler regime in practically all the European countries and the United States.
Few people realized that the torch marches would be followed by the ovens at Auschwitz, and that tens of millions of people would die in the fires of World War II. The same dynamic is playing out in Kiev now, except that the shout of “Heil Hitler!” has been replaced by “Glory to the heroes!”—heroes whose great feat was to execute defenseless Jews at Babi Yar. Moreover, the Ukrainian oligarchy—including the leaders of some Jewish organizations—is financing the anti-Semites and Nazis of Right Sector, who are the armed bulwark of the current regime in Ukraine. The Maidan sponsors have forgotten that, in the symbiotic relationship between Nazis and big capital, the Nazis always get the upper hand over the liberal businessmen. The latter are forced either to become Nazis themselves, or to leave the country. This is already happening in Ukraine: The oligarchs who remain in the country are competing with the petty führers of Right Sector in the domain of Russophobic and anti-Muscovite rhetoric, as well as in grabbing the property of those of their fellow businessmen who have fled the country.
The current rulers in Kiev count on protection from their American and European patrons, pledging to them daily that they will fight the “Russian occupation” to the last standing “Muscovite.”[2] They obviously underestimate how dangerous Nazis are, because Nazis truly believe they are a “superior race,” while all others, including the businessmen who sponsor them, are viewed as “sub-human” creatures, against whom violence of all sorts is permissible. That is why Nazis always prevail, within their symbiotic relationship with the bourgeoisie, who are then forced either to submit, or flee the country. There is no doubt that if the Bandera followers are not forcibly stopped, the Nazi regime in Ukraine will develop, expand, and penetrate more deeply. The only thing still in doubt will be Ukraine’s “European choice,” as the country reeks more and more of the fascism of 80 years ago.
The Eurobureaucracy
Of course, Eurofascism today is very different from its 20th-Century German, Italian, and Spanish versions. European national states have receded into the past, entering the European Union and submitting to the Eurobureaucracy. The latter has become the leading political power in Europe, easily quashing any bids for sovereignty by individual European countries. The bureaucracy’s power is based not on an army, but on its monopoly over the issuance of currency, over the mass media, and over the regulation of trade, all of which are managed by the bureaucracy in the interests of European big capital. In every conflict with national governments during the past decade, the Eurobureaucracy has invariably prevailed, forcing European nations to accept its technocrat governments and its policies. Those policies are based on the consistent rejection of all national traditions, from Christian moral standards to how sausages are produced.
The cookie-cutter, gender-neutral, and idea-free Europoliticians little resemble the raving führers of the Third Reich. What they have in common is a maniacal confidence that they are in the right, and readiness to force people to obey. Although the Eurofascists’ forms of compulsion are far softer, it is still a harsh approach. Dissent is not tolerated, and violence is allowed, up to and including the physical extermination of those who disagree with Brussels’ policies. Of course, the thousands who have died during the drive to instill “European values” in Yugoslavia, Georgia, Moldova, and now Ukraine, do not compare with the millions of victims of the German fascist invaders during World War II. But who has tallied up the indirect human casualties from the promotion of homosexuality and drugs, the ruin of national manufacturing sectors, or the degradation of culture? Entire European nations are disappearing in the crucible of European integration.
The Italian word fascio, from which “fascism” derives, denotes a union, or something bound together. In its current understanding, it refers to unification without preservation of the identity of what is integrated—whether people, social groups, or countries. Today’s Eurofascists are trying to erase not only national economic and cultural differences, but also the diversity of human individuals, including differentiation by sex and age. What’s more, the aggressiveness with which the Eurofascists are fighting to expand their area of influence sometimes reminds us of the paranoia of Hitler’s supporters, who were preoccupied with the conquest of Lebensraum for the superior Aryan race. Suffice it to recall the hysteria of the European politicians who appeared at the Maidan and in the Ukrainian media. They justified the crimes of the proponents of Eurointegration and groundlessly denounced those who disagreed with Ukraine’s “European choice,” taking the Goebbels approach that the more monstrous a lie is, the more it resembles the truth.
Today the driver of Eurofascism is the Eurobureaucracy, which gets its directions from Washington. The United States supports the eastward expansion of the EU and NATO in every way possible, viewing these organizations as important components of its global empire. The U.S. exercises control over the EU through supranational institutions, which have crushed the nation-states that joined the EU. Deprived of economic, financial, foreign-policy and military sovereignty, they submit to the directives of the European Commission, which are adopted under intense pressure from the U.S.
In essence, the EU is a bureaucratic empire that arranges things within its economic space in the interests of European and American capital, under U.S. control. Like any empire, it strives to expand, and does so by drawing neighboring countries into Association Agreements, under which they hand their sovereignty over to the European Commission. In order to make these countries accept becoming EU colonies, fear-mongering about an external threat is employed, with the U.S.-guided media portraying Russia as aggressive and bellicose, for this purpose. Under this pretext, the EU and NATO moved quickly to occupy the countries of Eastern Europe after the Soviet Union collapsed; the war in the Balkans was organized for this purpose. The next victims of Eurofascism were the Baltic republics, which Russophobic Nazis forced to join the EU and NATO. Then Eurofascism reached Georgia, where Nazis under American guidance unleashed civil war. Today, the Eurofascists are using the Georgian model in Ukraine, in order to force it sign the Association Agreement with the EU, as a subservient territory and a bridgehead for attacking Russia.
Eurasian Integration
The U.S. sees the principal threat to its plans for putting the Eurobureaucracy in charge of the post-Soviet area, as being the Eurasian integration process, which is developing successfully around the Russia-Belarus-Kazakhstan Customs Union. The EU and the U.S. have invested at least $10 billion in building up anti-Russian networks, in order to prevent Ukraine from taking part in that process. In parallel, using the support of Polish and Baltic Russophobes, as well as media under the control of American media moguls, the United States is inciting European officials against Russia, with the goal of isolating the former Soviet republics from the Eurasian integration process. The Eastern Partnership program, which they inspired, is a cover for aggression against Russia in the former Soviet area. This aggression takes the form of forcing former Soviet republics to enter EU Association Agreements, under which they transfer their sovereign economic, trade, foreign-policy and defense functions to the European Commission.
For Ukraine, the Association Agreement with the European Union means transferring to Brussels its sovereign functions of regulating trade and other foreign economic relations, technical standards, and veterinary, sanitary, and pest inspections, as well as opening its market to European goods. The agreement contains a thousand pages of EU directives that Ukraine would be required to follow. Every section mandates that Ukrainian legislation be brought into compliance with the requirements of Brussels. Moreover, Ukraine would assume the obligation to comply not only with current Brussels directives, but also future ones, in the drafting of which Ukraine will have no part.
Plainly put, after signing the Agreement, Ukraine is to become a colony of the European Union, blindly obeying its demands. These include requirements which Ukrainian industry is unable to carry out, and which will harm the Ukrainian economy. Ukraine is to completely open its market to European goods, which will lead to a $4 billion increase in Ukraine’s imports and drive uncompetitive Ukrainian industrial products out of the market. Ukraine will be obliged to meet European standards, which would take EU150 billion of investment in economic modernization. There are no sources for such amounts of money.
According to estimates by Ukrainian and Russian economists, Ukraine, after signing the Agreement, can look forward to a deterioration of its already negative balance of trade and balance of payments, and, as a consequence, default. This year, Ukraine has a projected balance of payments deficit of approximately $50 billion. Its currency reserves suffice for only three months—one quarter. Even if the full amounts of assistance mentioned in various talks were to materialize, they would win only one or two additional months. Thus, Ukraine under its current regime can expect to experience a drop in the standard of living not by 15 or 20 percent, but by half or two-thirds, with the residents of southeastern Ukraine, who are employed in major industrial plants, being the hardest hit.
The EU would achieve certain advantages from an Association Agreement with Ukraine, by way of an expanded market for its products and the opportunity to acquire devalued Ukrainian assets. U.S. corporations, for their part, would gain access to shale gas deposits, which they would like to supplement with pipeline infrastructure and a market for nuclear fuel elements for power plants. The main goal, however, is geopolitical: After signing the Association Agreement, Ukraine would not be able to participate in the Customs Union with Russia, Belarus, and Kazakhstan. It is for this outcome that the U.S. and the EU resorted to aggression against Ukraine, organizing an armed seizure of power by their protégés. While they accuse Russia of annexing Crimea, they themselves have taken over Ukraine as a whole, by installing a junta under their control. The junta’s mission is to strip Ukraine of its sovereignty and put it under the EU, through signing the Association Agreement.
The disaster in Ukraine may be termed aggression against Russia by the U.S. and its NATO allies. This is a contemporary version of Eurofascism, which differs from the previous face of fascism during World War II in that it employs “soft” power with just some elements of armed action in cases of extreme necessity, as well as the use of Nazi ideology as a supplementary rather than an absolute ideology. One of the main defining elements of Eurofascism has been preserved, however, and that is the division of citizens into superior ones (those who support the “European choice”) and inferior ones, who have no right to their own opinions and toward whom all is permitted. Another feature is the readiness to use violence and commit crimes in dealing with political opponents. The final aspect that needs to be understood, is what drives the rebirth of fascism in Europe; without grasping this, it is impossible to develop a resistance plan and save the Russian world from this latest threat of Euro-occupation.
Neocons: Maniacal Misantropes
The theory of long-term economic development recognizes an interrelationship between long waves of economic activity and long waves of military and political tension. Periodic shifts from one dominant technological mode to the next alternate with economic depressions, wherein increased government spending is used as an incentive for overcoming the crisis. The spending is concentrated in the military-industrial complex, because the liberal economic ideology allows enhancement of the role of the state only for national security objectives. Therefore, military and political tension is promoted and international conflicts provoked, to justify increased defense spending.
This is what is happening at present: The U.S. is attempting to resolve its accumulated economic, financial, and industrial imbalances at other countries’ expense, by escalating international conflicts that will allow it to write off debts, appropriate assets belonging to others, and weaken its geopolitical rivals. When this was done during the Great Depression of the 1930s, the result was World War II. The American aggression against Ukraine pursues all of the above-mentioned goals. First, economic sanctions against Russia are intended to wipe out billions of dollars of U.S. debt to Russia. A second objective is to take over Ukrainian state assets, including the natural gas transport system, mineral deposits, the country’s gold reserves, and valuable art and cultural objects. Third, to capture Ukrainian markets of importance to American companies, such as nuclear fuel, aircraft, energy sources, and others. Fourth, to weaken not only Russia, but also the European Union, whose economy will sustain an estimated trillion-dollar loss from economic sanctions against Russia. Fifth, to attract capital flight from instability in Europe, to the USA.
Thus, war in Ukraine is just business for the United States. Judging by reports in the media, the U.S. has already recouped its spending on the Orange Revolution and the Maidan by carrying off treasures from the ransacked National Museum of Russian Art and National Historical Museum, taking over potential gas fields, and forcing the Ukrainian government to switch from Russian to American nuclear fuel supplies for its power plants. In addition, the Americans have moved ahead on their long-term objective of splitting Ukraine from Russia, turning what used to be “Little Russia” into a state hostile to Russia, in order to prevent it from joining the Eurasian integration process.
This analysis leaves no room for doubt about the long-term and consistent nature of the American aggression against Russia in Ukraine. If we analyze who is influencing U.S. policy, it is not difficult to see that the ones responsible for these decisions are a handful of deranged radical extremists, the so-called Neocons, who see the entire world through the lens of their war to assert world rule. This is a small group of the American oligarchy. And it is also fascism, is in its own way, based not on radical nationalism, but on global hegemonism. These Neocons are real misanthropes and Satanists, who are even prepared to drop the atomic bomb!
At the same time, if we study the situation in the USA, there are plenty of sober-thinking people. American business is unenthusiastic about sanctions against Russia; I mean normal business, which seeks a return on investment through production and cooperation, rather than through financial speculation and the destruction of other countries. The majority of American citizens, as well, do not understand the point of fomenting a war in the middle of Europe. Therefore, another factor in determining the further course of events will be the extent to which sanity prevails in Washington.
What we are facing today is not America, not the American people, but the organizers of a string of wars, beginning with Iraq, then Yugoslavia, then Libya, the rest of North Africa, Syria, and on to Ukraine. This grouping of maniacal misanthropes, the Neocons, are prepared to plunge the entire world into chaos, in order to affirm their world dominance.
War Against Russia
To this end, Washington is directing its Kiev puppets to escalate the conflict, rather than the reverse. They are also inciting the Ukrainian military against Russia, aiming to drag Russian ground forces into a war against Ukraine. They are encouraging the Nazis there to initiate new combat operations. This is a real war, organized by the United States and its NATO allies. What has occurred is not merely a coup d’état, and not merely some unexpected outbreak of anti-Russian Nazism. It is a war. It is a war we didn’t notice for a long time, but it was prepared gradually, and then moved into its overt phase several months ago. It is not even a war for Ukraine, but a war against us: against Russia. Those are the goals of the forces guiding the Nazi guerrillas. And this well-prepared, paid for, and organized war represents aggression against Ukraine and against Russia by the relevant circles in the United States, Great Britain, the EU, and NATO. The goal of this war is to defeat, dismember, and annihilate Russia. Just like 75 years ago, it is being waged by Eurofascists against Russia, with the use of Ukrainian Nazis cultivated for this purpose.
We should not mince words. The people who have signed Ukraine’s Association Agreement with the EU, signed it with this Nazi government that rests on its machine guns and shoots people, are Eurofascists. Unfortunately, the European Commission has become a “Eurofascist Commission.” I insist on this definition, which is historically and conceptually accurate. And it is strange and sad to see our European partners descend to the level of fascists in the 21st Century.
It is surprising, this position of the European countries that are tailing the U.S. and doing nothing to prevent a further escalation of the crisis. They should understand better than anyone, that Nazis can only be stopped with force. The sooner this is done, the fewer victims and less destruction there will be in Europe. That avalanche of wars across North Africa, the Middle East, the Balkans, and now Ukraine, incited by people in the U.S. in their own interests, threatens Europe most of all; and it was the devastation of Europe in two world wars that gave rise to the American economic miracle in the 20th Century. But the Old World will not survive a Third World War. To prevent such a war means that there must be international acknowledgement that the actions of the U.S. constitute aggression, and that the EU and U.S. officials carrying them out are war criminals. It is important to accord this aggression the legal definition of “Eurofascism” and to condemn the actions of the European politicians and officials who are party to the revival of Nazism under cover of the Eastern Partnership.

[1] Malorossiya (“Little Russia” or “Lesser Russia”) is a term dating back to Greek place-names for the areas populated by eastern Slavs, nearer (“Lesser Russia”) and farther north (“Greater Russia”) of the Black Sea. It has been used at various times to denote all of modern Ukraine or, chiefly, northeastern Ukraine or the left bank of the Dnieper River. Novorossiya (“New Russia”) was introduced in the 18th Century for lands acquired by the Russian Empire under Catherine II in wars with the Ottoman Empire. These included the Black Sea littoral from the Dniester River to Crimea, the Sea of Azov littoral eastward nearly to the mouth of the Don River, and lands along the lower Dnieper.
[2] Moskal, or “Muscovite,” is a derogatory Ukrainian term for a Russian.

Sergei Glazyev's Message to Schiller Institute Conference

2001: At the invitation of Dr. Sergei Glazyev (right), Duma chairman of the Economic Affairs Committee, Helga and Lyndon LaRouche revisit Moscow. At a hearing before the Duma Economic Affairs Committee on June 29, 2001, LaRouche explained his policy to reorganize the world financial system and a global economic recovery in the context of Eurasian cooperation, in front of 150 members and government advisors.
Greetings to the Conference
Sergei Glazyev, Russian Federation
Advisor to the President of the Russian Federation
It is a great honor for me to greet and congratulate you on the occasion of the 30th anniversary of the Schiller Institute!
Dear colleagues! The Institute has been and will always be a unique platform for dialogue and for the development of important solutions to various aspects of contemporary social, political, and economic development and humanitarian cooperation in the world!
Many of your ideas, proposals, and thoughts have found demand, in the development of valuable initiatives of practical significance, in the areas of social justice, the global order, and the prevention of regional conflicts.
Besides the solution of strictly practical tasks related to current, day-to-day problems of our mutual development, you also make, on a daily basis, a weighty contribution to the conceptualization and solution of urgent issues of geopolitics and public life.
I am certain that your conference today will provide an important impetus to discussions concerning the equality of peoples, regardless of where they live, the sovereign right of peoples to self-determination, and the choice of methods for building a harmonious future, based on peace, cooperation and good-neighborly relations!
I wish you fruitful work, dear colleagues, and peace to your houses!
Sergei Glazyev
Moscow, June 13, 2014