COUNTERPUNCH
The Latest in the New Cold War
My Money’s on Putin
“History shows that the United States has benefited politically and economically from wars in Europe. The huge outflow of capital from Europe following the First and Second World Wars, transformed the U.S. into a superpower … Today, faced with economic decline, the US is trying to precipitate another European war to achieve the same objective.”– Sergey Glazyev, Russian politician and economist“The discovery of the world’s largest, known gas reserves in the Persian Gulf, shared by Qatar and Iran, and new assessments which found 70 percent more gas in the Levantine in 2007, are key to understanding the dynamics of the conflicts we see today. After a completion of the PARS pipeline, from Iran, through Iraq and Syria to the Eastern Mediterranean coast, the European Union would receive more than an estimated 45 percent of the gas it consumes over the next 100 – 120 years from Russian and Iranian sources. Under non-conflict circumstances, this would warrant an increased integration of the European, Russian and Iranian energy sectors and national economies.”– Christof Lehmann, Interview with Route Magazine
The
United States failed operation in Syria, has led to an intensification
of Washington’s proxy war in Ukraine. What the Obama administration
hoped to achieve in Syria through its support of so called “moderate”
Islamic militants was to topple the regime of Bashar al Assad, replace
him with a US-backed puppet, and prevent the construction of the
critical Iran-Iraq-Syria pipeline. That plan hasn’t succeeded nor will
it in the near future, which means that the plan for the prospective
pipeline will eventually go forward.
Why is that a problem?
It’s
a problem because–according to Dr. Lehmann–”Together with the Russian
gas… the EU would be able to cover some 50 percent of its requirements
for natural gas via Iranian and Russian sources.” As the primary
suppliers of critical resources to Europe, Moscow and Tehran would grow
stronger both economically and politically which would significantly
undermine the influence of the US and its allies in the region,
particularly Qatar and Israel. This is why opponents of the pipeline
developed a plan to sabotage the project by fomenting a civil war in
Syria. Here’s Lehmann again:
“In 2007, Qatar sent USD 10 billion to Turkey´s Foreign Minister Davotoglu to prepare Turkey´s and Syria´s Muslim Brotherhood for the subversion of Syria. As we recently learned from former French Foreign Minister Dumas, it was also about that time, that actors in the United Kingdom began planning the subversion of Syria with the help of “rebels”’ (Christof Lehmann,Interview with Route Magazine)
In
other words, the idea to arm, train and fund an army of jihadi
militants, to oust al Assad and open up Syria to western interests, had
its origins in an evolving energy picture that clearly tilted in the
favor of US rivals in the region. (Note: We’re not sure why Lehmann
leaves out Saudi Arabia, Kuwait or the other Gulf States that have also
been implicated.)
Lehmann’s
thesis is supported by other analysts including the Guardian’s Nafeez
Ahmed who explains what was going on behind the scenes of the fake civil
uprising in Syria. Here’s a clip from an article by Ahmed titled “Syria
intervention plan fueled by oil interests, not chemical weapon
concern”:
“In May 2007, a presidential finding revealed that Bush had authorised CIA operations against Iran. Anti-Syria operations were also in full swing around this time as part of this covert programme, according to Seymour Hersh in the New Yorker. A range of US government and intelligence sources told him that the Bush administration had “cooperated with Saudi Arabia’s government, which is Sunni, in clandestine operations” intended to weaken the Shi’ite Hezbollah in Lebanon. “The US has also taken part in clandestine operations aimed at Iran and its ally Syria,” wrote Hersh, “a byproduct” of which is “the bolstering of Sunni extremist groups” hostile to the United States and “sympathetic to al-Qaeda.” He noted that “the Saudi government, with Washington’s approval, would provide funds and logistical aid to weaken the government of President Bashir Assad, of Syria”…According to former French foreign minister Roland Dumas, Britain had planned covert action in Syria as early as 2009: “I was in England two years before the violence in Syria on other business”, he told French television:“I met with top British officials, who confessed to me that they were preparing something in Syria. This was in Britain not in America. Britain was preparing gunmen to invade Syria.”
… Leaked emails from the private intelligence firm Stratfor including notes from a meeting with Pentagon officials confirmed US-UK training of Syrian opposition forces since 2011 aimed at eliciting “collapse” of Assad’s regime “from within.”So what was this unfolding strategy to undermine Syria and Iran all about? According to retired NATO Secretary General Wesley Clark, a memo from the Office of the US Secretary of Defense just a few weeks after 9/11 revealed plans to “attack and destroy the governments in 7 countries in five years”, starting with Iraq and moving on to “Syria, Lebanon, Libya, Somalia, Sudan and Iran.” In a subsequent interview, Clark argues that this strategy is fundamentally about control of the region’s vast oil and gas resources.”
(“Syria intervention plan fueled by oil interests, not chemical weapon concern“, The Guardian)
Apparently,
Assad was approached by Qatar on the pipeline issue in 2009, but he
refused to cooperate in order “to protect the interests of [his] Russian
ally.” Had Assad fallen in line and agreed to Qatar’s offer, then the
effort to remove him from office probably would have been called off. In
any event, it was the developments in Syria that triggered the frenzied
reaction in Ukraine. According to Lehmann:
“The war in Ukraine became predictable (unavoidable?) when the great Muslim Brotherhood Project in Syria failed during the summer of 2012. …In June and July 2012 some 20,000 NATO mercenaries who had been recruited and trained in Libya and then staged in the Jordanian border town Al-Mafraq, launched two massive campaigns aimed at seizing the Syrian city of Aleppo. Both campaigns failed and the ”Libyan Brigade” was literally wiped out by the Syrian Arab Army.It was after this decisive defeat that Saudi Arabia began a massive campaign for the recruitment of jihadi fighters via the network of the Muslim Brotherhoods evil twin sister Al-Qaeda.The International Crisis Group responded by publishing its report ”Tentative Jihad”. Washington had to make an attempt to distance itself ”politically” from the ”extremists”. Plan B, the chemical weapons plan was hedged but it became obvious that the war on Syria was not winnable anymore.” (“The Atlantic Axis and the Making of a War in Ukraine“, New eastern Outlook)
There
were other factors that pushed the US towards a conflagration with
Moscow in Ukraine, but the driving force was the fact that US rivals
(Russia and Iran) stood to be the dominant players in an energy war that
would increasingly erode Washington’s power. Further economic
integration between Europe and Russia poses a direct threat to US plans
to pivot to Asia, deploy NATO to Russia’s borders, and to continue to
denominate global energy supplies in US dollars.
Lehmann
notes that he had a conversation with “a top-NATO admiral from a
northern European country” who clarified the situation in a terse,
two-sentence summary of US foreign policy. He said:
“American colleagues at the Pentagon told me, unequivocally, that the US and UK never would allow European – Soviet relations to develop to such a degree that they would challenge the US/UK’s political, economic or military primacy and hegemony on the European continent. Such a development will be prevented by all necessary means, if necessary by provoking a war in central Europe”.
This
is the crux of the issue. The United States is not going to allow any
state or combination of states to challenge its dominance. Washington
doesn’t want rivals. It wants to be the undisputed, global superpower,
which is the point that Paul Wolfowitz articulated in an early draft of
the US National Defense Strategy:
“Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”
So
the Obama administration is going to do whatever it thinks is necessary
to stop further EU-Russia economic integration and to preserve the
petrodollar system. That system originated in 1974 when President
Richard Nixon persuaded OPEC members to denominate their oil exclusively
in dollars, and to recycle their surplus oil proceeds into U.S.
Treasuries. The arrangement turned out to be a huge windfall for the US,
which rakes in more than $1 billion per day via the process. This, in
turn, allows the US to over-consume and run hefty deficits. Other
nations must stockpile dollars to purchase the energy that runs their
machinery, heats their homes and fuels their vehicles. Meanwhile, the US
can breezily exchange paper currency, which it can print at no-expense
to itself, for valuable imported goods that cost dearly in terms of
labor and materials. These dollars then go into purchasing oil or
natural gas, the profits of which are then recycled back into USTs or
other dollar-denominated assets such as U.S. stocks, bonds, real estate,
or ETFs. This is the virtuous circle that keeps the US in the top spot.
As
one critic put it: “World trade is now a game in which the US produces
dollars and the rest of the world produces things that dollars can buy.”
The
petrodollar system helps to maintain the dollar’s monopoly pricing
which, in turn, sustains the dollar as the world’s reserve currency. It
creates excessive demand for dollars which allows the Fed to expand the
nation’s credit by dramatically reducing the cost of financing. If oil
and natural gas were no longer denominated in USDs, the value of the
dollar would fall sharply, the bond market would collapse, and the US
economy would slip into a long-term slump.
This
is one of the reasons why the US invaded Iraq shortly after Saddam had
switched over to the euro; because it considers any challenge to the
petrodollar looting scam as a direct threat to US national security.
Moscow
is aware of Washington’s Achilles’s heel and is making every effort to
exploit that weakness by reducing its use of the dollar in its trade
agreements. So far, Moscow has persuaded China and Iran to drop the
dollar in their bilateral dealings, and they have found that other
trading partners are eager to do the same. Recently, Russian economic
ministers conducted a “de-dollarization” meeting in which a “currency
switch executive order” was issued stating that “the government has the
legal power to force Russian companies to trade a percentage of certain
goods in rubles.”
Last week, according to RT:
“The Russian and Chinese central banks have agreed a draft currency swap agreement, which will allow them to increase trade in domestic currencies and cut the dependence on the US dollar in bilateral payments. “The draft document between the Central Bank of Russia and the People’s Bank of China on national currency swaps has been agreed by the parties…..The agreement will stimulate further development of direct trade in yuan and rubles on the domestic foreign exchange markets of Russia and China,” the Russian regulator said.Currently, over 75 percent of payments in Russia-China trade settlements are made in US dollars, according to Rossiyskaya Gazeta newspaper.” (“De-Dollarization Accelerates – China/Russia Complete Currency Swap Agreement“, Zero Hedge)
The
attack on the petrodollar recycling system is one of many asymmetrical
strategies Moscow is presently employing to discourage US aggression, to
defend its sovereignty, and to promote a multi-polar world order where
the rule of law prevails. The Kremlin is also pushing for institutional
changes that will help to level the playing field instead of creating an
unfair advantage for the richer countries like the US. Naturally,
replacing the IMF, whose exploitative loans and punitive policies,
topped the list for most of the emerging market nations, particularly
the BRICS (Brazil, Russia, India, China and South Africa) who, in July,
agreed to create a $100 billion Development Bank that will “will counter
the influence of Western-based lending institutions and the dollar. The
new bank will provide money for infrastructure and development projects
in BRICS countries, and unlike the IMF or World Bank, each nation has
equal say, regardless of GDP size.
According to RT:
“The big launch of the BRICS bank is seen as a first step to break the dominance of the US dollar in global trade, as well as dollar-backed institutions such as the International Monetary Fund (IMF) and the World Bank, both US-based institutions BRICS countries have little influence within…“This mechanism creates the foundation for an effective protection of our national economies from a crisis in financial markets,” Russian President Vladimir Putin said.”
(“BRICS establish $100bn bank and currency pool to cut out Western dominance“, RT)
It’s
clear that Washington’s aggression in Ukraine has focused Moscow’s
attention on retaliation. But rather than confront the US militarily, as
Obama and Co. would prefer, Putin is taking aim at the vulnerabilities
within the system. A BRICS Development Bank challenges the IMF’s
dominant role as lender of last resort, a role that has enhanced the
power of the wealthy countries and their industries. The new bank
creates the basis for real institutional change, albeit, still within
the pervasive capitalist framework.
Russian
politician and economist, Sergei Glazyev, summarized Moscow’s approach
to the US-Russia conflagration in an essay titled “US is militarizing
Ukraine to invade Russia.” Here’s an excerpt:
“To stop the war, you need to terminate its driving forces. At this stage, the war unfolds mainly in the planes of economic, public relations and politics. All the power of US economic superiority is based on the financial pyramid of debt, and this has gone long beyond sustainability. Its major lenders are collapsing enough to deprive the US market of accumulated US dollars and Treasury bonds. Of course, the collapse of the US financial system will cause serious losses to all holders of US currency and securities. But first, these losses for Russia, Europe and China will be less than the losses caused by American geopolitics unleashing another world war. Secondly, the sooner the exit from the financial obligations of this American pyramid, the less will be the losses. Third, the collapse of the dollar Ponzi scheme gives an opportunity, finally, to reform the global financial system on the basis of equity and mutual benefit.”
Washington
thinks “modern warfare” involves covert support for proxy armies
comprised of Neo Nazis and Islamic extremists. Moscow thinks modern
warfare means undermining the enemy’s ability to wage war through
sustained attacks on it’s currency, its institutions, its bond market,
and its ability to convince its allies that it is a responsible steward
of the global economic system.
I’ll put my money on Russia.
MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.
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