Saturday, December 20, 2014

Paul Craig Roberts – Russia To Unleash Ultimate Black Swan Against The West



Paul Craig Roberts – Russia To Unleash Ultimate Black Swan Against The West

December 20, 2014
Paul Craig Roberts – Russia To Unleash Ultimate Black Swan Against The West
Today Dr. Paul Craig Roberts warned King World News that the Russians are going to unleash what he called the "ultimate black swan" against the West.  Dr. Roberts also discussed how a terrifying series of events would then bring the Western financial system to it knees as the banking system completely collapses.
Dr. Roberts:  “I was listening to the news today and there were all these self-righteous people just happy as all get out that they had finally stomped Russia into the ground and ‘Russia is now finished,’ and Russia was broken and ‘would soon be an American vassal state where it belongs.'  And I was listening to this rot and got to thinking, ‘How can people be so utterly stupid?’  But they are, and they are just as stupid in Washington.
And in the meantime, as part of this process, Eric, we may see Russia unleash black swans that bring down the Western house of cards….
Continue reading the Paul Craig Roberts interview below…  

“Suppose the Russian government says, ‘Well, since the attack on the ruble is political and you guys are attacking the ruble and causing us so much trouble, we are just not going to pay off the next traunch of our debt that comes due early in 2015.' 
Well, the European banking system would collapse because those banks are terribly undercapitalized.  Some of them have loans to Russia that almost absorb the entire capital base.  So the Russians don’t even have to default.  They can just say, ‘We’re not going to pay this year.  We will do it later.  We’ll do it when the ruble stabilizes.’ (Laughter).
You can understand the impact of such a decision by the Russians on the West.   And given all the linkages and the interconnections — when Lehman Brothers went down it had just about as much adverse affect on Europe as it did the United States.
What would come from that?  Who knows?  There are all kinds of derivatives and credit default swaps everywhere.  We know these derivatives now are some multiple of the world’s Gross Domestic Product.  And nobody really knows who all the counterparties are.  If the European banks start going down, who knows what the impact on this pile of derivatives would be?  But the whole Western system is a house of cards.  It’s not based on anything other than market manipulation.  So it doesn’t take much of a push to knock it down.
The biggest black swan of all, Eric, if the Russians get thoroughly angry, all they have to do is call up the European governments and say, ‘We no longer sell natural gas or any other form of energy to members of NATO.'  The consequence would be the utter and total collapse of NATO.  Not even a puppet state like Germany is going to let the people freeze to death, let the factories be closed down, and let the unemployment rate hit 40 percent.  It’s just not going to happen — it would be the end of NATO.
So whenever the Russians want to destroy NATO, that’s all they have to do.  Just call up the puppet Merkel, call up the puppet Hollande, the puppet Cameron, and say, ‘You guys really enjoy being in NATO, well let me tell you what, we no longer sell energy to NATO members.’  That’s the end of NATO and that’s the end of the cover for American power.
That would set off so many black swans.  Every banking system would probably collapse because if the German banks are faced with German industry closing down, what the hell is going to happen to the banks?  So all the cards are in Putin’s hands.  None of them are in Washington’s hands.  Putin is going to reorient Russia to the East.  Then you are going to see Russia, India, and China, take over the leadership of the world.  That will start in 2015.” KWN has now released the incredible Dr. Paul Craig Roberts audio interview where he discussed his stunning 2015 predictions, the 'Gold black swan' as well as other black swans Russia may unleash which would cause Western collapse and much more. This is one of Dr. Roberts' most important audio interviews ever and you can listen to it by CLICKING HERE.

On the Brink of War and Economic Collapse — Paul Craig Roberts



On the Brink of War and Economic Collapse — Paul Craig Roberts

On occasion a reader will ask if I can give readers some good news. The answer is: not unless I lie to you like “your” government and the mainstream media do. If you want faked “good news,” you need to retreat into The Matrix. In exchange for less stress and worry, you will be led unknowingly into financial ruin and nuclear armageddon.
If you want to be forewarned, and possibly prepared, for what “your” government is bringing you, and have some small chance of redirecting the course of events, read and support this site. It is your site. I already know these things. I write for you.
The neoconservatives, a small group of warmongers strongly allied with the military/industrial complex and Israel, gave us Granada and the Contras affair in Nicaragua. President Reagan fired them, and they were prosecuted, but subsequently pardoned by Reagan’s successor, George H.W. Bush.
Ensconced in think tanks and protected by Israeli and military/security complex money, the neoconservatives reemerged in the Clinton administration and engineered the breakup of Yugoslavia, the war against Serbia, and the expansion of NATO to Russia’s borders.
Neoconservatives dominated the George W. Bush regime. They controlled the Pentagon, the National Security Council, the Office of the Vice President, and much else. Neoconservatives gave us 9/11 and its coverup, the invasions of Afghanistan and Iraq, the beginning of the destabilizations of Pakistan and Yemen, the U.S. Africa Command, the invasion of South Ossetia by Georgia, the demise of the anti-ABM Treaty, unconstitutional and illegal spying on American citizens without warrants, loss of constitutional protections, torture, and the unaccountability of the executive branch to law, Congress, and the judiciary. In short, the neoconservatives laid the foundation for dictatorship and for WW III.
The Obama regime held no one accountable for the crimes of the Bush regime, thus creating the precedent that the executive branch is above the law. Instead, the Obama regime prosecuted whistleblowers who told the truth about government crimes.
Neoconservatives remain very influential in the Obama regime. As examples, Obama appointed neoconservative Susan Rice as his National Security Advisor. Obama appointed neoconservative Samantha Power as U.S. Ambassador to the United Nations. Obama appointed neoconservative Victoria Nuland as Assistant Secretary of State. Nuland’s office, working with the CIA and Washington-financed NGOs, organized the U.S. coup in Ukraine.
Neoconservatism is the only extant political ideology. The ideology is “America uber alles.” Neoconservatives believe that History has chosen the United States to exercise hegemony over the world, thereby making the U.S. “exceptional” and “indispensable.” Obama himself has declared as much. This ideology gives neoconservatives tremendous confidence and drive, just as Karl Marx’s conclusion that history had chosen the workers to be the ruling class gave early communists confidence and drive.
This confidence and drive makes the neoconservatives reckless.
To advance their agenda neoconservatives propagandize the populations of the U.S. and Washington’s vassal states. The presstitutes deliver the neoconservatives’ lies to the unsuspecting public: Russia has invaded and annexed Ukrainian provinces; Putin intends to reconstitute the Soviet Empire; Russia is a gangster state without democracy; Russia is a threat to the Baltics, Poland, and all of Europe, necessitating a U.S./NATO military buildup on Russia’s borders; China, a Russian ally, must be militarily contained with new U.S. naval and air bases surrounding China and controlling Chinese sea lanes.
The neoconservatives and President Obama have made it completely clear that the U.S. will not accept Russia and China as sovereign countries with economic and foreign policies independent of the interests of Washington. Russia and China are acceptable only as vassal states, like the UK, Europe, Japan, Canada, and Australia.
Clearly, the neoconservative formula is a formula for the final war.
All of humanity is endangered by a handful of evil men and women ensconced in positions of power in Washington.
Anti-Russia propaganda has gone into high gear. Putin is the “new Hitler.”
Daniel Zubov reports on a joint conference held by three U.S. think tanks.
The conference blamed Russia for the failures of Washington’s foreign policy. Read this article:http://sputniknews.com/columnists/20141205/1015538604.html to see how neoconservatives operate in order to control the explanations. Even Henry Kissinger is under attack for stating the obvious truth that Russia has a legitimate interest in Ukraine, a land long part of Russia and located in Russia’s legitimate sphere of influence.
Since the Clinton regime, Washington has been acting against Russian interests. In his forthcoming book, The Globalization of War: America’s Long War against Humanity, Professor Michel Chossudovsky presents a realistic appraisal of how close Washington has brought the world to its demise in nuclear war. This passage is from the Preface:
“The ‘globalization of war’ is a hegemonic project. Major military
and covert intelligence operations are being undertaken
simultaneously in the Middle East, Eastern Europe, sub-Saharan
Africa, Central Asia and the Far East. The US military agenda
combines both major theater operations as well as covert actions
geared towards destabilizing sovereign states.
“Under a global military agenda, the actions undertaken by the
Western military alliance (US-NATO-Israel) in Afghanistan, Pakistan,
Palestine, Ukraine, Syria and Iraq are coordinated at the highest
levels of the military hierarchy. We are not dealing with
piecemeal military and intelligence operations. The July-August
2014 attack on Gaza by Israeli forces was undertaken in close consultation
with the United States and NATO. In turn, the actions in
Ukraine and their timing coincided with the onslaught of the attack
on Gaza.
“In turn, military undertakings are closely coordinated with a
process of economic warfare which consists not only in imposing
sanctions on sovereign countries but also in deliberate acts of destabilization
of financial and currency markets, with a view to undermining
the enemies’ national economies.
“The United States and its allies have launched a military adventure
which threatens the future of humanity. As we go to press, US
and NATO forces have been deployed in Eastern Europe. US military
intervention under a humanitarian mandate is proceeding in sub-Saharan
Africa. The US and its allies are threatening China under President Obama’s
‘Pivot to Asia’.
“In turn, military maneuvers are being conducted at Russia’s
doorstep which could lead to escalation.
“The US airstrikes initiated in September 2014 directed against
Iraq and Syria under the pretext of going after the Islamic State are
part of a scenario of military escalation extending from North Africa
and the Eastern Mediterranean to Central and South Asia.
The Western military alliance is in an advanced state of readiness.
“And so is Russia.”
As I have often remarked, Americans are an insouciant people. They are simply unaware. Suppose they were aware, suppose that the entire population understood the peril, could anything be done, or have the insouciant Americans fallen under the control of the police state that Washington has created?
I don’t think there is much hope from the American people. The American people cannot tell genuine from fake leadership, and the ruling private elites will not permit real leaders to emerge. Moreover, there is no organized movement in opposition to the neoconservatives.
The hope comes from outside the political system. The hope is that the House of Cards and rigged markets erected by policymakers for the benefit of the One Percent collapses. David Stockman regards this outcome as a highly likely one. The collapse that Stockman sees as being on its way is the same collapse about which I have warned. Moreover, the number of Black Swans which can originate collapse are even more numerous than the ones Stockman correctly identifies. Some financial organizations are worried about a lack of liquidity in the fixed income (bonds) and derivatives markets. Barbara Novack, co-chair of Black Rock, is lobbying hard for a derivatives bailout mechanism.
David Stockman’s article is important. Read it until you understand it, and you will know more than most everyone. http://www.lewrockwell.com/2014/12/david-stockman/duck-and-cover%E2%80%A8/
Many will ask: If the wealth of the One Percent is vulnerable to economic collapse, will war be initiated to protect this wealth and to blame the Russians or Chinese for the hardships that engulf the American population? My answer is that the kind of collapse that I expect, and that David Stockman and no doubt others expect, presents government with such social, political, and economic insecurity that organizing for a major war becomes impossible.
Whereas the political impotence of the American people and the vassalage of the Western World impose no constraints on Washington, economic collapse brings revolutions and the demise of the existing order.
As hard as collapse would make it for people to survive, the chances for survival are higher than in the event of nuclear war

Friday, December 19, 2014

Tesla Stabbed in the Back 3 Times for an Endless Energy Secret

Subject: Tesla Stabbed in the Back 3 Times for an Endless Energy Secret




There's a dirty secret that the media don't want to expose
because it will probably set up a new energy revolution.
Recent documents show clearly the Nikola Tesla secret
that was meant to reduce electricity consumption
by 82% for all citizens.
Big fat cats didn't like this... and the big Inventor
got stabbed 3 times in the back...
ending up alone and broke.
In a strange chain of events this secret got leaked...
and it's right here.
Rumor says that some famous physicists screamed
when they first saw it.
Other refuse to believe it because it just
sounds too good to be true...
Anyway, the bottom line is that every person in this world
who is frustrated with how much they are paying for electricity
has the right to see this "weird" device
that can cut electricity costs by 82%.
To more cheap energy,
Dr. Richard Brooks
P.S - this is not some ordinary 'free' electricity invention.
It comes from the big inventor Nikola Tesla and
it could save your wallet.

Video: Exposing the White House's Dumb 'Executive Action' Numbers Game


Video: Exposing the White House's Dumb 'Executive Action' Numbers Game

Guy Benson

12/19/2014 1:22:00 PM - Guy Benson

Whenever the White House is pressed on President Obama's promiscuous and impactful use of executive action to achieve his policy objectives, they fall back on a specious talking point: Contrary to Republican claims, they say, Obama has issued significantly fewer executive orders than his predecessors from both parties over the last century. The goal is to paint critics as hypocritical, foolish, and blinded by irrational opposition. Many journalists seem to have swallowed Team Obama's story whole. But not USA Today reporter Gregory Korte, or Fox News' Ed Henry, who challenged White House Press Secretary Josh Earnest on the president's math, exposing the cynical and contradictory "rules" by which the administration has been playing in order to sustain their misleading claim:


EH: You will remember some months ago the president claimed he was using executive orders at the lowest rate in more than 100 years. 195 executive orders less than Democratic and Republican predecessors but when you add on 198 presidential memorandum, it actually turns out he is using a lot more than his predecessors, right? ...

JE: It was true because the number of executive orders is lower, as you pointed out, than executive orders that have been issued by many of his previous predecessors.

EH: Presidential memoranda have essentially the same effect, despite being called something different. The fact of the matter is that he is taking a lot more executive action.

JE: There is an important difference between executive orders and presidential memorandums. I would grant the premise that the president has used every element at his disposal to use -- to move the country forward and he has done that in a way consistent with the law and precedents and is often carried out in the face of pretty rigid Congressional obstruction….Generally speaking, presidential memoranda are associated with more technical issues and often directives related to a subset of agencies. Executive orders are often more sweeping and impactful...

EH: Generally they are more sweeping, but in the case of immigration, which you will announce was pretty sweeping, it was a presidential memorandum. So by your definition, I am slightly confused? You said the executive order was quite sweeping. The Immigration one actually was not. The point that I was trying to make them the matter what you call it, he was kind of misleading people about how often he was using executive actions.

JE: I think the president was being explicit that his predecessors have issued far more than he has. I do not think anyone has made the case come here that he is not willing to use executive authority to move the country forward. In fact, he has. Thank you, Ed.

"Thank you, Ed.  I've had enough of your questions on this subject."  That is some weak sauce spin from Earnest, parsing terms and harping on semantics to obscure the larger truth.  But as I said on Fox earlier, the numerical quantity and technical categories of executive action are far less relevant than the legality, propriety and consequences of the action being taken:


Even if a president almost never issued any executive orders or memoranda, if he then turned around and exceeded his authority with one giant violation of the separation of powers, those raw numbers don't matter.  They're a distraction.  And while this president's comprehensive hypocrisy on issues from campaign finance, to transparency, to executive power is well established at this point, I couldn't help but quote him as a presidential candidate in the 2008 cycle:


Notice that he wasn't troubled by President Bush's excessive issuance of executive memos vs. executive orders, or whatever.  He was (or at least claimed to be) worried about what he saw as Bush's improper arrogation of power, vis-a-vis Congress.  That Barack Obama is long gone.  Because Barack Obama's guiding principle is employing whatever argument or behavior Barack Obama needs in the moment.  His own standards and previous statements don't matter when the 'greater good' is at stake.

Foreign Bankers Rape Ukraine

From: Kent
Subject: Foreign Bankers Gain Power in Ukraine Government and loot the People's finances

a bankster coup and war...

Thursday, December 18, 2014

Foreign Bankers Rape Ukraine

William EngdahlActivist Post  

If it were not for the fact that the lives of some 45 million people are at stake, Ukrainian national politics could be laughed off as a very sick joke. Any pretenses that the October national elections would bring a semblance of genuine democracy of the sort thousands of ordinary Ukrainians demonstrated for on Maidan Square just one year ago vanished with the announcement by Victoria Nuland’s darling Prime Minister, “Yat” Yatsenyuk, of his new cabinet. 

The US-picked Ukraine President, billionaire oligarch Petro Poroshenko called “snap” elections at the end of August for October 26. He did so to make sure genuine opposition to his regime of murderers, gangsters and in some cases outright Nazis would be able to push an unprepared genuine opposition out of the Verkhovna Rada or Parliament. Because the parliament had significant opposition parties to the US-engineered February 22 coup d’etat, they had blocked many key pieces of legislation that the Western vultures were demanding, from changing key land ownership laws to privatization of precious state assets. By law, the old parliament would have sat until its five year term ended in October, 2017. That was clearly too long for State Department neo-con Ukraine puppet-mistress Victoria Nuland and her backers in Washington. 

Now, with a new parliament that is controlled by the Petro Poroshenko bloc as largest party and the boyish-looking former Prime Minister Arseniy Yatsenyuk, who is also new Prime Minister as head of the second largest party, the way was clear to get on with the rape of Ukraine. What shocked some is the blatant foreign takeover that followed, like a Wall Street vulture fund raid on a distressed debtor country of the Third World. 

The ridiculous charade 

Yatsenyuk, former finance minister in a previous criminal regime, and a suspected senior member of the US-intelligence-friendly “Church of Scientology,” has named three complete foreigners as cabinet ministers in key economic posts. And in an extraordinary act, the three have been made instant Ukrainian citizens by Poroshenko in a ridiculous ceremony. Ukraine is looking more and more like the US-occupied Philippines after the Spanish-American War of 1898 when General Arthur MacArthur, father of the mentally-dis-ordered Douglas, was Washington’s dictator on the spot. 



The new Ukrainian Finance Minister, the one who will control the money and decides where it goes, is one Natalia A. Jaresko. She speaks fluent Ukrainian. Only problem—she is an American citizen, a US State Department veteran who is also a US investment banker. Now, the Ukrainian Constitution, prudently enough, stipulates that government ministers be Ukrainian. How then does our sweet Natalia come in? 

The President of Ukraine, another Victoria Nuland favorite, the “Chocolate King” corrupt oligarch billionaire, Petro Poroshenko, made her a Ukrainian citizen in a bizarre ceremony the same day just hours before the parliament declared her Finance Minister. 

In justifying his astonishing move, Poroshenko declared, “There are absolutely extraordinary challenges facing Ukraine…All this requires innovative solutions in the government…These decisions mean searching for candidates for the new government not only in Ukraine but alsoabroad.” 

Forget your earlier silly schoolbook notions about how a democracy and a nation function. This is the age of no nation state, of private capital taking over the world for sake of profit. Looting über alles is the motto. The nation of Ukraine is being put on the auction bloc to be privatized anyway, so it makes sense that the auctioneers at the US State Department head-hunt the ones to do the inside job of preparing that auction wherever they find the willing executioners. And because what the privatizers have planned, it is easier to believe a non-Ukrainian would let the country be raped easier than a native Ukrainian, even corrupt natives. 

In her acceptance speech Jaresko declared, “The new team aims to change the country, to improve its transparency and to eliminate corruption. The members of the team are ready to deal with the challenges Ukraine faces today. This is a government of professionals and technocrats, and we intend to work. I’ve been living in Ukraine for 22 years and until this day I was the head of a large company that controlled three investment funds,” she told Ukrainian television news service TSN. 

What Jaresko did not say was that she had been sent to Ukraine 22 years before as a member of the US State Department. 

Jaresko’s qualifications for the job fit the requirements of a vulture fund rapist banker. She was founder and CEO of Horizon Capital Associates, LLC. Her Horizon Capital is “a private equity and venture capital firm specializing in early stage, buyouts, growth capital, and expansion opportunities. It prefers to invest in financial services, fast moving consumer goods, retail, and industrial goods sectors. It typically invests in mid-cap companies based in Ukraine, Belarus, and Moldova,” according to Business Week. They were founded in 1995 and have offices in Kiev. Jaresko is also at the same time CEO of a private equity fund WNISEF. 

WNISEF or Western NIS Enterprise Fund is a $150 million private equity fund, active in Ukraine and Moldova investing in small and medium-sized companies. Since its inception, “WNISEF has invested approximately $168 million in 118 companies in the region in a range of industries with a concentration on fast moving consumer goods, construction materials, packaging, retail, and financial services. WNISEF is managed by Horizon Capital Associates, LLC. WNISEF was established by the US Congress and funded by the US government via US Agency for International Development (USAID).” 

Before she founded Horizon and WNISEF, the Harvard-trained Jaresko worked for the US State Department in the IMF-steered looting of the country that began just after the US-inspired collapse of the Soviet Union in 1991. From 1992-1995 she was Chief of the Economic Section of the US Embassy in Kiev. When US-backed Viktor Yushchenko was installed via Washington’s “Orange Revolution” as President in 2004, Jaresko served on his Foreign Investors Advisory Council. 

US State Department deputy spokeswoman, former CIA spokeswoman Marie Harf has already denied Washington had any hand in her appointment. Of course she would never lie. 

Another foreign banker as Economy Minister

Apparently not satisfied that only one investment banker as Finance Minister would suffice, Nuland’s Washington friends have installed Aivaras Abromavicius, a Lithuanian investment banker, to be Economy Minister. According to the official US Government propaganda site, Radio Free Europe—the old CIA Cold War propaganda news service still exists, with its old name as kind of a sick joke—Abromavicius, born in Vilnius, Lithuania, has worked in Kyiv since 2008 as partner and fund manager at the East Capital asset management group. East Capital reportedly has invested almost $100 million in 2012 in Ukrainian projects. It would be interesting to know whose money. Abromavicius describes himself as a Ukrainian patriot (sic!), and has pledged “radical measures.” 

East Capital is a Sweden-based “frontier markets” fund active in 25 emerging market countries. The founder of Abromavicius’ East Capital is Peter Elam HÃ¥kansson according to their website. Before that HÃ¥kansson held leading positions with the Swedish Wallenberg family’s Enskilda Securities. 

And a Georgian Health Minister

Rounding out the bizarre new Cabinet of Yatsenyuk is Alexander Kvitashvili, a Georgian. Kvitashvili was health minister in Georgia between 2008 and 2010, under then-President Mikheil Saakashvili, like Yushchenko, another US-installed corrupt puppet President from the US-financed Rose Revolution of 2003. Kvitashvili studied and worked in the United States before becoming Georgia’s health minister. 

According to Radio Free Europe, “Yatsenyuk has tasked Kvitashvili with introducing sweeping reforms to tackle rampant corruption among health authorities.” However, the designated corruption-fighter has one handicap: he does not speak the Ukrainian language. That doesn’t matter apparently, as he has stated that he has a “deep respect for Ukraine and its people.” More than that, a corruption-fighting health minister in Ukraine these days apparently doesn’t need. 

Rape of an entire country, just as rape of a small child, is murder. It is a form of murder of the soul and ultimately of the child. Forty five million Ukrainians do not deserve such treatment any more than an innocent four-year-old child does. 

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook” where this first appeared. 








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The United States and Cuba Begin Restoring Relations

The United States and Cuba Begin Restoring Relations

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The United States and Cuba on Dec. 17 took their most assertive step in several decades toward normalizing relations. The most important announcements concerned the resumption of high-level political discussions focused on renewing formal diplomatic ties between the countries, which have been nonexistent since 1961. Cuban and U.S. officials will hold high-level meetings in the coming months, and the two countries will work toward establishing embassies in Havana and Washington. The United States will also immediately relax some sanctions on trade and travel to Cuba. President Barack Obama announced that the United States would loosen certain restrictions on financial transactions with Cuba, remove some restrictions on U.S. citizens traveling to Cuba, and authorize the export of certain goods to the Cuban private sector. The U.S. State Department will also review Cuba's designation as a state sponsor of terrorism. Obama has the legal authority to immediately implement the measures he announced, but he left the issue of formally lifting the trade embargo up to Congress. Together, the announcements signaled a gradual process of reopening Cuba to the United States.
Havana has much to gain from starting such a process, especially at a time when its regional partner, Venezuela, faces severe instability. Cuba fears that a declining Venezuelan economy will limit one of the island nation's sources of financing and low-cost petroleum shipments while it is attempting to transition toward a new leadership and economic model.
What is a Geopolitical Diary? George Friedman Explains.
However, a formal end to the embargo is a long way off. The United States' Cuban Liberty and Democratic Solidarity Act of 1996 requires visible progress toward Cuban concessions such as liberalizing political activity, holding free elections and dissolving state security bodies. Nonetheless, the measures announced by Obama will allow the administration to deepen ties with Havana before it approaches Congress to request the lifting of sanctions. Talks between U.S. and Cuban officials will continue into the next year, with the April summit of the Organization of American States serving as the largest public forum at which the two sides can meet. Given Cuban President Raul Castro's advanced age, it is likely the talks will discuss an eventual political transition in the country.
A more immediate question is how the budding rapprochement between the United States and Cuba will affect the behavior of Venezuela, Cuba's most important ally in Latin America. Cuba shares intelligence with Venezuela, enabling Caracas to detect threats from within the country — though at the cost of fomenting discontent within the Venezuelan armed forces. While Cuba's rapprochement with the United States may not immediately change Caracas' relationship with Havana, Venezuela's mounting economic distress and potential for unrest may make it see Cuba's improved ties with the United States as a potential threat in the long run.
Ultimately, Venezuela's future will rely on global oil prices and Venezuelan President Nicolas Maduro's ability to simultaneously manage unrest on the streets and from challengers within the government. The coming year will be a critical one for Maduro, and he is looking for any lifelines that could provide an economic reprieve. With Cuba openly engaging the United States, Maduro may have an additional incentive to seek his own rapprochement with the United States. In fact, several hours after the U.S.-Cuba prisoner swap was announced, Maduro publicly said Venezuela would be willing to improve its stagnant political ties with the United States.
Maduro would not be starting from scratch. Earlier this year, he designated an ambassadorial nominee to the United States and held discussions — albeit inconclusive ones — with Washington to restore normal diplomatic relations. Over the past year, several reports emerged that Caracas was negotiating the resumption of direct counternarcotic activities with the U.S. Drug Enforcement Administration, though no deal has been reached yet. These discussions could be renewed as a result of today's agreements between Cuba and the United States.
Restoring relations with the United States will not solve all of Maduro's problems, however. Venezuela's plummeting economy and its negative impact on the ruling United Socialist Party of Venezuela is largely the result of long-term structural problems that cannot be easily reversed. It is highly unlikely that Maduro will be able to address these problems without incurring major political costs. Consequently, restoring political ties with the United States will depend more on domestic factors than moves from Obama or a subsequent U.S. president.
Regardless, today's developments signal the first step in a long process of reconciliation. While the details of the rapprochement have yet to be solidified, Obama's announcement sets a clear goal for U.S.-Cuban relations, one that could have broader implications throughout the region.

Read more: The United States and Cuba Begin Restoring Relations | Stratfor
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The Half-Moon Shoal Trials: China’s Half-Hearted Response

RSIS Commentary is a platform to provide timely and, where appropriate, policy-relevant commentary and analysis of topical issues and contemporary developments. The views of the authors are their own and do not represent the official position of the S. Rajaratnam School of International Studies, NTU. These commentaries may be reproduced electronically or in print with prior permission from RSIS and due recognition to the author(s) and RSIS. Please email: RSISPublications@ntu.edu.sg for feedback to the Editor RSIS Commentary, Yang Razali Kassim. 


No. 249/2014 dated 19 December 2014
The Half-Moon Shoal Trials:
China’s Half-Hearted Response
By Lim Kheng Swe and Li Mingjiang

Synopsis


China has responded softly to the Philippines’ conviction of nine Chinese fishermen for poaching near Half-Moon Shoal. China’s not-so-strident stance raises questions about its “historic rights” claim in the South China Sea.

Commentary


IN NOVEMBER 2014, a Philippine court found nine Chinese fishermen guilty of poaching sea turtles near the Half-Moon Shoal in the South China Sea. Manila claimed that the poaching took place in its Exclusive Economic Zone (EEZ). On that basis, the fishermen were fined US$102,000 each, and they may remain in jail until May 2015 as they are unlikely to be able to pay up.

China also claims sovereignty over the shoal. From Beijing’s point of view, the fishermen were in Chinese waters exercising China’s “historical rights”, and the Philippines had no right to arrest them and try them in a Philippine court. What is puzzling, though, is China’s low-profile response to the arrest, legal process, and verdict despite the fact that Chinese leaders have been expressing strong resolve to protect China’s maritime interests.

China’s Half-hearted response
China’s Ministry of Foreign Affairs stated that the arrest had infringed on China’s sovereignty and called on the Philippines to release the men and their boat. China, though, has not openly placed other forms of diplomatic pressure or other coercive means on Manila to release its citizens. China’s actions could be a gauge as to its current policy towards the South China Sea, behind the official statements.

Beijing’s stance stands in sharp contrast to its actions over a similar case in 2010, when the Japanese coast guard vessels arrested a Chinese fishing-boat captain in waters over the disputed Diaoyu/Senkaku islands, turning him over to a Japanese court. Beijing suspended all high-level exchanges and blocked rare-earth exports to Japan, eventually securing the captain’s release.

The nine fishermen were arrested on 6 May 2014, after the Philippine coast guard spotted two Chinese fishing vessels in the vicinity of Half-Moon Shoal. One ship fled, but the Philippine authorities boarded the other vessel, and arrested the fishermen, taking them to Palawan to be charged and stand trial.

In response to their arrest, China demanded the release of the fishermen and their boat. China also placed pressure on the Chinese community of Palawan not to cooperate with the Philippine authorities, making it difficult for the courts to find an interpreter. Furthermore, the Chinese embassy refused to issue a “certificate of indigence”, which would qualify the defendants for a public lawyer, further delaying the trial.

China therefore tried to show that it does not recognise the jurisdiction of Philippine law primarily by using the loopholes of that very legal system, which contradicts the very aims it sets out to accomplish. This approach is very different from Beijing’s very vocal stance towards Japan in 2010, and has implications for its claims in the South China Sea. Beijing’s response, after the fishermen were found guilty, further cements the impression of China “going soft” on the issue.

Why so quiet?

Certainly, the “history issue” between China and Japan played a vital role in China’s response to Japan’s arrest of the Chinese captain. Chinese authorities may feel safe that a softer stance to the fishing dispute with the Philippines would not entail strong nationalistic backlash inside China. But, there are other factors that have helped shape China’s nearly quiet response this time around.

This small incident suggests that China is perhaps changing its tone over the South China Sea. There are four possible reasons: Firstly, China’s soft response may reflect the tacit understanding of many among the Chinese elite that China’s claim in the South China Sea, still ambiguous in some respects, has weaknesses.

China understands that, under mainstream interpretations of international law, it cannot realistically make an exclusive claim to the waters within the entire nine-dash line, disregarding the interests of its Southeast Asian neighbours. This is compounded by a second factor, namely that such fishing disputes happen very often in the South China Sea, meaning that China no longer has any strong impulse to act.

Thirdly, the Philippines has initiated an international arbitration that is mainly targeted at China’s positions in the South China Sea. Although China does not officially recognise the arbitration proceedings, it does not want to arouse international tension that may have an impact on the proceedings. China’s top priority is to encourage the tribunal to drop the case. Beijing may have feared that a high-profile and heavy-handed approach to the fishing dispute would only help the Philippine legal case.

Lastly, China is trying to mend fences with ASEAN countries after a few years of difficult interactions over the South China Sea disputes. China has proposed several initiatives, such as the 21st Century Maritime Silk Road, the attempt to forge a “Diamond Decade” in the Sino-ASEAN partnership over the next ten years, and the declaration of 2015 as a Sino-ASEAN “Maritime Cooperation Year”. China would not want to take any actions that could scupper the positive trajectory in Sino-ASEAN relations.
Implications for China’s historical rights claim

China has not clearly defined its claim in the South China Sea, largely because of the ambiguity revolving around the nine-dash line. The policy discourses in China have revealed a few possible interpretations of the line. Emerging as mainstream is the view that China enjoys sovereignty over all the land features and “historical rights” in the waters within the whole nine-dash line.

The right of Chinese citizens to exploit the fishing resources within these waters has been a key component of the “historical rights” claim. This view is based on the argument that Chinese fishermen have historically exploited the resources within the nine-dash line for hundreds of years.
   
China faces a dilemma in its actual behaviour in the South China Sea. If it tries to press its claims strongly, it risks inflaming relations with its neighbours, hurting regional stability. However, by not doing so, China has not shown sufficient resistance over the arrest of its fishermen for exercising their 'historical right' to fish near Half-Moon Shoal. By taking such an approach, China is not standing up for its own claimed historical rights in the South China Sea, thus weakening its very claims in the South China Sea.

Lim Kheng Swe is a Research Analyst and Li Mingjiang is Associate Professor and Coordinator of the China Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University.
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