Monday, May 19, 2014

America, the unnecessary (Added note)

Added note: Margaret Kimberley has written an article which sounds a note similar to the piece by Pepe Escobar quoted below. Kimberly:
Because of American intervention, Ukraine is embroiled in what can only be described as a civil war. For the past two weeks, the Ukrainians coupists supported by the United States and NATO have openly massacred their fellow citizens with the tacit approval of the White House and without exposure from the American corporate media.

The United States behaves like a caricature of action movie villains, an evil empire which foments violence around the world in order to have its way. Yet there is nothing cartoonish about the dead people in Iraq and Afghanistan and Somalia and Syria and now Ukraine. There is no great mystery to America’s awful but very simple motive.

The United States wants to maintain its status as the world’s only superpower and makes the rest of humanity its enemy in the process. If the United States controls the world the dollar will remain the world’s reserve currency. In order for this to happen the upstart BRIC nations have to remain upstarts and that means that they must be destabilized whenever and wherever possible. The project for a new American century can be realized and every nation will have to bow to America’s whims. That is the nightmarish vision of this president and of anyone who yearns to capture that position after him.
The effort seems doomed. As the Escobar piece below establishes, we're really no match for the BRICS alliance.

It's ironic: The very people behind the Project for a New American Century insured that the New Century will be the BRICS Century. Neoliberalism works as well as neoconservativism -- that is to say, not at all. We're flailing like a wounded rhino, desperate to re-assert our dominance in a world that has simply had it with our shit.

And here's our original post:

I see Pepe Escobar's important new story in terms of libertarianism vs. the mixed economy. The US is more thoroughly wedded to neo-liberal or libertarian economic ideology than are any of the BRICS countries. If libertarianism were the better system, then -- logically -- we should by surging forward while Russia and China fall into the mire.

And yet...
A specter is haunting Washington, an unnerving vision of a Sino-Russian alliance wedded to an expansive symbiosis of trade and commerce across much of the Eurasian land mass -- at the expense of the United States.

And no wonder Washington is anxious. That alliance is already a done deal in a variety of ways: through the BRICS group of emerging powers (Brazil, Russia, India, China, and South Africa); at the Shanghai Cooperation Organization, the Asian counterweight to NATO; inside the G20; and via the 120-member-nation Non-Aligned Movement (NAM). Trade and commerce are just part of the future bargain. Synergies in the development of new military technologies beckon as well. After Russia’s Star Wars-style, ultra-sophisticated S-500 air defense anti-missile system comes online in 2018, Beijing is sure to want a version of it. Meanwhile, Russia is about to sell dozens of state-of-the-art Sukhoi Su-35 jet fighters to the Chinese as Beijing and Moscow move to seal an aviation-industrial partnership.

This week should provide the first real fireworks in the celebration of a new Eurasian century-in-the-making when Russian President Vladimir Putin drops in on Chinese President Xi Jinping in Beijing. You remember “Pipelineistan,” all those crucial oil and gas pipelines crisscrossing Eurasia that make up the true circulatory system for the life of the region. Now, it looks like the ultimate Pipelineistan deal, worth $1 trillion and 10 years in the making, will be inked as well. In it, the giant, state-controlled Russian energy giant Gazprom will agree to supply the giant state-controlled China National Petroleum Corporation (CNPC) with 3.75 billion cubic feet of liquefied natural gas a day for no less than 30 years, starting in 2018. That’s the equivalent of a quarter of Russia’s massive gas exports to all of Europe. China’s current daily gas demand is around 16 billion cubic feet a day, and imports account for 31.6% of total consumption.
Right after the potentially game-changing Sino-Russian summit comes a BRICS summit in Brazil in July. That’s when a $100 billion BRICS development bank, announced in 2012, will officially be born as a potential alternative to the International Monetary Fund (IMF) and the World Bank as a source of project financing for the developing world.
Meanwhile, back at the ranch...
The Fed is arguably monetizing 70% of the U.S. government debt in an attempt to keep interest rates from heading skywards. Pentagon adviser Jim Rickards, as well as every Hong Kong-based banker, tends to believe that the Fed is bust (though they won’t say it on the record). No one can even imagine the extent of the possible future deluge the U.S. dollar might experience amid a $1.4 trillion Mount Ararat of financial derivatives. Don’t think that this is the death knell of Western capitalism, however, just the faltering of that reigning economic faith, neoliberalism, still the official ideology of the United States, the overwhelming majority of the European Union, and parts of Asia and South America.
Escobar sees the New Cold War as a reaction (perhaps even a tantrum) against the emergent BRICS powerhouse.
Embedded in the mad dash toward Cold War 2.0 are some ludicrous facts-on-the-ground: the U.S. government, with $17.5 trillion in national debt and counting, is contemplating a financial showdown with Russia, the largest global energy producer and a major nuclear power, just as it’s also promoting an economically unsustainable military encirclement of its largest creditor, China.

Russia runs a sizeable trade surplus. Humongous Chinese banks will have no trouble helping Russian banks out if Western funds dry up.
America is becoming the Unnecessary Empire. The next century will be the BRICS century.
What is it with these people who say the US is the world's only superpower? Then why can't it run the security for its own nuclear warheads?
I believe the $1.4 Trillion in derivatives mentioned is a typo in the original text. It should likely rather be $1.4 Quadrillion, or 1,400 Trillion. A loss of just a few percentage points of that notional value would be in the double digit trillions. If the entire derivative total were just $1.4 Trillion, we'd actually be in good shape on that issue.

The Federal Reserve has been fiddling its own books, buying Treasuries from itself in a covert way through Belgium, maintaining the lie that the financial markets are stable. (LINK)
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