Debt Rattle June 4 2022
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New interview with Michael Hudson is excerpted here:
Today’s global fracture is dividing the world between two different economic philosophies: In the US/NATO West, finance capitalism is de-industrializing economies and has shifted manufacturing to Eurasian leadership, above all China, India and other Asian countries in conjunction with Russia providing basic raw materials and arms.
These countries are a basic extension of industrial capitalism evolving into socialism, that is, into a mixed economy with strong government infrastructure investment to provide education, health care, transportation and other basic needs by treating them as public utilities with subsidized or free services for these needs.
In the neoliberal US/NATO West, by contrast, this basic infrastructure is privatized as a rent-extracting natural monopoly.
The result is that the US/NATO West is left as a high-cost economy, with its housing, education and medical expenses increasingly debt financed, leaving less and less personal and business income to be invested in new means of production (capital formation). This poses an existential problem for Western finance capitalism: How can it maintain living standards in the face of de-industrialization, debt deflation and financialized rent-seeking impoverishing the 99% to enrich the One Percent?The first U.S. aim is to deter Europe and Japan from seeking a more prosperous future to lie in closer trade and investment ties with Eurasia and the Shanghai Cooperation Organization (SCO, a more helpful way of thinking about the global fracture from the BRICS). To keep Europe and Japan as satellite economies, U.S. diplomats are insisting on a new economic Berlin Wall of sanctions to block trade between East and West.
For many decades U.S. diplomacy has meddled in European and Japanese internal politics, sponsoring pro-neoliberal officials into government leadership. These officials feel that their destiny (and also their personal political fortunes) is closely allied with U.S. leadership. Meanwhile, European politics has now become basically NATO politics run from the United States.
The problem is how to hold the Global South – Latin America, Africa and many Asian countries – in the US/NATO orbit. Sanctions against Russia have the effect of hurting the trade balance of these countries by sharply raising oil, gas and food prices (as well as prices for many metals) that they must import. Meanwhile, rising U.S. interest rates are drawing financial savings and bank credit into U.S.-dollar-denominated securities. This has raised the dollar’s exchange rate, making it much harder for SCO and Global South countries to pay their dollarized debt service falling due this year.
This forces a choice on these countries: either go without energy and food in order to pay foreign creditors – thereby putting international financial interests before their domestic economic survival – or defaulting on their debts, as occurred in the 1980s after Mexico announced in 1982 that it could not pay foreign bondholders…..The overriding U.S. policy is to fight against China, hoping to break of the Western Uighur regions and divide China into smaller states. To do that, it is necessary to break away Russian military and raw-materials support for China – and in due course to break it up into a number of smaller states (the Western large cities, northern Siberia, a southern flank, etc.).
Sanctions were imposed in hopes of making living conditions so unpleasant for Russians that they would press for regime change. The NATO attack in Ukraine was designed to drain Russia militarily – by having the bodies of Ukrainians deplete Russia’s supply of bullets and bombs by giving their lives simply to absorb Russian arms…
..The effect has been to increase Russian support for Putin – just the opposite of what was intended. There is a growing disillusion with the West…..There is a general agreement that Russia is making a long-term turn Eastward instead of Westward.
So the effect of U.S. sanctions and military opposition to Russia has been to impose a political and economic Iron Curtain locking in Europe to dependency on the United States, while driving Russia together with China instead of prying them apart. Meanwhile, the cost of European sanctions against Russian oil and food – much to the benefit of U.S. LNG gas suppliers and agricultural exporters – threatens to create long-term European opposition to U.S. unipolar global strategy. A new “Ami go home” movement is likely to develop.
But for Europe, the damage already has been done, and neither Russia nor China are likely to trust that European government officials can withstand the bribery and personal pressure brought to bear by U.S. interference…..In effect, U.S. officials have asked Germany to commit economic suicide and bring on a depression, higher consumer prices and lower living standards. German chemical companies have already begun to shut down their fertilizer production, given Germany’s acceptance of trade and financial sanctions that prevent it from buying Russian gas (the raw material for most fertilizer). And German car companies are suffering from supply cut-offs.
These European economic shortages are a huge benefit to the United States, which is making enormous profits on more expensive oil (which is controlled largely by U.S. companies, followed by British and French oil companies). Europe’s replenishment of the arms that it donated to Ukraine also is a boon to the U.S. military-industrial complex, whose profits are soaring.
But the United States is not recycling these economic gains to Europe, which is looking like the big loser…
..The question is just how soon Russia will simply stop supplying Europe altogether.
It looks like Europe is becoming an appendage of the U.S. economy, in effect bearing the fiscal burden of America’s Cold War 2.0, with no political representation in the United States…..The US/NATO war in Ukraine is the first battle in what looks like a 20-year attempt to isolate the Dollar Area West from Eurasia and the Global South. U.S. politicians promise to keep the Ukraine war going indefinitely, hoping that this may become Russia’s “new Afghanistan.” But this tactic now looks like it may threaten to be America’s own Afghanistan. It is a proxy war, whose effect is to lock in Europe’s dependency on the United States as a client oligarchy with the euro as a satellite currency to the dollar…
..The effect has been that Russian imports from the West have declined, while its exports of oil, gas and food are soaring. That has raised the ruble’s exchange rate instead of hurting it. And as sanctions block Russia’s imports from the West, President Putin has announced that his government will invest heavily in import substitution. The effect will be a permanent loss of Russian markets for European suppliers and exporters.
Meanwhile, the Trump tariffs against European exports to the United States remain in place, leaving European industry with shrinking business opportunities…
..In the medium and long run, the US/NATO sanctions are therefore aimed mainly against Europe. And Europeans don’t even seem to see that they are the primary victims of this new U.S. economic war …..“Blocking Nord Stream 2” is really a Buy-American policy. The United States has persuaded Europe not to buy in the lowest-price market, but to pay as much as seven times more for its gas from U.S. LGN suppliers, and to spend a reported $5 billion on expanding port capacity – that will not even be available for… years.
This threatens a very uncomfortable interregnum for Germany and other European countries following U.S. dictates. Basically, national parliaments are now subservient to NATO, whose policies are run from Washington…..It looks like Europe and America will confiscate Russian investments in their countries, and sell off (or have Russia confiscate) NATO-country investments in Russia. This means a de-linking of the Russian economy from the West, and a closer linking with China – which looks like the next economy to be sanctioned by NATO as it becomes an Eastern Pacific Treaty Organization involving Europe in tis confrontation in the China Sea.
I would be surprised if Russia resumes selling oil and gas to Europe without being reimbursed for what Europe (and also the United States) has seized…..The common denominator of all socialist movements, from the right to the left of the political spectrum, was stronger government infrastructure spending. The transition to socialism was being led (in the United States and Germany) by industrial capitalism itself, seeking to minimize the cost of living (and hence the basic living wage) and the cost of doing business by government investment in basic infrastructure, whose services were to be provided freely, or at least at subsidized prices.
That aim would prevent basic services from becoming opportunities for monopoly rent. The antithesis was the Thatcher-neoliberal doctrine of privatization. Governments turned over public utilities to private investors. Companies were bought on credit, adding interest and other financial charges to profits and payments to management. The result has been to turn neoliberal Europe and America into high-cost economies unable to compete in production prices…..There will still be petrodollars, but also a variety of currency-area blocs as the world de-dollarizes its international trade and investment arrangements. In late May, Foreign Secretary Lavrov said that Saudi Arabia and Argentina want to join BRICS. As Pepe Escobar recently noted, BRICS+ may expand to include MERCOSUR and the South African Development Community (SADC)
These arrangements probably will call for a non-U.S. alternative to the IMF to create credit and provide a vehicle for official foreign-exchange reserves for the non-NATO countries. The IMF will still survive to impose austerity on U.S. satellite countries while subsidizing capital flight from Global South countries and creating SDRs to finance U.S. military spending abroad.
Summer 2022 will be a testing ground as Global South countries suffer a balance-of-payments crisis… SCO countries can offer oil and food – IF countries give assurances of repaying credit by repudiating their dollar debts to the West…..My book Super Imperialism has explained how, for the past 50 years, ever since the United States went off gold in August 1971, the U.S. Treasury Bill standard has given the United States a free ride at foreign expense. Foreign central banks have recycled their dollar inflow resulting from the U.S. balance-of-payments deficit into loans to the U.S. Treasury – that is, to buy U.S. Treasury securities to hold their savings. This arrangement has enabled the United States to undertake foreign military spending for its nearly 800 military bases around Eurasia without having to depreciate the dollar or tax its own citizens. The cost has been borne by countries whose central banks have built up their dollar loans to the U.S. Treasury.
But now that it has become unsafe for countries to hold dollar-denominated U.S. bank deposits or government securities or investments if they “threaten” to defend their own economic interests or if their policies diverge from those dictated by U.S. diplomats, how can America continue to get a free ride? …..The euro already is a satellite currency to the United States. Its member countries cannot run domestic budget deficits to cope with the coming inflationary depression resulting from the U.S.-sponsored sanctions and resulting Global Fracture…
..U.S. propagandists call governments that keep natural monopolies as public utilities “autocratic.” To be “democratic” means to let U.S. firms by control of these commanding heights, being “free” of government regulation and taxation of finance capital. So “left” and “right,” “democracy” and “autocracy,” have become an Orwellian Doublespeak vocabulary sponsored by America’s oligarchy (which it euphemizes as “democracy”)…
..The world is being split into two parts. The conflict is not merely national by the West against the East, but is a conflict of economic systems: predatory finance capitalism against industrial socialism aiming at self-sufficiency for Eurasia and the SCO.
The non-aligned countries were not able to “go it alone” in the 1970s because they lacked a critical mass to produce their own food, energy and raw materials. But now that the United States has de-industrialized its own economy and outsourced its production to Asia, these countries have an option not to remain in dependency on U.S. Dollar Diplomacy.Michael Hudson: Interview with the newly founded German magazine “ViER”
Vladimir Putin gives an interview about the global food and fertilizer problems, which began in 2020, and are exacerbated by $US trillions created by the US during COVID, which have raised global food prices. Embargos and sea-mines laid by Ukraine have further effects. Russia is ready to facilitate Ukrainian exports of grain, which are blocked by sea-mines and western sanctions. Russia is hopeful to increase Russian grain exports this year, but sanctions will affect this. Natural gas is essential to produce nitrogen fertilizer, which is now cost prohibitive in Europe. Russia and Belarus together provide 45% of global potash exports.
Russia will seek ways to aid African and global south countries facing famine. (See above discussion by Professor Hudson, please. This summer is pivotal.)
https://www.zerohedge.com/markets/putin-says-us-decision-print-money-behind-soaring-food-pricesPepe Escobar reports rumors of the Bilderberg meeting in Washington DC, unofficial, of course.
A serious debate is raging across virtually all sectors of Chinese society on the American weaponization of the world financial casino. The conclusions are inevitable: get rid of US Treasuries, fast, by any means necessary; more imports of commodities and strategic materials (thus the importance of the Russia-China strategic partnership); and firmly secure overseas assets, especially those foreign currency reserves.
Meanwhile Bilderberg’s “diverse group”, on the other side of the pond, is discussing, among other things, what will really happen in case they force the IMF racket to blow up (a key plan to implement The Great Reset, or “Great Narrative”).
They are starting to literally freak out with the slowly but surely emergence of an alternative, resource-based monetary/financial system: exactly what the Eurasia Economic Union (EAEU) is currently discussing and designing, with Chinese input.
Imagine a counter-Bilderberg system where a basket of Global South actors, resource-rich but economically poor, are able to issue their own currencies backed by commodities, and finally get rid of their status of IMF hostages. They are all paying close attention to the Russia gas-for-rubles experiment.Beijing Calls on US to Stop Trade Talks With Taiwan
The trade talks are the latest example of the US taking steps to boost informal relations with Taiwan. Chinese Foreign Ministry spokesman Zhao Lijian said the US should “stop negotiating agreements with implications of sovereignty and of official nature, and refrain from sending any wrong signal to the ‘Taiwan independence’ separatist forces.”
Zhao also called on the US to stop selling weapons to Taiwan in response to comments from Secretary of Defense Lloyd Austin. The Pentagon chief said the US “will make available to Taiwan defense articles and services necessary to enable it to maintain a sufficient self-defense capability commensurate with the Chinese threat.”Russia has a low enough production cost for oil that its break-even cost is quite low, under $40/bbl, last I saw. Russia can deeply discount and sell at a good profit.
There is room for middle-men to make profits on Russian oil, refining and rebranding, or just transferring it to other ships at night.
Mish Shedlock, Russia Uses Chinese Ships and Indian Refiners to Stay Ahead of Oil Sanctions
https://mishtalk.com/economics/russia-uses-chinese-ships-and-indian-refiners-to-stay-ahead-of-oil-sanctions“Joe Biden” fails to say that Ukrainian territory is sacrosanct when asked. He mumbles about “supporting Ukraine” and “supporting Ukrainian decisions”. That seems to mean that the position expressed by 99 year old Henry Kissinger, presumably the Rockefeller family position, that Ukraine should consider giving up territory for peace, is now dominant in US foreign policy. How will this be played?
https://nypost.com/2022/06/03/biden-says-ukraine-might-have-to-give-russia-land/Same little fork in the tongue here… (I think “the long haul” is a bluff. Morale is low. $US debt defaults may begin this summer, and November elections loom.)
Western Backers Of Ukraine Must Persist For ‘Long Haul War Of Attrition’: NATO Chief
In a Thursday speech held just prior to Friday marking the 100th day of Russia’s invasion of Ukraine, NATO Secretary-General Jens Stoltenberg said that the alliance must prepare itself to support Kiev for the “long haul”.
He made the comments just after meeting with President Joe Biden at the White House. “We just have to be prepared for the long haul,” Stoltenberg said, adding ominously, “Because what we see is that this war has now become a war of attrition.” …
“Most wars – also, most likely this war – will at some stage end at the negotiating table, but what we know is that what happens around the negotiating table is very closely linked to the situation on the ground, on the battlefield,”
https://www.zerohedge.com/geopolitical/western-backers-ukraine-must-persist-long-haul-war-attrition-nato-chiefThanks Eleni. The secret Ukrainian military programs , by Thierry Meyssan
In 2016, the United States committed to arming Ukraine to fight and win a war against Russia. Subsequently, the US Department of Defense organized a biological research program in Ukraine, and then huge amounts of nuclear fuel were secretly transferred to the country. These data change the interpretation of this war: it was not wanted and prepared by Moscow, but by Washington.
https://www.voltairenet.org/article217092.htmlReports about this vary. Severodonetsk and several hill-towns in that area have been deeply fortified by Ukrainian military forces since 2014. These kinds of fortifications have been slow to give way. Ukrainians are reporting they trapped Russian forces with this counterattack. They have fortified positions nearby, so they can withdraw and attack Russian forces again. They have high ground for artillery.
The AFU reportedly launched counter attack in the city of SeverodonetskMilitary Situation In Eastern Ukraine On June 4, 2022 (Map Update)
Moon of Alabama: Ukraine Beyond Day 100, Breaking Resistance, Deep Operations, A New Country
The Ukrainian army has moved seven brigades of its Territorial Defense Forces from the west into the area east of the Dnieper. If these were fully maned each will have had some 3,000 soldiers. That are a lot of troops but they are pure infantry without heavy weapons and with extremely little training. Col. Reisner also showed a collection of 15 videos in which members of such and other units describe hopeless situations, declare a retreat or call out their commanders for neglect.
Morale is so bad because those troops do not fare well. (65% casualty rates)
https://www.moonofalabama.org/2022/06/ukraine-beyond-day-100-breaking-resistance-deep-operation-a-new-country.html#moreAutopsies last year (pre-Omicron) of vaccinated and partly vaccinated (did not complete series yet) people who died of COVID showed very high viral-load levels compared to non-vaccinated (at all) patients who died of COVID. “Antibody Dependent Enhancement” is “discussed” as a possibility, with a hand-wave away, b y saying that it just occurs with previous viral infections (like Dengue, which it does) and discounting the molecular modeling that shows it occurring with spike-protein vaccines. The rest of the paper is reasonable, but the elephant in the room is not actually to be discussed. Viral loads were highest after one dose of Pfizer or Modern mRNA vaccine, corresponding to the 2 week period after first injection where chance of symptomatic illness is known to be higher. The immune system appears to be impaired. Pfizer and the FDA knew it, so always classified these people as “unvaccinated”. It is lost upon the researchers in this discussion, as they speculate on any other possibility at all. (Hey, they got it published. That’s the main thing!)
High viral loads: what drives fatal cases of COVID-19 in vaccinees? – an autopsy study
https://www.nature.com/articles/s41379-022-01069-9.pdfScott Ritter as a “limited hangout” seems likely — his track record appears to be self-contradictory — but ambiguity is ambiguity.
It interests me that his alleged sex with minors bothers people more than that he worked for the military for many years assisting in various murderous enterprises that were based on less than zero moral justification. We give our soldiers immunity via the Nuremberg Excuse: I was just following orders, but crucify anyone tainted with the pedo brush.
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In the pre-op before my last surgery, the admitting nurse’s first question was:
“What pronoun do you prefer?”
“Huh? Oh, I get it. Ummm… ‘It’.”
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This may warrant notice:
Regional Comprehensive Economic Partnership
Notice the date it went into effect:
Type Free trade agreement
Signed 15 November 2020
Location Hanoi, Vietnam (virtual host)
Effective 1 January 2022and this:
“The 15 member countries account for about 30% of the world’s population (2.2 billion people) and 30% of global GDP ($29.7 trillion), making it the largest trade bloc in history.[3] Signed in November 2020, RCEP is the first free trade agreement among the largest economies in Asia, including China, Indonesia, Japan, and South Korea.[4]”
It’s as if a very large star hove into the vicinity of our solar (global economic) system, discreetly affecting planetary (regional economic) orbits.
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As for talk of WWIII: if we cross Russia’s plainly drawn red line and find ourselvfes therefore being nuked, it will likely be all about these locales:
“The current ICBM force consists of Minuteman III missiles located at the 90th Missile Wing at F.E. Warren Air Force Base, Wyoming; the 341st Missile Wing at Malmstrom Air Force Base, Montana; and the 91st Missile Wing at Minot Air Force Base, North Dakota.”
Taking out DC would presumably trigger an all-out USA nuclear response via a ‘dead man switch’ or such. Besides, DC is busy taking itself out, and this Sun Tzu quote is becoming so popular it risks becoming a canard: “Never interfere when your enemy is busy destroying itself.”
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As for Ukraine, Russia is kindly helping the milindustrial $$$ complex make money by kindly blowing up most of the weapons we send there, requiring our defense contractors be paid more money for more moneys to give to the Russians to blow up.
“Dem Rep. Yells “Spare Me the Bullshit about Constitutional Rights” During Gun Debate”
The Constitution is Federal Law. We know you don’t follow that. You can also change it. There are methods, but no one is trying to change the rules legally and properly. And this is Congress that is both not following the law and not passing legal rules, but only saying “Shut up, shut up, shut up!!!”
75 years later…
Exactly what I am teaching for over 20 years : do not burn it, save it for what we can not substitute.
@JohnDay 109050,
Bravo, great summation. Worth saving for the lemmings. Maybe one will see the reality and prepare their family.
That was an amazing post, you seem to have come full circle to an awareness of the “bigger” picture, I sincerely hope you can help/save your daughter from the trap she’s caught in…
As we’re all limited finite creations, it is often difficult to overcome extreme propaganda/psyops from the CULTure that has miswired ALL of our brains.
In addition to seeking spiritual progress from my previous faulty state of EGOcentricity, the community here @ TAE has been a continuous blessing to help me disavow my conscientiousness from external programming that’s still hidden in the foggy recesses of my gray matter…
Also worth noting, the APEX of 20th century antisemitism was of course the Nazi’s “final solution”.
Many forget that the early concentration camps were used for “political dissidents”, the mental/physically “unfit” (including homosexuals), which was EVIL except when protecting humanity from pathological monsters, who had knowingly harmed the Life, Liberty and the Pursuit of Happiness of another.
Of course, that was not the Nazi’s intent, & even though they fomented a legal system to support their EVIL, every sane Child of the Infinite knew in their spirit the majority of those incarcerated in Nazi camps had done no harm ~ Later innocent Jews were then hunted, tortured & murdered by a CULTure that had become poisoned by propaganda/psyop into a state of mass psychosis…
Sound familiar?
As a strict adherent to Natural Law, I know that the Loving, Healing, Creative Power of the Infinite passes no judgment, but that the Infinite’s Rule of Law enables individuals and/or community to protect themselves from the sick & twisted that have harmed themselves and/or others.
EVERYONE is INNOCENT until PROVEN GUILTY.
The Infinite loves ALL of his children, instructing them to Love one another. As I have loved you, so you must love one another, so everyone should be supported to follow their dreams, unless it damages others, in any way.
Sociopaths, are at WAR with Natural Law (generally), modern CULTure has erred GREATLY by allowing them FAR too much leeway, to the point now that we have once again approached the debasement of Nazi Germany 😕
Fast forward to the 1980s when I married my first wife who had “defected” from communist Poland ~ The entire family was antisemantic to the core, as was most of the emerging Polish community that I became a part of due to my inclusion into her family.
It was one of the reasons that later I divorced her, as all of the baggage she was carrying was too much for my then innocent person to bear…
Oh, that & her infidelity 🙄
That experience helped awaken my awareness that there was something truly rotten in EUROtardistan + the real reality regarding the U$ Empire LLP…
All the best to you & your daughter 🙂
All prayers & love to my TAE family,
Gary
Dr. D,
Russia has the firepower and man power. So what gives? I can change my mind tomorrow, it’s not the Super Bowl for me, just would like to see it end. The Z-tards said it would be over by now, that the Russians had fire control over the highway into Severodonetsk. Not what I’m reading.
I see quite a bit of this,
https://meaninginhistory.substack.com/p/briefly-noted-russia-winning-the?s=r
But then there is this, pretty recent but needs confirmation.
https://threadreaderapp.com/thread/1533206149952159744.html
“We could always make a huge bet on it, and of course I already have.”
What, me take the Nazis and you take the Orcs? Even odds?
I’m not sure how to process that, so I will have fun with it.
You can be Carey I will be the other guy.
Antidote,
Was it you that said, “you only see what what your mind allows”?
Anyway, Dr. D super nice and super smart. Why foster Ill will?
@Chooch: Thanks for including the link to the Severodonetsk “trap for the Russians” post. It is different from what I have been seeing and I will keep it in mind as events continue to unfold.
It says here that monkeypox, a slow mutating DNA virus with a large, stable genome, had 50 years of mutation in 4 years, but it was completely natural, because when it jumped to humans, the humans made it do that. The strains from around the world have a particular cluster of about 40 mutations in common with each other.
Still, it’s a completely natural fluke, an oddity…What the surprising mutations in the monkeypox virus could indicate about the new outbreak
bosco: ““What pronoun do you prefer?” “Huh? Oh, I get it. Ummm… ‘It’.”
Pronouns for ‘spiritual’ people?
one/one’se.g.,
One has a headache.
One’s blood pressure is normal.Why do I get the hunch that “chooch” is just Deflationista pouncing on another hot topic? Because the posts make just as much sense.
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