Autumn Potpourri 2022
Position of the US
The US midterm elections, 8th November 2022, seems to be more important than hardly ever before, both internally and internationally. If Republicans manage to get majority in both chambers, Senate and Congress, it will be fatal to Democratic party and the incumbent president Biden who will be a “lame duck” for the rest of his term.
At the same time, it is expected more difficulties and changes in American foreign policy, especially regarding US posture versus Ukraine aid and Taiwan case. The results of midterm elections will have a direct impact on international scene. On the other hand, it appears that both Russia and China are waiting for the results of the US election before their next steps in the crisis of Ukraine or Taiwan.
Anyway, US economic problems and skyrocketing public debt will make US position significantly weaker than before.
Since 2009, the US economy has been sustained by continuous money printing to prop up financial markets and the Pentagon military expenditure. Not surprisingly, this has been accompanied by an explosion of debt and rising inflation, further exacerbated by the Covid-19 pandemic, war in Ukraine and sanctions on Russian energy, which has led to demands for even more money to support financial markets and the Pentagon.
While there has been a gradual erosion of American global power since 2009, this decline has accelerated since 2020. The Covid-19 pandemic precipitated a global economic slowdown that severely impacted the US and EU: unemployment rose, tax receipts fell and US federal debt grew over staggering $7 trillion (30% increase) in 3 years (2020-2022).
November 2, the US central bank has approved another sharp rise in interest rates as it wrestles to rein in fast rising prices. Fed said it was raising its key interest rate by 0.75 percentage points, lifting it to its highest rate since early 2008. The bank hopes pushing up borrowing costs will cool the economy and bring down price inflation but critics are worried the moves could trigger a serious downturn. The latest increase takes the bank’s benchmark lending rate to 3.75% – 4%, a range that is the highest since January 2008.
The rapid growth of debt, especially since 2019, causes an obvious question – how has the US been able to amass such high debt levels and how much longer can this continue? This is primarily due to the dollars status as world reserve currency and the immense size and power of the US economy, giving it the ability to exert a dominant effect on international financial institutions and engage in economic warfare, such as imposing economic sanctions and physically seizing the assets of other countries that are viewed as hostile to American hegemony.
US midterm elections and aid to Ukraine
US midterm elections and Europe’s deteriorating economic situation are likely to influence public sentiment on the both side of Atlantic Ocean.
Ukraine’s armed forces have defended much of their country but without US massive assistance (nearly as big as Russia’s annual military budget), the Ukrainian military campaign would have likely failed months ago. With the US midterm elections to be held on November 8, both Biden’s administration and Ukrainian Zelensky fear that these channels of support for Ukraine will diminish significantly.
The economic effects of the Russian-Ukrainian conflict, such as higher energy prices, have taken their toll on American voters and recent polling (Pew Research Center) shows that US support for the war is waning, especially among Republicans. While the US economy is in a relatively good state compared with much of the rest of the world, Republicans have exploited domestic economic concerns to undermine Biden and the Democrats for months.
In May, 57 Republican members of the House of Representatives voted against the $40 billion aid package to Ukraine, and in mid-October, Republican McCarthy warned that the US is “not going to write a blank check to Ukraine.” If election polls predicting a Republican House majority prove correct, future aid packages to Ukraine are likely to face greater resistance in Congress. Support for the North Atlantic Treaty Organization and Ukraine among Trump-leaning Republicans has traditionally been low. Trump derided NATO throughout his 2016 presidential campaign and presidency.
Unfortunately for Kiev, Democratic support for Ukraine has also fallen, according to the September Pew Research Center poll, as anxiety over the economy, access to abortion and other issues have mounted. Another Pew Research Center poll from October found that the economy is the top issue for voters heading into the midterm elections and on October 24, 30 members of the progressive caucus in the US House of Representatives sent a letter to President Biden urging him to hold direct talks with Russia and end the war. While the letter was retracted the next day, it further demonstrated Ukraine’s falling support with the left in the US.
Any significant drop in American assistance to Ukraine – the US provided more than €52 billion in military, humanitarian and financial aid to Ukraine from January to October – will severely impact the latter’s ability to defend itself. The US is now committing nearly twice as much as all EU countries and institutions combined.
Position of Russia
Ukrainian crisis has been the focus for the whole year of 2022 regarding Russia. I have analyzed the situation in several articles in the section of “News and articles” on this website.
In late October – early November, the situation remains unchanged on many fronts of Ukraine. Amid the heavy artillery duels, Ukrainian units are trying to advance in small groups, while Russian forces repel the attacks. In the Kharkov and Kherson regions, Ukrainian units continued their attempts to break the defense lines of Russia but were repelled and suffered heavy daily losses both in troops and equipment. Meanwhile, Russian troops went on the offensive in the Donbas.
Meanwhile, the evacuation of civilians to the eastern bank of the Dnieper-river continues in Kherson region. The evacuation zone was expanded to15 km extending from the eastern bank. The decision was taken due to the risk of Ukrainian attacks on the Kakhovskaya dam and the danger of flooding of coastal areas.
Partial mobilization in Russia, up to 300.000 soldiers, has been implemented now and 87.000 from them have already been deployed in their positions. 213.000 are still in the various training phases.
Russian Ministry of Defense (RMOD) has reported on the results of the missile and UAV attacks on the military and energy infrastructure facilities throughout Ukraine. Russian high-precision long-range air- and sea-based weapons hit the facilities of control, communications and energy systems of Ukraine. As a result, the management of the Armed Forces of Ukraine (AFU) and their logistics were heavily disrupted. Military supplies to the areas of combat operations by railway lines was hampered and work of the enterprises of the military-industrial complex of Ukraine has been disrupted. These strikes have effectively reduced the military potential of Ukraine.
Following the terrorist attack against ships of the Black Sea Fleet and civilian vessels involved in ensuring the security of the ‘grain corridor’ on 29 October this year, Russia suspended the implementation of the agreement on the export of agricultural products from Ukrainian ports (Black Sea Initiative).
On November 2, RMOD announced that with the help of the UN and Turkey, the necessary written guarantees from Ukraine were obtained and submitted to the Joint Coordination Centre (JCC) on 1 November 2022. The Ukrainian side officially assured that “the maritime humanitarian corridor will be used only in accordance with the provisions of the Black Sea Initiative and the related JCC regulation.” Russia believes that the guarantees received at this time are adequate and resumes implementation of the agreement (the Black Sea Initiative), which had been halted following the terrorist attack in Sevastopol.
The US has officially announced will send the first two NASAMS air defense systems to Ukraine “in the very near future,” a Pentagon official said on Monday, October 31. Russia targeting Ukrainian power infrastructure with missiles and drones, Kiev has lobbied the West for better air defense weaponry. The US has committed eight NASAMS and associated munitions and two of those will be in Ukraine in few days.
Regarding the Ukrainian war, it is important to recall the fact that the intense cyberwar is going on behind the scenes, in every second of every day. Recently, one of the most famous hackers, Ukrainian hacker known as Joker, who moved to the Donetsk People’s Republic, said that his “spies” were working in the office of the President of Ukraine, in the Security Service and the Armed Forces of Ukraine and he lets Russia know every detail about the US’s plans in Ukraine. Be it this or that, the fact is that the modern communication and data networks are “open” to hackers and to wide-range of cyber operations. Nothing is “secret” any more.
Now that November has begun and Russia’s partial mobilization has been carried out, military experts are expecting Russia’s new Big Offensive starting some day in the near future. What will happen, remains to be seen.
Terror Strikes, by the UK?
The Big Three strikes in last two months have been
- the attack on Nord Stream 1 and 2 (September 26)
- the attack on Crimea Bridge (October 8)
- the attack on the Black Sea Fleet based in Sevastopol (October 29)
The city of Sevastopol and the Russian Black Sea Fleet in Crimea were subjected to a major attack by enemy drones, on October 29th. This was the largest attack by a swarm of drones on a Russian city since the beginning of the Russian military operation in Ukraine.
In total 9 UAVs and 7 British unmanned surface vehicles (USVs) targeted the ships of the Black Sea Fleet and civilian vessels. The operation was coordinated by the US-made RQ-4B Global Hawk reconnaissance UAV, which has been circling over the neutral waters over the Black Sea near Crimea for several hours.
The warships of the Black Sea Fleet and air defense systems in Sevastopol managed to destroy all of the targets. According to local reports, the hull of the minesweeper Ivan Golubets was pierced but the ship stayed afloat and the frigate Admiral Makarov received some minor shrapnel damage to its hull and its radar system was disabled. As a result of the military provocation, Russia suspended its participation in the “grain deal”.
Specialists of the Russian Ministry of Defense picked up the wreckage of marine drones and conducted an examination. The analysis of the navigation modules allowed for the establishing that the USVs were heading from Odessa through the “grain corridor” towards the coast of Crimea. The track of one of them began from the security zone of the “grain corridor”, which indicates that it was launched from a civilian cargo ship.
Hard evidence found. A few hours after the attack, Russia identified the culprits. British navy specialists located in the town Ochakov in the Mykolaiv region coordinated the preparation of the attack and trained Ukrainian servicemen of the 73rd Special Center for Naval Operations.
On October 30, the Ukrainian training center in Ochakov, where the attack on Sevastopol was coordinated from, was hit by Russian missiles. The Ukrainian Emergency Services reported two fires in in the town after Russian missile strike but as usual it was silent about damage to its military facilities. According to various sources, warehouses, headquarters buildings and barracks with personnel were destroyed.
Attacks by Russian missiles and drones on military and energy infrastructure facilities continued. In next days, the Ukrainian authorities confirmed damage to energy infrastructure facilities in the Kiev, Dnepropetrovsk, Cherkasy, Kharkiv and Zaporozhye regions. Part of the railway lines in Ukraine remain without power. There have been also the largest losses of energy supply throughout the country since the beginning of the Russian military operation.
On October 1st, the Kremlin said Russia’s intelligence has information about London’s involvement in attacks on Nord Stream gas pipelines and its Black Sea fleet in the port of Sevastopol. Spokesman Dmitry Peskov told at a press briefing in Moscow: “Our special services have evidence that the leadership and coordination of the attack on Sevastopol Bay was carried out by British military consultants. There is also evidence that Britain is involved in sabotage … a terrorist act on critical energy infrastructure, the Nord Stream pipelines.”
Moscow expects that despite the silence, European capitals will analyze the information on London’s involvement in attack on Nord Stream gas pipelines, Peskov said. “We cannot leave such actions for nothing. We will think over further steps. … We will do what we have to do,” he stressed.
Former British Prime Minister Liz Truss is reported to have texted the words “It’s done” to US Secretary of State Anthony Blinken just minutes after the Nord Stream explosion. Russia has summoned the British Ambassador to explain this message, on November 2. There are numerous “net-based hints” of this episode.
It appears to be, in some way, tragic-comic to follow up European public debate on this matter … or the lack of the debate. There seems to be no slightest idea that the real culprit is among themselves, a British Judas Iskariot … and all the Heads of European States unanimously convince to defend and secure their critical energy assets against evil bad guys from East. How moving consensus.
Europe and the EU at risk
Dark and ominous views for Eurozone economy
Eurozone inflation rose above 10 percent this month as economies across the 19-nation bloc begin to slow. Rising prices throughout the continent have put immense pressure on countries throughout the region. Preliminary data from the European Union’s statistics agency showed inflation hitting an annual rate of 10.7 percent for October, for the highest monthly reading since the creation of the eurozone.
The European Central Bank (ECB), like its counterpart the US Federal Reserve, has been working to control inflation by raising interest rates. The chance of a recession in the eurozone has increased as higher interest rates slow the economy down even more. The ECB raised its key policy rates by 75 basis points on Oct. 27, bringing the benchmark interest rate to 1.5 percent. The ECB confirmed additional rate hikes last week for the coming months, explaining that it had made “substantial progress” in normalizing rates in the euro zone. It has plans to raise interest rates even further to bring inflation back to its 2 percent medium-term target.
Prices throughout the zone have been skyrocketing over the past year, especially food and energy. The spikes have largely been led by supply chain disruptions over the war in Ukraine and EU energy sanctions against Russia. The loss of essential Russian natural gas has raised energy costs in Europe to surge in October to an annual rate of 41.9 percent from the 40.7 percent rate in September. Russian gas supplies to the bloc are about 80 percent below last year’s total, forcing Europeans to import their gas from elsewhere and at higher prices. High energy costs on the continent forced governments to offer financial assistance to households and manufacturers, with drastic measures such as price caps to limit inflation.
Meanwhile, food prices rose in the same period by 13.1 percent in October, up from 11.8 percent the previous month, causing pain throughout the euro bloc. After a sluggish 0.8 percent growth in gross domestic product in the second quarter, the euro bloc showed 0.2 percent growth for the third quarter. The sudden rise in the cost of living has also launched a wave of protests across Europe, as residents fear the lack of heat and food and severe financial stress this coming winter.
Another concern for the ECB is the decline of the euro against the U.S. dollar, which has become a key factor in pushing up inflation throughout the bloc. Inflation means currency is worth less. In the Eurozone inflation rates vary from 6% in France to 17% Netherland & 24% Estonia. This is not sustainable and without their own currencies little can be done to rebalance, which means that pressure will build to disintegrate Eurozone and end Euro.
European shaky support
The UK has led major European efforts to defend Ukraine: financial and material aid; military intelligence, planning and conducting support; services of MI6 and Navy & SAS-special forces; training services up to 10,000 Ukrainian soldiers on its own soil this year. The UK is experiencing political destabilization after the death of Queen Elizabeth II in September and the resignation of two prime ministers in less than two months. These events have inhibited the British government’s ability to form a coherent foreign policy and expand its support for Ukraine.
Furthermore, the UK has its own disputes with the European Union regarding Brexit and is unlikely to rally many of the EU states to join its efforts to support Ukraine without strong US coordination.
The EU has sent billions of euros of financial aid to Ukraine since the beginning of the conflict, but far less humanitarian and military aid. Bilateral military aid from France, Germany, Spain, Italy and Poland fell significantly since the end of April, with no new military pledges being made in July.
Large-scale European military assistance only resumed after the launch of the successful Ukrainian counteroffensive since early September. Yet around the same time, EU foreign-policy chief Josep Borrell warned that member states’ weapons stocks were “severely depleted” after months of providing Ukraine with arms, reinforcing perceptions of the EU’s inability to provide long-term military support to Kiev.
On October 17, the EU formed its own military training program for Ukrainian soldiers. France declared it would train 2,000 on its soil, while other EU members will train another 13,000 Ukrainian soldiers. The latest round of EU sanctions against Russia, which were approved on October 5, demonstrate Europe’s commitment to keeping pressure on Russia. A drastic increase in EU assistance to Ukraine and confrontation with Russia, however, remains unlikely and with Europe’s energy costs mounting, the ability of the EU countries to maintain, let alone increase, their support for Ukraine may also soon come under much further strain.
Position of China
In my previous article “China after the 20th CPC Congress” I particularly examined Chinese views regarding Taiwan case.
The CPC called for boosting the People’s Liberation Army’s (PLA) combat abilities to achieve “national unification” with Taiwan after its new military commission was formed on Sunday. The Chinese army will deepen its reform and innovation, change the way of its training, recruit new talent and keep learning from the spirit of the 20th Party Congress, Zhang Youxia, vice chairman of the CPC Central Military Commission (CMC), said in a meeting on Tuesday (October 25).
I also concluded that …
No doubt, the countdown of Taiwan reunification has been initiated now. The detailed schedule is covered by the twilight, both to outsiders and to Chinese themselves. However, it appears to take place much sooner than 2049 (PRC 100y), highly likely in 2020s. Taking into account of all the above mentioned and some previous events, particularly recent Samarkand summit, some clues and hints can and shall be monitored:
- China starts outselling of US Treasury Bonds in quantities
- US Navy makes large-scale FONOPS (freedom of navigation operations)
- the US – Taiwan “extra” military drills or extra military deals
- China organizes large-scale military drills around Taiwan
- extra military “performance” by North Korea
- “crucial events” in Ukraine war or other “exceptional” events, e.g. in the Middle East
Geopolitical analysts in Asia have recently argued for why China might invade Taiwan as early as this winter. The heart of their arguments was that China might take advantage of the Ukraine War depleting Western armaments and Western sanctions on Russia weakening Western economies. While this is just a speculation, there are reasons to make such.
In the European theater, Russians have started to win back the momentum. With the newly mobilized military groups, they could probably bring Odessa, Mykolaiv and Kharkov under their control. European weapons stocks have been depleted, eroded at an alarming rate. Production of the new system is going to be costlier, longer and difficult, since Europe has to choose between eating and heating.
The United Kingdom is in great chaos and the population has less appetite for any new conflict. Domestic issues seem far more urgent and important. Brits are in dire need of a leader to fix the domestic mess rather than the international chaos.
America is vastly preoccupied in Ukraine. They have sacrificed a significant portion of their resources in supporting Kiev. Their military supplies and stocks are being used, destroyed in Ukraine faster than all the Middle Eastern wars. That makes it harder for Americans at this point to fight another multi-pronged war with a sophisticated, armed to the teeth enemy with enormous, untested capacities. Russia is not deterred and willing to fight NATO if it comes to that. This makes fighting against near peer enemies in two ends of the world a nightmare for the USA.
Since then, though, two commentators have offered arguments for why China is unlikely to invade Taiwan soon.
British economist Philip Pilkington argued that China’s economic power is such that it can eventually peal Taiwan away from the US and achieve unification without resorting to military force and that America has little to offer Taiwan in response. Besides, if you read the old Chinese philosophies and publications on “wisdom”, they all counsel the long-term procedure, which is also in harmony with centuries of Chinese behaviour.
It’s also worth remembering that unlike in Europe, where NATO expansion eventually helped provoke Russia’s invasion of Ukraine, there is no similar US-led, explicitly anti-China alliance. Arnaud Bertrand, a French expatriate entrepreneur who lives in China, made this point recently in relation to NATO Secretary General Jens Stoltenberg suggesting NATO should think about containing China. Bertrand also argues that China has the incentive to be patient regarding Taiwan reunification, since China is on the ascendance, while the US is not.
BRICS and SCO
Presidential election in Brazil
Lula da Silva won the second round of the presidential elections in Brazil, Lula received 50.9% of the votes, while Bolsonaro reached 49.1%. It was a small advantage, revealing high levels of polarization in Brazilian society. The leftist candidate will inaugurate in January 2023 and promises to put an end to the legacy of Jair Bolsonaro, the incumbent president. Analysts hope he will bring social improvements to the country and cooperate with BRICS’ partners. However, there are also those who see the situation from a more critical point of view and find many differences between the current Lula and that one of previous terms. Lula won but his room for maneuver will be limited by powerful forces aligned against his Global South agenda.
Despite worsening living conditions of the people through a disastrous economic policy, Bolsonaro remains really popular, particularly among the most conservative sectors of Brazilian society, which includes not only the middle classes but a considerable part of the low-income populations. The reason for this is quite simple: most of the Brazilian people is conservative. The institutions historically most trusted by the population are the Catholic Church and the Brazilian Army, which are groups linked to more reactionary political positions. Brazilian people are accustomed to a long history of material scarcity and social problems but who for cultural and religious reasons prioritize politicians with a conservative discourse.
In fact, the defeat in the presidential election did not mean a “political death” for Bolsonaro. Analyzing the result of the elections, Bolsonaro obtained a wide advantage in the Congress. In most states, right-wing senators and deputies were elected on a large scale, which makes Lula’s parliamentary situation very delicate for the next four years. His victory did not mean reaching massive support in the Congress, with predictions that the left-wing government will have great difficulty in passing bills that contradict the interests of groups linked to Bolsonaro.
This is just one of the challenges that Lula will face. To defeat Bolsonaro and return to power, Lula accepted delicate agreements with Brazilian and foreign political and economic groups. The “anti-Bolsonaro coalition” included liberal parties, the mainstream media, the artistic class, and other sectors historically unconcerned with the interests of the poorest population. At the international level, Lula was not only supported by the traditional Latin American left but also by European and American liberal politicians.
Indeed, Lula will be demanded to have a more submissive international posture with regard to the Western elites and this will be his biggest problem. The great dilemma for the president-elect will be to balance the interests of his historic allies (BRICS and emerging countries) with the ones of his new “friends” (US and EU politicians, global NGOs).
So, for these reasons, it is premature to think that Lula’s return is a kind of “great victory for the multipolar world”, although Lula is one of the founders of the BRICS in 2006, which evolved out of the Russia-China dialogue.
The drive towards a multipolar world, institutionally represented by organizations from BRICS+ (enlarged BRICS) to the Shanghai Cooperation Organization to the Eurasia Economic Union, will profit greatly to have Lula on board as the natural leader of the Global South. His initial foreign policy focus will be South America, his first presidential visit will most probably be Argentina, which is bound to join BRICS+. Then he will visit Washington.
Brazil will be a “listening student” at the upcoming G20 in Bali in mid-November but obviously, in 2023, Lula will be back in business side-by-side with other BRICS leaders. The next BRICS summit in South Africa will consolidate BRICS+, as an array of nations to join, from Argentina and Saudi Arabia to Iran and Turkey.
It is assumed that Lula will invest his considerable global clout in strengthening BRICS+, which may be at the center of his foreign policy and the inner workings of South-South geopolitical and geo-economic cooperation.
Brazil has been Beijing’s key trade partner in Latin America since 2009, absorbing roughly half of China’s investment in the region. Right from the start, in 2003, Lula bet on a strategic partnership with China. He considered his first trip to Beijing in 2004 as his top foreign policy priority. The goodwill in Beijing is unshakeable: Lula is considered an old friend by China – and that political capital will open virtually every red door. That may even include Lula formally signing up Brazil as a partner of the Belt and Road Initiative (BRI) in a way that won’t antagonize the US. Lula, after all, is a master of this craft.
Chinese Premier Li Keqiang hosted the 21st meeting of the Council of Heads of Government of SCO Member States, which promised to continue developing political, security, economic and trade cooperation, according to a joint statement that was adopted on Tuesday, November 1.
Premier Li made five proposals on advancing SCO cooperation, which was accepted.
First, safeguarding security and stability to foster a sound environment for development.
Second, expanding trade and investment to bolster regional economic recovery.
Third, enhancing connectivity to realize integrated development of the region.
Fourth, promoting sustainable development to build up resilience against risks.
Fifth, enhancing people-to-people and cultural exchanges to strengthen the bond between peoples.
Ramifications of economic sanctions and assets seizures imposed by the US/EU/UK
Immediately following the Russian invasion of Ukraine in February 2022, the US/EU imposed sanctions in large volumes on Russian energy imports. At the time, the Biden Administration believed these sanctions would cause severe economic problems in Russia and a decline in support for Russian President Putin.
Instead, these sanctions completely backfired, as Russia redirected energy exports previously going to the EU, to China and India. Energy costs have skyrocketed across the EU and UK, while the Russian ruble has strengthened to historic highs and President Putin enjoys strong support from the Russian public (over 80% by Levada polls in September).
The US and EU have resorted to economic sanctions and physically seizing assets of countries deemed hostile to their ambitions. Over the last decades, the US, along with support from their “allies” primarily the UK, has used its economic power to impose economic sanctions on North Korea (DPRK), Cuba, Iran, Syria, Venezuela, China and Russia and to exclude most of them from the SWIFT system, to impose the US-driven “rules-based order”. In addition, the US, UK and EU have been aggressively confiscating assets of other countries (e.g. Venezuela, Russia, Iran and Afghanistan).
With reduced support from the US and Europe, Ukraine’s ability to hold off Russia would weaken significantly in 2023. While most UN members voted to condemn Russia for its invasion, only Western allies such as Japan, South Korea, Taiwan, Australia, Canada and New Zealand have chosen to sanction Russia and aid Ukraine.
Blowback from increasingly assertive Global South
After seeing the US/EU/UK impose economic sanctions and freeze or seize financial assets and destroy infrastructure supplying energy to an “ally” (blowing up the Nord Stream pipelines), has made many countries in the Global South to ask a fundamental question: “Are we the next?”
No doubt, this is one of the reasons Saudi Arabia and other Gulf countries are reexamining their relationship with the West and exploring closer relations with China and Russia. We are seeing the rapid expansion of BRICS and Shanghai Cooperation Organization (SCO), Saudi Arabia, Qatar and Egypt are considering joining the SCO. Both organizations are closely integrated with China’s Belt and Road Initiative (BRI) and EAEU led by Russia.
Russia has developed the Mir payment system to directly compete with Master Card and Visa. The US response has been threatening to impose economic sanctions and expulsion from SWIFT against any foreign financial institution using the Mir system. Russia is also developing a bullion exchange, the Moscow World Standard, to end gold price manipulation by the LBMA and Comex bullion exchanges (derivatives trade only) and reveal the metal’s true market value.
To avoid using the petrodollar, China has set up an energy trading platform, Shanghai International Energy Exchange to advance China’s goal of increasing the use of yuan for energy transactions. This platform is now being used to complete transactions for energy imports from Russia and Iran and in the future, with Saudi Arabia and other Gulf countries, reducing China’s reliance on the petrodollar.
As American economist and professor Michael Hudson has pointed out, the American economy has been transformed into post-industrial finance capitalism that seeks wealth primarily through the extraction of economic rent, not industrial capital formation. The US now confronts an increasingly assertive Russia-China-Iran axis, that has attained military and economic parity with the west and also unifying the Global South via BRICS and SCO, which threatens the dollars status as reserve currency and American global power.
In 2000, Iraqi leader Saddam Hussein began pricing oil in euros rather than dollars, while in North Africa, Libyan leader Muammar Qaddafi increased Libya’s gold and silver reserves, which were intended to back a pan-African currency based on the Libyan golden Dinar. Both of these actions threatened the primacy of the dollar as the world reserve currency and, not surprisingly, ignited the countermeasures of the US&UK. Both countries and their leaders were destroyed some years later in military operations by the US&UK. President Obama would later describe the war on Libya as the “worst mistake” of his presidency.
The Russia-China-Iran alliance is now aggressively challenging the primacy of the US dollar and any war with Russia/China will result in the high risk of worldwide conflagration. Perilous times ahead.
Final words of the Author
I have many times being surprised and even astonished by the full blindness and foolishness of European citizens. How is it possible that they do not understand how much they have been cheated and spoofed by the elite of the EU. Perhaps the realities of the coming winter will open their eyes and minds to understand the wretched reality.