March 25, 2015


China’s international payments system ready, could launch by end-2015 & Canada’s export agency signs deal to promote the use of the yuan as a settlement currency

China’s yuan became one of the world’s top five payment currencies in November 2014, overtaking the Canadian dollar and the Australian dollar, according to global transaction services organization SWIFT.

China’s international payments system ready, could launch by end-2015 – sources
Michelle chen and Koh Gui Qing Thomson Reuters Canada/UK March 9, 2015

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HONG KONG/BEIJING (Reuters) – China’s long-awaited international payment system to process cross-border yuan transactions is ready, and may be launched as early as September or October, three sources with direct knowledge of the matter told Reuters.

The launch of the China International Payment System (CIPS) will remove one of the biggest hurdles to internationalizing the yuan and should greatly increase global usage of the Chinese currency by cutting transaction costs and processing times.

It will also put the yuan on a more even footing with other major global currencies like the U.S. dollar, as CIPS is expected to use the same messaging format as other international payment systems, making transactions smoother.

CIPS, which would be a worldwide payments superhighway for the yuan CHN= CNY=CFXS, will replace a patchwork of existing networks that make processing renminbi payments a more cumbersome process.

“The CIPS is ready now and China has selected 20 banks to do the testing, among which 13 banks are Chinese banks and the rest are subsidiaries of foreign banks,” said a senior banking source who is involved in the matter.

The official launch will be in September or October, depending on the results of the testings and preparation, the source said.

A second source with direct knowledge of the matter said authorities want to launch the first phase of CIPS before December.

“If it’s all smooth, (the launch) will be in September or October. If there is a need for a bit more time, we are still confident about (rolling it out) before the year-end,” said the source, who declined to be named because he is not authorized to speak to the media.

The system was expected to be launched in 2014 but was delayed by technical problems, with most market participants anticipating it would not come on stream before 2016.

Currently, cross-border yuan clearing has to be done either through one of the offshore yuan clearing banks in the likes of Hong Kong, Singapore and London, or else with the help of a correspondent bank in mainland China.

“Misunderstandings under the current clearing system happen from time-to-time due to different languages and codings. The CIPS is a breakthrough since it will offer a united platform and enhance efficiency,” said Raymond Yeung, an analyst at ANZ in Hong Kong.

The launch of CIPS will enable companies outside China to clear yuan transactions with their Chinese counterparts directly, reducing the number of stages a payment has to go through.

“This is a big development for the small and medium enterprise sector operating in China as their correspondent banks can now access a wider network for settling payments in yuan, leading to lower costs,” said the head of treasury solutions at a large European multinational company based in Hong Kong.

For large international companies, CIPS will remove operational inefficiencies as companies will no longer have to worry about ensuring yuan transactions are processed at certain times of day, as they do now, he added.

Related: Canadian export agency signs deal to promote yuan use
Reuters Canada Canada March 23, 2015

TORONTO (Reuters) – Canada’s export agency signed a deal with China’s biggest bank on Monday to promote the use of the yuan as a settlement currency in trade-related transactions, as officials in Toronto launched the first yuan trading hub in the Americas.

Export Development Canada (EDC) signed the memorandum of understanding with the Canadian subsidiary of Industrial and Commercial Bank of China Ltd, the hub’s clearing bank.

The two institutions will be “looking at ways to make the transactional aspect of Canadian and Chinese trade a little less cumbersome,” EDC Senior Vice President Mairead Lavery said in a statement.

The trading hub and clearing center launched on Monday in Toronto.

Canadian banks currently have to convert from Canadian dollars into U.S. dollars before settling trade payments in yuan. The trading hub will eliminate costs to clients by enabling settlements to be made directly in yuan.

Still, offshore clearing may become less important down the line. Sources told Reuters earlier in the month that China’s international payment system to process cross-border yuan transactions is ready and may be launched as early as September or October.

Posted at: March 25, 2015 - 1:49 pm -- Posted by: Jim Scott -- Permalink: # -- Email This Post

Ditching US dollar: China, Russia launch financial tools in local currencies & China eclipses Europe on Russian e-commerce market

Ditching US dollar: China, Russia launch financial tools in local currencies
RT Russia December 29, 2014

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China and Russia have effectively switched to domestic currencies in trading using financial tools as swaps and forwards, as they seek to reduce the influence of the US dollar and foreign exchange risks.

The agreement signed in the end of October comes into force Monday, December 29, and provides a currency swap of CNY150 billion (up to US$25 billion).

he country’s Foreign Exchange Trade System will carry out similar transactions with the Malaysian ringgit and the New Zealand dollar.

From now on yuan swaps are available for 11 currencies on the foreign exchange market.

“China won’t stop yuan globalization or capital account opening because of the volatility in emerging market currencies,” Ju Wang, a senior currency strategist at HSBC Holdings Plc in Hong Kong told Bloomberg.

China has set up bilateral currency swap lines with more than 20 countries and regions since 2009, including Switzerland, Brazil, Hong Kong, Indonesia and South Korea, Xinhua News reported in July.

A swap is a financial tool to ease transactions by exchanging certain elements of a loan in one currency, like the principal or interest payments into an equivalent loan in another currency.

Currency forward is an obligation of two parties to convert an agreed amount of one currency into another by a certain date at an exchange rate specified at the moment of signing the deal.

Russia and China have long been looking for ways to cut the dollar’s role in international trade. The question is significant for China as 32 percent, or $4 trillion of its foreign exchange reserves are in US bonds, which means there is a vulnerability to fluctuations in the exchange rate.

Russia’s foreign exchange reserves are worth $398 billion, and the US dollar accounts for about $162.45 billion.

The country’s economic growth has slowed amid a standoff with Western countries over the Ukrainian conflict. After the country’s financial sector faced EU and US sanctions it became hard for Russian businesses to raise finance in the West.

Chinese authorities are particularly interested in currency swap lines with developing countries, mainly from the Asia-Pacific region. Australia, New Zealand, Brazil, Singapore, Hong Kong, Argentina, and Malaysia are actively involved in transactions with China.

Related: The Paypers is the Netherlands-based leading independent source of news and intelligence for professionals in the global payment community.

China advances into Russia’s ecommerce market
The Paypers Netherlands August 12, 2014

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The China-Russia cross-border ecommerce market represents almost half of international e-retailers’ total sales to Russia, accounting for up to USD 1.5 billion in 2013, according to a study by East-West Digital News.

Alibaba, a Chinese ecommerce company, stands out as a frontrunner, as it prepares its introduction on the NASDAQ.

Also, in July 2014, AliExpress, the group’s B2C platform made Yandex.Money available as a new payment option. This Russian electronic currency allows its users to pay via mobile phone as well as in cash via 170,000 offline locations across Russia. This includes the Sberbank cash-in kiosks and Russian mobile retailer outlets.

China eclipses Europe on Russian e-commerce market
Delphine d’Amora The Moscow Times Russia December 18, 2014

Europe is rapidly losing its share in the Russian e-commerce market to Chinese firms whose steady growth in the region has been fueled by this year’s headlong devaluation of the ruble.

About 70 percent of packages shipped to Russian consumers from abroad this year came from China, up from 40 percent in 2013, a report by industry watcher East-West Digital News (EWDN) found.

China’s growth in the sector was driven by massive Chinese online marketplace AliExpress and Chinese sellers operating through Internet auction house eBay, the report by EWDN found.

AliExpress is now the single largest foreign player on the Russian e-commerce market with 35 percent of cross-border sales, business daily RBC reported last month, citing data from analytics company RBC Research.

In second place came eBay with 30 percent of the market followed by U.S. e-commerce titan Amazon with 7.5 percent, the report said.

Russia and China to open joint e-commerce platform in summer
RT Russia March 19, 2015

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Russian online payment system Yandex.Money is to start processing payments for China’s online platform TradeEase, which is aimed at increasing cross-border trade between the two countries.

The project is expected to have a turnover of $830,000 in the first 3 months after it starts in the summer.

The platform will be launched by China’s PayEase payment service, Bank of China, China’s Heilongjiang province and the border city of Suifenhe, Vedomosti reported on Thursday.

The new platform will allow Chinese shops operating on the border with Russia to sell their goods online. Trade between the Chinese province of Heilongjiang and Russia exceeded $23 billion in 2014, accounting for about a quarter of the total trade turnover between Russia and China. Nevertheless, the fall of the ruble has led to a decline in tourist traffic in Suifenhe, which is the most popular shopping city in the province, so the e-commerce platform will help Chinese businesses maintain Russian customers; the CEO of PayEase was quoted as saying by Vedomosti.

Last month China’s ambassador to Moscow said the Russian ruble’s slump would not significantly affect China-Russia trade and cooperation. The ruble lost almost a half of its value against the dollar in 2014 due to plummeting oil prices and Western economic sanctions. In late 2014, Russia and China agreed to switch trading settlements to local currencies to reduce dependence on the US dollar and create an alternative within the global financial system.

Chinese online stores are the most popular foreign e-commerce platforms among Russia’s online customers, according to the results of the recent survey by Yandex.Market and Germany’s Research Institute.

Last week China announced the setting up of a pilot cross-border e-commerce zone to improve the country’s overseas e-commerce industry.

China is Russia’s second largest trading partner after the EU, after hitting a record $59 billion in the first half of 2014. The two countries are planning to increase bilateral trade to $200 billion by 2020.

Posted at: March 25, 2015 - 1:45 pm -- Posted by: Jim Scott -- Permalink: # -- Email This Post

The new Chinese dream: Westward Ho on China’s Eurasia BRIC Road

China’s plans for land and maritime “silk roads” constitute a foreign policy initiative that has huge potential for cooperation between China and India and with other countries in the region. It can work only if China can reassure the countries and communities involved that their past as well as future interests will be respected. China’s record on this score is far from reassuring asserts Jabin T Jacob. Jacob is Assistant Director and Fellow at the Institute of Chinese Studies, Delhi, India.

Pothole potential on China’s silk roads
Jabin T Jacob Asia Times Online Hong Kong March 13, 2015

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Communist Party of China (CPC) General Secretary and Chinese President Xi Jinping announced the Silk Road Economic Belt (sichouzhilu jingjidai) in a speech on September 7, 2013, at the Nazarbayev University in Kazakhstan [1] and the Maritime Silk Road (haishang sichouzhilu) during his visit to Indonesia the following month. [2]

The two initiatives – collectively termed the “one belt, one road” (yidai yilu) initiative – taken together with his declaration of a new neighborhood policy in October 2013 at the first work forum (zuotan) on diplomacy towards China’s periphery(zhoubian), [3] constitute a major Chinese foreign policy initiative.

It is designed not just to increase China’s influence but also to put forward a new way of doing business, different from the Western/American approaches and tries also to assuage fears of an impending Chinese regional and global hegemony.

The “one belt, one road” initiative has several implications for China’s immediate neighborhood that includes India. The Silk Road Economic Belt connecting China with Central Asia and onwards to Europe with Xinjiang at its core is of a piece with similar initiatives such as the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor and the China-Pakistan Economic Corridor.

Along all three economic corridors India is a directly or indirectly influential presence. In the case of the BCIM Economic Corridor, India is a formal member.

In the case of the Silk Road Economic Belt through Central Asia, India enjoys enormous goodwill and soft power in the region that transcends political developments and economic relations. The China-Pakistan Economic Corridor meanwhile, will inevitably have to develop and draw on connections with the large Indian market in order to reach its full economic potential.

Pakistan’s infrastructure currently is woefully inadequate and its economy short of maturity to develop and provide the returns that Chinese investors seek. Even if political stability through economic development within Pakistan were the objective, this could be achieved much faster and sustainably through an opening up to the Indian economy.

Pakistan could thus avoid the roundabout and wasteful current situation of routing Indian imports through third-countries instead of receiving them directly over its land borders and direct sea links with India. As Pakistan’s Minister of Finance and Revenue Mohammad Ishaq Dar has himself noted while praising China’s Silk Road projects, “international trade is the only option to sustain economic growth and development”. [4]

At least one Pakistani commentator has, in fact, conflated the Silk Road Economic Belt with a “China-Pakistan-Afghanistan-India Economic Corridor’ and the Maritime Silk Road with the “China-Myanmar-Bangladesh-India sea route”. [5] According to official Chinese sources, too, the Silk Road Economic Belt through Xinjiang and Central Asia is seen as having a population of “nearly 3 billion” [6] and therefore, must also include India in its calculations.

Therefore, it is clear that the Chinese government and its state-owned and private enterprises must see the benefits of including India as part of any long-term and sustainable Silk Roads strategy.

Clearly, the “one belt, one road” initiative offers huge potential for cooperation between China and India and for the two countries to develop their relations with third countries. The issue for New Delhi is of how willing China is to acknowledge India’s historical role and influence in the areas it now seeks to service through the “one belt, one road” initiative. How capable is China of understanding Indian interests and sensitivities on both continental Asia and its waters?

The “Asian Century”, after all, will have to be one in which both India and China have to work together – and not just with each other but also together with their neighbors – to establish, if it is to be truly a source of peace, development and prosperity for its peoples.

Finally, from a purely historical perspective, the “silk” in the Silk Roads while referring to a Chinese product should not lead to the interpretation that the road itself was Chinese.

This is far from being historically true. In fact, it was the many ethnic groups of Central Asia and West Asia that constituted the trading communities linking China with the rest of the world, carrying European, Indian and West Asian products to China and Chinese products to the other regions.

It also needs to be remembered that cotton from India has an equally long, if not longer, history of being traded along the ancient trade routes as silk. It is well-known of course that the name “Silk Road” was originally coined by the German explorer Ferdinand von Richthofen only in the late 19th century, but less known is the fact that his explorations and studies also covered the spread of Buddhism from India into China along these Silk Roads. [9]

The modern Silk Roads need to also acknowledge this legacy of serving both as a means and metaphor for the exchange of ideas and dialogue between peoples and communities.

Similarly, the “sound historical basis” that Chinese commentators seem to find for the Maritime Silk Road might not be all that sound, or at the very least might just as well be true of other nomenclature for ancient maritime routes. For example, the Maritime Silk Road might just as well be called the Maritime Spice Road, referring to Indian products that also found transport to distant markets in China, Southeast Asia and Europe through history.

There is, in fact, a new tourism initiative launched by the state (provincial) government of Kerala in India – like Fujian, a coastal province with a long history of maritime trade and commerce – called the Spice Route Initiative, started in 2014. Here too, it was mainly Arab and Indian traders who connected China and Southeast Asia with India, West Asia and Africa, in the past.

The point of this brief digression into history is to underline the fact that China’s modern-day initiative of the “one belt, one road” must remember to take on board all the peoples along these routes. It can work only if China can reassure all the countries and communities involved that not only is their present and future well-being taken care but that their past, too, will be respected. China’s record on this score, however, is far from reassuring.

Indeed, China might actually be engaged in a larger exercise of historical revival than of just the Silk Roads. China has recently created institutions such as the Asian Infrastructure Investment Bank and the Silk Roads Fund or promoted others like the BRICS New Development Bank, even as it has increased its hard line or assertiveness on issues of territory, sovereignty and image.

Taken together these developments appear to constitute a new version of the ancient Chinese political governing philosophy of tianxia. While the concept has been variously defined over history, at its most basic, it represented the rule over peoples with different cultures and from varied geographical areas by a single ruler.

In effect, it represented a Chinese conception of political and moral superiority, to go with economic and cultural dominance over China’s neighbors, including its prominent role in arbitrating disputes and conflicts between them.

Under a CPC dedicated to preserving its rule at home and using the assertion of China’s rights and influence abroad as a means to this end, it is possibly this ancient historical concept that might be a more useful framework to understand what China’s current foreign policy intentions are.

Below: Brazilian Pepe Escobar is a globetrotting investigative reporter. He writes, “Of course China’s new drive may be interpreted as the stirrings of a new tributary system, ordered and centered in Beijing. At the same time, many in the U.S. are uncomfortable that the New Silk Road may be a geopolitical, “peaceful development”, “win-win” answer to the Obama administration’s Pentagon-driven pivoting to Asia.”

The new Chinese dream
Pepe Escobar CounterPunch USA March 24, 2015

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“…it is imperative that no Eurasian challenger (to the U.S.)

emerges capable of dominating Eurasia

and thus also of challenging America”

Zbigniew Brzezinski, The Grand Chessboard, 1997

What’s in a name, rather an ideogram? Everything. A single Chinese character – jie (for “between”) – graphically illustrates the key foreign policy initiative of the new Chinese dream.

In the upper part of the four-stroke character – which, symbolically, should be read as the roof of a house – the stroke on the left means the Silk Road Economic Belt, and the stroke on the right means the 21st century Maritime Silk Road. In the lower part, the stroke on the left means the China-Pakistan corridor, via Xinjiang province, and the stroke on the right, the China-Myanmar-Bangladesh-India corridor via Yunnan province.

Chinese culture feasts on myriad formulas, mottoes – and symbols. If many a Chinese scholar worries about how the Middle Kingdom’s new intimation of soft power may be lost in translation, the character jie – pregnant with connectivity – is already the starting point to make 1.3 billion Chinese, plus the overseas Chinese diaspora, visualize the top twin axis – continental and naval – of the New Silk Road vision unveiled by President Xi Jinping, a concept also known as “One Road, One Belt”.

In practical terms, it also helps that the New Silk Road will be boosted by a special, multi-billion-dollar Silk Road Fund and the new Asian Infrastructure Investment Bank (AIIB), which, not by accident, has attracted the attention of European investors.

The New Silk Road, actually roads, symbolizes China’s pivot to an old heartland: Eurasia. That implies a powerful China even more enriched by its environs, without losing its essence as a civilization-state. Call it a post-modern remix of the Tang, Sung and early Ming dynasties – as Beijing deftly and recently stressed via a superb exhibition in the National Museum of China consisting of rare early Silk Road pieces assembled from a range of regional museums.

In the past, China had a unifying infrastructure enterprise like the Great Wall. In the future it will have a major project of unifying Eurasia via high-speed rail. When one considers the breadth of this vision, depictions of Xi striving to be an equal of Mao Zedong and Deng Xiaoping sound so pedestrian.

Of course China’s new drive may be interpreted as the stirrings of a new tributary system, ordered and centered in Beijing. At the same time, many in the U.S. are uncomfortable that the New Silk Road may be a geopolitical, “peaceful development”, “win-win” answer to the Obama administration’s Pentagon-driven pivoting to Asia.

Beijing has been quick to dismiss any notions of hegemony. It maintains this is no Marshall Plan. It’s undeniable that the Marshall Plan “covered only Western nations and excluded all countries and regions the West thought were ideologically close to the Soviet Union”. China, on the other hand, is focused on integrating “emerging economies” into a vast, pan-Eurasian trade/commerce network.

It’s no wonder top nations in the beleaguered EU have gravitated to the AIIB – which will play a key role in the New Silk Road(s). A German geographer – Ferdinand von Richthofen – invented the Seidenstrasse (Silk Road) concept. Marco Polo forever linked Italy with the Silk Road. The EU is already China’s number one trade partner. And, once again symbolically, this happens to be the 40th year of China-EU relations. Watch the distinct possibility of an emerging Sino-European Fund that finances infrastructure and even green energy projects across an integrated Eurasia.

It’s as if the Angel of History – that striking image in a Paul Klee painting eulogized by philosopher Walter Benjamin – is now trying to tell us that a 21st century China-EU Seidenstrasse synergy is all but inevitable. And that, crucially, would have to include Russia, which is a vital part of the New Silk Road through an upcoming, Russia-China financed $280 billion high-speed rail upgrade of the Trans-Siberian railway. This is where the New Silk Road project and President Putin’s initial idea of a huge trade emporium from Lisbon to Vladivostok actually merge.

In parallel, the 21st century Maritime Silk Road will deepen the already frantic trade interaction between China and Southeast Asia by sea. Fujian province – which faces Taiwan – will play a key role. Xi, crucially, spent many years of his life in Fujian. And Hong Kong, not by accident, also wants to be part of the action.

And Eurasia – contrary to perennial Brzezinski wishful thinking – will likely take the form of a geopolitical challenge: A de facto China-Russia strategic partnership that manifests itself in various facets of the New Silk Road that also bolsters the strength of the Shanghai Cooperation Organization (SCO).

By then, both Iran and Pakistan will be SCO members. The close relations between what was ancient Persia and China span two millennia – and now they are viewed by Beijing as a matter of national security. Pakistan is an essential node of the Maritime Silk Road, especially when one considers the Indian Ocean port of Gwadar, which in a few years may double as a key transit point of the IP or Iran-Pakistan gas pipeline. It may also be the starting point of yet another major Chinese Pipelineistan gambit parallel to the Karakorum highway, delivering gas to Xinjiang.

Beijing values both Iran and Pakistan – the intersection of Southwest Asia and South Asia – as fundamentally strategic nodes of the New Silk Road. This allows China to project trade/commerce power not only in the Indian Ocean but the Persian Gulf.

Got vision, will travel.

Posted at: March 25, 2015 - 1:42 pm -- Posted by: Jim Scott -- Permalink: # -- Email This Post


China’s infrastructure bank initiative (the AIIB) addresses the failures of Bretton Woods: A discussion & A massive U-turn in Washington’s stance on the Asian Infrastructure Investment Bank

China’s infrastructure bank initiative addresses the failures of Bretton Woods
Francesco Sisci Asia Times Online Hong Kong March 25, 2015

The problem is not with the AIIB and the U.S. participation or not in it or its governance: the real problem is with the legacy of the 1944 Bretton Woods agreement which is still shaping the financial and economic order of the world. The AIIB is an instrument that will be able to intervene as the World Bank or the Asian Development Bank (both children of Bretton Woods) do to finance necessary infrastructure projects in Asia, and thus will sustain demand and financial stability and growth in a region which badly needs it. In fact, the AIIB can do it because the legacy of Bretton Woods is wobbling and many countries in Asia and in the world believe this legacy is not working well enough.

The early signs of crisis came at least during the 1997 Financial Crisis. Then many countries in the region objected to the IMF interventions and played with the idea of setting up an Asian Monetary Fund (then Japan, crisis stricken, agreed with China on it). The idea of the AMF was rejected by the U.S., but the problem stayed and came back again in 2008. Then China wanted to use more an instrument of international monetary stability, the basket of currencies set aside by the IMF, which have been not fully used. Again, America refused the idea.

Those rejections may have been right, and the concern about the AIIB governance may also be right. However the problem is: the pillars of Bretton Woods are not working, they are under huge criticism, not only from China, and China with the AIIB is moving cautiously to try to address some of the issues. Now, either the US will start thinking about a new international financial and economic architecture or the Chinese and other countries will start building competing structures further undermining the pillars of Bretton Woods. The Chinese answers may be not the best, but they are answers, the U.S. can’t any longer be defensive about it: it needs to be pro-active: propose different architectures.

Of course part of the issue is also political. Bretton Woods was done by U.S. and U.K., with the U.K. as the junior partner. U.S. and U.K. then, and now shared a lot politically. The same can’t be said between US and China. But if that is the real problem why do not bring it up openly? The US, the EU and Japan (the three main economic powers) are concerned about the Chinese political system, so do they have any recommendation, request about it? Why not set up an international dialogue on the long-term political concerns of the developed countries about the Chinese political system and how it (the present Chinese political system) could impact the global economic/ political order? This is a legitimate concern, which I think the Chinese are well aware of and would discuss.

The Asian infrastructure bank and Bretton Woods — Spengler responds to Francesco Sisci
David P. Goldman Asia Times Online Hong Kong March 25, 2015

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Francesco Sisci’s effort to put China’s infrastructure bank initiative in context of the failure of Bretton Woods seems like a stretch: Bretton Woods, after all, was a currency stabilization mechanism that collapsed when the US de-linked the dollar from gold in 1971, and the Asian Infrastructure Investment Bank is a development vehicle; it competes with the World Bank, but not the International Monetary Fund. China wants to enhance the international use of its currency, but in the context of the IMF for the time being, for example, by including the yuan in the calculation of the value of Special Drawing Rights. China is cautious about the use of the yuan as a reserve currency, because that would open China’s still-primitive capital markets to global pressures. Currency and investment issues appear to run on separate tracks.

In the broader context, though, I think Francesco’s point worthy of close consideration. Paul Volcker observed years ago (in a seminar I attended at the summer home of Robert Mundell in Siena) that economic factors in rich countries could insulate themselves against currency fluctuations by hedging (rich countries have developed derivative markets and yield curves going out several years). Poor countries without derivatives markets, not to mention the credit quality to make swap agreements practicable, and without multi-year yield curves, can’t hedge. It’s always the poorer countries that get whipsawed by currency fluctuations, e.g., Asia after the mid-1990s dollar depreciation (which pushed hot money flows into their economies and set up the 1997 crash), or most of the emerging markets after the big dollar appreciation of the past eight months.

An alternative lender with a long horizon, such as the new AIIB, would go a long way to ameliorate the effects of monetary policy whipsaw on developing countries. That outcome would of course enhance China’s global influence considerably.

Related: Support of China’s development bank is ‘gigantic concession’ by US
RT Russia March 24, 2015

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Washington and the World Bank have no choice but to co-operate with Beijing on the new China-led development bank. The US has changed its tune after first opposing its allies cozying up to China.

“This is a gigantic concession on the part of the US, that it is not the world’s only superpower,” Jeffrey Albert Tucker, CLO of the Foundation for Economic Education, told RT.

Instead of fighting the new China-led development bank, the US was forced to add its support to the development bank after allies jumped ship to join the $100 billion China-led project that could rival the World Bank.

“This represents a dramatic shift on the part of Washington and a concession to its allies in Europe,” Tucker said.

US officials had voiced displeasure when the UK, Germany, France and Italy agreed to work with the Bank, but now, in an apparent concession, the US will work with, and not against, the new global development fund. The White House wants to co-finance projects with Beijing along with existing banks such as the World Bank, the WSJ reported Monday.

The offer is a massive U-turn in Washington’s stance on the Asian Infrastructure Investment Bank. The tone quickly changed last week after an unnamed US official told the Financial Times that America was “wary about a trend toward constant accommodation of China.”

Chinese state newspaper lambasted the comment, calling the attitude towards China childish paranoia.

“Essentially there was no more of this cold war attitude that the US was having towards China. Was boycotting the AIIB, but it received massive pushback from very important governments around the world, so the US did not get its way,” Tucker said.

The British government was the first to announce that they would be a founding member of the financial institution, which is largely seen as a rival to the World Bank. Luxembourg and Switzerland were the latest to sign up along with France, Germany, and Italy.

Austria wants to be part of China-led infrastructure bank
RT Russia March 25, 2015

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Austria is looking to join the China-led Asian Infrastructure Investment Bank (AIIB), Xinhua news agency reported, citing a top official. It is the latest European nation to invest in the bank, which is seen as the future rival of the US-based World Bank.

“Austria has already had close economic and political ties with the Asian region and has always been so far very positive about international projects,” Johannes Frischmann, a spokesman for Austrian Finance Minister Hans Joerg Schelling, told Xinhua, adding that the nation “now checks for the membership.”

Posted at: March 25, 2015 - 1:37 pm -- Posted by: Jim Scott -- Permalink: # -- Email This Post

March 24, 2015


The return of Dr. Strangelove: If the Russians and Chinese do not expect a pre-emptive nuclear attack from Washington, they will be destroyed

Andrew Korybko is a political analyst who writes extensively on Russian international relations. He is a specialist on Middle Eastern politics, Central Asia, and Eastern Europe. He is a frequent commentator on TV and radio. Originally from Cleveland, Ohio, he is currently completing graduate studies in international relations at Moscow State Institute of International Relations (MGIMO). He believes it can be certain that the arrival of the ‘Male Nuland’ to Kyrgyzstan, freshly forced out of retirement to take on this pivotal role, portends the Central Asian anti-Russian equivalent of what Nuland unleashed in Eastern Europe over a year ago with EuroMaidan.

The coming color revolution chaos in Kyrgyzstan
Andrew Korybko Russia Insider Russia March 19, 2015

The first part of the article discussed Richard Miles’ Color Revolution credentials and why the arrival of the ‘Male Nuland’ in Bishkek likely portends an oncoming destabilization there. It also looked at American policy towards Uzbekistan and the importance of Ambassador Spratlen’s appointment to Tashkent. An overview of the US’s grand strategy against Russia, as adapted for the Central Asian vector, was also explored in that section. At this juncture, the article forecasts what the chaos that Miles is about to unleash in Kyrgyzstan will look like, including the tempting ‘media Crimea’ scenario that is bound to split Tashkent from Moscow and crown Uzbekistan as the US’s long-term Lead From Behind proxy in Central Asia.

Zeroing in on Kyrgyzstan and Richard Miles’ ‘temporary’ appointment as the de-facto ambassador there, it’s likely that the general course of Color Revolutionary chaos will take on a relatively predetermined path. Parliamentary elections are scheduled for October, and will likely serve as ‘the event’ needed to ‘justify’ a Color Revolution. This is a very opportune time for the destabilization to commence, since Kyrgyzstan would have already joined the Eurasian Union, and ‘opposition’ candidates and/or activists can attempt to manipulate this into a campaign issue (either within the country or in front of the foreign media). Also, October represents the tail end of fall and the beginning of winter, which in Kyrgyzstan, leads to a de-facto months-long division between the North and the South owing to the blocking of critical mountain passes connecting the two.

With the country having almost splitduring the last spate of externally driven instability in 2010, the prospects remain for it to do so once more if there’s a repeat of similar violence. This is because the North-South Kyrgyzstan rivalry hasn’t gone away in the years since, but only went underground and outside of the international public’s attention. The emergence of ‘South Kyrgyzstan’ in fact or in form could become an epicenter of future conflicts and easily follow the Afghan model of drug trafficking and terrorism. These fears could create the conditions needed to force Russia and the CSTO into a Reverse Brzezinski intervention, made even more difficult by the mountainous terrain that favors insurgency over counter-guerrilla operations. Left to its own, ‘South Kyrgyzstan’s’ black hole of destabilization could combine with a renewed Taliban threat in Afghanistan to existentially endanger Tajikistan, which aside from further pressuring Russia to intervene and crush the fledgling ‘Central Asian Islamic State’, could raise fears in China that Uighur terrorists will exploit the disorder to establish bases for carrying out attacks in Xinjiang.

The entire dynamic would be complicated by the re-eruption of ethnic violence in Kyrgyzstan’s portion of the Fergana Valley, where the ethnic Uzbeks’ grievances and the tensions between them and ethnic Kyrgyz were simply swept under the rug for the past few years in the same way that the North-South Kyrgyzstan rivalry was. In the event that Miles succeeds in initiating any type of Color Revolution disorder in the country (which given its existing instability, isn’t that difficult to do), it’s expected that the 2010 ethnic chaos will return, when about 300,000 Uzbeks were displaced and 100,000 fled to Uzbekistan. This time, however, instead of Uzbekistan sitting on the sidelines and reacting to the crisis, it’s forecasted that it will directly intervene in the country, which is the tripwire that will irrevocably break Uzbek-Russian bilateral relations and herald in Tashkent’s role as the US’ Lead From Behind partner in Central Asia.

If the Kyrgyz authorities and their Eurasian Union and SCO allies aren’t successful in quickly containing and extinguishing Miles’ planned Color Revolutionary violence, then the prospects for foreign military intervention dramatically increase, due to all actors’ fears that the situation will rapidly spiral out of control if left unattended. While it’s never known exactly how any campaign can play out in advance, if the oncoming crisis in Kyrgyzstan even remotely mirrors that which the country experienced in 2010 (as was forecasted above), then the following is the most likely way that events could play out:

Related: Below: Paul Craig Roberts is a former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal.

Russia under attack
Paul Craig Roberts Institute of Political Economy USA March 20, 2015

While Washington works assiduously to undermine the Minsk agreement that German chancellor Merkel and French president Hollande achieved in order to halt the military conflict in Ukraine, Washington has sent Victoria Nuland to Armenia to organize a “color revolution” or coup there, has sent Richard Miles as ambassador to Kyrgyzstan to do the same there, and has sent Pamela Spratlen as ambassador to Uzbekistan to purchase that government’s allegiance away from Russia. The result would be to break up the Collective Security Treaty Organization and present Russia and China with destabilization where they can least afford it. For details go here:

Thus, Russia faces the renewal of conflict in Ukraine simultaneously with three more Ukraine-type situations along its Asian border.

And this is only the beginning of the pressure that Washington is mounting on Russia.

On March 18 the Secretary General of NATO denounced the peace settlement between Russia and Georgia that ended Georgia’s military assault on South Ossetia. The NATO Secretary General said that NATO rejects the settlement because it “hampers ongoing efforts by the international community to strengthen security and stability in the region.” Look closely at this statement. It defines the “international community” as Washington’s NATO puppet states, and it defines strengthening security and stability as removing buffers between Russia and Georgia so that Washington can position military bases in Georgia directly on Russia’s border.

In Poland and the Baltic states Washington and NATO lies about a pending Russian invasion are being used to justify provocative war games on Russia’s borders and to build up US forces in NATO military bases on Russia’s borders.

We have crazed US generals on national television calling for “killing Russians.”

The EU leadership has agreed to launch a propaganda war against Russia, broadcasting Washington’s lies inside Russia in an effort to undermine the Russian people’s support of their government.

All of this is being done in order to coerce Russia into handing over Crimea and its Black Sea naval base to Washington and accepting vassalage under Washington’s suzerainty.

If Saddam Hussein, Gaddafi, Assad, and the Taliban would not fold to Washington’s threats, why do the fools in Washington think Putin, who holds in his hands the largest nuclear arsenal in the world, will fold?

European governments, apparently, are incapable of any thought. Washington has set London and the capitals of every European country, as well as every American city, for destruction by Russian nuclear weapons. The stupid Europeans rush to destroy themselves in service to their Washington master.

Human intelligence has gone missing if after 14 years of US military aggression against eight countries the world does not understand that Washington is lost in arrogance and hubris and imagines itself the ruler of the universe who will tolerate no dissent from its will.

We know that the American, British, and European media are whores well paid to lie for their master. We know that the NATO commander and secretary general, if not the member countries, are lusting for war. We know that the American Dr. Strangeloves in the Pentagon and armaments industry cannot wait to test their ABMs and new weapons systems in which they always place excessive confidence. We know that the prime minister of Britain is a total cipher. But are the chancellor of Germany and the president of France ready for the destruction of their countries and of Europe? If the EU is of such value, why is the very existence of its populations put at risk in order to bow down and accept leadership from an insane Washington whose megalomania will destroy life on earth?

The Saker interviews Paul Craig Roberts
‘The Saker’ Vineyard of the Saker Iceland March 24, 2015

I had been wanting to interview Paul Craig Roberts for a long time already. For many years I have been following his writings and interviews and every time I read what he had to say I was hoping that one day I would have the privilege to interview him about the nature of the US deep state and the Empire. Recently, I emailed him and asked for such an interview, and he very kindly agreed. I am very grateful to him for this opportunity.

The Saker


The Saker: It has become rather obvious to many, if not most, people that the USA is not a democracy or a republic, but rather a plutocracy run by a small elite which some call “the 1%”. Others speak of the “deep state”. So my first question to you is the following. Could you please take the time to assess the influence and power of each of the following entities one by one. In particular, can you specify for each of the following whether it has a decision-making “top” position, or a decision-implementing “middle” position in the real structure of power (listed in no specific order)

  • Federal Reserve
  • Big Banking
  • Bilderberg
  • Council on Foreign Relations
  • Skull & Bones
  • CIA
  • Goldman Sachs and top banks
  • “Top 100 families” (Rothschild, Rockefeller, Dutch Royal Family, British Royal Family, etc.)
  • Israel Lobby
  • Freemasons and their lodges
  • Big Business: Big Oil, Military Industrial Complex, etc.
  • Other people or organizations not listed above?

Who, which group, what entity would you consider is really at the apex of power in the current US polity?

Paul Craig Roberts: The US is ruled by private interest groups and by the neoconservative ideology that History has chosen the US as the “exceptional and indispensable” country with the right and responsibility to impose its will on the world.

In my opinion the most powerful of the private interest groups are:
The Military/security Complex
The 4 or 5 mega-sized “banks too big to fail” and Wall Street
The Israel Lobby
The Extractive industries (oil, mining, timber).

The interests of these interest groups coincide with those of the neoconservatives. The neoconservative ideology supports American financial and military-political imperialism or hegemony.

There is no independent American print or TV media. In the last years of the Clinton regime, 90% of the print and TV media was concentrated in 6 mega-companies. During the Bush regime, National Public Radio lost its independence. So the media functions as a Ministry of Propaganda.

Both political parties, Republicans and Democrats, are dependent on the same private interest groups for campaign funds, so both parties dance to the same masters. Jobs offshoring destroyed the manufacturing and industrial unions and deprived the Democrats of Labor Union political contributions. In those days, Democrats represented the working people and Republicans represented business.

The Federal Reserve is there for the banks, mainly the large ones.The Federal Reserve was created as lender of last resort to prevent banks from failing because of runs on the bank or withdrawal of deposits. The New York Fed, which conducts the financial interventions, has a board that consists of the executives of the big banks. The last three Federal Reserve chairmen have been Jews, and the current vice chairman is the former head of the Israeli central bank. Jews are prominent in the financial sector, for example, Goldman Sachs. In recent years, the US Treasury Secretaries and heads of the financial regulatory agencies have mainly been the bank executives responsible for the fraud and excessive debt leverage that set off the last financial crisis.

In the 21st century, the Federal Reserve and Treasury have served only the interests of the large banks. This has been at the expense of the economy and the population. For example, retired people have had no interest income for eight years in order that the financial institutions can borrow at zero costs and make money.

No matter how rich some families are, they cannot compete with powerful interest groups such as the military/security complex or Wall Street and the banks. Long established wealth can look after its interests, and some, such as the Rockefellers, have activist foundations that most likely work hand in hand with the National Endowment for Democracy to fund and encourage various pro-American non-governmental organizations (NGOs) in countries that the US wants to influence or overthrow, such as occurred in Ukraine. The NGOs are essentially US Fifth Columns and operate under such names as “human rights,” “democracy,” etc. A Chinese professor told me that the Rockefeller Foundation had created an American University in China and is used to organize various anti-regime Chinese. At one time, and perhaps still, there were hundreds of US and German financed NGOs in Russia, possibly as many as 1,000.

I don’t know if the Bilderbergs do the same. Possibly they are just very rich people and have their proteges in governments who try to protect their interests. I have never seen any signs of Bilderbergs or Masons or Rothchilds affecting congressional or executive branch decisions.

On the other hand, the Council for Foreign Relations is influential. The council consists of former government policy officials and academics involved in foreign policy and international relations. The council’s publication, Foreign Affairs, is the premier foreign policy forum. Some journalists are also members. When I was proposed for membership in the 1980s, I was blackballed.

Skull & Bones is a Yale University secret fraternity. A number of universities have such secret fraternities. For example, the University of Virginia has one, and the University of Georgia. These fraternities do not have secret governmental plots or ruling powers. Their influence would be limited to the personal influence of the members, who tend to be sons of elite families. In my opinion, these fraternities exist to convey elite status to members. They have no operational functions.

The Saker: What about individuals? Who are, in your opinion, the most powerful people in the USA today? Who takes the final, top level, strategic decision?

Paul Craig Roberts: There really are no people powerful in themselves. Powerful people are ones that powerful interest groups are behind. Ever since Secretary of Defense William Perry privatized so much of the military in 1991, the military/security complex has been extremely powerful, and its power is further amplified by its ability to finance political campaigns and by the fact that it is a source of employment in many states. Essentially Pentagon expenditures are controlled by defense contractors.

The Saker: I have always believed that in international terms, organizations such as NATO, the EU or all the others are only a front, and that the real alliance which controls the planet are the ECHELON countries: US, UK, Canada, Australia and New Zealand aka “AUSCANNZUKUS” (they are also referred to as the “Anglosphere” or the “Five Eyes”) with the US and the UK are the senior partners while Canada, Australia and New Zealand are the junior partners here. Is this model correct?

Paul Craig Roberts: NATO was a US creation allegedly to protect Europe from a Soviet invasion. Its purpose expired in 1991. Today NATO provides cover for US aggression and provides mercenary forces for the American Empire. Britain, Canada, Australia, are simply US vassal states just as are Germany, France, Italy, Japan and the rest. There are no partners; just vassals. It is Washington’s empire, no one else’s.

The US favors the EU, because it is easier to control than the individual countries.

The Saker: It is often said that Israel controls the USA. Chomsky, and others, say that it is the USA which controls Israel. How would you characterize the relationship between Israel and the USA – does the dog wag the tail or does the tail wag the dog? Would you say that the Israel Lobby is in total control of the USA or are there still other forces capable of saying “no” to the Israel Lobby and impose their own agenda?

Paul Craig Roberts: I have never seen any evidence that the US controls Israel. All the evidence is that Israel controls the US, but only its MidEast policy. In recent years, Israel or the Israel Lobby, has been able to control or block academic appointments in the US and tenure for professors considered to be critics of Israel. Israel has successfully reached into both Catholic and State universities to block tenure and appointments. Israel can also block some presidential appointments and has vast influence over the print and TV media. The Israel Lobby also has plenty of money for political campaign funds and never fails to unseat US Representatives and Senators considered critical of Israel. The Israel lobby was able to reach into the black congressional district of Cynthia McKinney, a black woman, and defeat her reelection. As Admiral Tom Moorer, Chief of Naval Operations and Chairman of the Joint Chiefs of Staff, said: “No American President can stand up to Israel.” Adm. Moorer could not even get an official investigation of Israel’s deadly attack on the USS Liberty in 1967.

Anyone who criticizes Israeli policies even in a helpful way is labeled an “anti-Semite.”

In American politics, media, and universities, this is a death-dealing blow. You might as well get hit with a hellfire missile.

The Saker: Which of the 12 entities of power which I listed above have, in your opinion, played a key role in the planning and execution of the 9/11 “false flag” operation? After all, it is hard to imagine that this was planned and prepared between the inauguration of GW Bush and September 11th – it must have been prepared during the years of the Clinton Administration. Is it not true the the Oklahoma City bombing was a rehearsal for 9/11?

Paul Craig Roberts: In my opinion 9/11 was the product of the neoconservatives, many of whom are Jewish allied with Israel, Dick Cheney, and Israel. Its purpose was to provide “the new Pearl Harbor” that the neoconservatives said was necessary to launch their wars of conquest in the Middle East. I don’t know how far back it was planned, but Silverstein was obviously part of it and he had not had the WTC for very long before 9/11.

As for the bombing of the Murrah Federal Building in Oklahoma City, US Air Force General Partin, the Air Force’s munitions expert, prepared an expert report proving beyond all doubt that the building blew up from the inside out and that the truck bomb was cover. Congress and the media ignored his report. The patsy, McVeigh, was already set up, and that was the only story allowed.

The Saker: Do you think that the people who run the USA today realize that they are on a collision course with Russia which could lead to thermonuclear war? If yes, why would they take such a risk? Do they really believe that at the last moment Russian will “blink” and back down, or do they actually believe that they can win a nuclear war? Are they not afraid that in a nuclear conflagration with Russia they will lose everything they have, including their power and even their lives?

Paul Craig Roberts: I am as puzzled as much as you. I think Washington is lost in hubris and arrogance and
is more or less insane. Also, there is belief that the US can win a nuclear war with Russia. There was an article in Foreign Affairs around 2005 or 2006 in which this conclusion was reached. The belief in the winnability of nuclear war has been boosted by faith in ABM defenses. The argument is that the US can hit Russia so hard in a preemptive first strike that Russia would not retaliate in fear of a second blow.

The Saker: What are, in your opinion, the roots of the hatred of so many members of the US elites for Russia? Is that just a leftover from the Cold War, or is there another reason for the almost universal russophobia amongst US elites? Even during the Cold War, it was unclear whether the US was anti-Communist or anti-Russian? Is there something in the Russian culture, nation or civilization which triggers that hostility and, if yes, what is it?

Paul Craig Roberts: The hostility toward Russia goes back to the Wolfowttz Doctrine:

“Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”

While the US was focused on its MidEast wars, Putin restored Russia and blocked Washington’s planned invasion of Syria and bombing of Iran. The “first objective” of the neocon doctrine was breached. Russia had to be brought into line. That is the origin of Washington’s attack on Russia. The dependent and captive US and European media simply repeats “the Russian Threat” to the public, which is insouciant and otherwise uninformed.

The offense of Russian culture is also there–Christian morals, respect for law and humanity, diplomacy in place of coercion, traditional social mores–but these are in the background. Russia is hated because Russia (and China) is a check on Washington’s unilateral uni-power. This check is what will lead to war.

If the Russians and Chinese do not expect a pre-emptive nuclear attack from Washington, they will be destroyed.

Posted at: March 24, 2015 - 4:11 pm -- Posted by: Jim Scott -- Permalink: # -- Email This Post

March 23, 2015

Embracing the ‘game’ of war: Clinton and Kagan families accepting monies and the US Army as it parades 118-vehicle armored column 1800 km across Europe

Ukraine oligarch ‘top cash contributor’ to Clinton Foundation prior to Kiev crisis
RT Russia March 22, 2015

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From 2009 up to 2013, the year the Ukrainian crisis erupted, the Clinton Foundation received at least $8.6 million from the Victor Pinchuk Foundation, which is headquartered in the Ukrainian capital of Kiev, a new report claims.

In 2008, Viktor Pinchuk, who made a fortune in the pipe-building business, pledged a five-year, $29-million commitment to the Clinton Global Initiative, a program that works to train future Ukrainian leaders “to modernize Ukraine.” The Wall Street Journal revealed the donations the fund received from foreigners abroad between 2009-2014 in their report published earlier this week.

Several alumni of the program have already graduated into the ranks of Ukraine’s parliament, while a former Clinton pollster went to work as a lobbyist for Pinchuk at the same time Clinton was working in government.

Between 2009 and 2013, the very period when Hillary Clinton was serving as US secretary of state, the Clinton Foundation appears to have received at least $8.6 million from the Victor Pinchuk Foundation.

That places Ukraine as the leading contributor among foreign donators to the Clinton Foundation.

The Pinchuk foundation said its donations to the Clinton-family organization were designed to make Ukraine “a successful, free, modern country based on European values.” It went on to remark that if Pinchuk was hoping to lobby the US State Department about Ukraine, “this cannot be seen as anything but a good thing,” WSJ quoted it as saying.

However, critics have pointed to some disturbing aspects regarding the donations, including the coincidence of the Ukrainian crisis, which began in November 2013, and the heavy amount of cash donations being made to the Clinton Foundation on behalf of wealthy Ukrainian businessmen. In any case, given that Hillary Clinton appears to be considering a possible run in the next presidential elections, more scrutiny will be devoted to her past work with the charity that bears the Clinton name.

First, as already mentioned, Clinton was serving as the US secretary of state at the time that the donations to her family’s charity were being made. Although it is true that the Clinton Foundation refused donations directly from foreign governments while Clinton was serving in the Obama administration, the door remained wide open to donations from public citizens like Pinchuk, who has advocated on behalf of stronger ties between Ukraine and the European Union.

Below: Victoria Nuland and Robert Kagan have a great mom-and-pop business going. From the State Department, she generates wars and – from op-ed pages – he demands Congress buy more weapons. There’s a pay-off, too, as grateful military contractors kick in money to think tanks where other Kagans work, writes Robert Parry. Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s.

A family business of perpetual war
Robert Parry USA March 20, 2015

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Neoconservative pundit Robert Kagan and his wife, Assistant Secretary of State Victoria Nuland, run a remarkable family business: she has sparked a hot war in Ukraine and helped launch Cold War II with Russia – and he steps in to demand that Congress jack up military spending so America can meet these new security threats.

This extraordinary husband-and-wife duo makes quite a one-two punch for the Military-Industrial Complex, an inside-outside team that creates the need for more military spending, applies political pressure to ensure higher appropriations, and watches as thankful weapons manufacturers lavish grants on like-minded hawkish Washington think tanks.

Not only does the broader community of neoconservatives stand to benefit but so do other members of the Kagan clan, including Robert’s brother Frederick at the American Enterprise Institute and his wife Kimberly, who runs her own shop called the Institute for the Study of War.

Yet, if it weren’t for Nuland’s efforts as Assistant Secretary of State for European Affairs, the Ukraine crisis might not exist. A neocon holdover who advised Vice President Dick Cheney, Nuland gained promotions under former Secretary of State Hillary Clinton and received backing, too, from current Secretary of State John Kerry.

Confirmed to her present job in September 2013, Nuland soon undertook an extraordinary effort to promote “regime change” in Ukraine. She personally urged on business leaders and political activists to challenge elected President Viktor Yanukovych. She reminded corporate executives that the United States had invested $5 billion in their “European aspirations,” and she literally passed out cookies to anti-government protesters in Kiev’s Maidan square.

Working with other key neocons, including National Endowment for Democracy President Carl Gershman and Sen. John McCain, Nuland made clear that the United States would back a “regime change” against Yanukovych, which grew more likely as neo-Nazi and other right-wing militias poured into Kiev from western Ukraine.

In early February 2014, Nuland discussed U.S.-desired changes with U.S. Ambassador to Ukraine Geoffrey Pyatt (himself a veteran of a “regime change” operation at the International Atomic Energy Agency, helping to install U.S. yes man Yukiya Amano as the director-general in 2009).

Nuland treated her proposed new line-up of Ukrainian officials as if she were trading baseball cards, casting aside some while valuing others. “Yats is the guy,” she said of her favorite Arseniy Yatsenyuk.

Disparaging the less aggressive European Union, she uttered “Fuck the EU” – and brainstormed how she would “glue this thing” as Pyatt pondered how to “mid-wife this thing.” Their unsecure phone call was intercepted and leaked.

The coup against Yanukovych played out on Feb. 22, 2014, as the neo-Nazi militias and other violent extremists overran government buildings forcing the president and other officials to flee for their lives. Nuland’s State Department quickly declared the new regime “legitimate” and Yatsenyuk took over as prime minister.

To be fair, the Nuland-Kagan mom-and-pop shop is really only a microcosm of how the Military-Industrial Complex has worked for decades: think-tank analysts generate the reasons for military spending, the government bureaucrats implement the necessary war policies, and the military contractors make lots of money before kicking back some to the think tanks — so the bloody but profitable cycle can spin again.

The only thing that makes the Nuland-Kagan operation special perhaps is that the whole process is all in the family.

Related: Tone deaf. US sends armored column through countries that still bitterly remember the German and Soviet armored divisions on their territory.

Czechs told not to throw tomatoes, eggs at US military convoy
RT Russia March 23, 2015

This page contains an audio link, embedded video links (4:53) and (1:23), Czech-language embedded links and related links.

Czech people were told not to throw tomatoes and eggs at a US military convoy rumbling through Eastern Europe, the local media said, citing the laws of the land. Those in love with egg & tomato hurling may get up to three years if convicted.

“Should anyone emerge with the intent to attack the convoy, with [items] such as tomatoes or eggs, it would qualify as disorderly conduct according to Czech legislation (up to 2 years without parole, in recidivist cases up to 3 years) or damage to property (sentences in the range of 6 months to 3 years).”

This statement was aired on Czech TV Nova and cited by the Russian Insider last week, ahead of the planned US military convoy.

Operation ‘Dragoon Ride’, a convoy of US military vehicles, mostly IAV Stryker APCs, started on Saturday. The convoy will make its way through Estonia, Lithuania, Poland, Latvia, the Czech Republic, with its final destination being Germany. It will cross the Czech Republic between March 29 and April 1 on its way to a base in the German city of Vilseck.

If skirmishes break out, offenders can expect to spend up to 3 years of prison. However, serious violence may incur 10-year sentences for the perpetrators.

On Sunday Czech anti-war activists launched the ‘Tanks? No thanks!’ campaign to protest the procession of US Army hardware through the Eastern European country. They say it has been turned into a “provocative victory parade” near the Russian border.

“The last time that vehicles like this came to the Czech Republic, they were Soviet tanks coming to crush moves towards democracy in 1968. We don’t want such vehicles from foreign armies coming here ever again,” said Tana Bednarova from the ‘World without Wars and without Violence’ organization.

Posted at: March 23, 2015 - 1:28 pm -- Posted by: Jim Scott -- Permalink: # -- Email This Post


Spitting in the face of Israel’s Arab citizens

The success of the Joint List is the Arab public’s message — an outstretched hand — to its Jewish compatriots, which is the antithesis of the message it received in return.

Spitting in the face of Israel’s Arab citizens
Haggai Matar +972 Magazine Israel/Palestine March 18, 2015

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Nearly one quarter of Israeli voters cast their ballots for a prime minister whose central message to the public on election day was that Arab citizens of Israel are the enemy.

An almost equal number of people cast their votes for: the guy who joined him in delivering that message, the head of the most right-wing party in the Knesset (Naftali Bennett); the guy who based his entire campaign on incitement against Arabs (Avigdor Liberman); the guy who said he would not sit in a government that relies on the votes of Arabs (Moshe Kahlon); and, the guy who rejected an outstretched hand from the Arab parties offering to form an alliance of the oppressed (Arye Deri). Their levels of support are even higher if you look only at the Jewish voting public.

Meet the 34th government of Israel, ladies and gentlemen.

Do not discount the message delivered at the ballot box on Tuesday, especially considering the massive victory of the Joint List, the third-largest party in the next Knesset. With 14 seats representing over 400,000 voters, and with above-average voter participation, the success of the Joint List is the Palestinian public in Israel’s message to its Jewish compatriots, which was the antithesis of the message it got in return.

For weeks, Joint List chairman Ayman Odeh has been all over Israeli television, radio, newspapers and every type of online media. He broadcast a message of openness, of partnership, of striving for equality, of democracy, of a struggle for social justice — for all Israelis. He spoke of reconciliation and of turning a new leaf.

Tuesday night, when Israeli television was busy interviewing every politician in the land, save for those gathered in Nazareth, long before there was a clear picture of the results, Odeh and MK Dov Khenin sent a message to Isaac Herzog. They told him they would recommend him as the next prime minister if he took them on as partners. It could have been historic.

That outstretched hand should not be taken for granted. These elections came after two years in which the Knesset did everything in its power to broadcast to the Arab public that it doesn’t deserve representation (from raising the electoral threshold to the attempted disqualification of MK Haneen Zoabi). Even Yair Lapid and the Zionist Camp took part in that.

That outstretched hand should not be taken for granted after a summer in which Israel launched a war in Gaza and killed over 2,000 Palestinians. The same summer in which incitement by government ministers and members of Knesset against the Arab public reached new heights, in which we say waves of Palestinians being fired from their jobs, attacks on the streets, mass arrests of hundreds of protesters, among them children and public figures, of police shooting to death Arabs because they are Arabs. And all of that goes without mentioning the decades of home demolitions, land appropriations, discrimination in budgeting and much more.

If you take everything the Palestinian public in Israel has gone through, especially in recent months, and if you then look at the overwhelming vote for a message of hope and partnership espoused by Ayman Odeh and the Joint List — only then can you understand just how extreme the landscape has become. Only then can you see just how outstretched his hand was, and how ugly the spit directed at their faces was.

Related: Benjamin Netanyahu’s attack on Arab voters was not just an electioneering tactic. Such fear-mongering is rooted in the foundation of the Zionist project in Palestine.

What it feels like to be a ‘demographic threat’ to Israel
Yousef Munayyer The Nation USA March 20, 2015

An Israeli Arab woman waits to cast her vote in Israel’s March, 2015 election. Photo: Ammar Awad/Reuters

I am a demographic threat.

I am a demographic threat; I am the son, grandson and father of demographic threats; and I am the husband of demographic spillover. I am a Palestinian citizen of Israel, and this is the language that the State of Israel, its leaders and its elites have sanctioned within their discourse to refer to me and to millions of other human beings.

And once you have defined a threat, what action is there to take other than to attack it, marginalize it, contain it or eliminate it?

It is refreshing to see that so many are appalled at the rhetoric Benjamin Netanyahu used in Israel on election day, when he mobilized ultra-right-wing voters by saying “right-wing rule is in danger” because “Arab voters are streaming in huge quantities to the polling stations.” Some have likened it to the “Southern Strategy” in the United States, when the Republican Party appealed to racism among white Southerners in the late 1960s to draw them away from a Democratic Party that had come out in support of civil rights.

But Netanyahu’s language was not just an electioneering tactic. Indeed, as Palestinians—whether citizens of Israel, residents of Jerusalem or those living under occupation in the West Bank and Gaza or in refugee camps or in the diaspora—know, this demographic fear-mongering is rooted in the foundation of the Zionist project in Palestine. The origin and maintenance of Zionism has relied on demographic engineering to ensure that political power remains in the hands of one ethno-religious group, Israeli Jews. This isn’t about an election tactic; this is about Zionism itself.

So while Netanyahu’s comments at the polls should be condemned as racist fear-mongering, we should know that this fear-mongering is far deeper and more central to Israel than any of its individual political parties. Anyone advancing the notion that people of one ethnicity, religion or race pose a threat merely because of their background and by virtue of their existence is advancing the same fear-mongering discourse Netanyahu chose to amplify. Just because it’s done to advance a different political objective does not make it any less pernicious.

Motivating people through fear—especially demographic fear—will not lead to anything good. What is needed instead is to tackle head-on the paradox that Zionism introduced to Palestine and challenge the systems and institutions it has created that support inequality.

Israel: The stark truth
David Shulman New York Review of Books USA March 22, 2015

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Benjamin Netanyahu has won again. He will have no difficulty putting together a solid right-wing coalition. But the naked numbers may be deceptive. What really counts is the fact that the Israeli electorate is still dominated by hypernationalist, in some cases proto-fascist, figures. It is in no way inclined to make peace. It has given a clear mandate for policies that preclude any possibility of moving toward a settlement with the Palestinians and that will further deepen Israel’s colonial venture in the Palestinian territories, probably irreversibly.

Netanyahu’s shrill public statements during the last two or three days before the vote may account in part for Likud’s startling margin of victory. For the first time since his Bar Ilan speech in 2009, he explicitly renounced a two-state solution and swore that no Palestinian state would come into existence on his watch. He promised vast new building projects in the Palestinian territories, including East Jerusalem. He made it clear that Israel would make no further territorial concessions, anywhere, since any land that would be relinquished would, in his view, immediately be taken over by Muslim terrorists.

And then there was his truly astonishing, by now notorious statement on election day itself, in which he urged Jewish voters to rush to the polls because “the Arabs are voting in droves.” One might have thought that those Arab voters were members of the body politic he headed as prime minister. Imagine a white American president calling on whites to vote because “blacks are voting in large numbers.” If there’s a choice to be made between democratic values and fierce Jewish tribalism, there’s no doubt what the present and future prime minister of Israel would choose.

Already for years the public space has been contaminated by ugly, violent voices coming from the heart of the right-wing establishment. As Zvi Barel has cogently written in Haaretz, “Netanyahu has succeeded in overturning the principle that the state exists for the sake of its citizens and putting in its place the Fascist belief that the citizens exist for the state.”

In accordance with that belief, there will be more hypernationalist, antidemocratic legislation, more deliberate and consistent attempts to undermine the authority of the courts, more rampant racism, more thugs in high office, more acts of cruelty inflicted on innocents, more attacks on moderates perceived as enemies of the state, more paranoid indoctrination in the schools, more hate propaganda and self-righteous whining by official spokesmen, more discrimination against the Israeli-Arab population, more wanton destruction of the villages of Israeli Bedouins, more war-mongering, and quite possibly more needless war.

The danger from within—to who we are and how we live in the world—is infinitely greater than any external threat. The corruption (I am not talking about money) is already far advanced. Israel has, in effect, knowingly moved further toward a full-fledged apartheid system. Those who don’t like the word can suggest another one for what I see each week in the territories and more and more inside the Green Line.

Is there any good news? The Joint List, a new alliance of four Arab parties, having won thirteen seats in the election, is now the third largest party in the Knesset and two seats stronger than the combined Arab parties in the outgoing Knesset. A certain tentative awakening was evident in the Arab sector during the campaign. We will have to see if it continues. The great discovery of this period was the eloquent, charming, always unruffled leader of the Joint List, Ayman Odeh. They have called for full equality for the Arab-Palestinian minority within Israel and for an end to racist discrimination and to the occupation of the West Bank. A little new energy on the left can’t hurt. For the moment, it won’t be enough to challenge the right-wing tide.

Posted at: March 23, 2015 - 11:35 am -- Posted by: Jim Scott -- Permalink: # -- Email This Post

Syria: What was once a land steeped in history and diverse culture is now a war-torn nation reduced to rubble & News consumers cannot stand to hear anymore, they are ground down by the carnage, choosing not to hear more

What was once a land steeped in history and diverse culture is now a war-torn nation reduced to rubble.

What’s left of Syria?
Diana Al Rifai and Mohammed Haddad Al Jazeera Qatar March 17, 2015

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In the past four years, the Syrian war has increased in intensity causing severe damage and destruction to most of the country. Millions have lost their homes while hundreds of thousands have been killed. What was once a country steeped in history and diverse culture is now a war-torn country brought to rubble. Here is what’s left of Syria.

Related: Barry Malone is an online editor at Al Jazeera.

You probably won’t read this piece about Syria
Barry Malone Al Jazeera Qatar March 17, 2015

Injured women arrive at a field hospital after an air strike hit their homes in the town of Azaz on the outskirts of Aleppo, Syria. Photo: Khalil Hamra/AP

There’s something in her eyes. Something more than the bafflement you so often see in the faces of innocents victimised by the wars of others. It’s something that haunts. Something that reaches you most powerfully not in your mind, but somewhere more prosaic. In your guts. In your bones.

Her expression seems to plead directly. To ask of you, do you care? Do you see me?

When we saw this image, there was no other that seemed more apt to lead our website on March 15th, the day Syria entered its fifth year of misery and mayhem. Its fifth year of slaughter.

Several human rights groups, and many Syrians, had a powerful accusation to make that day. The world, they said, had failed the country and her people. The world didn’t care anymore.

The twisted steal the attention. And the people we should pay attention to fade into the background, bit players in a narrative wrongly and unfairly dominated by the grotesque.

Sometimes journalism itself feels like a fight to get people to care.

And as often, maybe more often, it’s a fight to get yourself to. Every day, the media deals in stories of death and devastation and despair. Too often, it feels like work, just there to be processed. A day’s pay to be earned.

But we have a duty. Because these are other people’s stories.

And they deserve to have them heard.

On the anniversary, we published a lot of content. There were stirring documentaries, powerful polemics, Syrian paintings, infographics, analysis, interviews, features and news. There was streaming TV. We tried to take our audience into the lives of those caught up in this.

And all of it was fronted with the bloodied woman, that gaze taking up most of the screen.

But the number of people who came to our site that day was far lower than expected. As we watched the analytics, tracked our traffic, that stinging accusation of apathy seemed justified.

There are variables, of course. Anniversaries don’t tend to grab the imagination, some people may prefer other news organisations for Syria reporting, and perhaps our work wasn’t what it could be.

Then there’s fatigue. It’s been a rough few years for the world. Syria, Iraq, Nigeria, Libya, the Central African Republic, South Sudan, Ukraine, Somalia and more. Dark stories dominate.

I have never heard so many journalists say that the job is grinding them down nor so many people who watch the news say that they cannot stand to do so anymore. Bearing witness is gruelling.

We have seen a stagnation in traffic to our Syria conflict stories since 2012 with intermittent peaks when it makes headlines – Assad says something unusual, the possibility of Western missiles.

Posted at: March 23, 2015 - 11:33 am -- Posted by: Jim Scott -- Permalink: # -- Email This Post

March 21, 2015

Weekly Headlines

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Thursday, March 19, 2015


Speculating on our changing world: Why leaving Canada makes sense for Alberta, and U.S. would likely welcome a new state


Germany, France and Italy follow Britain; announce Tuesday they plan to join a proposed Chinese-led Asian regional bank, swinging Europe’s biggest economic powers behind a project that is viewed with concern in Washington


Ukraine’s economy: IMF scrapped its Plan A in January, and went with its Plan B. Now IMF’s Plan B falling apart in Ukraine

Tuesday, March 17, 2015


Stephen Harper scares the hell out of anybody who can reason. Should Canadians be worried about tyranny or fascism? & Six things to know about Bill C-51

Monday, March 16, 2015


Crimea signs first investment deals since reunification with Russia & US policy toward Crimea is a denial of reality


Greece: Suffering Greeks to break out of the Euro prison? & Europe’s trapdoor slams shut

World News

A new beginning? China stakes its claim in Latin America & A touch on the tiller: Is the UK gradually changing course away from the US-EU?

Posted at: March 21, 2015 - 7:01 am -- Posted by: SSNews -- Permalink: # -- Email This Post