Category Archives: IMF

Ecuador: The fight against Moreno and the IMF is far from over

In Ecuador, the fight against IMF austerity measures is far from over. Just a few hours after my article was published on Sunday, 13 October, Ecuador and the IMF’s Killing Spree, President Lenin Moreno declared the infamous Decree 883 was canceled; i.e., the astronomical price increases for fuel were reversed, the (police) state of emergency and curfew were called off. He wanted to put an end to the 11 days of protests with police and military-induced violence.

The police, supported by the army, carried out repression during the protests, like they have not been seen in Ecuador’s recent history, claiming at least 7 deaths, about 1,340 injured, and more than 1,100 arrested. The streets of Quito were an absolute chaos; destruction, fire, tear gas, smoke.

Austerity measures, other than an exorbitant hike in fuel prices, included shrinking government spending, laying off 23,000 state employees, privatization of social services and infrastructure, and more, all linked to the IMF loan of US$ 4.2 billion. These measures were apparently also “canceled”. At least, so it looked and sounded at the outset.

This seeming victory was achieved largely thanks to the indigenous movement, the Conaie (Confederation of Indigenous Nationalities of Ecuador), an umbrella organization of indigenous groups across Ecuador. They have relentlessly fought for their rights and against the ferocious abrogation of all the social benefits they acquired – finally – during the ten years of Rafael Correa’s socialist government which served, and still serves, as an example for much of Latin America.

Not the indigenous groups, or anybody else of the Ecuadorian people were consulted about the IMF loan. The basic IMF deal was already brokered in January 2019, when Lenin Moreno met Madame Lagarde, at that time still head of the IMF, at the World Economic Forum (WEF) in Davos. There were just some “minor issues” that Moreno had to resolve before he could sign this horrendous debt onto Ecuador’s books.

One of the “issues” was a request by the US via its extended arm, the IMF was to expel Julian Assange from the Ecuadorian Embassy in London, to bring him closer to extradition to the US, where he may face the death penalty, or Guantanamo, for having said and published the truth about the atrocious war crimes committed by the United States. And neo-Nazi, Moreno, complied. Julian Assange is now slowly degenerating by torture and disease in a UK maximum security prison. And the world says nothing. Not even our “Peace Loving’ UN system. All is quiet. Not to molest the Chief-in-Tyrant, sitting on his cardboard throne in Washington.

Just a few days after British police dragged Julian Assange out of the Ecuadorian Embassy in London, the 4.2-billion-dollar loan / debt deal was signed. No coincidence. Assange was holed-up by self-imposed asylum in the Ecuadorian Embassy in London, for almost seven years, for justified fear of being “renditioned” to the US or another torturing US ally.

Now, when all the austerity measures were to be cancelled by nullifying Decree 883, why did Moreno assemble a team of advisers to work out a new decree? Who are these advisers? People from the IMF, from the US Treasury, or simply “Fifth Columnists”, trained and funded by NED (National Endowment for Democracy)? Why isn’t the decree and with it all IMF-imposed austerity simply canceled? Full stop?

In any case, Sunday night, Conaie reported that a “commission” was set up to “draft the decree that replaces it 883 – that this does not end until the agreement is fully implemented”.

Who is part of this commission and what exactly is the commission drafting? Will the commission prepare a new decree with new conditions? None of this is clear at this point. Is Conaie prepared to make conditions that in the long-rung could be disastrous? Does Conaie know that the empire never gives up; i.e., the IMF, as long as they have their dirty fingers in Ecuador with 4.2 billion dollars? No compromise, please, Conaie!

If anything, the new “decree” should include a clause requesting full cancellation of the IMF loan. Otherwise, the IMF will not let go, will come back in one form or another to grab Ecuador’s resources. That is the US doctrine — never depart from a goal, and it is extended through the IMF, the World Bank and through other financial institutions over which the US Treasury has control. This is modern warfare through a financial handle on a country, stealing accumulated social capital and natural resources by strictly enforced austerity programs causing famine, disease, desperation, and death. See recent examples — Greece, Ukraine, Argentina.

Of course, it takes two to tango, and without a corrupt government on the other side, the IMF can do nothing.

What will happen to the protest leaders? Is this being covered by the new decree? The front men and women of a revolution that shook the country for eleven days? Many of the leaders, and others, are incarcerated as political prisoners and should be freed.

A new decree to replace the old one, Decree 883, smells like a rat; like a new deception is being prepared and the apparent “victory” is just a make-believe for the moment to reinstate order in Quito and the country. Instead of crushing Ecuadorians with a bulldozer; i.e., the Decree 883 that attempted to shove all the IMF austerity measures down the throat of the Ecuadorians at once, it may come piecemeal, little by little, so the immediate impact will be less noticeable and eventually the sour bites are sliding better down the throat of Ecuadorians so Moreno may expect. This would not be the first time that a Government weasels its way out of protests: Stop the “killer measures” for now, and reintroduce them later, slowly in a different format.

Conaie’s leaders are concerned about this. They have said so. They would like to know what the new decree contains, and want to have a say in its drafting, before they definitely call off their protests. What they really want is the resignation of Lenin Moreno. That’s what they should aim for, because this man has already proven several times in only two years of presidency that he is a liar, cannot be trusted, and sells the people and their natural resources for the benefit of a small Ecuadorian elite and their foreign partners, mostly US oil corporations. Even if he were to cave in now, Moreno will come back, if allowed to stay in power, to neoliberalize the country. That’s his compact. That’s the premise under which he has been made president.

And, what nobody talked about, nor are there any reports in either mainstream or progressive news, is what will happen with the US$ 4.2 billion IMF loan?  Why is it not cancelled? Is the cancellation of this loan going to be part of the new decree? Ecuador doesn’t need the loan. With a debt – GDP ratio of 40%, there is definitely no need whatsoever to call for IMF’s “help”. As proportion of GDP, Ecuador’s debt is only two thirds of that of Germany.

Instead of foreign loans, Ecuador’s Government could call in the outstanding debt of about US$ 4.5 billion from fines, unpaid interests and other overdue fees from corporations and Ecuadorian oligarchs so the government could recapitalize her treasury with own, interest free money. But instead, Moreno “forgave” the debt of the oligarchs, when contracting the IMF loan. That, in itself, is telling a lot. President Moreno, who used to be Correa’s Vice President, running on the same Platform, the center-left PAIS Alliance, turned tables less than a year into his presidency, destroyed the PAIS Alliance and betrayed his compatriots miserably.

Canceling an IMF loan is relatively easy. There is no law that would prevent Ecuador from withdrawing from the IMF deal, at no penalty. This has happened many times before. All that’s needed are politicians with a people-oriented mentality – a people’s friendly attitude – and the country would be rid of this debt and rid of the dictate of the IMF.

Conaie may consider insisting on two objectives before calling off the protests and moving back to their lands: One, canceling the IMF loan of US$ 4.2 billion, and two, suspending the Parliament and President Moreno of his functions; calling-in a caretaker government and planning new elections within 3 months; elections in which Rafael Correa might again run for President.

The IMF Does Not Fight Financial Fires but Douses Them with Gasoline

Quito’s streets tremble between aspiration and repression; the smell of tear gas and the shouts for freedom reverberating in equal measure from one part of the city to another. President Lenín Moreno’s State of Emergency (October 3) and Curfew (October 12) give the men with guns more authority, but – despite hundreds of injured protestors and at least five dead – the violence has not broken the enthusiasm on the streets. The protests continue. Moreno’s options will soon run out. The oligarchy and the International Monetary Fund (IMF) – with a wink from the White House – might ask him to resign. They like their comprador to be credible.

On 13 October, Moreno had to promise to withdraw Decree 833. Pressure from the streets, from the United Nations, and from the Ecuadorian Episcopal Conference forced him to the table, where a televised discussion was held. The indigenous leaders won the ‘debate’ – they were much more prepared and far more humane than the president and his clumsy ministers. Moreno and his team – Minister of Government María Paula Romo and Minister of Defense Oswaldo Jarrín – left the room for a recess and surrendered. This is a triumph for the people. But now Moreno must go to the IMF. What pressure will it put on him? The battle continues.

The IMF’s board gathers in Washington, DC for its annual meeting. The Fund’s new leader is Kristalina Georgieva – from Bulgaria – who used to be at the World Bank. Her job is not easy. The IMF’s World Economic Outlook, published in July, calculates that 2019 world output is expected to shrink to 3.2%, compared to 3.8% (2017) and 3.6% (2018). In order to remain optimistic – with little data to support this attitude – the Fund estimates that world outlook will rise to 3.5% in 2020. But Georgieva and her associates on the Fund’s board know that matters are far grimmer. ‘Global economic growth continues to disappoint’, Georgieva said recently. Trade wars and high debt levels contribute further to a general crisis of capitalism.

The new Trade and Development Report (2019) from the UN Conference on Trade and Development (UNCTAD), published in late September, says that a recession in 2020 is more than likely. Over the past few years, growth rates have been sustained by ‘one-off tax cuts and unsustainable deficits, made all the more precarious by a rapid build-up of private debt positions, particularly in the corporate sector’. Meanwhile, ‘unemployment figures hide problems of insecure jobs and discouraged workers’. Add to this ‘disrupted supply chains, volatile capital flows, and rising oil prices’, and it seems inevitable that ‘on these trends a slowdown – and possibly even a recession – looks likely’.

There is nothing that the IMF can do. It is beholden to the United States, from whom Georgieva hopes to raise funds towards the IMF’s cache of around $1 trillion. The United States continues to dominate the IMF. In 2015, the IMF released a staff study that argued against ‘supply-side economics’, suggesting that the policy that suggests tax cuts and budgets cuts does not lead to utopia. Instead, the authors write, tax cuts and budget cuts produce results whose benefits ‘do not trickle down’. The implications of this study did not penetrate the upper floors of the IMF, neither the office of the managing director nor the board. It is business as usual at the IMF. Its own economists are not as important as the whispers from the US Treasury Department and the White House.

Late last year, the European Network on Debt and Development (Eurodad) released an important study on IMF loan conditionalities and the impact this has had on health care. The author – Gino Brunswijck – looked at IMF loans to twenty-six countries between 2016 and 2017. In twenty of these twenty-six countries, ‘people have gone on strike or taken to the streets to protest against government cutbacks, the rising cost of living, tax restructuring and wage bill reforms pushed by IMF conditionality’. Since the study came out, the people of Argentina, the Czech Republic, Ecuador, Egypt, Haiti, Jordan, Morocco, Pakistan, Sudan, Tunisia, and other countries have taken to the streets. For them, there is no alternative: either they protest, or they starve.

German soldiers, their mule, and tear gas (1916)

Several important points emerge from the study by the European Network which bear reflection:

  1. In the past few years, the IMF loans come with an increased number of structural adjustment conditions. The average number of conditions per loan between 2017 and 2018 was 26.8; between 2011 and 2013, the average number of conditions per loan was 19.5.
  2. Inside the dense language of the loan, there are a series of ‘hidden’ conditionalities; these are often in the annex documents for the loan.
  3. Once the loan agreements have been signed, the IMF returns to add more conditions on the same loan.
  4. Of the twenty-six loans studied, twenty-three of them demanded ‘fiscal consolidation’, which means that the governments were forced to restrict spending. The IMF, in other words, foisted austerity on these countries.
  5. Most of the countries that went to the IMF were ‘repeat borrowers’, which means that the IMF loans did not fix their problems but only exacerbated them. The IMF did nothing to solve the structural insolvency of these governments, but instead loaned the countries into unsustainable debt. In 2013, an IMF study admitted that due to the IMF agreement with Greece in 2010, ‘Market confidence was not restored, the banking system lost 30 per cent of its deposits and the economy encountered a much deeper than expected recession with exceptionally high unemployment’. The Fund’s demands only deepened Greece’s problems. This lesson has not been absorbed.
  6. Finally, the IMF demanded austerity of developing countries even in times of crisis, knowing full well that this is the time when it is important for governments to spend towards fiscal stimulation of a depressed economy. Advanced capitalist countries, on the other hand, do not observe the IMF demand. Between the autumn of 2008 and the start of 2009, calculates the French economist Cédric Durand, these states committed 50.4% of the world GDP to support the financial sector. Nothing of this generosity has ever been committed to support the poor, who make up the vast majority of the planet’s people.

Camouflaged behind IMF phrases such as ‘forging a stronger social compact’ comes the old fashioned tonic of austerity for the poor, generosity for the rich. The agreement between the IMF and Ecuador called upon Moreno’s government to cut wages and to cut 140,000 public sector employees, while energy prices and fees for government services would be raised. The rich would pay none of the price. The money paid to buy gallons of tear gas and riot police equipment could just as easily have been paid out for health care and education. The ‘social compact’ that the IMF finds itself building in each country is forged not through the bonds of society but through the barricades of protest and repression.

Each IMF chief comes to the top office with a signature agenda. Christine Lagarde wanted to push gender equity, which meant – for Lagarde and the IMF – increasing the number of women in the workforce. In one of the staff papers, the IMF researchers pointed out that this would only be possible if countries invest in infrastructure (such as public transport), promote equal rights for women (such as equal inheritance laws and property rights), and promote access to affordable childcare. But, most IMF loan agreements demand cuts in public infrastructure and in childcare and healthcare. IMF policy, in fact, went against even the limited agenda promoted by Lagarde.

Lagarde, who is now in the running to head the European Central Bank, could have done well to listen to Ofelia Fernández, a 19-year-old Argentinian militant who is running for a seat in the Buenos Aires government. Ofelia does not want to define her politics narrowly. She wanted to make it clear to me last month that feminism must take up all the social issues from a feminist perspective – not allow itself to be restricted to ‘women’s issues’, which are themselves, she pointed out, everyone’s issues. In the poorer parts of Argentina, organisations have emerged to fight against the outcome of the crisis. Hunger is a serious issue, with special emphasis on the hunger of children. Most of the leaders of these popular organisations, Ofelia said, are women. Their fight around the economy of care and against austerity must also be seen as a feminist fight. The fight against hunger, Ofelia said, is also feminism.

Georgieva comes to her post eager to tackle ‘climate risks’ and to urge a move to a post-carbon energy system. Her policy form will be cuts to energy subsidies and a rise in carbon taxes. A recent IMF study shows that gasoline and household energy bills should rise dramatically to limit global warming. What we have here is austerity packaged as environmentalism. Rather than promote a policy slate of regressive taxes on the poor, the IMF could urge more expenditure on public transportation and on a transition from carbon-based energy to more sustainable forms of energy. But this is not the temper of the IMF. Neoliberal policy and austerity are its contours.

The headline of this newsletter does not come from a radical poet. It comes from the Wall Street Journal. During the Asian financial crisis in 1998, the WSJ ran an editorial that said that the IMF ‘has not been fighting financial fires but dousing them with gasoline’. The IMF pours the first tranche of gasoline.

People want to douse these flames. Their hopes explode out of the verse of Dennis Brutus (1924-2009), South Africa’s anti-apartheid poet:

There will come a time we believe
when the shape of the planet
and the divisions of the land
will be less important.
We will be caught in the glow of friendship.
A red star of hope
will illuminate our lives.
A star of hope.
A star of joy.
A star of freedom.

  • First published at The Tricontinental.
  • Death, Misery and Bloodshed in Yemen

    Writing about his visit to the world’s largest weapons bazaar, held in London during October, Arron Merat describes reading this slogan emblazoned above Raytheon’s stall: “Strike with Creativity.” Raytheon manufactures Paveway laser-guided bombs, fragments of which have been found in the wreckage of schools, hospitals, and markets across Yemen. How can a weapons manufacturer that causes such death, bloodshed, and misery lay claim to creativity?

    “Strike with Creativity” (Cartoon credit: Sean Reynolds)

    Greta Thunberg, sitting alone outside her school as she initiated a movement of climate strikes, could properly invoke the words “Strike with Creativity.” She inspired Friday classroom walkouts, worldwide, by young people protesting destruction and death caused by climate catastrophe. Her admirable goal is to save the planet by promoting such strikes.

    Coming from Raytheon, the words “Strike with Creativity” sound chilling, grotesque.

    Consider the Raytheon weapons now demolishing Yemen. Fragments of Raytheon and other U.S. manufactured weapons dot blast sites where Yemeni survivors struggle to collect body parts and scattered bits of clothing, which are needed to compile lists of the dead.

    In September, the Kingdom of Saudi Arabia (KSA) hit a detention center in the Dhamar governorate, in the northern highlands of Yemen with seven airstrikes that killed at least 100 people and “pulverized” the area, according to Bethan McKernan, reporting for The Guardian. “It took five days to remove all the bodies impaled on metalwork ripped from the walls in the blasts,” she wrote.

    After the attack, McKernan interviewed Adel, a 22-year-old security guard  employed at the site. His brother, Ahmed, also a guard, was among those killed. Adel pointed to a blanket, visible on the second floor of a building where the guards had slept. “You can see Ahmed’s blue blanket up there,” said Adel. “There were 200 people here but now it’s just ghosts.”

    Saudi Arabia and other countries in the Saudi-led coalition bombarding and blockading Yemen have killed tens of thousands, wrecking the country’s already enfeebled infrastructure and bringing Yemen to the brink of a famine that may kill millions. President Trump signaled additional support for Saudi Arabia on October 11 when the U.S. military announced it would send thousands more troops to the kingdom, bringing the number of U.S. troops there to 14,000.

    Just as Greta Thunberg insists adults must become intensely aware of details and possible solutions regarding the climate catastrophe, people in the U.S. should learn about ways to end economic as well as military war waged against Yemen. For us to understand why Yemenis would link together in the loose coalition of fighters called Houthis requires deepening awareness of how financial institutions, in attempting to gain control of valuable resources, have pushed farmers and villagers across Yemen into debt and desperation. Isa Blumi writes about this sordid history in his 2018 book, Destroying Yemen, What Chaos in Arabia Tells Us about the World.

    Blumi details how Yemen’s society, largely independent and agrarian, became a guinea pig for International Monetary Fund (IMF) “development projects” which, based on strikingly colonialist theories of modernization, crushed grassroots institutions and amounted to “cost-effective ways of prying Yemen’s wealth out of its peoples’ hands.”

    Local Development Associations, for example, were formed during the 1970s to help people hang on to their land, cooperatively determine what crops they would grow and decide how they would use the profits. But U.S. Agency for International Development “experts” pressured these groups to instead produce “cash crops strictly meant for export.”

    “After all,” Blumi writes, “with the right kind of cash crop and the use of American labor-saving technology, pesticides and fertilizers included, Yemen’s villagers were no longer needed in the fields. Alternatively, they could work in cities in sweatshops producing clothes for a global market or the soon booming oil and gas projects.”

    Blumi’s book documents the fiercely stubborn creativity with which, decade by decade, Yemenis kept surprising the West, exploring and pursuing countermeasures to resist its exploitative control, and risking the West’s destructive anger.

    Yemenis resisted U.N. and IMF prescriptions of global integration and debt peonage. When farmers desperate for cash went to work in, for instance, Saudi Arabia, “they consistently sent remittances home to families that saved the cash and invested in local projects, using local bank transfers.” Imams and village leaders encouraged people to resist imperialist “modernization” projects, knowing that the West’s preferred “modern” role for them was as wage slaves with no hope of developing a better future.

    The “Houthi” movement began when Husayn al-Houthi, an opponent of Yemen’s dictatorial (and Western-allied) Saleh regime, tried to defend the water and land rights of locals in the Sa’adah province in northwestern Yemen. Sharing what was then a porous and informal border with the KSA, they often found themselves in disputes with Saudi border patrols. They also resisted ‘structural adjustment’ demands by the IMF to privatize some of Yemen’s best farming and grazing land. When the dictator Saleh made criminal concessions to the KSA, al-Houthi and his followers persisted with protests. Each new confrontation won over thousands of people, eventually spreading beyond Sa’adah.

    Blumi cites numerous instances in which Yemen’s economic assets were pillaged, with Saleh’s approval, by “well-heeled global financial interests” who now designate Saleh’s successor Abdrabbuh Mansur Hadi as Yemen’s “internationally recognized government.” Hadi governs from Riyadh in Saudi Arabia, due to a stunning lack of Yemeni support.

    In 2008, an extremely wealthy member of the bin Laden family aimed to build a bridge across the mouth of the Red Sea from Yemen to Djibouti. The project could generate hundreds of billions for investors, and quicken the process of exploitative modernization; but it would also require building railways and roads where there are only villages now. People living along the coastline of the Red Sea would be in the way.

    Since 2015, fighting has been concentrated in this area, called the Tihama. Control of the coastline would also allow financial takeover of potentially profitable Yemeni fisheries. Blumi says billions of dollars of annual income are at stake, noting with irony that a war causing starvation is being waged, in part, to gain control over food assets.

    A recent United Nations report says that Yemen is now “on course to become the world’s poorest country” with 79 percent of the population living under the poverty line and 65 percent classified as “extremely poor.” The Yemen Data Project estimated 600 civilian structures have been destroyed, monthly, in Yemen, mostly by airstrikes.

    “Staple food items are now on average 150 per cent higher than before the crisis escalated,” says a 2019 report by the Norwegian Refugee Council. “Teachers, health workers and civil servants in the northern parts of the country haven’t been paid in years,” according to the same report.

    Mainstream media reports could convince concerned onlookers that Yemenis have been particularly vulnerable to violence and war because they are socially and economically backward, having failed to modernize. Blumi insists we recognize the guilt of financial elites from multiple countries within and beyond the Gulf states as well as institutions within the World Bank, the IMF and the UN. It’s wrong to blame “eighty percent of a country’s population currently being starved to death”

    Here in the United States, news commentators discussing the Trump impeachment story liken the breaking developments to “bombshell after bombshell.” In Yemen, real and horribly modern bombshells, made in the United States, kill and maim Yemeni civilians, including children, every day.

    Greta Thunberg continues calling us to join her on an unfamiliar, unprecedented, and arduous path to change course as our world careens toward terrifying devastation. We’re offered a chance to resist destructive, albeit “modern” means of exploiting the planet’s resources. A true strike for creativity, necessarily challenging militarism and greed, will help prevent the hellish work of destroying Yemen.

    Map (Credit: Political Geography Now)

    A version of this article appeared in The Progressive Magazine

    Pink Tide Against US Domination Rising Again In Latin America

    (Photo from Dissent Magazine)

    Once again, the left is rising in Latin America as people revolt against authoritarian regimes, many of whom were put in place by US-supported coups. These regimes have taken International Monetary Fund (IMF) loans and are under the thumb of international finance, which is against the interests of people.After the embattled President of Ecuador claimed that President Nicolas Maduro was the cause of the massive protests against him, Maduro made clear what was occurring in Latin America, saying:

    We have two models: the IMF model which privatizes everything and takes away the people’s rights to health, education and work; and the humanist-progressive model which is emerging in Latin America and has the Bolivarian Revolution at the forefront.

    Maduro’s clear understanding of the conflict is why it has been so important for the US to remove him. His success in defeating ongoing US coup attempts is a model guiding Latin America to a future independent of US domination.

    Ecuadorians celebrate the repeal of Decree 883 (From Twitter)

    Ecuador in Rebellion Against IMF and the US Puppet Moreno

    On October 4, Moreno proclaimed the end of a 40-year policy of fuel and petrol subsidies, which had traditionally benefited his country’s working-class population. He also announced a 20 percent decrease in the salary of public employees and initiated plans to privatize pensions. He removed workplace and job security safeguards. Decree 883, known as ‘The Package’, was a series of neoliberal policies demanded by the IMF in return for a $4.2 billion dollar loan. It was preceded by policies for the wealthy including reducing their taxes.

    The IMF loan was part of Moreno serving as a puppet and bowing to multiple US demands. Ecuador promised to settle a long dispute with Chevron whose oil drilling and pipelines have polluted the country. Tens of billions of dollars in restitution from Chevron are at stake but Moreno said he is willing to give them up. In fact, the IMF loan is strange in that it was dependent on Ecuador paying external debt obligations; i.e., it was not new funds for Ecuador but new debt to subsidize paying back Wall Street.

    In making the announcement, Moreno called the people “Zánganos,” or Drone Bees leading to the uprising of the Drone Bees. The mass protests were called by the Popular Front, a group of unions, and the Unified Workers Federation of Indigenous Nationalities of Ecuador (CONAIE). Students and social movements joined protests throughout the nation in Loja, Guayaquil, Cuenca, Ambato, and Riobamba, among other cites as well as Quito, the capital. Moreno claimed without any evidence that the uprising was financed by Venezuelan President Nicolas Maduro and Correa.

    Protests in Ecuador were relentless with no end in sight. They grew when 20,000 indigenous people marched into Quito. Police responded with violence, tear gas, and mass arrests. An October 4 video circulated on social media showed nonviolent protesters killed in the street by the police as well as other police violence. On October 5, Moreno declared a 60-day state of Emergency. Sometimes police had to retreat in the face of mass protests. On October 7, Moreno fled the capital to hide in the Navy base 260 miles away in the conservative stronghold of Guayaquil.

    As we wrote this newsletter, unrest in Ecuador was escalating. On Saturday, the nation was put on military lockdown. Law enforcement attacked protesters with pellets and tear gas in the immediate vicinity of the  National Assembly. By Sunday, Moreno decreed a 3:00 pm curfew, which people defied. Then, facing an emergency session in the National Assembly, Moreno backed down. Protesters celebrated when Moreno’s government announced that Decree 883 had been repealed after eleven days of popular mobilizations.

    Peter Koenig describes a root cause of the problems:

    Since January 2000, Ecuador’s economy is 100% dollarized, compliments of the IMF (entirely controlled by the US Treasury, by force of an absolute veto). The other two fully dollarized Latin American countries are El Salvador and Panama.

    The US and IMF used the economic crises of the 1990s to dollarize Ecuador’s economy and gain full control over the nation’s riches as Ecuador is the second-largest oil economy in South America. This led to unaffordable goods for Ecuadorians, social unrest and a series of unstable governments until President Correa, who served from 2007 to 17, was elected.

    A Center for Economic and Policy Research 2017 report found under Correa Ecuador did well with an average annual GDP growth of 1.5%  compared to 0.6% average for the previous 26 years; a decline of 38% in poverty with extreme poverty reduced by 47%; and a decline in inequality with the Gini coefficient falling substantially. Correa doubled social spending from 4.3% in 2006 to 8.6% in 2016; tripling education spending from 0.7% to 2.1%; and, increasing public investments from 4% of GDP in 2006 to 10% in 2016.

    Correa served two terms. A third term would have required a constitutional amendment. Rather than running, Correa endorsed Lenin Moreno who had served as his vice president from 2007-13. He was expected to continue Correa’s policies but instead reversed them.

    Moreno was unpopular before announcing ‘The Package’ due to structural poverty increasing from 23.1 percent in June 2017 to 25.5 percent in June 2019 with projections of 30 percent by the end of the year. Injustices like the imprisonment of the popular former Vice President Jorge Glas on dubious charges and his continuous political witch hunt against Rafael Correa and other leaders of the Citizens’ Revolution Party added to his unpopularity. In addition, he has been engulfed in a personal corruption crisis involving an offshore Shell corporation INA, which cast Moreno’s presidency in doubt.

    Moreno’s forcible and illegal ejection of Julian Assange from the London embassy in return for payoffs from the US and UK resulted in a national strike in Ecuador in July. This, along with the arrest of Ola Bini, who is being prosecuted falsely as a conspirator with Wikileaks, was unpopular with Ecuadorians.

    Will repeal of ‘The Package’ end the protests and the threat to Moreno’s presidency? As we write, the answer to these questions are unclear. The people won a major victory, but the Moreno/IMF infection remains.

    Rally in Argentina (By Enfoque Rojo)

    Latin Americans Rising Against the Right and US Domination

    Latin American countries are rejecting neoliberalism and US domination using multiple strategies to achieve change.

    This month the deepening anti-capitalist movement in Bolivia is set to strengthen with the probable re-election of Evo Morales on October 20. Argentina is expected to remove right-wing President Mauricio Macri on October 27 and replace him with Alberto Fernandez. And, Mexico put in place its first progressive, left-of-center government with the election of Andrés Manuel López Obrador (AMLO) on July 1, 2018. Elections are also upcoming in Uruguay on October 27 and in Peru in January. Venezuela may have National Assembly elections in January as well.

    Bolivia’s Evo Morales has a 13-point lead in polls as his governing party Movement Toward Socialism (MAS) looks to re-election for a third Morales term that will last until 2025. Morales has 38.8 percent, just 1.2 percent short of the 40 percent required for a first-round victory in the upcoming elections. The survey also indicated majority support for the nationalization of gas and strategic industries, 51 percent say that public ownership is positive for the economy. On social programs, 61.7 percent say they are essential for providing dignity to those of low incomes.

    Morales has launched a large reforestation plan and put in place a model healthcare program. He is under attack from the United States and segments of Bolivia. Morales leads an independent, sovereign Bolivia that has rejected US dominance, decolonized and displaced neoliberalism. A recent color revolution attempt by the wealthy, with the support of the US and western powers, failed.

    Argentina’s first round of voting on August 11 resulted in Fernandez, running with former president Cristina Kirchner, finishing 15 percent ahead of Macri. The surprising landslide brought into question Macri’s ability to govern between now and the election. As a result, the IMF put a $5.4 billion dollar loan on hold part of the $56.3 billion stand-by agreement signed in mid-2018. Fernandez opposed the loan, which required sharp budget cuts affecting public services at a time of increasing poverty.

    Under Macri, the economy has gone into crisis with poverty increasing to a record 36.4 percent, a recession accompanied by a 47 percent inflation rate in 2018 and an inflation rate of 25.1 percent during the first seven months of this year. Argentina’s unemployment is at the highest level in 14 years. Poverty was at 19.7 percent when Kirchner left office in 2015. Fernandez has put forward an anti-hunger plan, not dependent on the IMF. Three weeks before the election, thousands of people rallied in Buenos Aires as the Workers Left Front sent a message of opposition to neoliberalism and austerity to the two major political parties.

    In Mexico, AMLO won a landslide 53 percent of the vote on July 31 ending decades of right-wing rule. People were fed up with the corruption, impunity, and violence — decades of loss of rights, pillaging and destruction of the nation’s wealth and public enterprises. At his inauguration, AMLO decried 36 years of neoliberalism and public and private corruption, promised a “peaceful and radical” transition with “indigenous people as its priority,” in a government “for the good of all, first the poor.” His fight against neoliberalism is challenged by NAFTA II (or the USMCA), as AMLO is careful not to confront Trump on this. On border policy, AMLO offered migrants home in Mexico and urged investment in Central America.

    The Zapatistas have conflicted with AMLO over the exploitation of resources and the use of the military in policing, demanding its autonomy based on indigenous principles but he has sought diplomacy with them. AMLO has also faced massive strikes of tens of thousands of autoworkers, workers at US companies in Mexico and wildcat strikes at the border. AMLO has been a counterweight to US aggression in Latin America standing with Venezuela, Nicaragua, and Cuba.

    Peru is in the midst of a crisis. President Martin Vizcarra who came into office after a corruption scandal removed his predecessor, dissolved the Congress, a move supported by the left, because it is controlled by far-right politician Keiko Fujimori and was preventing Vizcarra’s anti-corruption campaign. Congress ignored the president’s order and voted to remove him from office instead. The vice president resigned rather than take over and Vizcarra remains in office with the support of the military. He has now called for new congressional elections to be held on January 26. Vizcarra is a conservative battling the oligarchic right. The left, which has been divided, is coalescing around the Popular National Assembly and allying with social movements. The movements want an end to neoliberal policies, a Constituent Assembly to draft a new Constitution and to break with Washington’s domination.

    In Central America, Honduras has been in revolt against the coup government of Juan Orlando Hernandez (JOH), which for ten years has put in place neoliberalism, repression, and violence. Protests have been ongoing since his coup and fraudulent re-election. This summer, protests intensified with a national strike over austerity and privatization measures required by an IMF loan, leading to a 66-day uprising.  The US has trained Honduran police to use repressive measures in an attempt to stop the protests, but their actions feed more protests.

    Many have fled Honduras in caravans to escape the corruption and violence. Now, a coalition of civil groups is urging the president’s departure over a scandal ignited by accusations of large-scale drug trafficking to the United States being litigated against the president’s brother Juan Antonio “Tony” Hernandez. In the trial, several witnesses have declared JOH’s campaign was financed with drug money, and that he took millions in bribes from various Mexican drug lords, including the infamous Joaquin “El-Chapo” Guzman. The Liberal Party joined in calling for his resignation and protests have intensified. The trial may be the end of this cocaine-fueled presidency.

    Brazil’s election of Bolsonaro has been marred by scandal now that the corruption of Operation Car Wash has been exposed. Private conversations between the prosecutors and then-judge Sergio Moro, now Super Minister of Justice, show that former President Luiz Inacio Lula da Silva was the “victim of a conspiracy” to prevent him from running against Bolsonaro.  In the secret exchanges, Moro admitted that the corruption case was designed to frame him. Lula has said the US is behind the conspiracy.

    Calls to free Lula are increasing and the Supreme Court will be reviewing the case. Lula is demanding his record be cleared and refused a panicked offer from prosecutors that he be freed from jail and put under house arrest. Bolsonaro is also under attack for the Amazon fires, for an increase in police killings, for genocide against the Indigenous and for attacks on public education. Former President Michel Temer acknowledged that the impeachment of former president Dilma Rousseff, the Worker’s Party leader, was a coup d’etat.

    Nicaragua survived a 2018 US coup attempt and the revolution continues to thrive after 40 years of independence from US domination after US-backed dictator Anastasio Somoza fled. People were very confused about what happened in the 2018 coup attempt as media misinformation was prevalent. A group of us joined and produced a reader to help people understand the reality of Nicaragua. Peace is coming back to Nicaragua, even though continued pressure from the US is expected in the form of new illegal sanctions.

    Venezuela, which we have reported on intensively for years, has also survived ongoing coup attempts that continue to escalate in the post-John Bolton era of the Trump administration most recently with a threat of war through the Organization of American States (OAS). They are prepared for a military attack and have created new alliances to overcome the US economic war. This week, Russia announced it was investing $16.5 billion in Venezuela by the end of 2019.

    Russia has provided anti-missile defense systems, is keeping Navy ships in Venezuela to deter a US blockade and has helped gather intelligence on US actions. With their help, Venezuela has uncovered terrorist plots coming from Colombia and involving US-puppet Juan Guiado’s team. Guaido has faltered and failed time and again, and now is being investigated for ties to Colombian drug traffickers and corruption.

    The non-aligned movement of 120 nations met in Caracas this summer and expressed support for Venezuelan sovereignty.  Venezuela has been a lynchpin for left movements in Latin America. When oil prices were high, it shared its wealth not only with poorest Venezuelans but with other countries seeking to challenge US and oligarch domination. Even in the midst of an escalating economic war with the United States, they continue to provide housing, food, and essentials to their people.

    Protesters in Haiti (Twitter)

    Caribbean Resistance

    In the Caribbean, Cuba is challenged by the US economic war but continues its revolution. Mass protests in Haiti threaten the survival of the government and Puerto Rico’s revolt removed a governor.

    Cuba, despite the increasing US economic war, continues to be a bulwark against US imperialism, standing with governments like Venezuela and Nicaragua when they are under attack. Cuba completed a successful transition to a new president, Miguel Díaz-Canel, and voted on a new constitution developed using a participatory process involving 9 million people through 133,000 citizen meetings. The constitution includes “universal and free health, education, sports and recreation, culture and respect for human dignity.” Cuba is currently facing major economic challenges as the US is blocking their access to oil. Russia and Venezuela are helping Cuba overcome this oil blockade.

    Haiti has been in protest since April calling for an end to neoliberal US domination and the resignation of Jovenel Moise. The president has not spoken in public since the beginning of this latest round of protests and this week he named a commission of seven politicians to lead discussions for a solution to end the crisis.

    In Puerto Rico, a colony of the United States, massive protests led to Governor Ricardo A. Rosselló resigning on July 22, 2019. People also want the corrupt legislature cleaned out, the Fiscal Control Board, created by Obama, ended and the debt to be audited. Former political prisoner, Luis Rosa, said three things are needed: “decolonization, an end to our colonial status through a constitutional assembly; health care, free for all Puerto Rican citizens; and free public education up through the university level.”

    Stephen Sefton wrote a country-by-country review of Latin America and the Caribbean in June describing the decline of the United States in the region and how changes were coming to many nations. He predicted that we are seeing “the last throw of the dice for the US to retain its accustomed power and influence against the relentless fundamental drive for emancipation by the region’s impoverished majority.”

    Rafael Correa said: “Neoliberalism is what failed, not socialism of the 21st century, on the contrary, socialism of the 21st century is what has us firmly on our feet, withstanding all of these difficulties.” This hemisphere is a key battleground in the conflict between neoliberalism v Socialism and US dominance v. independence. People are demanding democracy from the bottom up and a fair economy that meets their needs.

    Ecuador and the IMF’s Killing Spree

    For close to 40 years the IMF has weaponized its handle on the western economy through the dollar-based western monetary system, and brutally destroyed nation after nation, thereby killed hundreds of thousands of people. Indirectly, of course, as the IMF would not use traditional guns and bombs, but financial instruments that kill. They kill by famine, by economic strangulation, preventing indispensable medical equipment and medication entering a country, even preventing food from being imported, or being imported at horrendous prices only the rich can pay.

    The latest victim of this horrifying IMF scheme is Ecuador. For starters, you should know that since January 2000, Ecuador’s economy is 100% dollarized, compliments of the IMF (entirely controlled by the US Treasury, by force of an absolute veto). The other two fully dollarized Latin American countries are El Salvador and Panama.

    The Wall Street Journal recently stated that Ecuador “has the misfortune to be an oil producer with a ‘dollarized’ economy that uses the U.S. currency as legal tender.” The Journal added: “The appreciation of the U.S. dollar against other currencies has decreased the net exports of non-oil commodities from Ecuador, which, coupled with the volatility of oil prices, is constraining the country’s potential for economic growth.”

    Starting in the mid 1990’s, culminating around 1998, Ecuador suffered a severe economic crisis, resulting from climatic calamities, and US corporate and banking oil price manipulations (petrol is Ecuador’s main export product), resulting in massive bank failures and hyper-inflation. Ecuador’s economy at that time had been semi-dollarized, like that of most Latin American countries; i.e., Peru, Colombia, Chile, Brazil, and so on.

    The ‘crisis’ was a great opportunity for the US via the IMF to take full control of the Ecuadorian (petrol) economy by 100% dollarizing it. The IMF propagated the same recipe for Ecuador as it did ten years earlier for Argentina, namely full dollarization of the economy in order to combat inflation and to bring about economic stability and growth. In January 2000, then President Jorge Jamil Mahuad Witt, from the “Popular Democracy Party”, or the Ecuadorian Christian Democratic Union (equivalent to the German CDU), declared the US dollar as the official currency of Ecuador, replacing their own currency, the Sucre.

    Adopting another country’s currency is an absurdity and can only bring failure. And that it did, almost to the day, 10 years after Argentina was forced by the same US-led villains to revalue her peso to parity with the US-dollar, no fluctuations allowed. Same reason (“economic crisis”, hyper-inflation), same purpose: controlling the riches of the country.  Absolute failure was preprogrammed. Did Ecuador not learn from the Argentinian experience and convert her currency at the very moment the Argentinian economy collapsed due to dollarization, into the US dollar? That is not only a fraud, but a planned fraud.

    Ecuadorian goods and services quoted in dollars, became unaffordable for locals and uncompetitive for exports. This led to social unrests, resulting in a popular ‘golpe’. President Mahuad was disposed, had to flee the country, and was replaced by Gustavo Noboa, from the same CDU party (2000 – 2003). Ever since the dollar remained controversial among the Ecuadorian population. President Rafael Correa’s quiet attempt to return to the Sucre, was answered by a CIA-inspired police coup attempt on 30 September 2010.

    In 2017, the CIA / NED (National Endowment for Democracy) and the US State Department have brought about a so-called “soft” regime change. They urged (very likely coerced) Rafael Correa to abstain from running again for President, as the vast majority of Ecuadorians requested him to do. This would have required a Constitutional amendment which probably would have been easily accepted by Parliament. Instead they had Correa endorse his former Vice-President (2007-2013) Lenin Moreno, who ran on Correa’s platform, the socialist PAIS Alliance, therefore expected to continue in Correa’s line with same socioeconomic policies.

    Less than a year later, Moreno turned tables, became an outright traitor to his country and the people who voted for him. He converted Ecuador’s economy to the neoliberal doctrine – privatization of everything, stealing the money from the social sectors, depriving people of work, drastically reducing social services and converting a surplus economy of tremendous social gains into one of poverty and misery.

    President Correa left the country a modest debt of about 40% to GDP at the end of his Presidency in 2017. A debt-GDP ratio that would be no problem anywhere in the world. Compare this to the US debt vs. GDP – 105% in current terms and about 700% in terms of unmet obligations (net present value of total outstanding obligations). There was absolutely no reason to call the IMF for help. The IMF, the long arm of the US Treasury, ‘bought’ its way into Moreno’s neoliberal Ecuador, coinciding with Moreno evicting Julian Assange from the Ecuadorian Embassy in London.

    The IMF loan of US$ 4,2 billion increases the debt / GDP ratio by 4% and brings social misery and upheaval in return, and that as usual, at an unimaginable cost, by neoliberal economists called “externalities”. It was practically a US “present” for Moreno’s treason, bringing Assange closer into US custody. What most people are unaware of is that at the same time, Moreno forgave US$ 4.5 billion in fines, interest and other dues to large corporations and oligarchs, hence decapitalizing the country’s treasury. The amount of canceled corporate fiscal obligations is about equivalent to the IMF loan, plunging large sectors of the Ecuadorian population into more misery.

    Besides, under wrong pretexts it allowed Moreno to apply neoliberal policies, all those that usually come as draconian conditions with IMF loans and that eventually benefit only a small elite in the country but allows western banking and corporations to further milk the countries social system.

    According to a 2017 report of the Center for Economic and Policy Research (CEPR), an economic think-tank in Washington, Ecuador’s economy has done rather well under Rafael Correa’s 10-year leadership (2007 – 2017). The country has improved her key indicators significantly: Average annual GDP growth was 1.5% (0.6% past 26 years average); the poverty rate declined by 38%, extreme poverty by 47%, a multiple of poverty reduction of that in the previous ten years, thanks to a horizontally distributive growth; inequality (Gini coefficient) fell substantially, from 0.55 to 0.47; the government doubled social spending from 4.3% in 2006 to 8.6% in 2016; tripled education spending from 0.7% to 2.1% with a corresponding increase in school enrollments; increased public investments from 4% of GDP in 2006 to 10% in 2016.

    Now, Moreno is in the process of reversing these gains. Only six months after contracting the IMF loans, he has already largely succeeded. The public outcry can be heard internationally. Quito is besieged by tens of thousands of demonstrators, steadily increasing as large numbers, in the tens of thousands, of indigenous people are coming from Ecuador’s Amazon region and the Andes to Quito to voice their discontent with their traitor president. Government tyranny is rampant. Moreno declared a 60-day state of emergency with curfew and a militarized country. As a consequence, Moreno moved the Government Administration to Guayaquil and ordered one of the most severe police and military repressions Ecuador has ever known, resulting within ten days to at least 7 people killed, about 600 injured and approximately 1,000 people arrested.

    The protests are directed against the infamous Government Decree 883, that dictates major social reforms, including an increase in fuel prices by more than 100%, reflecting directly on public transportation, as well as on food prices; privatization of public services, bringing about untold layoffs, including some 23,000 government employees; an increase in Aggregated Value Taxes – all part of the so-called “paquetazo”, imposed by the IMF. Protesters called on Moreno, “Fuera asesino, fuera” – Get out, murderer, get out!  Will they succeed?

    The IMF’s guns are needlessly imposed debt, forced privatization of social services and public assets as railways, roads, and worst of all, health, education, water supply and sewerage services. Unemployment rises, extreme poverty skyrockets, public service tariffs – water, electricity, transportation – increase, often exponentially, depriving people from moving to work or look for new employment elsewhere. Diseases that otherwise may have been curable, like cancers, under the new regime lack medication. Patients die prematurely. Depression brings about rapidly rising suicide rates, as the British medical journal Lancet has observed in many IMF oppressed countries, but especially in Greece.

    Targeted are primarily those nations that do not want to bend to the dictate of Washington, and even more so those with natural resources the west covets, or countries that are in strategic geographic locations where NATO wants to establish itself or get a stronger foothold; i.e., Greece. The IMF is often helped by the World Bank. The former providing, or rather coercing, a ‘debt-strapped’ country into accepting so-called rescue packages, billions of dollars of loans, at exorbitant “high-risk” interest rates, with deadly strings attached.

    The latter, the WB, would usually come in with loans – also euphemistically called “blank checks” – to be disbursed against a matrix of fulfilled conditions, of economic reforms, privatizations. Again, all usually resulting in massive government layoffs, unemployment, poverty. In fact, both the IMF and the WB approaches are similar and often overlapping – imposing “structural adjustment” (now in disguise given different names), to steal a country’s resources, and sovereignty, by making them dependent on the very financial institutions that pretend to ‘help’ them.

    The three most recent and flagrant cases of IMF interference were Greece, Ukraine and Argentina. Greece was doubly destroyed, once by her brothers and sisters of the European non-Union that blackmailed them into staying with the euro, instead of exiting it and converting to their local currency and regaining financial sovereignty.

    Ukraine, possibly the richest country in terms of national resources and with an enormous agricultural potential due to her fertile soil, was “regime changed” by a bloody coup, The Maidan massacre in February 2014, instigated and planned by the CIA, the EU and NATO and carried out through the very US Embassy in Kiev. This was all long-term planning. Remember Victoria Nuland boasting that the US has spent more than 5 billion dollars over the past five year to bring about regime change and to convert Ukraine into a fully democratic country and making it ready to enter the European Union?

    The western allies put a Nazi Government into Kiev, created a “civil war” with the eastern Russia-aligned part of Ukraine, the Donbass. Thousands of people were killed, millions fled the country, mostly to Russia, the country’s debt went through the roof, and in comes the IMF, approving in December 2018 a 14-month Stand-By Arrangement for Ukraine, with an immediate disbursement of US$ 1.4 billion. This is totally against the IMF’s own Constitution, because it does not allow lending to a country at war or conflict. Ukraine was an “exception”, dictated by the US. Blamed for the ever-changing and escalating Ukraine fiasco was Russia.

    Another IMF victim is Argentina. In December 2015 through fraudulent election, Washington put a neoliberal henchman into the Presidency, Mauricio Macri. He carried out economic and labor reforms by decree and within the first 12 months in office, increased unemployment and poverty from about 12% he inherited from his predecessor, Christine Kirchner, to over 30%.

    Within 15 years of Kirchner Governments, Argentina largely recovered from the collapse of 2000 / 2001 / 2002, accumulating a healthy reserve. There was no need to call the IMF to the rescue, except if it was a pre-condition for Macri to become president. In September 2018, Argentina contracted from the IMF the largest ever IMF loan of 57.1 billion dollars, to be disbursed over a three-year period, plunging Argentina in an almost irrecoverable debt situation.

    The Bretton Woods Organizations — World Bank and IMF — were created in 1944 precisely for that reason, to enslave the world, particularly the resources-rich countries. The purpose of these so-called international financial institutions, foresaw an absolute veto power of the United States, meaning they are doing the bidding of the US Treasury. They were created under the UN Charter for good disguise, and are to work hand-in-glove with the fiat monetary system created in 1913 by the Federal Reserve Act. The pretext was to monitor western “convertible” currencies that subscribed to the also newly modified gold standard (1 Troy ounce [31.1 grams] of gold = US$ 35), also established during the Bretton Woods Conference in 1944.

    Both organizations started lending money – the Marshall Fund, managed by the world Bank in the 1950s – to war devastated Europe, moving gradually into economic development of “Third World” countries, and eventually, in the 1980s, showing their evil heads by introducing the neoliberal doctrines of the Washington Consensus worldwide. It is a miracle how they get away with spewing so much misery, literally unopposed for the last 30 – 40 years, throughout the world. Why are they not stopped and dismantled?  The UN has 193 members; only a small proportion of them benefit from the IMF-WB financial crimes. Why does the vast majority, also potential victims, remain silent?

    Nuclear War: Just Another Day

    Catastrophic events that send the world into turmoil happen on ‘just another day’. The atom bomb that exploded over Hiroshima took place while thousands of ordinary folk were just going about their everyday business on ‘just another day’. A missile attack on a neighbourhood in Gaza or a drone attack on unsuspecting civilians in Afghanistan: death and destruction come like a bolt from the blue as people shop at the local market or take their kids to school on ‘just another day’.

    Will it be ‘just another day’ when the next nuclear bomb is exploded in anger, an ordinary day when people are just going about their daily business? By then it might be too late to do anything, too late to act to try to prevent an unfolding global catastrophe on a scale never before witnessed by humans.

    Yet so many appear too apathetic and wrapped up in a world of gadgets, technology, shopping malls, millionaire sports players and big-time sports events to think that such a thing could be imminent.

    Are they so preoccupied with the machinations of their own lives in cotton-wool cocooned societies to think that what is happening in Syria or Iraq is just too boring to follow or that it doesn’t really concern them or it is ‘not my problem’? Do they think they are untouchable, that only death, war and violence happens in faraway places?

    Could any of us even contemplate that on some not-too-distant day a series of European cities could be laid waste within a matter of minutes? It isn’t worth thinking about. Or is it?

    The US (and the West’s) foreign policy is being driven on the basis of fake morality and duplicity. Millions lie dead in Iraq, Afghanistan, Syria and Libya as a result of US-led imperialism and nuclear-armed Russia is constantly demonised simply because it will not acquiesce to Washington and serve as a vassal state.

    And now, as the US continues to stir up tensions with Iran and as China warns neighbouring countries about allowing US nuclear missiles aimed at it on their territories, much of the Western public and media remain oblivious to the dangers of conflict escalation and the biggest immediate threat to all life on Earth: nuclear war.

    The threat of mass murder

    Some fell to the ground and their stomachs already expanded full, burst and organs fell out. Others had skin falling off them and others still were carrying limbs. And one in particular was carrying their eyeballs in their hand.

    The above extract comes from an account by a Hiroshima survivor talking about the fate of her schoolmates. In 2016, it was read out in the British parliament by Scottish National Party MP Chris Law during a debate about Britain’s nuclear arsenal.

    In response to a question from MP George Kereven, the then British PM Theresa May said without hesitation that, if necessary, she would authorise the use of a nuclear weapon that would kill hundreds of thousands of innocent men, women and children. May also implied that those wishing to scrap Britain’s nuclear weapons are siding with the nation’s enemies.

    Politicians like May read from a script devised by elite interests. This transnational capitalist class dictates global economic policies and decides on who lives and who dies and which wars are fought and inflicted on which people.

    The mainstream narrative tends to depict individuals who belong to this class as ‘wealth creators’. In reality, however, these ‘high flyers’ have stolen ordinary people’s wealth, stashed it away in tax havens, bankrupted economies and have imposed a form of globalisation that results in devastating destruction and war for those who attempt to remain independent or structurally adjusted violence via privatisation and economic neoliberalism for millions in countries that have acquiesced.

    While ordinary folk across the world have been subjected to policies that have resulted in oppression, poverty and conflict, this is all passed off by politicians and the mainstream media as the way things must be.

    The agritech sector poisons our food and agriculture. Madelaine Albright says it was worth it to have killed half a million kids in Iraq to secure energy resources for rich corporations and extend the wider geopolitical goals of ‘corporate America’. The welfare state is dismantled and austerity is imposed on millions. The rich increase their already enormous wealth. Powerful corporations corrupt government machinery and colonise every aspect of life for profit. Environmental destruction and ecological devastation continue apace.

    And nuclear weapons hang over humanity like the sword of Damocles.

    The public is supposed to back this status quo in support of what? Austerity, powerlessness, imperialism, propping up the US dollar and a moribund system. For whom? Occidental Petroleum, Soros, Murdoch, Rothschild, BP, JP Morgan, Boeing and the rest of the elite and their corporations whose policies are devised in think tanks and handed to politicians to sell to a largely ignorant public: those who swallow the lie about some ‘war on terror’ or Washington as the world’s policeman, protecting life and liberty.

    Rejecting hegemonic thought

    Many believe nuclear weapons are a necessary evil and fall into line with hegemonic thinking about humanity being inherently conflictual, competitive and war-like. Such tendencies do, of course, exist, but they do not exist in a vacuum. They are fuelled by capitalism and imperialism and played upon by politicians, the media and elite interests who seek to scare the population into accepting a ‘necessary’ status quo.

    Co-operation and equality are as much a part of any arbitrary aspect of ‘human nature’ as any other defined characteristic. These values are, however, sidelined by a system of capitalism that is inherently conflict-ridden and expansionist.

    Much of humanity has been convinced to accept the potential for instant nuclear Armageddon hanging over its collective head as a given, as a ‘deterrent’. However, the reality is that these weapons exist to protect elite, imperialist interests or to pressure others to cave into their demands. If the 20th century has shown us anything, it is these interests are adept at gathering the masses under notions of flag, god and country to justify their slaughter.

    To prevent us all shuddering with the fear of the threat of instant nuclear destruction on a daily basis, it’s a case of don’t worry, be happy, forget about it and watch TV. It was the late academic Rick Roderick who highlighted that modern society trivialises issues that are of ultimate importance: they eventually become banal or ‘matter of fact’ to the population.

    People are spun the notion that nuclear-backed militarism and neoliberalism and its structural violence are necessary for securing peace, defeating terror, creating prosperity or promoting ‘growth’. The ultimate banality is to accept this pack of lies and to believe there is no alternative, to acquiesce or just switch off to it all.

    Instead of acquiescing and accepting it as ‘normal’, we should listen to writer and campaigner Robert J Burrowes:

    Many people evade responsibility, of course, simply by believing and acting as if someone else, perhaps even ‘the government’, is ‘properly’ responsible. Undoubtedly, however, the most widespread ways of evading responsibility are to deny any responsibility for military violence while paying the taxes to finance it, denying any responsibility for adverse environmental and climate impacts while making no effort to reduce consumption, denying any responsibility for the exploitation of other people while buying the cheap products produced by their exploited (and sometimes slave) labour, denying any responsibility for the exploitation of animals despite eating and/or otherwise consuming a range of animal products, and denying any part in inflicting violence, especially on children, without understanding the many forms this violence can take.

    Burrowes concludes by saying that ultimately, we evade responsibility by ignoring the existence of a problem. The evasion of responsibility, acquiescence and acceptance are, of course, part of the conditioning process.

    The ‘problem’ encompasses not only ongoing militarism, but the structural violence of neoliberal capitalism, aided and abetted by the World Bank, IMF and the WTO. It’s a type of violence that is steady, lingering and a daily fact of life under globalised capitalism.

    Of course, oppression and conflict have been a feature throughout history and have taken place under various economic and political systems. Indeed, in his various articles, Burrowes goes deep into the psychology and causes of violence.

    But there is potentially a different path for humanity. In 1990, the late British MP Tony Benn gave a speech in parliament that indicated the kind of values that such a route might look like.

    Benn spoke about having been on a crowded train, where people had been tapping away on calculators and not interacting or making eye contact with one another. It represented what Britain had apparently become under Thatcherism: excessively individualistic, materialistic, narcissistic and atomised.

    The train broke down. As time went by, people began to talk with one another, offer snacks and share stories. Benn said it wasn’t too long before that train had been turned into a socialist train of self-help, communality and comradeship. Despite the damaging policies and ideology of Thatcherism, these features had survived her tenure, were deeply embedded and never too far from the surface.

    For Tony Benn, what had been witnessed aboard that train was an aspect of ‘human nature’ that is too often suppressed, devalued and, when used as a basis for political change, regarded as a threat to ruling interests. It is an aspect that draws on notions of unity, solidarity, common purpose, self-help and finds its ultimate expression in the vibrancy of community, the collective ownership of productive resources and co-operation. The type of values far removed from the destructive, divisive ones of imperialism and capitalism which key politicians and the corporate media protect and promote.

    “Ukrainegate” Teaches Us More About Ourselves Than Trump Or Biden

    Anti-Imperialism protest in the Phillippines. Photo: Carlo Manalansan by Bulatlat

    ‘Ukrainegate’ has opened the floodgates of impeachment in Washington, DC. President Trump’s phone call with Ukrainian President Zelensky provided such an opportunity that Democratic Leader Nancy Pelosi, who resisted pressure for impeachment, is now on board along with a majority of the party. Democrats are moving quickly to make Trump the third president ever to be impeached.

    Conviction is up to the Republican-controlled Senate, where a two-thirds vote is required, so that is very unlikely. Trump will probably be the Republican nominee even though he has never broken 50 percent support in the polls. Chris Hedges writes that a partisan impeachment will anger the people in Trump’s base who view him as challenging the establishment and could backfire for the Democrats.

    The political impact of impeachment depends on how the Democrats build their case and whether it becomes bi-partisan. Richard Nixon grew more unpopular and public support for his impeachment grew during the process. Bill Clinton consistently had more than 60 percent support during his presidency, ending with 66 percent popularity while support for impeachment decreased as it progressed. Trump starts with a historically low level of popularity, whether an angered base and failed impeachment in the Senate will help Trump is too soon to say.

    Impeachment by the House seems inevitable even though less than a majority of voters currently support it. The Democrats need to be careful because shining a light on Ukraine, where Obama-Biden conducted the most open coup in US history (until the recent Trump failed coup in Venezuela,) could undermine Joe Biden, their highest polling candidate. It will also expose the ugly realities of US foreign policy, the corporate control of both parties and the need for fundamental change in US politics.

    Joe Biden with Petro Poroshenko, who was an informant for the US government for six years before becoming president. Photo: Sergey Dolzhenko for EPA.

    The US Coup in Ukraine

    The openness of the US coup in Ukraine is something to behold. In December 2013, Victoria Nuland, the Assistant US Secretary of State for Europe and Eurasia, bragged to a meeting of the International Business Conference sponsored by the US-Ukrainian Foundation that the US had ‘invested’ more than $5 billion and “five years worth of work and preparation” to bring Ukraine into the US orbit. In November 2013, President Yanuyovch rejected an EU Agreement in favor of joining Russia’s Common Union with the other Commonwealth Independent States.

    The timeline of events around the coup shows pressure and bribery were being used including the promise of a $1.5 billion International Monetary Fund (IMF) loan and $850 million from the World Bank. Nuland described three trips to Ukraine where she made it “absolutely clear” to Yanukovych that the US required “immediate steps” …to “get back into conversation with Europe and the IMF.” Threats and payoffs were the modes of US operation.

    Nuland was also meeting with the Ukrainian opposition including the neo-Nazi Svoboda party. Less than one month before the coup removed Yanuyovch on January 30, 2014, the State Department announced Nuland would be meeting “with government officials, opposition leaders, civil society and business leaders to encourage agreement on a new government and plan of action.” On February 4, Nuland was caught speaking on a taped open telephone conversation with US Ambassador to Ukraine Geoffrey Pyatt, discussing the next government saying,  “I think Yats is the guy,” referring to Holocaust-denier, Arseniy Yatsenyuk, who became the post-coup prime minister. In the call, she also urged that Yats should work with neo-Nazis.

    Shortly after Yats became Prime Minister, Joe Biden called him. Biden was the White House point-person on Ukraine. At a press conference, Obama touted Biden’s role while stumbling over Yats’ name, saying: “Vice President Biden just spoke with Prime Minister [pause] – the prime minister of Ukraine to assure him that in this difficult moment the United States supports his government’s efforts.”

    In addition to Yats, the post-coup president of Ukraine was known by US authorities as “Our Ukraine Insider” or “OU.” A series of Wikileaks documents showed OU had been working as an informant for the United States for six years. A Wikileaks cable made clear the US considered Petro Poroshenko to be corrupt but his “price had to be paid.” In a cable involving Secretary of State Clinton, OU explained the value of the US being in Crimea — Russia’s only seaport and long-time naval base.

    OU added another US agent, Natalia Jaresko, a long-time State Department official, who went to Ukraine after the U.S.-sponsored Orange Revolution. Jaresko was made a Ukrainian citizen by OU on the same day he appointed her finance minister. Between the Orange Revolution and the 2014 coup, William Boardman reports, Jaresko ran a hedge fund in Ukraine used to manage “a CIA fund that supported ‘pro-democracy movements’ and laundered much of the $5 billion the US spent supporting the Maidan protests that led to the Kiev coup.” Jaresko received $1.77 million in bonuses from the tax-payer funded investment project in addition to her $150,000 annual salary. She is now head of the “La Junta” in Puerto Rico.

    In addition to controlling the top government posts in Ukraine, the US moved to control key economic sectors. Regarding agriculture, Monsanto was given the ability to buy property (which had been previously forbidden) and an $8.7 billion IMF loan required Ukraine to allow biotech farming and the sale of Monsanto’s poison crops and chemicals thereby destroying farmland that was one of the most pristine in Europe.

    Regarding energy, the largest private gas company in Ukraine, Bursima Holdings, appointed Vice President Joe Biden‘s son, Hunter Biden, and a close friend of Secretary of State John Kerry, and Devon Archer, the college roommate of Kerry’s stepson, to the board. Archer also served as an adviser to Kerry’s 2004 presidential campaign, co-chaired his National Finance Committee and serves as a trustee of the Heinz Family Office, which manages the family business. Hunter Biden and Archer, along with Christopher Heinz, co-founded Rosemont Seneca Partners.

    President Donald Trump and Ukrainian President Volodymyr Zelensky meet in New York on September 25, 2019, on the sidelines of the United Nations General Assembly. Photo: Saul Loeb for Getty Images

    Trump’s Phone Call with Zelensky Urging Investigation of Biden

    Donald Trump is concerned about Biden as a political opponent in the 2020 election. Although he is fading in current polls, Biden still leads among Democrats seeking the nomination and defeats Trump in all head-to-head polls, as do other leading Democratic candidates.

    The impeachment spike occurred because of a July 25 telephone call between Trump and President Zelensky where Trump urged Zelensky to investigate Biden. A CIA official filed a whistleblower complaint about it and the Inspector General sent a letter to Jerry Maguire, Director of National Intelligence, who initially withheld both from Congress. The Inspector General of the Intelligence Community, Michael Atkinson, found the complaint to be “credible” and “of urgent concern” and alerted Rep. Adam Schiff, the Chair of the House Intelligence Committee, about it. The administration has taken steps to restrict access to records of the call, the transcript of which has still not been provided to Congress.

    Since December 2018, Rudy Guiliani had been pressuring Ukraine to investigate Biden and Hunter Biden’s involvement with Bursima. The April 21 election of Zelensky and July 21 Parliamentary elections, which brought in a new government, undid much of Guiliani’s lobbying. Trump’s call after the legislative elections, ostensibly to congratulate Zelensky, included multiple mentions of the need to investigate Biden. The Washington Post reports, “Days after the two presidents spoke…Giuliani met with an aide to the Ukrainian president in Madrid and spelled out two specific cases he believed Ukraine should pursue. One was a probe of a Ukrainian gas tycoon who had Biden’s son Hunter on his board. Another was an allegation that Democrats colluded with Ukraine to release information on former Trump campaign chairman Paul Manafort during the 2016 election.”

    Manafort was one of the few convictions from the Mueller investigation. Manafort was indicted on twelve counts, including committing conspiracy against the United States by failing to register as a foreign agent of Ukraine. Manafort pleaded guilty to that charge in September 2018.

    Democrats calling for impeachment describe Trump’s actions as coercing a foreign nation into the 2020 elections by pressuring them to investigate a chief rival, Joe Biden. Trump withheld military funding for Ukraine and scheduling a meeting with Zelensky at the White House as coercive instruments. US policy in Ukraine has emphasized militarism against Russia since the coup. The New Yorker reports, “McCain was calling for the U.S. to arm Ukraine for defense against a ‘Russian invasion’ that he sees as part of Putin’s plan to ‘re-establish the old Russian empire.’ McCain also called for the U.S. to send military ‘advisors.’”

    Trump says he is waiting to see if Zelensky will “play ball” with the US. Trump is using threats and payoffs in Ukraine, just as Joe Biden did.

    Joe Biden points to some faces in the crowd with his son Hunter in Washington, D.C., January 20, 2009. Photo: Carlos Barria For Reuters.

    The Risk to Biden Grows

    While Trump is deservedly at serious risk for impeachment, the risk to Biden is also growing. Politico reports that Joe Biden is waging war on the Hunter Biden-Ukraine reporting. The risk to Biden is existential, he needs Democrats to remain silent and for the impeachment inquiry not to examine what Trump was investigating in Ukraine.

    In January 2018, Biden bragged on video in his speech to the Council on Foreign Relations how he pressured Ukraine to fire Prosecutor General Viktor Shokin saying he would not approve a $1 billion dollar IMF loan if Shokin was not fired before Biden left Ukraine during a six-hour visit.  On April 1, The Hill published an article that reports: “The prosecutor [Biden] got fired was leading a wide-ranging corruption probe into the natural gas firm Burisma Holdings that employed Biden’s younger son, Hunter, as a board member.” They report Rosemont Seneca Partners received “regular transfers into one of its accounts — usually more than $166,000 a month — from Burisma from spring 2014 through fall 2015,” confirmed by US banking records. Shokin’s file shows prosecutors identified Hunter Biden, business partner Devon Archer, and their firm, Rosemont Seneca, as potential recipients of the money.

    The article further reports that Shokin wrote before he was fired that he had made “specific plans” for the investigation that “included interrogations and other crime-investigation procedures into all members of the executive board, including Hunter Biden.” This is consistent with a sworn affidavit of Shokin (see shokin-ukraine-prosecutor-sworn-statement) where he said, “Poroshenko asked me to resign due to pressure from…Joe Biden…who was threatening to withhold USD $1 billion in subsidies to Ukraine until I was removed.” There were no complaints against Shokin at the time. He explains, “The truth is I was forced out because I was leading a wide-ranging corruption probe of Bursima Holdings.” Shokin describes how Poroshenko had asked him to end the probe multiple times and he had refused.

    The Hill reports that “interviews with a half-dozen senior Ukrainian officials confirm Biden’s account, though they claim the pressure was applied over several months in late 2015 and early 2016, not just six hours of one dramatic day.” Obama named Biden the administration’s point man on Ukraine in February 2014, after the coup and as Crimea was voting to return to Russia.

    The New Yorker not only details Hunter’s personal and professional problems but also reports that Guiliani said “in the fall of 2018, he spoke to Viktor Shokin, Ukraine’s former Prosecutor General. Shokin told him that Vice-President Biden had him fired in 2016 because he was investigating Burisma and the company’s payments to Hunter and Archer. Giuliani said that, in January 2019, he met with Yurii Lutsenko, Ukraine’s current prosecutor general, in New York, and Lutsenko confirmed Shokin’s version of events.” Biden and his supporters are working to change the narrative, perhaps the impeachment inquiry will get the facts out.

    This weekend, Mykola Azarov, Ukraine’s former prime minister from 2010-2014, said in an interview that Ukraine must investigate whether Hunter Biden’s role in Burisma complied with the country’s laws; i.e., investigate what Biden had done for Burisma to justify his remuneration. Further, he said allegations that Joe Biden had gotten Ukraine’s prosecutor general fired to protect his son must also be investigated. On Friday, Ukraine’s National Anti-Corruption Bureau said it was investigating activity at Burisma between 2010-2012, but it was not looking into changes to its board in 2014 when Hunter Biden joined.

    Protesters opposing a coup against Nicolás Maduro outside the Venezuelan embassy in Washington, DC, on May 16, 2019. Photo: Jose Luis Magana for AP.

    The Quagmire Of US Imperialism

    The Ukraine crisis exposes the bipartisan corruption inherent in the US imperialist foreign policy. An investigation into Ukraine may expose what are actually common practices by both Democratic and Republican administrations in regime change efforts. As John Kiriakou explained when he gave a talk at the Venezuelan Embassy during the Embassy Protection Collective action, the CIA has a secret regime change office that provides plans to overthrow any government the US chooses to target. These plans involve similar tactics – the investment of large amounts of money into NGOs (often ‘human rights groups’), support for a violent opposition, installing US-trained and controlled leaders and payoffs for those involved.

    In the past, these practices occurred behind closed doors, but now it seems the ruling class has become so brazen, it doesn’t try very hard to hide what it’s doing. This provides an opportunity for the public to discuss whether or not the current foreign policy is serving our interests or the world. If we agree that it doesn’t, then it is up to us to organize to change it.

    Regime change efforts have had disastrous consequences. Certainly, no country is better off than it was before US interference.  Look at Iraq and Libya, thriving countries that were thrown into chaos, for recent examples. Ukraine has elected a new government, but its GDP is 24 percent smaller now than it was in 1993, and corruption has continued. And the echoes of US regime change from 1953 in removing Mohammad Mosaddegh, the elected Prime Minister of Iran, continue to reverberate and poison relations between the US and Iran.

    Other countries have resisted regime change but have paid a heavy price. Syria is trying to rebuild after more than eight years of war instigated and supported by the US. Venezuela is resisting ongoing coup attempts and brutal unilateral coercive measures imposed by the US. This week at the United Nations, Venezuela successfully prevented the US from removing its diplomats but the US doubled down on its regime change tactics. Even leading Democratic candidates Bernie Sanders and Elizabeth Warren are making false claims about Venezuela.

    As residents in a corrupt, corporate-controlled, imperialist country, we have a responsibility to ourselves and the world to take action to stop the US disastrous foreign policy. The world is changing. The US will no longer be the hegemon. Will we allow the US to continue wreaking havoc as it goes down, or are we ready to change course and become a cooperative member of the global community? Last weekend, we held the People’s Mobilization to Stop the US War Machine. On October 11, we’ll participate in the Rage Against the War Machine actions at the White House. We are committed to organizing to end US imperialism because it is fundamental in creating the future world we need.

    Houthi Attack on Saudi Oil Fields:  a False Flag?

    On Saturday morning, September 14, 2019, a few drones – were they drones or long-range missiles? – hit the Saudis most important two oil fields, set them ablaze, apparently knocking out half of the Saudi crude production but measured in terms of world production it is a mere 5%. Could be made up in no time by other Gulf oil producers – or indeed, as the Saudis said, by the end of September 2019 their production is back to ‘normal’ – to pre-attack levels.

    The financial reaction was immediate. Saudi stocks fell, the oil prices rose, then settled and later fell again. It was an immediate reaction of major banks’ algorithmic speculation with about 10,000 operational hits a second. A trial for larger things to come?

    The Yemeni Shiites, the Houthis, immediately claimed credit for the attack, saying they sent some ten “suicide drones” to the major Saudi oilfields and processing center. US Secretary of State, Mike Pompeo, immediately and without a shred of evidence, blamed Iran for the ‘terror attack’.  Immediately more economic sanctions were imposed on Iran (Trump proudly said, the most severe ever put on a country), for an occurrence they had nothing to do with. The Saudis, as if confused, held off on accusations. And as of this day, they refrain from accusing Iran. And this despite the fact that there is no love left between SA and Iran which would make blaming Iran an easy feat.

    Also immediately following the attack, a high Iraqi Government official assured that the attack was launched from Iraqi soil, not from Yemen. But shortly thereafter Iraqi officials vehemently denied that they had anything to do with this attack. Yet, the launch location Iraq was “confirmed” by the leading Iraqi analyst based in the US, Entifadh Qanbar, President and Founder of the Future Foundation. The Asia Times says, he follows closely developments in his home country, and he has many associates feeding him with information that has proved more than once to be accurate. [Apparently], his information about the attack coming from Iraq is backed by prior history and by Pompeo’s clear declaration.

    Here is the thing: Pompeo was never clear from where the attack was launched. He just blamed Iran. He then later, following Qanbar’s statement, joined the chorus, also saying the attack was launched from Iraq, that it was not originating from Yemen. Later the location was further defined as close to the Iranian border, from a “territory held by Iran sympathizing rebels”. No matter what, Iran remains the villain.

    The Asia Times further reports, [It] is growing more certain that the attacks on the Khurais oil fields and the Abqaig oil processing center in Saudi Arabia were launched from southern Iraq and not from Yemen by the Houthis. This was made clear by Secretary of State, Mike Pompeo, who said: “There is no evidence the attacks came from Yemen.”

    If it all sounds like a big fabricated confusion, it’s because it is a big fabricated confusion. Iran is singled out; fingers pointing to Iran (except, miraculously those of Saudi Arabia), like a sledgehammer hitting Iran, again and again. The mainstream media loves it. Today, a week after the attack, most nobody remembers the Houthis claiming responsibility. It was Iran. Period. The media blitz won.

    But let’s look at this more carefully. The Saudis have about a 70-billion-dollar annual military budget, an armada of US missile defense systems – quite a sizable budget for a country that is studded with US military bases, receives permanent US military and logistics support, technical advice and on the ground defense systems, plus bombs and missiles delivered from the US, UK and France. How come the US-UK-France backed Saudi defense was unable to detect this, albeit, sophisticated drone (missile?) attack? Some say, too sophisticated for the Houthis? Doesn’t that raise some questions?

    Who wins? Yes, the table is turning and the Houthis are now on the winning side. And they clearly have taken strength. Yemen has lost tens of thousands of people, including thousands and thousands of children through bombs, famine and diarrheal diseases, including a massive cholera epidemic, in an unjust and unprovoked war that started in early 2015, carried out by Saudis as a proxy for the Washington and Pentagon handlers.

    Many of the debris of weapons you find on the ground in Yemen say ‘Made in USA’ – which would lead you to conclude that America is at war with Yemen, not the Saudis. Yemen occupies a strategic geographic and geopolitical location and must not be ruled by a people-friendly government, let alone by a socialist leaning government, as the Houthis are. Besides, Yemen may have huge deep off-shore oil reserves.

    Isn’t it logical that the Houthis hit back to defend themselves to eventually reach an end to the war and its indescribable atrocities? Isn’t it weird that the misery and tens of thousands of Yemeni deaths in an unjust and purely criminal aggression instigated by the US, carried out by Riyadh and lasting already for more than 4 years, that this monstrous aggression pales in the mainstream media, as compared to two blazing Saudi oil fields?  Doesn’t that say a lot about our programed-to-the-core western brains, our sense of humanity, what’s left of it?

    The biggest winner may be Washington. They have a new devastating blame on Iran – more sanctions, more justification to launch a direct confrontation against Iran, possibly through Israel, or the NATO forces; the “neutral” international killing machine, an amalgam of spineless Europeans and Canada, who love to dance to the tunes of Washington, hoping to get some crumbs of the loot at the end of the day, before the empires falls.

    But there is more. Almost unrelated, but if you look closer the dots click and connect. And that’s where the ‘false flag’ comes in. It is indeed very possible that the attack, by drones or missiles was launched out of Iraq – either directly by US forces, or by US-trained terrorist groups. The US has countless military bases in Iraq. A false flag; i.e., an attack at one of the major energy resources the world still uses to economically survive – hydrocarbons – will definitely enhance the planned ‘new’ economic crisis that is ‘over-due’ and has begun trickling down the melting pillars of western social infrastructure – unemployment on the rise (the real figures), to hit the western world in full swing in 2020 and counting, a financial crisis sustained by astronomical energy prices.  What better scenario to shuffle more wealth from down to up, from the poor to the rich? This attack on the Saudi oil fields may be just the beginning of more to come. Wall Street is trained in capitalizing on “crisis oil”.

    In parallel with this Houthi or non-Houthi attack, according to many economists’ assessments, a crisis worse than 2008 / 2009, has indeed already been launched, as worldwide GDP growth is already slowing way beyond expectations. The year 2020 and the following years, may perhaps go down in history as the worst economic downturn since the Great Depression of the 1930s. It may also be the last one under the current western fiat money system.

    But how to construct the crisis? The dollar hegemony is faltering rapidly.  Trust in the US economy is in freefall. The smart heads of neoliberal thinking, FED, IMF, ECB, are at a loss of finding the ‘right solution’, but yes, the principle of looting the poor for the benefit of the rich must go on. In the last ten years, enough hard and social capital has been accumulated – social welfare, pensions, health services, public education and infrastructure, social and physical – for the kleptocrats to shuffle some trillions upwards, and let the working class start from scratch again. The example Greece is a demonstration in a crystal ball. The IMF, ECB and European Commission (EC) are to be proud of their achievement.

    There is confusion and uncertainty. The FED just lowered the interest rate by 0.25% down to a range of 1.75% – 2%, with Chairman Jerome Powell’s incoherent explanations, clearly under pressure from President Trump, who wants to be reelected next year – hoping to defer a major crisis. At the same token, the lead interest in other western countries are adjusted to reflect the FED’s decision. In Switzerland, where the Swiss Franc is one of the assets of refuge in cases of crisis, the Central Bank just decided to leave interbank rates at minus 0.75%, in line with other western central banks.  Listening to central bankers, there is not going to be any significant change in low or minus interest rates in the foreseeable future. An economic aberration if ever there was one!

    People – bank on it! Borrow and invest at no cost like there is no tomorrow. Help building the bubble of debt – when it bursts, you know what happens – and burst it will. It’s just a matter of time.

    Yet, there seems to be an indecision – indicating a major dollar crisis is looming, but nobody quite knows how ‘major’ and how it will pan out and where; quite unusual for these heads of wisdom, running the financial globe’s kingdom.

    Madame Christine Lagarde, changing ship from the IMF to the ECB (European Central Bank), the outgoing Governor of the Bank of England, Mark Carney, and the former New York Federal Reserve Bank chiefBill Dudley, hinted that the United States might have to give up her dollar dominance, the backbone for her world hegemony – and let it be replaced by a kind of Special Drawing Rights (SDR), in which the dollar might still have a dominant role, but, albeit, it would no longer be seen as an untrustworthy fiat Ponzi scheme.

    The decadent dollar would be hidden among the other currencies of the basket, presumably the British Pound, the Euro, the Japanese Yen and the Chinese Yuan if the pattern of the current IMF SDR basket was to be followed. The hegemonic power of the dollar might be hidden, so that the world’s “worries” vis-à-vis the western dollar dominated economy, could be at least partially and temporarily mitigated (see Will the IMF, Federal Reserve, Negative Interest Rates and Digital Money Kill the Western Economy?

    What does all that have to do with the Yemeni attack on the Saudi oil fields? Everything.

    The reduction of the Saudi crude production, cut in half, though amounting only to 5% of world production, would under normal circumstances hardly affect significantly the world petrol price  unless it becomes the subject of speculation, which it obviously will, a justified “high risk” speculation. Goldman Sachs, JP Morgan and others are experts in the matter, doing the bidding for the FED, IMF, ECB, BIS – the western instruments behind the dollar system – let it milk as much as it can before biting the dust, letting it shuffle as much as it can from the bottom to the top, as is usual for a manufactured economic crisis. Mind you, they ALL are, and have been, manufactured for at least the last 100 years.

    While the uncertainty about (western) global interest rates prevails  a major attack on a couple of Saudi oil fields is an ideal reason for letting oil prices skyrocket. It could make for an ideal ‘false flag’; a win-win for Washington: sustaining the manufactured economic crisis with an attack on major oil fields (maybe the first of others to come) and a good new reason to blame ran, another good reason to go to war with Iran. But will the Trump Administration dare?

    In today’s world, economic progress is still measured in linear GDP output which, in turn, depends largely on available (and affordable) energy. Once the hydrocarbon damage or shortage is known or predictable in terms of escalating oil prices — pundits claim it could exceed the100 dollar mark — decisions on how to deal with interest rates are much easier. Combine this with ongoing trade wars, real wars in the Middle East and elsewhere, economic strangulations left and right, regime change efforts, refugee issues, and you have the perfect scenario for the next crisis.

    To this you may add the Soros-driven massive around-the-globe climate hype, but I mean a ferocious climate propaganda machine, the highly publicized “Greta Crowd”, the “Friday for Future” school strike movement, and more, much more, prompting a special UN Climate Conference – 23 September. As Carla Stea from Global Research pointedly asks: Has the UN become a Wall Street Asset?.

    All of this with the specific objective of collecting enormous sums of special ‘climate taxes’, for everything that moves and that our usual climate “scientists” are connecting with global warming, or more politically correct “climate change”. There is talk about the revival of some kind of the infamous “carbon fund”. Most of day-in-day-out manipulated westerners will happily pay the extra “fee” to clear their minds of ‘guilt’ and go on with life. Never mind, that climate change is a natural phenomenon and is primarily nature-driven, as Mother Earth has done for the four billion years of her existence.

    This fits well with the attacks on the Saudi oil fields – who knows, others may follow – as the destruction, or disruption of the flow of vital hydrocarbon energy resources serves the Bigger Picture; i.e., bringing about a major worldwide economic depression. And by now we know that every recession-depression brings more misery to the poor and makes the rich richer.

    So, cui bono is as usual the western corporate military and financial elite. Therefore, a false flag attack on the Saudi Oil fields — of course, with the Saudis in collusion — is not as far-fetched as one might believe at first glance. Last Saturday’s attack may be just the first one of a series of misdeeds on the Middle Eastern oil industry to drive oil prices up — a solid support to the well-prepared financial crisis.

    This is first-rate economic terrorism. The dollar may survive a few years longer, while the children of Yemen, Syria, Afghanistan, Sudan, Iraq, Venezuela, Cuba, Nicaragua – you name it – will continue to be exposed to man-made misery no end. Let’s stop this criminal western shenaniganism now!  Let’s disconnect our economies from the west, of those who are aware and awaken, and turn to the East, where the future is.

    • First published by the New Eastern Outlook – NEO

    Desperate Central Bankers Grab for More Power

    Conceding that their grip on the economy is slipping, central bankers are proposing a radical economic reset that would shift yet more power from government to themselves.

    Central bankers are acknowledging that they are out of ammunition. Mark Carney, the soon-to-be-retiring head of the Bank of England, said in a speech at the annual meeting of central bankers in August in Jackson Hole, Wyoming, “In the longer-term, we need to change the game.” The same point was made by Philipp Hildebrand, former head of the Swiss National Bank, in an August 2019 interview with Bloomberg. “Really there is little if any ammunition left,” he said. “More of the same in terms of monetary policy is unlikely to be an appropriate response if we get into a recession or sharp downturn.”

    “More of the same” meant further lowering interest rates, the central bankers’ stock tool for maintaining their targeted inflation rate in a downturn. Bargain-basement interest rates are supposed to stimulate the economy by encouraging borrowers to borrow (since rates are so low) and savers to spend (since they aren’t making any interest on their deposits and may have to pay to store them). But over $15 trillion in bonds are now trading globally at negative interest rates, yet this radical maneuver has not been shown to measurably improve economic performance. In fact  new research shows that negative interest rates from central banks, rather than increasing spending, stopping deflation, and stimulating the economy as they were expected to do, may be having the opposite effects. They are being blamed for squeezing banks, punishing savers, keeping dying companies on life support, and fueling a potentially unsustainable surge in asset prices.

    So what is a central banker to do? Hildebrand’s proposed solution was presented in a paper he wrote with three of his colleagues at BlackRock, the world’s largest asset manager, where he is now vice chairman. Released in August to coincide with the annual Jackson Hole meeting of central bankers, the paper was co-authored by Stanley Fischer, former governor of the Bank of Israel and former vice chairman of the U.S. Federal Reserve; Jean Boivin, former deputy governor of the Bank of Canada; and BlackRock economist Elga Bartsch. Their proposal calls for “more explicit coordination between central banks and governments when economies are in a recession so that monetary and fiscal policy can better work in synergy.” The goal, according to Hildebrand, is to go “direct with money to consumers and companies in order to enliven consumption,” putting spending money directly into consumers’ pockets.

    It sounds a lot like “helicopter money,” but he was not actually talking about raining money down on the people. The central bank would maintain a “Standing Emergency Fiscal Facility” that would be activated when interest rate manipulation was no longer working and deflation had set in. The central bank would determine the size of the Facility based on its estimates of what was needed to get the price level back on target. It sounds good until you get to who would disburse the funds: “Independent experts would decide how best to deploy the funds to both maximize impact and meet strategic investment objectives set by the government.”

    “Independent experts” is another term for “technocrats” – bureaucrats chosen for their technical skill rather than by popular vote. They might be using sophisticated data, algorithms and economic formulae to determine “how best to deploy the funds,” but the question is, “best for whom?” It was central bank technocrats who plunged the economies of Greece and Italy into austerity after 2011, and unelected technocrats who put Detroit into bankruptcy in 2013.

    In short, Hildebrand and co-authors are not talking about central banks giving up their ivory tower independence to work with legislators in coordinating fiscal and monetary policy. Rather, central bankers would be acquiring even more power, by giving themselves a new pot of free money that they could deploy as they saw fit in the service of “government objectives.”

    Carney’s New Game

    The tendency to overreach was also evident in the Jackson Hole speech of BOE head Mark Carney, in which he said “we need to change the game.” The game changer he proposed was to break the power of the US dollar as global reserve currency. This would be done through the issuance of an international digital currency backed by multiple national currencies, on the model of Facebook’s “Libra.”

    Multiple reserve currencies are not a bad idea, but if we’re following the Libra model, we’re talking about a new, single reserve currency that is merely “backed” by a basket of other currencies. The question then is who would issue this global currency, and who would set the rules for obtaining the reserves.

    Carney suggested that the new currency might be “best provided by the public sector, perhaps through a network of central bank digital currencies.” This raises further questions. Are central banks really “public”? And who would be the issuer – the banker-controlled Bank for International Settlements, the bank of central banks in Switzerland? Or perhaps the International Monetary Fund, which Carney is in line to head?

    The IMF already issues Special Drawing Rights to supplement global currency reserves, but they are merely “units of account” which must be exchanged for national currencies. Allowing the IMF to issue the global reserve currency outright would give unelected technocrats unprecedented power over nations and their money. The effect would be similar to the surrender by EU governments of control over their own currencies, making their central banks dependent on the European Central Bank for liquidity, with its disastrous consequences.

    Time to End the “Independent” Fed?

    A media event that provoked even more outrage against central bankers last month, however, was an August 27th op-ed in Bloomberg by William Dudley, former president of the New York Fed and a former partner at Goldman Sachs. Titled “The Fed Shouldn’t Enable Donald Trump,” it concluded:

    There’s even an argument that the [presidential] election itself falls within the Fed’s purview. After all, Trump’s reelection arguably presents a threat to the U.S. and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives. If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020.

    The Fed is so independent that, according to former Fed chair Alan Greenspan, it is answerable to no one. A chief argument for retaining the Fed’s independence is that it needs to remain a neutral arbiter, beyond politics and political influence; and Dudley’s op-ed clearly breached that rule. Critics called it an attempt to overthrow a sitting president, a treasonous would-be coup that justified ending the Fed altogether.

    Perhaps, but central banks actually serve some useful functions. Better would be to nationalize the Fed, turning it into a true public utility, mandated to serve the interests of the economy and the voting public. Having the central bank and the federal government work together to coordinate fiscal and monetary policy is actually a good idea, so long as the process is transparent and public representatives have control over where the money is deployed. It’s our money, and we should be able to decide where it goes.

    This article was first posted on Truthdig.org.

    Will the IMF, FED, Negative Interest and Digital Money Kill the Western Economy?

    The IMF, has been instrumental in helping destroying the economy of a myriad of countries, notably, and to start with, the new Russia after the fall of the Soviet Union, Greece, Ukraine and lately Argentina, to mention just a few. Madame Christine Lagarde, as chief of the IMF had a heavy hand in the annihilation of at least the last three mentioned. She is now taking over the Presidency of the European Central Bank (ECB). There, she expects to complete the job that Mario Draghi had started but was not quite able to finish: Further bleeding the economy of Europe, especially southern Europe into anemia.

    Let’s see what we may have in store to come.

    Negative interest, we have it already. It’s the latest banking fraud stealing money from depositors to give to large borrowers. It’s a reverse cross-subsidy, the poor financing the rich. That’s the essence. It’s a new form of moving money from the bottom to the top. Now, a Danish bank has launched the world’s first negative interest rate mortgage. It provides mortgages to home owners for a negative rate of 0.5%. The bank pays borrowers to take some money off their books. Of course, as usual, only relatively well-off people can become home owners and benefit from this reverse cross-subsidy. It is a token gesture, duping the public at large into believing that they are benefitting from the new banking stint. The bulk of such operations serve large corporations.

    The borrower pays back less than the full loan amount. Switzerland may soon go into the direction of Denmark. Bank deposits with central banks pay negative interest almost everywhere in the western world, except in the US – yet. It’s only a question of time until the average consumer will have to reimburse the banks for their central bank deposit expenses, meaning, the customers are getting negative interest on their deposits. That’s inflation camouflage. A sheer fraud, but all made legal by a system that runs amok, that does not follow any ethics or legal standards. A totally deregulated western private banking system, compliments of the 1990s Clinton Administration, and, of course, his handlers. As Professor Michael Hudson calls it, financial barbarism. We are haplessly enslaved in this aberrant ever more abusive private  fiat money banking shenaniganism.

    RT’s Max Keiser recently interviewed Karl Denninger of Market-Ticker.org. Denninger told Keiser:

    Negative yielding bond is forced inflationary instrument: you buy it, you’re guaranteed inflation in the amount of a negative yield.

    He blasted the tool as plain “theft” by any government that issues these bonds, which is done in an effort to nominally expand a country’s GDP.

    If the government is issuing more in sovereign debt their GDP is expanding in nominal terms. If you have negative interest rates on those government bonds, you’re creating excess space for the government to run the fiscal deficit […] in excess of GDP expansion. Nobody in any civilized nation should allow this to happen because it is theft, on the scale of that differential, from everybody in the economy,

    To make sure the little saver doesn’t think about depositing his savings under his mattress or in a hole in the ground instead of bringing it to the bank, money will be digitized and cash will disappear. Madame Lagarde has already more than hinted at that, when she gave a pre-departure speech at the IMF – explaining on how she sees the future of monetary banking. The future, according to her, being no more than 15 to 20 years away, is a no-cash society. Just enough time for the elder generations, those that may still feel an instinct of rejection and have some consciousness about personal privacy, those that may resist money digitization, may have died out. The young, up-and-coming age groups may be brainwashed enough to find a cashless society so cool.

    Since Madame Lagarde is moving to head the ECB in Frankfurt, it is fair to assume that Europe will be one of the largest test grounds for digitized money; i.e., towards a cashless society. In fact, it is already a test ground. Many department stores and other shops in Nordic countries — Sweden, Norway, Denmark, Finland — do no longer accept cash, only electronic money. In Denmark already up of 80% of all monetary transactions are made digitally.

    Imagine, for your chewing gum wrapper, pack of cigarette, or candy bar, you swipe a card in front of an electronic eye, and bingo, you have paid, not touching any money – “that’s mega cool!”.  That’s what the young people may think, oblivious to leaving a trail of personal data behind, among them their bank account details, their GPS-geared location, what they are shopping, a pattern of data that is in ten years-time expected to amount to about 70,000 points of information about an individual’s characteristics, emotions, preferences, photos, personal contacts… what Cambridge Analytica in the superb documentary “The Great Hack” revealed as already today on average 5,000 points of data per citizen. The system will know you inside out better than you know yourself. And you will be exposed to algorithms that know exactly how to influence every action, every move of yours. Cool!

    That, combined with face recognition which is advancing rapidly around the globe, will be super cool.

    A horrendous trial on how an entire country, India, with the world’s second largest population, may react to demonization, was introduced in 2016 by President Modi, bending to the pressure of the western financial system, with support of the IMF and implementation funding by USAID. It amounted in a disastrous and cruel demonetization, invalidating almost over-night the most popular 100 Rupee (Rs) bank note, replacing it with a 200 Rs note which in most places, especially in rural towns, where banks are scarce, was not available. Never mind that less than half of the Indian population has a bank account, where the bank note exchange transactions had to be carried out.

    The sudden disappearance of the most popular bank note – more than 80% of all monetary cash transactions in India took place in 100 Rs notes – was a proxy to digitization of money. Countless people starved to death especially in rural areas, because their 100 Rs were declared worthless and became unacceptable to buy food.

    The 340,000 citizens of Iceland have already a fully digitized e-ID, now moving towards a mobile ID; i.e., accessible through your smart phone uniting every possible data that belongs to you, from medical records to insurance policies, all the way to dog, cat and car registrations. You name it. Most say they trust their government and are not unhappy with their divulging their most intimate data. Many have no or little idea, though, to what extent the private sector is involved in setting up such a hermetic countrywide data bank for the government. Even if the regulator is within the government and you trust your government, how much can you trust the profit-oriented private sector in protecting your data?

    The surveillance state that you, among other clandestine intrusions into your privacy, will allow by willy-nilly accepting digitization of money, and eventually digitization of your entire private data, pales Orwell’s imagination of “1984”. Every citizen is registered in every western “security agency’s” electronic data bank, and, of course, those of the empire and Middle East affiliate, Israel, CIA, NSA, FBI, Mossad, and so on.  No escaping anymore.

    It just so happens that you, dear citizen, are oblivious to all of what is going on behind your back, since your attention will be captured by massive marketing and directed towards the nefarious machinations of the corporate elite-ruled, globalized world, making you an eternal and ever-more intense consumer. You must spend the last penny of your income on trendy stuff, all those fashion things that will be pumped non-stop day-in-day-out into your brain, what’s left of it, by propaganda on television, radio, electronic cartoon-like billboards, internet, and that at every turn you take. And let’s not forget sports events.  They increase every year and are the most direct deviation tactic take-over from the Roman Empire.

    The most aberrant trends will be cool, like shredded jeans, for which you pay a premium, body-paintings called tattoos, footballer hair styles, because they are fashionable and your looks are key to fit into a standardized, globalized society that has seized thinking for itself, no more interest in politics, in what your non-democratically elected representatives decide for you. It’s what Noam Chomsky calls the marginalization of the populace.

    You are made to believe that you are living in a democracy where you can do what you want, shop what you want, watch what you want, and even when the elections or occasional referenda are offered to request your opinions, you are cheated into believing your choice is free. Of course, it is not. It is all programmed. Algorithms drawing on your profile of 70,000 points of information on emotions, desires and dreams, will clandestinely help the ‘system’ to enslave, cheat and master you, and you won’t even notice.

    That’s where we are headed, largely thanks to digitalization of money – but not only, because surveillance will also follow all your steps on internet, on Facebook, Twitter, Instagram, Whatsapp – and many more of those especially created marketing tools, implanted in societies’ social media, that make life and communication so much easier.

    And there is more to digital money. Much more. In 2014, the unelected European Commission (EC) has put on its books of regulations, following a similar decree in the US, the rule that an overextended bankrupt too-big-to-fail private bank will no longer be rescued by the state, by your tax money – which used to be called a “bail-out”. Instead, there will be “bail-ins”, meaning that the bank will seize your deposits, your savings and sanitize itself with money stolen from you. You have no choice. There will be no ‘run on the banks’  because there is no cash to withdraw. We have seen signs of this when Greece collapsed after 2010, and cash machines spitting out no more than 20 € per day, if at all. For many Greek citizens, especially the poorer class living from day to day, this meant often cruel starvation.

    Bail-ins are little talked about, but they happen already today and ever more so. In 2014, the Austrian bank Hypo Alpe Adria – the Heta Asset Resolution AG, was given green light by the Austrian Banking Regulator, the Austrian Financial Market Authority (FMA), to refinance itself by a so-called “haircut” of an average 54%, meaning, stealing 54% of depositors’ money.

    But the first and largest “haircut” test took place in Cyprus, when in 2013 the Bank of Cyprus depositors lost about 47.5% in a “haircut” to bail out their bank. Of course, the big sharks were forewarned, so they could withdraw their money in time and transfer it abroad.1

    It could get worse. The state, tax authority, an institution, a corporation says you owe them money which you deny, possibly for a good reason, but they have access to your bank account and just seize the amount they pretend is their due. You are powerless against these tyrannical monsters and may have to hire expensive legal service to get your stolen money back if at all. Because the “system” is run by the “system”. And once that level has been reached, a form of Full Spectrum Dominance, a key target of the PNAC (Plan for a New American Century), there is hardly any escaping. That has all happened already, in front of our publicity-blinded eyes, little spoken about, the trend is growing and this even without necessarily a digitized world.

    Is it that the kind of society you want?

    Then there are the rather prominent gurus who bet on gold and bitcoins to replace the faltering dollar, like a last-ditch solution. None of them is any more viable than the fiat dollar. Gold is highly volatile due to its vulnerability for manipulation – as it is largely controlled by the BIS (Bank for International Settlement, in Basle, Switzerland, also called the central bank of all central banks, and yes, the same bank that helped the FED finance Hitler’s war against the Soviet Union.  (So you see where this bank is coming from.) It is entirely privately owned and largely controlled by the Rothschild clan. And as an associated side note — few people talk about it — there is in excess of 100 times more paper gold in circulation than you could ever cash in, if you needed it. It is another one of those bank-invented ‘derivative’ bubbles that will explode and serve to enrich them when the time is ripe.

    Bitcoins, the most prominent of some 3,000 to 4,000 cryptocurrencies flooding the world, is totally unreliable. A year after it was created in 2008 allegedly by an unknown person or group of people using the name Satoshi Nakamoto, bitcoin’s value in 2009 was US$ 0.08, It gradually rose and eventually jumped in December 2017 briefly above US$ 20,000, but dropped within a year to about US$ 3,500. Today bitcoin is hovering around US$ 9,500 (August/September 2019). Bitcoin – along with other cryptocurrencies – is highly speculative, lends itself to Mafia-type money-laundering and other fraudulent transactions. It is about equivalent to fiat money and certainly inept to be the backing for a monetary system.

    And let’s not forget, the latest Facebook initiative — a cryptocurrency, the Libra, to be launched in 2020 out of Geneva, Switzerland – is expected to dominate within a few years 70% to 80% of the international money market. You see, the same clan that has been manipulating and cheating you with the dollar, is now ‘banking’ on you falling for the Facebook currency  as it will be so easy to use your smart phone for any kind of monetary transaction, thus, avoiding traditional predatory banking. Looks like a good thing at the outside – right? – Nope! It’s entirely privately owned and run by an unscrupulous mafia that is being set up to continue milking the masses for the benefits of an ever-smaller elite.

    There is ,however, a role for blockchain cryptocurrencies, to circumvent private banking, those that are government controlled and regulated. China and Russia are about to launch their government-controlled cryptocurrencies and others – Iran, Venezuela, India – are following in the same steps. But they all ban privately run cryptocurrencies in their countries and rightly so. A combination of government-regulated blockchain cryptos and public banking, where no private profits are in the fore, but rather the well being of the citizen and the country’s economy, may be a viable solution into a new monetary scheme, protected from the kleptocracy of western banking.

    Desperation about the dollar losing its world hegemony is growing – and growing fast. To salvage the western fiat monetary system, Madame Lagarde and others are also talking about some kind of Special Drawing Rights (SDR) to replace the dollar as a reserve currency, since there is no escaping – the dollar as reserve currency is doomed. The current IMF SDR basket consists of five currencies, the US-dollar (weighing 41.73%), the British Pound (8.02%) the Euro (30.93%), the Japanese Yen (8.33%) and since 2017 the Chinese Yuan, the currency of the world’s largest economy compared by Purchasing Power GDP (10.92%).

    At this point thinking of any reshuffling of the SDR basket’s contents is purely speculative. However, it can easily be assumed that the dollar would remain in a very prominent position within the basket, as it should remain the leading hegemon of world economy. Let’s not forget, the US Treasury controls the IMF with an absolute veto, in other words, 100%. It can also be assumed that the Chinese Yuan would either be kicked out altogether or would be given a minor weight in the basket so to diminish its role. If this was to become the chosen option by the US Treasury, it could and probably might prompt China to withdraw the Yuan from the SDR basket, as the Yuan does no longer need SDR recognition in the world to be considered a primary reserve currency.

    Unless this is stealthily done — outside of public sight and in disguise of countries still holding major US-dollar reserves — the world would unlikely accept such an alternative, especially since it is widely known among treasurers of countries around the globe that the Chinese Yuan is rapidly raising to become the key world reserve currency.

    As reported by William Engdahl’s analytical essay “Is the Fed Preparing to Topple the US Dollar?”, the outgoing Governor of the Bank of England, Mark Carney, delivered at the recent annual meeting of central bankers in Jackson Hole, Wyoming, a set of ideas that went into a similar direction, towards a shift away from the dominant role of the US dollar as a reserve currency. Similar to Mme. Lagarde’s earlier remarks about an SDR-type reserve currency, he made it understood that though the Chinese Yuan, the currency of the key trading nation, may have a role in the basket, it would – for now – not be an important one. He also was clear about the current disturbing and destabilizing imbalance where a faltering dollar still pretends to hold the hegemonic scepter over the world economy.

    Keeping the dollar still in a leading role, while the US economy is declining, was no longer a viable option for an increasingly globalized world economy. Carney was hinting at a multipolar monetary and reserve system for a multipolar globalized world. Similar remarks came from former New York Federal Reserve Bank chief, Bill Dudley. However, Dudley, hinted that for the United States to give up her dollar dominance, the backbone for her world hegemony, may not come voluntarily. Might that lead to a major, maybe armed world conflict?

    Much of this is speculation from the western perspective. It is, however, clear that there is a tremendous and mounting uneasiness about the western dollar-based fiat monetary system, backed by nothing, not even by the western economy. You compare this with the Chinese Yuan and the Russian Ruble, both backed by gold and – more importantly – by their own economy. It becomes increasingly clear that much of the speculation and efforts by influential central banking figures to save the western monetary Ponzi scheme maybe just propaganda to calm the minds of western financiers – holding them back from jumping ship.

    • First published in New Eastern Outlook (NEO)

    1. See: Peter Koenig: “Infringing upon the Eurozone’s Sovereignty on behalf of Wall Street.  The EBC’s “Haircut” Measures, Undermining Trade and Investment with Russia and China“, Global Research, November 7, 2015; and Peter Koenig, “Retrenchment, Robotization and Crypto-Currencies: The Runaway Train Towards Full Digitization of Money and Labor“, Global Research, December 27, 2017.