Category Archives: Yuan

The American Dream Is Alive and Well – in China

Home ownership has been called “the quintessential American dream.” Yet today less than 65% of American homes are owner occupied, and more than 50% of the equity in those homes is owned by the banks. Compare China, where, despite facing one of the most expensive real estate markets in the world, a whopping 90% of families can afford to own their homes.

Over the last decade, American wages have stagnated and U.S. productivity has consistently been outpaced by China’s. The U.S. government has responded by engaging in a trade war and imposing stiff tariffs in order to penalize China for what the White House deems unfair trade practices. China’s industries are said to be propped up by the state and to have significantly lower labor costs, allowing them to dump cheap products on the U.S. market, causing prices to fall and forcing U.S. companies out of business. The message to middle America is that Chinese labor costs are low because their workers are being exploited in slave-like conditions at poverty-level wages.

But if that’s true, how is it that the great majority of Chinese families own homes? According to a March 2016 article in Forbes:

… 90% of families in the country own their home, giving China one of the highest home ownership rates in the world. What’s more is that 80% of these homes are owned outright, without mortgages or any other liens. On top of this, north of 20% of urban households own more than one home.

Due to their communist legacy, what Chinese buyers get for their money is not actually ownership in perpetuity but a long-term leasehold, and the quality of the construction may be poor. But the question posed here is, how can Chinese families afford the price tag for these homes, in a country where the average income is only one-seventh that in the United States?

The Misleading Disparity Between U.S. and Chinese Incomes

Some commentators explain the phenomenon by pointing to cultural differences. The Chinese are inveterate savers, with household savings rates that are more than double those in the U.S.; and they devote as much as 74%of their money to housing. Under China’s earlier one-child policy, many families had only one heir, who tended to be male; and home ownership was a requirement to score a wife. Families would therefore pool their resources to make sure their sole heir was equipped for the competition. Homes would be purchased either with large down payments or without financing at all. Financing through banks at compound interest rates doubles the cost of a typical mortgage, so sidestepping the banks cuts the cost of housing in half.

Those factors alone, however, cannot explain the difference in home ownership rates between the two countries. The average middle-class U.S. family could not afford to buy a home outright for their oldest heir even if they did pool their money. Americans would be savers if they could, but they have other bills to pay. And therein lies a major difference between Chinese and American family wealth: In China, the cost of living is significantly lower. The Chinese government subsidizes not only its industries but its families—with educational, medical and transportation subsidies.

According to a 2017 HSBC fact sheet, 70% of Chinese millennials (ages 19 to 36) already own their own homes. American young people cannot afford to buy homes because they are saddled with student debt, a millstone that now averages $37,000 per student and will be carried an average of 20 years before it is paid off. A recent survey found that 80% of American workers are living paycheck to paycheck. Another found that 60% of U.S. millennials could not come up with $500 to cover their tax bills.

In China, by contrast, student debt is virtually nonexistent. Heavy government subsidies have made higher education cheap enough that students can work their way through college with a part-time job. Health care is also subsidized by the government, with a state-run health insurance program similar to Canada’s. The program doesn’t cover everything, but medical costs are still substantially lower than in the U.S. Public transportation, too, is quite affordable in China, and it is fast, efficient and ubiquitous.

The disparity in incomes between American and Chinese workers is misleading for other reasons. The “average” income includes the very rich along with the poor; in the U.S., the gap between those two classes is greater than in China. The oversize incomes at the top pull the average up.

Even worse, however, is the disparity in debt levels, which pulls disposable income down. A survey after the 2008-09 credit crisis found that household debt in the U.S. was 136% of household income, compared with only 17% for the Chinese.

Another notable difference is that 70% of Chinese family wealth comes not from salaries but from home ownership itself. Under communism, all real property was owned by the state. When Deng Xiaoping opened the market to private ownership, families had an opportunity to get a home on reasonable terms; and as new homes were built they traded up, building the family asset base.

Deng’s market liberalization also gave families an income boost by allowing them to become entrepreneurs. New family-owned businesses sprang up, aided by affordable loans. Cheap credit from state-owned banks subsidized state-affiliated industries as well.

“Quantitative Easing With Chinese Characteristics”

All this was done with the help of China’s federal government, which in recent decades has pumped massive amounts of economic stimulus into the economy. Unlike the U.S. Federal Reserve’s quantitative easing, which went straight into big bank reserve accounts, the Chinese stimulus has generated new money for productive purposes, including local business development and infrastructure. Sometimes called “qualitative easing,” this “quantitative easing with Chinese characteristics” has meant more jobs, more GDP and more money available to spend, which in turn improves quality of life.

The Chinese government has done this without amassing a crippling federal debt or triggering runaway inflation. In the last 20 years, its M2 money supply has grown from just over 10 trillion yuan to 80 trillion yuan ($11.6T), a nearly 800% increase. Yet the inflation rate of its Consumer Price Index (CPI) has remained low. In February of this year, it was just 1.5%. In May it rose to 2.7% due to an outbreak of swine fever, which drove pork prices up; but this was a response to shortages, not to an increase in the money supply. Radically increasing the money supply has not driven consumer prices up because GDP has increased at an even faster rate. Supply and demand have risen together, keeping consumer prices low.

Real estate prices, on the other hand, have skyrocketed 325% in the last two decades, fueled by a Chinese shadow banking system that is largely beyond regulatory control. Pundits warn that China’s housing is in an unsustainable bubble that will pop, but the Chinese housing market is still more stable than the U.S. subprime market before 2008, with its “no-doc no-down” loans. Chinese buyers typically put 40 to 50% down on their homes, and the demand for houses remains high. The central bank is also taking steps to cool the market, by targeting credit so that it is steered away from real estate and other existing assets and toward newly-produced goods and services.

That central bank intervention illustrates another difference between Chinese-style qualitative easing and Western-style QE. The People’s Bank of China is not trying to improve banking sector liquidity so that banks can make more loans. Chinese economists say they don’t need that form of QE. China’s banks are already lending, and the central bank has plenty of room to manipulate interest rates and control the money supply. China’s central bank is directing credit into the local economy because it doesn’t trust the private financial market to allocate credit where local markets need it. True to its name, the People’s Bank of China seems actually to be a people’s bank, geared to serving the economy and the public rather than just the banks themselves.

Time for More QE?

 In early April, President Trump said in one of his many criticisms of the U.S.  central bank that he thought the Fed should be doing more quantitative easing (expanding the money supply) rather than quantitative tightening (shrinking the money supply). Commentators were left scratching their heads, because the official U.S. unemployment rate is considered to be low. But more QE could be a good idea if it were done as Chinese-style qualitative easing. A form of monetary expansion that would allow Congress to relieve medical and educational costs, grant cheap credit to states to upgrade their roads and mass transit, and support local businesses could go a long way toward making American workers competitive with Chinese workers.

Unlike the U.S. government, the Chinese government supports its workers and its industries. Rather than penalizing China for that “unfair” trade practice, perhaps the U.S. government should try doing the same. China’s legacy is socialist, and after opening to international trade it has continued to serve the collective good, particularly of its workers. Meanwhile, the U.S. model has been regressing into feudalism, with workers driven into slave-like conditions through debt. In the 21st century, it is time to upgrade our economic model from one of feudal exploitation to a cooperative democracy that recognizes the needs, contributions and inalienable rights of all participants.

• Article was first published on Truthdig.org.

Trump: From China to Iran to Venezuela, Threats and Sanctions Everywhere

As of May 10, Mr. Trump has arbitrarily increased tariffs on Chinese goods imported into the US, worth about 200 billion dollars, from 10% to 25%. It is an action without any foundation. An action that makes no sense at all, as China can and will retaliate – and retaliate much stronger than what the impact of the US’s new “sanctions” may bear – because these arbitrary tariffs are nothing else but sanctions. Illegality of such foreign interference aside, there is hardly any serious economist in this world who would favor tariffs in international trade among “adults” anywhere and for any reason, and, of course, least as a punishment for a nation. All that such sanctions do is pushing a partner away. In this case it’s not just any partner; China is a key trading partner of the United States.

The new tariffs will hardly harm the American consumer. There are huge profit margins by US middlemen and importers of Chinese goods. They are competing with each other within the US  and the consumer may not even notice a thing. However, the US economy will likely suffer, especially from Chinese retaliatory actions.

A spoiled child, what Trump is, doesn’t get his way – and goes into a tantrum, not quite knowing what he is doing, and knowing even less what he may expect in return. Mr. Trump, himself, has not only reached a level of incompetence and ignorance which is scary – but he has also surrounded himself with inept, preposterous people, like, Pence, Bolton, Pompeo – who, it appears, have no other means left than running around the world amok, dishing out threats left and right and spending billions on moving aircraft carriers around the globe to make sure people are afraid of the great-great United States of America.

Back to trading with China. China has a million ways (almost) to retaliate. China can devalue her currency vis-à-vis the dollar, or China can dump some of their almost 3 trillion dollars-worth of reserves on the money market – just take a wild guess about what that would do to the hegemony of the dollar which is already in dire straits – with ever more countries departing from the use of dollars for international trade.

And just hypothetically, China could stop altogether exporting all that Walmart junk that American consumers love so much just for a while. Or China could stop making iPhones for the US market. Guess what kind of an uproar that would trigger in the US?  Or China could, of course, levy herself high tariffs on US imports, or stop US imports altogether. China being part of the Shanghai Cooperation Organization (SCO) – actually the co-founder of it – has many alternatives to cover her demand. No need to depend on the west.

Let’s not forget, the SCO which also counts as its members, Russia, India, Pakistan, most of Central Asia, and Iran poised to become a full-fledged member, covers about half of the world population and a third of the world’s economic output, or GDP. No need to look to the west for ‘survival’ – those times are long gone.

But more importantly, what all this looks like to me is the desperate thrashing around of a dying beast, or in this case a dying empire.

We have the US and Venezuela – threats after threats after threats – Maduro must go, or more sanctions. Indeed, according to a study by the Center for Economic Policy Research (CEPR), these horrifying, totally illegal sanctions or blockages of imports, most of them already paid for by Venezuela, have killed some 40,000 people in Venezuela. Of course, Washington doesn’t care about legality and killing, also typical for a fading mighty power – no respect for law and order, no respect for human rights and human lives. One only has to see what type of psychopaths are occupying the tasks of “Foreign Minister” and of “National Security Advisor” or of Vice President, for that matter – they are all sick, but very sick and dangerous people.

Well, in Venezuela “regime change” didn’t work out – so far. Pompeo has been clearly told off by Mr. Lavrov during their recent get-together in Helsinki,  and China is in the same line of supporting the government of Nicolas Maduro.

Next – Iran. Attacking Iran has been a dream of Bolton’s ever since the US 2003 “Shock and Awe” invasion of Iraq. Bolton and Pompeo are of the same revolting kind: They want wars, conflicts, or if they don’t get wars, they want to sow fear, they enjoy seeing people scared. They want suffering. Now they didn’t succeed – at least so far – with Venezuela, let’s try Iran. Pompeo – “Iran has done irregular things” – not saying what in particular he means – so Iran has to be punished, with yet more sanctions. And any argument is good.

The entire world knows, including the Vienna-based UN Economic Energy Commission, and has acknowledged umpteen times that Iran has fully adhered to the conditions of the Nuclear Deal from which the US exited a year ago. Of course, no secret here either, this at the demand of Trump’s Big Friend Bibi Netanyahu. The European Union vassals may actually turn for their own business interests, not for political ethics, but pure and simple self-interest – towards respecting the Joint Comprehensive Plan of Action (JCPOA), or Nuclear Deal. China and Russia are already holding on to the Deal, and they are not impressed by Washington’s threats. So, there is very little Trump and his minions can do, other than saber rattling.

Therefore, the nefarious Pence-Pompeo-Bolton trio must invent another warning: Iran or any proxy of Iran shall attack an ally of the US, and Iran will be devastated. In fact, they consider the Houthis in Yemen who fight for their sheer survival against the US-UK-France – and NATO supported Saudis, as a proxy for Iran. So, the US could start bombing Iran already today. Why don’t they?

Maybe they are afraid – afraid Iran could lock down the Strait of Hormuz, where 60% of US oil imports have to sail through. What a disaster that would be, not just for the US but also for the rest of the world. Oil prices could skyrocket. Would Washington want to risk a war over their irrationality? Maybe, Mr. Halfwit Trump might, but I doubt that his deep-dark state handlers would. They know what’s at stake for them and the world. But they let Trump play his games a bit longer.

Moving the aircraft carrier USS Abraham Lincoln, loaded with war planes, close to Iranian waters costs hundreds of millions or billions. Just to enhance a threat. A show-off. Bolton and Pompeo will entertain their sadism, enjoying seeing scared people. But the cost of war doesn’t matter – it’s just more debt, and as we know, the US never, but never pays back its debt.

Next, or simultaneously, is China. The trade war with China that started last year, then had a respite to the point of the recent joint negotiations and suddenly the Trumpians are veering off again. They must smash China, wanting to appear superior. But why? The world knows that the US is no longer superior by a long shot, and haven’t been for the last couple of years, when China surpassed the US in economic strength, measured by PPP – Purchasing Power Parity – which is the only parity or exchange rate that has any real meaning.

Guess what!  All these three cases have one common denominator: The dollar as a chief instrument for world hegemony. Venezuela and Iran have stopped using the dollar for their hydrocarbon and other international trading, already some years ago. And so did China and Russia. China’s strong currency, the Yuan, is rapidly taking over the US-dollar’s reserve position in the world. Sanctioning China with insane tariffs is supposed to weaken the Yuan; but it won’t.

All of these three countries, China, Iran and Venezuela are threatening the US dollar’s world hegemony and without that the US economy is dead, literally. The dollar is based on thin air, and on fraud.  The dollar system used around the globe is nothing but a huge, a very big and monstrous Ponzi-scheme, that one day must be coming crashing down.

That’s what’s at stake. New FED Board member, Herman Cain, for example, is pledging for a new gold standard. But none of these last resort US measure will work, not a new gold standard, not a trade and tariff war, and not threats of wars and destruction and “regime change”. The nations around the world know what’s going on, they know the US is in her last breath; though they don’t quite dare saying so, but they know it, and are waiting for the downfall to continue. The world is waiting for the grand fiesta, dancing in the streets, when the empire disappears or becomes utterly irrelevant.

• First published in New Eastern Outlook (NEO)

Venezuela: A Risk to Dollar Hegemony

After the new coup attempt – or propaganda coup – Venezuela lives in a state of foreign imposed insecurity. The failed coup was executed on 30 April by Juan Guaidó, the self-proclaimed and Washington-trained and endorsed “interim President”, and the opposition leader, Leopoldo López, who was hurriedly freed from house arrest by Guaidó with a couple of dozens of armed-to-the-teeth defecting military, who apparently didn’t quite know what they were up to. Because, when all was over after a few hours, most of them asked to be re-integrated into their military units – and, as far as I know, they were readmitted.

These are Washington’s puppets and “coup-makers”. When one sees that the so-called coup was defeated in a mere few hours, without any Venezuelan military interference, one wonders whether this was really planned as a coup, or merely as a “public relations” coup, for the media to ‘recharge’ their narrative of Maduro dictatorship, of a suffering people, of famine, of lack of medication and medical supplies all due to the Maduro government’s mismanagement of Venezuela’s natural riches, the lie-slander we have been used to for the last several years.

For sure, the Venezuelan people are suffering. According to a CEPR report sanctions have killed some 40,000 Venezuelans. And this, not because of President Maduro’s squandering of Venezuelan resources, but because of a brutal, merciless outside interference, principally from the United States and to a lesser degree from Washington’s European vassals. If you listen to the ceaseless drumbeat for war against Venezuela and her democratically elected President Nicolas Maduro, by Pompeo, Bolton, Pence and Trump, you can only wonder and shake your head.  What pathological and schizophrenic world are we living in? And are we all sick to the bone, that we tolerate it, that nobody of and in power – other than Russia and China – say ‘Halt’ to this deadly fiasco?

This article by Eric Zuesse, including leaked documents from Pentagon’s southern command, SOUTHCOM, will give the non-believers plenty of reasons to change their minds.

Western humanity has reached an abject state of mental disease. We allow the slaughter of tens of millions of people by the United States and its NATO allies in US-provoked wars and conflicts around the world, indiscriminate killing for resources and monetary dominion. But we follow the same killer nation in accusing a quiet, peace-loving, fully democratic country, like Venezuela, to be utterly trampled on and punished with the most horrific monetary and economic sanctions – all illegal, by any standards of law – and our western “leaders” know it all.

These western heads of state and their chosen minions do not have the guts or political courage to say ‘STOP’. They could, if they had any conscience left. These so-called leaders (sic) of vassal states, they have it all in their sovereign power. They could together decide that enough is enough, separate themselves from the Washington horrors and form a real European Union, a union to say no to the tyrant, a union that is capable of calling its own sovereign shots, decide its own destiny, a destiny of alliance with peaceful countries like Venezuela, Cuba, Russia, China, Iran and more, basically all those that have decided not to bend to the dictate of Washington.

Why don’t they? Have they been bought, or received death threats if they dare to deviate? All is possible, even likely, because it is unfathomable that the leaders, the political heads of all those 28 EU countries are hell-bent to believe the lies being propagated day-in and day-out, drip-by-miserable drip. It is not possible.

Back to Venezuela.

The western public at large must never be too long without devastating smear-news about a regime the empire wants to “change”. It is clear that the nefarious pair in Venezuela, Guaidó-López, followed strict Washington instructions. Guaidó would never dare do anything without prior approval and directives from his masters in Washington.

Despite threats after pompous threats and false accusations and failed coup attempts, President Maduro holds on to a solid backing of six million voters who supported him, more than two thirds of those who went to the ballots, on 20 May 2018. He also has the solid support of the military, who have a revolutionary integrity and conscience unknown to the west. And not least, he has the support of Venezuela’s solid allies, Russia and China.

Nevertheless, the United States will not let go. Why do they risk everything – even a devastating war?

Well, there are several reasons. First you may think, “It’s the Oil, stupid!”, and second, the turbo-capitalist, neoliberal turning-to-neofascist US will not tolerate a socialist state in what they still consider their ‘backyard’.  Well, all of this is true. Venezuela has indeed the world’s largest hydrocarbon reserves, and it is conveniently close to The US’s Texas refineries.

However, the key reason for Washington forcing ‘regime change’ is that Venezuela has stopped selling her hydrocarbon in US dollars, and, may therefore become a risk for the US-dollar hegemony around the globe. That is a punishable violation for the empire. At least two heads of state were assassinated because they dared abandoning the unwritten and unlawful, but nevertheless US-imposed rule to sell their oil and gas in US-dollars, Saddam Hussein of Iraq and Muammar Gaddafi. Both had started trading their oil in other than US-dollar currencies and were strong advocates for others to do likewise.

Some three years ago, Venezuela started selling her oil and gas in other currencies than the US-dollar, a cardinal sin.

Global dollar hegemony, meaning the full control of economies throughout the globe – a control that is rapidly fading – can only be maintained by a world flooded by dollars and with a monetary system that is entirely controlled by the FED and its associated American banks, by an international transfer system, SWIFT, that channels every dollar to be moved between countries, whether it is the US or any other country – through a US bank, in either New York or London. That still being the case, the US dollar remains the key reserve currency in the world, though rapidly fading. And second, through the obligatory trading of a commodities – like hydrocarbon energy – ONLY in US-dollars. The latter also allows the empire to print as many dollars as it needs to keep the world economy under control – and punish those that do not want to bend to Washington’s rule, with sanctions and confiscation of assets abroad, because — all transactions are controlled by the US banking system.

First, the dollar as a reserve currency, is fading rapidly, as ever fewer countries entrust their reserves to a largely recognized ‘fake’, fiat and debt-based currency, the US-dollar. They convert their dollar reserve holdings gradually into other assets; i.e. gold, or the Chinese Yuan which has become high in demand over the last few years. Logically, because China is already known as the undisputable strongest economy in the world, hence, the Chinese currency has a special reserve standing. However, the mainstream media do not report on this.

Second, with a growing number of countries that do no longer respect the Washington imposed US-dollar rule for hydrocarbon trading – the demand for dollars decreases rapidly – a direct confrontation to the United States’ dollar hegemony over the world. Russia and China have years ago stopped trading in US dollars, not only hydrocarbons, but everything. India and Iran have started doing the same. Other countries will follow – and Venezuela, one of the vanguards with the world’s largest oil reserves – should, therefore, not be allowed to become a model for other nations. The Trump Administration and its Wall Street masters will do what it takes to stop Venezuela from abandoning the dollar.

Hence, regime change and taking over the vast oil assets is of the order – with war, if necessary – “all options are on the table” – all under the blatantly fakest pretexts of “humanitarian intervention” and bringing back democracy – when the world knows that anywhere the US intervenes, democracy is abolished. In fact, what the US has managed – and wantonly so – is kill any democracy that ever existed.

Under these circumstances, Venezuela’s transgression in shedding the dollar for oil trading – and for trading in general – amounts to a serious threat to the dollar hegemony and must be suffocated. That’s what these coup attempts are all about. If they succeed, the dollar-currency collapse could be postponed for a bit, and taking possession of the oil reserves would be the icing on the cake.

What’s left after the dollar dominance over the world is gone, once the key tool, economic sanctions, for manipulating nations into doing the bidding of the emperor is no longer effective?  A broken US economy, one that already today depends heavily on the war and weapons industry – in fact, for over 50% of US GDP, when all associated manufacturing and services are counted. What’s left is the overwhelming firepower of that belligerent warmongering and war-dependent nation, with which the US and NATO could pull the rest of the world into oblivion.

That’s what’s at stake with any nation that wants to kick the petro-dollar. Also, Iran, of course. But both Iran and Venezuela have strong protection from Russia and China – two countries that freed themselves from the fangs of the dollar system years ago. And they are offering a bright future with viable Eastern monetary alternatives, mostly based on the Chinese Yuan and other currencies linked to SCO (Shanghai Cooperation Organization) members.

Venezuela – Venceremos!

China and Macron’s U-Turn

Less than a week ago, President Macron was lambasting Italy for signing agreements with China in the context of their New Silk Road, alias President Xi Jinping’s Belt and Road Initiative (BRI), in the same breath he was criticizing China for attempting to undermine Europe with new trade individual country deals under the pretext of BRI. However, Italy, also scolded by Brussels for her single-handed deals with China, was, in fact, the first G7 country for signing a number of contracts with China to use Italian ports under the BRI, making Italy also the first official EU partner of China’s BRI.

In his zeal of becoming Europe’s new king, Macron also called on all EU members not to go their own way with China, but to jointly negotiate with China “new deals” under the BRI. A joint EU to be strong and equal to the economic and trade behemoth, China. Indeed, solidarity is always ‘good’, but Europe is the last bit of Mother Earth’s territory that has ever shown any solidarity and cohesion among her neighbors and co-members of this illustrious non-union club, called the European Union.

Yet, surprise-surprise! On President Xi’s next stop, Paris, coming from Italy, Macron rolled out the red carpet for the Chinese President and, according to RT, went on to sign billions worth of new contracts with the Asian leader. If this looked like a Macron U-turn, it was a Macron U-turn. As an afterthought he invited German Chancellor, Madame Merkel and EU President Junker to Paris for a photo-Op under the Arc de Triomphe just to make sure his about-face was not to be misinterpreted.

President Xi also signed a multi-billion-euro deal – may be as much as € 30billion – for some 300 passenger jets from Airbus. Though Airbus is a European venture, its main manufacturing plants are in France. This is an especially hard blow to Boeing, after the company’s 737 MAX disasters. Weakening Boeing is also weakening an important US military contractor.

As was to be expected, Washington didn’t like Italy’s moving closer to the East by signing several BRI contracts, and even less so, while the EU, represented by Jean-Claude Juncker, Angela Merkel, Germany and Emmanuel Macron, France, were welcoming President Xi today in Paris. Showing a little sympathy to friend Trump, Merkel observed to Reuters, “We, as Europeans, want to play an active part and that must lead to certain reciprocity and we are still wrangling over that a bit.”  Showing Washington that not all is lost will surely give the empire a grain of hope.

Exactly 6 years ago, President Xi Jinping launched the BRI, the most ambitious and largest economic development project in recent history. On President Xi’s second state visit to Germany in March 2014, he specifically offered Madame Merkel to become (at that time) the western most link for the BRI. But Madame Merkel just snubbed at the proposal and let it go. She was too close to Washington, and, who knows, maybe received marching orders from Obama and his handlers, to leave her fingers from tightening relations with China.

As the Chinese are not pushy, Mr. Xi went home and pursued this massive project further. Within the next 30 years at least, it will build multi-trillions of Chinese Yuans-worth of infrastructure, interconnected research and education centers, industrial development, facilitate cultural exchange – it will build bridges among people. The BRI is so important that the Chinese National Assembly decided in 2017 to incorporate it into the Chinese Constitution.

Today BRI spans the globe with some six land and maritime routes. More are under preparation. BRI is not to invade and take over the world, as the west would like you to believe. The New Silk Road is instead promoting a multi-polar world. It will pave the way towards a new world order, but not the one the Rothschilds and Co. are dreaming about, but one that promotes equal partnership and solidarity among countries.

It is amazing.  The west was a sleep for 6 years, or didn’t want to see. Maybe the Washington-driven war machine simply thought it will go away. But it didn’t and doesn’t. China has the world’s strongest economy according to Purchasing Power Parity (PPP) indicators (that’s all that really counts), surpassing the US in 2017. With the BRI, and an ever-stronger currency, the Yuan, due to a stable and steadily growing distributive economy, and in a military and strategic alliance with Russia, China is literally unbeatable. Hence, as basically a last-ditch effort, Washington’s multiple attempts at trade wars. It’s a publicity stunt, to make the world believe the US is still calling the shots. In reality, the New Silk Road is most likely the vehicle to drive the United States warrior arrogance into the ground. Good riddens!

And let’s not forget, BRI is intimately linked with Russia, not only physically as in transport infrastructure, but also strategically for purposes of economic development of henceforth forgotten and neglected countries and regions. So far the esperando west has not even reacted to this “imminent threat”, as perceived by Washington, the Russian haters. If they would add Russia and China together as the new Silk Road front, they would pee in their pants – as they may realize their days of never-ending treachery and lies would soon end. Therefore, better that the Ostrich pulls only one eye out of the sand, blinking at China. Lying to themselves, and, of course, to their people, is just one more nail in the coffin of the west.

We may not be there yet, as war threats, and attempts at regime change from the neofascist Trump team are still very much “on the table”. But with Russia’s far superiority in military power, and the Chinese economic masters, this table may soon be symbolically blown apart, meaning, will the commanding and reigning elite living a lush and ego-centric lifestyle really want to run the risk of being out-nuked?  Because a new war will not just be played out in Europe, like the last two WWs; nor will New Zealand offer a safe haven for those elite and super rich, who have already secured their properties in this far-away land.  Don’t think so. They, the dark state elite, who pull the strings, rather live in a safe world and enjoy their bounties stolen over hundreds of years, as long as they last, even under a Russia-China and multipolar SCO (Shanghai Cooperation Organization) sponsorship.

When that recognition dawns on western minds, that all that counts is economics – economics that may bring more equality, a better life and harmony among nations, and more prosperity for more people on this planet earth.

Did Mr. Macron and his European counterparts just see the light? Did he realize that being the king of vassal Europe is really meaningless and that it’s high time to jump the sinking boat? Only the near future will tell.

Another scenario is that China has long realized the futurelessness of the EU, and instead of banking their trade agreements with a potentially dead body, they approach country by country, Greece, Italy, France, Germany – who is next? Because, even with the collapse of the European Union, the 28 countries must and will survive. So, trade agreements with each one of them individually have an infinitely higher value than signing up with a block of unsolidary, uncoordinated, even in some cases hostile-to-each-other nations with a fiat currency that is doomed, as it will never survive in such a non-union constellation without even a Constitution pointing to a common vision.

Why the Europeans can’t see that for themselves, and run away from this disaster called Brussels, is a miracle for me. If a Martian would watch the human behavior on our Mother Earth from outer space, he, she or it would laugh no end at our abject schizophrenic behavior but at the same time with tears of sadness, as humanity is hell-bent to self-destruct.

Well, Roi Macron will not let go, he is not (yet) allowed to let go. His paymasters, those that put him there, the Rothschild financial clan and Co. have not gotten enough out of him yet, in terms of milking Europe to the bones. How much more can Macron’s naïve pathological egocentricity still give? By launching the military, the first time since 1948, with live ammunition against harmless, unarmed protesters, the Yellow Vests, his French co-patriots (although he is an Über-French, he is a wannabe European king), is maybe the last nail in Macron’s coffin – figurately speaking.

As Tom Luongo so aptly describes:

There are few people in this world more odious than French President Emmanuel Macron after his behavior this week. I’m sure there are child molesters who are worse. But as a man who is pivotal in the future of hundreds of millions of people, his decision to order the French military to quell the Yellow Vests protests with live ammunition is simply vile. Macron outed himself as the very symbol of what animates the globalist elite he represents. Disdain.

Those black-hooded “protesters”, who plant the violence, burn down bank entrances, break windows and loot shops, are nothing less than paid agents-provocateur. You may have noticed, in the hundreds of demo-videos circulating on internet, the police leave them pretty much alone – orders from the Macron regime. Will the military be loyal to deceitful, despicable Macron, or to the nation; i.e. to the people? That remains the question, as fissures within the military are already noticeable.

So, Macron’s about-face, or U-Turn, after having scolded Italy for going it alone, instead of ’collectively’ with the EU, may be by orders of the financial monarchs who forced him with millions of false propaganda into the French Presidency and who may now also see the light: Europe is no longer a viable bet.

• First published in New Eastern Outlook NEO

China: A New Philosophy of Economics

China’s economic philosophy is a far cry from that of the west.

The west consistently seeks to undermine the interests of their partners, be it for trade or political agreements; be it partners from the west, their smaller and weaker brothers; or from the east; or from the south, there is always an element of exploitation, of “one-upmanship”, of outdoing a partner, of domination. Equality and fairness are unknown by the west. Or, when the concept was once known, at least by some countries and some people, it has been erased by indoctrinated neoliberal thinking – egocentricity, “me first”, and the sheer, all-permeating doctrine of “maximizing profits”; short-term thinking, instant gratification or more extreme, making a killing today for a gamble or deal that takes place tomorrow. Futures trading – the epitome of manipulating economic values. Only in the capitalist world.

This has become a key feature of western commerce and trading. It’s manipulation and exploitation over ethics; it’s Profits Über Alles! Doesn’t it sound like fascism? Well it is. And if the partner doesn’t fall for the ruse, coercion becomes the name of the game, and if that doesn’t work the western military move in with bombs and tanks, seeking regime change, destroying the very country the west wants to dominate. That’s western brutal economics – full hegemony. No sharing.

China’s approach is quite different. It’s one of sharing, of participating, of mutual benefits. China invests trillions of dollars equivalent in developing countries – Asia, especially India and now also Pakistan, Africa, South America, largely for infrastructure projects, as well as mining of natural resources. Unlike the gains from western investments, the benefits of China’s investments are shared. China’s investment and mining concessions are not coerced, but fairly negotiated. China’s investment relationship with a partner country remains peaceful and is not ‘invasive’ and abusive, as are most of those of the west which uses threats and guns to get what they want.

Of course, the west complains about Chinese investments, lying how abusive they are, when in reality the west is upset about Chinese competition in Africa and South America, continents that are still considered part of the western domain, as they were colonized for about thousand years by western powers and empires, and as of today, African and Latin-American countries are neo-colonized, no longer (for now) with brute military force, but with even more ferocious financial strangulation, through sanctions, boycotts and embargos; all highly illegal by any international standards. But there aren’t any international laws that are upheld. International courts and judges are coerced to obey Washington’s dictates, or else… literally “or else”; and these are serious threats.

Take the case of West and Central Africa, former French colonies. The French West African zone includes eight countries: Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal, Togo; and the French Central African area comprises six countries – Cameroon, the Central African Republic, Chad, Republic of the Congo, Equatorial Guinea and Gabon. All 14 countries have a common currency, the CFA franc (CFA = Communauté financière africaine – African Financial Community).

They are two separate currencies, though always at parity and therefore interchangeable. The Western and Central African monetary union have separate central banks, the Banque Centrale des États de l’Afrique de l’Ouest, BCEAO, headquartered in Dakar, Senegal; and the Banque des États de l’Afrique Centrale, BEAC, in Yaoundé, Cameroun. Both currencies are guaranteed by the French treasury. This means, in fact, that the economy of these 14 countries not only depends on France, but setting the value of the currency (at present one € = 655 CFA francs) is entirely the prerogative of the Banque de France (French Central Bank). This ultra-complicated setup between the two groups of former and new French colonies is not only a matter of French accounting, but foremost a means to confuse and distract the mostly innocent observer from a flagrant abusive reality.

With the French control over the West and Central African currencies, the foreign trading capacity of these countries is reduced to what France will allow. France has a de facto monopoly on these countries’ production. Should France stop buying their “former-new” colonies’ goods, the countries go broke, as they have been unable to develop alternative markets under the French yoke. Thus, they are always at the mercy of France, the IMF, World Bank and the African Development Bank. From labor slaves up to the early 1960s, they have become debt slaves of the neoliberal age.

In addition, to back this French Treasury guarantee, 85% of the countries’ foreign exchange reserves are blocked by the French Central Bank and may only be used by the respective counties against specific permission and as a loan. Imagine! The “former” French colonies have to borrow their own money from the French Central Bank. Similar debt enslaving is going on in former British and Portuguese colonies, though, none of them is as abjectly abusive as are the French.

Big wonder that Chinese investors are highly welcome in Africa. And knowing western manipulating and deranged mindsets, no wonder that China is demonized by the west as exploiting Africa to the bones, when exactly the contrary is the case. But almighty western lie-propaganda media has the brainwashed western populace believe China is stealing African natural resources. Chinese fairness is indeed tough competition against the usual western trickery and deceit.

In Africa, China is not only focusing on buying and trading natural resources, but on training and using local African brainpower to convert Africa from a western slave into an equal partner. For example, to boost African autonomy, China is using an approach, Gaddafi intended to apply – entering the wireless phone system, conquering some of the market with efficient batteries, and providing cheaper and more efficient services than the west, hence directly competing with the western exploited African telephone market. Chinese phones also come with their own browsers, so that internet may eventually be accessed in the remotest places of Africa, providing a top tool for education. Challenging the EU and US dominated multi-billion-dollar market, is just one of the reasons Gaddafi was miserably murdered by French-led NATO forces. Of course, China’s presence is a bit more difficult to kick than was Gaddafi’s.

This is just one more signal that China is in Africa – and Asia and Latin America – not just for the legendary American Quick Buck, but for genuine investments in long-term economic development which involves developing transportation networks, efficient and independent financial systems which may escape the western SWIFT and FED / Wall Street banking system through which US sanctions are imposed. This may involve the creation of government controlled blockchain currencies – see also Venezuela’s hydrocarbon-backed Petro – and linking African currencies to the Yuan and the eastern SCO (Shanghai Cooperation Organization) monetary system, freeing Africa from the dollar hegemony. With the help of China and Russia, Africa may, in fact, become the forerunner of crypto-currencies and, in the case of west-and central Africa, the 14 countries would be able to gain financial autonomy, and to the chagrin of the French Central Bank, manage their own financial resources, breaking loose from under the little-talked about French yoke. It is quite conceivable that with Chinese development assistance Africa will become an important trading partner for the east, leaving western exploiting and abusing business and banking magnates behind in the dust.

The Overseas Private Investment Cooperation (OPIC), a US private lending as well as investment guarantee agency, is upset about US investors losing out to Chinese and wants US corporations to compete more aggressively which is precisely what Africa rejects, America’s violent bombing approach to impose her trade and concession rules with the coercing help of the IMF and the World Bank. Africa is seeking – finally – sovereignty, deciding over her own financial and political destiny. This includes choosing investors and trading partners of their liking.

Many African and South American countries prefer China’s yuan-investments, rather than Washington’s US-dollar investments. It’s ‘softer’ money coming from the Chinese. For China it’s also a way of diverting the world from the US-dollar, providing incentives for countries to divest their dollar reserves into yuan reserves. That is already happening at accelerating speed.

China’s outlook at home and abroad is nothing less than spectacular. On the home front, they are building cutting-edge technology transport infrastructure, such as high-speed railways, for example, connecting Shanghai and Hangzhou, cutting travel time from one and a half hour in half. China’s high-speed bullet train connects for the first time Hong Kong with the mainland, cutting travel time Hong Kong to Beijing from 24 hours to 9 hours.

In October 2018, after nine years construction, President Xi Jinping opened the world’s longest sea crossing bridge, linking Hong Kong to Macau and the mainland Chinese city of Zhuhai. The bridge is 55 km long, about 20 times the length of San Francisco’s Golden Gate bridge. In urban development, existing and new multi-million people cities are planned, expanded and stamped out of the ground in less than a generation.

China has just built a US$ 2.1 billion AI (Artificial Intelligence) industrial park, and is not sleeping either on the environmental protection and development front, investing billions in research and development of alternative clean energies, especially solar power and its storage potential, next generation beyond lithium batteries, ranging from lithium solid state to electrolyte materials to graphene batteries and eventually to copper foam substrate. And that’s not the end of the line. Each battery technology offers increased capacity, safety and charging and discharging speed.

On the domestic and international front, the Belt and Road (B and R) Initiative – the New Silk Road – is China’s President Xi’s phenomenal geo-economic initiative to connect the world from China with several transport routes and develop in a first step Western China, Eastern Russia, Central Asia and Eastern Europe – all the way to the frontiers of western Europe. This massive economic development program includes industrial parks, trade and cultural interchanges, research and development through existing universities and new science and learning centers. Maritime routes are also foreseen entering Africa through Kenya and Southern Europe and the Middle East via the Greek port of Piraeus and Iran. A southern route is also planned to enter the southern cone of Latin America.

The endeavor is so huge, it has recently been inscribed into the Chinese Constitution. It will mobilize in the coming decades and possibly century trillions of yuan and dollar-equivalent of investments, mostly from China, Russia, the other SCO countries, as well as European partners, and foremost the Beijing-based AIIB (Asian Infrastructure and Investment Bank) which has already 70 member countries, among them Australia, Canada, Western European nations and close to 20 prospective new countries; but not the United States of America.

This giant project, is, of course, not without challenges. While the need for proof of “credit worthiness” by being tied to the IMF and World Bank of the eighties and nineties had since long faded into oblivion, China is still bound to the IMF and WB. Why?  In my opinion it proves two things, The People’s Bank of China – the Chinese Central Bank – is still controlled by the FED and BIS (Bank for International Settlement, alias, central bank of all central banks), and a strong Fifth Column that doesn’t yield an inch of their power. The Chinese leadership could implement the necessary changes towards full financial sovereignty but, why is that not happening? Western threats and their secret services have become ever more sophisticated abduction and “neutralizing” machines over the past 70 years.

The next question is what’s the Chinese lending limit to countries who have already or will subscribe to the Belt and Road Initiative to help them repay western debt and integrate into the new eastern economic model and monetary system? The question is relevant, because China’s money supply is based on China’s economic output; unlike western currencies which are purely fiat money (hot air).

Also, how will ownership of foreign assets; i.e., infrastructure funded and perhaps built, be dealt with? Will they become Chinese property, increasing China’s capital base and flow of money? Or would they be negotiated as long-term concessions, after which a country may repay to acquire sovereign ownership, or transfer part or all of the assets to China as a shareholder. These are relevant considerations, especially with regard to the huge B&R investments foreseen in the coming years. These decisions should be made autonomously by Chinese leadership, totally outside the influence of western monetary czars, like IMF and WB.

Another issue which is steadily and increasingly cropping up in the west, of course, to demonize China and discourage “western civilized” (sic) countries to associate themselves with socialist China is China’s concept of “Social Credits”. It is largely based on what the west calls a dictatorial, freedom-robbing surveillance state with cameras and face-recognition everywhere. Of course, totally ignoring the western own Orwellian Big Brother Surveillance and lie apparatus which calls itself democracy, and, in fact, is a democracy for then the elite of the plutocrats, gradually and by heavy propaganda brainwashing converting what’s left of ‘democracy’ into outright fascism, we, in the west, are almost there. And this, to the detriment of the “Silent Lambs” as per Rainer Mausfeld’s latest book, in German, “Why are Lambs Silent” (German Westend-Verlag). Yes, that’s what we have become: “Silent Lambs”.

It is too easy to demonize China for attempting to create a more harmonious, cohesive and peaceful society. Granted, this surveillance in China as in the west, demolishes to a large extent individualism, individual thinking, thereby limiting human creativeness and freedom. This is a topic which the Chinese socialist government, independent of western critique, may have to address soon to keep precisely one of the key principles of Chinese society alive – ‘social cohesiveness’ and a sense of equality and freedom.

What is the “Social Credit” system? It is a digital footprint of everything the Chinese do, as private citizens, as corporate managers in production as well as banking, workers, food sellers, in order to basically create an ambiance of full transparency (that’s the goal – far from having been reached), so as to establish citizens’ and corporations’ “creditworthiness”, in financial terms, but also assessing crime elements, political inclinations, radicalism, to prevent potential terror acts (interestingly, in the case of most western terror acts, officials say the ‘terrorists’ were known to the police which simply leaves you to conclude that they acted in connivance with the forces of order); and to enhance food safety in restaurants and by other food sellers.

In other words, the aim is to establish corporate and individual “score cards” which will work as a rewards and punishment system, a “carrot and stick” approach. Depending on the crime or deviation from the rule, you may be reprimanded and get ‘debits’ which you may wipe out by changing your behavior. Living under the spell of debits may limit, for example, your access to comfortable or speedy travel, better and speedier trains, air tickets, certain cultural events and more.

Yes, the idea of creating a stable domestic society has its drawbacks – surveillance – demolition of much of individualism, creativity, by implanting conformity. The government’s axiom is “we want a society where people don’t desire to break the rules, but the earliest stage is that they are afraid to break the rules.”

In the end, the question is, will the “Social Credits” approach to societal living, meaning a total surveillance state with every data recorded into a network of total control, be beneficial or detrimental for the Chinese goal to push ahead with her extraordinary and mostly egalitarian economic development approach, transport and industrial infrastructure, scientific research and cultural exchange – called Belt and Road, alias the New Silk Road? Only the future will tell; but the Chinese are not alone. They have solid partners in the SCO and long-term economic development endeavors never work in linear values, but with the unknown of dynamics to which humans are uniquely adapted to adjust.

• First published in New Eastern Outlook (NEO)

Iran Sanctions: Trump Gives Waivers to Iran’s Major Customers?

PressTV Interview with Peter Koenig
Transcript

Background

Iranian President Hassan Rouhani says the new US sanctions against Tehran show that Washington has targeted ordinary people.

Rouhani said the US has spared no effort to mount pressure on Iran through what he called wrong sanctions. He noted that Washington, however, failed in its campaign to bring Iranian oil sales to zero as it had to give waivers to Iran’s major customers. He also slammed the US for waging a psychological war against Iran, saying Washington will soon understand that it has taken a wrong path.

PressTV: What is your take on this?

Peter Koenig:  As I said on previous occasions, these and all other US sanctions, interfering in other countries’ sovereign affairs are totally illegal – by any standards of international law.

What is amazing is that this crime, which Washington inflicts with impunity to every nation that refuses to follow its dictate, this crime has grown to become a “normality” and the rest of the western civilization simply accepts it –- well, “civilization” – if we can still consider ourselves a “civilization”.

Having said this, these sanctions are actually toothless. They are ineffective, as Iran will keep selling oil and gas to petrol companies and honor their long-term government contracts. Of course, there are countries afraid of being “sanctioned’ by the United States if they continue dealing with Iran. But by and large, they are few and fewer, because even the western world starts seeing that relying on Washington is like committing slow suicide.

Many have decided to go their own way. Even the EU talks about it, including creating their own transfer system to avoid going through SWIFT for monetary transfers. SWIFT is the western totally privately-owned transfer system, thanks to which financial sanctions are possible. SWIFT is linked to Wall Street banks through which all western transfers have to transit.

In the meantime, of course, Iran has been “cut off” SWIFT as mandated by Trump, but that is of little importance, because Iran has linked up, as part of her Economy of Resistance, with the eastern SCO – Shanghai Cooperation Organization – using CIPS – the Chinese International Payment System for international monetary transfers.

Of course, Mr. Trump knows it.

So, his sanctions are not much more than a constantly repeated propaganda stint, trying to impress the world, like “we can put any country to its knees, if we want to”.  Sorry, Washington, no longer. These are times of the past, and your dollar hegemony is nearing the end. It’s just a question of time.

PressTV: Do you think, considering all the countries that seem to defy US sanctions, has anything changed in recent times?

PK: Absolutely. A lot. It would have been unthinkable only 5 to 10 years ago that countries like Iran, Venezuela and others trade hydrocarbons, and other goods and commodities, in other currencies than the US dollar. Today it has become a common occurrence. It started some 5 years ago with Russia and China, when they detached themselves from the dollar dictate — opening swap accounts in their respective central banks and started trading in their local currencies, circumventing the SWIFT payment system and the “obligatory” Wall Street banks.

This is also reflected in the fact that the US dollar is rapidly losing its status as the world’s reserve currency. When some 20 years back more than 90% of all reserves were held in US dollar denominated securities, today that figure has shrunk to less than 60% – and is going down as we speak. The Chinese yuan is largely replacing the dollar as reserve currency. Some two years ago, the Yuan was admitted by the IMF in the basket of reserve currencies. Since then the yuan has become officially recognized also by the west as a viable reserve money. Many treasurers around the world, who may have been afraid before to divest their dollar reserves into yuans, now dare do so.  This, in the not too distant, future may mean the end of the dollar hegemony.

However, coming back to your earlier question related to sanctions and their effectiveness, there is an important “Fifth Column” in Iran, and they will use these sanctions against the Iranian Government, no matter whether these sanctions have any legal standing and impact or not.

They will try to influence the Iranian people to believe that Washington is punishing them because of their government. – And that, in my opinion, is what the Iranian Government has to focus on – the Fifth Column – those infiltrated or local enemies of the state that try to damage Iran from inside.

US Trade Sanctions Against China

PressTV Interview – Transcript

Background

New Trade Sanctions by the US in the form of tariffs on US$ 200 billion Chinese exports to the US – China in a tit-for-tat move imposed new tariffs on 60 billion of US goods to China

China’s prime minister speaks out about the rise of unilateralism, saying the approach to trade will not solve any problems.

Li Keqiang made the comment at the World Economic Forum in the Chinese city of Tianjin. He said multilateralism should be upheld and the basic principle of free trade should be maintained. The Chinese premier said the trend of globalization is unstoppable, even though there are flaws in the process. Li’s comments come amid heightened trade tensions between China and the United States. Beijing imposed tariffs on 60 more billion dollars-worth of American imports in a tit-for-tat response to Washington’s levies on 200-billion dollars of Chinese goods.

PressTV: What is your take on this?

Peter Koenig:  These are indeed “trade sanctions”. US-imposed trade sanctions.

Of course, the Chinese are right. In a world that strives for free trade – unilateralism as demonstrated by the Trump Administration’s-imposed tariffs – is working in the opposite direction.

Two comments, if I may:

First, personally, I have been doubting from the beginning that globalization — and especially globalization in terms of “free trade” — is a good thing. There is nothing FREE.

Free trade among equals is one thing, but “free trade” American style, where they call the shots is, of course, not what is intended. The weaker always suffers, and I am not referring to China.  China doesn’t really suffer, they dominate the entire Asian market, having overtaken the US in Asia about three years ago, but I’m talking in general about developing countries that have to accept highly subsidized US and EU goods in order to stay within these “free trade deals”.

And we see that the west cannot be trusted; i.e., President Trump. He is making his own rules. Therefore, free trade and the related globalization is in my opinion not a good thing. It has hurt too many people of mostly poor countries over the past 30-some years, when neoliberalism started driving the agenda of “globalized free trade”.

Trading among friendly nations, nations that share the same objective, the same political and economic ideology, would be a much preferable alternative. There, nobody can bully another nation into accept his conditions.

This is something we may want to move back to — trading among friendly and culturally aligned nations, where trading is a win-win for both parties.

The second point I wanted to make is maybe more important: These tariff impositions have nothing really to do with trade. The Chinese know it and the US Administration knows it.

They, the tariffs, have everything to do with pulling down, weakening the Yuan, the very strong Chinese Yuan, and by doing so, the Chinese economy. The Yuan is an officially declared reserve currency recognized by the IMF and is fast replacing the dollar as the key reserve currency in the world.

That is what Washington is afraid of — and rightly so. Once the dollar ceases being the main reserve currency, the demand for the dollar will decline, and the hegemonic role for the dollar is gone – which may mean the collapse of the dollar-empire — and in the end the end of the empire altogether.

Already the biggest hydrocarbon producers and consumers in the world, China, Russia, Venezuela and Iran are no longer using the dollar for their trade deals, but local currencies or the gold-convertible Chinese Yuan.

So, the end of the dollar hegemony is coming sooner or later, but Washington wants to delay it as long as possible, hoping for a miracle, or actually even preparing for a military intervention to save the dollar.

Trump Threatens WTO Exit

Transcript: PressTV Skype Interview with Peter Koenig
31 August 2018

Introduction

U-S President, Donald Trump, has threatened to withdraw from the World Trade Organization.

Trump, in an interview with Bloomberg News, said he will pull out from the organization if it “does not shape up”. The U-S president warned that he could even take action against the WTO. Trump has complained that the US is being treated unfairly in global trade and has blamed the World Trade Organization for allowing it to happen. Regarding tariffs, Trump said he will enact import duties on 200-billion dollars-worth of Chinese goods as early as next week. Following his remarks, Asian stock markets dropped and partially erased gains made in this week’s global rally. Trump has ignited a global trade war by slapping sharp tariffs on goods from the EU, Canada, Mexico, and China.

PressTV: What is your take on this?

Peter Koenig: Well, it looks like this latest threat to exit WTO goes into the same direction as his trade war with the EU and with China, and also with the new NAFTA Agreement – which so far was negotiated only with Mexico and does not include Canada; it eventually would have another name.

The new trade agreement with Mexico was negotiated like all trade agreements with the US, behind closed doors. Canada was invited to also join, but as far as I know, no decision has been taken yet. At the outset it looks like the new “draft” agreement with Mexico is worse than the original – with all the rights and benefits going to big US corporations.

In the case of Mexico, it is really only a “draft”; nothing has been accepted yet. It will be subject to Mexican approval once the new President, Andrés Manuel López Obrador is sworn-in in December 2018.

What Trump is doing – or attempting to do – with tariffs and with sanctions is dividing the world, breaking up alliances; i.e.. trade alliances in the case of WTO. It’s the old rule: “Divide to Conquer” – and conquer in this case means that when alliances like WTO, in the creation of which – by the way – the US and the EU were instrumental, are broken up, the US will engage in bilateral agreements with individual nations, like in the case of the “new NAFTA”, negotiating with Mexico alone, dictating her terms to weaker nations. If Canada will be ready again for a NAFTA-like agreement, the process will be similar, with Washington in the driver’s seat.

What transpires from these negotiations, or tariff impositions – like China and the EU, or even the reneging of the Iran Nuclear Deal – is Make America Great Again, meaning really American Corporatism, not the people.

New bilateral trade deals will continue to allow bilateral outsourcing to cheap labor countries, for example, between the US and Mexico, and the export of highly subsidized US goods. In the case of agriculture, NAFTA killed hundreds of thousands of small farming businesses in Mexico which was one of the key reasons for the massive increase of illegal migration to the US.

This will hardly be different in a new agreement. That’s why nothing is done yet. The progressive new President, López Obrador, may not easily submit to a flagrant one-sided agreement.

The case of tariffs on China for 200 billion worth of merchandise – has a different purpose, namely, to degrade the value of the Chinese currency, the Yuan, which is emerging rapidly as one of the world’s foremost reserve currencies, to the detriment of the US dollar. The Trump move is meant to discourage countries to adopt the Yuan among their reserve currencies. Some success was indeed registered by Trump’s announcement – the Asian markets dropped drastically wiping out much of the gains made during last week’s rally. This, however, will be short-lived, as investors realize the hot air behind the threat and that these tariffs will really make hardly a dent in China’s economy which is dominating the Asian market and doesn’t really depend on exports to the US.

If the US would indeed exit WTO – which is by no means sure, since Trump likes to play god, threatening, fearmongering – and then negotiate under conditions of intimidation and coercion – so, if the US would actually get out of WTO, they – the US – might set themselves up as sort of a competitor to WTO, negotiating individual bilateral deals with nations, especially weaker ones. They would no longer be under the oversight of WTO – and as with the International Court of Justice – to which the US does not belong – complaining would be meaningless.

But we are not there yet.

Credit Suisse Freezes $5 billion of Russian Money due to U.S. Sanctions

A few days ago, Reuter reported that Switzerland’s second largest bank, Crédit Suisse, has ‘frozen‘ about 5 billion Swiss francs of Russian money, or about the same in US-dollars, for fear of falling out of favors with Washington – and being ‘sanctioned’ in one way or another. Crédit Suisse, like her bigger sister, UBS, have been amply punished already by Washington for facilitating in the US as well as in Switzerland tax evasion for US oligarchs. They want to be good boys now with Washington.

Switzerland’s banking watchdog, FINMA, does not require Swiss banks to enforce foreign sanctions, but has said they have a responsibility to minimize legal and reputational risks. Crédit Suisse is cautious. In 2009, it reached a $500 million settlement with U.S. authorities over dealings with sanctions-hit Iran. And most every major bank remembers the 2014 settlement of France’s BNP Paribas for a record $8.9 billion fine for violating U.S. sanctions against Sudan, Cuba and Iran.

When asked, two other Swiss banks, UBS and Julius Baer, who are known to deal with Russian clients, declined a straight forward answer whether they too will resort to sanctioning their Russian customers. An UBS spokesman said evasively, they were “implementing worldwide at least the sanctions currently imposed by Switzerland, the U.N., the EU and the U.S.”

What doesn’t stop amazing me is how the western world just accepts such horrendous US fraud, or better called, outright theft of other countries resources, be it monetary or natural resources. And all that is possible only because the entire western world and all those African and lately again, Latin American countries – many of them developing countries, including some of the major oil producers – are still tied to the US dollar. All international money transactions, regardless whether they concern the United States, or simply two completely independent countries, have to transit through a US bank either in London or New York. This is what makes it possible for the US to implement financial and economic sanctions in the first place.

A few days ago, the German Foreign Minister, Heiko Maas, dared proposing that the EU detach itself from the international, totally privately run, Belgium registered SWIFT transfer system, as it is fully controlled by the US banking oligarchy, is operating in more than 200 countries and territories. He suggested that the EU create an independent transfer system, much like Russia and China have done, to free themselves from the financial slavehood to Washington. The reaction of one of his right wing German countryman and parliamentarian was swift – it was not the right time to even think of de-coupling the EU from Washington, now where Russia is in dire straits and Germany and the rest of Europe needs the US more than ever.  Can you imagine!

In this pathetic, gutless Europe, it is highly questionable whether Mr. Mass’s excellent idea will survive and actually gain support. Hardly at this stage.

Irrespective of the spineless behavior of the EU and the Swiss Government, the latter unable even to stand up to its own neutrality – let them rot in their submissiveness to empire and its EU vassals – gutlessness, which by the way they, the Swiss Government, has also demonstrated vis-à-vis Venezuela – more important, much more important is, what does this all mean for Russia?

To begin with, the Crédit Suisse ‘frozen’ 5 billion dollars, you may as well call it what it is in reality: Totally illegally “confiscated” Russian assets. It is rare, if ever, that the US government returns so called ‘frozen’ assets of any sanctioned country. And under the current scenario, Trump and his masters and the pressure of the corrupt Hillary swamp, will not let go of demonizing and ‘sanctioning’ Russia, regardless of the real impact of these sanctions, and regardless of the total lawlessness of these actions, regardless of the manufactured and lie-based reason for these sanctions, regardless of the fact that everybody with a half-brain knows about the manipulated and false pretexts for sanctions, and regardless of another fact, namely, that these actions are contributing to an ever accelerating suicide of the empire and its corrupt system that eventually will drown in its own Washington swamp. Good riddens!  The sooner the better.

And the impact of these sanctions is hardly what they pretend to be. They are foremost a call on the Atlantists – or call them Fifth Columnists, of which there are still too many embedded in the Russian financial sector – to counteract the internal measures Russia is taking to escape the dollar slavehood. They will not succeed. The vessel is turning and turning ever faster; turning from west to east.

Despite the constant demonization of the ruble, how it lost 50% of its value because of the sanctions, the Russian currency is worth way more than all the western fiat currencies together. The western dollar-dependent moneys are based on hot air, or not even – on zilch, nada, zero; they are literally produced by private banks like casino money. The ruble is doubly-backed by gold and by Russia’s well-recovered economy and so is the Chinese Yuan.

So, what does a 50% loss of the ruble mean? Loss against what? Loss against the US dollar and the currencies of Washington’s vassal allies? With a de-linked Russian economy from the western economy, the western concept of ‘devaluation’ is totally meaningless. The ruble doesn’t need to compare itself anymore to the western dollar-enslaved currencies.

So, the urgent call by the nature of things for Russia to delink from the western economy, from the western fraudulent dollar-based monetary system, is being heeded by Russia.  I cannot but repeat and repeat again that the dollar economy and the enslaving monetary system it produced is an absolute fraud. It is a crime that would be punishable by any international court that deserves the name of a court of law, that is not bought and whose judges are not threatened if they don’t fold to the dictate of Washington. But upholding the laws of ethics and moral, the laws that our more honest and humble forefathers not too long ago crafted, is a thing of the past. The corruption in everything accompanied by intimidations and coercions, have been accepted by just about everybody as the new normal. This, in itself, is not normal. It creates a pressure cooker that eventually will simply explode.

To move away from this ever-increasing stench of cultural decay, a de-dollarization is a must, is a recipe for survival. And survive, Russia will. Russia is buying massively gold, shedding US treasury bonds from its reserves, replacing them with gold and Chinese Yuan, an IMF-accepted official reserve currency. In July 2018 Russia purchased a record 26 tons of gold, leading up to gold reserves of close to a total of 2000 tons, quadrupling her gold inventory since 2008. This makes Russia the world’s fifth largest gold holder.

As Mr. Putin said already a few years ago, the sanctions are the best thing that happened to Russia since the collapse of the Soviet Union. It forced us to rehabilitate and boost our agricultural production for food self-sufficiency and to rebuild and modernize our industrial park. Today Russia has a cutting-edge industrial arsenal and is no longer dependent on “sanctioned” imports. Russia is not only food-autonomous but has become the world’s largest wheat exporter. And take this – according to Mr. Putin, Russia will supply the world with only organic food, no GMOs, no toxic fertilizers and pesticides.

Russia has clearly and unstoppably embarked on an “Economy of Resistance”: Local production for local markets with local money based on and for the development of the local economy; trading with friendly nations who share similar cultural and moral values.  It’s called regaining economic sovereignty. That’s key. That’s what most countries in the west under the yoke of the US empire and its puppets, enforced by NATO, have lost in the steadily increasing stranglehold of globalization. Russia, China, Iran, Venezuela, Syria, North Korea, Pakistan, soon Mexico, and others are breaking loose from the fangs of the Washington Consensus that brought the world almost three decades of pure misery, exploitation and monetary enslavement.

Russia is strengthening her ties with China, with whom she has already for years a ruble-yuan swap agreement between the respective central banks, indicating a strong economic and trading relation. Both are members of the SCO – Shanghai Cooperation Organization. And Russia is also an integral part and link in President Xi’s Belt and Road Initiative – BRI – a multi-trillion-yuan economic development scheme for the next at least hundred years, that will span the world with several transport routes, including shipping lines, ports and industrial expansion, as well as cultural exchange, education and research centers on the way. Members of the SCO encompass half the world’s population and account today already for about a third of the globe’s GDP and growing fast, both in members as well as economic output.

Russia as part of this block of sovereign nations doesn’t need the west anymore, doesn’t need the Crédit Suisse confiscated 5 billion dollars anymore. Freedom is priceless. Sanctions are like the fiat currency they are based on; not more than rotten smelling hot air, and dissipating fast into oblivion.

“Russia is Buying Gold: Will it Save Russia from Dollar Sanctions?”

Sputnik Radio Interview
by Anastasia Romadina

Transcript of a Sputnik Live Radio Interview with Peter Koenig
28 August 2018

Introduction
The German newspaper “Die Welt” announced that Russia actively seeks to get rid of dependency on the US dollar by purchasing gold and selling the bulk of the Moscow-owned US Treasury bonds.

According to political advisor and author James Rickards, cited by the newspaper, the Russian government pursues “a strategic plan” aimed at protecting the country from “dollar sanctions” by building up Russia’s gold reserves.

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Sputnik Radio: The author of the article for “Die Welt” called gold ‘a perfect investment’ for Russia in the face of US sanctions. How much does this assessment correspond to reality? If it is true, why?

Peter Koenig: Yes, Mr. Zschäpitz, from the German “Die Welt“, quoting James Rickards, makes some good points.

The fact that Russia is stocking up on gold is not new. They have been doing this for years, especially during Mr. Putin’s leadership and more so since the imposition of the totally illegal sanctions that are based on falsehood and fabricated reasons in the first place – and continue on fabricated reasons, mostly by the US and the UK.

And to add injury to insult, the Swiss bank Crédit Swiss has just frozen roughly 5 billion dollars of money linked to Russia to avoid falling out of favors with Washington and risking sanctions. This is, of course, further increasing pressure on Moscow to de-dollarize as quickly as possible. Washington must know, of course, what these “sanctions” do. They are talking to Russian Atlantists – or Fifth Columnists – of whom there are still too many in Russia. And the sanctions against Russia are also propaganda-speak “we still command the world”.

These sanctions call for de-dollarization – which is already happening, and this on a rapidly increasing scale, as Mr. Zschäpitz points out. At the same time as Russia is buying gold, Russian dollar reserves have been reduced drastically over the past years.

They were replaced by gold and the Chinese Yuan – since about two years the Yuan has been an officially recognized reserve currency by the IMF. The accumulation of gold has made Russia the world’s fifth largest gold owner. They have increased their gold holdings from less than 500 tons in 2008 to almost 2000 tons in July 2018, including the latest purchase of 26 tons in July 2018.

The Russian Ruble today is covered twice by the value of gold. The ruble is no fiat currency like the dollar-based western monetary system, including the euro. The ruble is a solid currency, despite contrary western propaganda. When the western media demonizes the Russian currency as having lost 50% of its value due to sanctions it is a manipulated half-truth. The 50% loss of value as compared to what?  Compared to the US dollar and other western currencies? With a western de-linked economy a 50% devaluation, or any devaluation, is irrelevant.

Being decoupled from the dollar, Russia will no longer be vulnerable to western sanctions and no longer needs the western economy which is already almost the case today. Russia has embarked on an effective “Economy of Resistance”.

As President Putin pointed out already years ago, the sanctions are the best thing that happened to Russia since the collapse of the Soviet Union. They forced Russia to rehabilitate and boost her agricultural production for food self-sufficiency, and likewise with the industrial sector. Today Russia is not only food-autonomous, but is by far the world’s largest wheat exporter; and Russia has developed a cutting-edge industrial park, no longer dependent on ‘sanctioned’ imports from the west.

And take this – as Mr. Putin pointed out, Russia will be supplying the world exclusively with organic food!

All of this confirms that investing in gold as a reserve currency and in Yuan is a move away from the western dollar economy and towards economic sovereignty. Besides, Russia has had for years a Yuan-Ruble swap agreement with the Central Bank of China, a sign of close economic and trade relations.

By the way, China has also been on a gold-buying spree for years. The Chinese Yuan is also covered by gold, plus by a solid national economy. Therefore, sanctions or ‘Trump’s tariff war’ have also only limited effect on China, if any. They serve more western anti-Yuan propaganda, alleging that tariffs and sanctions may weaken the yuan, thereby discouraging countries to buy yuans for their reserve coffers. It is a fact that the Yuan is rapidly replacing the dollar as a reserve currency.

Besides, both Russia and China are part of the Shanghai Cooperation Organization – the so-called SCO – and along with 6 other countries the SCO encompasses already close to 50% of the world population and controls about a third of the globes GDP. Dependence on the west is no longer necessary.

SR: The author also speaks about the growing importance of gold. What effect could its increased role have in the international financial system?

PK: It is half-secretly speculated that as a last-ditch effort to save the dollar, the US may return to some kind of a gold standard, thereby massively devaluating the dollar – and the US international debt – all those dollars currently still in many countries’ treasuries as reserves.

Having alternatives to dollars in a country’s reserve coffers, like gold and yuans, is, of course, a great defense mechanism. On the other hand, if such a move back to a kind of gold-standard by Washington, introduced by the FED and the US Treasury-controlled IMF, would take place, it would most likely boost the market value of gold, a good thing for those who have converted their reserves into gold.

Those who would suffer from such a move are as always, the poor countries, those that are highly indebted by IMF and World Bank loans, and may now be asked to pay back their debt in gold-convertible dollars.

SR: What will happen to the dominance of dollar? What impact could it have on the US position on the world arena?

PK: It would most likely accelerate the fall of the dollar, meaning the end of the US-dollar hegemony. It would probably also trigger the fall of the US economy which depends so much on the dollar hegemony, on being able to pressure countries into their following by ‘sanctions’.

I’m not a believer in gold as a sustainable ‘currency-alike’ in the long-run because gold is also vulnerable to high-stakes manipulation and speculation. I more believe in a country’s economy as the true backing of a country’s currency. This is already happening in China, where the currency in circulation is backed by its strong economy. It may be soon, or is already, the case in Russia.

The use of gold, in my view, is but a temporary measure, and will last as long as the world still believes in the godly and historic and ancient powers of this precious metal. Today only about 10% of the available gold is for industrial use, the rest is “reserve money” and for pure speculation. If the world discovers that there is about 100 times more paper gold – gold derivatives – in circulation than physical gold, this miracle perception of gold may disappear. If all the derivative-paper gold would be cashed in at once, guess what would happen?

So, gold is good for now, but a temporary solution, in the longer run to be replaced by the actual strength of a country’s economy.

SR: Amid US sanction policy, there have been calls for switching to national currencies in trade and ditch dollar. How efficient is this approach?

PK: Very efficient.

This is already happening. Russia and China are for years no longer trading in dollars but in local currencies, or even in gold, or in the case of China in gold-convertible yuan, especially for trading hydrocarbons, oil and gas. So are largely India, Iran, Venezuela and other countries that are eager to escape the dollar- hegemony with sanctions.

I think one of the ways out of the nefarious neoliberal globalization is returning to sovereign country economies, with local currencies and satisfying local market needs. External trade with friendly nations, that share similar cultural and ideological values.

This is what China has done. China opened its borders to the west gradually in the mid-eighties, when she was self-sufficient in alimentation, health, education and shelter. And this practice is paying off until today. It is very difficult, if not impossible, to pressure China into anything – political or monetary – as Trump may soon find out or knows already. China is fully autonomous and controls the Asian market, doesn’t really need the west in the long.

What Mr. Putin said about the sanctions being the best thing that happened to Russia – for achieving economic sovereignty – which is really the key, goes in the same direction.

So, yes, local production for local markets with local currencies and trading with friendly nations; i.e., the SCO nations and nations participating in President Xi’s Belt and Road Initiative (BRI) is the future.