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https://www.informationclearinghouse.info/57048.htm

Russian Judo Tears the West Apart

Washington's sanctions on Moscow will destroy Europe, not Russia

The official Russian blacklist of hostile sanctioning nations includes the US, the EU, Canada and, in Asia, Japan, South Korea, Taiwan, and Singapore (the only one from Southeast Asia). Notice how that ‘international community’ keeps shrinking.

The Global South should be aware that no nations from West Asia, Latin America and Africa have joined Washington’s sanctions bandwagon.

Moscow has not even announced its own package of counter-sanctions. Yet an official decree “On Temporary Order of Obligations to Certain Foreign Creditors,” which allows Russian companies to settle their debts in rubles, provides a hint of what’s to come.

Russian counter-measures all revolve around this new presidential decree, signed last Saturday, which economist Yevgeny Yushchuk defines as a “nuclear retaliatory landmine.” .

It works like this: to pay for loans obtained from a sanctioning country exceeding 10 million rubles a month, a Russian company does not have to make a transfer. They ask for a Russian bank to open a correspondent account in rubles under the creditor’s name. Then the company transfers rubles to this account at the current exchange rate, and it’s all perfectly legal.

Payments in foreign currency only go through the Central Bank on a case-by-case basis. They must receive special permission from the Government Commission for the Control of Foreign Investment.

What this mean in practice is that the bulk of the $478 billion or so in Russian foreign debt may “disappear” from the balance sheets of western banks. The equivalent in rubles will be deposited somewhere, in Russian banks, but western banks, as things stand, can’t access it.

It is debatable whether this straightforward strategy was the product of those non-sovereignist brains gathered at the Russian Central Bank. More likely, there has been input from influential economist Sergei Glazyev, also a top former advisor to Russian President Vladimir Putin on regional integration: here is a revised edition, in English, of his groundbreaking essay Sanctions and Sovereignty, which I have previously summarized.

Meanwhile, Sberbank confirmed it will issue Russia’s Mir debit/credit cards co-badged with China’s UnionPay. Alfa-Bank – the largest private bank in Russia – will also issue UnionPay credit and debit cards. Although only introduced five years ago, 40 percent of Russians already have a Mir card for domestic use. Now they will also be able to use it internationally, via UnionPay’s enormous network. And without Visa and Mastercard, commissions on all transactions will remain in the Russia-China sphere. De-dollarization in effect.

Mr. Maduro, gimme some oil

The Iran sanctions negotiations in Vienna may be reaching the last stage – as acknowledged even by Chinese diplomat Wang Qun. But it was Russian Foreign Minister Sergei Lavrov who introduced a new, crucial variable into Vienna’s final discussions.

Lavrov made his eleventh-hour demand quite explicit: “We have asked for a written guarantee…that the current [Russian sanctions] process triggered by the United States does not in any way damage our right to free and full trade, economic and investment cooperation and military-technical cooperation with the Islamic Republic.”

As per the Joint Comprehensive Plan of Action (JCPOA) agreement of 2015, Russia receives enriched uranium from Iran and exchanges it for yellowcake, and in parallel, is reconverting Iran’s Fordow nuclear plant into a research center. Without Iranian enriched uranium exports there’s simply no JCPOA deal. It boggles the mind that US Secretary of State Blinken does not seem to understand that.

Everyone in Vienna, sidelines included, knows that for all actors to sign on the JCPOA revival, no nation must be individually targeted in terms of trading with Iran. Tehran also knows it.

So what’s happening now is an elaborate game of Persian mirrors, coordinated between Russian and Iranian diplomacy. Moscow’s Ambassador to Tehran, Levan Jagaryan, attributed the fierce reaction to Lavrov in some Iranian quarters to a “misunderstanding.” This will all be played out in the shade.

An extra element is that according to a Persian Gulf intel source with privileged Iranian access, Tehran may be selling as many as three million barrels of oil a day already, “so if they do sign a deal it will not affect supply at all, only they will be paid more.”

The US administration of President Joe Biden is now absolutely desperate: today it banned all imports of oil and gas from Russia, which happens to be the second-largest exporter of oil to the US, behind Canada and ahead of Mexico. The US’ big Russian-energy ‘replacement strategy’ is to beg for oil from Iran and Venezuela.

So, the White House sent a delegation to talk to Venezuelan President Nicolás Maduro, led by Juan Gonzalez, the White House’s top Latin America adviser. The US offer is to “alleviate” sanctions on Caracas in exchange for oil.

The United States government has spent years – if not decades – burning all bridges with Venezuela and Iran. The USG destroyed Iraq and Libya, and isolated Venezuela and Iran, in its attempt to take over global oil markets – just to end up miserably trying to buy out both and escape from being crushed by the economic forces it has unleashed. That proves, once again, that imperial ‘policy makers’ are utterly clueless.

Caracas will request the elimination of all sanctions on Venezuela and the return of all its confiscated gold. And it seems like none of this was cleared with ‘President’ Juan Guaido, who since 2019, was the only Venezuelan leader “recognized” by Washington.

Social cohesion torn apart

Oil and gas markets, meanwhile, are in total panic. No western trader wants to buy Russian gas; and that has nothing to do with Russia’s state-owned energy behemoth Gazprom, which continues to duly supply customers that signed contracts with fixed tariffs, from $100 to $300 (others are paying over $3,000 in the spot market).

European banks are less and less willing to grant loans for energy trade with Russia because of the sanctions hysteria. A strong hint that the Russia-to-Germany gas pipeline Nord Stream 2 may be literally six feet under is that importer Wintershall-Dea wrote off its share of the financing, de facto assuming that the pipeline will not be launched.

Everyone with a brain in Germany knows that two extra Liquefied natural gas (LNG) terminals – still to be constructed – will not be enough for Berlin’s needs. There is simply not enough LNG to supply them. Europe will have to fight with Asia over who can pay more. Asia wins.

Europe imports roughly 400 billion cubic meters of gas a year, with Russia responsible for 200 billion of this. There’s no way Europe can find $200 billion anywhere else to replace Russia – be it in Algeria, Qatar or Turkmenistan. Not to mention its lack of necessary LNG terminals.

So obviously the top beneficiary of all the mess will be the US – which will be able to impose not only their terminals and control systems, but also profit from loans to the EU, sales of equipment, and full access to the whole EU energy infrastructure. All LNG installations, pipelines and warehouses will be connected to a sole network with a single control room: an American business dream.

Europe will be left with reduced gas production for its – dwindling – industry; job losses; decreasing quality of life standards; increased pressure over the social security system; and, last but not least, the necessity to apply for extra American loans. Some nations will go back to coal for heating. The Green Parade will be livid.

What about Russia? As a hypothesis, even if all its energy exports were curtailed – and they won’t be, their top clients are in Asia – Russia would not have to use its foreign reserves.

The Russophobic all-out attack on Russian exports also targets palladium metals – vital for electronics, from laptops to aircraft systems. Prices are skyrocketing. Russia controls 50% of the global market. Then there are noble gases – neon, helium, argon, xenon – essential for production of microchips. Titanium has risen by a quarter, and both Boeing – by a third – and Airbus – by two thirds – rely on titanium from Russia.

Oil, food, fertilizers, strategic metals, neon gas for semiconductors: all burning at the stake, at the feet of Witch Russia.

Some Westerners who still treasure Bismarckian realpolitik have started wondering whether shielding energy (in the case of Europe) and selected commodity flows from sanctions may have everything to do with protecting an immense racket: the commodity derivatives system.

After all, if that implodes, because of a shortage of commodities, the whole western financial system blows up. Now that’s a real system failure.

The key issue for the Global South to digest is that the “west” is not committing suicide. What we have here, essentially, is the United States willfully destroying German industry and the European economy – bizarrely, with their connivance.

To destroy the European economy means not allowing extra market space for China, and blocking the inevitable extra trade which will be a direct consequence of closer exchanges between the EU and the Regional Comprehensive Economic Partnership (RCEP), the world’s biggest trade deal.

The end result will be the US eating European savings for lunch while China expands its middle class to over 500 million people. Russia will do just fine, as Glazyev outlines: sovereign – and self-sufficient.

American economist Michael Hudson has concisely sketched the lineaments of imperial self-implosion. Yet way more dramatic, as a strategic disaster, is how the deaf, dumb and blind parade toward deep recession and near-hyperinflation will rip what’s left of the west’s social cohesion apart. Mission Accomplished.

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https://stephenlendman.org/2022/04/01/hegemon-usa-on-the-ropes/

Hegemon USA on the Ropes?

Hegemon USA is its own worst enemy.

In decline for decades, dominant Biden regime hardliners accelerated the process.

Years earlier, Chalmers Johnson explained the dynamic that doomed past empires.

Following the pattern of earlier empires in world history, the US is on track toward “isolation, overstretch, the uniting of local and global forces opposed to imperialism, and in the end bankruptcy.”

It’s combined with totalitarian rule on a fast track toward full-blown tyranny to include loss of what remains of greatly eroded freedoms.

It’s far too late “for mere scattered reforms…or bloated military (spending) to make much difference,” Johnson stressed.

No matter how much is thrown at its war machine, its decline continues politically, economically and militarily.

Throughout the post-war WW II period, dollar hegemony as the world’s reserve currency facilitated US global dominance.

What financed its reckless spending, global militarism, its empire of bases, endless wars, corporate takeovers, and hegemony over most other nations is losing its mojo to increasing de-dollarization.

Russia, China and other nations are increasingly trading in their own currencies.

As long as world central banks bought US dollars, their use dominated international trade.

That’s been slowly changing for some time.

Things accelerated following harebrained US/Western sanctions war on Russia.

In March last year, Sergey Lavrov said the following:

“We need to reduce sanctions risks by strengthening our technological independence, by switching (entirely) to payments in national currencies and in world currencies,” adding: 

“We need to move away from the use of Western-controlled international payment systems.” 

The US dominated West “promote(s) (an) ideologized agenda aimed at maintaining their dominance by holding back the development of other countries.” 

“This policy runs counter to the objective trend…(It’s) on the wrong side of history.” 

“The historical process will still take its toll, but increased de-dollarization can greatly lessen its impact.”

Russian Deputy Foreign Minister Sergey Ryabkov said his nation, China and others “need to barricade (themselves) against the US financial and economic system to eliminate dependence on this toxic source of permanent hostile actions.”

“We need to” de-dollarize, eliminating its use altogether to be free from its hegemonic strangulation.”

What Russia, China and other nations began doing in baby steps is now proceeding at an accelerated pace.

As the process continues, increasing dollar weakness will sap US hegemonic strength.

On Thursday, an announcement by the US Treasury’s Office of Foreign Assets Control (OFAC) revealed an example of increasing US weakness — by lifting some illegally imposed sanctions on Russia, including the following:

Food, fertilizer and other agricultural commodities, medicine, medical devices and software updates.

Seeds for food crops.

Live animals.

Vitamins and minerals.

Food additives and supplements.

Reproductive materials.

Other Western regimes will likely follow Washington’s lead.

Will more sanctions be lifted?

Russia is the world’s largest natural gas supplier.

Europe depends on Russia for about 40% of its gas.

Its largest supplier by far, Russian gas is readily available by pipeline.

For countries like Germany, no alternative to Russia as a reliable supplier exists.

What’s partially replaced by LNG translates to greatly increased cost.

Russia already is largely self-sufficient as long as it’s able to export energy and other commodities.

Its goal is self-sufficiency in parts of its economy not yet achieved.

Its history reflects success in overcoming devastating adversity.

Along with lifting the above sanctions on Russia, OFAC imposed others on 21 entities and 13 individuals in the country.

Separately on Thursday, Vladimir Putin announced the following:

By decree, he “offer(ed) contractors from (unfriendly) countries a clear and transparent” one and only option.

“To purchase Russian natural gas, they must open ruble accounts in Russian banks.” 

“It is from these accounts that payments for gas supplied starting tomorrow, 1 April, will be paid.”

“No one sells anything for free, and we too will not engage in charity.” 

“Existing contracts (not paid for in rubles) will be (declared null, void and) stopped.”

“If such payments (in rubles) are not made, we will consider this a default on obligations by buyers.

“With all the ensuing consequences.”

“Gazprombank is given authority to open accounts on behalf of foreign buyers without their direct presence if they wish.” 

“The special accounts are not subject to the Russian Tax Code until appropriate amendments are made, and the suspension, arrest or write-off of these funds is prohibited for any reason other than payment for gas contracts.”

Hegemon USA’s aim to get Europe to buy much more expense LNG from its suppliers is part of its “bag of tricks.”

Nations shifting from much more affordable Russian gas to US LNG will “undermine the(ir) competitiveness.”

If taken, this move will hasten their “deindustrialization” at the further cost “of millions of (lost) jobs.”

It will also “lead to a breakdown in production and logistics ties, cause increased inflation, cause a decrease in the well-being of millions of people, and in the poorest countries, to the tragedy of mass starvation.”

A “food crisis will be followed by another wave of migration.”

“I propose to proceed from the fact that previous levels of interaction with (Europe) will not be reached in the near future.” 

“We are not going to close ourselves off from anyone, and we will not be a closed country.” 

“But we must proceed from the realities that are emerging.”

Separately in response to Europe’s collusion with hegemon USA, Russia’s Foreign Ministry announced the following:

“The sanctions policy of the European Union toward Russia has gone beyond all bounds.” 

After its special military operation began, “Brussels arbitrarily subjected Russian citizens and companies to unilateral restrictions on a broad scale.” 

“Ignoring all applicable international legal norms, (its ruling regimes) posted personal data in the public domain.”

They “invent(ed) absurd extra-legal ‘criteria’ ” to wage illegal sanctions war on Russia.

At the same time, they backed Nazified Ukraine and its war on Donbass since April 2014.

They turned a blind eye to its crimes of war, against humanity and other atrocities.

In response, Russia blacklisted EU leadership.

In mid-March it took similar action against hegemon USA officials, including dementia Joe, interventionist Blinken, top Pentagon brass and others.

“Retaliatory visa measures” targeted the US and European regimes.

“Restrictions apply to top EU (and US) leadership (for) promoting anti-Russian policies.” 

“The ‘black list’ also includes other high-ranking (US and European) officials.”

It includes other “public figures and media workers who are personally responsible for promoting illegal anti-Russian sanctions, inciting Russophobic sentiments, infringing on the rights and freedoms of the Russian-speaking population.”

Led by dominant Biden regime hardliners, the West is waging unparalleled cold war and proxy hot war on Russia.

Will a formal East/West split follow?

Will US calls for regime change in Russia risk global war by accident or design?