“It’s not going to be called that [USSR]. It’s going to be called customs union, it will be called Eurasian Union and all of that. But let’s make no mistake about it. We know what the goal is and we are trying to figure out effective ways to slow down or prevent it.” – Hillary Clinton, October 2012 (Source)
“For America, the chief geopolitical prize is Eurasia. For half a millennium, world affairs were dominated by Eurasian powers and people who fought with one another for regional domination and reached out for global power. Now a non-Eurasian power is preeminent in Eurasia–and America’s global primacy is directly dependent on how long and how effectively its preponderance on the Eurasian continent is sustained.” – Zbigniew Brzezinski, “The Grand Chessboard: American Primacy and Its Geostrategic Imperatives” Pg. 30, 1997
As a macro-oriented investor, it is imperative to have a basic understanding of what the causes and true intentions are of our political elite. This basic understanding creates the foundation toward better comprehending foreign policy decisions. Ultimately this comprehension allows us to formulate a much more accurate geopolitical analysis. The next step as an investor is to then implement that analysis into an investment strategy that produces winning results.
Through the use of the main stream media, the men and women who desire a world order under their system of control, deceive and manipulate the general populace into believing many falsehoods. While a large percentage of the American population may realize they’re being swindled, very few actually take the time to try and understand why.
“Apathy is the glove into which evil slips its hand.” – Bodie Thoene
The US is an empire that is currently participating in the Great Game. This is a game played by the oligarchs of the world where the ultimate prize is global supremacy. Coming to the realization that our leaders in Washington are caught up in this neurotic “game” where human life is simply taken as collateral damage all in the quest of accumulating wealth and power may surprise some. But to those of us who have a basic understanding of history and the inherit lust for power found in those men and women who usually seek it, we should not be taken aback.
“And remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that.” – Lord Acton
In 1904 Sir Halford John Mackinder formulated what is known as the Heartland Theory which outlines the necessary steps world powers should take in order to achieve what is essentially world domination. The theory can be summarized by the famous dictum:
Who rules East Europe commands the Heartland;
Who rules the Heartland commands the World-Island;
Who rules the World-Island commands the world.
The Heartland stretches roughly from the Volga to the Yangtze and from the Himalayas to the Arctic. The World Island is essentially the Eurasian landmass. This area contains the vast majority of natural resources and people, giving the owner an incredible amount of wealth and power.
A large percentage of this area was controlled for quite some time by the Russian Empire until the USSR ultimately succeeded it. During the 19th century, Imperial Russia was in a consistent battle against primarily the British Empire over its continued expansion southward through Central Asia. In order to protect its “Crown Jewel”, the British engaged the Russians in what was to become known as the Great Game.
We now find ourselves in the midst of a New Great Game (New, New Great Game may be more appropriate). Following the collapse of the USSR, the US found itself in a position without equal. Now the lone superpower, the US had a choice to either fallback or push forward. It should be evident in regard to which direction the US chose.
Globalist Zbigniew Brzezinski explained the setting of the New Great Game and how America should proceed in the 21st century when he wrote his 1997 classic “The Grand Chessboard: American Primacy and Its Geostrategic Imperatives“.
“This huge, oddly shaped Eurasian chessboard–extending from Lisbon to Vladivostok–provides the setting for “the game.” If the middle space can be drawn increasingly into the expanding orbit of the West (where America preponderates), if the southern region is not subjected to domination by a single player, and if the East is not unified in a manner that prompts the expulsion of America from its offshore bases, American can then be said to prevail. But if the middle space rebuffs the West, becomes an assertive singly entity, and either gains control over the South or forms an alliance with the major Eastern actor, then America’s primacy in Eurasia shrinks dramatically. The same would be the case if the two major Eastern players were somehow to unite. Finally, any ejection of America by its Western partners from its perch on the western periphery would automatically spell the end of America’s participation in the game on the Eurasian chessboard, even though that would probably also mean the eventual subordination of the western extremity to a revived player occupying the middle space.” – Zbigniew Brzezinski “The Grand Chessboard: American Primacy and Its Geostrategic Imperatives” Pg. 35
Let’s break down Brzezinski’s logic. What he’s basically saying is that the Eurasian landmass is one big chessboard (“The Grand Chessboard”) and in order for the US to win this geopolitical chess match it must do a couple of things.
First, if the Caucuses and other Central Asian states can be drawn into the orbit of the West (being the EU and NATO), while the southern region (being the Middle East) does not come under the control of either the Arabs (think Gulf Cooperation Countries) or the Persians (Iran) or some other power (Russia/Eurasian Union or China), and the East (China) does not unify SE Asia in a way that disrupts US supremacy in the Pacific, America wins. But, if the middle space (Central Asia) rebuffs the West by unifying itself (think Eurasian Union led by Russia) and somehow gains control of the South or forms an alliance with China, then America’s primacy in Eurasia shrinks. The same would be the case if somehow China and Japan were to unite (doubtful). And finally, if for some reason the major EU countries (France and Germany) were to reject the US in favor of looking east, that would put the nail in the coffin for the US on the Eurasian landmass. Also, if the US were to leave the “game”, the EU would probably be consumed by a revived player in the middle space (Moscow led Eurasian Union consuming the Brussels led European Union).
UKRAINE “ON THE EDGE”
5,500 miles away on the western Eurasian Steppe, the US is engaged in a major proxy war over the future of Ukraine. The significance of Ukraine to the average American is inconsequential, but to the globalist oligarchs in Washington, Ukraine represents a major pivot toward securing its preponderance on the Eurasian landmass while eliminating Russia’s ability to be a major player in the ongoing regionalization of the world.
“Ukraine, a new and important space on the Eurasian chessboard, is a geopolitical pivot because its very existence as an independent country helps to transform Russia. Without Ukraine, Russia ceases to be a Eurasian empire. Russia without Ukraine can still strive for imperial status, but it would then become a predominantly Asian imperial state, more likely to be drawn into debilitating conflicts with aroused Central Asians, who would then be resentful of the loss of their recent independence and would be supported by their fellow Islamic states to the south. China would also be likely to oppose any restoration of Russian domination over Central Asia, given its increasing interest in the newly independent states there. However, if Moscow regains control over Ukraine, with its 52 million people and major resources as well as its access to the Black Sea, Russia automatically again regains the wherewithal to become a powerful imperial state, spanning Europe and Asia. Ukraine’s loss of independence would have immediate consequences for Central Europe, transforming Poland into the geopolitical pivot on the eastern frontier of a united Europe.” – Zbigniew Brzezinski “The Grand Chessboard: American Primacy and Its Geostrategic Imperatives” – Pg. 46
The conflict in Ukraine had been simmering for quite some time, patiently awaiting a trigger that would spark the current war. That spark was to come in November of 2013 when former Ukrainian President Viktor Yanukovych turned away from signing an Association Agreement with the EU in favor of looking east toward Moscow and the (eventual) Eurasian Union. Upon the move made by Yanukovych, hundreds of thousands of Ukrainian protesters led by pro-Western Arseniy Yatsenyuk, the now elected Prime Minister, marched through Kiev over the disagreement with Yanukovych’s decision.
It wasn’t long before the likes of John McCain were giving speeches in the middle of Kiev’s Independence Square calling for “freedom” and “democracy” and essentially the ousting of Yanukovych. Why is it that a US Senator from Arizona is in Kiev issuing statements of propaganda during the midst of a “revolution”? He’s there because the battle over Ukraine represents a major battle between that of the West (Washington/EU/NATO) and Russia. To be as blunt as possible, Swedish Foreign Minister Carl Bildt tweeted on December 11, 2013, “Eurasia versus Europe in streets of Kyiv tonight”.
The influence of the US meddling in the affairs of Ukraine could not be better demonstrated then the leaked recording of a phone conversation between Assistant Secretary of State for European and Eurasian Affairs at the US Department of State, Victoria Nuland, and Geoffrey R. Pyatt, the US ambassador in Kiev. In the phone conversation which can be listened to here, Nuland and Pyatt essentially layout who they desire to have in power in Kiev. This phone conversation simply validates what was already known to anyone paying attention in that the US assisted in the financing and development of the opposition parties in Ukraine which led to the overthrow of the former government led by Yanukovych. It wasn’t long after this leaked recording (certainly done by the Russians) in early February, that Yanukovych fled the country to find safety in Russia.
As the Sochi Olympics came to a close on February 23, and Yanukovych had fled the country, Putin finally made the move to seize Crimea. Given the circumstances, Putin’s play was inevitable. Crimea, sitting on the Black Sea, contains an extremely strategic naval port (Sevastopol) for the Russians. Losing control over such a port would be unacceptable to the Russians as it would isolate its access to the Black Sea and ultimately the Mediterranean. This marked the beginning of what Marin Katusa correctly acknowledges as a war of secession, not a civil war.
Ukraine, or “little Russia”, has deep historical ties with its Russian neighbor. Though not all of that history is peaceful, the Slavic ties between the two countries is unquestionable. As the above map shows, the eastern part of Ukraine is heavily populated by native Russians while the Western part of the country is much more Ukrainian, Polish, Hungarian, etc.
Vladimir Putin during his speech at the Valdai International Discussions Club in Sochi back in late October of 2014 described how the borders formed after WWII (otherwise known as the ‘Great Patriotic War‘ to the Russians) mixed and matched various cultures and ethnicities thus creating nation states in Eastern Europe that were not necessarily homogenous.
“As for western Ukraine, perhaps you are not aware that Ukraine gained territory following World War II? Some territory was transferred from Poland and some from Hungary…What was Lvov if not a Polish city? Are you not aware of these facts?…Poland was compensated through the territory it gained from Germany when the Germans were driven out of a number of eastern regions. If you ask around, you will see that there are whole associations of these expelled Germans…I cannot judge here and now whether this was right or wrong, but this is what happened. In this respect it is difficult not to recognize that Ukraine is a complex, multi-component state formation. This is simply the way historical developments went.” – Vladimir Putin, 10/24/14, Valdai International Discussions Club
There’s no doubt that many Eastern European countries fear an expanding Russian sphere of influence. After living under Soviet control for almost fifty years post WWII, the people living in these “borderlands” (land between Germany and Russia) have no desire to once again live under the authoritarian control of Moscow. After the official collapse of the USSR in 1991, the vast majority of these countries looked West toward the “safety” of the EU and NATO. Opting for what was/is believed to be a chance at free-market capitalism and democracy over communism and authoritarianism.
This NATO/EU expansion has not sat well with a resurgent Russia. It is in particular the expansion of NATO up to the borders of Russia that has most alarmed Putin and his oligarchs. Considering Putin is a rather staunch Russian nationalist who considered the fall of the USSR to be the “major geopolitical catastrophe of the century”, it should not come as a surprise that Putin is fighting back against the West. From reading and listening to Putin’s remarks it is easy to gather the sense of unease that he has in regards to being surrounded by the Washington led NATO.
“Didn’t they tell us after the fall of the Berlin Wall that NATO would not expand eastwards? However, the expansion started immediately…You see, nobody has ever stopped. This is the main issue of current international relations. Our partners never stopped. They decided they were the winners, they were an empire, while all the others were their vassals, and they needed to put the squeeze on them. I said the same in my Address [to the Federal Assembly]…This is the problem. They never stopped building walls, despite all our attempts at working together without any dividing lines in Europe and the world at large…I believe that our tough stand on certain critical situations, including that in the Ukraine, should send a message to our partners that the best thing to do is to stop building walls and to start building a common humanitarian space of security and economic freedom.” – Vladimir Putin, 10/24/14, Valdai International Discussions Club
(SIDE NOTE: Don’t be fooled into believing that Putin is some hero saving humanity from the “evil” oligarchs of the West. Putin and his cronies are just as vicious and cold-blooded as any of these other men who seek power. Human life is taken for granted in the quest for wealth and power, and the radicals that sit atop this global hierarchy, whether they be from the East or the West, do not care in regard to how extreme they’ll have to go in order to achieve their goals and objectives, or more importantly to survive)
While I was backpacking through the Baltics during the spring of 2008, I remember the sense of pride I felt when I saw the following plaque located in the main square in Vilnius, Lithuania:
Being a rather naive 21-year-old at the time, I failed to truly grasp the meaning of this plaque. Now that I’m a bit older with a tad more knowledge, I have a much better appreciation for the meaning of this message and its implications. Considering the predicament we now find our world in, this plaque demonstrates the far-seeing strategies of those building world order (from the West) and the objectives and enemies in which they have.
While analyzing events that have occurred in Eastern Europe, the Balkans, Caucuses, Middle East, and Central Asia over the past twenty years it becomes a bit clearer in regard to determining what the strategy is of our leaders in Washington. Ultimately, the Western globalists would like to bring Russia into their “order” as a junior partner.
“Presumably, a democratic Russia would be more sympathetic to the values shared by America and Europe and hence also more likely to become a junior partner in shaping a more stable and cooperative Eurasia. But Russia’s ambitions may go beyond the attainment of recognition and respect as a democracy. Within the Russian foreign policy establishment (composed largely of former Soviet officials), there still thrives a deeply ingrained desire for a special Eurasian role, one that would consequently entail the subordination to Moscow of the newly independent post-Soviet states.” – Zbigniew Brzezinski “The Grand Chessboard: American Primacy and Its Geostrategic Imperatives”Pg. 51
NATO has successfully added Estonia, Latvia, Lithuania, Poland, Slovakia, Romania, and Bulgaria as members over the last fifteen years. However, the drive to expand NATO is still underway. Strategically, NATO has targeted membership for both Georgia and Ukraine, two states that border Russia to the South and West. If both Georgia and Ukraine were to become members of NATO, Moscow would be completely surrounded with the exception of Belarus, Finland (EU and Eurozone), and Azerbaijan (very Western friendly).
The Russo-Georgian War of 2008 was in partial response to Georgia’s desire to join NATO. The controversy between Russia and Georgia over the regions of South Ossetia and Abkhazia stem back to the dissolution of the USSR, however, what potentially sparked the ultimate showdown in August of that year was the Georgian push to join NATO. Washington has feverously supported the ascension of not only Georgia, but also Ukraine into NATO. The delay in these two countries from joining NATO has primarily been related to German/French resistance in appeasement to Russia who is defiantly opposed to such a maneuver.
Georgia as a NATO member also helps solidify the construction of the Southern Gas Corridor which is being built in order to provide an alternative gas supply for Europe. Currently, the EU is heavily dependent upon Russian gas. Eastern Europe in particular is basically entirely dependent on Russian gas for its energy, which creates a very uneasy situation for many of these countries as relying on Russian gas makes them dependent upon Putin and Gazprom. This creates a situation, such as we’ve seen in Ukraine, where if you either disagree with or upset Putin, the gas is turned off. The pipeline politics that is in play right now is rather complex and the EU is struggling to find a unified position. Though there have been many calls for and some action taken to create an EU Energy Union, it has been difficult to find a consensus.
The cancelling of the South Stream pipeline in early December of 2014 by Russia has also created quite a bit of controversy and animosity amongst EU members. In particular, the countries of Southeastern Europe such as Bulgaria, Hungary, Serbia, etc. were expecting to have a secure flow of Russian gas that was no longer dependent upon a sketchy Ukrainian transit. Now that this project has been cancelled, SE Europe is finding itself in a rather precarious position as they no longer can expect a stable supply of gas for at least a few years until the Southern Corridor is completed. The Russian-Turkish-Greek Turkish Stream pipeline is a possibility as well, but of course this project is mired in controversy.
Putin has been able to revive Russia economically primarily through its exports of oil and gas. In an environment of $100+/bbl oil and $10+/mmbtu gas, the Putin controlled Gazprom and Rosneft have been able to accumulate an extraordinary amount of profits over the years. In addition, by controlling the primary source of energy for Eastern Europe, Putin is able to leverage a considerable amount of power. As Kissinger says, “control the energy supply, control the continent”.
However, with the EU looking to import LNG from North America, develop the Southern Gas Corridor which would see gas from the Caspian Sea flow through Azerbaijan, Georgia, and Turkey into the EU, Russia’s market share in Europe is being threatened. This isn’t even considering a potential pipeline stemming from Qatar which is made possible with Assad falling in Syria. Therefore, Putin’s window to retain his market share is dwindling. It is also why he has begun to look east (primarily China) in order to open up new markets for Russian oil and gas.
The timing of the $400 billion Russian-Chinese gas deal was significant in that it demonstrated Putin’s precarious position. As Louis Gave of Gavekal Research based out of Hong Kong stated in a Real Vision TV interview dated January 19 of this year, “Putin needed a deal real bad, and he got a real bad deal.” China is supposedly to have gotten a deal done at a ~40% discount to European gas prices. The Chinese are perhaps the biggest beneficiary of the crisis in Ukraine as their patience and shrewdness is getting them not only cheap oil and gas, but also equity stakes in various Russian corporations. In addition, as Russia is in the limelight, China is making aggressive moves toward establishing regional hegemony in SE Asia, Central Asia, and the Pacific.
Putin’s regime is under attack and he is well aware of it. Sanctions along with low oil and gas prices are causing serious strain on Russia’s finances and economy. Washington is looking for regime change in Moscow, and as Simon Hunt in a recent Real Vision TV interview pointed out, Kiev was the dress rehearsal for Moscow.
Successful regime change in Moscow is a tall order filled with an incredible amount of risk that has the potential to lead to a full blown war. The EU is caught in the middle of a battle between Washington and Moscow that leaves the Germans (the de facto hegemon of the EU) with some serious choices to make. George Friedman, Founder and Chairman of Stratfor (“shadow CIA”) and author of the recently released “Flashpoints: The Emerging Crisis in Europe“, described in a recent interview of how the current crisis in Europe and the direction it takes will be primarily dependent upon the decisions in which the Germans make going forward.
The Germans/EU are stuck in a position of either looking East or West as Washington and Moscow stand their ground and refuse to negotiate. It’s a battle between the pro-Western ‘Atlantic Integrationists’ and the ‘Eurasian Sovereignists’. Various interests are at stake and the competition within the EU to set the course is fierce.
The major fear of the American Atlanticists is a coalition between that of Germany and Russia which would unite German capital and technology with Russian natural resources and manpower. This has been a longtime fear of the Anglo-American establishment and the possibility of this happening is real.
“The course of restricting Russia’s opportunities is led not by European nations but primarily the US. Many analysts in Russia, the European Union and even the United States itself are stressing that Americans are trying to prevent the unification of the potentials of Russia and the EU guided primarily by the objective of keeping its own global leadership.” – Sergei Lavrov, Russian Foreign Minister (Source)
Remarks and statements have been made numerous times over the past decade by both leaders in Russia and the EU over the creation of a unified free trade zone from Lisbon to Vladivostok (with the intent of eventual monetary and political union as we are witnessing with the EU…all under the auspices of the UN of course). However, the question is not over regionalization, it is over who will lead the development of such order. Putin has his plans for the Eurasian Union and its eventual merger with that of the EU. The Western Atlanticists have their vision of a unified Europe merged with North America under NATO and the Transatlantic Trade and Investment Partnership (TTIP) with Russia as a subordinate junior partner (read my blog post The Economic Integration of NATO for more information). Here in lies the “game” and the stakes could not be higher. Human life is at risk while the oligarchs in Moscow and Washington duke it out.
“Russia and the EU agreed to form a common economic space and coordinate economic regulations without the establishment of supranational structures back in 2003. In line with this idea, we proposed setting up a harmonized community of economies stretching from Lisbon to Vladivostok, a free trade zone and even employing more sophisticated integration patterns. We also proposed pursuing coordinated policies in industry, technology, the energy sector, education, science, and also to eventually scrap visas. These proposals have not been left hanging in midair; our European colleagues are discussing them in detail.
Soon the Customs Union, and later the Eurasian Union, will join the dialogue with the EU. As a result, apart from bringing direct economic benefits, accession to the Eurasian Union will also help countries integrate into Europe sooner and from a stronger position.” – Vladimir Putin, “A new integration project for Eurasia: The future in the making“, “Izvestia”, 10/3/11
“Russia’s only real geostrategic option–the option that could give Russia a realistic international role and also maximize the opportunity of transforming and socially modernizing itself–is Europe. And not just any Europe, but the transatlantic Europe of the enlarging EU and NATO. Such a Europe is taking shape, as we have seen in chapter 3, and it is also likely to remain linked closely to America. That is the Europe to which Russia will have to relate, if it is to avoid dangerous geopolitical isolation.” – Zbigniew Brzezinski “The Grand Chessboard: American Primacy and Its Geostrategic Imperatives” Pg. 118
On January 1st, 2015, the Russian led Eurasian Economic Union officially came into existence. The union consists of Russia, Belarus, Kazakhstan, and Armenia, with Kyrgyzstan to join in May. Modeled after the European Union, the EEU is the most recent regional organization to come into existence. The ultimate objective of the regionalization of the world is to move away from the current nation state structure and into a more regional, federalized structure that falls under the dominion of the UN.
“We do not have a New World Order…We cannot leap into world government in one quick step. In brief, the precondition for eventual globalization — genuine globalization — is progressive regionalization, because thereby we move toward larger, more stable, more cooperative units.” – Zbigniew Brzezinski, “State of the World Forum”, 1995
“The contemporary quest for world order will require a coherent strategy to establish a concept of order within the various regions and to relate these regional orders to one another.” – Henry Kissinger, “World Order”, 2014, Pg. 371
The regionalization of the world is in no way guaranteed to succeed, but it is certainly underway. Success is in question not only because of the nationalism which is sure to arise (which is already growing within the EU), but also because of the maniacal behavior of the various oligarchs who are looking to build such a structure. The egos amongst the men and women who “lead” this world are significant and it is guaranteed that they will fight for what is their vision of world order and the regional hegemony that will precede such an order. Meanwhile, the lives of average people are disturbed immensely for a cause in which they have no real understanding.
In the past, propaganda techniques utilized by the state have been extremely successful in manipulating the thoughts and fears of men and women. However, due to the advent of the internet, a moment in history that shares a strong comparison to that of the invention of the printing press, a global political awakening is occurring.
“[The] major world powers, new and old, also face a novel reality: while the lethality of their military might is greater than ever, their capacity to impose control over the politically awakened masses of the world is at a historic low. To put it bluntly: in earlier times, it was easier to control one million people than to physically kill one million people; today, it is infinitely easier to kill one million people than to control one million people.” – Zbigniew Brzezinski, Council on Foreign Relations speech in Montreal, 2008 (Source)
As both Hillary Clinton and Zbigniew Brzezinksi have shared, a resurgent and regionally hegemonic Russia is not acceptable. The establishment of a Moscow led Eurasian Union by Putin and his fellow oligarchs falls into direct conflict with that of Brzezinksi’s American strategy on the Eurasian Chessboard. Keeping the Ukraine out of this new regional structure is imperative toward isolating Russia away from Eastern Europe and pushing them toward a politically unstable, Muslim dominated, economically weak and underdeveloped Central Asia. The coup in Kiev successfully reoriented Ukraine toward the West, but whether or not the government in Kiev can survive is up for debate. In addition, the separatist regions of Donetsk and Luhansk, otherwise known as “New Russia” (Novorossiya), along with Crimea, are most likely long gone from the government in Kiev.
“The crisis we are talking about is not the Ukrainian crisis. It’s a global crisis. And if Putin succeeds in Ukraine, nobody can tell where his tanks will be tomorrow. His maniac idea I mentioned is also global. To stop Putin is not only Ukraine’s major goal. It should be the goal of the entire civilized world.” – Andriy Parubiy, Secretary of the National Security and Defense Council of Ukraine (Source)
Indeed, the failure of the American-led effort to expand NATO could reawaken even more ambitious Russian desires. It is not yet evident–and the historical record is strongly to the contrary–that the Russian political elite shares Europe’s desire for a strong and enduring American political and military presence. Therefore, while the fostering of an increasingly cooperative relationship with Russia is clearly desirable, it is important for America to send a clear message about its global priorities. If a choice has to be made between a larger Euro-Atlantic system and a better relationship with Russia, the former has to rank incomparably higher to America.” – Zbigniew Brzezinski “The Grand Chessboard: American Primacy and Its Geostrategic Imperatives” Pg. 200-201
Ukrainian nationalists along with the support of Washington may be willing to confront Putin, but their efforts are meaningless if the EU led by Angela Merkel and Germany decide to play ball with Moscow. It seems rather apparent that the European elites do not want another European war, however, they may not have a choice. Playing both sides off one another in order to lead to a peaceful resolution is the ideal situation, but the time for peace may have already come and gone.
“We are pawns in the game of influence between the United States and Russia. Russia is a great country, a great people, with which Europe has many common strategic interests. We need to talk with Russia…Regarding Ukraine, we behave like American lackeys…the aim of the Americans is to start a war in Europe to push NATO to the Russian border.” – Marine Le Pen, leader of the French National Front Party (Source)
“I’m not for the policy of attaining goals by making things worse. I think that sanctions must stop now.” – Francois Hollande, French President (Source)
“The goal was never to push Russia politically and economically into chaos. Whoever wants that will provoke a much more dangerous situation for all of us in Europe…We want to help solve the conflict in Ukraine, not to force Russia to its knees.” – Sigmar Gabriel, Germany’s deputy chancellor (Source)
The economic sanctions that have targeted not only Russia, but the Russian oligarchs in Putin’s orbit, were another attack on the regime. The attack on the Russian ruble that led to “Black Tuesday” on December 16, 2014, where the markets witnessed a ruble crashing to as high as 80-1, was another shot at Putin’s ability to retain economic and social order within Russia.
We are now seeing the US calling for the supply of weapons to Ukraine. If this begins, the collapse of the Minsk II agreement is all but guaranteed. Besides the US supplying weapons directly to Kiev, NATO is actively creating new bases and stations in at least seven Eastern European countries.
The direct economic, trade, and currency war is well underway. The boots on the ground proxy war is currently in a ceasefire, but the stability of such is highly fragile. We are now seeing the stationing of troops and supplies in the “borderlands” along with military exercises being conducted by both sides. In addition, we are seeing strategic diplomatic maneuvers in Central Asia taking place amongst Washington’s ambassadors:
“One of the most prominent Color Revolution experts in America’s coup d’état toolkit has been hurriedly recalled from retirement for immediate deployment to Kyrgyzstan. Richard Miles, the engineer of the first Color Revolution in Serbia and the Rose Revolution in Georgia, has been appointed as charge d’affaires in Kyrgyzstan until a new ambassador is confirmed by the Senate, because the former one, Pamela Spratlen, has been reassigned as the US Ambassador to Uzbekistan. While it is not known how long Miles will remain in Kyrgyzstan, which will be the Eurasian Union’s weakest economy when it joins in May of this year, ordinary citizens there already suspect that foul play is being planned against their country and have protested his arrival. Given that Miles’ track record of regime change makes him worthy of the ‘Male Nuland’ moniker, it’s appropriate to investigate what tricks the US may be up to in Central Asia, and how it may be trying to force the Ukrainian scenario onto Russia’s southern doorstep.” – 3/10/15 US Dispatches Regime Change Specialist to Pro-Russian Central Asian ‘Stan’
Putin understands he is under attack, and he isn’t backing down. Putin has done an incredible job of inspiring Russian nationalism amongst his population. His support levels are the highest of any political leader that I’m aware of at well over 80%. In addition, he has been able to effectively and understandably stir up a strong anti-American sentiment amongst the general Russian population.
Two days after the ruble crashed on Black Tuesday, Putin held his annual press conference where in answering a question about the economic stress underway in Russia he gave the following answer (edited):
“You know, at the Valdai [International Discussion] Club I gave an example of our most recognizable symbol. It is a bear protecting his taiga. You see, if we continue the analogy, sometimes I think that maybe it would be best if our bear just sat still. Maybe he should stop chasing pigs and boars around the taiga but start picking berries and eating honey. Maybe then he will be left alone. But no, he won’t be! Because someone will always try to chain him up. As soon as he’s chained they will tear out his teeth and claws. In this analogy, I am referring to the power of nuclear deterrence. As soon as – God forbid – it happens and they no longer need the bear, the taiga will be taken over.
We have heard it even from high-level officials that it is unfair that the whole of Siberia with its immense resources belongs to Russia in its entirety. Why exactly is it unfair? So it is fair to snatch Texas from Mexico but it is unfair that we are working on our own land – no, we have to share.
And then, when all the teeth and claws are torn out, the bear will be of no use at all. Perhaps they’ll stuff it and that’s all.
So, it is not about Crimea but about us protecting our independence, our sovereignty and our right to exist. That is what we should all realize.
If we believe that one of the current problems – including in the economy as a result of the sanctions – is crucial… And it is so because out of all the problems the sanctions take up about 25 to 30 percent. But we must decide whether we want to keep going and fight, change our economy – for the better, by the way, because we can use the current situation to our own advantage – and be more independent, go through all this or we want our skin to hang on the wall. This is the choice we need to make and it has nothing to do with Crimea at all.”
It is interesting to note that as Putin talks about the West’s desire to have a stake in Russia’s natural resources, Warren Buffet recently sold his stake in Exxon Mobile. This is noteworthy due to the fact “Exxon boosted its Russian holdings to 63.7 million acres in 2014 from 11.4 million at the end of 2013, according to data from U.S. regulatory filings. That dwarfs the 14.6 million acres of rights Exxon holds in the U.S., which until last year was its largest exploration prospect.” Considering Buffet is a value-oriented, long-term investor who took his position in Exxon just over one year prior, does it not raise your eyebrow that just maybe Buffet understands the risks outweigh the potential rewards for a Western oil and gas company doing business in Russia? It’s something to consider.
Besides stirring up Russian nationalism, Putin has made aggressive moves to ally and integrate economically, politically, and militarily with the East. The major oil and gas deal signed with China is one move, but there are numerous other examples of Putin’s strategy to rebuff the West.
The establishment of the Shanghai Cooperation Organization (SCO) may be the most notable attempt Putin and China have made at deterring Washington and NATO.
“Finally, some possible contingencies involving future political alignments should also be briefly noted, subject to fuller discussion in pertinent chapters. In the past, international affairs were largely dominated by contests among individual states for regional domination. Henceforth, the United States may have to determine how to cope with regional coalitions that seek to push America out of Eurasia, thereby threatening America’s status as a global power. However, whether any such coalitions do or do not arise to challenge American primacy will in fact depend to a very large degree on how effectively the United States responds to the major dilemmas identified here.
Potentially, the most dangerous scenario would be a grand coalition of China, Russia, and perhaps Iran, an “antihegemonic” coalition united not by ideology but by complementary grievances. It would be reminiscent in scale and scope of the challenge once posed by the Sino-Soviet bloc, though this time China would likely be the leader and Russia the follower. Averting this contingency, however remote it may be, will require a display of U.S. geostrategic skill on the western, eastern, and southern perimeters of Eurasia simultaneously.” – Zbigniew Brzezinski “The Grand Chessboard: American Primacy and Its Geostrategic Imperatives” Pg. 55
“The result could, at least theoretically, bring together the world’s leading Slavic power, the world’s most militant Islamic power, and the world’s most populated and powerful Asian power, thereby creating a potent coalition.” – Zbigniew Brzezinski “The Grand Chessboard: American Primacy and Its Geostrategic Imperatives” Pg. 116
“According to Zbigniew Brzezinski’s theory, control of the Eurasian landmass is the key to global domination and control of Central Asia is the key to control of the Eurasian landmass….Russia and China have been paying attention to Brzezinski’s theory, since they formed the Shanghai Cooperation Organisation in 2001, ostensibly to curb extremism in the region and enhance border security, but most probably with the real objective of counterbalancing the activities of the United States and NATO in Central Asia.” – Hamid Golpira, Tehran Times, 11/20/2008
It seems as though Brzezinski’s worst fear has come to fruition. The establishment of the SCO, led by China and Russia, is no doubt a Eurasian military alliance created in order to act as a deterrent against NATO and the US. Establishing a security framework that is led by Eurasian States in many ways eliminates the argument for having a US presence in the region. Whether or not the SCO will have success in doing so is the question.
With the SCO set to expand to include four additional members by July of this year when the SCO meets in Ufa (Russia), Washington will have to simply look on. The addition of Iran, India, and Pakistan, however odd of a threesome that may be, adds to the growing clout of the Russian-Chinese axis (Mongolia is the fourth).
Once again, to quote Brzezinski, “if the middle space rebuffs the West, becomes an assertive singly entity, and either gains control over the South or forms an alliance with the major Eastern actor, then America’s primacy in Eurasia shrinks dramatically.” Eighteen years since Brzezinski wrote that, we see it all playing out as he had warned.
Putin’s isolation from the West has forced him to look East, and considering the powerful economic emergence of China, along with the general rise in strength of many of the other Asian States, his option isn’t a terrible one.
“Russia, China, the other BRICS countries, are looking for a new model…. It’s not driven by some sort of anti-Western logic. There is a crisis of trust. There is a feeling that our countries are on their own. We don’t have a point of reference anymore…We look at Beijing, and we don’t hear them lecturing us about human rights and how to conduct democracy. There is no missionary element on either side. But there is strong economic incentive. The Chinese economy is a factory, and we have the energy to power that factory. That’s a pretty solid basis.” – Alexei Pushkov, chairman of the State Duma’s international affairs committee
“In terms of Chinese advantages, keep in mind that the future of the global economy clearly lies in Asia with its record rise in middle-class incomes. In 2009, the Asia-Pacific region had just 18% of the world’s middle class; by 2030, according to the Development Center of the Organization for Economic Cooperation and Development, that figure will rise to an astounding 66%. North America and Europe had 54% of the global middle class in 2009; in 2030, it will only be 21%.” – Pepe Escobar (Source)
China’s economic growth over the past two decades has been absolutely astounding and unprecedented. The stability of China’s credit fueled expansion is certainly up for debate, however, if we are to take the long-view, there is a good chance that China will ultimately survive any major bust which is probably inevitable, though not necessarily imminent as Doug Casey is prone to say. Of course what China will look like politically after such a bust is also up for debate, but the Communist Party of China will do whatever they have to do in order to retain their power, just as Putin will do.
As part of China’s attempt at establishing regional hegemony, China is moving forward with its extremely ambitious infrastructure and economic development project known as the Silk Road Economic Belt (“one belt, one road”). Putin is certainly participating as his alliance with the Chinese Communist party may be his only ticket to survival.
The “New Silk Road” will see the Chinese invest billions it not trillions in connecting and unifying the Eurasian continent. The building of high speed rail lines from “Berlin to Shanghai”, along with roads, ports, oil and gas pipelines, and fiber-optic networks, will connect and facilitate trade and communications throughout Eurasia. The successful development of these trade routes, which is a major gamble on behalf of the Chinese, leads to big questions for that of the Germans and the EU as well. Put in a situation where they have to choose between looking East or West, going East where the major economic growth is may be their choice. Cheap energy from the Russians along with strong, growing trade relations with Asia (primarily China) may be too much for the Germans to forgo.
In a sign of support of such Chinese efforts, the Germans, along with the UK, France, Switzerland, and other European countries recently signed on to become founding members of China’s new Asian Infrastructure Investment Bank (AIIB). With an initial capitalization of $50 billion (soon to double to $100 billion), this new bank will compete (maybe collaborate?) with that of the US led World Bank and US/Japan led Asian Development Bank (ADB) for influence in the financing and development of this region. The creation of the AIIB demonstrates Beijing’s desire to establish regional hegemony and confront the US led world order.
The establishment of the Beijing based AIIB coincides with the establishment of the BRICS Beijing based New Development Bank (NDB) which launched last year with an initial capitalization of $100 billion. The creation of the NDB is another sign of non-Western countries joining forces in order to compete against the Washington led order.
“We are creating a new axis of global development. The global economic order created several decades ago is now undergoing change and we believe for the better to make it more representative.” – Anand Sharma, India’s Minister of Commerce
Washington is aware of China’s ambitions, hence why the US pivot to Asia is in place. However, Washington’s ability to restrain the economic rise and regional/world leadership role of China will be no easy feat. One example of US policy to retain its sphere of influence in Asia would be its desire to establish the Trans Pacific Partnership (TPP), a Free-Trade Agreement like that of NAFTA or the already mentioned Transatlantic Trade and Investment Partnership (TTIP). The TPP is definitely not a done deal and China is actively pursuing its own regional free trade agreement in Asia via the Regional Comprehensive Economic Partnership (RCEP).
“The conclusion of different regional free trade agreements is one of the global trends. It is no coincidence that this practice is widespread in the Asia-Pacific Region, which is becoming the center of global economic and political activity. Today there are about 70 such agreements and a number of projects are underway. Among them is the above-mentioned Trans-Pacific Partnership and a comprehensive regional economic partnership.
Russia seeks to strengthen regional economic integration. Moreover, we also believe that free trade agreements should not fragment the multilateral trading system, but rather complement them, contribute to its consolidation and the growth of interconnectedness. The regional unions should not be turned against each other or otherwise divided. Such agreements should be transparent, fair and address the needs of each economy. Regional integration should be transparent and promote information-sharing between all the negotiations processes.
We pay special attention to this approach in the implementation of our priority integration project – the Eurasian Economic Union. The values and principles of this association’s activities are transparent and carried out in full compliance with the rules and regulations of the World Trade Organization.
It is not yet easy to evaluate the progress of the Trans-Pacific Partnership. This initiative is carried out behind closed doors, even businesses and the public of the contracting states have no access to it, let alone other countries. Over the past five years of negotiations, we have repeatedly heard about the success achieved, but such statements have always been refuted later. Last time this happened on the threshold of the APEC summit in Bali in November 2013. It looks like it was a question of continuing negotiations, which have been “frozen” for over a year now. Dates for the resumption of negotiations have not been announced.
Obviously, the Trans-Pacific Partnership is just another U.S. attempt to build an architecture of regional economic cooperation that the USA would benefit from. At the same time, I believe that the absence of two major regional players such as Russia and China in its composition will not promote the establishment of effective trade and economic cooperation.
The multilateral system of economic relations in the APR can only be strong if the interests of all states across the region are taken into account. This approach is reflected in the draft of the Beijing road map for the establishment of an Asia-Pacific free trade area. The draft is to be discussed at the forthcoming meeting of APEC leaders.” – Vladimir Putin, 11/6/14, (Source)
It is important to understand that the oligarchs whom lead each power center desire centralization and the building of a world order under the auspices of the United Nations and IMF. What we are witnessing is a competition amongst the elites over who will have the greatest power in the development and creation of such a world order. Therefore, though these power centers have very similar objectives in regard to the establishment of what is essentially world government in the long-run, they are currently in a major competition over who will dictate the rules and structure of such a system. Certainly if necessary, war is an option.
“We are well aware that the world has entered an era of changes and global transformations, when we all need a particular degree of caution, the ability to avoid thoughtless steps. In the years after the Cold War, participants in global politics lost these qualities somewhat. Now, we need to remember them. Otherwise, hopes for a peaceful, stable development will be a dangerous illusion, while today’s turmoil will simply serve as a prelude to the collapse of world order.
Yes, of course, I have already said that building a more stable world order is a difficult task. We are talking about long and hard work. We were able to develop rules for interaction after World War II, and we were able to reach an agreement in Helsinki in the 1970s. Our common duty is to resolve this fundamental challenge at this new stage of development.” – Vladimir Putin, 10/24/14, Valdai International Discussions Club (Source)
“I am certain that if there is a will, we can restore the effectiveness of the international and regional institutions system. We do not even need to build anything anew, from the scratch; this is not a “greenfield,” especially since the institutions created after World War II are quite universal and can be given modern substance, adequate to manage the current situation.
This is true of improving the work of the UN, whose central role is irreplaceable, as well as the OSCE, which, over the course of 40 years, has proven to be a necessary mechanism for ensuring security and cooperation in the Euro-Atlantic region. I must say that even now, in trying to resolve the crisis in southeast Ukraine, the OSCE is playing a very positive role.” – Vladimir Putin, 10/24/14, Valdai International Discussions Club (Source)
The existing global institutions such as the IMF and UN do not need to be re-invented as Putin states. Rather, what needs to change is the configuration and composition of such institutions to make them more representative of the new economic and geopolitical realities. This is why China, along with many other countries, and the IMF itself, have been after the United States to reform the voting structure of the IMF. The IMF, the hopeful world central bank amongst the globalist oligarchs of the world, has been a US dominated institution since its creation in 1944. The US has complete veto power in what is supposed to be a multilateral international organization. Since 2010, the US Congress has refused to approve its funding quota and the proposed governance reforms of the IMF that would give more power to countries such as China and Russia.
Here is an excerpt from a recent article published 3/17/15 on the website France 24 where US Treasury Secretary Jack Lew was quoted as saying:
“Our continued failure to approve the IMF quota and governance reforms is causing other countries, including some of our allies, to question our commitment to the IMF and other multilateral institutions that we worked to create and that advance important US and global economic and security interests.”
Lew noted that the reform delay was pushing emerging-market powers to create their own parallel multilateral financial institutions. The BRICS — Brazil, Russia, India, China and South Africa — announced their own development bank in 2014, and China recently led the launch of a separate institution, the Asian Infrastructure Investment Bank.
“The IMF reforms will help convince emerging economies to remain anchored in the multilateral system that the United States helped design and continues to lead,” Lew said.
When you consider the fact that the head of the IMF, Christine Lagarde, was quoted as saying that she wouldn’t be surprised to see the IMF move its headquarters from DC to Beijing, you have to accept the fact that the world order is indeed going through an evolutionary change.
This coincides with the growing use of China’s currency, the yuan (renminbi), in global trade and finance. There’s little doubt that the yuan will be included in the basket of currencies that makes up the SDR (Special Drawing Rights), the currency issued by the IMF that has the potential to replace the US dollar as the world reserve currency. It’s important to understand that the Chinese will do whatever they feel is appropriate in regard to the development, use, and exchange rate of the yuan, however, it seems rather logical that the Chinese would like to make the yuan at the very least a regional currency, one in which allows them to replace the use of the US dollar in their personal trading and financing (which they’re already beginning to do).
The pace of change that is taking place is accelerating at a dramatic rate. For anyone trying to pay attention it can become overwhelming to say the least.
While many people try to stay engaged with what is going economically, geopolitically, socially, technologically, etc. it can becomes rather difficult to connect the dots and formulate a vision of where we are being led. Though it is not possible to forecast with complete accuracy, we can certainly look at history and current developments in order to increase our probability of making more realistic assumptions about the future. Having a fair understanding of the various potential paths our domestic and global society will take assists in all aspects of our decision making. Staying on top of the trends and being flexible is an important factor when it comes to the overall well-being of each of us as individuals.
There’s no doubt that the complexity of our reality is compounded by the propaganda and misinformation that spews out of our main stream media. We are bombarded with headline after headline that consume us and in many ways indoctrinate us. We aren’t told the truth because the truth is the enemy in the empire of lies. God forbid the US, or the world for that matter, had an educated and properly informed populace, in particular when it comes to money, banking, and debt.
“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford
“The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth becomes the greatest enemy of the State.” – Dr. Joseph Goebbels, Nazi Propaganda Minister
In writing this piece, I have made an attempt at explaining “the game” in which the oligarchs of this world are playing. While they will stoke the flames of nationalism in order to protect their interests, the ultimate loser in all of this is the average man and woman. I ask of you to not fall for the deceit and lies which will grow ever more loudly in the years to come. Though the Russians and the Chinese are led by rather immoral and corrupt men, are we not guilty ourselves of allowing rather dishonorable and malicious men and women to “lead” us? I am of the opinion that the next Great War should not be between the oligarchs of the world who rule their states, but instead it should be a united revolution consisting of all men and women who desire to live free in what is most certainly an unfree world. Unrealistic? Perhaps. But to quote Jimmy Cliff, “I’d rather be a free man in my grave, than living as a puppet or a slave.”
“The supreme law of the State is self-preservation at any cost. All States, ever since they came to exist upon the earth, have been condemned to perpetual struggle – a struggle against their own populations, whom they oppress and ruin. A struggle against all foreign States, every one of which can be strong only if the others are weak. And since the States cannot hold their own in this struggle unless they constantly keep on augmenting their power against their own subjects as well as against other States, it follows that the supreme law of the State is the augmentation of its power to the detriment of internal liberty and external justice.” – Mikhail Alexandrovich Bakunin, The Immorality of the State, 1870
REAL VISION TV
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Watching NBC Nightly News, CNN, Fox, etc. isn’t really educating yourself. You’re certainly keeping abreast of current events, but you’re not getting the real insight nor the real story in most cases that will assist in your ability to get a clearer understanding of the true macro picture.
As an investor and fund manager, watching programming on CNBC or Bloomberg for the most part doesn’t really do me any good when it comes to actually implementing an investment strategy that not only protects my wealth, but grows it. If you’re an individual investor, investment advisor, financial planner, or fund manager yourself, the same probably applies.
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@JaredRifenbary
Real Vision Television is the world’s only Video on Demand channel for finance. Its aim is to counterbalance the dumbed-down approach of the main stream media and offer a platform for high quality, in depth, unbiased, independent and unfiltered economic and financial analysis utilizing the brightest minds in the world. It is the brain child of Raoul Pal, publisher of The Global Macro Investor and Grant Williams of Things That Make You Go Hmmm…. It was launched in September 2014 and now features subscribers in over 100 countries worldwide. New videos are added almost on a daily basis and the library in content now features over 150 interviews, think pieces and presentation from some of the world’s great minds such as Kyle Bass, Albert Edwards, Mike Novogratz, Bill Fleckenstein, John Burbank, Dylan Grice, John Mauldin, Ben Hunt, Rick Rule, etc.
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