Has the Hong Kong Protests been Part of the US Pivot to Asia?

The Russian government accuses her US contemporary of plotting Hong Kong’s pro-democracy protests...

First, here is a spectacular coverage of the rally by a drone (source vox)

Next, the alleged orchestration from the US government. From the Wall Street Journal

Russian state news outlets have begun airing reports casting the pro-democracy protests in Hong Kong as a U.S.-organized plot, echoing previous Russian coverage of similar demonstrations that have cropped up far closer to home.

The coverage reflected the Kremlin's contention that pro-democracy protests in Moscow and Kiev in recent years amounted to Western schemes designed to undermine the Russian government, as opposed to bona fide outpourings of popular discontent.

On Monday, when the demonstrations in Hong Kong dominated headlines around the world, Russia's main news broadcast on the state-controlled First Channel skipped the story. State-controlled NTV aired a brief report on the protests and little more. But by Tuesday, state-controlled channels—the primary source of news for the vast majority of Russians—were presenting the Hong Kong protesters as agents of a U.S.-organized revolt just like their counterparts in Kiev.

"According to the Chinese press, the leaders of the movement received special training from the American intelligence services," the anchor on state-owned Rossiya 24 said during a segment on the Hong Kong protests.

Later in the day, the anchor on state-controlled First Channel introduced the report from Hong Kong by suggesting the U.S. was behind the protests. "Beijing has said the protest organizers are linked to the American State Department," the anchor said. The Chinese government, however, hasn't explicitly made such an accusation.

Are these connected to the US imperial policy known as the “pivot to Asia” or the encirclement strategy or the setting up of military bases surrounding powers that have been opposed to the US hegemony? 

The Business Insider gives us some clues (bold mine) 

But China still has a military presence on the island. The protest movement is driven by concern over the mainland rolling back Hong Kong's autonomy — but in terms of hard power, Beijing has already established some crucial facts on the ground.

Beijing has had its military Hong Kong from the moment Great Britain handed the island over to China in 1997 — Beijing sent 21 armored personnel carriers and 4,000 soldiers carrying assault rifles into the territory the morning of the handover.

China has been making efforts to build up its military infrastructure in Hong Kong, including Beijing's approval of a controversial naval port in Victoria Harbor this past February. But from a purely strategic perspective, Beijing's garrison of Hong Kong might serve more as a statement of Chinese sovereignty than as a real base of operations.

We'd never know what the Chinese government's strategic perspective is.

Nevertheless, Daniel McAdams at the Lew Rockwell Blog sees more US fingerprints (bold mine)

Nevertheless, it seems Washington may have decided to execute that pivot after all — while keeping its other foot precariously planted in the Middle East and Europe. But it appears the pivot has begun in an unexpectedly aggressive manner: a US-backed full frontal assault on Chinese rule in Hong Kong.

A student protest in Hong Kong has finished its first week, taking on all the appearances of the numerous US-backed color revolutions that have unseated governments with which Washington has a beef from Georgia to Ukraine to Egypt and beyond. The protesters demand that existing portions of the Basic Law agreed upon when Hong Kong was handed back to China from former British imperial control be changed to allow sooner direct election of the chief executive of the Hong Kong Special Administrative Region.

As with previous color revolutions, protesters represent a tiny minority of the actual population yet they claim to speak with the voice of “the people.”

These voices of the people again seem to have been trained by Washington, however.

As the Moon of Alabama blog has pointed out, the US government-funded National Endowment for Democracy — AKA “regime-change central” — has poured hundreds of thousands of dollars into stoking the regime change flame in Hong Kong. For example, in 2012 alone the US government sent half a million dollars to support these regime-change movements in Hong Kong. Here is the grant listing:

National Democratic Institute for International Affairs
$460,000
To foster awareness regarding Hong Kong’s political institutions and constitutional reform process and to develop the capacity of citizens – particularly university students – to more effectively participate in the public debate on political reform, NDI will work with civil society organizations on parliamentary monitoring, a survey, and development of an Internet portal, allowing students and citizens to explore possible reforms leading to universal suffrage.

In addition, Joshua Wong, the 17 year-old leader of main student group Scholarism has beenaccused of maintaining close US government ties, including regular meetings at the US Consulate in Hong Kong.

The US Consulate and other US government bodies also fund the Hong Kong-America Center, which is run by a former US diplomat and brings Chinese students to the United States to “study” about democracy (and perhaps how to launch a color revolution?). The Ford Foundation, long associated with the US Central Intelligence Agency, is also a major sponsor of the organization’s student exchange programs.

As pointed out by color revolution observer Tony Cartalucci, leaders of the main Hong Kong protest group, Occupy Central, have long ties to US government regime change money.Writes Cartalucci:

Occupy Central’s self-proclaimed leader, Benny Tai, is a law professor at the…University of Hong Kong and a regular collaborator with the NDI-funded Centre for Comparative and Public Law (CCPL)…

Recent events in Hong Kong follow a pattern of US-engineered regime change operations, where naive students and other youth are encouraged to be the public face of protests, which start out preaching non-violence only to be very soon shunted aside by far more radical elements who provide the real muscle behind the regime change. This happened in Egypt, with the US-sponsored April 6 Movement, it happened in Syria with the initial peaceful protests soon taken over by armed (and also US-backed) radicals, and it happened in Ukraine, where the Maidan protests soon gave way to violent, armed groups sporting neo-nazi tattoos and radical ideologies.

If the pattern is repeating in Hong Kong, we will soon see an uptick in violence, meant to provoke authorities into a crackdown. This will be followed by strong condemnation from the United States government, which urges foreign authorities to refrain from what US police routinely do during such situations: exercise extreme violence. US sanctions may follow if the situation can approach terminal velocity.

And, because Color Revolutions 2.0 have adopted extreme violence as a critical element, look for a great deal of bloodshed. Finally, some observers have said that the Chinese government would never let this situation get out of hand. Don’t be fooled. The exercise is well practiced. The sclerotic Chinese authorities will likely not see what has hit them. Nobody expects regime change.

Remember, the HKMA have already raised “risks” concerns on their economy from “rising interest rates” due to “historic credit growth”. This means the ongoing protests may serve as a trigger for her domestic bubble to burst as her economy goes into a standstill. 

And bursting of Hong Kong’s bubble will ricochet to the mainland thereby aggravating China’s struggling debt burdened economy that may lead to the mainland’s economic and financial disaster.

If this has been part of the covert “low intensity conflict” being waged by Washington’s war mongers, then they may be underestimating the catastrophic impact from a possible Hong Kong-China economic collapse, which is likely spread not only to the region but to the world.

Given the vulnerability of the global markets and economy to risks, an escalation of Hong Kong’s protest may lead to the global Black Swan event.

More importantly, if the Chinese government will be convinced that the US has a hand on these, then we may expect more indirect reprisals via increased heated confrontations in South China Sea thereby increasing risks of war.

Nonetheless, the US has an indirect hand in the inflation of Hong Kong’s bubble, as I recently noted “Interest rate increases would only expose on the massive malinvestments spawned, nurtured and accumulated from the US Fed’s zero bound rates which has been imported by Hong Kong’s economy and financial markets via the US dollar peg.”

And Hong Kong’s property bubble has been part of the protesters agenda which reveals how bubbles weigh on social stability.

From another Wall Street Journal article: "another frequent gripe among Hongkongers, and especially young residents, is that property prices are too high and are inflated by money from mainland Chinese investors"

Bubbles lead to social instability and become fertile grounds for manipulations from external political forces

US Government’s Frankenstein: How the ISIS Emerged from the ‘Sunni Turn’

Like Osama Bin Laden, the ISIS monster signifies the unintended consequences that has emerged from perverted US foreign imperialist policies in the Middle East.

Writes author and editor Justin Raimondo of the Antiwar.com (ht: Contra Corner) [bold mine]

ISIS didn’t just arise out of the earth like some Islamist variation on the fabled Myrmidons: they needed money, weapons, logistics, propaganda facilities, and international connections to reach the relatively high level of organization and lethality they seem to have achieved in such a short period of time. Where did they get these assets?

None of this is any secret: Saudi Arabia, Qatar, and the rest of the oil-rich Gulf states have been backing them all the way. Prince Bandar al-Sultan, until recently the head of the Kingdom’s intelligence agency – and still the chief of its National Security Council – has been among their biggest backers. Qatar and the Gulf states have also been generous in their support for the Syrian jihadists who were too radical for the US to openly back. Although pressure from Washington – only recently exerted – has reportedly forced them to cut off the aid, ISIS is now an accomplished fact – and how can anyone say that support has entirely evaporated instead of merely going underground?

Washington’s responsibility for the success of ISIS is less direct, but no less damning.

The US was in a de facto alliance with the groups that merged to form ISIS ever since President Barack Obama declared Syria’s Bashar al-Assad "must go" – and Washington started funding Syrian rebel groups whose composition and leadership kept changing. By funding the Free Syrian Army (FSA), our "vetted" Syrian Islamists, this administration has actively worked to defeat the only forces capable of rooting out ISIS from its Syrian nest – Assad’s Ba’athist government. Millions of dollars in overt aid – and who knows how much covertly? – were pumped into the FSA. How much of that seeped into the coffers of ISIS when constantly forming and re-forming chameleon-like rebel groups defected from the FSA? These defectors didn’t just go away: they joined up with more radical – and militarily effective – Islamist militias, some of which undoubtedly found their way to ISIS.

How many ISIS cadres who started out in the FSA were trained and equipped by American "advisors" in neighboring Jordan? We’ll never know the exact answer to that question, but the number is very likely not zero – and this Mother Jones piece shows that, at least under the Clinton-Petraeus duo, the "vetting" process was a joke. Furthermore, Senator Rand Paul (R-Kentucky) may have been on to something when he confronted Hillary with the contention that some of the arms looted from Gaddafi’s arsenals may well have reached the Syrian rebels. There was, after all, the question of where that mysterious "charity ship," the Al Entisar, carrying "humanitarian aid" to the Syrian rebels headquartered in Turkey, sailed from.

Secondly, the open backing by the US of particular Syrian rebel groups no doubt discredited them in the eyes of most Islamist types, driving them away from the FSA and into the arms of ISIS. When it became clear Washington wasn’t going to provide air support for rebel actions on the ground, these guys left the FSA in droves – and swelled the ranks of groups that eventually coalesced into ISIS.

Thirdly, the one silent partner in all this has been the state of Israel. While there is no evidence of direct Israeli backing, the public statements of some top Israeli officials lead one to believe Tel Aviv has little interest in stopping the ISIS threat – except, of course, to urge Washington to step deeper into the Syrian quagmire.

In a recent public event held at the Aspen Institute, former Israeli ambassador to the US Michael Oren bluntly stated that in any struggle between the Sunni jihadists and their Iranian Shi’ite enemies, the former are the "lesser evil." They’re all "bad guys," says Oren, but "we always wanted Bashar Assad to go, we always preferred the bad guys who weren’t backed by Iran to the bad guys who were backed by Iran." Last year, Sima Shine, Israel’s Minister of Strategic Affairs, declared:

"The alternative, whereby [Assad falls and] Jihadists flock to Syria, is not good. We have no good options in Syria. But Assad remaining along with the Iranians is worse. His ouster would exert immense pressure on Iran."

None of this should come as much of a surprise to anyone who has been following Israel’s machinations in the region. It has long been known that the Israelis have been standing very close to the sidelines of the Syrian civil war, gloating and hoping for "no outcome," as this New York Times piece put it.

Israel’s goal in the region has been to gin up as much conflict and chaos as possible, keeping its Islamic enemies divided, making it impossible for any credible challenge to arise among its Arab neighbors – and aiming the main blow at Tehran. As Ambassador Oren so brazenly asserted – while paying lip service to the awfulness of ISIS and al-Qaeda – their quarrel isn’t really with the Arabs, anyway – it’s with the Persians, whom they fear and loathe, and whose destruction has been their number one objective since the days of Ariel Sharon.

Why anyone is shocked that our Middle Eastern allies have been building up Sunni radicals in the region is beyond me – because this has also been de facto US policy since the Bush administration, which began recruiting American assets in the Sunni region as the linchpin of the Iraqi "surge." This was part and parcel of the so-called "Sunni turn," or "redirection," in Seymour Hersh’s phrase, which, as I warned in 2006, would become Washington’s chosen strategy for dealing with what they called the "Shia crescent" – the crescent-shaped territory spanning Iran, Iraq, Syria, and parts of Lebanon under Hezbollah’s control, which the neocons began pointing to as the Big New Threat shortly after Saddam Hussein’s defeat.

The pro-Sunni orientation of US policymakers wasn’t reversed with the change of administrations: instead, it went into overdrive, especially after the much-vaunted Arab Spring. Both Hillary Clinton, then Secretary of State, and David Petraeus, who had yet to disgrace himself and was still CIA director, lobbied intensively for more support to the Syrian rebels. The Sunni Turn took a fateful turn when the Three Harpies of the Apocalypse – Hillary, Susan Rice, and now UN ambassador Samantha Power – hectored Obama into pursuing regime change in Libya. In this case the US and its NATO allies acted as the Islamist militia’s air force while supplying them with arms on the ground and diplomatic support internationally.

Yet even as Libya was imploding from the effects of its "liberation," the neocons and their "liberal" interventionist allies in the Democratic party – and in the highest reaches of the Obama administration – were building support for yet another fateful "Sunni turn," this time in Syria. Caving to this pressure, the Obama administration decided to act on accusations of poison gas supposedly used by Assad against the rebels to directly intervene with a bombing campaign modeled along Libyan lines. Only a huge public outcry stopped them.

ISIS could never have been consolidated in the form it has now taken without the strategic disaster of Washington’s "Sunni turn." While the US may have reason to regret this harebrained strategy, it’s far too late for that – and it looks to me like our "allies" in the region, including Israel, aren’t about to turn on a dime at Obama’s command.

Pls read the entire article here

Iraq War: Washington’s Confused Policy

Analyst David Stockman explains of how US foreign imperial policy in Iraq has been one colossal jumbled mess. The US government has not only been bombing their own weapons, they are bombing jihadist troops which they previously trained and armed at the expense of the opposing sect which the US government has previously fought against but ironically are now protecting. 

As a side note, the US bombing of own weapons means more business for the the military industrial complex.

Back to Mr. Stockman 

But then again, ISIS got provisioned by none other than the Iraqi Army. The latter not only dropped its uniforms for civvies during the battle for Mosul, but also left behind armored Humvees, heavy artillery, night vision systems, state of the art firearms and much else of like and similar nature. Nor was this the first time that the Iraqi Army disarmed itself unilaterally. A while back they also surrendered their uniforms and guns when another American President—George W. Bush—-bombed them.

That was called “shock and awe”. Afterwards, the remnants of the Iraqi army must have found it indeed shocking and awesome that Washington immediately pivoted— after hanging the country’s leader—and spent $25 billion re-equipping and training them in brand new uniforms and with far better weapons.

Fast-forward to 2014. The hasty hand-off of these American weapons to ISIS during its June blitzkrieg was easy enough to explain. On their way out of Baghdad, the Washington “nation builders” had equipped and trained a native army so that it could defend a “nation” which did not exist. What passed for “Iraq” was some very long, straight lines drawn on a map exactly 98 years ago by the British and French foreign offices as they carved up their winnings from the Ottoman Empire. What passed for governance within these so-called Sykes-Picot boundaries was a series of kings, generals and dictators—- culminating in Saddam Hussein—-who ruled from the barrel of whatever gun had been supplied by the highest bidder among the Great Powers.

Thus, Brezhnev gave the Iraqi generals weapons in the 1970s. In the 1980s, President Reagan joined in, green lighting exports of the components and precursors for chemical weapons and providing Saddam with the satellite-based intelligence to practice using them on his “enemies” ( i.e. teenage boys in the Iranian Army) before he used them on his own people (i.e. the Kurds and the Shiite).

Not surprisingly, after the US had “liberated” Iraq from 90 years of dictatorship—democracy took hold with lightening speed subsequent to the 2011 departure of American GIs. The “rule of the majority”—that is, the Shiite majority—-soon ripped through most governmental institutions, but especially the military. In short order the “Iraqi” army became a Shiite army. Hence the precipitous surrender and flight from the battles of Mosul and other northern cities. That was Sunni and Kurd territory—–not a place where Shiite soldiers wanted to be shot dead or caught alive.

The more interesting mystery is how the ISIS fighters learned how to use Uncle Sam’s advanced weaponry so quickly. Perhaps the CIA knows. It did train several thousand anti-Assad fighters in its secret camps in Jordan in preparation for Washington’s “regime change” campaign in Syria. Undoubtedly, in the fog of war—-especially the sectarian wars in the Islamic heartland that have been raging for 13 centuries—it is difficult to have friend and foe vetted effectively.

Please read the rest here

Simon Black: The US Dollar is Going Down

Sovereign Man’s Simon Black predicts (bold mine)

So the government of Switzerland recently signed a bilateral currency swap agreement with China, enabling the two countries to buy and sell up to 150 billion RMB or 21 billion Swiss Francs of each other’s currencies.

Switzerland is just the latest to join the queue, as nearly 25 other central banks already signed similar agreements with China.

Every few weeks, and with increasing frequency, we’re hearing news of the next country that is accepting China’s future financial primacy.

There’s no denying that both sovereign nations and market participants are accepting the validity of the RMB as a major trade currency. This is no longer an anomaly, but part of an obvious trend.

To be fair, it’s not that the RMB is a shoe-in for the next global reserve currency—because the country and its currency undoubtedly both have problems.

What’s really being revealed with these latest developments is relative confidence.

It may not be clear whether or not the RMB will make it to the top, but what is clear to everyone is that the USD is going down.

Here we see ambitious countries like the UK and Switzerland proactively trying to adapt to and take advantage of the changing financial climate.

The sole tactic of the US government, on the other hand, is to lash out at countries which make them feel threatened.

They rally the whole world against Russia for acts of war. They blast China as a currency manipulator.

And all of this as if the US wasn’t dropping bombs by remote control drone… or heavily manipulating its own currency.

This has accomplished nothing other than to demonstrate just how weak and insecure the former financial superpower has become.

Continuing to believe that the dollar is going to maintain its global reserve status is now not only foolish, but financially hazardous. To countries, businesses and individuals.

Those that accept these changes and try to get out in front of this trend will do incredibly well. They are the ones who will survive intact when the financial system resets.

Those who ignore the trend do so at their own peril.

I would add that aside from US balance sheet problems and the Fed policies inflating of the mother of all bubbles, financial imperialism via intrusive laws like FACTA and possibly Dodd Frank and brinkmanship foreignimperialist policies as (noted by Mr. Black) that has prompted for geopolitical factionalism which has only given rise of protectionism risks and of a World War as previously discussed are negatives for the US dollar overtime.

Michael Rozeff: US Implements the Wolfowitz Doctrine

Retired Professor and author Michael Rozeff on the undeclared "Wolfowitz Doctrine" as blueprint to US imperial foreign policy.

From the Lew Rockwell Blog (bold mine)

The U.S. is implementing the Wolfowitz Doctrine. It aims to maintain the U.S. as the sole superpower and to preclude any regional powers. It wants no rivals such as Russia, Iran and China. This agenda is primary for the U.S. Other purported goals of foreign policy such as anti-terrorism, furthering democracy, advancing human rights, and the self-determination of peoples are useful only insofar as they advance the superpower status of the U.S. and the elimination of rivals. Whenever the Wolfowitz Doctrine can be implemented by sacrificing anti-terrorism, democracy, human rights and self-determination, the U.S. does not hesitate to sacrifice them. This is why the U.S. appears to be so hypocritical.

Here is an example out of today’s news. The U.S. condemns separatism in Ukraine and aids Kiev in attacking its own people with heavy and advanced weapons of all kinds. This is because the superpower agenda is served by steering Ukraine into the Western camp. At the very same time, the U.S. condemns China for indicting a professor who is a vocal separatist and critical of Chinese policy in Xinjiang. Hence, we observe the U.S. against separatism in Ukraine but supporting it in China. This is because the U.S. is applying pressure on China wherever it thinks this will succeed in diminishing China as a power. If China has to contend with breakaway movements, the U.S. agenda is advanced.

Numerous other instances of U.S. hypocrisy can be understood in this way. The U.S. will support democracy but then ignore elections and support dictators. It will bemoan the deaths of children in some instances but support their being killed in others. It will condemn interfering in domestic politics in some countries but approve of it in other instances. It will condemn terrorism and then arm terrorists. This is because the overriding agenda is the Wolfowitz Doctrine.

The U.S. supplies the Israeli military with aid and ammunition so as to maintain Israel in the region and prevent regional powers like Iran from growing in strength. When Israel attacks Gaza, the U.S. approves a certain amount of death and destruction. However, if Israel’s killing becomes so excessive that it promises to cause a backlash that weakens Israel or gives rise to an anti-Israel movement that is more radical than Hamas, then the U.S. will switch and disapprove of Israel’s attack and seek to stop it. The criterion being used is that of the supremacy of U.S. power in a worldwide game of power.

This is not to say that the different divisions in Washington are united in this goal or united in how to play this game. It’s not to say that the Wolfowitz Doctrine is sensible. It’s not to say that important leaders are playing this game effectively. In most instances, they are playing it foolishly, rashly, dangerously and in a very costly way that results in diminishing U.S. power. This exclusive superpower goal and game generally reduces American well-being in numerous ways. From that standpoint, the Wolfowitz Doctrine is deeply flawed.

Daniel Adams also at the Lew Rockwell Blog also reveals that the US government just gave a green light to the Israeli government for the use armaments from a US government owned US $ 1 billion cache or “War Reserves Stocks Allies-Israel (WRSA-I) in the ghastly war with the Hamas at the Gaza. Reportedly 80% of the fatalities have been civilians as the military industrial complex benefits from sale of arms.

Sad to see how political (and politically based economic) greed has led to senseless slaughter of innocent lives.

David Stockman: The Ukrainian crisis is the outcome of the mindless 20-year drive of the Warfare State to push an obsolete NATO to the very doorstep of Russia

The public loves the visible, so they are easily swayed by media who sell political messages by focusing on the visible and the sensational. Yet it has hardly been reckoned that much of social activities have been a product of history.  This means that to ignore history is to neglect an important component of reality.

In the case of the Ukraine crisis, which risks morphing into World War III, analyst David Stockman at his Contra Corner website explains how the past and present US foreign policy warfare state-imperialism agenda has brought upon the current tensions. The key excerpts from the article (bold mine, italics original)

The Kiev government is a dysfunctional, bankrupt usurper that is deploying western taxpayer money to wage a vicious war on several million Russian-speaking citizens in the Donbas—-the traditional center of greater Russia’s coal, steel and industrial infrastructure. It is geographically part of present day Ukraine by historical happenstance. For better or worse, it was Stalin who financed its forced draft industrialization during the 1930s; populated it with Russian speakers to insure political reliability; and expelled the Nazi occupiers at immeasurable cost in blood and treasure during WWII. Indeed, the Donbas and Russia have been Saimese twins economically and politically not merely for decades, but centuries.

On the other hand, Kiev’s marauding army and militias would come to an instant halt without access to the $35 billion of promised aid from the IMF, EU and US treasury. Obama just needs to say “stop”. That’s it. The civil war would quickly end, permitting the US, Russia and the warring parties of the Ukraine to hold a peace conference and work out the details of a separation agreement.

After all, what is so sacrosanct about preserving the territorial integrity of the Ukraine? Ever since the middle ages, it has consisted of a set of meandering borders in search of a nation that never existed owing to endemic ethnic, tribal and religious differences. Its modern boundaries are merely the fruit of 20th century wars and  the expediencies of a totalitarian state during the decades of its rise, rule and disintegration.

There was until recently a neighboring “state” of equally artificial lineage called Czechoslovakia. It was carved out of the German and Austrian empires by the vengeful victors at Versailles, urged on by scheming Czech nationalists who coveted the resources of the Slovaks. But notwithstanding revolutions, the Stalinist oppression, the Cold War, the Prague Spring and all the rest of the 20th century mayhem—-the machinations at Versailles didn’t birth a state that was viable or sustainable. Accordingly, separation has been had, and the parties are better off for it—as are its neighbors and the larger world.

And on the topic of partition there is the ghost of Yugoslavia–another state that emerged in whole cloth  from the madness of Versailles. Yes, it has been partitioned now into half a dozen smaller states—-Slovenia, Macedonia, Serbia, Montenegro, Croatia, Kosovo and Bosnia. But the operative point is that the partitioner was none other than Washington and its European groupies who had no regard for those happenstance 20th century-made borders when it suited their purpose. 

So the sanctimonious yelping from Washington about the sacred territorial integrity of the Ukraine is ahistorical tommyrot. In fact, however, it is a thin fig leaf for a far more insidious purpose. Namely, the self-aggrandizement of the Warfare State machinery that was left stranded in Imperial Washington without purpose or justification when the Cold War ended two decades ago.

So the Warfare State machinery—including its spy network, state department, aid agencies and NGO supplicants— invented enemies and missions to justify their continued existence and their massive dissipation of fiscal resources. Those are upwards of $1 trillion annually if you count everything including veterans and homeland security.

Thus, after arming the mujahedeen in Afghanistan against the Soviets in the 1980s, their Taliban successors were deemed our enemy after the cold war ended—even though they never poised a scintilla of threat to the citizens of Lincoln NE or Worcester MA.  So too with our 1980′s ally Saddam Hussein, and also with Khadafy, Assad and the warring tribal potentates and cutthroats of Yemen, Somalia and Waziristan, to name just a few.

But it is in eastern Europe that the Warfare State machinery has most egregiously made an enemy and mission out of whole cloth. As the Cold War was drawing to a close in the late 1980s, then Secretary of State James Baker made a sensible deal with Gorbachev. In return for Soviet acquiesce in the reunification of Germany, the US would insure that NATO did not expand by a “single inch”. 

Since then, of course, there has been a senseless bipartisan betrayal and stampede in the opposite direction. Starting under Clinton and extending through Bush and Obama, NATO has been expanded from 16 nations at the end of the Cold War to 28 countries today. 

Yet the very recitation of its new members underscores the historical farce that this needless expansion amounted to. For better or worse, the formation of NATO in the late 1940′s involved what were perceived to be vital national security interests against a Stalinist policy that by the lights of the hawks and militarists of the day amounted to a violation of his Yalta obligations. Accordingly, NATO constituted an alliance of real nations—England, France, Italy and West Germany—-that could make a meaningful contribution to collective security against the perceived Soviet threat of the times.

But Albania, Bulgaria, Latvia, Slovakia and Slovenia?  And that is not to forget Moldova, Georgia, Macedonia and the Ukraine—all of which are still coveted for membership by the NATO apparatchiks. What could these micro-states possibly contribute to American security? That’s especially the case since the Warsaw pact had been dissolved; the Soviet Empire has erased from the pages of history; and the Russian successor was left with an Italian sized GDP encumbered with the destructive legacy of a state-dominated economy that had been appropriated by a passel of thieves, opportunists and oligarchs.

In short, today’s Ukrainian crisis is the outcome of the mindless 20-year drive of the Warfare State to push an obsolete NATO to the very doorstep of Russia, and into the messy remnants of the Soviet disintegration. Stated differently, Putin has been in power for 15 years, yet during 13 of those years there was no hue and cry from Washington, London and Brussels that he was an incipient Hitler bent on sweeping conquest. Even the so-called invasion of Georgia in 2008 was a tempest in a teapot provoked by local pro-Russian separatists who did not want to be ruled by a de facto American interloper in Tbilisi.

Pls read the entire article here

Quote of the Day: Why Was Iran Named in Bush’s Axis of Evil?

Washington included Iran in the axis of evil because Iran had the audacity, and to Washington the impudence and gall, to have a revolution that threw out Washington’s hand-picked ruler of Iran. Iran defied Washington. It sought to be its own power and to have its independence. It withdrew from Washington’s orbit of control. Iran sought to have its own policies. It was Iran’s defiance that Bush could not forget or forgive, because that was a direct challenge to the boss of all bosses, to the number one man. Washington’s the top dog and it has to show it’s the top dog. It can’t let some upstart country challenge it. And in the years following its 1979 revolution, Iran mounted some definite challenges to Washington’s blueprint for it and for the Middle East.

Every item in the Frontline list, be it real or imagined, important or unimportant in and of itself, represents a challenge to Washington’s power and view of the world. Every item is therefore an act of defiance as Washington sees and experiences it. This is why Bush included Iran in his axis of evil.

Washington hates defiance. This explains much of its behavior such as with respect to Assange, Manning, Snowden, whistleblowers, journalists, and others.

This is from retired finance and economic professor Michael S. Rozeff at the Lew Rockwell Blog

Iraq War: Dick Cheney’s predictions come true

Mises Academy director Daniel Sanchez at the lewrockwell.com evaluates the predictions of former US VP Dick Cheney

In a 1994 interview, Cheney was taken to task over this “missed opportunity” by the neocon American Enterprise Institute. Cheney defended the decision using the following predictions:

Once you got to Iraq and took it over, took down Saddam Hussein’s government, then what are you going to put in its place? That’s a very volatile part of the world, and if you take down the central government of Iraq, you could very easily end up seeing pieces of Iraq fly off: part of it, the Syrians would like to have to the west, part of it — eastern Iraq — the Iranians would like to claim, they fought over it for eight years. In the north you’ve got the Kurds, and if the Kurds spin loose and join with the Kurds in Turkey, then you threaten the territorial integrity of Turkey.

Let’s look at the events of this past week, and see how clear Cheney’s crystal ball was.

Cheney predicted Syrians taking over western Iraq. Western Iraq, including oil-rich Mosul (the second-largest city in the country), has indeed been taken over by a force entering from Syria: namely, ISIS (the Islamic State of Iraq and Syria), an Al Qaeda splinter group (and beneficiary of American military aid to the rebel forces in the Syrian civil war). True, it’s not the Syrian state, and only partially consists of Syrian people. But he got the geography right, and the demographics partially right. 

Check.

Cheney predicted the Iranians taking eastern Iraq. The U.S. war that overthrew Saddam’s Sunni Muslim regime put the government and the capital in the east, Baghdad, into the hands of a Shi’ite regime allied with Shi’ite Iran, who backed the election of the current prime minister. And now Iran has actually deployed troops to combat ISIS into Iraq from the east. With the U.S. ground presence already mostly gone, and now rapidly evacuating, and Iraqi government soldiers stripping off their uniforms and abandoning their U.S.-supplied weapons to ISIS at the first sight of them, the Iranian troops are becoming the only serious ground force in the east.

Check. 

Finally, Cheney predicted the Kurds spinning loose and being a threat in the north. The Kurds have indeed become autonomous, and recently seized the northern city of Kirkuk for themselves, after it was abandoned by Iraqi government forces fleeing the oncoming ISIS forces.

Check. That’s 3 for 3. 

Pls read the rest here

Watch Out, Surging Oil Prices will COMPOUND on Inflation Risks!

Low-flation eh?

From Reuters:

Oil prices jumped to nine-month highs on Thursday, as concerns mounted that escalating violence in Iraq could disrupt oil supplies from the second-largest OPEC producer.

Sunni Islamist militants, who took over Iraq's second-biggest city Mosul earlier this week, extended their advance south toward Baghdad and surrounded the country's largest refinery in the northern town of Baiji on Thursday.

Let us see these via charts.

The US crude benchmark the WTIC just had a breakout!

US gasoline likewise posted a seeming breakout, which will likely be confirmed or falsified during the coming sessions.

This will ADD to the growing inflation pressures in the US which will jeopardize the stock market bubble.

Even Europe's Brent Crude seems as testing a critical resistance level.

The question is will troubles in Iraq signify a temporary event or will these escalate?

The recent twist of events reveals how the US Bush-Obama war on Iraq has not only been a dramatic failure of US interventionist policies, but a blowback, as the so-called terrorists seemingly beating back the Americans at their own game.  Talk about Karma.

These also seem as the unintended consequence of the confused and self contradictory imperial policies by the US government in the region.

Paradoxically, the client state or the US sponsored Iraq government has been fighting off insurgents whom has relations with US backed rebels in Syria!

From the PBS Frontline (May 2014): The interviews are the latest evidence that after more than three years of warfare, the United States has stepped up the provision of lethal aid to the rebels. In recent months, at least five rebel units have posted videos showing their members firing U.S.-made TOW anti-tank missiles at Syrian positions…many both inside and out of government fear U.S.-provided weapons could make their way into extremist hands, particularly in a place like Syria, where alliances and foes change with breakneck fluidity. Moderate rebel groups have worked closely with the al Qaida-aligned Nusra Front and the Islamic Front, one of whose factions, Ahrar al Sham, includes al Qaida members among its founders."

Now Iraq’s rebels could be using some of the US provided weapons in their war to take control of Iraq via Baghdad. 

Al Qaida-inspired militants from ISIS, the Islamic State of Iraq and al-Sham, have reportedly seized US Black Hawk helicopters, looted 500 billion Iraqi dinars - the equivalent of $429m (£256m) - from Mosul's central bank, has now laid siege or surrounded Iraq's largest refinery in Baiji, and may have unleashed a sectarian war.

Reports the Zero Hedge: As the WSJ reports, after hard core Al Qaeda spin off ISIS (no relation to Sterling Archer) took over Saddam's home town of Tikrit yesterday, Iraq edged closer to all-out sectarian conflict on Thursday as Kurdish forces took control of a provincial capital in the oil-rich north and Sunni militants vowed to march on two cities revered by Shiite Muslims.  Kurdish militia known as peshmerga said they had taken up positions in key government installations in Kirkuk, as forces of the Shiite-dominated government of Prime Minister Nouri al-Maliki abandoned their posts and fled in fear of advancing Sunni militants, an official in the office of the provincial governor said.

Cumulative years of US interventions seem to have triggered a regional conflagration.

Yet the US government will continue to intervene as wars signifies as good business for the politically influential military industrial complex. President Obama has pledged to support the incumbent Iraq government, but did not offer ground troops.

Aside from the renewed outbreak violence in Iraq, one ramification of the US –Russia proxy civil war in Ukraine has been a test of mettle between two major military powers: The US government acknowledged that they have scrambled jet fighters to intercept 4 Russian bombers who flew nearly 50 miles off the California Coast. Wow! Russians frontally testing the US.

As geopolitical risks have been simmering, the effects of which has been to disrupt supply chains (as oil), thereby compounding on pressures to global consumer price inflation.

But for the don’t worry be happy crowd, whether in the Philippines or the US or elsewhere, various additional risks aside from inflation, such as protectionism or war should be dismissed because stocks are bound to rise forever, based on the kooky idea of "don't fight the FED" or central banks! Maybe they think that central banks can print oil too.

Rob Schneider: America is Sliding Very Fast Towards Fascism

Even celebrity American comedian Rob Schneider, in a recent interview with Chris Stigall, recognizes how freedom is fast being eroded and transformed into fascism in America. Fascism, according to Wikipedia, is a “form of radical authoritarian nationalism”. Known Fascist regimes include Italy’s Benito Mussolini and Germany’s Adolf Hitler 

From CBS

Chris Stigall spoke with comedian Rob Schneider on Talk Radio 1210 WPHT about the struggle comedians face in today’s current political environment.

Schneider struck on ominous tone when discussing the path he sees the country on.

“Democracies don’t end well. We are sliding very fast towards fascism. It’s an ugly kind of thing. There’s this kind of mob mentality that we have to be careful of,” he said.

He believes comedians are pressured toward one side of the political spectrum.

“There’s a polarization that’s happening…I do think you look can look at government and go, ‘Wow, it is out of control now,’ and if you do criticize or tend to be not directly along a liberal stand, you can get murdered,” Schneider commented.

Schneider was very critical of the President’s handling of the economy and he feels certain policies are impacting businesses.

“There’s not one segment of business under the Obama administration that hasn’t been hurt…he attacks for-profit schools, which is totally an elitist thing from a guy that went to Harvard. I think for free, by the way,” Schneider said.

He was also critical of the media for being overly influenced by the government and not standing up for the American people.

This looks intriguing (but praiseworthy) because Mr. Schneider seems to be playing a role of an industry iconoclast, particularly when he censures media for being influenced by politics and the mob mentality (where political media plays a big role in shaping opinions).

Fascism is not just a political aspect, it covers economic dimensions via massive interventionism which compromises private property but gives marginal leeway to entrepreneurs. Crony capitalism is a common feature of such state determined political economic arrangement.

Finally, if the political trend in the US has been in transition to fascism, what would characterize her foreign policies? Would her allies be transformed into fascist satellite states too?

Behind Ukraine’s Bank Run

The emerging market Bank run has now spread to political crisis stricken Ukraine. 

From Bloomberg:

Ukraine’s deadly clashes prompted OAO Sberbank to stop offering loans to individuals in the country less than one year after it opened 50 branches there, Chief Executive Officer Herman Gref said.

Russia’s biggest bank, which closed three branches in downtown Kiev this week as violent clashes killed at least 77, has also witnessed a “run on” its automatic teller machines in the country, Gref told reporters in Moscow today. The hryvnia, which is managed by Ukraine’s central bank, plunged almost 8 percent against the dollar this year and non-deliverable forward rates show it will slump another 11 percent in three months….

Growing pressure on the currency could lead individuals to rush to pull money from Ukrainian bank accounts, Dmitri Barinov, a money manager overseeing $2.5 billion of debt at Frankfurt-based Union Investment Privatfonds, said Feb. 18.

Political instability has been blamed on the “bank run” while ignoring the fact that Ukraine has been in a recession even prior to the current political crisis. 

The World Bank during the 2nd quarter of 2013 outlook even notes of the Ukraine’s government’s spendthrift ways even during the recession. (bold mine)

Weak economic performance resulted in a significant budget shortfall in the second half of 2012. Actual revenue of the central budget was UAH 33 billion (2.5 percent GDP) lower than initial budget plan because both real GDP growth and inflation were lower than the forecast on which the budget was based. Meanwhile, expenditures remained inflated due to a hike in social spending (by over 2 percentage points of GDP) introduced in Spring 2012. Fiscal deficit (general government definition) reached 4.5 percent GDP in 2012. In addition, structural deficit of the state-owned company “Naftogaz” was not addressed.

I also pointed out that this has not just been the government, but the private sector sector has been engaged in a debt financed-borrowing spree.

Ukraine’s credit as % to gdp as of 2012 (based on World Bank Data)

Ukraine’s banking sector credit as % of gdp as of 2012.

As you can see Ukraine’s debt levels in both dimensions has more than doubled since 2005.

What the credit inflation has done? Well it has inflated two incredible stock market bubbles in a span of about 5-6 years (2007-12).

Like the first stock market bubble collapse, the second coincided with a recession. The imploding stock market bubbles has now segued into a currency meltdown.

The question unaddressed is how much of money has been lent by the banks to the private sector that had been funneled to inflate such stock market bubbles? How much had been borrowed in foreign currencies?

To what degree have Ukraine’s banks have been affected by deterioration in loan quality? 

So given Ukraine’s Wile E. Coyote moment, 'bank runs' would seem as natural consequence as bank assets deteriorate in the face of fractional reserve banking, a recession, escalating shortage of liquidity and debt deflation.

And banks can hardly rely on the public sector support because Ukraine government has been cash strapped, she desperately sealed a financing deal with Russia in December 2013

In short Ukraine’s economic crisis, primarily due to inflationism or bubble blowing policies, set stage for this political crisis. The likely ramification from the Ukraine's economic crisis is that more bank runs will occur.

I don’t deny that politics have become a factor. But this is a consequence rather than the cause. 

Ukraine’s economic crisis has only deepened the polarization of Ukraine’s fragmented society via partisan politics. Geopolitics may even have been involved here. Some have even alleged that the US has been operating behind the scenes in fomenting another Orange revolution

Because of Russia’s intensive exposure in Ukraine in terms of culture (Russian population in Ukraine) and embedded interests in the energy sector, aside from perceived threats from a supposed US ‘encirclement strategy’ of Russia, where a new US friendly government in Ukraine will be enticed to join NATO.…Russia has reportedly declared that she is “prepared to fight a war over the Ukrainian territory” using the Russian population as cover.

So Ukraine’s crisis can easily metastasize into a international geopolitical crisis. 

And while Ukraine has just signed a peace deal, this serves as no certainty that the political crisis has passed. Russia, a major influence to Ukraine's politics, didn’t join the accord.

What is likely to aggravate the political conditions will be sustained economic uncertainty brought about by Ukraine’s earlier bubble blowing policies amidst heated tensions from culture based politics inflamed by geopolitical interventions.

Anyway the above charts from the World Bank demonstrates why relative debt position seem irrelevant in the measuring of credit risks.

Ukraine’s debt in terms of nominal USD stock has been lower than many developing nations or emerging markets equivalent. This can also be seen in terms terms of % of gdp but at a much lesser scale. Yet Ukraine’s government recognized her near bankruptcy last year.

Debt tolerance has been always based on independent valuations from creditor’s perception of the capacity and willingness of debtors to settle indentures which differs from country to country. When a critical mass of creditors begin to call on the loans, the crisis becomes apparent--one symptom "bank runs".

Going back to the bank run, again if Ukraine’s economic crisis intensifies then more bank runs should be expected.

Yet increasing accounts of emerging market bank runs such as in Thailand, Kazakhstan and now Ukraine, aside from China’s continuing bailouts of delinquent financial institutions demonstrates why the EM crisis have not been over. And as reminder, all these has transpired in a span of two weeks.

And contra the bulls, this may just be the tip of the iceberg.