Yemen: Follow-Up

Clapper has called AQAP (Al Qaeda on the Arab Peninsula) the greatest threat to US national interests… now it’s Russia. Quite a shift in so little time. But what was the AQAP remark all about? Weapons sales, of course.

Terror has been the excuse for small corrupt governments, like that of Yemen, to milk hegemons (either global like the US, or local like Saud) of their money to combat terror. While strikes against both civilians and terror groups lead to more recruitment, the terrorists (considered by locals as freedom-fighters) are increasing acts of terror (read: liberation) to further the cycle. It is a self-fulfilling prophecy and a perpetual wheel, and US military contractors salivate at the prospect. If war is the most profitable industry, that is where capital (and capitalism) will flow… moral compass be damned. A corporation can be sued by its shareholders for acts of morality which cost the company money. Let the poor defenseless suckers pay for it all. This is disaster capitalism at its finest, the strong picking on the weak. This is why there is a wealth gap, in the first place.

Meanwhile, the poorest suffer, but they fight, for what other choice is there? Abandoning sovereignty is not a choice, it is a consequence of defeat.

America’s Dangerous Game In Yemen – (25:01)

 

Prince Charles is one of the world’s leading arms dealers (47:15) and should be brought to answer for his deeds especially concerning Saud and their war with Yemeni people. Unfortunately, there exists no legal mechanism in England to accuse any member of the royal family of having broken the law. They are the law. The UK, USA, Turkey, and Canada, amongst others, have sold the Saudis all the weapons which are now being used against the innocent people of Yemen including illegal cluster bombs and white phosphorus munitions. The mainstream media are silent and, in so being, complicit.

Prequel to this article here.

Of Bulls And Bears (and why they’re both screwed)

As a follow-up to two recent articles (here and here) on Turkey, Eurasia, and the coming crash of the US$, please consider the following.

As Russia’s Sergey Glazyev said, “As soon as we and China dump the dollar, it will be the end of the US’ military might…” Keep that in mind as you read the following.

China’s current credit crisis causes concern for the world’s economies, but not for China. China can amass all the debt it wants in order to finance its economic revolution and the New Silk Road. There is no limit because the money it is using is free money. This is why they support shadow banking, why they lend enormous amounts to institutions, corporations, entrepreneurs, and citizens; it’s not their money they are lending. They are using their manufacturing sector to pull as much cash as possible out of the west and using that to finance their future. Their own foreign debt is financed by Americans paying interest on obligations. Even their US holdings were financed with American money. Trillions of dollar-store knick-knacks can buy a lot of T-bills. Merry Christmas.

Once they have squeezed all the blood they can out of the dollar, they have no need for the US anymore. This is when they will start calling in their US debt, gradually at first, but accelerating until the dollar is out of breath and collapses, well short of the finish line. This will kill the US dollar, and remove its ‘reserve’ status.

America owes China about $1 trillion, give or take, and owes Japan about $1.1 trillion. Japan is very close to China, both physically and culturally (in many respects – much closer than it is to America in any case.) This will become important in the near-future.

Eric Clapton – Nobody Knows You (3:19)

 

The United States allowed China to become one of its biggest bankers because the American people enjoy low consumer prices. Selling debt to China funds federal government programs that allow the U.S. economy to grow. It also keeps U.S. interest rates low. But China’s ownership of the U.S. debt is shifting the economic balance of power in its favor. …Owning U.S. Treasury notes helps China’s economy grow by keeping its currency weaker than the dollar. It keeps Chinese exports cheaper than U.S. products. …China would not call in its debt all at once. If it did so, the demand for the dollar would plummet like a rock.”

America, as it turns out, is at China’s mercy. China and Russia have become very close, best buds, if you will. The New Silk Road is a plan to bring the Chinese economy to Europe’s doorstep. Beijing and Moscow are connected by a rail line which passes through Kazakhstan. Russia now controls most of the energy going into Europe through pipelines that run (or are being built) through Turkey. Turkey has a virtual stranglehold on the EU because it will have all the pipelines supplying European energy running through its territory as well as having control of the Euphrates river which delivers water to the middle-east. Because of Russian military strength, Turkey listens to Russia. Saud will soon see (or already does) that it makes a lot more sense to sell their oil to China and Europe, and now that Russia can protect them in the middle-east, they have no need for America anymore, nor Israel, for that matter. The petro-dollar will die the same death, America will leave the middle-east once and for all, and Israel will stop settling Arab land, one way or another. They will never have felt so alone. ISIS will be eradicated in short order, to boot.

Once the dollar is crippled, the stock markets will obviously take a nose-dive, but here’s where the insidious part of the plan goes into action – all western investors will be wiped out in one fell swoop. Sure lots of slick investors have a bearish hedging strategy against a Chinese credit crunch, but just think about it. If you are bullish and bet long stocks or dollars or whatever, you will lose it all; but even if you are bearish, what will you be paid with, dollars? Sure you will win all your bets, but your dollar rewards will then be worthless, too… and I haven’t even mentioned derivatives.

There will be nowhere left to turn. Only stackers will be able to eat, and only those heavily invested in crypto-currencies will manage to keep up their standards of living… in another country, of course.

In this new reverse alchemy, defenestration would become a popular pastime and paper gold would turn into lead, one bullet at a time.


Europe will suffer greatly as their currencies collapse, and Saudi and Russian energy will be very expensive (Saud has to make up all that money they’ve lost trying to kill US shale,) but they could still pull through. They might even sell a lot of luxury cars to the new billionaires in the east. Canada could also survive, as it could simply trade one global hegemon for another and sell its resources to China, instead. A very weak dollar would be good for exports, after all.

America, on the other hand, would finally be punished for all its bull-y-ing as city after city would very swiftly be turned into so many Detroits.

America would be rid of its arrogant bull’, and bears would once again roam free, smirking.


 

*UPDATE*

If anything ever goes wrong with the Chinese economy, they always have the option of selling their American holdings (T-bills) despite the fact that this would weaken USD.

Is North Korea The Excuse China Needs To Launch Monetary Armageddon?

The BIS, since its reporting is lagged, can provide cover for secret Chinese plans to crush the USD.

“This collapse in foreign exposure to China is confirmed by Bank of International Settlements (“BIS”), although this data is only to q3 2016.”

This may be hiding the underlying move by the Yuan.

“The forced deleveraging of China’s WMP-driven excess was not helped overnight by disappointing trade data as both import and export growth slumped.”

“The question now is not if China’s economy will slow, but rather how fast,” Mr Frieda added.

If ever there was a good time to sell some US assets, now might be it.

Ingushetia Where?

The dark green-striped republic in the above image.

Caught between Russia to the north and Georgia to the south, North Ossetia to the west and Chechnya to the east, lies a small Caucasus republic called Ingushetia. The president of Ingushetia is Yunus-Bek Yevkurov. He’s the bad-ass’s bad-ass. He’s like Bond’s Jaws.

Some background on Yunus-Bek Yevkurov.

Yevkurov was recently (October 11, 2015) invited to sit in on a meeting between Vladimir Putin and Mohammad bin Salman Al Saud. Mohammad bin Salman Al Saud is the deputy crown prince of Saudi Arabia, second deputy prime minister and the youngest minister of defense in the world. Also included in the meeting were foreign minister Sergei Lavrov, industry and trade minister Denis Manturov, energy minister Alexander Novak, and defence minister Sergei Shoigu.

Turkey has ties to the Ukraine just as it has ties to Georgia. Turkey also has ties to IS which is seen from Syria to Chechnya. Georgia is known for many things, some of which involve smuggling. People, drugs, weapons, and now viruses have become black market currency in and through Georgia. This is why picking Sochi for the winter olympics in 2014 was such a brave move (despite being somewhat shielded by Abkhazia.) It was a move of great strength and one of great defiance. If the terrorists could be contained, Russia was impenetrable – a claim America could not make.

Ingushetia has always been used to cushion against/contain Chechen rebels. It’s a rough neighbourhood. It is, in essence, nothing but a military outpost, as it needs to be. It acts as a buffer zone between Russia and Chechyn ‘terrorists.’ It is also a passage from Russia to Turkey and Greece (Europe) through Georgia. Ingushetia is the Gibraltor of the Caucasus. If Russia ever secures South Ossetia, the focus may then shift away from Ingushetia, to a certain degree. Either that or a block will be formed of the two.

Why was Ingushetia included in this meeting? What do Saud and Caucasus terror have in common? What is Israel’s role?


This article may shed some light on the subject.

Ingushetia Proposes Measures To Crack Down On IS Recruitment, Blowback

“Local militants have shifted their allegiance from the local Islamist insurgent group, the Caucasus Emirate, to IS. In June, IS’s leadership accepted pledges of allegiance from militants in the North Caucasus, including in Ingushetia, and declared an IS “province” in the region called Wilayat al-Qawqaz.”


This article may provide some context. (Ignore the title and the call for funding at the top of the page and scroll down for the main article.)

“Washington continues to force its European vassals to impose sanctions on Russia based on the false claim that the conflict in Ukraine was caused by a Russian invasion of Ukraine, not by Washington’s coup in overthrowing a democratically elected government and installing a puppet answering to Washington.”


Finally, this article explains much.

The president of Ingushetia, who is recovering from an attempt on his life, accused on Monday the United States, Britain and Israel of seeking to destabilize the situation in the North Caucasus.

“I am miles from believing that Arabs are behind this. There are other, more serious forces there… We understand whose interests these are: the United States, Britain, and Israel too,” President Yunus-Bek Yevkurov said in an interview with the Russian News Service (RSN) radio.


Size means nothing in the world of geo-politics; what really counts is location, location, location.


 

Saddam, Saud, and Sino-Petrol

The Kingdom of Saudi Arabia is hurting. Their move of increasing oil production with the goal of lowering prices in order to gain a larger market share (Saud denies this but they are trying to put US shale out of business – low interest rates in the US have contributed to staving off the death blow, for now) has hurt all net oil exporting economies worldwide, including Saud, itself. The secondary effect was to pressure Russia into leaving Assad to the jackals. Russia bit the bullet and did not yield. Strike two. The war in Yemen as well as the financing of Syrian rebels costs the kingdom a lot of money they just don’t have. Steeeerike three.

Oil represents about 80% of Saud’s revenue. With ISIS competing for market share by selling oil to Turkey at $20/barrel – thereby undercutting the market by half, their economy can simply not withstand this price point for much longer. So what can they do?

They could find other sources of income, they could cut output of oil, they could de-peg from the US dollar, or they could start selling oil in yuan. Remember what happened to Saddam Hussein when he tried to sell his oil in Euros. Everybody was a loser in that affair.

Today, the renminbi (yuan – for all intents and purposes) will likely be included in the IMF’s SDR basket of funds. There is an OPEC meeting this Friday.

*Update*

Saudi Aramco is rumoured to be going public, that is to say, privatized. An IPO is being considered. Of course the Saudis wouldn’t let this corporation fall into the wrong hands (5% for now,) so is this simply a variation on a stock-buyback scheme of epic proportion? This way they can raise their stock price without raising the price of oil. Since doing so would hurt the stock price, this would more or less guarantee low oil prices for a while. This would be a bad thing for all oil net exporters; Canada will be especially hard hit.

One wonders if they will allow Yuan transactions for their shares.

Welcome Back Qatar

The recent drop in the price of oil has had widespread negative consequences for Canada and many other net oil-exporting countries. It has also had dire consequences for the United States. The fracking industry has seen lay-offs, rig closures, and the beginnings of consolidation; the smaller outfits are becoming more and more attractive to large corporate buy-outs as their over-leveraged business models are being slaughtered by dwindling margins. We have been told that lower gas prices are good for the average consumer, but how good can it be if it takes out their entire economy? The petro-dollar scheme, it would appear, is showing signs of stress.

Meanwhile, strategic reserves and storage facilities are filling up fast. It has been estimated that all the extra storage space left in the USA will be full by the end of May. According to the American Petroleum Institute (API) last month saw the biggest build-up of US oil reserves in 34 years (at least.) Most countries that can afford to buy more oil are also adding to their reserves; and who can’t at these prices? Stockpiles are at an all-time high, and not just in the USA; China is also buying a lot of oil while the prices are near record lows. When all the storage capacity is used up, oil will be dumped onto the market driving the price down even further. Yet, the algos aren’t crashing; nobody is putting much pressure on the Saudis to cut production, the markets are not in a panic, and there seems to be a laissez-faire attitude towards the whole debacle. Surely this must be temporary. Maybe things will turn out for the best, but how? We’ll get back to this in a moment.

The Arab spring has brought about many changes in the middle-east. Egypt, Bahrain, and Yemen have seen meaningful change since 2011, and they are not alone. There has been a political awakening in some parts of the region, and there are now new actors taking the stage. ISIS has become a force thanks to the backing (either direct or indirect) of the Saudi and American governments; a renewed call for a caliphate has re-awoken a new generation of Arabs who want to assert themselves internationally. There are grass-roots political movements springing up all around the region and even spilling into northern Africa. It seems that change is all around.

Continue reading “Welcome Back Qatar”