The Calm
Before the Coming Global Storm
By Pepe
Escobar
Major
turbulence seems to be the name of the game in 2016.
Yet the current turbulence may be interpreted as the
calm before the next, devastating
geopolitical/financial storm. Let’s review the
current state of play via the dilemmas afflicting
the House of Saud, the EU and BRICS members Russia,
Brazil and China.
Oil
and the House of Saud
May 02,
2016 "Information
Clearing House"
- "Sputnik
News" -
Not
many people are familiar with the Baltic Dry Index.
Yet the Index is key to track commodity demand. Two
months ago, it was trading to all-time lows. Since
then, it has increased over 130%. Precious metals
prices have all moved higher in virtually all
currencies. Why is this important? Because it tells
us that faith in fiat currencies – the US dollar
especially — is sharply declining.
The Baltic
Index rise portends a rise in oil demand in Asia –
especially China. Falling supply and rising demand
for oil will likely drive up the price of the barrel
of oil in the second half of 2016.
That does
not mean that the House of Saud will win back the
trust of both the US and Russia. Deep sources keep
confirming that as far as Washington and Moscow are
concerned, the House of Saud is expendable. Both are
really energy independent (should the US want to
be). Powerful Washington factions blatantly accuse
Riyadh of “terror” – well, it’s way more complicated
– while Moscow regards the House of Saud as
following US orders to destroy Russia in an oil
price war.
Ailing – on
the way to dementia — King Salman and young Warrior
Prince Mohammed would be finished if those famous 28
pages about 9/11 were released and the Saudi
connection is incontrovertible. What next? Regime
change. A CIA coup. A “trusted” Saudi military CIA
asset elevated to power.
What’s left
for the House of Saud is to play for time. High up
in Riyadh the feeling is that relations with
Washington won’t improve while Obama is president;
the next president — whether Hillary or The Donald –
will be a much better deal. So Plan A for now is to
keep posing as essential to Washington in the “war
on terra”; that means King Salman falling back on
Mohammed bin Nayef, the Crown Prince, way more adept
at it than the Warrior Prince, the conductor of the
disastrous war on Yemen.
In
parallel, Turkey’s Sultan Erdogan keeps advancing
his play to take over oil in Iraqi Kurdistan,
eventually diverting the whole supply to make Turkey
energy independent – and thus a regional superpower.
Moreover,
in Pipelineistan terms, Erdogan absolutely also
needs the Qatar gas pipeline through Saudi Arabia
and Syria to gain energy independence from Russia.
That also happens to be a major US goal. And that
also portends perennial trouble for the Syria peace
process.
Erdogan
already has the German superpower at his feet in the
shape of a groveling, begging Chancellor Merkel.
Were Turkey on its way to become an energy power,
Merkel would prostrate herself on that Ankara palace
golden ground non-stop. The CIA intimates as much,
when it analyzes how Turkey will keep “expanding its
influence” in Iraq through the militias they
support, at the expense of Iraq’s security and
political unity.
Andrew
Bacevich’s America’s War for the Greater Middle East
examines how Washington ruled that “military
preponderance” across the Middle East should be the
strategic objective in a war against the USSR — that
was when Dr. Zbig “Grand Chessboard” Brzezinski
reigned as geopolitical supremo. This was always
supposed to be an endless war – now encompassing the
“Greater Middle East” the neocons are so fond of.
Russia, Brazil and Hybrid War
Russia’s
largest commodity exchange is actively courting
international oil traders to join its emerging
futures market. The goals are crystal clear; to
disconnect the price-setting mechanism from the
Brent oil benchmark and, crucially, to move away
from the petrodollar. That also happens to be a key
condition imposed by Beijing to the House of Saud
for continuing to buy their oil.
It’s easy
to forget that it was only 20 years ago that Moscow
wanted to join the West as Christians, and was
treated like trash. Russia was perceived in the
Beltway to be weak under Yeltsin, who let in looters
who ate up Russia as locusts, collapsing Russia’s
GDP by 40% as they drew out natural resources,
absconding with at least a trillion US dollars.
Now
Exceptionalistan keeps updating every trick in the
book to destroy or at least undermine Russia with
Maidan in Ukraine, an oil price war, attacks on the
ruble, Syrian pipelines. Hybrid, unconventional
warfare rules – and these will only get nastier. The
BRICS as a whole are under siege. The Brazilian
color revolution, set up as a soft regime change
process, is just the first stage in a new,
sophisticated Hybrid War strategy bound to be
studied in academia for decades.
As oil
demand soars and supply contracts, Hybrid War
practitioners across the spectrum will have to
create a recession to keep the chaos going. A
possible scenario is to let the embattled Italian
banking system go down; that’s the next frontier in
the EU.
Walking
Dead Europe, meanwhile, subcontracted and/or
externalized a policy of refugee repression, thus
unleashing the largest mass deportation since WWII,
complete with camps financed by EU taxpayers and
managed by the Great Democrat Erdogan. The missing
link is now in the open; everything is proceeding
under control of NATO-linked think tanks.
As
appalling as it may be, this is hardly new. It was
already inbuilt in agreements that the EU imposes on
African nations, “upgrading” their status to border
Cerberuses. That’s the key mission of the Frontex
agency, which is progressively delocalizing the
external borders of the EU – to the east and to the
south – to better repel migrants. Not a dot
connected to NATO’s neo-imperial wars of choice, of
course.
No wonder
Noam Chomsky has noted that support for formal
democracy in the West is dwindling, because they are
not real democracies. All major decisions affecting
the EU are taken by unelected eurocrats in Brussels.
In a groundbreaking book published in Spain,
Mercado-Estado-Carcel en la Democracia Neoliberal
Espanola (Anthropos), Daniel Jimenez, doctor in
Juridical Sociology at the University of Zaragoza,
details how the new institutional local order is
about de-democratization, denationalization and
dependency; NATO, IMF, World Bank, the Paris club,
BCE, the European Commission, the Fed, they are part
of a global web of institutions, private but
self-described as public or public but managed by
private interests (such as the Fed). Michael Hudson,
among others, has detailed how the EU never
developed sustained mechanisms of transfer of
capital from the wealthier economies towards poorer
members.
I’m
a mess without my China fix
Sophisticated Hybrid War-derived techniques may have
been deployed full blast against Russia and Brazil.
But against China, everything fizzles.
Exceptionalistan’s spin is that China is not as
economically secure as it seems. So global public
opinion is bombarded by the usual litany of
“convulsions in its financial markets”, “investor
risk aversion”, “volatility”, or an inevitable
crash.
Nonsense.
The leadership in Beijing has its strategic
imperatives fully delineated in the latest
Five-Year-Plan. It will pump whatever amount of
credit into the system whenever it takes. It won’t
depreciate the yuan – no matter how loud
Washington/New York complain.
A yuan
devaluation would sink an array of Chinese firms
loaded up on US dollar debt. Moreover, Beijing is
tweaking its system, a carefully calibrated
transition from an export-driven model to one geared
toward consumption by the internal market. A strong
yuan preserves the purchasing power of tens of
millions of members of the New Chinese Middle Class
– all of them upwardly mobile, and all of them asset
owners.
According
to the US Treasury, only about $1.2 trillion in
liquid securities is in Chinese hands. And that will
keep diminishing, fast – as China keeps buying gold.
And to top it off, China has already turned its
economy around. That brings us back to that dramatic
increase in the Baltic Index. Oil prices are rising.
And China is buying the whole lot.
Beijing is
advancing on all fronts; spreading
influence/commercial deals all across Eurasia, which
the New Silk Roads will shape into a mass emporium;
modernizing its military; buying strategic foreign
assets; building up global trust in the yuan as a
stable reserve currency; allowing Chinese elites to
diversify their enormous wealth by buying foreign
assets, from vineyards in Bordeaux to the odd
football giant, such as AC Milan.
No wonder
the astonishing spread of Chinese economic power has
left assorted Exceptionalists – from neocons to
neoliberalcons — totally deranged. Washington has
absolutely nothing to offer to nations across Asia,
Africa and Latin America – to the whole Global South
for that matter. They have all seen how Beijing is
not in the market demanding Mob-style compound
interest on sovereign debt; “support” for
neo-imperial moves by NATO or the UN; one more
extra-territorial hub for the US Empire of Bases; or
total domination of their central banks.
On the
other hand, they have seen what Washington does
offer; endless war; the progressive smashing of the
nation state; democracy blasted to smithereens; and
technocratic governance by the 0.00001%.
Yet all
this is just the calm before the storm. The Empire
is already striking back. There’s serious blood on
the tracks ahead.
Pepe
Escobar was the roving correspondent for Asia
Times/Hong Kong, an analyst for RT and TomDispatch,
and a frequent contributor to websites and radio
shows ranging from the US to East Asia. Born in
Brazil, he's been a foreign correspondent since
1985, and has lived in London, Paris, Milan, Los
Angeles, Washington, Bangkok and Hong Kong.
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