Upcoming 2015 year will be all about further moves towards the integration of Eurasia as the US is progressively squeezed out of Eurasia, Pepe Escobar believes.BEIJING, December 31 (Sputnik) Fasten your seatbelts; 2015 will be a whirlwind pitting China, Russia and Iran againstwhat I have described astheEmpire ofChaos.
So yes it will be all aboutfurther moves towardsthe integration ofEurasia asthe US is progressively squeezed outof Eurasia. We will see a complex geostrategic interplay progressively undermining the hegemony ofthe US dollar asa reserve currency and, most ofall, the petrodollar.For all the immense challenges the Chinese face, all overBeijing it's easy todetect unmistakable signs ofa self-assured, self-confident, fully emerged commercial superpower. President Xi Jinping and the current leadership will keep investing heavily inthe urbanization drive and the fight againstcorruption, including atthe highest levels ofthe Chinese Communist Party (CCP). Internationally, the Chinese will accelerate their overwhelming push fornew 'Silk Roads' both overland and maritime which will underpin the long-term Chinese master strategy ofunifying Eurasia withtrade and commerce.
Global oil prices are bound toremain low. All bets are offon whether a nuclear deal will be reached bythis summer betweenIran and the P5+1. If sanctions (actually economic war) againstIran remain and continue toseriously hurt its economy, Tehrans reaction will be firm, and will include even more integration withAsia, not the West.
No matter how it was engineered, the fact that stands is that the current financial/strategic oil price collapse is a direct attack against (who else?) Iran and Russia.
Washington is well-aware that a comprehensive deal withIran cannot be reached withoutRussias help. That would be the Obama administrations sole and I repeat sole foreign policy success. A return tothe Bomb Iran hysteria would only suit the proverbial usual (neo-con) suspects. Still, byno accident, both Iran and Russia are now subject toWestern sanctions. No matter how it was engineered, the fact that stands is that the current financial/strategic oil price collapse is a direct attack against (who else?) Iran and Russia.
That derivative war
Now lets take a look atRussian fundamentals. Russias government debt totals only 13.4% ofits GDP. Its budget deficit inrelation toGDP is only 0.5%. If we assume a US GDP of $16.8 trillion (the figure for2013), the US budget deficit totals 4% ofGDP, versus 0.5% forRussia. The Fed is essentially a private corporation owned byregional US private banks, although it passes itself offas a state institution. US publicly held debt is equal toa whopping 74% ofGDP infiscal year 2014. Russias is only 13.4%.The declaration ofeconomic war bythe US and EU onRussia viathe run onthe ruble and the oil derivative attack was essentially a derivatives racket. Derivatives intheory may be multiplied toinfinity. Derivative operators attacked both the ruble and oil prices inorder todestroy the Russian economy. The problem is, the Russian economy is more soundly financed thanAmerica's.
Considering that this swift move was conceived asa checkmate, Moscows defensive strategy was not that bad. On the key energy front, the problem remains the Wests not Russias. If the EU does not buy what Gazprom has tooffer, it will collapse.
Moscows key mistake was toallow Russia's domestic industry tobe financed byexternal, dollar-denominated debt. Talk abouta monster debt trap which can be easily manipulated bythe West. The first step forMoscow should be toclosely supervise its banks. Russian companies should borrow domestically and move tosell their assets abroad. Moscow should also consider implementing a system ofcurrency controls so the basic interest rate can be brought downquickly.
And dont forget that Russia can always deploy a moratorium ondebt and interest, affecting over $600 billion. That would shake the entire world's banking system tothe core. Talk aboutan undisguised message forcing the US/EU economic warfare todissolve.
And dont forget that Russia can always deploy a moratorium ondebt and interest, affecting over $600 billion.
Russia does not need toimport any raw materials. Russia can easily reverse-engineer virtually any imported technology if it needs to. Most ofall, Russia can generate fromthe sale ofraw materials enough credit inUS dollars or euros. Russia's sale ofits energy wealth or sophisticated military gear may decline. However, they will bring inthe same amount ofrubles asthe ruble has also declined.
Replacing imports withdomestic Russian manufacturing makes total sense. There will be an inevitable adjustment phase butthat wont take long. German car manufacturers, forinstance, can no longer sell their cars inRussia due tothe ruble's decline. This means they will have torelocate their factories toRussia. If they dont, Asia fromSouth Korea toChina will blow them outof the market.
Bear and dragon onthe prowl
The EU's declaration ofeconomic war againstRussia makes no sense whatsoever. Russia controls, directly or indirectly, most ofthe oil and natural gas betweenRussia and China: roughly 25% ofthe world's supply. The Middle East is bound toremain a mess. Africa is unstable. The EU is doing everything it can tocut itself offfrom its most stable supply ofhydrocarbons, prompting Moscow toredirect energy toChina and the rest ofAsia. What a gift forBeijing asit minimizes the alarm aboutthe US Navy playing with "containment" acrossthe high seas.Still, an unspoken axiom inBeijing is that the Chinese remain extremely worried aboutan Empire ofChaos losing more and more control, and dictating the stormy terms ofthe relationship betweenthe EU and Russia. The bottom line is that Beijing would never allow itself tobe ina position where the US could interfere withChina's energy imports aswas the case withJapan inJuly 1941 when the US declared war byimposing an oil embargo, cutting off92% ofJapanese oil imports.
Everyone knows a key plank ofChinas spectacular surge inindustrial power was the requirement formanufacturers toproduce inChina. If Russia did the same, its economy would be growing ata rate ofover 5% per year inno time. It could grow even more if bank credit was tied only toproductive investment.
Now imagine Russia and China jointly investing ina new gold, oil and natural resource-backed monetary union asa crucial alternative tothe failed debt "democracy" model pushed bythe Masters ofthe Universe onWall Street, the Western central bank cartel, and neoliberal politicians. They would be showing the Global South that financing prosperity and improved standards ofliving bysaddling future generations withdebt was never meant towork inthe first place.
Until then, a storm will be threatening our very lives today and tomorrow. The Masters ofthe Universe/Washington combo wont give uptheir strategy tomake Russia a pariah state cut offfrom trade, the transfer offunds, banking and Western credit markets and thus prone toregime change.
Further ondown the road, if all goes according toplan, their target will be (who else) China. And Beijing knows it. Meanwhile, expect a few bombshells toshake the EU toits foundations. Time may be running out butfor the EU, not Russia. Still, the overall trend wont be altered; the Empire ofChaos is slowly butsurely being squeezed outof Eurasia.
By Sputnik News
The Iran Project is not responsible for the content of quoted articles.
