Wednesday, May 23, 2018

Global Links — 23 May 2018

The Syrian Foreign Ministry has accused the US-led international coalition of deliberately bombing Syrian oil wells so that the government loses crucial energy infrastructure.
“They did it so that we have to pay tens of millions of dollars to restart work in these fields,” the Syrian Deputy Foreign Minister Faisal Mekdad stated....
Meanwhile, representatives of the Russian Center for Reconciliation and the Syrian military have found in the eastern part of Homs province warehouses with armaments manufactured in NATO countries that were held by terrorist forces. 
Fort Russ
Paul Antonopoulos


“Uniquely Russian technology? My ass!” — Professor [of organic chemistry] Dave Collum — Cornell University

Intel Today

I had been planning to write a post today about the latest report on Russia by the British House of Commons, but something came my way which is so out of the ordinary that it has to take precedence. The item in question is an article by University of Rhode Island professor Nicolai Petro entitled ‘Are We Reading Russia Right?’ and published in The Fletcher Forum of World Affairs. I urge you all to read the full text online here, and to spread it as far and wide as you can. But in case some of you only have time for a condensed version, below is a summary of what Nicolai has to say....
Reading Russia Right
Paul Robinson | Professor, Graduate School of Public and International Affairs at the University of Ottawa

… Russian trade is moving in an eastward direction and Russia could quite possibly see trade with Asia on par with the EU by 2022. If so, Russia will have made impressive steps towards balancing trade relations between East and West and undergone a clear change in trade flows in under 20 years. Most importantly, the change in direction cannot be viewed solely as a knee-jerk reaction to Russia’s geopolitical tensions with the West during the last five years. Rather, it is the fruition of a policy effort to improve relationships in order to significantly increase trade with Asia over the last decade and a half.
Kennan Institute
Michael Corbin

The legal basis is now established, and the Russian government has a legislatively approved mandate. Now we wait and see what counter sanctions will be specifically taken against the US and other nations considered unfriendly by Russia, and restricting the principles of free and open trade. This should be interesting, and moreover it was undertaken with thought, restraint and due process.
Russia Feed
Russia slaps US, Europe with counter-sanctions

Russia strikes back, levels counter-sanctions on US and unfriendly nations (Part II)
Paul Goncharoff 





Konrad said...

This is off topic, for which I apologize, but I just saw an RT article that spouts the usual nonsense…

“Beijing is by far the largest holder of US Treasury bills, meaning China can affect their price and yield. It could be China's trump card in the trade war with Donald Trump.”

WRONG. “Holder of US Treasury bills” means that Chinese parties have deposited money in Fed savings accounts. Chinese parties can sell their Treasury securities, or take back their deposits early, but in either case the Chinese parties would lose the interest they would have gained.

Moreover, how much or how little money those Chinese parties have deposited into Fed savings accounts has nothing to do with the price and yield of Treasury securities. The price and yield is based entirely on internal Fed decisions, which are based on inflation control.

Then RT repeats the “dumping securities” nonsense that we have heard for years...

“If China wanted to pull the nuclear switch, if they committed to dumping Treasuries, it would have an immediate and temporary impact on money markets in the United States,” said Jeff Klingelhofer, a portfolio manager who oversees more than $6 billion at Thornburg Investment Management.”

Nonsense. “Dumping securities” means selling securities at a loss (since Chinese parties would lose the interest they would have gained). This would hurt only China. It would not hurt the Fed, or the U.S. government. And I repeat that the Fed decides the yields and prices of T-securities based on inflation factors, not on the amount of securities sold. “Dumping securities” is meaningless.

“Jeffrey Gundlach, chief executive of DoubleLine Capital LP, agrees, saying that China can use US Treasuries as leverage. ‘It is more effective as a threat. If they sell, they have no threat. It would only escalate the situation and eliminate their leverage’.”

Do you see the self-contradiction? He admits that “dumping securities” poses no threat to the USA, yet he claims that China could somehow gain “leverage” by threatening to go through with this non-existent threat.

Think, people. THINK.


Konrad said...

Below is yet more nonsense from RT.

RT wants to make the USA look bad, but does so by repeating the lies about the U.S. government’s (non-existent) “debt crisis.” This gives ammunition to right-wing politicians who want to privatize Medicare and Social Security.

“Goldman Sachs has warned that the growing US deficit could pose a significant threat to the country's economic security during the next recession.”

Goldman Sachs? The evil vampire squid? Those liars would never lie, right?

“Goldman Dachs’ chief economist Jan Hatzius forecast the federal deficit to increase from $825 billion (or 4.1 percent of gross domestic product) to $1.25 trillion (5.5 percent of GDP) by 2021. The number will balloon to $2.05 trillion (seven percent of GDP) over 10 years, he said.”

Let’s hope that is correct. The U.S. economy needs deficit spending in order to remain strong.

“An expanding deficit and debt level is likely to put upward pressure on interest rates, expanding the deficit further,” said Hatzius.

The only thing that would put “upward pressure” on interest rates is Fed decisions, which are based on inflation factors.

“While we do not believe that the US faces a risk to its ability to borrow or repay, the rising debt level could nevertheless have three consequences long before debt sustainability becomes a major obstacle.”

He admits that the Fed’s “rising debt level” (i.e. the amount of money deposited in Fed savings accounts) poses no threat to the U.S. government’s ability to keep creating money out of thin air.

So what is the “crisis”?