Tag Archives: russia

Peace in Ukraine will not end the economic world war declared by the Biden administration

Equities markets are slightly up today while gold and oil are down as investors digest news of progress in peace talks between Ukraine and Russia. While a deal between the countries would most importantly end the bloodshed and, secondarily, ease the immediate economic pressure the war is causing, it would not end the economic war I wrote about last week.

That war was declared by the United States when it banished Russia from its SWIFT system, seized its FOREX assets, and demanded the whole world boycott Russian exports (something even many NATO allies were unable to do).

Russia’s first response was to announce it would only accept rubles in payment for its natural gas exports to “unfriendly countries.” Over the weekend, it made another move. It put the ruble back on the gold standard domestically, allowing its central bank to buy gold at a fixed price of 5,000 rubles per gram (approximately 155,550 per troy ounce).

This immediately strengthened the ruble against the U.S. dollar. On Friday, RUB/USD was over 102. As of this writing, it had dropped to just under 88.

As Tom Luongo explains, this effectively sets up an opportunity for Russia to sell oil, natural gas, and its myriad other natural resource exports at a discount for gold. This will eventually bring the ruble back to its pre-war value in USD of 75.

Washington obtusely seeks to prevent Russia from selling its gold while Russia has no plans to do so. It is buying gold at a discount based on the demand for its exports.

Even if a treaty is secured and the U.S. offers to readmit Russia to SWIFT, releases its frozen assets, and end the boycotts, it’s hard to imagine Russia accepting the offer. Why put itself in the same position again when it is holding all the cards as an exporter of vital resources with a positive trade balance?

Not only Russia but every country in the world is now on notice that any reserves it has in dollars could be rendered worthless at the whim of the U.S. government. This provides tremendous incentive for most of the world to find a store of wealth and medium of exchange other than the U.S. dollar.

Americans are not ready for the reality that will be imposed if the dollar loses its world reserve currency status.

This isn’t immediately apparent to them because they believe they have the world’s most productive economy, based on having the largest GDP. It is true that U.S. GDP priced in dollars was the largest in the world at approximately $22 trillion in 2021. China was second at $16 trillion.

The problem with GDP is it merely measures total money spent in the economy. It does not measure the value of things that were produced. Since value is subjective, it is a matter of how much an economy produces for which people would truly be willing to give up something of value in return. This willingness depends upon what is produced having what economists call “utility,” a product’s usefulness in fulfilling some purpose for the consumer, whether a need like food or a luxury like a fancy car.

A large percentage of what the U.S. economy produces has no real market value.

Rising prices are not the only negative consequence of monetary inflation. Inflation also misdirects capital towards nonproductive use. That is why at the end of a business cycle, when the economy crashes, there is high unemployment. All of the people misdirected into unprofitable enterprises must be let go and redirected towards productive work – towards producing products whose value to others exceeds their cost of production.

The U.S. dollar’s status as the world’s reserve currency has allowed its central bank to inflate the currency far beyond what it would be able to get away with otherwise. This has caused huge distortions in the U.S. economy. In other words, it has directed capital towards producing products whose value does not exceed their cost of production.

What value have Americans received in return for spending more on their military establishment than the next ten countries combined? How were they better off for the military spending 20 years and trillions of dollars in Afghanistan? How do they benefit from maintaining a global standing army that will never be used against a nuclear power, as was just confirmed after Russia invaded Ukraine?

What additional value have they received for paying the highest prices in the world for healthcare and education?

What these and other malinvestments have in common is they are not funded voluntarily. The military is 100 percent tax funded. Half of all healthcare spending is government spending. College education is largely underwritten by government-guaranteed loans, meaning taxpayers guarantee them whether they want to or not.

Even outside of government-funded enterprises, capital is misdirected towards nonprofitable use by monetary inflation. Houses and automobiles, for example, are bid up beyond their true market value because of the artificially low interest rates of the loans that make their inflated prices affordable.

Like taxation, monetary inflation transfers purchasing power involuntarily from holders of dollars to those receiving the loans. That means there is no market discipline acting upon the borrowers and lenders. No one was asked to voluntarily give up something of value to underwrite the loan. Therefore, capital is much more likely to be invested unprofitably.

Yes, all countries in the world have fiat currencies that they inflate, but no other country has been able to do it on the scale and with the impunity the U.S. has while enjoying reserve currency status. This has directed huge amounts of people and resources towards unproductive ends.

Foreigners have paid Americans to waste resources and collect salaries for non-value producing jobs in government, health care and education bureaucracies, finance, and other bubble industries by accepting American exports of dollars in return for imports of valuable products.

Removing this privilege will cause an enormous deflation of some economic sectors and the complete disappearance of others. Millions of people employed unproductively, as well as millions of others who sell to them, will be devastated. The result will be a sharp reduction in living standards for virtually all Americans outside of the very wealthiest strata.

While this cleansing of waste in the economy might be beneficial at some point in the future, it will be unimaginably painful for most Americans in the present. For a country already near a political boiling point, the economic reality on its way could blow the lid.

America is not ready.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

Is Russia Really the Aggressor in Ukraine?

If you haven’t received the memo, the U.S. government is vitally interested in you seeing the Russian invasion of Ukraine one way and one way only: Russia is the aggressor due to its “unprovoked” invasion of a sovereign country. Ukraine must be supported by NATO with every economic and financial “tool” in its toolbox to punish Russia for this lawless act.

It is your duty as an upright and moral person to suffer the economic consequences of these sanctions because, “that is who we are.”

It is true that Ukraine had not committed any overt acts of war against Russia prior to the invasion. It had not breached Russia’s borders with troops. It had not conducted airstrikes on targets inside Russia’s borders. It had not released any biological weapons against Russia’s population (as far as we know).

By those parameters, Russia was certainly the aggressor in this war with Ukraine. And by the same parameters, the U.S. was the aggressor in Afghanistan, Iraq, Syria, Libya, Yemen, Yugoslavia, and Kosovo, just to name a few previous interventions. So, are there other valid reasons (by their standards) for preemptive war?

The stated reason for invading Iraq was the supposed “weapons of mass destruction” (WMD) that would be used against the United States in the future. Russia has similarly cited weapons of mass destruction (biological weapons labs) in Ukraine that could be used against Russia in the future.

The Iraqi weapons of mass destruction were not there. Plenty of people suspect the Bush administration never really believed they were and simply used them as a false pretext for the war. That invasion plans were discussed at Bush’s very first cabinet meeting, months before 9/11/2001, certainly lends indirect support to that theory.

The U.S. government vehemently denied there were any bioweapons labs in Ukraine until Victoria Nuland told Marco Rubio during her Senate testimony the Ukrainians had “research labs.” The new story became that the labs were studying “purely defensive” biotechnologies to thwart a chemical weapons attack.

This may be true. Yet, Nuland is nevertheless concerned that materials in these labs may fall into Russian hands as a result of the invasion. Just remember that narratives given full-throated support from the media often evolve:

“The Covid vaccinations are 95% effective at preventing infection.” “The Covid vaccinations’ protection may wane.” “The Covid vaccinations don’t prevent infection but do prevent serious illness.” “We never said the Covid vaccinations prevent infection.”

A similar evolution occurred regarding the lab leak theory of Covid.

At the beginning of the bioweapons lab controversy, the idea there were labs at all was pooh-poohed as “conspiracy theory.” Today, they’re “not really weapons labs but still have dangerous materials in them.” What will the story be a month from now?

Regardless, there seems to be a lot more bases for the Russian claim of bioweapons labs in Ukraine than there was for the U.S. claims of WMD in Iraq. Yet, no worldwide boycott of the U.S. occurred following its invasion of Iraq.

Russia also claims to be defending breakaway republics in Donbas against atrocities committed by the Ukrainian government. No one disputes President Zelensky was shelling the region prior to Russia’s invasion. How is this different from U.S. military interventions in Syria or Kosovo?

Kosovo is especially similar in that it was a breakaway region, populated by people of a different ethnicity, language, and culture from the rest of Yugoslavia. The U.S. took the side of the seceding region against the government of the country from which it seceded. In both Kosovo and Syria, the U.S. justified its military interventions based on supposed atrocities committed by the recognized government against the rebels.

Why is it different when Russia does it?

There are two important differences between the Russia-Ukraine conflict and any of the aforementioned U.S. military interventions. One, Russia is intervening in a conflict on its own border, not thousands of miles from it as in the case of the U.S. interventions.

Two, Russia is obviously responding to the decades-long attempt by the U.S. government to admit Ukraine into NATO, thereby justifying the deployment of NATO troops and weapons, including nuclear weapons, in Ukraine. These efforts have included running color revolutions to overthrow the Ukrainian government twice, in 2004 and 2014, for that express purpose.

To this allegation, the U.S. government-media complex responds that Ukraine is a sovereign country and can enter any alliance it wishes. Putin responds, “International documents explicitly enshrine the principle of equal and indivisible security, which, as you know, includes the obligation not to strengthen one’s own security at the expense of the security of other states. I can refer here to the OSCE Charter for European Security adopted in Istanbul in 1999 and the OSCE Declaration of Astana in 2010.”

It is Putin’s contention that Ukraine has violated these agreements. Even if it is not an official member of NATO, it has been a de facto member given the deployment of troops and weapons in Ukraine over the past eight years.

What is NATO’s response to this argument?

Does anyone really believe that if Russia not-so-covertly overthrew the government of Mexico, admitted it into an alliance against the United States that included, let’s say, Cuba and Canada, and began running military exercises within Mexico’s borders while the Mexican president mused about acquiring nuclear weapons, that the U.S. government would stand idly by because “Mexico is a sovereign country?”

The U.S. has long claimed status as the “exceptional nation,” imagining it has a mandate to police the world militarily and punish what it considers “rogue nations” for bad behavior. What “exceptional” really means is the U.S. government doesn’t believe international law applies to it the way it applies to every other country on earth.

Vladimir Putin has shown tremendous restraint while watching NATO’s long march eastward towards his borders. The U.S. government has dismissed his concerns as those of the leader of a “secondary power.” His last diplomatic effort was made in late 2021, asking for what any objective observer would describe as very reasonable assurances: a written guarantee of Ukraine’s neutrality and abstention from placing weapons near his borders.

The “exceptional nation” blew off his requests yet again. So, Putin has now made a clear statement in Ukraine: “Russia is exceptional, too.”

The Book of Proverbs says, “Pride goeth before destruction, and an haughty spirit before a fall.”

Which nation had been the proud and haughty one before this war broke out?

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

Will Poland Sacrifice Itself Again for a Global Empire Risking World War?

Yesterday, Secretary of State Anthony Blinken told Face the Nation the U.S. would “greenlight” Poland sending fighter jets to Ukraine. Later in the day, Pentagon spokesman John Kirby issued a statement indicating it would not allow Poland to use the U.S. Ramstein AFB as the middleman for this transfer. However, Kirby also said, “the decision about whether to transfer Polish-owned planes to Ukraine is ultimately one for the Polish government.”

Apparently, the Pentagon recognizes fighter jets sent to a hot war to benefit one side would be recognized as an act of war by the other. This is nothing new. See the Lusitania. But why the statement leaving it up to Poland to send the jets directly? Poland is a NATO member and any attack on a NATO member brings the United States into the war anyway.

What’s going on here?

Nothing good for Poles who remember their history. In 1939, Poland was in a dispute with Nazi Germany over a city called “Danzig” at the time (it is now Gdansk). It’s strategic significance on the Baltic coast is obvious and it had a long history of changing hands politically. However, it had been a part of the Kingdom of Prussia and subsequently the German Empire from 1793 until the end of World War I.

After regaining its independence at the end of the war, Poland wanted Danzig placed under Polish rule. However, as the city was majority ethnic Germans, the wise masters of the universe who imposed the disastrous Treaty of Versailles upon Germany made Danzig an independent city under the authority of the League of Nations.

The cartoon version of history most Americans learn says Hitler’s invasion of Poland was just the first in his quest to conquer the whole world. It wasn’t. Danzig was merely a strategic point on the map in the foreign policy plan he clearly laid out in Mein Kampf:

“We put an end to the perpetual Germanic march towards the South and West of Europe and turn our eyes towards the lands of the East. We finally put a stop to the colonial and trade policy of pre-War times and pass over to the territorial policy of the future.

But when we speak of new territory in Europe to-day we must principally think of Russia and the border States subject to her.”

By Hitler’s reasoning, communism was just part of the “Jewish conspiracy” and since Russia had become communist, “Fate robbed the Russian people of that intellectual class which had once created the Russian State and were the guarantee of its existence.” And since Germany needed land to become the first-tier power Hitler believed it must become to survive, it was entitled to carve this new territory out of the USSR, including Ukraine.

Was any of this justified? Of course not. But here is the connection to yesterday’s news. Poland had a choice to make: stand firm on keeping Danzig out of Hitler’s hands or make a deal with Hitler and allow him to proceed east towards his true objective: conquest of Ukraine and other Soviet territory. This was not a choice between good and bad. It was a choice between two bad alternatives. Giving up Danzig strengthened the evil Nazi regime. Standing firm would lead to a war Poland could not win.

It was here that the dominant global empire of that time, England, stepped in. It issued a war guarantee to Poland should Hitler invade that England could not and did not keep. This strengthened Poland’s resolve to deny Hitler Danzig.

As conservative author Pat Buchanan documents in his book, Churchill, Hitler, and “The Unnecessary War”: How Britain Lost Its Empire and the West Lost the World, Hitler did not want a war with England. Once learning of England’s war guarantee, he postponed his invasion of Poland to try to negotiate. It was only after those negotiations were unsuccessful that Hitler went ahead with his invasion, leading to war against the allies.

This isn’t “apologizing” for Hitler or diminishing Hitler’s atrocities, as Buchanan’s critics claim. It is simply a fact that Hitler did not want war with Western or Southern Europe, as he stated clearly in his own book.

Sometimes reality has no room for moralizing. When Hitler invaded Poland, England reneged on its war guarantee, as Poland should have known it would. England had disarmed itself after WWI, as had most of the Allied powers. Poland spent the next fifty-two years in darkness, occupied first by the Nazis and then the communists. Had they allowed Danzig to rejoin Germany, WWII may have been a fight to the death exclusively between Hitler and Stalin, resulting in both evil regimes being destroyed.

Is Poland facing a similar choice today? Why is the U.S. government telling Poland it is free to provide fighter jets to Ukraine, as long as they do not involve the U.S. government in doing so? If the U.S. were planning to honor its NATO commitment, it wouldn’t really matter whether those jets went directly to Ukraine or via a U.S. military base. Either scenario leads to a U.S. war with Russia should Russia retaliate against the sender.

Unless the U.S. plans to renege on its war guarantee in 2022 just as England did in 1939.

Until he invaded Ukraine, Vladimir Putin had been the world leader who showed the most restraint during this century. He had sucked up color revolutions run by the U.S. in Georgia and Ukraine in 2004-08 and Syria and Ukraine in 2012-14. Syria and Ukraine are both home to vital Russian warm water ports, while the revolutions in Georgia and Ukraine sought to install hostile governments on his border that would host NATO troops and missiles.

This in addition to constant demonization as a meddler in U.S. elections by the most prolific foreign election meddler in human history.

February 24, 2022 may have marked the end of Putin’s restraint period. Let’s hope not. If Polish military aircraft end up in Ukraine, it will only be restraint on Putin’s part that prevents a NATO country from being dragged into the war. Then, it will be a matter of whether Washington commits much of the Western World to possible nuclear annihilation or leaves Poland high and dry as England once did.

There was no good answer to Hitler in 1939. But there were plenty of strategically better ways to handle him than the one chosen, which was arguably the worst. Faced with a choice between leaving the USSR to fight Nazi Germany alone or allying with the Soviets to defeat him, hindsight says the former choice would have been better.

It was prevented by English government officials blustering about a moral duty to defend a country they could not and did not defend anyway. Does that sound familiar?

Poland should know better than to trust the current world empire.

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

Trump under siege by the PNAC crowd for seeking peace with Russia

pnacTwenty-one years ago, Bill Kristol, Paul Wolfowicz, Donald Rumsfeld, Dick Cheney and a host of other “neoconservatives” collaborated on the “Project for the New American Century.” That produced, among other documents, “Rebuilding America’s Defenses” in which Thomas Donnelly posited the US had an opportunity after the fall of the Soviet Union to do whatever it wanted militarily, before a new power rose to challenge it.

Dominating foreign policy and entrenched throughout the military and intelligence establishments ever since, these neocons have attempted to prolong that unchallenged status, including doing all they can to ensure Russia would not again become a superpower rival. To that end, the U.S. government has:

– Broken its promise to Gorbachev that NATO would not move “one inch eastward;” instead rolling the alliance right up to Russia’s borders

– Waged a proxy regime change war against Syria and covertly helped overthrow the elected president of Ukraine, threatening Russia’s only two warm water ports that remain ice-free year round.

– Meddled in Russia’s 2012 elections to attempt to prevent Putin’s re-election, in response to which Russian intelligence retaliated pathetically and ineffectively during the 2016 U.S. presidential election

– Generally done all it can to keep its boot on Russia’s neck and reignite the Cold War, which they’ve somewhat succeeded in doing. This continued throughout the Bush and Obama years – these people don’t care who is president or what you voted for.

They are also likely the primary source of all the propaganda about Trump’s visit to Russia, and the Mueller/Russiagate hoax in general. They will stop at nothing to prevent a normalization of relations with Russia, including fomenting what amounts to mass hysteria among a well-meaning but incredibly naive populace, ready to hate another boogeyman, just like Saddam Hussein (their work as well). Remember “freedom fries?”

Anyone who has read any of my writing knows I am often critical of Trump’s policies, but when you join in on this “treason” nonsense, just be aware of whose side you’re taking. I implore you to look up the document I mentioned for yourselves and check my story.

No, this is not “blaming America” for anything Russia or any other foreign actor does. “America” and the entrenched, unelected bureaucracy in Washington, D.C. are not remotely the same thing, something the American people instinctively grasped during the last election, regardless of whether you believe their candidate was the best solution. And as for anyone who reflexively yells “treason” or even “unpatriotic,” I’d remind them that blind allegiance to one’s government is about as un-American as it gets.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Earth to Washington, D.C.: Russia will never give up ports in Syria and Ukraine

sevastopolThere are four days to go before the election and voters are up to their ears in the usual cries of “most important election of our lifetimes” and “we’re at a crossroads,” the latter suggesting, as usual, that the very nature of the republic is at stake.

In reality, there are very few policy differences between the two major party candidates. Both are protectionists. Yes, Trump presents his protectionism with the rhetoric of a classic conservative mercantilist, while Clinton tries to sound more like a socialist unionist. But in the end, they are both willing to champion destructive trade policies to appease specials interests.

Both promise to sign family leave legislation, forcing employers to provide this compensation, which they will either subtract from monetary compensation or add to the prices of their products. Neither Trump nor Clinton have said anything remotely suggesting they will rein in government spying or protect civil liberties in general. And they both promise yet another war of some sort in the Middle East, this time against paper-tiger-boogeyman-of-the-month, ISIS.

But there is one significant policy upon which the candidates appear to disagree, relations with Russia. Trump has stuck by his position to attempt to negotiate with Vladimir Putin, despite the ammunition it has given Clinton in portraying him as being influenced by a foreign power and even a Putin “puppet.”

Clinton has maintained the Establishment position: Putin is aggressive, seeks to expand Russia’s borders and the U.S. must remain firm on curbing this ambition, including military intefvention in the Ukraine.

There is only one problem with the Establishment narrative: It has no basis in reality. A quick glance at maps of NATO in 1991 and 2016, respectively/ makes it abundantly clear that it is not Russia that has expanded over the past 25 years. On the contrary, NATO has expanded eastward, breaking well-documented promises to then-Premier Mikhail Gorbachev it would not do so if he acquiesced to the reunification of Germany. Gorbachev kept his promise; U.S.-led NATO did not.

With NATO now literally on its border, Russia has two things left to lose: it’s only two warm water ports in Tartus, Syria and Sevastopol, Ukraine. And guess where the U.S. has focused its latest “regime change” efforts? The $100 prize goes to the nice lady in the second row who said, “Syria and Ukraine.”

Aggression doesn’t get any more naked than this and, in case you haven’t noticed with all the e-mail servers and groping dominating the news cycles, the Russian’s have zero sense of humor at this point. Yes, there are cover stories on both sides for what is going on in Syria and Ukraine, but the bottom line is this: Russia is not going to give up those ports without a fight. And with a GDP roughly the size of Italy’s, they can’t fight a conventional war against the U.S.

Do the math.

The scariest part is the indifference with which beltway elites seem to be treating the overt preparations for war in Russia. That any intervention by the “exceptional nation” might be resisted with force by a major power seems completely beyond the comprehension of the enlightened ones, as evidenced by the stunned reaction to joint Chiefs Chairman Gen. Joseph Dunford’s blunt answer to Republican Sen. Roger Whicker on why a no-fly zone over Syria might not be such a swell idea:

Right now, Senator, for us to control all of the airspace in Syria it would require us to go to war, against Syria and Russia. That’s a pretty fundamental decision that certainly I’m not going to make.

Yes, there are many in the national media pooh-poohing “alarmism” over Russia’s recent moves, writing them off as election-year posturing or mere coincidence. Who ever heard of a world war starting due to major powers butting heads over a tiny country, right?

Maps don’t lie. Whatever Washington and Moscow says or does today, they are both involved in conflicts involving assets the Russians are not going to relinquish, in places the United States have no legitimate reason to be in the first place. This doesn’t end well unless the U.S. changes course, something Hillary Clinton has firmly resolved not to do.

She cannot be allowed to ascend to the presidency. If Trump is too flawed, there is still a chance for peace with Libertarian Party Nominee Gary Johnson.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Why Can’t Russia and China Help Police the World?

n-PUTIN-largePresident Obama today announced his administration’s reluctant agreement to work with Russia and Iran to defeat ISIS and Al Qaeda in the Middle East. This will no doubt be met with howls of “Weakness!” and “leading from behind” by Mr. Obama’s Republican detractors.

We may even hear the tired “appeasement” argument trotted out regarding both Russia’s and Iran’s supposed ambitions to expand their territories.

Republicans have consistently criticized Obama for not being aggressive enough on the world stage and for pulling back too early from Iraq and Afghanistan. With the emergence of ISIS, the GOP has seized the opportunity to quash more reasonable foreign policy positions from candidates like Rand Paul and push for sharper increases in military spending and even more aggressive foreign intervention.

The argument we hear repeatedly from Republican presidential candidates is that Obama has “eviscerated the military” and “led from behind.” If the United States is not “engaged” (i.e., bombing or invading) in all crises at all times in every part of the world, emerging powers like Russia or China are going to fill the resulting vacuum. That raises an obvious question:

So, what?

Read the rest at The Huffington Post…

 

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.