“Heightened Tensions With Iran”: Provoking the Bear and the Dragon – And Hoping for the Best?

Interview with PressTV

By Peter Koenig

“We are urging all the sides to show restraint,” said President Vladimir Putin’s spokesman Dmitry Peskov, to avoid escalation in the Middle East after the US said it was deploying additional troops due to heightened tensions with Iran” 

“We would prefer not to see steps that could introduce additional tensions in the already unstable region.”

According to press reports:

The United States said Monday it has approved the deployment of 1,000 additional troops to the Middle East. Acting Defense Secretary Patrick Shanahan said the troops were being sent “for defensive purposes” as the US has blamed Iran for last week’s attacks on two tankers in the Gulf of Oman.

Russian Deputy Foreign Minister Sergei Ryabkov said Tuesday that US plans to increase its troop presence in the Middle East were aimed at provoking armed conflict. Such actions “cannot be seen otherwise than as a deliberate course to provoke war,” … He said that US Secretary of State Mike Pompeo while visiting in Russia last month had stated that US troops were in the region not to start war but prevent it.  Pompeo said at a news conference with Russian foreign minister Sergei Lavrov in Sochi on May 14 that “we fundamentally do not seek a war with Iran.” (AFP, June 18, 2019)

Sergei Ryabkov’s pointed response:

“If that’s the case, the US should refrain from further reinforcement of its presence and from other steps, including dragging and pushing its allies in various parts of the world into stepping up pressure on Iran,” 

In this Press TV interview geopolitical analyst Peter Koenig comments on the nature of US threats and the unfolding crisis.

***

PressTV: Could you please comment on Moscow’s position and Sergei Ryabkov’s statement. 

Peter Koenig: What Russian Deputy Foreign Minister Sergei Ryabkov said on Tuesday that US plans to increase its troop presence in the Middle East were aimed at provoking armed conflict – is very true; and is very important to take note of.

America Planned to Break “Iran Nuclear Deal” Years Before Signing It

To me it looks like the commando behind Trump has decided to put Venezuela on the backburner, that, for now, Iran is more important.

Controlling Iran, means basically controlling not only the entire Middle East with all its riches, but it’s also contributing to the Chosen People’s – Israel, the Zionists’ – overall goal to exert hegemony over the world’s finances – controlling the globe’s economy.

Domination of people by military power and domination of the economy by financial power, go hand in hand.

Let’s face it, to engage in war – or provoke war – were also the two ‘false flag’ attacks on the Norwegian and Japanese oil tankers in the Gulf of Oman. Only an absolute moron, or someone who has never lived on planet earth, would not understand that these were two flagrant “false flags”; and Pompeo’s immediate accusations without a shred of proof, were the usual “Pompeoisms” – lying, deceiving, stealing, – or as he said literally what they did at the CIA, “We lied, we cheated, we stole”. Well these people do not change.

By engaging Iran in a war, Washington knows they would also engage Russia and China – and that’s what they want. The two super powers are their last stronghold to conquer.

And people who are narcissistic and full of themselves, as are the characteristics of neoliberals and neofascists, who want to run the show, they do not see their own limits – they see only their own power with impunity.

Its like a drug for them. They act under addiction… addiction for power and dominance. They are even ready to destroy themselves for power and dominance.

If we analyze one particular incident on this globe, like the announcement to deploy a 1000 more troops to the Middle East – have they said where? – not that I know – then we always have to see the entire picture.

It’s part of a Chess game – a Chess game they – the US and the international handlers behind them – only are allowed to win. That’s why they never give up an objective. They may put it on the backburner for a while, like what they are likely doing with Venezuela, but in the long run, as the they see the Big Picture only, Full Spectrum Dominance, they will continue – until their collapse.

And why is the collapse the logical outcome? – Because such a war cannot be won. By nobody.

*Peter Koenig is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21st Century; TeleSUR; The Saker Blog, the New Eastern Outlook (NEO); and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance. He is a Research Associate of the Centre for Research on Globalization.

Washington’s silent weapon for not-so-quiet wars

Today by far the deadliest weapon of mass destruction in Washington’s arsenal lies not with the Pentagon or its traditional killing machines.

It’s de facto a silent weapon: the ability of Washington to control the global supply of money, of dollars, through actions of the privately-owned Federal Reserve in coordination with the US Treasury and select Wall Street financial groups. 

Developed over a period of decades since the decoupling of the dollar from gold by Nixon in August, 1971, today control of the dollar is a financial weapon that few if any rival nations are prepared to withstand, at least not yet.

Ten years ago, in September, 2008, US Treasury Secretary, former Wall Street banker Henry Paulson, deliberately pulled the plug on the global dollar system by allowing the mid-sized Wall Street investment bank, Lehman Bros go under. At that point, with aid of the infinite money-creating resources of the Fed known as Quantitative Easing, the half-dozen top banks of Wall Street, including Paulson’s own Goldman Sachs, were rescued from a debacle their exotic securitized finance created. The Fed also acted to give unprecedented hundreds of billions of US dollar credit lines to EU central banks to avert a dollar shortage that would clearly have brought the entire global financial architecture crashing down. At the time six Eurozone banks had dollar liabilities in excess of 100% of their country GDP.

Since that time a decade ago, the supply of cheap dollars to the global financial system has risen to unprecedented levels. The Institute for International Finance in Washington estimates the debt of households, governments, corporations and the financial sector in the 30 largest emerging markets rose to 211% of gross domestic product at the start of this year. It was 143% at the end of 2008.

Further data from the Washington Institute of International Finance, IIF, indicate the scale of a debt trap that is only in early stages of detonating across the less-advanced economies from Latin America to Turkey to Asia. Excluding China, emerging market total debt, in all currencies including domestic, has nearly doubled from 15 trillion dollars in 2007 to 27 trillion dollars at end of 2017. According to IIF, China debt in the same time went from 6 trillion dollars to 36 trillion dollars. For the group of Emerging Market countries, their debts denominated in US dollars has grown to some 6.4 trillion dollars from 2.8 trillion dollars in 2007. Turkish companies now owe almost 300 billion dollars in foreign-denominated debt, over half its GDP, most in dollars. Emerging markets preferred the dollar for many reasons.

As long as those emerging economies were growing, earning export dollars at a rising rate, the debt was manageable. Now all that’s beginning to change. The agent of that change is the world’s most political central bank, the US Federal Reserve, whose new chairman, Jerome Powell, is a former partner of the spooky Carlyle Group. Arguing that the domestic US economy is strong enough that they can return US dollar interest rates to “normal,” the Fed has begun a titanic shift in dollar liquidity to the world economy. Powell and the Fed know very well what they are doing. They are ratcheting up the dollar screws to precipitate a major new economic crisis across the emerging world, most especially from key Eurasian economies such as Iran, Turkey, Russia and China.

Despite all efforts of Russia, China, Iran and other countries to shift away from US dollar dependence for international trade and finance, the dollar remains still not so much challenged, as expected, as the world central bank reserve currency, some 63% of all BIS central bank reserves. The BIS is an international financial institution owned by 55 central banks and monetary authorities, with substantial accumulated reserves and a range of immunities granted to assist it in its work. Moreover, almost 88% of daily foreign currency trades are in US dollars. Most all oil trade, gold and commodity trades are denominated in dollars. Since the Greek crisis in 2011 the Euro has not been a serious rival for reserve currency hegemony. Its share in reserves are about 20% today.

Since the 2008 financial crisis the dollar and the importance of the Fed have expanded to unprecedented levels. This is only now beginning to be appreciated as the world begins to feel for the first time since 2008 real dollar shortages, meaning a much higher cost to borrow more dollars to refinance old dollar debt. The peak for total emerging market dollar debt falling due comes in 2019, with more than 1.3 trillion dollars maturing.

Here comes the trap. The Fed is not only hinting it will raise US Fed funds rates more aggressively later this year into next. It is also reducing the amount of US Treasury debt it bought after the 2008 crisis, so-called QT or Quantitative Tightening.

After 2008 the Fed began what was called Quantitative Easing (QE). The Fed bought a staggering sum of bonds from the banks up to a peak of 4.5 trillion dollars from only 900 billion dollars at the start of the crisis. Now the Fed announces it plans to reduce that by at least one third in coming months.

The result of QE was that the major banks behind the 2008 financial crisis were flooded with liquidity from the Fed and interest rates plunged to zero. That bank liquidity was in turn invested in any part of the world offering higher returns as US bonds paid near zero interest. It went into junk bonds in the shale oil sector, into a new US housing mini boom. Most markedly the liquid dollars went into higher-risk emerging markets like Turkey, Brazil, Argentina, Indonesia, India. Dollars flooded into China where the economy was booming. And the dollars poured into Russia before US sanctions earlier this year began to put a chill on foreign investors.

Now the Fed has begun QT – Quantitative Tightening – the reverse of QE. Late 2017 the Fed slowly began to shrink its bond holdings which reduces dollar liquidity in the banking system. In late 2014 the Fed already stopped buying new bonds from the market. The reduction of the bond holdings of the Fed in turn pushed interest rates higher. Until this summer, it was all “gently, gently.” Then the US President launched a global targeted trade war offensive, creating huge uncertainty in China, Latin America, Turkey and beyond, and new economic sanctions on Russia and Iran.

Today the Fed is allowing 40 billion dollars of its Treasury and corporate bonds mature without replacing them, rising to 50 billion dollars monthly later this year. That takes those dollars out of the banking system. In addition, to aggravate what is quickly becoming a full-blown dollar shortage, the Trump tax cut law is adding hundreds of billions to the deficit that the US Treasury will have to finance by issuing new bond debt. As the supply of US Treasury debt rises, the Treasury will be forced to pay higher interest to sell those bonds. Higher US interest rates already are acting as a magnet to suck dollars back into the US from around the world.

Adding to the global tightening, under pressure from the dominance of the Fed and the dollar, the Bank of Japan and the European Central Bank have been forced to announce they would no longer buy bonds in their respective QE actions. Since March, the world has de facto been in the new era of QT.

From here it looks to get dramatic unless the Federal Reserve does an about face and resumes with a new QE liquidity operation to avoid a global systemic crisis. At this juncture that looks unlikely. Today the world central banks more than even before 2008, dance to the tune played by the Federal Reserve. As Henry Kissinger stated in the 1970’s “If you control the money, you control the world.”

While so far the impact of dollar contraction has been gradual, it’s about to get dramatic. The combined G-3 central banks’ balance sheet increased by a mere 76 billion dollars in the first half of 2018, compared with a 703 billion dollars rise in the prior six months – almost half a trillion of dollars gone from the global lending pool.

Bloomberg estimates that net asset purchases by the three main central banks will fall to zero by the end of this year, from close to 100 billion dollars a month at the end of 2017. Annually that translates into an equivalent 1.2 trillion dollars less of dollar liquidity in 2019 in the world.

The Turkish Lira has dropped by half since early this year in relation to the US dollar. That means Turkish large construction companies and others who were able to borrow “cheap” dollars, now must find double the sum of US dollars to service those debts. The debt is not state Turkish debt for the most part but private corporate borrowing. Turkish companies owe an estimated 300 billion dollars in foreign currency debt, most dollars, almost half the entire GDP of the country. That dollar liquidity has kept the Turkish economy growing since the 2008 US financial crisis. Not only the Turkish economy…Asian countries from Pakistan to South Korea, minus China, have borrowed an estimated 2.1 trillion dollars.

As long as the dollar depreciated against those currencies and the Fed kept interest rates low – as from 2008 – 2015, there was little problem. Now that’s all changing and dramatically so. The dollar is rising strongly against all other currencies, 7% this year. Combined with this, Washington is deliberately initiating trade wars, political provocations, unilateral breaking of the internationally inked Iran nuclear treaty known as JCPOA, new sanctions on Russia, Iran, North Korea, Venezuela, and unprecedented provocations against China. Trump’s trade wars, ironically, have led to a “flight to safety” out of emerging countries like Turkey or China to the US markets, most notably the stock market.

The Fed is weaponizing the US dollar and the preconditions are in many ways similar to that during the 1997 Asia crisis. Then all it needed was a concerted US hedge fund attack on the weakest Asian Tier economy, the Thai Baht to trigger collapse across most of South Asia to South Korea and even Hong Kong. Today the trigger is Trump and his bellicose tweets against Turkish President Rajab Tayyeb Erdogan.

The US Trump trade wars, political sanctions and new tax laws, in the context of the clear Fed strategy of dollar tightening, provide the backdrop to wage a dollar war against key political opponents globally without ever having to declare war. All it took was a series of trade provocations against the huge China economy, political provocations against the Turkish government, new groundless sanctions against Russia, and banks from Paris to Milan to Frankfurt to New York and anyone else with dollar loans to higher risk emerging markets began the rush for the exit. The Lira collapses as a result of near panic selling, or attempts against the Iran currency, and the fall of the Russian ruble. All reflects the beginning, as likely does the decline in the China Renminbi, of a global dollar shortage.

If Washington succeeds, once in a blue moon, on November 4 in cutting all Iran oil exports, world (dollar) oil prices could soar above 100 dollars, adding dramatically to the developing world dollar shortage. This is war by other means. The Fed dollar strategy is acting now as a “silent weapon” for not so quiet wars. If it continues it could deal a serious setback to the growing independence of Eurasian countries around the China New Silk Road and the Russia-China-Iran alternative to the dollar system. The role of the dollar as lead global reserve currency and the ability of the Federal Reserve to control it, is a weapon of massive destruction and a strategic pillar of American superpower control.

Are the nations of Eurasia or even the European Central Bank ready to deal effectively? Undoubtedly, a united front against the US bullying is the only option in the way.

That was an analysis on the US trade war and new version of bullying from an article by F. William Engdahl, a strategic risk consultant and lecturer, who holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics.

Where will we end up? Terrorism, Islamophobia and the logic of fascism

ILYA AFANASYEV 

Fascism is not only a form of prejudice, it is also a political logic. A logic that reduces complex problems to ‘us and them’ issues.

Rally for 'Patriotic Europeans against the Islamization of the West' (PEGIDA) hold German flags during a demonstration in Dresden, Germany, Jan. 5, 2015. Jens Meyer /Press Association. All rights reserved.

What is fascism? Perhaps one way to answer this question is to say that fascism is a political logic that assumes that there is an easy solution to complex political, economic and societal problems, and that this solution is grounded in being ‘honest’ and ruthless about who ‘us’ and ‘them’ are.

Political practice is then understood as a necessity and even a moral obligation to pursue this reductive identity-based vision to its logical conclusions. In this view, the complexity of society and all structural socio-economic conditions are rendered ultimately unimportant, while identity is equated with ideology and political action. Hence, for example, in classic Nazism, an integrated, baptised and ‘Germanised’ Jew, who had nothing to do with any ‘Jewish community’, was seen as ultimately representing the same coherent entity, conceived as a conscious and malevolent political agent, as a traditional religious Jew, who spoke Yiddish and practised Judaism. No matter what their appearances were, they were all the same at some level and must have been treated as an alien element in the body of the nation.

Today, a very similar logic is propagated by those who are obsessed with the connection between Islam and terrorism. Charlie Hebdo’s recent editorial ‘How did we end up here?’ is a perfect example of it. The article’s main argument is that every Muslim, who publically reveals her or his religion, engages in an act of terror and is, therefore, complicit in violent terrorism.

A peaceful intellectual, a polite baker who does not serve ham sandwiches or a woman daring to wear the veil in public – they all are members of the same entity that is not only different from ‘us’, but is also attacking ‘us’, either with their alien cultural practices or their bombs, a distinction between the two turned into a difference of scale, not of quality.

A conclusion, which is offered implicitly, is that to end terrorism we must admit that ‘Muslims’ are a problem, alongside those ‘politically correct’ lefties who do not want to acknowledge that. The only thing that is still missing here is an explicit form of biological racism: we are not yet told that everyone of ‘Muslim descent’ is guilty by definition. For now, we are ‘only’ sold comprehensive cultural discrimination.

At least, this is the case at the level of discourse. When one looks at it in practice, the situation is already more blurred, as police forces across western countries are systematically harassing those citizens and immigrants who look ‘Muslim’. For many liberals and leftists, the far-right undercurrent of Charlie Hebdo’s editorial is obvious in its attempt to build a case for a comprehensive discrimination against, in fact, a heterogeneous group of people mainly engaging in harmless activities. But we should notice that there is more to it. Fascism is not only a form of prejudice, it is also a political logic. A logic that reduces complex problems to ‘us and them’ issues.

Multiple factors, homegrown and otherwise

Terrorism is a complex problem. Any attempt to deal with it cannot be separated from understanding its multiple roots, causes and structural conditions. As even security services admit, Islamist terrorism in the west is linked to western countries’ foreign policies across the globe. This is logical in the most basic common-sense way: if you claim to wage a war, how can you be so surprised that there will be people who would want to bring it back to you?

But there is also a more complex socio-economic and geo-political dimension, related to both the west’s historical support of various Islamists movements, as well as its ongoing support of the most oppressive dictatorships across the world. Next, although systematic poverty and exclusion of (post)immigrant communities in Europe is not the only explanation of terrorism (neither is it its justification, for that matter), terrorism is indeed inseparable from the structural conditions imposed on those communities by European states and societies.

Finally, one should not dismiss the role of Islamism as a form of religiously-sanctioned political ideology and practice that attracts alienated individuals seeking empowerment. In that sense, all well-meaning proclamations that ‘terrorism has nothing to do with Islam’ are not only a form of wishful thinking, but also an explicitly harmful contribution to the reification of ‘Muslims’ as a coherent and uniform group.

The key point here is that none of the reductive singular explanations will do. Islamism and its rise in the Middle East, Central Asia, Africa and Europe is a complex story. The attractiveness of violent Islamism to a certain segment of immigrant and post-immigrant communities in the west (a very small segment, one should add) cannot be understood outside the long history and immediate politics of the west’s actions in Muslim-majority regions, those regions’ own political, socio-economic and ideological dynamics, as well as the systemic poverty and exclusion affecting minorities in the west itself. These are just three interconnected factors causing and shaping Islamist terrorism today. There are many more, as well as many more forms of terrorism, both in the west and in the world as a whole.

Banal binaries

All this should be fairly banal, but instead, we are constantly being sold a different identity-focused narrative. It is assembled in a few simple steps. There is a terrifying problem of terrorism, terrorism perpetrated by ‘them’ against ‘us’, and the only solution is to admit that there are ‘us’ and ‘them’ and stop pretending that ‘they’ are not a threat, with all their veils, refusal to serve ‘us’ ham sandwiches, smart talk of Muslim ethics and bombs.

Only when we admit that can we somehow get rid of the actual physical threat of terrorism. For now, nobody is yet telling us how exactly to solve this problem in practice (although Trump with his suggestions of banning Muslims from entering the US is coming close).

That is the difference between fascism as political practice and fascism as logic and rhetoric. But the latter is of course enabling the possibility of the former. This is why it should be resisted fiercely. To everyone who insists on a direct link between Islam, ‘the Muslims’ and terrorism, we should reply that there are no ‘Muslims’ as a coherent group, that religion itself, independently of whether we like it or not, is not a cause of political violence and that the problem of terrorism will never be solved by an insistence on any reductive identity-based approach to it.

Serious solutions

Of course, a genuine solution to the problem of terrorism is difficult to imagine short of a radical transformation of the world. Such a transformation would address the three problems singled out above and involve at least three massive structural changes.

First, ending the neo-colonialist practices of the west, Russia and China. Second, opening up a political space for going beyond the wrong choice between phony-capitalist murderous dictatorships and thuggish Islamism in the Middle East (and other post-colonial regions). Third, resurrecting the social state in Europe, one able to efficiently address the appalling conditions and exclusion of its post-immigrant communities.

While these changes remain utopian, the problem of terrorism is going to stay with us and will influence where we are going to end up. Its actual influence has nothing to do with challenges to ‘our way of life’ or any other pseudo-threats, omnipresent in the rhetoric of mainstream politicians.

The real danger is in what must be called the myth of terrorism: a view that terrorism is the ultimate form of evil, simultaneously an act of war and the most despicable vile crime, somehow both cunning and meaningless. This emotional and a-political understanding of terrorism is widespread and makes the job of those who want to reduce politics to scapegoating imagined communities easier.

The potential harm here is not only in increasing prejudices against people who are already discriminated against, but also in the replacement of necessary struggles over the forms of political-economic organisation and the distribution of wealth with reductive and simplistic politics of ‘us and them’. This is why we must prevent the supporters of fascist logic from using it to enable a new age of fascist politics to prevail in the west.