Death to America, Trump’s Secret Plan?

Gordon Duff

A mythology around Trump is growing, that he is secretly brilliant, secretly fighting “the swamp” and “Deep State” despite overwhelming evidence to the contrary. To the majority of Americans, it’s business as usual, rich stealing everything not nailed down, a massive, and that’s 12% secret income tax hike for even upper middle-class Americans, largest in history, this is the Trump seen every day.

Lake Michigan filled with cyanide and dead fish, oil and gas drilling in our parks, entire cities with poisoned water due to fracking and dumping of industrial waste while medical care, social security, veteran’s benefits, food and drug safety and, worst of all, free elections a thing of the past, are the real stories.

Still, there are true believers, those who think his continual gaffs, lies and blunders are part of a grand plan. Whether a grand plan exists or not, one thing is for sure, things have changed. On the good side, for the most part stock markets are good with exceptions, debt issues and labor issues.

Americans owe too much money, more than exists as in 2008 and the US is going bankrupt at an astounding rate. These might be problems at some point.

Then there is the labor issue. America has 10 million unfilled jobs, work normally done by poorly documented labor. Problem is, those laborers are now still here but they aren’t working, they are terrified. The work they did, building roads, roofing crews, food processing is being done by “whites” but too often “not at all.”

Construction work has halted, many things simply aren’t being done. Normally, a rise in wages should ensue but that hasn’t happened nor have benefits increased. Instead, the overall standard of living has lowered as hidden inflation has crept in. You can get a job but to live, you need two. Your wife needs to work, your children need to work and things you might have enjoyed, vacations, new cars, appliances, home remodeling, those things are a thing of the past.

So is a college education. Most who attend, quit, buried in debt they never pay off, interest mounting year after year as tuition, which was $10 per credit hour in the early 1970s, even at major universities, is now $800 per hour while classes are taught by students, often undergrad teaching assistants where half a century ago, tenured professors once ruled.

The majority of those who graduate now make less than the unionized industrial workers that no longer exist, not since NAFTA and the deindustrialization that Trump promises to redress, though his efforts have rendered “0” positive results. No televisions are made here, almost no clothing and though many cars are assembled here, some of the robotized factories employ dozens where thousands once worked.

There will be no industrial rebirth in the US as Wall Street runs the show and is addicted to Asian slave labor.

Here is our hypothesis, that Trump has decided to kill America because he hates it, he believes Americans are stupid and lazy, that they are an inferior people without drive, who are subservient and have allowed themselves to be taken over by the Deep State, a fake term intended to deflect real issues involving organized crime and his own roots that tie him to Roy Cohn, Felix Sater and “boss of bosses,” Simeon Mogelievich, the man many believe may well rule the world.

The point being, that Trump’s ties to those who left the Soviet Union and later Russia, often those who had been imprisoned or rogue intelligence agents “gone privatized,” is hardly an affiliation with Russia.

The general case, and this can be seen and proven over and over, is that regime change, Russia, Libya or the failed attempts in Syria and Iraq, coincide with the theft of billions in assets, gold reserves, oil, entire factories, antiquities or as with the Soviet Union, a looting of the Commercial Banks by the CIA, laundered through bankrupt Donald Trump and split with key Washington politicians.

The result, as always is questions:

• Who really runs things, Israel, the mob, Wall Street?
• Is Trump really an idiot?
• Why hasn’t Putin lowered the boom on Israel and Turkey for their aid to terrorists in Syria?

Then we have a second tier of questions as fall approaches in 2019:

• How far will Russia go to back Syria in Idlib?
• What are Russian intentions in the Persian Gulf and what are the real deals between Iran and Russia, naval cooperation but more, port construction as well?
• Are rumors of an S400 system for Saudi Arabia in the cards?
• What does cooperation between the UAE and Iran mean to Saudi Arabia?
• Is the new deal between Israel and the UAE a threat to Saudi Arabia?

Then we look at Europe and what appears to be the real end of NATO:

• With Germany and France boycotting American efforts to dominate the Persian Gulf, and Britain facing a “hard BREXIT,” is NATO dead?
• With the INF treaty dead and Poland refusing to host an American military migration from Germany, is fear of the nuclear holocaust that mandated the INF treaty in the first place destroying Trump’s credibility with states bordering Russia?

Conclusion

Trump successes, his trade wars, his “regime change” plans, are non-existent. The question is, and this question should seem odd to many, did Trump plan it this way? Did he see the Neocons, the ones he has surrounded himself with, Miller, Bolton, Pompeo and the rest of his cabinet, as the disaster they turned out to be?

Remember their accomplishments:

• Iraq destroyed, American dead by the thousands, $3 trillion wasted for nothing and Iraq now closer to Iran than ever before.
• Afghanistan, a big win for the Taliban, a nation the US turned into the largest heroin producer in history.
• The 2008 economic crash, really responsible for all Obama era debt as well, with Trump inheriting a nation beyond bankruptcy.

Thus, it is conceivable that, to save the US, destroying “the swamp” as Trump calls it, would be required. However, to do that, destroying those around Trump, his closest confidants and advisors, might well be best for America. Where is “the rub,” as it were, is that Trump has already run through dozens of advisors, all fired, smeared and tossed aside and those now gone may well have been, and we mean names like Kelly or Tillerson, better than those who remain.

Did Trump want to ensure Venezuela’s government by opposing it? Did he want to give control of the Persian Gulf to Iran and Russia by trying to destabilize them?

Will his friendship for Modi in India be his downfall?

The questions, that of a pattern or a subtext of incompetence and corruption, with the veil of censorship and lies that America feeds itself and the world….” Is the truth out there as opposed to or compared with?”

Gordon Duff is a Marine combat veteran of the Vietnam War that has worked on veterans and POW issues for decades and consulted with governments challenged by security issues. He’s a senior editor and chairman of the board of Veterans Today, especially for the online magazine “New Eastern Outlook.”

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.