This commentary was first published in Foreign Policy Journal 2015 15 15.
Over Reach of the Financial-Military Complex and the New Multi-Polar World Order
From a perspective of continually searching for knowledge and relationships, for synthesizing information into a larger paradigm I have reached a point where the world - the human world and its cultural and physical geography - is reaching certain tipping or turning points. Several genres of interest - financial, military, and environmental - appear to be at a stage where whatever I could say, whatever I have said, will have no further impact and I can only observe events until some resolution is reached by whatever means.
These broad topics are deeply related, and the resolution of one will have strong ramifications for the others. They are not separate categories except as an organizer for the academic and political minds of today. Information gleaned from many books, the western mainstream media (MSM), alternate media (being for the most part various websites), and from other sources in Asia and Europe provides a broad base from which to formulate a perspective on current events.
There are some broad trends that should be obvious. Financially, the ‘western’ world is operating as a debt laden consumer society, competing with the rising strengths of China and Russia as co-leaders in an at best multi-polar world. Militarily, the U.S. and its allied NATO countries remain dominant, but that dominance is reckoned on the threats of a failed “full spectrum dominance” military, backed by an official first strike nuclear capability and policy.
As for the environment - the consumer society run by corporations with zero environmental concerns, and the military fighting for control of resources and for control of the financial world are dominant topics in the MSM, leaving the environment to change almost unheralded. These changes would be seriously aggravated by a larger war and /or significant financial changes.
There are two main ways to examine these faultlines. It can be done region by region, highlighting the impacts on the populations of defined areas. There are, however, no isolated regions, as one bleeds (literally) into another, with the global context quickly encroaching into any discussion of one country or region. Another examination could be approached from the genres mentioned above, in which an attempt to precis the global aspects of each would again bleed (literally, financially, and metaphorically!) one into the other. A third approach would take an even less well defined train of thought approach, following the bleeding as it encircles the world.
Palestine is the best place to start as it is the topic on which I had my first article posted online many years ago, at Palestine Chronicle. Without detailing the current events around then until now, it leads to the proposition that perhaps Netanyahu has achieved what he wants - a one state solution.
It is not a pretty one state solution, as it carries horrible complications. But the Palestinian people appear to have been effectively divided and controlled (the word conquered cannot be used yet, and hopefully never will be). Abbas and the Palestinian Authority seem to be fully complicit with the Israeli military occupation, guarding their own little sphere of influence and power.
Talk of a two state solution is just that - talk. The ‘wall’ encloses many of the settlements along with much prime Palestinian land (with many other settlements remaining in the West Bank). It serves not so much for a two state solution but as a manner to control the many bantustan style enclaves restricting the movement and freedoms of the Palestinian people. More talk simply provides more time to build more settlements while destroying more Palestinian settlements and encroaching upon more Palestinian land.
The only country that could currently affect change is the United States. It is very inconvenient for the U.S. to do anything because of the large influence AIPAC has on Congress and the various neocon/right wing think tanks spread throughout the country. Obama and Netanyahu have their differences, but the U.S. remains financially and militarily committed to Israel.
This is where it gets tricky, going beyond the current paradigm into the changing global situation. Israel is more or less allied with Saudi Arabia and other Gulf states in its rhetoric against Iran, and in its military actions from the annexed Golan Heights. The Arab states are where Israel wants them to be - at war with each other, impoverished, divided, and ineffective domestically. Israel is apparently aiding ISIL/al-Qaeda against Assad while controlling their own border in Syria’s Golan Heights, cooperating with the Saudis in their manic fear of Iran, arguing then making good with Turkey and Egypt, and - this is even trickier to decipher - turning its trade and financial outlook towards Asia.
All that goes without even touching Gaza. Is this to be a part of Netanyahu’s one state? It would be dangerous to count it fully in from the Jewish perspective as the 1.5 million Palestinians imprisoned there would tip the demographic balance into uncertain territory if its population were included within Israel proper. Egypt does not want them, not for the financial burden nor for the political burden of a defiant people. The elimination of the population by violent means is not sufferable even for the Israelis under current conditions, nor is their any place for them to be removed to.
A free Gaza is not likely in the works, and it would be high conjecture to explore the various implications and ramifications were that feasible.
Perhaps though, Gaza is convenient. It is convenient like the talks for a two state solution, providing a distraction while more West Bank settlements are built. Convenient in that it carries the rhetoric of violent Islam, allowing the ongoing dogma against Iran, and in general providing a significant fear factor, a significant, different, and outlawed ‘other’ to be a domestic source of unity. It is convenient as well for carrying that fear factor abroad to harvest support from its western admirers. It might also prove to be convenient for Israel’s exploration and extraction of carbon resources under the Mediterranean.
It would seem then, that Israel is comfortable in its miserable neighbourhood. But that neighbourhood has changed and will change significantly more. The U.S.’ military entanglements and its increasingly violent actions in the Middle East are for the most part its attempts to assert its global dominance financially.
Many years ago, the New York Times Thomas Friedman mentioned the “hidden fist” of the military that kept the U.S. economy going. That ‘fist’ has long been visible, increasingly so in the Twenty-first Century. Its most dangerous and threatening turn has been its recent overthrow of the Ukrainian government and its replacement with a corrupt (same old same old!) neonazi government. Now with NATO encroaching onto Russia’s borders and the U.S. moving military and black ops personnel into Ukraine, the U.S. is setting itself up to create a scenario that would help lead to the breakup of Russia itself. That takes the presentation from one of analyzing a particular region or country to examining the overarching military and financial paradigms.
Back to Israel, momentarily. Israel along with several other significant western countries and against U.S. wishes, has signed up for membership in the Asian Infrastructure Investment Bank (AIIB) set up to remove the influence of the U.S. controlled/sponsored Asian Development Bank, the World Bank, and other Washington consensus institutions. The largest part of Israeli trade is now with Asia and not the western countries. And perhaps not insignificantly, Israel is not selling drones to Ukraine, but they are to Russia.
Follow the money...why would Israel, along with Germany, France, the U.K., and many other countries (significantly, Russia), sign up for a Chinese dominated bank against the wishes of its long time sponsor, the U.S.? What do they see occurring that is not presented to the world in the MSM? What is China doing that is so attractive financially to many other countries without any military threat obvious or implied? What is the “carrot” without the “stick”?
It is impossible to separate China/Asia/Russia rising and the U.S. declining as they are highly intertwined financially. It is worth it to try and look at the U.S.’ financial situation first, as that has huge ramifications for what is happening in Asia, Eurasia, and China and Russia in particular.
Essentially, the U.S. is broke. The value of the U.S. dollar over the last century has dropped to near worthlessness in its comparative purchasing power. Fortunately for the U.S., and unfortunately for the rest of the world, the U.S. can ‘print’ as much money as it needs without fully debasing the currency as it is currently the world’s “reserve” currency, the one that up to now everyone needed in order to have international financial transactions.
Without getting into the details of how the Federal Reserve Bank (a private bank, not a government bank) and the Treasury Department work together rather incestuously, the end result is a massive U.S. debt load that will never be able to be repaid - unless hyperinflation sets in a la Zimbabwe, or the dollar is revalued (devalued) unilaterally, or a gold standard is re-established with its value being rather astronomical in order to support the size of the debt/dollar.
Beyond that huge debt load, the economy is not recovering. The statistical figures are all manipulated and the markets are all manipulated, providing a thin veneer of financial respectability over an enormous black hole of debt. The employment participation rate (as compared to the unemployment figure) is the lowest it has been in decades - many fewer people are working. New job creation is mainly for lower paid service work. The rate of home ownership has been declining. Net worth for the middle class is declining and the income disparity between those in control and the rest of the population is increasingly very large.
The stock market continues its positive run, supported by trillions of dollars of government ‘printed’ dollars at zero or near zero interest rates borrowed and leveraged for various financialized schemes, including a lot of companies buying back their own stocks in order to inflate their value and pay them larger dividends and bonuses. The Baltic Dry Index (a measure of demand for shipping capacity) has declined precipitously after the 2007-08 recession.
China owns a lot of the debt. China has its own financial problems within its domestic and global economies but it is the U.S.’ main creditor and carries 21 per cent of U.S. foreign owned debt, or ten per cent of all U.S. debt. Should China decide at any time to sell its U.S. reserves, it could simply put the dollar into shock, creating a quick and immediate devaluation to the point of making it worthless.
But the Chinese are operating much more carefully than this. They have openly stated that the world needs another reserve currency, or a basket of currencies, and it is working towards eliminating the stranglehold that the US$ has on international commerce and finance.
Russia - neither collapsing, nor isolated.
Russia enters into the picture as both military and financial roles. Both China and Russia are within the U.S.’ military containment policy under the idea of global hegemony as expressed by the likes of Zbigniew Brzezinski, Robert Kagan (spouse of Victoria Nuland), and the other neocon elites.
Russia is obviously reluctant to surrender to U.S. dictates and has been very effective in deflecting its military and economic attempts at destabilization. After suffering the economic depredations from the west during the Yeltsin era, then watching the aggressive military actions of the U.S. from Yugoslavia through Afghanistan, Iraq, and Libya (among others), Russia balked at supporting U.S. efforts to overthrow Assad in Syria.
Next up was the U.S. created (see Kagan, Nuland, above) neonazi takeover of the Ukrainian government and the currently frozen military front lines in Luhansk and Donetsk after a successful rebellion against the Kiev right sector/nazi forces. NATO has approached Russia’s border. Western sanctions have been applied however ineffectively. A raid on the ruble and the devaluation of oil prices have coincided with the military aggression and trade sanctions.
Russia is doing well, not in spite of the sanctions, but because of the sanctions. The ruble suffered a large depreciation at first, but since has recovered and stabilized, with the current interest rate set at 12.5 per cent (I well remember when I carried a set mortgage at 12 per cent, while the official rate rose to over 20 per cent). Russia’s debt load is very small in relation to its foreign reserves/gold reserves and in relation to the GDP.
It is forecast that Russian GDP will fall two or three per cent over the year, but that has two caveats. First is that the GDP is probably one of the worst and most easily manipulable statistics available; secondly, by comparison, if the U.S.GDP was measured accurately and without using manipulated statistics such as the consumer price index (inflation), it would be showing declines year over year since 2008.
In other areas, the Russian economy is doing well. Sanctions have forced Russia to repatriate its manufacturing, and many businesses are improving technologically and financially because of this. Agriculture, always a difficult area for financial survival, has been reinvigorated by Russia’s counter-sanctions against various western agricultural producers.
Ironically, the U.S. is not stopping trade with Russia in three important areas. First is the space station, reliant on Russian rocket power for supplies and access. Next, the U.S. purchases about twenty per cent of its uranium from Russia - more US$ to support Russia’s favorable trade balance and foreign reserves! To top it off, U.S. oil imports include eight per cent of its total imported from Russia.
Isolation is not a problem for Russia. China has become a major industrial, military, and financial partner, along with the other BRIC nations. Much of Latin America, most of Asia, and many African countries, independently and through their Chinese connections, are working with Russia. Importantly, Egypt is working with Russia for trade, and the triangle of Iran-Russia-China is strengthening.
Several European countries are expressing a distaste for sanctions and several are having lower level officials attending Moscow’s May 09 Victory Day parade, along with many other global leaders outside the EU, most importantly, China’s president Xi Jinping. The Chinese leader intends to visit Crimea during his visit. The visit coincides with two Chinese warships showing the flag in the Black Sea alongside Russian ships. That isolated feeling is certainly not the reality.
The World Island - and the New Silk Road.
Eurasia as a whole - the World Island - is a natural economic unit. It is entirely sustainable through its various geographic regions for all resource materials - agriculture, mining, forestry, fishing, natural gas, oil, coal, water. These may not all be distributed equally, but given the land mass and the possibilities for trade and transportation, that only creates the natural idea of a New Silk Road to incorporate trade throughout all regions.
Both China and Russia have large industrial sectors, large technological sectors, and trained and well educated work forces. India has a large and technologically savvy work force. Iran has many resources and a strong technological base. Germany - well, that is where Eurasia finds a dividing line, the artificial boundary of the New Cold War as manipulated by the U.S.
Europe is a natural trade partner with other elements of the World Island. Unfortunately its sycophantic puppet leaders of the EU/NATO have been sucked into the two main artificial fears created by the U.S. - fear of terror/Islam and fear of Russia. What it truly amounts to is the U.S. fear of losing its dominant global position should Europe, or even part of Europe, align itself with the rest of the World Island by joining in the infrastructure development being initiated by China and Russia.
The leaders of France, Germany, and the U.K. in particular appear to be only interested in maintaining their own power and control among the world elite. Their wilful ignorance - or natural stupidity - allows the U.S. to continue to dictate to them what their foreign - and indeed domestic - policies should be. But cracks in European/NATO unity are apparent.
One of the major faultlines is the new Asian Infrastructure Investment Bank. Originating with China, this new bank has received applications for participation from many countries around the world. Significantly, most of the G7 countries (not Canada!) have signed on, as has Israel as mentioned above. Huge sums of money are to be spent/earned by supporting infrastructure development throughout Asia and Europe: high speed rail lines, highways, internet connections, pipelines, bridges, seaports, mines, airports, tech centres, schools, hospitals, and a host of supporting structures required for a growing wealthier society.
The U.S. fear of losing its dominance is well grounded, not militarily but financially. Should the US$ be slowly sidelined as the hegemonic fiat currency - or perhaps rapidly sidelined due to the weight of its own domestic ‘house of cards’ weaknesses - the New World Order will not be quite what the U.S. neocons envisioned in their original concept of the idea. The neocon wars serve several purposes: the destabilization of any organized opposition, especially in the Middle East vis a vis Israel and resources; the support of domestic military industries, about the only industries growing in the U.S. today; and along with the latter, control of other regions to bolster the use of the US$ as the reigning global fiat currency.
Thus the two are intertwined - war and finances. Their uses/abuses by the U.S. are its waning attempts to prevent the rise of a multipolar world - which already it truly is - or worse for the U.S. - a singular world order peacefully trading within itself without using the US$.
Last as always - the environment
Burdened with an enormous and growing consumer oriented human population the earth’s environment is changing. How adaptable it all is only time will tell. Pollutants are dispersed throughout all parts of the world, Antarctic to Arctic, from the depths of the oceans to the summits of it land masses. Along with concerns about environmental changes many chemical pollutants enter our environment from the procurement of resources (e.g. mining, fracking, transportation), and their refinement into consumer products. These pollutants are widespread, including among others DU weapons, chemical sprays used militarily and in agriculture, and the unstable wastes from nuclear reactors.
Until something happens to the economy or to human health in general to require human behaviour to alter, not much will be accomplished beyond a lot of greenwashing and a few technological fixes while the last profits are squeezed out of the industrial-military complex.
The worst scenario comes back to the military. It is one of the largest consumers of oil based energy and its use of depleted uranium weapons and the threat of nuclear weapons and the latent threat of damaged nuclear power plants makes war the dirtiest of industries. The current face off between the U.S. and Russia, instigated by the U.S. Maidan coup that ousted a legal democratically elected (if corrupt) government, presents the ultimate threat of nuclear war.
The complete insanity of that seems to escape the proponents of the Wolfowitz Doctrine who uphold the strategy of a winnable nuclear war. Depleted uranium weapons are bad enough, but the use of nuclear weapons would be devastating for many if not most life forms on earth. Beyond the initial destruction from the weapons and the associated radiation poisoning, the 400 plus nuclear plants in the world would either have been destroyed initially or would self-destruct as local infrastructures and services failed in the war’s aftermath. The result would be 400 Chernobyl/Three Mile Island/Fukushima’s to radiate the planet for hundreds of years to come.
Unfortunately, many humans are terribly short-sighted and intent on ‘winning’ at whatever cost. Hopefully the balancing power of Russia, China, India and other countries not aligned with the U.S. will be able to moderate the craziness that is widespread in the U.S./NATO today. Russia is doing its best to not become involved with U.S. instigated wars whether in Syria, Ukraine, or anywhere else in the world. China is supporting Russia as the Chinese are well aware that the U.S. views them as another threat to their global hegemony.
The U.S. fiat currency will collapse - all fiat currencies have. The U.S. is lashing out violently at the world trying to support its near hegemonic control of international finance. The World Bank, the International Monetary Fund, the Bank of International Settlements (based in Basel), national central banks, and other powerhouses of the current financialized world market are now having to deal with the new AIIB, the Latin American Bank of the South, and the BRICS Development Bank.
John Kerry's recent trip to Sochi indicates a slight ratcheting down of U.S. hubris. Kerry also remonstrated Poroshenko for his idiotic statements abouty retaking the airport at Donetsk. Ironically, even the suggestion of a New Cold War indicates that there is no longer a unipolar world tipped in favour of the U.S.
Which way events of today will turn is obviously an unknown. There are too many possible scenarios from the calm settlement of rational ideas overcoming military lunacy to its obverse, a world destroyed by that military lunacy.
The broad trends working through our societies today - the interplay of a financialized world, the militarization of domestic and foreign policies, and the understated importance of global climate change - are in a period of dramatic change.
I offer no solutions. That is out of my abilities, out of my range of influence, as events are turning now on their own energies, propelled by the actions of the powerful state actors of the world. I do not believe that anything I can do will have much bearing on the outcomes….yet at the same time while many other people suffer in so many significant ways beyond my experience, it behooves me to continue to observe and to try and synthesize the various sets of information as best as possible into a coherent whole. Interesting times, with big changes already in process.