Paul Craig Roberts

Cracks in Washington’s empire

Washington’s EU vassals might be finding their backbone. Britain, Germany, France, and Italy are reported to have defied Washington’s orders and applied to join the Chinese-led Asian Investment Bank. Australia, Japan, South Korea, Switzerland and Luxembourg might also join.

Washington uses its development banks such as the Asian Development Bank, the World Bank, along with the IMF, in order to exercise financial and political hegemony. These banks are crucial elements of American economic and political imperialism.

The Chinese-led bank will, of course, be much more effective. The Chinese will use the bank to actually help countries and thereby make friends and grow trust, whereas Washington uses its banks for domination by force.

This new bank, together with the BRICS Bank, will provide countries with escape routes from Washington’s domination.

The Evil Empire is beginning to crack. It will crack more as the Russian-Chinese alliance unfolds its potentials and when European capitals understand that hegemonic Washington has put their existence at risk in order to try to prevent Russia’s rise. The crazed American and British neocon nazis, and their dupes among the populations, comprise the greatest human threat that the world has ever known. The sooner the Evil Empire collapses, the safer the world will be.

Here is the report.

Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Roberts’ latest books are The Failure of Laissez Faire Capitalism and Economic Dissolution of the West and How America Was Lost.

The neoconservative threat to international relations

This week I was invited to address an important conference of the Russian Academy of Sciences in Moscow. Scholars from Russia and from around the world, Russian government officials, and the Russian people seek an answer as to why Washington destroyed during the past year the friendly relations between America and Russia that President Reagan and President Gorbachev succeeded in establishing. All of Russia is distressed that Washington alone has destroyed the trust between the two major nuclear powers that had been created during the Reagan-Gorbachev era, trust that had removed the threat of nuclear armageddon. Russians at every level are astonished at the virulent propaganda and lies constantly issuing from Washington and the Western media. Washington’s gratuitous demonization of the Russian president, Vladimir Putin, has rallied the Russian people behind him. Putin has the highest approval rating ever achieved by any leader in my lifetime.

Washington’s reckless and irresponsible destruction of the trust achieved by Reagan and Gorbachev has resurrected the possibility of nuclear war from the grave in which Reagan and Gorbachev buried it. Again, as during the Cold War the specter of nuclear armageddon stalks the earth.

Why did Washington revive the threat of world annihilation? Why is this threat to all of humanity supported by the majority of the US Congress, by the entirety of the presstitute media, and by academics and think-tank inhabitants in the US, such as Motyl and Weiss, about whom I wrote recently?

It was my task to answer this question for the conference. You can read my February 25 and February 26 addresses below. But first you should understand what nuclear war means. You can gain that understanding here:

The Threat Posed to International Relations By The Neoconservative Ideology of American Hegemony,
Address to the 70th Anniversary of the Yalta Conference, Hosted by Institutes of the Russian Academy of Sciences and Moscow State Institute of International Relations, Moscow, February 25, 2015, Hon. Paul Craig Roberts

Colleagues,

What I propose to you is that the current difficulties in the international order are unrelated to Yalta and its consequences, but have their origin in the rise of the neoconservative ideology in the post-Soviet era and its influence on Washington’s foreign policy.

The collapse of the Soviet Union removed the only constraint on Washington’s power to act unilaterally abroad. At that time China’s rise was estimated to require a half century. Suddenly the United States found itself to be the Uni-power, the “world’s only superpower.” Neoconservatives proclaimed “the end of history.”

By the “end of history” neoconservatives mean that the competition between socio-economic-political systems is at an end. History has chosen “American Democratic-Capitalism.” It is Washington’s responsibility to exercise the hegemony over the world given to Washington by History and to bring the world in line with History’s choice of American democratic-capitalism.

In other words, Marx has been proven wrong. The future does not belong to the proletariat but to Washington.

The neoconservative ideology raises the United States to the unique status of being “the exceptional country,” and the American people acquire exalted status as “the indispensable people.”

If a country is “the exceptional country,” it means that all other countries are unexceptional. If a people are “indispensable,” it means other peoples are dispensable. We have seen this attitude at work in Washington’s 14 years of wars of aggression in the Middle East. These wars have left countries destroyed and millions of people dead, maimed, and displaced. Yet Washington continues to speak of its commitment to protect smaller countries from the aggression of larger countries. The explanation for this hypocrisy is that Washington does not regard Washington’s aggression as aggression, but as History’s purpose.

We have also seen this attitude at work in Washington’s disdain for Russia’s national interests and in Washington’s propagandistic response to Russian diplomacy.

The neoconservative ideology requires that Washington maintain its Uni-power status, because this status is necessary for Washington’s hegemony and History’s purpose.

The neoconservative doctrine of US world supremacy is most clearly and concisely stated by Paul Wolfowitz, a leading neoconservative who has held many high positions: Deputy Assistant Secretary of Defense, Director of Policy Planning US Department of State, Assistant Secretary of State, Ambassador to Indonesia, Undersecretary of Defense for Policy, Deputy Secretary of Defense, President of the World Bank.

In 1992 Paul Wolfowitz stated the neoconservative doctrine of American world supremacy:

“Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”

For clarification, a “hostile power” is a country with an independent policy (Russia, China, Iran, and formerly Saddam Hussein, Gaddafi, Assad).

This bold statement struck the traditional American foreign policy establishment as a declaration of American Imperialism. The document was rewritten in order to soften and disguise the blatant assertion of supremacy without changing the intent. These documents are available online, and you can examine them at your convenience.

Softening the language allowed the neoconservatives to rise to foreign policy dominance. The neoconservatives are responsible for the Clinton regime’s attacks on Yugoslavia and Serbia. Neoconservatives, especially Paul Wolfowitz, are responsible for the George W. Bush regime’s invasion of Iraq. The neoconservatives are responsible for the overthrow and murder of Gaddafi in Libya, the assault on Syria, the propaganda against Iran, the drone attacks on Pakistan and Yemen, the color revolutions in former Soviet Republics, the attempted “Green Revolution” in Iran, the coup in Ukraine, and the demonization of Vladimir Putin.

A number of thoughtful Americans suspect that the neoconservatives are responsible for 9/11, as that event gave the neoconservatives the “New Pearl Harbor” that their position papers said was necessary in order to launch their wars for hegemony in the Middle East. 9/11 led directly and instantly to the invasion of Afghanistan, where Washington has been fighting since 2001. Neoconservatives controlled all the important government positions necessary for a “false flag” attack.

Neoconservative Assistant Secretary of State Victoria Nuland, who is married to another neoconservative, Robert Kagan, implemented and oversaw Washington’s coup in Ukraine and chose the new government.

The neoconservatives are highly organized and networked, well-financed, supported by the print and TV media, and backed by the US military/security complex and the Israel Lobby. There is no countervailing power to their influence on US foreign power.

The neoconservative doctrine goes beyond the Brzezinski doctrine, which dissented from Detente and provocatively supported dissidents inside the Soviet empire. Despite its provocative character, the Brzezinski doctrine remained a doctrine of Great Power politics and containment. It is not a doctrine of US world hegemony.

While the neoconservatives were preoccupied for a decade with their wars in the Middle East, creating a US Africa Command, organizing color revolutions, exiting disarmament treaties, surrounding Russia with military bases, and “pivoting to Asia” to surround China with new air and naval bases, Vladimir Putin led Russia back to economic and military competence and successfully asserted an independent Russian foreign policy.

When Russian diplomacy blocked Washington’s planned invasion of Syria and Washington’s planned bombing of Iran, the neoconservatives realized that they had failed the “first objective” of the Wolfowitz Doctrine and had allowed “the re-emergence of a new rival . . . on the territory of the former Soviet Union” with the power to block unilateral action by Washington.

The attack on Russia began. Washington had spent $5 billion over a decade creating non-governmental organizations (NGOs) in Ukraine and cultivating Ukrainian politicians. The NGOs were called into the streets. The extreme nationalists or nazi elements were used to introduce violence, and the elected democratic government was overthrown. The intercepted conversation between Victoria Nuland and the US ambassador in Kiev, in which the two Washington operatives choose the members of the new Ukrainian government, is well known.

If the information that has recently come to me from Armenia and Kyrgyzstan is correct, Washington has financed NGOs and is cultivating politicians in Armenia and the former Soviet Central Asian Republics. If the information is correct, Russia can expect more “color revolutions” or coups in other former territories of the Soviet Union. Perhaps China faces a similar threat in Uyghurstan.

The conflict in Ukraine is often called a “civil war.” This is incorrect. A civil war is when two sides fight for the control of the government. The break-away republics in eastern and southern Ukraine are fighting a war of secession.

Washington would have been happy to use its coup in Ukraine to evict Russia from its Black Sea naval base as this would have been a strategic military achievement. However, Washington is pleased that the “Ukraine crisis” that Washington orchestrated has resulted in the demonization of Vladimir Putin, thus permitting economic sanctions that have disrupted Russia’s economic and political relations with Europe. The sanctions have kept Europe in Washington’s orbit.

Washington has no interest in resolving the Ukrainian situation. The situation can be resolved diplomatically only if Europe can achieve sufficient sovereignty over its foreign policy to act in Europe’s interest instead of Washington’s interest.

The neoconservative doctrine of US world hegemony is a threat to the sovereignty of every country. The doctrine requires subservience to Washington’s leadership and to Washington’s purposes. Independent governments are targeted for destabilization. The Obama regime overthrew the reformist government in Honduras and currently is at work destabilizing Venezuela, Bolivia, Ecuador, and Argentina, and most likely also Armenia and the former Central Asian Soviet Republics.

Yalta and its consequences have to do with Great Power rivalries. But in the neoconservative doctrine, there is only one Great Power–the Uni-power. There are no others, and no others are to be permitted

Therefore, unless a modern foreign policy arises in Washington and displaces the neoconservatives, the future is one of conflict.

It would be a strategic error to dismiss the neoconservative ideology as unrealistic. The doctrine is unrealistic, but it is also the guiding force of US foreign policy and is capable of producing a world war.

In their conflict with Washington’s hegemony, Russia and China are disadvantaged. The success of American propaganda during the Cold War, the large differences between living standards in the US and those in communist lands, overt communist political oppression, at times brutal, and the Soviet collapse created in the minds of many people nonexistent virtues for the United States. As English is the world language and the Western media is cooperative, Washington is able to control explanations regardless of the facts. The ability of Washington to be the aggressor and to blame the victim encourages Washington’s march to more aggression.

This concludes my remarks. Tomorrow I will address whether there are domestic political restraints or economic restraints on the neoconservative ideology.

Paul Craig Roberts, Address to the 70th Anniversary of the Yalta Conference, Moscow, February 26, 2015

Colleagues,

At the plenary session yesterday I addressed the threat that the neoconservative ideology poses to international relations. In this closing session I address whether there are any internal restraints on this policy from the US population and whether there are economic restraints.

Just as 9/11 served to launch Washington’s wars for hegemony in the Middle East, 9/11 served to create the American police state. The Constitution and the civil liberties it protects quickly fell to the accumulation of power in the executive branch that a state of war permitted.

New laws, some clearly pre-prepared such as the PATRIOT Act, executive orders, presidential directives, and Department of Justice memos created an executive authority unaccountable to the US Constitution and to domestic and international law.

Suddenly Americans could be detained indefinitely without cause presented to a court. Habeas corpus, a constitutional protection which prohibits any such detention, has been set aside.

Suddenly people could be tortured into confessions in violation of the right against self-incrimination and in violation of domestic and international laws against torture.

Suddenly Americans and Washington’s closest allies could be spied on indiscriminately without the need of warrants demonstrating cause.

The Obama regime added to the Bush regime’s transgressions the assertion of the right of the executive branch to assassinate US citizens without due process of law.

The police state was organized under a massive new Department of Homeland Security. Almost immediately whistleblower protections, freedom of the press and speech, and protest rights were attacked and reduced.

It was not long before the director of Homeland Security declared that the department’s focus has shifted from Muslim terrorists to “domestic extremists,” an undefined category. Anyone can be swept into this category. Homes of war protesters were raided and grand juries were convened to investigate the protesters. Americans of Arab descent who donated to charities–even charities on the State Department’s approved list–that aided Palestinian children were arrested and sentenced to prison for “providing material support to terrorism.”

All of this and more, including police brutality, has had a chilling effect on protests against the wars and the loss of civil liberty. The rising protests from the American population and from soldiers themselves that eventually forced Washington to end the Vietnam War have been prevented in the 21st century by the erosion of rights, intimidation, loss of mobility (no-fly list), job dismissal, and other heavy-handed actions inconsistent with a government accountable to law and to the people.

In an important sense, the US has emerged from the “war on terror” as an executive branch dictatorship unconstrained by the media and barely, if at all, constrained by Congress and the federal courts. The lawlessness of the executive branch has spread into governments of Washington’s vassal states and into the Federal Reserve, the International Monetary Fund, and the European Central Bank, all of which violate their charters and operate outside their legal powers.

Jobs offshoring destroyed the American industrial and manufacturing unions. Their demise and the current attack on the public employee unions has left the Democratic Party financially dependent on the same organized private interest groups as the Republicans. Both parties now report to the same interest groups. Wall Street, the military/security complex, the Israel Lobby, agribusiness, and the extractive industries (oil, mining, timber) control the government regardless of the party in power. These powerful interests all have a stake in American hegemony.

The message is that the constellation of forces preclude internal political change.

Hegemony’s Archilles heel is the US economy. The fairy tale of American economic recovery supports America’s image as the safe haven, an image that keeps the dollar’s value up, the stock market up, and interest rates down. However, there is no economic information that supports this fairy tale.

Real median household income has not grown for years and is below the levels of the early 1970s. There has been no growth in real retail sales for six years. The labor force is shrinking. The labor force participation rate has declined since 2007 as has the civilian employment to population ratio. The 5.7 percent reported unemployment rate is achieved by not counting discouraged workers as part of the work force. (A discouraged worker is a person who is unable to find a job and has given up looking.)

A second official unemployment rate, which counts short-term (less than one year) discouraged workers and is seldom reported, stands at 11.2 percent. The US government stopped including long-term discouraged workers (discouraged for more than one year) in 1994. If the long-term discouraged are counted, the current unemployment rate in the US stands at 23.2 percent.

The offshoring of American manufacturing and professional service jobs such as software engineering and Information Technology has decimated the middle class. The middle class has not found jobs with incomes comparable to those moved abroad. The labor cost savings from offshoring the jobs to Asia has boosted corporate profits, the performance bonuses of executives and capital gains of shareholders. Thus all income and wealth gains are concentrated in a few hands at the top of the income distribution. The number of billionaires grows as destitution reaches from the lower economic class into the middle class. American university graduates unable to find jobs return to their childhood rooms in their parents’ homes and work as waitresses and bartenders in part-time jobs that will not support an independent existence.

With a large percentage of the young economically unable to form households, residential construction, home furnishings, and home appliances suffer economic weakness. Cars can still be sold only because the purchaser can obtain 100 percent financing in a six-year loan. The lenders sell the loans, which are securitized and sold to gullible investors, just as were the mortgage-backed financial instruments that precipitated the 2007 US financial crash.

None of the problems that created the 2008 recession, and that were created by the 2008 recession, have been addressed. Instead, policymakers have used an expansion of debt and money to paper over the problems. Money and debt have grown much more than US GDP, which raises questions about the value of the US dollar and the credit worthiness of the US government. On July 8, 2014, my colleagues and I pointed out that when correctly measured, US national debt stands at 185 percent of GDP.

This raises the question: Why was the credit rating of Russia, a country with an extremely low ratio of debt to GDP, downgraded and not that of the US? The answer is that the downgrading of Russian credit worthiness was a political act directed against Russia in behalf of US hegemony.

How long can fairy tales and political acts keep the US house of cards standing? A rigged stock market. A rigged interest rate. A rigged dollar exchange value, a rigged and suppressed gold price. The current Western financial system rests on world support for the US dollar and on nothing more.

The problem with neoliberal economics, which pervades all countries, even Russia and China, is that neoliberal economics is a tool of American economic imperialism, as is Globalism. As long as countries targeted by Washington for destabilization support and cling to the American doctrines that enable the destabilization, the targets are defenseless.

If Russia, China, and the BRICS Bank were willing to finance Greece, Italy, and Spain, perhaps those countries could be separated from the EU and NATO. The unraveling of Washington’s empire would

For the illustrated version go here:

Whatever became of economists and the American economy?

According to the official economic fairy tale, the US economy has been in recovery since June 2009.

This fairy tale supports America’s image as the safe haven, an image that keeps the dollar up, the stock market up, and interest rates down. It is an image that causes the massive numbers of unemployed Americans to blame themselves and not the mishandled economy.

This fairy tale survives despite the fact that there is no economic information whatsoever that supports it.

Real median household income has not grown for years and is below the levels of the early 1970s.

There has been no growth in real retail sales for six years.

How does an economy dependent on consumer demand grow when real consumer incomes and real retail sales do not grow?

Not from business investment. Why invest when there is no sales growth? Industrial production, properly deflated, remains well below the pre-recession level.

Not from construction. The real value of total construction put in place declined sharply from 2006 through 2011 and has bounced around the 2011 bottom for the past three years.

How does an economy grow when the labor force is shrinking? The labor force participation rate has declined since 2007 as has the civilian employment to population ratio.

How can there be a recovery when nothing has recovered?

Do economists believe that the entire corpus of macroeconomics taught since the 1940s is simply incorrect? If not, how can economists possibly support the recovery fairy tale?

We see the same absence of economics in the policy response to the sovereign debt crisis in Europe. First of all, the only reason that there is a crisis is because instead of writing off that part of the debt that cannot be paid, as in the past, so that the rest of the debt could be paid, creditors have demanded the impossible–that all the debt be paid.

In an attempt to achieve the impossible, heavily indebted countries, such as Greece, have been forced to reduce old age pensions, fire government employees, reduce social services such as health care and education, reduce wages, and sell-off public property such as ports, municipal water companies, and the state lottery. These austerity packages deprive the government of revenues and the population of spending power. Consequently, consumption, investment, and government spending all fall, and the economy sinks lower. As the economy sinks, the existing debt becomes a larger percentage of the GDP and becomes even more unserviceable.

Economists have known this ever since John Maynard Keynes taught it to them in the 1930s. Yet there is no sign of this foundational economics in the policy approach to the sovereign debt crisis.

Economists it appears have simply vanished from the earth. Or, if some are still present, they have lost their voices and do not speak.

Consider “globalism.” Every country has been convinced that globalism is imperative and that not to be part of the “global economy” means economic death. In fact, to be part of the global economy means death.

Understand the economic destruction that globalism has wreaked on the United States. Millions of middle class factory jobs and professional skill jobs such as software engineering and Information Technology have been taken away from the American middle class and given to people in Asia. In the short-run this drops labor costs and benefits the profits of the US corporations that offshore the jobs, but the consequence is to destroy the domestic consumer market as jobs that permit the formation of households are replaced with lowly paid part-time jobs that do not.

If households cannot form, the demand for housing, home appliances and furnishings declines. College graduates return home to live with their parents.

Part-time jobs hurt the ability to save. People are only able to purchase cars because they can get 100 percent financing, and more in order to pay off an existing car loan that exceeds the vehicle’s trade-in value, in a six-year loan. These loans are possible, because those who make the loans sell them. The loans are then securitized and sold as investments to those desperate for yield in a zero interest rate world. Derivatives are spun off these “investments,” and a new bubble is put in place.

When manufacturing jobs are offshored, the US plants are closed, and the tax base of state and local governments declines. When the governments have trouble servicing their accumulated debt, the tendency is not to meet their pension obligations. This reduces retiree incomes, incomes already reduced by zero or negative interest rates.

This unraveling of consumer demand, the basis for our economy, was entirely obvious at the very beginning. Yet junk economists or hired corporate mouthpieces promised Americans a “New Economy” that would provide them with better, higher paying, cleaner jobs to take the place of the jobs moved abroad. As I have pointed out for more than a decade, there is no sign of these jobs anywhere in the economy.

Why did economists make no protest as the US economy was shipped abroad and deep-sixed at home?

Globalism also devastates “emerging economies.” Self-sufficient agricultural communities are destroyed by the introduction of large-scale monoculture agriculture. The uprooted peoples relocate to cities where they become a drain on social services and a source of political instability.

Globalism, like neoliberal economics, is an instrument of economic imperialism. Labor is exploited, while peoples, cultures, and environments are destroyed. Yet the propaganda is so powerful that people partake of their own destruction.

Delusional America

Robert Parry is one of my favorite columnists. He is truthful, has a sense of justice, and delivers a firm punch. He used to be a “mainstream journalist,” like me, but we were too truthful for them. They kicked us out.

I can’t say Parry has always been one of my favorite journalists. During the 1980s he spent a lot of time on Reagan’s case. Having been on corporate boards, I know that CEOs seldom know everything that is going on in the company. There are just too many people and too many programs representing too many agendas. For presidents of countries with governments as large as the US government, there is far more going on than a president has time to learn about even if he could get accurate information.

In my day Assistant Secretaries and chiefs of staff were the most important people, because they controlled the flow of information. Presidents have to focus on fund raising for their reelection and for their party. More time and energy is used up with formalities and meetings with dignitaries and media events. At the most there are two or three issues on which a president can attempt leadership. If an organized clique such as the neoconservatives get into varied positions of authority, they can actually “create the reality” and take the government away from the president.

As I have reported on many occasions, my experience with Reagan left me with the conclusion that he was interested in two big issues. He wanted to stop the stagflation for which only the supply-side economists had a solution, and he wanted to end, not win, the cold war.

Both of these agendas put Reagan at odds with two of the most powerful of the private interest groups: Wall Street and the military/security complex.

Wall Street for the most part opposed Reagan’s economic program. They opposed it because they understood it as Keynesian deficit pump-priming that would cause an already high inflation rate to explode, which would drive down bond and stock prices.

The CIA and the military opposed any ending of the Cold War because of the obvious impact on their power and budget.

Left-wing journalists never picked up on this, and neither did right-wing journalists.

The left could not get beyond Reagan’s rhetoric. For the left, Reagan was trickle-down economics, Iran/Contra, and the fired air traffic controllers.

The right-wing liked Reagan’s rhetoric and blamed him for not delivering on it.

For the left, the Reagan years were a traumatic time. Robert Parry has never recovered from them. He can scarcely write a column about events today, which are horrific in comparison, without dragging Reagan into it. Parry doesn’t realize it, but if it is all Reagan’s fault, little wonder it has been impossible to hold Clinton, Bush 1 and 2, and Obama accountable.

Having written these lines, I already detect the denunciations coming my way for again attempting to “rehabilitate Ronald Ray-Gun.” Reagan does not need rehabilitating. This column is not about Reagan, and it is not a criticism of Parry. It is praise for Parry’s column, “‘Group-thinking’ the World into a New War.” Read it.

The pattern since Milosevic (and before) has been to demonize a foreign head of state and to take the US to war to get rid of him. That way the secret agenda is achieved under the cover of the necessity of deposing a bad or dangerous ruler.

Parry describes this well. Group-Think plays the important role of preventing any dissent, any suspicion of the case against the demonized person, and any examination of the real agenda that is being pursued.

Now it is Russian President Vladimir Putin who is being demonized. As Parry and I and Stephen F. Cohen, the most knowledgeable of the Russian experts, appreciate, Putin is not Saddam Hussein and Russia is not Iraq, Libya, Syria, Serbia, or Iran. To foment conflict with Russia that could lead to war is worse than irresponsible. Yet, as Parry writes, “from the start of the Ukraine crisis in fall 2013, the New York Times, the Washington Post and virtually every mainstream U.S. news outlet have behaved as dishonestly as they did during the run-up to war with Iraq.”

When Professor Cohen pointed out, correctly, that the lies about Russia, Ukraine, and Putin were hot and heavy, the propagandists had to get rid of the man with the facts. The New Republic, a hang-out for low IQ fools, called America’s leading Russian expert “Putin’s American toady.”

From Parry’s reporting, it appears that Group-Think has spread from the media and foreign policy community into the Association for Slavic, East European and Eurasian Studies, which has decided that academic careers require adherence to the government’s propaganda line, which means the neoconservatives’ line.

As I have written on a number of occasions, facts no longer play a role in American political life. Fact-based analysis is also disappearing from academic life and no longer plays a role in official economic reporting. A matrix has been created, an artificial reality that channels the energies and resources of the country into secret agendas that serve the interests of the ruling private interest groups and neoconservative ideology.

The United States government and the American people cannot contend with reality, because they do not know what the reality is.

In America’s make-believe world, neoconservative toadies such as New York Times columnist Thomas Friedman, set the Group-Think tone, while knowledgeable experts such as Stephen Cohen are tuned out.

In effect, America is both blind and deaf. It lives in delusions. Consequently, it will destroy itself and perhaps the world.

Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Roberts’ latest books are The Failure of Laissez Faire Capitalism and Economic Dissolution of the West and How America Was Lost.

Magic growth numbers from the US Government

Everyone wants good news, so the government makes it up. The latest fiction is that US real GDP grew 4.6% in the second quarter and 5% in the third.

Where did this growth come from?

Not from rising real consumer incomes.

Not from rising consumer credit.

Not from rising real retail sales.

Not from the housing sector.

Not from a trade surplus.

The growth came from a Bureau of Economic Analysis survey of consumer spending on services. The BEA found that spending on Obamacare drove the US real GDP growth to 5% in the third quarter.

In America, unlike in other countries, a huge chunk of medical spending goes to insurance company profits, not to health care. Another big chunk goes to paperwork, which has a variety of purposes such as collecting personal information on patients and combating fraud (probably the paperwork costs more than fraud).

Another chunk goes for tests and procedures in order to justify further procedures. For example, if a doctor thinks a patient’s diagnosis requires a MRI, he must often first order an x-ray to establish that a cheaper procedure does not suffice.

If a cancerous skin growth needs to come off, first a biopsy must be done to establish that it is a cancer so that a needless removal is not performed. And, of course, medical practicians must order unnecessary tests in order to protect themselves from the liability of relying on their medical judgment.

To regard any of these expenses as economic growth is farfetched.

There are sampling and other problems with the survey of personal consumption, and apparently Obamacare spending was all dumped into the third quarter. Why the third quarter?

The answer is that the illusion of economic recovery must be kept alive.

Real GDP growth of 5% in the third quarter is inconsistent with the sharp fall in key industrial commodity prices. It is not only oil (down 47%) but iron ore prices (down 49%), natural gas (down 30%), copper (down 15%). Pam and Russ Martens show that the fall in the producer price index for industrial commodities in 2014 is sharper than in 2008, the year of the crash.

With 30% of 30-year old Americans and almost 50% of 25-year olds living with parents, with debt-based derivative instruments impacted by falling oil and industrial commodity prices, with the likelihood that the US and EU economic attack on Russia will fail and perhaps produce retaliatory measures that could bring down the European banking system, look for 2015 to be the year that Washington will cease to get away with its economic lies.

The financial media and Wall Street economists by refusing to ask obvious questions have left the American people unprepared for another drop in their living standards and ability to cope.

The Swiss gold referendum: What it really means

In a few days the Swiss people will go to the polls to decide whether the Swiss central bank is to be required to hold 20% of its reserves in the form of gold

Polls show that the gold requirement is favored by the less well off and opposed by wealthy Swiss invested in stocks. These poll results provide new insight into the real reason for Quantitative Easing by the Federal Reserve and European Central Bank.

First, let’s examine the reasons for these class-based poll results. The view in Switzerland is that a gold backed Swiss franc would be more valuable, and a more valuable franc would increase the purchasing power of wage earners, thus reducing their living costs. For the wealthy stock owners, a stronger franc would reduce Swiss exports, and less exports would reduce stock prices and the wealth of the wealthy.

The vote is clearly a vote about income shares between the rich and the poor. The Swiss establishment opposes the gold-backed franc, as does Washington.

A few years ago the Swiss government, after experiencing a strong rise in the exchange value of the Swiss franc as a result of dollar and euro inflows seeking safety in the Swiss franc, decided to expand the Swiss money supply in line with the foreign currency inflows in order to stop the rise of the franc. The liquidity supplied by the central bank creating new francs has stopped the rise of the franc and supports exports and stock prices. As a vote in favor of a gold backed franc is not in the interest of the elite, it is unclear that the vote will be honest.

What does this tell us about the Federal Reserve’s policy of Quantitative Easing, which is an euphemism for printing an enormous amount of new dollars?

The official reason for QE is the Keynesian Phillips Curve claim that economic growth requires mild inflation of 2-3%. This false theory was put to death by the supply-side policy of the Reagan administration, but the misrepresentation of the Reagan administration’s policy by the Establishment has kept the bogus Phillips curve theory alive.

The claim based in disproven Phillips Curve theory that the Fed’s policy is directed at helping the overall economy is another example of the deception practiced by US authorities. The real purpose of QE is to drive up the wealth and income of the one percent by providing the liquidity that flows into financial asset prices such as stocks and bonds.

Since the 2008 US recession, skeptics of the Fed’s explanation of QE as support for the US economy have stressed instead that the purpose of US economic policy has been to support the federal deficit at low interest rate costs and to support the balance sheets of the troubled banks by pushing up the prices of debt-related derivatives on the banks balance sheets.

These have been important purposes, but it now appears that the main purpose has been to make the rich richer. This is why we have a stock market whose high values are not based in fundamentals but, instead, are based on the outpouring of liquidity by the Federal Reserve. As the economic policy of the US is entirely in the hands of the rich, it is not surprising that the rich use it to enrich themselves at the expense of everyone else. The Fed’s monetary policy that enriches the rich by driving up the prices of stocks and bonds also has robbed retirees of hundreds of billions of dollars, perhaps trillions, in lost interest income on their savings.

As I recently explained, QE is not over. The Fed is rolling over its interest and principal payments on its $4.5 trillion bond inventory into new bond purchases, and the banks now infused with $2.6 trillion in cash from the Fed are purchasing the bonds in place of the Fed’s QE purchases.

According to the latest news reports, Mario Draghi, the head of the European Central Bank will print all the money necessary to support financial asset prices. Draghi, like the Federal Reserve, masks his policy of enriching the rich in Phillips curve terms of driving up inflation in order to support economic growth. Of course, the real purpose is to drive up stock prices.

Like the Fed, the ECB pretends that the money it prints flows into the economy. But given the poor condition of the banks and potential borrowers loan volume is low. Instead the money created by central banks flows into paper financial asset prices. Thus, the monetary policy of the Western world is directed toward supporting the wealth of the rich and worsening the inequality in the distribution of income and wealth.

The rich are far from finished with their pillage. In exchange for campaign donations, state governors are turning over state pension funds to the management of high-fee, high-risk private pension fund managers who do a better job of maximizing their fee income than protecting the nest eggs of retirees.

Throughout the Western world economic policy is run for the sole benefit of the one percent and at the cost of everyone else. The greed and stupidity of the rich are creating ideal conditions for violent revolution. Karl Marx might yet triumph.

American financial markets bear no relationship to reality

By Paul Craig Roberts and Dave Kranzler

As we have demonstrated in previous articles, the bullion banks (primarily JP Morgan, HSBC, ScotiaMocatta, Barclays, UBS, and Deutsche Bank), most likely acting as agents for the Federal Reserve, have been systematically forcing down the price of gold since September 2011. Suppression of the gold price protects the US dollar against the extraordinary explosion in the growth of dollars and dollar-denominated debt.

It is possible to suppress the price of gold despite rising demand, because the price is not determined in the physical market in which gold is actually purchased and carried away. Instead, the price of gold is determined in a speculative futures market in which bets are placed on the direction of the gold price. Practically all of the bets made in the futures market are settled in cash, not in gold. Cash settlement of the contracts serves to remove price determination from the physical market.

Cash settlement makes it possible for enormous amounts of uncovered or “naked” futures contracts — paper gold — to be printed and dumped all at once for sale in the futures market at times when trading is thin. By increasing the supply of paper gold, the enormous sales drive down the futures price, and it is the futures price that determines the price at which physical quantities of bullion can be purchased.

The fact that the price of gold is determined in a paper market, in which there is no limit to the supply of paper contracts that can be created, produces the strange result that the demand for physical bullion is at an all time high, outstripping world production, but the price continues to fall! Asian demand is heavy, especially from China, and silver and gold eagles are flying off the shelves of the US Mint in record quantities. Bullion stocks are being depleted; yet the prices of gold and silver fall day after day.

The only way that this makes sense is that the price of bullion is not determined in a real market, but in a rigged paper market in which there is no limit to the ability to print paper gold.

The Chinese, Russians, and Indians are delighted that the corrupt American authorities make it possible for them to purchase ever larger quantities of gold at ever lower prices. The rigged market is perfectly acceptable to purchasers of bullion, just as it is to US authorities who are committed to protecting the dollar from a rising price of gold.

Nevertheless, an honest person would think that the incompatibility of high demand with constrained supply and falling price would arouse the interest of economists, the financial media, financial authorities, and congressional committees.

Where are the class action suits from gold mining companies against the Federal Reserve, its bullion bank agents, and all who are harming the interest of the mining companies by short-selling gold with uncovered contracts? Rigged markets–especially on the basis of inside information–are illegal and highly unethical. The naked short-selling is causing damage to mining interests. Once the price of gold is driven below $1200 per ounce, many mines become uneconomical. They shut down. Miners are unemployed. Shareholders lose money. How can such an obviously rigged and manipulated price be permitted to continue? The answer is that the US political and financial system is engulfed with corruption and criminality. The Federal Reserve’s policy of rigging bond and gold prices and providing liquidity for stock market speculation has damaged the US economy and tens of millions of US citizens in order to protect four mega-banks from their mistakes and crimes. This private use of public policy is unprecedented in history. Those responsible should be arrested and put on trial and they should simultaneously be sued for damages.

US authorities use the Plunge Protection Team, the Exchange Stabilization Fund, currency swaps, Federal Reserve policy, and purchases of S&P futures to support an artificial exchange value of the dollar and to provide the liquidity needed to support stock and bond prices, with the latter so artificially high that savers receive negative real interest rates on their saving.

The authorities have created a financial system totally out of sync with reality. When the authorities can no longer keep the house of cards standing, the collapse will be extreme.

It is a testament to the complicity of economists, the incompetence of financial media, and the corruption of public authorities and private institutions that this house of cards was constructed. The executives of the handful of mega-banks that caused the problem are the people who are running the US Treasury, the New York Fed, and the US financial regulatory agencies. They are using their control over public policy to protect themselves and their institutions from their own reckless behavior. The price for this protection is being paid by the economy and ordinary Americans – and that price is rising.

The latest orchestrated takedown of the gold price is related to two events (see the graphs below). One is that the Federal Reserve decided to boost the upward spike in the dollar’s exchange rate from the Fed’s announcement of the end of Quantitative Easing (QE). The Fed’s announcement of the end of dollar creation in order to support bond prices lessened the rising anxiety in the world about the US dollar’s value when the supply of new dollars continued to increase faster than the US output of goods and services. The Fed reinforced the boost that its announcement gave to the dollar by having its bullion bank agents drive down the gold price with naked short-selling.

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Naked short selling was also used to offset the effect on the gold price by the Bank of Japan’s surprise announcement on October 31 of a massive new program of QE. Apparently, the Bank of Japan either has been pressured by Washington to inflate Japan’s currency in order to support the dollar’s value or is applying a policy based on the Keynesian Phillips Curve that 2-3% inflation stimulates economic growth. Japan has been in the economic doldrums for a long time and is now reduced to pre-Reagan “snake oil” prescriptions in a desperate attempt to revive its economy.

Japan’s announcement of infinite money creation should have caused the price of gold to rise. To prevent a rise, at 3:00 AM US Eastern Time, during one of the least active trading periods for gold futures, the electronic futures market (Globex) was hit with a sale of 25 tonnes of uncovered Comex paper gold contracts, which dropped the gold price $20 dollars. No legitimate seller would destroy his own capital by selling a position in this way.

The gold price stabilized and moved higher, but at 8 AM US Eastern Time, and 20 minutes prior to the opening of the New York futures market (Comex), another 38 tonnes of uncovered paper gold futures were sold. The only possible purpose of such a sale is to drive down the price of gold. Again, no legitimate investor would unload a huge amount of his holdings in this way, thereby wiping out his own wealth.

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Allegedly, the United States is the home of scientific economics with the predominance of winners of the Nobel Prize in economics. Despite these high qualifications, the price of gold, silver, equities, and bonds that are set in the US bear no relationship to economic reality, and American economists do not notice.

The divergence of markets from economic reality disturbs neither public policymakers nor economists, who promote the interests of the government and its allied interest groups. The result is an economy that is a house of cards.

For additional reading see: http://investmentresearchdynamics.com/the-system-is-terminally-broken/

Presidential Crimes: Then And Now

Writing for Americans is not always an enjoyable experience. Many readers want to have their prejudices confirmed, not challenged. Emotions rule their reason, and they are capable of a determined resistance to facts and are not inhibited from displays of rudeness and ignorance. Indeed, some are so proud of their shortcomings that they can’t wait to show them to others. Some simply cannot read and confuse explanations with justifications as if the act of explaining something justifies the person or event explained. Thankfully, all readers are not handicapped in these ways or there would be no point in trying to inform the American people.

In a recent column I used some examples of Clinton-era scandals to make a point about the media, pointing out that the media and the American people were more interested in Clinton’s sexual escapades and in his choice of underwear than in the many anomalies associated with such serious events as the Oklahoma City bombing, Waco, and the mysterious death of a White House legal counsel.

Reaganphobes responded in an infantile way, remonstrating that the same standards should be applied to “your dear beloved Ray-Gun” as to Clinton. Those readers were unable to understand that the article was not about Clinton, but about how the media sensationalizes unimportant events in order to distract attention from serious ones. Examples from the Clinton era were used, because no question better epitomizes the level of the American public’s interest in political life than the young woman’s question to President Clinton–”boxers or briefs?”

It is doubtful that journalists and historians are capable of providing accurate understandings of any presidential term. Even those personally involved often do not know why some things happened. I have been in White House meetings from which every participant departed with a different understanding of what the president’s policy was. This was not the result of lack of clarity on the president’s part, but from the various interests present shaping the policy to their agendas.

Many Americans regard the White House as the lair of a powerful being who can snap his fingers and make things happen. The fact of the matter is that presidents have little idea of what is transpiring in the vast cabinet departments and federal agencies that constitute “their” administration. Many parts of government are empires unto themselves. The “Deep State,” about which Mike Lofgren, formerly a senior member of the Congressional staff has written, is unaccountable to anyone. But even the accountable part of the government isn’t. For example, the information flows from the cabinet departments, such as defense, state, and treasury, are reported to Assistant Secretaries, who control the flow of information to the Secretaries, who inform the President. The civil service professionals can massage the information one way, the Assistant Secretaries another, and the Secretaries yet another. If the Secretaries report the information to the White House Chief of Staff, the information can be massaged yet again. In my day before George W. Bush and Dick Cheney gave us the Gestapo-sounding Department of Homeland Security, the Secret Service reported to an Assistant Secretary of the Treasury, but the official had no way of evaluating the reliability of the information. The Secret Service reported whatever it suited the Secret Service to report.

Those who think that “the President knows” can test their conviction by trying to keep up with the daily announcements from all departments and agencies of the government. It is a known fact that CEOs of large corporations, the relative size of which are tiny compared to the US government, cannot know all that is happening within their organizations.

Nixon: Villain or Centrist Reformer?

I am not particularly knowledgeable about the terms of our various presidents. Nevertheless, I suspect that the Nixon and Reagan terms are among the least understood. Both presidents had more ideological opponents among journalists and historians than they had defenders. Consequently, their stories are more distorted by how their ideological opponents want them to be seen and remembered. For example, compare your view of Richard Nixon with the portrait Patrick Buchanan provides in his latest book, The Greatest Comeback. A person doesn’t have to agree with Buchanan’s view of the issues of those years, or with how Buchanan positioned, or tried to position, Nixon on various issues, to learn a great deal about Nixon. Buchanan can be wrong on issues, but he is not dishonest.

For a politician, Richard Nixon was a very knowledgable person. He travelled widely, visiting foreign leaders. Nixon was the most knowledgable president about foreign policy we have ever had. He knew more than Obama, Bush I and II, Clinton, Reagan, Ford, and Johnson combined.

The liberal-left created an image of Nixon as paranoid and secretive with a long enemies list, but Buchanan shows that Nixon was inclusive, a “big tent” politician with a wide range of advisors. There is no doubt that Nixon had enemies. Many of them continue to operate against him long after his death.

Indeed, it was Nixon’s inclusiveness that made conservatives suspicious of him. To keep conservatives in his camp, Nixon used their rhetoric, and it was Nixon’s rhetoric rather than his policies that generated Nixon-hatred among the liberal-left. The inclination to focus on words rather than deeds is another indication of the insubstantiality of American political comprehension.

Probably, the US has never had a more liberal president than Nixon. Nixon went against conservatives and established the Environmental Protection Agency (EPA) by executive order. He supported the Clean Air Act of 1970. Nixon federalized Medicaid for poor families with dependent children and proposed a mandate that private employers provide health insurance to employees. He desegregated public schools and implemented the first federal affirmative action program.

Declaring that “there is no place on this planet for a billion of its potentially most able people to live in angry isolation,” Nixon engineered the opening to Communist China. He ended the Vietnam War and replaced the draft with the volunteer army. He established economic trade with the Soviet Union and negotiated with Soviet leader Brezhnev landmark arms control treaties–SALT I and the Anti-Ballistic Missile Treaty in 1972, which lasted for 30 years until the neoconized George W. Bush regime violated and terminated the treaty in 2002.

These are astonishing achievements for any president, especially a Republican one. But if you ask Americans what they know about Nixon, the response is Watergate and President Nixon’s forced resignation.

I am convinced that Nixon’s opening to China and Nixon’s arms control treaties and de-escalation of tensions with the Soviet Union threatened the power and profit of the military/security complex. Watergate was an orchestration used to remove the threat. If you read the Watergate reporting by Woodward and Bernstein in the Washington Post, there is no real information in it. In place of information, words are used to create an ominous presence and sinister atmosphere that is transferred to Nixon.

Nixon himself had done nothing that justified impeachment, but his liberal policies had alienated conservative Republicans. Conservatives never forgave Nixon for agreeing with Zhou Enlai that Taiwan was part of China. When the Washington Post, John Dean, and a missing segment of a tape got Nixon in trouble, conservatives did not come to his defense. The liberal-left was overjoyed that Nixon got his comeuppance for supporting the exposure and prosecution of Alger Hiss two decades previously.

The Reagan era is also misunderstood. Just as President Jimmy Carter was regarded as an outsider by the Democratic Washington Establishment, Ronald Reagan was an outsider to the Republican Establishment whose candidate was George H. W. Bush. Just as Carter’s presidency was neutered by the Washington Establishment with the frame-up of Carter’s Budget Director and Chief of Staff, Reagan was partially neutered before he assumed office, and the Establishment removed in succession two national security advisors who were loyal to him.

Reagan’s Priorities and the Establishment’s Agenda

When Reagan won the Republican presidential nomination, he was told that although he had defeated the Establishment in the primaries, the voters would not be able to come to his defense in Washington. He must not make Goldwater’s mistake and shun the Republican Establishment, but pick its presidential candidate for his vice president. Otherwise, the Republican Establishment would work to defeat him in the presidential election just as Rockefeller had undermined Goldwater.

As a former movie star, Nancy Reagan put great store on personal appearance. Reagan’s California crew was a motley one. Lynn Nofziger, for example, sported a beard and a loosely knotted tie if a tie at all. He moved around his office in sock feet without shoes. When Nancy saw Bush’s man, Jim Baker, she concluded that the properly attired Baker was the person that she wanted standing next to her husband when photos were made. Consequently, Reagan’s first term had Bush’s most capable operative as Chief of Staff of the White House.

To get Reagan’s program implemented with the Republican Establishment occupying the chief of staff position was a hard fight. I don’t mean that Jim Baker was malevolent and wished to damage Reagan. For a member of the Republican Establishment, Jim Baker was very intelligent, and he is a hard person to dislike.

The problem with Baker was two-fold. He was not part of the Reagan team and did not understand what we were about or why Reagan was elected. Americans wanted the stagflation that had destroyed Jimmy Carter’s presidency ended, and they were tired of the ongoing Cold War with the Soviet Union and its ever present threat of nuclear armageddon.

It is not that Baker (or VP Bush) were personally opposed to these goals. The problem was, and still is, that the Establishment, whether Republican or Democratic, is responsive not to solving issues but to accommodating the special interest groups that comprise the Establishment. For the Establishment, preserving power is the primary issue.

The Republican Establishment and the Federal Reserve did not understand Reagan’s Supply-Side economic policy. In the entire post World War II period, reductions in tax rates were associated with the Keynesian demand management macroeconomic policy of increasing aggregate demand. The Reagan administration had inherited high inflation, and economists, Wall Street, and the Republican Establishment misunderstood Reagan’s Supply-side policy as a stimulus to consumer demand that would cause inflation, already high, to explode.

On top of this, conservatives in Congress were disturbed that Reagan’s policy would worsen the deficit–in their opinion the worst evil of all.

Reagan’s supply-side economic policy was designed not to increase aggregate demand, but to increase aggregate supply. Instead of prices rising, output and employment would rise. This was a radically new way of using fiscal policy, but instead of helping people to understand the new policy, the media ridiculed and mischaracterized the policy as “voodoo economics,” “trickle-down economics,” and “tax cuts for the rich.” These mischaracterizations are still with us three decades later.

Nevertheless, the supply-side policy was partially implemented. It was enough to end stagflation and provided the basis for Clinton’s economic success.

Ending the Cold War and Bad CIA Advice

President Reagan’s goal of ending the Cold War was also upsetting to both conservatives and the Establishment. Conservatives warned that wily Soviets would deceive Reagan and gain from the negotiations. The Establishment regarded Reagan’s goal of ending the cold war as a threat to the military/security complex comparable to Nixon’s opening to China and arms limitations treaties with the Soviet Union. President John F. Kennedy had threatened the same powerful interests when he realized from the Cuban Missile Crisis that the US must put an end to the risk of nuclear confrontation with the Soviet Union.

With the success of his economic policy in putting the US economy back on its feet, Reagan intended to force a negotiated end to the Cold War by threatening the Soviets with an arms race that their suffering economy could not endure. However, the CIA advised Reagan that if he renewed the arms race, he would lose it, because the Soviet economy, being centrally planned, was in the hands of Soviet leaders, who, unlike Reagan, could allocate as much of the economy as necessary to win the arms race.

Reagan did not believe the CIA. He created a secret presidential committee with authority to investigate the CIA’s evidence for its claim, and he appointed me to the committee. The committee concluded that the CIA was wrong.

Reagan always told us that his purpose was to end, not win, the Cold War. He said that the only victory he wanted was to remove the threat of nuclear annihilation. He made it clear that he did not want a Soviet scalp. Like Nixon, to keep conservatives on board, he used their rhetoric.

Curing stagflation and ending the Cold War were the main interests of President Reagan. Perhaps I am mistaken, but I do not think he paid much attention to anything else.

Grenada and the Contras in Nicaragua were explained to Reagan by the military/security complex as necessary interventions to make the Soviets aware that there would be no further Soviet advances and, thus, help to bring the Soviets to the negotiating table to end the nuclear threat. Unlike the George W. Bush and Obama regimes, the Reagan administration had no goal of a universal American Empire exercising hegemony over the world. Granada and Nicaragua were not part of an empire-building policy. Reagan understood them as a message to the Soviets that “you are not going any further, so lets negotiate.” Some conservatives regarded the revolutionary movements in Grenada and Nicaragua as communist subversion, but the general concern was that they would ally with the Soviet Union, thus creating more Cuba-like situations. Even President Carter opposed the rise of a left-wing government in Nicaragua.

America Playing the Foreign Policy Game

Today the Western governments support and participate in Washington’s invasions, but not then. The invasion of Grenada was criticized by both the British and Canadian governments. The US had to use its UN Security Council veto to save itself from being condemned for “a flagrant violation of international law.”

The Sandinistas in Nicaragua were reformers opposed to the corruption of the Somoza regime that catered to Washington’s interests. The Sandinistas aroused the same opposition from Washington as every reformist government in Latin America always has. Washington has traditionally regarded Latin American reformers as Marxist revolutionary movements and has consistently overthrown reformist governments in behalf of the United Fruit Company and other private interests that have large holdings in countries ruled by unrepresentative governments.

Washington’s policy was, and still is, short-sighted and hypocritical. The United States should have allied with representative governments, not against them. However, no American president, no matter how wise and well-intentioned, would have been a match for the combination of the interests of politically-connected US corporations and the fear of more Cubas. Remember Marine General Smedley Butler’s confession that he and his US Marines served to make Latin America safe for the United Fruit Company and “some lousy investment of the bankers.”

Information is Power

Americans, even well informed ones, dramatically over-estimate the knowledge of presidents and the neutrality of the information that is fed to them by the various agencies and advisors. Information is power, and presidents get the information that Washington wants them to receive. In Washington private agendas abound, and no president is immune from these agendas. A cabinet secretary, budget director, or White House chief of staff who knows how Washington works and has media allies is capable, if so inclined, of shaping the agenda independently of the president’s preferences.

The Establishment prefers a nonentity as president, a person without experience and a cadre of knowledgable supporters to serve him. Harry Truman was, and Obama is, putty in the hands of the Establishment.

If you read Oliver Stone and Peter Kuznick’s True History of the US, you will see that the Democratic Establishment, realizing that FDR would not survive his fourth term, forced his popular Vice President Henry Wallace off the ticket and put in his place the inconsequential Truman. With Truman in place, the military/security complex was able to create the Cold War.

From Bad to Worse

The transgressions of law that occurred during the Nixon and Reagan years are small when compared to the crimes of Clinton, George W. Bush and Obama, and the crimes were punished. Nixon and Reagan would have been impeached if they had started major wars in the Middle East based on lies and used US armed forces to invade or bomb numerous countries without Congressional authorization, or had claimed to be above both Constitution and statutory law, setting aside habeas corpus and due process and detaining US citizens indefinitely, engaging in torture, spying without warrants, and executing US citizens without due process of law.

Moreover, unlike the Clinton, Bush, and Obama regimes, the Reagan administration prosecuted those who broke the law. Assistant Secretary of State Elliott Abrams was convicted, National Security Advisor Robert McFarlane was convicted, Chief of CIA Central American Task Force Alan Fiers was convicted, Clair George, Chief of the CIA’s Division of Covert Operations was convicted. Richard Secord was convicted. National Security Advisor John Poindexter was convicted. Oliver North was convicted. North’s conviction was later overturned, and President George H.W. Bush pardoned others. But the Reagan Administration held its operatives accountable to law. No American President since Reagan has held the government accountable.

Clair George was convicted of lying to congressional committees. Richard Secord was convicted of lying to Congress. John Poindexter was convicted of lying to Congress. Alan Fiers was convicted of withholding information from Congress. Compare these convictions then with James R. Clapper now. President Obama appointed Clapper Director of National Intelligence on June 5, 2010, declaring that Clapper “possesses a quality that I value in all my advisers: a willingness to tell leaders what we need to know even if its’s not what we want to hear.” With this endorsement, Clapper proceeded to lie to Congress under oath, a felony. Clapper was not indicted and prosecuted. He was not even fired or forced to resign. For executive branch officials, perjury is now a dead letter law.

The destruction of the rule of law and accountable government has extended to state and local levels. Police officers no longer “serve and protect” the public. The most dangerous encounter most Americans will ever experience is with police, who brutalize citizens without cause and even shoot them down in their homes and on their streets. A police badge has become a license to kill, and police use it to the hilt. During the Iraq War, more Americans were murdered by police than the military lost troops in combat.

And nothing is done about it. The country is facing the November 4 elections, and the abuse of US citizens by “their” police is not an issue. Neither are the many illegal interventions by Washington into the internal affairs of other sovereign countries or the unconstitutional spying that violates citizens’ privacy. The fact that Washington is gearing up for yet another war in the Middle East is not an important issue in the election.

In the US the rule of law, and with it liberty, have been lost. With few exceptions, Americans are too ignorant and unconcerned to do anything about it. The longer the rule of law is set aside, the more difficult it is to reestablish it. Sooner or later the rule of law ceases even as a memory. No candidate in the upcoming election has made the rule of law an issue.

Americans have become a small-minded divided people, ruled by petty hatreds, who are easily set against one another and against other peoples by their rulers.

Vladimir Putin is the leader of the moral world

Washington has declared Russia, China, India, Brazil and other parts of South America, Iran, and South Africa to be enemies

Dear Friends,

Vladimir Putin’s remarks at the 11th meeting of the Valdai International Discussion Club are worth more than a link in my latest column. These are the remarks of a humanitarian political leader, the like of which the world has not seen in my lifetime. Compare Putin to the corrupt war criminal in the White House or to his puppets in office in Germany, UK, France, Japan, Canada, Australia, and you will see the difference between a criminal clique and a leader striving for a humane and livable world in which the interests of all peoples are respected.

In a sane Western society, Putin’s statements would have been reproduced in full and discussions organized with remarks from experts such as Stephen F. Cohen. Choruses of approval would have been heard on television and read in the print media. But, of course, nothing like this is possible in a country whose rulers claim that it is the “exceptional” and “indispensable” country with an extra-legal right to hegemony over the world. As far as Washington and its prostitute media, named “presstitutes” by the trends specialist Gerald Celente, are concerned, no country counts except Washington. “You are with us or against us,” which means “you are our vassals or our enemies.” This means that Washington has declared Russia, China, India, Brazil and other parts of South America, Iran, and South Africa to be enemies.

This is a big chunk of the world for a bankrupt country, hated by its vassal populations and many of its own subjects, that has not won a war since it defeated tiny Japan in 1945 by using nuclear weapons, the only use of such terrible weapons in world history.

As an American, try to image any known American politician, or for that matter any professor at Harvard, Princeton, Yale, or Stanford capable of giving an address to an educated discussion group of the quality of Putin’s remarks. Try to find any American politician capable of responding precisely and directly to questions instead of employing evasion.

No one can read Putin’s remarks without concluding that Putin is the leader of the world.

In my opinion, Putin is such a towering figure that Washington has him marked for assassination. The CIA will use one of the Muslim terrorists that the CIA supports inside Russia. Unlike an American president, who dares not move among the people openly, Putin is not kept remote from the people. Putin is at ease with the Russian people and mingles among them. This makes him an easy target for the CIA to use a Chechnya terrorist, a Jihadist suicide bomber, or the traditional “lone nut” to assassinate Putin.

The immoral, wicked, and declining West is incapable of producing leadership of Putin’s quality. Having defamed Putin, assassinating him will cause little comment in the Western media.

Here are Putin’s remarkable remarks:

Meeting of the Valdai International Discussion Club
24 October 2014, Sochi

Vladimir Putin took part in the final plenary meeting of the Valdai International Discussion Club’s XI session. The meeting’s theme is The World Order: New Rules or a Game without Rules.
This year, 108 experts, historians and political analysts from 25 countries, including 62 foreign participants, took part in the club’s work.

The plenary meeting summed up the club’s work over the previous three days, which concentrated on analysing the factors eroding the current system of institutions and norms of international law.

PRESIDENT OF RUSSIA VLADIMIR PUTIN: Colleagues, ladies and gentlemen, friends, it is a pleasure to welcome you to the XI meeting of the Valdai International Discussion Club.

It was mentioned already that the club has new co-organisers this year. They include Russian non-governmental organisations, expert groups and leading universities. The idea was also raised of broadening the discussions to include not just issues related to Russia itself but also global politics and the economy.

n organisation and content will bolster the club’s influence as a leading discussion and expert forum. At the same time, I hope the ‘Valdai spirit’ will remain – this free and open atmosphere and chance to express all manner of very different and frank opinions.

Let me say in this respect that I will also not let you down and will speak directly and frankly. Some of what I say might seem a bit too harsh, but if we do not speak directly and honestly about what we really think, then there is little point in even meeting in this way. It would be better in that case just to keep to diplomatic get-togethers, where no one says anything of real sense and, recalling the words of one famous diplomat, you realise that diplomats have tongues so as not to speak the truth.

We get together for other reasons. We get together so as to talk frankly with each other. We need to be direct and blunt today not so as to trade barbs, but so as to attempt to get to the bottom of what is actually happening in the world, try to understand why the world is becoming less safe and more unpredictable, and why the risks are increasing everywhere around us.
Today’s discussion took place under the theme: New Rules or a Game without Rules. I think that this formula accurately describes the historic turning point we have reached today and the choice we all face. There is nothing new of course in the idea that the world is changing very fast. I know this is something you have spoken about at the discussions today. It is certainly hard not to notice the dramatic transformations in global politics and the economy, public life, and in industry, information and social technologies.

Let me ask you right now to forgive me if I end up repeating what some of the discussion’s participants have already said. It’s practically impossible to avoid. You have already held detailed discussions, but I will set out my point of view. It will coincide with other participants’ views on some points and differ on others.

As we analyse today’s situation, let us not forget history’s lessons. First of all, changes in the world order – and what we are seeing today are events on this scale – have usually been accompanied by if not global war and conflict, then by chains of intensive local-level conflicts. Second, global politics is above all about economic leadership, issues of war and peace, and the humanitarian dimension, including human rights.

The world is full of contradictions today. We need to be frank in asking each other if we have a reliable safety net in place. Sadly, there is no guarantee and no certainty that the current system of global and regional security is able to protect us from upheavals. This system has become seriously weakened, fragmented and deformed. The international and regional political, economic, and cultural cooperation organisations are also going through difficult times.

Yes, many of the mechanisms we have for ensuring the world order were created quite a long time ago now, including and above all in the period immediately following World War II. Let me stress that the solidity of the system created back then rested not only on the balance of power and the rights of the victor countries, but on the fact that this system’s ‘founding fathers’ had respect for each other, did not try to put the squeeze on others, but attempted to reach agreements.

The main thing is that this system needs to develop, and despite its various shortcomings, needs to at least be capable of keeping the world’s current problems within certain limits and regulating the intensity of the natural competition between countries.

It is my conviction that we could not take this mechanism of checks and balances that we built over the last decades, sometimes with such effort and difficulty, and simply tear it apart without building anything in its place. Otherwise we would be left with no instruments other than brute force.

What we needed to do was to carry out a rational reconstruction and adapt it the new realities in the system of international relations.

But the United States, having declared itself the winner of the Cold War, saw no need for this. Instead of establishing a new balance of power, essential for maintaining order and stability, they took steps that threw the system into sharp and deep imbalance.

The Cold War ended, but it did not end with the signing of a peace treaty with clear and transparent agreements on respecting existing rules or creating new rules and standards. This created the impression that the so-called ‘victors’ in the Cold War had decided to pressure events and reshape the world to suit their own needs and interests. If the existing system of international relations, international law and the checks and balances in place got in the way of these aims, this system was declared worthless, outdated and in need of immediate demolition.

Pardon the analogy, but this is the way nouveaux riches behave when they suddenly end up with a great fortune, in this case, in the shape of world leadership and domination. Instead of managing their wealth wisely, for their own benefit too of course, I think they have committed many follies.

We have entered a period of differing interpretations and deliberate silences in world politics. International law has been forced to retreat over and over by the onslaught of legal nihilism. Objectivity and justice have been sacrificed on the altar of political expediency. Arbitrary interpretations and biased assessments have replaced legal norms. At the same time, total control of the global mass media has made it possible when desired to portray white as black and black as white.

In a situation where you had domination by one country and its allies, or its satellites rather, the search for global solutions often turned into an attempt to impose their own universal recipes. This group’s ambitions grew so big that they started presenting the policies they put together in their corridors of power as the view of the entire international community. But this is not the case.

The very notion of ‘national sovereignty’ became a relative value for most countries. In essence, what was being proposed was the formula: the greater the loyalty towards the world’s sole power centre, the greater this or that ruling regime’s legitimacy.

We will have a free discussion afterwards and I will be happy to answer your questions and would also like to use my right to ask you questions. Let someone try to disprove the arguments that I just set out during the upcoming discussion.

The measures taken against those who refuse to submit are well-known and have been tried and tested many times. They include use of force, economic and propaganda pressure, meddling in domestic affairs, and appeals to a kind of ‘supra-legal’ legitimacy when they need to justify illegal intervention in this or that conflict or toppling inconvenient regimes. Of late, we have increasing evidence too that outright blackmail has been used with regard to a number of leaders. It is not for nothing that ‘big brother’ is spending billions of dollars on keeping the whole world, including its own closest allies, under surveillance.

Let’s ask ourselves, how comfortable are we with this, how safe are we, how happy living in this world, and how fair and rational has it become? Maybe, we have no real reasons to worry, argue and ask awkward questions? Maybe the United States’ exceptional position and the way they are carrying out their leadership really is a blessing for us all, and their meddling in events all around the world is bringing peace, prosperity, progress, growth and democracy, and we should maybe just relax and enjoy it all?

Let me say that this is not the case, absolutely not the case.

A unilateral diktat and imposing one’s own models produces the opposite result. Instead of settling conflicts it leads to their escalation, instead of sovereign and stable states we see the growing spread of chaos, and instead of democracy there is support for a very dubious public ranging from open neo-fascists to Islamic radicals.

Why do they support such people? They do this because they decide to use them as instruments along the way in achieving their goals but then burn their fingers and recoil. I never cease to be amazed by the way that our partners just keep stepping on the same rake, as we say here in Russia, that is to say, make the same mistake over and over.

They once sponsored Islamic extremist movements to fight the Soviet Union. Those groups got their battle experience in Afghanistan and later gave birth to the Taliban and Al-Qaeda. The West if not supported, at least closed its eyes, and, I would say, gave information, political and financial support to international terrorists’ invasion of Russia (we have not forgotten this) and the Central Asian region’s countries. Only after horrific terrorist attacks were committed on US soil itself did the United States wake up to the common threat of terrorism. Let me remind you that we were the first country to support the American people back then, the first to react as friends and partners to the terrible tragedy of September 11.

During my conversations with American and European leaders, I always spoke of the need to fight terrorism together, as a challenge on a global scale. We cannot resign ourselves to and accept this threat, cannot cut it into separate pieces using double standards. Our partners expressed agreement, but a little time passed and we ended up back where we started. First there was the military operation in Iraq, then in Libya, which got pushed to the brink of falling apart. Why was Libya pushed into this situation? Today it is a country in danger of breaking apart and has become a training ground for terrorists.

Only the current Egyptian leadership’s determination and wisdom saved this key Arab country from chaos and having extremists run rampant. In Syria, as in the past, the United States and its allies started directly financing and arming rebels and allowing them to fill their ranks with mercenaries from various countries. Let me ask where do these rebels get their money, arms and military specialists? Where does all this come from? How did the notorious ISIL manage to become such a powerful group, essentially a real armed force?

As for financing sources, today, the money is coming not just from drugs, production of which has increased not just by a few percentage points but many-fold, since the international coalition forces have been present in Afghanistan. You are aware of this. The terrorists are getting money from selling oil too. Oil is produced in territory controlled by the terrorists, who sell it at dumping prices, produce it and transport it. But someone buys this oil, resells it, and makes a profit from it, not thinking about the fact that they are thus financing terrorists who could come sooner or later to their own soil and sow destruction in their own countries.

Where do they get new recruits? In Iraq, after Saddam Hussein was toppled, the state’s institutions, including the army, were left in ruins. We said back then, be very, very careful. You are driving people out into the street, and what will they do there? Don’t forget (rightfully or not) that they were in the leadership of a large regional power, and what are you now turning them into?

What was the result? Tens of thousands of soldiers, officers and former Baath Party activists were turned out into the streets and today have joined the rebels’ ranks. Perhaps this is what explains why the Islamic State group has turned out so effective? In military terms, it is acting very effectively and has some very professional people. Russia warned repeatedly about the dangers of unilateral military actions, intervening in sovereign states’ affairs, and flirting with extremists and radicals. We insisted on having the groups fighting the central Syrian government, above all the Islamic State, included on the lists of terrorist organisations. But did we see any results? We appealed in vain.

We sometimes get the impression that our colleagues and friends are constantly fighting the consequences of their own policies, throw all their effort into addressing the risks they themselves have created, and pay an ever-greater price.

Colleagues, this period of unipolar domination has convincingly demonstrated that having only one power centre does not make global processes more manageable. On the contrary, this kind of unstable construction has shown its inability to fight the real threats such as regional conflicts, terrorism, drug trafficking, religious fanaticism, chauvinism and neo-Nazism. At the same time, it has opened the road wide for inflated national pride, manipulating public opinion and letting the strong bully and suppress the weak.

Essentially, the unipolar world is simply a means of justifying dictatorship over people and countries. The unipolar world turned out too uncomfortable, heavy and unmanageable a burden even for the self-proclaimed leader. Comments along this line were made here just before and I fully agree with this. This is why we see attempts at this new historic stage to recreate a semblance of a quasi-bipolar world as a convenient model for perpetuating American leadership. It does not matter who takes the place of the centre of evil in American propaganda, the USSR’s old place as the main adversary. It could be Iran, as a country seeking to acquire nuclear technology, China, as the world’s biggest economy, or Russia, as a nuclear superpower.

Today, we are seeing new efforts to fragment the world, draw new dividing lines, put together coalitions not built for something but directed against someone, anyone, create the image of an enemy as was the case during the Cold War years, and obtain the right to this leadership, or diktat if you wish. The situation was presented this way during the Cold War. We all understand this and know this. The United States always told its allies: “We have a common enemy, a terrible foe, the centre of evil, and we are defending you, our allies, from this foe, and so we have the right to order you around, force you to sacrifice your political and economic interests and pay your share of the costs for this collective defence, but we will be the ones in charge of it all of course.” In short, we see today attempts in a new and changing world to reproduce the familiar models of global management, and all this so as to guarantee their [the US’] exceptional position and reap political and economic dividends.

But these attempts are increasingly divorced from reality and are in contradiction with the world’s diversity. Steps of this kind inevitably create confrontation and countermeasures and have the opposite effect to the hoped-for goals. We see what happens when politics rashly starts meddling in the economy and the logic of rational decisions gives way to the logic of confrontation that only hurt one’s own economic positions and interests, including national business interests.

Joint economic projects and mutual investment objectively bring countries closer together and help to smooth out current problems in relations between states. But today, the global business community faces unprecedented pressure from Western governments. What business, economic expediency and pragmatism can we speak of when we hear slogans such as “the homeland is in danger”, “the free world is under threat”, and “democracy is in jeopardy”? And so everyone needs to mobilise. That is what a real mobilisation policy looks like.

Sanctions are already undermining the foundations of world trade, the WTO rules and the principle of inviolability of private property. They are dealing a blow to liberal model of globalisation based on markets, freedom and competition, which, let me note, is a model that has primarily benefited precisely the Western countries. And now they risk losing trust as the leaders of globalisation. We have to ask ourselves, why was this necessary? After all, the United States’ prosperity rests in large part on the trust of investors and foreign holders of dollars and US securities. This trust is clearly being undermined and signs of disappointment in the fruits of globalisation are visible now in many countries.

The well-known Cyprus precedent and the politically motivated sanctions have only strengthened the trend towards seeking to bolster economic and financial sovereignty and countries’ or their regional groups’ desire to find ways of protecting themselves from the risks of outside pressure. We already see that more and more countries are looking for ways to become less dependent on the dollar and are setting up alternative financial and payments systems and reserve currencies. I think that our American friends are quite simply cutting the branch they are sitting on. You cannot mix politics and the economy, but this is what is happening now. I have always thought and still think today that politically motivated sanctions were a mistake that will harm everyone, but I am sure that we will come back to this subject later.

We know how these decisions were taken and who was applying the pressure. But let me stress that Russia is not going to get all worked up, get offended or come begging at anyone’s door. Russia is a self-sufficient country. We will work within the foreign economic environment that has taken shape, develop domestic production and technology and act more decisively to carry out transformation. Pressure from outside, as has been the case on past occasions, will only consolidate our society, keep us alert and make us concentrate on our main development goals.

Of course the sanctions are a hindrance. They are trying to hurt us through these sanctions, block our development and push us into political, economic and cultural isolation, force us into backwardness in other words. But let me say yet again that the world is a very different place today. We have no intention of shutting ourselves off from anyone and choosing some kind of closed development road, trying to live in autarky. We are always open to dialogue, including on normalising our economic and political relations. We are counting here on the pragmatic approach and position of business communities in the leading countries.

Some are saying today that Russia is supposedly turning its back on Europe – such words were probably spoken already here too during the discussions – and is looking for new business partners, above all in Asia. Let me say that this is absolutely not the case. Our active policy in the Asian-Pacific region began not just yesterday and not in response to sanctions, but is a policy that we have been following for a good many years now. Like many other countries, including Western countries, we saw that Asia is playing an ever greater role in the world, in the economy and in politics, and there is simply no way we can afford to overlook these developments.

Let me say again that everyone is doing this, and we will do so to, all the more so as a large part of our country is geographically in Asia. Why should we not make use of our competitive advantages in this area? It would be extremely shortsighted not to do so.

Developing economic ties with these countries and carrying out joint integration projects also creates big incentives for our domestic development. Today’s demographic, economic and cultural trends all suggest that dependence on a sole superpower will objectively decrease. This is something that European and American experts have been talking and writing about too.
Perhaps developments in global politics will mirror the developments we are seeing in the global economy, namely, intensive competition for specific niches and frequent change of leaders in specific areas. This is entirely possible.

There is no doubt that humanitarian factors such as education, science, healthcare and culture are playing a greater role in global competition. This also has a big impact on international relations, including because this ‘soft power’ resource will depend to a great extent on real achievements in developing human capital rather than on sophisticated propaganda tricks.
At the same time, the formation of a so-called polycentric world (I would also like to draw attention to this, colleagues) in and of itself does not improve stability; in fact, it is more likely to be the opposite. The goal of reaching global equilibrium is turning into a fairly difficult puzzle, an equation with many unknowns.

So, what is in store for us if we choose not to live by the rules – even if they may be strict and inconvenient – but rather live without any rules at all? And that scenario is entirely possible; we cannot rule it out, given the tensions in the global situation. Many predictions can already be made, taking into account current trends, and unfortunately, they are not optimistic. If we do not create a clear system of mutual commitments and agreements, if we do not build the mechanisms for managing and resolving crisis situations, the symptoms of global anarchy will inevitably grow.
Today, we already see a sharp increase in the likelihood of a whole set of violent conflicts with either direct or indirect participation by the world’s major powers. And the risk factors include not just traditional multinational conflicts, but also the internal instability in separate states, especially when we talk about nations located at the intersections of major states’ geopolitical interests, or on the border of cultural, historical, and economic civilizational continents.

Ukraine, which I’m sure was discussed at length and which we will discuss some more, is one of the example of such sorts of conflicts that affect international power balance, and I think it will certainly not be the last. From here emanates the next real threat of destroying the current system of arms control agreements. And this dangerous process was launched by the United States of America when it unilaterally withdrew from the Anti-Ballistic Missile Treaty in 2002, and then set about and continues today to actively pursue the creation of its global missile defence system.

Colleagues, friends, I want to point out that we did not start this. Once again, we are sliding into the times when, instead of the balance of interests and mutual guarantees, it is fear and the balance of mutual destruction that prevent nations from engaging in direct conflict. In absence of legal and political instruments, arms are once again becoming the focal point of the global agenda; they are used wherever and however, without any UN Security Council sanctions. And if the Security Council refuses to produce such decisions, then it is immediately declared to be an outdated and ineffective instrument.

Many states do not see any other ways of ensuring their sovereignty but to obtain their own bombs. This is extremely dangerous. We insist on continuing talks; we are not only in favour of talks, but insist on continuing talks to reduce nuclear arsenals. The less nuclear weapons we have in the world, the better. And we are ready for the most serious, concrete discussions on nuclear disarmament – but only serious discussions without any double standards.

What do I mean? Today, many types of high-precision weaponry are already close to mass-destruction weapons in terms of their capabilities, and in the event of full renunciation of nuclear weapons or radical reduction of nuclear potential, nations that are leaders in creating and producing high-precision systems will have a clear military advantage. Strategic parity will be disrupted, and this is likely to bring destabilization. The use of a so-called first global pre-emptive strike may become tempting. In short, the risks do not decrease, but intensify.

The next obvious threat is the further escalation of ethnic, religious, and social conflicts. Such conflicts are dangerous not only as such, but also because they create zones of anarchy, lawlessness, and chaos around them, places that are comfortable for terrorists and criminals, where piracy, human trafficking, and drug trafficking flourish.

Incidentally, at the time, our colleagues tried to somehow manage these processes, use regional conflicts and design ‘colour revolutions’ to suit their interests, but the genie escaped the bottle. It looks like the controlled chaos theory fathers themselves do not know what to do with it; there is disarray in their ranks.

We closely follow the discussions by both the ruling elite and the expert community. It is enough to look at the headlines of the Western press over the last year. The same people are called fighters for democracy, and then Islamists; first they write about revolutions and then call them riots and upheavals. The result is obvious: the further expansion of global chaos.

Colleagues, given the global situation, it is time to start agreeing on fundamental things. This is incredibly important and necessary; this is much better than going back to our own corners. The more we all face common problems, the more we find ourselves in the same boat, so to speak. And the logical way out is in cooperation between nations, societies, in finding collective answers to increasing challenges, and in joint risk management. Granted, some of our partners, for some reason, remember this only when it suits their interests.

Practical experience shows that joint answers to challenges are not always a panacea; and we need to understand this. Moreover, in most cases, they are hard to reach; it is not easy to overcome the differences in national interests, the subjectivity of different approaches, particularly when it comes to nations with different cultural and historical traditions. But nevertheless, we have examples when, having common goals and acting based on the same criteria, together we achieved real success.

Let me remind you about solving the problem of chemical weapons in Syria, and the substantive dialogue on the Iranian nuclear programme, as well as our work on North Korean issues, which also has some positive results. Why can’t we use this experience in the future to solve local and global challenges?

What could be the legal, political, and economic basis for a new world order that would allow for stability and security, while encouraging healthy competition, not allowing the formation of new monopolies that hinder development? It is unlikely that someone could provide absolutely exhaustive, ready-made solutions right now. We will need extensive work with participation by a wide range of governments, global businesses, civil society, and such expert platforms as ours.

However, it is obvious that success and real results are only possible if key participants in international affairs can agree on harmonising basic interests, on reasonable self-restraint, and set the example of positive and responsible leadership. We must clearly identify where unilateral actions end and we need to apply multilateral mechanisms, and as part of improving the effectiveness of international law, we must resolve the dilemma between the actions by international community to ensure security and human rights and the principle of national sovereignty and non-interference in the internal affairs of any state.

Those very collisions increasingly lead to arbitrary external interference in complex internal processes, and time and again, they provoke dangerous conflicts between leading global players. The issue of maintaining sovereignty becomes almost paramount in maintaining and strengthening global stability.

Clearly, discussing the criteria for the use of external force is extremely difficult; it is practically impossible to separate it from the interests of particular nations. However, it is far more dangerous when there are no agreements that are clear to everyone, when no clear conditions are set for necessary and legal interference.

I will add that international relations must be based on international law, which itself should rest on moral principles such as justice, equality and truth. Perhaps most important is respect for one’s partners and their interests. This is an obvious formula, but simply following it could radically change the global situation.

I am certain that if there is a will, we can restore the effectiveness of the international and regional institutions system. We do not even need to build anything anew, from the scratch; this is not a “greenfield,” especially since the institutions created after World War II are quite universal and can be given modern substance, adequate to manage the current situation.

This is true of improving the work of the UN, whose central role is irreplaceable, as well as the OSCE, which, over the course of 40 years, has proven to be a necessary mechanism for ensuring security and cooperation in the Euro-Atlantic region. I must say that even now, in trying to resolve the crisis in southeast Ukraine, the OSCE is playing a very positive role.

In light of the fundamental changes in the international environment, the increase in uncontrollability and various threats, we need a new global consensus of responsible forces. It’s not about some local deals or a division of spheres of influence in the spirit of classic diplomacy, or somebody’s complete global domination. I think that we need a new version of interdependence. We should not be afraid of it. On the contrary, this is a good instrument for harmonising positions.

This is particularly relevant given the strengthening and growth of certain regions on the planet, which process objectively requires institutionalisation of such new poles, creating powerful regional organisations and developing rules for their interaction. Cooperation between these centres would seriously add to the stability of global security, policy and economy. But in order to establish such a dialogue, we need to proceed from the assumption that all regional centres and integration projects forming around them need to have equal rights to development, so that they can complement each other and nobody can force them into conflict or opposition artificially. Such destructive actions would break down ties between states, and the states themselves would be subjected to extreme hardship, or perhaps even total destruction.

I would like to remind you of the last year’s events. We have told our American and European partners that hasty backstage decisions, for example, on Ukraine’s association with the EU, are fraught with serious risks to the economy. We didn’t even say anything about politics; we spoke only about the economy, saying that such steps, made without any prior arrangements, touch on the interests of many other nations, including Russia as Ukraine’s main trade partner, and that a wide discussion of the issues is necessary. Incidentally, in this regard, I will remind you that, for example, the talks on Russia’s accession to the WTO lasted 19 years. This was very difficult work, and a certain consensus was reached.

Why am I bringing this up? Because in implementing Ukraine’s association project, our partners would come to us with their goods and services through the back gate, so to speak, and we did not agree to this, nobody asked us about this. We had discussions on all topics related to Ukraine’s association with the EU, persistent discussions, but I want to stress that this was done in an entirely civilised manner, indicating possible problems, showing the obvious reasoning and arguments. Nobody wanted to listen to us and nobody wanted to talk. They simply told us: this is none of your business, point, end of discussion. Instead of a comprehensive but – I stress – civilised dialogue, it all came down to a government overthrow; they plunged the country into chaos, into economic and social collapse, into a civil war with enormous casualties.

Why? When I ask my colleagues why, they no longer have an answer; nobody says anything. That’s it. Everyone’s at a loss, saying it just turned out that way. Those actions should not have been encouraged – it wouldn’t have worked. After all (I already spoke about this), former Ukrainian President Yanukovych signed everything, agreed with everything. Why do it? What was the point? What is this, a civilised way of solving problems? Apparently, those who constantly throw together new ‘colour revolutions’ consider themselves ‘brilliant artists’ and simply cannot stop.

I am certain that the work of integrated associations, the cooperation of regional structures, should be built on a transparent, clear basis; the Eurasian Economic Union’s formation process is a good example of such transparency. The states that are parties to this project informed their partners of their plans in advance, specifying the parameters of our association, the principles of its work, which fully correspond with the World Trade Organisation rules.

I will add that we would also have welcomed the start of a concrete dialogue between the Eurasian and European Union. Incidentally, they have almost completely refused us this as well, and it is also unclear why – what is so scary about it?

And, of course, with such joint work, we would think that we need to engage in dialogue (I spoke about this many times and heard agreement from many of our western partners, at least in Europe) on the need to create a common space for economic and humanitarian cooperation stretching all the way from the Atlantic to the Pacific Ocean.

Colleagues, Russia made its choice. Our priorities are further improving our democratic and open economy institutions, accelerated internal development, taking into account all the positive modern trends in the world, and consolidating society based on traditional values and patriotism.

We have an integration-oriented, positive, peaceful agenda; we are working actively with our colleagues in the Eurasian Economic Union, the Shanghai Cooperation Organisation, BRICS and other partners. This agenda is aimed at developing ties between governments, not dissociating. We are not planning to cobble together any blocs or get involved in an exchange of blows.

The allegations and statements that Russia is trying to establish some sort of empire, encroaching on the sovereignty of its neighbours, are groundless. Russia does not need any kind of special, exclusive place in the world – I want to emphasise this. While respecting the interests of others, we simply want for our own interests to be taken into account and for our position to be respected.
We are well aware that the world has entered an era of changes and global transformations, when we all need a particular degree of caution, the ability to avoid thoughtless steps. In the years after the Cold War, participants in global politics lost these qualities somewhat. Now, we need to remember them. Otherwise, hopes for a peaceful, stable development will be a dangerous illusion, while today’s turmoil will simply serve as a prelude to the collapse of world order.

Yes, of course, I have already said that building a more stable world order is a difficult task. We are talking about long and hard work. We were able to develop rules for interaction after World War II, and we were able to reach an agreement in Helsinki in the 1970s. Our common duty is to resolve this fundamental challenge at this new stage of development.

Thank you very much for your attention.

VLADIMIR PUTIN (commenting on statements by former Prime Minister of France Dominique de Villepin and former Federal Chancellor of Austria Wolfgang Schuessel): I would like to begin by saying that overall I agree with what both Wolfgang and Dominique have said. I fully support everything they said. However, there are a few things I would like to clarify.

I believe Dominique referred to the Ukrainian crisis as the reason for the deterioration in international relations. Naturally, this crisis is a cause, but this is not the principal cause. The crisis in Ukraine is itself a result of a misbalance in international relations.
I have already said in my address why this is happening, and my colleagues have already mentioned it. I can add to this, if necessary. However, primarily this is the outcome of the misbalance in international relations.

As for the issues mentioned by Wolfgang, we will get back to them: we will talk about the elections, if necessary, and about the supply of energy resources to Ukraine and Europe.
However, I would like to respond to the phrase “Wolfgang is an optimist, while life is harder for pessimists.” I already mentioned the old joke we have about a pessimist and an optimist, but I cannot help telling it again. We have this very old joke about a pessimist and an optimist: a pessimist drinks his cognac and says, “It smells of bedbugs,” while an optimist catches a bedbug, crushes it, then sniffs it and says, “A slight whiff of cognac.”

I would rather be the pessimist who drinks cognac than the optimist who sniffs bedbugs. (Laughter)
Though it does seem that optimists have a better time, our common goal is to live a decent life (without overindulging in alcohol). For this purpose, we need to avoid crises, together handle all challenges and threats and build such relations on the global arena that would help us reach these goals.

Later I will be ready to respond to some of the other things mentioned here. Thank you.
BRITISH JOURNALIST SEUMAS MILNE (retranslated from Russian): I would like to ask a two-in-one question.

First, Mr President, do you believe that the actions of Russia in Ukraine and Crimea over the past months were a reaction to rules being broken and are an example of state management without rules? And the other question is: does Russia see these global violations of rules as a signal for changing its position? It has been said here lately that Russia cannot lead in the existing global situation; however, it is demonstrating the qualities of a leader. How would you respond to this?
VLADIMIR PUTIN: I would like to ask you to reword the second part of your question, please. What exactly is your second question?

SEUMAS MILNE (retranslated from Russian): It has been said here that Russia cannot strive for leading positions in the world considering the outcomes of the Soviet Union’s collapse, however it can influence who the leader will be. Is it possible that Russia would alter its position, change its focus, as you mentioned, regarding the Middle East and the issues connected with Iran’s nuclear program me?

VLADIMIR PUTIN: Russia has never altered its position. We are a country with a traditional focus on cooperation and search for joint solutions. This is first.
Second. We do not have any claims to world leadership. The idea that Russia is seeking some sort of exclusivity is false; I said so in my address. We are not demanding a place under the sun; we are simply proceeding from the premise that all participants in international relations should respect each other’s interests. We are ready to respect the interests of our partners, but we expect the same respect for our interests.

We did not change our attitude to the situation in the Middle East, to the Iranian nuclear programme, to the North Korean conflict, to fighting terrorism and crime in general, as well as drug trafficking. We never changed any of our priorities even under the pressure of unfriendly actions on the part of our western partners, who are lead, very obviously in this case, by the United States. We did not even change the terms of the sanctions.

However, here too everything has its limits. I proceed from the idea that it might be possible that external circumstances can force us to alter some of our positions, but so far there have not been any extreme situations of this kind and we have no intention of changing anything. That is the first point.

The second point has to do with our actions in Crimea. I have spoken about this on numerous occasions, but if necessary, I can repeat it. This is Part 2 of Article 1 of the United Nations’ Charter – the right of nations to self-determination. It has all been written down, and not simply as the right to self-determination, but as the goal of the united nations. Read the article carefully.

I do not understand why people living in Crimea do not have this right, just like the people living in, say, Kosovo. This was also mentioned here. Why is it that in one case white is white, while in another the same is called black? We will never agree with this nonsense. That is one thing.
The other very important thing is something nobody mentions, so I would like to draw attention to it. What happened in Crimea? First, there was this anti-state overthrow in Kiev. Whatever anyone may say, I find this obvious – there was an armed seizure of power.

In many parts of the world, people welcomed this, not realising what this could lead to, while in some regions people were frightened that power was seized by extremists, by nationalists and right-wingers including neo-Nazis. People feared for their future and for their families and reacted accordingly. In Crimea, people held a referendum.

I would like to draw your attention to this. It was not by chance that we in Russia stated that there was a referendum. The decision to hold the referendum was made by the legitimate authority of Crimea – its Parliament, elected a few years ago under Ukrainian law prior to all these grave events. This legitimate body of authority declared a referendum, and then based on its results, they adopted a declaration of independence, just as Kosovo did, and turned to the Russian Federation with a request to accept Crimea into the Russian state.

You know, whatever anyone may say and no matter how hard they try to dig something up, this would be very difficult, considering the language of the United Nations court ruling, which clearly states (as applied to the Kosovo precedent) that the decision on self-determination does not require the approval of the supreme authority of a country.

In this connection I always recall what the sages of the past said. You may remember the wonderful saying: Whatever Jupiter is allowed, the Ox is not.

We cannot agree with such an approach. The ox may not be allowed something, but the bear will not even bother to ask permission. Here we consider it the master of the taiga, and I know for sure that it does not intend to move to any other climatic zones – it will not be comfortable there. However, it will not let anyone have its taiga either. I believe this is clear.

What are the problems of the present-day world order? Let us be frank about it, we are all experts here. We talk and talk, we are like diplomats. What happened in the world? There used to be a bipolar system. The Soviet Union collapsed, the power called the Soviet Union ceased to exist.
All the rules governing international relations after World War II were designed for a bipolar world. True, the Soviet Union was referred to as ‘the Upper Volta with missiles’. Maybe so, and there were loads of missiles. Besides, we had such brilliant politicians like Nikita Khrushchev, who hammered the desk with his shoe at the UN. And the whole world, primarily the United States, and NATO thought: this Nikita is best left alone, he might just go and fire a missile, they have lots of them, we should better show some respect for them.

Now that the Soviet Union is gone, what is the situation and what are the temptations? There is no need to take into account Russia’s views, it is very dependent, it has gone through transformation during the collapse of the Soviet Union, and we can do whatever we like, disregarding all rules and regulations.

This is exactly what is happening. Dominique here mentioned Iraq, Libya, Afghanistan and Yugoslavia before that. Was this really all handled within the framework of international law? Do not tell us those fairy-tales.

This means that some can ignore everything, while we cannot protect the interests of the Russian-speaking and Russian population of Crimea. This will not happen.

I would like everyone to understand this. We need to get rid of this temptation and attempts to arrange the world to one’s liking, and to create a balanced system of interests and relations that has long been prescribed in the world, we only have to show some respect.

As I have already said, we understand that the world has changed, and we are ready to take heed of it and adjust this system accordingly, but we will never allow anyone to completely ignore our interests.

Does Russia aim for any leading role? We don’t need to be a superpower; this would only be an extra load for us. I have already mentioned the taiga: it is immense, illimitable, and just to develop our territories we need plenty of time, energy and resources.

We have no need of getting involved in things, of ordering others around, but we want others to stay out of our affairs as well and to stop pretending they rule the world. That is all. If there is an area where Russia could be a leader – it is in asserting the norms of international law.
QUESTION: The peaceful process between the Palestinians and Israelis has completely collapsed. The United States never let the quartet work properly. At the same time, the growth of illegal Israeli settlements on the occupied territories renders impossible the creation of a Palestinian state. We have recently witnessed a very severe attack on the Gaza Strip. What is Russia’s attitude to this tense situation in the Middle East? And what do you think of the developments in Syria?

One remark for Mr Villepin as well. You spoke of humiliation. What can be more humiliating than the occupation that Palestine has been experiencing all these years?

VLADIMIR PUTIN: Regarding Palestine and the Israeli conflict. It is easy for me to speak about this because, first, I have to say and I believe everyone can see that our relations with Israel have transformed seriously in the past decade. I am referring to the fact that a large number of people from the former Soviet Union live in Israel and we cannot remain indifferent to their fate. At the same time, we have traditional relations with the Arab world, specifically with Palestine. Moreover, the Soviet Union, and Russia is its legal successor, has recognised Palestinian statehood. We are not changing anything here.

Finally, regarding the settlements. We share the views of the main participants in international relations. We consider this a mistake. I have already said this to our Israeli partners. I believe this is an obstacle to normal relations and I strongly expect that the practice itself will be stopped and the entire process of a peaceful settlement will return to its legal course based on agreement.

We proceed from the fact that that Middle East conflict is one of the primary causes of destabilisation not only in the region, but also in the world at large. Humiliation of any people living in the area, or anywhere else in the world is clearly a source of destabilisation and should be done away with. Naturally, this should be done using such means and measures that would be acceptable for all the participants in the process and for all those living in the area.
This is a very complicated process, but Russia is ready to use every means it has for this settlement, including its good relations with the parties to this conflict.

DIRECTOR, KIEV CENTER FOR POLITICAL AND CONFLICT STUDIES MIKHAIL POGREBINSKY: Mr President, I have come from Ukraine. For the first time in 70 years, it is going through very hard times. My question has to do with the possibility of a settlement. In this connection, I would like to go back in history. You mentioned that there was a moment when a trilateral format was under consideration: Russia-Ukraine-Europe. Back then, Europe did not agree to it, after which a series of tragic events took place, including the loss of Crimea, the death of thousands of people and so forth.

Recently, Europe together with Ukraine and Russia agreed that this format is possible after all; moreover, a corresponding resolution was passed. At that moment, there was hope that Russia together with Europe and Ukraine would manage to reach agreement and could become the restorer of peace in Ukraine. What happened next? What happened between Moscow and Brussels, Moscow and Berlin – because now the situation seems completely insane? It is unclear what this might lead to. What do you think happened to Europe?

VLADIMIR PUTIN: You know, what happened can be described as nothing happened. Agreements were reached, but neither side complied with them in full. However, full compliance by both sides might be impossible.

For instance, Ukrainian army units were supposed to leave certain locations where they were stationed prior to the Minsk agreements, while the militia army was supposed to leave certain settlements they were holding prior to these agreements. However, neither is the Ukrainian army withdrawing from the locations they should leave, nor is the militia army withdrawing from the settlements they have to move out of, referring, and I will be frank now – to the fact that their families remain there (I mean the militia) and they fear for their safety. Their families, their wives and children live there. This is a serious humanitarian factor.

We are ready to make every effort to ensure the implementation of the Minsk agreements. I would like to take advantage of your question to stress Russia’s position: we are in favour of complete compliance with the Minsk agreements by both sides.

What is the problem? In my view, the key problem is that we do not see the desire on the part of our partners in Kiev, primarily the authorities, to resolve the issue of relations with the country’s southeast peacefully, through negotiations. We keep seeing the same thing in various forms: suppression by force. It all began with Maidan, when they decided to suppress Yanukovych by force. They succeeded and raised this wave of nationalism and then it all transformed into some nationalistic battalions.

When people in southeast Ukraine did not like it, they tried to elect their own bodies of government and management and they were arrested and taken to prison in Kiev at night. Then, when people saw this happening and took to arms, instead of stopping and finally resorting to peaceful dialogue, they sent troops there, with tanks and aircraft.

Incidentally, the global community keeps silent, as if it does not see any of this, as if there is no such thing as ‘disproportionate use of force’. They suddenly forgot all about it. I remember all the frenzy around when we had a complicated situation in the Caucasus. I would hear one and the same thing every day. No more such words today, no more ‘disproportionate use of force’. And that’s while cluster bombs and even tactical weapons are being used.

You see, under the circumstances, it is very difficult for us in Russia to arrange work with people in southeast Ukraine in a way that would induce them to fully comply with all the agreements. They keep saying that the authorities in Kiev do not fully comply with the agreements either.
However, there is no other way. I would like to stress that we are for the full implementation of the agreements by both parties, and the most important thing I want to say – and I want everyone to hear that – if, God forbid, anyone is again tempted to use force for the final settlement of the situation in southeast Ukraine, this will bring the situation to a complete deadlock.

In my view, there is still a chance to reach agreement. Yes, Wolfgang spoke about this, I understood him. He spoke of the upcoming elections in Ukraine and in the southeast of the country. We know it and we are constantly discussing it. Just this morning I had another discussion with the Chancellor of Germany about it. The Minsk agreements do stipulate that elections in the southeast should be held in coordination with Ukrainian legislation, not under Ukrainian law, but in coordination with it.

This was done on purpose, because nobody in the southeast wants to hold elections in line with Ukrainian law. Why? How can this be done, when there is shooting every day, people get killed on both sides and they have to hold elections under Ukrainian law? The war should finally stop and the troops should be withdrawn. You see? Once this is achieved, we can start considering any kind of rapprochement or cooperation. Until this happens, it is hard to talk about anything else.

They spoke of the date of the elections in the southeast, but few know that there has been an agreement that elections in southeast Ukraine should be held by November 3. Later, the date was amended in the corresponding law, without consulting anyone, without consulting with the southeast. The elections were set for December 7, but nobody talked to them. Therefore, the people in the southeast say, “See, they cheated us again, and it will always be this way.”

You can argue over this any way you like. The most important thing is to immediately stop the war and move the troops away. If Ukraine wants to keep its territorial integrity, and this is something we want as well, they need to understand that there is no sense in holding on to some village or other – this is pointless. The idea is to stop the bloodshed and to start normal dialogue, to build relations based on this dialogue and restore at least some communication, primarily in the economy, and gradually other things will follow. I believe this is what should be achieved first and then we can move on.

PROFESSOR OF POLITICAL SCIENCE, DIRECTOR OF THE CENTER FOR GOVERNANCE AND PUBLIC POLICY AT CARLETON UNIVERSITY (OTTAWA) PIOTR DUTKIEWICZ: Mr President, if I may I would like to go back to the issue of Crimea, because it is of key importance for both the East and the West. I would like to ask you to give us your picture of the events that lead to it, specifically why you made this decision. Was it possible to do things differently? How did you do it? There are important details – how Russia did it inside Crimea. Finally, how do you see the consequences of this decision for Russia, for Ukraine, for Europe and for the normative world order? I am asking this because I believe millions of people would like to hear your personal reconstruction of those events and of the way you made the decision.

VLADIMIR PUTIN: I do not know how many times I spoke about this, but I will do it again.
On February 21, Viktor Yanukovych signed the well-known documents with the opposition. Foreign ministers of three European countries signed their names under this agreement as guarantors of its implementation.

In the evening of February 21, President Obama called me and we discussed these issues and how we would assist in the implementation of these agreements. Russia undertook certain obligations. I heard that my American colleague was also ready to undertake some obligations. This was the evening of the 21st. On the same day, President Yanukovych called me to say he signed the agreement, the situation had stabilized and he was going to a conference in Kharkov. I will not conceal the fact that I expressed my concern: how was it possible to leave the capital in this situation. He replied that he found it possible because there was the document signed with the opposition and guaranteed by foreign ministers of European countries.

I will tell you more, I told him I was not sure everything would be fine, but it was for him to decide. He was the president, he knew the situation, and he knew better what to do. “In any case, I do not think you should withdraw the law enforcement forces from Kiev,” I told him. He said he understood. Then he left and gave orders to withdraw all the law enforcement troops from Kiev. Nice move, of course.

We all know what happened in Kiev. On the following day, despite all our telephone conversations, despite the signatures of the foreign ministers, as soon as Yanukovych left Kiev his administration was taken over by force along with the government building. On the same day, they shot at the cortege of Ukraine’s Prosecutor General, wounding one of his security guards.

Yanukovych called me and said he would like us to meet to talk it over. I agreed. Eventually we agreed to meet in Rostov because it was closer and he did not want to go too far. I was ready to fly to Rostov. However, it turned out he could not go even there. They were beginning to use force against him already, holding him at gunpoint. They were not quite sure where to go.

I will not conceal it; we helped him move to Crimea, where he stayed for a few days. That was when Crimea was still part of Ukraine. However, the situation in Kiev was developing very rapidly and violently, we know what happened, though the broad public may not know – people were killed, they were burned alive there. They came into the office of the Party of Regions, seized the technical workers and killed them, burned them alive in the basement. Under those circumstances, there was no way he could return to Kiev. Everybody forgot about the agreements with the opposition signed by foreign ministers and about our telephone conversations. Yes, I will tell you frankly that he asked us to help him get to Russia, which we did. That was all.

Seeing these developments, people in Crimea almost immediately took to arms and asked us for help in arranging the events they intended to hold. I will be frank; we used our Armed Forces to block Ukrainian units stationed in Crimea, but not to force anyone to take part in the elections. This is impossible, you are all grown people, and you understand it. How could we do it? Lead people to polling stations at gunpoint?

People went to vote as if it were a celebration, everybody knows this, and they all voted, even the Crimean Tatars. There were fewer Crimean Tatars, but the overall vote was high. While the turnout in Crimea in general was about 96 or 94 percent, a smaller number of Crimean Tatars showed up. However 97 percent of them voted ‘yes’. Why? Because those who did not want it did not come to the polling stations, and those who did voted ‘yes’.

I already spoke of the legal side of the matter. The Crimean Parliament met and voted in favour of the referendum. Here again, how could anyone say that several dozen people were dragged to parliament to vote? This never happened and it was impossible: if anyone did not want to vote they would get on a train or plane, or their car and be gone.

They all came and voted for the referendum, and then the people came and voted in favour of joining Russia, that is all. How will this influence international relations? We can see what is happening; however if we refrain from using so-called double standards and accept that all people have equal rights, it would have no influence at all. We have to admit the right of those people to self-determination.

Link to this page: http://eng.news.kremlin.ru/news/23137

Washington is defaming Putin

The issue of manipulation of news by intelligence services has been in the news recently with revelations that the CIA and German Secret Service (GSS) have long-running programs to influence how media executives and top journalists convey and interpret the news, including direct cash payments.

Here is a translation of Putin’s address at Valdai.

At the Valdai International Discussion Club meeting in Sochi, Russia’s President Putin correctly and justifiably denounced Washington for destabilizing the world in order to serve its own narrow and selfish interest and the interests of the private interest groups that control Washington at the expense of the rest of the world. It is about time a world leader denounced the thuggish neocon regime in Washington. Putin described Washington’s double standards with the Roman phrase: “What is allowed for God [the US] is not allowed for cattle [the rest of the world].”

RT reports on Putin’s address here.

RIA Novotsi reports here.

Curiously, the Russian media has not, at this time of writing, produced an English translation of Putin’s full remarks. Perhaps the Russian media do not realize the importance of Putin’s words. Too much of the Russian media is owned by foreign interests who use the access to Russian readers to attack and discredit the Russian government. It is amazing that the Russian government allows Washington’s propaganda within its own ranks. Perhaps Moscow accepts Washington’s propaganda among Russians in order to protect the broadcasts in the US of RT, RIA, and Voice of Russia. But the balance is uneven. The Russian broadcasts in the West report otherwise unreported news; they do not defame America.

In the hope that Washington hears

In an interview today with Politika, a Serbian newspaper, Russia’s president, Vladimir Putin, said that it is futile and dangerous for the US and its European puppets to blackmail Russia and that the Exceptional Nation and its vassals should consider the risks that are inherent in aggressive disputes between countries heavily armed with nuclear weapons.

Putin noted that Obama took a hostile attitude toward Russia in Obama’s UN speech to the General Assembly on September 24 when Obama declared Russia to be one of the three threats to the world along with the Islamic State and ebola.

President Putin said that unilateral and punitive actions taken against Russia can provoke a crisis, and that if Washington’s purpose is to”isolate our country, it is an absurd and illusory goal.”

Here are some of President Putin’s direct quotes:

“How can we talk about de-escalation in Ukraine while the decisions on new sanctions are introduced almost simultaneously with the agreements on the peace process?”

“Together with the sanctions against entire sectors of our economy, this approach can be called nothing but hostile.”

“We hope that our partners will realize the futility of attempts to blackmail Russia and remember what consequences discord between major nuclear powers could bring for strategic stability.”

If we don’t all die from nuclear blasts, radiation, and nuclear winter, it will be because of the humanity and common sense–both of which are missing in Washington–of the President of Russia.

Look around you. The economies and stock markets of Western civilization are in retreat. Stupid and incompetent public authorities have brought ebola into America. And what is Washington doing? The energies of the Exceptional Government are focused on combating the Islamic State, a creature created by Washington itself, and on demonizing Russia.

Has any country, anywhere on the fact of the earth, at any period of history been so totally misruled as the United States?

Americans need to understand that their government is not merely incompetent and immoral, but that it is evil. Washington hides behind moral language but is itself devoid of moral conscience. There is no evil of which Washington is incapable. Those who support Washington support evil.

Paul Craig Roberts served as an Assistant Secretary of the Treasury in the Reagan Administration. He was associate editor and columnist for The Wall Street Journal and columnist for Business Week and the Scripps Howard News Service. In 1992 he received the Warren Brookes Award for Excellence in Journalism. In 1993 the Forbes Media Guide ranked him as one of the top seven journalists in the United States. He is also chairman of The Institute for Political Economy.

Washington is destroying the world

The aggressive and mindless stance that Washington’s warmongers have taken toward Russia and China have shattered the accomplishment of Reagan and Gorbachev.

Reagan and Gorbachev ended the cold war and removed the threat of nuclear armageddon. Now the neocons, the US budget-dependent (taxpayer dependent) US military/security complex, and the US politicians dependent on campaign funds from the military/security complex have resurrected the nuclear threat.

The corrupt and duplicitous Clinton regime broke the agreement that the George H.W. Bush administration gave Moscow in 1990. In exchange for Moscow permitting a reunified Germany to be a NATO member, Washington agreed that there would be no expansion of NATO to the east. Gorbachev, US Secretary of State James Baker, US ambassador to Moscow Jack Matlock, and declassified documents all testify to the fact that Moscow was assured that there would be no expansion of NATO into Eastern Europe.

In 1999 President Bill Clinton made a liar of the administration of President George H.W. Bush. The corrupt Clinton brought Poland, Hungary, and the newly formed Czech Republic into NATO.

President George W. Bush also made a liar out of his father, George H.W. Bush, and his father’s trusted Secretary of State, James Baker. “Dubya,” as the fool and drunkard is known, brought Estonia, Latvia, Lithuania, Slovenia, Slovakia, Bulgaria, and Romania into NATO in 2004. The corrupt and hopeless Obama regime added Albania and Croatia in 2009.

In other words, over the past 21 years three two-term US presidents have taught Moscow that the word of the US government is worthless.

Today Russia is surrounded by US and NATO military bases, with more to come in Ukraine (part of Russia for centuries), Georgia (part of Russia for centuries and the birthplace of Joseph Stalin), Montenegro, Macedonia, Bosnia-Herzegovina, and perhaps also Azerbaijan.

A large land expanse that was formerly part of the Soviet Empire is now part of Washington’s Empire. The “coming of democracy” simply meant the changing of masters.

Washington always picks the puppet who serves as Secretary General of NATO. The latest is a former Norwegian politician and prime minister, Jens Stoltenberg. On Washington’s orders, the puppet quickly antagonized Moscow with the statement that NATO has a powerful army that has a global policing role and can be deployed wherever Washington wishes. This claim is a total contradiction of NATO’s purpose and charter.

Igor Korochenko, a member of the Russian Defense Ministry Public Council replied to Washington’s puppet Stoltenberg: “Such statements run counter to the system of international security, as the NATO alliance poses a threat to Russia. Therefore, it will cause responsive measures.”

The responsive measures are what you would expect: enough nuclear capability to wipe out the United States and Europe many times over.

The arrogant fools in Washington, wallowing in their hubris as “the indispensable nation,” have provoked Moscow to the point that Russia now has more deployed nuclear weapons than the US. As a result of Washington breaking its word and putting ABM missile bases on Russia’s border, Russia has developed supersonic ICBMs that can rapidly change their trajectory and cannot be shot down by any missile defense system. Of course, the US corporations making billions of dollars selling Washington a useless ABM system will deny this.

Moreover, those countries, such as Poland, whose governments are sufficiently stupid to accept US ABM bases, would be obliterated before the bases could function. The utter stupidity of Eastern Europe’s bought-and-paid-for governments to put trust in Washington is likely to be the main cause of WW III.

The happy participant in the new Armageddon is the American military/security complex. These greedy bastards–”private corporations” whose revenues are entirely public funds– are guaranteed more money regardless of the potential cost in human life. Their US Senate spokesperson, Jim Inhofe, a member of the Senate Armed Services Subcommittee on Strategic Forces, has resurrected the argument from 60 years ago that America is falling behind in the arms race. Restarting the arms race is essential to the profits of the US military/security complex and to the campaign contributions of senators.

It is not only Russia’s strategic nuclear forces that the fools in Washington have revived and activated, but China’s as well. Last year China released a pictorial description of how China’s nuclear forces could destroy the US. This was China’s response to Washington’s insane plan of building new air and naval bases from the Philippines to Vietnam in order to control the flow of resources in the South China Sea. What kind of idiotic government does America have that thinks China is going to put up with this kind of interference in China’s sphere of influence?

China has now added to its nuclear arsenal a new variant of one of its mobile ICBMs. Washington does not know much about this new missile, because the CIA is too busy arranging protests in Hong Kong.

Both Russia and China were content to be part of the world economy and to improve the economic situation of their citizens by developing their economies. But along comes the neocon Unipower, a collection of arrogant psychopaths who declare that Washington will not permit any other country, not even Russia and China, to rise to a capability of exercising a foreign policy independent of Washington’s purposes.

Nuclear war is back into the picture. First Washington threatens those it perceives as rivals. When the perceived rivals don’t submit, Washington demonizes them.

In the histories written by Washington’s court historians, the greatest demons of modern times are the WW II governments of Japan and Germany along with the post-WW II Soviet government of Joseph Stalin. These American court historians ignore the facts.

Japan was forced into war by Washington, which cut off Japan’s access to resources. Japan was then nuked twice while the Japanese government was trying to surrender.

All of US president Woodrow Wilson’s promises made to Germany in order to end WW I, such as no territorial loses and no reparations, were broken. Germany was torn apart and German territory was handed over to Poland, France, and Czechoslovakia. Despite US president Woodrow Wilson’s promise to the contrary, impossible reparations were imposed on Germany by the Treaty of Versailles. The prescient John Maynard Keynes declared that the reparations would result in a second world war. If memory serves, portions of Germany were also given to Belgium, Lithuania, and Denmark.

This humiliation of an industrious and powerful people, whose armies occupied foreign territories when WW I ended, demonstrated the mendacity of the so-called “Western powers.” The French, British, and Americans paved the way for Adolph Hitler. By 1935 Hitler was sufficiently ensconced to denounce the Versailles Treaty. If Hitler had not succumbed to hubris and sent the German armies marching off into Russia where they were destroyed, he, or his successors, would still be ruling Europe today.

The true history is so different from what Washington pretends and Americans are taught. The majority of Americans are blind enablers of Washington’s war on the world. If ebola and global warming don’t destroy humanity, the ignorance of the American people and Washington’s war for world hegemony surely will.

Rigged gold price distorts perception of economic reality

The Federal Reserve and its bullion bank agents (JP Morgan, Scotia, and HSBC) have been using naked short-selling to drive down the price of gold since September 2011. The latest containment effort began in mid-July of this year, after gold had moved higher in price from the beginning of June and was threatening to take out key technical levels, which would have triggered a flood of buying from hedge funds.

The Fed and its agents rig the gold price in the New York Comex futures (paper gold) market. The bullion banks have the ability to print an unlimited supply of gold contracts which are sold in large volumes at times when Comex activity is light.

Generally, on the other side of the trade the buyers of contracts are large hedge funds and other speculators, who use the contracts to speculate on the direction of the gold price. The hedge funds and speculators have no interest in acquiring physical gold and settle their bets in cash, which makes it possible for the bullion banks to sell claims to gold that they cannot back with physical metal. Contracts sold without underlying gold to back them are called “uncovered contracts” or “naked shorts.” It is illegal to engage in naked shorting in the stock and bond markets, but it is permitted in the gold futures market.

The fact that the price of gold is determined in a futures market in which paper claims to gold are traded merely to speculate on price means that the Fed and its bank agents can suppress the price of gold even though demand for physical gold is rising. If there were strict requirements that gold shorts could not be naked and had to be backed by the seller’s possession of physical gold represented by the futures contract, the Federal Reserve and its agents would be unable to control the price of gold, and the gold price would be much higher than it is now.

Gold price manipulation is used when demand for delivery of gold bullion begins to put upward pressure on the price of gold and hedge funds speculate on the rising price of gold by purchasing large quantities of Comex futures contracts (paper gold). This speculation accelerates the upward move in the price of gold. The TF Metals Report provides a good description of this illegal manipulation of the gold market:

“Over a period of 10 weeks to begin the year, the Comex bullion banks were able to limit the rally to only 15% by supplying the “market” with 95,000 brand new naked short contracts. That’s 9.5MM ounces of make-believe paper gold or about 295 metric tonnes.

“Over a period of just 5 weeks in June and July, the Comex bullion banks were able to limit the rally to only 7% by supplying the “market” with 79,000 brand new naked short contracts. That’s 7.9MM ounces of make-believe paper gold or about 246 metric tonnes.” http://www.tfmetalsreport.com/comment/429940

In previous columns, we have documented the heavy short-selling into light trading periods.
See for example: http://www.paulcraigroberts.org/2014/07/16/insider-trading-financial-terrorism-comex/.

The bullion banks do not have nearly enough gold in their possession to make deliveries to the buyers if the buyers decide to stand for delivery per the terms of the paper gold contract. The reason this scheme works is because the majority of the buyers of the contracts are speculators, not gold purchasers, and never demand delivery of the gold. Instead, they settle the contracts in cash. They are looking for short-term trading profits, not for a gold hedge against currency inflation. If a majority of the longs (the purchasers of the contracts) required delivery of the gold, the regulators would not tolerate the extent to which gold is shorted with uncovered contracts.

In our opinion, the manipulation is illegal, because it is insider trading. The bullion banks that short the gold market are clearing members of the Comex/NYMEX/CME. In that role, the bullion banks have access to the computer system used to clear and settle trades, which means that the bullion banks have access to all the trading positions, including those of the hedge funds. When the hedge funds are in the deepest, the bullion banks dump naked shorts on the Comex, driving down the futures price, which triggers selling from stop-loss orders and margin calls that drive the price down further. Then the bullion banks buy the contracts at a lower price than they sold and pocket the difference, simultaneously serving the Fed by protecting the dollar from the Fed’s loose monetary policy by lowering the gold price and preventing the concern that a rising gold price would bring to the dollar.

Since mid-July, nearly every night in the US the price of gold remains steady or drifts higher. This is when the eastern hemisphere markets are open and the market players are busy buying physical gold for which delivery is mandatory. But as regular as clockwork, following the close of the Asian markets, the London and New York paper gold markets open, and the price of gold is immediately taken lower as paper gold contracts flood into the market setting a negative tone for the day’s trading.

Gold serves as a warning for aware people that financial and economic trouble are brewing. For instance, from the period of time just before the tech bubble collapsed (January 2000) until just before the collapse of Bear Stearns triggered the Great Financial Crisis (March 2008), gold rose in value from $250 to $1020 per ounce, or just over 400%. Moreover, in the period since the Great Financial Collapse, gold has risen 61% despite claims that the financial system was repaired. It was up as much as 225% (September 2011) before the Fed began the systematic take-down and containment of gold in order to protect the dollar from the massive creation of new dollars required by Quantitative Easing.

The US economy and financial system are in worse condition than the Fed and Treasury claim and the financial media reports. Both public and private debt burdens are high. Corporations are borrowing from banks in order to buy back their own stocks. This leaves corporations with new debt but without income streams from new investments with which to service the debt. Retail stores are in trouble, including dollar store chains. The housing market is showing signs of renewed downturn. The September 16 release of the 2013 Income and Poverty report shows that real median household income has declined to the level in 1994 two decades ago and is actually lower than in the late 1960s and early 1970s. The combination of high debt and decline in real income means that there is no engine to drive the economy.

In the 21st century, US debt and money creation has not been matched by an increase in real goods and services. The implication of this mismatch is inflation. Without the price-rigging by the bullion banks, gold and silver would be reflecting these inflation expectations.

The dollar is also in trouble because its role as world reserve currency is threatened by the abuse of this role in order to gain financial hegemony over others and to punish with sanctions those countries that do not comply with the goals of US foreign policy. The Wolfowitz Doctrine, which is the basis of US foreign policy, says that it is imperative for Washington to prevent the rise of other countries, such as Russia and China, that can limit the exercise of US power.

Sanctions and the threat of sanctions encourage other countries to leave the dollar payments system and to abandon the petrodollar. The BRICS (Brazil, Russia, India, China, South Africa) have formed to do precisely that. Russia and China have arranged a massive long-term energy deal that avoids use of the US dollar. Both countries are settling their trade accounts with each other in their own currencies, and this practice is spreading. China is considering a gold-backed yuan, which would make the Chinese currency highly desirable as a reserve asset. It is possible that the Fed’s attack on gold is also aimed at making Chinese and Russian gold accumulation less supportive of their currencies. A currency linked to a falling gold price is not the same as a currency linked to a rising gold price.

It is unclear whether the new Chinese gold exchange in Shanghai will displace the London and New York futures markets. Naked short-selling is not permitted in the Chinese gold exchange. The world could end up with two gold futures markets: one based on assessments of reality, and the other based on gambling and price-rigging.

The future will also determine whether the role of reserve currency has been overtaken by time. The US dollar took that role in the aftermath of World War II, a time when the US had the only industrial economy that had not been destroyed in the war. A stable means of settling international accounts was needed. Today there are many economies that have tradable currencies, and accounts can be settled between countries in their own currencies. There is no longer a need for a single reserve currency. As this realization spreads, pressure on the dollar’s value will intensify.

For a period the Federal Reserve can support the dollar’s exchange value by pressuring Japan and the European Central Bank to print their currencies with which to support the dollar with purchases in the foreign exchange market. Other countries, such as Switzerland, will print their own currencies so as not to endanger their exports by a rise in the dollar price of their exports. But eventually the large US trade deficits produced by offshoring the production of goods and services sold into US markets and the collapse of the middle class and tax base caused by jobs offshoring will destroy the value of the US dollar.

When that day arrives, US living standards, already endangered, will plummet. American power will have been destroyed by corporate greed and the Fed’s policy of sacrificing the US economy in order to save four or five mega-banks, whose former executives control the Fed, the US Treasury, and the federal financial regulatory agencies.

Dave Kranzler also contributed to this article.

Washington’s War Against Russia

The new sanctions against Russia announced by Washington and Europe do not make sense as merely economic measures. I would be surprised if Russian oil and military industries were dependent on European capital markets in a meaningful way. Such a dependence would indicate a failure in Russian strategic thinking. The Russian companies should be able to secure adequate financing from Russian Banks or from the Russian government. If foreign loans are needed, Russia can borrow from China.

If critical Russian industries are dependent on European capital markets, the sanctions will help Russia by forcing an end to this debilitating dependence. Russia should not be dependent on the West in any way.

The real question is the purpose of the sanctions. My conclusion is that the purpose of the sanctions is to break up and undermine Europe’s economic and political relations with Russia. When international relations are intentionally undermined, war can be the result. Washington will continue to push sanctions against Russia until Russia shows Europe that there is a heavy cost of serving as Washington’s tool.

Russia needs to break up this process of ever more sanctions in order to derail the drive toward war. In my opinion this is easy for Russia to do. Russia can tell Europe that since you do not like our oil companies, you must not like our gas company, so we are turning off the gas. Or Russia can tell Europe, we don’t sell natural gas to NATO members, or Russia can say we will continue to sell you gas, but you must pay in rubles, not in dollars. This would have the additional benefit of increasing the demand for rubles in exchange markets, thus making it harder for speculators and the US government to drive down the ruble.

The real danger to Russia is a continuation of its low-key, moderate response to the sanctions. This is a response that encourages more sanctions. To stop the sanctions, Russia needs to show Europe that the sanctions have serious costs for Europe.

A Russian response to Washington would be to stop selling to the US the Russian rocket engines on which the US satellite program is dependent. This could leave the US without rockets for its satellites for six years between the period 2016 and 2022.

Possibly the Russian government is worried about losing the earnings from gas and rocket engine sales. However, Europe cannot do without the gas and would quickly abandon its participation in the sanctions, so no gas revenues would be lost. The Americans are going to develop their own rocket engine anyhow, so the Russian sales of rocket engines to the US have at most about 6 more years. But the US with an impaired satellite program for six years would mean a great relief to the entire world from the American spy program. It would also make difficult US military aggression against Russia during the period.

Russian President Putin and his government have been very low-key and unprovocative in responding to the sanctions and to the trouble that Washington continues to cause for Russia in Ukraine. The low-key Russian behavior can be understood as a strategy for undermining Washington’s use of Europe against Russia by presenting a non-threatening face to Europe. However, another explanation is the presence inside Russia of a fifth column that represents Washington’s interest and constrains the power of the Russian government.

Strelkov describes the American fifth column here.

Saker describes the two power groups inside Russia as the Eurasian Sovereignists who stand behind Putin and an independent Russia and the Atlantic Integrationists, the fifth column that works to incorporate Russia in Europe under US hegemony or, failing that, to help Washington break up the Russian Federation into several weaker countries that are too weak to constrain Washington’s use of power.

Russia’s Atlantic Integrationists share the Brzezinski and Wolfowitz doctrines with Washington. These doctrines are the basis for US foreign policy. The doctrines define the goal of US foreign policy in terms of preventing the rise of other countries, such as Russia and China, that could limit Washington’s hegemony.

Washington is in a position to exploit the tensions between these two Russian power groups. Washington’s fifth column is not best positioned to prevail. However, Washington can at least count on the struggle causing dissent within the Eurasian Sovereignists over Putin’s low-key response to Western provocations. Some of this dissent can be seen in Strelkov’s defense of Russia.

Russia, thinking the Cold War ended with the collapse of the Soviet Union, opened herself to the West. Russian governments trusted the West, and as a result of Russia’s gullibility, the West was able to purchase numerous allies among the Russian elites. Depending on the alignment of the media, these compromised elites are capable of assassinating Putin and attempting a coup.

One would think that by now Putin’s government would recognize the danger and arrest the main elements of the fifth column, followed by trial and execution for treason, in order that Russia can stand united against the Western Threat. If Putin does not take this step, it means either than Putin does not recognize the extent of the threat or that his government lacks the power to protect Russia from the internal threat.

It is clear that Putin has not achieved any respite for his government from the West’s propaganda and economic assault by refusing to defend the Donbass area from Ukrainian attack and by pressuring the Donetsk Republic into a ceasefire when its military forces were on the verge of a major defeat of the disintegrating Ukrainian army. All Putin has achieved is to open himself to criticism among his supporters for betraying the Russians in eastern and southern Ukraine.

The European politicians and elites are so deeply in Washington’s pocket that Putin has little chance of courting Europe with a Russian show of good will. I have never believed that this strategy could work, although I would be pleased if it did. Only a direct threat todeprive Europe of energy has a chance of producing within Europe a foreign policy independent of Washington. I do not think Europe can survive a cutoff of the Russian natural gas. Europe would abandon sanctions in order to guarantee the flow of gas. If Washington’s hold on Europe is so powerful that Europe is willing to endure a major disruption of its energy supply as the price of its vassalage, Russia will know to cease its futile attempts at diplomacy and to prepare for war.

If China sits on the sidelines, China will be the next isolated target and will receive the same treatment.

Washington intends to defeat both countries, either through internal dissent or through war.

Nothing said by Obama or any member of his government or any influential voice in Congress has signaled any pullback in Washington’s drive for hegemony over the world.

The US economy is now dependent on looting and plunder, and Washington’s hegemony is essential to this corrupted form of capitalism.