China may build rail tunnel under Mount Everest

China may build rail tunnel under Mount Everest, state media reports.

China is considering extending a railway line linking the country to Nepal via a tunnel under Mount Everest, according to Chinese state media.

The proposal is the latest in a series of ambitious rail schemes Beijing is reportedly examining. It comes amid scepticism about whether some of the projects will ever get off the ground and at a time of a growing Chinese presence in Nepal, which has caused some concern in rival regional power India.

The Qinghai-Tibet railway already links the rest of China with the Tibetan capital, Lhasa, and beyond, and an extension running as far as the international border is already being planned “at Nepal’s request”, the China Daily quoted a railway expert at the Chinese Academy of Engineering as saying.

The project is expected to be completed by 2020, the newspaper cited a Tibetan official as saying. Extending the line would potentially forge a crucial link between China and the huge markets of India. It was raised by the Chinese foreign minister, Wang Yi, on a visit to Kathmandu in December, according to Nepalese reports.

“The line will probably have to go through Qomolangma so that workers may have to dig some very long tunnels,” railway expert Wang Mengshu told the China Daily, referring to Mount Everest by its Tibetan name.

Owing to the challenging Himalayan terrain, with its remarkable changes in elevation, trains on any line to Kathmandu would probably have a maximum speed of 75mph (120km/h), he added.

Beijing’s increasing role has raised alarms in New Delhi that China, already closely allied to Pakistan, is forging closer economic ties with Sri Lanka, the Maldives and Nepal in a deliberate strategy to encircle India.

In an apparent counter-move, Indian Prime Minister Narendra Modi pledged late last year that South Asia’s largest economy would fund a series of regional investments and free up its markets to its neighbours’ exporters.

Source: investmentwatchblog.com

Oil tumbles as Iran, China discuss supply

Brent crude oil fell below $58 a barrel on Tuesday on signs of growing oversupply as Iranian officials visited Beijing to seek more oil sales following the framework nuclear deal that could lead to the lifting of sanctions.

China is Iran’s largest trade partner and has bought roughly half of its crude exports since 2012, when sanctions against the Islamic Republic were tightened.

Oil markets were also pressured by a Goldman Sachs report saying prices needed to remain low for months to slow U.S. oil output growth.

Brent LCOc1 was down 70 cents at $57.42 a barrel by 1335 GMT. U.S. crude CLc1 was down 75 cents at $51.39 a barrel.

Representatives of state-run National Iranian Oil Company will meet China’s biggest crude buyers including Unipec, the trading arm of top Asian refiner Sinopec Corp (0386.HK), and state trader Zhuhai Zhenrong Corp, officials told Reuters.

Global oil markets already face a supply glut with producers pumping over 1.5 million barrels per day (bpd) more than demand in the first half of this year, analysts say.

“There is a massive oversupply. Stocks are rising and now we have the prospect of more Iranian oil coming onto the market,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt.

Goldman said in a research note it expected U.S. crude inventories to top out in April and subsequently be drawn down at 350,000 bpd during the May-September period, when demand for fuel to power cars and air-conditioners is at its greatest.

Still, the bank said it saw little upside for its $40-a-barrel forecast over the next three months, anticipating inventories would rise again by October, pressuring prices into 2016.

“Prices need to remain low in coming months to achieve a sufficient and sustainable slowdown in U.S. production growth,” the bank said, adding that the U.S. outlook for 2016 made its forecast for $65-a-barrel oil next year look too high.

Source: Reuters

Oil sinks on hopes of Iran deal

Oil prices edged lower on Tuesday on high hopes for a deal on Iran’s nuclear program and increased Iranian crude-oil exports.

Light, sweet crude for May delivery settled down 0.48% at $47.37 a barrel on the New York Mercantile Exchange.
Brent, the global benchmark, slid 0.14%, to $56.13 a barrel on ICE Futures Europe.

Both benchmarks fell for the third straight quarter on expectations of a final deal on Iran’s nuclear program in exchange for lifting international sanctions on Tehran. Market analysts say additional oil supplies from Iran would flood an already-oversupplied market and push prices even lower.

Crude prices have dropped more than 50% from their mid-June high due to growing production and lackluster demand.
Talks between Iran and six world powers to settle a dispute around Tehran’s nuclear program extended beyond a Tuesday deadline, as the parties moved towards a deal but failed to agree to crucial details such as the lifting of UN sanctions.

Efforts to reach a framework deal were scheduled to continue on Wednesday in the Swiss city of Lausanne.
Russian Foreign Minister Sergei Lavrov said a general agreement had been reached on all key aspects of a future deal.

“If the flood gates to Iranian crude open, (prices) will probably test this year’s lows again,” Phillip Futures analyst Daniel Ang told Reuters.

Iran’s oil production is expected to rise by around 500,000 barrels per day within six months if sanctions are removed, and by a further 700,000bpd within another year.

Source: Sputnik News

Interview with Paul Craig Roberts

The Saker interviews Paul Craig Roberts

I had been wanting to interview Paul Craig Roberts for a long time already. For many years I have been following his writings and interviews and every time I read what he had to say I was hoping that one day I would have the privilege to interview him about the nature of the US deep state and the Empire. Recently, I emailed him and asked for such an interview, and he very kindly agreed. I am very grateful to him for this opportunity.

The Saker

——-

The Saker: It has become rather obvious to many, if not most, people that the USA is not a democracy or a republic, but rather a plutocracy run by a small elite which some call “the 1%”. Others speak of the “deep state”. So my first question to you is the following. Could you please take the time to assess the influence and power of each of the following entities one by one. In particular, can you specify for each of the following whether it has a decision-making “top” position, or a decision-implementing “middle” position in the real structure of power (listed in no specific order)

Federal Reserve
Big Banking
Bilderberg
Council on Foreign Relations
Skull & Bones
CIA
Goldman Sachs and top banks
“Top 100 families” (Rothschild, Rockefeller, Dutch Royal Family, British Royal Family, etc.)
Israel Lobby
Freemasons and their lodges
Big Business: Big Oil, Military Industrial Complex, etc.
Other people or organizations not listed above?
Who, which group, what entity would you consider is really at the apex of power in the current US polity?

Paul Craig Roberts: The US is ruled by private interest groups and by the neoconservative ideology that History has chosen the US as the “exceptional and indispensable” country with the right and responsibility to impose its will on the world.

In my opinion the most powerful of the private interest groups are:
The Military/security Complex
The 4 or 5 mega-sized “banks too big to fail” and Wall Street
The Israel Lobby
Agribusiness
The Extractive industries (oil, mining, timber).

The interests of these interest groups coincide with those of the neoconservatives. The neoconservative ideology supports American financial and military-political imperialism or hegemony.

There is no independent American print or TV media. In the last years of the Clinton regime, 90% of the print and TV media was concentrated in 6 mega-companies. During the Bush regime, National Public Radio lost its independence. So the media functions as a Ministry of Propaganda.

Both political parties, Republicans and Democrats, are dependent on the same private interest groups for campaign funds, so both parties dance to the same masters. Jobs offshoring destroyed the manufacturing and industrial unions and deprived the Democrats of Labor Union political contributions. In those days, Democrats represented the working people and Republicans represented business.

The Federal Reserve is there for the banks, mainly the large ones.The Federal Reserve was created as lender of last resort to prevent banks from failing because of runs on the bank or withdrawal of deposits. The New York Fed, which conducts the financial interventions, has a board that consists of the executives of the big banks. The last three Federal Reserve chairmen have been Jews, and the current vice chairman is the former head of the Israeli central bank. Jews are prominent in the financial sector, for example, Goldman Sachs. In recent years, the US Treasury Secretaries and heads of the financial regulatory agencies have mainly been the bank executives responsible for the fraud and excessive debt leverage that set off the last financial crisis.

In the 21st century, the Federal Reserve and Treasury have served only the interests of the large banks. This has been at the expense of the economy and the population. For example, retired people have had no interest income for eight years in order that the financial institutions can borrow at zero costs and make money.

No matter how rich some families are, they cannot compete with powerful interest groups such as the military/security complex or Wall Street and the banks. Long established wealth can look after its interests, and some, such as the Rockefellers, have activist foundations that most likely work hand in hand with the National Endowment for Democracy to fund and encourage various pro-American non-governmental organizations (NGOs) in countries that the US wants to influence or overthrow, such as occurred in Ukraine. The NGOs are essentially US Fifth Columns and operate under such names as “human rights,” “democracy,” etc. A Chinese professor told me that the Rockefeller Foundation had created an American University in China and is used to organize various anti-regime Chinese. At one time, and perhaps still, there were hundreds of US and German financed NGOs in Russia, possibly as many as 1,000.

I don’t know if the Bilderbergs do the same. Possibly they are just very rich people and have their proteges in governments who try to protect their interests. I have never seen any signs of Bilderbergs or Masons or Rothchilds affecting congressional or executive branch decisions.

On the other hand, the Council for Foreign Relations is influential. The council consists of former government policy officials and academics involved in foreign policy and international relations. The council’s publication, Foreign Affairs, is the premier foreign policy forum. Some journalists are also members. When I was proposed for membership in the 1980s, I was blackballed.

Skull & Bones is a Yale University secret fraternity. A number of universities have such secret fraternities. For example, the University of Virginia has one, and the University of Georgia. These fraternities do not have secret governmental plots or ruling powers. Their influence would be limited to the personal influence of the members, who tend to be sons of elite families. In my opinion, these fraternities exist to convey elite status to members. They have no operational functions.

The Saker: What about individuals? Who are, in your opinion, the most powerful people in the USA today? Who takes the final, top level, strategic decision?

Paul Craig Roberts: There really are no people powerful in themselves. Powerful people are ones that powerful interest groups are behind. Ever since Secretary of Defense William Perry privatized so much of the military in 1991, the military/security complex has been extremely powerful, and its power is further amplified by its ability to finance political campaigns and by the fact that it is a source of employment in many states. Essentially Pentagon expenditures are controlled by defense contractors.

The Saker: I have always believed that in international terms, organizations such as NATO, the EU or all the others are only a front, and that the real alliance which controls the planet are the ECHELON countries: US, UK, Canada, Australia and New Zealand aka “AUSCANNZUKUS” (they are also referred to as the “Anglosphere” or the “Five Eyes”) with the US and the UK are the senior partners while Canada, Australia and New Zealand are the junior partners here. Is this model correct?

Paul Craig Roberts: NATO was a US creation allegedly to protect Europe from a Soviet invasion. Its purpose expired in 1991. Today NATO provides cover for US aggression and provides mercenary forces for the American Empire. Britain, Canada, Australia, are simply US vassal states just as are Germany, France, Italy, Japan and the rest. There are no partners; just vassals. It is Washington’s empire, no one else’s.

The US favors the EU, because it is easier to control than the individual countries.

The Saker: It is often said that Israel controls the USA. Chomsky, and others, say that it is the USA which controls Israel. How would you characterize the relationship between Israel and the USA – does the dog wag the tail or does the tail wag the dog? Would you say that the Israel Lobby is in total control of the USA or are there still other forces capable of saying “no” to the Israel Lobby and impose their own agenda?

Paul Craig Roberts: I have never seen any evidence that the US controls Israel. All the evidence is that Israel controls the US, but only its MidEast policy. In recent years, Israel or the Israel Lobby, has been able to control or block academic appointments in the US and tenure for professors considered to be critics of Israel. Israel has successfully reached into both Catholic and State universities to block tenure and appointments. Israel can also block some presidential appointments and has vast influence over the print and TV media. The Israel Lobby also has plenty of money for political campaign funds and never fails to unseat US Representatives and Senators considered critical of Israel. The Israel lobby was able to reach into the black congressional district of Cynthia McKinney, a black woman, and defeat her reelection. As Admiral Tom Moorer, Chief of Naval Operations and Chairman of the Joint Chiefs of Staff, said: “No American President can stand up to Israel.” Adm. Moorer could not even get an official investigation of Israel’s deadly attack on the USS Liberty in 1967.

Anyone who criticizes Israeli policies even in a helpful way is labeled an “anti-Semite.”

In American politics, media, and universities, this is a death-dealing blow. You might as well get hit with a hellfire missile.

The Saker: Which of the 12 entities of power which I listed above have, in your opinion, played a key role in the planning and execution of the 9/11 “false flag” operation? After all, it is hard to imagine that this was planned and prepared between the inauguration of GW Bush and September 11th – it must have been prepared during the years of the Clinton Administration. Is it not true that the Oklahoma City bombing was a rehearsal for 9/11?

Paul Craig Roberts: In my opinion 9/11 was the product of the neoconservatives, many of whom are Jewish allied with Israel, Dick Cheney, and Israel. Its purpose was to provide “the new Pearl Harbor” that the neoconservatives said was necessary to launch their wars of conquest in the Middle East. I don’t know how far back it was planned, but Silverstein was obviously part of it and he had not had the WTC for very long before 9/11.

As for the bombing of the Murrah Federal Building in Oklahoma City, US Air Force General Partin, the Air Force’s munitions expert, prepared an expert report proving beyond all doubt that the building blew up from the inside out and that the truck bomb was cover. Congress and the media ignored his report. The patsy, McVeigh, was already set up, and that was the only story allowed.

The Saker: Do you think that the people who run the USA today realize that they are on a collision course with Russia which could lead to thermonuclear war? If yes, why would they take such a risk? Do they really believe that at the last moment Russian will “blink” and back down, or do they actually believe that they can win a nuclear war? Are they not afraid that in a nuclear conflagration with Russia they will lose everything they have, including their power and even their lives?

Paul Craig Roberts: I am as puzzled as much as you. I think Washington is lost in hubris and arrogance and is more or less insane. Also, there is belief that the US can win a nuclear war with Russia. There was an article in Foreign Affairs around 2005 or 2006 in which this conclusion was reached. The belief in the winnability of nuclear war has been boosted by faith in ABM defenses. The argument is that the US can hit Russia so hard in a preemptive first strike that Russia would not retaliate in fear of a second blow.

The Saker: How do you assess the current health of the Empire? For many years we have seen clear signs of decline, but there is still not visible collapse. Do you believe that such a collapse is inevitable and, if not, how could it be prevented? Will we see the day when the US Dollar suddenly become worthless or will another mechanism precipitate the collapse of this Empire?

Paul Craig Roberts: The US economy is hollowed out. There has been no real median family income growth for decades. Alan Greenspan as Fed Chairman used an expansion of consumer credit to take the place of the missing growth in consumer income, but the population is now too indebted to take on more. So there is nothing to drive the economy. So many manufacturing and tradable professional service jobs such as software engineering have been moved offshore that the middle class has shrunk. University graduates cannot get jobs that support an independent existence. So they can’t form households, buy houses, appliances and home furnishings. The government produces low inflation measures by not measuring inflation and low unemployment rates by not measuring unemployment. The financial markets are rigged, and gold is driven down despite rising demand by selling uncovered shorts in the futures market. It is a house of cards that has stood longer than I thought possible. Apparently, the house of cards can stand until the rest of the world ceases to hold the US dollar as reserves.

Possibly the empire has put too much stress on Europe by involving Europe in a conflict with Russia. If Germany, for example, were to pull out of NATO, the empire would collapse, or if Russia can find the wits to finance Greece, Italy, and Spain in exchange for them leaving the Euro and EU, the empire would suffer a fatal blow.

Alternatively, Russia might tell Europe that Russia has no alternative but to target European capitals with nuclear weapons now that Europe has joined the US in conducting war against Russia.

The Saker: Russia and China have done something unique in history and they have gone beyond the traditional model of forming an alliance: they have agreed to become interdependent – one could say that they have agreed to a symbiotic relationship. Do you believe that those in charge of the Empire have understood the tectonic change which has just happen or are they simply going into deep denial because reality scares them too much?

Paul Craig Roberts: Stephen Cohen says that there is simply no foreign policy discussion. There is no debate. I think the empire thinks that it can destabilize Russia and China and that is one reason Washington has color revolutions working in Armenia, Kyrgyzstan, and Uzbekistan. As Washington is determined to prevent the rise of other powers and is lost in hubris and arrogance, Washington probably believes that it will succeed. After all, History chose Washington.

The Saker: In your opinion, do presidential elections still matter and, if yes, what is your best hope for 2016? I am personally very afraid of Hillary Clinton whom I see as an exceptionally dangerous and outright evil person, but with the current Neocon influence inside the Republican, can we really hope for a non-Neocon candidate to win the GOP nomination?

Paul Craig Roberts: The only way a presidential election could matter would be if the elected president had behind him a strong movement. Without a movement, the president has no independent power and no one to appoint who will do his bidding. Presidents are captives. Reagan had something of a movement, just enough that we were able to cure stagflation despite Wall Street’s opposition and we were able to end the cold war despite the opposition of the CIA and the military/security complex. Plus Reagan was very old and came from a long time ago. He assumed the office of the president was powerful and acted that way.

The Saker: What about the armed forces? Can you imagine a Chairman of the JCS saying “no, Mr President, that is crazy, we will not do this” or do you expect the generals to obey any order, including one starting a nuclear war against Russia? Do you have any hope that the US military could step in and stop the “crazies” currently in power in the White House and Congress?

Paul Craig Roberts: The US military is a creature of the armaments industries. The whole purpose of making general is to be qualified to be a consultant to the “defense” industry, or to become an executive or on the board of a “defense” contractor. The military serves as the source of retirement careers when the generals make the big money. The US military is totally corrupt. Read Andrew Cockburn’s book, Kill Chain.

The Saker: If the USA is really deliberately going down the path towards war with Russia – what should Russia do? Should Russia back down and accept to be subjugated as a preferable option to a thermonuclear war, or should Russia resist and thereby accept the possibility of a thermonuclear war? Do you believe that a very deliberate and strong show of strength on the part of Russia could deter a US attack?

Paul Craig Roberts: I have often wondered about this. I can’t say that I know. I think Putin is humane enough to surrender rather than to be part of the destruction of the world, but Putin has to answer to others inside Russia and I doubt the nationalists would stand for surrender.

In my opinion, I think Putin should focus on Europe and make Europe aware that Russia expects an American attack and will have no choice except to wipe out Europe in response. Putin should encourage Europe to break off from NATO in order to prevent World War 3.

Putin should also make sure China understands that China represents the same perceived threat to the US as Russia and that the two countries need to stand together. Perhaps if Russia and China were to maintain their forces on a nuclear alert, not the top one, but an elevated one that conveyed recognition of the American threat and conveyed this threat to the world, the US could be isolated.

Perhaps if the Indian press, the Japanese Press, the French and German press, the UK press, the Chinese and Russian press began reporting that Russia and China wonder if they will receive a pre-emptive nuclear attack from Washington the result would be to prevent the attack.

As far as I can tell from my many media interviews with the Russian media, there is no Russian awareness of the Wolfowitz Doctrine. Russians think that there is some kind of misunderstanding about Russian intentions. The Russian media does not understand that Russia is unacceptable, because Russia is not a US vassal. Russians believe all the Western bullshit about “freedom and democracy” and believe that they are short on both but making progress. In other words, Russians have no idea that they are targeted for destruction.

The Saker: What are, in your opinion, the roots of the hatred of so many members of the US elites for Russia? Is that just a leftover from the Cold War, or is there another reason for the almost universal russophobia amongst US elites? Even during the Cold War, it was unclear whether the US was anti-Communist or anti-Russian? Is there something in the Russian culture, nation or civilization which triggers that hostility and, if yes, what is it?

Paul Craig Roberts: The hostility toward Russia goes back to the Wolfowttz Doctrine:

“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.”

While the US was focused on its MidEast wars, Putin restored Russia and blocked Washington’s planned invasion of Syria and bombing of Iran. The “first objective” of the neocon doctrine was breached. Russia had to be brought into line. That is the origin of Washington’s attack on Russia. The dependent and captive US and European media simply repeats “the Russian Threat” to the public, which is insouciant and otherwise uninformed.

The offense of Russian culture is also there–Christian morals, respect for law and humanity, diplomacy in place of coercion, traditional social mores–but these are in the background. Russia is hated because Russia (and China) is a check on Washington’s unilateral uni-power. This check is what will lead to war.

If the Russians and Chinese do not expect a pre-emptive nuclear attack from Washington, they will be destroyed.

Strong dollar a threat to Eskom and South Africa

In the world of economics, one policymaker towers above all others. The head of America’s central bank, Janet Yellen, presides over a $17 trillion economy. The empire of her nearest competitor, Mario Draghi, amounts to a relatively puny $10 trillion. On top of this, the dollar’s global role means Ms Yellen has a huge impact abroad, influencing more than $9 trillion in borrowing in dollars by non-financial companies outside America—more than enough to buy all the firms listed on the stock exchanges of Shanghai and Tokyo. As the dollar strengthens both in response to healthier growth in America and in the expectation that the Federal Reserve is getting ready to raise rates, this burden is becoming harder to bear.

Dollar borrowing is everywhere, but the biggest growth has been in emerging markets. Between 2009 and 2014 the dollar-denominated debts of the developing world, in the form of both bank loans and bonds, more than doubled, from around $2 trillion to some $4.5 trillion, according to the Bank for International Settlements (BIS). Places like Brazil, South Africa and Turkey, whose exports fall far short of imports, finance their current-account gaps by building up debts to foreigners.

Even countries without trade gaps have been borrowing heavily. With interest rates on American assets so meagre—a five-year Treasury bond pays just 1.5%—those with dollars to invest have sought out more rewarding opportunities. Firms based in emerging markets seemed to fit the bill. Some are big names: state-owned energy giants like Russia’s Gazprom and Brazil’s Petrobras have been issuing dollar bonds via subsidiaries based in Luxembourg and the Cayman Islands. Others are smaller. Recent months have seen Lodha group, an Indian property developer, Eskom, a South African power generator, and Yasar, a Turkish firm that makes TV dinners, sell dollar-denominated bonds. By borrowing dollars at several percentage points below the prevailing interest rate in their domestic currency, CEOs have pepped up profits in the short term.

But finance rarely offers a free lunch. The worry is that tumbling energy prices mean firms like Gazprom and Petrobras now have much lower dollar income than expected when they took on debts. Others, such as Lodha, Eskom and Yasar, have few dollar earnings. Taking on debt just before a shift in exchange rates can be painful. In 2010 a Turkish firm borrowing $10m via a ten-year bond with a 5% coupon could expect to pay 22.5m lira ($15m) over the life of the bond. But the lira is down 43% against the dollar since then; the payments are now over 39m lira.

Where foreign debts and earnings line up there is little reason to worry. Asian firms’ foreign-currency debts tripled from $700 billion to $2.1 trillion between 2008 and 2014, going from 7.9% of regional GDP to 12.3%, according to economists at Morgan Stanley, a bank. To see whether the surge was bearable, the economists looked at the accounts of 762 firms across Asia. The findings were reassuring: on average 22% of their debt is dollar-denominated, but so are 21% of earnings. Although Asian firms are a big part of the emerging-markets’ borrowing binge, on the whole they seem well placed to cope with a rising dollar.

Yet there are still two reasons to worry. First, the outlook for China is a puzzle. The country holds $1.2 trillion in Treasury bills, many of which are sitting in its sovereign-wealth fund. When the dollar rises, the fund gets richer. But even in a dollar-rich country, there can be pockets of pain. China’s firms have built up a nasty currency mismatch. Almost 25% of corporate debt is dollar-denominated, but only 8.5% of corporate earnings are. Worse, this debt is concentrated, according to Morgan Stanley, with 5% of firms holding 50% of it.

Chinese property developers are the most obviously vulnerable. Companies like Evergrande, China Vanke and Wanda build and sell offices and houses, so most of their earnings are in yuan. Banned from borrowing directly from banks, they have been active issuers of dollar bonds. They have also borrowed from trust companies, according to Fitch, a rating agency. The trusts are themselves highly leveraged and have borrowed dollars via subsidiaries in Hong Kong. This arrangement will amplify the economic pain if property prices in China continue to decline, as they have been doing for several months.

The second problem is that whole economies, rather than just the corporate sector, look short of dollars. In Brazil and Russia, for instance, bail-outs of firms lacking greenbacks are blurring the lines between the state, banks and big companies. The general scramble for dollars has contributed to the plunge of the real and the rouble. Others could follow this path. Turkey’s dollar borrowing has grown rapidly since 2009: in addition to the debts Turkish firms have taken on, the state’s external debt has grown to almost 50% of GDP, far above the average for middle-income countries (23%). South Africa looks worrying too: its current-account deficit is the widest of any big emerging market, and the government’s external debt is 40% of GDP.

A wave of defaults would be unlikely to cause problems as widespread as the subprime crisis of 2008. Most bonds are owned by deep-pocketed institutional investors such as pension funds and insurers. The banks that have made loans face far tougher regulation than they did eight years ago and are generally far better capitalised. An emerging-market rout would not cause another Lehman moment. But it would mean big job losses at stricken firms. As investors reprice risk it would probably also lead to a sudden tightening of credit. In countries like South Africa or Turkey, where growth is evaporating fast, that could still be very painful. – The Economist

US headed for a collision with Israel

Patrick J. Buchanan says the US is headed for a collision with Israel as serious as Suez ’56, and they are about to see what Barack Obama is made of.

In November 1956, President Eisenhower, enraged he had not been forewarned of their invasion of Egypt, ordered the British, French and Israelis to get out of Suez and Sinai. They did as told.

How far we have fallen from the America of Ike and John Foster Dulles has been on painful display this March.

An Israeli leader told a joint session of Congress that President Obama’s nuclear deal with Iran is stupid and dangerous and must be rejected. Congress gave him 40 ovations.

Bibi Netanyahu then went home and told the world there will be no Palestinian state, and was re-elected in a smashing victory.

“Perhaps it’s time for Americans, especially those in the White House, to recognize this new reality of Israeli politics,” says The Wall Street Journal. We should restore “Israeli confidence in U.S. support.”

Excuse me? Who is the senior partner here? Who needs whom more?

Israel is entitled to choose its own leaders, who are entitled to make their own policy. But that goes for us as well.

We are today headed for a collision with Israel as serious as Suez ’56, and we are about to see what Barack Obama is made of.

The days of self-delusion are over. For was there ever a doubt where Bibi stood? In 1994, he denounced the Oslo Accords in a speech interrupted by chants that Prime Minister Yitzhak Rabin was a “traitor.”

Did anyone think Bibi, who opposed Ariel Sharon’s withdrawal of Israeli settlers from Gaza, was going to withdraw tens of thousands of Jewish settlers from Judea and Samaria, share Jerusalem with a Palestinian state, or allow the return of Arab refugees to what Bibi says is the “Jewish state”?

“Arab voters are coming out in droves to the polls. Left-wing organizations are busing them out,” said Bibi on his Facebook page in Hebrew, according to a translation by Haaretz.

That’s the real Bibi. We have clarity now.

What should Obama do?

Drop the petulance, call and congratulate Bibi on his election and tell him we are proceeding with the Iran deal — if we conclude it accords with our interests. And if he attempts to sabotage or scuttle the deal, he should expect political and economic retaliation.

Bibi is looking out for Israel first. America needs a president like Ike who will start looking out for America first.

It appears we are at a moment of truth worldwide.

[…]

The Chinese are launching an Asian Infrastructure Investment Bank as a rival to the U.S.-dominated World Bank. Despite our pleas, Britain, France, Italy and Germany are rushing to sign on as charter members. South Korea and Australia may follow.

Our allies are looking to pick up contracts for the construction projects for the new Chinese “silk road” from Asia to Europe.

The AIIB will have $50 billion in startup cash, a pittance to a China sitting on a hoard of $3 to $4 trillion in cash reserves, from decades of huge trade surpluses run at the expense of the United States.

Virtually all our Asian allies do a larger share of their trade with China than with us. They want to buy from and sell to China, and stay in Beijing’s good graces. But if menaced by China, they want the United States obligated by treaty to come and fight for them.

One understands why this is in their interests. But why is it in ours?

Nor is the Middle East any different.

China ready to shut down foreign NGOs

New law that would allow Beijing to filter out foreign funding of groups, seen as a matter of national security

After years of operating in a precarious legal limbo, foreign non-governmental organizations in China are facing a moment of truth that could force many of them to close their doors.

The Chinese government is drafting a new foreign NGO law that is widely expected to make work more difficult, if not impossible, for many of the 6,000 overseas non-profits that operate here in a broad range of fields from education and the environment to HIV-Aids and legal education.

Under the new law, foreign non-profits would not be allowed to open more than one office, or to raise funds locally, or be allowed to fund projects deemed counter to what is being called “Chinese society’s moral customs,” according to excerpts seen by The Christian Science Monitor of the still unpublished bill.

At the heart of the proposed law is a view that foreign non-profits are a potential threat to national security.

“We need to protect their legitimate interests, to let them play a greater role, but on the other hand they need more effective management, to sufficiently protect our national security and social stability,” said Fu Ying, spokeswoman for the National People’s Congress (NPC), China’s parliament, before it opened its annual session last week.

The bill was presented last December to the Standing Committee of the NPC by Yang Huanning, Vice Minister of Public Security. It came on the heels of a survey of foreign-funded NGOs ordered last summer by the National Security Commission, headed by President Xi Jinping.

The Ministry of Civil Affairs, traditionally responsible for non-governmental organizations, appears to play no role in the drafting of the legal text, according to people familiar with the situation.

The draft law puts the Ministry of Public Security in charge of registering foreign NGOs, which are obliged to find a government agency to sponsor them. They would also have to submit annual work plans, including all funding proposals, in advance to their sponsoring agency such as a ministry or local government authority.

NGO’s, especially those who work in politically sensitive areas such as gay rights, journalism training or labor relations fear that the new law will be used to shut them down. “This law, from what we have heard, gives unprecedented power to the police,” says one activist with a foreign NGO in Beijing. “They want to show a heavy hand.”

The new bill, now under closed-door discussion, is expected to pass by the end of this year.

Source: csmonitor.com

France, Germany, Italy join China’s Infrastructure Investment Bank

France, Germany and Italy have confirmed they’ll join China’s new Asian Infrastructure Investment Bank (AIIB). Participation in the rival to the US-led World Bank is seen as a setback for the Obama administration.

The three European countries on Tuesday confirmed in a statement they intend “to become founding members of the Asian Infrastructure Investment Bank,” according to AFP.

“We want to bring our long experience… to help the bank build a solid reputation,” said German Finance Minister Wolfgang Schaeuble, speaking also for Italy and France at a joint press conference with Chinese Deputy-Premier Ma Kai on Tuesday in Berlin. He added that the three countries want to make a contribution to the positive development of the Asian economy, in which German companies were actively taking part.

Chinese Foreign Ministry spokesman Hong Lei welcomed the decision, saying “the AIIB is an open and inclusive multilateral investment institution.”

“Participation by countries outside the region will intensify the extensive representatives of the AIIB,” he added.

The decision of the three European countries comes after Britain last week became the first Western country to agree to become a founding member of the AIIB, FT reports. The UK government said the decision was in the country’s national interest, but it got a negative reaction from the United States.

The new China-led bank is expected to challenge the Washington-based World Bank, so the US is increasing pressure on its allies not to join the institution. The US’ concern is that the new investment bank might not have high standards of governance and environmental and social safeguards.

The new bank is expected to challenge the Western dominance of the US-led World Bank and IMF in global infrastructure projects, which experts believe will create healthy competition.

South Korea, Switzerland and Luxembourg were also considering joining the Asian Infrastructure Investment Bank, the Financial Times reported.

Australian Prime Minister Tony Abbott said he would make a final decision on AIIB membership soon. South Korea and other countries are in discussions with China over possible participation.

China’s main regional rival Japan said earlier this month that Asian countries including Japan have until March 31 to decide on becoming AIIB founding members.

“They told us they are considering. Whether Japan will join, we do not know. It is Japan’s own decision,” Chinese Finance Minister Lou Jiwei said, according to the Xinhua news agency.

Nearly 30 countries have confirmed their participation in the AIIB, which is aimed at helping finance infrastructure projects across Asia and is expected to come into being this year.

The AIIB was formally launched by Chinese President Xi Jinping in 2014, and is expected to become a tool of a broader Chinese push for growing international power and economic significance.

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.

China producing arms at a faster clip than West

China has surpassed Germany to become the world’s third largest arms exporter, a Stockholm-based think tank said in a report on Monday.

China’s military spending has seen double-digit growth for decades, and Beijing has poured funds into modernizing its armed forces as it takes a more assertive stance on territorial disputes in the region.

Exports of major arms from the world’s second largest economy grew 143 percent over the years 2010 to 2014, versus the previous five-year period, when China had ranked ninth globally, the Stockholm International Peace Research Institute (SIPRI) said in a report.

“Asian countries continue to expand their military capabilities, with an emphasis on maritime assets,” Siemon Wezeman, senior researcher with the SIPRI Arms and Military Expenditure Programme, said in a news release.

More than 68 percent of Chinese exports went to Pakistan, Bangladesh and Myanmar. Beijing also sold major arms to 18 African states.

The volume of US exports of major weapons rose by 23 per cent between 2005–2009 and 2010–14. The USA’s share of the volume of international arms exports was 31 per cent in 2010–14, compared with 27 per cent for Russia. Russian exports of major weapons increased by 37 per cent between 2005–2009 and 2010–14. During the same period, Chinese exports of major arms increased by 143 per cent, making it the third largest supplier in 2010–14, however still significantly behind the USA and Russia.

‘The USA has long seen arms exports as a major foreign policy and security tool, but in recent years exports are increasingly needed to help the US arms industry maintain production levels at a time of decreasing US military expenditure’, said Dr Aude Fleurant, Director of the SIPRI Arms and Military Expenditure Programme.

Analysts say Chinese-made equipment has found eager buyers among countries at odds with the United States and its allies.

Source: Reuters

Swiss diplomat dissects diverging US, EU interests

It is important to understand that US interests are fundamentally different from those of Europeans, Lena Lio, a former Swiss politician and diplomat, expert on Russian studies, told the newspaper 24 Heures.

The instability in Eastern Europe is beneficial for Washington, as the ongoing conflict in Ukraine will lead to a weak Europe, implying also that mostly white nations will suffer the consequences.

The weak Europe, in turn, cannot pose an economic threat or political competition to the United States. That is one reason why Washington passionately hates “nationalists”, the real backbone of the EU.

If Europe manages to solve its internal problems, it will be a dangerous challenger for the US hegemony, Lio said.

Unable to remain the top dog in international politics, the United States deliberately destabilizes its potential competitors by creating conflicts and fueling existing disputes.

The United States is losing its dominance in the international arena and that is why Washington deliberately tries to destabilize and crush any potential competition.

Most Americans now see Russia – ahead of North Korea, China and Iran – as the US’s public enemy number one and the greatest threat to the US due to a relentless demonization campaign. Americans regard Europeans as “appeasers”.

But the EU has no energy security in the Middle East and North Africa, and without their reliable partner Russia, will have no energy security at all.

The United States can thus no longer remain the only hegemon in the world, the position it has become so used to since the fall of the Berlin Wall and the end of Cold War.

Therefore, unable to stay on the top, the United States uses aggressive style of conducting politics by deliberately damaging relations between other countries, such as fueling disputes between China and Japan, destabilizing Eastern Europe by supporting the conflict in Ukraine, artificially driving down global oil prices and damaging the Russian economy by imposing economic sanctions, said the former Swiss diplomat.

NATO in Europe embodies the ultimate geopolitical existential paradox; an alliance that exists to manage the chaos it perpetuates.

US attacks London’s ‘constant accomodation’ of China

The Obama administration accused the UK of a “constant accommodation” of China after Britain decided to join a new China-led financial institution that could rival the World Bank.

The rare rebuke of one of the US’s closest allies came as Britain prepared to announce that it will become a founding member of the $50bn Asian Infrastructure Investment Bank, making it the first country in the G7 group of leading economies to join an institution launched by China last October.

Thursday’s reprimand was a rare breach in the “special relationship” that has been a backbone of western policy for decades. It also underlined US concerns over China’s efforts to establish a new generation of international development banks that could challenge Washington-based global institutions. The US has been lobbying other allies not to join the AIIB.

Relations between Washington and David Cameron’s government have become strained, with senior US officials criticising Britain over falling defence spending, which could soon go below the Nato target of 2 per cent of gross domestic product.

A senior US administration official told the Financial Times that the British decision was taken after “virtually no consultation with the US” and at a time when the G7 had been discussing how to approach the new bank.

“We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power,” the US official said.

British officials were publicly restrained in criticising China over its handling of Hong Kong’s pro-democracy protests while Mr Cameron has made it clear he has no further plans to meet the Dalai Lama, Tibet’s spiritual leader — after a 2012 meeting that prompted a furious response from Beijing.

While Beijing has long been suspicious about US influence over the World Bank and International Monetary Fund, China also believes that the US and Japan have too much control over the Manila-based Asian Development Bank. In addition to the AIIB, China is the driving force behind last year’s creation of a Brics development bank and is promoting a $40bn Silk Road Fund to finance economic integration with Central Asia.

The Obama administration has said it is not opposed to the AIIB but US officials fear it could become an instrument of Chinese foreign policy if Beijing ends up having veto power over the bank’s decisions.

The UK Treasury denied that Britain had acted out of the blue, saying there had been “at least a month of extensive consultation” at a G7 level, including with Jack Lew, US Treasury secretary.

George Osborne, UK chancellor of the exchequer, was unrepentant, arguing that Britain should be in at the start of the new bank, ensuring that it operates in a transparent way. He believes it fills an important gap in providing finance for infrastructure for Asia.

“Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together,” Mr Osborne said. He expects other western countries, which have been making positive noises privately about the new bank, to become involved.

Beijing launched the AIIB in October with the backing of 20 other countries but Japan, South Korea and Australia —US allies in the region — did not become founding members. There has been a strong debate within the Australian cabinet about whether to join, after US pressure to stay on the sidelines.

Mr Osborne’s decision reflects London’s desire to pursue commercial relations with China aggressively, even at the expense of antagonising Washington.

The UK has been keen to establish the City of London as a platform for overseas business in the Chinese currency as it starts to play a bigger role in the global economy.

Source: FT

Nemtsov’s role in plundering Russia

Murdered opposition figure Boris Nemtsov apparently liked to accuse Putin of things he himself was busy with.

“Russia is rapidly becoming a colony of China. Russia is losing sovereignty. This is the main point of modern foreign policy of the Kremlin” Nemtsov ranted about Putin’s stance towards China.

He had clearly forgotten that back in 1997 as Deputy Prime Minister he personally initiated a peculiar diplomacy towards Beijing, arriving a day ahead of President Yeltsin to finalize the hushed agreement on the gas pipeline from the Kovyktinskij gas field in Irkutsk and from Western Siberia to China.

His signature is actually on the agreement between the governments of Russia and China for the transportation of crude oil from Eastern Siberia to China. Nemtsov even participated in the negotiations on the demarcation of the Russian-Chinese border, which ended with the signing of a disadvantageous treaty for Russia.

After Nemtsov’s direct meddling, many Russians, to their astonishment, ended up on Chinese territory.

And what about the agreement with Japan “about some cooperation in the field of harvesting live marine resources”?

Business publications briefly reported that the Japanese were allowed by Nemtsov to fish in Russian waters without having to worry about strict Russian legislation. After only seven years the damage to Russia was then estimated at $10 billion.

The Deputy Prime Minister also aided the Chechen terrorists. He personally signed an agreement on the transit of oil through Chechnya, through which the militants received about $10 million in excess fees for oil transit from the federal budget.

This instrument of financial support for terrorism from the state worked swimmingly before Putin put an abrupt end to it. The Antlanticist press predictably only howled about human rights violations in Chechnya and remained mum on state sponsored terror.

In one interview Nemtsov admitted that he had agreed to become first Deputy Prime Minister under pressure from Boris Berezovsky’s allies. Nemtsov later denied this, but the jury from the High Court of England came to a different conclusion.

Boris and Boris admittedly had quarreled about a stake in Svyazinvest. Berezovsky wanted to buy it, but Nemtsov sold it to Soros!

In 1998 Nemtsov founded “The National Fund for Regional Policy” for the transfer of money from offshore companies, including TNK and YUKOS of the criminal Mikhail Khodorkovsky. Part of the funds went to Nemtsov.

The loss to the state was estimated at 370 billion rubles. But everything remained on the fringes of the law, since after October 1993, the laws were written by scoundrels for scoundrels, and approved by the cohort of senators whom Nemtsov had joined in December of the same year.

His election to the Council of Federation [Russian Senate] was financed by a businessman with a criminal background, Andrey Klimentyev.

Translated from Russian

China, Russia to finalize yet another major gas deal

Another major energy deal with Russia shows China is eager to develop overland energy supply lines that reduce its dependence on vulnerable sea lanes

China and Russia will seal an agreement later this year on piped gas from Western Siberia, China’s foreign minister said on Sunday, a deal that will continue Russia’s economic shift towards Asia and away from Western Europe.

Russia’s split with the west over Ukraine has pushed it closer to China, which is eager to develop overland energy supply lines that reduce its dependence on vulnerable sea lanes. China has taken a carefully neutral stance on the Ukraine conflict, while more broadly expressing its support for Russia.

The relationship between the two on-again, off-again Cold War allies is “mature and stable,” Chinese foreign minister Wang Yi told a press conference on Sunday. “There is enormous internal impetus and room for expansion.”

Much of that expansion will be in oil, gas and nuclear energy co-operation, he added. “We will fully begin construction of the eastern gas line and sign a co-operation agreement for the western line,” he said.

During a visit to Beijing in November, Russian president Vladimir Putin reached a preliminary agreement for Gazprom, the Kremlin-controlled energy group, to supply China’s state oil company CNPC with 30bn cubic metres of gas per year from the Altai region of western Siberia. However, most of the details — including the price of the gas — are still to be worked out.

Beijing expects the deal to be finalised later this year, leading to a pipeline that will, for the first time, allow Russia to choose between exporting gas to Asia or to Europe.

Russia has also made a commitment to sell gas from its far east to China, but gas from that area of Siberia can only be sold economically to Asia. In a $400bn agreement signed during Mr Putin’s visit to Shanghai in May, Russia agreed to sell up to 38bn cubic metres a year to China.

Chinese and Russian leaders officially inaugurated construction of the Power of Siberia pipeline in September last year, but little work can be done during the harsh Siberian winter. The two sides have also disagreed over financing for the massive projects, with Russia strapped for cash amid sanctions imposed by the West. To sweeten the deal for China, Russia has offered Chinese oil firms the chance to invest directly in its upstream operations. Russia’s deputy premier Arkardy Dvorkovich said at an investment forum last month that there are no longer political barriers to China controlling strategic assets.

Increased economic ties with Russia, particularly the Russian Far East, fall under the broader One Belt, One Road strategy of increasing exports and investment in Central Asia, Mr Wang said.

China wants to create a new Silk Road economic belt that roughly retraces trade networks active at the height of China’s presence in Central Asia, during the Han dynasty 2,000 years ago, as well as a 21st-century maritime Silk Road that revisits the greatest extent of its sea power during the early Ming dynasty.

Rising investment in Central Asia, Southeast Asia, South Asia and Africa would allow China to export its surplus capacity in steel, rail and other industries, an overhang that is increasingly weighing on its domestic economy.

An added attraction for energy-hungry China is the creation of overland rail, road and pipe networks, which it views as more defensible than easily blockaded sea routes including the Suez Canal and the narrow Strait of Malacca.

Source: FT