US-Iran nuclear fuel agreement & Asian infrastructure investment bank
These are two very important developments in undermining the military and economic unilateralism exercised by USA and its allies since World War II. The agreement on restrictions on enrichment of uranium by Iran is totally against NPT, to which Tehran is signatory. It is now allowed to do so with constraints .It is just another example of general lawlessness followed by USA and its Western allies. Hopefully there would be no slip between the cup and lip, by end June, whatever Israeli Prime Minister Mr Netanyahu might proclaim and opposition by Republican fanatics in USA.
The agreement on in Asia infrastructure investment bank organised at the behest of China, to which even Western powers and allies of USA have joined is another major move to do away with unequal financial and economic arrangement enforced around the world since World War II by Washington and its allies.
Dr William Engdahl, who has written these two articles, is a very well known and reputed commentator and analyst of international affairs, especially in the energy and financial field. These articles are concise, lucid and hard-hitting and bring out the truth of US exceptionalism and riding roughshod over international treaties, laws and obligations. Since the fall of the Berlin Wall, Washington has been a raging Bull, bringing about havoc and destruction recently in North Africa, countries of Sahel, West, South and Southwest Asia, not to forget Ukraine, a country which is being devastated almost as badly as Iraq, Libya and Syria.
It must be said to some credit of US Pres Barack Obama that in spite of fanatic right-wing resistance and noise ,he is trying to bring some sanity into US foreign and strategic relations keeping in view its declining manufacturing and exporting capability except for arms. Apart from promoting the nuclear enrichment deal with Iran, Obama has after 50 years made up with US neighbour in south, Cuba, which has stood as a sentinel against US exceptionalism, and pure and simple US sponsored terrorism and gangsterism either directly or through its allies and cronies .
In recent decades Latin America, considered a US backyard has shown great spine in resisting US exceptionalism led by Fidel Castro and others.
K Gajendra Singh, April 13, 2015, DelhiIran and a Possible New Energy Geopolitics
F. William Engdahl (NEO) : The recent tentative agreement between Iran and the USA regarding Iran's nuclear program open the prospect of a lifting of almost 36 years of American economic sanctions against Iran. It is being greeted by threats of unilateral military strikes by Israel against Iran to "pre-empt" Iran developing a nuclear bomb.
An alliance improbable as it may seem between the ultra-conservative Saudi monarchy and the government of Israel is emerging against Iran and the US deal. The real question is what the deeper motive of the Obama Administration is regarding Iran. Here energy geopolitics plays the lead role, as so often in the energy-rich Middle East. And Russia is the target.
I recently had a dialogue with Shervin, an Iranian energy expert I met two years ago in Tehran regarding these developments. I want to share some of the highlights of that discussion here. He is an energy specialist with Iran's leading international news agency, Tasnim News Agency. The talk provides a useful insight into the thinking of Iranian intellectuals regarding US sanctions, Iran's possible role in the world and in energy geopolitics.
Tasnim: What is your opinion about Iran's sanctions?
WE: The US sanctions on Iran are illegal under the precepts of international law and an act of war, just as are the sanctions on Syria and now on Russia.
Tasnim: Has the Iran negotiations reached a final agreement that will see the West's economic sanctions against Iran cancelled?
WE: We must be specific. The sanctions come from Washington and the US Treasury financial warfare unit, especially the latest round of sanctions against using the SWIFT interbank clearing system to sell Iranian oil, an unprecedented step by Washington that is now being threatened against Russia. The EU would love to reopen trade with Iran. So long as Washington is controlled by the banks of Wall Street and the military-industrial complex you can expect some excuse, even with a nuclear agreement, to continue the sanctions in some form. Look at Cuba.
Tasnim: How do the current low oil prices affect the economy in America?
WE: The US Secretary of State John Kerry met the Saudi King in Saudi Arabia last September and proposed the collapse of oil prices to put extreme pressure on Iran and primarily on Putin's Russia whom they are determined to destroy as the only military great power that could threaten the Pentagon's total military hegemony. If Russia capitulates, which I am convinced it will not, the current world will collapse, Iran will be isolated and destroyed, China as well and the entire alternative multi-polar new structures opposed to the increasingly naked totalitarianism of the Anglo-American hegemonists will suffer a devastating setback.
Ironically, the Saudi oil shock since last year is having a devastating impact on the huge new shale oil industry in North Dakota, Texas, California and such. I estimate if it goes another three to six months, we will begin to see a snowball series of oil company bankruptcies and default on more than $1 trillion in oil company loans or "junk" bonds. So far the shale oil companies have been flooding the market with their oil to get cash to avoid bank loan default in hopes the crisis will soon end. The Big Oil boys like ExxonMobil, Chevron, BP, Shell can ride the storm as they are well capitalized and global. In terms of the larger US economy, virtually the only bright spot in terms of jobs growth has been hundreds of thousands of new jobs in the domestic shale industry. Those are now vanishing rapidly. The Obama Administration once again failed to see the larger consequences of their actions. They have shot themselves in both feet in the oil war against Putin.
Tasnim: How do the economic sanctions against Iran also impact the US economy?
WE: The US Treasury sanctions on Iran have virtually no impact on the US economy, which makes them so diabolical.
Tasnim: Are economic sanctions against Iran more beneficial to America or Iran?
WE: Actually, and I saw this when I was in Tehran two years ago, it benefits Iran far more. This is because it forces you to be more self-reliant and not let your economy, your industries, your agriculture be destroyed by cheap Western imports like so many countries in Asia, Africa, South America have done. It forces Iran to develop the wonderful capacities internally, to control her own credit, not become a vassal of a dollar system that is going bankrupt. Iranians are very educated and very intelligent people, very resourceful. I think you will do quite well without importing iPhone6 or Monsanto GMO toxic soybeans.
Tasnim: Did Washington get the Saudis to drive down the price in order to hurt Russia and perhaps Iran?
WE: Yes, of course. It was a repeat of what George Schultz and Vice President Bush Sr. did back in 1986 to get the Saudis at that time to flood the market and drive prices below $10 a barrel, in order to bankrupt the Soviet Union during their Afghan war against the US-backed Mujahideen of Osama bin Laden.
But the policy people at the State Department and CIA in Washington were rather stupid this time. They did not calculate that the Saudis had their own agenda with cheap oil, namely to destroy the growing competition from the US shale oil. Now it's too late for Obama and Washington to easily reverse oil prices. The intellectual quality of the people today in Washington's bureaucracy, even compared to those some three decades ago, is so poor, in terms of understanding history, culture, economics, strategy. Note that some of the nastiest persons in the US foreign policy establishment like Brzezinski and Kissinger are urging Obama to not provoke a war with Russia. They at least have some grasp of history. Neo-conservatives like Victoria Nuland at State Department or Defense Secretary Ashton Carter or Hillary Clinton who has her cold eye on the White House, lack the depth in addition to being bad people. Therefore they are so dangerous to their nation as well as the world.
Tasnim: Did the Saudis see in Washington's request the opportunity to drive the US fracking industry out of business, thus preserving its US market?
WE: It's not about the Saudi US market. Saudi exports mainly to Asia today and rather little, about 800,000 barrels a day, to the US of a daily US oil consumption of around 19 million barrels a day, around 4%. It's the global market the Saudis are concerned with dominating via leverage of Arab OPEC—Saudi, Kuwait, Emirates.
Without Iran for the Saudis of course, but that Sunni-Shi'ite conflict, especially since Washington deliberately started the Arab Spring Color Revolutions in late 2010, was intended to create total dis-order between once-cooperating OPEC members in the Middle East in order to establish direct US military control over the entire region. The OPEC countries and their Sovereign Wealth Funds, using their huge oil revenues, were beginning to establish networks of Islamic banking independent from Western usury and debt slavery—Tunisia, Libya, Egypt…Had that continued, the dollar would become a worthless banana republic currency in a few years, much like the threat Washington sees today from the BRICS and the Asian Infrastructure Investment Bank.
It is useful to keep in mind, there are two pillars of Washington hegemony: Control of money via Wall Street and the Dollar as world reserve currency; and control of the military power. The money control began collapsing with the foolish deregulation of the banks under Alan Greenspan's time at the Federal Reserve and the resulting orgy of speculation called the Asset Backed Securitization that led to the inevitable 2007-2008 financial crisis. After that, the military "solution" has become more dominant as the financial pillar was too weak to continue the push for global domination or as Bush and David Rockefeller have called it, their New World Order.
It might help to know that today these American Oligarchs, as I call them, are becoming terrified as never since at least one hundred years that they can lose everything. They are desperate. Washington today is riddled with confused people fighting each other and the world. It is a bit like the last years of the Roman Empire of the Fourth Century AD. It reminds of the ancient Greek saying, "Whom the gods would destroy they first make mad." Today Washington is home of the Lost Hegemon and some very mad people as in Israel under that gangster, Binjamin Netanyahu.
Tasnim: Is the reduction of price oil for Iran a threat or an opportunity?
WE: An opportunity, a wonderful one, to take a lead in a new just international trading system, one pricing oil not in dollars. As long as the world trades its oil in dollars, you support the Dollar Empire and destroy yourselves. Here China, Russia and others are playing a crucial role pricing in local currencies, thus de-dollarizing their economies. Today the only thing propping up the debt-bloated US Dollar System are oil sales in dollars, narcotics traffic worldwide in dollars and the US military worldwide as the global cops. That's a pretty fragile system in my view.
Tasnim: What suggestions do you have for economic authorities?
WE: Iran is a wonderful land with beautiful, warm-hearted people and enormous intelligence and economic resources. Were I Iranian head of state I would direct my government to create planning processes across Iran in every region if it does not already exist, to engage local citizens in dialogue with the regional economic officials to define priority economic goals of each region for the next 5 year period (anything longer becomes too rigid). Much like Charles deGaulle, who was certainly no communist, did with his and Jacques Rueff's "Planification."
Then the central government ministers meet and review the wants and needs of the people across Iran and draft realizable priorities. I would ban all Western vaccines, all. A healthy diet and loving family and community are the only way to a healthy immune system. I would ban GMO and the chemical weed killers like Monsanto Roundup from ever coming in, even indirectly via soybeans from USA or Argentina or GMO corn. China is just now realizing its error in allowing 60% of her soybeans to be imported and all are GMO. I would develop Iran's wonderful food culture naturally, with natural chemical-free methods, subsidize that with a positive tax policy and punish industrial US-style agribusiness with punitive taxes.
Today the oligarchs of the West have a simple agenda: genocide against all darker-skinned non-Anglo Saxon blood lines. I have met many of them over the years at conferences in Davos, Frankfurt, many places. They are bloody racists, eugenicists, people like Gates with his vaccines that kill small babies or make young girls unable to have children.
Bill Gates, George Soros, David Rockefeller, Warren Buffett, the DuPonts, the Russell family of Yale University, and others whose names are not so known. They are all fundamentally stupid and ridiculous people who are incapable of seeing the consequences of every life they take to the entirety of the human species. For them to kill the "useless eaters" like ourselves, they make wars, spread disease, make more and more of our children sick and crippled via their poison vaccines, destroy healthy non-chemical traditional medicine like exists still in parts of China or Iran or Russia in favor of the drugs and toxins of Western Drug companies who, by the way, control WHO. They create terrorist organizations to spread their wars of destruction such as Al Qaeda in Libya, Iraq, Yemen, and across the Arab world, Fethullah Gülen's Cemaat in Turkey and beyond, ISIS which was a creation of US and Israeli intelligence to destroy Bashar al-Assad and the Syrian ties to Iran and Iraq.
Washington now wants to seduce Iran into turning her back on previous ally, Russia and undercutting Russian gas exports to Turkey and the EU. In my view Iran's future lies not in becoming a new ally of the present Washington neo conservatives to get a few economic cookies from the West if they abandon their natural alliance with Eurasia, especially with Russia, China and the countries of the Shanghai Cooperation Organization.
Iran's proven natural gas reserves are estimated by BP to be some 34 trillion cubic meters, while Russia's are at 33 trillion cubic meters. Cooperation now between those two natural gas superpowers is essential in order to build the architecture of Eurasia in a way beneficial to all, including to Germany and the rest of the EU. This is a golden opportunity to change the locus of global energy geopolitics away from the Washington-London-Riyadh axis powers who have controlled it since the initial agreement between US President Roosevelt and Saudi King Ibn Saud in 1943 giving American Rockefeller oil majors exclusive control of the vast oil riches of Saudi Arabia.
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine "New Eastern Outlook".
AIIB, BRICS Development Bank and an Emerging World
Germany is a founding member as France. So is Luxemburg, even Great Britain. Putin's Russia and India are also among the founders. To the surprise of many, so is the International Monetary Fund (IMF), an institution that until now has been a pillar of the dollar system. We are talking about China's Asian Infrastructure Investment Bank or AIIB. The question is whether the AIIB is on its way to become the seed crystal of a new monetary order that could replace the destructive influence of the dollar? Or will it be infected by Trojans like the UK and the IMF? The answer could well shape the architecture of a new world in which the dollar and its bloated debt structures no longer dictate to the entire world what their economic policies shall be.
In October 2014, China announced it was creating a new international bank to finance major infrastructure projects across Asia. The prime driver for China was to finance their New Silk Road high-speed Eurasian rail and also sea infrastructure projects and the refusal of the United States to agree to major IMF voting reform that would give China and other emerging economic nations more say. Beijing announced they will give $50 billion to start the new bank. At the time, Washington and most of the rest of the world ignored the bank, while the Obama Administration attacked the AIIB for possibly lacking transparency or sufficient concern for environmental risks, patent diversions from the reality, namely, that the AIIB represents a strategic threat to continued American global dollar hegemony.
Washington's well-aimed shot in the foot
The Obama Administration, by fiercely opposing it when the UK, Australia, Japan and other core US allies indicated interest in joining the AIIB, now have royally shot themselves in both feet. Today, as of the March 31 deadline, more than 40 nations have joined with China's new banks as Founding Members. The bank now threatens to rival the IMF, World Bank and the related Asian Development Bank as a long-term creditor able to attract capital to major infrastructure investment across Eurasia and perhaps beyond. Those three public banks are all derived from the US' postwar Bretton Woods Treaty and all three are controlled tightly by Washington to the advantage of the dollar and of US interests.
Now it's not as if China is sneaking behind the back of their dear friends in Washington. In 2010 China, Brazil and other fast-developing countries won an agreement on reform of the IMF that would have doubled the funds available to the IMF in return for a greater voting weight for countries such as China, Russia, India and Brazil and other economies which were not even on the map in 1944 in terms of relative economic size. The proposal won 77% of the share votes of all IMF member countries.
The 2010 IMF voting rights reform stipulated that China will become the 3rd largest member country in the IMF, and there will be four emerging economies—Brazil, China, India, and Russia—among the 10 largest shareholders in the Fund. Under present rules, Washington, conveniently holds 16.75%, a veto minority. Close US geopolitical allies—Japan with 6.23%, UK and France each with 4.29% and Germany with 5.81% would typically insure that IMF policies in any area were "friendly" to American defined national interests.
China, Russia, India, Brazil and other fast-emerging economies find it is manifestly absurd that today IMF voting rights on the Executive Board give France, with a $3 trillion GDP, far more votes than China with a 2014 GDP of more than three times that, at $10 trillion, or gives Belgium (1.86%) with a $500 billion GDP a larger voting share than Brazil (1.72%) with a GDP more than four times as large at $2.2 trillion. According to the IMF bylaws, a member country's voting shares ought to be roughly proportional to its relative size among the 147 IMF member countries in terms of GDP. When Washington drew up the IMF bylaws in 1944 it stipulated, conveniently, that no major decision of the IMF could come into force unless it had 85% of all member voting shares supporting it.
Washington is holding on like a pit bull to the old bylaws in which the US retains a blocking veto share of votes. The US Congress refuses to pass the IMF reforms and to break the impasse. This is a major way forced China and the other fast-growing BRICS states to look outside the IMF and World Bank and build an entirely new architecture. The AIIB today is emerging rapidly as a centerpiece in this emerging new global architecture.
Rather than trying to influence the new AIIB from within, Washington has chosen a tactic that has delivered it a huge and humiliating geopolitical defeat, and which will likely exclude US corporations from lucrative construction bids.
US foreign policy under Obama, as it was under George W. Bush, is being run by a gaggle of neo-conservative ideologues who seem incapable of flexible response. For them anything China does is "bad" and must be opposed with all US might.
China for those Washington people is the emerging global challenger to US military power, so Obama imposes an "Asia Pivot" military strategy to encircle and anger Beijing. China's economic and financial influence threatens the dollar system so that too must be opposed. The BRICS threatens to become independent of Washington control as vassal states, so BRICS states must be "taught a lesson" as Washington recently attempted with its usual Color Revolution organized opposition protests against pro-BRICS president Dilma Rousseff in hopes of installing a US-friendly free market alternative.
The problem for Washington is that none of this is working as it used to. And Washington sees the desertion of her closest "allies" to join China's AIIB. One is reminded of the statement by England's Prime Minister Lord Palmerston, "England has no friends, merely her interests."
The new architecture emerging
Not only are Russia, Brazil, India, in the AIIB founders list—four of the five BRICS—as well Australia, New Zealand, Indonesia, Pakistan, Philippines, Vietnam—countries the Obama Administration is relying on to join the military Asia Pivot against China, have all decided to join with China in her new bank. Even Taiwan has applied to join under the name Chinese Taipei.
And in a further devastating for the image of Washington and perhaps for the future of its domination of the IMF and World Bank, was the fact that five of the Group of Seven large western industrial countries—Italy, France, Germany, UK and even Japan looks likely to join. In all more than forty nations have applied to become founding members.
"Money talks and nobody walks," as the crazy radio jingle during the 1960's aired by Rock 'n Roll DJ Charlie Greer on the popular WABC Top 40 New York radio station, on behalf of Dennison's Clothing Store put it. China has the money, and nobody, except the USA, is walking away from that it seems.
The rush to get in on the China-backed Asian Infrastructure Investment Bank by all these countries including the largest EU members is the realization that Asia and Eurasia is where the economic future of the planet will be made or broken. The USA and Canadian economies are choking in unpayable debts, rotting infrastructure and rustbelt industrial ghost towns like Detroit or Pittsburgh. America is no longer the magnet that all others are drawn to for trade. The country is bust, its government economic figures a bodyguard of lies, its true unemployment at Great Depression levels of 23.2% according to John Williams' Shadow Government Statistics.
China is in a pivotal position to found such a new bank to finance transnational large infrastructure such as the New Silk Road trans-Eurasian high-speed railway that Russia is in the process of connecting with. There will emerge large demand for construction of infrastructure in terms of electric power facilities, highways across Eurasia and Asia. Economic infrastructure is on the drawing boards ultimately linking South Korea to the vast Chinese economy via North Korea.
The infrastructure gap across Asia and Eurasia is enough to spur global industrial growth for decades. The Asian Development Bank (ADB) estimates Asia will need $8 trillion over the next decade for energy, transportation, telecommunication and water/sanitation. Now private investment in infrastructure runs a mere $13 billion a year, most in low-risk projects. Official development assistance adds another $11 billion a year. That means a shortfall exceeding $700 billion a year.
By refusing to join and trying to stop the AIIB Washington in effect stands opposed to Asian regional investments that will expand trade, support financial market development and macroeconomic stability, and improve environmental, health and social conditions. Instead all Washington has to offer is the silly Trans-Pacific Partnership for US-friendly free trade deals that would allow Monsanto and other US corporations to override Asian national laws in pursuit of profit.
The very fact that the AIIB has gathered such worldwide support is demonstration of the impotence of the US-dominated Bretton Woods institutions of the World Bank, IMF and Asian Development Bank.
And a new BRICS Bank
The Asian Infrastructure Investment Bank is but one new initiative by the world's emerging economies.
At the 2014 BRICS summit in Fortaleza, Brazil, they five heads of state declared bluntly, "We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund reforms, which negatively impacts on the IMF's legitimacy, credibility and effectiveness." Collectively, BRICS account for nearly $16 trillion in GDP and 40% of the world's population, nothing to be lightly disregarded as a group of banana republics as some policymakers in Washington evidently still see them. They haven't had their eyes checked since 1944 apparently.
The New Development Bank as it is formally called, or informally the BRICS Development Bank will be headquartered in Shanghai, China's fast-emerging world financial hub. It will open for business with a $100 billion dollar liquidity reserve to defend against possible currency wars as Washington and Wall Street launched in 1997 to destroy the then-booming Asian Tiger economies led by South Korea, Malaysia and Indonesia. The New Bank will also have an initial $50 billion in capital, each BRICS country contributing $10 billion, with the agreed option to rise to $100 billion for financing BRICS infrastructure projects.
The NDB charter specified its membership will be open to all United Nations member states. However, and this is crucial, the five founding BRICS capital share must never fall below 55 percent, and a non-founding member may never increase above 7 percent. In short The BRICS bank will be managed by governments who share deep dissatisfaction with the Washington-controlled Bretton-Woods institutions.
The combination of the two new infrastructure banks poses the greatest threat to the US dollar system and its control of world financial flows since 1944.iv It is this threat that is driving the rudderless foreign policy agenda of Washington. Peace and cooperation is a far more useful way to resolve affairs among civilized nations.
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine "New Eastern Outlook"