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CONFIRMED: Foreign investors flock back to Russia

As economy strengthens Russia overtakes India as top pick for foreign investors and equity funds

Alexander Mercouris

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This article was first published by RussiaFeed

Growing investor confidence in the Russia as its historically high inflation rate continues to fall, and as its economy leaves recession behind it, has received dramatic confirmation with the news that for the first time Russia has overtaken India as the preferred investment option of emerging market investors.

This confirmation comes from the most authoritative possible source, an article in the Financial Times, which in recent years has been intensely critical of Russia.

Russia has taken over from India as the largest overweight position for emerging market equity funds.

The move comes despite the imposition of ever-tighter sanctions on Moscow, still low oil prices and an economy now pulling out of bitter recession but still assailed by real, inflation-adjusted interest rates of 5.2 per cent.

In contrast, India has long been a darling of foreign investors licking their lips at the prospect of the world’s second-most populous country growing at a punchy rate, assisted by the reformist zeal of Prime Minister Narendra Modi.

“Russia is now the largest overweight position among emerging market managers for the first time since our records began in 2011, surpassing longstanding EM favourite India,” said Steven Holden, founder of Copley Fund Research, who compiled the data and confessed to “surprise” at Russia’s newfound popularity.

The average EM equity fund is now overweight Russia by 1.46 percentage points, surpassing the 1.4 percentage-point figure for India, where fund managers had an average overweight position of 4.4 per cent in early 2015, according to Copley’s numbers, as shown in the first chart.

The data are based on the holdings of 126 funds with combined assets of $300bn. Of these funds, 72.8 per cent are now overweight Russia, compared with only 60 per cent with an outsize position in India….

The article points out correctly that foreign investor interest in Russia starts from a very low base, and that Russia has overtaken India as much because of India’s recent loss of attractiveness as Russia’s rise in attractiveness.

However the article also makes it clear that the rise in investor interest in Russia is ultimately driven by Russia’s increasingly strong fundamentals

Mr Jain is among a group of investors with a genuine fervour for Russia now, which is striking given that he was “ultra bearish for 15 years”, while CIO of Switzerland’s Vontobel Asset Management, where he ran as much as $32bn. Yet now his GQG Partners Emerging Markets Equity fund has an exposure of 10.2 per cent to Russia, more than three times its index weight.

“I was publicly critical of investing in Russia. I have covered Russia for 25 years and this is the most I have had,” he said.

Nicholas Field, EM strategist at Schroders and co-manager of the group’s Global Emerging Market Opportunities fund, is another convert, with a punchier weighting of 14.2 per cent.

“A lot of the headlines one reads about Russia are about geopolitics and relations with the US and so on, but when you look at the economy you do see some things that are interesting to investors,” he said.

Mr Jain’s thesis is that the sanctions imposed on Russia by the US and EU, as well as the slide in oil prices, have been largely beneficial to foreign investors because they have forced Russian companies to delever and cut costs.

India is very expensive. It has gone from very cheap to one of the most expensive markets.  More specifically, he says Russian oil companies have been forced to develop complex drilling technology in-house, potentially helping them in the long term, while some domestic agricultural companies, such as cheesemakers, have benefited from reduced foreign competition amid Russian counter-sanctions on European food imports.

“Sanctions have been positive for the Russian corporate world. [Companies] were forced to get their act together and there was a massive cost-cutting effort,” said Mr Jain. “Because of this cost-cutting, operating profits are higher than people estimate. Corporate earnings have begun to recover after a long slump. You have to follow the corporate profits.”

He even sees positives in the travails of Otkritie and B&N Bank, two private banks that have been bailed out by the central bank and nationalised in recent weeks after running into financial difficulties.

About 4.2 per cent of Mr Jain’s fund is invested in Sberbank, Russia’s largest bank. He said: “The banking industry has seen massive consolidation. Now three banks control 70 per cent of the assets. “Sberbank is very well run, on six times earnings. How many banks make 20 per cent ROE [return on equity] in the middle of a recession? The position they have wouldn’t be allowed in many countries, and now there is tremendous credit growth and NPLs [non-performing loans] are coming off.”

Overall, he sees room for further top-line revenue growth, margin expansion and a market re-rating, given that Moscow currently trades on a price/earnings ratio of just 7.8 and has a chunky dividend yield of 4.7 per cent.

Readers of RussiaFeed and of The Duran will already be familiar with much of this.  By way of example, here is a recent article I wrote for The Duran on the subject of Russia’s advances in oil drilling technology (one of the subjects touched on in the Financial Times article by Rajiv Jain), whilst the rapid advance of Russian agriculture, in part as a consequence of Russia’s counter-sanctions (a subject also touched on by Rajiv Jain) was recently discussed by me on RussiaFeed here.

As for the growing strength of the Russian financial and banking system – historically the Achilles heel of Russia’s post-Soviet economy – I have discussed it many times and in many places (see for example here and here).

What is finally happening is that the international investment community – and the Financial Times – are finally catching up with the truth of all of this.

Given the enormous amount of negative “noise” from which Russia suffers and the Financial Times’s longstanding hostility to the country and its government, the article about international investors coming to Russia nonetheless and entirely unsurprisingly comes with a sting in its tail.  The growing interest in Russia is supposedly not because its long term economic prospects are good.  It is only because of Russia’s recovery from recession

Mr Field’s optimism is fuelled by the country’s economic recovery, which he expects to continue until at least the middle of 2018. “Demand has been suppressed so the recovery should continue for a while. Inflation has dropped to 3.3 per cent, which is pretty unheard of in Russia. In the next 12-24 months there is room for quite a few interest rate cuts and that can certainly boost the economy. The one thing that can upset that is another major move in the oil price,” said Mr Field.

Nevertheless, he is not a long-term bull. “We don’t think long-term structural trend growth is very high, so as much as people are buying into Russia now it’s not because it has a glorious 10 or 20 years ahead, it’s because it’s recovering.”

We are likely to hear numerous such comments over the next few months as Russia’s renewed economic growth becomes impossible to deny even by those who previously said it would never happen.

Such comments are actually meaningless.  In what sense is an economy’s successful recovery from recession a reason for doubting its future growth?

Putting that aside, the article itself provides abundant examples of the ‘structural reasons’ why strong growth in the future is likely.  To repeat again the comments which appear in the article from Rajiv Jain

…….Russian oil companies have been forced to develop complex drilling technology in-house, potentially helping them in the long term, while some domestic agricultural companies, such as cheesemakers, have benefited from reduced foreign competition amid Russian counter-sanctions on European food imports.

“Sanctions have been positive for the Russian corporate world. [Companies] were forced to get their act together and there was a massive cost-cutting effort,” said Mr Jain. “Because of this cost-cutting, operating profits are higher than people estimate. Corporate earnings have begun to recover after a long slump. You have to follow the corporate profits.”

He even sees positives in the travails of Otkritie and B&N Bank, two private banks that have been bailed out by the central bank and nationalised in recent weeks after running into financial difficulties.

About 4.2 per cent of Mr Jain’s fund is invested in Sberbank, Russia’s largest bank. He said: “The banking industry has seen massive consolidation. Now three banks control 70 per cent of the assets. “Sberbank is very well run, on six times earnings. How many banks make 20 per cent ROE [return on equity] in the middle of a recession? The position they have wouldn’t be allowed in many countries, and now there is tremendous credit growth and NPLs [non-performing loans] are coming off.”

What is cost-cutting, greater efficiency, development of new products and new technologies, high operating profits and (within the banking system) successful industry consolidation if not evidence of the economy successfully addressing its structural problems, thereby ensuring its successful long term growth in the future?  No doubt there is much more still to do, but why go on pretending that nothing is happening when it obviously is?

One of the perennial problems discussion of Russia’s economy faces is that its Western critics insist on having it both ways.  They are forced to concede that the Russian economy has successfully adapted to the harsh post-2014 economic conditions in which it found itself (low oil prices and Western sanctions) and is now recovering from a recession that most of them thought would break it, but at the same time they refuse to admit that this successful adaption of the Russian economy to these same harsh economic conditions in any way undermines their deeply critical even at times apocalyptic picture of it.

In reality an economy that could adapt so quickly and so successfully to the challenges it faced in 2014 cannot be the inefficient, corrupt, badly managed, ‘kleptocratic’ and underdeveloped ‘Zaire with snow’ economy imagined by its Western critics.

The article in the Financial Times shows that increasing numbers of fund managers, including some like Rajiv Jain and Nicholas Field who had previously bought into this dark picture, are starting to see the truth of this.

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Douma chemical weapons hoax exposed by BBC producer

Very frightening for us all is the coordination of propaganda between the States of US, Britain, France and Israel.

Richard Galustian

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It is beyond doubt that the White Helmets ‘staged’ the false flag operation at the Douma hospital that caused President Trump to attack Syria last April.

Days after the attack the much to be admired, yet still maligned by many, investigative reporter, Robert Fisk was on the ground in Douma and interviewed countless people, videoed the scene, made it public in the newspapers and by TV the fact of the fake sarin attack.

What happened next were attempts to rubbish Fisk’s story; a almost frightening Orwellian propaganda machine kicked in….and went into overdrive. That is to say a combination of ‘corrupt’ reporters; some just naive or dumb, many of whom had never been to Douma or even Syria, plus the full weight of the US, British and French Governments and finally, not forgetting, one of the greatest fraudsters of this century an absolute nobody, that calls himself Eliot Higgins and his ‘Bellycat Organisation’, all weighed in to accuse Fisk of lying.

Clearly not in order of importance but suffice to say Elliot Higgins, is now obviously ‘used’ as a convenient tool for Russia bashing by certain Western powers, but is a total fraud. Rather than write too much about this person, judge by reading an exposé that couldn’t be more revealing, uncovering his lie in the Daily Telegraph (link:http://www.telegraph.co.uk/news/worldnews/middleeast/syria/10730163/The-blogger-who-tracks-Syrian-rockets-from-his-sofa.html).

Not much more need be said about this con-man turned ‘G-Man’. However later in this piece, I will quote some of the Douma ridiculing propaganda of Higgins/Bellingcat, as it is too crass not to be reminded of the way our governments operate.

So based on a complete lie, President Trump ordered an attack on an Assad controlled area in Syria using several bombs including 66 Tomahawk cruise missiles and 19 JASSM-ER (fired from USAF fighters, air to surface standoff missiles). The price for all was around $200million. Much needed money wasted that belongs to the people of US in these austere times.

That by the way does not include the cost of the coordinated attack by the British and French of a total (together) of 17 stormshadow missiles dropped from fighters. Its worth mentioning that in a pathetic display of oneupmanship directed at the British, the French made a last minute decision to add a meagre three more missile types to their attack; ‘Missiles de Croisière Navals’.

As said earlier it is important to remember the Orwellian ‘anti-truth’ propaganda and instead of commenting on it, I’ll just quote what Higgins/Bellingcat said at the time. “The OPCW-FFM report on the February 4 2018 chemical attack in Saraqib, Idlib, reveals not only information about the Saraqib attack, but also the broader use of chemical weapons in Syria by Assad, and additional evidence to support the theory that Assad’s Syrian government forces were behind the April 7 2018 chemical attack in Douma, Damascus. Consistent with Bellingcat’s earlier investigation into the Saraqib chemical attack, the OPCW-FFM report establishes it was the same case in Douma.”

Nonsense.

This scandal of this and other fake White Helmets videos is developing as more details emerge daily, so expect more facts matched with more disinformation and lies from the US and UK.

What we have is first a copy of a twitter exchange which is self explanatory:

So as to be absolutely clear, on February 13th, BBC Syria’s Producer said he could “without a doubt” prove that the Douma hospital scene was false, a White Helmets (WH) fake event.

He said “the Douma Hospital scene was staged. No fatalities occurred in the hospital. All the WH, activists and people I spoke to are either in Idlib or Euphrates Shield areas.

Only one person was in Damascus.”

The evidence is seen above in the tweet at 05:33 – 13 February 2019, the BBC Producer wrote on his personal, verified Twitter account, which has since been made private or perhaps blocked by persons or governments unknown, anyway someone who controls Twitter.

So some sort of what clearly must have been a false flag attack did happen at Douma but it was like a film scene, staged, using as left over evidence, cylinders filled with say oxygen even chlorine, anything but poison gas and certainly not Sarin gas. The cylinders were left in tact, undamaged as if laid there on the site rather than dropped from thousands of feet from the sky – and who can prove Assad’s airforce dropped them? – and how come they remained undamaged when hitting the ground? – ridiculous; how stupid do our governments think we, the people, are.

“Everything around the attack was manufactured for maximum effect.”

Adding “I can tell you that Jaysh al-Islam ruled Douma with an iron fist. They co-opted activists, doctors and humanitarians with fear and intimidation.”

In fact, one of the 4 people filming the scene was Dr. Abu Bakr Hanan, whom the BBC Producer described as a “brute and shifty” doctor affiliated with Jaysh Al-Islam. The Producer further stating that the narrative should be that “there weren’t enough doctors”. That said, there was one even (seen and filmed) filming and not taking part in the rescue efforts.” A joke!

Why, we must all ask, has no major newspaper or TV any large media outlet in US, UK or France headlined or even mentioned these new facts, that Douma was a lie, that it was staged?

On 9 February, James Harkin, published in ‘The Intercept’ an article where Harkin speaks about Jaysh al-Islam’s rule in Douma, among others. His article ends with “What government pummels its citizens with bombs and chlorine to get them to pressure rebels to leave their city? At the same time, Jaish Al-Islam was sending volleys of improvised rockets into Damascus and snatching activists and members of religious minorities for ransom or to be disappeared. It’s between these two violent truths that the real story of the Syrian conflict begins to emerge not in a bewildering collage of images sent from a war zone, designed to terrify and outrage.”

To conclude, the BBC Producer was so disgusted at pro-rebel activists and rebels’ conduct and the seeming complicity of Western officials, he decide to speak out.

As far as the Russian government is concerned, they now are counter accusing the British government of ordering the White Helmets to fake a chemical attack to help persuade President Trump to unleash cruise missiles. The Russian response was to an allegation by the British government that the “demonisation” of the (thoroughly already discredited) White Helmets comes from the Russian government itself.

Which version do you believe?

Very frightening for us all is the coordination of propaganda between the States of US, Britain, France and Israel.

ALL these wars must stop.

I am neither pro-nor against Russia, but it is very clear to anyone that these wars and attempts at regime changing is a US/British/Israeli idea.

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Here’s Where America’s Imported Oil Comes from: Venezuela Is Currently the 4th-Largest

Saudi Arabia used to be the top foreign source of oil imported into the US, but now it’s only a very weak second-place to Canada.

Eric Zuesse

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Originally posted at strategic-culture.org:


At the present time, the latest month for which the US Department of Energy publishes the number of barrels per day (bpd) of oil that’s exported to the US is November 2018. Here are the rankings:

1. Canada        142,206 bpd

2. Saudi Arabia  30,028

3. Mexico        18,020

4. Venezuela     16,889

5. Iraq          11,767

6. Colombia      7,769

7. Russia        7,611

8. Ecuador       5,866

9. Nigeria       5,392

10. Algeria      4,848

11. UK           4,653

12. Norway       4,073

13. Kuwait       3,027

14. Brazil       2,777

15. Belgium      2,075

16. S. Korea     1,927

17. Netherlands  1,462

18. Egypt        1,405

19. UAE          1,771

20. China        1.268

21. France       1,239

22. Singapore    1,232

23. Indonesia    1,204

24. Argentina    1,101

25. Peru         1,061

26. Denmark      1,000

27. Brunei       961

28. Spain        846

29. Angola       833

Here were the top 10 for the entire year of 2015 as reported by Bloomberg Finance at Forbes. For comparison to today, the country’s sales and rank in November 2018 is also indicated [between brackets]”

1. Canada        3.2 million bpd  [1. Canada 142,206]

2. Saudi Arabia  1,1 [2. Saudi Arabia 30,028]

3. Venezuela     780,000 bpd [4. Venezuela 16,889]

4. Mexico        690,000 [3. Mexico 18,020]

5. Colombia      370,000 [6. Colombia 7,769]

6. Iraq          230,000 [5. Iraq 11,767]

7. Ecuador       225,000 [8. Ecuador 5,866]

8. Kuwait        210,000 [13. Kuwait 3,027]

9. Brazil        190,000 [14. Brazil 2,777]

10. Angola       190,000 [29. Angola, 833]

Clearly, the figures change over time. Whereas Angola was #10 in 2015, it’s #29 now; and whereas Russia, Nigeria, and Algeria, weren’t in the top 10 in 2015, they now are.

US President Donald Trump is bringing down the latest Venezuelan monthly number from 16,889 to close to zero. On 25 August 2017, Reuters headlined two stories, “Trump slaps sanctions on Venezuela; Maduro sees effort to force default” and “Venezuela says US sanctions designed to push Venezuela to default”. The first of those reported that, “US President Donald Trump signed an executive order that prohibits dealings in new debt from the Venezuelan government or its state oil company on Friday in an effort to halt financing that the White House said fuels President Nicolas Maduro’s ‘dictatorship’.” The second reported that Venezuela’s Government daid that Trump’s action “essentially forces the closure of its US refining unit Citgo,” which means bringing an end to Venezuela’s oil exports to the US

Venezuela’s socialized oil company, PDVSA, of which Citgo is the US distributor, had never prepared for the measures that Trump is now imposing, and Reuters’s report said, “As a result, it will be it tricky for PDVSA to refinance its heavy debt burden.” The Reuters report continued:

“Maduro may no longer take advantage of the American financial system to facilitate the wholesale looting of the Venezuelan economy at the expense of the Venezuelan people,” US Treasury Secretary Steven Mnuchin said on Friday.

PDVSA, the financial engine of Maduro’s government, is already struggling due to low global oil prices, mismanagement, allegations of corruption and a brain drain.

However, the likely failure of Venzuela’s oil company is due not only to the lowered price of oil, but to the fact that Venezuela’s oil is among the two costliest in the world to produce, because it’s from the dirtiest source, tar sands, much like Canada’s oil is. The difference between Canada and Venezuela is twofold: first, that whereas Canada is a vassal-state of the US empire and so its aristocracy is allied with America’s aristocracy (which controls America’s Government), Venezuela isn’t. And, second, that whereas Venezuela has a monoeconomy that’s based on oil (which accounts for around 95% of Venezuela’s exports), Canada does not.

Saudi Arabia used to be the top foreign source of oil imported into the US, but now it’s only a very weak second-place to Canada in this, exporting only 21% as much oil to the US as does Canada. This is a huge decline for the Sauds.

Whereas Saudi oil is the world’s most “light” or cleanest and least-costly to produce and therefore has the lowest “carbon footprint” of any oil, Canada and Venezuela have the most “heavy” or dirtiest and most-costly to produce and therefore have the highest “carbon footprint” of all the world’s oils.

(NOTE: There are many different ranking-systems for the ‘average’ cost per barrel of oil produced, such as this and this and these, but all tend to vastly underestimate in order to continue the case for fossil fuels. The BBC once noted that its calculation-system “only covers the cost of production, not the cost of exploration and development.” And it also ignored the cost of transit. It also ignored environmental costs. It also ignored the costs to taxpayers for the many subsidies they pay in order for the fossil-fuels investors to continue investing in those companies. The environmental site “The Energy Mix” headlined in April 2018, “Ditched Bitumen Desperately Seeks True Commitment” and reported that fewer and fewer investors were continuing to trust the industry’s reported numbers regarding the costs of tar-sands oils. Also, on 11 February 2019, they headlined “Trans Mountain’s Fee Plan for Fossil Customers Represents $2-Billion Taxpayer Subsidy”. But, mostly, the heavy taxpayer subsidizations to the fossil-fuels industries are ignored, both by consumers and by investors. Realistically, the tar-sands oils in both Canada and Venezuela are costing far more than any per-barrel oil price that’s below $100. They are money-losers, but bring lots of money to the ‘right’ people.)

So: the US is replacing the world’s cleanest oil with the world’s filthiest oil, and that’s not only from Canada but also from Venezuela. However, because the US aristocracy want to take over Venezuela, the US Government now is set to zero-out oil imports from Venezuela, so as to increase the pressure on Venezuela’s Government to place in charge there a leader who will do America’s bidding. Canada has been working right alongside the US to achieve that objective, and will probably be supplying to the US much (if not all) of the 16,889 bpd oil that currently has been supplied by the other producer of very dirty oil: Venezuela. The US produces fracked oil, which is dirty but not as dirty as that from Canada and Venezuela. The US, Canada, and Venezuela, have been committed to ignoring the global warming problem. To the extent that the problem becomes globally recognized, the oil-production in all three of those countries will decline in its marketable price even more than will the oil-production in other countries (especially than Saudi Arabia’s oil-production, since that’s the cleanest); and, so, the profits from those dirty oils will quickly (especially for Canada and Venezuela, where it has already happened) turn into losses. All three governments — Venezuela, Canada, and US — are trying to postpone that, till as late a time as possible.

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While Pompeo Pouts In Poland, Putin Pushes Peace In Syria

In the end, the Neocons in D.C. and Tel Aviv are showing real desperation in summoning everyone to Poland while having almost no support for the intended policy, war with Iran.

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Authored by Tom Luongo:


If there was ever a Valentine’s Day which highlight the stark differences to diplomacy between the U.S. and Russia it is this one.

In Warsaw, the U.S. cajoled some sixty countries, many of them Arab, to send representatives only to be scolded like schoolchildren by Vice President Mike Pence for undermining the drive for war with Iran.

Mike Pompeo, for his part, showed no signs of shame or remorse after his public rebuke by Hungarian Foreign Minister Peter Szijjarto.

Szijjarto retorted to Pompeo’s lecturing that “the world is not going to be a better place if some countries spend their time intervening in the internal political affairs of other countries.” He insisted that Budapest can have transparent relations with Moscow and Beijing and the West, and said it was an “enormous hypocrisy” that Hungary is singled out for its ties with Moscow.

He then went to Poland with the intention of whipping up support for a war with Iran. But not to actually call it that. Until Benjamin Netanyahu arrived with fever dreams on his lips.

As Moon of Alabama pointed out, this was a huge slap for Pompeo, whose staff kept trying to downplay the anti-Iran nature of the Poland fiasco to make it more palatable for media consumption.

By claiming that the conference is about waging war on Iran Netanyahoo is not only embarrassing the State Department and Secretary Mike Pompeo. He also makes it extremely difficult for other attendees to justify their presence. The Arabs will be especially furious that they are shown in such an open alliance with Israel and its hostility against Iran. Scheming with Israel in the dark is fine. But being publicly associated with a war mongering Israel is difficult to sell to their people. It would be unsurprising to see some of them leave.

The entire Warsaw meeting was designed to impress upon everyone how seriously they should take U.S. and Israeli desires for regime change in Iran. And how committed they are to keeping everyone in the fold on all matters pertaining to the Trump administration’s hostility towards Iran, Russia, and China.

This is part of a wider set of actions, taken broadly, designed to hit the headlines all at the same time:

  • U.S. is openly pushing for regime change in Venezuela and drumming up international support for it.
  • It is also urging EU Parliamentarians to push through new pipeline rules as part of changes to the EU’s Third Energy Package to try and stop the Nordstream 2 pipeline from being completed.
  • New sanctions were placed on Russia a few days after Moody’s had to accede to reality and upgrade Russian government debt to investment grade, which will only accelerate foreign capital inflows into Russia.

Pompeo and Netanyahu were putting the world on notice that they are not only 1) insane but 2) committed to their path to braying for war While, as Elijah Magnier points out, the entire dog and pony show in Warsawa was for Netanyahu’s re-election bid amidst cabinet resignations and corruption scandals.

At the same time, Russian President Vladimir Putin met with his Iranian and Turkish counterparts in Sochi to discuss the next phase of bringing peace to Syria.

These three countries continue moving the ball forward pragmatically and diplomatically to resolve the issues left by the U.S.’s insistence on staying in Syria.

Putin, with the iron fist firmly in his velvet glove, said two things that are important in his post-meeting remarks .

The first will give the frothing red-baiting, Trump-hating buffoons in the U.S. media and foreign policy establishments a fit of the vapors.

“President Trump is quite actively working on fulfilling his election campaign promises, which in practice rarely happens in the US political life. The withdrawal of the American troops from Syria was one of those promises,” Putin said.

Think of the thirteen different ways Rachel Maddow will spin this simple statement of truth by Putin. He’s got the goods on Trump. Putin wouldn’t say this if Trump were working for the U.S. Yadda Yadda Yadda.

This type of naked stupidity used to be frowned upon now it is openly encouraged at every level of the U.S. and European narrative machines.

But regardless of that, Putin is right to encourage Trump to fulfill that campaign promise because that is the quickest path to peace in Syria, a U.S. troop withdrawal.

Putin continued, “If that happens the only right decision in terms of security would be handing over those territories under the control of the Syrian armed forces.”

And that is his way of saying that he has control of Turkish President Erdogan and will not let the Syrian Kurds be attacked. Syrian President Bashar al-Assad will not make reconciliation between his government and the Kurdish Syrian Democratic Council easy. But it will be better than anything Erdogan would offer them.

But, then again, they lost their gambit for independence the day Barzani’s Peshmerga forces were destroyed in Erbil, Iraq last year by the Iraqi militia known as the Popular Mobilization Unit.

Erdogan’s biggest worry is the U.S. leaving the Kurds weapons after leaving to be a constant annoyance on Turkey’s border. That’s the Bolton way of doing things.

Putin also stressed that Erdogan’s pet terrorists in Idlib province are to be wiped out as part of the plan to stabilize Syria. These are all wins for Syria diplomatically, establishing Turkey as Russia’s subordinate in the power structure to reshape the Middle East.

The fact that Erdogan was not in Warsaw with his NATO allies but rather at a high level summit with the Russian and Iranian presidents tells you all you need to know about where he feels his future lies.

Then again, I’ve taken for granted that Erdogan is still a NATO member in name only for a couple of years now, so I wasn’t surprised by this.

Lastly, don’t overlook the Saudi’s offer to Putin recently about creating a new OPEC+ cartel with Russia and Saudi Arabia leading it. Trump’s own plans for Middle East peace rest on the Saudis keeping the rest of the Gulf States in line, which is why there was nothing on the agenda about ending the conflict in Yemen.

In the end, the Neocons in D.C. and Tel Aviv are showing real desperation in summoning everyone to Poland while having almost no support for the intended policy, war with Iran.

You can only hold onto people for so long through fear of retribution. Eventually, they realize you can’t attack everyone at once all the time, though Trump and company are certainly willing to give it the old college try.

As each instance of disobedience occurs and punishment is ineffective – Erdogan is still in power despite a coup attempt and a currency attack, for example – the bolder allies will become in their own defiance.


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