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No more sectoral sanctions against Russia: US gives up targeting Russia’s sovereign debt

US Treasury admits further sectoral sanctions against Russia’s sovereign debt would backfire

Alexander Mercouris

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In a recent article for RussiaFeed I discussed the possible additional sectoral sanctions against Russia which were being discussed in the US, and I said that none of them would do significant long term harm to Russia, but all of them risked doing real harm to the US.

As a self-sufficient continental economy sanctions on Russia almost by definition can have only a limited impact, and one which over time must diminish anyway.

As it happens the most effective sanctions the West could have imposed on Russia, both in terms of their impact on the Russian economy and their limited impact on the economies of the West, were the sectoral sanctions which were imposed in 2014.

Those sanctions did stop for a time the flow of capital from the West into Russia at a time when Russia was facing heavy debt repayments and when the price of its main export products – oil and gas – was collapsing.  The result was to deepen the recession caused by the collapse of oil and gas prices whilst further lowering the value of the rouble in a way which intensified the inflation spike.

With oil prices now rising, most short term Russian foreign debt repaid, and with the rouble floating, none of the sanctions discussed in this article look like they can have anything like the impact on Russia that the sanctions imposed in 2014 did.

The fact that the Russian economy successfully – in fact almost effortlessly – adjusted to those sanctions despite the difficult conditions ought to serve as a warning that further sanctions against Russia will not work, and if they are of the sort discussed in this article are counter-productive.

I also discussed at length in the same article the one set of sanctions the US seemed to be most actively considering, which was a prohibition on US investors buying Russian sovereign debt.

I said why this would be counterproductive and would not work and why it would only harm US investors if it was not backed by a freeze on Russian gold and foreign currency reserves held abroad and specifically in the US

The US cannot prevent Russia from floating bonds in the international money markets – in Asia if not in Europe – and the Democratic Senators’ assumption that prohibiting US investors from buying such bonds will dissuade other international investors from doing so is also almost certainly wrong (the cited authority for the claim are not ‘economists’ but two articles in Bloomberg Markets).

The problem anyway is that with Russia now expected to run a budget surplus next year, and with Russia’s trading position also in healthy surplus, and with Russia’s gold and foreign currency reserves now standing at more than $430 billion and growing, it is not obvious that Russia needs to borrow at all.

Unless this measure is combined with a freezing of Russian gold and foreign currency reserves, it is difficult to see how this could be more than a pinprick, just as the Democratic Senators report Russian Central Bank Chair Nabiullina having said.

However if the US were to freeze Russian gold and foreign currency reserves this step would not be necessary anyway, since US investors would not want to buy Russian foreign debt in those circumstances if the Russian reserves were frozen.

At that point of course the US would be facing all the consequences outlined in (2).

Needless to say, if US investors were prohibited from buying Russian debt but no action was taken against Russia’s reserves, then the US would simply be forcing its own investors to forego an opportunity to make money by buying into a strong financial asset which was being bought by other international investors elsewhere.  Again it is not obvious how this would benefit the US.

As to the suggestion that the US freeze Russian gold and foreign currency reserves held abroad and specifically on US territory – which would be the indispensable step if a prohibition on US investors buying Russian sovereign debt were to have any effect – I said why that would be totally counterproductive first and foremost for the US itself

Russia does keep some of its foreign currency reserves in the US with the IMF, but it is not clear how great the amount is and claims that it is much as a third of the reserves is probably an overstatement.

There is no doubt that such a step would have a serious impact, causing the value of the rouble to fall, at least for a short time.

However Russia runs a trade surplus and has paid off most of its foreign debt and the Central Bank since 2014 has been letting the rouble float.

The economy would swiftly adjust as it did to the crisis of 2014, with the Russian trade surplus growing still further as Russia’s trade position benefitted from the rouble’s fall and from the surge in oil prices which would be likely follow such a measure.

Doubtless inflation in Russia would be higher, though it would be unlikely to go as high as it did during the inflation spike of 2015.  However the political impact of the increase in inflation within Russia would be mitigated with the Russian government in a position to blame the US for causing it.  Besides as happened following the inflation spike of 2015, once the economy adjusted inflation would fall back again.

If freezing the Russian state’s foreign currency reserves in the US would only have a short term impact on the Russian economy, it would nonetheless constitute a colossal shock across the world financial system.

It would show that the US is prepared to abuse its position at the core of the world finance system and as the host of institutions such as the IMF to target not just the financial reserves of the smaller economies such as Libya, Venezuela or Iran but also the reserves of big G20 economies such as Russia.

The Chinese especially – who have been on the receiving end of similar threats against their reserves for some time – would be horrified.

It would be difficult to imagine any step the US might take that would galvanise more countries like China and Russia to set up their own alternatives to the world financial system and its institutions which have historically been under the control of the US.  Such moves are already underway and following the freezing (ie. seizure) of whatever proportion of Russia’s reserves are on US territory that process would be bound to accelerate.

It is impossible to see how that would benefit the US.

On 1st February 2018 Russian Central Bank Chair Nabiullina made the same points about the limited effect of the sanctions being discussed on the Russian economy.  Here is how Interfax reports her comments

We saw this risk previously, we see it now. We evaluated it, evaluated the effect of two possible scenarios: a scenario when there is a ban on purchase of new [obligations] and a ban on ownership [of existing obligations]. Of course, both of these decisions might trigger some volatility on the sovereign debt market, but in our view, even if there is initial short-term volatility, the markets will arrive at equilibrium.  We do not see any great effects either for the economy, financial stability or the financial sector.

(bold italics added)

A short while earlier – on 16th January 2018 – Russian Finance Minister Siluanov made the same point.  Here is how Interfax reports his comments

If these sanctions are introduced, those primarily suffering would be foreign investors, who are happy to invest in Russian obligations and receive a steady, reliable, guaranteed high return.  [Russian sovereign bonds would in that case be placed] among our Russian investors, using Russian infrastructure, which is very important.  We will also be engaged in not increasing budget imbalances, in order to carry out this borrowing in minimal volumes.

The US Treasury Department has now released a report which concedes all these points and which says that sanctions against Russia’s sovereign debt would be counterproductive, would have only a limited impact on Russia, and would harm the US.

The report concedes the Russian government’s very limited dependence on foreign borrowing and its invulnerability to sanctions on Russia’s sovereign debt

According to public information from the Russian Finance Ministry, Russia plans to issue roughly $17 billion annually in net new domestic bonds [NB: this refers to rouble bonds which the Russian government issues internally in Russia’s own domestic money markets, and which are invulnerable to sanctions – AM] to finance its fiscal deficits over 2018-2019, but to taper issuance beyond 2019 as the Russian budget comes into balance.  On the external side, Russia’s persistent current account surplus, supported by energy exports, its ample foreign exchange reserves, and its manageable schedule of dollar-denominated bond redemptions limit the need for Eurobond issuance in upcoming years.  However, Russia plans to continue to maintain a presence in this market to support a benchmark yield curve and to reach new investors.  Future external debt issuances will continue to be primarily denominated in US dollars.

In other words Russia does not need to borrow externally at all since it has very limited foreign debt, very large foreign currency reserves (which actually exceed the amount of its foreign debt), and a budget which is almost balanced and which will be in surplus from next year.

To the extent that Russia needs to borrow at all in order to cover its budget deficit, it can do so without difficulty on its own internal rouble denominated money markets.

The only reason Russia continues to float dollar denominated Eurobonds in the international money markets is not because it needs to do so in order to raise money to cover its budget or trade deficits or to pay its foreign debt.

It is in order to impress on foreign investors the strength and credit worthiness of the Russian economy as confirmed by the low interest Russia pays on its Eurobonds.

The US Treasury report does say that despite this invulnerability sanctions on Russia’s sovereign debt would nonetheless have a negative impact on Russia’s economy

Expanding Directive 1 to include dealings in new Russian sovereign debt and the full range of related derivatives would likely raise borrowing costs for Russia; prompt Russian authorities to alter their fiscal and monetary strategies; put downward pressure on Russian economic growth; destabilize financial markets, including Russia’s repurchase market, which is critical for overnight bank funding; increase strain on Russia’s banking sector; and lead to Russian retaliation against US interests.

Some of this is no doubt true, though it undoubtedly underestimates the extent to which the Russian economy – as Nabiullina and Siluanov have said – would rapidly adjust to these sanctions.

It also seriously underestimates the action the Russian authorities would themselves take to mitigate the effect of the sanctions.  By way of example, the assumption that Russia’s repurchase market would be destabilised by sanctions on Russia’s sovereign debt almost certainly underestimates the steps Russia’s Finance Ministry and Central Bank would immediately take to support it.

It is a certainty that more than four years after sanctions began to be imposed Russia’s Finance Ministry and Central Bank have game-planned for all conceivable scenarios, and are prepared to counter them.  Given Russia’s exceptionally strong financial position they have all the available means to do so, and that already makes any plans for new sanctions look unviable.

However the key point is that even the US Treasury report now admits that additional sanctions on Russia’s sovereign debt such as those which are being proposed would have extremely negative consequences for the US and world economies irrespective of whatever effect they might have on Russia

However, because the Russian economy has extensive real and financial sector linkages to global businesses and investors, the effect of the sanctions would not be limited to Russian authorities and businesses.  In particular, expanding sanctions could hinder the competitiveness of large US asset managers and potentially have negative spillover effects on global financial markets and businesses, although competitive distortions could be partially mitigated if the EU implemented similar sanctions.  Expanding US sanctions to include dealings in new Russian sovereign debt without corresponding measures by the EU and other US partners could undermine efforts to maintain unity on Russia sanctions.  Given the size of Russia’s economy, its interconnectedness and prevalence in global asset markets, and the likely over-compliance by global firms to US sanctions, the magnitude and scope of consequences from expanding sanctions to sovereign debt and derivatives is uncertain and the effects could be borne by both the Russian Federation and US investors and businesses.

In plain English, if the sanctions are limited to prohibiting US investors from buying Russian sovereign debt they will fail, and US investors will be the losers; whereas if the US were to succeed in strong arming its allies (ie. Japan and the EU) into supporting the sanctions then because of the Russian economy’s great size and sophistication the damage done to the world financial system and to the world economy would be extensive, and might call into question the US’s management of the world financial system and the reserve currency status of the US dollar.

The last words in the preceding paragraph of course do not appear anywhere in the US Treasury report.  US officials invariably avoid discussing the US’s role in managing the world financial system or the reserve currency status of the US dollar in discussions of this sort, since for completely understandable reasons they do not want to give the slightest hint that they might ever be questioned.  However concern for them is implicit in the whole paragraph from the US Treasury’s report which I have just quoted.

I return to my original point in my article discussing the proposed additional sectoral sanctions which I wrote when reports first circulated that these sanctions were being considered.

The sectoral sanctions which were imposed in Russia in July 2014 were calibrated to do the greatest possible harm to Russia and the least possible harm to the US and its allies.  Indeed I can remember no less a person than Barack Obama saying precisely that about them at the time.

The fact that those sanctions have failed is not a reason to double-down on still more sanctions.

No sanctions the West can now impose on Russia can harm Russia more than did the sanctions which the West imposed on Russia in July 2014.

On the contrary any further sectoral sanctions the West now imposes on Russia look more likely to harm the West than to harm Russia, especially over the medium and long term.

Rather the fact that the sectoral sanctions imposed on Russia in July 2014 failed should be a reason not for doubling down on still more sanctions, but rather for drawing back and reconsidering whether imposing sanctions on Russia is a good idea in the first place.

That in the present fraught atmosphere is something Western leaders seem unable to do.

However it does for the moment seem that the folly of imposing more sectoral sanctions is simply too obvious, and has for the moment been abandoned.

Following publication of the US Treasury report US Treasury Secretary Steven Mnuchin has now admitted as much, and in testimony to the House Financial Services Committee on 6th February 2018 has said that the only further sanctions the US Treasury is now considering are sanctions against individual Russian persons (“oligarchs”) and businesses

We’re targeting specific sanctions to bad individuals and companies as opposed to sanctions on debt.

As I have said previously, such sanctions on individual Russian persons and businesses are wrong and unfair.

However they cannot affect the Russian economy or the political situation in Russia, and in political and economic terms they are pinpricks.

On the contrary, all such sanctions do is give added force to the campaign the Russian authorities have been waging for some time to persuade Russian businessmen to repatriate to Russia the money they have been squirrelling away abroad, and it is almost certainly not a coincidence that for the first time that campaign looks to be meeting with a measure of success.

Inevitably there have been suggestions that the US Treasury Department’s decision to give up on further sectoral sanctions against Russia was somehow inspired by the well-known wish of US President Trump for better relations with Russians.

I think that is very unlikely to be true, with the true reasons for the decision being set out in this and my previous article and in the US Treasury Department’s own report.  As I have said many times, there is no reason to look for a secret conspiratorial reason for a decision, when the straightforward and openly expressed reason is fully sufficient and satisfactory.

On 27th May 2016, shortly after The Duran was started, I wrote a long article for The Duran in which I pointed out that Western attempts to stop the Russian government raising funds by borrowing both internally on Russia’s own money markets and internationally were guaranteed to fail, and that the attempts being made to stop the Russian government doing this were merely making Russia stronger.

The US’s decision not to proceed with sectoral sanctions targeting Russia’s sovereign debt confirm this.

With further sectoral sanctions against Russia now conclusively off the agenda, this episode merely highlights how much stronger in financial terms Russia has become.

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At Age 70, Time To Rethink NATO

The architect of Cold War containment, Dr. George Kennan, warned that moving NATO into Eastern Europe and former Soviet republics would prove a “fateful error.”

Patrick J. Buchanan

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Authored by Patrick Buchanan via The Unz Review:


“Treaties are like roses and young girls. They last while they last.”

So said President Charles De Gaulle, who in 1966 ordered NATO to vacate its Paris headquarters and get out of France.

NATO this year celebrates a major birthday. The young girl of 1966 is no longer young. The alliance is 70 years old.

And under this aging NATO today, the U.S. is committed to treat an attack on any one of 28 nations from Estonia to Montenegro to Romania to Albania as an attack on the United States.

The time is ripe for a strategic review of these war guarantees to fight a nuclear-armed Russia in defense of countries across the length of Europe that few could find on a map.

Apparently, President Donald Trump, on trips to Europe, raised questions as to whether these war guarantees comport with vital U.S. interests and whether they could pass a rigorous cost-benefit analysis.

The shock of our establishment that Trump even raised this issue in front of Europeans suggests that the establishment, frozen in the realities of yesterday, ought to be made to justify these sweeping war guarantees.

Celebrated as “the most successful alliance in history,” NATO has had two histories. Some of us can yet recall its beginnings.

In 1948, Soviet troops, occupying eastern Germany all the way to the Elbe and surrounding Berlin, imposed a blockade on the city.

The regime in Prague was overthrown in a Communist coup. Foreign minister Jan Masaryk fell, or was thrown, from a third-story window to his death. In 1949, Stalin exploded an atomic bomb.

As the U.S. Army had gone home after V-E Day, the U.S. formed a new alliance to protect the crucial European powers — West Germany, France, Britain, Italy. Twelve nations agreed that an attack on one would be treated as an attack on them all.

Cross the Elbe and you are at war with us, including the U.S. with its nuclear arsenal, Stalin was, in effect, told. Hundreds of thousands of U.S. troops returned to Europe to send the message that America was serious.

Crucial to the alliance was the Yalta line dividing Europe agreed to by Stalin, FDR and Churchill at the 1945 Crimean summit on the Black Sea.

U.S. presidents, even when monstrous outrages were committed in Soviet-occupied Europe, did not cross this line into the Soviet sphere.

Truman did not send armored units up the highway to Berlin. He launched an airlift to break the Berlin blockade. Ike did not intervene to save the Hungarian rebels in 1956. JFK confined his rage at the building of the Berlin Wall to the rhetorical: “Ich bin ein Berliner.”

LBJ did nothing to help the Czechs when, before the Democratic convention in 1968, Leonid Brezhnev sent Warsaw Pact tank armies to crush the Prague Spring.

When the Solidarity movement of Lech Walesa was crushed in Gdansk, Reagan sent copy and printing machines. At the Berlin Wall in 1988, he called on Mikhail Gorbachev to “tear down this wall.”

Reagan never threatened to tear it down himself.

But beginning in 1989, the Wall was torn down, Germany was united, the Red Army went home, the Warsaw Pact dissolved, the USSR broke apart into 15 nations, and Leninism expired in its birthplace.

As the threat that had led to NATO disappeared, many argued that the alliance created to deal with that threat should be allowed to fade away, and a free and prosperous Europe should now provide for its own defense.

It was not to be. The architect of Cold War containment, Dr. George Kennan, warned that moving NATO into Eastern Europe and former Soviet republics would prove a “fateful error.”

This, said Kennan, would “inflame the nationalistic and militaristic tendencies in Russian opinion” and “restore the atmosphere of the cold war in East-West relations.” Kennan was proven right.

America is now burdened with the duty to defend Europe from the Atlantic to the Baltic, even as we face a far greater threat in China, with an economy and population 10 times that of Russia.

And we must do this with a defense budget that is not half the share of the federal budget or the GDP that Eisenhower and Kennedy had.

Trump is president today because the American people concluded that our foreign policy elite, with their endless interventions where no vital U.S. interest was imperiled, had bled and virtually bankrupted us, while kicking away all of the fruits of our Cold War victory.

Halfway into Trump’s term, the question is whether he is going to just talk about halting Cold War II with Russia, about demanding that Europe pay for its own defense, and about bringing the troops home — or whether he is going to act upon his convictions.

Our foreign policy establishment is determined to prevent Trump from carrying out his mandate. And if he means to carry out his agenda, he had best get on with it.

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The ISIS attack in Syria appears to have failed in its real mission

ISIS probably tried to get Mr. Trump to keep troops in Syria, but in reality this attack shows no compelling reason to remain there.

Seraphim Hanisch

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ISIS is one of the bloodiest, most brutal organizations to ever exist in modern history. During its meteoric rise, the “Caliphate” struck with death and fear across the deserts of Iraq and the wastes of Syria, seducing a seemingly increasing number of recruits from the West, developing its own currency and financing abilities, all the while remaining a death cult, in the conviction that their eventual destruction would trigger a far greater Islamic uprising.

But something changed for them starting in about 2013. While ISIS got quietly aided and abetted by President Obama’s (perhaps not unwitting) support through neglect and then even quieter collaboration (Obama thought ISIS could be “managed” in the effort to oust Bashar Al-Assad from Syria), its power and reach extended through much of Syria.

But then came Russia. Russia didn’t think ISIS should be managed. Russia determined that ISIS should be destroyed. And in 2015, invited by Syria, the Russians came and went to work. They did most of the heavy lifting in terms of driving ISIS back, while (inconveniently for the US and West) also carefully taking back Syrian territory from antigovernment groups that were supported by the US and its coalition of forces operating in the country, including Al-Qaeda affiliate Jabhat al-Nusra, and all the names it took on afterwards. This was quietly carried out because the Americans also had face to save, owing to Obama’s clumsy decision to send American forces into the country, which gradually grew and metastasized into a significantly sized fighting force.

With an extremely complicated group of alliances and enemies, the American forces were forced to quietly abandon their mission of removing Bashar al-Assad from power and to pivot to actually destroying ISIS. President Trump does deserve some credit for his part in helping this to happen. He also deserves a lot of credit for his recent decision to pull American troops out of Syria.

This move was severely condemned by the US hawks, resulting in the resignation / firing / retirement of former Secretary of Defense James Mattis, and, in an amusing show of hypocrisy, the pundits from the Anti-Trump crowd at CNN and other news outlets characterized this decision as the US President proving once and for all that he is a Putin operative, a real-life Manchurian President.

ISIS evidently wanted the US not to leave either, so it conducted an attack on Wednesday, January 16th, tragically killing 19 people, with four Americans among the dead. The New York Times was lightning-fast to jump into the fray to carry out what was probably ISIS’ real mission with this attack: to sow seeds of doubt among the US authorities, and to keep American forces in the region (emphasis added).

Four Americans were among 19 people killed in Syria on Wednesday in a suicide bombing that was claimed by the Islamic State, just weeks after President Trump ordered the withdrawal of United States forces and declared that the extremist group had been defeated.

The attack targeted an American military convoy in the northern city of Manbij while troops were inside the Palace of the Princes, a restaurant where they often stopped to eat during patrols, residents said. While the Americans were inside, a nearby suicide attacker wearing an explosive vest blew himself up.

The bombing raised new questions about Mr. Trump’s surprise decision last month to end the American ground war in Syria. Critics of the president’s plans, including members of his own party, said Mr. Trump’s claim of victory over the Islamic State may have emboldened its fighters and encouraged Wednesday’s strike… Mr. Trump’s withdrawal announcement, made over the objections of his top national security officials, “set in motion enthusiasm by the enemy we’re fighting,” said Senator Lindsey Graham, Republican of South Carolina and a prominent Trump ally who has nonetheless criticized the military drawdown.

“I saw this in Iraq. And I’m now seeing it in Syria,” Mr. Graham said at a Senate Judiciary Committee hearing on Wednesday.

The rest of the article, of course, had the Trump Administration defending itself, with Vice President Mike Pence as the spokesman of that defense.

However, already only two days later, the noise about this seems to have faded. There is no ongoing media fury about the President’s decision to remove troops. In fact, aside from the ongoing investigation to confirm that ISIS indeed did carry out this attack, there is no indication of a change in the troop withdrawal process.

If this situation remains as it is, it is a very good sign for these reasons:

  1. President Trump is showing his resolve and confidence in a decision he knows to be right (to withdraw) and not to accede to the War Party wishes.
  2. ISIS is losing its reputation as a significant fighting force as far as the US population is concerned, as it probably should. With the US gone, Russia can prosecute this war full force without risk of creating more serious incidents with the Americans.
  3. The possibility exists that this attack, already heinous in what we know, could have been a false flag, designed specifically to provoke the US troop withdrawal to stop and be reversed.

This last scenario has oddly not been visibly mentioned, but it should be, because it probably happened in April 2018 and earlier. The Duran covered this quite extensively, and while the “official” (Western) investigation has come up curiously silent on the alleged chemical weapons attack last April in Ghouta, the overwhelming body of reports from the region suggested that the “gas” attack was nothing at all but drama to keep the US ensnared in the region. Remember, President Trump at that time also expressed the intention of withdrawing US troops from the area, and this event caused a reversal for a time.

ISIS tried to become a nation. It operates on terror and theater, but it considers itself free to kill people along the way as it creates its pageantry. For the souls of all those innocent people who perished in this attack, we must pray and not forget.

But ISIS is substantially done, and what is left will be dealt with by Russian and Syrian forces.

For once, the definition of “American courage” might be not to fight. President Trump’s decision to remove the troops remains one of the most significant achievements of his presidency, and one of the most important in terms of restoring balance to the United States that it deserves to have.

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Trump grounds Nancy Pelosi from taxpayer-subsidized travel

Nancy Pelosi is exhibiting all the maturity of a 14-year-old druggie teenager who just got grounded, only House Speaker Pelosi is 78.

Seraphim Hanisch

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Nancy Pelosi is 78 years old. She is the Democrat Party leader of the House of Representatives, and presently she is Speaker of the House since her party holds the majority of seats there. She is also grounded, like a naughty teenager.

Like a naughty, gossipy teenager, she is bitterly embroiled in a popularity war against another septuagenarian, US President Donald Trump (age 72).

One has to admit that there is a great deal of humor that can be extracted from this. After all, we are taught as kid to “behave like adults.” No doubt The Donald and Mrs. Pelosi were taught this too, probably even more strongly than those of us who are younger.

However, the American media is eager mostly to brand this as a “temper tantrum” of the President, because most of the American media, for some reason, just doesn’t like Mr. Trump. We have noted before here on The Duran the thought experiment surrounding Mr. Trump: “what if he had run as a Democrat, but with the exact same policy set as he has now?”

It is really too bad that it is not possible to see what would happen, but a thinking person can use this thought experiment to discover that most of the sentiment against Mr. Trump is simply because he ran as a Republican.

At any rate, we have a situation where it is being reported by a one-sided media that President Trump is at fault and is being somehow unfair and mean to Mrs. Pelosi. Mrs. Pelosi evidently thinks so too, for after Mr. Trump yanked her travel privileges via taxpayer-paid military transportation, she shot back, claiming that it was in fact President Trump who blew the security for the troops and personnel on this planned trip by announcing a secret trip publicly. CNN reports:

Speaker Nancy Pelosi canceled a planned trip to visit troops in Afghanistan Friday, after — her office alleged in a statement — the White House leaked the details of the congressional delegation’s commercial plane travel.

In the middle of the night, the State Department’s Diplomatic Security Service provided an updated threat assessment detailing that the President announcing this sensitive travel had significantly increased the danger to the delegation and to the troops, security, and other officials supporting the trip,” Pelosi spokesman Drew Hammill said. “This morning, we learned that the administration had leaked the commercial travel plans as well.”

Which, to borrow the parlance of the Internet, is VERY big, if true.

It’s one thing for Trump, as he did on Thursday, to rescind the military plane Pelosi and the rest of her colleagues were planning to fly on as a way of exacting revenge on her for asking the President to delay his planned “State of the Union” speech on January 29. To do so publicly — White House press secretary Sarah Sanders tweeted out the letter Trump sent to Pelosi — is to raise the stakes. To leak commercial travel plans to make absolutely certain that Pelosi can’t go on the trip is a bridge even further.

Now, to be clear, this is an allegation made by Pelosi without corroboration to date. And, the White House denies it. “When the Speaker of the House and about 20 others from Capitol Hill decide to book their own commercial flights to Afghanistan, the world is going to find out,” a White House official told CNN’s Sarah Westwood and Kevin Liptak. “The idea we would leak anything that would put the safety and security of any American at risk is a flat out lie.”

It appears that Mrs Pelosi is copying The New York Times and The Washington Post narrative style of “slander the President, acknowledge somewhere buried in the article that the slanderous charge is unsubstantiated, but get that slander out there so people hear it and read it!”

It is a shoddy attempt for the news media to manipulate its consumers all while “protecting itself” from libel.

The unfortunate fact is that it does work, at least insofar as to galvanize the anti-Trump crowd into a very solid bloc of insanely angry Americans. Further, in using the classic style in which a drug addict or active alcoholic manipulates people to pity him or her, Mrs. Pelosi and the media act like the druggie teenagers arrayed as one against Dear old Dad, who is the only adult in the house.

The White House. But, still.

To put a bit of adult analysis on this story is very simple, but it is honestly not very thrilling. To be honest, it is probably more fun to be like the mainstream media and the Democrats – energized by passion, doing stupid things publicly and getting attention and praise for it.

But here is what appears to be the hard cold boring reality behind this saga.

President Trump is committed to getting a change made in how the United States handles illegal immigration. For decades, the country has been getting slowly infiltrated, if not invaded, by immigrants who at the very least game the welfare and social support mechanisms of various levels of US federal, state and local governments. When people come into the country illegally and go on welfare, taxpayers start paying non-citizens for being here. Taking care of even 100,000 illegal immigrants with such programs is likely to be extremely expensive. Housing, food, healthcare, schooling, legal protection by police… it goes on and on.

But there are not just 100,000 such people here. Last year, the Border Patrol apprehended well over four times that number. 467,000 illegals were apprehended in 2018. Estimates show anywhere from 12 million to 22 million illegals presently living in the United States. While it is certainly doubtful that all of them are gaming the welfare system, they are in the country, unknown, untracked, and not being good citizens by paying taxes and supporting our agreed-upon infrastructure and services the same way that American citizens are.

That is a huge money drain.

Add to that the drugs that do flow across the Mexican border, a fair infusion of criminals like murderers and rapists, and the possibility of terrorists making use of the open border to infiltrate the US and the situation becomes both costly and dangerous.

This is why President Trump wants to change it with a barrier running the length of the US-Mexico border.

While it is unlikely that all 2,000 miles need to have a wall, we certainly need more of a barrier than what we have now, and the barriers that DO exist are extremely successful in cutting the flow of illegals. From the high point of 2000, immigration apprehensions have on the whole fallen by quite a bit. This chart shows the track through 2016.


But our 467,000 apprehensions is an enormous number – larger than the population of the city of Long Beach, California! 

This is an enormous number, but it is far lower than the 1.6 million that got caught before the existing barriers were built. This is also the number of illegals that were caught. We do not know how many were not caught.

Now, President Trump begins to look like the adult in the room, because he wants to fix this, bringing the numbers down much closer to zero, and also finding a way to vet and interview immigrants that truly can contribute to the US dream as Americans. So, as part of creating a real border security apparatus, he wants to extend and even complete the Border Wall. It is not very expensive – even a $50 billion price tag is only about 1.3% of the bloated federal budget this year, and President Trump thinks the wall can be finished with half that amount. At this time, he is only asking for about $5 bn.

And all Nancy Pelosi will say is “no!” So, like a good parent, the President refuses to reward such behavior by giving her what she wants. Now there is a partial government shutdown. President Trump took it on himself, but he is correct. He is doing this because the Democrats are doing this childish druggie routine. And he cannot reward this behavior.

Pelosi and her loyal sidekick Senator Charles Schumer are like a clique of druggie kids in the class, disrupting everything by commanding some attention. But it seems they are gradually losing it, and the government remains shut down. However, they wanted to act like it is Trump’s fault, so Nancy Pelosi was trying to do “business as usual” and go to Afghanistan for whatever reason (do they want her?).

And the President said, “hey, not so fast. You have a partially closed government, and I have been here every day waiting for you to negotiate a deal. You have to be nuts to think this shutdown is not going to affect you, so you cannot use our military transportation while the government is shut down. It is only fair.”

Now who is looking like the bratty teenager?

For some people who read articles like this, the answer will probably still be “President Trump.”

But maybe if they put down the cannabis and the booze and read facts for a change, their heads will clear up and they will come to see what the rest of properly thinking people have already seen.

In this feud, there is an adult in the room. And he is having to manage the childish behavior of a woman six years older than he is.

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