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Why we are seeing a slow motion decline of the US-led world order

Of dominoes and contagion.

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In contrast to the US decline, a rising China, particularly in the Asia Pacific and Eurasian regions. The current “America First” US policy contrasting with positions stated at the 19th Party Congress in China (CPC) have demonstrated that regional dynamics are changing.

While the realignment and trade tariff tiffs between DC and Beijing may be headline grabbers, the global financial balancing act is not limited to these two heavyweights in isolation.

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Washington and Beijing have at the core two differing views on what constitutes geo-economic “order”. The US has based their vision on certain security assurances, US Dollar-friendly economic policies and a distinctly American brand of “values”. Beijing on the other hand has stressed economic development and human inter-relations.

Both positions contrast clearly when in the beltway the budget mantra keeps circling around increasing US military capabilities, against China’s efforts to boost its sphere of influence via the Belt and Road Initiative, and developing closer bilateral ties with Russia, India, Pakistan, Iran, Turkey and quite a few more including many of  the nations within the African continent.

Trade volume between ASEAN member nations and China hit a record high in 2017, as China has become the largest trading partner for almost all member states. Similarly, ASEAN is the main foreign direct investment area and the fourth largest export market for the United States.

That being said, and despite territorial disagreements between ASEAN members and Beijing’s views on the South China Sea, the contrast with the US administration with its trade war with China and it’s on again off again mercurial policies throughout the region does not give confidence within ASEAN that the US will  be a reliable partner in the future.

This being the case, there is a strong effort to diversify away from geo-economic and geopolitical dualities choosing either a US or China umbrella. This diversification opens the door for other regionally significant countries to play constructive roles such as Russia, Japan, India and Australia in shaping regional economic order.

Internationally, China is not the only challenger the US brand of world order is facing. There is also Russia to consider especially in view of the strengthening economic relationship between Moscow and Beijing. Russia has become China’s biggest supplier of crude oil in 2017 and both have secured more oil and gas supplies for the future. This is a distinct break from the petrodollar, which plays no role in this. They are also actively having regular joint military exercises throughout their several regions of influence.

Beijing and Moscow share a multipolar worldview, which simply is not US-centric, and revolves around the concept embracing polycentric spheres-of-influence as the basis for international order. Much therefore is at stake worldwide both economically and politically on whether, when and how the US finally decides to normalize relations and on what multilateral economic and political terms.

For decades the primacy of the US Dollar has underpinned US foreign policy and been supportive of projecting US policies and power on the international stage. The fierce bull elephant in the room is the “real cost” of using the US Dollar, as opposed to relying more on national currencies. This is now quite apparent to a number of sovereign countries, particularly the emerging markets. Weakness vs. the dollar throughout all the Emerging Markets (EM) continues, and it looks to be with us for a while. The list of EM’s affected is growing steadily with South Africa now joining Turkey, Argentina or similar others in showing initial recession signs.

The Central Bank of India has and is conducting several interventions in an attempt to protect their national currency from contagion. The Philippine peso also dropped to lows last seen in 2007. Indonesia too has seen it’s Rupiah severely battered. It looks like the investing world is getting ever jitterier as evidenced by a continued outflow of capital from emerging markets mostly back into US dollar instruments as a default “safe haven”. Yet this safe haven is being increasingly clouded and questioned when viewed from the perspective of the massive US debt.

As I am working out of Moscow, this EM’s outflow is affecting the Russian ruble as well, although reasons for ruble weakness are quite different from most of the EM’s.  The weakness is not due to questionable financial management or past overindulgence at the US Dollar trough – that has been laudable and conservatively solid. Much of the negative impact is due to the various pressures directed against Russia through sanctions and the possibility of enlarging them with yet more pressure from the US.

Weighing on the Russian ruble is also the Syria situation where comments from all sides involved indicate that most countries currently on the ground there will maintain their strategies and military presence ongoing in Syria. This serves to maintain a high international anxiety quotient that weighs down most non-dollar markets, and supports a stronger US dollar.

Investors in Russia will therefore continue to monitor discussions about the package of impending new “Syrian” sanctions against the Russian Federation by the US Congress. Assumptions are that they may affect some of Russia’s largest Russian banks, which may increase risks for foreign partners of the Russian Federation in the event these new sanctions restrict financial settlement processes.

The above, added to the pressure EM’s have been under because of the Fed ratcheting up U.S. interest rates and a stronger dollar have dampened investor interest in the EM’s. The appeal of many of the EM’s are their higher relative yields when compared to the established developed markets. When that differential narrows due to the U.S. Federal Reserve raising borrowing costs, emerging markets in consequence become less attractive.

A cycle feeds on itself, and as some have observed may lead to a domino effect of contagion. That in turn again serves to underscore the need to diversify away from having so many sovereign financial eggs so dependent on a unipolar US Dollar basket. It may also be the spark that could very well form a very real, long sought after serious foundation for other lead currencies or even select cryptocurrencies to play a serious future role on the world stage. That however is another story for a different time.

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John NolanYou can call me ALRobert BertrandTjoeVera Gottlieb Recent comment authors
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Vera Gottlieb
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Vera Gottlieb

Is there any way to speed up this slow motion decline? Before all of us end up in this abyss?

Tjoe
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Tjoe

It is speeding up. M3 if it were still kept would scare the poo out of the mommy’s and daddy’s with it’s ever increasing rate of debt growth that is the FED Dollar system we live under. The “money supply” (amount of money in US dollar denomination) follows the simple math curve of compounding interest from 1913 when the FED was made. Graph $1.00 borrowed at 6% interest, with the debt not paid so the interest is capitalized in, and do it for 110 years (to 2023). The end is exponentially growing….that’s a simple model to show why a system… Read more »

Robert Bertrand
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Others need to live their ways. America is not in war any place. Américains are back to work again. It’s not that bad !
Talks and discussions are active between practically all Countries.

You can call me AL
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You can call me AL

“America is not in war any place. ” ?????????. Are you joking ?.

John Nolan
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John Nolan

The banker’s DEBT system, where money is created, out of nothing, by the bankers, not the government, as a debt to the community, is the most criminal rort which has ever been pulled over the eyes of the citizens. Money is a representation of work, it has no intrinsic value of its own, but is simply a means of transaction, by which we can interact with suppliers of products we wish to purchase. ‘The love of money is the root of all evil’1Tim-6:10, The economic system under which we are now trapped is a satanically inspired snare, invented by greedy… Read more »

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Major Syrian Army Assault On Southeast Idlib As Sochi Deal Unravels

Though the Syrian war has grown cold in terms of international spotlight and media interest since September, it is likely again going to ramp up dramatically over the next few months. 

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Via Zerohedge


The Syrian Army unleashed a major assault across the southeastern part of Idlib province on Saturday, a military source told Middle East news site Al-Masdar in a breaking report. According to the source, government forces pounded jihadist defenses across the southeast Idlib axis with a plethora of artillery shells and surface-to-surface missiles.

This latest exchange between the Syrian military and jihadist rebels comes as the Sochi Agreement falls apart in northwestern Syria, and in response to a Friday attack by jihadists which killed 22 Syrian soldiers near a planned buffer zone around the country’s last major anti-Assad and al-Qaeda held region. The jihadist strikes resulted in the highest number of casualties for the army since the Sochi Agreement was established on September 17th.

Though the Syrian war has grown cold in terms of international spotlight and media interest since September, it is likely again going to ramp up dramatically over the next few months.

The Al-Masdar source said the primary targets for the Syrian Army were the trenches and military posts for Hay’at Tahrir Al-Sham in the towns of Al-Taman’ah, Khuwayn, Babulin, Haish, Jarjanaz, Um Jalal, and Mashirfah Shmaliyah. In retaliation for the Syrian Army assault, the jihadist rebels began shelling the government towns of Ma’an, Um Hariteen, and ‘Atshan.

Damascus has been critical of the Sochi deal from the start as it’s criticized Turkey’s role in the Russian-brokered ceasefire plan, especially as a proposed ‘de-militarized’ zone has failed due to jihadist insurgents still holding around 70% of the planned buffer area which they were supposed to withdraw from by mid-October. Sporadic clashes have rocked the “buffer zone” since.

Russia itself recently acknowledged the on the ground failure of the Sochi agreement even as parties officially cling to it. During a Thursday press briefing by Russian Foreign Ministry Spokesperson Maria Zakharova admitted the following:

We have to state that the real disengagement in Idlib has not been achieved despite Turkey’s continuing efforts to live up to its commitments under the Russian-Turkish Memorandum of September 17.

This followed Russia also recently condemning  “sporadic clashes” and “provocations” by the jihadist group HTS (the main al-Qaeda presence) in Idlib.

Likely due to Moscow seeing the writing on the wall that all-out fighting and a full assault by government forces on Idlib will soon resume, Russian naval forces continued a show of force in the Mediterranean this week.

Russian military and naval officials announced Friday that its warships held extensive anti-submarine warfare drills in the Mediterranean. Specifically the Russian Black Sea Fleet’s frigates Admiral Makarov and Admiral Essen conducted the exercise in tandem with deck-based helicopters near Syrian coastal waters.

Notably, according to TASS, the warships central to the drill are “armed with eight launchers of Kalibr-NK cruise missiles that are capable of striking surface, coastal and underwater targets at a distance of up to 2,600 km.”

Since September when what was gearing up to be a major Syrian-Russian assault on Idlib was called off through the Russian-Turkish ceasefire agreement, possibly in avoidance of the stated threat that American forces would intervene in defense of the al-Qaeda insurgent held province (also claiming to have intelligence of an impending government “chemical attack”), the war has largely taken a back-burner in the media and public consciousness.

But as sporadic fighting between jihadists and Syrian government forces is reignited and fast turning into major offensive operations by government forces, the war could once again be thrust back into the media spotlight as ground zero for a great power confrontation between Moscow and Washington.

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Trump Quietly Orders Elimination of Assange

The destruction of Assange has clearly been arranged for, at the highest levels of the U.S. Government, just as the destruction of Jamal Khashoggi was by Saudi Arabia’s Government.

Eric Zuesse

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On June 28th, the Washington Examiner headlined “Pence pressed Ecuadorian president on country’s protection of Julian Assange” and reported that “Vice President Mike Pence discussed the asylum status of Julian Assange during a meeting with Ecuador’s leader on Thursday, following pressure from Senate Democrats who have voiced concerns over the country’s protection of the WikiLeaks founder.” Pence had been given this assignment by U.S. President Donald Trump. The following day, the Examiner bannered “Mike Pence raises Julian Assange case with Ecuadorean president, White House confirms” and reported that the White House had told the newspaper, “They agreed to remain in close coordination on potential next steps going forward.”

On August 24th, a court-filing by Kellen S. Dwyer, Assistant U.S. Attorney for the Alexandria Division of the Eastern District of Virginia, stated: “Due to the sophistication of the defendant and the publicity surrounding the case, no other procedure [than sealing the case, hiding it from the public] is likely to keep confidential the fact that Assange has been charged. … This motion and the proposed order would need to remain sealed until Assange is arrested in connection with the charges in the criminal complaint and can therefore no longer evade or avoid arrest and extradition in this matter.” That filing was discovered by Seamus Hughes, a terrorism expert at the Program on Extremism at George Washington University. On November 15th, he posted an excerpt of it on Twitter, just hours after the Wall Street Journal had reported on the same day that the Justice Department was preparing to prosecute Assange. However, now that we know “the fact that Assange has been charged” and that the U.S. Government is simply waiting “until Assange is arrested in connection with the charges in the criminal complaint and can therefore no longer evade or avoid arrest and extradition in this matter,” it is clear and public that the arrangements which were secretly made between Trump’s agent Pence and the current President of Ecuador are expected to deliver Assange into U.S. custody for criminal prosecution, if Assange doesn’t die at the Ecuadorean Embassy first.

On November 3rd (which, of course, preceded the disclosures on November 15th), Julian Assange’s mother, Christine Ann Hawkins, described in detail what has happened to her son since the time of Pence’s meeting with Ecuador’s President. She said:

He is, right now, alone, sick, in pain, silenced in solitary confinement, cut off from all contact, and being tortured in the heart of London. … He has been detained nearly eight years, without trial, without charge. For the past six years, the UK Government has refused his requests to exit for basic health needs, … [even for] vitamin D. … As a result, his health has seriously deteriorated. … A slow and cruel assassination is taking place before our very eyes. … They will stop at nothing. … When U.S. Vice President Mike Pence recently visited Ecuador, a deal was done to hand Julian over to the U.S. He said that because the political cost of expelling Julian from the Embassy was too high, the plan was to break him down mentally…   to such a point that he will break and be forced to leave. … The extradition warrant is held in secret, four prosecutors but no defense, and no judge, … without a prima-facie case. [Under the U.S. system, the result nonetheless can be] indefinite detention without trial. Julian could be held in Guantanamo Bay and tortured, sentenced to 45 years in a maximum security prison, or face the death penalty,” for “espionage,” in such secret proceedings.

Her phrase, “because the political cost of expelling Julian from the Embassy was too high” refers to the worry that this new President of Ecuador has, of his cooperating with the U.S. regime’s demands and thereby basically ceding sovereignty to those foreigners (the rulers of the U.S.), regarding the Ecuadorian citizen, Assange.

This conservative new President of Ecuador, who has replaced the progressive President who had granted Assange protection, is obviously doing all that he can to comply with U.S. President Trump and the U.S. Congress’s demand for Assange either to die soon inside the Embassy or else be transferred to the U.S. and basically just disappear, at Guantanamo or elsewhere. Ecuador’s President wants to do this in such a way that Ecuador’s voters won’t blame him for it, and that he’ll thus be able to be re-elected. This is the type of deal he apparently has reached with Trump’s agent, Pence. It’s all secret, but the evidence on this much of what was secretly agreed-to seems clear. There are likely other details of the agreement that cannot, as yet, be conclusively inferred from the subsequent events, but this much can.

Basically, Trump has arranged for Assange to be eliminated either by illness that’s imposed by his Ecuadorean agent, or else by Assange’s own suicide resulting from that “torture,” or else by America’s own criminal-justice system. If this elimination happens inside the Ecuadorean Embassy in London, then that would be optimal for America’s President and Congress; but, if it instead happens on U.S. soil, then that would be optimal for Ecuador’s President. Apparently, America’s President thinks that his subjects, the American people, will become sufficiently hostile toward Assange so that even if Assange disappears or is executed inside the United States, this President will be able to retain his supporters. Trump, of course, needs his supporters, but this is a gamble that he has now clearly taken. This much is clear, even though the rest of the secret agreement that was reached between Pence and Ecuador’s President is not.

Scooter Libby, who had arranged for the smearing of Valerie Plame who had tried to prevent the illegal and deceit-based 2003 invasion of Iraq, was sentenced to 30 months but never spent even a day in prison, and U.S. President Trump finally went so far as to grant him a complete pardon, on 13 April 2018. (The carefully researched docudrama “Fair Game” covered well the Plame-incident.) Libby had overseen the career-destruction of a courageous CIA agent, Plame, who had done the right thing and gotten fired for it; and Trump pardoned Libby, thus retroactively endorsing the lie-based invasion of Iraq in 2003. By contrast, Trump is determined to get Julian Assange killed or otherwise eliminated, and even Democrats in Congress are pushing for him to get that done. The new President of Ecuador is doing their bidding. Without pressure from the U.S. Government, Assange would already be a free man. Thus, either Assange will die (be murdered) soon inside the Embassy, or else he will disappear and be smeared in the press under U.S. control. And, of course, this is being done in such a way that no one will be prosecuted for the murder or false-imprisonment. Trump had promised to “clean the swamp,” but as soon as he was elected, he abandoned that pretense; and, as President, he has been bipartisan on that matter, to hide the crimes of the bipartisan U.S. Government, and he is remarkably similar in policy to his immediate predecessors, whom he had severely criticized while he was running for the Presidency.

In any event, the destruction of Assange has clearly been arranged for, at the highest levels of the U.S. Government, just as the destruction of Jamal Khashoggi was by Saudi Arabia’s Government; and, just like in Khashoggi’s case, the nation’s ruler controls the prosecutors and can therefore do whatever he chooses to do that the rest of the nation’s aristocracy consider to be acceptable.

The assault against truth isn’t only against Assange, but it is instead also closing down many of the best, most courageous, independent news sites, such as washingtonsblog. However, in Assange’s case, the penalty for having a firm commitment to truth has been especially excruciating and will almost certainly end in his premature death. This is simply the reality. Because of the system under which we live, a 100% commitment to truth is now a clear pathway to oblivion. Assange is experiencing this reality to the fullest. That’s what’s happening here.

—————

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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Libya’s Peace Process Dies in Palermo

The best the Palermo negotiators could come up with at the end was a bland statement declaring their hope that sometime in the future all the Libyan forces will meet to sort out their differences.

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Authored by Richard Galustian for the Ron Paul Institute for Peace and Prosperity:


“Resounding flop” was the verdict of Italy’s former prime minister Matteo Renzi on this week’s Libya peace conference held in Palermo. He’s not wrong. The conference hosted by Italy’s new government achieved the remarkable feat of making Libya’s tensions worse, not better. Acrimony broke out between the parties, and Turkey’s delegation walked out, its vice president Fuat Oktay accusing unnamed States of trying to “hijack the process.”

Some sources in Palermo suggested, yet to be verified, that the US thought the Conference was not too bad: a joke if true.

Moreover the mystery we might ask is what “process” is there to hijack? Because the truth is, the peace plan the conference was supporting is already dead.

That plan was the brainchild of the United Nations, launched more than a year ago with the aim of ending Libya’s split between warring Eastern and Western governments with elections in December.

Even before the first delegates set foot in the pleasant Sicilian city of Palermo this week, the UN admitted the election date of December 10 they had decided to scrap.

The eastern government, led by the parliament in Tobruk, had made moves in the summer to organize a referendum on a new constitution which would govern the elections. But no referendum was held, and most Libyans agree it would be pointless because Tripoli, home to a third of the country’s population, is under the iron grip of multiple warring militias who have the firepower to defy any new elected government. Hours after the delegates left Palermo, those militias began a new bout of fighting in the Tripoli suburbs.

The best the Palermo negotiators could come up with at the end of the talks was a bland statement declaring their hope that sometime in the future all the Libyan forces will meet in a grand conference to sort out their differences – and this after four years of civil war. To say that chances of this are slim is an understatement.

Dominating the Palermo talks, and indeed Libya’s political landscape, was and is Field Marshall Khalifa Haftar, the commander of the Libyan National Army, the country’s most powerful formation. In four years, the LNA has secured Libya’s key oil fields and Benghazi, its second city, ridding most of the east Libya of Islamist militias.

Haftar met reluctantly negotiators in Palermo, but insisted he was not part of the talks process. The Italian government press office said Haftar was not having dinner with the other participants nor joining them for talks. Haftar specifically opposed the presence of the Muslim Brotherhood champion, Qatar, at the event along with Turkey.

Haftar clearly only attended because he had a few days before visiting Moscow – which sent to Sicily Russia’s Prime Minister Dmitry Medvedev – and because also of Egyptian President Sisi’s presence along with his allies.

Possibly Haftar was simply fed up. Twice in the past two years he has attended previous peace talks, hosted each time in Paris, giving the nod to declarations that Libya’s militias would dissolve. Yet the militias remain as strong as ever in Tripoli.

Haftar is detested by the militias and the Muslim Brotherhood (MB) but supported by a large segment of the population – 68 percent, according to an opinion poll by America’s USAID. His popularity is based on a single policy – his demand that security be in the hands of regular police and military, not the militias.

Not everyone is happy, certainly not Turkey, which is backing Islamist, MB and Misratan forces in western Libya who detest Haftar. Yet Turkey’s greatest statesman, the great Kamal Ataturk, was a champion of secularism: After the collapse of the Ottoman Empire following World War One Turkey faced the prospect of utter disintegration, and it was Attaturk who rose to the challenge, defending the country’s borders, while ordering that the mullahs, while responsible for spiritual welfare, have no political power.

Political Islam is not popular in Libya either. Libya is a Muslim country, its people know their faith, and most want government to be decided through the ballot box.

The problem for Libya is what happens next with the peace process broken. Haftar has in the past threatened to move on Tripoli and rid the militias by force if they refuse to dissolve, and it may come to that – a fierce escalation of the civil war.

The second possibility is that Libya will split. The east is, thanks to the LNA, militarily secure. It also controls two thirds of the country’s oil and operates as a separate entity, down to it banknotes, which are printed in Russia while the Tripoli government’s are printed in Britain. A formal split would be an economic boon for the lightly populated east, but a disaster for Tripolitania, its population losing most of the oil, its only source of export income.

Yet with the failure of peace talks, and no sign of Tripoli militias dissolving, military escalation or breakup seem more likely than ever.

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