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Russia can fully maintain its defence spending; here’s why.

Contrary to certain claims Russia’s finances are fully adequate for it to sustain the level of defence spending it needs to maintain itself as one of the world’s leading military powers.

Alexander Mercouris

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Russia’s Deputy Defence Minister Yury Borisov on Thursday let slip some information about ongoing Russian weapons programmes.

There has been some discussion in the West and even in Russia about whether Russia can afford to maintain its current pace of defence spending for much longer, with certain commentators highlighting falls in budget spending for the military over the coming years, and with defence spending set to fall as a proportion of GDP.

Russian President Putin provided the actual figures during his recent press conference.

National defence is the biggest spending item in the budget. In 2011, we spent 2.7 percent of our GDP on defence. This year, and over the last five years, we have substantially increased defence spending. This year’s figure will come to 4.7 percent of GDP. Next year, the figure will be 3.3 percent, and in 2019, 2.8 percent. We will arrive at this level of 2.8 and maintain it there over the several years to follow. This will not affect out plans to strengthen our country’s defence capability because, as I said, we have invested substantial funds in this sector over the last five years. What is very important is that we will pay off all debts to defence companies this year, and this makes it possible for us to programme the financing levels I just mentioned.

This explanation is perfectly clear, but has been widely misunderstood.  What Putin is saying is that after 2011 Russia embarked on a major programme to renew its armed forces, which had been severely degraded during the long post Soviet years.  The result was a sharp but temporary increase in defence spending to 4.7% of GDP in 2016.  With Russia’s armed forces now substantially re-equipped, and with the defence factories refurbished, defence spending as a proportion of GDP is set to fall to a fully sustainable level of 2.8% of GDP.

As to Russia running out of money, including to maintain its military – as it did in the 1990s – I have previously discussed at length why this is not the case (see for example here and here).

In the event Russia’s budget deficit in 2016 turned out to be just 3.5% of GDP, low for a country exiting recession though higher than anticipated in the economic forecasts prepared during 2015 because of the unanticipated sharp fall in oil prices at the start of 2016, but still lower than predicted at the start of 2016, or even a few weeks ago.

Russia is fully capable of financing a budget deficit of just 3.5% of GDP, besides which, because of the ongoing recovery and the likely higher oil price this year, the size of the budget deficit is anyway going to fall, even if no retrenchment on spending takes place.

Ultimately, with a government debt to GDP ratio of just 17.7% – as compared to 71.8% in the US, 70.1% in Germany, 89.1% in the United Kingdom, 98.2% in France and 135.5% in Italy – Russia would have no difficulty sustaining even higher levels of defence spending if it wanted to.

In any event, not only is Russia fully able to afford its ongoing conventional military programmes – the Armata tank, the SU-T50 fighter, the Kurganets and Bumerang fighting vehicles, the Yasen class submarines etc – whilst maintaining and even upgrading its nuclear strategic forces – but as Borisov has said, it is also able to fund ongoing programmes into new types of weapons

Coming next are hypersonic weapons, which require the use of principally new materials and control systems that operate in a completely different medium, in plasma [and] completely new principles of troop operations’ control, because today one who learns to detect the enemy quicker and give the target designation – and all this has to be done in real time – is the one who actually wins.

Interaction between the Russian Academy of Sciences and the Defence Ministry has specific goals, first of all, in developing the scientific and technical potential. We expect an especially serious breakthrough in the field of laser issues, electromagnetic weapons and so on.

We [the Defence Ministry and the Russian Academy of Sciences] have mapped out a plan of action. On the one hand, our officers are learning in the direct meaning of this word – special courses are being organised for them. On the other hand, we have kindled academic institutes with our ideas to some extent and they are beginning to think about new approaches to modelling serious operations.

In his press conference of 16th December 2016 US President Obama admitted that Russia is a military superpower.  In terms of the range of capabilities of its military – exceeded only by that of the US – that is true, though as The Saker has written, it is a mistake to think of the Russian military as simply a smaller version of the military of the US.  Borisov’s comments show that the Russians intend to keep it that way, and the economic facts show they can do so.

 

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CIA Director and NYT Accidentally Expose Skripal Poisoning Hoax – DUCKGATE (Video)

The Duran – News in Review – Episode 189.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the stunning, inadvertent, admission by the New York Times and CIA Director Gina Haspel that much of what we know from the Salisbury-Skripal poisoning is pure fabrication and manipulation.

‘Duckgate’, as it is now being dubbed, was used to trick US President Trump into expelling 60 Russian Diplomats over false photographic evidence presented to him by Haspel, as it was provided to her by UK authorities.

The manipulation of POTUS Trump, courtesy of CIA Director Haspel, the UK government (and accidentally documented on by the NYT), has now blown open some serious holes into the entire narrative that Sergei and Yulia Skripal were poisoned by Russian agents with the deadly Novichok nerve agent.

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Via The Blogmire…


(SEE UPDATE AT THE BOTTOM)

Well this is interesting.

I had intended to put up a new thread for people who want to continue commenting on the Salisbury and Amesbury cases, as the last piece I did on it has reached an unmanageable 1,500+ comments. But just as I was about to do so, I was alerted to an important piece over on the Moon of Alabama website, entitled, “CIA Director Used Fake Skripal Incident Photos To Manipulate Trump“.

The gist of the piece is as follows. Back in April 2018, the Washington Post published an article about the decision taken by the United States to expel 60 Russian diplomats in the wake of the Salisbury poisoning. According to the authors, the day after the decision was made, President Trump reacted in anger when he found out that the French and the Germans were expelling just four diplomats each:

“The next day, when the expulsions were announced publicly, Trump erupted, officials said. To his shock and dismay, France and Germany were each expelling only four Russian officials — far fewer than the 60 his administration had decided on. The President, who seemed to believe that other individual countries would largely equal the United States, was furious that his administration was being portrayed in the media as taking by far the toughest stance on Russia.”

Mr Trump, it seems, believed that he had been misled by officials, as the piece goes on to say:

“Growing angrier, Trump insisted that his aides had misled him about the magnitude of the expulsions. ‘There were curse words,’ the official said, ‘a lot of curse words.’”

Whether Mr Trump was misled about the magnitude of the expulsions is impossible to say without a transcript of that meeting. What does seem certain, however, is that he was misled in another, far more important way, as Moon of Alabama goes on to point out.

In an article in today’s New York Times about the head of the CIA, Gina Haspel, an extraordinary piece of information is revealed — albeit unwittingly, it would seem, by authors who probably have no idea of its significance. Pointing to that same meeting mentioned in the Washington Post article, in which Mr Trump was persuaded to expel 60 diplomats, here is the NYT’s account of what took place:

“During the discussion, Ms. Haspel, then deputy C.I.A. director, turned toward Mr. Trump. She outlined possible responses in a quiet but firm voice, then leaned forward and told the president that the “strong option” was to expel 60 diplomats.

To persuade Mr. Trump, according to people briefed on the conversation, officials including Ms. Haspel also tried to show him that Mr. Skripal and his daughter were not the only victims of Russia’s attack.

Ms. Haspel showed pictures the British government had supplied her of young children hospitalized after being sickened by the Novichok nerve agent that poisoned the Skripals. She then showed a photograph of ducks that British officials said were inadvertently killed by the sloppy work of the Russian operatives [my emphasis].”

If you’re late joining the party, and don’t understand what is so extraordinary about this, let me spell it out plainly and unambiguously:

Firstly, there were no dead ducks as a result of poisoning. None. Zilch. Nada!

Secondly, there were no children sickened by nerve agent. None. Zilch. Nada!

Yet even though there were no dead ducks, and no sick children, Mr Trump was apparently persuaded by the head of the CIA to expel 60 diplomats after being shown pictures of dead ducks and sick children.

In addition to the extraordinary nature of this revelation, there is also a huge irony here. Along with many others, I have long felt that the duck feed is one of the many achilles heels of the whole story we’ve been presented with about what happened in Salisbury on 4th March 2018. And the reason for this is precisely because if it were true, there would indeed have been dead ducks and sick children.

According to the official story, Mr Skripal and his daughter became contaminated with “Novichok” by touching the handle of his front door at some point between 13:00 and 13:30 that afternoon. A few minutes later (13:45), they were filmed on CCTV camera feeding ducks, and handing bread to three local boys, one of whom ate a piece. After this they went to Zizzis, where they apparently so contaminated the table they sat at, that it had to be incinerated.

You see the problem? According to the official story, ducks should have died. According to the official story children should have become contaminated and ended up in hospital. Yet as it happens, no ducks died, and no boys got sick (all that happened was that the boys’ parents were contacted two weeks later by police, the boys were sent for tests, and they were given the all clear).

And yet despite the fact that no ducks died and no children were made sick, the director of the CIA (a.k.a. the Canard Invention Association), allegedly using information given to her agency by the British Government, showed the President of the United States pictures of dead ducks and sick children, apparently from Salisbury, to persuade him to take extreme action (Note: You can read more about the duck feed and all the other holes in the official story here). In other words, Mr Trump was lied to, and in a big way, and with potentially huge consequences.

I have no reason to doubt the authenticity of the claims made in the New York Times piece, since the purpose of inserting the bit about the ducks and the children was to cast Gina Haspel as a strong leader, rather than to cast doubt on the Skripal story. My guess is that Mr Trump might be quite interested to know that he was misled, either by the director of the CIA and/or the British Government. It might even make him wonder this: if no less a person than the President of the United States was given a false version of events, what are the chances that the rest of the story stacks up?

As ever, someone got some ‘splaining to do.  Discuss among yourselves.


PS. An aside. The Independent, which is apparently a publisher of news, has picked up on this storyhere. In their piece, they basically repeat what was said in the New York Times about how Gina Haspel persuaded Mr Trump using the dead ducks and sick children pics. But here’s the thing. Whilst it doesn’t surprise me that writers in the likes of the Washington Post or New York Times might not know too many details regarding the Salisbury case, the Independent knows full well that there were no dead ducks and no sick children. And so since they are writing about it, they must know that either the CIA director or the British Government, or both, knowingly misled the US President. Yet they say nothing about this in their piece. Why? Simply because they are not journalists, but stenographers, and they have no intention of informing their readers of what is true and what is real. I’m not sure how they live with themselves, but somehow they manage.


UPDATE: The Guardian has published an article (18th April), in which the director of public health at Wiltshire Council, Tracy Daszkiewicz, was asked to comment on the New York Times report. Here is what she said:

“There were no other casualties other than those previously stated. No wildlife were impacted by the incident and no children were exposed to or became ill as a result of either incident [my emphasis].”

So according to Ms Daszkiewicz, not only were no children made ill (which we already knew), but nor were any exposed to the substance. How does this accord with the official narrative? In that scenario, Mr Skripal gave bread to three boys, one of whom ate a piece, less than half-an-hour after his hands had become contaminated. In which case, they would undoubtedly have been exposed to it. Then again, if he wasn’t contaminated at that time … well, that would agree with Ms Daszkiewicz’s assessment, but it would have another consequence involving cans and worms!

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Airline wars heat up, as industry undergoes massive disruption (Video)

The Duran Quick Take: Episode 145.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris examine the global commercial airline industry, which is undergoing massive changes, as competition creeps in from Russia and China.

Reuters reports that Boeing Co’s legal troubles grew as a new lawsuit accused the company of defrauding shareholders by concealing safety deficiencies in its 737 MAX planes before two fatal crashes led to their worldwide grounding.

The proposed class action filed in Chicago federal court seeks damages for alleged securities fraud violations, after Boeing’s market value tumbled by $34 billion within two weeks of the March 10 crash of an Ethiopian Airlines 737 MAX.

*****

According to the complaint, Boeing “effectively put profitability and growth ahead of airplane safety and honesty” by rushing the 737 MAX to market to compete with Airbus SE, while leaving out “extra” or “optional” features designed to prevent the Ethiopian Airlines and Lion Air crashes.

It also said Boeing’s statements about its growth prospects and the 737 MAX were undermined by its alleged conflict of interest from retaining broad authority from federal regulators to assess the plane’s safety.

*****

Boeing said on Tuesday that aircraft orders in the first quarter fell to 95 from 180 a year earlier, with no orders for the 737 MAX following the worldwide grounding.

On April 5, it said it planned to cut monthly 737 production to 42 planes from 52, and was making progress on a 737 MAX software update to prevent further accidents.

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Via Zerohedge…

Step aside (fading) trade war with China: there is a new aggressor – at least according to the US Trade Rep Robert Lighthizer – in town.

In a statement on the USTR’s website published late on Monday, the US fair trade agency announced that under Section 301 of the Trade Act, it was proposing a list of EU products to be covered by additional duties. And as justification for the incremental import taxes, the USTR said that it was in response to EU aircraft subsidies, specifically to Europea’s aerospace giant, Airbus, which “have caused adverse effects to the United States” and which the USTR estimates cause $11 billion in harm to the US each year

One can’t help but notice that the latest shot across the bow in the simmering trade war with Europe comes as i) Trump is reportedly preparing to fold in his trade war with China, punting enforcement to whoever is president in 2025, and ii) comes just as Boeing has found itself scrambling to preserve orders as the world has put its orderbook for Boeing 737 MAX airplanes on hold, which prompted Boeing to cut 737 production by 20% on Friday.

While the first may be purely a coincidence, the second – which is expected to not only slam Boeing’s financials for Q1 and Q2, but may also adversely impact US GDP – had at least some impact on the decision to proceed with these tariffs at this moment.

We now await Europe’s angry response to what is Trump’s latest salvo in what is once again a global trade war. And, paradoxically, we also expect this news to send stocks blasting higher as, taking a page from the US-China trade book, every day algos will price in imminent “US-European trade deal optimism.”

Below the full statement from the USTR (link):

USTR Proposes Products for Tariff Countermeasures in Response to Harm Caused by EU Aircraft Subsidies

The World Trade Organization (WTO) has found repeatedly that European Union (EU) subsidies to Airbus have caused adverse effects to the United States.  Today, the Office of the United States Trade Representative (USTR) begins its process under Section 301 of the Trade Act of 1974 to identify products of the EU to which additional duties may be applied until the EU removes those subsidies.

USTR is releasing for public comment a preliminary list of EU products to be covered by additional duties.  USTR estimates the harm from the EU subsidies as $11 billion in trade each year.  The amount is subject to an arbitration at the WTO, the result of which is expected to be issued this summer.

“This case has been in litigation for 14 years, and the time has come for action. The Administration is preparing to respond immediately when the WTO issues its finding on the value of U.S. countermeasures,” said U.S. Trade Representative Robert Lighthizer.  “Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft.  When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted.”

In line with U.S. law, the preliminary list contains a number of products in the civil aviation sector, including Airbus aircraft.  Once the WTO arbitrator issues its report on the value of countermeasures, USTR will announce a final product list covering a level of trade commensurate with the adverse effects determined to exist.

Background

After many years of seeking unsuccessfully to convince the EU and four of its member States (France, Germany, Spain, and the United Kingdom) to cease their subsidization of Airbus, the United States brought a WTO challenge to EU subsidies in 2004. In 2011, the WTO found that the EU provided Airbus $18 billion in subsidized financing from 1968 to 2006.  In particular, the WTO found that European “launch aid” subsidies were instrumental in permitting Airbus to launch every model of its large civil aircraft, causing Boeing to lose sales of more than 300 aircraft and market share throughout the world.

In response, the EU removed two minor subsidies, but left most of them unchanged.  The EU also granted Airbus more than $5 billion in new subsidized “launch aid” financing for the A350 XWB.  The United States requested establishment of a compliance panel in March 2012 to address the EU’s failure to remove its old subsidies, as well as the new subsidies and their adverse effects.  That process came to a close with the issuance of an appellate report in May 2018 finding that EU subsidies to high-value, twin-aisle aircraft have caused serious prejudice to U.S. interests.  The report found that billions of dollars in launch aid to the A350 XWB and A380 cause significant lost sales to Boeing 787 and 747 aircraft, as well as lost market share for Boeing very large aircraft in the EU, Australia, China, Korea, Singapore, and UAE markets.

Based on the appellate report, the United States requested authority to impose countermeasures worth $11.2 billion per year, commensurate with the adverse effects caused by EU subsidies.  The EU challenged that estimate, and a WTO arbitrator is currently evaluating those claims

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Mueller report takes ‘Russian meddling’ for granted, offers no actual evidence

RT

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Via RT…


Special counsel Robert Mueller’s ‘Russiagate’ report has cleared Donald Trump of ‘collusion’ charges but maintains that Russia meddled in the 2016 US presidential election. Yet concrete evidence of that is nowhere to be seen.

The report by Mueller and his team, made public on Thursday by the US Department of Justice, exonerates not just Trump but all Americans of any “collusion” with Russia, “obliterating” the Russiagate conspiracy theory, as journalist Glenn Greenwald put it.

However, it asserts that Russian “interference” in the election did happen, and says it consisted of a campaign on social media as well as Russian military intelligence (repeatedly referred to by its old, Soviet-era name, GRU) “hacking” the Democratic Congressional Campaign Committee (DCCC), the DNC, and the private email account of Hillary Clinton’s campaign chair, John Podesta.

As evidence of this, the report basically offers nothing but Mueller’s indictment of “GRU agents,” delivered on the eve of the Helsinki Summit between Trump and Russian President Vladimir Putin in what was surely a cosmic coincidence.

Indictments are not evidence, however, but allegations. Any time it looks like the report might be bringing up proof, it ends up being redacted, ostensibly to protect sources and methods, and out of concern it might cause “harm to an ongoing matter.”

‘Active measures’ on social media

Mueller’s report leads with the claim that the Internet Research Agency (IRA) ran an “active measures” campaign of social media influence. Citing Facebook and Twitter estimates, the report says this consisted of 470 Facebook accounts that made 80,000 posts that may have been seen by up to 126 million people, between January 2015 and August 2017 (almost a year after the election), and 3,814 Twitter accounts that “may have been” in contact with about 1.4 million people.

Those numbers may seem substantial but, as investigative journalist Gareth Porter pointed out in November 2018, they should be regarded against the background of 33 trillion Facebook posts made during the same period.

According to Mueller, the IRA mind-controlled the American electorate by spending “approximately $100,000” on Facebook ads, hiring someone to walk around New York City “dressed up as Santa Claus with a Trump mask,” and getting Trump campaign affiliates to promote “dozens of tweets, posts, and other political content created by the IRA.” Dozens!

Meanwhile, the key evidence against IRA’s alleged boss Evgeny Prigozhin is that he “appeared together in public photographs” with Putin.

Alleged hacking & release

The report claims that the GRU hacked their way into 29 DCCC computers and another 30 DNC computers, and downloaded data using software called “X-Tunnel.” It is unclear how Mueller’s investigators claim to know this, as the report makes no mention of them or FBI actually examining DNC or DCCC computers. Presumably they took the word of CrowdStrike, the Democrats’ private contractor, for it.

However obtained, the documents were published first through DCLeaks and Guccifer 2.0 – which the report claims are “fictitious online personas” created by the GRU – and later through WikiLeaks. What is Mueller’s proof that these two entities were “GRU” cutouts? In a word, this:

That the Guccifer 2.0 persona provided reporters access to a restricted portion of the DCLeaks website tends to indicate that both personas were operated by the same or a closely-related group of people.(p. 43)

However, the report acknowledges that the “first known contact” between Guccifer 2.0 and WikiLeaks was on September 15, 2016 – months after the DNC and DCCC documents were published! Here we do get actual evidence: direct messages on Twitter obtained by investigators. Behold, these “spies” are so good, they don’t even talk – and when they do, they use unsecured channels.

Mueller notably claims “it is clear that the stolen DNC and Podesta documents were transferred from the GRU to WikiLeaks” (the rest of that sentence is redacted), but the report clearly implies the investigators do not actually know how. On page 47, the report says Mueller “cannot rule out that stolen documents were transferred to WikiLeaks through intermediaries who visited during the summer of 2016.”

Strangely, the report accuses WikiLeaks co-founder Julian Assange of making “public statements apparently designed to obscure the source” of the materials (p.48), notably the offer of a reward for finding the murderer of DNC staffer Seth Rich – even though this can be read as corroborating the intermediaries theory, and Assange never actually said Rich was his source.

The rest of Mueller’s report goes on to discuss the Trump campaign’s contacts with anyone even remotely Russian and to create torturous constructions that the president had “obstructed” justice by basically defending himself from charges of being a Russian agent – neither of which resulted in any indictments, however. But the central premise that the 22-month investigation, breathless media coverage, and the 448-page report are based on – that Russia somehow meddled in the 2016 election – remains unproven.

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