A MUST -- READ AND SHARE --The Self-Imposed Impotence of the Russian and Chinese Governments

The Self-Imposed Impotence of the Russian and Chinese Governments

August 12, 2018 

The Self-Imposed Impotence of the Russian and Chinese Governments

Paul Craig Roberts

The Russian and Chinese governments are puzzling. They hold all the cards in the sanction wars and sit there with no wits whatsoever as to how to play them.

The Russians won’t get any help from the Western media which obscures the issue by stressing that the Russian government doesn’t want to deprive its citizens of consumer goods from the West, which is precisely what Washington’s sanctions intend to do.

The Russian and Chinese governments are in Washington’s hands because Russia and China, thinking that capitalism had won, quickly adopted American neoliberal economics, which is a propaganda device that serves only American interests.

For years NASA has been unable to function without Russian rocket engines. Despite all the sanctions, insults, military provocations, the Russian government still sends NASA the engines. Why? Because the Russian economists tell the government that foreign exchange is essential to Russia’s development.

Europe is dependent on Russian energy to run its factories and to keep warm in winter. But Russia does not turn off the energy in response to Europe’s participation in Washington’s sanctions, because the Russian economists tell the government that foreign exchange is essential to Russia’s development.

As Michael Hudson and I explained on a number of occasions, this is nonsense. Russia’s development is dependent in no way on the acquisition of foreign currencies.

The Russians are also convinced that they need foreign investment, which serves only to drain profits out of their economy.

The Russians are also convinced that they should freely trade their currency, thereby subjecting the ruble to manipulation on foreign exchange markets. If Washington wants to bring a currency crisis to Russia, all the Federal Reserve, its vassal Japanese, EU, and UK central banks have to do is to short the ruble. Hedge funds and speculators join in for the profits.

Neoliberal economics is a hoax, and the Russians have fallen for it.

So have the Chinese

Suppose that when all these accusations against Russia began—take the alleged attack on the Skirpals for example—Putin had stood up and said: “The British government is lying through its teeth and so is every government including that of Washington that echoes this lie. Russia regards this lie as highly provocative and as a part of a propaganda campaign to prepare Western peoples for military attack on Russia. The constant stream of gratuitous lies and military exercises on our border have convinced Russia that the West intends war. The consequence will be the total destruction of the United States and its puppets.”

That would have been the end of the gratuitous provocations, military exercises, and sanctions.

Instead, we heard about “misunderstandings” with out “American partners,” which encouraged more lies and more provocations.

Or, for a more mild response, Putin could have announced: “As Washington and its servile European puppets have sanctioned us, we are turning off the rocket engines, all energy to Europe, titanium to US aircraft companies, banning overflights of US cargo and passenger aircraft, and putting in place punitive measures against all US firms operating in Russia.”

One reason, perhaps, that Russia does not do this in addition to Russia’s mistaken belief that it needs Western money and good will is that Russia mistakenly thinks that Washington will steal their European energy market and ship natural gas to Europe. No such infrastructure exists. It would take several years to develop the infrastructure. By then Europe would have mass unemployment and would have frozen in several winters.

What about China? China hosts a large number of major US corporations, including Apple, the largest capitalized corporation in the world. China can simply nationalize without compensation, as South Africa is doing to white South African farmers without any Western protest, all global corporations operating in China. Washington would be overwhelmed with global corporations demanding removal of every sanction on China and complete subservience of Washington to the Chinese government.

Or, or in addition, China could dump all $1.2 trillion of its US Treasuries. The Federal Reserve would quickly print the money to buy the bonds so that the price did not collapse. China could then dump the dollars that the Fed printed in order to redeem the bonds. The Fed cannot print the foreign curriences with which to purchase the dollars. The dollar would plummet and not be worth a Venezuelan bolivar unless Washington could order its pupper foreign central banks in Japan, UK, and EU to print their currencies in order to purchase the dollars. This, even if complied with, would cause a great deal of stress in what is called “the Western alliance,” but what is really Washington’s Empire.

Why don’t the Russian and Chinese play their winning hands? The reason is that neither government has any advisers who are not brainwashed by neoliberalism. The brainwashing that Americans gave Russia during the Yeltsin years has been institutionalized in Russian institutions. Trapped in this box, Russia is a sitting duck for Washington.

Turkey is a perfect opportunity for Russia and China to step forward and remove Turkey from NATO. The two countries could offer Turkey membership in BRICS, trade deals, and mutual security treaties. China could easily buy up the Turkish currency off foreign exchange markets. The same could be done for Iran. Yet neither Russia nor China appear capable of decisive action. The two countries, both under attack as Turkey is from Washington, sit there sucking their thumbs. https://www.zerohedge.com/news/2018-08-11/us-risks-completely-losing-turkey-erdogan-vows-defy-us-threats-over-pastor-brunson

 "US Risks Completely Losing Turkey": Erdogan Vows To Defy US "Threats" Over Pastor Brunson

by Tyler Durden

Sat, 08/11/2018 - 09:43

Turkey President Recep Tayyip Erdogan hit back Saturday at US "threats" over detained American pastor Brunson which has escalated tensions between the two NATO allies, sent the Turkish currency into a historic nosedive on Friday and crashed Turkish capital markets.

"It is wrong to dare bring Turkey to its knees through threats over a pastor," Erdogan lashed out during a rally in the Black Sea town of Unye.

"I am calling on those in America again. Shame on you, shame on you. You are exchanging your strategic partner in NATO for a priest."

"They are threatening us. You cannot tame our people with threats" but perhaps a collapse in the stock market will suffice: the Turkish lira crashed as much as 20% against the dollar on Friday, its biggest drop on record, after President Trump announced he would double steel and aluminium tariffs on Turkey, adding to pressure to Turkey's troubled economy. The White House has said the newly-imposed sanctions would take effect from August 13.

Turkey remains at an impasse with the United States in one of the worst diplomatic spats in years over the nearly two-year detention of American pastor Andrew Brunson and a host of other issues. But Erdogan urged Turks not to be panicked by the currency crisis, saying on Friday that "if they have the dollar, we have Allah."

He also advised them to show solidarity by converting any stashed-away gold or foreign currency to Turkish lira in a bid to wage a "war of independence" against America.

Commenting on the possibility of Brunson's release, Erdogan said Turkey will act in accordance with the law, saying: "We have not made concessions on justice so far, and we will never make any."

And he brushed off the issue of tariffs: "They say we will not give this or that. Don't give. What we have is enough for us."

* * *

Separately, on Saturday a spokesman for Erdogan, Ibrahim Kalin, wrote an Op-Ed in the Daily Sabah newspaper titled "Turkey's Resolve" in which he warned that "the U.S. runs the risk of losing Turkey as a whole" and said that "the entire Turkish public is against U.S. policies that disregard Turkey's legitimate security demands. Threats, sanctions and bullying against Turkey will not work. It will only increase Turkey's resolve. But it will also further isolate the U.S. in both Turkey and on the international scene."

The Trump administration has already picked fights with Canada, Mexico, Cuba, China, Russia, NATO, Germany and other countries for mostly domestic reasons. This has only damaged the credibility of the U.S. as a reliable partner and ally. The perception is not any different in Turkey.

He also hinted that as the US cracks down on Turkey, the country will seek out other strategic alliances with countries and "will also continue to diversify its energy sources and financial alternatives. This is only natural given Turkey's geopolitical standing and the realities of 21st century diplomacy."

As Turkey expands its foreign policy outlook, it will not give up on its independence and sovereignty. It will continue to develop relations with all countries based on equality, mutual interest and partnership. It will also continue to diversify its energy sources and financial alternatives. This is only natural given Turkey's geopolitical standing and the realities of 21st century diplomacy.

Naturally, such an appeal to nationalist emotions was to be expected, as was Turkey's continued defiance. But the question remains: how much longer can the Turkish people, and its government, continue to pretend nothing has changed even as inflation soars, the currency crumbles, and the economy grinds to a halt.

The full Op-Ed is below (link):

Turkey's resolve

When the Gülenist Terror Group (FETÖ) members launched a coup attempt on July 15, 2016, many international commentators predicted a total collapse of the Turkish state and the economy. But Turkey grew stronger out of this dark day and continued on its path of political stability and economic development. Two years later, the crisis with the Trump administration over a pastor and the fluctuations in the currency market will not diminish Turkey's resolve.

The June 24 elections, where more than 50 millions Turkish voters went to the polls, gave President Erdoğan another mandate for the next five years. The election results were also a confirmation of the new presidential system which will lessen bureaucracy and increase efficient governance. Last week, President Erdoğan announced the 100-day action plan for ongoing and new projects. Treasury and Finance Minister Berat Albayrak will announce the midterm economic plan and set new goals for the Turkish economy. On Oct. 29, the new mega airport in Istanbul will be opened. The number of tourists visiting Turkey this year are expected to reach nearly 40 million. Major public projects continue as planned. All this shows the resilience of Turkish state institutions and the economy.

Having said that, it is also a fact that the Turkish lira losing value against the U.S. dollar is a challenge. But it is a challenge Turkey is ready to confront. The issue, however, is larger than just a currency war. The Trump administration's decision to sanction two Turkish ministers over the issue of pastor Brunson, who is under house arrest in Turkey on terrorism-related charges, has set a new low in Turkish-U.S. relations. Efforts by the Turkish side to resolve this issue through diplomatic channels has been rejected by the U.S. side. Turkey's good intentions and result-oriented approaches have been sidelined by the ideological attitudes and the "my way or high way" approach of the Trump White House.

Turkey is right to demand that its security concerns be taken seriously by its NATO ally. But instead, the U.S. government, under both Obama and Trump, has done practically nothing to address Turkey's objections in regards to U.S. engagement with the PKK's Syria branch – the Democratic Union Party (PYD) and the People's Protection Units (YPG) –and the presence of the FETÖ network in the U.S. Neither the fight against Daesh nor the U.S. system can be an excuse to justify policies and attitudes that hurt Turkey's national security interests and harm Turkish-U.S. relations.

The U.S. runs the risk of losing Turkey as a whole. The entire Turkish public is against U.S. policies that disregard Turkey's legitimate security demands. Threats, sanctions and bullying against Turkey will not work. It will only increase Turkey's resolve. But it will also further isolate the U.S. in both Turkey and on the international scene. The Trump administration has already picked fights with Canada, Mexico, Cuba, China, Russia, NATO, Germany and other countries for mostly domestic reasons. This has only damaged the credibility of the U.S. as a reliable partner and ally. The perception is not any different in Turkey.

Turkey will not give in to threats, pressures, sanctions or financial operations against its currency and financial markets. It will not put others' demands over its own security demands. As a NATO ally, it has done more than its share to provide security for all. It has stood by its allies against all forms of terrorism. It has cooperated with them to eliminate terrorist threats against their countries. It is only natural that it demands its allies to reciprocate. Yet its allies have done little or nothing to help Turkey in its fight against the PKK and FETÖ terrorist groups.

As Turkey expands its foreign policy outlook, it will not give up on its independence and sovereignty. It will continue to develop relations with all countries based on equality, mutual interest and partnership. It will also continue to diversify its energy sources and financial alternatives. This is only natural given Turkey's geopolitical standing and the realities of 21st century diplomacy.

Having seen military coups, terrorist attacks and financial operations, Turkey has only strengthened its resolve and resilience. No threats or attacks will change that.

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