THE ROVING EYE Russia, China mock divide and rule By Pepe Escobar

THE ROVING EYE Russia, China mock divide and rule By Pepe Escobar ROME and BEIJING - The Roman Empire did it. The British Empire copied it in style. The Empire of Chaos has always done it. They all do it. Divide et impera. Divide and rule - or divide and conquer. It's nasty, brutish and effective. Not forever though, like diamonds, because empires do crumble. A room with a view to the Pantheon may be a celebration of Venus - but also a glimpse on the works of Mars. I had been in Rome essentially for a symposium - Global WARning - organized by a very committed, talented group led by a former member of European Parliament, Giulietto Chiesa. Three days later, as the run on the rouble was unleashed, Chiesa was arrested and expelled from Estonia as persona non grata, yet another graphic illustration of the anti-Russia hysteria gripping the Baltic nations and the Orwellian grip NATO has on Europe's weak links. [1] Dissent is simply not allowed. At the symposium, held in a divinely frescoed former 15th century Dominican refectory now part of the Italian parliament's library, Sergey Glazyev, on the phone from Moscow, gave a stark reading of Cold War 2.0. There's no real "government" in Kiev; the US ambassador is in charge. An anti-Russia doctrine has been hatched in Washington to foment war in Europe - and European politicians are its collaborators. Washington wants a war in Europe because it is losing the competition with China. Glazyev addressed the sanctions dementia: Russia is trying simultaneously to reorganize the politics of the International Monetary Fund, fight capital flight and minimize the effect of banks closing credit lines for many businessmen. Yet the end result of sanctions, he says, is that Europe will be the ultimate losers economically; bureaucracy in Europe has lost economic focus as American geopoliticians have taken over. Only three days before the run on the rouble, I asked Rosneft's Mikhail Leontyev (Press-Secretary - Director of the Information and Advertisement Department) about the growing rumors of the Russian government getting ready to apply currency controls. At the time, no one knew an attack on rouble would be so swift, and conceived as a checkmate to destroy the Russian economy. After sublime espressos at the Tazza d'Oro, right by the Pantheon, Leontyev told me that currency controls were indeed a possibility. But not yet. What he did emphasize was this was outright financial war, helped by a fifth column in the Russian establishment. The only equal component in this asymmetrical war was nuclear forces. And yet Russia would not surrender. Leontyev characterized Europe not as a historical subject but as an object: "The European project is an American project." And "democracy" had become fiction. The run on the rouble came and went like a devastating economic hurricane. Yet you don't threat a checkmate against a skilled chess player unless your firepower is stronger than Jupiter's lightning bolt. Moscow survived. Gazprom heeded the request of President Vladimir Putin and will sell its US dollar reserves on the domestic market. German Foreign Minister Frank-Walter Steinmeier went on the record against the EU further "turning the screw" as in more counterproductive sanctions against Moscow. And at his annual press conference, Putin emphasized how Russia would weather the storm. Yet I was especially intrigued by what he did not say. [2] As Mars took over, in a frenetic acceleration of history, I retreated to my Pantheon room trying to channel Seneca; from euthymia - interior serenity - to that state of imperturbability the Stoics defined as aponia. Still, it's hard to cultivate euthymia when Cold War 2.0 rages. Show me your imperturbable missile Russia could always deploy an economic "nuclear" option, declaring a moratorium on its foreign debt. Then, if Western banks seized Russian assets, Moscow could seize every Western investment in Russia. In any event, the Pentagon and NATO's aim of a shooting war in the European theater would not happen; unless Washington was foolish enough to start it. Still, that remains a serious possibility, with the Empire of Chaos accusing Russia of violating the Intermediate-Range Nuclear Forces Treaty (INF) even as it prepares to force Europe in 2015 to accept the deployment of US nuclear cruise missiles. Russia could outmaneuver Western financial markets by cutting them off from its wealth of oil and natural gas. The markets would inevitably collapse - uncontrolled chaos for the Empire of Chaos (or "controlled chaos", in Putin's own words). Imagine the crumbling of the quadrillion-plus of derivatives. It would take years for the "West" to replace Russian oil and natural gas, but the EU's economy would be instantly devastated. Just this lightning-bolt Western attack on the rouble - and oil prices - using the crushing power of Wall Street firms had already shaken European banks exposed to Russia to the core; their credit default swaps soared. Imagine those banks collapsing in a Lehman Brothers-style house of cards if Russia decided to default - thus unleashing a chain reaction. Think about a non-nuclear MAD (Mutually Assured Destruction) - in fact warless. Still, Russia is self-sufficient in all kinds of energy, mineral wealth and agriculture. Europe isn't. This could become the lethal result of war by sanctions. Essentially, the Empire of Chaos is bluffing, using Europe as pawns. The Empire of Chaos is as lousy at chess as it is at history. What it excels in is in upping the ante to force Russia to back down. Russia won't back down. Darkness dawns at the break of chaos  Paraphrasing Bob Dylan in When I Paint My Masterpiece, I left Rome and landed in Beijing. Today's Marco Polos travel Air China; in 10 years, they will be zooming up in reverse, taking high-speed rail from Shanghai to Berlin. [3] From a room in imperial Rome to a room in a peaceful hutong - a lateral reminiscence of imperial China. In Rome, the barbarians swarm inside the gates, softly pillaging the crumbs of such a rich heritage, and that includes the local Mafia. In Beijing, the barbarians are kept under strict surveillance; of course there's a Panopticon element to it, essential to assure internal social peace. The leadership of the Chinese Communist Party (CCP) - ever since the earth-shattering reforms by the Little Helmsman Deng Xiaoping - is perfectly conscious that its Mandate of Heaven is directly conditioned by the perfect fine-tuning of nationalism and what we could term "neoliberalism with Chinese characteristics". In a different vein of the "soft beds of the East" seducing Marcus Aurelius, the silky splendors of chic Beijing offer a glimpse of an extremely self-assured emerging power. After all, Europe is nothing but a catalogue of multiple sclerosis and Japan is under its sixth recession in 20 years. To top it off, in 2014 President Xi Jinping has deployed unprecedented diplomatic/geostrategic frenzy - ultimately tied to the long-term project of slowly but surely keeping on erasing US supremacy in Asia and rearranging the global chessboard. What Xi said in Shanghai in May encapsulates the project; "It's time for Asians to manage the affairs of Asia." At the APEC meeting in November, he doubled down, promoting an "Asia-Pacific dream". Meanwhile, frenzy is the norm. Apart from the two monster, US$725 billion gas deals - Power of Siberia and Altai pipeline - and a recent New Silk Road-related offensive in Eastern Europe, [4] virtually no one in the West remembers that in September Chinese Prime Minister Li Keiqiang signed no fewer than 38 trade deals with the Russians, including a swap deal and a fiscal deal, which imply total economic interplay. A case can be made that the geopolitical shift towards Russia-China integration is arguably the greatest strategic maneuver of the last 100 years. Xi's ultimate master plan is unambiguous: a Russia-China-Germany trade/commerce alliance. German business/industry wants it badly, although German politicians still haven't got the message. Xi - and Putin - are building a new economic reality on the Eurasian ground, crammed with crucial political, economic and strategic ramifications. Of course, this will be an extremely rocky road. It has not leaked to Western corporate media yet, but independent-minded academics in Europe (yes, they do exist, almost like a secret society) are increasingly alarmed there is no alternative model to the chaotic, entropic hardcore neoliberalism/casino capitalism racket promoted by the Masters of the Universe. Even if Eurasian integration prevails in the long run, and Wall Street becomes a sort of local stock exchange, the Chinese and the emerging multipolar world still seem to be locked into the existing neoliberal model. And yet, as much as Lao Tzu, already an octogenarian, gave the young Confucius an intellectual slap on the face, the "West" could do with a wake-up call. Divide et impera? It's not working. And it's bound to fail miserably. As it stands, what we do know is that 2015 will be a hair-raising year in myriad aspects. Because from Europe to Asia, from the ruins of the Roman empire to the re-emerging Middle Kingdom, we all still remain under the sign of a fearful, dangerous, rampantly irrational Empire of Chaos. Notes: 1. See here. 2. What Putin is not telling us, Russia Today, December 18, 2014. 3. Eurasian Integration vs. the Empire of Chaos, TomDispatch, December 16, 2014. 4. China set to make tracks for Europe, China Daily, December 18, 2014. China's Li cements new export corridor into Europe, Channel News Asia, December 16, 2014. Pepe Escobar's latest book, just out, is Empire of Chaos. Follow him on Facebook. Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009). He may be reached at pepeasia@yahoo.com.

China pivot fuels Eurasian century By Pepe Escobar

China pivot fuels Eurasian century By Pepe Escobar A specter is haunting Washington, an unnerving vision of a Sino-Russian alliance wedded to an expansive symbiosis of trade and commerce across much of the Eurasian land mass - at the expense of the United States. And no wonder Washington is anxious. That alliance is already a done deal in a variety of ways: through the BRICS group of emerging powers (Brazil, Russia, India, China, and South Africa); at the Shanghai Cooperation Organization, the Asian counterweight to the North Atlantic Treaty Organization; inside the Group of 20; and via the 120-member-nation Non-Aligned Movement (NAM). Trade and commerce are just part of the future bargain. Synergies in the development of new military technologies beckon as well. After Russia's Star Wars-style, ultra-sophisticated S-500 air defense anti-missile system comes online in 2018, Beijing is sure to want a version of it. Meanwhile, Russia is about to sell dozens of state-of-the-art Sukhoi Su-35 jet fighters to the Chinese as Beijing and Moscow move to seal an aviation-industrial partnership. This week should provide the first real fireworks in the celebration of a new Eurasian century-in-the-making when Russian President Vladimir Putin drops in on Chinese President Xi Jinping in Beijing. You remember "Pipelineistan," all those crucial oil and gas pipelines crisscrossing Eurasia that make up the true circulatory system for the life of the region. Now, it looks like the ultimate Pipelineistan deal, worth US$1 trillion and 10 years in the making, will be signed off on as well. In it, the giant, state-controlled Russian energy giant Gazprom will agree to supply the giant state-controlled China National Petroleum Corporation (CNPC) with 3.75 billion cubic feet of liquefied natural gas a day for no less than 30 years, starting in 2018. That's the equivalent of a quarter of Russia's gas exports to all of Europe. China's present daily gas demand is around 16 billion cubic feet a day, and imports account for 31.6% of total consumption. Gazprom may still collect the bulk of its profits from Europe, but Asia could turn out to be its Everest. The company will use this mega-deal to boost investment in Eastern Siberia and the whole region will be reconfigured as a privileged gas hub for Japan and South Korea as well. If you want to know why no key country in Asia has been willing to "isolate" Russia in the midst of the Ukrainian crisis - and in defiance of the Obama administration - look no further than Pipelineistan. Exit the Petrodollar, enter the Gas-o-Yuan And then, talking about anxiety in Washington, there's the fate of the petrodollar to consider, or rather the "thermonuclear" possibility that Moscow and Beijing will agree on payment for the Gazprom-CNPC deal not in petrodollars but in Chinese yuan. One can hardly imagine a more tectonic shift, with Pipelineistan intersecting with a growing Sino-Russian political-economic-energy partnership. Along with it goes the future possibility of a push, led again by China and Russia, toward a new international reserve currency - actually a basket of currencies - that would supersede the dollar (at least in the optimistic dreams of BRICS members). Right after the potentially game-changing Sino-Russian summit comes a BRICS summit in Brazil in July. That's when a $100 billion BRICS development bank, announced in 2012, will officially be born as a potential alternative to the International Monetary Fund and the World Bank as a source of project financing for the developing world. More BRICS cooperation meant to bypass the dollar is reflected in the "Gas-o-yuan", as in natural gas bought and paid for in Chinese currency. Gazprom is even considering marketing bonds in yuan as part of the financial planning for its expansion. Yuan-backed bonds are already trading in Hong Kong, Singapore, London, and most recently Frankfurt. Nothing could be more sensible for the new Pipelineistan deal than to have it settled in yuan. Beijing would pay Gazprom in that currency (convertible into roubles); Gazprom would accumulate the yuan; Russia would then buy myriad made-in-China goods and services in yuan convertible into roubles. It's common knowledge that banks in Hong Kong, from Standard Chartered to HSBC - as well as others closely linked to China via trade deals - have been diversifying into the yuan, which implies that it could become one of the de facto global reserve currencies even before it's fully convertible. (Beijing is unofficially working for a fully convertible yuan by 2018.) The Russia-China gas deal is inextricably tied up with the energy relationship between the European Union and Russia. After all, the bulk of Russia's gross domestic product comes from oil and gas sales, as does much of its leverage in the Ukraine crisis. In turn, Germany depends on Russia for a hefty 30% of its natural gas supplies. Yet Washington's geopolitical imperatives - spiced up with Polish hysteria - have meant pushing Brussels to find ways to "punish" Moscow in the future energy sphere (while not imperiling present day energy relationships). There's a consistent rumble in Brussels these days about the possible cancellation of the projected 16 billion euro (US$22 billion) South Stream pipeline, whose construction is to start in June. On completion, it would pump yet more Russian natural gas to Europe - in this case, underneath the Black Sea (bypassing Ukraine) to Bulgaria, Hungary, Slovenia, Serbia, Croatia, Greece, Italy, and Austria. Bulgaria, Hungary, and the Czech Republic have already made it clear that they are firmly opposed to any cancellation, and cancellation is probably not in the cards. After all, the only obvious alternative is Caspian Sea gas from Azerbaijan, and that isn't likely to happen unless the EU develops its own construction projects. In any case, Azerbaijan doesn't have enough capacity to supply the levels of natural gas needed, and other actors like Kazakhstan, plagued with infrastructure problems, or unreliable Turkmenistan, which prefers to sell its gas to China, are already largely out of the picture. And don't forget that South Stream, coupled with subsidiary energy projects, will create a lot of jobs and investment in many of the most economically devastated EU nations. Nonetheless, such EU threats, however unrealistic, only serve to accelerate Russia's increasing symbiosis with Asian markets. For Beijing especially, it's a win-win situation. After all, between energy supplied across seas policed and controlled by the US Navy and steady, stable land routes out of Siberia, it's no contest. Pick your own Silk Road Of course, the US dollar remains the top global reserve currency, involving 33% of global foreign exchange holdings at the end of 2013, according to the IMF. It was, however, at 55% in 2000. Nobody knows the percentage in yuan (and Beijing isn't talking), but the IMF notes that reserves in "other currencies" in emerging markets have been up 400% since 2003. The Federal Reserve is arguably monetizing 70% of the US government debt in an attempt to keep interest rates from heading skywards. Pentagon adviser Jim Rickards, as well as every Hong Kong-based banker, tends to believe that the Fed is bust (though they won't say it on the record). No one can even imagine the extent of the possible future deluge the US dollar might experience amid a $1.4 quadrillion Mount Ararat of financial derivatives. Don't think that this is the death knell of Western capitalism, however, just the faltering of that reigning economic faith, neoliberalism, still the official ideology of the United States, the overwhelming majority of the European Union, and parts of Asia and South America. As far as what might be called the "authoritarian neoliberalism" of the Middle Kingdom, what's not to like at the moment? China has proven that there is a result-oriented alternative to the Western "democratic" capitalist model for nations aiming to be successful. It's building not one, but myriad new Silk Roads, far-reaching webs of high-speed railways, highways, pipelines, ports, and fiber-optic networks across huge parts of Eurasia. These include a Southeast Asian road, a Central Asian road, an Indian Ocean "maritime highway" and even a high-speed rail line through Iran and Turkey reaching all the way to Germany. In April, when President Xi Jinping visited the city of Duisburg on the Rhine River, with the world's largest inland harbor and right in the heartland of Germany's Ruhr steel industry, he made an audacious proposal: a new "economic Silk Road" should be built between China and Europe, on the basis of the Chongqing-Xinjiang-Europe railway, which already runs from China to Kazakhstan, to continue through Russia, Belarus, Poland, and finally Germany. That's 15 days by train, 20 less than for cargo ships sailing from China's eastern seaboard. Now that would represent the ultimate geopolitical earthquake in terms of integrating economic growth across Eurasia. Keep in mind that, if no bubbles burst, China is about to become - and remain - the number one global economic power, a position it enjoyed for 18 of the past 20 centuries. But don't tell London hagiographers; they still believe that US hegemony will last, well, forever. Take me to Cold War 2.0 Despite recent serious financial struggles, the BRICS countries have been consciously working to become a counterforce to the original and - having tossed Russia out in March - once again Group of 7, or G-7. They are eager to create a global architecture to replace the one first imposed in the wake of World War II, and they see themselves as a potential challenge to the exceptionalist and unipolar world that Washington imagines for our future (with itself as the global robocop and NATO as its robo-police force). Historian and imperialist cheerleader Ian Morris, in his book War! What is it Good For?, defines the US as the ultimate "globocop" and "the last best hope of Earth". If that globocop "wearies of its role", he writes, "there is no plan B". Well, there is a plan BRICS - or so the BRICS nations would like to think, at least. And when the BRICS do act in this spirit on the global stage, they quickly conjure up a curious mix of fear, hysteria, and pugnaciousness in the Washington establishment. Take Christopher Hill as an example. The former assistant secretary of state for East Asia and US ambassador to Iraq is now an advisor with the Albright Stonebridge Group, a consulting firm deeply connected to the White House and the State Department. When Russia was down and out, Hill used to dream of a hegemonic American "new world order". Now that the ungrateful Russians have spurned what "the West has been offering" - that is, "special status with NATO, a privileged relationship with the European Union, and partnership in international diplomatic endeavors" - they are, in his view, busy trying to revive the Soviet empire. Translation: if you're not our vassals, you're against us. Welcome to Cold War 2.0. The Pentagon has its own version of this directed not so much at Russia as at China, which, its think tank on future warfare claims, is already at war with Washington in a number of ways. So if it's not apocalypse now, it's Armageddon tomorrow. And it goes without saying that whatever's going wrong, as the Obama administration very publicly "pivots" to Asia and the American media fills with talk about a revival of Cold War-era "containment policy" in the Pacific, it's all China's fault. Embedded in the mad dash toward Cold War 2.0 are some ludicrous facts-on-the-ground: the US government, with $17.5 trillion in national debt and counting, is contemplating a financial showdown with Russia, the largest global energy producer and a major nuclear power, just as it's also promoting an economically unsustainable military encirclement of its largest creditor, China. Russia runs a sizeable trade surplus. Humongous Chinese banks will have no trouble helping Russian banks out if Western funds dry up. In terms of inter-BRICS cooperation, few projects beat a $30 billion oil pipeline in the planning stages that will stretch from Russia to India via Northwest China. Chinese companies are already eagerly discussing the possibility of taking part in the creation of a transport corridor from Russia into Crimea, as well as an airport, shipyard, and liquid natural gas terminal there. And there's another "thermonuclear" gambit in the making: the birth of a natural gas equivalent to the Organization of the Petroleum Exporting Countries that would include Russia, Iran, and reportedly disgruntled US ally Qatar. The (unstated) BRICS long-term plan involves the creation of an alternative economic system featuring a basket of gold-backed currencies that would bypass the present America-centric global financial system. (No wonder Russia and China are amassing as much gold as they can.) The euro - a sound currency backed by large liquid bond markets and huge gold reserves - would be welcomed in as well. It's no secret in Hong Kong that the Bank of China has been using a parallel SWIFT network to conduct every kind of trade with Tehran, which is under a heavy US sanctions regime. With Washington wielding Visa and MasterCard as weapons in a growing Cold War-style economic campaign against Russia, Moscow is about to implement an alternative payment and credit card system not controlled by Western finance. An even easier route would be to adopt the Chinese Union Pay system, whose operations have already overtaken American Express in global volume. I'm just pivoting with myself No amount of Obama administration "pivoting" to Asia to contain China (and threaten it with US Navy control of the energy sea lanes to that country) is likely to push Beijing far from its Deng Xiaoping-inspired, self-described "peaceful development" strategy meant to turn it into a global powerhouse of trade. Nor are the forward deployment of US or NATO troops in Eastern Europe or other such Cold-War-ish acts likely to deter Moscow from a careful balancing act: ensuring that Russia's sphere of influence in Ukraine remains strong without compromising trade and commercial, as well as political, ties with the European Union - above all, with strategic partner Germany. This is Moscow's Holy Grail; a free-trade zone from Lisbon to Vladivostok, which (not by accident) is mirrored in China's dream of a new Silk Road to Germany. Increasingly wary of Washington, Berlin for its part abhors the notion of Europe being caught in the grips of a Cold War 2.0. German leaders have more important fish to fry, including trying to stabilize a wobbly EU while warding off an economic collapse in southern and central Europe and the advance of ever more extreme rightwing parties. On the other side of the Atlantic, President Obama and his top officials show every sign of becoming entangled in their own pivoting - to Iran, to China, to Russia's eastern borderlands, and (under the radar) to Africa. The irony of all these military-first maneuvers is that they are actually helping Moscow, Tehran, and Beijing build up their own strategic depth in Eurasia and elsewhere, as reflected in Syria, or crucially in ever more energy deals. They are also helping cement the growing strategic partnership between China and Iran. The unrelenting Ministry of Truth narrative out of Washington about all these developments now carefully ignores the fact that, without Moscow, the "West" would never have sat down to discuss a final nuclear deal with Iran or gotten a chemical disarmament agreement out of Damascus. When the disputes between China and its neighbors in the South China Sea and between that country and Japan over the Senkaku/Diaoyou islands meet the Ukraine crisis, the inevitable conclusion will be that both Russia and China consider their borderlands and sea lanes private property and aren't going to take challenges quietly - be it via NATO expansion, US military encirclement, or missile shields. Neither Beijing nor Moscow is bent on the usual form of imperialist expansion, despite the version of events now being fed to Western publics. Their "red lines" remain essentially defensive in nature, no matter the bluster sometimes involved in securing them. Whatever Washington may want or fear or try to prevent, the facts on the ground suggest that, in the years ahead, Beijing, Moscow, and Tehran will only grow closer, slowly but surely creating a new geopolitical axis in Eurasia. Meanwhile, a discombobulated America seems to be aiding and abetting the deconstruction of its own unipolar world order, while offering the BRICS a genuine window of opportunity to try to change the rules of the game. Russia and China in pivot mode In Washington's think-tank land, the conviction that the Obama administration should be focused on replaying the Cold War via a new version of containment policy to "limit the development of Russia as a hegemonic power" has taken hold. The recipe: weaponize the neighbors from the Baltic states to Azerbaijan to "contain" Russia. Cold War 2.0 is on because, from the point of view of Washington's elites, the first one never really left town. Yet as much as the US may fight the emergence of a multipolar, multi-powered world, economic facts on the ground regularly point to such developments. The question remains: will the decline of the hegemon be slow and reasonably dignified, or will the whole world be dragged down with it in what has been called "the Samson option"? While we watch the spectacle unfold, with no end-game in sight, keep in mind that a new force is growing in Eurasia, with the Sino-Russian strategic alliance threatening to dominate its heartland along with great stretches of its inner rim. Now, that's a nightmare of Mackinderesque proportions from Washington's point of view. Think, for instance, of how Zbigniew Brzezinski, the former national security adviser who became a mentor on global politics to President Obama, would see it. In his 1997 book The Grand Chessboard, Brzezinski argued that "the struggle for global primacy [would] continue to be played" on the Eurasian "chessboard", of which "Ukraine was a geopolitical pivot". "If Moscow regains control over Ukraine," he wrote at the time, Russia would "automatically regain the wherewithal to become a powerful imperial state, spanning Europe and Asia." That remains most of the rationale behind the American imperial containment policy - from Russia's European "near abroad" to the South China Sea. Still, with no end-game in sight, keep your eye on Russia pivoting to Asia, China pivoting across the world, and the BRICS hard at work trying to bring about the new Eurasian Century. Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009). He may be reached at pepeasia@yahoo.com.

Ukraine and the grand chessboard By Pepe Escobar

THE ROVING EYE Ukraine and the grand chessboard By Pepe Escobar The US State Department, via spokeswoman Jennifer Psaki, said that reports of CIA Director John Brennan telling regime changers in Kiev to "conduct tactical operations" - or an "anti-terrorist" offensive - in eastern Ukraine are "completely false". This means Brennan did issue his marching orders. And by now the "anti-terrorist" campaign - with its nice little Dubya rhetorical touch - has degenerated into farce. Now couple that with NATO secretary general, Danish retriever Anders Fogh Rasmussen, yapping about the strengthening of military footprint along NATO's eastern border: "We will have more planes in the air, mores ships on the water and more readiness on the land." Welcome to the Two Stooges doctrine of post-modern warfare. Pay up or freeze to death Ukraine is for all practical purposes broke. The Kremlin's consistent position for the past three months has been to encourage the European Union to find a solution to Ukraine's dire economic mess. Brussels did nothing. It was betting on regime change to the benefit of Germany's heavyweight puppet Vladimir Klitschko, aka Klitsch The Boxer. Regime change did happen, but orchestrated by the Khaganate of Nulands - a neo-con cell of the State Department and its assistant secretary of state for European and Eurasian Affairs Victoria Nulands. And now the presidential option is between - what else - two US puppets, choco-billionaire Petro Poroshenko and "Saint Yulia" Timoshenko, Ukraine's former prime minister, ex-convict and prospective president. The EU is left to pick up the (unpayable) bill. Enter the International Monetary Fund - via a nasty, upcoming "structural adjustment" that will send Ukrainians to a hellhole even grimmer than the one they are already familiar with. Once again, for all the hysteria propagated by the US Ministry of Truth and its franchises across the Western corporate media, the Kremlin does not need to "invade" anything. If Gazprom does not get paid all it needs to do is to shut down the Ukrainian stretch of Pipelineistan. Kiev will then have no option but to use part of the gas supply destined for some EU countries so Ukrainians won't run out of fuel to keep themselves and the country's industries alive. And the EU - whose "energy policy" overall is already a joke - will find itself with yet another self-inflicted problem. The EU will be mired in a perennial lose-lose situation if Brussels does not talk seriously with Moscow. There's only one explanation for the refusal: hardcore Washington pressure, mounted via the North Atlantic Treaty Organization (NATO). Again, to counterpunch the current hysteria - the EU remains Gazprom's top client, with 61% of its overall exports. It's a complex relationship based on interdependence. The capitalization of Nord Stream, Blue Stream and the to-be-completed South Stream includes German, Dutch, French and Italian companies. So yes, Gazprom does need the EU market. But up to a point, considering the mega-deal of Siberian gas delivery to China which most probably will be signed next month in Beijing when Russian President Vladimir Putin visits President Xi Jinping. The crucial spanner in the works Last month, while the tortuous Ukraine sideshow was in progress, President Xi was in Europe clinching deals and promoting yet another branch of the New Silk Road all the way to Germany. In a sane, non-Hobbesian environment, a neutral Ukraine would only have to gain by positioning itself as a privileged crossroads between the EU and the proposed Eurasian Union - as well as becoming a key node of the Chinese New Silk Road offensive. Instead, the Kiev regime changers are betting on acceptance into the EU (it simply won't happen) and becoming a NATO forward base (the key Pentagon aim). As for the possibility of a common market from Lisbon to Vladivostok - which both Moscow and Beijing are aiming at, and would be also a boon for the EU - the Ukraine disaster is a real spanner in the works. And a spanner in the works that, crucially, suits only one player: the US government. The Obama administration may - and "may" is the operative word here - have realized the US government has lost the battle to control Pipelineistan from Asia to Europe, despite all the efforts of the Dick Cheney regime. What energy experts call the Asian Energy Security Grid is progressively evolving - as well as its myriad links to Europe. So what's left for the Obama administration is this spanner in the works - still trying to scotch the full economic integration of Eurasia. The Obama administration is predictably obsessed with the EU's increasing dependency on Russian gas. Thus its grandiose plan to position US shale gas for the EU as an alternative to Gazprom. Even assuming this might happen, it would take at least a decade - with no guarantee of success. In fact, the real alternative would be Iranian gas - after a comprehensive nuclear deal and the end of Western sanctions (the whole package, not surprisingly, being sabotaged en masse by various Beltway factions.) Just to start with, the US cannot export shale gas to countries with which it has not signed a free trade agreement. That's a "problem" which might be solved to a great extent by the secretly negotiated Trans-Atlantic Partnership between Washington and Brussels (see Breaking bad in southern NATOstan, Asia Times Online, April 15, 2014.) In parallel, the Obama administration keeps applying instances of "divide and rule" to scare minor players, as in spinning to the max the specter of an evil, militaristic China to reinforce the still crawling "pivoting to Asia". The whole game harks back to what Dr Zbig Brzezinski conceptualized way back in his 1997 opus The Grand Chessboard - and fine-tuned for his disciple Obama: the US ruling over Eurasia. Still the Kremlin won't be dragged into a military quagmire. It's fair to argue Putin has identified the Big Picture in the whole chessboard, which spells out an increasing Russia-China strategic partnership as crucial as an energy-manufacturing synergy with Europe; and most of all the titanic fear of US financial elites of the inevitable, ongoing process centered on the BRICS-conducted (and spreading to key Group of 20 members) drive to bypass the petrodollar. Ultimately, this all spells out the progressive demise of the petrodollar in parallel to the ascent of a basket to currencies as the reserve currency in the international system. The BRICS are already at work on their alternative to the IMF and the World Bank, investing in a currency reserve pool and the BRICS development bank. While a tentative new world order slouches towards all points Global South to be born, Robocop NATO dreams of war. Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009). He may be reached at pepeasia@yahoo.com.

THE ROVING EYE - Why the EU can't 'isolate' Russia - By Pepe Escobar

THE ROVING EYE Why the EU can't 'isolate' Russia By Pepe Escobar German Chancellor Angela Merkel could teach US President Barack Obama one or two things about how to establish a dialogue with Russian President Vladimir Putin. As if Obama would listen. He'd rather boost his constitutional law professor self, and pompously lecture an elite eurocrat audience in the glittering Palais des Beaux-Arts in Brussels, like he did this Wednesday, on how Putin is the greatest threat to the US-administered global order since World War II. Well, it didn't go that well; most eurocrats were busy taking selfies or twittering. Putin, meanwhile, met with the CEO of German engineering and electrical conglomerate Siemens, Joe Kaeser, at his official residence outside Moscow. Siemens invested more than US$1.1 billion in Russia over the past two years, and that, Kaeser said, is bound to continue. Angela was certainly taking notes. Obama couldn't behave otherwise. The constitutional law expert knows nothing about Russia, in his (meager) political career never had to understand how Russia works, and may even fear Russia - surrounded as he is by a coterie of spectacularly mediocre aids. His Brussels rhetorical tour de force yielded absolutely nothing - apart from the threat that if Putin persisted in his "aggression" against eastern Ukraine or even NATO members-countries the president of the United States would unroll a much stiffer sanction package. What else is new, considering this by supreme CIA asset and former Pentagon head in the first Obama administration, Bob Gates, is what passes for political analysis in the US. The $1 trillion game-changer  Demonized 24/7 by the sprawling Western propaganda machine as a ruthless aggressor, Putin and his Kremlin advisers just need to play Sun Tzu. The regime changers in Kiev are already mired in a vicious catfight. [1] And even Ukraine's acting Prime Minister Arseniy Petrovych "Yats" Yatsenyuk has identified the gloomy times ahead, stressing that the signature of the economic part of the association agreement between Ukraine and the EU has been postponed - so there will be no "negative consequences" for industrialized eastern Ukraine. Translation: he knows this will be the kiss of death for Ukrainian industry, on top of it coupled with an imminent structural adjustment by the International Monetary Fund linked to the EU (maybe) bailing out a bankrupt Ukraine. Asia Times Online's Spengler coined a formulation: "A specter is haunting Europe, and that is the specter of a Russian-Chinese alliance at the expense of Europe." The alliance is already on - manifested in the G-20, the BRICS and the Shanghai Cooperation Organization. There are military technology synergies on the horizon - the ultra-sophisticated S-500 air defense system is to be unveiled by Moscow, and Beijing would absolutely love to have it. But for the real fireworks, just wait a few weeks, when Putin visits Beijing in May. That's when he will sign the famous $1 trillion gas deal according to which Gazprom will supply China's CNPC with 3.75 billion cubic feet of gas a day for 30 years, starting in 2018 (China's current daily gas demand is around 16 billion cubic feet). Gazprom may still collect most of its profits from Europe, but Asia is its privileged future. On the competition front, the hyper-hyped US shale "revolution" is a myth - as much as the notion the US will be suddenly increasing exports of gas to the rest of the world any time soon. Gazprom will use this mega-deal to boost investment in eastern Siberia - which sooner rather than later will be configured as the privileged hub for gas shipments to both Japan and South Korea. That's the ultimate (substantial) reason why Asia won't "isolate" Russia. ( See Asia will not 'isolate' Russia, Asia Times Online, March 25, 2014.) Not to mention the much-anticipated "thermonuclear" (for the petrodollar) possibility that Russia and China will agree payment for the Gazprom-CNPC deal may be in yuan or rubles. That will be the dawn of a basket of currencies as the new international reserve currency - a key BRICS objective and the ultimate, incendiary, new (economic) fact on the ground. Time to invest in Pipelineistan  Even though its centrality pales compared to Asia, Europe, of course, is not "expendable" for Russia. There have been rumbles in Brussels by some poodles about canceling the South Stream pipeline - pumping Russian gas underneath the Black Sea (and bypassing Ukraine) to Bulgaria, Hungary, Slovenia, Serbia, Croatia, Greece, Italy and Austria. The Bulgarian Economy and Energy Minister, Dragomir Stoynev, said no way. Same for the Czech Republic, because it badly needs Russian investment, and Hungary, which recently signed a nuclear energy deal with Moscow. The only other possibility for the EU would be Caspian gas, from Azerbaijan - following on the trail of the Zbig Brzezinski-negotiated Baku-Tblisi-Ceyhan (BTC) oil pipeline, which was conceived expressly to bypass both Russia and Iran. As if the EU would have the will, the speed and funds to spend billions of dollars to build yet another pipeline virtually tomorrow, and assuming Azerbaijan had enough supply capacity (it doesn't; other actors, like Kazakhstan or ultra-unreliable Turkmenistan, which prefers to sell its gas to China, would have to be part of the picture). Well, nobody ever lost money betting on the cluelessness of Brussels eurocrats. South Stream and other energy projects will create a lot of jobs and investment in many of the most troubled EU nations. Extra sanctions? No less than 91% of Poland's energy, and 86% of Hungary's, come from Russia. Over 20% of the foreign lending of French banks is to Russian companies. No less than 68 Russian companies trade at the London Stock Exchange. For the Club Med nations, Russian tourism is now a lifeline (1 million went to Italy last year, for instance.) US Think Tankland is trying to fool American public opinion into believing what the Obama administration should be applying is a replay of the "containment" policy of 1945-1989 to "limit the development of Russia as a hegemonic power". The "recipe": weaponize everybody and his neighbor, from the Baltic nations to Azerbaijan, to "contain" Russia. The New Cold War is on because, from the point of view of US so-called "elites", it never really left. Meanwhile, Gazprom's stock price is up. Buy now. You won't regret it. Notes: 1. Popcorn Please While "Putin's Agitators" Rule in Kiev, Moon of Alabama, March 26, 2014. Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009). He may be reached at pepeasia@yahoo.com.

THE ROVING EYE - Russian sanctions as war and farce - By Pepe Escobar

THE ROVING EYE Russian sanctions as war and farce By Pepe Escobar If we come to a minefield, our infantry attacks exactly as if it was not there - Marshal Georgy Zhukov Let's start with the serious stuff. As Russia's Federation Council ratifies a treaty with Crimea, concluding the formal annexation, Ukraine signs the political chapters of an association agreement with the European Union (EU). The signing of the full EU agreement will only happen later in 2014. These are the facts on the ground. Now let's turn to comedy hour - also known as the sanctions war. The oh-so democratic EU has punished the democratic Crimea referendum by sanctioning 33 Russians and Crimeans with asset freezes and travel bans, according to that Magritte-style walking fiction, European Council President Van Rompuy. The EU also canceled the EU-Russia summit in Sochi on June 3. And the vast, Kafkaesque bureaucracy of the European Commission (EC) has taken time out from subsidizing European cows to prepare for "possible economic sanctions", according to German Chancellor Angela Merkel. The EU is irretrievably split on what to do. Whatever it does, Moscow's capacity to make the EU badly hurt is stronger. There may be another meek set of sanctions next week, as Merkel advertised. But that's it. European poodle action mirrors His Master's Voice - as in US President Barack Obama solemnly imposing, by executive order, further sanctions on "senior officials of the Russian government." Other US targets are private businessmen close to Russian President Vladimir Putin. Only exceptionalist logic legally allows sanctions on private individuals deemed responsible for political steps taken by the country they live in. International lawyers should have thought about sanctioning the entire US population for the Bush-Cheney junta's disaster. Well over 60% of Americans and Europeans are against a New Cold War against Russia. Putin's approval rating in Russia is around 75% - and arguably similar all across the developing world. Still, no one will lose money betting on the juvenile amateurism of the Obama administration. As if they and selected European minions could intimidate Moscow with some cosmetic "message". The American sanction religion, imposed with a conquistador/slave owner fury, did destroy Iraq for years - and was supposed to destroy Iran as well. But Russia is not Iraq or Iran. I love a man in sanction uniform Sanctioned Russians are not exactly quaking in their made-in-London brogues. After all, the practical impact of these sanctions is exactly zero. And most people targeted have minimal direct links with the US. The original American list included Deputy Prime Minister Dmitri Rogozin and presidential aide Vladislav Surkov. They laughed it off, loudly - adding it felt like a badge of honor. The expanded list includes key Putin advisers and even some of his friends. Obama, Iran-style, sanctioned the Bank of Russia - a minor player (less than US$10 billion in assets; compare it with giant Sberbank at $528 billion). But Bank of Russia is used by some Gazprom subsidiaries for some low-key deals - even as Gazprom owns its own bank, GazpromBank. The "message" here is that Washington is watching Gazprom. Chief of Presidential Administration Sergei Ivanov is a key adviser on Ukraine and a top negotiator with the US, the EU and NATO. The - counterproductive - "message" implied here is that Moscow and Washington are not talking anything substantial in the immediate future. So much for the West's "diplomatic efforts". Then there's Yuri Kovalchuk, a board member of the Bank of Russia, a key business adviser and - allegedly, no conclusive evidence - Putin's personal banker. The message here is of the "I'm gonna git you sucka" kind. Finally, among the notables, there's Gennady Timchenko, who has absolutely nothing to do with Ukraine. He's an energy deal operator, controlling oil and natural gas trading firm Gunvor. In this case, the "message" is that the US will target Russia's energy deals. Message void, because the EU - which needs Gazprom badly - is not inclined to sanction Timchenko. Other sanctioned include the head of the Federal Drug Control Service Viktor Ivanov, Chief of Military Intelligence Igor Sergun and Russian Railways President Vladimir Yakunin. They are all part of the Russia-US team involved in the Northern Distribution Network - the long, across-Central Asia highway that will allow NATO to flee Afghanistan. A swift Moscow counter-attack would be to leave the Americans and Europeans hanging dry - or to close the NDN altogether. I want to be sanction-free Moscow, predictably, struck back. The Russian Foreign Ministry has "repeatedly" stressed that using sanctions is a "double-edged thing" and it will have a "boomerang" effect against the US. Already barred from entering Russia is a nasty bunch including the senile John McCain, plus Robert Menendez, Daniel Coats, Mary Landrieu, Harry Reid, John Boehner and Obama advisers such as the cosmic mediocrity Ben Rhodes. Vicky "F**k the EU" Nuland has not made the list - yet. Moscow is playing it cool because it may choose among a staggering array of counterpunches. It enjoys the support of the BRICS group of emerging powers, the non-aligned movement (NAM) and the Shanghai Cooperation Organization (SCO). Composing with the US, Moscow agreed to impose sanctions on Iran, and is a key player in the P5+1 nuclear negotiations. If the sanction comedy goes on, Moscow has already announced it will play hardball with the P5+1, will cease to sanction Iran, and may even, finally, weaponize Tehran with jewels of the S-400 variety. Moscow - the number one oil and gas exporter on the planet - can also play further hardball with Europe's dependency on Gazprom; clinically target US companies working in Russia; speed up the BRICS-coordinated escape from the US dollar, as in a new international payment system in a basket of currencies for the BRICS as well as other emerging markets; and even activate the ultimate economic nuclear bomb - which is to accept payment for Russian oil and gas in ruble, yuan, euros or gold, thus delivering a terminal blow to the petrodollar. And that, ladies and gentlemen, will be the end of the comedy hour. Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009). He may be reached at pepeasia@yahoo.com.

THE ROVING EYE Russia 1, Regime Changers 0 By Pepe Escobar

THE ROVING EYE Russia 1, Regime Changers 0 By Pepe Escobar Let's cut to the chase - short and sweet. 1. The Obama administration's "strategic" gambit to subcontract the State Department's "Khaganate of Nulands" to extricate Ukraine from the Russian sphere of influence - and ultimately annex it to NATO - by instrumentalizing a coalition of willing neo-nazis and fascists with a central bank veneer (prime minister "Yats"), is in utter shambles. 2. Moscow's counterpunch was to prevent in Crimea - as intercepted by Russian intelligence - a planned replay of the putsch in Kiev. The referendum in Crimea - 85% of turnout, roughly 93% voting for re-joining Russia, according to exit polls - is a done deal, as much as the oh-so-democratic European Union (EU) keeps threatening to punish people in Crimea for exercising their basic democratic rights. (By the way, when the US got Kosovo to secede from Serbia, Serbians were offered no referendum). 3. The main rationale for the whole US "strategic" advance - to have their proxies, the regime changers in Kiev, cancel the agreement for the Russian naval base in Sevastopol - is up in smoke. Moscow remains present in the Black Sea and with full access to the Eastern Mediterranean. And the rest is blah blah blah. All aboard the Finland station  The US State Department has practically agreed to a federal and in fact Finlandized Ukraine [1] which, by the way, is the solution being proposed by Russian Foreign Minister Sergey Lavrov right from the start, as this Russian white paper attests. US Secretary of State John Kerry - as when Moscow saved the "red line" Obama administration from bombing Syria - will go on overdrive to steal all the credit from the Russians. US corporate media will duly buy it, but not independents such as Moon of Alabama. [2] This - sensible - road map implies, among other crucial points; strong autonomous regions; Russian reinstated as an official language, alongside Ukrainian; and most of all political/military neutrality, that is, Finlandization. To get there will be the mission of a support group - once again, proposed by Moscow from the start - with the US, EU and Russia as members. All that finally sanctified by a UN Security Council resolution (true, it could go spectacularly wrong, and most of all sabotaged by the "West".) And all that, as well, without Moscow having to officially recognize the regime changers in Kiev. In a nutshell; Moscow called Washington's bluff - and won. So after all that barrage of ominous threats including everyone from Obama, Kerry and assorted neo-con bomb-firsters down to minions such as Cameron, Hague and Fabius, the meat of the matter is that the Obama administration concluded it would not risk a nuclear war with Russia for the Khaganate of Nulands - especially after Moscow made it known, discreetly, it would create the conditions for eastern and southern Ukraine to also secede. Sweden, for instance, proposed an arms embargo on sales to Moscow. Paris took a quick glance at its industrial-military complex interests and immediately said no. Only the brain dead entertain the notion Paris and Berlin are willing to jeopardize their trade relations with Russia. As well as the notion that Beijing would ever join sanctions against fellow Group of 20, BRICS and Shanghai Cooperation Organization member Russia just because what they perceive as an increasingly irrational - and dangerous - Washington said so. And yet, Western hysteria of course will persist unabated. In the US, where it matters, the meme of the subsequent days will be, inevitably, who lost Syria and who lost Ukraine. Here's the record. Dubya launched two wars. He (miserably) lost both. Obama attempted to launch two wars (Syria and Ukraine). He - lucky for him - lost both even at the "attempt" stage. Assorted neo-cons and the whole exceptionalist brigade are predictably livid. Expect the editorial page of the Wall Street Journal to go ballistic. And expect US ambassador to the UN Samantha "R2P" Power to wish she were Sinead O'Connor singing Nothing Compares to You. It's a gas, gas, gas, not! The Kiev regime-changers are already announcing their intentions, as in Right Sector capo and confirmed neo-nazi Dmytro Yarosh saying, "… Russia makes money sending its oil through our pipelines to the West. We will destroy these pipelines and deprive our enemy of its source of income." That's a brilliant strategy straight from the Khaganate of Nulands playbook. So homes and the whole industrial base in Ukraine should be out of (cheap, discounted) gas, not to mention great swathes of Germany, so the neo-nazis can claim "victory". With friends like these … Gazprom's executives are not exactly raising an eyebrow. Russia is already shipping roughly half of its gas to Europe bypassing Ukraine, and after South Stream is completed in 2015, that percentage will increase (EU "sanctions" against South Stream are just empty rhetoric.) The regime changers will be trying to wreak havoc in other fronts as well. The new Ukrainian parliament has voted to assemble a 60,000-strong National Guard crammed with "activists". Guess who will be in charge; the new security chief, Andriy Parubiy, one of the founders of the neo-nazi Social-National Party. And his deputy happens to be none other than Yarosh, the leader of the paramilitary Right Sector. Feel free to add your own custom-made Hitlerian metaphors - even as the risk persists of Ukraine breaking apart. Which is not necessarily a bad deal. Let the "democratic" EU pay Ukraine's gas bills. Notes: 1. Lavrov, Kerry agree to work on constitutional reform in Ukraine: Russian ministry, Reuters, March 16, 2014. 2. Ukraine: U.S. Takes Off-Ramp, Agrees To Russian Demands, Moon of Alabama, March 16, 2014. Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009). He may be reached at pepeasia@yahoo.com.