“Going After” the Islamic State. Guess Who is Behind the Caliphate Project?

Author’s note and Update

The following article was first published in September 2014 at the outset of the air campaign “against the ISIS”. In recent developments Russia has officially joined the campaign against the Islamic State (ISIS). What are the implications?

Amply documented but rarely mentioned in news reports, the ISIS is a creation of US intelligence, recruited, trained and financed by the US and its allies including Saudi Arabia, Qatar, Turkey, Israel and Jordan.

What this means is that the ISIS terrorists are the foot soldiers of the Western alliance. While America claims to be targeting the ISIS, in reality it is protecting the ISIS. The air campaign is intent upon destroying Syria and Iraq rather than “going after the terrorists”.

But now Russia is involved in the campaign against the ISIS in coordination with the Syrian and Iraqi governments.

What does that mean? The official story is that Russia supports America’s resolve to fight the terrorists. It’s all for a good cause.

In reality, however, Russia is (indirectly) fighting America by supporting the actions of the Syrian and Iraqi governments against the ISIS terrorists, who happen to be the foot soldiers of the Western military alliance, with Western mercenaries and military advisers within their ranks.

The forbidden truth is that by providing military aid to both Syria and Iraq, Russia is (indirectly) confronting America. Moscow will be supporting both countries in their proxy war against the ISIL which is supported by the US and its allies.

Michel Chossudovsky, September 30, 2015

* * *

The Islamic State (IS) is portrayed as an Enemy of America and the Western world.

With the support of America’s indefectible British ally, President Barack Obama has ordered a series of US bombing raids on Iraq allegedly with a view to defeating the rebel army of the Islamic State (IS).

“We will not waver in our determination to confront the Islamic State … If terrorists think we will weaken in the face of their threats they could not be more wrong.” (Barack Obama and David Cameron, Strengthening the NATO alliance, op ed published in the London Times, September 4, 2014, emphasis added)

But Who is behind the Islamic State Project?

In a bitter irony, until recently the rebels of the Islamic State, formerly known as the Islamic State of Iraq and the Levant (ISIL) were heralded as Syria’s “opposition freedom fighters” committed to “restoring democracy” and unseating the secular government of Bashar al Assad.

And who was behind the jihadist insurgency in Syria?

Those who ordered the bombing campaign are those who are behind the Caliphate Project.

The Islamic State (IS) militia, which is currently the alleged target of a US-NATO bombing campaign under a “counter-terrorism” mandate, was and continues to be supported covertly by the United States and its allies.

In other words, the Islamic State (IS) is a creation of US intelligence with the support of Britain’s MI6, Israel’s Mossad, Pakistan’s Inter-Services Intelligence (ISI) and Saudi Arabia’s General Intelligence Presidency (GIP), Ri’āsat Al-Istikhbārāt Al-’Āmah ( رئاسة الاستخبارات العامة‎). Moreover, according to Israeli intelligence sources (Debka) NATO in liaison with the Turkish High Command has been involved in the recruitment of jihadist mercenaries from the outset of the Syrian crisis in March 2011.

In relation to the Syrian insurgency, the Islamic State fighters together with the Al Qaeda affiliated jihadist forces of the Al Nusrah Front are the foot soldiers of the Western military alliance. They are covertly supported by US-NATO-Israel. Their mandate is to wage a terrorist insurgency against the government of Bashar al-Assad. The atrocities committed by Islamic State fighters in Iraq are similar to those committed in Syria.

As a result of media disinformation, Western public opinion is unaware that the Islamic State terrorists have from the very outset been supported by the United States and its allies.

The killings of innocent civilians by the Islamic State terrorists in Iraq are used to create a pretext and a justification for US military intervention on humanitarian grounds. The bombing raids ordered by Obama, however, are not intended to eliminate the Islamic State, which constitutes a US “intelligence asset”. Quite the opposite, the US is targeting the civilian population as well as the Iraqi resistance movement.

The Role of Saudi Arabia and Qatar

Amply documented, US-NATO support to the Islamic State is channeled covertly through America’s staunchest allies: Qatar and Saudi Arabia. Acknowledged by the Western media, both Riyadh and Doha acting in liaison and on behalf of Washington have played (and continue to play) a central role in the financing the Islamic State (IS) as well as the recruitment, training and religious indoctrination of terrorist mercenary forces deployed in Syria.

According to London’s Daily Express “They [the Islamic State terrorists] had money and arms supplied by Qatar and Saudi Arabia.”

US Saudi connection

“The most important source of ISIS financing to date has been support coming out of the Gulf states, primarily Saudi Arabia but also Qatar, Kuwait and the United Arab Emirates,” (According to Dr. Günter Meyer, Director of the Center for Research into the Arabic World at University of Mainz, Germany, Deutsche Welle)

This money was channeled to ISIS terrorists fighting against government forces in Syria:

“Through allies such as Saudi Arabia and Qatar, the West [has] supported militant rebel groups which have since mutated into ISIS and other al‑Qaeda connected militias. ( Daily Telegraph, June 12, 2014)

According to Robert Fisk, the IS caliphate project “has been bankrolled by Saudi Arabia”:

…[M]eet Saudi Arabia’s latest monstrous contribution to world history: the Islamist Sunni caliphate of Iraq and the Levant, conquerors of Mosul and Tikrit – and Raqqa in Syria – and possibly Baghdad, and the ultimate humiliators of Bush and Obama.

From Aleppo in northern Syria almost to the Iraqi-Iranian border, the jihadists of Isis and sundry other groupuscules paid by the Saudi Wahhabis – and by Kuwaiti oligarchs – now rule thousands of square miles. (Robert Fisk, The Independent, June 12, 2014

In 2013, as part of its recruitment of terrorists, Saudi Arabia took the initiative of releasing prisoners on death row in Saudi jails.

A secret memo revealed that the prisoners were being “recruited” to join jihadist militia (including Al Nusrah and ISIS) to fight against government forces in Syria.

Saudi prison

The prisoners had reportedly been offered a deal — stay and be executed or fight against Assad in Syria. As part of the deal the prisoners were offered a “pardon and a monthly stipend for their families, who were allowed to stay in the Sunni Arab kingdom”.

Saudi officials apparently gave them a choice: decapitation or jihad? In total, inmates from Yemen, Palestine, Saudi Arabia, Sudan, Syria, Jordan, Somalia, Afghanistan, Egypt, Pakistan, Iraq, and Kuwait chose to go and fight in Syria.(See Global Research, September 11, 2013)

“Volte Face”: About Turn

On September 11, 2014, coinciding with the commemoration of 9/11, the King of Saudi Arabia together with the Monarchs of the Gulf States announced their unbending commitment to support Obama’s holy war against the Islamic State (IS), which has and continues to be funded by Qatari and Saudi money as part of a carefully engineered intelligence operation.

Secretary of State John F. Kerry, left, speaks with Joseph W. Westphal, the U.S. ambassador to Saudi Arabia, and Saudi Foreign Minister Prince Saud al-Faisal on his arrival at the King Abdulaziz International Airport in Jiddah, Saudi Arabia on Sept. 11, 2014. (Pool photo by Brendan Smialowski via Associated Press)

Saudi Arabia and the Gulf States which actively contributed to the financing of the Islamic State, not to mention the recruitment, training of terrorists on behalf of Washington, pledged their unbending support for Obama’s military campaign to “degrade and ultimately destroy” the Islamic State.

The statement of support contained in the communiqué, commits the “leading Arab states to working with the U.S. to cut off the flow of foreign fighters and funds to the Islamic State.” It also confirms that members discussed “a strategy to destroy the ISIL wherever it is, including in both Iraq and Syria.”

Saudi Arabia has come to understand the Islamic State group is a serious threat to their country as well– that it isn’t a mainstream Sunni movement.One element of Obama’s IS plan seeks to undermine the ideological and religious claims that the Islamic State militants make to Islam.

The administration hopes Riyadh will use its influence among Islamic religious leaders. (Voice of America, September 11, 2014)

Recruiting “Moderate Terrorists”

As part of the agreement, the House of Saud is to “host a training facility for thousands of Syrian rebel fighters who are combating both the Islamic State and President Bashar al-Assad’s regime.” An absurd and fake proposition. Until September 9th, “officially” Saudi Arabia had been supporting the Islamic State against the government of Bashar al Assad and now it has been entrusted in recruiting jihadists to fight the Islamic State. An absurd and fake proposition. But the media has failed to connect the dots and uncover the big lie.

We are dealing with a diabolical project: The architects of the Islamic State have informed the World that they are “going after” their own terrorists as part of a counter-terrorism operation.

While these actions are undertaken under the banner of the “Global War on Terrorism”, the US has no intention to target its IS own terror brigades which are integrated by Western special forces and intelligence operatives. In fact the only meaningful and effective campaign against Islamic State terrorists is being waged by Syrian government forces.

Needless to say, US, NATO, Saudi and Qatari support and funding to the Islamic State will continue. The objective is not to destroy the Islamic State as promised by Obama. What we are dealing with is a US sponsored process of destabilizing and destroying both Iraq and Syria. The campaign against the Islamic State is being used as a justification to bomb both countries, largely targeting civilians.

The endgame is to destabilize Iraq as a nation state and trigger its partition into three separate entities.

The broader US-NATO strategic objective is to destabilize the entire Middle East- North Africa -Central Asia -South Asia region, including Iran, Pakistan and India.

Posted by Ainhoa Aristizabal — Unruly Hearts editor

Order directly from Global Research
America’s “War on Terrorism”

by Michel Chossudovsky

In this new and expanded edition of Michel Chossudovsky’s 2002 best seller, the author blows away the smokescreen put up by the mainstream media, that 9/11 was an attack on America by “Islamic terrorists”. Through meticulous research, the author uncovers a military-intelligence ploy behind the September 11 attacks, and the cover-up and complicity of key members of the Bush Administration. original

The expanded edition, which includes twelve new chapters focuses on the use of 9/11 as a pretext for the invasion and illegal occupation of Iraq, the militarisation of justice and law enforcement and the repeal of democracy.

According to Chossudovsky, the “war on terrorism” is a complete fabrication based on the illusion that one man, Osama bin Laden, outwitted the $40 billion-a-year American intelligence apparatus. The “war on terrorism” is a war of conquest. Globalization is the final march to the “New World Order”, dominated by Wall Street and the U.S. military-industrial complex.

September 11, 2001 provides a justification for waging a war without borders. Washington’s agenda consists in extending the frontiers of the American Empire to facilitate complete U.S. corporate control, while installing within America the institutions of the Homeland Security State.
The original source of this article is Global Research
Copyright © Prof Michel Chossudovsky, Global Research, 2016

“Terrorist International” Takes Shape … Against Russia

Theme: US NATO War Agenda

russian-air-force-400x266On October 1, Turkey and six other countries of the US-led coalition published a joint declaration expressing concern over Russia Air Force strikes against the militants in Syria. The signatories include the United States of America (as expected), the monarchies of Persian Gulf (Saudi Arabia and Qatar that were also expected to join), as well as Great Britain, Germany and France.

The statement actually does not say anything extraordinary. Russia stole the initiative from the West. Instead of following the example of «anti-terrorist coalition» and delivering strikes against Syria’s government forces (which together with Kurds conduct combat actions against the militants of so-called Islamic State), Russia bombed the positions of the terrorists. It allowed the legitimate Syrian government to regroup forces, get a break and finally launch a ground offensive to clear the territory from the terrorist plague.

The expression of concern by the United States is logical and natural: Washington has spent great effort to train the «moderate» Syrian opposition (which mysteriously has turned into a source of weapons and manpower for «immoderate» groups). The start of the Russian operation may incur direct financial losses, let alone damage the image of the US.

There is nothing surprising in the fact that the monarchies of Persian Gulf – Saudi Arabia and Qatar – were eager to sign the statement. One may forget what country Osama bin Laden and the majority of terrorists, who seized the aircraft on September 11, 2001, came from. But it’s impossible to reject the fact that the Gulf monarchies (no matter all the real or imaginary contradictions and disagreements dividing them) are the main sponsors of major terrorist groups operating in the Greater Middle East – from Muslim Brotherhood in Egypt to Al-Qaeda and the Taliban in Afghanistan and, especially, in Pakistan. In case of Saudi Arabia the overthrow of Bashar Assad is just the first step on the way to do away with Iran, its main opponent in the region.

It’s easy to explain why the declaration was initiated by Turkey. Ankara views the Islamic State as the only force able to nip in the bud the aspiration of Kurds, the divided people, for statehood. It makes pale such things of ‘little importance’ like cheap oil exported by militants from Iraq and Syria with Turkey being the main customer.

It’s worth to mention the position of Europe. The fact that London signed the declaration can be explained by the inability of the 51st US state to stop playing the role of American poodle on a leash. It obediently dances to the US tune. The participation of France and Germany seems to be a bit irrational.

So many things have happened in Eastern Europe and the Middle East. Berlin and Paris could have realized that the events seemingly not interconnected meet the logic of US strategy aimed at creating an axis of instability. Its only goal is to preserve the unipolar world where West Europe plays the role of a passive satellite, not an independent actor.

The events in Ukraine occurred exactly when a Europe-Russia energy alliance started to loom and the US-led talks on the Transatlantic Trade and Investment Partnership got stalled. Just a coincidence, of course.

All these events let the United States to partially achieve the main goal – it has succeeded in driving a wedge between Europe and Russia, but the talks on the Transatlantic Trade and Investment Partnership did not make much progress. The United States had another ace up its sleeve. The civil war in Syria gave rise to the massive migrant flows threatening the very foundation of the European civilization and making European allies meekly ask the big brother overseas for help.

Russia’s resolute actions in Syria leave no chance for these plans. Supposedly, Europeans should breathe a sigh of relief. But it has not happened as yet.

What is the reason? Has the habit to snap to attention become so deeply enrooted? Have the Europeans left any thoughts about having a choice? Some analysts believe that the US National Security Agency has acquired serious compromising material to blackmail European leaders into agreement with Washington.

The hope is still looming that after some time Europe will realize where its real interests lie. The abovementioned declaration of the seven looks more like a creation of a new instrument of Washington. This time it has the form of an international alliance to support terrorists of the so-called Islamic State.

BREAKING: Over 1,000 ISIS and Al Nusra Militants Surrender To Syrian Army In Last 24 Hours

 

 

The development came after President Bashar al-Assad in a televised address in July pardoned all soldiers who have fled the army, saying that his words served as a general decree to relevant officials.

Hundreds of gunmen have been laying down their weapons and turning themselves in to authorities in areas across the country.

This number seems to be on the rise as the army has been making steady gains in the battlefield against the terrorist groups, recapturing an increasing number of regions, including strategic sites, which helped cut off many of the militants’ supply routes and forced them to surrender or run away.

Also in the past 24 hours, the Syrian air raids destroyed concentration centers of the ISIL, al-Nusra Front and other terrorist groups in Hama and Idlib.

The Syrian warplanes conducted airstrikes against positions of ISIL and the so-called Jeish al-Fath terrorists in the countryside of Hama and Idlib.

The airstrikes hit positions of the ISIL terrorists in al-Rahjan village, 50 km to the Northeast of Hama City, destroying a number of terrorists’ vehicles with all arms, ammunition and equipment on board.

The airstrikes also hit positions of al-Nusra Front and other terrorist groups in Aqrab village in the Southwestern countryside of Hama, killing scores of terrorists.

A number of vehicles belonging to Jeish al-Fath terrorists were also destroyed in airstrikes in Abdin village in the countryside of Ma’aret al-Nu’aman in Idlib countryside.

Meantime, the Syrian fighter jets pounded hideouts of the Takfiri militants in the countryside of Homs.

The Syrian air raids destroyed Takfiri terrorists’ hideouts and vehicles in al-Qaryatain, al-Sa’an, and in the vicinity of al-Sha’er field in Homs countryside.

The Russian air group in Syria is using Kh-29L air-to-surface missiles to conduct airstrikes against the ISIL militants, the Russian military said Sunday.

“A Kh-29L surface-to-air missile is equipped with a semi-active laser guidance system. When the launch is conducted, a pilot illuminates a target with a laser sight. At the same time an aircraft can continue the flight,” Aerospace Forces Spokesman Colonel Igor Klimov said.

Also, the Syrian army conducted military operations against the foreign-backed Takfiri militants in Aleppo province, leaving hundreds of them killed and injured.

Hundreds of terrorists were killed or wounded in Aleppo City and its countryside in the past 24 hours, a military source said.

Elsewhere, at least 28 militant fighters of the ISIL terrorist group were killed during clashes with the Kurdish forces in the Northeastern Syrian province of Hasaka.

“The YPG forces besieged the ISIL militants near Mount Abdulaziz and killed dozens of terrorists and destroyed several vehicles,” a spokesman for the YPG Media Center told ARA News.

Also, gunmen from the Jeish al-Fath coalition of extremist groups are pulling out their forces from Idlib and other towns in Northwestern Syria.

The radical group started moving towards the Turkish border on Saturday after having experienced “the efficiency of the Russian aerospace forces’ strikes,” the As-Safir Arabic-language daily reported.

The coalition is led by al-Nusra terrorist group, the Syrian branch of al-Qaeda, which is sponsored by Saudi Arabia, Turkey and Qatar. The group seized the Idlib province this spring.

The report said field commanders fear at any moment the attack of Syrian forces supported by Russian warplanes on the key town of Jisr al-Shugour, on the Lattakia-Aleppo highway.

Russia, China mock divide and rule

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BLOOD & OIL

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 the 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 an 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 counter-productive 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.

Russian companies ‘de-dollarize’ and switch to yuan, other Asian currencies

Reuters/Petar Kujundzic

Reuters/Petar Kujundzic

Russia will start settling more contracts in Asian currencies, especially the yuan, in order to lessen its dependence on the dollar market, and because of Western-led sanctions that could freeze funds at any moment.

“Over the last few weeks there has been a significant interest in the market from large Russian corporations to start using various products in renminbi and other Asian currencies, and to set up accounts in Asian locations,” Pavel Teplukhin, head of Deutsche Bank in Russia, told the Financial Times, which was published in an article on Sunday.

Diversifying trade accounts from dollars to the Chinese yuan and other Asian currencies such as the Hong Kong dollar and Singapore dollar has been a part of Russia’s pivot towards Asian as tension with Europe and the US remain strained over Russia’s action in Ukraine.

Since Crimea voted to rejoin Russia, the US government has imposed Cold War era sanctions, which have hurt the Russian economy and have slowed lending and investment activity.

VTB, Russia’s second largest bank, intends to increase the amount of non-dollar settlements, according to the bank’s president Andrey Kostin.

In May, Russia’s biggest gas producer, Gazprom, announced it wants to start trading shares in Singapore, obtaining a listing as early as July, the company said. Just before that Russia’s state-owned gas giant inked a $400 billion gas deal with China.

“Given the amount of bilateral trade volume with China, of course, we are working on the expansion of settlement in rubles and yuan,” Kostin said at a meeting with Russian President Vladimir Putin, adding this is a goal the bank has been moving towards since May.

Russia's Universal electronic card based on PRO100 payment system, RIA Novosti/Maksim Bogovid

Russia’s Universal electronic card based on PRO100 payment system, RIA Novosti/Maksim Bogovid

A NEW PAYMENT PLAN

Russia’s main tasks are expanding currency operations and creating Russia’s own forthcoming national payment system.

The Central Bank of Russia is working on creating a national payment system, which both China and Japan have already established, and is expected to be up and running within four months.

Alexander Dyukov, the CEO of Gazprom Neft, the oil division of Gazprom, has been very vocal about ditching the dollar over escalating pressure from the West.

“This shows that in principle there is nothing impossible – you can switch from dollar to euro and from euro, in principle, to rubles,” Vedomosti quotes Mr. Dyukov.

He has also said the company has discussed with customers the possibility of shifting contracts out of dollars, while Norilsk Nickel told the FT that it was discussing denominating long-term contracts with Chinese consumers in renminbi.

As of now, Russia is not preparing any countermeasures against the West, Putin’s chief advisor to the EU, Andrey Belousov has said.

“As long as Russia is not subject to systemic sanctions, which could bring an artificial limit to our economy’s access to dollars . . . then I don’t think Russia will take any steps in order to bring about artificial de-dollarization,” the FT quoted Belousov as saying.

Another swift move Russia has made towards Asia is the establishment of a joint rating agency with China, to replace more “biased” agencies like Fitch, Moody’s, and Standard & Poor’s.

Defying the dollar Russia & China agree currency swap worth over $20bn

Yuan banknotes (Reuters / Petar Kujundzic)

Yuan banknotes (Reuters / Petar Kujundzic)

Published: October 13, 2014

The central banks of China and Russia have signed a 3-year ruble-yuan currency swap deal up to $25 billion, in order to boost trade using national currencies and lessen dependence on the dollar and euro.

On Monday, China’s Central Bank announced the 150 billion yuan (815 billion ruble) currency swap between the Russian ruble and Chinese yuan. In terms of the Chinese currency that is $24.5 billion, and in Russian rubles, $20.1 billion.

“We need to expand the practice of using national currencies in trade. Currently they only account for 7 percent of turnover,” Prime Minister Dmitry Medvedev said at the 18th annual Russian-Chinese Commission, also attended by Chinese Premier Li Keqiang.

The deal is valid for 3 years, and can be extended if both Russia and China agree. The draft currency swap was settled in August, but details on the size of the deal were sketchy.

Using more local currencies will speed up trade between the two countries who are aiming to reach $100 billion by 2015. Trade between Russia and China is already nearly $90 billion and is scheduled to hit $200 billion in the next six years.

Cooperation between Russian and Chinese banks is also on the rise, and China’s Import Export Bank, which is 100% state owned, has pledged to help Russian banks now cut off from Western capital markets, due to the latest round of sanctions.

The Export-Import Bank (Exim) has agreed to establish a credit line equivalent to $2 billion for Russian state bank VTB, and has also signed agreements with VEB (Vnesheconombank), and the Russian Agricultural Bank.

The credit lines can be used to finance imports from China, from agriculture to high tech equipment.

Medvedev and Li signed over 40 other agreements at the meeting, including outlining plans to add another pipeline from Russia to China. Li is in Moscow for a three-day visit.

 

Politically-motivated sanctions see shift from dollar – Putin

Russian President Vladimir Putin (RIA Novosti / Vitaly Belousov)

Russian President Vladimir Putin (RIA Novosti / Vitaly Belousov)

The sanctions imposed on Russia by the US and the West, among other financial blunders, are mistakes that have triggered the world to de-dollarize. Russian President Putin describes this as like “cutting down the branches, upon which they are sitting.”

Putin said that sanctions have an overall negative effect on the entire global community, and actually motivate countries to seek financial sovereignty from the status quo.

President Putin was speaking at 11th annual meeting of the Valdai International Discussion Club in Sochi, Russia. The panel was fittingly called, “The World Order: New Rules or a Game without Rules.”

“Politically-motivated sanctions have intensified the trend of economic and financial sovereignty, the desire of countries and regions would like to secure themselves against outside pressure,” he said.

Putin at Valdai – World Order: New Rules or a Game without Rules (FULL VIDEO)

Dependence on a single global power will decrease, and new reserve currencies, such as the yuan and ruble, are already starting to emerge.

“Now, an increasing number of countries are attempting to move away from dollar dependence and to establish alternative reserve currencies and settlement systems,” the President said.

Maintaining global equilibrium becomes difficult when everyone stops playing by the rules, the President said, citing the precedent of the Cyprus bailout and the “politically-motivated” sanctions against Russia over its action in Ukraine.

“Now they risk losing confidence as the leaders of globalization. My question is- why would they do it? The prosperity of the US depends on its investors, those that own dollar debt,” he said.

“I think our American counterparts are sawing the branch they are sitting on,” Putin said.

Russia’s President Vladimir Putin (L) and US President Barack Obama (AFP Photo / Eric Feferberg)

Russia’s President Vladimir Putin (L) and US President Barack Obama (AFP Photo / Eric Feferberg)

Putin warned of the danger of mixing politics and economics, especially when nations are so deeply financially intertwined.

The West and Russia have increasingly become divided over the crisis in Ukraine, in which Russia accuses foreign powers of stirring up sentiment, and the West seeks to punish Russia for reclaiming Crimea.

US and EU sanctions against Russia include bans on long-term loans from Western capital markets, and bars the import of high tech oil equipment and technology, as well as weaponry to Russia.

Despite the cold diplomatic exchanges in the past year, Russia is ready for dialogue to normalize relations, the President said.

The annual panel includes the President and Prime Minister of Russia, who meet with the club members, both Russian and foreign experts in international affairs.

The club was created in September 2004 to promote dialogue between the Russian and international intellectual elite, and meets each year in a different Russian region. The name ‘Valdai’ comes from the lake where the first conference was held in Veliky Novgorod.

In the last decade, over 600 experts from 47 countries have participated in the talks.