Pepe Escobar, Inside China’s “New Normal”

 

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Pepe Escobar

 

Sometimes this planet changes right under your nose and you still don’t notice.  This sentence, buried in a New York Times piece on the Greek debt crisis, caught my attention the other day: “Greece, meanwhile, has suggested that it could turn to Russia or China for help if its talks on debt relief and a rollback of austerity measures break down.”  Russia is, of course, an unlikely bulwark, being on distinctly shaky economic grounds itself right now, but I’m not surprised by the thought — at least from Syriza, the lefty party now in power in Greece.  But China?  Not since tiny Albania joined the Chinese camp in the Cold War have we seen a sentence that in any way resembled that one.  And yet it certainly catches something of the changing face of our planet.  After all, as time goes by, the magnetic power of the Chinese economy is moving ever closer to Europe.  Just two years ago, the Chinese became the Middle East’s largest trading partner, leaving the European Union in second place and the United States in third.  By then, China was already Africa’s largest trading partner, having displaced the U.S. some years earlier.

This may not be making headlines here, but it’s no small thing.  The economic rise of China, especially in areas where the U.S. had committed so much in blood, sweat, and drones, should take anyone’s breath away.  Fortunately, TomDispatch’s peripatetic Eurasian correspondent Pepe Escobar (the man who invented the termPipelineistanfor the web of energy conduits that crisscross that vast continental area) arrives in the nick of time to offer us a view from Beijing of an economy still staggeringly on the rise and the plans of the Chinese leadership, from Asia to Europe, for knitting together what, if it happened, might indeed someday be seen as a new world economic order. Tom

Year of the Sheep, Century of the Dragon?
New Silk Roads and the Chinese Vision of a Brave New (Trade) World
By Pepe Escobar

BEIJING — Seen from the Chinese capital as the Year of the Sheep starts, the malaise affecting the West seems like a mirage in a galaxy far, far away. On the other hand, the China that surrounds you looks all too solid and nothing like the embattled nation you hear about in the Western media, with its falling industrial figures, its real estate bubble, and its looming environmental disasters. Prophecies of doom notwithstanding, as the dogs of austerity and war bark madly in the distance, the Chinese caravan passes by in what President Xi Jinping calls “new normal” mode.

“Slower” economic activity still means a staggeringly impressive annual growth rate of 7% in what is now the globe’s leading economy. Internally, an immensely complex economic restructuring is underway as consumption overtakes investment as the main driver of economic development. At 46.7% of the gross domestic product (GDP), the service economy has pulled ahead of manufacturing, which stands at 44%.

Geopolitically, Russia, India, and China have just sent a powerful message westward: they are busy fine-tuning a complex trilateral strategy for setting up a network of economic corridors the Chinese call “new silk roads” across Eurasia. Beijing is also organizing a maritime version of the same, modeled on the feats of Admiral Zheng He who, in the Ming dynasty, sailed the “western seas” seven times, commanding fleets of more than 200 vessels.

Meanwhile, Moscow and Beijing are at work planning a new high-speed rail remix of the fabled Trans-Siberian Railroad. And Beijing is committed to translating its growing strategic partnership with Russia into crucial financial and economic help, if a sanctions-besieged Moscow, facing a disastrous oil price war, asks for it.

To China’s south, Afghanistan, despite the 13-year American war still being fought there, is fast moving into its economic orbit, while a planned China-Myanmar oil pipeline is seen as a game-changing reconfiguration of the flow of Eurasian energy across what I’ve long called Pipelineistan.

And this is just part of the frenetic action shaping what the Beijing leadership defines as the New Silk Road Economic Belt and the Maritime Silk Road of the twenty-first century. We’re talking about a vision of creating a potentially mind-boggling infrastructure, much of it from scratch, that will connect China to Central Asia, the Middle East, and Western Europe. Such a development will include projects that range from upgrading the ancient silk road via Central Asia to developing a Bangladesh-China-India-Myanmar economic corridor; a China-Pakistan corridor through Kashmir; and a new maritime silk road that will extend from southern China all the way, in reverse Marco Polo fashion, to Venice.

Don’t think of this as the twenty-first-century Chinese equivalent of America’s post-World War II Marshall Plan for Europe, but as something far more ambitious and potentially with a far vaster reach.

China as a Mega-City

If you are following this frenzy of economic planning from Beijing, you end up with a perspective not available in Europe or the U.S. Here, red-and-gold billboards promote President Xi Jinping’s much ballyhooed new tagline for the country and the century, “the Chinese Dream” (which brings to mind “the American Dream” of another era). No subway station is without them. They are a reminder of why 40,000 miles of brand new high-speed rail is considered so essential to the country’s future. After all, no less than 300 million Chinese have, in the last three decades, made a paradigm-breaking migration from the countryside to exploding urban areas in search of that dream.

Another 350 million are expected to be on the way, according to a McKinsey Global Institute study. From 1980 to 2010, China’s urban population grew by 400 million, leaving the country with at least 700 million urban dwellers. This figure is expected to hit one billion by 2030, which means tremendous stress on cities, infrastructure, resources, and the economy as a whole, as well as near-apocalyptic air pollution levels in some major cities.

Already 160 Chinese cities boast populations of more than one million. (Europe has only 35.) No less than 250 Chinese cities have tripled their GDP per capita since 1990, while disposable income per capita is up by 300%.

These days, China should be thought of not in terms of individual cities but urban clusters — groupings of cities with more than 60 million people. The Beijing-Tianjin area, for example, is actually a cluster of 28 cities. Shenzhen, the ultimate migrant megacity in the southern province of Guangdong, is now a key hub in a cluster as well. China, in fact, has more than 20 such clusters, each the size of a European country. Pretty soon, the main clusters will account for 80% of China’s GDP and 60% of its population. So the country’s high-speed rail frenzy and its head-spinning infrastructure projects — part of a $1.1 trillion investment in 300 public works — are all about managing those clusters.

Not surprisingly, this process is intimately linked to what in the West is considered a notorious “housing bubble,” which in 1998 couldn’t have even existed. Until then all housing was still owned by the state. Once liberalized, that housing market sent a surging Chinese middle class into paroxysms of investment. Yet with rare exceptions, middle-class Chinese can still afford their mortgages because both rural and urban incomes have also surged.

The Chinese Communist Party (CCP) is, in fact, paying careful attention to this process, allowing farmers to lease or mortgage their land, among other things, and so finance their urban migration and new housing. Since we’re talking about hundreds of millions of people, however, there are bound to be distortions in the housing market, even the creation of whole disastrous ghost towns with associated eerie, empty malls.

The Chinese infrastructure frenzy is being financed by a pool of investments from central and local government sources, state-owned enterprises, and the private sector. The construction business, one of the country’s biggest employers, involves more than 100 million people, directly or indirectly. Real estate accounts for as much as 22% of total national investment in fixed assets and all of this is tied to the sale of consumer appliances, furnishings, and an annual turnover of 25% of China’s steel production, 70% of its cement, 70% of its plate glass, and 25% of its plastics.

So no wonder, on my recent stay in Beijing, businessmen kept assuring me that the ever-impending “popping” of the “housing bubble” is, in fact, a myth in a country where, for the average citizen, the ultimate investment is property. In addition, the vast urbanization drive ensures, as Premier Li Keqiang stressed at the recent World Economic Forum in Davos, a “long-term demand for housing.”

Markets, Markets, Markets

China is also modifying its manufacturing base, which increased by a multiple of 18 in the last three decades. The country still produces 80% of the world’s air conditioners, 90% of its personal computers, 75% of its solar panels, 70% of its cell phones, and 63% of its shoes. Manufacturing accounts for 44% of Chinese GDP, directly employing more than 130 million people. In addition, the country already accounts for 12.8% of global research and development, well ahead of England and most of Western Europe.

Yet the emphasis is now switching to a fast-growing domestic market, which will mean yet more major infrastructural investment, the need for an influx of further engineering talent, and a fast-developing supplier base. Globally, as China starts to face new challenges — rising labor costs, an increasingly complicated global supply chain, and market volatility — it is also making an aggressive push to move low-tech assembly to high-tech manufacturing. Already, the majority of Chinese exports are smartphones, engine systems, and cars (with planes on their way). In the process, a geographic shift in manufacturing is underway from the southern seaboard to Central and Western China. The city of Chengdu in the southwestern province of Sichuan, for instance, is now becoming a high-tech urban cluster as it expands around firms like Intel and HP.

So China is boldly attempting to upgrade in manufacturing terms, both internally and globally at the same time. In the past, Chinese companies have excelled in delivering the basics of life at cheap prices and acceptable quality levels. Now, many companies are fast upgrading their technology and moving up into second- and first-tier cities, while foreign firms, trying to lessen costs, are moving down to second- and third-tier cities. Meanwhile, globally, Chinese CEOs want their companies to become true multinationals in the next decade. The country already has 73 companies in the Fortune Global 500, leaving it in the number two spot behind the U.S.

In terms of Chinese advantages, keep in mind that the future of the global economy clearly lies in Asia with its record rise in middle-class incomes. In 2009, the Asia-Pacific region had just 18% of the world’s middle class; by 2030, according to the Development Center of the Organization for Economic Cooperation and Development, that figure will rise to an astounding 66%. North America and Europe had 54% of the global middle class in 2009; in 2030, it will only be 21%.

Follow the money, and the value you get for that money, too. For instance, no less than 200,000 Chinese workers were involved in the production of the first iPhone, overseen by 8,700 Chinese industrial engineers. They were recruited in only two weeks. In the U.S., that process might have taken more than nine months. The Chinese manufacturing ecosystem is indeed fast, flexible, and smart — and it’s backed by an ever more impressive education system. Since 1998, the percentage of GDP dedicated to education has almost tripled; the number of colleges has doubled; and in only a decade, China has built the largest higher education system in the world.

Strengths and Weaknesses

China holds more than $15 trillion in bank deposits, which are growing by a whopping $2 trillion a year. Foreign exchange reserves are nearing $4 trillion. A definitive study of how this torrent of funds circulates within China among projects, companies, financial institutions, and the state still does not exist. No one really knows, for instance, how many loans the Agricultural Bank of China actually makes. High finance, state capitalism, and one-party rule all mix and meld in the realm of Chinese financial services where realpolitik meets real big money.

The big four state-owned banks — the Bank of China, the Industrial and Commercial Bank of China, the China Construction Bank, and the Agricultural Bank of China — have all evolved from government organizations into semi-corporate state-owned entities. They benefit handsomely both from legacy assets and government connections, or guanxi, and operate with a mix of commercial and government objectives in mind. They are the drivers to watch when it comes to the formidable process of reshaping the Chinese economic model.

As for China’s debt-to-GDP ratio, it’s not yet a big deal. In a list of 17 countries, it lies well below those of Japan and the U.S., according to Standard Chartered Bank, and unlike in the West, consumer credit is only a small fraction of total debt. True, the West exhibits a particular fascination with China’s shadow banking industry: wealth management products, underground finance, off-the-balance-sheet lending. But such operations only add up to around 28% of GDP, whereas, according to the International Monetary Fund, it’s a much higher percentage in the U.S.

China’s problems may turn out to come from non-economic areas where the Beijing leadership has proven far more prone to false moves. It is, for instance, on the offensive on three fronts, each of which may prove to have its own form of blowback: tightening ideological control over the country under the rubric of sidelining “Western values”; tightening control over online information and social media networks, including reinforcing “the Great Firewall of China” to police the Internet; and tightening further its control over restive ethnic minorities, especially over the Uighurs in the key western province of Xinjiang.

On two of these fronts — the “Western values” controversy and Internet control — the leadership in Beijing might reap far more benefits, especially among the vast numbers of younger, well educated, globally connected citizens, by promoting debate, but that’s not how the hyper-centralized Chinese Communist Party machinery works.

When it comes to those minorities in Xinjiang, the essential problem may not be with the new guiding principles of President Xi’s ethnic policy. According to Beijing-based analyst Gabriele Battaglia, Xi wants to manage ethnic conflict there by applying the “three Js”: jiaowang, jiaoliu, jiaorong (“inter-ethnic contact,” “exchange,” and “mixage”). Yet what adds up to a push from Beijing for Han/Uighur assimilation may mean little in practice when day-to-day policy in Xinjiang is conducted by unprepared Han cadres who tend to view most Uighurs as “terrorists.”

If Beijing botches the handling of its Far West, Xinjiang won’t, as expected, become the peaceful, stable, new hub of a crucial part of the silk-road strategy. Yet it is already considered an essential communication link in Xi’s vision of Eurasian integration, as well as a crucial conduit for the massive flow of energy supplies from Central Asia and Russia. The Central Asia-China pipeline, for instance, which brings natural gas from the Turkmen-Uzbek border through Uzbekistan and southern Kazakhstan, is already adding a fourth line to Xinjiang. And one of the two newly agreed upon Russia-China pipelines will also arrive in Xinjiang.

The Book of Xi

The extent and complexity of China’s myriad transformations barely filter into the American media. Stories in the U.S. tend to emphasize the country’s “shrinking” economy and nervousness about its future global role, the way it has “duped” the U.S. about its designs, and its nature as a military “threat” to Washington and the world.

The U.S. media has a China fever, which results in typically feverish reports that don’t take the pulse of the country or its leader. In the process, so much is missed. One prescription might be for them to read The Governance of China, a compilation of President Xi’s major speeches, talks, interviews, and correspondence. It’s already a three-million-copy bestseller in its Mandarin edition and offers a remarkably digestible vision of what Xi’s highly proclaimed “China Dream” will mean in the new Chinese century.

Xi Dada (“Xi Big Bang” as he’s nicknamed here) is no post-Mao deity. He’s more like a pop phenomenon and that’s hardly surprising. In this “to get rich is glorious” remix, you couldn’t launch the superhuman task of reshaping the Chinese model by being a cold-as-a-cucumber bureaucrat. Xi has instead struck a collective nerve by stressing that the country’s governance must be based on competence, not insider trading and Party corruption, and he’s cleverly packaged the transformation he has in mind as an American-style “dream.”

Behind the pop star clearly lies a man of substance that the Western media should come to grips with. You don’t, after all, manage such an economic success story by accident. It may be particularly important to take his measure since he’s taken the measure of Washington and the West and decided that China’s fate and fortune lie elsewhere.

As a result, last November he made official an earthshaking geopolitical shift. From now on, Beijing would stop treating the U.S. or the European Union as its main strategic priority and refocus instead on China’s Asian neighbors and fellow BRICS countries (Brazil, Russia, India, and South Africa, with a special focus on Russia), also known here as the “major developing powers” (kuoda fazhanzhong de guojia). And just for the record, China does not consider itself a “developing country” anymore.

No wonder there’s been such a blitz of Chinese mega-deals and mega-dealings across Pipelineistan recently. Under Xi, Beijing is fast closing the gap on Washington in terms of intellectual and economic firepower and yet its global investment offensive has barely begun, new silk roads included.

Singapore’s former foreign minister George Yeo sees the newly emerging world order as a solar system with two suns, the United States and China. The Obama administration’s new National Security Strategy affirms that “the United States has been and will remain a Pacific power” and states that “while there will be competition, we reject the inevitability of confrontation” with Beijing. The “major developing powers,” intrigued as they are by China’s extraordinary infrastructural push, both internally and across those New Silk Roads, wonder whether a solar system with two suns might not be a non-starter. The question then is: Which “sun” will shine on Planet Earth?  Might this, in fact, be the century of the dragon?

Pepe Escobar is the roving correspondent for Asia Times, an analyst for RT and Sputnik, and a TomDispatch regular. His latest book is Empire of Chaos. Follow him on Facebook by clicking here.

Follow TomDispatch on Twitter and join us on Facebook. Check out the newest Dispatch Book, Rebecca Solnit’s Men Explain Things to Me, and Tom Engelhardt’s latest book, Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World.

Copyright 2015 Pepe Escobar

Russia, China mock divide and rule

s_300_i_ytimg_com_73066_hqdefault_435

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.

What Putin is not telling us?

Russian President Vladimir Putin

Russian President Vladimir Putin – Reprinted from RT

 
 

By Pepe Escobar

 
 

Russian President Vladimir Putin holds his annual press conference, addressing the economy, ruble and impact of sanctions from the U.S. and Europe.

 
 

Even facing what under any circumstances is a perfect storm; President Putin delivered an extremely measured performance at his annual press conference and Q&A marathon.

The perfect storm evolves in two fronts; an overt economic war — as in siege by sanctions — and a concerted, covert, shadow attack to the heart of the Russian economy. Washington’s endgame is clear: impoverish and defang the adversary and force him to meekly bow to the “Empire of Chaos’ s” whims. And bragging about it all the way to “victory.”

The problem is Moscow happens to have impeccably deciphered the game — even before Putin, at the Valdai Club in October, pinned down the Obama doctrine as “our Western partners” working as practitioners of the “theory of controlled chaos.”

So Putin neatly understood this week’s monster-controlled chaos attack. The Empire has massive money power; a great deal of influence over the world’s GDP at $85 trillion, and the banking power behind that. So nothing easier than using that power through the private banking systems that actually controls central banks to create a run on the ruble. Think about the “Empire of Chaos” dreaming of driving the ruble down by 99% or so — thus wrecking the Russian economy. What better way to impose imperial discipline on Russia?

The “nuclear” optionRussia sells oil in US dollars to the West. Lukoil, for instance, would have a deposit in US dollars in an American bank for the oil they sell. If Lukoil has to pay wages in rubles in Russia, then they will have to sell the US dollar deposits and buy in Russia a ruble deposit for their bank account. This in effect supports the ruble. The question is whether Lukoil, Rosneft and Gazprom are hoarding US dollars overseas — and holding back. The answer is no. And the same applies to other Russian businesses.

Russia is not “losing their savings,” as Western corporate media gloats. Russia can always require foreign companies to relocate to Russia. Apple, for instance, may open a manufacturing plant in Russia. The recent Russia-China deals include the Chinese building factories in Russia. With a depreciated ruble, Russia is able to force manufacturing that might have been located in the EU to be located in Russia; otherwise these companies lose the market. Putin somewhat admitted that Russia should have been demanding this much earlier. The — positive — process is now inevitable.

And then there’s a “nuclear” option — which Putin didn’t even have to mention. If Russia decides to impose capital controls and/or imposes a “holiday” on repayment of larger debt tranches coming due in early 2015, the European financial system will be bombed — Shock and Awe-style; after all, much of the Russian bank and corporate funding was underwritten in Europe.

Exposure to Russia per se is not the issue; what matters is the linkage to European banks. As an American investment banker told me, Lehman Brothers, for instance, brought down Europe just as much as New York City – based on inter-linkages. And yet Lehman was based in New York. It’s the domino effect that counts.

Were Russia to deploy this “nuclear” financial option, the Western financial system would not be able to absorb a shock of default. And that would demonstrate — once and for all – that Wall Street speculators have built a “House of Cards” so fragile and corrupt that the first real storm turns it to dust.

It’s just a shot away

And what if Russia defaults — creating a holy mess out of the country’s $600 billion debt? This scenario reads as the Masters of the Universe telling Janet Yellen and Mario Draghi to create credits in the banking systems to prevent “undue damage” — as in 2008.

But then Russia decides to cut off natural gas and oil from the West (while keeping the flow to the East). Russian intel may wreak non-stop havoc in pumping stations from the Maghreb to the Middle East. Russia may block all the oil and natural gas pumped in the Central Asian “stans.” The result: the greatest financial collapse in history. And the end of the “Empire of Chaos’ s” exceptionalist panacea.

Of course this is a doomsday scenario. But don’t provoke the bear, because the bear could pull that off in a flash.

Putin was so cool, calm, collected — and eager to delve into details — at his press conference because he knows Moscow is able to move in total autonomy. This is — of course — an asymmetrical war — against a crumbling, dangerous empire. What those intellectual midgets swarming the lame duck Obama administration are thinking? That they can sell American — and world — public opinion the notion Washington (European poodles, actually) will brave nuclear war, in the European theater, in the name of failed state Ukraine?

This is a chess game. The raid on the ruble was supposed to be a checkmate. It’s not. Not when deployed by amateur scrabble players. And don’t forget the Russia-China strategic partnership. The storm may be abating, but the match continues.

Pepe Escobar is the roving correspondent for Asia Times. His regular column, “The Roving Eye,” is widely read. He is an analyst for the online news channel Real News, the roving correspondent for Asia Times/Hong Kong, an analyst for RT and (more…)

Do the Trans-Siberian shuffle -By Pepe Escobar

ASIA TIMES ONLINE

THE ROVING EYE
Do the Trans-Siberian shuffle
By Pepe Escobar

Published October 18, 2014

A specter haunts the elites of the Empire of Chaos; the new Russia-China strategic partnership. It’s manifesting itself in myriad ways – energy deals, investment deals, a closer political alliance inside the G-20, the BRICS and the Shanghai Cooperation Organization, a concerted effort to progressively bypass the petrodollar. I have described this long process as essential to the birth of the Eurasian century.

From a Washington/Wall Street point of view, it was so much easier in those long gone, unipolar, “end of history” days. China was still tiptoeing on the banks of the river of capital accumulation, and Russia was down if not out.

So allow me a flashback to the early 1990s. I had been on the road in Asia for months, from all points Southeast Asia to India, Nepal, the Himalayas and the eastern Chinese seaboard. Then I finally hit Beijing – waiting in the bitter winter of early 1992 to take the Trans-Siberian to Moscow. I was barely aware of the collapse of the Soviet Union – not exactly a news item in the Himalayas. I was also fortunate enough to be in southern China just a few days after Deng Xiaoping made his famous tour – whose key consequence was to catapult the dragon to dizzying development heights. A look back to those heady times may have the merit of illuminating our present.

All aboard the night train
It’s 8:32 pm in Beijing Railway Station, and the Trans-Manchurian Train 19 to Moscow is about to depart. It’s minus 9 degrees Celsius. A bunch of Romanian crazies are trying to load more than 20 huge, vaguely green bundles stuffed with Made-in-China gear into one of the carriages. The Russian comptroller spouts out a “Nyet”. Romanian chicks immerse in Transylvanic hysteria. Then a stash of George Washingtons changes hands at the final whistle, just in time for PLA soldiers and lady sweepers sporting the ubiquitous red armband with the words “Serve The People” to impassibly observe the happy ending.

A cacophony of Russians, Poles, Romanians, Czechs and Mongols has deployed dozens of bags, bundles and sacks to totally overload the train corridors. 300 kg of shoes. 500 kg of jackets. 200 kg of T-shirts. Thousands of beauty cream pots that will be all the rage from Bucharest to Cracow. A “bed” on the train is a concavity over one of the bundles. That will be story for six days, across over 9,000 snowy kilometers in the former USSR, now Russia, from East to West.

At the comptroller’s compartment, more bags – whose content will be sold in the streets of Moscow. With so many George Washingtons in sight, the success of her bazaar is guaranteed – what with multiple stops on the way and an unregulated “free” market in every platform. The whole of Eastern Europe is loaded with stuff and dying to make a quick buck.

In the Chinese stretch of the journey, nothing happens, unlike the 1930s, when Japan occupied Manchuria, installed puppet Pu Yi on the throne and was ready to take over Asia. The Terminator action starts in Zabaikalsk, at the Russian-China border – after we cross a huge Arc of Triumph in cement, complete with Leninist motto and not-yet-destroyed hammer and sickle. Customs – on both sides – is absolutely deserted.

The train changes configuration to adapt to the new tracks. Yet all sights are set on the new dining car; exit Chinese, which only offered a miserable pork with soya sauce; enter Russian, crammed with goulash, soup, salami, frozen fish, black caviar, champagne from Crimea, coffee, eggs, even cheese – everything on the black market paid with US dollars.

With the border behind us, it’s go-go bazaar time. Everyone freaks out, because we instantly move from Beijing time to Moscow time. Sunrise is at 1 in the morning. The black market is running at $1 = 110 roubles, the rouble in free fall as we cut through the sublime snowy infinite desert of the Siberian tundra, where each spectacular sunrise under a slight Arctic fog is an epiphany celebrated with more Crimea champagne.

Occasionally we spot reindeers or even huskies. The taiga – coveted by Japan, Korea and the US – is enveloped in snow. Beyond lay the ghosts of the 20 million corpses in Stalin’s gulags, the hunters of the rare Amu tiger (fewer than 200 left) and the sinister Norilsk complex; 2 million tons a year of sulphuric acid and other heavy metals dumped in the atmosphere – the reason for that Arctic fog.

The train stops stretch for 15 and even 20 minutes, reaching a nadir in Novosibirsk and Perm, which previously housed a notorious gulag. At every stop, hordes of Russians in Genghis Khan mode attack the train with little plastic bags. The best deal in the Trans-Siberian is anoraks and leather jackets. Jao, from Beijing, sells 50 in three days, at up to US$50 each; she paid $20 each in the Beijing hutongs. The Russians buy everything in sight and sell roubles – now plunging to 160 to the US dollar – as well as vodka, beer, salami, champagne and local $1 Pepsi bottles.

The whole of Eastern Europe has taken over Train 19. Post-Ceausescu Romanians are the most exuberant – from former boxers to hookers to a seedy gangster in a tracksuit boasting about his two hours with a Russian doll for $10 (the going rate is $20). There’s an Albanian contingent, young Polish students, shirtless Mongol nomads feverishly counting their profits, babushkas bored to death and even a loquacious Chinese dandy.

The Russian carriages, once elegant, are a mess: foul air, dense cigarette smoke, drenched in sweat, toilets crammed with sacks, and “Kapitan”, the only waiter, trying to make a quick buck selling Soviet paraphernalia. I find it the ideal setting to devour almost 1,000 pages of Norman Mailer’s Harlot’s Ghost, a history of the CIA.

Blame it on glasnost
Train 19 is not only a bazaar but also a multinational Agora. Young Russians elaborate how the almost genius perversity of the Soviet system led it to boost to the limit all the problems of modern industrial societies – offering nearly none of its benefits. Eastern Europeans volunteer that it was not the Cold War that finished off “real socialism”; it was the invasion of the capitalist economy combined with the inefficiency and “stupidity” (copyright by a Polish undergraduate) of the socialist economy.

Russians say that glasnost finished off authority and perestroika finished off the economy – and there was nothing to replace either. End result: physics graduates selling caviar tins in a moving train for survival. Everyone praises Gorbachev but essentially condemn him to a short historical footnote. In the train, I heard arguments that would be reproduced years later in countless US academic studies.

All the Trans-Siberian navigators exhibit a solidarity not to be found at the United Nations; they exchange currencies, swap addresses, lend money and the indispensable calculators, help to load and unload the loot, accept bundles in their compartment, offer their places for half an hour for those who only have the corridor to sleep, and crack jokes about the small Bank of China yuan bills. They are all ardent defenders of this unheard of form of direct democracy that is synonym with the end of the Cold War.

Amid the casino lurks the most improbable character: Lulu, a diminutive Bangladeshi, always attached to a Samsonite, dabbling in Allah-only-knows mysterious activities, passport filled with dodgy visas, Saudi Arabian included. Chinese and Russians treat him like an allergic Pekingese. Train chow is predictably unbearable for this strict Muslim, who wakes us all up everyday at 5 am with his prayers – Rashid Muhammad spends six days literally on bread and water.

Skolka? That’s the Trans-Manchurian bazaar motto, a preview of Moscow. Pink Floyd launched the legendary Dark Side of the Moon at the height of the Brejnev era; Moscow suburbs look like the ghostly, dark side of the moon. Stalin’s lunatic legacy is alleviated only by a solitary kiosk selling flowers, fruit or sweet Georgia brandy.

We arrive as zombies – and only a few hours late – at Yaroslavlsky Vakzal, one of nine Moscow train stations, where a deluge of Volga taxis fight for the precious Chinese cargo. Those moving on to Eastern Europe without a reservation are doomed: seats for Warsaw and Berlin are only available in 40 days.

In Shenzhen, Guangzhou, Shanghai and Beijing, I had witnessed the spectacular success of post-Tiananmen Chinese “market socialism”, where the economy was the locomotive and politics was dispatched to the bottom end of the train. Nothing more astonishing than the contrast with Moscow, where politics was the locomotive.

I’m housed by Dmitri, an odontology student, three metro stops from the Kremlin, paying $6 a day, a small fortune; he and his girlfriend precariously subdivide the two-bedroom, one-bathroom apartment with a whole family, dog included, besides the occasional Western visitors, who sleep in the master bedroom. This is considered an upper middle-class lifestyle.

At the beautiful metro stations, it’s the return of the Trans-Siberian bazaar; on sale are political or porno samizdats, second-hand clothes, bottles of every possible liquid. Only when I reach Red Square doI see the light; at the Himalayas and China, my time-zone was still on Gorbachev. What’s now at the top of the Kremlin is a Russian flag – as well as in the center of Dzerzhinsky square, in front of the KGB. As a perfect idiot, I aim for the statue of Felix Dzerzhinsky, the former head of the Soviet secret police, only to be warned by a student that it had been torn down weeks ago. Gorbachev is now a vodka brand. And I can’t get inside the KGB building.

The whole city is converted into a giant Turkish bazaar. After Boris Yeltsin liberated the sidewalks, everyone wants to exercise this privatizatsiya thing. Until 1990, nobody knew what a checkbook or a credit card was, and $1 was equivalent to 1 rouble. There are absolutely astonishing street markets on Prospekt Marka and Gorki street, everyone silently in line exhibiting their wares; a broken doll, a solitary shoe, dusty champagne bottles, perfume, instant coffee, sardine tins, an empty beer bottle.

The streets are filled with all the stuff brought by the Trans-Siberian navigators, but the supermarkets are empty. There’s very little milk or meat, but lots of canned fish and interminable lines to buy nothing – with potential consumers resigned to play chess.

The biggest hit in town is the new McDonald’s on Pushkin square – one of the busiest in the world, selling full meals for 50 cents by cashiers sporting an Eva Herzigova smile. In front of the MacD, a paper Gorbie poses for tourists, and a crowd sells caviar tins for $5 and champagne for $3. At the GUM department store, there is not much except a few Sony and Honda showrooms and a new Dior window.

The recent past does not let go; it’s impossible to call Europe. It’s impossible to send a fax from the Post Office. It’s impossible to make a train reservation. It’s impossible to make a plane reservation – at least on the Aeroflot shop in Lubyanka; only at the cavernous Intourist Hotel.

At the lugubrious ground floor of the Mockba Hotel, deaf and dumb characters straight out of an Ionesco play crowd the corridors while a beer black-market does brisk business in front of the hotel bar. A glass of champagne goes for 50 cents. At the hall of the legendary Metropol – the 1899 Grand Dame favored by Trotsky – a dry martini is a steep $7,70. The Metropol is the new Wall Street; Danes, Italians, Americans and Chinese discuss all deals this side of a Brave New World downing Heinekens at $5 a pop.

On Armed Forces Day, a Sunday, there’s a communist demonstration, repressed with tact, boasting large numbers of old ladies carrying flowers and flags. For their part, Moscow punks with anarchist flags protest against the Armed Forces. A pre-historic Volga takes me to Sheremetyevo as if I was running from a 1950s Cold War B-movie set. The Volga gurgles, stops, cools off, runs, gurgles, stops again, cools off; a metaphor of the new Russia, and I almost miss Aeroflot SU 576 back to Paris.

Nothing will ever be the (unipolar) same
Those were the days. That McDonald’s – symbol of unipolar, “end of history”, Pax Americana – has been recently shut down. It’s harder and harder for the Empire of Chaos to rule the world alone while McDonald’s serves burgers. Across Pushkin square, the fashionable Cafe Pouchkine now serves the best of Russian haute cuisine.

And still, both Russia and China are seen as pariahs by the unipolar, imperial elite. It’s as if we were still frozen in those early1990s days. Russia and China may have changed almost beyond recognition – but for the Empire of Chaos the priorities are to tear Russia apart, starting with Ukraine, and “pivot to Asia” via an anti-China military/economic axis in the Western Pacific.

Meanwhile, the Trans-Siberian will soon be linked with the Chinese-driven New Silk Roads. And then one day in the early 2020s this will all be a high-speed rail network, linking Eurasia in a flash. And nothing will ever be the (unipolar) same. Except for the back-to-Russia Crimean champagne.

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).

 

(Copyright 2014 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

A Caliph in a wilderness of mirrors – By Pepe Escobar

THE ROVING EYE
A Caliph in a wilderness of mirrors
By Pepe Escobar

I’m aiming at you, lover
Cause killing you is killing myself

Orson Welles (director), The Lady from Shanghai,1947

 
 
He’s invincible. He beheads. He smuggles. He conquers. He’s the ultimate jack-of-all-trades. No Tomahawk or Hellfire can touch him. He always gets what he wants; in Kobani; in Anbar province; with the House of Saud (which he wants to replace) trying to make Putin (who he wants to behead) suffer because of low oil prices.

If this was a remake of Orson Welles’s noir classic The Lady from Shanghai, in the mirror sequence the lawyer (American?) and the femme fatale (Shi’ite?) would also get killed; but The Caliph of the Islamic State would survive as a larger than life Welles, free to roam, plunder and “give my love to the sunrise” – as in a Brave Caliphate World shining in “Syraq” over the ashes of the Sykes-Picot agreement.

If this was a remake of Orson Welles’s noir classic The Lady from Shanghai, in the mirror sequence the lawyer (American?) and the femme fatale (Shi’ite?) would also get killed; but The Caliph
of Islamic State would survive as a larger than life Welles, free to roam, plunder and “give my love to the sunrise” – as in a Brave Caliphate World shining in “Syraq” over the ashes of the Sykes-Picot agreement.

He’s winning big in Iraq’s Anbar province. The Caliph’s goons are now closing in on – of all places – Abu Ghraib; Dubya, Dick and Rummy’s former Torture Central. They are at a mere 12 kilometers away from Baghdad International. A shoulder-launched surface-to-air missile (or MANPAD) away from downing a passenger jet. Certainly not an Emirates flight – after all these are trusted sponsors.

Hit, in Anbar province, is now Caliph territory. The police forces and the province’s operational command have lost almost complete control of Ramadi. The Caliph now controls the crucial axis formed by Hit, Ramadi, Fallujah; Highway 1 between Baghdad and the Jordanian border; and Highway 12 between Baghdad and the Syrian border.

The Caliph’s goons are no less than taking over the whole, notorious Baghdad belt, the previous “triangle of death” in those hardcore days of American occupation circa 2004. Message to Donald Rumsfeld: remember your “remnants”? They’re back. And they’re in charge.

Both Ramadi and Fallujah have been reduced to an accumulation of bombed-out schools, hospitals, homes, mosques and bridges. Residential streets are virtually deserted. According to the United Nations, there are a least 360,803 internally displaced persons in Anbar, as well as 115,000 others in areas under The Caliph’s control. At least 63% of the 1.6 million people living in the province are classified as “in need” – with hair-raising minimal access to water, food and health care, and receiving little to absolutely zero humanitarian support from that fiction, the “international community.” US Ambassador to the UN Samantha Power is not screaming her lungs out for R2P (“responsibility to protect”).

How could the Pentagon’s spectacular Full Spectrum Dominance possibly not see any of this happening? Of course they see it. But they don’t give a damn. The Pentagon occasionally uses AH-64 Apache helicopters to attack some of The Caliph’s goons in Ramadi and Hit. But Apaches can be easily hit with MANPADS. They are stationed at Baghdad International and their only mission is to protect the airport. Who cares about local, civilian “collateral damage”?

Married to the Mob
In Kobani, the former third-biggest town in Syrian Kurdistan, in the far northeast, The Caliph also wins big. Another biblical exodus has reached 300,000 refugees – and counting, with over 180,000 headed to Turkey.

The Caliph counts on indirect help from The Sultan (or alternate Caliph), aka Turkish President Tayyip Erdogan. Tehran is – rightfully – furious, as it sees the “West” – and Turkey – betraying the Kurds all over again. It’s no secret Sultan Erdogan is doing nothing because he wants to screw the guerrillas of the Kurdistan Workers’ Party (PKK) and the Syrian-Kurdish Democratic Union Party (PYD); let them die instead of repelling The Caliph and then be strong enough to threaten Turkish domination of those huge, essentially Kurdish patches of Anatolia. Thus the only thing Sultan Erdogan does support is aimless bombing by the Pentagon cum coalition of the clueless-cowards.

Anybody who believes the US Central Command’s spin that House of Saud and United Arab Emirates fighter jets conduct “bombing raids” on the outskirts of Kobani gets a one-way ticket to Oz. Imagine these clowns being able to deploy precision-guided bombs or trained laser spotters. To start with, the Pentagon has zero local intel – as in zero operatives able to paint lasers on targets. Thus the “coalition” can barely hit the odd tank (out of 25 around Kobani) or Humvee out of 2,000 crammed in a valley for almost two weeks now.

But the “coalition” certainly is able – miraculously! – to hit Syrian state infrastructure, as in energy installations. In June, the official Pentagon excuse was, “We don’t have any drone assets in Iraq.” Now there’s no excuse for drones which can read a “Smoking Kills!” warning in a packet of Marlboros not hitting The Caliph’s assets in Kobani – or in Anbar province for that matter. So it’s down to a mix of incompetence and neglect. It was so much easier to hit Pashtun wedding parties in the Waziristans. Especially because no one was paying attention.

Erdogan’s own goons, meanwhile, have instituted a curfew on all major towns and cities in southeast Anatolia, and are even gunning down peaceful Kurdish protesters. Fifteen million Kurds in Anatolia cannot be wrong; Erdogan wants Kobani to fall. Ankara remains for all practical purposes the top logistical hub for The Caliph’s goons. The Sultan is using The Caliph as a proxy army to smash the Kurds.

Terminal evidence has been offered by the leader of the Kurdish PYD, Salih Muslim, meeting Turkish military intel and asking for help. Conditions: abandon any hope of self-determination for Syrian Kurds; give up all your self-governing towns and regions; and watch as we install a Turkish “buffer”/no-fly zone inside Syrian territory.

Don’t expect the Obama “Don’t Do Stupid Stuff/We Have No Strategy” administration to sentence, “Erdogan must go”. Besides, the pathetic club of National Security Advisor Susan Rice and her deputy Ben Rhodes has no clue about what’s goin’ on.

To the Green Zone!
Tehran, for its part, has clearly identified Erdogan’s nasty game. The Sultan knows monster B1-B bombers flying over Kobani are absolutely useless – while The Caliph’s goons deploy massive car bombs and keep advancing. “Boots on the ground” will be needed. Enter NATO asset Turkey. But with one condition: regime change in Damascus, or at least a prelude, via that “buffer”/no-fly zone over Syria.

The Big Picture remains the same. Sultan Erdogan and the House of Saud want regime change in Damascus (Erdogan dreams of a Sunni puppet as a vassal of Ankara; the Saudis want their own Wahhabi schemer). Israel merrily agrees. And if that comes with a bonus – attacking the new Iraqi government, still supported by Iran, in the American-made Green Zone – even better. The lowdown: “Don’t Do Stupid Stuff” translates as the Gulf Cooperation Council, Turkey and Israel using Washington to advance their quite explicit agenda.

Sultan Erdogan, as a Mob boss, does seem to have learned a thing or two from watching Martin Scorsese’s Goodfellas. He’s extracting the maximum pound of flesh from the bewildered “Don’t do Stupid Stuff” team. The Sultan is boldly aiming at Turkish boots on the ground gloriously invading Syria in NATO “humanitarian intervention” mode. And all this sold as NATO offering “protection” to a member-nation. NATO’s new secretary-general, former Norwegian Prime Minister Jens Stoltenberg, has just been to Ankara. Saudi Arabia has already “voted” out loud for the “buffer”/no-fly zone. Same for General Francois Hollande, that pitiful excuse for President of France.

Once again, it’s Tehran to the rescue. The Foreign Ministry has duly announced Iran is ready to liberate Kobani from The Caliph’s goons (and they can do it) if Bashar Al-Assad says the word. Now that’s how you work the chessboard; NATO is left with zero excuses to mount an invasion of Syria, whatever Mob Boss Erdogan comes up with.

Operation Hands Off My Toyota
The Caliph also wins big in the “bleeding the Pentagon” department. A single US “strike” against his goons – involving F-15s, F-16s or F-22s – costs up to US$500,000. The Pentagon has just revealed it has spent no less than $1.1 billion against The Caliph since June.

What for? Virtually all the assets being destroyed by American bombing are made in the USA, deployed to the Iraqi army and then duly captured during The Caliph’s offensive. So here we have the Empire of Chaos spending a fortune from the US Treasury to smash tanks, Humvees and other gear already paid for by American taxpayers. No wonder taxpayers are fuming. Thus Operation Hands off My Toyota.

Additionally, the Pentagon does not have a clue on how to build its Obama-designed proxy “rebel” force to fight The Caliph (with no US soldiers or marines; only fanatic Wahhabis and assorted mercenaries).

To start with, they have no clue who the hell qualifies as a “moderate rebel”. The rabble must be “vetted” – and then sent to, of all places, Saudi Arabia for training. There the guy in charge will be – who else – a Special Ops honcho, Major General Michael Nagata. Even under the most optimistic scenario, the Pentagon won’t have its proxy “moderate rebel” army on the ground in Syria before the summer of 2015.

Hefty bottles of Chateau Margaux can be bet that all this prime US weaponized know how will ultimately end up captured by The Caliph’s goons. Same applies to reliable “rebel” intel on the ground.

But the real Dadaist masterpiece is that first these “rebels” will be politely asked by the Pentagon to forget about getting rid of Assad to fight The Caliph. At least for a while. Re-enter Stoltenberg, the new NATO head: “Next year, at the ministerial meeting, we will take decisions regarding the so-called spearhead but, even before it is established, NATO has a strong army after all. We can deploy it wherever we want to.” OK, tough guy; why not “Syraq”?

If this all sounds like a plot straight out of hit series Blacklist, that’s because it is. Why not get Red (James Spader) to fight The Caliph? And then again, what if Red is The Caliph? He pretends to fight himself – and he wins, handsomely. Back to Welles’ The Lady from Shanghai: “Killing you is killing myself”. Yet nobody could possibly want The Caliph dead when he’s such a smashing, undisputed box-office success.

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).

(Copyright 2014 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

Pure War in Tehran – By Pepe Escobar

ASIA TIMES Online

THE ROVING EYE
Pure War in Tehran
By Pepe Escobar

I’ve just spent a frantic week in Tehran. Before departure, I had made a conscious decision; only one book in the backpack. Maximum concentration. I ended up choosing Pure War, the 2008 reprint by Semiotext(e) in LA of the 1983 Paul Virilio classic I had picked up at the revamped Foyles in London a few days back.

For a roving correspondent, going to Iran is always extra-special. Getting a press visa approved usually takes ages. This was my sixth trip – and I had no visa. Just a number, tied to a visa at the airport. Until the last minute, I thought I’d be deported from Imam Khomeini International – back to Abu Dhabi, which is now pretending to bomb The Caliph. Then, a small miracle; a VIP room, a visa in 10 minutes and the next I know I’m zooming into an eerily deserted Tehran at sunrise on a Friday, past the psychedelic space station decked in green that is Imam Khomeini’s shrine.

Why Virilio? Because he was the first to conceptualize that with the explosion of asymmetrical warfare, Total War had become local – on a global scale. I expanded on the theme in my 2007 book Globalistan and in my writings. Washington and Tel Aviv had been threatening to bomb Iran for years. Virilio was the first to assert that “peace” merely extends war by other means.

May 1968 as a theatre of the mind – a theatre of the imagination. When society could be an artwork, a performance, with the crowds in the street as the chorus. The last creative reaction against consumerism. “Power to the imagination”.

A beautiful sunny morning in front of the Foreign Ministry compound. An exhibition/installation about the “imposed” – as it’s widely known – Iran-Iraq war. A reconstructed minefield; a map of nations weaponizing Saddam; pictures of young fighters/martyrs who wouldn’t have been older than 14. A theatre of painful remembrance. In late 1978, Tehran also had its crowds in the streets as chorus – against the shah. Khomeini was a reaction against consumerism; but was he “power to the imagination”? And then, all was engulfed in a theatre of cruelty – the tragedy of the “imposed” war.

War in the journalistic sense is national delinquency elevated to the scale of an extremely important conflict – It’s the equivalent of the “tumults”, as ancient societies called them. We can no longer even speak of wars, they are interstate delinquencies. It’s State terrorism.

In Tehran, my immensely gracious hosts were the organizers of New Horizon: the International Conference of Independent Thinkers. After plenty of twists and turns, the Foreign Ministry ended up also being involved. The conference issued a important resolution condemning ISIS/ISIL/The Caliph; Zionism; Islamophobia; sectarianism; and Washington’s blind support for anything Israel unleashes over Palestine: Israel’s national delinquency, or State terrorism. The conference also called for cooperation and understanding between the West and Islam: that implies a struggle against interstate delinquencies.

The best defense is to attack; and to attack you must have some ideas; right now there aren’t any ideas. Imagination today is in the image, and the image is in power. There’s no imagination for anything but the image.

I have to leave a fabulous open-air traditional Persian dinner to go to Press TV studios for a debate with notorious neo-con Daniel Pipes about ISIS/ISIL/Daesh. We surprisingly agree more than I would normally expect. Well, not hard considering the Obama administration’s non-strategy “strategy”; an image (bombs and Tomahawks) fighting an image (The Caliph’s carefully edited beheading show).

Meanwhile, President Hassan Rouhani’s speech at the United Nations kept making waves; “Extremists threaten our neighbors, resort to violence and shed blood.” It’s “the people in the region who can deliver” in the fight against The Caliph. Rouhani was not exactly referring to the made in USA jets allegedly deployed by the Gulf Cooperation Council coalition of the clueless/cowards; the House of Saud, UAE, Bahrain and associate member Jordan.

In all my conversations, a consensus emerges; the power vacuum of post-2013 Shock and Awe and occupation led to the rise of al-Qaeda in Iraq and eventually ISIS/ISIL/Daesh. But even as Tehran and Washington may have flirted about a joint move against The Caliph, Washington then denied it wanted help and Tehran rejected it outright.

Still, what Rouhani said in New York kept echoing day after day everywhere in Tehran; weaponizing the “new” Free Syrian Army in Saudi Arabia, of all places, amounts “to train another group of terrorists and send them to Syria to fight”. And Washington’s “strategy” is further enabling hardcore Sunni dictators who’ve made their careers demonizing Shi’ites.

And then that other “unofficial” Caliph, neo-Ottoman Recep Tayyip Erdogan, stepped in; there would be no use of Turkish “territory” or “military bases” by the “coalition” if “the objective does not also include ousting the Bashar al-Assad regime”. Who needs Caliph Erdogan to fight Caliph Ibrahim? Major General Qassem Suleimani, head of the Iranian Quds Force, can do it; his picture, side by side with Kurdish peshmergas, made a splash all over Iran when published by IRINN.

The cinema shows us what our consciousness is. Our consciousness is an effect of montage – It’s a collage. There is only collage, cutting and splicing. This explains fairly well what Jean-Francois Lyotard calls the disappearance of the great narratives. Classless society, social justice – no one believes in them anymore. We’re in the age of micro-narratives, the art of the fragment.

The joy of Laleh park – a Persian park crisscrossed by stray Persian cats as well as accomplished volleyball and badminton players and pram-pushing families. That’s where Arash Darya-Bandari, medievalist extraordinaire with many years spent in the Bay Area, gives me a crash course on the finer points of one of the great surviving narratives; Shi’ism and Khomeini’s concept of velayat-e-faqih. In Pure Non-War terms, this was always supposed to be about social justice. And that’s why it’s unintelligible to turbo-capitalism.

The park as Agora; a garden of intellectual delights. Nearly all my top conversations took place walking across or around Laleh park. And then one night, I went for a solitary walk, just to find a revolutionary movie/performance on a makeshift stage, complete with a trench and mortars. An audience of a few solitary men and some scattered families. The cinema keeping the consciousness of the Iran-Iraq war alive.

The end of deterrence corresponds to the beginning of the information war, a conflict where the superiority of information is more important than the capability to inflict damage.

The New Horizon conference could not but be about information war. The overall theme was the fight against the Zionist lobby. Everyone knows what the lobby means and how it operates, especially in the US. And yet, in my short interventions, at the Foreign Ministry and at the conference, I preferred to focus on its global financial/economic reach. Follow the money. That’s the only way to pierce the lobby’s seemingly invincible armory.

Another face of information war. Everywhere I went, I had the pleasure to see how Gareth Porter’s book – Manufactured Crisis: The Untold Story of the Iranian Nuclear Scare – was received as a blessing. The book was translated into Farsi by the Fars News Agency, in only two months, with meticulous care, and launched in a simple ceremony.

It’s bound to become a best seller – as it conclusively proves, for instance, how the Iranian “plot” to equip missiles with nuclear warheads was entirely fabricated by the terrorist outfit Mujahedin-e Khalq (MEK) and then handed over to the International Atomic Energy Agency by the Mossad. Contrast the respect shown to Gareth in Tehran to the wall of silence of its US reception – just another reflection of the 35-year-old “wilderness of mirrors” opposing Washington to Tehran.

Predictably, the usual illiterate morons in the US dubbed the conference as an “anti-Semite hate fest”. Gareth was described as “an anti-Israel journalist” and myself as “a Brazilian anti-Israel journalist”. Obviously the moronic inferno is not familiar with the concept of “foreign policy”.

Space is no longer in geography – it’s in electronics. Unity is in the terminals. It’s in the instantaneous time of command posts, multinational headquarters, control towers, etc. Politics is less in physical space than in the time systems administered by various technologies. ? There is a movement from geo- to chronopolitics: the distribution of territory becomes the distribution of time. The distribution of territory is outmoded, minimal.

Time to go to the bazaar – the ultimate urban distribution of territory. At the main entrance, a gaggle brandishing calculators and pieces of paper is involved in an incredible racket. With Roberto Quaglia – author of a wicked debunking of the 9/11 saga – we joke this looks like a slaves market. Not really. This is nothing less than a futures market on the course of the rial. With the national currency fluctuating so much because of the sanctions – it lost three quarters of its value in the past few years – the chance to make a bundle is irresistible.

We meet the beautiful Zahra – she sells handmade towels but is essentially a killer fashion photographer. And then the ritual I’ve loved since forever; haggling for the perfect tribal rug. In this case, a Zaghol from the 1930s, never to be reproduced because the local nomads are becoming sedentary and there are no new weavers. A case of distribution of territory becoming the distribution of (lost) time.

The Pharaohs, the Romans, the Greeks were surveyors. That was geopolitics. We’re no longer there, we’re in chronopolitics. Organization, prohibitions, interruptions, orders, powers, structurings, subjections are now in the realm of temporality. And that’s also where resistance should be.

Which lead us, once again, to sanctions. Much had been made of what Rouhani told Austrian President Hans Fisher at the UN – about Iran being ready to deliver gas to the European Union. That’s not happening tomorrow; the last figure I had, in Tehran, years ago, is that the country would need at least US$200 billion in investments to upgrade its energy infrastructure. Rouhani was forced to clarify it. And Tehran won’t sell itself to the EU on the cheap.

The end of sanctions is all about chronopolitics.

We have entered an age of large-scale terrorism. Just as we speak of petty delinquency and major delinquency, I think the same should be said of petty and major terrorism. … The military-industrial and scientific complexes continue to function on their own momentum. It’s a crazy engine that won’t stop.

Tehran thinks about the crazy engine all the time. I’m sort of “kidnapped” from a meeting and end up in a small think tank with a fabulous map on the wall detailing the US command centers. All the students are eager to know what the Empire is really up to with Iran.

A visit to the “nest of spies” – the former US embassy – is also inevitable. An apotheosis of 1970s technology – immaculately preserved like nowhere else in the world; radio equipment, proto-computers, telephones, telexes, rolodexes, a “forgery room” for fake passports. No wonder Washington could never recover from the loss of this sterling listening post of the whole Middle East. Will this building ever be a “normal” US embassy again? Someone should ask the hick Hamlet who almost turned into a mad bomber.

This is why the airport today has become the new city. ? People are no longer citizens, they’re passengers in transit. No longer a nomad society, in the sense of the great nomadic drifts, but one concentrated on the vector of transportation. The new capital is … a city at the intersection of practicabilities of time, in other words, of speed.

The last day had to contain an epiphany. I waited for it all day long – amid myriad interviews and a fabulous Indian lunch in North Tehran with Gareth and Dr Marandi of the Faculty of World Studies, University of Tehran; the ideal Platonic banquet of conviviality and intellect. Then, at night, a mad dash across town to the Rey shrine; working-class neighborhood, foundation stone of Tehran, one of the top pilgrimage sites in Iran alongside Qom and Mashhad.

Aesthetic illumination meets sensorial overload meets spiritual pull – with an extra kick because you’re arguably the only Westerner in sight. Tens of thousands of pilgrims honor the death of Imam Ali’s son-in-law. What’s that thing about the death of grand narratives? Not in deep Iran.

And then it’s all over, as in a Coleridge dream; did I dream this fleeting Persian interlude, or did Tehran dreamed a little dream of me? I’m back to my default mode – the essential passenger in transit; a nomad carpet, a backpack and a boarding pass. Next stop; a faceless city in an intersection of speed.

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).

The coalition show, from Afghanistan to ‘Syraq’ – By Pepe Escobar

An Islamic State militant (L) stands next to residents as they hold pieces of wreckage from a Syrian war plane after it crashed in Raqqa, in northeast Syria September 16, 2014. (Reuters/Stringer)

An Islamic State militant (L) stands next to residents as they hold pieces of wreckage from a Syrian war plane after it crashed in Raqqa, in northeast Syria September 16, 2014. (Reuters/Stringer)

Published: September 23, 2014 15:26

By Pepe Escobar

Pepe Escobar is the roving correspondent for Asia Times/Hong Kong, an analyst for RT and TomDispatch, and a frequent contributor to websites and radio shows ranging from the US to East Asia.

US Secretary of State Kerry brokered a deal in Afghanistan, installing a ‘coalition’ government, but couldn’t come up with a credible coalition to bomb IS in Syria. So the Pentagon will do it alone to the applause of its Gulf ‘petrodollar allies.’

This is a short tale of two coalitions.

Let’s start with Afghanistan. The charade in Kabul goes by the name of “power-sharing agreement.”

You got an election problem? Call John Kerry. That’s right; this “agreement” was brokered by none other than the US Secretary of State, who shoved the embarrassing issue of a tainted democratic election under an Afghan carpet.

It came to the point that a UN representative, Jan Kubish, virtually ordered the Afghan electoral commission not to release vote numbers.

And this is while the UN itself had been monitoring an audit and a recount of approximately 8 million votes.

The predictable “senior US officials” spun that the vote result was “transparent.” But still, no numbers.

So now we have – essentially appointed by Washington – former Finance Minister and World Bank official Ashraf Ghani as President, and Dr. Abdullah Abdullah as “Chief Executive”, a new post.

And this after Abdullah insistently claimed the vote results were no less than a monster fraud. US “Think Tank-land,” unfazed, has called it a “temporary fix.”

U.S. Secretary of State John Kerry (Reuters/Gary Cameron)

U.S. Secretary of State John Kerry (Reuters/Gary Cameron)

Now for the all-important breakdown: NATO top honcho Gen. Philip Breedlove said Saturday in Lithuania that both “power-sharers” swore on their lives they will “quickly” sign a security agreement with Washington.

This agreement was brokered, once again, by Kerry and outgoing President Hamid Karzai in late 2013 – and approved by Afghanistan’s Loya Jirga. Karzai though had refused to sign.

Short translation: at least 10,000 American troops – mostly Special Forces – will remain deployed in Afghanistan in Enduring Freedom Forever mode. This is a Status of Forces Agreement (SOFA) by any other name.

So the occupation continues. Not only with US troops, but also with NATO starting a “training mission” in January 2015 called Resolute Support.

Watch out for major, certified blowback. It’s a no-brainer the Taliban will keep showing Resolute Support to kick NATO and the US’s collective behind.

But that’s great. That’s exactly what the never-ending GWOT (Global War on Terror) is all about.

When in doubt, bomb everybody

Now for the coalition to fight Caliph Ibrahim, the self-appointed beheading prophet of ISIS/ISIL/IS in “Syraq”.

US ambassador to the UN Samantha Power has been on a roll ahead of the UN summit this week in New York.

She frantically spun there are over 40 countries in the coalition of the reluctantly willing assembled to fight the Caliph.

But she won’t name them – or detail what they will be doing.

What she does know is that this new GWOT chapter will last “several years.”

Power also ruled out any collaboration with “rogue” Iran. But she was forced to admit that Russia has a role in fighting the Caliph.

Now that’s groundbreaking. Until virtually yesterday, for the Obama administration Russia was the “evil empire” remixed.

Moscow did warn that, “bombing Syria without the cooperation of Damascus can have destructive practical consequences on the humanitarian situation in Syria.”

Once again, the clearest Power got was to specify that, “we will not do the airstrikes alone if the President decides to do the airstrikes.”

People view the debris of their homes after a Syrian war plane crashed in Raqqa, in northeast Syria September 16, 2014. (Reuters/Stringer)

People view the debris of their homes after a Syrian war plane crashed in Raqqa, in northeast Syria September 16, 2014. (Reuters/Stringer)

And once again, John Kerry stole the show. For him, it’s not 40, but “some 50” countries who are barely containing themselves to go Caliph-hunting.

Kerry, to his credit, and unlike Power, at least is now saying that Iran may “have a role” after all.

For his part, Iranian Deputy Foreign Minister Abbas Araghchi made it clear that any strategy that undermines the Syrian government “will be a recipe for defeat.”

And Russia’s ambassador to the UN Vitaly Churkin demolished US President Barack Obama’s strategy to train and weaponize Washington’s mythical “moderate” Syrian rebels.

Even China’s ambassador to the UN Liu Jieyi carefully weighed in: “The international community should respect the sovereignty, independence and territorial integrity of the countries in question.”

Kabul was a piece of cake. Kerry just had to offer a decent bribe. But that won’t fly with the Caliph business.

Washington refuses to cooperate with Damascus and coordinate with Tehran – especially after Supreme Leader Ayatollah Khamenei vetoed it, and President Rouhani blasted Obama’s strategy as “ridiculous.”

Meanwhile Turkey, a NATO ally, is screaming, “The Syrian regime is the patron of extremism,” in the words of Turkish Foreign Minister Mevlut Cavusoglu.

Kerry at least does not need to bribe Haider al-Abadi, the new Iraqi Prime Minister. After all Washington already bagged its Mesopotamian regime change, getting rid of Nouri al-Maliki.

Al-Abadi decided not to bomb Sunni regions in Iraq. Yet most of the Caliph’s resources and goons are actually in Syria.

Call the French fry guy

The Pentagon, not to be unfazed, carefully prepared a “mini-Shock and Awe” in Syria and started in style this Monday, launching a barrage of Tomahawk missiles on Raqqa.

“General” Hollande in France has been eager to join. With his popularity numbers glamorously flirting with zero, deploying Rafales against the bad guys is the only game in town for him.

Now compare it with Germany, as Foreign Minister Frank-Walter Steinmeier insisted that air support or ground troops are “out of the question for us.”

It’s hard to see Kerry bribing Steinmeier. So what’s left is a coalition of two: Washington and Paris.

And it’s only in Iraq, because “General” Hollande already said bombing Syria is out.

The breakdown: bombing Syria will be via a coalition of the Pentagon with the Pentagon.

And this while Arab “diplomats” – as in the GCC (Gulf Cooperation Council) petrodollar gang – keep insisting the Pentagon should in fact bomb not only the Caliph’s goons but also Bashar al-Assad’s forces.

Which is what the Pentagon will “secretly” have in mind anyway.

Everyone remembers Obama’s red line last year when he threatened to bomb Damascus for “gassing its own people” just for Moscow to have him back off at the eleventh hour.

Now Obama could fulfill his dream via a “leading from behind” bombing.

Will the petrodollar gang also attack? Of course not. They will be applauding from the sidelines.

And for the doubters, there will always be Obama’s national security adviser, Susan Rice, spinning “this will be a unified coalition…It will be cohesive. And it will be under one single command authority.”

The Pentagon commanding the Pentagon. What could possibly go wrong?

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.