Iceland Shows Other Europeans How to Survive Bankruptcy

Greece’s Prime Minister Alexei Tsipras – June 5, 2015

Taxpayers in Europe (and the United States) who have been terrorized since 2008 by government officials warning about economic armageddon, catastrophe, and pestilence should look to tiny Iceland for a taste of how little there is to fear when the experts can’t save the people.

Christine Lagarde, managing director of the International Monetary Fund, recently branded Iceland’s economic performance “impressive.” In the last few years the small island in the north Atlantic has managed to shrink its deficit, reduce unemployment, and allow its economy to grow. [ Well, that means the IMF’s “austerity” reforms don’t work ]

Meanwhile, on mainland Europe, there is hardly any economic growth to be seen, and countries that pledged to make necessary austerity reforms have almost certainly failed to do so.

Government growth, fiscal activism, and national resentment are the norm. Officials from the eurozone have been trying to help heavily-indebted nations like Greece, Portugal, and Italy avoid banking-system collapse and exit from the single currency. Were they to examine Iceland’s example they might find that temporary financial collapse and monetary sovereignty provide a better roadmap to economic recovery than bailouts backed up by unpopular and unenforceable “austerity” conditions.

Iceland, like the rest of Europe, was faced with an almost unprecedented economic situation in 2008. Iceland’s central bank tried to rescue some of the country’s largest banks, bankrupting itself in the process. Iceland’s largest banks held almost 10 times Iceland’s GDP in assets (much of it foreign) in 2008. The central bank was forced to attempt the rescue after agreeing to guarantee future bailouts in 2001. With the central bank out of commission and a crippled financial sector, Iceland’s GDP took a nosedive.

Because so many of the assets held by Icelandic banks were foreign, the diplomatic fallout was almost as severe as the economic one. The British prime minister at the time, Gordon Brown, invoked anti-terrorism legislation in a bid to freeze assets of one Icelandic bank in the United Kingdom.

[But who are the real terrorists in this case: IMF, British Prime Minister, the European Central Bank, and the European Union? ]

 Iceland’s GDP per capita (in current U.S. dollars) was a little over $65,500 in 2007; in 2009 it was almost $38,000. It would be cruel to overlook the effect a sudden loss in wealth like this had on the average Icelander’s economic well-being. Having investments you thought were safe vanish is unfortunate at best and tragic at worst. However, the economic future of young Icelanders will almost certainly be substantially better than that of their peers in Greece.

Icelanders will do better than Greeks precisely because financial institutions collapsed in Iceland, ironically in part because of mechanisms in place requiring bailouts from the Icelandic Central Bank. Economic collapse allowed for proper refinancing. Greece has suffered from too much attention, and because of all of that attention, the actual size of the Greek economy has been forgotten.

Greece’s GDP is roughly the size of Maryland’s, about $300 billion. The eurozone as a whole has a GDP of almost $12 trillion. Figures like these only highlight the strictly political motiviations behind the attempted rescue of Greece by the rest of the eurozone. Certainly, a Greek exit from the eurozone would be a major event. However, Iceland’s example shows that letting financial institutions fail allows for strong and comparatively quick recoveries following a period of economic hardship.

Unsurprisingly, government attempts to fix the European financial crisis have made the situation worse and humiliated the most affected countries the most severely. Had Greece been left to default on its debt and leave the eurozone early, the effects, economic and political, would have been much less dire in comparison to the effect of a Greek exit now. What is forgotten about the example of Iceland is that although the initial international reaction to Iceland’s collapse was anger, the country’s reputation recovered. The animosity brewing between the Greeks and other Europeans (especially Germans) will not diminish within a matter of months. Too often the cultural changes that are happening in Europe are overshadowed by the economic fiasco.

The comparison between Greece and Iceland is not perfect. If Greek GDP, at $300 billion, puts it on par with the Old Line State, Iceland’s, at just $15 billion, puts the island nation below even Vermont, the U.S. state with the lowest GDP. But so what? The economic stagnation caused by Too Big To Fail, of which the Euro “crisis” is only the most monstrous example, resulted from policymakers believing that the same math you know to be true at the local level does not apply at the macro level. The central bankers are wrong about that, and the example of Iceland provides Greece and the rest of mainland Europe with a valuable example.

Unfortunately, it looks like it will be a lesson learned in hindsight. How severe the effects of fiscal and monetary activism will be on the eurozone will depend in part on how quickly continental policymakers can abandon their political agenda and focus on the economics.  

The War in Ukraine: Editorial in The New York Times Suggests US Is Looking for a Face-Saving Way Out

The New York Times recommends a diplomatic settlement of the Ukrainian conflict based on the Russian proposal of a year ago for Ukraine’s federalisation.

In-depth Report:

putin-nato-russia-ukraine_si-400x224The editorial in the New York Times we attach below is the first belated acknowledgement that the only way of saving Ukraine and ending the war is by conceding federalisation to Ukraine’s eastern regions.

We do not know for sure  whether this editorial reflects official US thinking. However, the probability is that it does.

Firstly, it is not unheard of for the US government to float ideas in this way through editorials in the New York Times. The New York Times is regularly chosen to do this because of its reputation and because it is widely read abroad.  The British government used to use the Times of London in the same way.

We have previously reported the concerns of some officials within the US government at the way in which the Ukrainian crisis is leading US relations with Russia into an impasse.

It is at least possible that with the war going disastrously wrong for Kiev and with the US administration looking increasingly short of options, the US administration is now trying to find a face-saving way out by finally embracing the federalisation solution that the Russians proposed last spring.  If so then this editorial, which will surely be read in Moscow, is intended as as an olive-branch.

The following words give the clear impression that a concrete offer has been made to Moscow through diplomatic back-channels. The carefully chosen words clearly convey the sense that the authority of the US government lies behind them:

“Russian officials have suggested that Moscow has no interest in annexing eastern Ukraine, the way it grabbed Crimea, but rather seeks a Ukrainian federation in which the pro-Russian provinces would have relative autonomy, along with assurances that Ukraine will not move to join NATO.

There is definitely potential for negotiations there……..

Tempting as it is to focus on punishing Mr. Putin, the greater objective must be to end the fighting so that Ukraine can finally undertake the arduous task of reforming and reviving its economy. Toward that end, the West must make clear to Mr. Putin that if a federation is his goal, the United States and its allies will actively use their good offices with Kiev to seek a workable arrangement.”

Poroshenko has just issued another statement ruling out federalisation.  This also suggests we are looking at an actual behind-the-scenes offer.  We have already explained why for Maidan talk of federalisation is anathema.  Poroshenko’s words suggest he knows of the US initiative and is trying to scotch it and to make his opposition to the idea clear before Secretary Kerry flies to Kiev as he is due shortly to do.

Moscow and the rebels are however unlikely to take up the offer.

The Russians pushed strongly for federalisation of Ukraine’s eastern regions following the February coup.  On 17th April 2014 a Statement was agreed by the US and Russian foreign ministers, John Kerry and Sergei Lavrov, in Geneva, and was signed by the EU and the Ukrainian government, that called for constitutional negotiations between the various Ukrainian parties. These were obviously intended to lead to a constitutional settlement that would have led to federalisation. Many people in the Donbass at the time of the independence referendum of 11th May 2014 appeared to support the idea.

What was offered (and declined) in Spring 2014 may however no longer be on the table in Winter 2015.

Since the federalisation idea was floated last Spring there has been a murderous war in the Donbass causing massive devastation and loss of life. Russia has been subjected to two rounds of sectoral sanctions. There has been a relentless propaganda campaign against Russia, the rebels and Putin himself. It is difficult to believe that all of this has not caused views to harden since the spring.

Promises of constitutional negotiations like the ones made in Geneva on 17th April 2014 and in Minsk on 5th September 2014 have come and gone. No negotiations have however taken place. Given that Kiev is dead against them, after all that has happened it is very doubrtful the rebels or the Russians now believe they ever will. Nor are the Russians likely to be in any sort of mood to believe in US assurances that “if federation is the goal, the United States and its allies will actively use their good offices with Kiev to seek a workable arrangement”.

What made sense in the Spring, when it was proposed to prevent a war, may anyway no longer make sense in the Winter, after the war has already happened. After so much violence it is barely conceivable that the rebels or the people of the Donbass who support them would now agree to be part of a federation that left them within Ukraine, especially now when they are on the brink of victory.

If this is correct, then it looks like the US and its allies have missed the bus.


The text of the editorial that appeared in The New York Times on February 2nd, 2015:

The fighting in eastern Ukraine has flared up again, putting an end to any myth about the cease-fire that was supposed to be in force since September.

Though the Russian economy is staggering under the twinned onslaught of low oil prices and sanctions — or, conceivably, as a result of that onslaught — President Vladimir Putin has sharply cranked up his direct support for the rebels in the provinces of Donetsk and Luhansk, while continuing to baldly deny it and to blame all the violence on the United States.

Meanwhile, Ukraine is broke, and without the military means to move against the Russian-backed rebels. Most of the victims are civilians who struggle with hunger and dislocation in the rubble of the combat zones and die in the constant exchanges of shells and rockets.

The eruption of fighting in recent weeks, which was not supposed to happen until spring, has given new force to pleas to the Obama administration to give Ukraine the means to resist Mr. Putin — in money and in arms.

Certainly the United States and Europe should increase their aid to Ukraine and explore ways to expand existing sanctions against Russia. NATO’s commander, Gen. Philip Breedlove, is said to support providing weapons and equipment to Kiev. And Secretary of State John Kerry is said to be open to discussing the idea. But lethal assistance could open a dangerous new chapter in the struggle — a chapter Mr. Putin would quite possibly welcome, as it would “confirm” his propaganda claims of Western aggression.

So far, President Obama has cautiously pledged to help Ukraine in every way “short of military confrontation.” Yet with sanctions and diplomacy making no headway against Russian aggression, it is imperative that the United States and its allies take a new look at what would bring Russia to a serious negotiation.

The first question is, to negotiate what? Along with denying the direct involvement of his troops in eastern Ukraine, Mr. Putin has not made clear what he is trying to achieve. Russian officials have suggested that Moscow has no interest in annexing eastern Ukraine, the way it grabbed Crimea, but rather seeks a Ukrainian federation in which the pro-Russian provinces would have relative autonomy, along with assurances that Ukraine will not move to join NATO.

There is definitely potential for negotiations there. Yet the latest rebel attacks have focused on Mariupol, an important port on the Black Sea, and on expanding the rebels’ control to areas that would give their self-proclaimed “republics” greater military and economic cohesion. And that speaks to long-term rebel occupation.

Tempting as it is to focus on punishing Mr. Putin, the greater objective must be to end the fighting so that Ukraine can finally undertake the arduous task of reforming and reviving its economy. Toward that end, the West must make clear to Mr. Putin that if a federation is his goal, the United States and its allies will actively use their good offices with Kiev to seek a workable arrangement.

But if the evidence continues to accumulate that Mr. Putin and the rebels are carving out a permanent rebel-held enclave in eastern Ukraine, à la Transdniestria, Abkhazia or South Ossetia, he must know that the United States and Europe will be compelled to increase the cost.

Crowd of Several Hundred Tries to Storm Ukrainian Presidential Administration Office

 

In-depth Report:

Ukraine-anniversary-Maidan-coup-4-400x270A crowd of several hundred people has begun storming the Ukrainian presidential administration’s office, a TASS correspondent reports from the scene.

Protest demonstrators have penetrated the first cordon of the National Guards and are trying to make their way to the conference hall. Police forces are being moved in. National guards in full riot gear entered a brawl with the demonstrators, who are demanding access to TV cameras for a statement.

Earlier, demonstrators demanded the introduction of martial law and resignation of all top law enforcement officials, including the defense minister and prosecutor-general.

Also, one of their demands is the removal of the 25th Kievan Rus battalion of the Ukrainian armed forces from the area of Debaltsevo. Women from the Mothers’ Union have told TASS their sons could not have been contacted for the past several days.

Oliver Stone: Ukrainians are suffering from US ‘ideological crusade’ against Russia

Oliver Stone

Oliver Stone

 

RT news

In response to those who took exception with his claims that the Ukrainian crisis involved “outside agitators,” Oliver Stone took to social media to advance his argument, saying that Ukrainians are the victims of a US strategy akin to Cold War 2.0.

This week, Stone stirred a political firestorm with his views on what he believed sparked the Ukrainian crisis, following a private interview with Viktor Yanukovich, the former Ukrainian president who was ousted in the February 2014 coup.

“It seems clear that the so-called ‘shooters’ who killed 14 policemen, wounded some 85 and killed 45 protesting civilians, were outside, third-party agitators,” Stone said, following his four-hour conversation with Yanukovich in Moscow. “Many witnesses, including Yanukovich and police officials, believe these foreign elements were introduced by pro-Western factions – with CIA fingerprints on it.”

According to the American-born filmmaker and writer, Ukraine is just the latest country in a long list to fall prey to “America’s soft power technique called ‘Regime Change 101.’”

Stone’s comments reverberated like an earthquake on both sides of the Ukrainian divide, prompting him to elaborate on his original statement. Stone’s follow-up post began with him explaining that he has no particular sympathy for Yanukovich.

“For those of you angry with my analysis of Ukraine yesterday, please try to understand the bigger picture I’m offering,” he wrote on his Facebook page. “I have no brief for Viktor Yanukovich, he may well be the most corrupt president Ukraine’s ever had. Ukraine has a dramatic history of corruption. That is not my point.”

What game is the House of Saud playing?

Pepe-EscobarPepe 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.

 

 

Published time: January 16, 2015 12:29

 

33.si

Reuters / Lucy Nicholson

The House of Saud now finds itself in times of extreme trouble. Their risky oil price war may eventually backfire. The succession of King Abdullah may turn into a bloodbath. And the American protector may be musing a change of heart.

Let’s start with oil – and some background. As much as US supply has increased by a couple of million barrels a day, enough oil from Iran, Kirkuk in Iraq, Libya and Syria has gone out of production; and that offsets extra US oil on the market. Essentially, the global economy – at least for the moment – is not searching for more oil because of European stagnation/recession and the relative China slowdown.

Reuters / Todd Korol

Reuters / Todd Korol

Since 2011, Saudi Arabia has been flooding the market to offset the decrease in Iran exports caused by the US economic war, a.k.a. sanctions. Riyadh, moreover, prevented OPEC from reducing country production quotas. The House of Saud believes it can play the waiting game – as fracked oil, mostly American, is inexorably driven out of the market because it is too expensive. After that, the Saudis believe they will regain market share.

In parallel, the House of Saud is obviously enjoying “punishing” Iran and Russia for their support of Bashar Assad in Damascus. Moreover, the House of Saud is absolutely terrified of a nuclear deal essentially between the US and Iran (although that’s still a major “if”) – leading to a long-term détente.

Tehran, though, remains defiant. Russia brushed off the attack because the lower ruble meant state revenues remained unchanged – so there will be no budget deficit. As for oil-thirsty East Asia – including top Saudi customer China – it’s enjoying the bonanza while it lasts.

Oil prices will remain very low for the time being. This week Goldman Sachs lowered their 2015 WTI and Brent Crude forecasts; Brent was slashed from $83.75 a barrel to $50.40, WTI was cut from $73.75 to $47.15 a barrel. Prices per barrel could soon drop as low as $42 and $40.50. But then, there will be an inevitable “U-shaped recovery.”

Nomura bets that oil will be back to $80 a barrel by the end of 2015.

Punish Russia or bust

US President Barack Obama, in this interview, openly admitted that he wanted “disruptions” in the “price of oil” because he figured Russian President Vladimir Putin would have “enormous difficulty managing it.” So that settles the argument about hurting Russia and US-Saudi collusion, after US Secretary of State John Kerry allowed/endorsed King Abdullah in Jeddah to simultaneously raise oil production and embark on a cut price strategy.

Whether Kerry sold out the US shale gas industry out of ignorance or incompetence – probably both – is irrelevant. What matters is if the House of Saud were ordered to back off, they would have to do it in a flash; the ‘Empire of Chaos’ dominates the Persian Gulf vassals, who can’t even breathe without at least an implicit US green light.

What is way more troubling is that the current bunch in Washington does not seem to be defending US national and industrial interests. If humongous trade deficits based on currency rigging were not enough, now virtually the entire US oil industry runs the risk of being destroyed by an oil price racket. Any sane analyst would interpret it as contrary to US national interests.

Anyway, the Riyadh deal was music for the House of Saud’s ears. Their official policy has always been to slash the development of all potential substitutes for oil, including US shale gas. So why not depress oil prices and keep them there long enough to make investments in shale gas a lunatic proposal?

But there’s a huge problem. The House of Saud simply won’t get enough in oil revenues to support their annual budget with oil at below $90 a barrel. So as much as hurting Iran and Russia may be appealing, hurting their own golden pocketbooks is not.

The long-term outlook spells out higher oil prices. Oil may be replaced in many instances; but there isn’t a replacement – yet – for the internal combustion engine. So whatever OPEC is doing, it is actually preserving demand for oil vs. oil substitutes, and maximizing the return on a limited resource. The bottom-line: yes, this is predatory pricing.

Once again, there’s an immense, crucial, complicating vector. We may have the House of Saud and other Persian Gulf producers flooding the market – but its Goldman Sachs, JP Morgan and Citigroup who are doing the shadow, nasty work via leveraged derivative short futures.

Oil prices are such an opaque racket that only major oil trading banks such as Goldman Sachs or Morgan Stanley have some idea who is buying and who is selling oil futures or derivative contracts – what is called “paper oil.” The non-rules of this multi-billion casino spell out “speculative bubble” – with a little help from those friends at the Gulf oil pumps. With oil futures trading and the two major London and New York exchanges monopolizing oil futures contracts, OPEC really does not control oil prices anymore; Wall Street does. This is the big secret. The House of Saud may entertain the illusion they are in control. They’re not.

 

U.S. President Barack Obama

U.S. President Barack Obama – (Reuters / Kevin Lamarque)

That dysfunctional marriage

As if this was not messy enough, the crucial succession of the House of Saud is propelled to the forefront. King Abdullah, 91, was diagnosed with pneumonia, hospitalized in Riyadh on New Year’s Eve, and was breathing with a tube. He may – or may not, this being the secretive House of Saud – have lung cancer. He won’t last long. The fact that he is hailed as a “progressive reformer” tells everything one needs to know about Saudi Arabia. “Freedom of expression”? You must be joking.

So who’ll be next? The first in the line of succession should be Crown Prince Salman, 79, also defense minister. He was governor of Riyadh province for a hefty 48 years. It was this certified falcon who supervised the wealth of private “donations” to the Afghan mujahedeen in the 1980s jihad, in tandem with hardcore Wahhabi preachers. Salman’s sons include the governor of Medina, Prince Faisal. Needless to add, the Salman family controls virtually all of Saudi media.

To get to the Holy Grail Salman must be proven fit. That’s not a given; and on top of it Abdullah, a tough nut to crack, already survived two of his crown princes, Sultan and Nayef. Salman’s prospects look bleak; he has had spinal surgery, a stroke and may be suffering from – how appropriate – dementia.

It also does not bode well that when Salman was promoted to Deputy Defense Minister, soon enough he was shown the door – as he got himself mixed up with Bandar Bush’s atrocious jihadi game in Syria.

Anyway, Salman already has a successor; second Deputy Prime Minister Prince Muqrin, former governor of Medina province and then head of Saudi intelligence. Muqrin is very, very close to Abdullah. Muqrin seems to be the last “capable” son of Ibn Saud; “capable” here is a figure of speech. The real problem though starts when Muqrin becomes Crown Prince. Because then the next in line will be picked from the grandsons of Ibn Saud.

Enter the so-called third generation princes – a pretty nasty bunch. Chief among them is none other than Mitab bin Abdullah, 62, the son of the king; cries of nepotism do proceed. Like a warlord, Mitab controls his own posse in the National Guard. Sources told me Riyadh is awash in rumors that Abdullah and Muqrin have made a deal: Abdullah gets Muqrin to become king, and Muqrin makes Mitab crown prince. Once again, this being the “secretive” House of Saud, the Hollywood mantra applies: no one knows anything.

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Saudi Arabia’s Foreign Minister Prince Saud al-Faisal.(Reuters / Brendan Smialowski)

Abdullah’s sons are all over the place; governor of Mecca, deputy governor of Riyadh, deputy foreign minister, president of the Saudi Red Crescent. Same for Salman’s sons. But then there’s Muhammad bin Nayif, son of the late Crown Prince Nayif, who became Interior Minister in 2012, in charge of ultra-sensitive internal security, as in cracking down on virtually anything. He is the top competitor against Mitab among the third-generation princes.

So forget about family “unity” when such juicy loot as an oil hacienda impersonating a whole country is in play. And yet whoever inherits the loot will have to face the abyss, and the same litany of distress; rising unemployment; abysmal inequality; horrendous sectarian divide; jihadism in all its forms – not least the fake Ibrahim Caliphate in “Syraq”, already threatening to march towards Mecca and Medina; the unspeakably medieval Council of Ulemas (the lashing/amputating/beheading-loving bunch); total dependency on oil; unbounded paranoia towards Iran; and a wobbly relationship with His Masters Voice, the US.

When will they call the cavalry?

And it so happens that the real ‘Masters of the Universe’ in the Washington-New York axis are debating exactly the erosion of this relationship; as in the House of Saud having no one to talk to but the “puppets”, from Bush Two minions to Kerry at most on occasion. This analysis contends that any promises made by Kerry over the House of Saud “cooperation” to damage Russia’s economy really mean nothing.

Rumbles from ‘Masters of the Universe’ territory indicate that the CIA sooner or later might move against the House of Saud. In this case the only way for the House of Saud to secure its survival would be to become friendly with none other than Moscow. This exposes once more the House of Saud’s suicidal present course of trying to hurt Russia’s economy.

As everyone is inexorably an outsider when faced with the totally opaque House of Saud, there’s an analytical current that swears they know what they’re doing. Not necessarily. The House of Saud seems to believe that pleasing US neocons will improve their status in Washington. That simply won’t happen. The neocons remain obsessed about the House of Saud helping Pakistan to develop its nuclear missiles; some of them – once again, that’s open to speculation – might even be deployed inside Saudi Arabia for “defensive purposes” against that mythical Iranian “threat.”

Messy? That doesn’t even begin to describe it. But one thing is certain; whatever game Riyadh thinks it’s playing, they’d better start seriously talking to Moscow. But please, don’t send Bandar Bush on another Russian mission.

Pepe Escobar’s latest book is Empire of Chaos. Follow him on Facebook.

 

No Saudi-Russian talks to bump up oil price in return for disowning Assad – Moscow

PutinFinger1-400x547

Russian President Vladimir Putin

RT News

Published time: February 04, 2015 09:57

Moscow denies a report claiming that Saudi Arabia had offered to adjust its oil production and create a crude price rise in exchange for Russia withdrawing support for Syrian President Bashar Assad.

The report in the New York Times cited an anonymous Saudi and US diplomatic sources as saying that Riyadh used its large oil market share as leverage in negotiations with Moscow.

“If oil can serve to bring peace in Syria, I don’t see how Saudi Arabia would back away from trying to reach a deal,” a Saudi diplomat was quoted as saying.

The report was denied by Aleksey Pushkov, the head of the Foreign Affairs Committee in the Russian State Duma.

“The New York Times distorted information so many times, especially since the Ukrainian crisis started. I wouldn’t advise you taking it as a reliable source. There were no talks of such exchange,” the official told RSN radio station.

Saudis kinda admit to keeping oil prices low to screw Russians and gain influence in Syria. No mention of ISIS. http://nyti.ms/1z8iOL6

The New York Times @nytimes

 

He added that the Russian delegation headed by Prime Minister Dmitry Medvedev, which visited Saudi Arabia for the funeral of late King Abdullah, did discuss oil-related issues, but no shady deals were proposed.

“We discussed oil, pricing, coordination between OPEC members and non-member states. The talks were positive and constructive. There was no Syrian dimension in them,” Pushkov said.

He added that Saudi Arabia is in the process of changing its position on the Syrian crisis and distancing itself from the armed conflict.

 

President of Russia Vladimir Putin (L) and Crown Prince Salman bin Abdulaziz Al Saud (R) of Saudi Arabia talk through their interpreters during a plenary session at the G20 leaders summit in Brisbane November 15, 2014 (Reuters / Rob Griffith)

President of Russia Vladimir Putin (L) and Crown Prince Salman bin Abdulaziz Al Saud (R) of Saudi Arabia talk through their interpreters during a plenary session at the G20 leaders summit in Brisbane November 15, 2014 (Reuters / Rob Griffith)

The report was denied by Aleksey Pushkov, the head of the Foreign Affairs Committee in the Russian State Duma.

“The New York Times distorted information so many times, especially since the Ukrainian crisis started. I wouldn’t advise you taking it as a reliable source. There were no talks of such exchange,” the official told RSN radio station.
He added that the Russian delegation headed by Prime Minister Dmitry Medvedev, which visited Saudi Arabia for the funeral of late King Abdullah, did discuss oil-related issues, but no shady deals were proposed.

“We discussed oil, pricing, coordination between OPEC members and non-member states. The talks were positive and constructive. There was no Syrian dimension in them,” Pushkov said.

He added that Saudi Arabia is in the process of changing its position on the Syrian crisis and distancing itself from the armed conflict.

 

READ MORE: Oil can recover to $200 if supply dries up – OPEC head

The report was also denied by Kremlin spokesman Dmitry Peskov, who called it “nothing more but speculation by the paper.”

Saudi Arabia has been an outspoken critic of the Syrian government over the years of civil war there. It was reported to supply weapons to various opposition groups seeking to topple Assad.

Russia remained an ally of Assad and negotiated a deal with the US, which led to dismantling of Syria’s chemical weapons arsenal. The deal saved face for Washington, having pledged to use military force against Damascus due to alleged use of chemical weapons, but being reluctant to actually do it.

The oil market experienced the biggest drop in price in years in 2014, imperiling the economies of oil exporters, including Russia and Saudi Arabia. Riyadh said it would not reduce its output regardless of the price do protect its market share.

‘Washington, the Hollywood of politics’: story behind Hagel’s exit

U.S. President Barack Obama (R) and Defense Secretary Chuck Hagel after the president announced Hagel's resignation at the White House in Washington, November 24, 2014 (Reuters / Kevin Lamarque)

U.S. President Barack Obama (R) and Defense Secretary Chuck Hagel after the president announced Hagel’s resignation at the White House in Washington, November 24, 2014 (Reuters / Kevin Lamarque)

RT NEWS

Regardless who is the US Secretary of Defense, there will always be Washington’s basic policy strategy around the desire to control the whole map and use the military to shape the entire world, anti-war activist Eugene Puryear, told RT.

U.S. President Barack Obama (L) listens to Defense Secretary Chuck Hagel after the president announced Hagel's resignation at the White House in Washington, November 24, 2014 (Reuters / Kevin Lamarque)

U.S. President Barack Obama (L) listens to Defense Secretary Chuck Hagel after the president announced Hagel’s resignation at the White House in Washington, November 24, 2014 (Reuters / Kevin Lamarque)

RT: You’ve seen this machine at work from the inside. What do you think is behind Chuck Hagel’s resignation?

Matthew Hoh:I think, of course, there is much more to this story than simply “Chuck Hagel no longer worked well with the administration.” I think you could tell by how quickly and how viciously the White House anonymously attacked Chuck Hagel as soon he announced his resignation. There were a lot of personal attacks against Hagel: he didn’t have leadership, he couldn’t do the job, he wasn’t up to the task, and I think any time you see the administration or the White House so quickly denouncing somebody, you know automatically there is another story to this. And what I believe to be case is that Chuck Hagel does not agree with the Obama Administration involving American troops in the middle of the Iraqi and the Syrian civil wars. And he is in disagreement with the American re-escalation of the war in Afghanistan that was just announced this past weekend.

RT: Judging by yesterday’s warm hugs between Obama and Hagel, the personal relationship between the two is quite friendly. How sincere were those smiles and handshakes?

MH: It’s Washington DC; it’s the Hollywood of politics. So, absolutely. I think may be in earlier time it could be described there is how cordial relations were among politicians, among elected leaders, among our senior people. But now it’s just as you described – it was a show.

RT: Recently Chuck Hagel became quite critical of the administration’s policy in Syria and Iraq. Do you think this made him an outcast in the White House?

MH: I think for the administration not to expect Secretary Hagel to be vocal or to speak up would have been be a very big mistake for them in their understanding of Secretary Chuck Hagel. Chuck Hagel earned the national reputation in the United States about 10 years ago or so for going against the Iraqi war. Chuck Hagel is a republican and member of President George Bush’s party and he very famously went against the Iraq war. So for the Obama Administration to have thought that Chuck Hagel was pliable, someone who was just going to go along with whatever decision they made and not to offer disagreements whether in private or in public, I think that was a huge mistake on their part. And so I think as I said as the story unfolds and as we get more perspectives on it, we’ll see the level of disagreement that was within the administration, within Obama’s Cabinet between Secretary Hagel and more hawkish members.

RT: Chuck Hagel is known for his anti-militaristic approach to U.S. foreign policy. Now that he’s going does it mean the Pentagon will become more aggressive?

MH: I think, unfortunately, the administration has bowed to pressure from both within the administration, from those in the administration who are beholding to a pro-intervention or a “military-first” policy as well as to very hawkish or warmongering senators on Capitol Hill. So I think the Obama Administration has made a commitment to expand America’s role in the Iraqi and Syrian civil wars. I think that is a cycle that will only worsen and deepen. Case in point – Afghanistan – where the United States escalated the war in 2009.Five years later, there is no end in sight for the war, the Afghan people continue to suffer, the government remains incredibly corrupt, the Taliban are stronger and the drug trade is the only industry in the country. I think what’s happening with American re-escalation of the war – sending American troops back into combat – is that President Obama is bowing to pressure, feeling stoned by abusing criticism that he is not tough enough. He is recommitting American troops to the war in Afghanistan, so that he cannot be criticized for ending the war prematurely. [But] they have been there for 13 years and that war, according to polls it has an 83 percent unfavorability rating in the United States, and is most unpopular war in American history, even more unpopular than the wars in Iraq or Vietnam.

General Dempsy

General Dempsy – Chairman of the Joint Chiefs, U.S. Army General Martin Dempsey (Reuters / Larry Downing)

Chairman of the Joint Chiefs, U.S. Army General Martin Dempsey (Reuters / Larry Downing)

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