Putin’s Blitz Leaves Washington Rankled and Confused

Posted by Ainhoa Aristizabal

Global Research, October 01, 2015
Mike Whitney, CounterPunch, 2015
Region: Middle East & North Africa, Russia and FSU, USA
Theme: US NATO War Agenda
In-depth Report: SYRIA: NATO’S NEXT WAR?

obama-putin-510x383-400x300On Monday, Russian President Vladimir Putin delivered a blistering critique of US foreign policy to the UN General Assembly.

On Tuesday, Barack Obama shoved a knife in Putin’s back. This is from Reuters:

“France will discuss with its partners in the coming days a proposal by Turkey and members of the Syrian opposition for a no-fly zone in northern Syria, French President Francois Hollande said on Monday…

French Foreign Minister Laurent Fabius “in the coming days will look at what the demarcation would be, how this zone could be secured and what our partners think,” Hollande told reporters on the sidelines of the annual United Nations General Assembly…

Hollande said such a proposal could eventually be rubber-stamped with a U.N. Security Council resolution that “would give international legitimacy to what’s happening in this zone.”…(France, partners to discuss northern Syria ‘safe zone’: Hollande, Reuters)

Hollande is a liar and a puppet. He knows the Security Council will never approve a no-fly zone. Russia and China have already said so. And they’ve explained why they are opposed to it, too. It’s because they don’t want another failed state on their hands like Libya, which is what happened last time the US and NATO imposed a no-fly zone.

But that’s beside the point. The real reason the no-fly zone issue has resurfaced is because it was one of the concessions Obama made to Turkish President Recep Tayyip Erdogan for the use of Incirlik airbase. Washington has kept the terms of that deal secret, but Hollande has let the cat out of the bag.

So who put sock-puppet Hollande up to this no-fly zone nonsense?

Why the Obama administration, of course. Does anyone seriously believe that Hollande is conducting his own independent policy in Syria? Of course not. Hollande is just doing what he’s been told to do, just like he did when he was told to scotch the Mistral deal that cost France a whopping $1.2 billion. Washington and NATO didn’t like the idea that France was selling state-of-the-art helicopter carriers to arch-rival Putin, so they ordered Hollande to put the kibosh on the deal. Which he did, because that’s what puppets do; they obey their masters. Now he’s providing cover for Obama so the real details of the Incirlik agreement remain off the public’s radar. That’s why we say, Obama shoved a knife in Putin’s back, because, ultimately, the no-fly zone damages Russia’s interests in Syria.

The significance of the Reuters article cannot be overstated. It suggests that there was a quid pro quo for the use of Incirlik, and that Turkey’s demands were accepted. Why is that important?

Because Turkey had three demands:

1–Safe zones in north Syria (which means that Turkey would basically annex a good portion of Syrian sovereign territory.)
2–A no-fly zone (which would allow either Turkish troops, US Special Forces or US-backed jihadi militants to conduct their military operations with the support of US air cover.)
3–A commitment from the US that it will help Turkey remove Assad.

Did Obama agree to all three of these demands before Erdogan agreed to let the USAF use Incirlik?

Yes, at least I think he did, which is why I think we are at the beginning of Phase 2 of the US aggression against Syria. Incirlik changes everything. US bombers, drones and fighters can enter Syrian airspace in just 15 minutes instead of 3 to 4 hours from Bahrain. That means more sorties, more surveillance drones, and more air-cover for US-backed militias and Special Forces on the ground. It means the US can impose a de facto no-fly zone over most of Syria that will expose and weaken Syrian forces tipping the odds decisively in favor of Obama’s jihadi army. Incirlik is a game-changer, the cornerstone of US policy in Syria. With access to Incirlik, victory is within Washington’s reach. That’s how important Incirlik is.

And that’s why the normally-cautious Putin decided to deploy his warplanes, troops and weaponry so soon after the Incirlik deal was signed. He could see the handwriting on the wall. He knew he had to either act fast and turn the tide or accept the fact that the US and Turkey were going to topple Assad sometime after Turkey’s snap elections on November 1. That was his timeline for action. So he did the right thing and joined the fighting.

But what does Putin do now?

On Wednesday, just two days after Putin announced to the UN General Assembly: “We can no longer tolerate the current state of affairs in the world,” Putin ordered the bombing of targets in Homs, an ISIS stronghold in West Syria. The attacks, which were unanimously approved by the Russian parliament earlier in the day, and which are entirely legal under international law (Putin was invited by Syria’s sitting president, Assad, to carry out the airstrikes), have put US policy in a tailspin. While the Russian military is maintaining an open channel to the Pentagon and reporting when-and-where it is carrying out its airstrikes, U.S. State Department spokesman John Kirby said that the US plans to “continue to fly missions over Iraq and Syria” increasing the possibility of an unintended clash that could lead to a confrontation between the US and Russia.

Is that what Washington wants, a violent incident that pits one nuclear-armed adversary against the other?

Let’s consider one probable scenario: Let’s say an F-16 is shot down over Syria while providing air cover for Obama’s militants on the ground. Now that Russia is conducting air raids over Syria, there’s a good chance that Putin would be blamed for the incident like he was when the Malaysian airliner was downed over East Ukraine.

So what happens next?

Judging by similar incidents in the past, the media would swing into full-propaganda mode exhorting the administration to launch retaliatory attacks on Russian military sites while calling for a broader US-NATO mobilization. That, in turn, would force Putin to either fight back and up-the-ante or back-down and face disgrace. Either way, Putin loses and the US gets one step closer to its objective of toppling Bashar al Assad.

Putin knows all this. He understands the risks of military involvement which is why he has only reluctantly committed to the present campaign. That said; we should expect him to act in much the same way as he did when Georgian troops invaded South Ossetia in 2007. Putin immediately deployed the tanks to push the invading troops back over the border into Georgia and then quickly ended the hostilities. He was lambasted by critics on the right for not invading Georgia and removing their leader, Mikheil Saakashvili, in the Capital. But as it turned out, Putin’s restraint spared Russia the unnecessary hardship of occupation which can drain resources and erode public support. Putin was right and his critics were wrong.

Will his actions in Syria mirror those in South Ossetia?

It’s hard to say, but it’s clear that the Obama crew is thunderstruck by the speed of the intervention. Check this out from the UK Guardian: “Back at the White House, spokesperson Josh Earnest suggests that Vladimir Putin did not give Barack Obama warning about his intentions to begin air strikes in Syria.

“We have long said we would welcome constructive Russian coordination,” Earnest says, before qualifying that the talks between US and Russian militaries will be purely tactical: “to ensure that our military activities and the military activities of coalition partners would be safely conducted.” (The Guardian)

What does Earnest’s statement mean? It means the entire US political class was caught off-guard by Putin’s blitz and has not yet settled on an appropriate response. They know that Putin is undoing years of work by rolling up proxy-units that were supposed to achieve US objectives, but there is no agreement among ruling elites about what should be done. And making a decision of that magnitude could take time, which means that Putin should be able to obliterate a fair number of the terrorist hideouts and restore control of large parts of the country to Assad before the US ever agrees to a strategy. In fact, if he moves fast, he might even be able to force the US and their Gulf allies to the bargaining table where a political solution could be reached.

It’s a long-shot, but it’s a much better option than waiting around for the US to impose a no-fly zone that would collapse the central government and reduce Syria to Libya-type anarchy. There’s no future in that at all.

Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.

Copyright © Mike Whitney, CounterPunch, 2015

Russia Strikes out at Sanctions and Takes its Battle to the Dollar

By Stefan Hedlund
Global Research, July 01, 2014
worldreview.info

dollars4The European Union sees a new deadline on implementing economic sanctions against Russia over the Ukraine crisis expire today, June 30, 2014. But Russia’s President Vladimir Putin is turning the tables on the United States to spur a global ‘de-dollarisation’, writes Professor Stefan Hedlund.

Russia is making a concerted attack on the status of the America’s greenback dollar as a global reserve currency and is in the process of abandoning the ‘petro-dollar’ as its trading unit for oil and gas.

Russian energy companies have been told to ditch the dollar and sign contracts in rubles and the currencies of partner-countries.

The desire to reduce the use of dollars is in line with China’s aim to promote international use of the Chinese yuan. Other emerging market nations would also like to see reduced American hegemony.

An attack by Russia on the US dollar would be devastating and could, in theory, trigger a stock market collapse in the United States. However, the status of the greenback as global reserve currency is not yet under serious threat, for the simple reason that the alternatives are worse. But the Russian attack may prod the global economy to take a further step on the road to a system without a designated reserve currency.

If Central Banks across the world were to sell off their holdings of US government bonds, then the US economy would be flooded with dollars, causing the currency to plummet, inflation to spike and interest rates to skyrocket.

The consequent rise in the cost of financing government debt would be monstrous, and having to return to fiscal balance would force the closure of so many social spending programmes that there would be rioting in the streets.

It is unlikely this will happen, but it does provide a sobering background to the game Russia is playing, and what may eventually happen if Washington persists in refusing to get its own house in order.

Over the past few decades, the world has become so used to viewing the greenback as the ‘natural’ global reserve currency that warnings about a possible end to this way of cheaply financing the US deficit have been routinely shrugged off. Measures to prepare for a declining role of the greenback are not being implemented.

In the aftermath of the subprime mortgage crisis which triggered the recession in 2008, and the humiliating 2011 downgrade of the US sovereign credit rating, warning voices have begun to question how long this can go on. Those who are the biggest holders of US debt, mainly the BRICS countries (Brazil, Russia, India, China and South Africa), have begun looking for ways to move away from the dollar.

Ever since the collapse of the Soviet Union in 1991, Russia has been addicted to US dollars. During the turbulent 1990s, the greenback all but replaced the collapsing ruble offering both a means of exchange and a store of value. With the spike in oil prices which began in 2001, the Russian Central Bank has been able to stabilise the currency, and the role of the dollar has receded.

But the Russian economy remains heavily intertwined with dollar circulation, ranging from large holdings of dollars in foreign exchange (forex) reserves, to banks and enterprises indebted in dollars, to substantial offshore holdings in dollars, and above all to energy exports being traded in dollars. When threats of economic sanctions were made by the West, the Kremlin felt truly vulnerable. And it has moved to reduce this vulnerability.

Russian banking and energy experts have discussed with government officials ways to eliminate the dollar from export operations. Economy minister Alexei Ulyukaev, has called on Russian energy companies to be ‘braver in signing contracts in rubles and the currencies of the partner-countries’.

There has been talk of introducing a ‘currency switch executive order’, whereby companies could be compelled to transact a percentage of their operations in, say, Russian rubles or Chinese yuans.

Rosneft has concluded a ‘goods-for-oil’ swap with Iran which provides 500,000 barrels of Iranian oil per day to sell on global markets. And Gazprom’s recent US$400 billion gas deal with China is viewed by both sides as a way of moving away from US dollar domination.

What will save the greenback for some time to come is that the alternatives are not good. A functioning global reserve currency has to be both liquid and ‘deep’, i.e. it must be possible to sell quickly and in large amounts without significant impact on price. Despite the gross mismanagement of the US economy, the US dollar still fits that bill. The euro has fallen far short of initial grand visions, but remains a second best. Neither sterling nor yen come close.

Stefan Hedlund is Professor and Research Director at the Centre for Russian and Eurasian Studies, at Uppsala University, Sweden. He trained as an economist and has specialised in Russian …

Articles by: Stefan Hedlund
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