Price-keeping operations in the global stock markets continue, if not directly (hard to prove) but indirectly via orchestrated news flows – press conferences, summits, announcements, exaggerated coverage of decisions already foregone (Bundestag vote on EFSF). Check out Ambrose Evans-Pritchard’s piece on the exact import of the Bundestag vote.
Nothing else is needed to convince ourselves that lessons have not been learnt. People are at their old games. They need a bigger shock to be shaken out of their bad habits. That is coming.
In the meantime, western media have begun their campaign against Russia now that Putin is going to be the president of the country in 2012. Just read the FT coverage since the day he was ‘nominated’ to contest.
In case you wonder why such vicious coverage of Russia takes place, two recent pieces by Stratfor provide the answer. One is ‘The Geopolitics of the United States, Part 1: The Inevitable Empire’ Some excerpts from it:
That leaves only the lands of northern Eurasia — Europe, the former Soviet Union and China — as candidates for an anti-American coalition of substance. Northern Eurasia holds even more arable land than North America, but it is split among three regions: the North European Plain, the Eurasian steppe and the Yellow River basin. Although the developed lands of the North European Plain and the Eurasian steppe are adjacent, they have no navigable waterways connecting them, and even within the North European Plain none of its rivers naturally interconnects…..
There is, however, the potential for unity. The Europeans and Russians have long engaged in canal-building to achieve greater economic linkages (although Russian canals linking the Volga to the sea all freeze in the winter). And aside from the tyranny of distance, there are very few geographic barriers separating the North European Plain from the Eurasian steppe from the Yellow River region, allowing one — theoretically — to travel from Bordeaux to the Yellow Sea unimpeded…..
Among these three northern Eurasian regions is the capital, labor and leadership required to forge a continental juggernaut. Unsurprisingly, Russian foreign policy for the better part of the past two centuries has been about dominating or allying with either China or major European powers to form precisely this sort of megapower…..
And so the final imperative of the dominant power of North America is to ensure that this never happens — to keep Eurasia divided among as many different (preferably mutually hostile) powers as possible…..
The United States’ repeated interventions in Eurasia have been designed to establish or preserve a balance of power or, to put it bluntly, to prevent any process on Eurasia from resulting in a singular dominating power. The United States participated in both world wars to prevent German domination, and then bolstered and occupied Western Europe during the Cold War to prevent complete Russian dominance. Similarly, the primary rationale for involvement in Korea and Vietnam was to limit Russian power…..
Ongoing efforts to hamstring Russia — Ukraine’s 2004-2005 Orange Revolution, for example — should also be viewed in this light. [The full article - a very long one - is worth a read]
The second piece titled, ‘Obama’s dilemma: U.S. Foreign Policy and Electoral Realities’ ties in neatly with the conclusions of the piece cited earlier (see extracts above):
Obama has to hold together a coalition that is inherently fragmented by many different understandings of what his presidency is about. This coalition has weakened substantially. Obama’s attention must be on holding it together. He cannot resurrect the foreign policy part of it at this point. He must bet on the fact that the coalition has nowhere else to go. What he must focus on is domestic policy crafted to hold his base and center together long enough to win the election.
The world, therefore, is facing at least 14 months with the United States being at best reactive and at worst non-responsive to events…..
….All of this creates opportunities for countries to build realities that may not be in the best interests of the United States in the long run. There is a period of at least 14 months for regional powers to act with confidence without being too concerned about the United States.
The rest of the world knows this, of course. The question is whether and how they take advantage of it. [Full piece here]
The solutions – purportedly being cooked up by Timothy Geithner for Europe – would involve a big loss for Germany as they would result in a central bank in Europe that resembles the Federal Reserve, that abandons its commitment to price stability and one that would consequently engineer a massively weak euro. This hurts Germany and China which holds a lot of euros in its foreign exchange reserves and also via loss of trade competitiveness. See the piece by Ambrose Evans-Pritchard for more details.
So, now the contours of American foreign and economic policy are becoming clear. Aren’t they? However, the odds are long that they would succeed.
This post originally appeared on The Gold Standard and is reproduced here with permission.
4 Responses to “America vs. Eurasia”
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You can spot the difference between an Economist and a Journalist, immediately.
Who cares if Germany gets hurt in a new Pan European Union?
Did Germnay care while they have taken advantage of the EU periphery over the last 10 years? Germany leads the EU in Government Debt, and all we hear about is what if Italy goes face down, with 1.868 Trillion Euros in Goverment Debt?
Germany has 2.088 Trillion in Government Debt according to EUROSTAT, and last week an additional 5 Trillion in hidden Government Debt surfaced. The fund cannot support Germany, when they go face down, and they will. I told Christian Menegatti this a year ago, still have the emails. Germany is the cancer in the EU, full stop. They will NEVER be able to service their 7 Trillion in Government Debt without China, China then gets the keys to the shop from Germany, and we have a Chinese footprint in the shape of Germany right in the middle of Europe. China then has access to everything it can consume, full blown financial destruction, no cure in sight. Germany's ultimate revenge on a Europe they could not conquer alone. In London, we are arranging a plan to short all things German, en masse. Their industrials have been taking a beating since July. Laugh if you want to, we have been killing on the shorts of SIEMENS, COMMERZBANK, DEUTSCHE BANK, all have lost half of their market value since July, DEUTSCHE BANK as much as 57% of their Market Cap. Think about that. If Greece leaves the EU, send Germany with them. The only way to level the playing field is to bump the weakest and strongest. Only chance to establish a new core and give the periphery an even chance, without Germany bullying like they have for the last 10 years. Last May 2010, Ed Harrison wrote a great article entitled, "The Shackle On EU Growth Was Always Germany", excellent work.
Dr. S A Visotsky
Chairman & CEO
Vitech Group LLC
I truly appreciate this post. I’ve been looking all over for this! Thank goodness I found it on Bing. You’ve made my day! Thanks again! “One never goes so far as when one doesn’t know where one is going.” by Johann Wolfgang von Goethe.