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Russia And China Do Pipelineistan

Tyler Durden's picture




 

Submitted by Pepe Escobar, 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.

The Birth Of Eurasia - Russia & China Do Pipelineistan

A specter is haunting Washington, an unnerving vision of a Sino-Russian alliance wedded to an expansive symbiosis of trade and commerce across much of the Eurasian land mass - at the expense of the United States.

And no wonder Washington is anxious. That alliance is already a done deal in a variety of ways: through the BRICS group of emerging powers (Brazil, Russia, India, China, and South Africa); at the Shanghai Cooperation Organization, the Asian counterweight to NATO; inside the G20; and via the 120-member-nation Non-Aligned Movement (NAM). Trade and commerce are just part of the future bargain. Synergies in the development of new military technologies beckon as well. After Russia’s Star Wars-style, ultra-sophisticated S-500 air defense anti-missile system comes online in 2018, Beijing is sure to want a version of it. Meanwhile, Russia is about to sell dozens of state-of-the-art Sukhoi Su-35 jet fighters to the Chinese as Beijing and Moscow move to seal an aviation-industrial partnership.

This week should provide the first real fireworks in the celebration of a new Eurasian century-in-the-making with Russian President Vladimir Putin visiting Xi in Shanghai this Tuesday and Wednesday. You remember Pipelineistan,” all those crucial oil and gas pipelines crisscrossing Eurasia that make up the true circulatory system for the life of the region. Now, it looks like the ultimate Pipelineistan deal, worth $1 trillion and 10 years in the making, will be inked as well. In it, the giant, state-controlled Russian energy giant Gazprom will agree to supply the giant state-controlled China National Petroleum Corporation (CNPC) with 3.75 billion cubic feet of liquefied natural gas a day for no less than 30 years, starting in 2018. That’s the equivalent of a quarter of Russia’s massive gas exports to all of Europe. China’s current daily gas demand is around 16 billion cubic feet a day, and imports account for 31.6% of total consumption.

Gazprom may still collect the bulk of its profits from Europe, but Asia could turn out to be its Everest. The company will use this mega-deal to boost investment in Eastern Siberia and the whole region will be reconfigured as a privileged gas hub for Japan and South Korea as well. If you want to know why no key country in Asia has been willing to isolate Russia in the midst of the Ukrainian crisis - and in defiance of the Obama administration - look no further than Pipelineistan.

Exit the Petrodollar, Enter the Gas-o-Yuan

And then, talking about anxiety in Washington, there’s the fate of the petrodollar to consider, or rather the “thermonuclear” possibility that Moscow and Beijing will agree on payment for the Gazprom-CNPC deal not in petrodollars but in Chinese yuan. One can hardly imagine a more tectonic shift, with Pipelineistan intersecting with a growing Sino-Russian political-economic-energy partnership. Along with it goes the future possibility of a push, led again by China and Russia, toward a new international reserve currency -- actually a basket of currencies -- that would supersede the dollar (at least in the optimistic dreams of BRICS members).

BRICS leaders (From L) India Prime minister Manmohan Singh, President of the People’s Republic of China Xi Jinping, South Africa's President Jacob Zuma, Brazil's President Dilma Rousseff and Russian Federation President Vladimir Putin, pose for a family photo in Durban on March 27, 2013.( AFP Photo / Alexander Joe )

Right after the potentially game-changing Sino-Russian summit comes a BRICS summit in Brazil in July. That’s when a $100 billion BRICS development bank, announced in 2012, will officially be born as a potential alternative to the International Monetary Fund (IMF) and the World Bank as a source of project financing for the developing world.

More BRICS cooperation meant to bypass the dollar is reflected in the Gas-o-yuan,” as in natural gas bought and paid for in Chinese currency. Gazprom is even considering marketing bonds in yuan as part of the financial planning for its expansion. Yuan-backed bonds are already trading in Hong Kong, Singapore, London, and most recently Frankfurt.

Nothing could be more sensible for the new Pipelineistan deal than to have it settled in yuan. Beijing would pay Gazprom in that currency (convertible into rubles); Gazprom would accumulate the yuan; and Russia would then buy myriad made-in-China goods and services in yuan convertible into rubles.

It’s common knowledge that banks in Hong Kong, from Standard Chartered to HSBC - as well as others closely linked to China via trade deals - have been diversifying into the yuan, which implies that it could become one of the de facto global reserve currencies even before it’s fully convertible. (Beijing is unofficially working for a fully convertible yuan by 2018.)

The Russia-China gas deal is inextricably tied up with the energy relationship between the European Union (EU) and Russia. After all, the bulk of Russia’s gross domestic product comes from oil and gas sales, as does much of its leverage in the Ukraine crisis. In turn, Germany depends on Russia for a hefty 30% of its natural gas supplies. Yet Washington’s geopolitical imperatives - spiced up with Polish hysteria - have meant pushing Brussels to find ways to “punish” Moscow in the future energy sphere (while not imperiling present day energy relationships).

There’s a consistent rumble in Brussels these days about the possible cancellation of the projected 16 billion euro South Stream pipeline, whose construction is to start in June. On completion, it would pump yet more Russian natural gas to Europe - in this case, underneath the Black Sea (bypassing Ukraine) to Bulgaria, Hungary, Slovenia, Serbia, Croatia, Greece, Italy, and Austria.

Bulgaria, Hungary, and the Czech Republic have already made it clear that they are firmly opposed to any cancellation. And cancellation is probably not in the cards. After all, the only obvious alternative is Caspian Sea gas from Azerbaijan, and that isn’t likely to happen unless the EU can suddenly muster the will and funds for a crash schedule to construct the fabled Baku-Tblisi-Ceyhan (BTC) oil pipeline, conceived during the Clinton years expressly to bypass Russia and Iran.

In any case, Azerbaijan doesn’t have enough capacity to supply the levels of natural gas needed, and other actors like Kazakhstan, plagued with infrastructure problems, or unreliable Turkmenistan, which prefers to sell its gas to China, are already largely out of the picture. And don’t forget that South Stream, coupled with subsidiary energy projects, will create a lot of jobs and investment in many of the most economically devastated EU nations.

Nonetheless, such EU threats, however unrealistic, only serve to accelerate Russia’s increasing symbiosis with Asian markets. For Beijing especially, it’s a win-win situation. After all, between energy supplied across seas policed and controlled by the US Navy and steady, stable land routes out of Siberia, it’s no contest.

Pick Your Own Silk Road

Of course, the US dollar remains the top global reserve currency, involving 33% of global foreign exchange holdings at the end of 2013, according to the IMF. It was, however, at 55% in 2000. Nobody knows the percentage in yuan (and Beijing isn’t talking), but the IMF notes that reserves in “other currencies” in emerging markets have been up 400% since 2003.

The Fed is arguably monetizing 70% of the US government debt in an attempt to keep interest rates from heading skywards. Pentagon adviser Jim Rickards, as well as every Hong Kong-based banker, tends to believe that the Fed is bust (though they won’t say it on the record). No one can even imagine the extent of the possible future deluge the US dollar might experience amid a $1.4 quadrillion Mount Ararat of financial derivatives. Don’t think that this is the death knell of Western capitalism, however, just the faltering of that reigning economic faith, neoliberalism, still the official ideology of the United States, the overwhelming majority of the European Union, and parts of Asia and South America.

As far as what might be called the “authoritarian neoliberalism” of the Middle Kingdom, what’s not to like at the moment? China has proven that there is a result-oriented alternative to the Western “democratic” capitalist model for nations aiming to be successful. It’s building not one, but myriad new Silk Roads, massive webs of high-speed railways, highways, pipelines, ports, and fiber optic networks across huge parts of Eurasia. These include a Southeast Asian road, a Central Asian road, an Indian Ocean “maritime highway” and even a high-speed rail line through Iran and Turkey reaching all the way to Germany.

In April, when President Xi Jinping visited the city of Duisburg on the Rhine River, with the largest inland harbor in the world and right in the heartland of Germany’s Ruhr steel industry, he made an audacious proposal: a new “economic Silk Road” should be built between China and Europe, on the basis of the Chongqing-Xinjiang-Europe railway, which already runs from China to Kazakhstan, then through Russia, Belarus, Poland, and finally Germany. That’s 15 days by train, 20 less than for cargo ships sailing from China’s eastern seaboard. Now that would represent the ultimate geopolitical earthquake in terms of integrating economic growth across Eurasia.

Keep in mind that, if no bubbles burst, China is about to become - and remain - the number one global economic power, a position it enjoyed for 18 of the past 20 centuries. But don’t tell London hagiographers; they still believe that US hegemony will last, well, forever.

Russia's President Vladimir Putin (L) and China's President Xi Jinping attend an agreement signing ceremony during a bilateral meeting at Xijiao State Guesthouse ahead of the fourth Conference on Interaction and Confidence Building Measures in Asia (CICA) summit, in Shanghai May 20, 2014.(Reuters / Carlos Barria)

 

Take Me to Cold War 2.0

Despite recent serious financial struggles, the BRICS countries have been consciously working to become a counterforce to the original and - having tossed Russia out in March - once again Group of 7, or G7. They are eager to create a new global architecture to replace the one first imposed in the wake of World War II, and they see themselves as a potential challenge to the exceptionalist and unipolar world that Washington imagines for our future (with itself as the global robocop and NATO as its robo-police force). Historian and imperialist cheerleader Ian Morris, in his book War! What is it Good For?, defines the US as the ultimate “globocop” and “the last best hope of Earth.” If that globocop “wearies of its role,” he writes, “there is no plan B.”

Well, there is a plan BRICS - or so the BRICS nations would like to think, at least. And when the BRICS do act in this spirit on the global stage, they quickly conjure up a curious mix of fear, hysteria, and pugnaciousness in the Washington establishment. Take Christopher Hill as an example. The former assistant secretary of state for East Asia and US ambassador to Iraq is now an advisor with the Albright Stonebridge Group, a consulting firm deeply connected to the White House and the State Department. When Russia was down and out, Hill used to dream of a hegemonic American “new world order.” Now that the ungrateful Russians have spurned what “the West has been offering” - that is, “special status with NATO, a privileged relationship with the European Union, and partnership in international diplomatic endeavors” - they are, in his view, busy trying to revive the Soviet empire. Translation: if you’re not our vassals, you’re against us. Welcome to Cold War 2.0.

The Pentagon has its own version of this directed not so much at Russia as at China, which, its think tank on future warfare claims, is already at war with Washington in a number of ways. So if it’s not apocalypse now, it’s Armageddon tomorrow. And it goes without saying that whatever’s going wrong, as the Obama administration very publicly “pivots” to Asia and the American media fills with talk about a revival of Cold War-era “containment policy” in the Pacific, it’s all China’s fault.

Embedded in the mad dash toward Cold War 2.0 are some ludicrous facts-on-the-ground: the US government, with $17.5 trillion in national debt and counting, is contemplating a financial showdown with Russia, the largest global energy producer and a major nuclear power, just as it’s also promoting an economically unsustainable military encirclement of its largest creditor, China.

Russia runs a sizeable trade surplus. Humongous Chinese banks will have no trouble helping Russian banks out if Western funds dry up. In terms of inter-BRICS cooperation, few projects beat a $30 billion oil pipeline in the planning stages that will stretch from Russia to India via Northwest China. Chinese companies are already eagerly discussing the possibility of taking part in the creation of a transport corridor from Russia into Crimea, as well as an airport, shipyard, and liquid natural gas terminal there. And there’s another “thermonuclear” gambit in the making: the birth of a natural gas equivalent to the Organization of the Petroleum Exporting Countries that would include Russia, Iran, and reportedly disgruntled US ally Qatar.

The (unstated) BRICS long-term plan involves the creation of an alternative economic system featuring a basket of gold-backed currencies that would bypass the present America-centric global financial system. (No wonder Russia and China are amassing as much gold as they can.) The euro - a sound currency backed by large liquid bond markets and huge gold reserves - would be welcomed in as well.

It’s no secret in Hong Kong that the Bank of China has been using a parallel SWIFT network to conduct every kind of trade with Tehran, which is under a heavy US sanctions regime. With Washington wielding Visa and Mastercard as weapons in a growing Cold War-style economic campaign against Russia, Moscow is about to implement an alternative payment and credit card system not controlled by Western finance. An even easier route would be to adopt the Chinese Union Pay system, whose operations have already overtaken American Express in global volume.

I’m Just Pivoting With Myself

No amount of Obama administration “pivoting” to Asia to contain China (and threaten it with US Navy control of the energy sea lanes to that country) is likely to push Beijing far from its Deng Xiaoping-inspired, self-described peaceful development strategy meant to turn it into a global powerhouse of trade. Nor are the forward deployment of US or NATO troops in Eastern Europe or other such Cold-War-ish acts likely to deter Moscow from a careful balancing act: ensuring that Russia’s sphere of influence in Ukraine remains strong without compromising trade and commercial, as well as political, ties with the European Union - above all, with strategic partner Germany. This is Moscow’s Holy Grail; a free-trade zone from Lisbon to Vladivostok, which (not by accident) is mirrored in China’s dream of a new Silk Road to Germany.

Increasingly wary of Washington, Berlin for its part abhors the notion of Europe being caught in the grips of a Cold War 2.0. German leaders have more important fish to fry, including trying to stabilize a wobbly EU while warding off an economic collapse in southern and central Europe and the advance of ever more extreme right-wing parties.

Reuters / Stringer

 

On the other side of the Atlantic, President Obama and his top officials show every sign of becoming entangled in their own pivoting - to Iran, to China, to Russia’s eastern borderlands, and (under the radar) to Africa. The irony of all these military-first maneuvers is that they are actually helping Moscow, Tehran, and Beijing build up their own strategic depth in Eurasia and elsewhere, as reflected in Syria, or crucially in ever more energy deals. They are also helping cement the growing strategic partnership between China and Iran. The unrelenting Ministry of Truth narrative out of Washington about all these developments now carefully ignores the fact that, without Moscow, the “West” would never have sat down to discuss a final nuclear deal with Iran or gotten a chemical disarmament agreement out of Damascus.

When the disputes between China and its neighbors in the South China Sea and between that country and Japan over the Senkaku/Diaoyou islands meet the Ukraine crisis, the inevitable conclusion will be that both Russia and China consider their borderlands and sea lanes private property and aren’t going to take challenges quietly - be it via NATO expansion, US military encirclement, or missile shields. Neither Beijing nor Moscow is bent on the usual form of imperialist expansion, despite the version of events now being fed to Western publics. Their “red lines” remain essentially defensive in nature, no matter the bluster sometimes involved in securing them.

Whatever Washington may want or fear or try to prevent, the facts on the ground suggest that, in the years ahead, Beijing, Moscow, and Tehran will only grow closer, slowly but surely creating a new geopolitical axis in Eurasia. Meanwhile, a discombobulated America seems to be aiding and abetting the deconstruction of its own unipolar world order, while offering the BRICS a genuine window of opportunity to try to change the rules of the game.

Russia and China in Pivot Mode

In Washington’s think-tank land, the conviction that the Obama administration should be focused on replaying the Cold War via a new version of containment policy to “limit the development of Russia as a hegemonic power” has taken hold. The recipe: weaponize the neighbors from the Baltic states to Azerbaijan to “contain” Russia. Cold War 2.0 is on because, from the point of view of Washington’s elites, the first one never really left town.

Yet as much as the US may fight the emergence of a multipolar, multi-powered world, economic facts on the ground regularly point to such developments. The question remains: Will the decline of the hegemon be slow and reasonably dignified, or will the whole world be dragged down with it in what has been called “the Samson option”?

While we watch the spectacle unfold, with no end game in sight, keep in mind that a new force is growing in Eurasia, with the Sino-Russian strategic alliance threatening to dominate its heartland along with great stretches of its inner rim. Now, that’s a nightmare of Mackinderesque proportions from Washington’s point of view. Think, for instance, of how Zbigniew Brzezinski, the former national security adviser who became a mentor on global politics to President Obama, would see it.

In his 1997 book The Grand Chessboard, Brzezinski argued that “the struggle for global primacy [would] continue to be played” on the Eurasian “chessboard,” of which “Ukraine was a geopolitical pivot.” “If Moscow regains control over Ukraine,” he wrote at the time, Russia would “automatically regain the wherewithal to become a powerful imperial state, spanning Europe and Asia.”

That remains most of the rationale behind the American imperial containment policy - from Russia’s European “near abroad” to the South China Sea. Still, with no endgame in sight, keep your eye on Russia pivoting to Asia, China pivoting across the world, and the BRICS hard at work trying to bring about the new Eurasian Century.

 

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Tue, 05/20/2014 - 21:31 | 4779654 luckylogger
luckylogger's picture

The chinease have the upper hand and will play it very well...........

They will beat the russian chess god.

Tue, 05/20/2014 - 21:31 | 4779655 luckylogger
luckylogger's picture

The chinease have the upper hand and will play it very well...........

They will beat the russian chess god.

Tue, 05/20/2014 - 21:30 | 4779656 luckylogger
luckylogger's picture

The chinease have the upper hand and will play it very well...........

They will beat the russian chess god.

Tue, 05/20/2014 - 21:31 | 4779657 luckylogger
luckylogger's picture

The chinease have the upper hand and will play it very well...........

They will beat the russian chess god.

Tue, 05/20/2014 - 21:31 | 4779659 luckylogger
luckylogger's picture

The chinease have the upper hand and will play it very well...........

They will beat the russian chess god.

Tue, 05/20/2014 - 21:31 | 4779661 luckylogger
luckylogger's picture

The chinease have the upper hand and will play it very well...........

They will beat the russian chess god.

Tue, 05/20/2014 - 21:33 | 4779667 espirit
espirit's picture

Lighten up on the caffeine please!

Wed, 05/21/2014 - 06:15 | 4780340 Volkodav
Volkodav's picture

useless talkings

better worry about your own country

 

Tue, 05/20/2014 - 19:31 | 4779222 neidermeyer
neidermeyer's picture

We've always been at war with Eurasia.

Tue, 05/20/2014 - 19:32 | 4779225 Kaiser Sousa
Kaiser Sousa's picture

its over for the debt coupon dollar....

Got real money?

Tue, 05/20/2014 - 19:33 | 4779228 Flakmeister
Flakmeister's picture

Call me when that CAPEX is moving along....

Tue, 05/20/2014 - 19:40 | 4779254 cn13
cn13's picture

So what do Chavez, Hussien and Quadafi all have in common besides being dead?

They all attempted to replace the dollar with a replacement currency in pricing their crude oil.

The Chavez outster by the CIA in 2001 failed.  But the U.S. definately got Hussien and Quadafi. 

Bottom line, try to replace the U.S. dollar as the world's reserve currency and the U.S. government will do anything in its power to crush you.

Which brings up the question of China and Russia no longer using the U.S. dollar for trade?

No telling what the U.S. government might attempt to pull on this one.

It actually scares me to think about it.

Tue, 05/20/2014 - 20:27 | 4779420 kill switch
kill switch's picture

If they do it the world as we know it will be dissolved!!! And they will stink in hell,,,and we will go on to a spiritual world of the elders... Bring it on you cretins.....Oh Fukushima will probably make all of this irrelevant..BUILDING 4 IS ON THE VERGE OF TIPPING OVER,,, BALL GAME OVER,, ,,HUMAN EXSTINTION EVENT...BEND OVER AND KISS YOUR ASS GOODBYE...

Tue, 05/20/2014 - 20:39 | 4779453 delivered
delivered's picture

All three were very small fish in a very big ocean. Now you have two of the largest whales in a suddenly smaller ocean looking to carve out their space/territory. As for the US's so called "all powerful" military, let's look at its history over the past 60 plus years. The Korean conflict in the 50's, basically a draw (as it left a mess with North Korea). The Vietnam war in the 60's (ending in the early 70's), a clear defeat that really left the US Military in a state of shock. Pass on the 70's and 80's as the country and politicians were war weary. The last two campaigns in Iraqx2 and Afganistan are at best, shallow victories and more than likely will do more long-term damage than good. Iraq is still a deeply divided nation with the potential for civil war present. Afganistan, once the US leaves later this year, will more than likely revert back to an unstable environment. My point is that for major US military actions (20k plus occupational based troops, heavy equipment, lenghty engagements, etc.), the track record has not been all that good. Of course I'm leaving out small actions such as in Libya, Grenada, and elsewhere but these were carried out against basically defenseless countries. 

What we are witnessing is history. That is, the rise of the Eur-Asia economic trading region and the fall of US dominance. Doesn't mean the US won't be a part of the global economy but rather, its role is changing rapidly from control and dominance (which the old guards won't let go of) to one that needs to focus on leadership and global intergration (which the younger new guards see and understand the importance of embracing). While everyone is focused on skirmishes between Russia and Nato in Ukraine and China and Japan, Vietnam, etc. in Southeast Asia maybe the real battle that needs to be focused on is the conflict that will occur sooner rather than later in the US - between the old guard and their outdated thinking and the masses that are growing increasingly frustrated each day by their incompetent and corrupt leaders. Approximately 250 years ago this conflict erupted into a war for freedom and independence and as they say, history has a way of repeating itself. 

So ask yourself this question. Why wouldn't both Russia and the Middle East look east to sell their products (i.e., oil and gas)? The long-term opportunities for future growth are much stronger (especially with the US pushing towards energy independence) so just like a business, these countries will look to deploy resources towards the markets that have the greatest potential. And further, why even bother with clearing transactions through with the USD? If active trade is occuring between these countries, simply set up a system to clear, settle, and convert the currencies between the different countries. I truly believe the majority of Europe understands this and helps explain why most countries in Europe have been very quiet on the Russian/Ukraine situation. The process to displace the PetroDollar has clearly begun, step by step, little by little, and bit by bit. Its clear that the actions being undertaken by Russia, China, Iran, India and others, although not individually all that significant, but when combined are starting to really push the US and test the waters to exit the control the "West" has had over the East for the past 100 years (especially on the banking front). 

No longer does the East really fear the West but rather has reached a point where the East is moving forward and it is up to the West to adapt, adjust, and integrate into a new global economy and order. The US is simply getting spread too thin, on a global scale, and will not be able to respond to turmoil in the Mideast, tension in Ukraine, and numerous conflicts in Southeast Asia (i.e., China and Japan, China and Vietnam, etc.) at the same time. The world is changing and unfortunately, the US is not.

 

Tue, 05/20/2014 - 21:00 | 4779529 Scarlett
Scarlett's picture

The USSA will finally be seen for what it is.  A criminal, inverted totaliarism distopia. 

Then it will lose the war, just to keep up with tradition.

Tue, 05/20/2014 - 21:27 | 4779632 NidStyles
NidStyles's picture

It's dystopia

Tue, 05/20/2014 - 19:43 | 4779266 Bollixed
Bollixed's picture

"...at the expense of the United States."

 

It's always about us. Once we stop being the world's biggest dickhead and learn to cooperate maybe things will change. There is no natural law that says we have to take by force everything we want as a country. Perhap if we had something to give in exchange things wouldn't happen 'at the expense of the United States'.

Tue, 05/20/2014 - 19:44 | 4779269 kill switch
kill switch's picture

Sorry bitchez, the deal fell through.

The deal fell................................Official verification????????

The deal fell through??? OK thats all I  SHOULD believe  because you say THE DEAL FELL THROUGH,,,, DEEP ANALYSIS....

THE WORLD WILL END TOMORROW..... Sorry BITCHES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

If It's true enlighten us all with evidence...

Tue, 05/20/2014 - 19:45 | 4779279 ebworthen
ebworthen's picture

WTF did we expect?

Our "leaders" sold out U.S. production and the populace to China.

Cheap crap at Walmart - so fucking what.

Tue, 05/20/2014 - 19:47 | 4779284 knukles
knukles's picture

So a drunk, Putin and Xi were walking along the street and at the same moment they all see a $100 bill just lying on the street.
Who gets it?

The Drunk. 

The others don't care about dollars anymore.

Tue, 05/20/2014 - 20:38 | 4779452 Let them eat iPads
Let them eat iPads's picture

Yeah, I'd  rather own the much stabler petro-ruble or those hilarious looking Mao-bucks.

Tue, 05/20/2014 - 21:02 | 4779535 samsara
samsara's picture

You're projecting a false dichotomy where there is none.

Us/Them, Dem/Repubs, and on and on.

No Sale.

Tue, 05/20/2014 - 19:48 | 4779291 IridiumRebel
IridiumRebel's picture

America has spread itself too thin.

Tue, 05/20/2014 - 19:55 | 4779318 BrosephStiglitz
BrosephStiglitz's picture

No doubt.

Tue, 05/20/2014 - 20:01 | 4779331 IridiumRebel
IridiumRebel's picture

It happens to all empires.

Tue, 05/20/2014 - 20:40 | 4779455 ThisIsBob
ThisIsBob's picture

And it does not treat its power with any humility whatsoever.  Deserves to lose it.

Tue, 05/20/2014 - 19:50 | 4779297 jusman
jusman's picture

Yeah, so on the road to globalisation and a "one world" government, would a logical step not be to split the globe into a few big units?  North America, Europe and Vietnam South Korea, Japan, Thailand, China and Russia, South America....

It is just a slow and messy process in moving towards a one world government, which will take several generations and humans maturing enough to just get along....

Tue, 05/20/2014 - 19:51 | 4779303 samsara
samsara's picture

Alright Tylers !

Gail, Kunstler, Orlov, Now Pepe.

Tue, 05/20/2014 - 20:14 | 4779372 earleflorida
earleflorida's picture

?

question authority,

... but please don't question the "Roving Eye" of wisdom!!!

thankyou Tyler for Pepe's 2nd post :-))

Tue, 05/20/2014 - 19:55 | 4779316 spacecadet
spacecadet's picture

Does Russia even have a middle class? What does China think it's gonna sell back to Russia? China is on the verge of collapse, I call B.S. What if Europe and the Americas stop purchasing from China? I think we're all going down in flames

Tue, 05/20/2014 - 19:56 | 4779324 Slave
Slave's picture

Then we'd have to make our own useless shit again and put everybody on welfare back to work.

Tue, 05/20/2014 - 20:04 | 4779339 IridiumRebel
IridiumRebel's picture

A boy can dream.

Tue, 05/20/2014 - 20:06 | 4779349 SAT 800
SAT 800's picture

Which would create what is called a functioning economy.

Tue, 05/20/2014 - 21:39 | 4779679 samsara
samsara's picture

Dup. (Damn touch screens)

Tue, 05/20/2014 - 21:38 | 4779682 samsara
samsara's picture

Work doing what, Making what?

That will be a gut wrenching change. Many WILL die of starvation or die trying not to.

We are in overshoot for the level of commerce "After" the transition.

Tue, 05/20/2014 - 21:54 | 4779733 paddyirishman
paddyirishman's picture

does the United States? well at least one with real wealth not debt.

Tue, 05/20/2014 - 22:26 | 4779816 Volkodav
Volkodav's picture

Russia has best educated middle class in the world.

seems you know nothing about Russia...

Tue, 05/20/2014 - 23:04 | 4779901 Arkadaba
Arkadaba's picture

I agree with you and speaking of middle class:

America dumbs down

Wed, 05/21/2014 - 01:36 | 4780127 FinalCollapse
FinalCollapse's picture

Vol - you gotta be fucking kidding..... I don't know what you're smoking but I like how it works. 

While the Russian computer programmers are tops the overall education picture in RuSSia is dismal and beyond repair.

Your opinion is not supported by facts.  Pure and simple. There are objective measurements of the quality of education. Most of the research is done by OECD but also by UN and other international bodies. RuSSia scores very low. Sometimes RuSSia scores so low that it is not even listed in the first 40 countries. C'mon - it is every ranking in every year unless it is Gazprom or RuSSian government ranking - then they are first, of course. Just like you have said. 

Here are the facts based on OECD. Russia is usually around 30th rank and below the world average. It is not top, it is not bad - it is exceptionally bad. 

http://www.geographic.org/country_ranks/educational_score_performance_co...

http://www.theguardian.com/news/datablog/2010/dec/07/world-education-ran...

Here it is the best standing for RuSSia: 14th overall. But it is only a private ranking.

http://thelearningcurve.pearson.com/index/index-ranking

In 2009 RuSSia was 41 rank (OECD) by overall score: reading+math+science.

Maybe they need more books and teachers than tanks and ICBMs. The same applies to USSA.

Maybe you do not need facts. Still I like the shit that you are smoking.

Wed, 05/21/2014 - 01:37 | 4780160 allgoodmen
allgoodmen's picture

Open your eyes, take a look at the real world, and stop relying on jiggered lists from people with agenda. Ask yourself for instance. Why in the FUCK are there so many Indian H1B engineers around here when India doesn't even figure on your list?

Wed, 05/21/2014 - 01:52 | 4780164 FinalCollapse
FinalCollapse's picture

Job racket. There are good Indians here in Silicon Valley but many are just pathetic. Why Indian computer programmers cannot win any respectable coding contest? They never won ICPC. You are talking religion and the shit while I talk hard facts. I worked with some of the top guns from India - they were all very good. But the Indian folks below are hard to describe - just pathetic. Btw - I truly like Indians, their culture and cuisine.

These are not my lists. These are OECD or other international bodies measuring the quality of education. 

Wed, 05/21/2014 - 06:04 | 4780326 Volkodav
Volkodav's picture

ICPC at URAL Federal University Ekaterinburg this year?

Putin must have paid billions bribes for that in attempt to distract from Russia's poor educational ratings by the west.....

 

Wed, 05/21/2014 - 05:51 | 4780316 Volkodav
Volkodav's picture

Yeh, like the list of world's 250 top universities with only one Russian school listed.

Yet Russia has worlds best physicists, mathmaticians,programmers and other fields.

Impressive considering Russian Federation only 23 years founded after collapse three times worse than US Great Depression.

I guess the fact missed you that certain parties NEVER give Russia respect for anything..

I think you know not much of facts.

Ever hear of Petr Mitrichev?   Look Top Coder ranks..count the Russian Guys.

Tue, 05/20/2014 - 20:07 | 4779353 Goldilocks
Goldilocks's picture

Billy Idol - Dancing With Myself
http://www.youtube.com/watch?v=FG1NrQYXjLU (3:22)

Tue, 05/20/2014 - 20:08 | 4779355 Duke Dog
Duke Dog's picture

Well done - 5 stars!

Tue, 05/20/2014 - 20:12 | 4779368 davidalan1
davidalan1's picture

Shhhhhhh.....idol and the voice are on simultaneously....gawd..

Tue, 05/20/2014 - 20:15 | 4779376 kurt
kurt's picture

Once again amateur propagandists are working overtime. They use the emotive words: spector, haunts, unnerving vision. Since when is an expansive symbiosis of trade and commerce a bad thing? The clincher is the absolute untruth and illogic that it is "at the expense of the United States." How do you figure Propa-Boy? 

I want Jesus himself to stick you war mongers in the lake of fire.

Tue, 05/20/2014 - 21:20 | 4779543 Muc Metals
Muc Metals's picture

Yeah, sounds really like "amateur propagandists are working overtime"

Ever heard of that sh*tty country called Ukraine?

 

In his 1997 book The Grand Chessboard, Brzezinski argued that "the struggle for global primacy [would] continue to be played" on the Eurasian "chessboard", of which "Ukraine was a geopolitical pivot". "If Moscow regains control over Ukraine," he wrote at the time, Russia would "automatically regain the wherewithal to become a powerful imperial state, spanning Europe and Asia."

That remains most of the rationale behind the American imperial containment policy - from Russia's European "near abroad" to the South China Sea. Still, with no end-game in sight, keep your eye on Russia pivoting to Asia, China pivoting across the world, and the BRICS hard at work trying to bring about the new Eurasian Century.

 

Time for an unipolar, US dominated world is running out.

Imperium Americanum is slowly going down.

Watch your Petrodollar...

Amen.

 

Tue, 05/20/2014 - 20:27 | 4779422 bankonzhongguo
bankonzhongguo's picture

"Engagement." That's going to leave a mark.

The danger going forward is after all these bilateral trade deals are cemented and operational, China is going to turn to a bankrupt US and start settling accounts in something other than dollars and the sucking sound you hear in the distance across America will turn into a fire-tornado.

The only end-run will be for the XDR to standardize trade and prevent larger war, but by that time will China play along?  I would be surprised they would continue to play the West's financialization games.

China can spend the rest of the century simply investing in their own development and Africa and otherwise bring online the other 800 million country-folk that have barely heard of America, let alone find it on a map.

China's central goal is to bankrupt the US war machine and keep it from being forward deployed and encircling China - like Russia, this entails destroying the dollar and the Fed's capacity to issue debt.  Maybe it happens in 20 years or never, but it necessitates putting the long term screws to America.

China has a very ancient identity and everything you know about China and its political culture could be summed up and glossed over in any one of hundreds of "peasant revolutions" that pock-mark the dynastics.

China can only tear itself part from the inside and for the foreseeable future everyone is energized to over take USA number 1 position.  In their view it is high time the US did its part with its experiment in democracy and simply fold.

Tue, 05/20/2014 - 22:12 | 4779778 samsara
samsara's picture

 

"China can spend the rest of the century simply investing in their own development and Africa and otherwise bring online the other 800 million country-folk that have barely heard of America, let alone find it on a map."

To those Chinese Long range plans ( considering those 800+ million,  And the rest of the 7 Billion.... )  all I can say about their chance of success...

Peak Oil.

NOBODY is going to relive ANY of those 1950 -2000 economic growth stories. 

There will be 2% - 4% less supply produced every year from now on.

Wed, 05/21/2014 - 04:31 | 4780252 JustUsChickensHere
JustUsChickensHere's picture

Peak Oil can be countered by a good Thorium reactor design. Molten Salt? Small scale units, mass produced, deployed across many locations...  roll out starting in about ten years... power to run electric transport, filter water, etc....

[sarc] what a wild idea [/sarc]

Oh  ... thats right - this is exactly what Xi authorised recently....

Peak Oil is better described as 'Peak Energy' - and if they get that Thorium plan done, China will effectively have unlimited energy.

That idea is a game changer.

 

Wed, 05/21/2014 - 09:42 | 4780887 earleflorida
earleflorida's picture

'Thorium is not only the future, but... it can use the highly toxic nuclear waste byproducts as fuel...?'

Myself-- huge advocate for Thorium. Yesteryear was Plutonium... because of the advent of a Cold/Hot War-- the Nuclear Weapons buildup in the USA was the fastest way to get there using 'Breeder Reactors' as the US was suddenly, and desparately playing catchup with the USSR... when in 1949 shortly after Truman put the nuclear program in civilian hands under the 'Nuclear Reactor *{(NRC) [Note: pg. 472 'Truman by David McCullough c.1992)} Commission' the Russian's ThermoNuclear bomb was 10x more lethal than the two-Nukes dropped in Japan **{(one Uranium/ one Hydrogen and one to spare with a six month window to produce a few moar)(the US was fully aware of Russia making a Nuke/bomb, but... not until the early 50's-- surprise, surprise)}. The nuclear buildup arsenal began in earnest and never actually stopped... even with M.A.D.?!?  

Note: Remember the first Gulf-War where Bush #41 used bombs with painted shellac-uranium waste-byproduct on them, and used by the UK airforce on Saddam's military?!? 

This was the only deterrent for not pursuing Thorium as a Nuclear Energy source. ***(jmho) Today, in the 21st century it is time to focus on alternatives... safe alternatives that don't 'Melt-Down/ Melt-up!'

Thorium is as plentiful as Uranium in its natural state. China has been researching Thorium along with India for quite awhile.

With that said,... its time for the world to focus on what's good for the planet... not just good for the fascist/oligarchy in the USSA that could give a fuck about the average joe-sixpack struggling with energy bills eating away at disposable income at a rate of 20%-30% annually.

Ref:    "Should the Nuclear Industry Ditch Uranium in Favor of Thorium?"    5/20/14 by Maxx Chatsko

http://www.fool.com/investing/general/2014/05/20/should-the-nuclear-industry-ditch-uranium-in-favor.aspx

again, jmo

Tue, 05/20/2014 - 20:37 | 4779443 messymerry
messymerry's picture

Gaz-O-Yuan, FTFY,  ;-D

 

Tue, 05/20/2014 - 20:50 | 4779495 22winmag
22winmag's picture

Bomb, bomb, bomb!

 

Oh wait, they can shoot back.

Tue, 05/20/2014 - 20:52 | 4779505 Irving Phelps
Irving Phelps's picture

Yea well, it's too fucking late for O'Fuckup to solve it now. he and his band of idiots have done their damage and the pieces are left to us to pick up. Screw him and the donkey he rode in on!!!

Tue, 05/20/2014 - 20:53 | 4779508 Muc Metals
Muc Metals's picture

Recommended bookmarking for US readers impaired by

FoxNews and friends:

 

http://www.atimes.com

and as a special: The Best of Pepe Escobar:

http://www.atimes.com/atimes/Others/Escobar.html

 

They are delivering news and comments not only from

an US perspective but also from an Eurasian point of view.

 

Wed, 05/21/2014 - 10:11 | 4781045 earleflorida
earleflorida's picture

everyday i wake, my first reading of the day-- the atimes.com site... with only pepe on my mind

again, thankyou Tyler for the post

please keep em comin...

Tue, 05/20/2014 - 21:00 | 4779530 insanelysane
insanelysane's picture

Maybe we could do a pipeline with a neighbor too?  Nah, that would just be silly, we'll just ship it by rail instead.

Tue, 05/20/2014 - 21:01 | 4779533 yrbmegr
yrbmegr's picture

Meh

Tue, 05/20/2014 - 21:22 | 4779620 Herdee
Herdee's picture

I see that Obama is still taking orders from the right wing neo-con establishment that stayed on in his Administration.A lot backfired on the last couple of Presidents with this dream of world dominance.World cop doesn't work for the U.S. taxpayer.

Tue, 05/20/2014 - 21:30 | 4779645 NidStyles
NidStyles's picture

Really? THe article is about Russia and China, what in the fuck does Obama have to do with either of those?

Tue, 05/20/2014 - 21:27 | 4779635 Ocean22
Ocean22's picture

Wow!!! Does Russia know this????? Something took out its rocket. Caught on camera. !!

http://youtu.be/NIIKKyBhd-E

Tue, 05/20/2014 - 21:29 | 4779639 nah
nah's picture

Russia wins cold war

Tue, 05/20/2014 - 23:06 | 4779909 yrbmegr
yrbmegr's picture

.

Tue, 05/20/2014 - 21:37 | 4779678 JR
JR's picture

In cae you have seen...

WikiLeaks threatens to name NSA-targeted country despite warnings it may lead to deaths |RT| May 20, 2014  

“Despite warnings that doing so ‘could lead to increased violence’ and potentially deaths, anti-secrecy group WikiLeaks says it plans to publish the name of a country targeted by a massive United States surveillance operation…, despite requests from the US government to leave that information redact over fears of what the response could be…”

http://rt.com/usa/160240-wikileaks-greenwald-intercept-phones/

Tue, 05/20/2014 - 22:38 | 4779843 Muc Metals
Muc Metals's picture

The Bahamas are a nice little country...

The NSA Records Every Cell-Phone Call That Takes Place in the Bahamas

http://www.slate.com/blogs/the_slatest/2014/05/19/nsa_bahamas_recordings...

Tue, 05/20/2014 - 21:51 | 4779719 Tachyon5321
Tachyon5321's picture

 

 

The answer to europe is more coal power plants. German was building 7 huge new ones last year.

 

So much for the $130 billion Europe wasted on solar

 

 

Tue, 05/20/2014 - 21:58 | 4779743 orangegeek
orangegeek's picture

and when things start to mysteriously break/blow up, then Russia/China can decide then if it is worth it to go it alone

Tue, 05/20/2014 - 22:03 | 4779757 acetinker
acetinker's picture

tl:dr;  Listen Kids, Obama, Putin, Merkel, Draghi, et, al; are all on the same team.  The thing you need to know is that their team is not interested in what you you think or believe.

Bank it.

Tue, 05/20/2014 - 22:09 | 4779768 NoWayJose
NoWayJose's picture

How can this be haunting to Washington - they drove it to happen!!!

Tue, 05/20/2014 - 22:12 | 4779780 ramacers
ramacers's picture

the end of this , lately, ferentic 240 yr history of the us looms.

Tue, 05/20/2014 - 22:58 | 4779892 Arkadaba
Arkadaba's picture

Thanks for posting. Excellent article.

Wed, 05/21/2014 - 00:08 | 4780054 DOGGONE
DOGGONE's picture

LOOK AT our track records that got us here!

The Public Be Suckered
http://patrick.net/forum/?p=1230886

America's leadershit/bipartisanshit always has re-election as the top priority, NOT smartening up dummies.
The news media DO KNOW HOW:
http://www.showrealhist.com/yTRIAL.html

How about we replace our civilian politicians with retired four star military!
Intellectual honesty ... look at the bottom of here:
http://www.showrealhist.com/

Wed, 05/21/2014 - 00:10 | 4780057 Atticus Finch
Atticus Finch's picture

Yeah, but don't forget the US gave that vaccination program in Pakistan.

Wed, 05/21/2014 - 05:52 | 4780317 Jano
Jano's picture

pepe ignore McCain and Nudelmann.

He ignores, how talented are they, giving away $5bn to everybody, who says, that he is a democrat.

Wed, 05/21/2014 - 08:02 | 4780561 vyeung
vyeung's picture

one of the best articles I've read thus far on ZERO HEDGE. Very similar in outlook to Jim Willie. Plus, its unfoldering before our eyes if people care to look. Well written.

Wed, 05/21/2014 - 08:31 | 4780635 straightlinelogic
straightlinelogic's picture

Excellent article. For more along this line: "What If We Picked On Somebody Our Own Size?"

Wed, 05/21/2014 - 08:45 | 4780669 gcjohns1971
gcjohns1971's picture

Great energy deal for Russia.

Most of the rest of the article is "Pinky And the Brain" shit... Or perhaps for those more familiar, Wolf and Rabit of "Nu Pogadi".

The 'we are going to conquer the world' refrain is ever so tiresome as one burgeoning empire after another politically masturbates.

The main problem with the forecast is that it ignores much of the political reality and history of central asia.  The plan depends on very good coordination between these countries for Russia's benefit, while these Countries benefit is to pursue their own interests as much as possible. 

When the two conflict, national interests and Russia's interest, someone gets invaded - and the very good coordination becomes the sullen footdragging or earnest incompetence of conquered vassals.

Most notably, if we believe the article a real gold standard is off the table.  Instead, according to the author, we would get a gold-exchange standard at best with a 'basket of currencies' that are 'exchangable for gold'.

Q:  Why currencies and not gold itself? 

A:  Because nations cannot control gold itself (for long).

Q: Why would you expect a nation's currency to remain convertable when it has already admitted that control is of more importance than reliable value?

A:  (crickets)

The basket of gold-backed currencies likely won't really be gold backed in the first place.   If they seem to be then there will be no auditing of their gold accounts.  And if there is, then the 'gold window' will close within a decade or two. 

The 'Gold' here is that this admits that gold-backing is nothing more than a marketing ploy.

Q:  Why does a country want to 'control' the value of what it pays in international transactions?

A:  Because it wants to determine what to pay by fiat rather than by bargaining between seller and recipient. 

 

Essentially controlled currencies exist purely from lust for larceny.

Wed, 05/21/2014 - 12:49 | 4781764 RMolineaux
RMolineaux's picture

Our neocons have concluded a very bad bargain - trading China for Ukraine.  Unless, of course, you are a Polish patriot (Brzezinski) for whom encircling Russia should be the end-all of US foreign policy, while blissfully unaware of the larger developments.

Fri, 05/23/2014 - 04:57 | 4787684 thisisjustarand...
thisisjustarandomusernameicreatedforzerohedge's picture

my uni poli sci teacher made our fp class worship the grand chessboard lol

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