Dr. Paul Craig Roberts: The Outlook For The New Year

Dr. Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University.

–  The Outlook for the New Year (Paul Craig Roberts, Dec 29, 2014):

The Outlook for the New Year

Dear Readers: The conflict that Washington has initiated between the West and Russia/China is reckless and irresponsible. Nuclear war could be the outcome. Indeed, Washington has been preparing for nuclear war since the George W. Bush regime.
Washington has revised US war doctrine in order to initiate conflict with a first strike nuclear attack.
Washington has discarded the ABM treaty in order to build and deploy anti-ballistic missiles that are intended to prevent a retaliatory strike against the US. Washington is engaged in a buildup of military forces on Russia’s borders, and Washington is demonizing Russia’s government with false charges.
As the Bush/Obama regimes dismantled the safeguards put in place in order to minimize the risk of nuclear war, no protests came from the American public or the media. Washington’s European vassal states have also been silent.
Washington’s drive for hegemony has brought nuclear insanity to the world.
Moscow and Beijing understand that they are Washington’s targets. As Larchmonter explains, Russia and China are conjoining their economic and military capabilities in order to protect against Washington’s attack. Read what Larchmonter reports. Open the URL in my column below and run your cursor over the bottom of the page and click “page fit.” Choose 50% and readable text will fill your screen.
Washington’s demonization of Saddam Hussein, Gaddafi, and Assad were preludes to military attacks on Iraq, Libya, and Syria. In view of these precedents, it is reasonable to regard Washington’s demonization of Vladimir Putin as a prelude to military action.
Russia is not Iraq, Libya, or Syria. Russian war doctrine states that Russia can use nuclear weapons in response to a nuclear or conventional attack on Russia. For the world to sit silent while Washington’s arrogance provokes armageddon telegraphs total political failure. Where are the voices in behalf of humanity?

The Outlook for the New Year

Paul Craig Roberts

Washington has shaped 2015 to be a year of conflict. The conflict could be intense.

Washington is the cause of the conflict, which has been brewing for some time. Russia was too weak to do anything about it when the Clinton regime pushed NATO to Russia’s borders and illegally attacked Yugoslavia, breaking the country into small easily controlled pieces. Russia was also too weak to do anything about it when the George W. Bush regime withdrew from the ABM treaty and undertook to locate anti-ballistic missile bases on Russia’s borders. Washington lied to Moscow that the purpose of the ABM bases is to protect Europe from non-existent Iranian nuclear ICBMs. However, Moscow understood that the purpose of the ABM bases is to degrade Russia’s nuclear deterrent, thereby enhancing Washington’s ability to coerce Russia into agreements that compromise Russian sovereignty.

By summer 2008 Russian power had returned. On Washington’s orders, the US and Israeli trained and equipped Georgian army attacked the breakaway republic of South Ossetia during the early hours of August 8, killing Russian peacekeepers and civilian population. Units of the Russian military instantly responded and within a few hours the American trained and equipped Georgian army was routed and defeated. Georgia was in Russia’s hands again, where the province had resided during the 19th and 20th centuries.

Putin should have hung Mikheil Saakashvili, the American puppet installed as president of Georgia by the Washington-instigated “Rose Revolution”, and reincorporated Georgia into the Russian Federation. Instead, in a strategic error, Russia withdrew its forces, leaving Washington’s puppet regime in place to cause future trouble for Russia. Washington is pushing hard to incorporate Georgia into NATO, thus adding more US military bases on Russia’s border. However, at the time, Moscow thought Europe to be more independent of Washington than it is and relied on good relations with Europe to keep American bases out of Georgia.

Today the Russian government no longer has any illusion that Europe is capable of an independent foreign policy. Russian President Vladimir Putin has stated publicly that Russia has learned that diplomacy with Europe is pointless, because European politicians represent Washington’s interest, not Europe’s. Foreign Minister Sergei Lavrov recently acknowledged that Europe’s Captive Nation status has made it clear to Russia that Russian goodwill gestures are unable to produce diplomatic results.

With Moscow’s delusion shattered that diplomacy with the West can produce peaceful solutions, reality has set in, reinforced by the demonization of Vladimir Putin by Washington and its vassal states. Hillary Clinton called Putin the new Hitler. While Washington incorporates former constituent parts of the Russian and Soviet empires into its own empire and bombs seven countries, Washington claims that Putin is militarily aggressive and intends to reconstitute the Soviet empire. Washington arms the neo-nazi regime Obama established in Ukraine, while erroneously claiming that Putin has invaded and annexed Ukrainian provinces. All of these blatant lies are echoed repeatedly by the Western presstitutes. Not even Hitler had such a compliant media as Washington has.

Every diplomatic effort by Russia has been blocked by Washington and has come to naught. So now Russia has been forced by reality to update its military doctrine. The new doctrine approved on December 26 states that the US and NATO comprise a major military threat to the existence of Russia as a sovereign independent country.

The Russian document cites Washington’s war doctrine of pre-emptive nuclear attack, deployment of anti-ballistic missiles, buildup of NATO forces, and intent to deploy weapons in space as clear indications that Washington is preparing to attack Russia.

Washington is also conducting economic and political warfare against Russia, attempting to destabilize the economy with economic sanctions and attacks on the ruble. The Russian document acknowledges that Russia faces Western threats of regime change achieved through “actions aimed at violent change of the Russian constitutional order, destabilization of the political and social environment, and disorganization of the functioning of governmental bodies, crucial civilian and military facilities and informational infrastructure of Russia.” Foreign financed NGOs and foreign owned Russian media are tools in Washington’s hands for destabilizing Russia.

Washington’s reckless aggressive policy against Russia has resurrected the nuclear arms race. Russia is developing two new ICBM systems and in 2016 will deploy a weapons system designed to negate the US anti-ballistic missile system. In short, the evil warmongers that rule in Washington have set the world on the path to nuclear armageddon.

The Russian and Chinese governments both understand that their existence is threatened by Washington’s hegemonic ambitions. Larchmonter reports that in order to defeat Washington’s plans to marginalize both countries, the Russian and Chinese governments have decided to unify their economies into one and to conjoin their military commands. Henceforth, Russia and China move together on the economic and military fronts. http://www.mediafire.com/view/08rzue8ffism94t/China-

The unity of the Bear and the Dragon reduces the crazed neoconservatives’ dream of “an American century” to dangerous nonsense. As Larchmonter puts it, “The US and NATO would need Michael the Archangel to defeat China-Russia, and from all signs Michael the Archangel is aligned with the Bear and its Orthodox culture. There is no weapon, no strategy, no tactic conceivable in the near future to damage either of these rising economies now that they are ‘base pairs.’”

Larchmonter sees hope in the new geopolitics created by the conjoining of Russia and China. I don’t dispute this, but if the arrogant neoconservatives realize that their hegemonic policy has created a foe over which Washington cannot prevail, they will push for a pre-emptive nuclear strike before the Russian-Chinese unified command is fully operational. To forestall a sneak attack, Russia and China should operate on full nuclear alert.

The US economy–indeed the entire Western orientated economy from Japan to Europe–is a house of cards. Since the economic downturn began seven years ago, the entirety of Western economic policy has been diverted to the support of a few over-sized banks, sovereign debt, and the US dollar. Consequently, the economies themselves and the ability of populations to cope have deteriorated.

The financial markets are based on manipulation, not on fundamentals. The manipulation is untenable. With debt exploding, negative real interest rates make no sense. With real consumer incomes, real consumer credit, and real retail sales stagnant or falling, the stock market is a bubble. With Russia, China, and other countries moving away from the use of the dollar to settle international accounts, with Russia developing an alternative to the SWIFT financial network, the BRICS developing alternatives to the IMF and World Bank, and with other parts of the world developing their own credit card and Internet systems, the US dollar, along with the Japanese and European currencies that are being printed in order to support the dollar’s exchange value, could experience a dramatic drop in exchange value, which would make the import-dependent Western world dysfunctional.

In my opinion, it took the Russians and Chinese too long to comprehend the evil that has control in Washington. Therefore, both countries risk nuclear attack prior to the full operational capability of their conjoined defense. As the Western economy is a house of cards, Russia and China could collapse the Western economy before the neoconservatives can drive the world to war. As Washington’s aggression against both countries is crystal clear, Russia and China have every right to the following defensive measures.

As the US and EU are conducting economic warfare against Russia, Russia could claim that by wrecking the Russian economy the West has deprived Russia of the ability to repay loans to the European banks. If this does not bring down the thinly capitalized EU banks, Russia can announce that as NATO countries are now officially recognized by Russian war doctrine as an enemy of the Russian state, Russia can no longer support NATO’s aggression against Russia by selling natural gas to NATO members. If the shutdown of much of European industry, rapidly rising rates of unemployment, and bank failures do not result in the dissolution of NATO and thus the end of the threat, the Chinese can act.

The Chinese hold a very large amount of dollar-denominated financial assets. Just as the Federal Reserve’s agents, the bullion banks, dump massive shorts onto the bullion futures markets during periods of little activity in order to drive down the bullion price, China can dump the equivalent in US Treasuries of years of Quantitative Easing in a few minutes. If the Federal Reserve quickly creates dollars with which to purchase the enormous quantity of Treasuries so that the financial house of cards does not implode, the Chinese can then dump the dollars that they are paid for the bonds in the currency market. Whereas the Federal Reserve can print dollars with which to purchase the Treasuries, the Fed cannot print foreign currencies with which to buy the dollars.

The dollar would collapse, and with it the power of the Hegemon. The war would be over without a shot or missile fired.

In my view, Russia and China owe it to the world to prevent the nuclear war intended by the neoconservatives simply by replying in kind to Washington’s economic warfare. Russia and China hold all the cards. Not Washington.

Russia and China should give no warning. They should just act. Indeed, instead of step by step, Russia and China could simultaneously use the counter-measures. With four US banks holding derivatives totaling many times world GDP, the financial explosion would be the equivalent to a nuclear one. The US and Europe would be finished, and the world would be saved.

Larchmonter possibly is correct. 2015 could be a very good year, but pre-emptive economic moves by Moscow and Beijing could be required. Putin’s current plan seems to be to turn away from the West, ignore the provocations, and mesh Russia’s strategic and economic interests with those of Asia. This is a humane and reasonable course of action, but it leaves the West untroubled and undistracted by its economic vulnerabilities. An untroubled West remains a grave danger not only to Russia and China but also to Americans and the entire world.

2 thoughts on “Dr. Paul Craig Roberts: The Outlook For The New Year”

  1. I don’t think Mr. Craig Roberts understands what has really happened to the US economy, the dollar or the European viewpoint of the US, or of the world’s view of either. He served under Ronald Reagan, and the world was different then.

    Russia is not only equal to any fool attack by the US, it has the world on its side. Putin is one of the most popular men on the planet, and if the US attacks Russia, the world will unite with Russia, China, India and all their other allies……the financial pressures alone will force that choice. The US is a shell of its former self.

    The US is despised by most of the world, since the time of Ronald Reagan, or even Clinton, the US has lost all its credibility, trustworthiness, and standing. I don’t think from from Mr. Robert’s writings that he understands what has happened to the US dollar. He is not alone, many in the US don’t realize it, either.

    It isn’t just a system that is changed, it is financial strength. The US skated on their role as world reserve currency, they printed money nonstop, and did everything abusing their status of trust, one they had held since the end of WW2. At the end of WW2, it was passed from the UK to the US.

    At that time, the US had currency backed in gold, was a large MFG power, and was loaning money at great rates to rebuild Europe. Everyone loved the US, everyone wanted to be American. We had gentlemen in power, men who listened to the people, and kept to honorable standards.

    Over the next 50 years, it eroded away. Iraq made the mistake of calling out the US for printing money without gold behind it, and requested the world demand the return of gold as the world reserve currency. Iraq had a lot of gold, they were a very rich oil country. We all know what the US did to them, and continues to do regardless they did nothing else.

    A very smart man named Hugo Chavez in Venezuela thought about the entire problem in depth. He realized that technology could render the need for any world reserve currency obsolete, so he tried it out on his small association, the South American Trade Alliance, made up of 12 countries, including Cuba. Their entire GDP was about $500 million per year, and it flew under US radar.

    He established the first electronic currency, the Sucre, for his organization in Spring, 2010. For the first time, member nations could trade with each other using their own currencies, leaving the dollar out. The Sucre translates the value of each currency at the time of transaction, making the need for any world reserve currency unnecessary.

    Russia and China, both allies of Chavez, watched closely and adopted an identical model in November of 2010. They started their trade agreement only with each other and built a world economy on it. Today, nearly 75% of the world no longer converts to the dollar before completing international transactions. Technology has rendered the need to convert obsolete. The only remaining players in the old US system are those of the EU, and the EU members are mired in debt. Dr. Roberts doesn’t seem cognizant of the portend of this change.

    Today, US External debt to GDP is 100.6%. Russia’s is 33.3%.
    But, it isn’t just Russia, it is the entire system they have built up leaving the US and the EU (to a lessor degree) isolated. They have set up their open basket of currencies, with technology doing the conversions between currencies, making the need for any world reserve currency obsolete.

    This last Summer, they went public with all of this, setting up BRICS as a new financial system. First, they put a pool of funds together to loan to smaller nations who need financial assistance but do not want to be under US financial domination…..a pool of about E100 billion. BRICS stands for Brazil, Russia, India, China and South Africa as the key players in this new economy. Like the US of old, they are offering to help nations in need. Today, the US makes promises they cannot fulfill, and make threats……..Except for Israel and the Saudis who use US troops to retain power, the US has no friends left.

    Even Germany, France and the UK have found alternative trading systems to the dollar.

    Some, but not all of the nations who have deserted the US for BRICS include:
    Argentina: External debt to GDP of 17%
    Brazil: External debt to GDP is 25%
    China: 6.7% (but, they lie)
    India: 25%
    Japan: 58%
    Mexico: 27%
    Russia: 33%
    There are many others that I cannot find data on. These include South Africa, and most emerging African nations, much of South and Central America, Switzerland, Qatar, Canada, Turkey, Iran, many middle eastern nations who are still playing both ends against the middle. The behavior of OPEC towards US requests they cut production speaks volumes, they are kicking the petrodollar to the curb.
    It is but a matter of time before they speak out. Australia and New Zealand dumped the dollar in 2013, and there are other nations also involved in the world basket of currencies I cannot recall. But, most are not buried in debt like the US and its remaining allies.

    Now, lets look at the EU and US. I don’t have the data for all the countries because US debt clock dot org only has some on record. Israel isn’t recorded. Saudi Arabia is, and their external debt to GDP is about 25%..
    The nations, and their external debt levels are as follows:
    UK: 470% to GDP
    France: 270%
    Germany: 224%
    Greece: 296%
    Ireland: 1066%
    Italy: 179%
    Portugal: 294%
    USA: 100.6%

    Right now, nations that need to borrow money (from BRICS?) include Cyprus, Greece, Italy, Portugal, Spain, Belgium, Ireland and many others. There are 28 states in the EU, at least 14 of them need low interest loans. The US cannot loan them the money because they don’t have it……that is the filthy secret that Dr. Roberts doesn’t seem to get………….the US is bankrupt.

    Total debt per citizen at this time is $186,000.00. US unfunded liabilities is close to $116 billion, each citizen’s liability is over $989,000.00…..getting close to the million dollar mark. Total national assets are $110 trillion, total liability is $116 trillion and growing. Does anyone understand what these numbers indicate? The debt is growing faster than any assets, and these are trillions…….how many Americans put together a million dollars, which is each citizen’s debt share.

    The US, as long as it held world reserve currency status, had a lot of economic power. Now that 75% of the world has abandoned the dollar, that picture has changed radically. Hugo Chavez’s concept has transformed the world economy.

    The nations still using the dollar are mired in debt.
    Most of the ones in BRICS do not.

    Who would you choose?

    Which group would you bet on?

  2. One comment I missed making last night was a response to Paul Craig’s comment that Russia and China should just use financial warfare against the US; dump the dollar and US bonds causing the US dollar to collapse. They have been doing this, very methodically over the past four years to get as much of their wealth out as they can……so have most investors.

    Russia and China are making these moves by bringing the other world players into their sister economy, isolating the US and EU. What Craig says they ought to do, they have been doing since 2010. Forcing the collapse of the dollar is a quick and painful win of this chess game for the East.

    Russia and China have been quietly divesting themselves of US securities and debt since 2008, preserving as much wealth as possible. Six trillion of US debt is still in foreign hands, far lower than it was in 2008, but still a considerable amount. It takes time to get rid of this much money and preserve as much money as possible. A sudden dump would plunge the entire world into a disaster, and they are trying to avoid that if possible.

    Forcing the collapse of the dollar is a nuclear option if the US continues their mad military moves towards Russia. As far as I know, US war tanks are still rolling towards Russia.

    A friend of mine, a military historian, warns me the desperate acts the US has displayed lately can lead to terrible acts of war……..he said desperation and war abilities can be a very dangerous thing in the hands of people with no other options.

    Conversely, Russia and China would like to get as much of their wealth out of US securities as possible. To force the collapse of the dollar (which is inevitable as soon as EU nations start openly breaking away from the old US system) will only cost them money. It will also have a very bad effect on the entire world economy.

    It is far wiser to move quietly as they have over the past four years, slowly and surely building up economic support from all nations around the world. Once the weaker EU members break away and seek to borrow money from BRICS (regardless of the IMF conditions they go to nobody else), the collapse of the dollar is inevitable. The worldwide reaction will be strong.

    The way Putin designed this sister economy is ingenious. He didn’t waste a single step in reinventing the wheel, the system is identical except for the basket of currencies replacing the obsolete world reserve currency. It is painless for people to shift over, and it works smoothly within the existing system.

    Once Russia and China are rid of their US debt, the collapse of the dollar will be an obvious conclusion. But, a far more subtle way is allowing the EU members to cause it…………it will be harder for the US to blame Russia, China, or anyone. Putin is first and foremost a chess player, and while the fools point fingers, Putin has set up the board to Russia’s advantage.

    Chess is not just a war game, it is a game about winning………I think it ought to be an important part of one’s education. In logic, we learn how to develop and use truth tables………….in life, we learn how to play chess. Chess is a life game, yet so few ever learn to play. Putin is a master chess player……a huge advantage in a fertile field of fools.


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