Tag: Dmitry Orlov

License to Kill

Guest Post by Dmitry Orlov

Jakub Rozalski

The story is the same every time: some nation, due to a confluence of lucky circumstances, becomes powerful—much more powerful than the rest—and, for a time, is dominant. But the lucky circumstances, which often amount to no more than a few advantageous quirks of geology, be it Welsh coal or West Texas oil, in due course come to an end. In the meantime, the erstwhile superpower becomes corrupted by its own power.

As the endgame approaches, those still nominally in charge of the collapsing empire resort to all sorts of desperate measures—all except one: they will refuse to ever consider the fact that their imperial superpower is at an end, and that they should change their ways accordingly. George Orwell once offered an excellent explanation for this phenomenon: as the imperial end-game approaches, it becomes a matter of imperial self-preservation to breed a special-purpose ruling class—one that is incapable of understanding that the end-game is approaching. Because, you see, if they had an inkling of what’s going on, they wouldn’t take their jobs seriously enough to keep the game going for as long as possible.

The approaching imperial collapse can be seen in the ever worsening results the empire gets for its imperial efforts. After World War II, the US was able to do a respectable job helping to rebuild Germany, along with the rest of western Europe. Japan also did rather well under US tutelage, as did South Korea after the end of fighting on the Korean peninsula. With Vietnam, Laos and Cambodia, all of which were badly damaged by the US, the results were significantly worse: Vietnam was an outright defeat, Cambodia lived through a period of genocide, while amazingly resilient Laos—the most heavily bombed country on the planet—recovered on its own.

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Financial Feudalism

Guest Post by Dmitry Orlov

Once upon a time—and a fairly long time it was—most of the thickly settled parts of the world had something called feudalism. It was a way of organizing society hierarchically. Typically, at the very top there was a sovereign (king, prince, emperor, pharaoh, along with some high priests). Below the sovereign were several ranks of noblemen, with hereditary titles. Below the noblemen were commoners, who likewise inherited their stations in life, be it by being bound to a piece of land upon which they toiled, or by being granted the right to engage in a certain type of production or trade, in case of craftsmen and merchants. Everybody was locked into position through permanent relationships of allegiance, tribute and customary duties: tribute and customary duties flowed up through the ranks, while favors, privileges and protection flowed down.

It was a remarkably resilient, self-perpetuating system, based largely on the use of land and other renewable resources, all ultimately powered by sunlight. Wealth was primarily derived from land and the various uses of land. Here is a simplified org chart showing the pecking order of a medieval society.

Feudalism was essentially a steady-state system. Population pressures were relieved primarily through emigration, war, pestilence and, failing all of the above, periodic famine. Wars of conquest sometimes opened up temporary new venues for economic growth, but since land and sunlight are finite, this amounted to a zero-sum game.

But all of that changed when feudalism was replaced with capitalism. What made the change possible was the exploitation of nonrenewable resources, the most important of which was energy from burning fossilized hydrocarbons: first peat and coal, then oil and natural gas. Suddenly, productive capacity was decoupled from the availability of land and sunlight, and could be ramped up almost, but not quite, ad infinitum, simply by burning more hydrocarbons. Energy use, industry and population all started going up exponentially. A new system of economic relations was brought into being, based on money that could be generated at will, in the form of debt, which could be repaid with interest using the products of ever-increasing future production. Compared with the previous, steady-state system, the change amounted to a new assumption: that the future will always be bigger and richer—rich enough to afford to pay back both principal and interest.

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The Rage of the Cultural Elites

 Guest Post from Club Orlov

Yoshitoshi Kanemaki

A certain unhappy incident happened to my aunt in the summer of 1966. The Cultural Revolution—a political movement initiated by Mao Zedong—was beginning to engulf the country. That same year many American college students were protesting against the Vietnam War and Leonid Brezhnev was keeping his seat warm as the General Secretary of CPSU, having replaced the somewhat volatile Nikita Khrushchev two years earlier. My aunt was then a freshman studying literature at Fudan University in Shanghai.

It so happened that my aunt, then a sensitive and somewhat dreamy young woman, had stubbornly and haplessly clung to certain musical tastes which at that time in China came to be regarded as politically incorrect, being said, in the trendy ideological jargon of that time, to reflect “decadent bourgeois revisionist aesthetics.” To wit, my aunt had kept in her record collection a rendition of “The Urals Mountain-Ash” (Уральская Рябинушка), a Russian folk song in which a young girl meets two nice boys under a mountain-ash tree and must choose between them, performed by the National Choir of the Ukrainian Soviet Socialist Republic. It was an old-style LP spinning at 78 RPM. It had a red emblem in the middle emblazoned with “CCCP.”

One of my aunt’s roommates, who probably had always resented her for one reason or another, found out about it and reported her to the authorities. For this rather serious infraction, student members of the Red Guard made my aunt publicly smash her beloved record, then kneel upon the fragments and recite an apology to Chairman Mao while fellow-students threw trash at her face shouting “Down with Soviet revisionists!” This generation of Chinese young people, who once donned Red Guard uniforms, beat people up around the country and smashed various cultural artifacts, is now mostly living on government pensions or earning meagre profits from home businesses, but some have prospered and can be found among the upper crust of contemporary China’s business, cultural, and political elites.

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Chaos: Practice and Applications

Guest Post by Dmitry Orlov

The term “chaos” has been popping up a lot lately in the increasingly collapse-prone world in which we find ourselves. Pepe Escobar has even published a book on it. Titled Empire of Chaos, it describes a scenario “where a[n American] plutocracy progressively projects its own internal disintegration upon the whole world.” Escobar’s chaos is tailor-made; its purpose is “to prevent an economic integration of Eurasia that would leave the U.S. a non-hegemon, or worse still, an outsider.”

Escobar is not the only one thinking along these lines; here is Vladimir Putin speaking at the Valdai Conference in 2014:

A unilateral diktat and imposing one’s own models produces the opposite result. Instead of settling conflicts it leads to their escalation, instead of sovereign and stable states we see the growing spread of chaos, and instead of democracy there is support for a very dubious public ranging from open neo-fascists to Islamic radicals.

Why do they support such people? They do this because they decide to use them as instruments along the way in achieving their goals but then burn their fingers and recoil. I never cease to be amazed by the way that our partners just keep stepping on the same rake, as we say here in Russia, that is to say, make the same mistake over and over.

Indeed, Escobar’s chaos doesn’t seem to be working too well. Eurasian integration is very much on track, with China and Russia now acting as an economic, military and political unit, and with other Eurasian states eager to play a role. The European Union is, for the moment, being excluded from Eurasia because it is effectively under American occupation, but this state of affairs is unlikely to last due to budgetary problems. (To be precise, we have to say that it is under NATO occupation, but if we dig just a little, we find that NATO is really just the US military with a European façade hammered onto it Potemkin village-style.)

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Financial collapse leads to war

 Guest Post by Dmitry Orlov

Scanning the headlines in the western mainstream press, and then peering behind the one-way mirror to compare that to the actual goings-on, one can’t but get the impression that America’s propagandists, and all those who follow in their wake, are struggling with all their might to concoct rationales for military action of one sort or another, be it supplying weapons to the largely defunct Ukrainian military, or staging parades of US military hardware and troops in the almost completely Russian town of Narva, in Estonia, a few hundred meters away from the Russian border, or putting US “advisers” in harm’s way in parts of Iraq mostly controlled by Islamic militants.

The strenuous efforts to whip up Cold War-like hysteria in the face of an otherwise preoccupied and essentially passive Russia seems out of all proportion to the actual military threat Russia poses. (Yes, volunteers and ammo do filter into Ukraine across the Russian border, but that’s about it.) Further south, the efforts to topple the government of Syria by aiding and arming Islamist radicals seem to be backfiring nicely. But that’s the pattern, isn’t it? What US military involvement in recent memory hasn’t resulted in a fiasco? Maybe failure is not just an option, but more of a requirement?

Let’s review. Afghanistan, after the longest military campaign in US history, is being handed back to the Taliban. Iraq no longer exists as a sovereign nation, but has fractured into three pieces, one of them controlled by radical Islamists. Egypt has been democratically reformed into a military dictatorship. Libya is a defunct state in the middle of a civil war. The Ukraine will soon be in a similar state; it has been reduced to pauper status in record time—less than a year. A recent government overthrow has caused Yemen to stop being US-friendly. Closer to home, things are going so well in the US-dominated Central American countries of Guatemala, Honduras and El Salvador that they have produced a flood of refugees, all trying to get into the US in the hopes of finding any sort of sanctuary.

The Amherst Cauldron

 Via Club Orlov

Finishing school for Nazis

[This is a guest post by Albert.]

We have been fortunate to be outside the United States for these past three months, and able to take our news unfogged by the media cabal. The parallel universe occupied by US news is especially poignant when viewing something like the situation in the Ukraine. Lately we have been watching a rebel counteroffensive that had surrounded and slowly exterminated the NATO puppet army in the Donbass region, around the railway hub at Debaltsevo, in a military maneuver called “the cauldron.” It was executed by volunteer foot-soldiers who, armed with small arms and trophy mortars and rockets, scored a massive victory against attacking battalions of Empire’s tanks and heavy artillery backed by NATO drones and AWACs.

The Russians remember “the cauldron” all too well. In the winter of 1941-1942, during the Wehrmacht Blitz on Stalingrad, Germany’s northern offensive was stopped and surrounded in the Valdai Hills near the town of Demyansk. There, nine of Stalin’s armies attacked Field Marshal Wilhelm Ritter von Leeb’s Heeresgruppe Nord (Army Group North) with the objective of breaking the siege at Leningrad and pushing the invaders farther west, away from Moscow. The Germans were facing a vastly superior enemy while freezing in their threadbare summer uniforms.

A cauldron

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Extinct—Extincter—Extinctest

Guest Post by Dmitry Orlov

David Herbert

This blog is dedicated to the idea of presenting the big picture—the biggest possible—of what is going on in the world. The abiding areas of interest that make up the big picture have included the following:

1. The terminal decay and eventual collapse of industrial civilization as the fossil fuels that power it become more and more expensive to produce in the needed quantities, of lower and lower resource quality and net energy and, eventually, in ever-shorter supply.

The first guess by Hubbert that the all-time peak of oil production in the US would be back in the 1970s was accurate, but later prediction of a global peak, followed by a swift collapse, around the year 2000 was rather off, because here we are 15 years later and global oil production has never been higher. Oil prices, which were high for a time, have temporarily moderated. However, zooming in on the oil picture just a little bit, we see that conventional oil production peaked in 2005—just 5 years late—and has been declining ever since, and the shortfall has been made up by oil that is difficult and expensive to get at (deep offshore, fracking) and by things that aren’t exactly oil (tar sands).

The current low prices are not high enough to sustain this new, expensive production for much longer, and the current glut is starting to look like a feast to be followed by famine. The direct cause of this famine will not be energy but debt, but it can still be traced back to energy: a successful, growing industrial economy requires cheap energy; expensive energy causes it to stop growing and to become mired in debt that can never be repaid. Once the debt bubble pops, there isn’t enough capital to invest in another round of expensive energy production, and terminal decay sets in.

Masters of Parallel Universes

Guest Post by Dmitry Orlov

Surajit Dutta

Much as we may dislike the fact, the results from quantum physics are unequivocal: parallel universes do exist. Schrödinger’s cat is both alive and dead, at the same time, while it exists as a probability distribution, which is resolved into either a live cat or a dead one by the act of opening the box and observing it. But until the observation is made, both parallel universes can be said to exist, and there is no way for us to know which one of them we inhabit.

Quantum effects dominate in the micro realm of subatomic particles. For instance, the laptop on which I am typing this contains millions of transistors which are created by implanting ions into silicon substrates to create patches with built-in electric fields and interconnecting these patches with etched aluminum wiring. Each transistor relies on the phenomenon of quantum tunneling: while in normal physics it is impossible for an electron to find itself on the wrong side of a built-in electric field, in quantum physics the electron is a probability distribution, not a particle, and quantum tunneling works reliably enough to support the entire electronics industry. But if you scale your circuit up, the chance of a pickup truck successfully “tunneling” through a brick wall becomes too minuscule to be of practical interest. It is still possible, but it would take anywhere between right now and several lifetimes of the universe hence to observe that result.

Oddly enough, such quantum effects are quite normal to observe within the political space. Here the physical objects involved are far too large to give rise to the parallel universes of quantum physics, but the narratives they give rise to are not. This is because the narratives are a matter of perception, and there can be historical periods, such as the present one, when the peephole through which the political establishment and the mainstream media allow us to see the world becomes so tiny that it becomes a toss-up as to whether or not any given photon will manage to find its way through it.

Here, reality becomes fractured into parallel universes as soon as we make the realization that we are being lied to. Were there weapons of mass destruction in Iraq? No, and the vial of white powder which Colin Powell menacingly held up at the UN was fake. The Iraqi mobile biological weapons factories did not exist. Was Al Qaeda active in Iraq prior to the US invasion? No, we know that it wasn’t. These lies are now known to be factual—uncontested, commonplace knowledge. Next: do we make the arbitrary leap of judgment and declare that that’s all the lies we will have ever been told, or do we admit the possibility that this is only the tip of an iceberg of lies, that lying is a modus vivendi for the operatives behind them? If we do, then, to be conservative, for every official narrative we must construct one or more unofficial but also plausible (and perhaps much more plausible) narratives. Each of them constitutes a parallel universe, and we can’t know which of them we inhabit until some happy accident—a leak, an investigation, a damning bit of physical evidence, or an outright admission of complicity or guilt—collapses the probability waveform, destroying all the parallel universes but the real one.

No escape

Guest Post by Dmitry Orlov

Quite a few of those currently inhabiting the belly of the decrepit and senile beast of western industrial civilization are experiencing an extreme sense of unease about what the future is likely to bring. But living with such a sensation is less than pleasant. In some other, perhaps less civilized language, the resolution to this crisis may be expressed as a special way of being, but in the language of civilization, the only possible work-out is through taking action. We must DO SOMETHING!

After all, who would want to not care about things that aren’t important at the moment, not think about objects that are not immediately and tangibly present, not treat depictions or representations as real or valid—but rely exclusively on their own perceptions, and perhaps those they share with those few people who are close to them? A decidedly uncivilized person, by most people’s standards. But we must remain civilized, and to be civilized means to always be driving towards some destination, even if it is an imaginary one. “Stop the world, I want to get off!” some of them exclaim in exasperation. But they are willing prisoners of this metaphor of the world as purposeful action, and their talk of escape is a mental loop (an escapist one) within another mental loop (from which there is no escape).

The Time Machine in Australia

Guest Post from Dmitry Orlov

The massive brain rot that is observable in the US can perhaps be explained by the “fracking fluid in the drinking water” theory; but what about the rest of the English-speaking world? This is a guest post by Gary Flomenhoft that offers some clues.

I’ve been in Australia (pronounced “Straya”) for four months now. I live in Brisbane and have traveled to Melbourne, the Sunshine Coast, the Gold Coast, and Stradbroke island. I’ve met my share of Australians around the world over the years. They are all “how’ya going, G-Day mate, no worries,” eternal optimists, and very nice people. They all, every single one of them, say thank you to the bus driver when exiting the public bus. They are happy, they are polite, they are kind. They live thousands of miles from most of the world, and haven’t got a care. Go for a surf, eat some prawns or Moreton Bay bugs, hike in the hills, enjoy life! Obsess about cricket, Australian Football League, National Rugby League, Rugby Union, soccer, any kind of sport.

Their Prime Minister Abbot is a doofus, but entirely harmless, like a Koala. His Putin “shirt-front” turned into a friendly photo-op at the G-20, although his outraged sentiment was entirely understandable after the shoot-down of MH17 with so many Australians on board. But Abbot credulously believed the absurd propaganda spewed out by the US, instantly blaming the Russians, and imposing sanctions as a result, without a shred of evidence. If they had evidence, don’t you think they would parade it all over the press? Duh! All the actual evidence so far, including 30mm bullet holes in the cockpit, point to a Ukrainian Airforce jet shooting it down. Australians remind me of the US in the 1950’s, very naïve and innocent, but no cold war, so truly nothing to worry about. But they reminded me of something else too. I just couldn’t put my finger on it… All blond and tanned, perfect hair, perfect bodies, pure and innocent… It suddenly dawned on me! ELOI!

If you don’t remember, Eloi are the surface dwelling people in HG Wells classic story, The Time Machine portrayed in a Hollywood movie. Tell me they don’t look like Strayans! Here’s a random couple of Strayans copied off the net for comparison:

Whiplash!

 Guest Post by Dmitry Orlov

Over the course of 2014 the prices the world pays for crude oil have tumbled from over $125 per barrel to around $45 per barrel now, and could easily drop further before heading much higher before collapsing again before spiking again. You get the idea. In the end, the wild whipsawing of the oil market, and the even wilder whipsawing of financial markets, currencies and the rolling bankruptcies of energy companies, then the entities that financed them, then national defaults of the countries that backed these entities, will in due course cause industrial economies to collapse. And without a functioning industrial economy crude oil would be reclassified as toxic waste. But that is still two or three decades off in the future.

In the meantime, the much lower prices of oil have priced most of the producers of unconventional oil out of the market. Recall that conventional oil (the cheap-to-produce kind that comes gushing out of vertical wells drilled not too deep down into dry ground) peaked in 2005 and has been declining ever since. The production of unconventional oil, including offshore drilling, tar sands, hydrofracturing to produce shale oil and other expensive techniques, was lavishly financed in order to make up for the shortfall. But at the moment most unconventional oil costs more to produce than it can be sold for. This means that entire countries, including Venezuela’s heavy oil (which requires upgrading before it will flow), offshore production in the Gulf of Mexico (Mexico and US), Norway and Nigeria, Canadian tar sands and, of course, shale oil in the US. All of these producers are now burning money as well as much of the oil they produce, and if the low oil prices persist, will be forced to shut down.

An additional problem is the very high depletion rate of “fracked” shale oil wells in the US. Currently, the shale oil producers are pumping flat out and setting new production records, but the drilling rate is collapsing fast. Shale oil wells deplete very fast: flow rates go down by half in just a few months, and are negligible after a couple of years. Production can only be maintained through relentless drilling, and that relentless drilling has now stopped. Thus, we have just a few months of glut left. After that, the whole shale oil revolution, which some bobbleheads thought would refashion the US into a new Saudi Arabia, will be over. It won’t help that most of the shale oil producers, who speculated wildly on drilling leases, will be going bankrupt, along with exploration and production companies and oil field service companies. The entire economy that popped up in recent years around the shale oil patch in the US, which was responsible for most of the growth in high-paying jobs, will collapse, causing the unemployment rate to spike.

On the Charlie Hebdo Carnage

 Guest Post by Dmitry Orlov

The killing of the staff at the French satirical publication Charlie Hebdo by Moslem assailants who said that they wanted to die as martyrs, and the subsequent killing of the assailants, together with their hostages, by the French police, could not have failed to produce strong emotions. For instance, my friend Bruno had this to say. I don’t entirely disagree, especially about the undue haste of the French police, but I do want to make a few points about methods.

No matter how difficult it is, what’s needed in such a situation, at least on the level of those aspiring to any sort of social adequacy, is a dispassionate look, with an eye toward what would qualify as a political fix that can win the peace, rather than some combination of police/military/judicial action that is virtually guaranteed to lose the war, by making the situation worse. You see, police/military/judicial action is only effective when the enemy could potentially admit defeat, surrender and make amends. When the enemy wishes to be martyred, police/military/judicial action is akin to combating alcoholism with bottles of booze.

What Bruno proposed—capture, torture, public humiliation, public execution—worked very well for Jesus Christ. Here we are over 2000 years later, and he is still the world’s best-known, most widely celebrated martyr. If, by the standards of one of the world’s greatest religions, poking fun at prophet Mohammed is a sin, and if the perpetrators of the Charlie Hebdo can be said to have died for that sin, then that, by a rather simple calculus, does qualify them as martyrs, even in the Christian tradition.

I was not a reader of Charlie Hebdo, and so I don’t know whether they properly satirized the American invasion of Iraq, the seeding of Basra, Fallujah and other parts of Iraq with depleted uranium munitions causing a large number of cancers and birth defects, the wholesale slaughter of Iraqi civilians, or the use of torture at Abu Ghraib and other US-run detention centers. Or whether they shined a comic light on the utter futility of the NATO war in Afghanistan, whose only result seems to be a speedy return to status quo ante as soon as the troops pull out. I think there are gems of comedy there: the Americans are still sending in advisers—as if they ever knew what to do there themselves! I hope they did satirize these events; if they didn’t, but on the other hand saw it fit to poke fun at Islam, then that would seems a tiny bit lopsided to me, but I hope to stand corrected.

Nor do I know if Charlie Hebdo properly savaged the Israelis for their various practices, such as shelling UN-run schools because there might be “terrorists” lurking among the women and children, or for the Israeli military propaganda along the lines of “shoot pregnant Palestinian women and kill two for the price of one.” Is there humor in such things? I don’t know. Nor is there humor in the Qur‘an, or in any of the acts ascribed to prophet Mohammed. And yet the satirical geniuses at Charlie Hebdo found some there. So why does Israel get the kid glove treatment? Again, I hope to stand corrected, but if that’s the case, then there is a bit of lopsidedness there as well.

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2015: Grounds for Optimism

Guest Post by Dmitry Orlov

This may seem like an odd line of reasoning to pursue given what everyone else seems to be saying. Some are thinking that 2015 will be a repeat of 2014 with a few incremental changes (always a safe bet, but makes for boring reading) while others are warning of the potential for a nuclear confrontation between the US and Russia (always a possibility, on par with an asteroid strike or a supernova in our galactic vicinity). But this is all more of the same. The interesting question to ask is, How has the ground shifted in 2014, if indeed it has?

To my mind, the really interesting development of 2014 is that the world as a whole (with a few minor exceptions) has become quite lucid on the topic of what the United States, as a global empire, is and stands for. It is now very commonly and completely understood that:

1. The United States is an evil empire, attempting not so much to rule the world as to disrupt it to its short-term advantage.

2. The United States is failing, as an empire and as a country, and no amount of fraud, mayhem, torture and murder is going to save it.

3. The United States is still quite powerful and can cause massive damage on its way down. This damage must be contained, while plans are drawn up for an international arrangement that will arise upon its demise.

Looking back on 2013 and before, such sentiments were already being expressed, but on the fringes and quietly. The difference is that in 2014 they became commonplace knowledge, and their expressions thundered from presidential podiums. What’s more, there just isn’t that much of a counterargument being voiced. I don’t hear a single voice out there arguing that the US is a benevolent force that is on the up-and-up, would never hurt a fly and is the permanent center of the universe. Yes, some people can still think that, but it’s hard to see value in such “thought.”

There are still a few holdouts: the UK, Canada and Australia especially. But even there the true picture is being distorted because of their Murdockified national media. Judging from what I hear from the people there, they are almost uniformly nauseated by the subservient pro-US antics of their national leaders. As for the EU, the image of political uniformity presented by Brussels is largely a fiction. In the core countries of Western Europe, business leaders are almost uniformly in favor of close cooperation with Russia and against sanctions. Along the fringe, entire countries appear to be on the verge of switching sides. Hungary—never a friend of Russia—now seems more pro-Russian than ever. Bulgaria, which has had a love/hate attitude toward Russia for centuries now, seems to be edging back closer to love. Even the Poles are scratching their heads and wondering if close cooperation with the US is in their national interest.

Another major shift I have observed is that a significant percentage of the thinking people in the US no longer trusts their national media. There is a certain pattern to the kinds of messages that can go viral and spread wildly via tweets and social media. Fringe messages must, by definition, stay on the fringe. And yet last year something snapped: a few times I ran a story in an attempt to plug a gaping hole in the US mass media’s coverage of events in the Ukraine, and the response was overwhelming, with hundreds of thousands of new readers showing up. What’s more, a lot of them have kept coming back for more. I take this to mean that what I have to say, while by no means mainstream, is no longer on the fringe, and that bloggers have an increasingly important role in helping plug the giant holes in national media coverage.

Of course, the national media still has an important role to play. For instance, I have no idea how big Kim Kardashian’s derrière is—but I hear it’s big in the media. Can it sing? And so if you are looking for authoritative information on that important subject, then American national media is your friend. But for most non-ass-related things, it seems to me that the Americans who run the nation’s political and media circuses broke a fundamental rule, which they apparently forgot, because it was first expressed by an American by the name of Abe Lincoln: “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.” In case somebody out there in the media realm is tired of playing it safe and printing stuff that’s only fit for wiping your Kardashian with, here are a some points for you to try to refute:

1. Economic inequality has to increase continuously, until the whole thing crashes, because that is the only way to continue propping the financial bubble while the real, physical, productive economy is actually shrinking. The rich can’t possibly spend all of their money in the real economy. Instead, the poor things have to content themselves with investing in various luxury items, which they can’t use all the same time, and so most of them sit and slowly decay. Or they put their money into paper wealth of various kinds—and that, of course, is very good for the financial bubble. In any event, if you have a financial bubble you need to prop up no matter what, in the face of serious physical limitations on land, energy, fresh water, high-grade ores and other essential industrial feedstocks, then your best bet is to do the reverse-Robin-Hood thing and go rob the poor and give to the rich.

2. Worldwide chaos must be driven up because that’s the only way the US military can justify its existence. It is a very expensive military, but not a particularly effective one. (Just the new F-35 fighter cost over a trillion to develop—and yet it is a complete dud of a project and may never even go into production.) But in spite of this lavish spending the US military is incapable of scoring a decisive victory in just about any conflict, against any adversary, no matter how weak and impoverished, and their end result is always some sort of ongoing low-grade conflict that can flare up again at any time. Nevertheless, it can still threaten the weak and the poor, and use these threats to its financial advantage. But the only way to make these threats effective is to destroy some country on a semi-regular basis: “Nice country you got there! We’d hate to see it go the way of Libya.” A military confrontation with any of the real military powers—Russia, China, India, even Iran—is, of course, entirely out of the question, because a single humiliating military defeat for the US (which is inevitable given its track record against smaller, weaker adversaries) would be sufficient to undermine the entire program of US militarism.

3. As another American (Dwight Eisenhower) once put it: “If you can’t solve a problem, enlarge it.” But it stands to reason that you do have to solve a problem once in a while; you can’t just go on enlarging every problem you see ad infinitum. Now, what problems has the US solved lately? Anything good happening in Iraq, Afghanistan, Libya, Syria or Ukraine? No, worse than ever. How about financial reform in the wake of the narrowly averted collapse in 2008? No, and there is another big one coming up in the form of the fracas in the fracking patch due to low oil prices. Anything good to report on health care reform? No, it’s more ridiculously bloated and expensive than ever. Student debt repayable now? No, not by a long shot. How about an effort to reduce carbon emissions, to postpone (no longer to avoid!) the eastern seaboard, where half of everything is, going underwater? No, not a glimmer of hope. Problems with runaway public debt or unfunded government liabilities solved? No, there have been no efforts in that direction at all. Is the country still on course for national bankruptcy and collapse? All systems check, go with throttle up!

Now, your mileage may vary, but I have discovered that a surprising number of people around the world (though not especially in the US) is now very much clued into these things. And that is something that makes me feel optimistic about 2015.


The Imperial Collapse Playbook

Guest Post by Dmitry Orlov

Some people enjoy having the Big Picture laid out in front of them—the biggest possible—on what is happening in the world at large, and I am happy to oblige. The largest development of 2014 is, very broadly, this: the Anglo-imperialists are finally being forced out of Eurasia. How can we tell? Well, here is the Big Picture—the biggest I could find. I found it thanks to Nikolai Starikov and a recent article of his.

Now, let’s first define our terms. By Anglo-imperialists I mean the combination of Britain and the United States. The latter took over for the former as it failed, turning it into a protectorate. Now the latter is failing too, and there are no new up-and-coming Anglo-imperialists to take over for it. But throughout this process their common playbook had remained the same: pseudoliberal pseudocapitalism for the insiders and military domination and economic exploitation for everyone else. Much more specifically, their playbook always called for a certain strategem to be executed whenever their plans to dominate and exploit any given country finally fail. On their way out, they do what they can to compromise and weaken the entity they leave behind, by inflicting a permanently oozing and festering political wound. “Poison all the wells” is the last thing on their pre-departure checklist.

• When the British got tossed out of their American Colonies, they did all they could, using a combination of import preferences and British “soft power,” to bolster the plantation economy of the American South, helping set it up as a sort of anti-United States, and the eventual result was the American Civil War.

• When the British got tossed out of Ireland, they set up Belfast as a sort of anti-Ireland, with much blood shed as a result.

• When the British got tossed out of India, they set up Pakistan, as a sort of anti-India, precipitating a nasty hot war, followed by a frozen conflict over Kashmir.

• When the US lost China to the Communists, they evacuated the Nationalists to Taiwan, and set it up as a sort of anti-China, and even gave it China’s seat at the United Nations.

The goal is always the same: if they can’t have the run of the place, they make sure that nobody else can either, by setting up a conflict scenario that nobody there can ever hope to resolve. And so if you see Anglo-imperialists going out of their way and spending lots of money to poison the political well somewhere in the world, you can be sure that they are on their way out. Simply put, they don’t spend lots of money to set up intractable problems for themselves to solve—it’s always done for the benefit of others.

Fast-forward to 2014, and what we saw was the Anglo-imperialist attempt to set up Ukraine as a sort of anti-Russia. They took a Slavic, mostly Russian-speaking country and spent billions (that’s with a “b”) of dollars corrupting its politics to make the Ukrainians hate the Russians. For a good while an average Ukrainian could earn a month’s salary simply by turning up for an anti-Russian demonstration in Kiev, and it was said that nobody in Ukraine goes to protests free of charge; it’s all paid for by the US State Department and associated American NGOs. The result was what we saw this year: a bloody coup, and a civil war marked by numerous atrocities. Ukraine is in the midst of economic collapse with power plants out of coal and lights going off everywhere, while at the same time the Ukrainians are being drafted into the army and indoctrinated to want to go fight against “the Muscovites.”

But, if you notice, things didn’t go quite as planned. First, Russia succeeded in making a nice little example of self-determination in the form of Crimea: if it worked for Kosovo, why can’t it work for Crimea? Oh, the Anglo-imperialist establishment wishes to handle these things on a case-by-case basis, and in this case it doesn’t approve? Well, that would be a double-standard, wouldn’t it? World, please take note: when the West talks about justice and human rights, that’s just noise.

Next, the Russians provided some amount of support, including weapons, volunteers and humanitarian aid, to Ukraine’s eastern provinces of Donetsk and Lugansk, which declared themselves People’s Republics and successfully fought Ukraine’s so-called “anti-terrorist operation” to a stalemate and an imperfect, precarious cease-fire. Very significantly, Russia absolutely refused to get involved militarily, has withheld official recognition of these republics, has refused to consider breaking up Ukraine, and continues to insist on national dialogue and a peace process even as the bullets fly. According to Putin, Ukraine must be maintained as “a contiguous political space.” Thus, the Russians have responded to the Anglo-imperialists’ setting up of an anti-Russia in the form of Ukraine by setting up an anti-Ukraine in the form of DPR and LPR, thereby shunting the Anglo-imperialist attempt to provoke a war between Ukraine and Russia into a civil war within Ukraine.

You might also notice that the Anglo-imperialists have been getting very, very angry. They have been doing everything they can to vilify Russia, comparing Putin to Hitler and so on. This is because for them it’s all about the money, and they didn’t get what they paid for. What the Anglo-imperialists were paying for in corrupting Ukraine’s politics was a ring-side seat at a fight between Ukraine and Russia. And what they got instead is a two-legged stool at a bar-room brawl between Eastern and Western Ukraine. Eastern Ukraine accounts for a quarter of the Ukrainian economy, produces most of the coal that had formerly kept the lights on in the rest of the country, and contains most of the industry that had made Ukraine an industrialized nation. Western Ukraine is centered on the unhappy little rump of Galicia, where the political soil is so fertile for growing neo-Nazis. So, paying billions to watch a bunch of Ukrainians fight each other inconclusively while Russia gets to play peacemaker is not what the Anglo-imperialists wanted, and they are absolutely livid about it. If they don’t get the war they paid for PDQ, they will simply cut their losses, pack up and leave, and then do what they always do, which is pretend that the country in question doesn’t exist, which, the way things are going in the Ukraine, it barely will.

Note that leaving, and then pretending that a place doesn’t exist, is something the Anglo-imperialists have been doing a lot lately. When they left Iraq, they did succeed in setting up a sort of anti-Iraq in the form of Iraqi Kurdistan, but that all blew up in their face. Their attempts to set up an anti-Syria or an anti-Libya died in their infancy, and they don’t seem to have any plan at all with regard to Afghanistan, unless it is to repeat every single blunder the Soviets made there as carefully and completely as possible.

What’s more, it’s starting to look like they are about to get kicked out of Eurasia altogether. Most of the major Eurasian players—China, Russia, India, Iran, much of Central Asia—are cementing their ties around the Shanghai Cooperation Organization, to which the United States isn’t even admitted as an observer. As for the European Union, the current crop of EU politicians is very much bought and will be paid for upon retirement by the Anglo-imperialists, but the only reason they are still in power is that there are lots of older voters in Western Europe, and older people tend to cling to what they know even after it stops working—for them or, especially, for their kids. If it was up to the young people, the Anglo-imperialists would face open rebellion. In fact, the trends in voting patterns show that their departure from the region is a matter of time.

Here is a preview of possible coming attractions. On their way out, the Anglo-imperialists will of course try to set up an anti-Europe, and the obvious choice for that is Britain. Of all the European nations, it is the most heavily manipulated by their Anglo cousins from across the pond. It would take minimal effort for them to hurt Britain economically, then launch a propaganda campaign to redirect the blame for the bad economy toward the continent. They wouldn’t even have to hire translators for their propaganda—a simple “spelling-chequer” (or whatever) would suffice. And so, to make sure that their efforts to provoke a large-scale, hugely destructive, festering conflict between Britain and Europe fail, Europe would do well to set up an anti-Britain within Britain.

And the obvious choice for an anti-Britain is of course Scotland, where the recent independence referendum failed because of… the recalcitrance of older voters. A dividing line between the Anglo empire and Eurasia running through the English Channel/La Manche would be a disaster for Europe and moving it somewhere west of Bermuda would pose a formidable challenge. On the other hand, suppose that line ran along Hadrian’s Wall, with the traditionally combative and ornery Scots, armed with the remnants of North Sea oil and gas, aligning themselves with the Continent, while England remains an ever-so-obedient vassal of the Anglo-imperialists? That would reduce the intercontinental conflict to what Americans like to call a “pissing contest”: not worth the high price of admission. Yes, there would be some strong words between the two sides, and some shoving and shouting outside of pubs, and even some black eyes and loose teeth should diplomacy fail, but that should be the extent of the damage. That I see as the best-case outcome.

So that’s the big picture I see heading into 2015, which I am sure will be a most tumultuous year. Not to make a prediction as to timing (don’t worry, you won’t ever get one out of me!) but 2015 could be the year the Anglo-imperialist franchise finally starts shutting down in obvious ways. We know it will have to shut down eventually, because failing all the time is not conducive to its survival. The bonus question is, what sort of anti-America will these parasites set up inside America before they abandon their host and scatter to their fortified compounds in undisclosed locations around the world? Or will they not even bother, and just provoke a war of all against all?

I would think that they would at least try to leverage their expensively engineered red/blue divide within the United States. This fake cultural/political divide, with all the pseudoliberal/pseudoconservative indoctrination and university- and church-based brainwashing that put it in place, cost them a pretty penny. It was engineered to produce the appearance of choice at election-time while making sure that there isn’t any. But could it not be pressed into service in some more extreme manner? How about leveraging it to organize some sort of rabidly homophobic racist fundamentalist separatist enclave somewhere down south? Or perhaps one somewhere in the north, where zoophilia is de rigeur while heterosexual intercourse requires a special permit from a committee stocked with graduates in women’s studies? Now, fight, you idiots! Don’t you see how well that could work in practice? Would they waste such a nice opportunity to set up a system of controlled mayhem? I think not!

I leave all of that up to you to imagine.

Happy New Year!


Are Americans Prepared For A Soviet Style Collapse?

 Guest Post from Dmitry Orlov

http://www.drescapes.com/2014/12/19/dmitry-orlov-are-americans-prepared-for-a-soviet-style-collapse-interview/

Last week I gave an interview to Barry at DR Escapes which is now up on Youtube. Please follow the link to listen to the interview. Barry’s notes on it are pasted in below.

If the social and financial structure around you collapsed tomorrow, as it did for many people during the fall of the Soviet Union, are you prepared to survive and even prosper? In my latest interview with best selling author Dmitry Orlov we discuss lifestyle and how your lifestyle decisions may dramatically impact how your family will fare if times get tough.

Dmitry left Russia with his family in 1976 and settled in the Boston area to pursue an education in computer science and  linguistics.  Along the way Dmitry realized he was trapped in the traditional American pursuit of a career.  He was working day and night to make money to pay for the car and city condo and all the trappings of success.  He needed the car and condo and all the trappings of business to keep making money.  The same vicious cycle most Americans face every day.  Well Dmitry gave it all up for a life on a sailboat full of travel and freedom.
In our interview, I passed along some of your questions as well as my own to get Dmitry’s perspectives. As you probably know if you follow Dmitry or the ClubOrlov blog, Dmitry brings an interesting perspective to the whole lifestyle and survival dialog. In this interview, Dmitry shares his thoughts on why he believes that Russian citizens were far better prepared for a collapse than the typical American citizen.  His logic is sound and it definitely makes you question…. “what would my family  do in a collapse, faced with”:

  • No lights
  • No running water
  • No flushing toilets
  • No trash removal
  • No gas at the gas pumps
  • No government services
  • No public transportation

Strangely enough, quite inadvertently, the Russian citizens may have been far better off to handle such a collapse, and here is why…..

In this first part of our two part interview with Dmitry, we learn more about his experience growing up in privilege in Russia and follow his journey out of Russia to Boston.  Some of the topics Dmitry touches on in this part of the interview include:

  • Benefits of a travel perspective
  • Failures in Soviet central planning
  • Evolving to a barter economy
  • Role of small family farms
  • Advantage of generalists over specialists
  • Transition from a “job” to life on a boat

In the second part of this interview we pass along a few more of your questions in order to dig a little deeper into Dmitry’s opinions about the current status of America and why Dmitry is convinced that what Russia suffered in the Soviet collapse was a soft crash and what America is headed for can only be a catastrophic hard collapse.
In this part of the interview, Dmitry poses a realistic scenario and challenges us to think about how we would handle a collapse.

As I interviewed Dmitry, I couldn’t help but draw parallels with my lifestyle down here on the north coast of the Dominican Republic.  Many of the things that Dmitry pointed out about the conditions that supported the bounce back by the Russian citizens seem to apply here.
On the north coast we enjoy:

  • Abundant food grown on small family farms or taken from the sea
  • Virtually unlimited fresh water not dependent on extensive government infrastructure
  • A resilient population unaccustomed and not dependent on many of life’s high-tech luxuries
  • An economy that can easily fall back on barter in the face of a currency collapse

 

 

Can anybody find me… a central banker to love?

Guest Post by Dmitry Orlov

Freddie

[Last minute update: the repo rate has been just hiked to an eyewatering 17%! At the same time, the percentage of bullshit in the rationale given was lowered significantly: it is to prevent further ruble devaluation. Simply put (perhaps too simply), ruble liquidity for currency speculation has just dried up. At the same time, the central bank is backing long-term investments in industry at a far more reasonable 6.5% rate. Will this be enough to stop the slide?]

On December 11 Russia’s central bank hiked its rate by one percent, from 9.5% to 10.5%. The rationale offered by the bank’s governor Elvira Nabiullina was that this would stop the slide in the value of the ruble. But nobody laughed.

So a more laughable rationale was offered: the rate hike would help contain inflation. Here’s why that’s funny: suppose I am a Russian manufacturer making widgets and now have to borrow at 10.5% instead of 9.5%. I will price my widgets correspondingly higher in order to pay the higher interest. That’s price inflation. Then my workers will start complaining and threatening to defect, and I will have to give them raises; that’s wage inflation. That’s if my widgets are life-saving and people have no choice but to buy them; if my widgets are discretionary and I hike prices, people would simply buy fewer of them, so instead of taking the loan and increasing production I convert my savings into dollars or euros, close up shop and leave the country, telling everyone that I’ve had enough of this Russian central bank nonsense. But what if that’s exactly what the bureaucrats at Russia’s central bank want to see happen? Hmm…

The rate hike didn’t stop the ruble’s slide, for some very obvious reasons. First, a minor one: the very fact of the hike signaled the expectation that the ruble’s slide will continue. In fact, there has been a consistent pattern of Russia’s central bank mouthpieces acting as the ruble’s worst enemies in signaling that they expect it to drop. Second, the major one: speculators, including powerful insiders such as German Gref, president of Sberbank, are dong all they can to push the ruble down while betting that it will go down even more as people try to rescue their savings by selling their rubles.  While most regular Russians go to Sberbank to pay their utility bills and municipal fees, a few highly irregular Russians (and a few foreigners among them) go to Sberbank to sit in posh offices in front of trading terminals and gamble away the regular Russians’ savings. The regular Russians are rather upset about this state of affairs, and 70% of them state in opinion polls that they consider currency manipulation to be a crime and want the criminals stopped and punished. Mr. Gref begs to differ and even expressed some political ambitions; is he going to be the next Michael Khodorkovsky?

“We know who the speculators are,” said Putin during his recent state of the nation speech, as the camera zoomed in on Elvira Nabiullina, who blushed and probably peed her panties a tiny bit (I know I would have if I were her). In spite of the Stalinesque overtones, at the moment Putin is pushing on a string. You see, once you staff the central bank with economic liberals trained to follow the dictates of the IMF, and do nothing to shut the revolving door between the central bank and other big banks (after all, if the Wall Street boys can do it, why can’t the Russians?) then why wouldn’t they rob their own people every chance they get, then attempt to use their ill-gotten gains to subvert the political system—just like the Americans have done?

Some people are starting to loudly criticize Putin for his inaction; but what can he do? Ideologically, he is a statist, and has done a good job of shoring up Russian sovereignty, clawing back control of natural resources from foreign interests and curtailing foreign manipulation of Russian politics. But he is also an economic liberal who believes in market mechanisms and the free flow of capital. He can’t go after the bankers on the basis of ideology alone, because what ideological differences are there? And so, once again, he is being patient, letting the bankers burn the old “wooden” ruble all the way to the ground, and their own career prospects in the process. And then he will step in and solve the ensuing political problem, as a political problem rather than as a financial one.

This strategy carries a very substantial opportunity cost. After all, if the central bank acted on behalf of regular Russians and their employers, it could take some very impressive and effective steps. For instance, it could buy out western-held Russian debt and declare force majeur on its repayment until financial sanctions against Russia are lifted. It could drop its interest rate for specifically targeted domestic industries—those involved in import replacement. And, most obviously, it could very effectively curtail the activities of well-connected financial insiders aimed at destroying the value of the ruble. Putin said he knows who they are. I hope that they are wearing adult diapers. I wouldn’t be at all surprised if they get Khodorkovskied before too long.

This conversion of an insoluble financial problem into a mundane political problem may take a bit of time, but once it has run its course the longer-term prognosis is still reasonably good. Russia has very low government debt, huge gold reserves, and in spite of the much lower price of oil its energy exports are still profitable. You see, at the wellhead Russian oil costs much less than shale oil in the US, or Canadian tar sands, or Norwegian off-shore oil, and so the Russian oil industry can survive a period of low oil prices, whereas these other producers may no longer be around by the time the price of oil recovers. Because the ruble has dropped even more than oil, the Russian treasury is going to be flush with tax receipts, and won’t have to try to finance a budget deficit. The 18% or so of revenue that the Russian treasury gets from energy exports is significant, but even more significant are the remaining 82%, much of which come from payroll taxes (some of the lowest in Europe, by the way). And therein lies a bigger danger: that because of loss of access to western sources of financing due to the sanctions, coupled with central bank shenanigans with hiking rates instead of dropping them, Russia’s domestic economy will experience a severe downturn.

With all the political and financial instability sweeping the world, it’s hard to make detailed predictions of any sort, but I will venture to issue just one little health warning: Russia’s central bankers, along with their friends and colleagues in the financial industry, are poised to experience an extreme lack of love from their own people.