BY Phil Butler

When the Russians first warned of the potential for armed conflict in Ukraine, the world looked on with pandemic blinded eyes. The public turned an unconcerned head, naturally, to still more “Russia” problems framed with the ever present “Putin” headline. Few suspected a more troubling underpinning. Then Russia marched across the border.

The question of “why” still echoes in the bottomless pit of international detente, media, and monetary policies.

Well, the “Nazi makers” who stand behind this Ukraine proxy war are wielding massive profit levers against the Russians, the Chinese, India, and all nations opposed to their order. For instance, all those who wonder at Poland’s renewed lust for killing Russians, news that US Treasury Secretary Janet Yellen in Warsaw is telling. I’m no economist, but I know there is no such thing as a coincidence. Yellen is in the eastern European country to push forward a new reformative tax regime that would benefit mightily rich nations like France, Germany, and even Poland, perhaps. As I said, I’m not a tax lawyer, but the “OECD Two-Pillar Solution” seems like a sort of bribery to me.

Maybe some of you readers are economists? All analysts like me have to go on corroborative evidence.

Let’s see. The Biden Administration needs Europe to go full-mental on Russia over the Ukraine situation. Okay. That means that Warsaw’s leadership needs to be willing to accept Russian nuclear missiles at any moment. The Poles’ traditional distrust and hatred of Russians must be rekindled, and even old Polish tanks and artillery must be pulled out of mothballs to help Kyiv. The possibility of a new Polish Empire might even be thrown in? At the very least, Poland’s right-wing leadership needs to toe the line, especially right now. This passage from a National Interest story, helps my premise here:

“Poland remains a frontline NATO member and an important American partner to challenge Russia’s ongoing aggression, reported war crimes, and corruption. However, the Biden administration must focus on Poland not only as a European ally but also as a credible democratic nation. Thus, both the United States and the EU must engage and assist Poland instructively—especially in political, economic, and military realms.”

Alright. Now, the US Treasury Secretary (not her EU counterpart?) being across the border from a brewing World War makes sense. It’s an offer for guaranteed Amazon, Google, Microsoft, and other US multinationals tax profits for Warsaw and the rest! Or, am I wrong?

Then again, perhaps the Ukraine proxy war is designed to leverage NATO countries to simply comply with anything the Biden administration comes up with? I hope you see my logic. Not knowing the ins and outs of Davos meetings, having skipped through both micro and macroeconomics courses in college, all I can attest to is that wheeling and dealing with these people always leads to something really bad for the rest of us.

After all, Russia is ready to launch “technical solutions” should Washington and Brussels convince Finland and Sweden war is the only path. How about the “levers” there?

Finland may be ready to send its citizens below ground into an underground city capable of housing 900,000 people, or about a third more than the city’s entire population. Finland President Sauli Niinisto and Prime Minister Sanna Marin confirmed the other day that their country would seek membership in NATO now. This would break a treaty with the Soviets at the end of World War 2, which essentially allowed Finland to exist even though the country had sided with Hitler’s Third Reich. The fact that Finland is also one of the most militarized nations in Europe, has not escaped the Russians, either.

The Kremlin response to Finland’s move is one of cool pragmatism, as the Russians say the NATO bid would “definitely” be viewed as a threat. Putin assured the Finns that Russia would be “forced to take reciprocal steps, military-technical and other, to address the resulting threats.” Finland as part of NATO extends Russia’s Europe borders with NATO friendly nations by 2x. So, it’s clear Russia will not back down on this one.

Still, the question of “why” remains for both Sweden and Finland. Why now?

The “levers” here are a bit more complicated than in Poland. But monetary gain and the extension of the existing liberal order are the answers. Finland, the Baltics, and the greater EU have big plans coming up. It all starts with segregating fossil fuel suppliers, then interposing so-called “green alternatives” when gas and oil prices get intolerable.

This story about converting Germany’s LNG terminals to hydrogen hubs clues us. Finland is already ahead of the game in setting up the game against Russia and its gas. This story is about floating LNG production connected to the Baltics, but other moves are in the works to shift profit from Russia to the US and other suppliers. Then you can expect “new technologies” to follow on with funding from public sources. But the whole Finland affair is more about cutting off Russian oil and gas exports to the west, than anything else. See the port of Primorsk and exports for more on this.

The western alliance is leveraging Finland the easy way, through the threat of pulling back on imports. Finland’s 5.5 million people have been so well off all these decades because 60% of the country’s GDP is tied to international trade. And most of this is with the EU, where Finland is the only nordic country using the Euro. I won’t get into how Nokia, the country’s biggest enterprise, screwed the pooch and let down the Finnish people. As further evidence of “arm twisting” in Helsinki, this European Commission €2 billion euro partnership just announced, stands as further proof of bribery.

By now, the reader is wondering how all this is going to work out. Well, if NATO does not force the Russians to launch a full-scale military response across a wide NATO-Russia front, it will play out something like this. I will summarize making use of a Yahoo! News quote:

“Germany plans to abandon fossil-fueled power by 2035. But instead of shutting down natural gas infrastructure, it’s speeding up construction of several new terminals that will allow companies to import the planet-warming fuel by ship for decades to come.”

Now, the west-order is planning to first optimize profits from fossil fuels by cordoning off Russia and other energy giants. America and British companies will gain massive profits from partitioning supply, elevated prices, and a new kind of monopoly. Meanwhile, “green alternatives” will be hyped, and ultimately funded by the public to the benefit of western corporations, state owned, and private companies. Russia will benefit in the short term, but ultimately her natural gas and oil will be all but worthless once replacement technologies and infrastructures are in place. Russia, Iran, and Venezuela will eventually be left holding gas stove energy, and lubricants.

At least, this is an ingenious plan, it seems. The plan for Making America Great Again, probably includes the rest of the world dying in mass, and American citizens funding electric car/home development for Elon Musk. At the end of all this, we become the ultimate consumer/batteries of progress. I think, perhaps, the elites of this order anticipate Russians, Chinese, Indian, Vietnamese, Brazilian slave laborers making wonder new appliances, for the superior race living to the north and west. Or, I should say, “continuing” to make.

And It’s all done with the smoke of war, economic mirrors, and the clever application of obvious levers.

Phil Butler, is a policy investigator and analyst, a political scientist and expert on Eastern Europe, he’s an author of the recent bestseller “Putin’s Praetorians” and other books. He writes exclusively for the online magazine “New Eastern Outlook”.

READ MORE:

https://journal-neo.org/2022/05/26/urging-europe-to-war-applying-the-corporate-levers/

GusNote: The war in Ukraine was started in 2014 by the US pushing a pro-western NAZI revolution in Ukraine. This provocation and the next stages of entrapping Moscow into defending the Russians in the Donbass.

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The war in Ukraine is momentous in its own right — the largest European war since World War II, and one of the most brutal and devastating. But it increasingly appears that the historical significance of the war could go beyond that. 

An Atlantic Council speech by Treasury Secretary Janet Yellen earlier this month, described how the war could create fundamental changes in the world economic order that prioritize security concerns over economic integration. Another recent speech by ECB head Christine Lagarde also described how the war could be an economic tipping point, driving a shift from economic “efficiency to security, and globalization to regionalization.”  

Yellen’s central concern was the lack of international cooperation with the U.S. effort to economically isolate Russia. It’s true that the United States has been highly effective in rallying core U.S. allies like the European Union, the UK, Japan, and Australia to participate in U.S. sanctions. These nations have instituted similar sanctions to the United States, strongly denounced Russia’s invasion of Ukraine, and at least expressed the desire to reduce trade with Russia for key commodities like energy. 

This core sanctions coalition includes most of the world’s wealthiest nations and represents about half of the global economy, but it only accounts for about 15 percent of the world’s population.

This means a massive share of the world is on the sidelines to a greater or lesser degree. Countries representing more than half of the world’s population — notably U.S. rivals like China, but also key rising nations like India — either abstained or voted against the United Nations resolution to condemn Russia for its invasion and did not vote for the removal of Russia from the U.N. Human Rights Council. 

Some of the world’s largest nations, notably including India and China, are significantly increasing their imports from Russia, especially commodities that are now available at prices well below world market levels.

Secretary Yellen delivered a warning to those nations that “the unified coalition of sanctioning countries will not be indifferent to actions that undermine the sanctions we’ve put in place.” It’s unclear exactly what this means, either in terms of the specific red lines that “undermine” U.S. sanctions and will trigger a coalition response, or the exact actions Washington may take in terms of secondary sanctions to punish violators. 

In another recent interview, Commerce Secretary Gina Raimondo gave one example, saying that if Chinese manufacturers provided Russia with semiconductors the United States would “shut them down” by denying them the use of critical U.S. software. And Secretary Yellen hinted at an even more significant threat when she said that “China cannot expect the global community to respect its appeals to the principles of sovereignty and territorial integrity in the future if does not respect these principles now” — implying that even respect for Chinese territorial integrity may depend on Beijing’s compliance with the U.S. response to Russia’s violation of Ukrainian sovereignty.

But the Atlantic Council speech went beyond threats to outline a more profound reconsideration of what the conflict with Russia would mean for the world economic order. “Going forward,” she said, “it will be increasingly difficult to separate economic issues…from national security.” She outlined a new U.S. approach to trade based not simply on economic integration or growth but a new concept of “free but secure” trade, which would seek to re-organize global supply chains around “friend-shoring” to a limited set of trusted countries. 

The extent to which the “friend-shoring” approach will require fundamental reorganization of global supply chains depends critically on the extent of its application to China. Yellen said that the world’s “willingness to embrace further economic integration” with China was now at stake in China’s response to the Russian invasion of Ukraine. But the reality is that Chinese economic integration has already happened. China is now the primary trading partner for manufactured goods of almost two-thirds of the world’s 195 nations, including many of the largest and most dynamic economies. 

A U.S. approach to “friend-shoring” that seeks to create supply chains which comprehensively screen out both Russia, one of the world’s largest commodity exporters, and China, the world’s most significant manufacturing power, could have profound implications for both the world economy and U.S. domestic economy.

These implications are often framed in terms of the loss of the U.S. dollar’s status as a reserve currency, and it is true that the weaponization of the dollar through the intensive use of sanctions has already createdsignificant and visible pressures for the fragmentation of currency blocs. But the dollar is deeply entrenched as a currency of international trade and any such shift would take time. The economic implications of a more protectionist and divided structure of global trade go well beyond the status of the dollar, to affect productivity and economic growth more broadly.

Secretary Yellen was honest about these costs in a press conference last week, stating that in rerouting supply chains through a more limited and restricted set of U.S. allies “there may be some cost to bear and permanently higher inflation, somewhat higher local costs, somewhat less efficient system, but one that is more resilient.” She added that “ideally, we would have a large group of trusted partners so that we can maintain the efficiencies that come from the global division of labor, but also feel more secure.” 

In her speech, ECB head Lagarde was also explicit about the potential growth costs of a more fragmented international order, stating that the “price of increased security could in principle take the form of lower international risk-sharing and higher transitional costs.”

Over the long term, what is at stake is the extent to which the United States will shift its leadership stance in the global economy from an expansive one, aimed at global economic integration, to one aimed at creating and fostering a more segregated trading coalition of U.S. allies. This could create a new tradeoff between our security and economic interests, one which is already becoming evident in even the initialnegative impacts of the current anti-Russian sanctions on the U.S., European, and world economies.

During the Cold War, the United States faced a divided world, but united under its leadership all the most economically dynamic nations. Through its innovation of post-WWII economic institutions, U.S. leadership served to economically integrate these liberal capitalist nations to a degree never before achieved. In the post-Cold War era this U.S.-led system grew to incorporate less developed and previously non-aligned nations. These new entrants fed vast stores of cheap labor into the global economy, a development that restrained inflation and increased global productivity and wealth, even as it undermined working and middle class wages in the wealthiest nations and benefited multinational corporations engaged in labor arbitrage. 

When a Rand Corporation team examined U.S. international policy since WWII, the researchers credited U.S. efforts at economic integration with a profound contribution to global stability, saying that, “the interlocking set of trade agreements put in place after 1945, and the deepening process of global trade and economic integration and collaboration, has contributed to an emergent sense of a shared economic fate, the need to cooperate in dealing with recessions and crises through such means as coordinated monetary policy, and the inability of nations to prosper in opposition to these established norms.”

We may now be entering a new era, where the goal of U.S. economic statecraft is shifting from integration to dis-integration, and U.S. security is defined in terms of protection from the economic networks of potential rivals rather than fostering a unified global economic order under U.S. leadership. The costs and benefits of this course are as yet uncertain. On the one hand, the benefits of globalization have come under question in recent years. But the costs of protectionism and the benefits of global economic cooperation could exert a countervailing pressure to the desire to subordinate economic goals to great power conflict.

Even as Secretary Yellen threatened to cut economic ties with countries not cooperating with U.S. sanctions over Ukraine, her speech also outlined an ambitious agenda for global economic cooperation. She called for action in areas that included the climate transition, globally coordinated counter-cyclical spending to prevent world recession, multilateral investment in global public goods and economic development, and even implementation of agreements around international tax enforcement.

It is difficult to imagine how leadership on anything like this agenda will be possible if Washington chooses to focus its efforts on a limited set of reliable allies, even if those allies include the wealthiest European and Anglosphere countries.

READ MORE:

https://responsiblestatecraft.org/2022/04/28/did-janet-yellen-just-signal-a-new-world-economic-order/

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GusNote: to a great extend, the Yelen/Lagarde blah blah blah signals the BEGINNING OF MULTIPOLARISM, as wished by Moscow and Bejing....

See also: the heartland explained...

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