26.08.2014 Author: Jim Dean

EU Sanctions Boomerang – Poor leadership once again

tradebalance

I must admit I was surprised at how quickly the sanctions blowback is developing in the EU. In fact, I see the possibility of it going to flamethrower level soon. Despite the EU’s plans to assist those businesses affected, hardworking, struggling workers will still have to pay for this huge mistake at the end of the day.

Not only parliamentary representatives are voicing dissent, but top government officials, also. The smart ones are getting ahead of the curve to survive what they seen coming — growing public outrage at the poor leadership shown. The West’s Russian Jihad is now going to economically destroy innocent lives in Europe, and not just those in East Ukraine.

I had written earlier in this manufactured crisis that with the EU having a $110-billion trade surplus with Russia, Europeans would have to be out of their minds to disturb such a beneficial economic policy when they are five years into trying to salvage their recession economies. But enter stage left the Americans, who were quite insulated from Russian counter-sanctions, but didn’t seem to mind putting the European livelihoods on the line.

The US elite spinmeisters tipped their hand early on that they were pushing for a major East-West economic war. It was a dual track move to pull the EU away from Russian energy supplies, despite the fortune spent for existing pipelines and those under construction, like Southstream — all had been for the purpose of assuring stable energy supplies and prices to Europe.

Despite all the years of East-West business bridge-building that had been done to decrease chances of any future conflicts, some think-tank thugs in Washington decided that peace, through trade and cooperation against terrorism,was now a “security risk”. This sounds hard to believe because it is so counter-intuitive, but stick with me.

The genesis of this came from the change in America’s long-held military preemptive strike policy, where we would only strike first with the threat of an impending strike. But the ascending NeoCons quietly pushed through the new policy, a carte blanche one, where we asserted that we could preemptively strike anyone whom we felt might become a threat at some time in the future — a virtual blank check.

One of the biggest disasters of our American democracy was that we let this slide by under the radar. Almost no one remembers much of a public debate on it. Most of us learned about it years afterward. Once I learned about it and got over the shock, I knew that the NeoCons and their allies would not have pushed through such an aggressive posture without having some plan to use it. And use it, they have.

What I am beginning to see now, which I had missed earlier, was an unofficial roll-out of the “economic war” version of that same preemptive strike policy. Some elites in a boardroom somewhere decided that we had the same right to attack countries that we felt could be an economic threat in the future, that it would be cheaper and safer to attack them now. Since we had already given ourselves permission to attack militarily, the elites also assumed the right to conduct first-strike economic wars and to use the military in whatever capacity needed.

One of the clues that woke me up to this was the obvious US play to steer Europe away from Russian energy supplies and replacing them with pipe-lined resources from the Persian Gulf. Hence, there was a need to take Syria out to eliminate the Russian base there, and control the pipeline territory to the Eastern Mediterranean. Over 170,000 Syrians have been murdered in the process.

The highlight of this energy replacement comedy act was the hoax story of how the US could quickly be exporting shale gas to Europe to replace the reduced Russian exports. But left out of that pitch was the inconvenient fact that the US has already contracted all of its projected LNG gas production to Far Eastern customers. No more would be available for years.

On top of that, Bill Engdahl’s analysis revealed that the shale gas wells had very fast depletion rates – manyh of them 50% in the second year, and the overall production had only been maintained by the mass drilling of new wells. So what we found was a pump and dump scam, creating a totally fictitious future European demand to keep well drilling funding going into shale gas here.

When the EU tech people had crunched the numbers on their end, they came up with energy price-hikes of around 50% during the “changeover” period, and then something like $100 billion in LNG port and infrastructure costs that there was no money to pay for. You would think that the EU leaders would have been locking their wallets away whenever the Americans came to town, but yet they got sucked into the Russian-sanctions scam anyway.

They started out simply enough with some travel bans — a joke really — but this had a trick side to it. No one really put their thinking caps on about what the economic damage could be if the Western sanctions picked up momentum and pushed Russia into serious counter-sanctions, which brings us up to today.

Sanctions Boomerang

Putin warned that if more sanctions were put on Russia that there would be a “measured response”, and it is turning out to be almost a knockout punch. The food ban had hit hardest some of the countries that have been most aggressively bashing Russia, like Poland. And then you had the stupid Latvian countries rolling out the red carpet to display their full cooperation with NATO, as a border-state flanking threat to Russia, who was no threat to them whatsoever. They had to be out of their minds.

So here were are at harvest time and our correspondents in France tell us they choking on fresh produce. Like many other European countries, there is not a large refrigerated transportation system nor cold storage to hold produce through even a one-month glut of supply. There are no buyers, as all the neighboring countries are in the same boat.

But it gets worse. Farmers live and die on their annual big crop sales to pay their debts and labor, last through the winter, and to replant in the Spring. That all just went up in smoke. Can you see mass bankruptcies all over Europe in the agricultural and upstream businesses? I can. How will those loan defaults hit the banks’ capital reserve requirements?

The dam broke this past week. We not only had citizen activist groups up in arms, but parliamentarians all over Europe and even high government officials stating that the sanctions policy had been a runaway train with no one at the helm really thinking out the consequences. Again, with a $110 trade surplus with Russia, what did they expect? The Russians had to cut imports that hurt them the least, but would have the most ripple effect in the EU, not only economically, but politically.

Finland and the Baltic countries are already thinking their one-night stand with NATO might not have been such a good idea as was proposed to them. From France and Italy, north to Germany, which had a 0.2% decline in GNP going into a recession, the business community began openly discussing that they need to put the brakes on the politicians making the current situation worse. The grownups want to take over the rudder.

There is a silver lining, and I almost had to pinch myself I was not dreaming when I heard it. The victims of the Russian counter-sanctions have figured out that the destabilization caused by the Western attack on Ukraine when they backed the violent coup, has been the well-head of all the current economic fallout. To guard against another round of self-defeating sanctions, they are pushing for a deescalation of the fighting in Ukraine and for opening a political dialogue to cap that problem. But, that will put them head to head with those elites who have not gotten the increased hostilities and sanctions they wanted for some reason.

If all the non-elite groups unite to stand up to the war crowd to them off their aggression plans, I hope they will be smart enough to know they must attack the war crowd and take them out permanently so they cannot regroup and attack us all again later.

And last, to put a cherry on top, the Russians have announced that, if there are new sanctions put on them, one of the options they are looking at is to block all EU vehicle imports — including cars, trucks and buses. That should nudge those industries and their supply chains and unions to join the fight against the “sanctionistas”.

I am already hearing the charge that European leaders sold the EU out, to be used as sanction cannon fodder for the US, NATO and European elites economic war desires. Hope that this builds up into what we really need — a throwing off of the corrupt political structures all over Europe… a mass hitting of the reset button. God only knows, we need the same thing in the US.

Jim W. Dean, managing editor for Veteran Today, producer/host of Heritage TV Atlanta, specially for the online magazine “New Eastern Outlook”.


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