The Growing Threat of War and the Critical State of the Global Financial System

Three developments are shaping the current world situation: an increase in social tensions, the intensification of international political conflicts and the increasingly undisguised preparation of the Western alliance for war against Iran.

The mainstream media try to miss no opportunity to tell the international public who will be friend and who will be foe in this coming war. Time and again, Iran’s allies Russia and China are depicted in the most negative light possible, while there is almost no mention of Israel’s and Saudi Arabia’s crimes in Yemen and against the Palestinians.

At the same time, the media are doing everything they can to conceal the most important reason behind the drive for the war – the critical state of the global financial system. Journalists are bending over backwards to convince the public that the global economy has completely recovered from the 2007/2008 crisis, that we are witnessing a global economic boom and that the dangers in the system are under control.

In fact, none of these claims are true. The simple reason is that they all ignore the historic importance of the cross-border manipulation by the central banks, which was necessary to save the system from collapse after it nearly broke down in 2007/2008, and which still keeps it alive today.

The global financial system would no longer exist without manipulation

This manipulation has set in motion a development that can be compared to the fate of a patient who survives a severe crisis only through an injection of addictive drugs and who would be killed by a subsequent withdrawal treatment because of his poor state of health. In other words, without money injections and low interest rates and without the purchase of government and corporate bonds by central banks, the global financial system, as we know it, would no longer exist.

The world’s leading central bankers are well aware of this. This is shown by their futile attempts to turn the wheel. Even the most timid announcements to contain the flood of money and significantly increase interest rates send such shock waves through the financial community that it is already clear: there can be no return to a normality in which no excess money is printed, interest rates are raised to a level that was once considered normal and no more bonds or shares are bought by the central banks.

So what will happen next? Will central banks simply continue the policy of the past ten years? After all, nobody can stop them from printing unlimited amounts of money and lowering interest rates – along the lines of the Swiss Central Bank – into negative territory…

In fact, nobody can stop them, but the consequences these measures would bring with them are foreseeable: A further increase in speculation, even greater volatility in the markets, an even stronger inflation of the bubbles, which are almost bursting already, the complete destruction of the classic banking business (lending against interest rates), the disintegration of traditional commercial banks and savings banks, the complete takeover of markets by investment banks and hedge funds, the collapse of pension systems – to name but a few of the expected consequences.

The biggest danger is the loss of confidence in the monetary system

Worse than any of these consequences is the creeping loss of confidence in the entire monetary system, which has not been tied to any real value since the decoupling of the US dollar from gold in 1971. It can be assumed that at some point it will affect the entire system, lead to a panic in the markets and cause the global financial card house to collapse.

How close we have already come to this point was shown by the dramatic price fluctuations of the US stock index Dow Jones in February of this year. It appears that this was a test run in which the US Federal Reserve, which is permanently on standby to prevent major price crashes, only intervened at the last second. These fluctuations were the strongest that the Dow Jones has experienced in its more than 100-year history.

This may have been a serious warning to the world’s financial elite. In any case, both the Skripal affair in Great Britain, the trade war instigated by the US against China and the recent hostile reaction towards Russia by most EU states are strong indications that the elites have decided to seriously consider an option that the German economist Ernst Winkler in 1952 described as “the best means put off the final catastrophe of the entire capitalist system over and over again” – the option of waging a war.


The Geopolitics of Targeting Russia

The escalation of tensions between the United States, Britain and France, on the one hand, and Russia, on the other, should not surprise anyone. In the last few years, the US leadership and mainstream British media have presented Russia as a major threat to global peace and the international order. Russian president Vladimir Putin in particular has been demonised as a ‘war-monger,’ an ‘aggressor,’ an ‘unscrupulous politician’ hell-bent on restoring Russia’s past glory’ at whatever cost.

This projection of Russia as a threat to world peace has intensified in recent days partly because of Putin’s unveiling of Russia’s cutting edge military technologies on 1st March 2018. They include advanced generation missiles with unlimited range and capability that can evade US or NATO anti-missile defences. Apart from the new Sarmat missile, the Russian defence industry has also developed a low-flying stealth missile capable of carrying a nuclear warhead with the ability to bypass interception boundaries that is “invincible against all existing and prospective missile defence and counter-air defence systems.”

Putin also revealed that his country has invented “ unmanned submersible vehicles that can move at great depths intercontinentally at a speed multiple times higher than the speed of submarines, … torpedoes and all kinds of surface vessels …“ He also spoke of the Kinzhal or dagger system, “a high-precision hypersonic aircraft missile system… the only one of its kind in the world.” Not only does the missile fly 10 times faster than the speed of sound but it also delivers nuclear and conventional warheads in a range of over 2.000 kilometers. The Russian president also drew attention to the development of Avangard, a hypersonic missile whose gliding cruise bloc engages in intensive lateral and vertical manoeuvring and is therefore “absolutely invulnerable to any air or missile defence system.”

With these military technologies, Russia has effectively brought to an end the US reign as the world’s sole military superpower. If Putin had made this his goal, it is not because of any obsession with military supremacy. As he explained, the strengthening of Russia’s military prowess was his country’s response to the unilateral US withdrawal from the 1972 Anti-Ballistic Missile (ABM) Treaty in 2002 engineered by President George Bush Junior and Vice-President Dick Cheney. As a consequence of the withdrawal, the US and NATO began deploying missile systems to encircle Russia, as observed by veteran analyst, William Engdahl. Countries that were once part of the demised Soviet Union and the dismantled Warsaw Pact in Eastern Europe were drawn into the US-NATO orbit either formally or informally. Anti-ballistic missile bases were built in Romania and Poland. The US global missile defence system now includes destroyers and cruisers deployed “in close proximity to Russia’s borders.”

It is against this backdrop that one should view another major episode that is responsible for the current tension between the West and Russia. It is true that the Russian annexation of Crimea, then part of Ukraine, in early 2014 had incensed the US and European elites and led to the imposition of crippling sanctions against Russia. While the annexation itself in strict legal terms was a violation of international law, an honest analysis of the episode cannot afford to ignore the larger geopolitical concerns that prompted Moscow to act the way it did. By organising a coup against Ukraine’s democratically elected president in February 2014, the US and its local surrogates demonstrated clearly that they intended to tighten their grip over a land that was not only part of the Soviet Union but also integral to Russian history and culture. Crimea with its strategic port was what the US and NATO coveted. It was all interwoven into the US-NATO agenda of expanding eastwards and emasculating Russia. That the overwhelming majority of the citizens of Crimea endorsed in a referendum conducted on the 16th of March 2014 what they viewed as the restoration of Crimea to its Russian fatherland testifies to the actual feelings of the people — feelings informed by a notion of identity and a sense of justice.

There is yet another recent development that has also contributed towards the exacerbation of tensions between the two sides. It is obvious that the rebels and terrorists in Syria fighting the Assad government backed by the centres of power in the West and supported by their allies in the region have been defeated. The concerted drive to crush the Hezbollah-Syria-Iran triumvirate opposed to Israeli occupation and US hegemony in West Asia has been thwarted. Since Russia played a significant role in the defeat of the US and Israel and their partners, the antagonism towards Putin among the elites in Washington and Tel Aviv in particular has heightened. Providing material support to some of the rebels and terrorists holed up in Eastern Ghouta, one of their last few footholds in Syria is a desperate attempt by Washington to ensure that it remains relevant to the emerging post-war political scenario. Highlighting the alleged use of chemical agents by the Syrian Army and the killing of children in government aerial bombardments are tools of propaganda that the Western media have exploited to the hilt in the Syrian war in spite of the effective demolition of some of these lies and half-truths in the past by independent Western journalists themselves reporting and analysing from actual zones of conflict in the country. For Western elites and their media it is not the death of children — after all many children have been killed in Yemen — that is their real concern. It is how Russia has anchored and buttressed its position in Syria and the region as a whole and has challenged American-Israeli hegemony that causes great distress.

The latest manifestation of the incessant manipulation of issues pertaining to Russia is of course the alleged use of a nerve agent, “Novichok” to attempt to murder a Russian double agent, Sergei Skripaland his daughter now living in Salisbury Britain. British authorities have offered no concrete proof that the attempted murder was the work of the Russian state. The Russian government has vehemently denied the allegation.

One should ask, what would the Russian government and Putin gain from killing Skripal a week before the Russian presidential election and in the midst of US sanctions? This is the question that the well-known American columnist, Eric Margolis, poses. A former British diplomat, Craig Murray, also doubts that the Russian government had the motivation to kill a double agent who was part of a spy swap some years ago. He suggests the assassination bid may be linked to an outfit known as ‘Orbis Intelligence’ or to the Israeli Mossad. In Murray’s words,

“Israel has a clear motivation for damaging the Russian reputation so grievously. Russian action in Syria has undermined the Israeli position in Syria and Lebanon in a fundamental way, and Israel has every motive for damaging Russia’s international position by an attack aiming to leave the blame on Russia.”

If Israel’s hand is behind the Skripal episode, the truth will never be known. Neither Britain nor any of the other Western powers, not even the UN, would want to conduct an honest, independent investigation. All that Washington and its allies want to do is to increase and expand the economic and financial sanctions against Russia — using Skripal as the excuse.

The aim is clear. It is to compel Moscow to submit to the hegemonic power of the Washington elite. Anyone who has a rudimentary understanding of Russian history knows that this will not happen. Russia will continue to resist. And Russian resistance may well hold the key to a different future for humankind.

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Dr. Chandra Muzaffar is the President of the International Movement for a Just World (JUST). She is Asia-Pacific Research correspondent.