STRATEGIC ALERT NEWSLETTER
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| | | For all their blustering about “human rights” and “moral superiority”, the trans-Atlantic powers are pursuing a policy of confrontation and war, on all fronts. With China, after the “chip war” initiated by the U.S. government, the Chinese government has now ordered a ban on the purchase of chips from the U.S. manufacturer Micron. The Biden Administration denounced the move as “intolerable” and “economic coercion”, although the same practice by Washington is deemed acceptable. In Europe, the EU Commission is pressing ahead with moves for “de-risking” trade with China, which is just another name for “de-coupling”, but designed to sound less threatening for the European economies.
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As for Russia, there has been a dangerous escalation in the warnings and provocations militarily, in addition to the West’s rejection of offers for negotiations (cf. below). President Biden’s National Security Adviser Jake Sullivan gave Ukraine a de facto green light to launch strikes against Russian territory, including Crimea, prompting an official protest from the Russian Foreign Ministry to U.S. diplomats in Moscow. On the same day, May 26, the same ministry mooted the possibility of breaking diplomatic relations with the U.K. over reports of direct British military involvement in cross-border attacks against Russia.
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Moscow is also proceeding with the deployment of tactical nuclear weapons in Belarus, as NATO prepares nuclear missions in Eastern Europe. Meanwhile, the “major offensive” by Ukrainian forces, announced in great pomp for months now, continues to be postponed.
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However, the policy pursued by Washington and London, and dutifully supported in European capitals, faces major obstacles. Not least among them, the collapse of the trans-Atlantic financial system, which is thoroughly bankrupt, as evidenced in the banking crisis. In addition, the very real danger of a nuclear war is forcing more and more circles in the U.S. and Europe to demand a serious change in policy. As for the vast majority of the “Global South”, comprising some 85% of the world’s population, they refuse to go along with the wars and the looting policies.
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This problem was addressed in an editorial in the Financial Times of May 23, under the headline “Taking Stock of the G7 Hiroshima Summit”. The editors are basically satisfied with the West’s gameplan for orchestrating a showdown with Russia and China, but lament that the world outside the West is not on board with that policy, at all.
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“Garnering support from the so-called ‘global south’ will however continue to be a major challenge for the G7. Economic ties between these nations and Russia and China are a barrier.... With China also building ports and doling out billions in aid and investment across Latin America, Africa, and Southeast Asia, stronger dialogue will only go so far....The G7 will need to follow through on promises to support developing nations with investment and climate finance.”
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| Promises, as the FT suggests, will certainly be forthcoming. But significant investments in the real economies of the Global South will not. In fact, today’s trans-Atlantic financial system is incapable of providing the funds and the productive credit needed to ensure actual development. That’s why it must be replaced, completely. |
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| | | While there has been much diplomacy in favor of a negotiated settlement to the war in Ukraine, the war party in the West, led by the British, as well as President Zelenskyy’s inner circle, are working to sabotage them. To begin with the former initiatives, Brazil’s President Lula da Silva has been actively organizing his “peace club” since the G7 summit in Hiroshima, which he attended as a guest (cf. SAS 21/23). On the sidelines of the meetings, he met with Indian Prime Minister Narendra Modi, and shortly after returning, spoke by phone with Chinese President Xi on May 24, then, two days later with Russian President Putin, about seeking a peaceful solution for Ukraine, as well as about the perspectives of the BRICS, of which all four countries are members.
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At the same time, China’s special envoy Li Hui was in Europe to sound out various leaders about the Chinese peace proposal (cf. SAS 21/23). His trip took him to Kyiv, Warsaw, Paris, Berlin, Brussels, and then Moscow. The EU’s foreign policy chief Josep Borrell refused to receive him, relegating the meeting to his Deputy Secretary-General for Political Affairs Enrique Mora, who insisted on “Russia’s full responsibility for the unprovoked and unjustified aggression against Ukraine”.
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As for the Ukrainian government, the adviser to the head of the Ukrainian presidential office Mykhailo Podolyak took to Ukrainian TV channels May 26 to attack all peace initiatives, explicitly rejecting those of China, Brazil, six African nations, and the Vatican. Acknowledging that “everyone is talking about peace”, he insisted that those who call for a compromise are “lobbying for Russia”. He called China’s proposal “absurd”, and a “capitulation plan”. Only two things count, he said: “swift weapons supplies” and “a basic NATO membership... The rest is mere talk about abstract things.”
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But the real decisions makers, of course, are not in Kyiv, but in London and Washington, and they are not about to back peace proposals at this point. That was made clear by two of Britain’s self-proclaimed elite, who are no longer officially in power, but very active. Former Prime Minister Boris Johnson was in Dallas, Texas, last week to try and convince Republican politicians and influentials to continue supporting Ukraine, despite growing opposition to financing the war effort from within their party. He was presented there as “the architect of Western policy” on Ukraine.
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| We should also mention Sir Richard Dearlove, the former chief of the British secret service MI6 (1999-2004), who has never given up on restoring the British Empire. In a speech last week to the U.K. National Conservatism conference, he openly stated that Britain requires war, be it cold war or hot, to maintain its identity. (“Without the essential threat to our way of life that was a constant feature of the Cold War, we have lost cohesion and motivation, and especially our self-confidence.”) From there, he denounced China’s proposals for seeking a settlement in Ukraine, and called for “revolutionary change” in Russia... |
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| | | The almost unprecedented economic sanctions applied against Russia have not achieved the desired results, due to the refusal of the “non-West” to go along. That reality was recently acknowledged in two prominent British publications, The Spectator and the Telegraph. Alastair Crooke, a former senior British diplomat with almost 30 years of career at MI6, reported on the admission on May 21 in the Beirut-based Al Mayadeen media network.
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| Crooke quotes from the lead article in the May 13 edition of The Spectator (of which Boris Johnson was editor, 1999-2005): |
| | “Unleashing financial ‘shock and awe’ on a scale never before seen, Russia was to be cut off almost entirely…. Putin’s Russia, went the theory, would be impoverished into surrender. Few people in the West are aware of how badly this aspect of the war is going. Europe has itself paid a high price to effect a partial boycott of Russian oil and gas.
“But these figures do not explain the scale of the failure to damage the Russian economy. It soon became clear that while the West was keen on an economic war, the rest of the world was not. As its oil and gas exports to Europe fell, Russia quickly upped its exports to China and India -- both of which preferred to buy oil at a discount than to make a stand against the invasion of Ukraine….
“The West embarked on its sanctions war with an exaggerated sense of its own influence around the world…. The results of the miscalculation are there for all to see…. The Russian economy has not been destroyed; it has merely been reconfigured, reorientated to look eastwards and southwards rather than westwards.” |
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| Crooke goes on to quote Allister Heath, from his article in the May 10 Telegraph: |
| | | “Russia was meant to have collapsed by now. Britain, America and Europe’s gambit was that drastic trade, financial and technological sanctions, a cap on the price of Russian seaborne oil, and substantial help to Ukraine would be enough to defeat Moscow. It hasn’t worked…. The reason? China has quietly stepped in, bailing out Putin’s shattered economy on a transformational scale, swapping energy and raw materials for goods and technology. The sanctions are a joke.” |
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Alastair Crooke adds on his own behalf: “For some, reading these words, their reaction will be one of utter amazement: How come it took this long for the British Establishment to ‘wake up’ to that which all the world knew?” His answer: “delusionary hubris placed ‘blinders’ on Western policymakers; they could not see what was before their own eyes.”
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| However, the former diplomat cautions, the West is unlikely to change policy on its own: |
| | | “The Western neo-cons do not possess ‘reverse gear’; when defeated in one sphere, they never apologise; they simply move on to the next colour-revolution.” |
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| | | The New Development Bank, created in 2015 by the five BRICS nations (Brazil, Russia, India, China, South Africa), is holding its annual Board of Governors meeting on May 30-31 at the bank’s headquarters in Shanghai. This is the first such meeting chaired by Dilma Rousseff, former Brazilian President and a close ally of Lula da Silva, who was inaugurated just one month ago.
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A major issue on the table is how the NDB can play an active role in shaping the new international financial system required to replace the collapsing transatlantic system. Until now, the NDB has been dependent on dollar-financing for its capital and constrained by limiting itself to issuing dollar-denominated loans to member nations. That means, for example, that funding for any new projects in Russia has been frozen since Western sanctions were imposed, a situation raised by Russian Prime Minister Mikhail Mishustin when he met on May 23 with chairwoman Rousseff.
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That has Wall Street and London very worried, as reflected in an article in the May 28 Financial Times, reporting that Saudi Arabia is now considering joining the NDB. A statement from the bank received by the daily notes that “In the Middle East, we attach great importance to the Kingdom of Saudi Arabia and are currently engaged in a qualified dialogue with them.” Saudi resources could significantly increase the NDB’s funding possibilities, in particular when moving out of the dollar. Riyad has reportedly filed to join the BRICS group as well.
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The Financial Times also regrets that the Saudis are “also pursuing closer relations with China”. Indeed, the negotiations between Riyad and Tehran brokered by China have seriously upset Anglo-American plans for the Middle East.
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| Another problem for London is that the NDB Board is set to discuss Lula’s request that the bank find ways to aid Argentina, which has applied for full membership in the BRICS and whose Finance Minister is attending the discussions as a special guest. The Board is made up of the Finance Ministers of the member countries, but it was announced late last week that Brazil’s Fernando Haddad, who was to play a leading role in those discussions, will not be able to attend in person, although he may participate virtually. The government is currently in a hard fight with Congress to pass important economic domestic legislation, which the minister is leading for the government. |
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| | | Following the historical defeat of the government in the debate over the bailout of Credit Suisse (cf. SAS 16/23), members of the National Council (lower house of parliament) took the first initiative for a real banking reform. On April 11, the Green Party filed a motion for a bank separation regime, along the lines of the U.S. Glass-Steagall Act of 1933, to which the government (Federal Council) announced its opposition on May 24. A Parliament debate should be scheduled now.
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| The text of the motion reads: "The Federal Council is instructed to take the necessary steps to introduce a bank separation system for systemically important banks in Switzerland. |
| | “The renewed intervention of the state to rescue/take over a systemically important bank in Switzerland within 5 years requires a careful examination of the effectiveness of the existing regulation and possible alternatives. The bank separation system, as the U.S. knew it from 1933 to 1999, can lead to an unbundling of risky investment banking from commercial banks. If nothing else, this can reduce the investment banking culture (high returns, high leverage and high risk appetite) that is evident in universal banks today, and contribute to a more responsible management culture. In the TBTF regulation, the option of a bank separation system was insufficiently explored and dismissed with the argument of too much restriction in the banks’ freedom of action. However, the past weeks have invalidated this argument, as despite TBTF regulation, government guarantees in the order of magnitude of the total existing government debt had to be issued in order to prevent further destabilizing effects on the financial markets and the economy.
“A report will therefore examine and explain how a bank separation system would work in day-to-day banking operations and in a crisis situation, what design options are available and what steps would be necessary for their implementation. In doing so, possible designs as well as the dependencies on the relevant capital and liquidity requirements will be examined and compared with regard to their feasibility and their respective advantages and disadvantages.” |
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| In its reply, the government states that the Federal Department of Finances (EFD) will issue a report within one year on the too-big-to-fail regulation, and on a possible bank separation system. |
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| | | One of the “brains” of Robert Habeck’s “climate transition policy” is Elga Bartsch, an investment banker who now leads the Economic Policy Division of Habeck’s Economy Ministry, where she is now responsible for the ministry’s annual economic reports. This year -- her first on the job -- the economic report includes for the first time “climate sustainable” assessments.
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It is known and is a source of controversy, which may create another scandal weakening Habeck’s “super-ministry”, that Elga Bartsch worked for BlackRock, Inc. which she quit shortly before being hired by Habeck at the beginning of January. Less well known, is that she has been working on a blueprint for climate-change “green finance” since at least 2007, when she was working at Morgan Stanley, before moving to BlackRock.
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| A Morgan Stanley report dated Oct. 3, 2007 and entitled The Economics of Climate Change, was authored by Bartsch. It lays out with shocking clarity the main features of the climate policy currently being implemented by the European Union and other Western governments. In the chapter “Another Dose of Creative Destruction”, Bartsch wrote: |
| | | “After the collapse of communism… climate change could be the next major shock to the global economy. Like the fall of the Iron Curtain, climate change could cause part of the existing capital stock to become obsolete as the production structure suddenly faces a big shift in relative prices (driven by carbon pricing). In addition, climate change could trigger major changes in global workforce dynamics.” |
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This certainly applies to what is happening to German industry and to the living standards of EU nations now. When talking about “climate change,” Bartsch means, in reality, policies to “rectify” climate change, as she makes clear later on. Thus, her actual intended meaning is: After a major shock to the world economy, actions to “rectify” climate change can depreciate fossil-based assets, as forced disinvestment and CO₂ pricing can make energy prices skyrocket. In addition, climate-rectification policies could provoke mass unemployment worldwide.
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| Further on, Bartsch suggests implementing climate policies dictatorially, top-down: |
| | | “Containing climate change will likely be top-down technological change heavily influenced by government policies. Climate change is not only the largest externality ever experienced globally, rectifying it will also require the most far-reaching government intervention.” |
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| She also cautioned not to rely on voters’ support, since they won’t understand why they should eat less, heat less, travel less, etc., to save the planet: |
| | | “Rational voter-behavior can result in too low a level of environmental protection because individuals lack the incentives to obtain all the necessary information on climate change and therefore don’t express their environmental preferences properly. In this context the rise of ‘green’ parties in many countries is an interesting breaking of the mould.” |
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| One might wonder, had she lived in the 1930s, would she have followed Keynes’s example in proposing Hitler’s regime as the one best suited to implement her schemes? |
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| | | As Ms. Bartsch was drafting her 2007 report on The Economics of Climate Change (cf. previous item), the “next major shock to the global economy,” was occurring right at her very bank, Morgan Stanley! One big trading desk alone lost $14.5 billion, dwarfing all previous bank losses in history. Hopelessly bankrupt, the investment bank was bailed out – first by a $9 billion “investment” from Mitsubishi UFJ; then by a $20 billion preferred stock “investment” by the U.S. Treasury’s TARP program; followed by the awarding of “commercial bank status” to enable it to borrow from the Federal Reserve’s discount window, etc. Millions were foreclosed and evicted, or lost everything. The biggest trans-Atlantic economies were driven into the “Great Recession” of 2009-10.
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Could Ms. Bartsch have missed all this? Was she locked in a room at Morgan Stanley where mortgage-backed securities, credit default swaps, and collateralized loan obligations were never mentioned, so as not to offend her lofty sensibilities? Did she frown on such money-grubbing while pursuing the noble goals of saving the planet? Did she really think it was climate change that was going to do the “creative destruction,” when all around her, “creative” bankers were destroying everything?
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| No. She was working on a scheme to create a new “green finance” bubble in order to bail out the bank -- and the financial system -- at the cost of regime-change and superpower wars, deindustrialization and another deep recession, a worldwide food crisis, and Malthusian sacrifices. (Recall, in this context, the comment of the 1991 follow-up to the Club of Rome book, Limits to Growth, published under the title The First Global Revolution: “In searching for a new enemy to unite us, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like would fit the bill.... All these dangers are caused by human intervention, and it is only through changed attitudes and behavior that they can be overcome.”) |
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| | | German Economy Minister and leading member of the Green Party Robert Habeck was finally forced to announce on May 17 the ousting of his state secretary Patrick Graichen, for blatant cronyism. Graichen, the main architect within the ministry of the “energy transition”, played a key role in the web of governmental/non-governmental organizations and banking institutions pushing the so-called Green Deal. The scandal hitting Habeck directly has been useful in focusing public attention on this network.
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EIR has just published a dossier on the subject titled (in translation): Stop the Economic Warfare against Germany. One section of it focuses on following the money trail of who is financing the much talked about energy policy think tank “Agora Energiewende”, which the same Graichen used to head. German media have mainly reported on the role of the American co-founder of Agora, Hal Harvey, as the key individual bringing millions of dollars into the think tank. But the EIR dossier focuses on the powerful foundations of the financial and IT oligarchy, of which Harvey is a very active agent. The various foundations, created many decades ago, act as the fondi of these oligarchs, controlling billions of dollars in endowments.
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They were pushing, already then, the Malthusian zero population growth campaign, which is the premise of the environmental movement, the deindustrialization policy of the Great Reset and the so-called carbon free economy. Mapped out in the dossier is how these endowment foundations, representing the powerful interests, create so-called “pass through” foundations to do their dirty work, by financing and creating activist organizations such as Agora, which are able to place people both high-up in government and policy-making circles, and among extremists, like the Extinction Rebellion.
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While Hal Harvey identifies himself on the Agora board of directors as managing director of Energy Innovations LLC, a for profit environmental consulting firm, he was hired, in 1990 at the age of 30, by some of the most influential foundations (including the Rockefeller Brothers Foundation, the David and Lucille Packard Foundation, the William and Flora Hewlett Foundation; the John D. and Catherine T. MacArthur Foundation; the Oak Foundation,etc.), that hold billions of dollars in endowments. Together, they decided on how to finance the promotion of a fundamental shift in international energy policy toward “energy efficiency” and “sustainability”. In 1991, they created the Energy Foundation, appointing Harvey as its president. Out of this came the Energy Foundation of China, which works to change China's energy policy.
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In 2001, Harvey became program director of the Hewlett Foundation. In 2007, the same group of above-mentioned foundations commissioned a report entitled Design to Win: Philanthropy’s Role in the Fight Against Global Warming, which is a blueprint on how to finance a global campaign for de-industrialization by creating a carbon free economy. That same year, theses same foundations, which now included Bloomberg Philanthropies, Grantham Foundation and others, gave hundreds of millions of dollars to create the U.S.-based ClimateWorks Foundation, appointing again Harvey as its president. They also finance the infamous European Climate Foundation based in The Hague. These in turn created hundreds of smaller pass through foundations and activist organizations, which supported radical groups such as the Extinction Rebellion and Last Generation.
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| | | In February 2022, the U.S. media giant AP (Associated Press) was granted a total of $8 million from the William and Flora Hewlett Foundation, the Howard Hughes Medical Institute, Quadrivium, the Rockefeller Foundation, and the Walton Family Foundation. These foundations make no attempt to hide their support for the “climate change” lobby and the measures needed to drastically reduce CO2 emissions.
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AP used the money to create a “climate desk”, and to hire 20 new writers to staff it, as the news agency itself confirmed in an article dated Feb. 15, 2022. “Together the team will transform how AP covers the climate story, including focusing on the profound and varied impacts of climate change on society in areas such as food, agriculture, migration, housing and urban planning, disaster response, the economy and culture.”
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| And the hired pens went to work. According to the Media Research Center, within one year, AP had churned out at at least 64 stories warning of environmental calamity, and used over 500 environmental extremism buzzwords in the articles, such as “global warming”, “climate disaster”, “damage”, etc. . |
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