Thursday, December 18, 2014

Some questions about Russia's economic crisis

There's been a lot of triumphalist gloating in our media of late about how our sanctions and oil-price-manipulation have got the Russian economy on the brink.

The usual anti-Putin pundits (pretty much the only ones we get to meet on CNN et al) are gleefully suggesting Putin prepare an exit plan.

On the other hand, there is plenty of evidence that the Russian economy is in far better shape, even with sanctions and $50 oil, than the US economy. There is no doubt that Russia can weather a sustained run of sub-$60 oil. The US fracking industry can't.

Long before Russia is crippled, the US fracking industry and the $500 billion in debt obligations tied to it will be ancient history. How that $500 billion write-off will effect the US economy remains to be seen.

Perhaps the prospect of that half-trillion $ default is one reason for the desperate lobbying by Citigroup and others to have Dodd-Frank emasculated. The big banks will have those toxic 500 billions repacked and sold off to one another in some form, and before you know, oopsie!... well what a surprise, the taxpayers are on the hook yet again!

Meanwhile, winter has descended on Europe, as it predictably does at this time of year, and Europe has very limited short and medium term options when it comes to replacing Russian gas. For the most part, they can't and they won't. That makes them half-hearted participants at best in the Washington-driven sanctions regime. Quite aside from their dependence on Russian gas, they must deal with the pressure of their own business communities who are saddled with substantial losses as a result of sanctions.

Obama imposes sanctions; France, Germany, Poland pay the price. How long do you suppose that's going to fly in Europe once sanctions start hurting European employment and economic well-being? While the more obsequious ass-kissers among the European leadership (Cameron) make much noise about Putin, the reality is that European business leaders generally consider Russia a sound business partner.

Also overlooked in this recent euphoria is that Russian energy is sold to Europe in dollars. The much-ballyhooed "collapse" of the rouble this week was nothing of the sort. Instead, it was a short-term aberration driven by speculators, and even the most deep-pocketed and well-connected speculators will be unable to sustain it, at least not without having their potential losses underwritten by the US tax-payer or the US government's printing presses. So long as the dollars and euros keep pouring in from outside, it's inevitable that the rouble will rebound.

Short term, the Russian economy is taking some unwarranted bad press in the West, but that's hardly new. The usual suspects who have been salivating for regime change there probably see this as their last best chance.

Unfortunately for them, Putin's popularity in Russia seems to be holding up, and in the medium to longer term, the Russian economy is on much firmer ground than America's.


Wednesday, December 17, 2014

Cuba - USA rapprochement; why now?

After all, the Yanks have had well over 50 years to set this right.

So why, after well over fifty years of missed opportunities, is this happening today?

My theory is that when some slow-burning back-burner story like this explodes, it's because the news gatekeepers are trying to take your eye off something else...

Like the EU striking Hamas off the terror list...

Like Islamist militants scoring hard in Pakistan and Afghanistan and Nigeria

Like the torture debate in America

Like the racism debate in America

Like the last round of concessions to the big banks

Like the bankruptcy of the USA

Like the fact that democracy in the USA has become a plaything of the .01%

Like the American elite's commitment to perpetual war

Like the rapidly disintegrating status quo around America's foster child in the Middle East...

When you think about it, there's never been a better time to make peace with Cuba!

There's a lot of stuff out there they want us to take our eyes off.

War is a tonic

Have a gander at this chart:

LocationPopulation Under Age 15
World26%
Afghanistan46%
Albania23%
Algeria28%
American SamoaN/A
Angola48%
AnguillaN/A
Antigua and Barbuda28%
Argentina25%
Armenia17%
ArubaN/A
Australia19%
Austria15%
Azerbaijan22%
Bahamas25%
Bahrain20%
Bangladesh31%
Barbados19%
Belarus15%
Belgium17%
Belize34%
Benin44%
BermudaN/A
Bhutan30%
Bolivia36%
Bosnia and Herzegovina15%
Botswana34%
Bouvet IslandN/A
Brazil24%
British Indian Ocean TerritoryN/A
British Virgin IslandsN/A
Brunei Darussalam26%
Bulgaria13%
Burkina Faso45%
Burundi46%
Cambodia33%
Cameroon43%
Canada16%
Cape Verde32%
Cayman IslandsN/A
Central African Republic40%
Chad46%
Chile23%
China16%
Christmas IslandN/A
Cocos (Keeling Islands)N/A
Colombia29%
Comoros43%
Congo41%
Congo (Dem. Republic of)46%
Cook IslandsN/A
Costa Rica24%
Cote d'Ivoire41%
Croatia15%
Cuba17%
Cyprus17%
Czech Republic14%
Denmark18%
Djibouti36%
Dominica23%
Dominican Republic31%
Ecuador30%
Egypt32%
El Salvador32%
Equatorial Guinea39%
Eritrea42%
Estonia16%
Ethiopia41%
Faeroe IslandsN/A
Falkland Islands (Malvinas)N/A
Fiji29%
Finland16%
France19%
French Guiana35%
French Polynesia25%
French Southern Territories and Antarctic LandsN/A
Gabon36%
Gambia44%
Georgia17%
Germany13%
Ghana39%
GibraltarN/A
Greece14%
GreenlandN/A
Grenada28%
Guadeloupe22%
Guam27%
Guatemala41%
Guinea43%
Guinea-Bissau41%
Guyana33%
Haiti36%
Heard Island and McDonald IslandsN/A
Honduras38%
Hungary15%
Iceland21%
India31%
Indonesia27%
Iran (Islamic Republic of)24%
Iraq43%
Ireland21%
Israel28%
Italy14%
Jamaica27%
Japan13%
Johnston AtollN/A
Jordan37%
Kazakhstan25%
Kenya42%
Kiribati35%
Korea (Dem. Peo. Rep. of)23%
Korea (Republic of)16%
Kuwait27%
Kyrgyzstan30%
Lao People's Democratic Rep.38%
Latvia14%
Lebanon25%
Lesotho37%
Liberia43%
Libya31%
Liechtenstein16%
Lithuania15%
Luxembourg18%
Macedonia (The former Yugoslav Republic of)17%
Madagascar43%
Malawi46%
Malaysia27%
Maldives27%
Mali47%
Malta15%
Marshall Islands42%
Martinique20%
Mauritania40%
Mauritius22%
Mayotte46%
Mexico29%
Micronesia (Federated States of)31%
MidwayN/A
Moldova (Republic of)16%
Monaco13%
Mongolia27%
Montenegro19%
MontserratN/A
Morocco28%
Mozambique45%
Myanmar28%
Namibia36%
Nauru35%
Nepal36%
Netherlands17%
Netherlands AntillesN/A
New Caledonia26%
New Zealand20%
Nicaragua35%
Niger52%
Nigeria44%
NiueN/A
Norfolk IslandN/A
Northern Mariana IslandsN/A
Norway19%
Oman32%
Pakistan35%
Palau20%
Panama29%
Papua New Guinea38%
Paraguay34%
Peru30%
Philippines35%
Pitcairn IslandN/A
Poland15%
Portugal15%
Puerto Rico20%
Qatar14%
Reunion25%
Romania15%
Russian Federation15%
Rwanda42%
Saint HelenaN/A
Saint Kitts and Nevis23%
Saint Lucia24%
Saint Vincent and the Grenadines31%
Samoa40%
San Marino15%
Sao Tome and Principe43%
Saudi Arabia30%
Senegal44%
Serbia15%
Seychelles20%
Sierra Leone43%
Singapore17%
Slovakia15%
Slovenia14%
Solomon Islands40%
Somalia45%
South Africa31%
Spain15%
Sri Lanka25%
Sudan41%
Suriname29%
Svalbard and Jan Mayen IslandsN/A
Swaziland38%
Sweden17%
Switzerland15%
Syrian Arab Republic36%
Tajikistan37%
Tanzania (United Rep. of)45%
Thailand21%
Timor Leste42%
Togo41%
TokelauN/A
Tonga38%
Trinidad and Tobago25%
Tunisia24%
Turkey26%
Turkmenistan29%
Turks and Caicos IslandN/A
Tuvalu32%
Uganda48%
Ukraine14%
United Arab Emirates17%
United Kingdom18%
United States of America20%
Uruguay23%
Uzbekistan29%
Vanuatu37%
Venezuela29%
Vietnam24%
Virgin Islands (U.S.)N/A
Wake IslandN/A
Wallis and Futuna IslandsN/A
West Bank and Gaza42%
Western Sahara29%
Yemen44%
Zambia46%
Zimbabwe43%

That's a read on what countries have the highest populations under the age of 15 as of 2012. Anything stand out? Do you notice that the higher your percentage of young people, the greater the likelihood that the country is involved in some kind of violent turmoil?

That's because you can't have wars without able-bodied young men to fight them.

That's not a new insight of course. Neil Wiener made that observation a pillar of his career, and deep thinkers all the way back to Aristotle have noted the same phenomenon. 

Which raises a question; if we've known for three thousand years that a surplus of young males leads to violent conflict, why don't we find them something else to do?

The answer lies in the fact that too many older rich men have learned to profit from the endeavours of the young. Disputes between Liechtenstein(16% pop< 15 years of age) and Switzerland (15%) tend to be resolved by middle-aged men with brief-cases and law degrees. Disputes between Eritrea (42%) and Ethiopia (41%) tend to be resolved (or not) by young men with guns.

But both Switzerland and Liechtenstein are home to many investors who profit handsomely from the conflicts raging in the global South.

If you look at the two countries most ravaged by American wars of choice in the past 15 years, Afghanistan (46%) and Iraq (43%), you realize immediately that the trillions spent annihilating those societies could have easily been spent providing every young man in those countries with a mud shack and a couple of acres to grow a garden. While that might have kept them too busy to wage war, it wouldn't have done a damned thing for the plump white shareholders at Boeing and Lockheed Martin and General Dynamics and all the rest of them.

Wars also provide an opportunity for countries to ship their restive youth to neighbouring conflicts. For example, both Uganda (48%) and Rwanda (42%) have kept the home fires relatively peaceable by exporting their youthful hotheads to the DRC (46%) to keep the flames of war burning brightly there.

A similar phenomenon plays itself out in the North. America's "volunteer army" would be an impossibility were it not for the dearth of opportunity available to so many young Americans. All those dispossessed young inner-city blacks and trailer trash honkies could stir up a lot of hoo-ha on the home front. It's so much better for everybody (except them and their victims) if we ship them to Iraq and Afghanistan to "keep us safe."

Same with the hordes of young Muslims fleeing the Arab ghettoes of Europe to lose themselves in the hell that is Syria. That's an invaluable safety-valve for the great cities of the continent. This media-generated fear-wave about what they might get up to if they come "home" to Sweden and France and Britain is largely hypothetical. The vast majority are going to Syria to die, but before they do, they will fire off many made-in-the-USA rounds from many different Western armament suppliers, which will make those plump shareholders very happy and even more plump.

So do not despair, dear reader. War may be immoral, but it is never senseless. It makes perfect sense for the people profiting from it. And when, as in America, those are also the people making foreign policy, don't expect this bonanza to whither away any time soon.