US Think Tanks Dream Up Russian Collapse, Aggression Despite the Facts

It's like clockwork. Oil price is on the rise again, as this column foresaw earlier this year. And the increasing possibility of Brexit is sending EU decision centers on a tailspin.

So it's time for US Think Tankland -- as in CIA front Stratfor, among others -- to renew their spin offensive, mixing "analyses" of imminent Russian economic collapse with calls for more NATO pressure over Russia's western borderlands.

A solid case can be made that Moscow does not need mountains of Western investment; credit can be created in Russia. Most of all, there is rather less productive investment money in the West than wild speculative funds; it's largely a matter of fiat money and credit, and Moscow does not need to go to the West for that.

As long as Russia uses investment capital to increase the production of goods, this will offset the increase in money supply. So in the end inflation will be negligible. Quite a few Russians must be puzzled at the Central Bank's Elvira Nabiullina, with her policy of raising interest rates to cut back the increase in investment; that could eventually lead to a strangled Russia. Not accidently Nabiullina happens to be extremely praised by US Think Tankland and the City of London.

As to what credits would Russia use to pay for needed imported technology, the obvious answer is to draw from energy exports -- especially now with the oil price back on the way up. And here intervenes the temptation to redirect the export of oil and natural gas away from the EU to China and Asia -- and let the EU grapple with its eternally inconsistent "energy policy," which consists mainly of blaming Gazprom.

It's a myth that a dearth of foreign investment today will delay large projects in Russia -- including the energy front; China will step up infrastructure investment in Russia with many projects linked to the New Silk Roads and overall Eurasia integration, as even US Think Tankland admits.

Russia may also replace most Western imports other than technology by building their own plants, following the massively successful Chinese model that has enabled Beijing, based on purchasing power parity, to become a larger industrial force than the US or the EU.

One would be hard-pressed to find US Think Tankland focusing on American economic collapse -- as true unemployment in the US may be as high as 23%. Inflation is also much higher, as the Bureau of Labor statistics takes out of the commodity basket rapidly rising individual commodities or products and substitutes it for less expensive replacements. This biases inflation to about half its actual rise over time. Meanwhile the -- dwindling -- "American dream" middle class is being squeezed, and that largely explains the masses coming out to cheer Donald Trump.

So we have reached a geopolitical juncture where the US is politically being torn apart as the EU is flooded by a sort of neo-Visigoth invasion. And this may be just a prelude. EU decision makers are so lost in space that they cannot control the Fortress's borders (and need a dodgy deal with Sultan Erdogan); but at the same time this does not prevent them from being led to (cold) war with Russia. Here is a good explanation for the contradiction.

Calling Article V on a lone hacker
Back in Russia, what do Russians want? A pol l from the Levada Center conducted four months ago still offers excellent insight.

52 percent of those surveyed prefer a state-controlled economy, compared to 26 percent who prefer Western turbo-capitalism and 22 percent who'd rather remain with the current economic model. Primary concern among Russians is recession. At the same time, nearly 75 percent support the Kremlin offering no concessions to the Atlanticist axis -- assuming that would cause the easing of sanctions.

Into this juncture intervenes the St. Petersburg International Economic Forum, forcefully boycotted by official Washington. But that did not prevent, for instance, a Russian visit for the head of the European Commission (EC), Jean-Claude Juncker, who discussed the current EU-Russia impasse face-to-face with President Putin. Even though "sanctions per se were not brought up," both parties know a mutually, Asian-style, face-saving way out must be found away from the current "frozen relationship."

It's also a myth that Moscow eventually "conceding" on Ukraine and Syria would be seen as conducive to more Western investment in Russia. These matters are decided in Washington, not Brussels. What matters for the Beltway -- and that's bipartisan -- is mostly NATO, not the EU.

What's irking the Beltway is that a possible Brexit would not so much accelerate the slow-motion disintegration of the EU (it's heading there anyway) but mostly severe the influence of a Trojan Horse UK (allied with American interests) in Brussels. And that would certainly give leeway to Moscow to exploit the political turmoil and try to undermine NATO from within.

Whatever happens post-Brexit, NATO will continue to build up on Russia's western borderlands -- and beyond. Take the announcement earlier this week that NATO will consider a cyber attack reason enough to summon its Article V -- "collective defense" provision.

NATO decided on this upgrade after alleging that "Russian hackers" attacked Hillary Clinton's subterranean email server. Well, it was actually Guccifer 2.0, a lone hacker; he gave a hoard of documents to Wikileaks; and the soon to be published result will be crushing news to NATO's official candidate to the US presidential election.

Suppose a scenario where NATO actually musters the courage to invoke Article V and attack Russia, which in turn neutralizes them with its own electronic weapons arsenal. This would still be re-engineered as "Russian aggression." Nothing to see here. US Think Tankland, the Beltway consensus, NATO's generals, they will all continue to believe their own hubris; "Russian aggression" exists because Russia is collapsing, so the only solution is to overwhelm them with our military might.

Good luck with that.

Source URL