It's All Connected

I spent most of today listening to my favored commentators, trying to wrap my head around the increasingly complicated state of world affairs. As you can imagine, most of the talk was about the possibility of Trump launching a war on Iran. And, of course, since Russia and China are increasingly openly aiding Iran, Trump’s wars on those countries also entered into the discussions, often in overlapping ways. In the end I decided to just do an overview of informed opinions.

Alastair Crooke maintained to Judge Nap that Trump had backed himself into a corner. Scott Ritter argued to Nima that Israel had done the same thing. And, of course, both are right. Trump, characteristically, listened to the people who paid to have his ear—through his advisers, whom they paid to have appointed. Trump’s original mistake was to believe, back in June, that Israel actually would be able to decapitate the Iranian leadership. He followed that up with his second big mistake by entering into the big CIA/Mossad/MI6 regime change push by using the King Dollar weapon to try to collapse the Iranian economy. Now he finds himself in the position of having committed himself to regime change, but lacking the ability to go forward without risking his presidency. Or even risking world war.

Ritter is right, too. Israel and the Jewish Nationalists have backed themselves into a corner, as well. Their hubristic ambitions for Jewish regional supremacy led them to oversell the propaganda of Iran as an existential threat that could never be negotiated with. Now, having failed in two wars on Iran in the last 6 months—because the regime change effort was a war by asymmetrical means—they are now in the position of needing to get Trump to go first. But Iran is refusing to let either the US or Israel off the hook. This time, Iran insists, will be entirely different—and that’s something that neither Israel nor the US are prepared for.

Larry Johnson offered an interesting take from his Jewish Nationalist friend Stephen Bryen, which, for LJ suggests the sense of desperation that people who have painted themselves into a corner feel:

Last week’s meeting between the US and Iran has ignited a Zionist freak out. Stephen Bryen’s latest article on SubStack is illustrative …

Stephen is an avowed Zionist, but he is not crazy like Smotrich or Ben-Gvir. ...

I know Mr. Bryen and like him. ... The piece I quoted above shows an uncharacteristic outburst of emotion and anger. If someone like Stephen is reacting this way then you know that the entire AIPAC crowd is up-in-arms. Donald Trump is facing unprecedented and enormous pressure from his Zionist supporters to strike Iran.

Right. These crazies think it’s entirely reasonable that Trump should risk his entire presidency for their psychosis. But, of course, Trump made his deal with these demons, so it’s hard to feel sympathy for his dilemma.

Danny Davis had a very interesting conversation with Jim Jatras, a veteran diplomat and national security official.

Iran Conflict COUNTDOWN / Lt Col Daniel Davis & Jim Jatras

Two points that Jatras made that stuck with me are these. Jatras was very concerned about the possibilities for any Trump attack on Iran escalating into nuclear war—at which point all bets for global survival would be up for grabs. He also repeatedly called into question how much control Trump actually has over his regime. He offered the example of Trump ordering US forces out of Syria. Right. We’re still there. Again, in the case of Russia, Trump can send Steve and Jared to Moscow every other week, but the CIA continues directing the war on Russia. In the end, Jatras asked, is Trump a free actor?

Lastly, I was very impressed with the discussion between Danny Haiphong and Alexander Mercouris. I’ve summarized it in part and quoted it in part—but only in part:

Trump in DEEP Trouble as Putin Helps Iran SMASH US Two-Front War | Alexander Mercouris

The show starts out with mention of a UK Telegraph story that claims that Russia has sent direct cash shipments upwards of $2.5B to Iran. Supposedly this happened in 2018, but the shipments are continuing. This story comes as the internet is awash with stories about Russia providing help to the Iranian missile program. The money issue is one that Alexander has addressed in the recent past. Bessent has openly bragged about bringing Iran to its knees by creating a shortage of USD and sparking the recent riots. Alexander found it inexplicable that China and Russia couldn’t have helped Iran out, since both countries have ample foreign currency reserves. He now suggests that the Telegraph story may be an indication that Iran has turned to its BRICS partners for help with the monetary problem. But Alexander then takes this opportunity to explain why Iran remains leery of accepting Russian assistance. The US is clearly plotting regime change in Iran, but until recently Iran has not wanted to accept outside help.

[Russia and Iran] have a very long history that has often not been a friendly one. This is the first thing to understand. There have been three wars between Russia and Iran up to the middle of the 19th century, and Russia in the 18th and 19th centuries expanded significantly at Iran’s expense. Before the First World War, the Russians almost succeeded in making Iran a kind of colony of Russia. Again, it’s a history that isn’t very well known, but the Russians even divided Iran into spheres of influence between themselves and the British. This was just before the First World War. And in the leadup to the First World War, they were almost pushing the British out of Iran. Afterwards, after the Soviet revolution, there were again critical conflicts between Iran and the Soviet Union in 1941 at the start of the second world war. The Soviet Union invaded Iran, occupied Tehran, claiming that Iran was potentially an ally of Nazi Germany. At the time when the famous Tehran Conference happened between Churchill, Roosevelt, and Stalin in 1943, Tehran was occupied by the Soviet Red Army, a fact which many people don’t know. And then, after the Second World War, the Soviet Union for a time tried to continue to occupy northern Iran, the territory called Azerbaijan. They eventually left, but only after significant American pressure. And during the Iran - Iraq war of the 1980s, the Soviet Union mostly backed Saddam Hussein and was his major arms supplier. So this is not a relationship that has been a very friendly one. The Iranians have a long history of being very suspicious of the Russians and, when you go through their history, it’s not difficult to understand why the Iranians have been very nervous of getting too close to the Russians. Nonetheless, there is a convergence of interest. Russia has put itself forward to Iran as a potential arms supplier. There is great uncertainty as to exactly which weapons, but recently MI28 helicopter gunships have been confirmed as have been being bought by Iran. And then there is all this enormous speculation about the other contacts and relationships that Iran and Russia has been having.

Reverting then to the currency story, Alexander points out that China is a major part of that story. He adds that he has learned that when Iran’s senior national security adviser, Ali Larijani, visited Moscow recentl--and spoke to Putin himself--senior Chinese officials were also present. From that observation they move on to one that I’ve made recently, regarding the great confidence that Iran is showing in the face of serious threats from Trump. This is almost certainly tied in to the assistance Iran is receiving from Russia and China. Iran certainly has the technology to develop its own missiles--missiles that are proven to be able to penetrate US and Israeli defenses--but Russia also has the ability to place this offensive capability within a more serious and in depth air defense system.

Iran, of course, has made it clear that this time will be very different from last time, and their increased AD capability probably factors into that position. Their calculation is that the neither the US nor Israel are able to sustain a lengthy war--meaning, a war that goes on for more than about a week or two. At the same time, they are keenly aware that tit for tat games with the Americans will not stop the attacks. Therefore, they intend a full out war that will force an end to US aggression. Alexander expresses the same concern that Jim Jatras expressed to Danny Davis, namely, that if Iran does, indeed, inflict really major losses this could lead to nuclear war. And Russia has said it will not sit by idly if Iran is attacked.

Russia is talking to all sides and, with the Chinese, is doing everything it can to avert war:

For the Russians, this is a short-term nightmare and a long-term opportunity--depending on how things play out. In the short term, they absolutely do not want an American attack on Iran. I think for them, this is massively destabilizing and extremely dangerous. ... there must always be worries in Moscow that the government in Iran might not be stable and they obviously do not want the government to fall. ... One thing that horrifies the Russians is the possibility of long-term instability in regions close to their borders. So, the Russians are going to do everything they possibly can to support diplomatic efforts to avoid the war. And they’ve apparently made all kinds of proposals.

On the other hand:

if Iran is able to hold together and absorb the blow, then--as we’ve just discussed--Iran becomes more dependent on its friends, on Russia and China, and that gives Russia and China potential leverage over Iran. But it also gives Russia and China potential leverage over the United States.

Danny then asks about how much of a disaster a war could prove to be for Trump. Alexander rejects the idea that Trump really has any sort of a grand plan with regard to Iran. Rather, he believes that Trump came to the Iran issue with a great degree of ignorance about Iran--much as he came to the Ukraine war issue:

I think Trump assumes--and has been told by far too many people--that the government in Iran is very precarious, that Iran is a house of cards, that if he blows hard enough that house of cards will fall and that he can simply then move in, take over its oil and its natural resources, install whoever he thinks should be the leader of Iran, make Iran an American ally or satellite, and war would be very easy. And I think if we go back to the June war, I think that the Israelis told him that they would be able to carry out this decapitation strike on the first day. ‘We’re going to be able to kill all the major Iranian leaders. All you need to do is to sit back and it will be easy and it will be done smoothly and you don’t need to worry.’ I think this is what Trump has been told and I think for a long time he’s believed it. I think he’s accepted all the usual stories about Iran that circulate every day in the media in the West. And I think he thinks it’d be a great victory for him if he is able to be the man who has overthrown the government of Iran. I think he’s starting to understand that this whole situation might be a lot more complicated than he realized. ... And this explains all of the hesitations and the uncertainties, because Trump doesn’t want a long war. But having reached this point, he can’t easily back off. If he does, he will lose face. Some of his donors will be unhappy. His friend Netanyahu will be unhappy. All of the various people who have been worked up in the United States to seek this war will be unhappy and he will be criticized. The reality is that unless this war succeeds in the way that he wants, it is going to destroy him. Just as Vietnam destroyed Lyndon Johnson, ... Whatever complicated, incoherent economic plans Donald Trump has with tariffs, whatever it is, all of that will fail if he finds himself in a long war in the Middle East with Iran.

The discussion shifts to Russia. Alexander observers that Trump, from the start of this second regime, has been setting deadlines--most of which come and go with scant attention from the Russians:

I don’t think the Russians are interested in Donald Trump’s deadlines. Moreover, the Russian foreign minister Lavrov has been making a whole series of statements that have been getting increasingly hardline. Lavrov gave an interview yesterday in which he said that the Russians and the Americans had come to all sorts of agreements in Anchorage during the meeting that took place between Trump and Putin, and that the Americans have failed to honor any of them. In fact, they’ve been unable to move forward and they’ve become increasingly aggressive. My sense is that, so far from the Russians being in a mood to agree to deadlines, they’re actually hardening their stance. And all of these missile and drone and bomb attacks that we’ve seen from the Russians over the last few weeks are of course completely consistent with that. And as for these tripartite meetings that have been taking place in Abu Dhabi, it seems to me that, on the Russian side, they’re being conducted at a very low level by military and security officials. Lavrov even stated that nothing much has changed since Biden.

Danny then offers this:

Donald Trump’s administration has this character to it where they want these quick strikes and they want to look really strong and move really fast to try to get something done. And then they find out that there are major barriers. And then the Trump administration often looks like a child that is throwing a tantrum but isn’t really doing much. In my estimation the Trump administration, like all administrations beforehand, are inheriting this declining empire and it just so happens to be in a major crisis and a worse crisis.

Alexander ties that in to Trump’s entire approach to Russia which, as with Iran, illustrates Trump believing the nonsense that he’s told--this time by knuckleheads like Kellogg:

This brings us back to Trump again. I think he did imagine that this would be a much easier conflict to end than it turned out to be. Like a lot of people, he assumed that the Russians were suffering incredible losses, that their economy was under tremendous strain, that they would quickly agree to a ceasefire, that they would take what they had, and that they would give up on everything else. I think he came in last year, very firmly convinced of that. And it hasn’t turned out that way. So since then, he’s been thrashing around. On the one hand, he does want the conflict to end. He wants a success, as you absolutely rightly say, before the midterms. ... [But] he doesn’t want to make the fundamental concessions to the Russians which might, indeed, persuade the Russians to stop. He won’t agree, for example, publicly that Ukraine won’t join NATO. What he’s talking about instead is that Ukraine won’t join NATO but will get security guarantees from the United States that are equivalent to Ukraine joining NATO. The Russians over the last few weeks have said, ‘You must be joking.’ They have actually formally rejected that proposal. The Russians are not going to agree to a peace simply in order to help Donald Trump through the midterm elections. In fact, Putin’s spokesman Peskov actually said that the Americans are in a hurry because they’ve got the midterms. And of course if somebody is in a hurry the Russians will sense that that puts them in a weaker position--not a stronger one.

This repeats the pattern of his first administration. People forget that the big bonfire of arms control treaties happened during Trump’s first administration. He walked out of the INF treaty. He walked out of the Open Skies agreement. He walked out of other arms control treaties as well. And going back to our discussion about Iran, he walked out of the JCPOA. He also further tightened sanctions on Russia during his first term. And he also started the process of supplying weapons to Ukraine, doing it publicly. Up to that time, the United States had been doing it covertly, but Trump made it public and he started to supply weapons to Ukraine on a much bigger scale. So once again, Trump is walking away from a big arms control treaty, which is the START treaty. He’s walking away from any ideas of sanctions relief. He’s in fact escalating sanctions. This is the way Trump responds. When he feels he’s not getting what he wants, he tends to lash out. At the same time, he’s also the sort of person who, if he’s pushed into a corner is more likely to back down if he can, because it’s his way of getting the offramp that he wants. The Russians know all of this. They calculate all of this very carefully and they’ll be judging their positions very, very carefully. But in the meantime, they’re going to continue the war and they’re not going to shape their actions on the battlefields to suit Trump’s timetable.

The discussion turns to Trump’s claims of a big deal with India, including India agreeing to stop buying Russian oil. In fact, as we’ve discussed, India has declined to confirm any of this. Alexander is of the opinion that this is another example of Trump making stuff up. He’ll pretend it’s true and then lower tariffs--as if that’s part of his big victory.

Lastly, we get to the title of this post. Danny brings up the topic of China urging banks to lower their exposure to US treasuries--which Sean Foo and others have been predicting would happen:

But Alexander, I can’t imagine that--given this massive instability, these conflicts that the US is a part of--that there isn’t some role this is playing in this de-dollarization push that we’re seeing around the world, especially when it comes to China. What’s your assessment of all of this instability that the Trump administration is creating?

Well, can I just say first of all that everything is connected. Even if the Chinese regulators did this for purely economic and financial reasons, there are no such things as purely economic and financial reasons when dealing with a country like the United States. What the United States does politically, geopolitically, in military terms, in foreign policy terms, all of that connects with its underlying financial position. And given that the United States has been increasingly aggressive in the way that it uses its various financial tools, it’s completely unsurprising that the Chinese are becoming increasingly wary. They’re probably saying to themselves, ‘Well, look, just a few days ago, Scott Bessent, the US Treasury Secretary openly bragged about how the US created a dollar shortage in Iran and created a crisis there. Are we really keen to hold the treasuries of a country whose finance minister talks like that?’ So you see all of this plays together. But that speech which Xi gave back in January 2024, what Xi was saying was that we cannot rely on American and Western financial markets. That in order to ensure our future development and growth, we must build up our own and do so based upon Chinese interests and Chinese perspectives as well. And other other BRICS countries are doing the same. ... So all of these countries are looking to create their own financial systems and architecture which interconnect with each other and which are independent of the United States. And this is inevitably going to happen.

It seems to me that China is probably taking the lead now and it’s probably going to happen sooner than many people think. I’ve been reading lots of articles about how difficult it is to replace the dollar and how the US reserve currency position is secure for 10, 20, 30 years because of all sorts of sophisticated technical reasons. I have to say straight away that none of these technical reasons impress me at all.