Roundup: Cluster Pushback? BRICS Currency; Politics

Most countries around the world ban the use of cluster munitions. The US, Ukraine, and Russia do not. Nevertheless, the announcement that the US will send cluster munitions to Ukaine—because, it is said, we’re running low on conventional munitions to send—is receiving what seems to me to be almost a surprising amount of pushback. You can start here in the US. The NYT provides a fairly full account of what this is all about, but the important thing is the strongly negative lede and intro to the article:

Biden Weighs Giving Ukraine Weapons Banned by Many U.S. Allies

Ukraine is seeking cluster munitions, which are known to cause grievous injuries to civilians, as its ammunition supply runs low.

For more than six months, President Biden and his aides have been wrestling with one of the most vexing questions in the war in Ukraine: whether to risk letting Ukrainian forces run out of the artillery rounds they desperately need to fight Russia, or agree to ship them cluster munitions — widely banned weapons known to cause grievous injury to civilians, especially children.

On Thursday, Mr. Biden appeared on the verge of providing the cluster munitions to Ukraine, a step that would sharply separate him from many of his closest allies, who have signed an international treaty banning the use, stockpiling or transfer of such weapons.

Everybody knows, and none better than NYT editors, that most people don’t get past the first few paragraphs of an article. So this is a strongly negative article overall, with the fact that Russia is a non-signatory buried deep down in the text. The main point is that the US is separating itself from basically all of its vassal states in Europe. Those states are not happy with this. The UK is quietly queasy, and Germany is openly “rejecting” this decision:

Germany Rejects Cluster Bombs For Ukraine As Clip Surfaces Of Biden Admin Previously Calling Them A 'War Crime'

One suspects that many American vassals in Europe fear that Russia will regard this as an unwarrantable escalation, and will find retaliatory means of counter escalation readily at hand. Larry Johnson writes this morning:

… this is not just a crazy policy advocated by Biden, it is bipartisan insanity. The Republicans want more cow bell. … There is no voice of sanity in Washington calling for an end to U.S. provocations that risk a war with Russia.

I am not sure how long Putin will be able to resist pressure from the Russian military to intensify the war and increase the targeting U.S. assets, such as the Global Hawk, that are facilitating the deaths of hundreds of Russian civilians. Can you imagine the outrage that would consume America if Russian supplied munitions were being used to kill U.S. citizens along the border with Mexico?

Is this what’s behind the growing alarm of the foreign policy establishment in the US, discussed yesterday at The Duran? Neocons warn Biden White House, Don’t Let Ukraine Join NATO. Even Neocons such as Richard Haass, outgoing president of the CFR, are concerned at the direction in which events appear to be headed—with, as LJ says, no countervailing voice of sanity in Washington. Where is Trump on this?

But there’s another notable development on the global stage, and it’s one which suggests that events may overtake Neocon strategery:

Going Underground

@GUnderground_TV

Russia has confirmed that the BRICS will introduce a new gold-backed currency which will challenge the dollar’s hegemonic dominance.

According to recent reports, as many as 41 countries are open to using the BRICS currency, which would mean a serious challenge to Washington’s domination over the world economy.

The new world order being shaped more rapidly than previously thought?

9:43 AM · Jul 8, 2023

The two Alexes at The Duran have a very illuminating discussion today, which I’ve transcribed in most relevant part. Please note that they emphasize the well nigh unfathomable stupidity and incompetence of the Zhou regime that McConnell, Barr, and the rest of the Ruling Class saw fit to foist upon America. The transcript begins right after the matter of this new BRICS currency is brought up:

AC: I wonder if this is one of the reasons that Yellen is going to China?

AM: Of course it is--that's exactly why she's going to China! [Laughs] The reason there is pressure on the Zhou administration to reverse course with China, why there are people in Washington who want to reopen dialogue with the Chinese, is because they're getting very, very worried, indeed, about these development. They want to see what the Chinese are up to and establish some kind of dialogue with them--to see whether they can persuade the Chinese to change their minds about it. That's why Blinken went to China. This is why there was talk of a summit meeting between Zhou and Xi Jinping. And, of course, it's also why Yellen herself is going to China.

The problem is that the Chinese have made it very clear that they don't trust Zhou [do you see a pattern here?], they don't trust the United States and, given that they are putting so much work into setting up this alternative reserve currency, I can't really see why they would put all that work aside now and re-engage with the Americans and return to trading with the dollar.

AC: Yeah, I think the Chinese learned their lesson with the whole Blinken affair, when within 24 hours Xi Jinping was [labeled by Zhou as] a dictator. I think they said, OK, we can't deal with these people. [The Chinese] even told Borrell [EU's top diplomat], who was scheduled to visit China, 'Don't even bother coming, don't even get on a plane and come--there's no need.'

AM: Exactly. There's going to be a period of great disruption because this new currency isn't going to simply replace the dollar. I mean, the United States is not going to trade in it and people will continue to want to trade with the United States. So we will have a situation where the dollar and this new currency will be functioning alongside each other, and that will inevitably create tensions. I suspect what Yellen primarily wants to do when she goes to Beijing is, she wants to get assurances that the United States can still pay for imports from China in US dollars. Now what will happen at some point is the Chinese will say--they'll probably go along with that for a while--but at some point [the Chinese will] say, 'Look, this new system, this new currency, is the major system used in international trade, you [Americans] must join it as well.’ That's probably where we're heading. ...

... People need to understand that this [new currency] will be used purely to conduct international trade. ... Commodities and big ticket items. But that's most of international trade.

AC: This is a ... Baidan really, really messed up. we're talking gigantic, mega-gigantic mess-up. ...

AM: ... It is a case of the United States no longer being able to control the system of international trade in the way that it [used to be] able to do, going all the way back to Bretton Woods. ... That is going to affect the situation internally of the US economy--I think it will be liberating ... American consumers and producers, even more, will benefit from the end of the system, but that will take time and there will be a period of turbulence. But the oligarchs in the United States, the globalists, all of those people, they will not benefit--they will see a massive reduction in their power and the United States will not be able to run unlimited budget and trade deficits. ... It will end this period of American global dominance. The person who brought this about? Zhou Baidan--he has actually changed history, at a speed that nobody could have imagined! [Laughing all the way through that last part]

Speaking of Bretton - Woods, Charles Hugh Smith offers what seems to me to be an interesting perspective (the original has lots of graphs). I’m not an economist and I don’t want to start a discussion about whether this is a correct characterization of Keynian economics. The main point has to do with how the global economy has been managed since Bretton - Woods:

All Dreams End: The Collapse Of Keynesian Economics

Now that debt is rising faster than "growth," and "growth" is dependent on speculative credit-asset bubbles, the collapse of the Keynesian dream looms large.

Unbeknownst to economists, the Keynesian bedrock of modern economics--using financial repression and government spending funded by debt to manage the business cycle of growth and recession--is an artifact of a century of expansive cheap energy and virtuous demographics.

Presented as quasi-scientific "laws of economics," Keynesian policies of suppressing interest rates and funding stimulus with debt were only possible in an era in which energy per capita (per person) always became more abundant and affordable in terms of the purchasing power of wages, i.e. how many hours of labor does it take to buy the energy to fuel a vehicle, prepare a meal, etc.

The demographics of the 100 years of Keynesian supremacy were also uniquely favorable. The workforce paying taxes and funding pay-as-you-go social benefits to retirees (Social Security and Medicare) and the less fortunate (welfare, Medicaid) expanded smartly decade after decade, expanding government revenues and spending as the natural result of an expanding workforce.

A third uniquely favorable condition was the vast pool of natural capital that had not yet been financialized, i.e. turned into a commodity that could be used as collateral for new debt and leverage. …

A fourth uniquely favorable condition was globalization, a benign-sounding term for the brazen exploitation of the planet's remaining reserves of resources and cheap labor. …

These four conditions have all topped out and are now reversing. …, globalization has run its course, having stripmined the planet and human populace, and every potential source of new collateral has been financialized / leveraged to the hilt.

Keynesian policies of pushing interest rates to near-zero to boost private debt and government deficit spending morphed from being "emergency policies" to permanent status quo. ...

…

The final desperate trick of the Keynesian fantasy is the wealth effect generated by speculative credit-asset bubbles, in which assets that were once grounded in utility and costs escape gravity and soar into the stratosphere, generating trillions of dollars in "free money" for those fortunate to have bought the assets before the bubble inflated.

The consumption afforded by this bubble-generated "free money" was the last source of Keynesian "growth": just suppress interest rates to juice private borrowing, flood the financial system with liquidity, and voila, trillions in unearned "free money" flows to those who were already rich enough to own the assets catapulted to the moon.

But all dreams end, even the Keynesian one. …

The planet has already been stripmined of cheap-to-access resources and cheap labor. Costs are rising and playing financial games with interest rates can't reverse real-world costs or the rising costs of capital. Demographics can't be reversed by financial trickery, either.

The Keynesian fantasy is drawing to a close. Financialization and endless debt-funded stimulus were artifacts of four unique conditions (cheap, abundant energy, demographics, globalization and financialization) that have all topped out and are now sliding down the backside of the S-Curve. AI can put lipstick on the mirror but it is incapable of reversing the end-game decay of these four unique conditions.

…

Now politics. Very briefly.

Is this story a straw in the wind of some sort?

THE FIX IS IN: Joe Biden Has No Campaign Headquarters, Has No Plans to Hold Campaign Events, Is Not Spending Campaign Money, and Democrats Aren’t Worried

How could the Dems possibly think they can win that way. Oh, wait—it’s been done before.

But here’s a hopeful article:

NBA is America's first Bud Light-style fiasco but you're not supposed to know that

The far left wing sports media has refused to cover the NBA’s ratings collapse over its embrace of woke politics because they don’t want to admit what happened

Just to give you a flavor …

In 1998 over 38 million people watched the NBA final game. This year? 11 million. Also this year, just a hair under 10 million people watched the final college women’s basketball game.

Get Woke, Go Broke.