Miles Report No. 42 - open letter to Janice Stein - Ukraine, Russia, and US.
2014-04-21

Dear Ms Stein,

I have just finished listening to your comments on Power and Politics concerning the Ukraine (Monday, April 21, 2014). It left me wondering what you really know about the situation between Russia and “the rest of the world”. Your comments were significant for two reasons: first, your full acceptance of the western view of what is driving Russia; and secondly, your apparent misunderstanding of the effects of sanctions on Russia.

I did check out your website and the two items listed there seem to indicate that you view the world from a significant pro-western bias - which for me means uncritical support of Canada’s role within U.S. imperial/hegemonic/financial role in global affairs.

Your article on Libya (March 21, 2011) indicated that Canada was a leader of the “right to protect” doctrine, which has become nothing more than an ideological excuse to interfere with affairs of other states. In spite of mainstream media reports, there were no massacres or genocidal incidents occurring in Libya - a nascent and festering civil war perhaps, but not genocide. Gaddafi, for whatever his dictatorial faults, led a country that simply opposed U.S. monopoly in the Mediterranean region, calling for an African currency based on gold and not the petrodollar. Following from that he had oil, most of it going to Italy, but more and more of it being controlled by the Chinese. Both of these items defied the power of the U.S. petrodollar empire.

The so-called “no fly zone” became a free bombing zone that destroyed civilian infrastructure and killed civilians as much as it killed government personnel. Before this, Libya had the highest standard of living in Africa, education and healthcare were free and plentiful, and Gaddafi had voluntarily given up his nuclear option after 9/11 in an erroneous attempt to placate the U.S. Now it is a country torn by tribal militias each seeking their own sphere of influence.

The second article on Egypt (November 12, 2012) erred significantly as well in its arguments concerning the direction that Mohamed Morsi should take. My main interest was your comparison with Israel as a theocracy, and then describing Israel as having “significant space” for “democratic rights.” Great from a western perspective that ignores the plight of the Palestinians, but that significant space for democracy occurs only in the spaces, physical and cultural, occupied by people of Jewish designation, and even many of them, in particular from Africa - the Mizrahi - are also denied rights and equality.

Israel is far from a democratic state. It is a theocratic state, becoming more and more a militarized theocratic oligarchy. Palestinian existence is essentially denied and what little is left of Palestine consists of small enclaves - bantustans - or enlarged concentration camps, as in Gaza.

You have made no comments on the site I viewed (U. of Toronto) that gave any advice to the leaders of the Egyptian military coup that - once again - overthrew a democratically elected government.

Finally, today’s conversation about the Ukraine again revealed some critical faults of analysis. The first of those are your comments indicating that everything that is happening is the fault of Vladimir Putin. Nothing was said about the U.S. role in initiating these events and then not being able to control them - a line of argument you said applied to Russia. It will yet be seen whether Russia is unable to control them, from either our perspective of their perspective.

As it happened, the U.S. and its many NGOs created a situation in which the neo nazi far right created a coup and kicked out a democratically elected government. Corrupt, yes, but that is not unusual for governments around the world and here in North America. The U.S. assistant Secretary of State, Victoria “F**k the EU” Nuland, was taped arguing for the overthrow of the elected government - well, she received her wish, and now perhaps it is Russia controlling events rather than the U.S.

You also argued about a position that Ukraine’s borders were guaranteed after disposing of its nuclear weapons. Bill Clinton also promised Russia that the U.S. would not move NATO an inch closer to Russia’s new boundaries - you seem to have forgotten to mention that idea.

You appear to have a wilful ignorance as to the west’s role (I include all NATO countries within that ‘west’) in many of the military mal-adventures over the past century. I won’t bother getting into them here, but U.S. covert or overt CIA or Pentagon or ‘other’ operations have interfered in most countries in Latin America, Asia, and are now digging into Africa (AFRICOM).

You may be genuinely ignorant about sanctions being applied to Russia, or perhaps you wilfully choose not to look at the alternative situation with the global economy. Your argument basically was that Russia will suffer significantly if sanctions are extended beyond what they are now so as to seriously interfere with Russia’s use of the petrodollar.

Therein lies your big mistake, as the U.S. relies fully on the fiat reserve currency status of its petrodollar. It is a currency that is only valued at the present because of an agreement that started with OPEC and is enforced through various western controlled financial institutions including the World Bank, the WTO, the IMF, EU Central bank et al.

After 2008-09, the U.S., already hugely indebted both domestically and abroad, started creating trillions of dollars to support its ‘too big to fail’ banks, and has continued to do so ever since. U.S. debt from this process is now about 17 trillion.

Further, the economy is not improving. The stock market is simply riding on this wave of free money under zero interest rates and is not creating new value or wealth from productivity but from financialization of the markets. Unemployment is down, but overall the rate of employment continues to decrease as fewer and fewer jobs are available (and those that are pay poorly) and the unemployed simply drop off the list. Housing is not improving. Most of the recent purchases were by large equity hedge funds buying up rock bottom priced houses in order to rent them out - home ownership in the U.S. has actually decreases since 2008-09. Inflation is much higher for consumers that given by government stats. All these numbers can be confirmed by viewing shadowstats.com.

So what happens when more severe actions are applied to Russia? Many things could occur. The Ukraine would freeze next winter. German industrial output would drop significantly, endangering the EUs already fragile hold onto its financial sanity. Russia could dump its holdings of US treasury bonds or its dollar holdings onto the market resulting in a highly devalued dollar that would see a short term deflation followed by rampant inflation as all those trillions of US dollars held by other countries came flooding home in order to get out of the then worthless and no longer petro-dollar. Okay sure, it would hurt Russia, but having survived major military attacks from the west over the past century they will probably have the resolve to survive.

And don’t forget China. They have already indirectly expressed support for Russia and are in the end term of negotiating a large oil/gas sale due to be finalized in May this year. China is the major trading partner with Saudi Arabia, the originator of the petrodollar.

China has its own financial problems (from copying the U.S.’ capitalistic style) but, and a big but, they have two things in their favour. First is over a trillion dollars of U.S. debt that it could dump on the market - and see above - totally overwhelm the U.S. economy. Secondly, they have been buying thousands upon thousands of tons of gold. You may consider gold to be an artifact of a previous financial culture, but four billion +/- Asians are buying gold at an enormous rate, while the U.S. (and the UK and the EU) are dumping gold in order to sustain the value of their currencies. China, along with Russia and the other BRICS (India, Brazil, South Africa) are negotiating an alternative to the IMF and its special drawing rights and its U.S. dominance. China could independently create a gold backed yuan currency but would probably choose to have a basket of currencies based on a gold standard, including the ruble, the rupee, the real, and the rand.

Let’s not forget Iran. Because of its own sanctions, it is barter trading oil for goods with Russia, oil for rupees with India, and gold with Turkey. No U.S. dollars involved - says a lot for unexpected outcomes.

Last note: are you aware that Israel, your bastion of democratic rights, did not support the U.S. vote at the UN on the Ukraine, and later Netanyahu himself said that he did not want to disturb the good relations Israel had with both the U.S. and Russia. So where will Israel go once the role of the U.S. as its main economic/military booster is greatly weakened?

What it all amounts to is that hard hitting sanctions against Russia would create the death of the dollar as a reserve currency, thus creating the death of the U.S.’ economy. There might be a bit of a security blanket, temporarily, with a captive EU under NATO command combined with the sycophantic Canadian government, all supporting the U.S. until the economic disaster became unbearable. In sum, your view of the Russia - U.S. fight over Ukraine is woefully lacking in perspective.