October 02, 2015
Russia's Campaign To Snuff Off The CIA's Al-Qaeda Forces
With some 125 strikes in three days the Russian bombing campaign continues to build. The U.S. media is now obsessed with the idea that Russia may be using "dumb bombs" instead of Syrian "barrel bombs". This is becoming a new propaganda meme. But videos from the Russian airbase show that at least some of the planes are armed with KAB-500S-E satellite (GLONAST) guided bombs which are precise "smart" bombs. (Other pictures and video from the Russian air base show a quite comfortable life including air conditioned quarters, a mess tent, Gulaschkanonen, a bakery, a laundry etc. This base is not an improvised short-term installation.)
Besides that how is it more humane to kill by a precise bomb than by a "dumb bomb" or "barrel bomb". Gaza was bombed by the Israelis with (U.S. produced) smart bombs. That did not lead to less destruction or killing. The recent Saudi (U.S. produced) bomb on the Yemen wedding that killed 130 people was also "smart" and hit right where it was targeted at.
The Russians bombed, as I earlier described, mostly in the corridor up to the Turkish border which is in the hand of al-Qaeda, Ahrar al Shams and CIA mercenaries. It also bombed Raqqa, the Syrian capital of the Islamic State and killed a dozen fighters. In response to that the Islamic State canceled Friday prayers in Raqqa seemingly out of fear that any congregation of IS fighters would now get bombed.
Funny. The U.S. claimed for a year that it was seriously bombing the Islamic State. But the Friday prayers have never be canceled before. Could it be that the Islamic State did not believe the U.S. claims but now fears that the Russians really mean business?
The Syrian air-force had avoided bombing near the Turkish border as it rightly feared that Turkey might shoot down a Syrian jet. But the Russian can now do this. The ground bombing is done by the ground attack planes build for task, Su-24, Su-25 and Su-34, while above those planes Su-30M fighter jets armed with superfast, medium to long range R-27 air to air missiles give cover. These would shoot down any Turkish jet that would try to attack the Russian bombers. This is just to make sure that Erdogan does not get any stupid ideas.
The air campaign is also well coordinated with Syrian government forces on the ground. From a paywalled WSJ piece quoted here:
[T]housands of rebels regrouped in several enclaves north of Homs, in towns like al-Rastan and Talbiseh. Russian jets hit both civilian and military targets in these two towns and five surrounding villages, said Rashid al-Hourani, a Syrian army officer from the area who defected to the rebels in 2012.
He said the airstrikes were followed with a barrage of artillery fire from several nearby positions where pro-regime Alawite and Shiite militias, including an Iran-backed group known as the Ridha Brigade, have been massing over the past few days.
The Syrian army will soon attack in coordination with the Russian air force and will try to regain northern territory along the M4 and M5 highway. That again would allow for a wider attack up to the Turkish border. Ground troop reinforcements from Iran, Iraq and Hizbullah are on their way or have already arrived. We are witnessing the build up to a wider battle.
The Guardian rumors that the Gulf states will counter the Russian move by providing more weapons:
Russia’s move clearly risks counter-action by countries supporting the rebels. According to one independent analyst, that may have already begun, with the Qataris – acting with the agreement of Saudi Arabia – flying in planeloads of weapons to Turkish airbases. “I would expect a huge influx of weapons into the north to try to blunt any ground assault by the regime,” the analyst said.
“The stakes are very high.”
And the Russian planes fly very high. They currently mostly fly above 5,000 meter and no Man-Portable-Air-Defense (MANPAD) missile can reach them. The people who get bombed do not even see or hear the planes coming. This will change when the Syrian army attacks and more direct ground support is needed but the planes to be used then are Su-25 and Su-34 build for that purpose and have armored cockpits.
The Russian airbase is protected by modern air defense on the ground and on Russian ships in the nearby sea. It is protected on the ground by some 1,250 Russian marines. It reportedly has ammunition and other supplies for at least three month. Nobody will mess with that base and the Russian campaign. It could not be done without very major forces and using such would practically guarantee a wider war with Russia, a nuclear superpower. Syria is Russia's sister (vid) and will be defended.
The Obama administration has therefore decided that it will not interfere with Russian attacks on CIA mercenaries and their al-Qaeda brother in arms. Some concerned trolling statement gets issued but that is just for show.
But the female candidates for the next presidential elections are not that smart. Both, Hillary Clinton and Carly Fiorina, have called for a U.S. enforced no-fly zone over northern Syria which would of course mean starting a war with Russia and its allies. These women want to attack Russian forces to defend al-Qaeda! Note: The country to decide who is flying or not over Syria is Russia. Dear U.S. voters. Please do not ever again allow these maniacs anywhere near a powerful position.
The CIA mercenaries in Syria - 10,000 men trained, armed and paid under a secret program - are directly cooperating with al-Qaeda and the likewise terrorist Ahrar al Shams. The NYT finally acknowledges this in two pieces today. The first says:
The fighters advancing on that [northern] front were not from the Islamic State but from the Army of Conquest, a group that includes an affiliate of Al Qaeda known as the Nusra Front and other Islamist groups, including several more secular groups that have been covertly armed and trained by the United States.
A second piece on the Army of Conquest:
The alliance consists of a number of mostly Islamist factions, including the Nusra Front, Al Qaeda’s Syrian affiliate; Ahrar al-Sham, another large group; and more moderate rebel factions that have received covert arms support from the intelligence services of the United States and its allies.
The groups fighting together in the Army of Conquest of course share their weapons, ammunition and other supplies. They very likely also have similar ideologies. The CIA, under Obama, Petraeus and Brennan, has been knowingly arming al-Qaeda in Syria and has done so for quite a while. The NYT had pointed out a year ago that the CIA mercenaries are working with Islamists but that piece was somewhat mealymouthed and depicted it as a minor problem. It is also quite astonishing that in-between the 2014 piece and the two pieces today no NYT pieces on Syria mentioned that relation but instead concentrated on the Pentagon "five moderate rebels" clown show which was a mere diversion.
The Pentagon is playing dumb with regards to the people hit when the Russians bomb al-Qaeda positions:
Q: McCain says they hit CIA-backed rebels. I mean, presumably, you guys are looking at the same information. Is that true, or you're uncertain? Where are we on that?
COL. WARREN: Right, well -- again, what I'll say, Tom, is we don't think they were ISIL. You know, who's backing who, you know, that's -- I'm not going to get into that. I'm just not going to, particularly when you're talking about -- you know, it's not even a DOD agency you're referring to.
I take that as confirmation.
The Israelis are now also admitting that they work with al-Qaeda:
Together with some local militias Nusra is in charge of most of the 100-kilometer border with Israel on the Syria side of the Golan Heights. In recent years, Nusra slightly toned down its militant ideology due to the influence of Qatar and Saudi Arabia, which provide it with financial support.
Nusra is in control of most of the border but so far has reached a tacit understanding not to turn its weapons against the Jewish state.
Nusra controls the border because Israel has helped it by firing at the Syrian army whenever Nusra needed help. The linked Jerusalem Post piece is also of interest with regards to the famous Odet Yinon plan as it confirms that destroying Middle Eastern nations into warlord statelets is supervised by the Israeli military intelligence:
Some years back, the intelligence community started to reassess the chaotic reality emerging in the Middle East. Maps drawn up by MI’s Research Department show states being replaced by organizations. ...
That is the plan also for Syria. But with stronger support now forming up to regain Syrian territories that plan might well falter.
Posted by b on October 2, 2015 at 03:10 PM | Permalink
- Israel also used dumb bombs to pound Gaza in the form of "dumb" artillery. Artillery is simply meant to destroy everything within a certain range (say 500 meters).
- Why not apply the Odet Yinan plan to the US ?
Posted by: Willy2 | Oct 2, 2015 3:20:07 PM | 1
what took vlad so long?
Posted by: Steve | Oct 2, 2015 3:22:28 PM | 2
Clinton & Fiorina simply want to increase the turn over of the US arms manufacturers.
Posted by: Willy2 | Oct 2, 2015 3:26:10 PM | 3
Thank you dear sir for your succinct and apt analysis. Looking forward to your next update. Bolshoe spasiba!
Posted by: Andy V | Oct 2, 2015 3:29:46 PM | 4
Judging by the squealing of a "terrorist coalition" (USA/KSA/Qatar), Russians are doing everything right and hitting the relevant targets. Hopefully Moscow remains steady and resolute. Its success will mean the emergence of a better world.
Posted by: MMARR | Oct 2, 2015 3:42:55 PM | 5
Would appreciate if the Russians also giving fitting reply to Saudi Foreign Minster, the mother of all bootlicker Adel al Jubair and knock him out like a fly!
Posted by: Jack | Oct 2, 2015 3:45:45 PM | 6
It's also nice target practice in a REAL war situation. (think: Ukraine).
Posted by: Willy2 | Oct 2, 2015 4:02:27 PM | 7
B, I'm really sorry, but you're doing such a fantastic job, that I'm afraid I have to insist that you quit your job, give up sleeping, and shun your family and friends, so to bring us essential coverage of the remarkable times we live in, 24/7.
Thanking you in advance, tom.
Posted by: tom | Oct 2, 2015 4:49:07 PM | 8
B states "these women (Clinton & Fiorina) want to attack Russian forces to defend Al-Queda." This is absolutely critical. How can the U.S. start World War III in defence of Al-Queda? They can't, and therefore there is absolutely nothing they can do except whinge. No amount of media spin can twist this one. And judging by comment sections even in places that I normally do not go to such as the UK Daily Mail and Daily Express support for Russia's initiative and Vladimir Putin as a leader is overwhelming. The thought of violent fanatics coming to European shores after they have laid waste to Syria and its people has angered and terrified people and maybe even woken them up a little.
A truly momentous week.
Posted by: Lochearn | Oct 2, 2015 5:25:10 PM | 9
Not for the first are we all indebted to B for providing such succinct news on what is happening in Syria and Yemen. If there were Nobel Prizes awarded to blogs, I'd nominate this one!
Although perhaps considering that in the past the Peace Prize was awarded to Obama, Kissinger and Ahtisaari among others, perhaps MoA might not wish to be associated with the Nobel name.
Thanks once again for an excellent article!
I have to say though that once 2015 passes into 2016 and the US Presidential election cycle begins in earnest, the Klintonator and Failorina (who couldn't even run Hewlett Packard well and left behind a hugely dysfunctional and demoralised company) will become truly hysterical comedy fodder. The silver lining in that cloud may be that they will drive even their PR teams away with their shrieking and rolling eyes. There is always hope!
Posted by: Jen | Oct 2, 2015 5:44:14 PM | 10
Russian warplanes hit IS targets in Syria
Xi's rag in China is reporting Putin's efforts as though they were a snowstorm on Mars.
Is China a member of the anti-terror coalition headed by Russia? Or is China a member of the pro-terror coalition headed by its (wannabe) G-2 partner, the USA?
After Russia China is next. The CIA has its Xinjiang <=> Turkey <=> Xinjiang rat trail open just as it has its Chechnya <=> Turkey <=> Chechnya rat trail open, and China is foolish playing neutral with respect to their 'win-win', their red envelopes for the poor at the GA, and looking the other way from the anti-terrorist coalition. They are only allowing the neocons and their Nobel Peace Prize Laureate and his European stooges more leverage and leeway in their pro-terrorist coalition.
Posted by: jfl | Oct 2, 2015 5:50:29 PM | 12
So interesting to see this blog sounding so much like Harry's Place in 2004.
Posted by: Louis Proyect | Oct 2, 2015 5:55:26 PM | 13
It would seem that the 'best laid plans' of the Elite (detailed in Z. Brzezinski's http://www.amazon.com/gp/product/0465027261?keywords=the%20grand%20chessboard&qid=1443821259&ref_=sr_1_1&sr=8-1>The Grand Chessboard are coming undone.
It is also interesting to remember that Putin had tried to warn the US about 9/11. This was after the 1997 publication of Zbig's magnum opus detailing what later became US foreign policy...which includes marginalizing both China and Russia. Zbig feared the combined economic force of Russia and China would develop the rising Asian markets for themselves and exclude US corporate development of the Caspian oil fields.
And so, like an idiot bringing a can of petrol to use in a fire-bucket brigade, the Elite bring about the very conditions they feared (witness the AIIB and the other major economic development packages, the rise of the BRICS, the forming of the Shanghai Co-operative Organization, etc.), courtesy of their meddling in Central and Southwest Asia and expansion of NATO.
If you're not that good at chess, the very last person you want to play against is a Russian chessmaster. Obama's bosses have done just that. And if both the Russians and Chinese announce simultaneously that their currencies and now gold-backed, the dollar will fall. Checkmate any week now.
Posted by: Nemo | Oct 2, 2015 5:55:35 PM | 14
The silver lining in that cloud may be that they will drive even their PR teams away with their shrieking and rolling eyes.
The dark cloud over the entire planet is that one of the donkey/elephant candidates will win! Except for the shreiking there's not a dime's worth of difference among them.
We need to do as b suggests - get together with our neighbors, hold our own primaries, choose a candidate from among ourselves - ordinary Americans, and write her/him in on our ballots on Tuesday 8 November 2016.
There is always hope!
Thank you b, for keeping us all up to date on Syria's struggle against the USA/KSA/EU/Da'esh.
Posted by: jfl | Oct 2, 2015 6:02:34 PM | 15
About two posts ago, in the first article about the Russian intervention, in a comment, I asked a question:
I wonder what Moscow's main motivations are. Destabilization of Iran? Pipeline routes? It feels like there may be factors that Moscow perceives that I do not know about.
Somebody evidently could not bring themselves to believe that I could think of asking a question in a comment:
your comment is simply so much word salad it is difficult to address...
Well how do you “address” a question? Some people did, nonetheless:
Putin is offering Obama an olive branch, a way out of the mess that the US has caused in Syria, but he wants it on his terms and along with the recognition of Russia as a legitimate world power on equal terms. For Obama this presents an opportunity that he will not pass up, even though it will cause him trouble with the Republicans at home. – William Bowles
William's response included a link to an odd “In Defense of Marxism” blog where someone said that if Assad were overthrown, the likely result would be that (perhaps with the exception of Iran – perhaps) the entire Arab world (likely including Saudi Arabia, et al.) would turn into what has become of Libya. Then what? A disaster, very possibly a disaster even for the U.S.
So in effect, the Russians (and Iranians, and Chinese) are saving us from ourselves. Why is that frightening? It proves “we're” totally stupid. Dangerously stupid.
Also, the Saker has just said (as I take it) that, by itself, the Russian air power would not be very effective. But with troops on the ground from the Syrian Army, Hezbollah, Iran, et al., It could be pivotal. So now that is happening.
Then we have these insane “presidential candidates” who want to shoot down the Russian planes. How stupid might our “leaders” be? Huh?
Posted by: blues | Oct 2, 2015 6:08:57 PM | 16
Like post @12
I too would like to know when China will come off the fence!
There silence suggests a real lack of support to Russia
They behaved like this over ukraine
Posted by: James lake | Oct 2, 2015 6:17:49 PM | 17
obviously the usa and alliance are pissed that russia is taking out military opposition to syria under assad.. i am sure the usa would do something similar if a country from outside itself was actively funding and supporting rebels who wanted to overthrow the usa gov't.. what fucking part the bilbos at neocon central don't get about that, i am not sure..
@12jfl.. i imagine china has to keep a neutral stance as much as possible.. no one wants to be involved in a war, but avoiding what is happening in the middle east won't make it go away.. the usa's cluster fuck foreign policy in line with saudi arabia and israel objectives at all times it seems, has been thrown into a tailspin with more openness expressed towards iran.. this is a dangerous game to be switching sides, and raises more questions then anything else for me. perhaps playing one side against the other is a part of this, but just like blues questions in @16, i don't think there are any simple easy answers..
@16 blues.. nothing wrong in asking questions.. a lot of them are impossible to answer though, and only raise more questions.. might be why you don't get many responses..
Posted by: james | Oct 2, 2015 6:22:20 PM | 18
Chinese care about one thing and one thing only - making money. They engage in geopolitics mostly to hedge the risks to their money-making activities. Since directly intervening into Syria would bring them no monetary benefit - and quite possibly lead to large losses - no one should expect them to take a clear position. They'll straddle the gap between Russia and America for as long as possible, without making serious commitments to either side.
That's not to say that China is not doing positive things, from Russian perspective. Hollowing out the West economically is one clear benefit. And its mere presence, with the gargantuan economy (probably 30 percent bigger than that of the US already, although Chinese prefer to downplay its size) and vast population, by default limits West's capacity for decisive action.
Posted by: MMARR | Oct 2, 2015 6:23:18 PM | 19
A Syria/Berliner ensemble: Escobar
Pepe Escobar (Asia Times)
BERLIN–Oh I love the sound of a Su-24 bombing “Caliphate” goons in the morning. Smells like…victory.]...]
[...]The “dreaming collective”
So many fabulous discussions at the HKW. How Germany “invented” adolescence – from Goethe’s Werther and Wagner’s Siegfried to 1960s California counterculture (echoes of the Lizard King: Die young, stay pretty, leave a beautiful corpse.) And the inevitable eternal recurrence of that tragic angel — Walter Benjamin, who conceptualized the “dreaming collective”; bourgeois culture from which history is totally absent. And when history evaporates what’s left is the (unregulated) madness of the commodity world; our world. Thus an abundance of projected collective dreams which fit right into the history of political terror.
Inevitably “dreaming collective” – and political terror – had to bring me back, once again, to Syria, where Russia, in roughly 48 hours, did more to smash the Wahhabi/Salafi-jihadi terror matrix than the coalition of dodgy opportunists in over a year and 6,000-plus “sorties.” So many wonders you can operate with a couple of Su-24s, decent sat intel, decent ground intel, and political will.
And then the bigger bang, not a whimper; the larger-than-life ridicule enveloping that tentacular industrial-military-security-intel complex that wastes 1.3 trillion a year.
Thus Full Spectrum Outrage; from neocons to neoliberalcons to “humanitarian” imperialists, everyone is absolutely fuming. It goes from “Putin plunges into a cauldron to save Assad” — no, dummies, the cauldrons will be laid out by Russia as traps for ISIS/ISIL/Daesh — to the new Russian “strategic blunder” (their new Afghanistan!) and the Pentagon weighing the use of “force” to “protect US-backed Syria rebels targeted by Russia.”
How dare the Russkies target “our” oh so “moderate” rebels? Our clean-cut al-Qaeda guys?
Instantly forgotten is that notorious August 2012 Defense Intelligence Agency (DIA) paper that spelled out how the NATOGCC combo and Turkey were facilitating the emergence of a Salafi-jihadi “Caliphate” to speed up the “Assad must go” regime change operation.
And instantly forgotten is how Gen. Michael Flynn, who headed the DIA at the time, went on the record stating this was a “willful decision” by the Obama administration.
And then there’s CIA top honcho John Brennan recently testifying that the CIA was “alert” to the emergence of the fake “Caliphate” — and had “correctly” assessed its power by 2012. Good job! And yet by early 2014 – when ISIS/ISIL/Daesh had already captured Fallujah and parts of Ramadi — Obama was still deriding them as “a junior varsity of al-Qaeda.”
So neither the CIA nor Obama nor any node in the acronym soup of US intel really gave a damn about ISIS/ISIL/Daesh. Willful decision. Let them wreak havoc. Thus the long convoy of gleaming white Toyotas crossing “Syraq” to take Mosul undetected by the most sophisticated satellite surveillance system ever.
Everyone who knows anything about the “Syraq” theatre knows there are no “moderate rebels.” And now Moscow is showing how you fight the whole Wahhabi/Salafi-jihadi matrix; a mix of drones, sigint aircraft, and on the ground intel (of which the coalition of dodgy opportunists is sorely deprived.) It’s progressive — starting near the urban areas in the east and moving to the western desert. And it will be relentless, to include direct ground support to the Syrian Arab Army when the “recapturing of territory” phase picks up, side-by-side with aerial support. You are leaving the American sector.
Expect the information war, from now on, to be absolutely vicious. The neocon, neoliberalcon, “humanitarian” imperialist galaxy will be madly trying to sell global public onion a monster “dreaming collective”; as in Russia is “evil” because they bomb “our” rebels and — horror of horrors — kill civilians! We would never commit such unspeakable acts!
And then there’s the prime slapstick effect to coronate the farce; Saudi foreign minister Adel al-Jubeir – in the role of proverbial Empire of Chaos lackey — adamant that the House of Saud petrodollar hacienda would never accept the Russian effort to keep Assad in power. And if there’s no political solution, there will be further weaponizing of the non-existent “moderate” rebels.
Now that’s a flick to watch: the fearful/paranoid House of Saud picking a fight with the Russian Air Force. But leave that to kindergarten — and let’s see why the Empire of Chaos itself is even more paranoid than usual.[...]
Posted by: Lone Wolf | Oct 2, 2015 6:27:05 PM | 20
"So in effect, the Russians (and Iranians, and Chinese) are saving us from ourselves."
Yes. Remember from Putin's UN speech: "[D]o you at least realize now what you’ve done?"
Obama's observations about the school massacre in Oregon says the answer's no, as does the propaganda campaign denigrating Russia's efforts.
The Western "elite's" depths of depravity seems infinite, and that's scary.
Posted by: karlof1 | Oct 2, 2015 6:28:03 PM | 21
It surprised me and made me quite amused that someone could take the presumptuousness of asking a question as sort of "radical". Wow. gotta try that rick again.
Posted by: blues | Oct 2, 2015 6:29:24 PM | 22
If a currency is 100% gold-backed and convertible to gold it just means that you can't increase the money supply-- which is absolutely essential monetary management. Certainly it's good that they have gold reserves, but you are, in my opinion, overstating its importance. All businesses & govts have a need to borrow money in order to invest, you see. And this borrowing requires an increase in the money supply. I know how very attractive is the idea that "This is real money, not just fiat paper," but there is more to it than that.
Posted by: Penelope | Oct 2, 2015 7:02:37 PM | 23
It's GLONASS, not GLONAST, isn't it? I get the impression that all these Presidential candidates are really only in it for the Secret Service protection. Apparently they can't find Blackwater under its latest branding effort. I can totally see the better part of H-P wanting to cut up Fiorina for printer parts, and any number of jilted business partners wanting a piece of Hillary.
Posted by: Jonathan | Oct 2, 2015 7:03:46 PM | 24
Pepe Escobar, in the spaced-out ramble about Berlin referenced by Lone Wolf @20 above, does furnish a couple of links to keep ready-to-hand for the duration of the hellfire of propaganda storm issuing from Hell itself on the Potomac ...
2012 Defense Intelligence Agency document: West will facilitate rise of Islamic State “in order to isolate the Syrian regime”
“THE WEST, GULF COUNTRIES, AND TURKEY [WHO] SUPPORT THE [SYRIAN] OPPOSITION… THERE IS THE POSSIBILITY OF ESTABLISHING A DECLARED OR UNDECLARED SALAFIST PRINCIPALITY IN EASTERN SYRIA (HASAKA AND DER ZOR), AND THIS IS EXACTLY WHAT THE SUPPORTING POWERS TO THE OPPOSITION WANT, IN ORDER TO ISOLATE THE SYRIAN REGIME…”.
Former Defense Intelligence Agency Chief Says Rise of Islamic State Was “A Willful Decision”
Hasan: You are basically saying that even in government at the time you knew these groups were around, you saw this analysis, and you were arguing against it, but who wasn’t listening?
Flynn: I think the administration.
Hasan: So the administration turned a blind eye to your analysis?
Flynn: I don’t know that they turned a blind eye, I think it was a decision. I think it was a willful decision.
Hasan: A willful decision to support an insurgency that had Salafists, Al Qaeda and the Muslim Brotherhood?
Flynn: It was a willful decision to do what they’re doing.
'Flynn' is former director of the Defense Intelligence Agency Michael Flynn. There is no question where the center of the pro-terrorist coalition is. The only question is if all the junior devils will stay clinging to Beelzebub the Nobel Peace Prize Laureate Obama, himself, or if they'll be made to answer the question : "do you realize, now, what you have done?".
Posted by: jfl | Oct 2, 2015 7:30:42 PM | 25
'...then we can agree on the Assad piece'.
What kind of Chosen Monsters ethnically cleanse a sovereign nation for their pipeline routes and offshore gas deposits, by saying, '...and then we can agree on the Assad piece.'
Piece of what ... carrion!?
First, kill all the Monsters.
Posted by: Chipnik | Oct 2, 2015 7:32:46 PM | 26
Blues, There's more than one reason why Russia's doing it: The smaller ones-- to preserve her own access to the Mediterranean, and to protect allies in the cold war against the Evil Empire and its vassals. And to protect her own people from the spread of the cancer.
But the Big Reason? SOMEBODY had to do it. I mean do you really allow an entire world region to return to rival gang-ruled thuggery where all that is innocent or productive is submerged by the Will To Power of moral pygmies? Haven't we seen enough of that from the US & its vassals?
And as for the gloss of religion thrown over it-- that's only a trap for the unwary and a rationalization for degradation of the soul.
But those who are the true decision-makers, above the US politicians & generals & lying media & academics-- those who control the financial institutions and the mega-TNCs-- they are doing exactly what their murderous protege's are doing. Only more efficiently. In larger numbers. And w/o getting their hands dirty.
Well, they say that courage and moral rectitude are contagious. Maybe the image of Russia & the Syrian soldiers and the rest of them will conjure up a response from humanity that we do not yet anticipate.
Posted by: Penelope | Oct 2, 2015 7:40:50 PM | 27
"If a currency is 100% gold-backed and convertible to gold it just means that you can't increase the money supply-- "
...which was why it was abandoned by all industrialized countries after realizing a gold-based currency was merely a totemic form of regicide against the population who have no gold, and then for 1971 years had to trade gerkins for jerkins, and turnips for trenchers, an "absolutely essential management" 'scheme', as The Chosen call it.
Face it, goldbuggery is a disease, like the Hindu rape culture.
Posted by: Chipnik | Oct 2, 2015 7:43:48 PM | 28
China doesn't have oil revenues or Med naval bases to defend.
Those Hasbaras and Marxists war trolls predicting 'Defeat of the Empire' are sadly deluded. Russia is merely creating the 'no fly zone' that US-NATO could not agree upon, while also stabilizing central government in Damascus against a Hasbara Coup, like we saw in Kiev (and those Nazim got away with).
Iran, for its part, needs Syrian pipeline routes. Once those are cleared, any Syrians living outside the New Economy Zones will rot in Daesh hell, and disappear, along with the Yemenese people, from the map of history.
'We won, you lost. It's JUST BUSINESS, get over it.'
Posted by: Chipnik | Oct 2, 2015 8:06:07 PM | 29
Penelope. could you please explain how a fractional reserve of gold system cannot be increased infinitely just like fiat money can and does, by those who control it ?
There is nothing stopping the owners of the money basis, no matter what form it takes, from increasing or lowering The fractional reserve at their will.
Could you speak please explain the magical powers that gold has over fiat.
Posted by: tom | Oct 2, 2015 8:12:01 PM | 30
I feel that much of this strife in the Middle East - namely Syria currently - is in regards to western gas security, especially in light of a potential peak in world oil production. It's important to note that Russia has the world's largest natural gas reserves, followed by Iran.
In light of the above, I suspect that the US, China and Saudi Arabia - for the most part - are forming an anti-Soviet/anti-Shi'ite alliance in the Middle East to ultimately obtain Iran and Russia's gas, Syria is merely a stepping stone to that process. Lets remember that China were staunchly supporting the Mujahideen during the Soviet-Afghan war to thwart Russia, and I suspect that much of the current West/China 'opposition' is fictional. China has a completely different culture to Russia and wants the gas, as does the US.
Posted by: john | Oct 2, 2015 8:14:02 PM | 31
Exceptionally well said.
The fate of the USA was sealed when it proclaimed itself to be "an indispensable nation" - relegating the rest of the world, by implication, to the "dispensable" category.
The hubris of such magnitude is always a precursor of the demise of its carrier.
Posted by: MMARR | Oct 2, 2015 8:14:46 PM | 32
China has a completely different culture to Russia and wants the gas, as does the US.
Russia has many cultures. China has many cultures.
U.S.A. has all-messed-up cultures. One big FAIL. Yeah we screwed this pooch up good.
Let's stop worrying about them.
Posted by: blues | Oct 2, 2015 8:57:48 PM | 34
@20 lone wolf. thanks for pepes latest.. as he notes - watch the propaganda kick into over drive from here on out..
@31 john.. i see all that in your last paragraph much the same way..
Posted by: james | Oct 2, 2015 9:06:56 PM | 35
"All businesses & govts have a need to borrow money in order to invest"
Businesses yes but governments no. Governments sovereign in their own currency (US, UK, Canada, Australia, Japan, China, Russia, etc.) do not have to borrow to spend or invest. If they do it is a choice. None of the countries listed has any significant foreign debt (except for Russia, which has maybe $500B(US), and they could unload that in a heartbeat or just refuse to honor it), nor do they need any. Why would any sovereign have to borrow a foreign currency when they can pay their own citizens in their own currency to produce what they need?
Because 'printing money' is evil? Every country in the World does it or there would be no World economy. If any country or group of countries ever succeeds in 'balancing their budget' (the Eurozone is trying hard) we will see what Depression really means. Economies are driven by the expansion of the money supply not the quantity of money. Savings is reverse stimulus, extracting financial wealth from the bottom of the income spectrum to the top.
Posted by: paulmeli | Oct 2, 2015 9:21:41 PM | 37
"Could you speak please explain the magical powers that gold has over fiat."
Seems to me she was saying there is none.
A gold standard historically limited (not really, because it was always abused) the growth of the money supply to the amount of gold you could take out of the ground.
There's reason no country in the World backs it's currency with gold.
But, if you can have unlimited leverage of the quantity of gold wrt the level of currency then why bother tying the currency to gold? What's the point?
The purchasing power of a currency is limited by a country's production of goods and services, not how much of a (relatively) worthless commodity can be dug out of the ground in one place and stored in another.
You can always afford to buy what is for sale in your own currency, but it is impossible to buy that which is not.
Posted by: paulmeli | Oct 2, 2015 9:32:10 PM | 38
While Peak Oil has been severely kicked around, as a drilling engineer working most of the world for 30-odd years, I believe M.King Hubbert was right in the concept - just a tad off on timing due to some technology that developed. The fact remains that all the Super-Giant oil fields are 75% or more depleted. The Giants are in similar shape, except for 3 or 4 located in the 'Stans' and offshore Brazil. The whole shale oil thing has barely offset US daily imports and is dying because world economics can't support it - yet - and may never.
Peak Oil has not gone away, because depletion never sleeps. This alone should be sufficient reason for most struggles we see, because those on "top" (@ 27) require BAU in order for things to function in predictable fashion. And BAU only works globally with much cheaper oil prices. Globalism will die, and Peak Oil is the likely murderer - but it does not happen smoothly in a hyper-complex world - it is a rough and bumpy ride as sand enters the global gears. There is nothing on the boards anywhere that comes close to oil in energy density combined with trans-portability - nothing.
There will be blood...but there is always a morning after too.
Posted by: BOG | Oct 2, 2015 9:54:24 PM | 39
"Maps drawn up by MI’s Research Department show states being replaced by organizations."
Yes, indeed, exactly the situation at hand and the most basic definition of fascism -- beyond Mussolini's cigarette paper separation of Business and State is the simplistic shadow puppet projection of a 'state' on the rice-paper screen declaring itself as a 'wall'.
Hell, we may even fond Plato's Cave some time soon!
And the Zionist apartheid 'state' of Israel is the classic post 1948 version of this -- it is not a state for its geographic citizens of diverse cultures -- but rather a cult driven enterprise with stakeholders, shareholders, customers and (often slave) workers.
What Putin's recent UN '95 Thesis' signifies is a return in the Geo-polis to the idea of good governance of a geography by a system of state balancing all the diverse agenda of its citizens.
Indeed Russia's 'slow to mount but fast to ride' methodology reminds one of that classic exchange between the little DC 'masters of their universe' and the 'planners' -- aka, at least in respect to Crimea (Ukraine) and now Syria, and perhaps a wider Middle East region, Putin and his Russian management team have turned the tables and left DC as one big 'reality base' community:
The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality — judiciously, as you will — we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors … and you, all of you, will be left to just study what we do." https://en.wikipedia.org/wiki/Reality-based_community
Posted by: x | Oct 2, 2015 10:30:17 PM | 40
The Western countries and their Gulf allies have no way to counter Russia other than by screaming that the Russians are making no distinctions among the terrorist groups. If the moderates want to be spared they must affirm officially they are NOT seeking a Islamist government in Syria. With Qatar and Saudi Arabia behind them, they will never make that declaration.
The West has no case against Russia. Russia is acting in total legality within the international law as it was called officially by the Syrian government.
The West has put so many sanctions on Russia after the Ukraine crisis, that they have almost no more leverage, so they resort to theatrical predictions and warning.
Obama: It will be a quagmire, Turkey: it will increase the number of refugees.. going to Europe. The West; It will fuel more violence. The less daring: It will complicate the Syrian crisis.
This only shows the disarray of the international community at the worry that Russia may succeed in neutralizing ISIS in a few months when the USA and its coalition has done nothing significant in a year.
An eventual Russia's efficient victory on ISIS would bring Russia an incredible prestige while the prestige of the USA will decline.
No wonder the signs of hysteria we see in the USA military and political establishement.
Posted by: Virgile | Oct 2, 2015 11:29:22 PM | 41
'what took vlad so long?'
Posted by: RussianBoy | Oct 2, 2015 11:43:06 PM | 42
Would the Sultan be crazy enough to have Turkish aircraft firing at Russian fighters from within the borders of Turkey? Irrationally tirring the pot seems his forte.
Posted by: sleepy | Oct 2, 2015 11:52:14 PM | 43
Yeah ... he was only off by a factor of 10 on the number of Iraqis killed by Americans since 2003, his estimate for Iraq barely covers Syria.
Posted by: jfl | Oct 3, 2015 12:01:38 AM | 45
i seem to be banned anyway
goings on on the turkey shoot border.
what a headache for the live organ dealer erdogan
RUAF bombed Sultan Murat & Sultan Selim brigades (run by TR) 5 km from Samandag
RU airstrikes are 2km from TR border. Tayyip's "rules of engagement" have gone up in flames and his Al Qaeda terrorists are fertilizer now.
A SyAF Mig-29 & a Pantsir SAM radar-locked 2 TR F-16s 4 52 secs today. Russia openly humiliating a NATO country while US looks on.
BREAKING RUAF bombed FSA, Ahrar & Nusra targets & supply lines on the TR border 1 hr ago. Total washout 4 TR dictator Tayyip.
Turkmen Mts & Mt. Al Dwela area bombed by RUAF full of Al Qaeda & Turkmen fascist bases: Rabia, Bdama, Darkoush, Salqin, Harem, Atmeh.++
Posted by: norman wisdom | Oct 3, 2015 12:03:50 AM | 46
' An eventual Russia's efficient victory on ISIS would bring Russia an incredible prestige while the prestige of the USA will decline.
No wonder the signs of hysteria we see in the USA military and political establishement. '
I think that does account for the hysteria, because there is nothing they can do about it. The US/EU have been engaged in outright criminal acts at least since Libya, everyone else - bullied/lulled to sleep by the US dominated media narrative - has been going along, hoping that somehow it would work itself out, would not affect them at any rate ... and then Putin walked into the dusky, drowsy, overheated room - turned on the lights and opened the windows. The willing/unwilling suspension of disbelief evaporated ... do you realize, now, what you have done?
Yes. Everyone realized now what their 'leaders' have done, what they've allowed their leaders to do. Their leaders haven't just 'made a mess' of things - they are textbook war criminals. A Nobel Peace Prize won't help you now. Cue the hysteria and panic among the soon to be indicted.
Posted by: jfl | Oct 3, 2015 12:14:05 AM | 47
The "Russia wants to distract attention away from the problems in the Ukraine" line is amusing as well ... since the Minsk ceasefire appears to be holding, even improving ... as the New York times says with exasperation -- if the ceasefire keeps holding people may be more likely to accept a commpromise solution ... imagine the American outrage THAT would cause ...
The usual suspects -- minus Russia and Poroshenko -- met today even ... not terribly interesting but the article can be found here ...
I was actually trying to find out how well promises of economic assistance the Ukraine were being fulfilled ... anyone?
Posted by: Susan Sunflower | Oct 3, 2015 12:14:41 AM | 48
@47: "Their leaders haven't just 'made a mess' of things - they are textbook war criminals. A Nobel Peace Prize won't help you now. Cue the hysteria and panic among the soon to be indicted."
Yes, impeach the bastards! ... "Obama Must Go!"
Posted by: doveman | Oct 3, 2015 12:39:50 AM | 50
@48: Read carefully. Leaders of Russia and Ukraine did not attend the news conference.
Posted by: doveman | Oct 3, 2015 12:43:50 AM | 51
Ukraine is shut off from the credit markets, so it subsists on loans from western governments or multilateral institutions, like IMF. It may get around $15B a year max, but probably needs at least double the amount. Since half of the money is stolen right away, and the rest is used for consumption, Ukraine won't be able to repay most of it. It has all the signs of Europe's first emerging failed state. Incredibly enough, Ukraine's new rulers want to spend 7 percent of GDP on military buildup. Sooner or later, the country will explode again, because neither math nor common sense seem to work here. Of course, once it happens, Russia will be blamed for it.
Posted by: MMARR | Oct 3, 2015 12:51:11 AM | 52
Not impeach him - the damage is done neither the plagiarist nor the new republicrat speaker of the house would change a thing - indict him for war crimes, and not just him of course but Brennan and the other CIA criminals, at least a few generals ... the question is where can they be tried. Venezuela maybe? Argentina?
' Of course, once it happens, Russia will be blamed for it. '
Pre-Putin UNGA 2015 I'd have agreed with you, but no longer. Sure they'll try. But the spell of the evil witches has been broken, it won't stick.
Posted by: jfl | Oct 3, 2015 1:05:31 AM | 53
That was @52 mmarr.
Posted by: jfl | Oct 3, 2015 1:06:18 AM | 54
You might be right.
Putin's international reputation is approaching "unimpeachable" status. On internet at least the man's support runs well over 70% even in the US and the UK.
Posted by: MMARR | Oct 3, 2015 1:17:45 AM | 55
io solo se j an montad¡o la de dios es cristo
Posted by: uan | Oct 3, 2015 1:47:58 AM | 56
paulmeli @ # 37 I don't slag people off on here - (I'm nowhere near smart enough imo). That said I must take umbrage with you paulmeli-who-must-get-his-news-from-the-telly.
"Governments sovereign in their own currency (US, UK, Canada, Australia, Japan, China, Russia, etc.) do not have to borrow to spend or invest."
WTF . . . The USA hasn't been able to create it's own money since the early 1914 when the Federal Reserve System got up and running after being created in stealth late December 1913. The US BORROWS every cent it spends and saddles future generations with the debt burden. The US treasury may print the dollars but the Fed is the one lending it - the FED The PRIVATELY OWNED bank that past presidents railed against and were sometimes assassinated over when they tried to interfere with it's machinations.
Please learn some basic facts about money and debt
Posted by: Kiwicris | Oct 3, 2015 1:55:23 AM | 57
Oops sorry . . . should have previewed . . .Bold was ment to stop after borrows
Posted by: Kiwicris | Oct 3, 2015 1:56:37 AM | 58
Kiwicris, paulmeli, goldbugs/anti-goldbugs ... please take it to the open thread. This one has a title and that's what it's about.
Or don't. Trash the thread. Be crypto-trolls. Certainly won't be the first time.
Posted by: jfl | Oct 3, 2015 2:15:42 AM | 59
US "smart bombs" slaughter MSF hospital staff building in Kunduz, Afghanistan.
Must've been deliberate since the US bombs are always smart bombs, compared to the dumb bombs of the Russians in Syria.
Posted by: tom | Oct 3, 2015 2:46:46 AM | 60
Western propaganda is again going full tilt against Russia. This has to be corrosive and is the least price Russia will have to pay to pursue its interests in Syria. Of course, unexpected military set backs are a definite possibility. If Obama and Kerry follow up on their belligerent statements and give the green light to Turkey, the Gulf States or the CIA to increase their support for the Islamist or even to directly sabotage Russian efforts then the price could be even higher. I am still worried that a serious Russian military setback in Syria could escalate into war with the US. For example, how would the US respond if Russia were to shoot down a NATO allied Turkish war plane.
Posted by: ToivoS | Oct 3, 2015 3:47:46 AM | 61
Tom @ 30, "Could you please explain the magical powers that gold has over fiat."
Nemo @ 14 was enthusiastic about gold, even thinking that a gold-backed ruble & a gold-backed yuan might bring down the dollar. @ 23 I pointed out that a 100% gold-backed convertible currency wdn't lend itself to the necessary monetary expansion. That is, I was NOT advocating a gold standard. However, since it's such a durable store of value I've no problem w its being kept as part of one's reserves. It can be useful to periodically pay down trade deficits. Otherwise I guess it's just a barbarous tradition, since it has little utility except for ornamentation.
Tom, you said, "There is nothing stopping the owners of the money basis, no matter what form it takes, from increasing or lowering The fractional reserve at their will."
To which I answer: If one wishes to avoid price inflation, money expansion cannot by very much exceed the production of goods and services. Of course it must increase by some amount or you couldn't invest-- in infrastructure, education, business expansion, etc. The reason the US is not having vast price increases in spite of Quantitative Easing is that the money is going into the stock market & other speculation, or being invested abroad.
Of course you're right that having part of your reserves in gold-- so long as your currency is not convertible-- cannot prevent fractional reserve banking OR ANY OTHER FORM OF MONEY/CREDIT EXPANSION.
Oops, I guess if your currency had a fixed fraction of gold that also wd prevent monetary expansion.
Posted by: Penelope | Oct 3, 2015 3:56:25 AM | 62
Tom @ 30, No, let me clarify: If your currency has a fixed content of 25% gold (content, not "fractional reserve". I should have said "content"), then you can't increase the paper money supply by fractional reserve or any other method-- not if each dollar is to still have a 25% gold content. That is, not unless you design your system to facilitate it.
You could say that by law each unit of currency must be backed by 25% gold, but that this requirement will not be applied to "digital money" wherein bankers simply enter numerical deposits as loans. It would follow that "check book money" wd also be stipulated as free of the requirement for gold backing.
Of course to expand your actual currency, you would have to buy more gold. Which does seem to involve us in a difficulty doesn't it? I mean a hundred dollar bill is, by law, "worth" only $25 worth of gold, but if you trade it for the gold you haven't expanded the money supply, since you will now print only a replacement bill for the one just spent. So therefore we have a caveat: Expanding the actual currency supply by purchasing more gold simply won't work unless the MARKET VALUE of your currency is greater than its gold content. However this wd always be so, so perhaps I ought not to have mentioned It. But I wanted to highlight the difference between gold content and Market value.
Posted by: Penelope | Oct 3, 2015 4:32:08 AM | 64
#Breaking: Russian Air Force Strikes Al-Qaeda in Jisr Al-Shughour and ...
Moments ago, the Russian Air Force launched four airstrikes above the Al-Qaeda controlled city of Jisr Al-Shughour in the Idlib Governorate, along with another series of aerial attacks inside Jabal Al-Zawiya (Idlib) and Jabal Al-Akrad (Latakia Governorate).
According to a military source in the Latakia Governorate, the Russian Air Force struck a convoy from the Syrian Al-Qaeda group “Jabhat Al-Nusra” that was making its way from the rebel-held city of Jisr Al-Shughour to the Latakia Governorate’s northeastern countryside to likely reinforce their embattled comrades.
The source further added that the Russian fighter jets took off from the Hmamiyat Airfields inside the Bassel Al-Assad International Airport this morning – they have yet to return back to the airport after these airstrikes.
In addition to their airstrikes over northeastern Latakia and northwestern Idlib, the Russian Air Force is also targeting the Al-Qaeda controlled cities of Ma’arat Al-Nu’man, Kafr Nabl, Sarmeen, Ariha, and Saraqib; these cities are all located inside the Idlib Governorate.
The Russian military command recently stated that these airstrikes should last up to 4 months; however, they could be extended if the Russian military is unable to destroy the Islamic State of Iraq and Al-Sham’s (ISIS) offensive capacity in both Syria and Iraq.
http://www.almasdarnews.com/article/breaking-russian-air-force-strikes-al-qaeda-in-jisr-al-shughour-and-northeast-latakia/ … #Syria
Posted by: brian | Oct 3, 2015 5:38:14 AM | 66
@61: "For example, how would the US respond if Russia were to shoot down a NATO allied Turkish war plane."
Rather depends on where that warplane was when it was shut down.
If it was flying inside Turkish airspace then the Turks would have every reason to complain, and the USA would have every reason to come to their aid.
If it was flying inside Syrian airspace then, heck, tough shit dudes. Next time keep your eyes open and your afterburners ready, because You Aren't Supposed To Be Inside Syrian Airspace.
Posted by: Yeah, Right | Oct 3, 2015 5:43:23 AM | 67
Blues there is a sorta more general answer that hasn’t been clearly given. After Lybia and Ukraine, to mention only recent events, and with Russia being vilified and perpetually poked (ex. sanctions, oil price, being excluded here and there, etc., etc.) all of which of course had a very long build-up (ex. NATO expansion, radicalisation of the Baltics, etc.), it became time for some kind of riposte or strong opposition, carefully avoided until now (ex. counter-sanctions are ‘normal’ and not ‘aggressive’.)
Refraining from implementing a forward move (that is, not a purely defensive one, or a mild reactionary one) was slipping over from ‘tempered, measured responsibility’ - ‘a willingness to deal with partners, not escalate, remain within the sphere of law’ to a dangerous position of vulnerability, a weak flank that encourages the opponent. It is also (question above: “What took Russia so long?”) sometimes a good idea to let the opponent muddle on further making many mistakes in a hubristic fashion, and thereby weakening himself, which is what Russia did - is doing, in Ukraine. (In Ukraine Russia cannot act except indirectly with support for Novorussia, etc.)
Syria presents an ideal case: Russia is not fighting a state entity for territory, but terrorists, practically everyone’s enemy, and Russia protects a legitimate gvmt.; Syria is a friend and can call for help; there are some allies, for ground forces, militarily imho all this is no problem; the world would be on Putin’s side, and US hypocrisy exposed, caught in its own lying trap. Lastly, letting the “West” send yet another country into the abyss - maybe that is a red line. (I have left Putin’s previous forward move, the re-integration of Crimea, aside, but note the West did absolutely nothing and pretty much pretended nothing occurred, which was very encouraging.)
Posted by: Noirette | Oct 3, 2015 6:09:41 AM | 68
john @ 31
i realize that 'john' is a pretty common name, but, to the best of my knowledge, i was the first one to post under it around here. for the last couple of years or so. so, why don't you personalize your version...god knows there's already enough confusion out there.
Posted by: john | Oct 3, 2015 6:33:26 AM | 69
I agree there are many reasons why Russia waited until now, but first and foremost is the world of public opinion, and I mean the public at large, not the cretins who think they're in charge. Let me explain. The mainstream media decided to make a spectacle of the refugee crisis the past two months when we all know full well this refugee crisis has been going on since the failing of Libya and the commencement of the civil war in Syria. Putin is leveraging the angst over this refugee influx amongst the common people of the countries who are the recipients of these refugees. The common people have legitimate concerns and worries and it's obvious the common people, or many of them at least, no longer have any trust the Elite will consider their interests — as if the Elite ever did. Putin waited for the Zeitgeist to manifest, and I'll be damned, it did. The Little People or The Small People understand and respect what he's now doing in Syria. Power vacuums created from failed states lead to unnecessary death & suffering, despotism and massive waves of refugees. Nation-States are obviously not irrelevant yet. Putin, precisely because of his timing, has the court of the common man public opinion squarely in his corner now and that doesn't bode well for the leaders, and would-be leaders, of The West.
Posted by: Cold N. Holefield | Oct 3, 2015 6:35:33 AM | 70
what a charming mini screed, Holefield...except for the failing of Libya and the commencement of the civil war in Syria. like the changing of the seasons, uh?
Si sta come
on the trees
(my translation, but everything's simple enough)
Posted by: john | Oct 3, 2015 7:24:53 AM | 71
Nemo, Penelope, Chipnik, tom, paulmeli:
Re gold, money, credit etc
If you'll forgive me, I'll try to lay out some basics about money and monetary systems as simply as possible to try to clarify some of the questions raised. It's an area that creates more confusion than pretty much any other, even amongst "professionals".
First off, all monetary systems are built on some form of "real money". That might be seashells, cigarettes, Federal Reserve banknotes and excess reserves (as it is today in the US), or some hard asset (usually gold iself or various quasi-gold arrangements depending on the type of gold standard involved).
On that base, various monetary superstructure evolve, generally in the following fashion.
- Credit is extended (by whatever sort of financial institutions spring up), the borrowers spend the proceeds and the recipients of that spending in turn either hold (or convert) the proceeds into base money or, far more often, deposit it into their financial institution.
- To "settle" (i.e. formally finalise) that transaction, the lending financial institution transfers base money to the financial institution ultimately receiving the borrower's spending.
- When this occurs, the amount of base money is unchanged, but because the borrower's spending generates new deposits in the system new "money" equal to the credit extended has been created in the process. (I put "money" in quotes here because for all practical purposes the holder of a deposit in a financial institution views it - entirely understandably - as money, even though it is in fact simply a claim on "real money").
- It's because such "money" is only a claim on base money that credit crises can occur. Put simply, if too many participants want to turn their "money" into the real thing, the system can't cope.
- This sort of system, which is what arises naturally and has characterised almost all financial systems in recent centuries, is called a "fractional reserve" banking system. That simply means that "money" created through lending greatly exceeds the underlying "real" (i.e. base) money.
- Whether the base money is FR notes (plus excess reserves), or gold, this "money" creation process through lending functions much the same. The only significant difference is that in a true gold standard system, where any owner of such created "money" can request that it be converted into "real money" (ie gold) on demand, financial institutions (principally banks) have to be very careful about getting too aggressive with their lending, lest they be unable to meet conversion demands. In a fiat system, such constraints largely disappear because the system is backed by central banks who can create any amount of new "base money" with a keystroke.
That's why historically, inflation tended to be much lower under a gold standard than under a fiat standard. In fact, generally speaking, under a true gold standard prices declined moderately over time to reflect GDP growth (through productivity gains and population growth) almost invariably exceeding monetary growth.
There's nothing inherently magical about gold, nor need there be anything inherently bad about fiat money. If the growth of fiat "base money" were as constrained as is the growth of gold, there would be no effective difference between them. In the real world, however, whereas under a gold standard there was an automatic, impartial, in many ways brutal restraint on credit (and hence "money") expansion, under a fiat money standard all manner of other (all too human) considerations come into play. Politics, various economic belief systems and so on and so forth. Hence, while prices declined on balance throughout the 19th century, they went up by 20 times plus through the 20th century.
The whole thing has become an often highly emotional topic, with proponents and opponents of various systems at times almost hysterical in their disparagement of the other. Hopefully, the above may help to clear things up at least a little.
Ultimately, what builds (or destroys) prosperity is increasing productivity. That can only flow from on balance intelligent investment into improved processes and products which, in turn, requires consistent real world savings. Put simply, we must consume less than we produce so that the excess can be devoted to building our capacity to produce for the future. The best monetary system is one that facilitates that process over time by introducing as few pricing distortions as possible, not only in goods and services but also interest rates.
A final point. It's vital to understand that the distribution of income and wealth in a society is determined by a mixture of market processes and political decisions. A "fair" distribution is entirely compatible with a gold standard, just as an appallingly "unfair" one is compatible with a fiat system (as we are currently witnessing).
Posted by: Basho | Oct 3, 2015 7:50:48 AM | 72
Just read Obomba's latest "Russia strengthening ISIS" . . . . No wonder the US see themselves as exceptional . . .exceptional liars,exceptionally deluded - they must think the whole westen world is ga-ga to believe the tripe that is spewing from the Whore House at 1600.
jfl @ # 59 I wasn't trolling and I never have. I read what had been posted about - found it ludicrous, so said something. There was no continuation and if paul meli had of responded I would have ignored it.
Posted by: Kiwicris | Oct 3, 2015 8:02:31 AM | 73
jfl @ 59
I'm aware the subject is off-topic but many continue to say stupid things about money in these threads, it's hard to let go. On the other hand, it's none of your business and you don't have to read it. You sound like a sad old man yelling 'get off my lawn'.
kiwichris @ 57
You have a strange definition of 'borrowing'.
First of all, Congress is given the sole power to create money in Article I Section 8 of the Constitution.
When Congress passes a spending bill that is the point when money is created. Neither the Fed nor Treasury will never say "we don't have the money". Never have never will.
Second, Congress created the banking system and the Fed, and every penny the Fed 'earns' is turned back over to Treasury minus expenses. This isn't much of a burden for future generations, and the federal government will always be able to create the interest, which, after all is just more income for the non-government. We don't need it because it's low-powered money but it isn't a burden either.
When a qualified borrower walks into a bank and takes out a loan, that is the only time banks create money.
Finally, Congress passed the law requiring Congress to pay interest on money previously created. It was voluntary, and if Congress so chose it could take the interest away. It has nothing to do with 'borrowing', it has to do with mopping up excess liquidity. There aren't enough mattresses to do that but there are better ways than issuing bonds.
The countries listed are unconstrained by their central banks when it comes to money creation.
All you have for some definition of 'borrowing' is "the Fed is a private corporation", which isn't much.
I'll look for an open thread somewhere for any responses.
Posted by: paulmeli | Oct 3, 2015 8:39:32 AM | 74
@70 All nonsense, of course.
The Russians moved *now* because the USA finally got permission from Turkey to use Incirlik Air Base for bombing raids into Syria, and using that base reduced the transit time for USAF jets to enter Syrian airspace from hours to around 15 minutes.
Putin believed - whether rightly or wrongly - that this was a development that indicated that Obama had decided that now was the time to go all Gadhafi on Assad's sorry arse, and unless he moved some top-of-the-line Russian air defences into Syria then that's exactly what the Americans were going to do.
It is irrelevant whether (or not) his fear was well-founded.
Either way, that's what he feared the USA was going to do, and that was an outcome that was utterly unacceptable to him, and so that's why he felt compelled to act *now*.
Posted by: Yeah, Right | Oct 3, 2015 9:13:59 AM | 75
Barack Obama is right. It is a "recipe for disaster", yes, but not for Syrians who have been living in continuous disasters for 4.5 years under the management of a bunch of dangerously amateurs western and Arab politicians. It is a disaster for the USA policy in the middle east as the USA, Turkey and the Gulf country are losing face and are now desperately trying to find a way out.
It is the best recipe for freeing the Syrians and the region from the vicious and irresponsible policy of the West and their non-democratic allies who are now s... in their pants: Iran is stronger, Russia is stronger and their ally the USA is weaker.
The USA and the Gulfd allies can only use their media propaganda but people are saturated and the announcements of children and women killed by Russian bombs or Western-supported rebels crushed by the Russians are received with total indifference, even on headlines.
Posted by: Virgile | Oct 3, 2015 9:31:17 AM | 76
@70 Close Cold One but still no cigar.
"The Little People or The Small People understand and respect what he's now doing in Syria." Indeed they do. The Little People are fed up with bearded crazies running around screaming Allah Akbar. And not just Little Western People. The Little Muslim People are sick of it too.
Posted by: dh | Oct 3, 2015 10:00:59 AM | 77
Re. Cold at 70. The ‘migrant’ crisis played right into Putin’s hands, which is why I have been saying it can’t be a US plot — contra some who imagine the US is covertly in charge of all things, and if not, it’s the Mossad / Zionists or George Soros or sumptin’.
Merkel and others (minus France, though public opinion has made the point relentlessly on blogs) immediately exploited it to timidly suggest a more collaborative stance towards Russia:
1) it has become necessary to wind down ‘the war’ that is spurring these migrants, who miraculously in bulk turned into Syrians, even though they are only a smallish part (the migrants themselves collaborated and announced themselves as Syrians.) Now the German FinMin is calling (link) for the end of sanctions on Russia (huh? Germany could have refused and can quit when it likes..in theory!), because, in part, I suppose, of the coming hit to German Industry via the VW scandal.
2) Statements that it is necessary to include the Syrian Gvmt. in discussions, making Assad a valid interlocutor. Support for the face-saving blah of a ‘transition’ period as if the Syrians would ever vote out Assad, or that any credible opposition could hold sway.
It probably also took time to set up the whole op, and only became possible once Iran lost its pariah status (care of the US btw.)
Other. Here Islamic Legion’s Pledge to Putin (Chechnya, care of Kadyrov), vid eng subs, fort russ
Posted by: Noirette | Oct 3, 2015 10:02:30 AM | 78
The Yankees are on the horns of a very painful dilemna. It's made several orders of magnitude riskier by the Superpower Myth. The Myth was concocted from the smoke & mirrors (and wreckage) of crappy little countries they've (mercilessly) bombed back to the Stone Age. The potential fruits of their Syria debacle aren't worth trying to SuperPower their way through the Russian Obstacle - so that's off the table.
Their only practical choices are to out-think the Russians (that's a joke, btw) or find a way to thank the Russians for their help in saving part of the world from Ter'rism (that's a joke too).
So they're pretty much fucked ... except as Just Another Ex-Superpower.
Posted by: Hoarsewhisperer | Oct 3, 2015 10:30:35 AM | 79
Posted by: Noirette | Oct 3, 2015 10:02:30 AM | 78
He is the German EconMin calling for an end to sanctions, at the same time leader of the Social Democrats in coalition but competition with Merkel's party. She has been under a lot of pressure recently.
I do think the "refugee crisis" was somehow engineered but backfired - because Merkel came out with "we can do this" and European citizens are not willing to enter a war for "no fly refugee zones". Anyway, the Russians did not wait for Europeans to realize the scale of the problem and presented themselves as the answer.
If the refugee crisis was engineered the country to be able to do so would be Turkey. However, US/Europe had a large role in engineering it themselves as they "forgot" to fund the UN for the refugee centers in Turkey, Lebanon and Jordan, causing near starvation. So maybe it was an elite attempt to bring their populations to accept war as a necessity in order to protect European life styles. Or just sheer stupidity.
Posted by: somebody | Oct 3, 2015 11:58:17 AM | 80
The prevailing view in Russia seems to be that the Americans engineered it, to further the imperial project of destroying Europe by destroying its culture, by imposing multiculturalism on it.
Posted by: Demian | Oct 3, 2015 2:36:44 PM | 81
I know it's in extremely poor taste ... but I am LOVING the anti-Putin bitching and whining from Obama's Coalition of Cowardice & Cretinism. BBC just mentioned that UK's Def Sec has persuaded itself that only about 1 in 20 of Russia's airstrikes have "targeted ISIS."
Given that no-one has said that ISIS can be shut down in a few days, there must be at least a dozen potentially different ways to draw up a logical, sequential, plan to achieve the desired result. And in any case, some stages would go better/worse than others and adjustments would be made. So this gormless prattle is going to backfire sooner rather than later. I suspect that Russia is going to make exterminating the vermin look too easy, too soon for the CCC to be able to explain their own abject incompetence and lying.
I'd put a few $$$ on the likelihood that the CCC is already in Panic Mode.
Posted by: Hoarsewhisperer | Oct 3, 2015 2:40:18 PM | 82
'... an elite attempt to bring their populations to accept war as a necessity in order to protect European life styles ...'
Make that Western lifestyles and it covers the USA and the 5 eyes as well and the whole pitch of perpetual war as 'the answer'. Seems like they've made the sale.
Posted by: jfl | Oct 3, 2015 2:46:44 PM | 83
0 minutes ago...
Russia says its Syria campaign could last "up to 4 months" (via France 24).
Posted by: Hoarsewhisperer | Oct 3, 2015 2:58:09 PM | 84
It would interesting to see this Louis Proyect's blog sounding like anything except obvious cover for CIA-sponsored "revolutions" all over the globe. Seriously Louis, you sound like Radio Marti or Radio Free Europe these days with all of their phony "concern".
Did you take any pause when you heard Victoria Nuland plan the future Ukrainian government which was to emerge from that "people's revolution" in the Maidan? Did you even when you heard EU heads discuss the fact the the snipers who murdered people on both sides at the Maidan were from those who organized the Maidan? Or is foreign governments planning the future of far off states and mass murder of police and protestors count as "revolution" to you?
You're nonsense about Russian Imperialism is a joke. The USSR dissolved itself peaceably - not too many "Empires" do that. Russia never was benefiting from the arrangement of the USSR anymore than Illinois benefits from being part of the United States. Any study of the economics shows this. Yet you write, like some mouth breathing Ukrainaina Nationalist, as though Russia had the same relationship to Ukraine as the UK had to India, or the USA to Guatemala. Its just not true, Louis.
You seem to have a fetish for "revolution" real or fake - though it surely must be difficult distinguishing between the two for a US intellectual who hasn't seen or heard or smelt the thing in 45 years or so (assuming you weren't confusing the revolution of Ho Chi Minh with Marshall Kỳ's phony ramblings about the same subject back then).
Posted by: guest77 | Oct 3, 2015 3:21:13 PM | 85
"I feel that much of this strife in the Middle East - namely Syria currently - is in regards to western gas security, especially in light of a potential peak in world oil production."
Peak oil is a big fat hoax-- a lie by the power structure as another strategy to stifle development, especially in the 3d World. This strategy has been mostly superceded by the "climate change" hoax. I am going to give you Wm Engdahl links. I attempted to summarize them for you, but I kept including dramatic bits that I didn't want you to miss & it got to be too long. Please read at least the first link, on Haitii; it's quite exciting. Remember that the US staged a "drill" for earthquake rescue close to Haiti just one day before the earthquake & that Bill Clinton is a Noble Oil lobbyist now in charge of (nonexistent) aid to Haiti, amid vast corruption.
1. There have been vast new discoveries of oil & gas that the peak oil people haven't been able to hide. Re: oil 6 new "Supergiant fields" since 1996.
2. These are so great that the financiers have already said they expect some to be "orphaned" for lack of capital development. They give as their reason for nondevelopment concern over climate change, but you know that even if climate change were real, money is more important to them.
3. The real reason for the "orphaning" of some new discoveries is that oil/gas SECURITY is not the goal-- rather it's CONTROL over this strategic resource. One of the means for those who seek to tighten their control of the world has been to seek to control all the petrochemicals and all the pipelines.
4. A final reason why there is no scarcity of oil & gas is that it is a natural, renewable product of the earth. If you drill deep enough, in a great many locations you'll hit gas or oil. As Wm Engdahl says, how cd there possibly be that many dead dinosaurs and how could they have gotten so deeply buried? The abiotic theory of oil: Russian oil is the fruit of this Russian technology.
http://www.voltairenet.org/article163808.html Engdahl. Haiti & Cuba. Russia steals a march. Abiotic explained.
http://www.voltairenet.org/article173018.html Maps & facts. Engdahl. Mediterranean. Greece, Cyprus, Syria, The Aegean.
Posted by: Penelope | Oct 3, 2015 4:23:08 PM | 86
The media of the “axis of resistance” are struggling to overcome this public Russian-Israeli consensus. They have made desperate and confusing attempts to justify it, such as Putin deterring Israel from violating Syrian airspace, and Netanyahu trying to save face by claiming a major understanding with the Russian president.
Why do we expect Israel to object to the Russian military role in Syria as long as this does not oppose its interests? Moscow is providing Israel with the kind of stability that former Syrian President Hafez al-Assad granted it 45 years ago.
Perhaps it would have been better if the media affiliated with the “axis of resistance” claimed that they do not know what is going on, instead of comically cheering these developments. The Putin-Netanyahu meeting subjects those affiliated with the “axis of resistance” to contradictions that they cannot overcome.
Congratulations to “axis of resistance” supporters, as it seems that Netanyahu is now at its forefront! However, one question remains: Who are you resisting? Most probably your societies, all for the sake of Netanyahu!
Posted by: Louis Proyect | Oct 3, 2015 4:48:24 PM | 87
"All businesses & govts have a need to borrow money in order to invest" Did I really say that? I did, didn't I? I've been corrupted. I didn't MEAN it; a mere slip.
Your correction that sovereign govts do NOT need to borrow because they have the sovereign right to issue their own currency is exactly my (mis-said) point. Govts need to invest, but not borrow to do it except in extraordinary circumstances.
But as long as I'm talking to you anyway, did you know that countries labelled "developing" are NOT considered to be economically sovereign as pertains to issuing their own currency? This injustice applies to Russia and is the reason that her economy is in trouble. You have probably heard the expression that Central Banks are "independent"? Well, what they are independent of is their host country's govt. They are controlled thru the IMF/BIS system. In fact, in Russia's case this is actually written into her constitution by those helpful Americans who went over there & damn near destroyed her after the dissolution of USSR in '91. I know: you thought you had plumbed the depths of the money bandits. But there's more.
But this is too fantastic & you can't possibly believe it. Only 25% of Russia's circulating currency is in rubles. In company w other "developing" countries her Central Bank will issue her currency only in the amount of her export income deposited as reserves into the CB. I'm going to write a comment explaining this more, but if you can suspend your disbelief long enough to look into this, look at the relevant part of this free online book by Russian economist Nikolai Starikov.
Thanks for the correction, Paul. I certainly don't want to be spreading that.
Posted by: Penelope | Oct 3, 2015 5:02:29 PM | 88
Netanyahu is glad to show off that he is siding with Russia in the ISIS+ bombing. This is going to infuriate Obama and that's what Netanyahu wants.
Posted by: Virgile | Oct 3, 2015 5:11:33 PM | 89
Re Noirette @78 The ‘migrant’ crisis played right into Putin’s hands, which is why I have been saying it can’t be a US plot — contra some who imagine the US is covertly in charge of all things, and if not, it’s the Mossad / Zionists or George Soros or sumptin’.
Unless, and this is a huge unless, they factored Putin's response into it anticipating that he would take that Western Mainstream Media Refugee Crisis Spectacle bait as his chance to assert himself in the Middle East more fully and completely. I know, that's a prodigious unless, but You Never Know. Nonetheless, you have to figure that in failing Syria, they knew this refugee crisis would be upon them. Could they be so competent and cynical as to have strategized this response by Putin well in advance. It's as though they want Putin to get tangled in the Middle East. Either way, Putin's meddle will be tested once and for all. If he pulls this off, whatever this is, and lives to tell about it, he's a magician and truly The Chosen One.
Posted by: Cold N. Holefield | Oct 3, 2015 7:09:49 PM | 90
Paul Craig Roberts is calling Putin's Man Who Spoke Truth to Power, a 'revolutionary act', revealing 'the Emperor has no clothes'. PCR is a Kremlinophile. He love Kremlin long time.
There are 10,000,000's of old hippie Marxists just like him, and MoA, along with 26% of Israelis, who are former Soviets, and who control the Israeli political economy, the 'White Israelis', trading openly with Russia, who are seizing on this lucky diversion in the global media to steal the Golan Heights from Syria, to poison the water wells of the Palestinians and to siphon off the Gazan's offshore gas fields.
They love Putin too!! They love Donbass and MH17, because Putin's distraction let Israel get away with the Kiev Coup, which even their Junta Coup leaders admit was illegal, but declare they are the 'legitimate (sic) security administration', entirely funded with junk bonds from loans by the ZiMF, that YOU underwrite.
Rafael and Marco and Old Joe Biden, that dual-citizen Israeli, they all love Putin, it distracts from the $58 BILLION the RINOs looted from Americans last July for their 'war slush fund', a fund to backstop the ZiMF junk bond loans that are privatizing all Ukraine lands and resources, ...just like Musk and Buffet's SolarCity is privatizing military housing, using YOUR savings in the form of Defense 'Green Technology' contracts. RINOs just love those Defense 'Green Technology' inside trading deals, that's why they keep funding it!!
They love Putin, and Xi. We all need 'protection' now.
It's a global PROTECTION RACKET!
Putin is a great man!! In saving Russia's two naval bases in Ukraine and Syria, he's lit off Cold War 2, and created a massive distraction for the gribbles of Mil.Gov, chewing through now over $1 TRILLION A YEAR of your last life savings, taxed away, and it's all set aside for the Blue Team, the TS clearance, their network of Boeing and Lockheed and Booz-Allen war profiteers, and the 32 foreign nation 'Made in USA' war factories, with 10,000,000s of foreign nationals 'War Fighter' workers, ...all on the Pentagon payroll.
Prolly many here on MoA are on that payroll ... or Israel's.
Putin is their Anti-Christ, whether he means to be, or not. Whether he's the last and only honest sheriff in the territory, ...it's All Dodge City, All the Time Now!
This is the greatest arms race in world history, and it's all in plain view, leading in the nightly news around the world. Posted on Defense.gov/contracts every day at 17:00 hours, ...more than $1 BILLION A DAY ... poof!
This is your biblical Arms-a-gettin'!
Posted by: Chipnik | Oct 3, 2015 7:33:12 PM | 91
wall of text
Posted by: Demian | Oct 3, 2015 7:54:38 PM | 92
Bernie Sanders Rejects Syria No-Fly Zone, Backs Airstrikes
“I support President Obama’s effort to combat the Islamic State in Syria,” he said, “while at the same time supporting those in Syria trying to overthrow the brutal dictatorship of Bashar Assad.”
Bernie must be furious ... he's been made to take a stand on 'foreign policy'. He's on the side of al-CIA-da. No surprise for anyone following his career, but might hurt him in the polls ... although he inherits all of Obama'x changey supporters and is the new Jewish identity pol as well.
Posted by: jfl | Oct 3, 2015 8:05:25 PM | 93
@45 -- The Russian moved now because they had finally completed various other projects including international banking and finance systems (e.g. SWIFT2 & Russian based credit card systems) so that the usual suspects could not blow back with sanctions and denial of service etc. It's been a long wait, but when the final one of these were completed a few weeks ago then the clock started ticking on Syrian action on the ground.
Posted by: doveman | Oct 3, 2015 10:22:45 PM | 94
Correction -- that was @75.
Posted by: doveman | Oct 3, 2015 10:23:35 PM | 95
@Louis Proyect #87
When you show up with your stupid trolling, it's a sure sign that a blog has "arrived." When Netanyahu, after making tactical alliance with ISIS-affiliated Jabhat al-Nusra against Hezbollah, is forced to acquiesce to actions that weaken JaL/ISIS, you know it's a retreat. Israel's major interest is in getting Hezbollah out of the way so they can have their way with Lebanon. If Syria disintegrates into a mess of Salafist fiefdoms, it weakens the position of Israel's main opposition in Lebanon.
The tendency to glom on to opposition for opposition's sake, without considering its fundamental character, is one reason Trotskyism is dead. Dead. It's pretty clear that what remains of that movement has learned nothing over the past 50 years.
Posted by: Thirdeye | Oct 4, 2015 1:11:15 AM | 97
I need to correct my assumption that Mr. Proyect still considers himself a Trotskyist. He's just a "Marxist" who always ends up cheerleading for reactionaries and neoliberals.
Posted by: Thirdeye | Oct 4, 2015 1:50:29 AM | 98
Re: Yeah, Right | Oct 3, 2015 9:13:59 AM | 75
The Russians moved *now* because the USA finally got permission from Turkey to use Incirlik Air Base for bombing raids into Syria, and using that base reduced the transit time for USAF jets to enter Syrian airspace from hours to around 15 minutes.
I do not think so. USA could use the British base at Acrotiri, Cyprus. From there to Aleppo there are 250 miles, 30 minutes by plane, and from Incirlic it is 100 miles, 12 minutes, of course a plane has to start, reach the altitude and the speed, but we are taking about 20 minute difference. It can make a difference for drones and helicopters that cannot operate from 300 miles away. However, the move to Incirlic base did not change the situation on the ground in a visible way. So far, neither did Russian move, but Turko-American alliance had August and September to create a "safe zone" under the control of "moderates", and the only shift there on the ground was to the advantage of ISIS. The case of the safe zone (that was not) shows that bombs do not matter if there are no boots to change the lines of control. Kurds have little ability and zero inclination to control ethnic Arab areas. Some Arab "moderates" were sent to Kobane canton, makes me wonder why Pentagon did not send the alumni of its training there, and other moderates that are morosely idle in Turkish camps. I think that Putin has a very good idea why that plan went nowhere.
I can see three delaying factors. Russia only recently finished technological improvements in its air force. E.g. observation drones were announced in 2011, but they also needed the actual production, testing of the products, developing manpower and software to actually use them intelligently (and who knows how far those steps were completed). Second, Iran was distracted by negotiations, which USA wanted to extend forever but and long last, they got accomplished. Third Russia was distracted by Ukraine, where of late we see some tranquility. Both agreement with Iran and more recent tranquility on Donbas ceasefire lines suggests that the main powers of EU actually wanted Iran+Russia combo to do something with the generator of refugees and terrorists in Iraq and Syria. Plus, spending to prop Ukrainian government is not popular (American neo-cons heartily advise Europeans to do it, and those Europeans that actually have money, unlike Latvia or Poland, already had their fill of spending money upon neo-conish advise. However unpopular it is, accepting Syrian refugees is PR disaster to whatever government is in charge.
I guess Putin waited for the green light and he got it, perhaps not verbally, but in actuality. The second guess is that he jumped into action faster than Western nations intended. A bit like eager drivers crossing an intersection as soon as the other side gets amber.
Posted by: Piotr Berman | Oct 4, 2015 2:35:11 AM | 99
Re: Mina | Oct 3, 2015 10:38:14 PM | 96, Syrian opposition fully frozen
I do not understand you, 50 rebel groups met and they managed to produce ten points! Ten!! Take that, leaders and pillars of the regime! True, in all those ten points they did not notice that (a) there is ISIL over there, and (b) the largest groups did not join them. But what a nice signature list: Sham Revolutionaries, Sham Legion etc.
Posted by: Piotr Berman | Oct 4, 2015 2:50:33 AM | 100