Neoconservatives arrayed in their Washington offices are congratulating themselves on their success in using the Charlie Hebdo affair to reunite Europe with Washington’s foreign policy. No more French votes with the Palestinians against the Washington-Israeli position.
No more growing European sympathy with the Palestinians. No more growing European opposition to launching new wars in the Middle East. No more calls from the French president to end the sanctions against Russia.
Do the neoconservatives also understand that they have united Europeans with the right-wing anti-immigration political parties? The wave of support for the Charlie Hebdo cartoonists is the wave of Marine Le Pen’s National Front, Nigel Farage’s UK Independence Party, and Germany’s PEGIDA sweeping over Europe. These parties are empowered by the anti-immigration fervor that was orchestrated in order to reunite Europeans with Washington and Israel.
Once again the arrogant and insolent neoconservatives have blundered. Charlie Hebdo’s empowerment of the anti-immigration parties has the potential to revolutionize European politics and destroy Washington’s empire. See my weekend interview with King World News for my thoughts on this potential game-changer. http://kingworldnews.com/paul-craig-roberts-new-crisis-worse-russia-unleashing-black-swans-west/
The reports from the UK Daily Mail and from Zero Hedge that Russia has cut off natural gas deliveries to six European countries must be incorrect.
These sources are credible and well-informed, but such a cut-off would have instantly produced political and financial turmoil of which there is no sign. Therefore, unless there is a news blackout, Russia’s action has been misunderstood.
We know something real has happened. Otherwise, EU energy official Maros Sefcovic would not be expressing such consternation.
Although I am without any definite information, I believe I know what the real story is. Russia, tired of Ukraine’s theft of the natural gas that passes through the country on its way to delivery to Europe, has made a decision to route the gas to Turkey, thus bypassing Ukraine.
The Russian energy minister has confirmed this decision and added that if European countries wish to avail themselves of this gas supply, they must put in place the infrastructure or pipeline to bring the gas into their countries.
In other words, there is a potential for a cutoff in the future, but no cutoff at the present.
These two events–Charlie Hebdo and the Russian decision to cease delivering gas to Europe via Ukraine–should remind us that the potential for black swans, and unintended consequences of official decisions that can produce black swans, always exist. Not even the American “superpower” is immune from black swans.
There is as much circumstantial evidence that the CIA and French Intelligence are responsible for the Charlie Hebdo shootings as there is that the shootings were carried out by the two brothers whose ID was conveniently found in the alleged get-away car. As the French made certain that the brothers were killed before they could talk, we will never know what they had to say about the plot.
The only evidence we have that the brothers are guilty is the claim by the security forces. Every time I hear government claims without real evidence, I remember Saddam Hussein’s “weapons of mass destruction,” Assad’s “use of chemical weapons,” and Iran’s “nuclear weapons program.”
If a US National Security Advisor can conjure up out of thin air “mushroom clouds over an American city,” Cherif and Said Kouachi can be turned into killers. After all, they are dead and cannot protest.
If this was, and we will never know for certain, a false flag attack, it achieved Washington’s goal of reuniting Europe under Washington and Israeli auspices. But this success has an unintended consequence. The unintended consequence is to unify Europe under the anti-immigration policy of the right-wing parties, thus empowering the leaders of those parties.
If this surmise is correct, Marie Le Pen and Nigel Farage will find their lives and/or reputations in danger as Washington will resist the rise of European governments that do not adhere to Washington’s line.
The consternation caused by Russia’s decision to relocate its gas delivery to Europe is proof that Russia holds many cards that Russia could play that would bring down the political and financial structures of the Western World.
China holds similar cards.
The two countries are not playing their cards, because they do not think that they need them. Instead, the two powers are withdrawing from the Western financial system that serves Western hegemony over the world. They are creating all of the economic institutions that they need in order to be completely independent of the West.
Therefore, the Russian and Chinese governments reason, “Why be provocative and slap down the Western fools. They might resort to their nuclear weapons, and the entire world would be lost. Let’s just walk away while they encourage us to depart with their provocations.”
We can be thankful that Vladimir Putin and the leaders of the Chinese government are both intelligent and humane, unlike Western leaders.
Imagine, for example, the dire consequences for the West if Putin were to become personally involved as a result of the numerous affronts to both Russia and Putin himself. Putin can destroy NATO and the entire Western financial system whenever he wants. All he has to do is to announce that as NATO has declared economic war against Russia, Russia no longer sells energy to NATO members.
The NATO alliance would dissolve as Europe cannot survive without Russian energy supplies. Washington’s empire would end.
Putin realizes that the insolent neoconservatives would have to push the nuclear button in order to save face. Unlike Putin, their egos are on the line. Thus, Putin saves the world from nuclear war by not being provocative.
Now, imagine if the Chinese government were to lose its patience with Washington. To confront the “exceptional, indispensable, unipower” with the reality of its impotence, all China needs to do is to dump its massive dollar-denominated financial assets on the market, all at once, just as the Federal Reserve’s bullion bank agents dump massive uncovered gold contracts on the future’s market.
In order to avoid US financial collapse, the Federal Reserve would have to print massive amounts of new dollars with which to purchase the dumped Chinese holdings. As the Federal Reserve would protect US financial markets by purchasing the dumped Chinese holdings, the Chinese would lose nothing from the sale. It is the next step that is decisive. The Chinese government then dumps the massive holdings of dollars it has received from its selloff of dollar-dominated financial instruments.
Now what happens? The Fed can print dollars with which to purchase the dumped Chinese holdings, but the Fed cannot print foreign currencies with which to buy up the dumped dollars.
The massive supply of dollars dumped in the exchange market by China would have no takers. The dollar’s value would collapse. Washington could no longer pay its bills by printing money. Americans living in an import-dependent country, thanks to jobs offshoring, would be faced with high prices that would seriously erode their living standard. The United States would experience economic, social, and political instability.
Putting aside their brainwashing, their defensiveness and patriotic support of the regime in Washington, Americans need to ask themselves: How is it possible that the government of the United States, an alleged Superpower, is so unaware of its true vulnerabilities that Washington is capable of pushing two real powers until they have had enough and play the cards that they hold?
Americans need to understand that the only thing exceptional about the US is the ignorance of the population and the stupidity of the government.
What other country would let a handful of Wall Street crooks control its economic and foreign policy, run its central bank and Treasury, and subordinate citizens’ interests to the interests of the one percent’s pocketbook?
A population this insouciant is at the total mercy of Russia and China.
Yesterday there was a black swan event, an event that could yet unleash other black swan events. The Swiss central bank announced an end to its pegging of the Swiss franc to the euro and US –
Three years ago flight from euros and dollars into Swiss francs pushed the exchange value of the franc so high that it threatened the existence of the Swiss export industries. Switzerland announced that any further inflows of foreign currencies into francs would be met by creating new francs to absorb the inflows so as not to drive up the exchange rate further. In other words, the Swiss pegged the franc.
Yesterday the Swiss central bank announced that the peg was off. The franc instantly rose in value. Stocks of Swiss export companies fell, and hedge funds wrongly positioned incurred major hits to their solvency.
Why did the Swiss remove the peg? It was not a costless action. It cost the central bank and Swiss export industries substantially.
The answer is that the EU attorney general ruled that it was permissible for the EU central bank to initiate Quantitative Easing–that is, the printing of new euros–in order to bail out the mistakes of the private bankers.
This decision means that Switzerland expects to be confronted with massive flight from the euro and that the Swiss central bank is unwilling to print enough new Swiss francs to maintain the peg. The Swiss central bank believes that it would have to run the printing press so hard that the basis of the Swiss money supply would explode, far exceeding the GDP of Switzerland.
The money printing policy of the US, Japan, and apparently now the EU has forced other countries to inflate their own currencies in order to prevent the rise in the exchange value of their currencies that would curtail their ability to export and earn foreign currencies with which to pay for their imports. Thus Washington has forced the world into printing money.
The Swiss have backed out of this system. Will others follow, or will the rest of the world follow the Russians and Chinese governments into new monetary arrangements and simply turn their backs on the corrupt and irredeemable West?
The level of corruption and manipulation that characterizes US economic and foreign policy today was impossible in earlier times when Washington’s ambition was constrained by the Soviet Union. The greed for hegemonic power has made Washington the most corrupt government on earth.
The consequence of this corruption is ruin.
“Leadership passes into empire. Empire begets insolence. Insolence brings ruin.”
Ruin is America’s future.
And, what about Russia’s Future:
Russia Just Pulled Itself Out Of Petrodollar
Back in November, before most grasped just how serious the collapse in crude was (and would become, as well as its massive implications), independent analytics wrote “How The Petrodollar Quietly Died, And Nobody Noticed“, because for the first time in almost two decades, energy-exporting countries would pull their “petrodollars” out of world markets in 2015.
This empirical death of Petrodollar followed years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling.
They added that in 2014 “the oil producers will effectively import capital amounting to $7.6 billion. By comparison, they exported $60 billion in 2013 and $248 billion in 2012, according to the following graphic based on BNP Paribas calculations.”
The problem was compounded by its own positive feedback loop: as the last few weeks vividly demonstrated, plunging oil would lead to a further liquidation in foreign reserves for the oil exporters who rushed to preserve their currencies, leading to even greater drops in oil as the viable producers rushed to pump out as much crude out of the ground as possible in a scramble to put the weakest producers out of business, and to crush marginal production. Call it Game Theory gone mad and on steroids.
Ironically, when the price of crude started its self-reinforcing plunge, such a death would happen whether the petrodollar participants wanted it, or, as the case may be, were dragged into the abattoir kicking and screaming.
It is the latter that seems to have taken place with the one country that many though initially would do everything in its power to have an amicable departure from the Petrodollar and yet whose divorce from the USD has quickly become a very messy affair, with lots of screaming and the occasional artillery shell.
As Bloomberg reports, Russia may ‘unseal its $88 billion Reserve Fund and convert some of its foreign-currency holdings into rubles, the latest government effort to prop up an economy veering into its worst slump since 2009.’
These are dollars which Russia would have otherwise recycled into US denominated assets. Instead, Russia will purchase even more Rubles and use the proceeds for FX and economic stabilization purposes.
“Together with the central bank, we are selling a part of our foreign-currency reserves,” Finance Minister Anton Siluanov said in Moscow today. “We’ll get rubles and place them in deposits for banks, giving liquidity to the economy.”
Call it less than amicable divorce, call it what you will: what it is, is Russia violently leaving the ranks of countries that exchange crude for US paper.
Russia may convert as much as 500 billion rubles from one of the government’s two sovereign wealth funds to support the national currency, Siluanov said, calling the ruble “undervalued.” The Finance Ministry last month started selling foreign currency remaining on the Treasury’s accounts.
The entire 500 billion rubles or part of the amount will be converted in January-February through the central bank, according to Deputy Finance Minister Alexey Moiseev. The Bank of Russia will determine the timing and method of the operation.
The ruble, the world’s second-worst performing currency last year, weakened for a fourth day, losing 1.3 percent to 66.0775 against the dollar by 3:21 p.m. in Moscow. It trimmed a drop of as much as 2 percent after Siluanov’s comments. The ruble’s continued slump this year underscores the fragility of coordinated measures by Russia’s government and central bank that steered the ruble’s rebound from a record-low intraday level of 80.10 on Dec. 16. OAO Gazprom and four other state-controlled exporters were ordered last month to cut foreign-currency holdings by March 1 to levels no higher than they were on Oct. 1. The central bank sought to make it easier for banks to access dollars and euros while raising its key rate to 17 percent, the emergency level it introduced last month to arrest the ruble collapse.
Today’s announcement “looks ruble-supportive, as together with state-driven selling from exporters it would support FX supply on the market,” Dmitry Polevoy, chief economist for Russia and the Commonwealth of Independent States at ING Groep NV in Moscow, said by e-mail. “Also, it will be helpful for banks, while there might be some negative effects related to extra money supply and risks of using some of the money on the FX market for short-term speculations.
Bloomberg’s dready summary of the US economy is generally spot on, and is to be expected when any nation finally leaves, voluntarily or otherwise, the stranglehold of a global reserve currency. What Bloomberg failed to account for is what happens to the remainder of the Petrodollar world. Here is what researches said last time:
Outside from the domestic economic impact within EMs due to the downward oil price shock, we believe that the implications for financial market liquidity via the reduced recycling of petrodollars should not be underestimated. Because energy exporters do not fully invest their export receipts and effectively ‘save’ a considerable portion of their income, these surplus funds find their way back into bank deposits (fuelling the loan market) as well as into financial markets and other assets. This capital has helped fund debt among importers, helping to boost overall growth as well as other financial markets liquidity conditions.
[T]his year, it is to expect that incremental liquidity typically provided by such recycled flows will be markedly reduced, estimating that direct and other capital outflows from energy exporters will have declined by USD253bn YoY. Of course, these economies also receive inward capital, so on a net basis, the additional capital provided externally is much lower. This year, it is to expect that net capital flows will be negative for EM, representing the first net inflow of capital (USD8bn) for the first time in eighteen years. This compares with USD60bn last year, which itself was down from USD248bn in 2012. At its peak, recycled EM petro dollars amounted to USD511bn back in 2006. The declines seen since 2006 not only reflect the changed global environment, but also the propensity of underlying exporters to begin investing the money domestically rather than save. The implications for financial markets liquidity – not to mention related downward pressure on US Treasury yields – is negative.
Considering the wildly violent moves we have seen so far in the market confirming just how little liquidity is left in the market, and of course, the absolutely collapse in Treasury yields, with the 30 Year just hitting a record low, this prediction has been borne out precisely as expected.
And now, one should await to see which other country will follow Russia out of the Petrodollar next, and what impact that will have not only on the world’s reserve currency, on US Treasury rates, and on the most financialized commodity as this chart demonstrates:
… but on what is most important to developed world central planners everywhere: asset prices levels, and specifically what happens when the sellers emerge into what is rapidly shaping up as the most illiquid market in history.
First published by 4th Media, under title: “Ruin is America’s Future: Swiss Central Bank Announced End to Its Pegging of the Swiss Franc to Euro and US Dollar”
Australia’s commitment to affordable, secure and clean energy
Australia should rely on long-term policy and energy market responses to strengthen energy security, foster competition, and make the power sector more resilient, according to the International Energy Agency’s latest review of the country’s energy policies.
In line with global trends, Australia’s energy system is undergoing a profound transformation, putting its energy markets under pressure. Concerns about affordable and secure energy supplies have grown in recent years, following several power outages, a tightening gas market in the east coast and rising energy prices.
Besides assessing progress since the IEA review of 2012, the Australian government requested the IEA to focus on how Australia can use global best practices in transitioning to a lower-carbon energy system. This question points to safeguarding electricity supply when ageing coal capacity retires, increased variable renewable energy comes on line and natural gas markets are tight. In this context, the IEA also contributed to the Independent Review into the Future Security of the National Electricity Market (NEM) by Chief Scientist Dr Alan Finkel.
“The government’s efforts to ensure energy security and move ahead with market reforms have been impressive. Australia can develop its vast renewable resources and remain a cornerstone of global energy markets as a leading supplier of coal, uranium and liquefied natural gas (LNG), securing the energy for growing Asian markets.” said Dr Fatih Birol, the IEA’s Executive Director, who presented the report’s findings in Canberra. “A comprehensive national energy and climate strategy is needed for Australia to have a cleaner and more secure energy future. The National Energy Guarantee is a promising opportunity for Australia to integrate climate and energy policy.”
Along with the United States, Australia is leading the next wave of growth in liquefied natural gas (LNG). As a major exporter of coal, Australia is also a strong supporter of carbon capture, utilization and storage technologies. The report commends Australia’s efforts which can be critical globally to meeting long-term climate goals.
The IEA’s review points out that the sustainable development of new gas resources is critical for natural gas to play a growing role in the energy transition, satisfying a growing domestic gas demand in power generation and industry and to honor export contracts at the same time. The report calls on Australia to continue efforts to improve transparency of gas pricing, boost market integration and facilitate access to transportation capacity.
Welcoming the government’s energy security focus, including the creation of the Energy Security Board, the Energy Security Office, and Australia’s plan to return to compliance with the IEA’s emergency stock holding obligations, the IEA recommends regular and comprehensive energy security assessments to identify risks early on, and foster the resilience of the energy sector.
In terms of power system security, the report offers a series of recommendations on how to improve the market design of the National Energy Market (NEM), one of the most liberalised and flexible power markets in the world. To accommodate higher shares of variable renewables, the IEA recommends that the NEM prioritises measures to safeguard system stability, enhance grid infrastructure, including interconnections, and regularly upgrade technical standards. As consumer choice and prices in retail markets are liberalised across Australia, the government needs to focus on wholesale competition and demand-side flexibility, in recognition of the changing ways energy is produced and consumed, thus contributing to reducing peak demand.
5 myths about solar panels, debunked
Home solar panels can drastically cut or even eliminate electricity bills, reduce a home’s carbon footprint, increase resale value, and may even help a home sell faster.
The cost of rooftop solar systems has fallen dramatically in recent years, and most homeowners have the option of buying the system, leasing it on reasonable payment terms, or having a third-party pay for and install the system at no up-front cost at all for the homeowner. Plus, home solar systems are eligible for federal tax credits.
All of this explains why the number of homeowners installing solar has sky-rocketed across America. Nevertheless, many homeowners remain skeptical about taking control of their energy use and installing solar. Why? The various myths that still persist around solar power could be the reason.
“Solar technology has been around for a long time, but even though it’s entered the mainstream, many homeowners are still skeptical,” says renewable energy expert Roger Ballentine, president of Green Strategies, a leading Washington-based consulting firm. “That’s because a number of myths persist, pointing to the need for better consumer education about the benefits of home solar installations.”
Ballentine points to private and government studies providing real information that debunks the myths surrounding solar power. For example, research by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) and the Lawrence Berkeley National Laboratory found solar panels help homes sell faster and for more money than those without solar.
If you’re considering installing a solar panel system on your home, here are five common myths — and why you shouldn’t believe them:
Myth 1: Solar panels only work if you live in a warm, sunny climate
While solar panels work best when they get a lot of sun, a lack of bright sun doesn’t mean they’re not working. Panels can still absorb ambient sunlight, even on cloudy days or in regions that get less bright sun. What’s more, today’s solar panels are more energy efficient than ever. Newer systems like the “LG NeOn R” maximize sunlight absorption and generate the maximum possible output — as much as 26 percent more than other comparably sized solar panels. This higher efficiency means that solar panels can work in virtually any climate and every season.
Myth 2: You need a lot of roof space for solar panels
Just like other amazing technologies (think microchips), solar panels are getting smaller, more powerful and more efficient. High-efficiency panels take up less space because fewer panels are required to produce the electricity needed to power your home. So even a smaller home could have enough roof space to fit the number of panels needed to generate the necessary power and save you money.
Myth 3: Installation is a long, drawn-out hassle
While adding solar panels to your home isn’t a DIY project, installation usually takes only a day or two. New models streamline the process further, eliminating the need to install a separate inverter. Most solar panels require a separate inverter to bring electricity into your house, but new panels from LG, for instance, incorporate the inverter, simplifying and accelerating the installation process.
Myth 4: If something goes wrong, you’re on your own
As with any major investment in your home, you should make sure you understand the manufacturer and installer warranties for your solar panels, including how long the coverage lasts and what types of problems are covered. One leading solar player, LG, even offers an industry-leading, 25-year product and power warranty. And unlike a furnace or an air conditioning system, a solar installation has no moving parts to wear out and typically requires little maintenance and repair.
Myth 5: Solar panels will look big, bulky and ugly on your roof
Solar panels are becoming smaller, sleeker and more aesthetically pleasing. Higher-efficiency models are also offering increased flexibility of configuration. Instead of having to cover an entire roof with panels in a specific arrangement in order to generate power, modern options allow you to arrange panels to meet your sense of aesthetics.
Adding solar power to a home offers homeowners many benefits, from reducing energy costs, to increasing the value of your home and helping the environment, Ballentine says. “Overall, it’s a decision most homeowners feel positively about once they’ve made it.” The NREL notes in its study: “Buyers of homes with (solar panel) systems are more satisfied than are comparison buyers. A significantly higher percentage … indicate they would buy the same houses again.”
ADB-Supported Kyrgyz Republic’s Largest Hydropower Plant Achieves Key Milestone
JSC Electric Power Plants (EPP), the major state-owned power generation company in the Kyrgyz Republic, today announced the award of a turn-key contract for the Asian Development Bank-supported (ADB) modernization of the Toktogul hydropower plant (HPP) to a joint venture of GE Hydro (France) and GE Renewables (Switzerland) for $104 million.
The modernization project includes new state-of-the-art units which will improve safety, efficiency, reliability, and availability of the Toktogul HPP, located on the Naryn River in the Jalal-Abad Province and considered the country’s largest and most important hydropower plant, increasing its overall capacity to 1,440 megawatts. The additional capacity will be sufficient to supply about 200,000 households for an entire year.
ADB and the Eurasian Development Bank (EDB) financed the replacement of four units of the Toktogul HPP, which has been generating about 6,000 gigawatt hours per year for 43 years. Because of aging equipment, however, the plant has experienced increasing number of failures in recent years.
“ADB has been supporting the energy sector in the Kyrgyz Republic since 1996 as the rehabilitation, replacement, and augmentation of power sector assets are critical for energy security in the country”, said Candice McDeigan, ADB’s Country Director for the Kyrgyz Republic.
“The phased rehabilitation of the Toktogul plant has been the key priority for ADB’s energy sector support in the Kyrgyz Republic and its timely rehabilitation is key to the country’s plan to export summer surplus to Afghanistan and Pakistan through the CASA-1000 power transmission line”, said Ashok Bhargava, Director for the Energy Division at ADB’s Central and West Asia Department.
EPP commenced phased rehabilitation of the Toktogul HPP project in 2012, starting with the refurbishment of the secondary electrical and mechanical equipment, the rehabilitation of two Toktogul units, and later completed by the remaining two Toktogul units, with an overall target completion by 2024-2026. The latest milestone was a result of the extensive competition among all major players and EPP’s innovative approach to procurement and design, which brought in competitive pricing and accelerated completion of the project by 3 years.
“In 2016, EPP decided to fast track the procurement of the four turbines and generators of the Toktogul HPP through single procurement for economies of scale, resulting to completion three years early. With ADB support, the EPP conducted multiple roadshows to improve the
procurement design based on industry feedback and international best practice to increase completion for the project,” said EPP General Director Uzak Kydyrbaev.
GE Capital, the ultimate parent of the GE consortium, has provided a guarantee to support its operation in the Kyrgyz Republic. GE has committed to commission the first unit by November 2020, and one additional unit each year by November 2023
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