Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

Friday, April 20, 2018

Rise of the robots: 8 professions that will be taken over by AI technology

As robots and artificial intelligence (AI) technology begin their takeover, more jobs will be taken away from humans, resulting in entire professions being supplanted by next level advances in modern technology. This is no longer a what-if, but a well-known fact. Robots have started to take away human jobs, and they will continue to do so as they get more sophisticated.


There might be those who think their own jobs are safe from this change, and for the most part, they’re right. But it’s really only a matter of time before technology catches up and will soon start automating things that currently require the time, effort, and attention of actual human beings. When that happens, wouldn’t you rather be prepared?


In one major study, researchers arrived at the conclusion that almost half of all currently existing jobs in the U.S. will be replaced with machines and automation in the next few decades. The technology that will be needed to make this happen has only gotten more advanced, and it’s likely that the percentage of eventual job losses has increased. But no matter what the case may be, there are certain professions that are just destined to be replaced by robots. Here are some of them.



  • Chefs – Burger-flipping robots are just the beginning. In the future, it may be possible to run entire restaurants with nothing more than a single computer and a staff of autonomous machines. Imagine walking into a restaurant where you input your order into a touchscreen, a robot waiter brings it over for you to eat, and you leave without even taking out your wallet because your bill has already been charged to your account. That restaurant could become a reality sooner than you think.

  • Customer Service Agents – Answering machines are a primitive example of the kind of AI technology that will eventually take away Customer Service Agent jobs. With chat robots, service lines can be much more efficient and can be used to reach more people than is currently possible. After all, the number of agents available serves as the hard limit on the number of calls that can be placed or taken at any given time. Robots will change this in a big way, and it’s going to happen eventually.

  • Drivers – Self-driving cars were thought of as impossible just a few years ago, yet now they are fast becoming standard across many developed nations in the world. The technology behind them is not perfect yet, but neither are actual humans when it comes to driving. Public transportation systems will be affected by this change the most.

  • Financial Analysts – Being a financial analyst requires going through numbers and records, trying to find patterns and possible trades, and making sense of it all on a daily basis. This sounds exactly like the type of job perfectly suited to a computer, which can run computations indefinitely as long as the power is running. It would require no food, no water, and no salary, unlike human counterparts. They could become industry standard within the next decade.

  • Journalists – Words on a screen can be rearranged to fit pretty much any agenda or narrative, and the technology that can be used to do this automatically is already available. It’s only a matter of time until full-on publications are filled with nothing more than a bunch of computers running specific algorithms for either news, features or even reviews.

  • Lawyers – Much of a lawyer’s work involves going through documents and tons of data and finding things that may be relevant to the case at hand. All of this grunt work can be done quickly and accurately with computers, and in fact, it’s already happening. Sooner or later, human lawyers will be replaced entirely with algorithmic robot alternatives.

  • Manual Laborers – Just like the chef robot and the restaurant service robot, physically dexterous machines have been invented to handle certain types of manual labor. They’re not as efficient as they need to be yet, but they have already begun to show their potential for use as bricklayers and in performing certain construction jobs.

  • Medics – As skillful as they are, doctors are simply no match to machines when it comes to accuracy, precision, and ability to hold raw information. The medical field could be hit hard by automation in the next decade, and future hospital visits may be with robot doctor appointments.


It may be a while before robots completely take over human jobs, but at the end of the day, it’s only a matter of time. It’s best to arm yourself with knowledge and information before that happens.


Via Natural News

Featured Image: Screenshot: “Artificial Intelligence: AI”

The post Rise of the robots: 8 professions that will be taken over by AI technology appeared first on Intellihub.

Thursday, March 29, 2018

The Real Reason Why Stock Markets Will Continue To Crumble This Year

This report was originally published by Brandon Smith at Alt-Market.com



Public sentiment on the economy is generally influenced by to two false indicators — the national unemployment rate and stock markets. This is not to say the average person tracks either of these numbers very vigorously; they don’t. What they do is hear these numbers on the morning news, the radio news on their way to work (if they are employed) or they hear them on the evening news just before bed. If the jobless rate is low and the Dow is high, then all is right with the world, at least financially.


When it comes to the economy, most people are lost.


The average American, in particular, is not as oblivious to the world of political and social discourse as they are on economics. Whether on the left or the right of the political spectrum, most citizens know that lines are being drawn and ideological battles are accelerating into realms of the extreme. Conservatives and the liberty activists that stand at the front line of the culture war understand quite well the threat of globalism and the “philosopher king” elitism of international financiers. They know that these criminals must eventually be dealt with if freedom and stability are to return to the world.


There is a rather common disinformation tactic used to manipulate people within conservative circles that has made a resurgence lately in the wake of the Trump election win. It is the idea that Americans within the “working class” aren’t interested in “high-minded” debates over philosophical conflicts, such as the conflicts between individualism versus collectivism and globalism. There is also the notion that “real” Americans could not care less about the elitist culprits behind the political theater of the false left/right paradigm.


This attitude is presented as a superior one. That is to say, disinformation agents play to people’s egos, suggesting that the working class should be focused on putting food on the table and money in their wallets and that the rest of this “intellectual nonsense” should be ignored as frivolous.


I have seen this working-class cultism before. When I lived in Pittsburgh for a time, there were many people who adopted the image of the steel mining working man, even though steel mining was almost non-existent in the region. People were extremely proud of the idea that they came from a tradition of industrial production, and technical and intellectual pursuits were predominantly ignored in the hopes of perpetuating the mining town mystic. The problem was, all of these folks were wage slaves now in the midst of Pittsburgh’s garbage economy. There were too many people scrambling for too few low wage jobs and production was a thing of the distant past.


And they were supposed to be proud of this?


The working class hero meme is nonsense. It is not a real thing; not anymore. It is something that appeals to many of us conservatives in particular, and it is a subject that politicians use to lure us with a pied piper song of reconstruction and reformation promises that they never intend to keep.


And, the idea that working Americans struggling to survive “do not care” about the bigger picture is a lie, perpetuated by disinformation peddlers trying to appeal to any misplaced sense of superiority. They want us all not only to remain ignorant, but to be prideful of that ignorance. They want us to look down our noses at anyone offering in-depth insight into why the world is becoming a harder place to live. In fact, they want us to revel in the struggle; to revel in self-flagellation and sing songs of how good we are at suffering and barely scraping by.


I mention this within an economic article because I do not see this disinformation tactic being successful, at least not yet. What I do see are millions upon millions of Americans who want answers, and many of them are well aware that the root of the problems they face today comes from globalism and globalists. All that is left is for them to understand the causes of the economic disasters they will soon face, so that they can prepare more effectively to counter them and change their own fates for the better.


The working man is smart enough to care about the bigger picture. So, with that in mind…


If you have not been tracking economic activity for the past several years then the frenetic movements of markets recently might have you a bit confused. I’ll summarize the “great stock market recovery” that many people have grown accustomed to in a single quote from former president of the Federal Reserve Bank of Dallas:


“What the Fed did — and I was part of that group — is we front-loaded a tremendous market rally, starting in 2009.


It’s sort of what I call the ‘reverse Whimpy factor’ — give me two hamburgers today for one tomorrow.”


Fisher went on to hint at his very reserved view of the impending danger:


“I was warning my colleagues, Don’t go wobbly if we have a 10 to 20 percent correction at some point… Everybody you talk to… has been warning that these markets are heavily priced.” [In reference to interest rate hikes]


I want to break down the situation in the clearest terms possible so that there are no misconceptions here. The bottom line is this — the Federal Reserve through monetary stimulus packages and near zero interest rates engineered an artificial economic recovery from thin air. But, just as they print money from thin air, everything the central banks create has fleeting value and will eventually crumble.


The Fed not only pumped trillions of fiat dollars into banks and corporations, they also purchased over $4 trillion (officially) in various assets. These purchases coincided with interest rates so low that loans through the Fed were essentially free for corporate borrowers. But what did corporations do with these loans?


Well, they poured that cash into their OWN stocks, of course. They did this through something called “stock buybacks” which is basically a legal form of stock market manipulation. Companies purchase their own stocks and reduce the number of stocks circulating on the market, thereby elevating the value of the remaining stocks and pushing the Dow to new highs every year… until this year, that is.


The Fed’s control of stock market prices is made perfectly clear in this chart, which shows the S&P 500 rising in exact tandem with the Fed’s balance sheet purchases:


Fed Balance Sheet


As I continually warned before the Fed pushed forward with balance sheet reductions, if stocks rallied in close relation to the rising balance sheet, then it only follows that stocks will crash as the balance sheet falls.  It appears as though this is exactly what is now happening.


You see, there is a problem with this model of economic alchemy. It only lasts so long as the central banks perpetually increase the ability of nations and corporations to take on debt. Ultimately, even central banks do not have the power to facilitate debt forever. They have limitations. That said, they never intended to continue with this farce anyway.


Giving the Federal Reserve the power to dictate the terms of the economic “recovery” also gave them the power to dictate the terms of an economic collapse. And now with Donald Trump in office an economic collapse can be achieved without the central bankers even getting any blame.


Donald Trump’s trade war activities set in motion by numerous tariffs have now provided a convenient cover for the banking elites. I do not believe it is a coincidence that Trump announces new trade measures (or fires an economic adviser) every time the Federal Reserve raises interest rates and cuts its balance sheet.


I also do not believe it is a coincidence that the Dow suffers a 1,200 to 1,500 point loss every time the Fed dumps more assets from its balance sheet. Recognize that the mainstream media barely mentions the Federal Reserve’s rate hikes and balance sheet cuts as being the cause of the renewed instability in stock markets. They blame Trump’s trade war rhetoric as the cause.


Again, I want to make this clear — Trump’s tariffs have little or nothing to do with the falling stock market. What Trump’s tariff theater does do is act as a smokescreen to hide the Fed’s culpability in the crash to come.


I warned of this distraction dynamic in January of this year in my article ‘Party While You Can – Central Bank Ready To Pop The ‘Everything’ Bubble‘.


It is not just the Fed that is pulling the plug on stock market support. Central banks around the globe are tightening policy, raising interest rates and halting purchases of new assets. It is important to remember that the fiscal bull run that the central banks conjured up since the crash of 2008 cannot continue unless the central banks continue to expand debt through purchases and easy credit. They are now doing the reverse.


And if you think the central bankers are somehow ignorant of what they are triggering here, then I suggest you read the new Federal Reserve chairman Jerome Powell’s thoughts in 2012 on the matter. He states unequivocally what will happen if the fed raises interest rates and dumps the balance sheet.


Powell made these comments in 2012, yet in 2018 he is implementing the exact measures he warned about. The Fed is perfectly aware that it engineered a recovery and now it is perfectly aware that it is engineering a calamity, and Powell is as big a part of the banking cabal as Yellen or Bernanke ever were.


A pattern appears to have developed in the past few months in terms of the ongoing decline in stocks. Every time the Fed cuts the balance sheet or raises interest rates stocks plunge by around 1,200-1,500 points within a few days. Then, there is a smaller rebound about a week later, which then fizzles out going into the next month as stocks return to a slower grinding downward trajectory. Then the cycle starts all over again.


New monthly highs are being replaced with new monthly lows as stocks are being steam valved down with each fresh balance sheet cut.


While stocks in the grand scheme of things are generally irrelevant, they still represent a psychological marker for the public. As go stocks, so goes the economic sentiment of the masses. It is an unfortunate thing, but also a true thing.


I expect that as the balance sheet cuts increase in size, it will become more difficult for stock markets to produce meaningful rebounds. Which means the bankers will need even greater distractions from the Trump administration and other political assets to hide the true source of the economic breakdown. A trade war alone will probably not be enough. Some regional wars are likely in the making. As these events unfold, it is vital that as many people as possible are made aware of the real reason and the real criminals behind them. A time of reckoning is required, and a reckoning requires accountability.


The banking elites hope to cause so much confusion and catastrophe that the masses will forget who was truly behind it all. We might not be able to stop the greater crash from taking place, but we can prepare accordingly, and we can educate others so that we can stop the culprits from fading back into the fog.


If you would like to support the publishing of articles like the one you have just read, visit our donations page here. We greatly appreciate your patronage.


You can contact Brandon Smith at: brandon@alt-market.com


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Tuesday, March 20, 2018

Facebook Just Lost $50 Billion in Market Value Over the Last Two Days

Facebook Market Value(ANTIMEDIA) —  The Cambridge Analytica scandal has Facebook feeling it where it counts most for a publicly traded company — investor confidence. On Friday, the social media giant’s closing stock price was $185.09, making it worth about $538 billion. The next day, the news broke that data consulting firm Cambridge Analytica, which worked with Donald Trump on the 2016 election, had allegedly obtained […]

Sunday, March 18, 2018

Opposition Grows to Merkel Macron EU Superstate

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A predictable process of dis-integration across the European union is underway. It has now gained momentum not only from the elections in Italy where more than two-thirds voted against open borders refugee policies pushed by Brussels. And it comes not only from Austria or the East states such as Hungary and Poland or the new Austrian government. Now opposition to the Berlin-Paris-Brussels “centralist” axis is coming from Holland and a group of northern EU countries. The issue at the heart involves nations who are asserting the sanctity of national sovereignty versus those who want to dissolve borders and create some form of top-down EU Superstate, euphemistically called the “ever closer union.” The conflict will determine the future viability of the entire European Union project. Brexit was only the first crack in the EU edifice.


‘Sovereign nations’


During a visit to Berlin March 3, Dutch Prime Minister Mark Rutte bluntly came out against the recent trend led by Germany, France and other EU states to create a top-down central supranational state along the lines of a United States of Europe. He told press, “There has been this narrative that there is this inevitability of closer cooperation in a European federal state.” He became blunt: “This horrible language about ‘ever closer Union’ I don’t like. In the past 20 or 30 years this has moved from ever closer union of the peoples of the EU working together on collective issues, where member states weren’t able to deal with it themselves, to become an inevitable goal in itself.” Then Rutte declared the unspeakable “S” word: “We can never forget that these are sovereign nations. This is not a movement in itself, just when needed in special occasions. It has moved from a collective effort of nations to a goal in itself. It’s totally wrong!”


North-south divide opens


Now in addition to the growing East-West divide within the EU between Poland, Hungary and others versus Berlin and Paris, there is a clear North-South divide opening. Rutte’s throwing down the gauntlet in Berlin was followed three days later by a meeting of eight northern EU finance ministers including Netherland on 6 March where they issued a common statement that was directed against the French-German Macron Plan that seeks to create more centralized Brussels control beginning with a single EU finance minister. The finance ministers of Holland, Denmark, Estonia, Finland, Latvia, Lithuania and Sweden issued their declaration from Den Haag where the meeting took place.


Macron, with apparent backing of the new German coalition, joined with EU Commission President Jean-Claude Juncker to call for a common Eurozone budget and a European finance minister as the first step to a central fiscal union that would be even more controlled top down from Brussels. Macron proposes in effect an ultimate EU fiscal union, with Europe-wide taxes and spending, even more top down than at present as sovereign nations would largely lose the taxation sovereignty. Macron’s plan is a thinly-disguised attempt to create an EU fiscal union in which German taxpayers as well as Dutch and other conservative EU members will in essence bail out Southern European countries, including Greece and Italy where French banks hold the largest exposure. Macron unveiled his plan in September 2017 just as German elections were taking place. He promoted it as a way to a “sovereign (sic), united and democratic Europe,” something it definitely is not.


Soros in Background


The push for a Brussels-run EU, ultimately with the central power to issue “Eurobonds” for the entire Eurozone, has been a top issue for billionaire US hedge fund speculator, George Soros. Were this to happen, it would turn the EU into a huge financial target for currency speculators and make Germany and other fiscally prudent states the paymaster for weaker states such as Greece or Italy or Spain in the next financial crisis, and make no mistake there will come a next, as nothing fundamental has been done by EU governments since the 2008 crisis to fundamentally reduce systemic risk. The zero interest rate policy of the ECB has kept the debt bubble inflated across the Eurozone. Since the ECB introduced its unprecedented program of buying Eurozone state debt in 2015, the ECB has bought an eye-popping €2.3 trillion of euro securities to end of 2017. All agree this is unsustainable. The question is what to do.


According to media reports, on 14 November last year Soros requested a private, unpublicized meeting with Benoît Coeuré, a European Central Bank executive board member. According to Coeure’s diary published in February this year, they discussed “euro area deepening.” An ECB spokeswoman told Reuters the meeting, which was also attended by a representative of his hedge fund and another ECB official, was to discuss a common eurozone budget and Treasury/Fiscal Union.


The surprise decision of Chancellor Angela Merkel late last year to “kick upstairs” long-standing and respected fiscal conservative CDU Finance Minister Wolfgang Schauble, the way was cleared to name a new German finance minister more open to the Macron ideas, something Schauble bitterly opposed. With Schauble gone, the resistance is greatly weakened to creation of a de facto Eurozone “transfer union” in which northern EU states, including above all Germany, accept large fiscal or tax transfers to the heavily indebted Eurozone states of the south. The ultimate winners in such a scheme would be French banks.


As the new German Great Coalition was finally announced, Merkel and Macron have decided to postpone their push for the Macron reforms at the EU summit in some weeks, claiming lack of adequate time for the new German government to prepare. In reality, it will likely reemerge in full fury in May.


According to a report in the online US news site Politico, EU Commission Vice President, Valdis Dombrovskis, revealed plans to propose creation of so-called “European Safe Bonds“ (ESB) or “Sovereign Bonds Backed Securtities“ (SBBS) at the May EU summit. The state bond debt of different EU states would be “bundled” into new securities and sold. As the US rating agency Standard and Poors noted, “European safe bonds (ESBies) have been proposed as a tool to increase the supply of ‘AAA’ rated euro-denominated assets and reduce systemic risks from banks’ large holdings of bonds issued by their respective sovereign governments.” The reality they point out is likely to be the opposite. German AAA bonds will have to be “bundled” with higher risk bonds from countries such as Italy or Greece in an effort to sell the risky Greek debt.


As the 2007-2008 US asset-backed securities crisis revealed, these schemes to bundle risky debt with safer debt such as Germany backfire badly once a real systemic crisis erupts. As Dutch Prime Minister Rutte warned, beware of US hedge fund operators bearing large gifts and beware of sly attempts to further erode EU national fiscal and other sovereignty to stabilize de facto bankrupt Eurozone French and other banks.


F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook.”

Wednesday, February 28, 2018

Russia is Strengthening its Positions in Laos

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South East Asia is a thriving region with a large population and significant economic and political potential. Strengthening influence in South East Asia is an important task for the world’s leading powers. The main partner of Russia in the Association of South East Asian Nations (ASEAN) is Vietnam. However, other ASEAN countries are also important for Russian foreign policy. Russia has achieved significant success in building relations with Vietnam’s nearest neighbour, Laos.


The history of Russian-Laotian relations in many ways is similar to the history of Russia’s relations with Vietnam. The civil war in Laos from 1960-1973 was fought parallel to the war in Vietnam and was closely intertwined with it. Together they were part of the Second Indochina war, in which communist forces of the Indochina Peninsula fought against the pro-American forces. This war led to the emergence of modern Vietnam and Laos. As in Vietnam, the communist rebels of Laos who fought against the former government, supported by the United States, received substantial help from the Soviet Union. In the same way as in Vietnam, the war ended with a communist victory and the establishment in 1975 of a new state – of the Lao People’s Democratic Republic (LPDR), which for many years had established close and friendly relations with the Soviet Union. The Soviet Union played a significant role in the development of the new state, strengthening its economy, industry, science and defence.


After the breakup of the USSR in 1991 relations continued though not in the same scale as during Soviet times. In 1994 LPDR and the Russian Federation signed an Agreement on the Foundation of friendly relations. The parties retained common views on crucial international issues and continued cooperation in various spheres.


Since the beginning of the 2000s Russia and Laos began to increase cooperation. It has been especially rapidly evolving in the last few years in connection with the generally increased interest of the Russian Federation in South East Asia.


In October 2011, the President of the LPDR Choummaly Sayasone arrived in Russia. He met with the then Russian President Dmitry Medvedev and Prime Minister Vladimir Putin. One result of the visit was the signing of the Declaration on strategic partnership between Russia and the Lao PDR in the Asia-Pacific region. The two countries actively cooperate within the UN, the dialogue partnership Russia-ASEAN and other international organizations.


The Russian-Laotian educational and cultural exchange is active. For example, it is known that since 1975 to the present more than 10 thousand Laotian students have received education in Soviet and Russian Universities. In November 2013, in the capital of Laos Vientiane the Russian Centre of Science and Culture opened up. In November 2015, the Centre of Russian Language began work at the Laos National University.


The volume of trade between the two countries is not very large. A record rise of 148% was recorded in 2016, when the trade turnover exceeded $40 million. But the parties are working hard to develop trade, for which they established the ad hoc intergovernmental commission on trade-economic and scientific-technical cooperation. In addition, the small volumes of Russian-Laotian trade are compensated by the importance of spheres of interaction between these countries, including energy (including nuclear power) and defence.


In September 2017 Moscow was visited by a delegation of high-ranking representatives of the LPDR. The Laotian Prime Minister Thongloun Sisoulith led the group. During the visit, the head of the government of the LPDR met with his Russian counterpart Dmitry Medvedev. The meeting was also attended by other members of the Lao delegation and the representatives of various Russian agencies. As a result a number of documents on cooperation in strategically important areas were signed.


The head of the Russian Ministry of Energy Alexander Novak and the Lao Minister of Energy Khammany Inthirath took part in the negotiations. As a result the Ministry of Energy of the Russian Federation and the LPDR Ministry of Energy and Mines signed a Memorandum on cooperation in the field of energy.


At the same time Russia and Laos signed an agreement on the construction of the hydroelectric power plant (HPP) ‘Sekong-5′. It has been reported that the estimated cost of the project is $800 million and the share of Russian investments in it may be about 70%. The HPP will be built on Russian technology and fitted with Russian equipment, at that. It has been reported that the Russian company ‘Power Machines’, which produces equipment for HPPs, intends to supply its products for ‘Sekong-5′ to Laos for $100 million. Electricity from the station may be exported to neighbouring Thailand.


As for nuclear energy, in April 2016, the Russian state nuclear corporation Rosatom signed a Memorandum on cooperation in the field of use of atomic energy for peaceful purposes with the Ministry of Energy and Mines of the LPDR. In accordance with the document, the parties intend to cooperate in research in areas such as radiation safety and nuclear medicine. Also, the Russian nuclear scientists intend to help train Laotian specialists. The possibility of joint construction of research and industrial nuclear reactors was discussed.


In September 2017, in the framework of the aforementioned Russian-Laotian talks the new document – the “road map” of Russian-Laotian nuclear cooperation was signed in Moscow. The Russian Federation and the Lao People’s Democratic Republic are going to discuss the possibility of constructing a nuclear power plant on Laotian territory, the creation of an associated infrastructure, as well as the supply and processing of nuclear fuel.


At the same time a contract was signed for military-technical cooperation between Rosoboronexport and the Ministry of Defence of LPDR. Details of the contract have not been disclosed, however it should be noted that the defence and military technology is one of the most important areas of Russian-Laotian cooperation. For a long time the USSR was an important supplier of weapons and instructors for the armed forces of the Lao People’s Democratic Republic. The degree of interaction between the Russian and Laotian militaries is still very high.


In January 2018, Defence Minister Sergei Shoigu arrived in the Lao People’s Democratic Republic as part of his Asian tour, during which he also visited Myanmar and Vietnam. During a meeting with the Russian minister, the Prime Minister of Laos Thongloun Sisoulith said that everything in the armed forces of Laos is connected with Russia. He also said that Laos hopes for help from Russia in the future.


Such a statement by Thongloun Sisoulith allows us to count on the great future of Russian-Laotian cooperation in defence and Russian-Laotian relations in general. And the development of friendly relations with Laos, in turn, may allow Russia to achieve another important objective – comprehensive development of relations with ASEAN.


Dmitry Bokarev, political observer, exclusively for the online magazine “New Eastern Outlook.

Sunday, February 25, 2018

Vietnam- Russia’s Key Ally in ASEAN

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The Socialist Republic of Vietnam was at one time one of the poorest countries in Asia. But, as a result of the transformation that the country has undergone in the last few decades, many are now of the opinion that it deserves to be considered as one of the ‘Asian tigers’ – a designation that traditionally refers to Hong Kong, South Korea, Singapore and Taiwan. It is worth noting that Russia has successfully developed its relationship with Vietnam, a member of the Association of South East Asian Nations (ASEAN), in particular.


At the end of the 1980s Vietnam started introducing certain elements of free market principles into its economy, while still preserving socialistic base. This decision played a significant role in developing Vietnam’s manufacturing, energy, science, agriculture and tourism sectors, and boosted its foreign trade. These changes also led to an increase in foreign investment. This renewal of Vietnam’s economy is still continuing, making it one of the leaders in the ASEAN group.


It is worth noting that China is exercising a strong influence over the ASEAN countries, an influence which is steadily growing as a result both of the USA’s loss of influence in the region, and of China’s own ‘One Belt, One Road’ (OBOR) initiative. Vietnam is no exception: China is a major exporter into this country. Vietnam is actively involved in the OBOR initiative and is developing its transport links with China. The KunmingSingapore railway, which will link China with the ASEAN countries, runs through almost the whole of the Indochinese peninsula.


However, Vietnam has been able to resist China’s influence to a certain extent. It is doing what it can to develop a mutually beneficial working relationship with China without allowing China to influence its foreign policy or trade links. Thus, Vietnam’s key trade partners include the USA, the leading importer of Vietnamese goods. Vietnam also actively supported the now-abandoned Trans-Pacific Partnership, in which the USA and Japan were to play a leading role and which China viewed as a challenge to its economic supremacy in Asia.


One further factor in Vietnam’s success in the ASEAN group is its relationship with its neighbor Laos. The two countries’ shared border is more than 2 100 km long, and ethnic Vietnamese constitute the largest section of Laos’s population. Vietnam played a leading role in the formation of the modern nation of Laos: the Vietnamese army fought in the Laotian Civil War (1968-1973), and the two countries have had a close relationship ever since. Vietnam is now Laos’s main foreign investor (with a total investment of approximately $5 billion) and an important trade partner. A record level of over $1 billion trade between the due countries was reached as early as 2014. The two countries are continuing to expand their cooperation, not only in the economic sphere but also in relation to cultural, political and security issues.


As a matter of fact, Vietnam and Laos can be seen as an alliance within ASEAN. Since each member of ASEAN has a vote and veto right within the organization, Vietnam’s close relationship with Laos significantly increases its influence within the group.


Vietnam has a similarly close relationship with another neighbor- Cambodia. In January 2018 there was a meeting of the Organizing Committee of the Vietnam-Laos Solidarity and Friendship Year 2017 and the Vietnam-Cambodia Solidarity and Friendship Year 2017. This event was led by the Vietnam’s Foreign Minister, Phạm Bình Minh. The meeting reviewed the results of the Year, which Phạm Bình Minh held to be a success. He said that Vietnam’s links with Laos and Cambodia were continually getting stronger, and growing in all sectors.


We can conclude that Vietnam is one of the most successful and influential countries in the ASEAN group, with an active foreign policy and a real influence in both ASEAN and the Asia-Pacific region. As a result those countries wishing to develop their relationship with ASEAN would do well to start with Vietnam. That is precisely the course that Russia is following at the moment.


The good relationship between Vietnam and Russia dates back to the Second Indochina War, in which the USSR provided the Vietnamese Communists with invaluable support in their fight against South Vietnamese forces, supported by US interventionists.


In 1994, after the fall of the USSR, Vietnam and Russia signed a Treaty of Friendship. After that, they continued to develop their cooperation in economic, political and military matters.


In 2012, the two countries published a joint declaration on a comprehensive strategic partnership.


As during the Soviet period, Russia and Vietnam continue to cooperate in the military and technical sphere. Russia provides the Vietnamese army and navy with military hardware, and Vietnamese soldiers undergo training in Russia. As it is known cooperation in the military and related spheres is a sign of the high level of trust between the two countries.


Russia and Vietnam are also working together on financial matters, oil and gas extraction and nuclear power projects. Cooperation in the area of tourism is also growing healthily. In 2017, for example, Vietnam was visited by more than half a million Russian tourists.


In 2015 trade between Russia and Vietnam was approximately $3.9 billion, and since then Vietnam has been Russia’s major trade partner in ASEAN.


One major achievement in the growth of economic cooperation between Russia and Vietnam has been the Free Trade Agreement between Vietnam and the Eurasian Economic Union, a body in which Russia plays the leading role. This agreement was signed in May 2015 and came into effect in October 2016.


It was not long before the agreement began to yield fruit. The level of trade between Russia and Vietnam has recently increased considerably. In the first quarter of 2017 trade between the two countries surpassed $984 million, which was almost 24% more than the figure for the equivalent period in the previous year. In the second quarter of 2017 trade between Russia and Vietnam was in excess of $1 billion, 32% higher than the figure for the second quarter in 2016. And, finally, the figure for the third quarter of 2017 was almost $1.5 billion, 57% higher than the figure for the equivalent period in 2016.


To sum up, we can say that Vietnam is a reliable partner of Russia. The two countries have decades of friendly relations behind them, and great plans for the future. Vietnam is one of the most successful and influential ASEAN countries and, as a result, friendship with Vietnam can help Russia to develop its relations with all the other countries in the group.


Dmitry Bokarev, political observer, exclusively for the online magazine “New Eastern Outlook.

Saturday, February 24, 2018

Yuan-priced Futures Can Be the End of the Petrodollar Age

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The diminished reliance on the US dollars is one of the major trends of international geopolitics. A lot of media attention has been paid to steps taken by the BRICS states, namely Brazil, Russia, India, China and South Africa to decrease their dependence on American currency. Both the BRICS states and a number of other international players have repeatedly voiced their concern over the design of the modern global economic architecture that was imposed on the rest of the world by the United States. The whole structure of this global economy simply ignores the growing influence of new emerging markets. Because of Washington’s relentless desire to remain a global hegemon, imposing its will on other countries, the US dollar remains an instrument of economic suppression. The creation of the Euro, the rapid rise of the Chinese economy, and the intentions of a number of countries of the former USSR,  the Middle East and Asia to switch to regional currency settlements have transformed the US dollar in a measuring instrument, thus undermining its status as a mandatory transaction currency.


Russia’s and China’s gold reserves against the dollar domination


The traditional transaction scheme, in which all financial operations are processed by London and a number of Swiss banks is losing its relevance these days as new centers of gold trade are emerging, primarily in India, China and South Africa. Suffice to say that Moscow and Beijing have already signed a memorandum on the development of mutual trade in gold. According Singapore -backed financial expert Ronan Manly, the gold reserves accumulated by China and Russia are a part of their strategy to move away from international trade denominated in US dollars. Manly is convinced that should those states show that they are holding more gold combined than the US, this would deal an enormous blow to the US dollar and to the position of the US within the global economy.


While all these initiatives can not immediately render the US dollar obsolete, one has to remember that China has been building its financial system for years and shows no signs of stopping.


The existing Western sanctions along with threats of new sanctions are forcing China and Russia t o cooperate more strategically in what is becoming the seed o f a genuine alternative to the  dollar system. Since the 1998 sovereign default triggered by the West, Russia has been extremely cautious in all of its financial dealings, which allowed it to withstand the sanctions imposed on in by Washington in 2014, and forced the country to search elsewhere for the means of ensuring financial stability. That “elsewhere” is increasingly called the Peoples’ Republic of China.


Yuan-denominated bonds they are


Now the Treasury of Russia is planning to launch the sale of Russian debt in the form of bonds denominated in Chinese yuan. The size of the first offering, a sort of a test of the market, will barely reach 1 billion US dollars, which amounts to 6 billion yuan. The move is being accelerated by reports that the US Treasury is examining the potential consequences of extending its economic pressure on Russia. It’s curious that Turkey’s Deputy Prime Minister Mehmet Şimşek has recently announced that Ankara is going to issue bonds in rubles and yuan in 2018, as it’s been reported by the Gercek Gundem recently.


These events are unravelling against the backdrop of the undeclared economic war between the US and China, which is moving into its active phase. The United States has already formally notified the World Trade Organization (WTO) that they refuse to recognize China as a market economy and are preparing another portion of anti-dumping duties. Washington has been constantly engaged in all sorts of investigations of China’s market policies, while relying on the rules that are most commonly applied to states with non-market economies. In turn, China’s authorities are seeking ways to achieve a “market” status, in a bid to get rid of the protective duties that are hampering its goods.


Gold for oil


But China has its own ways of turning the tables back on Washington, and while those ways are not quite as straightforward, their effects can potentially be much more devastating. China keeps pushing the US dollar off the global exchange market. Earlier, Beijing achieved the inclusion of the yuan in the SDR basket and is now about to challenge the dollar as a universal means of settling for oil futures. The twist is that the futures priced in yuans are going to be convertible into gold. It should be noted that gold-backed-oil-yuan-futures can prove to be extremely attractive for investors and oil-producing countries, particularly those that possess conflicting interests with the sole remaining “superpower”. Those are, among others, Russia, Venezuela, and Iran.


The sale of yuan priced futures is aimed at decreasing the dependency of the global financial markets on the US dollar, but this process can take a while. Since the 1970s, OPEC states have been selling oil in petrodollars, which has made the transformation of petrodollars into US treasury bonds an integral component of the US economy. But from now on, oil producers will be able to sidestep dollar priced futures by choosing those futures that they can freely convert into gold. In addition, China is going to give a greater share of the market to those countries that will agree to trade oil futures in yuan, thus the biggest trading partners of Beijing are going to be forced to invest in those futures in a bid to preserve their market share. The possibility of trading oil futures for yuan, no doubt, will be very in high demand across the Eurasian economic space, as well as in several countries of Africa and Latin America. Yet, this will be enough to increase China’s influence along the path chosen for the implementation of the One Belt, One Road massive infrastructure project.


Given the great strategic importance of oil and energy resources in general, the political aspect of yuan priced futures outweighs even the economic component of this shift. Even if initially they will occupy a small margin of the market, this will mean that China is capable of undermining the global reliance on the US dollar, which lays at the very foundation of Washington’s geopolitical power. As a result, we should expect a gradual, but nonetheless imminent reduction in the global dependence on petrodollars


Martin Berger is a freelance journalist and geopolitical analyst, exclusively for the online magazine “New Eastern Outlook.”  

Wednesday, February 21, 2018

Russia May Become a Leading LNG Supplier in Asia-Pacific

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The serious environmental problems faced by China in the past decade have forced it to reform its energy industry. One of the main changes has been the large-scale transition from coal to a more eco-friendly type of hydrocarbon fuel – natural gas. China’s decision to shield its atmosphere from the products of coal combustion, replacing it with gas, which burns almost completely without leaving any harmful residues, proved to be beneficial for countries exporting natural gas, including Russia.


The environmental situation in China has long threatened the lives and health of its citizens. Factories and thermal power plants block out the sky of the country’s most industrialized areas with thick smog. It has reached the point where poor visibility on the roads due to smog causes car accidents. In these areas, significant mortality is recorded from diseases associated with failure of the respiratory system and poisoning with harmful substances.


The situation demanded radical action by the Chinese authorities. In March 2017, all the coal stations in Beijing and the surrounding areas were closed. For example, more than 33,000 facilities were withdrawn from operation in Hebei province. Such drastic measures resulted in fuel shortages. To make good the deficit, China’s energy sector needs huge amounts of natural gas.


China has its own gas fields which it is actively developing. In 2017, China produced more than 147 million cubic meters of gas, which was 8.5% more than the production in 2016. However, this quantity is not enough to meet the demands of China’s energy sector. Significant volumes have to be bought from abroad.


The cheapest way to supply natural gas from one country to another is via a gas pipeline. However, the construction of pipelines is a complex and expensive task, which can be made even more complicated if the terrain is challenging. In addition, once the pipeline has been built, it can be destroyed by a natural disaster or sabotage, or, in the event of deterioration in relations between the countries through whose territory it passes, it may simply be blocked.


For example, China is now receiving pipeline gas from Kazakhstan, Turkmenistan, Uzbekistan and Myanmar. Despite friendly relations with these countries, China cannot be absolutely sure that there will be no interruption to supplies. In all the above countries, there is a certain level of terrorist threat associated with the activities of various extremist organizations. A much more reliable option, in that respect, would be the Russian “Power of Siberia” pipeline, which will transport gas from Russia to China and other countries of the Asia-Pacific region. However, it will not be operational until 2019.


To ensure its energy security, it makes sense for a large importer like China to buy gas not only from different countries, but also in different forms. Thus, China’s interest in liquefied natural gas (LNG) has increased significantly. LNG is transported by sea in special tankers. This method of gas supply is more expensive than using a pipeline, but it has its advantages. Most importantly, there is no need for a pipeline.


In 2017, China imported more than 94 billion cubic meters of natural gas, and, for the first time, more than 50% of this volume (about 52 billion cubic meters) was in the form of LNG. In terms of the volume of LNG purchased in 2017, China became the world’s second largest importer after Japan, surpassing the Republic of Korea. China is expected to increase its LNG imports in the coming years. Other major consumers of this energy source, such as Japan, the Republic of Korea and Taiwan, also increased their imports of LNG in 2017. It is likely that in the near future the demand for LNG will continue to grow, and all its potential suppliers will be able to offer their goods on the world market, without any risk of having to reduce their prices.


In the current situation, none of the CIS nations now supplying China and the other countries mentioned above with LNG will be superfluous. Now, China buys most of its LNG from Australia, Qatar and Malaysia. The United States also intends to start producing and selling LNG, and its main target market may also be the Asia-Pacific region. However, for a number of reasons many experts believe that Russia is the most promising potential supplier of LNG to the Chinese market.


China’s transition to natural gas has coincided with the development of the Russian “Yamal LNG” project, which is concerned with the extraction, liquefaction and sale of natural gas from the South-Tambey gas condensate field (Yamalo-Nenets Autonomous Region, the RF). The main shareholder of Yamal LNG Company is the Russian gas company Novatek, but in 2014, 20% of its shares were purchased by China’s National Oil and Gas Corporation. Another 9.9% of its shares were acquired by the Chinese Silk Road foundation in 2015.


In December 2017, Yamal LNG plant began its work on gas liquefaction. The first production line of the plant to be launched has a capacity of 5.5 million tons per year (one ton of LNG approximately corresponds to 1.4 thousand cubic meters of natural gas). Two more production lines are to be commissioned in 2018-2019. In 2018, supply of Russian LNG to China will begin.


For a number of reasons, it is expected that in the near future Russia will become a leading supplier of LNG to China, as well as to the countries of South-East Asia.


Firstly, there are huge natural gas deposits on the Yamal Peninsula and in Western Siberia, which are among the largest in the world. The proven natural gas reserves in the South-Tambey field, on the basis of which the Yamal LNG project is realized, amount to 926 billion cubic meters. There are also many gas fields in the Yamalo-Nenets Autonomous Region (the YNAO). In total, about 20% of the world’s known natural gas reserves are concentrated in this constituent entity of the Russian Federation. In addition to the Yamal LNG project, Novatek is currently working on the Arctic LNG-1, Arctic LNG-2 and Arctic LNG-3 projects in the YNAO. Thus, the Russian Federation has enough resources to become a major supplier of gas to China. The proximity of the liquefied natural gas plant to the gas fields reduces the cost of delivering raw materials for processing, and, consequently, the final cost of the product.


Secondly, the import of gas from YNAO to China is beneficial in terms of logistics. The Yamal LNG project will involve not only the production and processing, but also the supply of gas to customers. As part of the project, work on the development of transport infrastructure is under way. The key elements of such infrastructure are the Arctic port of Sabetta, and Sabetta International Airport, both on the eastern shore of the Yamal Peninsula, near the South Tambey field and the LNG plant. In addition, Novatek plans to build a transshipment terminal for LNG on the Kamchatka Peninsula. This will help to create an efficient logistics chain for supplying LNG to all parts of the Asia-Pacific region. Kamchatka is close to China, Korea and South-East Asia, but even closer to Japan. So, the Land of the Rising Sun would also benefit from acquiring large volumes of LNG from Russia.


Thus, as a result of its development of the YNAO fields and of LNG production, Russia may soon become a leading supplier of this product in the Asia-Pacific region. LNG is technologically more advanced and expensive than pipeline gas. Yamal LNG and other similar projects, and the introduction of Russian LNG into the Chinese market, together represent a big step forward for the entire gas industry of the Russian Federation.


Dmitry Bokarev, political observer, exclusively for the online magazine “New Eastern Outlook.

Friday, February 16, 2018

Deutsche: “Nobody Can Understand What’s Going On With The Dollar… The Answer Is Simple”

This report was originally published by Tyler Durden at Zero Hedge


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Earlier this week, the bizarre, unexplainable, ongoing plunge in the dollar and US bond prices in the aftermath of the stronger than expected CPI print which also sent equities surging, prompted at least one trader at Citi to explode: “Wake Up Folks, It’s Not Risk Positive


Then again, maybe it is not all that unexplainable.


As Deutsche’s FX strategist, George Saravelos, writes, he has been getting numerous inquiries as to how can it be that US yields are rising sharply, yet the dollar is so weak at the same time?


He believes the answer is simple: the dollar is not going down despite higher yields but because of them. Higher yields mean lower bond prices and US bonds are lower because investors don’t want to buy them, or as he puts it “this is an entirely different regime to previous years.”


Below we repost his simple explanation, while highlighting that maybe…



… just maybe, the bottom for the dollar is now in?


From Deutsche Bank:


Blame the dollar on yields


We are well into 2018 and our feedback from recently attending the TradeTech FX conference in Miami is that the market is still struggling to understand or embrace dollar weakness. How can it be that US yields are rising sharply, yet the dollar is so weak at the same time? The answer is simple: the dollar is not going down despite higher yields but because of them. Higher yields mean lower bond prices and US bonds are lower because investors don’t want to buy them. This is an entirely different regime to previous years.


Dollar weakness ultimately goes back to two major problems for the greenback this year. First, US asset valuations are extremely stretched. As we argued in our 2018 FX outlook a combined measure of P/E ratios for equities and term premia for bonds is at its highest levels since the 1960s. Simply put, US bond and equity prices cannot continue going up at the same time. This correlation breakdown is structurally bearish for the dollar because it inhibits sustained inflows into US bond and equity markets.


The second dollar problem is that irrespective of asset valuations the US twin deficit (the sum of the current account and fiscal balance) is set to deteriorate dramatically in coming years. Not only does the additional fiscal stimulus recently agreed by Congress push the fair value of bonds even lower via higher issuance and inflation risk premia effects, but the current account that also needs to be financed will widen via import multiplier effects. When an economy is stimulated at full employment the only way to absorb domestic demand is higher imports. Under conservative assumptions the US twin deficit is set to deteriorate by well over 3% of GDP over the next two years.


The mirror image to all of this is that the flow picture into both Europe and Japan has been improving dramatically anyway. We have previously written about the positive flow dynamics in Europe as the flow distortions caused by extremely unconventional ECB policy are starting to adjust. But the Japanese basic balance has also shot up to a 4% surplus in recent years helped by a big improvement in the services balance (Chinese tourists) and a collapse of Japanese inflows into the US: treasuries simply do not provide enough duration compensation any more. To conclude, embrace dollar weakness, it has more to run.

Thursday, February 15, 2018

China’s New World: Energy Markets, Sci-Fi Novels & Rational Progress

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The rise of China is the largest geopolitical gamechange of the epoch. Never in history has a country so rapidly shifted its status, from one of the poorest countries on earth to the planet’s second largest economy. The impact of this dramatic shift cannot be under-estimated. The energy markets are changing, international relations are changing, but the ultimate results could be much deeper. A new political concept is developing.


Western Politics Rejects Progress


Observing the prevalant political atmosphere in the US, Harvard Psychology Professor Steven Pinker observed “For all their disagreements, the left and right concurs on one thing: the world is getting worse.” Pinker isn’t the only one to observe that the western world seems to have universally embraced pessimism.


The roots of the term left and right during the opening stages of the French Revolution were tied in with the concept of historical progress. The “left” were progressive and revolutionary forces that sought to march forward, while the right-wing were the “reactionaries” and “conservatives” who sought to preserve or restore the existing power.


However, beginning with the 1960s ‘New Left,’ both wings of western politics took on a completely different character. The 1960s radicals emphasized individuality and cultural hedonism. They replaced the Marxist goal of constructing a rationally planned socialist society with a call to “do your own thing.”


In the aftermath of the cold-war leftism continued to deviate into complete absurdity. With the absence of Marxism, an atmosphere where discourse is facilitated by well-funded NGOs and foundations has overseen the degeneration of leftism into a kind of “victimology.” The post-modern leftist sees the world as lacking fairness, and cultivates a kind of group therapy atmosphere. The talk of “class struggle” “revolution” and “dictatorship of the proletariat” that once defined Leftism is now far “to male,”  to white,” and “to serious.”  In an atmosphere obsessed with personal identity, sexual and gender issues become primary, while economics is deemed to be almost irrelevant. Activists learn to feel ashamed for their own privilege and wrangle on a journey of “self-discovery” about their own “internalized oppression.”


The right-wing of western politics took a similar turn in the later part of the 20th Century. Mccarthyism and the Cold War defined opposition to any notion of “socialism” or “communism” as central for rightist politics. While the right-wing has historically positioned itself as defenders of authority, family, tradition, and social obligation, this has changed with the rise of neoliberalism. Writers like Ayn Rand and Milton Friedman inserted a new ideological formation. The flags, crosses, and emblems once upheld by conservatives have been replaced by mammon. For most right-wingers in the 21st century, being a conservative simply means to be an ardent believer in the free market. The right-wing favors a society in which the poor are completely left to their own devices. In modern conservative politics, notions of solidarity or community are all trumped by “the virtue of selfishness” and the sacredness of profits.


The political spectrum in the United States and western Europe has been completely swallowed by the ideology of liberalism, placing individuals above all else and seeking to destroy any collectivist notion. Naturally, they see calls for social progress, and advancing into the future as a threat. Moving history forward means a mobilzation of the population. Pushing the people into motion to build a better world represents a threat to “freedom.”


To the Council on Foreign Relations and the New York Times, the top enemy is now “populism.” To the western right “populism” is a mob of inferrior rabble seeking to redistribute their hard earned wealth. To the western left “populism” is a mob of ignorant racists, sexists, and homophobes who will tear down their enlightened, multicultural, non-gender binary, politically correct social order.


With populism as the central enemy, social progress becomes nearly impossible. Instead of presenting a practical vision to move forward, western politics seems to be defined by competing nightmares, with each candidate promising to stave off the apocolyptic scenario associated with his opponent.


China’s Future vs. Fossil Fuels


While western politics has nearly abandoned it, belief in historical progress has been ideologically essential to the forces that have transformed China in the last 100 years. One of the first political acts of Dr. Sun Yat Sen, the founder of the Chinese Nationalist KMT Party was to smash idols in a temple. Dr. Sun considered them to be a symbol of backwardness and ignorance. Belief in social progress is also essential for the Chinese Communists, who overtook the KMT, becoming the ruling party in 1949. Marxism-Leninism and Mao Zedong Thought put forward a clear trajectory of human history from hunter-gather tribalism, to slavery and feudalism, to capitalism, and eventually socialism and Communism.


In 2018, human progress, specifically in the field of technology, is an urgent economic need for China, not merely an ideological fixation. In order for China to keep rising, technology must advance and new energy must replace fossil fuels. While China is a center of industrial production, with 700 million people already lifted out of poverty and a constantly expanding middle class, the centrally planned economy is still vulnerable due to energy dependence.


As the GDP rises, China expects its oil imports to increase by 7.7% in 2018, with natural gas imports increasing by 13.4%. The Chinese National Petroleum Corporation (CNPC) has signed its first long term contract with the United States to import Liquified Natural Gas. Meanwhile, CNPC is set to begin extracting natural gas from Indonesia. China is a central player in the Arctic natural gas projects in Russia.


China’s thirst for oil has vastly transformed the African country of Angola, led by the revolutionary socialist political party known as MPLA. After peace was established in 2002, China began investing in Angola and its oil-centered economy boomed. From 2001 to 2010, the GDP of Angola increased by an average of 11.1% per year. The world is now anticipating the announcement of Angola’s new laws regarding natural gas extraction.


While a number of western oil companies have recently cut back their activities in Angola, China has announced that their strategic partnership with the country will flourish. The Chinese Foreign Minister was quoted as saying: “In these last few years of bilateral cooperation, China has helped Angola rebuild or build more than 20,000 kilometres of roads, built more than 2,800 kilometres of railway line, built more than 100 schools and more than 50 hospitals and thousands of homes.” China has already granted Angola over $60 billion for infrastructure.


The reason that China is determined to protect its maritime sea routes, is because the majority of its petroleum comes via oil tankers. Security in the South China Sea is essential for China’s energy supply, and China’s military forces are dedicated to securing it in order to keep the state-controlled engine of production on the Chinese mainland rolling ahead.


China Needs New Energy


As China rises on the global stage, it is working to shift the energy markets away from fossil fuels, a field dominated by old money and entrenched western power.


If you want to know who rules the world, just think of two words: “Oil Bankers.” The western financial institutions that dominate the world economy can all be traced back to fossil fuels. The House of Rockefeller, tied in with Exxon-Mobil,  sucessor of Standard Oil, along with the House of Morgan now exercise their titanic power via an entity called Chase Bank. HSBC Bank is closely tied to British Petroleum. The British banking dynasty known as the Rothschilds is closely tied in with Royal Dutch Shell.


The Chinese Communist Party  has worked to make the country a global center of production for cars that do not utilize fossil fuels. In 2011, China listed “New Energy Vehicles” i.e. electric cars, as one of its seven “strategic emerging industries.” The new regulations for 2018 regarding car production in China shocked global financial analysts, with the Wall Street Journal proclaiming: “China has created the world’s largest electric car market by sheer force of will.”


The metal known as Cobalt, which is essential in the production of car batteries is in high demand as a result of China’s moves. The price has increased by 230% since 2015. The African nation of the Congo is booming, as the state-run mining company cooperates with the Chinese Nonferrous Metal Mining Group to extract and refine huge amounts of cobalt in order to feed the growing electric car battery market.


In addition to New Energy Vehicles, China now produces 65% of the world’s solar panels.


The central planners in China have declared research and development to be a top priority. If China wants to keep rising, in a global order centered around old energy monopolies, it must embrace new energy, artificial intelligence, data technology, and every other cutting edge field in human progress.


China’s international allies share its technological enthusiasm. The World Festival of Youth and Students held in Sochi, Russia focused on technological research, railway, air transportation, and computers. Though Russia’s economy is centered around oil and natural gas exports, this has not stopped the other Eurasian Superpower from embracing China’s push for new energy and a new world beyond oil-banker domination.


The richest woman in Africa, Isabel Dos Santos, now echoes China’s enthusiasm for technological progress. She writes on twitter: “In the future cars will have no steering wheel,no fuel tanks,no driver.Its a new world and the future starts today”.


The Rise of Chinese Science Fiction


The drive for new technology now seems to be impacting Chinese popular culture. Amid a new China filled with prosperous urban centers, high speed trains, computer start-ups, and rural villages lifted up from poverty, the population is now embracing science fiction.


An article in China Daily describes a ‘new golden age’ of science fiction emerging on the Chinese mainland, where the genre was previously unheard of. Chinese novelist Han Song, six time winner of the Galaxy Award for fiction, directly linked the rise of Chinese sci-fi to ascension on the global stage saying: “The popularity of science fiction accompanies the rise of a country. If the country continues to rise, this genre will become more popular…When the United States became a world power, science fiction became popular. Before that, the United Kingdom dominated the whole world. That was a golden time for British science fiction. When the Soviets became a power confronting the US, that was a golden time for Soviet science fiction….Even Japan in the 1970s had a lot of very good science fiction at that time. China is now at that junction, maybe.”


Many cultural critics have written about the political implications of the science fiction genre, and how it seems to look forward. It has almost cliche to point to fantasy, with magical superstition and positive re-imagining of fuedalism, as being reactionary and right-wing, with science fiction as a progressive, and leftist alternative. The fact that right-wing Nazi Germany often used gothic and feudal imagery, while science fiction flourished under the rule of Communists in the Soviet Union, is seen as further reinforcing the point.


This analysis is a bit shallow, because Sci-Fi books, movies, and TV programs are far from merely a positive daydream of tomorrow. From its inception, Science Fiction writing has been a place for cutting edge social criticism. In the 1950s, US science fiction marched lockstep with the Cold War, and seemed to fixate on dystopias, obsessing about the danger of authoritarian regimes with high-tech abilities.


According to literary analysts, the first work of science fiction ever published was Mary Shelley’s novel Frankenstein. The piece told of a scientist who created his own human being in a laboratory, and then saw his creature become a monsterous killer. The scientist discovers that his creation is wreaking terror on the world because he did not provide it with the love and affection human beings naturally long for.


The classic proto-novel of the sci-fi genre seemed to be an analogy for the industrial revolution, and how amid the leaps in production, the new Europe of factories, electric lights, and assembly lines created misery and poverty for the new working class. Civilization was advancing in Europe, but key elements of humanity were being lost amid a drive for profits.


Not Vulgar Futurism, China Favors Rational Progress


One obvious inconsistency with the belief that science fiction is inherently “left-wing” is the way it was embraced by the Fascisti, a right-wing populist movement in Italy. The Italian school of poets and painters known as “The Futurists” which glorified technology and social progress, attached themselves to the Blackshirts and Benito Mussolini even before he seized power.


The poet Filippo Tommaso Martinetti penned “The Futurist Manifesto” describing the ideals of the artistic movement. He wrote “Except in struggle, there is no more beauty. No work without an aggressive character can be a masterpiece. Poetry must be conceived as a violent attack on unknown forces, to reduce and prostrate them before man…We will glorify war—the world’s only hygiene—militarism, patriotism, the destructive gesture of freedom-bringers, beautiful ideas worth dying for, and scorn for woman…. We will destroy the museums, libraries, academies of every kind, will fight moralism, feminism, every opportunistic or utilitarian cowardice.”


The manifesto of Futurism illustrates that the push for modernity and progress among Italian fascists had a particularly bloodthirsty edge to it. The forces of Italian fascism seemed to associate progress with total erasure of the past, violence, and destruction.


Martinetti proclaimed: “The oldest of us is thirty: so we have at least a decade for finishing our work. When we are forty, other younger and stronger men will probably throw us in the wastebasket like useless manuscripts—we want it to happen!”


This artistic and political tendency that could be called “vulgar futurism” most certainly led to destruction and suffering, done in the name of progress. However, the tone of Chinese science fiction is nothing like this, and neither is the careful, human-oriented optimism espoused by the Chinese Communist Party.


In China, museums are not being destroyed, but rather being constructed. The Chinese Communist Party is now working to revive and promote traditional Chinese culture, while at the same time rejecting aspects of it rooted in feudalism. In the autonomous regions of Tibet and Xianjing, the previouisly suppressed traditional religions of Buddhism and Islam are being actively cultivated by the Central Government. Traditional Tibetan monastaries are being funded, and study of China’s long history of civilization is being widely promoted. In 21st Century China, understanding both Confucius and Mao Zedong is considered essential to enacting Xi Jinping’s vision, and building a moderately prosperous socialist country free of poverty.


During the Cultural Revolution, the Gang of Four smashed archeological sites and worked to purge China of its past. After the rise of Deng Xiaoping, the policies and ideology of this period were viewed as a detrimental to the construction of Socialism. The Deng Xiaoping years were full of a new kind of optimism, with talk of reform and openness replacing the bloodthirsty ultra-leftist rhetoric of Lin Biao and Jiang Qing, who accepted poverty as a price for supposed ideological purity.


In the era of Xi Jinping, Communist ideology and talk of socialism is most certainly on the rise. Some of the “red songs” popular during the Cultural Revolution are once again being sung. However, traditional Chinese culture is also being promoted alongside it. Communism and traditional culture are not seen as contradictory, but rather as different aspects of China’s unique identity.


In his remarks at the 95th anniversary of the Chinese Communist Party’s founding, Chinese President Xi Jinping remarked: “Prosperity for the people is the primary goal of the Communist Party of China, and it is this goal that distinguishes Marxist parties from other political forces.”


As history marches onward, the Chinese Communist Party seems determined to continue raising people out of poverty, developing technology, and working to build a more peaceful and interconnected global community. Optimism is rising in the eastern world, but it is a rational optimism. As they move forward, the Chinese people will not be forgetting or trying to erase where they came from. They intend to keep advancing in a calculated and scientific way.


Caleb Maupin is a political analyst and activist based in New York. He studied political science at Baldwin-Wallace College and was inspired and involved in the Occupy Wall Street movement, especially for the online magazine “New Eastern Outlook”.

Tuesday, February 13, 2018

Russian Peaceful Atom is Supporting Peace in Africa

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As is well-known, Russia is one of the most popular suppliers of nuclear technologies. The experience and high safety standards of Russian nuclear specialists are recognised throughout the world. Many developing countries in Africa and Asia are declaring an interest in nuclear power and would like to work together with Russia in this field. For some of these countries, nuclear power has the potential to solve major problems.


Compared with other methods of generating electricity, nuclear power is considered to be relatively cheap and environmentally friendly. The development of this sector can help provide a country’s industry and population with the electricity capacity they need, and enable it to save considerable sums of money. Nevertheless, nuclear power has plenty of opponents, who consider that its benefits are outweighed by itsrisks. However, many developing countries facing shortages of natural resources and environmental and economic problems may see nuclear power as the best solution to their most pressing problems. Among them are African nations such as Egypt and Ethiopia.


These hot, drought-prone countries, largely made up of desert, are linked by a great river, the Nile, which provides them with an essential source of water. The sources of this river are in central Africa, and it flows out into the Mediterranean Sea through a number of countries, including Ethiopia (the source of one of the Nile’s two main tributaries, the Blue Nile), Sudan and Egypt. The Nile, together with its tributaries, is of the highest importance for all the countries through which it flows. It enables them to grow crops and generate electricity in hydroelectric power stations. However, even the waters of the Nile are a finite resource, and are frequently the subject of international disputes.


In 2011, Ethiopia began the construction of the Hidase Dam on the Blue Nile, which will be the biggest dam in Africa. If it is completed successfully, Ethiopia may become the master of the Nile. The Hidase Dam may deprive Egypt, downriver from Ethiopia, of much of its water. Egypt’s economy is almost entirely dependent on the Nile. Even now, Egypt is suffering from water shortages, and the Hidase Dam could result in a 25% fall in its water resources.


The dam is expected to be completed by 2019. The project has caused an increase in tensions between Ethiopia and the other countries mentioned above. By the end of 2017 the dispute had reached a serious level and a number of North African nations found themselves in one of two opposing camps. Sudan, situated between Ethiopia and Egypt, frequently suffers from the Nile’s alluvial floods and thus supports Ethiopia’s project. Egypt has the support of Eritrea- a fairly small East African state. In 1993, after a protracted war, Eritrea gained independence from Ethiopia and then there was a war between the two countries between 1998 and 2000. Since then relations between Ethiopia and Eritrea have been very strained.


In fact, the dispute about the dam has reawakened all the old disputes in the region, including the territorial dispute between Egypt and Sudan. In the opinion of a number of experts, the possibility of armed conflict cannot be excluded. There are reports that Egypt is sending more troops to the disputed territory and even into Eritrean territory. And Ethiopia is increasing its military presence on its Eastern border with Sudan.


The Ethiopian dam has not yet started working, but Egypt is already, for a number of reasons, suffering from a real shortage of water, and thisis having an effect on its agriculture, hydroelectric power capacity, and even its ability to provide its population with sufficient drinking water. When the dam is finished, the situation may well get much worse.


At the moment it is hard to predict how Egypt, Ethiopia and the other countries involved in this dispute will resolve their differences. One thing is clear, however: nuclear power could help to improve their situation. As already mentioned, water is essential not just for agriculture and to meet the needs of the general population, but also for generating power- another essential for any state. Sometimes it is possible to compensate for a lack of natural resources, including water, by improving industry, using more advanced technologies and generally increasing efficiency. Singapore is a good example of this: even without any land suitable for agriculture, or sufficient sources of fresh water, it has still been able to provide its population with a fairly high standard of living. But, for the development of manufacturing and technology, water is essential.


When Ethiopia completes its dam the Egyptian section of the Nile will see a reduction in flow, and this could cause a significant fall in the generation capacity of the Aswan hydro-electric power plant. That power plant, built by Soviet specialists from 1960 to 1967, once supplied more than half of Egypt’s electricity needs. This proportion has steadily decreased as new hydrocarbon-fuelled power plants have been built.


But hydrocarbons are expensive, and, in the difficult economic conditions that Egypt is experiencing, any unnecessary spending results in real hardship. Given the current situation, nuclear power could provide the Egyptian power sector with much-needed support. Egypt was well aware of this when it signed an agreement with Russia in November 2015, under which Russia will finance and build El Dabaa, Egypt’s first nuclear power station. During the course of the next two years the parties finalized details and in December 2017 they signed a statement on the entry into force of the El Dabaa construction contracts. Preparatory work is already being carried out on the construction site.


Ethiopia, which has started the construction of the Hidase dam with a view to significantly increasing its generation capacity, is also interested in developing a nuclear power sector and building a nuclear power station. Following the example set by Egypt, Turkey, and many other African and Asian countries, it has asked Russia for assistance.


In June 2017, during the Atomexpo 2017 international forum, held in Moscow, Russia and Ethiopia reached agreement on a memorandum of cooperation in the area of civil nuclear power.


A similar agreement was signed by Russia and Sudan during a visit by the Sudanese President, Omar al-Bashir, to Russia in November 2017. Omar al-Bashir said that Sudan was interested in purchasing a small floating power station, and, after that, building its first large nuclear power station.


Naturally, the construction of nuclear power stations in Egypt, Sudan and Ethiopia will not solve all those countries’ disagreements with each other. But it will still be a contribution to the development of their energy sectors, and their economies. If a nuclear power station is built in Ethiopia, the electricity it generates may reduce Ethiopia’s use of Nile water for generating power, and it would then not be forced to decrease the flow of water towards Egypt so much. The same could be said for Sudan, which is now also considering a number of hydroelectric power projects which would involve damming the Nile.


Thus the cooperation between North African countries and Russia in the area of civil nuclear power may make it possible to reduce tensions and promote peace in the region.


Dmitry Bokarev, political observer, exclusively for the online magazine “New Eastern Outlook.

Friday, February 9, 2018

Europe’s Energy Geopolitics is Getting Dicey

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Europe’s energy geopolitics and the security of EU energy supplies is getting very dicey as in contentious. The latest developments revolve around who will be the major suppliers of natural gas to the EU markets going forward. The major actors in the growing fight for market in what is one of the world’s largest natural gas markets, the EU, include Russia, Norway, Azerbaijan, Qatar and most recently the USA with shale gas in LNG tankers. Into this mix Holland, since the 1960’s a major supplier of EU gas, has just decided to severely limit production from its largest gas field.


On January 27 during a mischievous meeting with Polish Prime Minister Morawiecki in Warsaw, Rex Tillerson, US Secretary of State and former CEO of ExxonMobil, declared openly, “Like Poland, the United States opposes the Nord Stream 2 pipeline. We see it as undermining Europe’s overall energy security and stability.” This refers to the second undersea gas pipeline being built across the Baltic Sea by Russia’s Gazprom to double the existing gas capacity now flowing from Nord Stream I to northern Germany. Nord Stream II will deliver 55 billion cubic meters Russian gas via Germany at capacity.


Polish Prime Minister Mateusz Morawiecki in a press interview said he urged Tillerson to convince the US President to impose sanctions on the completion of Russia’s Nord Stream II pipeline. Morawiecki stated, “we talked about Nord Stream 2. We want the construction of the Nord Stream 2 pipeline to fall under the U.S. sanctions bill …which includes, among others, sanctions against Russia.”


The two Nord Stream pipelines are deliberately intended to avoid disruption of Russian gas flows through the politically unstable and Russo-phobic Ukraine. In June, 2017 as the US President made a dramatic appearance in Warsaw to promote EU imports of US LNG from shale gas, Poland took delivery of the first tanker of US LNG, as Trump told the Poles they should rely on the far more costly US LNG. The US is pushing Poland and other states to ask that Brussels, where the climate is strongly against Russia, to take over negotiations with Gazprom. Germany refuses, at least until now, insisting it is an internal German commercial affair. Last November the Polish state gas company PGNiG signed a mid-term deal with Centrica LNG Co. an Anglo-American energy group, to receive nine LNG shipments in 2018-2022 from the United States, as part of their plan to cut dependence on Russian supplies.


Poland gets most of its natural gas today from Russia, but when their contract with Gazprom expires in 2022, they plan to turn to imports of LNG from Qatar and the US, as well as gas from Norway. To block Germany’s Nord Stream II in the process is a high-risk venture, further adding to tensions between Poland and Germany as well as economici insecurity across the EU.


Largest EU Gas Field Must Cut


The Polish call for US sanctions to block Nord Stream II comes at an inopportune time to put it mildly. On February 2 the Dutch gas regulator, the State Supervision of Mines, said gas production from Holland’s giant Groningen field should be cut to half the present production, to a maximum of 12 Bcm/year as soon as possible to further minimize the risk of earthquakes. Recent quakes have caused major damage to homes there. That is a mere 25% of production as recently as 2014. The government is advising that the field will no longer be able to deliver gas within four years.


Groningen is one of the world’s largest natural gas fields, in production since the 1960’s. It is operated jointly by Shell and Tillerson’s former company, ExxonMobil, so the US Secretary of State is well aware of the reality. The sharp cut in output now exposes the gas dilemma of the EU.


A constant barrage of NATO and EU Commission propaganda has attacked EU reliance on Russian gas imports, while German and other EU industry groups strongly back Nord Stream as a stable and low-cost alternative to costly US LNG or other gas imports. According to the official EU Eurostat, Russia’s share of EU-28 imports of natural gas declined from 34.6 % to 26.8 % between 2005 and 2010.Today it is around 29% of total imports. NATO member Norway is the second largest supplier, with some 26%. Algeria and Qatar are other supply sources.


Alternative EU Gas Supplies?


Serious, stable and economical alternatives to Russian gas for the 28 member states of the EU are limited. The import of US shale gas LNG, even were the infrastructure in form of landing facilities and regasification facilities in place, is far more costly, given the cost of special LNG tanker transport, than Russian gas via pipeline. Estimates are that Poland had to pay a premium of 50% more for delivery of US LNG last June compared with Russian gas. The Russian gas which Poland presently receives via Soviet-era gas pipelines transiting Ukraine are precarious. The Ukraine Energy Minister Igor Nasalik admitted last summer the country will soon be unable to ensure Russian gas transit to Europe because of the deteriorating state of its gas transportation system. Indicative of the economic chaos there Nasalik accused Naftogaz, Ukraine’s state oil and gas company, of refusing to invest in the country’s gas transportation system. In any case the existing Gazprom-Naftogaz contract expires December, 2019 and Russia has announced it will not renew. By then the EU energy situation will have to look different or the EU faces a supply crisis.


Aside from the limited prospect for US shale gas via LNG tanker to fill the EU gas import demand in place of Russian gas, other options being looked at in Brussels are even more risky.


One possible alternative to Russian gas, an option backed also by the EU Commission for that reason, is the Azerbaijan Southern Gas Corridor, a project also backed by Washington, to bring gas from BP’S Shah Deniz offshore Caspian gas field, via pipeline through Azerbaijan, Georgia, Turkey on to Greece, Albania and to Italy and Southern Europe. That project entails some 2,200 miles or 3,500 kilometers of pipeline at a sobering cost of $42 billion. Nord Stream II will cost some $9.5 billion by contrast and not be dependent on politically unstable countries such as Georgia or Turkey which presently has major disputes with the EU. For the time Gazprom’s Turkish Stream gas pipeline through Turkey to the Greece border is not certain of EU approval for political reasons.


The Azeri gas platform from Shah Deniz II has been contracted to deliver 6 billion cubic meters per year by 2020 to Turkey. Shah Deniz Phase 2 is expected to reach its 16 billion cubic meters per year peak by 2024-25, when it would supply gas to EU countries including Greece, Bulgaria and Italy beginning 2020. Azeri gas to the EU is a significant counter at this point to Gazprom’s Turkish Stream project. BP, the main operator of Shah Deniz II has supply agreements with European companies totaling 10 billion cubic meters annually from 2020. The first gas to Georgia and to Turkey is due to begin late in 2018.


The Azeri gas option faces a risk that Gazprom exercises its huge market power and abundant gas reserves to wage a price war on the costly Azeri Shah Deniz II gas should Azerbaijan make a too-big tilt away from Russia. “Gazprom could, in theory, offer large volumes of below-cost natural gas into the transit infrastructure crossing Turkey and Greece just to block Azeri gas and any other gas from accessing the European market,” said Antonia Colibasanu, Russian energy analyst with US-based Geopolitical Futures. Russia produces 500 billion cubic meters of gas per year and supplies 161 billion cubic meters or 34% of EU gas annually. It has an estimated 24 trillion cubic meters of natural gas reserves, according to Gazprom. They are holding the world’s largest gas reserves by far.


And Israel Too?


In April of 2017 EU officials pursued yet another alternative to Russian gas, this in cooperation with Israel and Cyprus. Representatives of Israel’s government along with Cyprus met with EU officials in Tel Aviv in April last year to discuss development of a so-called “East Med Pipeline” from Israeli and Cypriot offshore gas fields via pipeline to Greece and on to the EU markets. Eastern Mediterranean Natural Gas (East Med) pipeline would run 1,300 kilometers or 808 miles offshore and 600 km or 373 miles onshore, starting in Israel with exit points in Cyprus, Crete and Greece. The EU Commission surprisingly announced it favored the Israeli East Med Pipeline as alternative to Russia’s Nord Stream II, with EU Energy Commissioner Miguel Arias Cañete of Spain ecstatic about the Mediterranean alternative to Russia. Goldman Sachs and JP MorganChase from Wall Street claimed to be ready to finance construction along with the Leviathan offshore gas field operator, Texas-based Nobel Energy.


East Med plans would complete the pipeline by 2025 to deliver up to 16 billion cubic meters annually to Greece and other EU markets. It would be one of the longest underwater gas pipelines and deepest built. There’s only one problem with the Brussels dream of replacing Nord Stream II with Israeli gas. It isn’t economically viable. Leaving aside for now the fact that there is a growing rift between the EU and Israel over Palestine and over the US unilateral recognition of Jerusalem as Israeli capital, something the EU states refuse to recognize, the Israeli pipeline economics are not at all competitive in the present gas market. Dr Charles Ellinas, an energy expert with the NATO-tied Atlantic Council says, “With Noble expecting about $4.50/mmBTU at the platform, adding the cost of pipelines, liquefaction and transport to Europe would always take the price above the European market range. Noble cannot reduce the price at the platform. If it does it will have to offer such a lower price to its customers in Israel.”


This does not even take into account the huge political and geopolitical tensions in the Eastern Mediterranean. Israel has yet to come to a formal agreement with Cyprus defining each other’s Exclusive Economic Zone, essential for such a cooperative pipeline. Turkey is vehemently opposed to the gas drilling in the Greek part of Cyprus. Aphrodite, the Cyprus component gas field of the proposed East Med Pipeline straddles the Cyprus-Israel EEZ boundary. Without agreeing who owns what part of Aphrodite it is not possible to progress development plans. Israel and Cyprus have failed to reach agreement in six years of talks.


What the EU is left with is a silly political attempt to contain her one stable and economical gas supplier, Gazprom, to the detriment of her own energy security and her economy. US LNG from shale to Poland and other EU markets such as Lithuania, as I have previously written, is an elaborate Ponzi scheme for unconventional gas which depletes far more rapidly than conventional gas and is more costly. The Azerbaijan Shah Deniz II Southern Gas Corridor, while providing a share of non-Russian gas to southern Europe, by no means is able, at present prospects, to displace Russian gas in the EU market, not for price nor volume. The dream of an Israel-Cyprus East Med gas pipeline advocated by EU Commissioner Cañete is financially not viable.


With Holland forced to cut gas production from its giant Groningen field, Europe’s largest, adequacy of supply should be higher on the EU list of priorities than merely blocking Russian gas at all costs. In 2009 it was the illegal action of the Ukraine state gas company that cut Russian gas to EU states, not Gazprom. That was a US-inspired geopolitical ploy to weaken ties between Russia and the EU. Even during the height of Cold War East-West tensions, not once did Gazprom interrupt gas deliveries to Europe.


F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook.”