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US might use credit default to attack competitors

By Ahmed Adel | May 26, 2023

On May 22, US Treasury Secretary Janet Yellen warned that the country may be unable to service its debt by June 1 unless Congress raises its ceiling or suspends it. In turn, President Joe Biden ruled out the declaration of default. At the same time, despite all the predictions of doom and gloom, the US could benefit from a default, especially to wreak havoc on the international economy and competitors.

In the US, the amount of public debt is limited by law. Currently, it has reached $31.4 trillion. It is up to the US Congress to raise the national debt ceiling, but this year the issue became a major contention between Republicans and Democrats. The Republican party, with a majority in the House of Representatives, set a condition: it will vote to raise the ceiling if the Democratic government accepts significant cuts in budget spending.

Specifically, the Republicans propose cutting tax credits for the purchase of electric cars and the installation of solar panels, as well as reducing public spending on the repayment of educational loans. For Democrats, if they want to win the 2024 presidential election on their terms, these conditions are unacceptable.

No economic reasons for default prevent raising the public debt ceiling. Still, there are political reasons. The Republican majority in the US House of Representatives want to bring greater accountability to the Biden Administration, which has been making economic decisions without consulting Congress. The Republicans hope to catch the Biden Administration, the Federal Treasury, the State Department, and the Defense Department violating American law.

There is a low chance of default in Washington, but this does not rule it out entirely because a default can be used as a financial weapon capable of unleashing a global economic crisis which will also affect the US’s main competitors. It is much easier and more politically legitimate to default in the context of increasing global military and political tensions. For this reason, it cannot be entirely ruled out that Biden will pursue such a path.

Likewise, the US could use default to influence other countries. Despite the enormous debt figure of $31.4 trillion, the external debt is only $7 trillion. Consequently, some countries —which Washington will want to target economically and geopolitically— may be the victims of this default.

Even so, the main thing for the US is not to let doubts about the sustainability of its economy and debt loom. If a default occurs, it will be more difficult for the US to obtain loans.

For this reason, the probability of default is low because many tools exist to avoid it. Article 14 of the Constitution could be invoked, which states that the US debt cannot be called into question. Also, the Federal Reserve could easily double its balance sheet and buy all foreign debt.

On May 24, the US House of Representatives speaker, Kevin McCarthy, acknowledged that the Republicans and the White House maintain substantial discrepancies on the increase in the public debt limit requested by the Biden administration. The senior official expects to negotiate with the president daily until an agreement is reached.

Even if Republicans and Democrats overcome the impasse, it is recalled that in 2011, the last time the two parties had such fiscal odds, the most severe turmoil happened after a deal was struck, which saw shares fall the most steeply since the 2008 financial crisis. This was also amid worries about the impact of the spending cuts made to get the agreement and the implications of a downgrade in America’s bond rating by one credit rating agency.

Fitch Ratings on May 24 put the US on a negative watch – the first step toward a downgrade in the country’s rating by the major credit ratings firm. The credit agency cited “increased political partisanship” and weak governance compared to other countries that hold its top rating.

“The brinkmanship over the debt ceiling, failure of the US authorities to meaningfully tackle medium-term fiscal challenges that will lead to rising budget deficits and a growing debt burden signal downside risks to US creditworthiness,” the company said.

All this signals that the US is on the economic brink. What is most alarming, though, is that if the US was to default, it might not do so quietly and calmly but instead use an opportunity to bring down the world economy to hurt enemies and partners alike.

Ahmed Adel is a Cairo-based geopolitics and political economy researcher.

May 26, 2023 Posted by | Economics | | Leave a comment

Eurasian countries need own rating system – Putin

RT | May 25, 2023

The Eurasian Economic Union (EEU) member states should establish a rating agency to provide adequate assessment tools for the region’s growing economic activity, Russian President Vladimir Putin has said.

The proposal was made during a meeting of the Supreme Eurasian Economic Council in Moscow on Thursday.

Currently, the market for international credit ratings is dominated by three US-based agencies: Moody’s Investor Services, Standard and Poor’s (S&P), and Fitch Group. Countries outside the West have accused them of economic and political bias when it comes to assessing their markets.

“It would be useful to establish the Eurasian rating agency,” Putin stated, adding that principled approaches and strict criteria are needed. “It is important to guarantee that the work is absolutely objective. This is its whole value. If this is not the case, then there is no point in it,” the Russian leader stressed.

In addition, the president called for the development of industrial cooperation and an increase in the number of new joint ventures under the common trade mark “Made in the EEU.”

“It is important that such a new brand become recognizable and gain popularity among consumers in all our countries as soon as possible, and the Eurasian quality mark on goods manufactured in the territory of the five countries means that products meet the highest standards,” he stressed.

Additionally, the Russian leader called on participants at the EEU summit to develop common priorities for technological development, and create technological alliances with the involvement of third countries. Such associations could help set up new science-intensive and high-tech industries in the region, according to Putin.

The EEU, which is based on the Customs Union of Russia, Kazakhstan and Belarus, was established in 2015. It was later joined by Armenia and Kyrgyzstan. This year, Iran sealed a memorandum on free trade with the bloc. The union is designed to ensure the free movement of goods, services, capital, and workers between member nations.

May 25, 2023 Posted by | Economics | | Leave a comment

US military aid to Ukraine could be suspended due to debt ceiling – media

By Ahmed Adel | May 25, 2023

The Hill reported that US military funding to Ukraine could be suspended indefinitely due to proceedings in Washington over the public debt ceiling. Effectively, the public debt situation will force the US to reduce its financial support to Ukraine since it is no longer possible to expect as much support as before.

Congressman Andy Kim, a House Armed Services Committee (HASC) member, was quoted by The Hill as saying that lawmakers had conversations about what needs to be a part of the following package but expressed doubts about the timing of the legislation and highlighted that the ongoing fight over the debt ceiling was putting Ukraine aid at risk.

“It’s delaying our ability to focus on these issues,” Kim said. “That really shows that it has national security implications because we’re not able to have that kind of earnest conversation about Ukraine or the [National Defense Authorization Act] until they’re done with that.”

For his part, Congressman Bill Keating said aid to Ukraine would ultimately depend on its counteroffensive, something that will seemingly miss its long-anticipated spring deadline.

“It’s not a precise science to say what because it could be gains that were made that make more support less necessary,” Keating said. “Or there could be damage inflicted where there has to be more” assistance.

Ukrainian authorities have been promoting its upcoming counteroffensive, and NATO officials have indicated Ukraine has nearly all the promised weapons and equipment needed. Last year’s support was phenomenal, but sustaining such aid at this level is difficult. The public debt situation has affected and will continue affecting public opinion because out of all the spending, people will sacrifice those least sensitive to American society, and not such huge expenses as funding a war in Eastern Europe.

Congress is determined to cut spending, making funding difficult for Ukraine. The only thing that was announced by Congress Speaker Kevin McCarthy and confirmed by the White House was the spending cuts. Military spending is not discussed, but the funding for Ukraine now is many times less than last year. Ukraine can hardly expect the same funding it received as in the past.

The Treasury Department warned in a letter to Congress that as early as June 1, the US may not be able to fully meet its obligations if lawmakers do not authorise an increase in the borrowing limit by that time. Normally, Congress almost automatically raises the borrowing limit, but this time, the Republican opposition, who controls the House, has demanded that it reduce spending by several trillion dollars. The Republican bill passed the House of Representatives but has no chance of being approved in the Senate by Democrats, and even if the document reaches Biden, he will most likely veto the bill.

At the same time, the US finds it very difficult to accept the loss of Artemovsk (Bakhmut). With Ukrainian forces losing control of Artemovsk, the long-mooted counteroffensive becomes more politically urgent than ever for Kiev.

Ukrainian President Volodymyr Zelensky tried to keep his promise to launch a counterattack and for this reason, he continually requested the West for more weapons. As they lost control of Artemovsk, launching an offensive operation is the best way for Kiev to restart its plea for weapons from its NATO allies.

Zelensky is clearly in a difficult situation because the Ukrainian army is not ready for a counterattack and desperately needs ammunition. However, the Russian army almost immediately destroys any weapon concentration, which is starting to raise a series of questions about the success or failure of the Ukrainian counterattack.

This comes as many high-ranking military officials, including Polish Chief of the General Staff Rajmund Andrzejczak and US General Christopher G. Cavoli, acknowledged Russia’s ability to continue fighting without significant loss. Meanwhile, 40% to 60% of Ukrainian soldiers who completed their training in France in 2022 have no contact with their trainers and have likely died in battle or abandoned the battlefield.

Despite the propaganda pushed by the Kiev regime and Western media, Ukraine is clearly unable to launch its long-awaited spring offensive, and instead this is all a show to procure more weapons. The desperate situation for Ukraine coincides as Republicans and Democrats face off over the debt ceiling, proving problematic for Kiev’s quest to rearm.

House Republicans insist on spending cuts before they approve raising the nation’s debt ceiling past $31 trillion. Democrats claim Congress has already spent the money and must be allowed to repay America’s debtholders without leading to an economically disastrous default.

Negotiations are continuing to unfold to reach a debt limit deal, but the US default clock is ticking down despite it not being entirely clear when the US will officially run out of cash. When seen through this context, it is understandable why massive and reckless funding of the Ukrainian military is increasingly scrutinised.

Ahmed Adel is a Cairo-based geopolitics and political economy researcher.

May 25, 2023 Posted by | Economics, Militarism | , | Leave a comment

Iranian President: US Claims to Promote Democracy Are ‘Fake’

By Wyatt Reed – Sputnik – 24.05.2023

Claims by the US government that it pursues the promotion of democracy abroad are simply “fake,” Iranian President Ebrahim Raisi said Tuesday.

“The United States and [some] Western countries are not after democracy, but domination and plundering of other countries’ wealth,” Raisi said during an official visit to Indonesia, according to Iranian media.

“With the rise of emerging powers, the era of US domination has come to an end, said Iran’s chief executive,” media summarized.

Raisi pointed out that if Western powers are really after democracy and self-determination, they can start by guaranteeing Palestinians the right to choose their own destiny.
“Let the Yemeni and Afghan people decide for themselves,” he concluded, asking: “Why are you interfering in their affairs?”

The statements, delivered during a speech urging unity among Muslims at an Islamic center in Jakarta, came as Raisi seeks to bolster bilateral relations on his first official trip to Indonesia.

During a meeting with Indonesian House Speaker Puan Maharani, Raisi said the “expansion of ties between the Islamic Republic and Indonesia holds great promise for the progress of the two nations, the region, and the broader Muslim community,” state media reported.

“Despite the unjust threats and sanctions, the Islamic Republic of Iran has made significant progress and has achieved capabilities that have created good opportunities for the development of bilateral relations,” Raisi is quoted as saying.

On Tuesday, the two countries’ presidents and high-ranking officials met to sign off on 11 cooperation agreements.

The deals relate to “preferential trade, visa waivers, cultural exchanges, cooperation on supervising the production of pharmaceutical products, collaborations in scientific, technological, and innovative arenas, and bilateral cooperation in oil and gas sectors,” media indicated.

May 24, 2023 Posted by | Economics, Solidarity and Activism | , , | Leave a comment

Ukraine to hike tariffs on Russian oil transit to EU

RT | May 24, 2023

Ukraine will significantly raise transit fees for Russian oil running through the Druzhba pipeline on its territory to the EU on June 1, TASS reported on Tuesday, citing data from Russian oil and gas transport company Transneft.

It is expected that Kiev will increase tariffs for transporting crude to Hungary and Slovakia by €3.4 per ton to €17 ($18), bringing the total hike to 25%.

The planned increase in transit costs will be the second this year, after Kiev raised the tariff by 18.3% in January. Prior to that, the tariff was hiked twice last year.

Ukraine has cited the destruction of the country’s energy infrastructure which resulted in “a significant shortage of electricity, an increase in its costs, a shortage of fuel, and spare parts” as the main reason behind the decision.

Russian business daily Kommersant reported last month that Kiev was planning to hike transit fees for Moscow by over 50%. According to the outlet, Ukrainian pipeline operator UkrTransNafta had applied for a two-step increase in transit prices, by 25% from the current $14.6 per ton to $18.3 on June 1, and by an additional 23.5% to €21 ($22.6) on August 1.

Ukraine continues to collect payments for fuel flowing through pipelines in the country, while urging EU countries to stop purchasing Russian oil and gas.

Kiev is currently negotiating the hike directly with buyers in Slovakia, Hungary, and the Czech Republic, according to media reports.

Druzhba, one of the longest pipeline networks in the world, carries oil around 4,000km from Russia to refineries in the Czech Republic, Germany, Hungary, Poland, and Slovakia.

May 24, 2023 Posted by | Economics, Malthusian Ideology, Phony Scarcity | , , , , , | Leave a comment

Hungary Demands Explanations From Ukraine, Brussels Over Druzhba Pipeline

Sputnik – 21.05.2023

BUDAPEST – Hungary is waiting for explanations from Ukraine and European Commission President Ursula von der Leyen concerning reports on a possible stop of oil supplies from Russia to the European Union via the Druzhba pipeline, Hungarian Foreign Minister Peter Szijjarto said.

Last week, media reported that von der Leyen had offered Ukrainian President Volodymyr Zelensky to suspend the Druzhba pipeline, which transits Russian oil to Hungary among other EU countries, as part of the 11th package of sanctions against Moscow. A British business newspaper later reported that the EU was considering expanding Russian oil embargo by cutting transit through Druzhba, adding that the European Commission refused to provide any comments.

“We have received no explanations concerning this from Kiev. I think this is an issue of such importance that the European Commission’s president should personally present explanations as energy security is a question of sovereignty,” Szijjarto told a Hungarian radio station.

If someone attempts to make a secure energy supply impossible for a country, it can be considered an infringement on the country’s sovereignty, he explained.

International treaties guarantee Hungary transit oil supplies from Ukraine, the minister said, going on to accuse Ukraine and Croatia of taking advantage of conflict to raise the transit fee by five to six times.

May 22, 2023 Posted by | Economics | , , | Leave a comment

Railway of Resistance: A grand project to connect Iran, Iraq, Syria

By Mohamad Hasan Sweidan | The Cradle | May 19 2023

Sir Halford John Mackinder, one of Britain’s most prominent theorists in the field of geopolitics, discusses the significance of land connectivity between nations in his 1904 essay called The Geographical Pivot of History.

Besides introducing his notable Heartland Theory, Mackinder argued that advancements in transportation technology, such as the development of railways, have altered the balance of power in international politics by enabling a powerful state or group of states to expand its influence along transport routes.

The establishment of blocs, like the EU or BRICS, for instance, aims to enhance communication between member states. This objective has positive implications for the economy and helps reduce the risk of tensions among them.

The cost of such tensions has increased considerably, given the growing benefits and common interests achieved through strengthened ties between nations. Consequently, reinforcing connections within a specific region has a positive impact on the entire area.

Therefore, any infrastructure project between countries cannot be viewed solely from an economic standpoint; its geopolitical effects must also be highlighted.

West Asia connected by railway

In July 2018, Saeed Rasouli, head of the Islamic Republic of Iran Railways (RAI), announced the country’s intention to construct a railway line connecting the Persian Gulf to the Mediterranean Sea, the Iran-Iraq-Syria railway link. This ambitious project would run from Basra in southern Iraq to Albu Kamal on the Iraqi-Syrian border and then extend to Deir Ezzor in northeastern Syria.

Undoubtedly, this project strengthens communication between the countries of West Asia and increases the need for other powers to collaborate with this important region, which is strategically located in parts of Mackinder’s “Heartland” and Nicholas Spykman’s “Rimland” of Eurasia.

Moreover, in accordance with Mackinder’s proposition, it can be argued that this railway project holds geopolitical significance for the three involved countries – Iran, Iraq, and Syria – and for West Asia as a whole.

The concept of a railway link between Iran and Iraq emerged over a decade ago. In 2011, Iran completed the 17-kilometer Khorramshahr-Shalamjah railway, which aimed to connect Iran’s railways to the city of Basra. Subsequently, in 2014, a memorandum of understanding (MoU) was signed between Tehran and Baghdad to construct the Shalamjah-Basra line.

As per the agreement, Iran was responsible for designing and building a bridge over the Arvand River, while the Iraqi side pledged to construct a 32-kilometer railway line from the Shalamjah border to the Basra railway station within Iraqi territory.

Final destination: Syria

On 14 August, 2018, Iran announced its intention to further extend the railway from its territory to Syria, with Iraq’s participation. This move aimed to counter western sanctions and enhance economic cooperation.

The railway project would begin at the Imam Khomeini port on the Persian Gulf, located in Iran’s southwestern Khuzestan province, to the Shalamjah crossing on the Iraqi border. From there, the railway traverses through the Iraqi province of Basra, crossing Albu Kamal on the Syrian border and ending at the Mediterranean port of Latakia.

Iranian official sources stated that this railway would contribute to Syria’s reconstruction efforts, bolster the transport sector, and facilitate religious tourism between Iran, Iraq, and Syria. Iran would bear the costs of the project within its own territory, while Iraq would contribute its share up to the Syrian border.

During the visit of former Iranian President Hassan Rouhani to Iraq in March 2019, a memorandum of understanding on the project was signed between Tehran and Baghdad. However, despite the agreements, the Iraqi side has faced economic challenges and a lack of funds, resulting in a delay in the construction of the railway.

Proposed railway links between Iran, Iraq, and Syria

Three Sections

The railway project can be divided into three sections: The first section links the Imam Khomeini Port to the Shalamjah crossing on the Iraqi border. According to the Iranian Minister of Roads and Urban Development Mehrdad Bazrpash, the railway line in Iran has been completed and has reached the zero border point.

The second section will link the Shalamjah Crossing to Basra in southern Iraq, then extend to Baghdad, Anbar province, and finally, the Syrian border. The financing of this section, according to the agreement, falls under the responsibility of the Iraqi government. The commencement of this phase is expected soon.

The third section, within Syria, encompasses two routes: The northern route extends between Iraq’s al-Qaim and Syria’s Albu Kamal, then heads west towards the Syrian port of Latakia. The southern route runs from the al-Qaim crossing on the Iraqi-Syrian border to Damascus via Homs.

It should be noted that although the shortest route to Damascus is through al-Tanf, due to the presence of the illegal US occupation forces there, the longer Homs-Damascus corridor was adopted. This also ensures the passage of railways through a greater number of Syrian cities.

Economic significance

Although the rail line between Iran and Iraq will only span 32 km and cost approximately $120 million, divided equally, its significance extends far beyond its length. It will serve as the sole railway connection between the two countries and play a crucial role in improving communication throughout the wider region by linking China’s Belt and Road Initative (BRI) lines to Iraq via Iran.

Once completed, the project will enable Iraq to easily connect to Iran’s extensive railway network, which extends to Iran’s eastern border. This linkage will open pathways for Baghdad to connect with Afghanistan, Pakistan, China, the Caucasus, Central Asia, and the Far East.

Moreover, in the future, the project positions Iraq as a transit route for trade between the Arab countries of the Persian Gulf region and Central Asia, as well as Russia. Incidentally, Iran and Russia have just inked an agreement to establish a railway connecting the Iranian cities of Astara with Rasht, as part of the International North–South Transport Corridor (INSTC).

The railway line also contributes to the promotion of religious tourism among the three countries, which are home to several important Shia shrines. In September 2022, more than 21 million people from around the world, including 3 million Iranians, visited Iraq for the annual Arbaeen pilgrimage in the holy city of Karbala. This figure is likely to increase significantly with a rail link, leading to increased revenues for the Iraqi treasury.

Furthermore, the project serves as a means to bypass western sanctions and external pressures on the three countries, particularly Iran and Syria. It strengthens the independence of these nations and reduces the likelihood of foreign powers interfering in the economic relations of the project countries.

Obstacles to project implementation

Despite the signed agreements, the Tehran-Baghdad-Damascus railway project has faced mixed reactions in Iraq, leading to a lack of enthusiasm for moving forward with the rail link. Only last month, the Ministry of Transport issued a clarification regarding its rail link with Iran, stressing that the project is related to “passenger transportation only.”

Iraqi politicians have expressed concerns that the rail link with Iran could hinder their country’s Dry Canal project, which aims to connect the port of Faw in Basra province to the Turkish and Syrian borders.

They believe that the Grand Faw Port is strategically positioned as the closest point for sea cargo to Europe, potentially bringing economic benefits and employment opportunities. These concerns arise from the fear that the Imam Khomeini port in Iran could gain increased importance, diminishing the significance of the Faw Port.

But Iraqi concerns actually present an opportunity to link Iran to the Dry Canal, enhancing the strategic importance of both projects and bolstering Iraq’s position as a regional trading hub. In the near future, communication and cooperation between these neighbors will be crucial in thwarting external efforts to impede the economic interdependence of the three countries.

A promising journey

The tripartite railway link project holds immense significance as it connects these countries within a larger network, resembling the historical Silk Road that facilitated trade between the east and the west for centuries.

The railway project has the ability to initiate a major transformation in West Asia if it materializes and expands further afield to countries like Saudi Arabia, Jordan, and Lebanon.

Their participation would not only reduce tensions among regional states but also yield positive economic outcomes and bolster tourism, particularly religious tourism, and foster stronger inter-regional ties.

By connecting key players in a geopolitically strategic region, the Tehran-Baghdad-Damascus rail link has the potential to lay the foundation for a new West Asian paradigm that promotes connectivity, stability, and prosperity.

As seen by the recent Iran-Saudi and Syria-Saudi rapprochement agreements, the region is in a collaborative mood, actively seeking economic development instead of conflict. With China and Russia – two powers at the forefront of Eurasia’s biggest interconnectivity projects (BRI and INSTC) – brokering and impacting many of these diplomatic initiatives, expect railways, roads, and waterways to begin linking countries that have been at odds for decades.

May 19, 2023 Posted by | Economics | , , | Leave a comment

Second largest Swedish party wants Stockholm to prepare for ‘Swexit’

By Drago Bosnic | May 19, 2023

As if the European Union didn’t have enough major problems already, now the troubled bloc is faced with the nontrivial prospect of a “Swexit”. Namely, senior officials of the second largest political party in the Scandinavian country, the Sweden Democrats, are now openly saying that their country needs to be prepared to leave the EU. This includes the party leader himself, Per Jimmie Akesson, who stated that “only by making the necessary preparations for ‘Swexit’ can the government maximize its bargaining power in Brussels”. The right-wing Sweden Democrats have long been frustrated by the power that the unelected bureaucrats in Brussels wield over their country, so this is hardly a surprising development.

However, even Eurosceptic Swedish parties usually refrain from such open anti-EU declarations, meaning that the bloc is gradually losing its power, even in previously somewhat pro-EU member states. On May 15, Akesson authored an article along with his Sweden Democrats fellow member Charlie Weimers, who also represents his party and his country as a Member of the European Parliament (MEP). The op-ed was published by the Stockholm-based Svenska Dagbladet daily, in which the authors explicitly stated that their intention is to ensure Sweden “maximizes its influence” in the EU, specifying several legal measures the country’s government must take to accomplish the stated goals.

First, the Swedish government must insist on making constitutional changes that would make it possible to introduce what Akesson and Weimers called a “referendum lock”. According to the authors’ reasoning, this would enshrine into law the requirement of a nationwide referendum before any further national powers can be renounced by Sweden and transferred to the unelected EU bureaucrats. The goal is to ensure that any further erosion of the Scandinavian country’s sovereignty is prevented if the Swedish people choose not to comply with it. The authors cited the examples of the United Kingdom and Denmark as an inspiration, as both London and Copenhagen previously adopted similar legal mechanisms.

“Only the knowledge that every decision on the transfer of power must be submitted to the citizens would slow down the worst abuses from Brussels,” Akesson and Weimers wrote in the op-ed.

Second, the country’s government must make the necessary preparations to leave the EU, as the troubled bloc should not take Sweden’s national interests for granted. The authors insist that the government must ensure it’s ready in case such a decision is ever made by the Swedish people and to formally legitimize any threat to withdraw from the EU in future negotiations with the troubled bloc. They further added that to accomplish this, Sweden needs to remove the clause that it’s an EU member from its constitution, as well as study the example of the UK during Brexit, while also training civil servants to ensure the process runs without any major issues. As previously mentioned, Akesson and Weimers see this as instrumental for improving the country’s negotiating position.

“In order for preparedness to be credible, it’s necessary that we remove the writings in the constitution that state that Sweden is a member of the EU … In addition, we should train a cadre of civil servants with the expertise to negotiate trade agreements and other things that we have delegated to the EU and study how Brexit could have been implemented better. The better we are prepared to leave, the more we will gain in future negotiations,” the authors added.

Akesson and Weimers believe these are the bare minimum requirements that will provide a solid backstop against any possible power-grab attempts by Brussels. In addition, the leader of the Sweden Democrats also wants an investigation to be launched into how the negative aspects of the Scandinavian country’s membership in the EU can be alleviated. Among other things, this also includes the issue of immigration, a major problem that the Sweden Democrats see as crucial for the country’s future. The right-wing party is the largest member of the country’s governing bloc, providing virtually all of its confidence-and-supply votes in the Riksdag (Swedish Parliament), although the Sweden Democrats are not directly taking part in Prime Minister Ulf Kristersson’s administration.

As per the Tidö Agreement to which all coalition parties agreed, Stockholm is to adopt a more restrictive immigration policy in return for support of the Sweden Democrats, something the more liberal-leftist opposition, informally supported by Brussels, staunchly disagrees with. And while Euroscepticism is still not the view of the majority of the Swedish electorate, it has steadily been growing in recent years, particularly as the disastrous policies supported by the EU have drastically eroded the well-being of the Scandinavian country’s citizens. Although Akesson himself acknowledges the fact that the majority still doesn’t support Sweden’s withdrawal from the EU (which has been the long-standing policy of his party), he certainly wants to capitalize on the growing support it’s been getting.

Drago Bosnic is an independent geopolitical and military analyst.

May 19, 2023 Posted by | Civil Liberties, Economics | , | Leave a comment

The climate scaremongers: How to lose a lot of money – buy an electric car

By Paul Homewood | TCW Defending Freedom | May 19, 2023

New analysis shows that electric cars (EVs) are depreciating at twice the rate of petrol cars. According to the Express :

‘EVs on average will lose 51 per cent of their purchase value from 2020 to 2023, compared with just 37 per cent for petrol vehicles. This equates to a massive £15,220 loss for electric car owners, with petrol drivers seeing a decrease of £9,901.

‘The data, from ChooseMyCar.com, used a comparison of new car prices three years ago compared with their value now.

‘The higher the original purchase price of the car, the bigger the loss, with the Tesla Model S losing £25,000 in value in just three years – a 46 per cent drop. However, entry-level EVs like the Nissan Leaf are also losing a massive amount of value in such a short space of time. The Leaf’s value dropped by £13,000 – or 58 per cent – despite being one of the most popular small EVs on the market.’

There are three factors in play here. Firstly the battery life for an EV, typically around 100,000 miles, means that the car is virtually worthless once it gets to around 80,000 miles. Nobody is going to pay thousands for a car which will end up in the scrapyard a year or so later. This depreciation works its way up the chain. For instance, if you buy a petrol car with 50,000 miles on the clock, you expect to still get a reasonable trade-in three years later.

Secondly, whilst new EVs are attractive for companies and green virtue signallers thanks to government subsidies, there is very little demand for them amongst the public at large. People buy second-hand cars for a very good reason – they cannot afford new models. Consequently they cannot afford to pay a surcharge for a second-hand EV, even if they want one.

Thirdly, increasing numbers of EVs are appearing on the second-hand market, reflecting the surge in new sales in recent years. As demand has not increased, this is also forcing the price down.

The prospect of losing so much money in depreciation will inevitably make drivers think twice before buying a new one.

Meanwhile a US study has found that EVs may not reduce emissions of carbon dioxide as much as thought – indeed they may even increase emissions. According to the report:

‘the relevant and surprising emissions wildcard comes from the gargantuan, energy-hungry processes needed to make EV batteries. To match the energy stored in one pound of oil requires 15 pounds of lithium battery, which in turn entails digging up about 7,000 pounds of rock and dirt to get the minerals needed – lithium, graphite, copper, nickel, aluminum, zinc, neodymium, manganese and so on. Thus, fabricating a typical single half-ton EV battery requires mining and processing about 250 tons of materials.’

The fact that much of this mining and processing takes place in China, where energy is nearly all derived from fossil fuels, makes the carbon footprint even larger. Other studies have suggested that an EV will break even at about 60,000 miles as far as emissions are concerned. This new study implies that the situation is probably worse.

And as some of us have been warning for years, the UK and EU rush to phase out petrol/diesel cars is beginning to cause real harm to the European car industry. Whereas Europe has long had an unassailable technological lead over China in car manufacturing, EVs have introduced a level playing field which China is now exploiting through its lower energy and labour costs, along with its near–monopoly of the battery market.

As a consequence, Chinese EVs are flooding the German market. Official statistics have revealed that 28.2 per cent of the electric vehicles imported into the country during the January-March period originated from China. This figure demonstrates a substantial rise from the 7.8 per cent recorded over the same period in 2022, highlighting China’s expanding influence in the global adoption of EVs. If this was not bad enough, the data also reveals a decline of 23.9 per cent in German exports of new vehicles to China compared with the same quarter of the previous year.

Unsurprisingly, then, a major study by Allianz Trade, part of the European insurance giant, says that China’s growing share of the EV market in its home market and the EU will see the European car industry shrink by €24billion a year and associated supply chain industries shrink by an additional €21billion.

It is not only Chinese inroads into Europe which are in play here; another nail in the European motor car industry’s coffin is the fact that the enforced switch to EVs will force millions out of their cars completely, because they are simply not fit for purpose for many drivers.

Indeed it is becoming increasingly clear, with ULEZ zones, 15-minute cities and so on, that the real objective of European governments, including our own, is drastically to reduce the numbers of cars on the road, cut the mileage driven and force us all on to buses, bikes and Shanks’s pony.

They do not seem to care that they will destroy a major industry and millions of jobs as a direct consequence. – Full article

May 18, 2023 Posted by | Economics, Malthusian Ideology, Phony Scarcity | , , | Leave a comment

What If AI Is Only a Cost and Not a Profit Bonanza?

In the real-world, the costs are all we know for sure and profits remain elusive and contingent.

BY CHARLES HUGH SMITH | OF TWO MINDS | MAY 15, 2023

No one knows how the flood of AI products will play out, but we do know it’s unleashed a corporate frenzy to “get our own AI up and running.” Corporate fads are one of the least discussed but most obvious dynamics in the economy. Corporations follow fads as avidly as any other heedless consumer, rushing headlong into whatever everyone else is doing.

Globalization is a recent example. Back in the early 2000s, I sat next to corporate employees on flights to China and other Asian destinations who described the travails and costly disasters created by their employers’ mad rush to move production overseas: quality control cratered, proprietary technologies were stolen and quickly copied, costs soared rather than declined, and so on.

So let’s talk about costs of AI rather than just the benefits. Like many other heavily-hyped technologies, Large Language Model (LLM) AI is presented as stand-alone and “free.” But it’s actually not stand-alone or free: it requires an army of humans toiling away to make it functional: “We Are Grunt Workers”: The Lowly Humans Helping Run ChatGPT Make Just $15 Per Hour (Zero Hedge ).

“We are grunt workers, but there would be no AI language systems without it. You can design all the neural networks you want, you can get all the researchers involved you want, but without labelers, you have no ChatGPT. You have nothing.”

The tasks performed by this hidden army of human workers is euphemistically sanitized by corporate-speak as data enrichment work.

Then there’s the stupendous costs of all the extra computing power needed to deliver AI to the masses: For tech giants, AI like Bing and Bard poses billion-dollar search problem

What makes this form of AI pricier than conventional search is the computing power involved. Such AI depends on billions of dollars of chips, a cost that has to be spread out over their useful life of several years, analysts said. Electricity likewise adds costs and pressure to companies with carbon-footprint goals.

Corporations are counting on the magic of the Waste Is Growth / Landfill Economy to generate higher margins from whatever AI touches — don’t ask, it’s magic — but few ask how all this magic will work in a global recession where consumers will have less income and credit to buy, buy, buy.

LLM-AI is riddled with errors, and nobody can tell what’s semi-accurate, what’s misleading and what’s flat-out wrong. Despite wildly optimistic claims, locating the errors and semi-accuracies can’t be fully automated. Errors are inconsequential in an AI-generated book report, but when patients’ health is on the line, they become very consequential: I’m an ER doctor: Here’s what I found when I asked ChatGPT to diagnose my patients.

This raises fundamental questions about precisely how much work LLM-AI can perform without human oversight, and the all-too breezy claims that tens of millions of jobs will be lost as this iteration of AI automates vast swaths of human labor.

AI excels at echo-chamber reinforcement of risky or error-prone suppositions and policies: Spirals of Delusion: How AI Distorts Decision-Making and Makes Dictators More Dangerous. What’s the threshold for concern that the AI conclusions are riskier than presented? How do we calculate the possibilities that the AI conclusions are catastrophically misguided?

At what point will decision-makers realize that trusting AI is not worth the risk? If history is any guide, that realization will only arise from financial losses and bad decisions. For the rest of us, it might just be the novelty wears off as the inadequacies pile up: Noam Chomsky: The False Promise of ChatGPT.

Since all this LLM-AI is “free,” what AI-created goods and services will generate hundreds of billions of dollars in new revenues and tens of billions in new profits? The general answer is the profits will flow from firing millions of costly humans and replacing them with “nearly free” AI software.

But since all your competitors are rushing down the same frenzied path to AI, what competitive advantage will accrue to what is already a commodity (LLM-AI)? Nobody asks such questions because the euphoria of tech revolutions is so much fun.

The enthusiasm unleashed by new technologies is selectively euphoric: the benefits will prove immeasurable and the costs will soon be near-zero. But in the real-world, the costs are all we know for sure and profits remain elusive and contingent.

Exactly what gets wiped out by the meteor strike is not yet known.

May 18, 2023 Posted by | Economics | Leave a comment

‘Voter anger over Erdogan’s interference in Syria, war fallout, cost him dearly: Analyst

Press TV – May 17, 2023

A Lebanese political expert says incumbent Turkish President Recep Tayyip Erdogan failed to get the support of people in urban areas in the recent election mainly due to his interference in Syria and the fallout of his intervention in the war.

In an interview with the Press TV website, Nasser Qandil, editor-in-chief of Lebanon’s al-Binaa newspaper, noted that most of the youths in cities did not vote for Erdogan – who has been at the pinnacle of Turkish politics for more than two decades – with the slogan “20 years is enough.”

“The issue of Syrian refugees and Erdogan’s role in the Syrian war was among the reasons behind the decrease in his votes in cities,” he said.

“This is while his rival has promised to transfer refugees to their country within two years and deport them if necessary.”

Erdogan gained 49.5 percent of the vote in Sunday’s presidential race compared to 44.9 percent for his challenger, Kemal Kilicdaroglu.

As neither candidate reached the 50 percent threshold needed to win outright, a runoff vote will take place on May 28.

Erdogan took home fewer votes in 2023 than he did in the 2018 presidential contest.

Qandil said that in the second round of the election, Erdogan will face challenges such as heavy economic and social costs of Syrian refugees residing in Turkey, the growing unemployment rate, the rent surge, and the rising competition between Turkish and Syrian workers.

“With the support of Russia, Iran and Persian Gulf states, Erdogan can draw a two-year framework for the Turkish withdrawal from Syria, the return of refugees, and the dispersal of terrorists from Syria’s northeast and northwest,” he said.

“The second round may give better opportunities to Erdogan’s rival, unless he bravely plays his trump card and voices readiness to formulate a timetable for the return of Syrian refugees.”

For more than a decade, Turkey has backed militants fighting against the government of Syrian President Bashar al-Assad, and sent its own troops into the Arab country’s northern areas.

In recent months, however, the strategically-located US-led NATO member has taken steps to normalize relations with Syria.

Also in his interview, the Lebanese political analyst compared Erdogan with Kilicdaroglu, saying the incumbent president represents a political religion close to the West, while the latter acts for the Western-oriented and anti-religious secular movement.

Regarding international developments, he argued that Erdogan tends to pay attention to political and economic partnerships, but his rival wants Turkey to play a regional role without being drawn into war and expansionism.

Qandil further emphasized that Erdogan has managed to build a national economy while Kilicdaroglu, with a tendency towards the US, seeks to realize liberalism, eliminate the government’s role in the economy, and legalize homosexuality.

Unlike large cities, suburbs favored Erdogan as they supported an Islamic national identity aligned with the region and were unhappy with Europe’s racist approach towards Turkey’s EU accession bid, he said.

May 17, 2023 Posted by | Economics, Militarism | | Leave a comment

Ukraine aid — and US stockpiles — are running out. What’s next?

By Kelley Beaucar Vlahos | Responsible Statecraft | May 17, 2023

There might be a massive new Ukraine aid budget debate on the horizon, as Uncle Sam is depleting the last one at a record pace and Pentagon stockpiles are, by all accounts, running low.

According to a new report by Defense One, some $36.4 billion of the $48.9 billion allocated for Ukraine-related military aid since February 2022 has been delivered, contracted, or “otherwise committed.” There is only $11.3 billion left, and it will “run out in four months.”

The most recent allocation ($1.2 billion last week) came under the U.S. Security Assistance Initiative, which means the additional air defense systems, artillery rounds, and ammunition that have been promised will be farmed out to U.S. defense contractors and won’t be ready for shipment right away. Alternatively, aid has come via the Presidential Drawdown Authority, which sends Ukraine weapons directly from the Pentagon’s stockpiles. According to the Department of Defense, there have been 37 such drawdowns totaling over $21 billion in weapons and supplies since August 2021 when the U.S. first responded to Russian forces massing along the border with Ukraine.

But now reports indicate that American stockpiles of HIMARS, Javelins, Stinger missiles, and 155 mm artillery rounds have been shrinking since late last year, and arms manufacturers are now scrambling to keep up.

This has led the U.S. to go out on an ammo-raising spree, gathering pledges from allies and partners. Some, like South Korea, have resisted but found a way to comply. According to the Wall Street Journal, Washington has sent Ukraine more than one million rounds of 155 mm caliber ammunition, and allies and partners have contributed more on top of that. Moreover, NATO and European partners are being pressed to send whatever they have from their own stockpiles for Ukraine’s anticipated counteroffensive.

So where does this leave us? It would seem that defense contractors need additional money and capacity to backfill the stores. Without more, Ukraine with be under-supplied for both its counteroffensive and whatever follows it. Meanwhile, American stockpiles are waning, which hurts readiness.

One congressional aide “who closely tracks the issue” told POLITICO this week that the money to draw down existing U.S. stockpiles will expire in July. According to the report, which speculated when and how big the next aid package will be, “that would mean the flow of equipment could be disrupted if Kyiv has to wait an extended period for a new tranche of funding.” Would it be included in the appropriations process, or a supplemental? “I expect there will need to be a supplemental at some point,” Senator Susan Collins (R-Maine) told POLITICO. “It’s also clear that it’s taken far too long to get munitions and tanks delivered to the Ukrainians.”

But as Sam Skove points out in his Defense One report, there is the nagging issue of Republican members of Congress who have said they would not support another “blank check” to Ukraine and would expect not only greater oversight but also an articulation of a diplomatic strategy for ending the war before they would support another multi-billion-dollar package. Their position not only reflects a need for a full accounting for where the money is going, but also concern that the American economy right now cannot afford what has become the most expensive U.S.-war-that-is-not-a-U.S.-war in history.

In addition, Skove points out:

American public support for the war is also flagging. Both Democrat and Republican voters’ willingness to pay for the war has fallen, according to a recent poll by the Brookings Institution think tank. For example, the share of Democratic respondents willing to support Ukraine even if it meant higher energy prices at home dipped from 80% last October to 65% last month.

As the president ramps up for what should be a grueling 2024 re-election campaign, what happens on the battlefield in the next few months will no doubt signal how much more the U.S. will press on with such limitless assistance. There is certainly a constituency for continuing “for as long as it takes,” but it’s clear now that our stockpiles are not limitless, and neither is American patience, especially when their own economic security is at stake.

May 17, 2023 Posted by | Economics, Militarism | , | Leave a comment

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