The End is Here

Washington is Prepared to Unleash a New Financial Terror for the Whole World

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By Henry Johnston, an RT editor. He worked for over a decade in finance and is a FINRA Series 7 and Series 24 license holder.

The US Treasury market, essential to the functioning of the global financial system, doesn’t seem to be working

There is a mantra that has essentially become axiomatic: the US Treasury market is the deepest and most liquid in the world. And a corollary to that is: US Treasury bonds are ‘risk free.’

These once-taken-for-granted pillars of eternal truth are looking awfully shaky. The tectonic plates of the US-led global financial system have been rustling ever more frequently in recent years but the quivers are now coming more frequently. At the heart of this increasingly brittle and dysfunctional system is the US Treasury market.

Everyone has noticed the sharp rise in yields in recent months. In early October, the US 10y hit a yield of nearly 5%, the highest level in 16 years. This is, of course, entirely understandable: rate hikes by the Federal Reserve have pushed bond yields higher. But what we have been seeing is more than a manifestation of the vicissitudes of finicky markets.

As foreign buyers of US Treasuries dry up and the US government continues to run astronomical deficits at a time of high interest rates, the Treasury market is coming under increasing strain and showing ever more signs of dysfunction. The implications of this are hard to overstate.

Where have all the foreigners gone?

There was a time when Treasuries were essentially the US’ biggest export and served as the mechanism for the sort of macro-level vendor financing scheme under which the US imported goods and energy from the rest of the world in exchange for dollars – and these dollars were dutifully recycled back into Treasuries to finance the US deficit.

When deficits began to surge in the 1980s under President Ronald Reagan, many wondered how they would be financed. But starting in the middle of that decade, foreign central banks – primarily the Japanese – swooped in and started scooping up larger amounts of US Treasuries. Over 1986-2002, foreign central banks bought 28-30% of all aggregate US Treasury bonds issued; from 2002-2014, the People’s Bank of China (PBOC) had become the main buyer and the foreign purchases figure reached a whopping 53%.

Since 2014, that figure has been negative 4%, meaning foreign central banks have stopped buying on a net basis, all while US deficits have continued to grow. There are many reasons for that shift. A lot of attention has been given to the first batch of sanctions on Russia in 2014 and Moscow’s subsequently embarking on the path of dollar divestment – a process that Beijing was watching closely. But there was also a deeper realization across the globe that the US no longer would or could manage the dollar in the best interest of the world.

When the Fed unleashed its unprecedented quantitative easing program in March 2009, Chair Ben Bernanke admitted that it had “crossed the Rubicon.” Five days after the program was announced, Zhou Xiaochuan, the governor of the PBoC, released a white paper with the not very subtle title ‘Reform the International Monetary System’ calling for a remaking of the post-World War II framework. By 2014, having watched the Fed quadruple its balance sheet to some $4.5 trillion, China made the strategic decision to stop adding to its Treasury portfolio. The cavalier nature in which the Americans were printing money for purely domestic reasons – thus implicitly devaluing the existing debt of which China held a lot – surely did not sit well in Beijing.

Chinese purchases of US Treasuries peaked in 2014 and have been declining since © Source: Ycharts.com

If 2014 marked something of a crossroads for foreign demand for Treasuries, it was also when – and this certainly shouldn’t be seen as a coincidence – the US adopted a rule forcing large banks to hold a certain level of high-quality liquid assets. A large portion of these would of course be Treasuries. Ostensibly, this was done to ensure systemically important banks had sufficient liquidity in a short-term stress scenario. But it had the effect of forcing banks to buy more Treasuries – just as major foreign central banks were shying away.

The first inkling of a liquidity problem

Incidentally, it was also 2014 when problems with Treasury market liquidity first began to draw scrutiny. In October of that year, the market convulsed with no apparent trigger in what ended up being dismissed as merely a “flash rally.”

There have been several other significant convulsions along the way – the sudden repo crisis in September 2019, the Treasury market seizing up in March 2022, and the UK Gilt market breaking in the fall of 2022, which reverberated in the Treasury market, but we’ll fast-forward to 2022.

The nastiest bout of inflation in four decades had forced the Fed to sharply hike rates. The higher interest rates pushed bond yields up, and since bond prices move inversely with yields, US Treasuries took losses. Many US banks became deeply underwater on their Treasury positions, a fact that played no small role in the collapse of Silicon Valley Bank earlier this year. There were many specific reasons why that particular bank collapsed – practically non-existent risk management being one of them – but what that episode revealed is that many banks were sitting on large unrealized losses in their Treasury positions.

As depositors demanded their money back – both for fear of bank failures and in order to place their money in higher-yielding money market funds – banks would have had to sell their underwater Treasuries into a rapidly deteriorating market, where bids would have been few.

However, undoubtedly sensing the fragility of the entire system and not wanting a full-blown meltdown on their watch, Fed Chair Jerome Powell and colleagues decided to act – and they acted decisively.

Rolling out another acronym

But what exactly did they do? They instituted another one of those acronym bailout programs, this one called the Bank Term Funding Program (BTFP). At a time when the Fed was attempting to tighten financial conditions to fight inflation, this had the effect of adding liquidity to the market, thus proving (as if there had been any doubt) that the Fed’s macho rhetoric about fighting inflation extends only to the point where market dysfunction begins.

The BTFP allowed banks to access one-year loans from the Fed by posting bonds. There’s nothing unusual about that – pretty standard stuff. But it’s the pricing that raises eyebrows. Instead of following normal practice and forcing those bonds to be marked to market – meaning using the market value rather than the nominal value – the collateral can be posted at par, regardless of where it is trading. So a bond that, say, has a nominal value of $100 but is currently trading at $70 can be posted to the Fed in exchange for a $100 loan.

But the story is actually a lot more interesting than that. As analyst Luke Gromen pointed out, when you peer below the surface at the BTFP facility, you realize that it is basically tantamount to soft yield curve control for banks – at least for those with US branches. In other words, it was as much of a bailout of the Treasury market as a bailout of the banks.

It certainly was a bailout for banks, which were quickly being wrongfooted by a double-whammy of market moves against them and deposit outflows, and needed to cover their substantial paper losses. But the deeper implication was that this served as something of a foreshadowing of yield curve control – an unorthodox policy tool employed by central banks to target with purchases a specific interest rate level. One thing should be made explicit: yield curve control is where free financial markets go to die.

Although the Fed wasn’t targeting a specific interest rate but was rather seeking to control the flow of credit, the policy tool had the effect of essentially capping yields below the current market price – and that is an important harbinger of where things are headed.

The collapse of Silicon Valley Bank is now old news and the powers that be have provided assurances that the banking crisis is long over. But the BTFP figures seem to say otherwise: as of June 28 (the most recent data I could find), the takeup of the program by banks had reached over $100 billion – meaning that the bailouts have still been happening many months later.

The BTFP is supposed to run for just one year, but there is already talk that it will become a permanent part of the financial landscape. As the old saying goes, there is nothing more permanent than a temporary government program.

© Source: Ycharts.com

The Treasury announces buybacks….wait buybacks?

Meanwhile, more recently another firm step in the direction of yield curve control was taken when the US Treasury announced that it would be launching a buyback program next year. Somewhere along the way in the slow descent of the US Treasury market into illiquidity and dysfunction we were bound to see direct Treasury purchases of debt that nobody in the market wants to buy – and now we have it.

This tool hasn’t been trotted out since the year 2000, when it was done under very different circumstances (the government was running a surplus and was issuing Treasuries to maintain market access, with the proceeds from the new bonds used to repurchase the old ones).

Now, however, this is being done, according to comments by one Treasury Department official at a forum in New York in September to “[help] to make the Treasury market more liquid and resilient” and in a bit of cheery party-line speak, “to ensure that the Treasury market remains the deepest and most liquid market in the world.” Statements such as these made in a casual business-as-usual way and presented as a small maintenance program that will not be used to combat a potential crisis belie just how much this represents another “crossing of the Rubicon.”

If you unpack this, it means that the Treasury is preparing for the possibility that there won’t be enough buyers for the avalanche of issuance that will be hitting the market in the coming quarters. By announcing a buyback program, the Treasury is essentially laying the groundwork to become the ‘buyer of last resort’ without stating so explicitly, which would of course spook the markets. It is also pretty much exactly what Japan has been doing for the last decade or so – essentially nationalizing the debt that nobody wants.

Legendary analyst Zoltan Pozsar has described what we’re seeing as the Fed and Treasury “building scaffolding around the Treasury market” to deal with issues of illiquidity and the lack of a marginal buyer. The question that can’t be asked but needs to be asked is: why is all this necessary in the deepest, safest and most liquid market in the world?

The government is spending like there’s no tomorrow

Meanwhile, this year the US deficit is expected to hit $2 trillion, representing an astounding 8.5% of GDP and there is no sign that it is slowing down. This is a practically unheard of figure during a time of economic growth. Unsurprisingly, Treasury issuance is slated to go through the roof in the coming quarters. In addition to the separate question of how the US can afford the suddenly massively higher interest payments on this debt – now estimated to reach $1 trillion on an annualized basis this year – there is the issue of the acute lack of marginal buyers of this debt.

The 2020 and 2021 deficits were abnormally high due to pandemic-related stimulus. © Source: Ycharts.com

The Fed is engaged in quantitative tightening, meaning it is allowing bonds to mature and run off its balance sheet rather than roll them over. US commercial banks have little capacity or appetite for more Treasury purchases. They are in fact trying to take duration off their balance sheets and have been reducing Treasury holdings. JPMorgan CEO Jamie Dimon recently warned that rates could go higher still, so he’s clearly not looking to plough into Treasuries.

The US has for a long time steadfastly refused to believe it had a fiscal problem and, to be fair, in the low-interest rate era and with foreign demand for US debt ever present, perhaps it didn’t. The US was perhaps a debt addict, but a functional one.

But running huge deficits in a time of rising interest rates is a combustible mix. In some ways this harkens back to the 1940s, also a time of high deficits and rising rates due to the war – and also when yield curve control was trotted out. But really the two cases are a world apart. The still fundamentally healthy and enormously productive US economy of the post-war period got back on the proper footing quickly and such unorthodox policies were abandoned. The current highly financialized, deeply indebted US economy is a shadow of its former self, but US policymakers don’t seem to have adjusted.

Some form of outright yield curve control is coming and probably sooner rather than later. It is already creeping into the realm of mainstream speculation. But this time it will hardly resemble a temporary war-time policy; rather it will be a move of desperation far down the road toward outright dysfunction of a market at the very heart of the global financial system.

And this will spawn a banquet of consequences. A breakdown in the functioning of the Treasury market will trigger the widespread epiphany that the US has turned itself into something akin to the terrorist-rigged bus set to explode if it slows to below 50 mph in the 1994 Keanu Reeves film ‘Speed’. Politically unable to backtrack on its entitlements and military commitments but unable to afford them, it will run into the fiscal wall of excessive interest expenses and insufficient demand for its debt.

The Fed has become uncannily adept at patching up markets and, to quote Luke Gromen, employing its standard technique of “extend and pretend… then inflate” and it may continue to find ever more ingenious ways to keep the tottering edifice upright for some time. But the rot at the very heart of the global financial system is becoming increasingly apparent for those with the eyes to see it.

Western Hegemony's Collapse

Russian Political Elites on their U.S. Counterparts

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by Gilbert Doctorow via Gilbert Doctorow

The 19th century American showman P.T. Barnum is best known for his aphorism “There’s a sucker born every minute.” This is precisely the kind of cynical card cheat who epitomizes America’s political establishment today in the view of Russian expert observers and legislators appearing on the widely watched talk show Evening with Vladimir Solovyov. They have in their crosshairs not just what they call “the Collective Biden,” meaning the senile, disoriented fool who has his finger on the red button plus the Deep State that writes his speeches and steers him to and from his speaking engagements. It also takes in scoundrels in the U.S. Senate like Chuck Schumer, my classmate (Harvard ’67) Mike Blumenthal and the ever notorious Lindsey Graham. Their sound bites are very frequently put up on the screen for the audience to better understand what Russia’s erstwhile “partners” abroad are saying.

Those of you who had experience watching RT (Russia Today) have never been exposed to this kind of trenchant analysis and utter contempt for the American political classes. This goes much farther than what you might imagine when Western mainstream media concede that ‘there is little trust between the sides.’

If we dig a bit deeper, the contempt of the Russian political commentators, many of whom hold advanced academic degrees, is built on their conviction that American politicians, like their European Union counterparts today, are poorly educated if not simply ignoramuses. By a curious irony of fate, the Americans appear to Russian sophisticates to be the conniving rubes that Americans once saw in the Soviet leaders of Khrushchev’s time in power.

We all may have had a laugh at the expense of the utterly stupid German Foreign Minister Annalena Baerbock who said several months ago that “Vladimir Putin must change his course by 360 degrees.” But then in Moscow the biggest laughs have come at the expense of the seemingly well-turned out, Yale-educated Jake Sullivan, National Security Adviser to the President, and his never to be lived down quote from a couple of weeks before the 7 October Hamas attack on Israel that “the Middle East is quieter now than it has been in two decades.”

However, these Russian panelists are laughing through their tears. The value of an Ivy League education, once considered the nec plus ultra by ambitious oligarch parents in Moscow, has been shown to be nil. More to the point, they see no alternative to preparedness for the worst atrocities to be unleashed by the United States against Russia’s allies, like Iran, at any moment. That is the unsubtle hint they read into the stationing of a nuclear-armed U.S. submarine in the Red Sea at present. They foresee the outbreak of direct warfare with Washington at any moment. Hence, the Russians are determined to further increase military expenditures and to boost the military industrial complex several times over in the immediate future. To put things in the perspective of Lev Tolstoy in his Epilogue to War and Peace, Vladimir Putin is the instrument of Russian elites as much or more than he is their pathfinder.

I mention all of the foregoing to help readers appreciate how the Russian political elites and the Kremlin look at the suggestions now surfacing in U.S. and Western media that the Russia-Ukraine war has reached an impasse and that it is time for the sides to negotiate a peace.

The Russians take this to mean that the United States has shifted its priorities to the conflict in the Middle East and to preparing for the coming armed confrontation with China. Kiev can now be let go without calling undue attention to America’s unreliability as defense guarantor, because global media are focused on the Hamas-Israel fight.

However, from the standpoint of Russian elites the war in Ukraine has tilted decisively in Moscow’s favor now that Kiev has largely exhausted its human and material reserves for waging war. These elites have no interest whatsoever in a Korea-like solution, in a ‘frozen conflict’ that could be warmed up again at some time in the future when Washington so decides. No, they will not sit down at a negotiating table until and unless Kiev capitulates and accepts what amounts to neutrality and removal of the neo-Nazi directed Zelensky regime. Moscow is ready to fight on ‘as long as it takes’ to achieve its objectives.

The End is Here

Endgame: Interest on US Debt Above $1 Trillion, First Ever

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via Zero Hedge

Back in July, when we last looked at the unprecedented horror show that is the US budget deficit – and concluded correctly, long before the Q2 Quarterly Refunding Announcement, that debt issuance was about to explode and yields would soar – we warned that the debt Rubicon was about to be crossed and “US Debt Interest Payments Are About To Hit $1 Trillion.”

Fast forward to today when the endgame has apparently arrived: according to the Treasury’s own calculations, total interest is now over $1 trillion (or $1.027 trillion to be precise).

We calculated this by multiplying the average interest rate on marketable US Treasury debt (which according to the Treasury is 3.096% as of Oct 31) by the $26.003 trillion in marketable US debt (as of Oct 31) which nets off to $805 billion, and adding to this non-marketable debt interest (which as of Oct 31 was 2.884% multiplied by the amount of non-marketable debt which is $7.696 trillion) and which in turn is an additional $222 billion in interest. Add across and you get $1.027 trillion.

Naturally, this calculation of estimated real-time interest costs – which is entirely based on Treasury data – is different than what the Treasury actually paid. Interest costs in the fiscal year that ended Sept. 30 ultimately totaled $879.3 billion, up from $717.6 billion the previous year and about 14% of total outlays, however that number is merely lagging what the pro forma print currently is, and will inevitably catch up to it, and then lag on the other side even as pro forma interest payment start dropping (once interest rates plunge after the next QE/YCC is launched).

Fans of exponential functions, we got you covered: the unprecedented surge in both interest rates and interest expense in the past two years means that total US interest has doubled since April 2022 and that’s with the inherent lag in interest catch up – as a reminder, the vast majority of 5, 7, 10 and 30 year debt is still locked in at much lower interest rates, and as such, rates will continue to rise as all of the existing debt rolls into much higher rates over the coming years.

Looking ahead, the staggering surge in both yields and total long-term Treasuries in recent months confirms the government will continue to face an escalating interest bill. As a reminder, we were the first to point out that it took just one month after US federal debt first rose above $33 trillion for the first time, to spike by another $600 billion…

… bringing the total to $33.6 trillion, more than the combined GDPs of China, Japan, Germany, and India.

And just to show you how terrifying it is about to get, BofA’s Michael Hartnett notes that “the CBO projects that US government debt will rise by $20 trillion next 10 years, or $5.2 billion every day or $218 million every hour!”

Some more context: total world debt (government, corporate & household) hit a record $227tn in Q1’23, double from $110tn in 2007 & $0.5tn in 1952.

And then there was this warning from the TBAC which very tongue-in-cheek said that “Interest rate expense, as % of GDP, is likely to rise over the medium term”, and also over every other term.

As Bloomberg’s Mark Cudmore concludes, the worsening metrics may “reignite debate about the US fiscal path amid heavy borrowing from Washington. That dynamic has already helped drive up bond yields, threatened the return of the so-called bond vigilantes and led Fitch Ratings to downgrade US government debt in August.”

An even more damning conclusion comes from Hartnett, Fiscal excess in the 2020s is adding to already high levels of government debt; until policy makers address the trajectory of government debt, investors are likely to worry that asset-bearish solutions to indebtedness such as inflation, default, currency debasement, are set to be pursued; but as likely central banks may simply bail out governments in coming years via QE & the introduction of YCC (policies that would be v US dollar negative).

Anglozionism

Address by UN Secretary–General Ban Ki-Moon on the 60th Anniversary of Israel’s Admission

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UNGA Resolution 273—May 11, 1949
Admission of Israel to membership in the United Nations
Having received the report of the Security Council on the application of Israel for membership in the United Nations,

Noting that, in the judgment of the Security Council, Israel is a peace-loving State and is able and willing to carry out the obligations contained in the Charter,

Noting that the Security Council has recommended to the General Assembly that it admit Israel to membership in the United Nations,
Noting furthermore the declaration by the State of Israel that it “unreservedly accepts the obligations of the United Nations Charter and undertakes to honour them from the day when it becomes a Member of the United Nations”
Recalling its resolutions of 29 November 1947
[UNGA Resolution 181] and 11 December 1948
[UNGA Resolution 194] and taking note of the declarations and explanations made by the representative of the Government of Israel before the ad hoc Political Committee in respect of the implementation of the said resolutions.
The General Assembly,
Acting in discharge of its functions under Article 4 of the Charter and rule 125 of its rules of procedure,
1. Decides that Israel is a peace-loving State which accepts the obligations contained in the Charter and is able and willing to carry out those obligations;
2. Decides to admit Israel to membership in the United Nations.

Download pdf transcript

For 60 years Israel has violated its terms of admission, and for 60 years the UN has done nothing about it. It has watched as Israel heaped misery upon misery on Palestine, and violated international law with impunity.

After “Operation Cast Lead,” no person, no country, no democracy can look at Israel without thinking of the inhuman slaughter and destruction committed by the axis powers in World War II, though one could have said the same about numerous past massacres. What atrocities might the world have been spared if the UN had refused to admit Israel 60 years ago?

Of course, the immediate post-war world was a different time. The world had just witnessed the horrors of Hitler’s racist excesses, and collective Western guilt for the Holocaust dictated attitudes toward the idea of Jewish state. Even the UN could not withstand the moral pressure.

On Nov. 29, 1947, it passed General Assembly Resolution 181, “The Partition Plan,” to carve a Jewish state out of Arab Palestine. However, it was never ratified by the Security Council, and so does not exist in law, which means the UN played no role in the creation of Israel. Nevertheless, “The Partition Plan” was utterly illegal and a violation of the UN Charter, because the UN had no right or power to take land from one people and give it to another.

If it hopes to play a meaningful role in the 21st century, the UN must do more than simply promise to enact reforms. It must search deep within its soul to redress the fundamental violations of its founding principles, which have long since ceased to have any force. That recommitment must begin now, for it was 60 years ago today, May 11, 1949, that Israel became a member of the UN. The UN cannot hope to achieve any measure of peace or justice as long as it condones war crimes, which it does every day that Israel is allowed to flout its terms of admission.

“For 60 years Israel has violated its terms of admission, and for 60 years the UN has done nothing about it. It has watched as Israel heaped misery upon misery on Palestine, and violated international law with impunity.”—Ban Ki-Moon

The past cannot be undone, but the future can change. As its newly elected Secretary-General, I promise that the UN will no longer be a passive enabler of genocide. Therefore, I will ask the General Assembly to meet in special session at the earliest possible time to strip Israel of its membership.

Ordinarily, a motion to expel a member nation would have to come at the recommendation of the Security Council, but this is not an ordinary motion. Because Israel is in violation of its terms of admission, it is not a member in good standing, so the UN has every right to declare General Assembly Resolution 273 null and void. Since Israel’s membership depends on adherence to that resolution, its expulsion is automatic.

Essentially, the unavoidable, lamentable truth of the last six decades is that the UN has been a moral and political failure because it has refused to enforce its own rules and defend the Charter. Nothing the UN does can have any value as long as this illegitimate member occupies a place in the General Assembly. I want the UN to have value.

I count on your support.

Thank you very much.

via http://www.gregfelton.com/int_politics/2009_05_11.htm

Original Thinking

What International Order?

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by Thierry Meyssan via Voltaire Net


We reproduce the text of Thierry Meyssan’s speech in Magdeburg (Germany), at the conference organized by the magazine Compact, “Amitié avec la Russie” , on November 4, 2023. In it, he explains what, in his view, constitutes the fundamental difference between the two conceptions of the world order now clashing from the Donbass to Gaza: that of the Western bloc and that to which the rest of the world refers. The question is not whether this order should be dominated by one power (unipolar) or by a group of powers (multipolar), but whether or not it should respect the sovereignty of each. He draws on the history of international law, as conceived by Tsar Nicholas II and Nobel Peace Prize winner Léon Bourgeois.

We’ve seen NATO’s crimes, but why affirm our friendship with Russia? Isn’t there a risk of Russia behaving tomorrow like NATO does today? Are we not substituting one form of slavery for another?

To answer this question, I would draw on my successive experience as advisor to five heads of state. Everywhere, Russian diplomats have told me: you’re on the wrong track: you’re committed to putting out one fire here, while another has started elsewhere. The problem is deeper and broader.

I would therefore like to describe the difference between a world order based on rules and one based on international law. This is not a linear story, but a struggle between two worldviews – a struggle we must continue.

In the 17th century, the Treaties of Westphalia established the principle of state sovereignty. Each is equal to the others, and no one may interfere in the internal affairs of others. For centuries, these treaties governed relations between the present-day Länder, as well as between European states. They were reaffirmed by the Congress of Vienna in 1815, when Napoleon I was defeated.

On the eve of the First World War, Tsar Nicholas II convened two International Peace Conferences (1899 and 1907) in The Hague to “seek the most effective means of assuring all peoples the benefits of a real and lasting peace”. Together with Pope Benedict XV, he prepared them on the basis of canon law, not the law of the strongest. After two months of deliberation, 27 states signed the final proceedings. The president of the French Radical [Republican] Party, Léon Bourgeois, presented his thoughts [1] on the mutual dependence of states and their interest in uniting despite their rivalries.

At the instigation of Léon Bourgeois, the Conference created an International Court of Arbitration to settle disputes by legal means rather than by war. According to Bourgeois, states would only agree to disarm when they had other guarantees of security.

The final text instituted the notion of “the duty of States to avoid war”… by resorting to arbitration.

At the instigation of one of the Tsar’s ministers, Frédéric Fromhold de Martens, the Conference agreed that, during armed conflict, populations and belligerents must remain under the protection of the principles resulting from “the usages established between civilized nations, the laws of humanity and the dictates of public conscience”. In short, the signatories undertook to stop behaving like barbarians.

This system only works between civilized states that honour their signatures and are accountable to public opinion. It failed, in 1914, because states had lost their sovereignty by entering into defense treaties that required them to go to war automatically in certain circumstances that they could not assess for themselves.

Léon Bourgeois’s ideas gained ground, but met with opposition, including from his rival in Georges Clemenceau’s Radical Party. Clemenceau did not believe that public opinion could prevent wars. Nor did the Anglo-Saxons, U.S. President Woodrow Wilson and British Prime Minister Lloyd George. At the end of the First World War, these three men substituted the might of the victors for the fledgling international law. They shared the world and the remnants of the Austro-Hungarian, German and Ottoman empires. They blamed Germany alone for the massacres, denying their own. They imposed disarmament without guarantees. To prevent the emergence of a rival to the British Empire in Europe, the Anglo-Saxons began to pit Germany against the USSR, and secured France’s silence by assuring her that she could plunder the defeated Second Reich. In a way, as the first President of the Federal Republic, Theodor Heuss, put it, they organized the conditions for the development of Nazism.

As they had agreed among themselves, the three men reshaped the world in their own image (Wilson’s 14 points, the Sykes-Picot agreements, the Balfour Declaration). They created the Jewish homeland of Palestine, dissected Africa and Asia, and tried to reduce Turkey to its minimum size. They organized all the current disorders in the Middle East.

Yet it was on the basis of the ideas of the late Nicholas II and Léon Bourgeois that the League of Nations (League) was established after the First World War, without the participation of the United States, which thus officially rejected any idea of International Law. However, the League also failed. Not because the United States refused to join, as some say. That was their right. But firstly, because it was incapable of re-establishing strict equality between states, as the United Kingdom was opposed to considering colonized peoples as equals. Secondly, it did not have a common army. And finally, because the Nazis massacred their opponents, destroyed German public opinion, violated the Berlin signature and did not hesitate to behave like barbarians.

As early as the Atlantic Charter in 1942, the new U.S. President, Franklin Roosevelt, and the new British Prime Minister, Winston Churchill, set themselves the common goal of establishing a world government at the end of the conflict. The Anglo-Saxons, who imagined they could rule the world, did not, however, agree amongst themselves on how to go about it. Washington did not wish London to meddle in its affairs in Latin America, while London had no intention of sharing the hegemony of the Empire over which “the sun never set”. During the war, the Anglo-Saxons signed numerous treaties with Allied governments, including those in exile, which they hosted in London.
Incidentally, the Anglo-Saxons failed to defeat the Third Reich, and it was the Soviets who overthrew it and took Berlin. Joseph Stalin, First Secretary of the CPSU, was opposed to the idea of a world government, and an Anglo-Saxon one at that. All he wanted was an organization capable of preventing future conflicts. In any case, it was Russian conceptions that gave birth to the system: that of the United Nations Charter, at the San Francisco conference.

In the spirit of the Hague Conferences, all UN member states are equal. The Organization includes an internal tribunal, the International Court of Justice, responsible for settling disputes between its members. However, in the light of previous experience, the five victorious powers have a permanent seat on the Security Council, with a veto. Given that there was no trust between them (the Anglo-Saxons had planned to continue the war with the remaining German troops against the USSR) and that it was unknown how the General Assembly would behave, the various victors wanted to ensure that the UN would not turn against them (the USA had committed appalling war crimes by dropping two atomic bombs against civilians, while Japan… was preparing its surrender to the Soviets). But the great powers did not understand the veto in the same way. For some, it was a right to censor the decisions of others; for others, it was an obligation to take decisions unanimously.

Except that, right from the start, the Anglo-Saxons didn’t play ball: an Israeli state declared itself (May 14, 1948) before its borders had been agreed, and the UN Secretary-General’s special envoy to oversee the creation of a Palestinian state, Count Folke Bernadotte, was assassinated by Jewish supremacists under the command of Yitzhak Shamir. Moreover, the seat on the Security Council allocated to China, in the context of the end of the Chinese civil war, was given to Chiang Kai-shek’s Kuomintang and not to Beijing. The Anglo-Saxons proclaimed the independence of their Korean zone of occupation as the “Republic of Korea” (August 15, 1948), created Nato (April 4, 1949), and then proclaimed the independence of their German zone of occupation as “Federal Germany” (May 23, 1949).

The USSR considered itself fooled, and slammed the door (“empty seat” policy). The Georgian Joseph Stalin had mistakenly believed that the veto was not a right of censure, but a condition of unanimity of the victors. He thought he could block the organization by boycotting it.

The Anglo-Saxons interpreted the text of the Charter they had drafted and took advantage of the Soviets’ absence to place “blue helmets” on the heads of their soldiers and wage war on the North Koreans (June 25, 1950) in the “name of the international community” (sic). Finally, on August 1, 1950, the Soviets returned to the UN after an absence of six and a half months.

The North Atlantic Treaty may be legal but NATO’s rules of procedure violate the UN Charter. It places the Allied armies under Anglo-Saxon command. Its Commander-in-Chief, the SACEUR, is necessarily an American officer. According to its first Secretary General, Lord Ismay, the Alliance’s real aim was neither to preserve the peace nor to fight the Soviets, but to “keep the Americans in, the Russians out and the Germans under control” [2]. In short, it was the armed wing of the world government that Roosevelt and Churchill wanted to create. It was in pursuit of this goal that President Joe Biden ordered the sabotage of the Nord Stream gas pipeline linking Russia and Germany.

At the Liberation, MI6 and OPC (the future CIA) secretly set up a stay-behind network in Germany. They placed thousands of Nazi leaders in this network, helping them to escape justice. Klaus Barbie, who tortured French Resistance coordinator Jean Moulin, became the first commander of this shadow army. The network was then incorporated into NATO, where it was greatly reduced. It was then used by the Anglo-Saxons to interfere in the political life of their supposed allies, who were in reality their vassals.

Joseph Goebbels’ former collaborators created the Volksbund für Frieden und Freiheit. With the help of the USA, they persecuted German communists. Later, NATO’s stay-behind agents were able to manipulate the extreme left to make it detestable. A case in point is the Bader gang. But as these men were arrested, the stay-behind came and murdered them in prison, before they could stand trial and speak out. In 1992, Denmark spied on Chancellor Angela Merkel on NATO instructions, just as in 2022, Norway, another NATO member, helped the USA sabotage Nord Stream…

Returning to international law, things gradually returned to normal, until in 1968, during the Prague Spring, the Ukrainian Leonid Brezhnev did in Central Europe what the Anglo-Saxons were doing everywhere else: he forbade the USSR’s allies to choose an economic model other than their own.

With the dissolution of the USSR, things began to get worse. The US Undersecretary of Defense, Paul Wolfowitz, drew up a doctrine according to which, to remain masters of the world, the United States had to do everything in its power to prevent the emergence of a new rival, starting with the European Union. It was in application of this idea that Secretary of State James Baker imposed the enlargement of the European Union to include all the former states of the Warsaw Pact and the USSR. By expanding in this way, the Union deprived itself of the possibility of becoming a political entity. It was again in application of this doctrine that the Maastricht Treaty placed the EU under NATO’s protection. And it is still in application of this doctrine that Germany and France are paying for and arming the Ukraine.

Then came Czech-US professor Josef Korbel. He proposed that the Anglo-Saxons should dominate the world by rewriting international treaties. All that was needed, he argued, was to substitute Anglo-Saxon law, based on custom, for the rationality of Roman law. In this way, in the long term, all treaties would give the advantage to the dominant powers: the United States and the United Kingdom, linked by a “special relationship”, in the words of Winston Churchill. Professor Korbel’s daughter, Democrat Madeleine Albright, became Ambassador to the UN, then Secretary of State. Then, when the White House passed into Republican hands, Professor Korbel’s adopted daughter, Condoleeza Rice, succeeded her as National Security Advisor, then Secretary of State. For two decades, the two “sisters” [3]patiently rewrote the main international texts, ostensibly to modernize them, but in fact to change their spirit.

Today, international institutions operate according to Anglo-Saxon rules, based on previous violations of international law. This law is not written in any code, since it is an interpretation of custom by the dominant power. Every day, we substitute unjust rules for International Law and violate our own signature.

For example:

• When the Baltic States were created in 1990, they made a written commitment to preserve the monuments to the sacrifices of the Red Army. The destruction of these monuments is therefore a violation of their own signature.
• Finland made a written commitment in 1947 to remain neutral. Joining NATO is therefore a violation of its own signature.
• On October 25, 1971, the United Nations adopted Resolution 2758 recognizing Beijing, not Taiwan, as the sole legitimate representative of China. As a result, Chiang Kai-shek’s government was expelled from the Security Council and replaced by that of Mao Zedong. Consequently, China’s recent naval manoeuvres in the Taiwan Strait do not constitute aggression against a sovereign state, but the free deployment of its forces in its own territorial waters.
• The Minsk agreements were intended to protect Russian-speaking Ukrainians from harassment by “integral nationalists”. France and Germany vouched for them before the Security Council. But, as Angela Merkel and François Hollande have said, neither of them had any intention of implementing them. Their signatures are worthless. If it had been otherwise, there would never have been a war in Ukraine.

The perversion of International Law reached a peak with the appointment, in 2012, of the American Jeffrey Feltman as Director of Political Affairs. From his office in New York, he oversaw the Western war on Syria. Using the institutions of peace to wage war [4].

Until the United States threatened it by stockpiling weapons on its border, the Russian Federation respected all the commitments it had signed or that the Soviet Union had signed. The Nuclear Non-Proliferation Treaty (NPT) obliges the nuclear powers not to spread their nuclear arsenals around the world. The United States, in violation of its signature, has been stockpiling atomic bombs in five vassal countries for decades. They train allied soldiers in the handling of these weapons at the Kleine Brogel base in Belgium, the Büchel base here in Germany (Rhineland-Palatinate), the Aviano and Ghedi bases in Italy, the Volkel base in the Netherlands and the Incirlik base in Turkey.

Then they say, by virtue of their coups de force, that this has become the custom.
Now, the Russian Federation, considering itself under siege after a US nuclear bomber flew over the Gulf of Finland, has also played with the Non-Proliferation Treaty and installed atomic bombs on the territory of Belarus.Of course, Belarus is not Cuba. Placing Russian nuclear bombs there changes nothing.It’s just a message sent to Washington: if you want to re-establish the Law of the Strongest, we can accept that too, except that, from now on, we’re the strongest.Note that Russia has not violated the letter of the Treaty, as it is not training the Belarusian military in these weapons, but it has taken liberties with the spirit of the Treaty.

As Léon Bourgeois explained in the last century, to be effective and lasting, disarmament treaties must be based on legal guarantees. It is therefore urgent to return to international law, failing which we will plunge headlong into a devastating war.

Our honour and our interest lie in re-establishing international law. It’s a fragile construction. If we want to avoid war, we must re-establish it, and we can be sure that Russia thinks as we do, that it will not violate it.

Or we can support NATO, which brought its 31 defense ministers together in Brussels on October 11 to listen to their Israeli counterpart announce, via videoconference, that he was going to raze Gaza to the ground. And none of our ministers, including Germany’s Boris Pistorius, dared to speak out against the planning of this mass crime against civilians. The honor of the German people has already been betrayed by the Nazis, who ultimately sacrificed you. Don’t let yourselves be betrayed again, this time by the Social Democratic Party and the Greens.

We don’t have to choose between two overlords, but to protect peace, from the Donbass to Gaza, and, ultimately, to defend International Law.

[1] “Solidarism” became the dominant ideology of the French Third Republic.
[2] Note, “the Russians outside”, not the Soviets.
[3] Condoleeezza Rice was never legally adopted, but she lived with Professor Korbel. Madeleine Albright considered her her younger sister.
[4] “Germany and the UNO against Syria”, by Thierry Meyssan, Translation Pete Kimberley, Al-Watan (Syria) , Voltaire Network, 28 January 2016.

Translation
Roger Lagassé

Anglozionism

CNN Admits the Horrific Genocide of the Palestinians

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Emily Callahan, an American nurse with Doctors Without Borders, gives a harrowing description of what she witnessed in Gaza as she was attempting to get out of the area.

◾ Emotional and valiant appearance on American prime time TV giving a first hand account of the horrible conditions of death and starvation the Palestinian people are been subjected by the Israelis, but also of their incredible bravery and heroism, their endurance and love for their homeland and their people.

It's All About Jews

The Politics of The Slaughter of Everybody

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by John Helmer, Moscow
@bears_with

Religious fundamentalists think that because God is on their side – more, that God has Chosen Them to be His People — they can leave it to Him to keep tabs on history, remember the lessons of the past, count the years, tote up the gains, costs, and losses. So long as God doesn’t issue any red alerts or insolvency notices during their prayers, when the Chosen People get up they can concentrate their minds and resources on preparing for the future. When the murder of a million or two Palestinians is the future which the Israelis and Americans are concentrating on now, it’s obvious that they and their God have not been re-reading the Melian Dialogue, if He did in the first place.

That’s Sections 84 to 116 of Book Five of Thucydides’ History of the Peloponnesian War, which he wrote over twenty years of the war, from 431 to 411 BC, leaving off before Athens and its army were defeated and lost everything they thought they had won.

It was in 416 that the Athenian army laid a starvation siege to Melos; then when the Melians surrendered, the Athenians murdered every man and enslaved every woman and child. After that, the Athenian empire of Melos lasted just eleven years before the Athenians were driven off the island by a Spartan force the Hellenes had become too weak to resist. The German empire of the island didn’t murder as many; they were driven off after just two years, from 1943 to 1945.

What Thucydides has reproduced in his book is the argument for genocide if you think you are strong enough to get away with it.

Its main point — the most remembered today of the lines from the book — is the Athenian declaration: “When these matters are discussed by practical people, the standard of justice depends on the equality of power to compel and that in fact the strong do what they have the power to do and the weak accept what they must.”

This is what US President Joseph Biden and Israeli Prime Minister Benjamin Netanyahu are insisting upon. It’s what Biden means to demonstrate with his fleets in the eastern Mediterranean, northern Red Sea, and the Persian Gulf.

This is slaughter of everybody in Gaza because the Americans and the Israelis have the power, for the time being.

Practical people is the phrase Thucydides put in the mouth of the Athenian side in the dialogue.

ATHENIANS

Left to right: Olaf Scholz (Germany), Joseph Biden (US), Rishi Sunak (UK), Benjamin Netanyahu (Israel).

These days it means politicians running for election. They are Vladimir Putin in March 2024; Olaf Scholz in June 2024; Biden in November 2024; Rishi Sunak in January 2025; the French election is in 2027 but Emmanuel Macron cannot run for a third term. Netanyahu’s term is likely to run out as soon as the war against the Palestinians of Gaza ends. If all of them are dead or gone, Netanyahu may win.

The only certain winner on this list of practical people is Putin; he has now agreed with the Russian Army to concentrate their force against the US on the Ukrainian battlefield. The terms of this agreement can be found on, and also between, the lines of Putin’s speech of October 30. Read between the lines here.

In Thucydides’s reconstruction and dramatisation of the negotiations between the attacking and the defending sides, the Melians acknowledged it was pointless appealing to commonly held ideas of justice, morality, and fair play because the Athenians made clear they didn’t share them. Worse, the Athenians said they were convinced that only by demonstrating their superior force against the weaker Melians could they deter others, including their own critical and restive fellow citizens at home. “It is not so much your hostility that injures us,” the Athenians said. “It is rather the case that if we were on friendly terms with you, our subjects would regard that as a sign of weakness, whereas your hatred is a sign of our power.”

So the Melians tried arguing instead that there were common and shared political and economic interests which should spare them from the Athenians’ liquidation plan. “If yours and ours happen to coincide, we must try to persuade you of the fact. Is it not certain that you will make enemies of all states who are at present neutral, when they see what is happening here and naturally conclude that in the course of time you will attack them too?”

Forget it – there is only the present for you, leave the future to us, the Athenians replied. “This is no fair fight , with honour on one side and shame on the other. It is rather a question of saving your lives and not resisting those who are far too strong for you.”

Death-dealing is the power – for those who are victims, and even more for those who are witnesses. Hope for another outcome which the Melians expressed, “is by nature”, said the Athenians, “an expensive commodity, and those who are risking all on one cast find out what it means only when they are already ruined.”

The Melians tried the Chosen People line. That wasn’t because they were Semites, although God had sailed westward from ancient Palestine to make landfall on the island. The Phoenicians, a Semitic people but not a Jewish one, had established trading posts on Melos and intermarried with the Caucasian arrivals from Sparta, on the Hellenic mainland. The Athenians dismissed the theology – God, like history and warfare, chooses winners, not losers. “So far as the favour of the gods is concerned, we think we have as much right to that as you have,” the Melians were told. “Our opinion of the gods and our knowledge of men lead us to conclude that it is a general and necessary law of nature to rule whatever one can.”

An Israel Air Force strike on October 10 destroyed this mosque in Khan Younis, Gaza.

The Melians then tried to argue that if they fought on for long enough, their ethnic allies, the Spartans, would come to their rescue, break the Athenian siege, defeat Athens. “Where danger is concerned,” came the Athenian reply, “the Spartans are not as a rule very venturesome.”

The force calculus would prevail on the Spartans, the Athenians were confident – Melos was too small and was surrounded, so a Spartan relief operation was out of the question. “What is looked for is a positive preponderance of power in action. And the Spartans pay attention to this point even more than others do.”

Inferiority wasn’t so dishonourable, the Athenians offered as they prepared to wind up the talks. “There is nothing disgraceful in giving way to the greatest city in Hellas when she is offering you such reasonable terms – alliance on a tribute-paying basis and liberty to enjoy your own property…And when you are allowed to choose between war and safety…this is the safe rule – to stand up to one’s equals, to behave with deference to one’s superiors, and to treat one’s inferiors with moderation.”

MELIANS

Left to right: Yahya Sinwar, Mohammed Deif, and Ismail Haniyeh of Hamas.

The two sides then adjourned for internal consultations; later they returned to the table for the last round. The Melians said they had decided not to surrender their seven-hundred year old city state. “We put our trust in the fortune that the gods will send and which has saved us up to now, and in the help of men — that is of the Spartans; and so we shall try to save ourselves.” They added they were still open to negotiating terms of “a treaty which shall be agreeable to both you and us”. One condition was non-negotiable — the Athenians must “leave our country”.

The Athenian negotiators stood up. “As you have staked most on and trusted most in Spartans, luck, and hopes, so in all these you will find yourselves most deluded.”

The Athenian army built a new wall completely cutting off the Melians inside their city from the outside. Several months of siege followed while the Athenians withdrew their heavy forces to fight elsewhere. The Melians made sallies to capture food. Then the Athenians returned in force; but even then they didn’t risk a frontal assault. Instead, they bribed several Melians inside the city to betray the others. “As there was also some treachery from inside,” Thucydides concluded his account without more detail, “the Melians surrendered unconditionally to the Athenians, who put to death all the men of military age whom they took, and sold the women and children as slaves. Melos itself they took over for themselves, sending out later a colony of 500 men.” Book Five ends at this point.

That was almost two thousand five hundred years ago.

It’s near-certain that Biden and Netanyahu haven’t read the Melian Dialogue. If men like US Secretary of State Antony Blinken and National Security Adviser Jacob Sullivan were required to read the book during their undergraduate studies at Harvard and Yale, they have forgotten that after the genocide of the Melians, the Athenians were defeated – first their army and foreign empire, then their domestic democracy.

These practical men can hear the political clock ticking. They can’t hear the gods counting down.

Eastern Europe Awakening

November 7, Great October Socialist Revolution

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Sergey Markov
November 7 is a forgotten holiday, the Day of the Great October Socialist Revolution. The statists – the security officers who are in power in the country – do not like the fact that the Bolshevik revolution destroyed the great Russian empire. 

The billionaires who control the economy do not like to remember the revolt of the people against other millionaires.
People remember how the CPSU bureaucratized the November 7 holiday ad nauseum. — That’s why few people remember November 7th.
Only the Communist Party of the Russian Federation celebrates this holiday together with the remnants of the Soviet people. Those who celebrate it are the remnants of the Soviet people.
The October Revolution brought Russia to world leadership. Russia created a new society of state socialism and stood at the head of the social progress of mankind. Therefore, Soviet Russia had friends in every country and in every city. Russia has made a giant leap in development and has become one of the world’s two superpowers. The USSR is the peak of Russia’s civilizational development. It was socialism and the USSR that created the political 20th century.
Lenin is the main political genius of the 20th century. Lenin created a working theory of political revolution. A political party of professional activists is central to this theory. And the concept of a revolutionary situation. The 20th century became the century of revolutions.
Lenin himself also carried out a political revolution in the largest country in the world. Therefore, Lenin is studied by anyone who wants to succeed in real politics.
In addition, Lenin also created a new type of state, the USSR, which became the main innovating state of the turbulent 20th century. Socialism became the main ideology of the 20th century.
You may not accept Lenin’s theory and his cruel practice. For example, I really don’t like the destruction of the church.
But Lenin’s theory of political revolution works. And Lenin’s practical policy fully corresponds to the realities of the 20th century. This makes Lenin the main politician of the 20th century.
Anglozionism

Western Support for Military Action in Gaza Evaporating

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Western support for military action in Gaza will evaporate as public opinion turns against it, Ehud Barak told Politico

via RT

The Israeli military only has weeks to destroy Hamas before Western governments withdraw their support for the operation in Gaza, former prime minister Ehud Barak has said.

The Israeli military has but weeks to inflict damage on Hamas, before Western governments reduce support for the operation in Gaza, former Prime Minister and Defense Minister Ehud Barak believes.

“Listen to the public tone – and behind doors it is a little bit more explicit,” said the 81-year-old, who also served as defense minister and a general with the Israel Defence Forces (IDF).

“We are losing public opinion in Europe and in a week or two we’ll start to lose governments in Europe,” Barak told Politico, as reported on Tuesday. “And after another week the friction with the Americans will emerge to the surface.”

US officials have been advocating for “humanitarian pauses” in Gaza, but have not publicly threatened to withdraw Washington’s backing. The government of Prime Minister Benjamin Netanyahu has refused to stop hostilities. Barak believes Israel will have to “come to terms with the American demands within the next two or three weeks, probably less.”

“You can see the window is closing. It’s clear we are heading towards friction with the Americans about the offensive. America cannot dictate to Israel what to do. But we cannot ignore them,” he remarked.

However, the former general believes it would take the IDF months, or even a year, to push Hamas out of Gaza. Israel has made the obliteration of the Palestinian military group its primary objective after it caused hundreds of civilian deaths during an incursion a month ago.

The IDF has subjected Gaza to intensive bombardments as part of its strategy. Gaza officials reported that the death toll in the Palestinian enclave had surpassed 10,000 on Monday.

New evidence of changing attitudes in Europe emerged on Monday, when Belgian Prime Minister Alexander De Croo blasted Israel’s military tactics.

“Bombing an entire refugee camp with the intention of taking out one terrorist, I don’t think you can say that is proportional,” De Croo said. “It is a bridge too far.”

Last week, the IDF hit several Palestinian refugee camps, including the large Jabalia settlement in northern Gaza, which Israel had declared an evacuation zone. Israeli military spokesman Richard Hecht described the civilian casualties from Israeli strikes as “the tragedy of war” when confronted by CNN host Wolf Blitzer last week.

Barak served as prime minister from 1999 to 2001 and represented his nation during the US-mediated 2000 Camp David Summit with Yasser Arafat, the leader of the Palestine Liberation Organization.