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    World Economic News and Discussion

    AlfaT8
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    Post  AlfaT8 Thu Jun 15, 2023 12:26 pm

    Traders Aren't Buying The Oil Deficit Story

    Traders are not buying the oil deficit story.

    That’s the conclusion that forces itself based on the latest oil and fuel buying and selling developments ahead of the latest OPEC+ meeting.

    The price movements that followed that meeting were proof that this attitude was correct.

    The initial price jump that every production cut announcement from OPEC+ causes fizzled out less than a day after the announcement.

    Over the past six weeks, institutional traders have reduced their positions in crude oil and fuels by 238 million barrels, Reuters’ John Kemp reported earlier this week, which was one of the lowest weekly positions in those contracts since 2013.

    These six weeks were marked by some strongly bearish developments reinforcing the sentiment, such as weaker than expected Chinese economic index readings and the U.S. debt ceiling negotiations.

    It appears that traders have focused entirely on those economic index readings instead of the fact that Chinese crude oil demand hit a record in April despite refineries shutting down for seasonal maintenance.

    They also did not really acknowledge U.S. legislators’ success in passing the debt ceiling bill that averted a federal debt default, even though the uncertainty surrounding the issue was a major driver for bullish behavior on the oil market.

    Perhaps this has something to do with news about a recession in the U.S. manufacturing and freight transport sectors, which has hurt oil consumption in these industries. It seems that institutional oil traders have been focusing almost exclusively on consumption lately.

    It will not be good news for OPEC, however. The cartel cannot keep cutting deeper and deeper – at some point, this will start playing to the advantage of U.S. shale. In fact, according to some, it already is, with analysts predicting higher U.S. exports as Saudi Arabia trims production by another 1 million bpd.


    https://www.zerohedge.com/markets/traders-arent-buying-oil-deficit-story

    How real is this Shale threat from the U.S??
    Could they even hope to compete with OPEC+?

    As i see it, shale is still very expensive, and if the U.S cant export much of it since they need it for themselves.
    Either way, the price is gonna go up.

    Or am i missing something?? scratch

    Whats the current state of the U.S shale industry?
    GarryB
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    Post  GarryB Thu Jun 15, 2023 4:18 pm

    Shale sounds like a house of cards that promises too much and when it does not deliver then money invested is not recovered, and that is not to mention the ecological damage that creates situations where they are going to get sued for all sorts of stuff like damaging ground water etc etc...

    Essentially what they are saying is that if OPEC keeps cutting oil production then the US will start licking the inside of old used oil barrels to make up the difference... the investors promised those old barrels are almost still full when they know they are practically empty because they need investment or it simply does not work.

    Sounds like the west saying it is OK Europe... if evil Russia cuts you off from gas and oil supplies then you can buy American gas and oil and you will be fine...
    kvs
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    Post  kvs Thu Jun 15, 2023 10:50 pm

    There is no such thing as shale oil.   These liars typically claim that formations such as the Bakken are "shale oil".   In fact, they
    are trapped regular oil reservoirs sandwiched between layers of shale-like low-porosity sedimentary rock.   Shale only has kerogens
    which require heat processing to "cook" into oil.  

    So we have the deliberate confounding of Bakken type reservoirs and Green River shale kerogens as if they are the same thing.  
    There is no commercial operation anywhere on the planet that is extracting and cooking shale kerogens into oil.   Shell had a
    test operation that ran from the 1970s until the 2010s that failed to come up with a commercially viable method of cooking
    the kerogens in situ.   They would drill a series of boreholes around the target zone and fill them with liquid nitrogen to create
    and thermal barrier for the zone where an attempt was made to start a flame front in the shale itself.   The idea was to
    produce oil in the rock and drive it out using the same heat source.   I do not have all the details but this process failed.

    Estonia has a shale fossil fuel operation since the USSR period where shale is mined and crushed and then cooked in furnaces.
    The heat creates and releases oil that burns and keeps the process going.   As far as I know Estonia is only place where this
    process works because of the particularly rich kerogen amount in the local shale.  

    The US reserves of hard-to-access oil in the Bakken and East Texas formations is very small compared to the touted trillion barrels
    of "shale oil" in the Green River formation.   When these clowns start to do something with the Green River formation, then they
    should start yapping.   For now it is not even a prospective development.   It is masturbatory drivel.

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    lancelot
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    Post  lancelot Thu Jun 15, 2023 11:12 pm

    The latest claim to fame seems to be refractruring.
    https://oilprice.com/Energy/Energy-General/ExxonMobil-New-Fracking-Technology-Can-Double-Oil-Output.html

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    kvs
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    Post  kvs Thu Jun 15, 2023 11:48 pm

    lancelot wrote:The latest claim to fame seems to be refractruring.
    https://oilprice.com/Energy/Energy-General/ExxonMobil-New-Fracking-Technology-Can-Double-Oil-Output.html

    I scanned through this article an it is pure investor BS. The extraction from the rock layers trapped by tight rock follows the
    same dynamics as with any other conventional reservoir. They make it sound like they are enhancing extraction via a new
    fangled process. The only thing they could be doing is accessing more of the non-uniform conventional reservoir. The
    oil comes out through internal reservoir pressure from both the weight of the overlying strata and gas that comes together
    with the oil. This naturally depletes and water driving helps to extract more oil. But there is a fundamental limit at around
    45% extraction when the regime transitions from an inverse emulsion (water in an oil matrix) to a regular emulsion (oil in a water
    matrix). When this occurs the water flows but the oil stays in place. Nothing outside of mining and crushing the rock will extract
    the remaining 55% of the oil and that ain't happening.

    Fancy steel borehole lining with holes has nothing to do with any of this. Water driving is already pressurized.

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    Kiko
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    Post  Kiko Sat Jul 01, 2023 10:01 am

    Argentina pays IMF debt in yuan, 07.01.2023. Exclamation Exclamation

    La Nación: Argentina used yuan instead of dollars to pay IMF debt.

    BUENOS AIRES, July 1 - RIA Novosti. Argentina, amid problems with international reserves, paid off its debt to the IMF in yuan, writes the newspaper La Nación.

    The government made a $2.7 billion payment today using yuan and special drawing rights.

    An Argentine delegation is expected to travel to the United States next week to continue negotiations.

    In June 2018, the IMF approved a $50 billion loan to Argentina. This was supposed to help reduce the budget deficit against the backdrop of soaring inflation. In October of that year, the fund agreed to increase the funding program to $56.3 billion. But in 2021, the amount was reduced to 44 billion.

    https://ria.ru/20230701/argentina-1881606944.html

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    Kiko
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    Post  Kiko Tue Jul 04, 2023 6:00 pm

    China hits back in semiconductor trade war, 07.04.2023.

    Beijing has responded to curbs imposed by the US and its allies by restricting exports of key rare metals.

    China has pushed back against US-led efforts to block advances in its chipmaking industry, by slapping restrictions on exports of key raw materials that its Western rivals need for producing semiconductors.

    The new export controls, announced on Monday by the Chinese Commerce Ministry, will take effect on August 1 and apply to gallium and germanium – rare metals used in making computer chips and a variety of other products, such as solar panels and advanced radar equipment. Exporters will need “special permission” to ship either of the two metals or their derivative compounds out of China, the ministry said, citing national security interests.

    China is the world’s top producer of gallium and is a leading exporter of germanium. The European Union has included both metals on its list of critical raw materials, meaning they are considered “crucial to Europe’s economy.” The US hasn’t produced any gallium since 1987 and relied on China for 53% of its imports of the material between 2018 and 2021, according to the US Geological Survey.

    Beijing’s announcement comes just three days after the Dutch government imposed new restrictions on exports of advanced semiconductor equipment, backing US efforts to block China from accessing technology deemed critical to development of artificial intelligence.

    Amsterdam’s move drew an angry response from the Chinese government, which claimed that the US was coercing other countries to help maintain its “global hegemony” and implement “semiconductor suppression against China.” Beijing added that the Netherlands should “refrain from abusing export control measures” to help maintain stability of the semiconductor industry’s global supply chain.

    The new restrictions on raw materials apparently deliver on China’s warning about the chipmaking supply chain. An editorial published on Monday in the state-owned China Daily newspaper suggested that Beijing’s move was made in retaliation for the curbs imposed by the US and its allies.

    “Those doubting China’s decision could ask the US government why it holds the world’s largest germanium mines but seldom exploits them,” the editorial said. “Or they could ask the Netherlands why it included certain semiconductor-related products, such as lithographic machines, into its export control list. It is they that challenge the world supply chain, and the blames that belong to them should never be shifted to China, as it's defending its own legal national interests in this rather uncertain world.”

    https://www.rt.com/news/579165-china-metals-semiconductor-restrictions/

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    Kiko
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    Post  Kiko Fri Jul 14, 2023 12:59 pm

    China may take on Argentina's debt to IMF amid new deal talks, 07.14.2023.

    Portal 'Euro Es Euro' points out that Beijing intends to absorb the loan, if Argentina can pay IMF with foreign exchange resources.

    China's representative to the International Monetary Fund (IMF), Zhengxim Zhang, told the financial body that if a new agreement is not made with Argentina, Beijing may assume a debt contracted by Buenos Aires during the government of Mauricio Macri (2015-2019). The Euro es Euro portal reports.

    The article interprets the Chinese official's statement as a" provocation", since it" removes the IMF from the role of creditor", allowing China to assume the debt with resources from foreign exchange exchanges made between the two countries.

    Zhang "played hardball for Argentina" by sending an internal note to the IMF board announcing that if the Fund "continues to delay approval of the agreement, China will authorize Buenos Aires to use the second part of its foreign exchange exchange for debt repayment."

    The representative makes reference to the agreement opened during the trip of an economic team of the Argentine government this Tuesday (11/07) to Washington, in the United States.

    The South American delegation went in search of closing a negotiation with the IMF that contemplates Argentina's difficulties in meeting the deadlines stipulated by the organization.

    According to the Russian newspaper RT en español, the government of President Alberto Fernández intends to reformulate the debt maturity schedule.

    Foreign exchange between Argentina and China

    According to the Euro Es Euro, Argentina and China have made "foreign exchange swap" procedures, that is, exchanges between currencies (Argentine pesos and yuan, respectively) so that the foreign exchange market does not present dysfunctional movements, such as the devaluation of some currency.

    The latest exchange was renewed by Argentina's Economy Minister Sergio Massa and the country's Central Bank President Miguel Ángel Pesce on their last trip to Beijing in early June.

    The two countries have a foreign exchange swap of 130 billion yuan, equivalent to US$ 19 billion, which represents 60% of the gross reserves of the Argentine central bank.

    Among the financial possibilities that the Argentine government can realize with part of this reserve (about$ 5 billion) are the financing of imports from China and the payment of debt to the IMF.

    In this way, Argentina cleared part of the account on June 30 with this reserve in yuan.

    The portal also highlights that this amount can be renewed for another $ 5 billion, totaling $ 10 billion for imports or the IMF payment.

    Thus, if the international lending body does not approve a new schedule for the payment of argentina's debt, China can authorize the use of the remaining$ 9 billion resulting from its exchanges for the solution of the collection.

    Yandex Translate from Portuguese

    https://www.brasil247.com/mundo/china-ameaca-fmi-de-assumir-divida-argentina-caso-novo-acordo-nao-seja-feito.

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    JohninMK
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    Post  JohninMK Fri Aug 04, 2023 12:05 pm

    GEROMAN -- time will tell - 👀 --
    @GeromanAT
    ·
    10h
    - The Battle for Africa -
    It was never about spreading "democracy"

    May the people win.

    World Economic News and Discussion - Page 12 F2pGF1RXMAE73ji?format=png&name=small

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    franco
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    Post  franco Wed Aug 16, 2023 9:09 pm

    Russians got richer last year even as the war in Ukraine raged on, while the US and Europe lost trillions of dollars, UBS reported.

    Russia added $600 billion of total wealth, the Swiss bank found in its annual Global Wealth Report, published Tuesday.

    The number of Russian millionaires also rose by about 56,000 to 408,000 in 2022, while the number of ultra-high-net-worth individuals — people worth over $50 million — jumped by nearly 4,500.

    But the US lost more wealth than any other country last year, shedding $5.9 trillion, while North America and Europe combined got $10.9 trillion poorer, UBS reported.


    Zurich, 15 August 2023 – The fourteenth edition of the Global Wealth Report was launched today jointly by Credit Suisse and UBS. It shows that measured in current nominal USD, total net private wealth fell by USD 11.3 trillion (–2.4%) to USD 454.4 trillion at the end of 2022. Wealth per adult also declined by USD 3,198 (–3.6%) to reach USD 84,718 per adult. Much of this decline comes from the appreciation of the US dollar against many other currencies. Financial assets contributed most to wealth declines in 2022 while non-financial assets (mostly real estate) stayed resilient, despite rapidly rising interest rates.

    Regional and demographic themes:

    - Regionally, the report shows the loss of global wealth was heavily concentrated in wealthier regions such as North America and Europe, which together shed USD 10.9 trillion.
    - Asia Pacific recorded losses of USD 2.1 trillion.
    - Latin America is the outlier with a total wealth increase of USD 2.4 trillion, helped by an average 6% currency appreciation against the US dollar.
    - Heading the list of losses in market terms in 2022 is the United States, followed by Japan, China, Canada and Australia.
    - The largest wealth increases at the other end were recorded for Russia, Mexico, India and Brazil.
    - In terms of wealth per adult, Switzerland continues to top the list followed by the USA, Hong Kong SAR, Australia and Denmark despite sizeable reductions in mean wealth versus 2021.
    - Ranking markets by median wealth puts Belgium in the lead followed by Australia, Hong Kong SAR, New Zealand and Denmark.

    When looked at in demographic terms, Generation X and Millennials continued to do relatively well in 2022 in the USA and Canada but were not immune to the overall wealth reduction. Broken down by race, non-Hispanic Caucasians in the USA saw their wealth decrease in 2022, while African-Americans were left almost unscathed by the downturn. In contrast, Hispanics achieved 9.5% growth in 2022, owing to their greater holdings of housing assets compared to financial assets.
    Reduction in wealth inequalities

    Along with the decline in aggregate wealth, overall wealth inequality also fell in 2022, with the wealth share of the global top 1% falling to 44.5%. The number of USD millionaires worldwide fell by 3.5 million during 2022 to 59.4 million. This figure does not, however, take into account 4.4 million “inflation millionaires” who would no longer qualify if the millionaire threshold were adjusted for inflation in 2022.

    Global median wealth, arguably a more meaningful indicator of how the typical person is faring, did in fact increase by 3% in 2022 in contrast to the 3.6% fall in wealth per adult. For the world as a whole, median wealth has increased five-fold this century at roughly double the pace of wealth per adult, largely due to the rapid wealth growth in China.
    A brighter outlook

    According to the report’s projections, global wealth will rise by 38% over the next five years, reaching USD 629 trillion by 2027. Growth by middle-income markets will be the primary driver of global trends. The report estimates wealth per adult to reach USD 110,270 in 2027 and the number of millionaires to reach 86 million while the number of ultra-high-net-worth individuals (UHNWIs) is likely to rise to 372,000 individuals.

    https://www.ubs.com/global/en/media/display-page-ndp/en-20230815-global-wealth-report-2023.html

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    kvs
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    Post  kvs Wed Aug 16, 2023 11:01 pm

    lancelot wrote:This has been discussed for decades. I hope so, but remains to be seen if it will happen.

    The US engineered regime change in Thailand in the last few weeks so Thailand is not a good host for a canal that would be secure for
    China. China needs a good navy to put the self-anointed masters of the universe in their place.

    US attempts to terrorize states with control over shipping bottlenecks only works if it is not risking all of its precious ships being sent to
    the sea floor. If it wants to escalate to nuclear war, China can send enough ICBMs to reduce the exceptional Yankee toilet to the
    stone age.
    higurashihougi
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    Post  higurashihougi Thu Aug 17, 2023 3:39 pm

    https://www.rt.com/india/581386-ukraine-not-invited-g20-india/

    Ukraine not invited to G20 – India

    An invitation for the group’s summit in New Delhi has not been extended to Kiev, the Indian foreign minister has said


    Indian Foreign Minister Subrahmanyam Jaishankar has reiterated New Delhi’s position on Ukraine’s potential participation at the G20 summit in September.

    Speaking to the media on Wednesday, Jaishankar stated that Ukraine had not been extended an invitation to the high-profile gathering of leaders of the world’s major economies, which includes Russia, a permanent member of the G20.

    The foreign minister said that in addition to G20 member states, India had sent invitations to Spain, Bangladesh, Nigeria, Mauritius, Egypt, the Netherlands, Oman, Singapore, and the United Arab Emirates, EFE news agency reported.

    Jaishankar explained that India’s position on Ukraine’s participation is due to the fact that the G20 is primarily focused on fostering growth and development, leaving matters of conflict resolution to be addressed at the UN Security Council.

    He also noted that Indian Prime Minister Narendra Modi had previously engaged with his Ukrainian counterpart on numerous occasions, underlining the “robust” relations between the two nations across various domains.

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    GarryB
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    Post  GarryB Fri Aug 18, 2023 4:03 am

    If the west try to put more pressure on India to allow Zelensky to come and speak they should simply say, well if you want politics then we will invite Julian Assange to speak too about this magnificent western civilisation that Kiev claims to be fighting to save.

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    Kiko
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    Post  Kiko Thu Aug 31, 2023 4:00 pm

    Pepe Escobar: Does BRICS Need Its Own Currency?, 08.31.2023.

    The new era opened with the strategic tour de force inbuilt in the creation of BRICS 11 involves the make-or-break issue of setting up a new international economic/financial strategy.
    Right at the heart of fervent discussions are the merits of designing a new BRICS currency.

    Brazilian economist Paulo Nogueira Batista Jr., a former IMF director who was deeply involved with BRICS from 2007 to 2015, has noted how a reserve currency discussion among the original five members was already too difficult. With 11, even more so.

    A currency has to be issued by a sovereign government. The indispensable Michael Hudson has cut to the chase to focus on what President Putin stressed in the summit in Johannesburg: what is needed is a means of settlement among Central Banks to keep in check the imbalances of trade and investment in their balance of payments.

    That implies no BRICS supra-national gold backed currency.

    Prof. Hudson has observed that, “nobody uses gold as a currency. You don’t go to the grocery store or you don’t buy stocks and bonds or even houses with gold. You’re not going to be able to do it with anything like a BRICS currency within the future.”

    So the possible “BRICS currency” on a - distant? – future will be “only a narrow currency that only governments can spend for each other, and it’s created on a computer. It’s not anything that you can hold in your pocket to spend.”

    You Can’t Pay for Your Coffee with This

    Michael Kumhof, a senior advisor for the Bank of England, adds a few more elements: “A currency does not need to be issued by a single state, instead its issuance can be delegated by a group of states to a common institution, see the ECB [European Central Bank]. And while that currency would be unlikely to be used by people to buy a coffee (although who knows, given enough time), it could be used by corporations for invoicing in cross-border trade.”

    Kumhof projects a different future: “Imagine if 50-100 countries joined BRICS, some of them with pretty small, marginal currencies. They might appreciate being able to invoice and settle in a strong common currency rather than only having a choice between USD and, say, RMB. Not to mention the fact that if the Chinese want to keep some of their capital controls (good idea for now, I think), the RMB could not really fully replace the USD in such transactions. A BRICS currency would not be subject to such restrictions. This BRICS bank would buy up bonds of member countries according to some quota, and then issue a common currency against it, with all its gains and losses shared by member governments. That could create an arbitrarily large amount of liquidity (and firepower for BRICS) without requiring any debt to do so, in fact massively reducing debt while doing so. And of course I agree that this would need to be supplemented by a bancor-type arrangement to clear cross-country imbalances.”

    What’s certain for now is that at the heart of what’s coming next will be an enhanced role for the New Development Bank (NDB), the BRICS bank, headquartered in Shanghai and now presided by former Brazilian President Dilma Rousseff.

    Sergey Glazyev, the Minister of Macroeconomics at the Eurasia Economic Commission, an arm of the EAEU, has been very critical of the NDB, explaining how the bank statutes are linked to the US dollar; and that’s the reason why the bank is now semi-paralyzed, afraid of secondary US sanctions.

    That brings to the fore another issue stressed by Kumhof: the BRICS-IMF connection. Kumhof observes, “it seems to me that the NDB is basically a World Bank, while I have heard very little about the Contingent Reserve Arrangement, which at one point was mentioned as a sort of embryonic BRICS-IMF."

    What China Really Wants

    This analysis , which caught Glazyev’s attention, delves on why the BRICS will not be able to become a competitor to reserve currencies – especially the US dollar and the euro - and launch full-fledged dedollarization right away.

    The gist of the argument is that only China “can claim to create a reserve currency”, as “the scale, depth of diversification and level of development of the Chinese economy are sufficient to compete with the US and the Eurozone.”

    The problem, according to the analysis, is that “reserve status cannot arise under conditions of restrictions on capital flows.”

    That brings us to the restricted convertible yuan, as there are “limits for foreign exchange that vary by region and investment destinations”; limits on “repatriation of capital through dividends and interest”; “industry capital withdrawal quotas for sensitive industries”; and “strict requirements for registration of foreign companies”, among other issues.

    So the analysis in fact boils down to raw capitalism:

    "There are no competitors to the dollar and euro in the international capital market and none are expected in the near future, because in order for the yuan to come out of the shadows China must liberalize financial policy and remove restrictions on capital control.”

    So “any breakdown of the existing world order in the currency market should be viewed exclusively through the focus of China.”

    But the thing is Beijing is not interested in having the yuan assuming the role of a world reserve currency. And neither were the BRICS, even before BRICS 11.
    The Chinese focus is increasing yuan trading and cash and settlement operations (roughly 4.5-5% of global turnover as of this month).

    In the next stage there will be more cross-border funding (as in yuan loans) and more attraction of international capital in yuan-denominated financial instruments. We’re not there yet.

    The analysis is correct to identify China’s priorities as “expanding the yuan's presence in the external market and resetting internal entropy through decentralization and international spread of the yuan money supply.”

    The analysis is also not off the mark when it concludes that the yuan is not a competitor to the US dollar or the euro: “They are in different dimensions, at different stages of development and with a different development trajectory.”

    So what’s bound to happen next is “more pronounced yuanization among neutral countries, where China will take subordinate and dependent countries into its orbit, expanding its influence.”

    We’re not Gonna Take it Anymore

    Michael Hudson’s vision is way more sophisticated, and goes way beyond the internationalization of the yuan or the need for a BRICS currency. He touches the heart of the problem for the Global South/Global Majority/Global Globe:

    “The Global South countries have an economic catheter into their monetary bloodstream, draining their balance-of-payments surpluses to pay the post-colonial (or perhaps we should say neo-colonial) burden of dollarized ‘dependency arrears’ from being blocked from balancing their foreign trade and investment.”

    He adds, “if countries have to keep paying their export earnings and new borrowing (such as Argentina’s borrowing of yuan from China) to pay the IMF and other dollar holders (often their own domestic kleptocratic elite), then how can they accumulate yuan, rubles, rupees, rials and other Global South currencies? For this to occur they have to say, ‘Now that we have kicked out the French colonialists and U.S. NGOs, we have to annul the bills they are holding for making us pay for the warped investment and trade patterns that have been forced upon us since World War II.”

    It goes without saying imperial forces, even in their current disarray, will accept that over their dead bodies. Still, Prof. Hudson is relentless when denouncing how the IMF and the World Bank “pushed resource allocation away from domestic food production to export-crop production, and away from import substitution to import dependency – all capped by privatization sell-offs of basic infrastructure to foreigners to impose monopoly pricing and capital flight instead of providing basic services at subsidized prices to make their economies more competitive, as the U.S. and Europe were doing with their own economies.”

    That, as Prof. Hudson stresses, is where the political discussion should focus on. Call it a direct message to the BRICS 11. And that is way more relevant than speculating about a far and away BRICS currency.

    https://sputnikglobe.com/20230831/pepe-escobar-does-brics-need-its-own-currency-1113013286.html

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    Post  Kiko Wed Sep 06, 2023 3:46 pm

    Trade war shooting backfires as Brazil captures U.S. market in China, analyst says, by Ana Lívia Esteves for SputniknewsBrazil. 09.06.2023.

    After losing the lead in exports of soybeans and wheat, the United States undergoes another bitter defeat to be overtaken by Brazil in the world corn market. Learn why Sergio Mendes, director general of Brazil's National Association of cereal exporters, believes Brazil will not be unseated from this leadership anytime soon.

    Brazil overtook the United States to become the world's largest corn exporter in the 2023 agricultural year, which ended in August. The finding is from the US Department of Agriculture (USDA) itself.

    The loss of US leadership in the corn market is another defeat for US agriculture, which in recent decades has already ceded first place in soy and wheat exports to Brazil and Russia, respectively.

    Recent data indicate that the U.S. accounts for only one-third of the world's soybean exports, well below Brazil's level. In the wheat market, the former Export leaders, USA, now embitter the fifth place in the global ranking, as Bloomberg reported.

    All indications are that the loss of U.S. leadership in corn exports will not be reversed either. In the last year, Brazil accounted for 32% of world grain exports, while the United States, which traditionally occupies the world leadership in the segment, occupied only 23% of the market.

    The US data also indicate that Brazil exported 56 million tons of corn, while the US sold only 41.277 million.

    According to the Director General of the National Association of cereal exporters of Brazil (ANEC), Sergio Mendes, Brazil has the potential to remain in the lead in the coming years.

    "I see no obstacles for us to continue in the lead, unless there is some unexpected climate event," Mendes told Sputnik Brasil. "The future trend for the Brazilian corn crop is one of growth."

    According to him, corn was incorporated by soybean producers as an intermediate crop for soybeans, grown in the off-season.

    "The producers sought the ideal crop to be planted in the soybean off-season, using the same soil. And corn has proven to be the ideal partner," Mendes explained. "This is perhaps the main reason that has led corn to reach the position in which it is today."

    The Managing Partner of the consultancy Markestrat, specialized in agribusiness strategy, José Carlos De Lima Júnior, also points to the increase in the use of technology in the Brazilian corn crop.

    "Before we didn't have the level of application of Technology per hectare in corn," Lima Junior told Sputnik Brasil. "Currently, the producer has realized that corn can be much more than a soil recomposition crop and, in fact, bring effective income. That is why it began to invest in technology, especially in the term of seeds."

    Competition with the USA

    The U.S. has held the lead in World corn exports for decades. Historically, Brazil had only surpassed the US in this culture once, in 2013. One of the obstacles to US exports is that Washington needs, first of all, to ensure the supply of its domestic market.

    "The Brazilian domestic market is not as relevant as the US, so our production can be largely reverted to export," said ANEC director Sergio Mendes. "This gives security to the importer that the supply of Brazilian corn is guaranteed."

    In addition, the US faced difficulties due to the instability of prices for nitrogen fertilizers, which Washington imported mainly from Canada, necessary for growing corn.

    "The North American producer had to make a crop decision at the same time of rising nitrogen production and price instability, which led him to reduce the area planted with corn and increase the area of soybeans," explained consultant Lima Júnior.

    China Factor

    The trade war initiated by President Donald Trump against China may also have negatively reflected on US corn exports.

    "The trade clash between the US and China persists to the present day, since even with Biden's entry, protectionist guidelines were maintained," Lima Júnior said. "The consequence was that the US ended up exporting less and Brazil captured a part of the market that was previously owned by the Americans."

    Despite the stumbles in U.S. domestic management, Chinese grain demand is sure to be a determining factor in determining who will be the world's top corn exporter. China has actively bet on Brazil as an alternative corn supplier to the US by sealing a bilateral agreement in 2022 to ensure increased bilateral grain trade.

    The result was a significant increase in Brazilian corn exports to China. If, in July 2022, China had not imported any tons of Brazilian corn, in the same month of 2023 Beijing was the main buyer, importing 902,000 tons.

    China consolidates its position as the main buyer of Brazilian agribusiness, which does not bring losses to the producer, believes consultant Lima Júnior.

    "I see no problem with Brazil having a major trading partner. The problem is to stop opening other business fronts, with other countries, just because we have a key partner in hand", considered Lima Júnior. "China knows what it wants from Brazil, but Brazil doesn't know what it wants from China."

    In the short and medium term, however, China's role will remain fundamental for the corn produced in Brazil. If previously, Chinese demand for corn was mainly supplied by Washington, Brasilia and Buenos Aires, with the Argentine crop failure, exports to China between 2022 and 2023 ended up being practically dominated by Brazilian agribusiness.

    ANEC's Director General, Sergio Mendes, acknowledges that Brazil's success may have hurt the country's main competitors, but credits the corn's good performance to the planning carried out nationally.

    "Our corn crop was very good. This growth has been a well-sustained and planned project over the years. We do not need the unhappiness of others to grow, let this be very clear", concluded the director general of ANEC.

    Yandex Translate from Portuguese

    https://sputniknewsbr.com.br/20230906/tiro-da-guerra-comercial-sai-pela-culatra-e-brasil-captura-mercado-dos-eua-na-china-diz-analista--30192683.html

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    Post  Kiko Mon Sep 11, 2023 10:42 pm

    Brazil moves closer to the US and could become the world's largest cotton exporter, 09.11.2023.

    Both countries are the world's largest exporters of the product.

    Brazil is close to overtaking the United States and becoming the world's largest cotton exporter, since Texas. The two countries are the world's largest cotton exporters, together accounting for more than half of global supply. The U.S. is expected to export 12.5 million bales in the 2023-24 season, but that estimate is likely to be lowered when the U.S.

    Department of Agriculture updates its projections on Tuesday. Brazil is expected to ship 11.25 million bales. A bale of cotton fiber ranges from 200 kilograms to 225 kilograms.

    According to information published on Monday (11) by Brazilian newspaper Folha de Sao Paulo, the director of risk management at Plexus Cotton, Peter Egli, "if the United States crop continues to deteriorate, Brazil could easily overtake them". "The two countries are already equal in basic statistics. It is conceivable that Brazil will become the world's largest exporter this season," he said.

    Brazil overtook the U.S. in the agricultural year ended Aug.31. Several factors have contributed to a change in the global agricultural landscape. Among them are the increase in production costs in the United States. The dollar also affected the competitiveness of agricultural products in the US, which is the largest global economy.

    Yandex Translate from Portuguese

    https://www.brasil247.com/economia/brasil-se-aproxima-dos-eua-e-pode-virar-maior-exportador-de-algodao-do-mundo

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    Post  Kiko Thu Sep 14, 2023 2:57 pm

    Europe starts investigation on Chinese electric cars: a trade war with Beijing?, 09.14.2023.

    The European Commission will now have up to 13 months to assess whether to impose higher tariffs on Chinese electric vehicles.

    The president of the European Commission, Ursula von der Leyen, announced on Wednesday that the European Union has decided to launch an investigation into Chinese subsidies for electric vehicles to prevent an avalanche of cheap imports.

    "World markets are now flooded with cheaper electric cars. And its price is kept artificially low thanks to huge state subsidies," Von der Leyen was quoted as saying by Reuters. The Commission will now have up to 13 months to assess whether to impose tariffs higher than the EU's standard 10% rate on cars.

    The investigation is "part of a broader rethink by the governments of developed economies to bring production closer to home, especially for key sectors such as semiconductors, pharmaceuticals and heavy industries, which were disrupted during the covid-19 pandemic," Bloomberg writes.

    Possible consequences

    A person familiar with the matter told Bloomberg that the measure may lead to tariffs close to the 27.5% already imposed by the US on Chinese electric vehicles. He also added that EU tariffs could vary depending on the producer.

    In addition, if the bloc imposes additional tariffs, one of the important markets for Chinese electric vehicle exports will be reduced, raising the prospect of a cascade of defensive measures in places like the United Kingdom to protect their markets from the flood of vehicles coming from the EU, the agency notes.

    Meanwhile, a source familiar with the situation indicated that EU officials have also been studying other Chinese sectors, but do not have any ongoing investigation.

    However, according to Bloomberg, "addressing Chinese subsidies - even if confirmed - will also not change the view that Chinese vehicles are technologically advanced and European carmakers have been slow to adapt and innovate."

    "A poison for the European economy"

    After the news broke, the shares of Chinese electric vehicle manufacturers had a mixed behavior. Meanwhile, BYD Co Ltd. and SAIC Motor Corp Ltd. they fell more than 3% in mainland China, Li Auto Inc. and XPeng Inc. they opened lower in Hong Kong, but quickly recovered and gained more than 1%.

    For its part, the Chinese Ministry of Commerce said that the investigation is "blatant protectionism that will seriously disrupt and distort the supply chain of the global automotive industry, including the EU, and will have a negative impact on China-EU economic and trade relations."

    In this context, Beijing urged the EU to "engage in dialogue and consultations with the Chinese side to create fair, non-discriminatory and predictable market conditions for the joint development of the China-EU electric vehicle industry."

    Meanwhile, Global Times wrote in an article that "trade protectionism will become a poison for the European economy" and will not "boost the European car industry", but "will only pass the costs on to European consumers and hinder the achievement of Europe's climate goals".

    "The European car industry cannot afford a 'trade war' with China," the newspaper notes, adding that any dispute between the two sides will only make American carmakers the biggest winners.

    Yandex Translate from Spanish

    https://actualidad.rt.com/actualidad/479868-europa-iniciar-guerra-comercial-china

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    Post  lancelot Fri Sep 15, 2023 12:31 am

    The Chinese car market is larger than the US one. Volkswagen and General Motors make huge amounts of money selling cars in China either directly or through joint ventures. Good luck with the tariffs.

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    Post  Kiko Fri Sep 15, 2023 8:01 am

    The EU went to war on Chinese electric cars, by Olga Samofalova for VZGLYAD. 09.15.2023.

    Brussels has embarked on one of the most serious confrontations with Beijing. It begins an investigation into electric vehicles from China in order to obtain formal grounds for removing the “Chinese” from the market. However, the EU should think carefully: Beijing has the coveted batteries, without which European car factories simply will not cope with their “green” transition.

    Europe is escalating trade relations with China. The EC has announced an investigation into China, which is accused of flooding the European market with electric cars. Brussels believes prices for Chinese-made electric cars have been artificially low due to huge government subsidies.

    China's share of electric vehicle sales in Europe has risen to 8% and could reach 15% in 2025, according to the EC. Last year, 35% of all electric vehicles exported in the world were produced in China, which is 10% more than the previous year (data from the American CSIS center).

    This year, for example, Chinese brand BYD has made a big splash, dethroning Volkswagen as the top-selling car brand in China by expanding sales to about 15 European countries. The Atto 3 crossover became the best-selling electric car in Sweden in July. At the same time, BYD intends to offer new models. At the end of the year, the Seal sedan will go on sale, the cost of which in Germany will be about 45,000 euros. This puts it in direct competition with the Tesla Model 3 and some Volkswagen vehicles.

    Shares of Chinese electric vehicle makers fell immediately after the news from Brussels. Beijing called the EC investigation protectionist and warned it would damage economic and trade relations between the two countries. According to China, the competitive advantage of Chinese electric vehicles was not due to subsidies.

    The China Passenger Car Association notes that Chinese-made cars exported to Europe typically cost almost twice as much as they sell in China.

    At the same time, when they talk about Chinese electric cars, we are also talking about Western brands that assemble cars in China.

    Beijing notes that the single largest exporter of electric vehicles from China to the EU is actually the American giant Tesla. It accounted for 40.25% of China's electric vehicle exports between January and April 2023.

    The purpose of the EC's investigation is to obtain justification for introducing punitive duties on electric vehicles produced in China.

    The irony is that the EU intends to ban the purchase of new combustion engine cars in 2035 as part of its ambitious Green Deal plan to cut elections. They should be replaced by electric cars, and this market should be supported in every possible way, but Brussels is trying to remove the “Chinese” from its market. The European Union fears that the growing popularity of cheaper Chinese electric vehicles could undermine the “green” transition of its own European automakers, says Anna Buylakova, an analyst at Finam Financial Group.

    “The European Union may have entered one of the most difficult confrontations in recent times. The EC's investigation could lead to new EU tariffs on imports of Chinese electric vehicles and devastate major non-European automakers such as Tesla, which make cars in China for export to the EU.

    On the one hand, by tightening duties, the EU will stimulate European manufacturers of electric vehicles, but on the other hand, China is a major supplier of raw materials and components for European industry. In addition, China is the most important market for German cars. China may respond by limiting their access to its market,” says Sergei Ramaninov, an analyst at the Markets Money Power channel.

    Experts have not yet discussed whether the EC’s accusations are justified. However, Ramaninov believes that the likelihood of introducing duties based on the results of the investigation is not as high as it may initially show. At least according to the statement of the German Minister of Economy, who stated that “this is not about keeping high-performance, low-cost cars out of the European market; it’s about looking at whether there are hidden, direct or indirect subsidies that create an unfair competitive advantage.”  

    However, such investigations often lead to the imposition of tariffs on foreign products. Similar accusations, for example, were repeatedly heard by producers of Russian fertilizers (long before February 2022), which, according to European officials, were hiddenly subsidized due to cheap gas prices. For example, the EU conducted an anti-dumping investigation and introduced duties on Russian fertilizers (Eurochem, Acron) back in 2019. Even Ukrainian grain was recently banned from being exported to the EU for much the same reason - because it is cheap and ruins European farmers. And it is cheap, of course, because of hidden subsidies - due to cheap labor, etc.

    An alternative scenario for the investigation could be a global one, in which Beijing agrees with the accusations, raises prices on par with German VW, and makes certain trade concessions. For example, it will reduce prices for European factories for its batteries and open its market wider to European goods.

    European officials surprise with their ambivalent position. On the one hand, with their own hands they are killing part of their own energy-intensive industry (chemistry, metallurgy), abandoning Russian energy resources, primarily gas. On the other hand, there is so much commotion around our own production of electric vehicles.

    If the EU nevertheless increases duties on electric cars from China, the West’s trade war with China will seriously escalate. Beijing will not silently watch this and will take retaliatory steps.

    And China has something to harm Europeans with. For example, 16% of batteries and electric vehicles sold in the EU last year were produced in China. How will European automakers produce their own electric cars without Chinese batteries?

    “Any retaliatory measures from Beijing could hit the Europeans. China already controls 60% of global battery production. Where will European companies source batteries for their eco-friendly cars? German automakers, which have huge production capacities in China, will suffer the most. Until recently, Volkswagen was the largest seller in China, while BMW and Mercedes dominated the premium market,” notes Sergei Ramaninov.

    It is no coincidence that the news about the investigation caused the shares of not only Chinese automakers to fall, but also European automakers too.

    https://vz.ru/economy/2023/9/15/1230479.html

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    Post  GarryB Fri Sep 15, 2023 12:12 pm

    The president of the European Commission, Ursula von der Leyen, announced on Wednesday that the European Union has decided to launch an investigation into Chinese subsidies for electric vehicles to prevent an avalanche of cheap imports.

    Wow... that alone is very funny.

    So cheap electric cars are bad?

    I thought the EU wanted cheap affordable electric vehicles so they didn't need to buy Russian energy.

    And China subsidising its electric vehicle industry... the bastards... the EU would never ever do that with their EV industry... NOT.

    Imagine the damage to the EU with millions of cheap affordable electric vehicles... the chaos... the death... the destruction...


    A person familiar with the matter told Bloomberg that the measure may lead to tariffs close to the 27.5% already imposed by the US on Chinese electric vehicles. He also added that EU tariffs could vary depending on the producer.

    So Tariffs on Chinese EVs but China has to buy European and American EVs that cost way more and probably don't have the same performance...

    The China Passenger Car Association notes that Chinese-made cars exported to Europe typically cost almost twice as much as they sell in China.

    Which suggests they are not trying to flood the market with cheap EVs and that they are making a good profit but that EU makers of EVs are horribly inefficient if they can't compete with companies that are selling cars with such a high profit margin.

    The European Union fears that the growing popularity of cheaper Chinese electric vehicles could undermine the “green” transition of its own European automakers, says Anna Buylakova, an analyst at Finam Financial Group.

    Cheap Chinese competition should drive their green transition... protecting them will have the opposite effect... their electric cars will remain over priced and likely inefficient... especially if in response China decides to stop them making their cars in China or stop them using Chinese batteries...

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    Post  kvs Fri Sep 15, 2023 12:34 pm

    The rotten NATzO west claims to value free market principles but always resorts to market meddling when it does not get the profit flow it wants.
    Chinese EVs are going to be cheaper simply because of economies of scale. U-rope and Merikuh can't compete so need to control the market.

    Of course the free market is an ideal, but in this case it is actually working.

    This is the same BS as when the US imposed tariffs on Japanese supercomputers (from NEC) in the early 1990s because Cray couldn't compete.

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    Post  Kiko Tue Sep 19, 2023 10:55 am

    Europe may be left without diesel, but it will also become more expensive in Russia, by Sergei Tikhonov for Rossiyskaya Gazeta. 09.19.2023.

    The world is short of diesel fuel (DF); existing oil refineries simply do not have the capacity to produce it in the required quantity. This conclusion was reached by the International Energy Agency (IEA). The high-risk zone is Europe, which, having abandoned Russian oil and petroleum products, was unable to provide itself with the required amount of diesel fuel and is completely dependent on imports.

    Our country is not facing a shortage; we produce twice as much diesel as the domestic market needs, but rising diesel prices in Europe are pushing up diesel stock prices in Russia. Coupled with the growing tax burden on oil companies in our country, this accelerates the rise in fuel prices both in wholesale and retail, and the export of gasoline and diesel is becoming more and more attractive for our manufacturers than supplies to the domestic market.

    Since the end of August, diesel fuel in the Netherlands has risen in retail price by 7%, in Italy, Spain and France - by 5%, in Ireland - by 8%, and in the Czech Republic price jumps at gas stations reached 30% (an average of 4.5 %). All of these countries, with the exception of the Czech Republic, are Europe's largest producers of agricultural products. That is, the demand for diesel fuel here concerns not only personal cars, public transport, cargo transportation, but also the agricultural sector, that is, it is subject to seasonal factors, as in Russia.

    Europe has existed for a long time thanks to the supply of Russian oil and petroleum products. Most diesel fuel was produced from our oil in the countries of the Old World, but it was mostly imported from Russia by Europeans. In December 2022, the EU introduced an embargo on maritime purchases of Russian oil, and in February 2023 - on petroleum products. The parties seem to have prepared for the bans. But the EU did not take into account that oil-producing countries could begin to reduce oil production and exports, which would lead to a deficit, albeit small. Prices for oil and petroleum products went up, and fuel itself became scarce. The situation was aggravated by the fact that many European refineries were set up to process Russian Urals oil. After the embargo, they had to switch to other varieties and mixtures, which sometimes yielded a smaller volume of product and increased its cost.

    Diesel inventories in OECD countries have dropped to their lowest level in the last 50 years, and in the US and Singapore they are lower than for this time of year, notes Freedom Finance Global analyst Vlakdimir Chernov. This is happening due to a decrease in oil exports and production volumes in Russia and Saudi Arabia. Also, heat in the Northern Hemisphere this summer has forced many refineries to operate slower than usual, so U.S. petroleum products production has been low for months. European refiners were also unable to ramp up supplies in the summer due to widespread unplanned refinery outages that left supplies tight heading into the winter.

    In addition, the lack of investment in the oil industry in recent years has played a role, which has led to a shortage of refining capacity, says Finam analyst Sergei Kaufman.

    At the same time, according to leading analyst at Otkritie Investments Andrei Kochetkov, it is not yet possible to talk about a full-fledged crisis. There is only a certain shortage in a number of regions, which is due to the specific availability of certain types of oil and seasonal consumption. At the end of summer and beginning of autumn, agricultural work is carried out in a number of regions of the planet, which significantly increases the demand for diesel fuel. However, this is purely a seasonal factor. For example, in China, demand for diesel fuel has remained almost unchanged this year, while exports have increased. In the first 8 months of 2023 by 197%. This became largely possible due to an increase in Russian oil supplies.

    But our country is voluntarily reducing oil exports, and since March of this year, sea exports of petroleum products, according to S&P Global Platts, decreased by 780 thousand barrels per day by August, to 2.27 million barrels. In addition, the main supplier of diesel fuel to Europe was not China, but India, the USA and the countries of the Middle East. It is unlikely that the Old World will remain on a "starvation ration", but they will clearly have to overpay for the supply of diesel fuel. And this will have an impact on our market.

    According to Valery Andrianov, an associate professor at the Financial University under the Government of the Russian Federation and an expert at the InfoTEK analytical center, world market conditions affect wholesale prices for petroleum products in Russia, but not directly. The mechanism for minimizing this influence was a damper (payments to oil workers from the budget of part of the difference between export and Russian wholesale prices when supplying fuel to the domestic market).

    As Chernov notes, with the rise in world prices for diesel, its export from Russia becomes much more profitable than wholesale supplies to the domestic market. At the same time, from September 1, damper payments to oil workers were halved; previously, they smoothed out for refineries the difference in cost between fuel exports and its supplies to the domestic market, therefore, most likely, wholesale prices on the St. Petersburg International Trading Exchange will continue to grow following world prices.

    The situation is especially dangerous given the weakening ruble exchange rate, says Andrianov. As a result, in ruble terms, retail prices in Europe became four times higher than in Russia. Of course, this gives us the opportunity to say that gasoline in Russia is relatively cheap compared to Europe. But, on the other hand, such a gap in prices (and, accordingly, in the marginality of supplies) is an incentive for commodity flows to be reoriented toward exports.

    Kaufman expressed a similar opinion. The increase in world prices for diesel, together with a decrease in damper payments, encourages oil producers to choose export rather than the Russian market, which creates problems within the country. The government is already discussing restrictions on exports or an increase in export duties, which could solve the problem, the expert clarifies.

    https://rg.ru/2023/09/18/evropa-mozhet-ostatsia-bez-dizelia-no-dorozhat-on-budet-i-v-rossii.html

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    Post  Kiko Tue Sep 26, 2023 11:26 pm

    War of Economic Corridors: The India-Mideast-Europe Ploy, by Pepe Escobar for the Cradle. 09.26.2023.

    The India-Middle East-Europe Economic Corridor (IMEC) is a massive public diplomacy op launched at the recent G20 summit in New Delhi, complete with a memorandum of understanding signed on 9 September.

    Players include the US, India, UAE, Saudi Arabia, and the EU, with a special role for the latter’s top three powers Germany, France, and Italy. It’s a multimodal railway project, coupled with trans-shipments and with ancillary digital and electricity roads extending to Jordan and Israel.

    If this walks and talks like the collective west’s very late response to China’s Belt and Road Initiative (BRI), launched 10 years ago and celebrating a Belt and Road Forum in Beijing next month, that’s because it is. And yes, it is, above all, yet another American project to bypass China, to be claimed for crude electoral purposes as a meager foreign policy “success.”

    No one among the Global Majority remembers that the Americans came up with their own Silk Road plan way back in 2010. The concept came from the State Department’s Kurt Campbell and was sold by then-Secretary Hillary Clinton as her idea. History is implacable, it came down to nought.

    And no one among the Global Majority remembers the New Silk Road plan peddled by Poland, Ukraine, Azerbaijan, and Georgia in the early 2010s, complete with four troublesome trans-shipments in the Black Sea and the Caspian. History is implacable, this too came down to nought.

    In fact, very few among the Global Majority remember the $40 trillion US-sponsored Build Back Better World (BBBW, or B3W) global plan rolled out with great fanfare just two summers ago, focusing on “climate, health and health security, digital technology, and gender equity and equality.”

    A year later, at a G7 meeting, B3W had already shrunk to a $600 billion infrastructure-and-investment project. Of course, nothing was built. History really is implacable, it came down to nought.

    The same fate awaits IMEC, for a number of very specific reasons.

    Pivoting to a black void

    The whole IMEC rationale rests on what writer and former Ambassador M.K. Bhadrakumar deliciously described as “conjuring up the Abraham Accords by the incantation of a Saudi-Israeli tango.”

    This tango is Dead On Arrival; even the ghost of Piazzolla can’t revive it. For starters, one of the principals – Saudi Crown Prince Mohammad bin Salman – has made it clear that Riyadh’s priorities are a new, energized Chinese-brokered relationship with Iran), with Turkey, and with Syria after its return to the Arab League.

    Moreover, both Riyadh and its Emirati IMEC partner share immense trade, commerce, and energy interests with China, so they’re not going to do anything to upset Beijing.

    At face value, IMEC proposes a joint drive by G7 and BRICS 11 nations. That’s the western method of seducing eternally-hedging India under Modi and US-allied Saudi Arabia and the UAE to its agenda.

    Its real intention, however, is not only to undermine BRI, but also the International North-South Transportation Corridor (INTSC), in which India is a major player alongside Russia and Iran.

    The game is quite crude and really quite obvious: a transportation corridor conceived to bypass the top three vectors of real Eurasia integration – and BRICS members China, Russia, and Iran – by dangling an enticing Divide and Rule carrot that promises Things That Cannot Be Delivered.

    The American neoliberal obsession at this stage of the New Great Game is, as always, all about Israel. Their goal is to make Haifa port viable and turn it into a key transportation hub between West Asia and Europe. Everything else is subordinated to this Israeli imperative.

    IMEC, in principle, will transit across West Asia to link India to Eastern and Western Europe – selling the fiction that India is a Global Pivot state and a Convergence of Civilizations.

    Nonsense. While India’s great dream is to become a pivot state, its best shot would be via the already up-and-running INTSC, which could open markets to New Delhi from Central Asia to the Caucasus. Otherwise, as a Global Pivot state, Russia is way ahead of India diplomatically, and China is way ahead in trade and connectivity.

    Comparisons between IMEC and the China-Pakistan Economic Corridor (CPEC) are futile. IMEC is a joke compared to this BRI flagship project: the $57.7 billion plan to build a railway over 3,000 km long linking Kashgar in Xinjiang to Gwadar in the Arabian Sea, which will connect to other overland BRI corridors heading toward Iran and Turkey.

    This is a matter of national security for China. So bets can be made that the leadership in Beijing will have some discreet and serious conversations with the current fifth-columnists in power in Islamabad, before or during the Belt and Road Forum, to remind them of the relevant geostrategic, geoeconomic, and investment Facts.

    So, what’s left for Indian trade in all of this? Not much. They already use the Suez Canal, a direct, tested route. There’s no incentive to even start contemplating being stuck in black voids across the vast desert expanses surrounding the Persian Gulf.

    One glaring problem, for example, is that almost 1,100 km of tracks are “missing” from the railway from Fujairah in the UAE to Haifa, 745 km is “missing” from Jebel Ali in Dubai to Haifa, and 630 km is “missing” from the railway from Abu Dhabi to Haifa.

    When all the missing links are added up, there’s over 3,000 km of railway still to be built. The Chinese, of course, can do this for breakfast and on a dime, but they are not part of this game. And there’s no evidence the IMEC gang plans to invite them.

    All eyes on Syunik

    In the War of Transportation Corridors charted in detail for The Cradle in June 2022, it becomes clear that intentions rarely meet reality. These grand projects are all about logistics, logistics, logistics – of course, intertwined with the three other key pillars: energy and energy resources, labor and manufacturing, and market/trade rules.

    Let’s examine a Central Asian example. Russia and three Central Asian “stans” – Kyrgyzstan, Uzbekistan and Turkmenistan – are launching a multimodal Southern Transportation Corridor which will bypass Kazakhstan.

    Why? After all, Kazakhstan, alongside Russia, is a key member of both the Eurasia Economic Union (EAEU) and the Shanghai Cooperation Organization (SCO).

    The reason is because this new corridor solves two key problems for Russia that arose with the west’s sanctions hysteria. It bypasses the Kazakh border, where everything going to Russia is scrutinized in excruciating detail. And a significant part of the cargo may now be transferred to the Russian port of Astrakhan in the Caspian.

    So Astana, which under western pressure has played a risky hedging game on Russia, may end up losing the status of a full-fledged transport hub in Central Asia and the Caspian Sea region. Kazakhstan is also part of BRI; the Chinese are already very much interested in the potential of this new corridor.

    In the Caucasus, the story is even more complex, and once again, it’s all about Divide and Rule.

    Two months ago, Russia, Iran, and Azerbaijan committed to building a single railway from Iran and its ports in the Persian Gulf through Azerbaijan, to be linked to the Russian-Eastern Europe railway system.

    This is a railway project on the scale of the Trans-Siberian – to connect Eastern Europe with Eastern Africa and South Asia, bypassing the Suez Canal and European ports. The INSTC on steroids, in fact.

    Guess what happened next? A provocation in Nagorno-Karabakh, with the deadly potential of involving not only Armenia and Azerbaijan but also Iran and Turkey.

    Tehran has been crystal clear on its red lines: it will never allow a defeat of Armenia, with direct participation from Turkiye, which fully supports Azerbaijan.

    Add to the incendiary mix are joint military exercises with the US in Armenia – which happens to be a member of the Russian-led CSTO – cast, for public consumption, as one of those seemingly innocent “partnership” NATO programs.

    This all spells out an IMEC subplot bound to undermine INTSC. Both Russia and Iran are fully aware of the former’s endemic weaknesses: political trouble between several participants, those “missing links” of track, and all important infrastructure still to be built.

    Turkish Sultan Recep Tayyip Erdogan, for his part, will never give up the Zangezur corridor across Syunik, the south Armenian province, which was envisaged by the 2020 armistice, linking Azerbaijan to Turkey via the Azeri enclave of Nakhitchevan – that will run through Armenian territory.
    Baku did threaten to attack southern Armenia if the Zangezur corridor was not facilitated by Yerevan. So Syunik is the next big unresolved deal in this riddle. Tehran, it must be noted, will go no holds barred to prevent a Turkish-Israeli-NATO corridor cutting Iran off from Armenia, Georgia, the Black Sea, and Russia. That would be the reality if this NATO-tinted coalition grabs Syunik.

    Today, Erdogan and Azerbaijan’s President Ilham Aliyev meet in the Nakhchivan enclave between Turkiye, Armenia, and Iran to start a gas pipeline and open a military production complex.

    The Sultan knows that Zangezur may finally allow Turkiye to be linked to China via a corridor that will transit the Turkic world, in Azerbaijan and the Caspian. This would also allow the collective west to go even bolder on Divide and Rule against Russia and Iran.

    Is the IMEC another far-fetched western fantasy? but The place to watch is Syunik.

    https://www.unz.com/pescobar/war-of-economic-corridors-the-india-mideast-europe-ploy/

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    flamming_python
    flamming_python


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    Post  flamming_python Wed Sep 27, 2023 2:05 pm

    The Turks nor Azeris will never have the balls to go after the Zangezur province

    Not unless Russia is given a catastrophic defeat by NATO and China is hemmed in. Then yeah, Iran is a manageable problem.
    franco
    franco


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    Post  franco Wed Oct 04, 2023 1:45 pm

    European manufacturing is taking quite the hit, while Russia is building up strong.

    Overall the global economy is going to go down the next year by a fair bit.

    https://pbs.twimg.com/media/F7kyevHXwAAnHmv?format=png&name=900x900

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