Cross-posted from Paul Craig Roberts
The unilateral US sanctions announced by Obama on July 16 blocking Russian weapons and energy companies access to US bank loans demonstrate Washington's impotence. The rest of the world, including America's two largest business organizations, turned their backs on Obama. The US Chamber of Commerce and the National Association of Manufacturers placed ads in the New York Times, Wall Street Journal, and Washington Post protesting US sanctions. NAM said that the manufacturer's association is "disappointed that the US is extending sanctions in increasingly unilateral ways that will undermine US commercial engagement." Bloomberg reported that "meeting in Brussels, leaders of the European Union refused to match the US measures."
In attempting to isolate Russia, the White House Fool has isolated Washington.
The sanctions will have no effect on the Russian companies. The Russian companies can get more bank loans than they need from China, or from France and Germany.
The three traits that define Washington -- arrogance, hubris, and corruption -- make Washington a slow learner. Arrogant people wallowing in hubris are incapable of learning. When they encounter resistance they respond with bribes, threats, and coercion. Diplomacy requires learning ability, but Washington left diplomacy years ago and relies on force.
Consequently, with its sanctions Washington is undermining its own power and influence. Sanctions are encouraging countries to withdraw from the dollar payments system that is the foundation of US power. Christian Noyer, Governor of the Bank of France and a member of the European Central Bank's Governing Council, said that Washington's sanctions are driving companies and countries out of the dollar payments system. The huge sum extorted from the French bank, BNP Paribus, for doing business with countries disapproved by Washington makes clear the increased legal risks that arise from using the dollar when Washington makes the rules.
Washington's attack on the French bank was the occasion for many to remember the numerous past sanctions and to contemplate future sanctions, such as those that loom for Germany's Commerzbank. A movement to diversify the currencies used in international trade is inevitable. Noyer pointed out that trade between Europe and China does not need to use the dollar and can be fully paid in Euros or Renminbi.
The phenomenon of US rules expanding to all US dollar-denominated transactions around the world is accelerating the movement away from the dollar payment system. Some countries have already arranged bilateral agreements with trading partners to make their trade payments in their own currencies. The BRICS are establishing new payment methods independently of the dollar and are setting up their own International Monetary Fund to finance trade imbalances.
The US dollar's exchange value depends on its role in the international payments system. As this role shrivels, so will demand for dollars and the dollar's exchange value. Inflation will enter the US economy via import prices, and already hard-pressed Americans will experience more compression of their living standards.
In the 21st century distrust has been growing of Washington. Washington's lies, such as Iraq's "weapons of mass destruction," "Assad's use of chemical weapons," and "Iranian nukes" are recognized as lies by other governments. The lies were used by Washington to destroy countries and to threaten others with destruction, keeping the world in constant turmoil. Washington delivers no benefit that offsets the turmoil that Washington inflicts on everyone else. Washington's friendship requires complying with Washington's demands, and governments are concluding that Washington's friendship is not worth the high cost.
The NSA spy scandal and Washington's refusal to apologize and desist has deepened the distrust of Washington by its own allies. World polls show that other countries regard the US as the greatest threat to peace. The American people themselves have no confidence in their government. Polls show that a large majority of Americans believe that politicians, the presstitute media, and private interest groups such as Wall Street and the military/security complex rig the system to serve themselves at the expense of the American people.
Washington's empire is beginning to crack, a circumstances that will bring desperate action from Washington. Today (July 17) I heard a BBC news report on National Public Radio about a Malaysian airliner being shot down in Ukraine. The reporting might have been honest, but it sounded like a frame-up of Russia and the Ukrainian "separatists." As the BBC solicited more biased opinions, the broadcast ended with a report from social media that separatists had brought down the airliner with a Russian weapon system.
No one on the program wondered what the separatists had to gain by shooting down an airliner. Instead, the discussion was whether once Russian responsibility was established, would this force the EU to endorse tougher US sanctions against Russia. The BBC was following Washington's script and heading the story where Washington wanted it to go.
The appearance of a Washington operation is present. All the warmongers were ready on cue. US Vice President Joe Biden declared that the airliner was "blown out of the sky." It was "not an accident." Why would a person without an agenda be so declarative prior to having any information? Clearly, Biden was not implying that it was Kiev that blew the airliner out of the sky. Biden was at work in advance of the evidence blaming Russia. Indeed, the way Washington operates, it will pile on blame until it needs no evidence.
Senator John McCain jumped on the supposition that there were US citizens aboard to call for punitive actions against Russia before the passenger list and the cause of the airliner's fate are known.
The "investigation" is being conducted by Washington's puppet regime in Kiev. I think we already know what the conclusion will be.
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Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His books, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available (more...)