New Era of American Financial Warfare

New Era of Financial Warfare

Ambrose Evans-Pritchard, in Thursday’s Daily Telegraph, reports on new ways the U.S. is carrying out financial warfare against Russia by stealth. He writes that the U.S. has created a financial “neutron bomb” that can target any country and is now targeting Russia. He claims that for the past 12 years an “elite cell” at the U.S. Treasury has been designing ways to bring almost any country to its knees without firing a shot.

“It is a new kind of war, like a creeping financial insurgency, intended to constrict our enemies’ financial lifeblood, unprecedented in its reach and effectiveness,” says Juan Zarate, the Treasury and White House official who led the policy after 9/11. “The new geo-economic game may be more efficient and subtle than past geopolitical competitions, but it is no less ruthless and destructive,” he writes in his book Treasury’s War: The Unleashing of a New Era of Financial Warfare.

This includes shutting off market access for Russian banks, companies, and state bodies with $714 billion of debt. He calls it the “scarlet letter,” created under Section 311 of the U.S. Patriot Act, which was devised to be used against terrorist financiers. Once a bank is named, it will be caught in a “boa constrictor’s lethal embrace,” as Zarate puts it. Even if the bank has no operations in the U.S., European banks will not violate it.

Evans-Pritchard continues, “The U.S. Treasury faces a more formidable prey with Russia, the world’s biggest producer of energy with a $2 trillion economy, superb scientists, and a first-strike nuclear arsenal. It is also tightly linked to the German and East European economies,” and therefore the U.S. risks destabilizing its own alliance system. Furthermore, President Vladimir Putin knows this as well and no doubt is prepared to take counter-moves.

Zarate now advises HSBC on how to stop in-house money laundering, which is a laugh in itself.

Evans-Pritchard’s column cites Princeton Professor Harold James, who compares such actions to the pre-First World War attempts by Britain and France to use financial warfare against Germany. Warning of the dangers of such action, James said, in a piece for Project Syndicate, “Lehman was a small institution compared with the Austrian, French, and German banks that have become highly exposed to Russia’s financial system. A Russian asset freeze could be catastrophic for European — indeed, global — financial markets.”

Evans-Pritchard seems to be familiarizing himself with the Classics, as he cites how the sanction imposed by Pericles turned out badly. “So are the salutary lessons. Pericles tried to cow the city state of Megara in 432 B.C. by cutting off trade access to markets of the Athenian Empire. He set off the Peloponnesian Wars, bringing Sparta’s Hoplite infantry crashing down on Athens. Greece’s economic system was left in ruins, at the mercy of Persia. That was a taste of asymmetry.”

Bodhita | News & Analysis

China’s Asian Infrastructure Investment Bank Putting Real Heat On World Bank

All of the countries joining China’s alternative to the World Bank

Russia, the Netherlands, and Australia announced over the weekend that they will be joining the Chinese-led Asian Infrastructure Investment Bank (AIIB), whose membership has become something of a test of diplomatic clout between China and the United States. The development bank is seen as a challenger to existing institutions like the World Bank or the Asian Development Bank.

Unable to increase its voice in the current institutions—China commands just 6.47% of the vote in the Asian Development Bank, 5.17% in the World Bank, and 3.81% in the International Monetary Fund—China is building its own alternative. The bank is intended to make up for the gap in funding the region needs—about $800 billion a year in infrastructure investment, according to the Asian Development Bank. It is expected to launch later this year.

So far, just over 40 countries have joined AIIB, with one day left before the deadline to join as a founding member expires. The United States and only one of its main allies, Japan, remain absent from that list. The US and other critics question whether the Beijing-led institution will uphold international standards of transparency, debt sustainability, and environmental and social protections, or just turn into an arm of Chinese foreign policy. Last week, Japan’s finance minister said, “Unless [China] clarifies these matters, which are not clear at all, Japan remains cautious.”

But as more countries join the bank, the more likely AIIB will have to follow international standards, observers have noted, and the less likely China will be able to use a multilateral institution to wield influence in the region. Here are all the countries that have joined or applied to join the AIIB aside from Spain, which said late last week that it would also apply to be a member (link in Spanish).

US Policy Is Driving Force Behind the Call To Jihad

[A very strong case is made that it is US foreign policy which fuels Islamist anger and drives the call to “jihad.”  American policy has been humiliating to every Muslim since 2001, in particular, the policies of torture, secret renditions and drone assassinations, all of which have been designed to destroy the collective psyche of all Muslim males.  

Murder by drone and rendition have demonstrated to every Muslim family that none of them are safe in their beds, or in their homes anymore.  What more reason would a sensible young man need than this, to drive him to take-up arms against the American aggressors?   Yemen hosted a US drone/counter-insurgency base, allegedly used to “hunt al-Qaeda,” which was probably the driving force in Yemen’s destabilization.  The more the US and the Saudis bombed Yemen, the greater grew the unrest of all sectarian derivations. 

The ease of recruitment for ISIS (and the Middle Eastern radicals in general) is a pretty direct measure of the effectiveness of US psychological warfare.  The more we humiliate Muslims, the more jihadis answer the call to battle. 

But, I would argue that that has been the objective of the entire war on terror since its inception…find those who would be jihadis and kill them all.  It doesn’t matter to the Pentagon/CIA that they are feeding the cycle that they have been fighting to stop?  Instead of trying to kill the Muslim world to get all the survivors to “LIKE” us, we should try to disengage long enough for the Arabs to fight among themselves and settle their tribal/religious feuds which we had no right to interfere with, at all.]

Smith College religion professor, historian says US should stay out of Middle East battles

By Diane Lederman | dlederman@repub.com

 

Smith College religion professor Suleiman A. Mourad believes the United States should not be involved in the Middle East. (Diane Lederman/The Republican)

 

NORTHAMPTON – This week, Saudi Arabia took on rebels in Yemen, the latest action in the escalating conflict in the Middle East. It’s a confusing muddle of alliances.

As the New York Times reports the United States is supporting the Saudi campaign to dislodge Iranian-backed Houthi rebels but in Iraq and Syria, the United States is on the same side as Iran in the fight against the Islamic State.

And while some Congress debate whether to send in ground troops, Smith College religion professor Suleiman A. Mourad believes the United States should not be involved.

In fact anger against the United States is fueling the antagonism and serves as a recruiting tool for Isis and other extremists.

Mourad, who also studies jihad, explained some of the roots of the conflict and the reasons he believes that it needs to play out there without United States intervention.

He doesn’t think the warring parties are ready or able to talk to each other nor does he see any diplomat in the United States able to bring the parties to the table.

In fact, he said the United States is hated abroad. A native of Lebanon he returned recently and said the level of animosity between Sunnis and Shia towards the United States was extreme.

Middle Eastern leaders don’t trust or respect the United States.

The wars between Sunnis and the Shia – different sects within the Muslim community with different customs – have both modern and historical roots.
According to the BBC, most of the Muslims are Sunnis – estimates suggest the figure is somewhere between 85 to 90 percent.

Historically, Sunnis consider themselves as the orthodox or traditional form of Islam where the Shia the political faction, according to the BBC.

“There are historical grievances historical reasons that speak to the current grievances,” Mourad said, much in the way slavery here is linked to issue of race in America.

He said at the same time, some Shia are aligned with some Sunnis and vice versa. Also he said Shias in Yemen are different than the Shias of Iran. “They don’t have a common history. There’s much animosity.”

Each political leader has his own agenda and uses the rebel groups to support that just as long they don’t topple their own regime. “Every dictator has interests.”

While the Middle East was under the control of such leaders as Saddam Hussein, the militant factions were squelched but as those leaders were toppled the militant groups were able to emerge.
And what makes the modern conflict unprecedented is how widespread the uprisings are. The battle “across the Muslim world is unprecedented.”

He said the modern day Sunni militant movements began in the 1960s-1970s with the ideas of Sayyid Qutb of Egypt and Sayyid Abul Ala Maududi of Pakistan being put into practice.

They believed that Muslims rulers “were in the pockets of the West.:” And he said those militant ideologues were in “pursuit of a great Islam” and urged Muslims to jihad and unity.

Later there was a split where one group wanted a less militant approach and instead advocated for activism. The idea was “to just do activism to take control of the Sunnis. Teach ideas to ultimately unify Islam.”

But with such things as the overthrow of the Shah in Iran and Ayatollah Khomeini becoming the supreme leader and the defeat of the Soviet Union in Afghanistan, these militants groups realized they had power and could demonstrate that militarism could achieve their goals.

Isis too feels like it has power with the attention it garners with the beheadings of Americans or its connection to attacks in France at Charlie Hebdo, the satirical magazine in January.

“(In their minds) It puts them on equal footing with the west,” Mourad said. And if “we are equal to the West, we can defeat the West.”

Each regime, meanwhile, in the Middle East has its own agenda but leaders are not able or willing right now to talk about what that is and how to meet their needs. Some take advantage of groups like Isis to push for their respective interests and agendas.

So the wars have to play out until they are willing to talk. Meanwhile he said, “We have no business being (there.)”

He said the Iranians during the overthrow of the Shah said, “America is Satan” and wanted to destroy the country. That hatred has only worsened as the United States has gotten more involved in the battles of the countries in the Middle East.