Waiting for Perfect Storm
Pepe ESCOBAR | 31.01.2016 | OPINION

Waiting for Perfect Storm

Let’s start with the IMF «reform» which will be in full effect in a few weeks. Even this mini «reform» had been repeatedly vetoed by the Empire of Chaos. Washington still holds the largest quota and voting shares in the IMF, ahead of Japan. But now China is in the 3rd place and BRICS members Brazil, Russia and India are in the top ten.

This does not spell out radical change though. The US government still refuses to implement a full reform that will end up reducing the IMF's global power. China, meanwhile, advances with facts on the ground such as the Asian Infrastructure Investment Bank (AIIB), and the BRICS with their New Development Bank (NDB), a serious attempt at breaking the stranglehold of a fraudulent – and hyper exploitative – monetary and financial system.

Bretton Woods may be dead but the world is still encumbered with its corpse. The same applies to the larger Washington Consensus – as much as deadly chickens are increasingly coming home to roost.

An avalanche has been building up since the Reagan years – that late Cold War show neatly immortalized in the new TV series Deutschland 83.

In the go-go 1980s, the US government cut taxes for the wealthy and attacked organized labor. Then, in the 1990s, it outsourced good paying manufacturing jobs to Mexico, China and other low wage platforms and deregulated finance – via the repeal of Glass Steagall and the passage of the Commodity Futures Modernization act of 2000 under Bill Clinton.

The Afghanistan and Iraq wars, in the early 2000s, cost US taxpayers at least $3 trillion – and paved the way for the massive 2008 financial crisis, which is still ongoing and about to metastasize into an even bigger crash.

After all, in «response» to the crisis, the Fed, followed by the European Central Bank (ECB) and the Bank of Japan, went all out quantitative easing (QE) – essentially transferring trillions of US dollars from taxpayers to prop up (still) insolvent banks.

This tsunami of cash obviously did not sit idle, but was channeled into dizzying scams maximizing returns, inflating stocks (via corporate stock buybacks) and providing ultra-cheap money to invest in real estate.

The state of play in the US – which Il Generalissimo Trump scholarly describes as «nothing works in this country» – spells out high unemployment; anemic job growth (90% of «new jobs» are temp with low pay, few benefits and zero job security); and exploding deficits.

US foreign policy under the lame duck Obama administration – in commercial terms – is now resumed to pushing «NATO on trade» pacts; the TPP and TTIP, which include the EU and Japan, both stagnating and/or declining, while excluding China. This means both pacts are virtually, eventually DOA; no one can increase economic growth anywhere by excluding China.

In Cold War 2.0 terms, US foreign policy now entails a US/NATO latent war theater engulfing the Maghreb, the Horn of Africa, the Levant, the Caspian Basin, the Persian Gulf, the Indian Ocean, the South China Sea, and the whole of Eastern Europe as far as the Russian borderlands.

Predictably, US taxpayers are financing the Cold War 2.0 mindset with the Pentagon keeping very much alive the possibility of direct military confrontation against the three key hubs of Eurasia integration; Russia, China and Iran.

Pivot to nowhere

The myriad of economic problems confronting US turbo-capitalism are structural and absolutely insolvable under the economic/political system in place, which is in fact a Washington/Wall Street crypto-consensus. Fissures among the Masters of the Universe themselves are about to explode in the open as the planet embarks on a tectonic shift towards a more multipolar economic and political order centered on Eurasia.

Geopolitically, the best the Obama administration could come up with was the 2011 «pivot to Asia» which has translated so far into sporadic US Navy bullying in the South China Sea, converted into a new prime tension region even before the US had managed to extricate itself from the Middle East quagmire.

Beijing, meanwhile, puts the pedal to the metal on the restraint front, while accumulating political – and economic – capital as it enhances pan-Eurasian economic interdependence. Not only the AIIB but also the Silk Road Fund, and even the NDB bank in the future, will all be geared towards bringing about the One Belt, One Road vision; the New Silk Roads which will be the lifeblood of an integrated Eurasia.

China and the BRICS’s strategy of establishing a rival international monetary, financial, diplomatic, trade and geopolitical system is the ultimate nightmare of the Masters of the Universe – as divided as they may be. So no wonder the only visible reaction – via Pentagon / NATO – has been to ratchet up fear and/or warn about impeding chaos if the hegemon is not trusted to impose its version of order. 

It’s as if the whole planet would be fatalistically waiting, in suspension, for the next big, inevitable crisis. The real suspense is whether this new metastasized crisis will doom for good the hegemon’s financial and military domination. Meanwhile, we watch Deutschland 83.