On March 1st Russian President Vladimir Putin changed the geopolitical game. During his speech he unveiled new weapons which instantly made obsolete much of the U.S military’s physical arsenal.
And the panic in Washington was palpable.
Since that speech everything geopolitical has accelerated. The US government under Trump has shifted its strategies in response to this. No longer were we threatening North Korea with military invasion.
No, Trump sat down with Kim Jong-un to negotiate peace.
On Russia, Iran, China, Turkey, Venezuela and even Europe Trump’s war rhetoric has intensified. Trump is only talking about economic sanctions and tariffs, however, leveraging the dollar as his primary weapon to bring countries to heel.
There’s no hint of US invasion, no matter how much John Bolton whispers in his ear or Bibi Netanyahu bangs his shoe on the table.
Because US military dominance has always been enforced not by technology but by logistics. Those bases, while expensive, are also the real strength of the US military. They are a financial albatross which the ‘Axis of Resistance’ is using to win a war of attrition against US hegemony.
And now, Putin’s new weapons rendered them obsolete in a moment’s time. Once fully deployed there will be no going back to the old world order.
So, that’s why Trump talked to North Korea yesterday and why he will talk with Iran tomorrow.
The End of Leverage
With his latest escalation -- “Anyone doing business with Iran will not do business with the US” – Trump is waving the White Flag on using the military to enforce his vision of world order.
This is the Nuclear Option of Financial Warfare. Going nuclear is a losing strategy because you have to back it up.
In the same way Trump threatened fire and brimstone on North Korea, but ultimately went to Singapore.
So, what’s he going to do? Sanction Apple for selling an iPhone in Tehran?
Because that’s what’s implied in that statement.
The cost of compliance to these sanctions will cripple banks and businesses the world over. We saw a preview of it in April when Trump tried to cut Rusal from the aluminum market.
In that same tweet, though, he revealed his hand, finally, that he wants world peace.
But, like the Beauty Queens he used to manage, Trump says a lot of things people want to hear, but does he really know how to go about bringing that dream to reality.
Financial warfare is just as devastating as physical warfare. And a peace won through subjugation via the sword or the futures contract is still a false one. It wasn’t won through respect and acquiescence to all parties’ needs, it was done through the worst kind of bullying.
It will have blowback.
At this point it is hard to tell whether Trump understands this or not.
Of course, this erratic behavior is exactly his plan. It is the Art of the Deal on the geopolitical stage.
But, the Art of the Deal requires leverage and Trump has only financial leverage.
And financial leverage can only erode over time. Every transaction made in another currency, every bank that survives being sanctioned by the US erodes that leverage a little more.
By going nuclear Trump has told the entire world he will destroy it to save it.
And if he’s serious it means today everyone with three brain cells to rub together is making alternate plans.
What looks invincible today, the dollar, is obsolete tomorrow. Currencies are fungible. They are easily cross-shopped in the end.
What most geopolitical commentators choose to forget in their strategic calculations is that the post-WWII institutional order has been maintained by the interplay between US financial dominance via the IMF, the BIS and the World Bank and the military logistical archipelago of bases and carrier strike groups circling the globe.
Nicolas Maduro in Venezuela is trying to rebuild his country without resorting to the extortion rackets of the global banking system via the Petro and Sovereign Bolivar. The jury is out whether he’ll be successful. If he is, expect the US to put more sanctions on Venezuela. But, since there are no dollars in country, what would be the point?
Again, you can’t force someone to use your currency.
Trump realizes the military portion of this system is aligned all wrong. It’s wasteful and it has destroyed the US back home. He wants it to end.
But, at the same time, he wants America to win in all deals and retain financial dominance through the energy trade. So, destroy Venezuela, Iran and stymie Russia to allow the US to keep control of the oil and gas trade via the petrodollar.
Moreover, I agree The problem is no one else in Washington D.C., Tel Aviv, New York, the City of London or Brussels has.
So, how does he make everyone happy while tearing down the parts of the world order he doesn’t like while using its remnants to shore up those he does?
By backing every demand Israel makes on Iran, that’s how. He placates the neocons in D.C. and Tel Aviv this way. But, he’s not fooling anyone really.
They are still convinced he’s not on their side and use independent means to put more pressure on Russia and him. They want control of the Congress after the mid-terms and need the narratives to hold through November.
Case in point, the recent announcement that the British government will demand extradition of the mythical Russian agents who poisoned the Skripals earlier in the year. There’s no proof, but the British Deep State continues on, to distract from reality.
The cries of treason for Donald Trump meeting with Vladimir Putin. The new sanctions bill introduced by Senator Lindsay Graham, said to throw everything at Putin to make him know the US is serious.
Like Putin hasn’t gotten that idea yet?
Trump is still being targeted for impeachment by shutting down dissent domestically (Alex Jones, Ron Paul) while he attempts to pursue a somewhat independent foreign policy.
And that’s why he has to go nuclear in his use of sanctions because Trump, despite all appearances, is not interested in any more Americans dying overseas for the dreams of the Empire. And he knows that’s what will happen if any military option is on the table with Iran.
There is little hope of the kind of makeover of US and European leadership Mr. Crooke feels is necessary to change the dynamic between the US and its geopolitical rivals. So, Trump will pursue this sanctions strategy to the bitter end.
Because, Iran, like Venezuela, Russia and China will not negotiate with someone who has nothing to offer except the back of his hand.