Monthly Archives: September 2018

US Sanctions reach a Turning Point

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By: Karsten Riise*

A defining moment for the US sanctions regime

Each year, the USA finds a new country or group of countries to target with sanctions. Each year the USA adds about 1,000 individuals to its ever longer sanctions list. Now, US sanctions are coming to a turning point.

Up till now, the EU – representing around the same percentage of the world economy as the USA – was sitting put, as the USA grew its sanctions regime to ever more bizarre proportions. Together, the USA and the EU constituted nearly half of the world economy, and US sanctions previously “only” used to target the other half of the world’s economies. Hitherto, the EU had no compelling reasons to strain is relations with the USA because of US sanctions not affecting themselves. 

But now, “secondary sanctions” regarding Iran also hit hard at strategic EU companies and financial institutions and negatively affect EU global strategic interests in energy from the Persian Gulf. US sanctions in effect attack the liberty, security and sovereignty of its biggest group of friends, the EU. 

Thus, we have now come to a defining moment for the global sanctions regime, run by the USA.

The US economy is already less than a quarter of the world’s GDP in USD dollars, and in 2023 it will fall to only just about one fifth of the world (source: IMF). The non-US part, the 4 fifths of the world economy (now including the EU and China), constitute an increasingly advanced group, and they are about to collude against the US sanctions regime. Collusion is the result of parallel interests, and the EU may not actually (or at least not publicly) coordinate all its counter-sanctions with other major power centers.

We talk about the world’s most powerful and complex political-economic structures starting to fundamentally change, here.

So we need to analyze the bigger picture, how complete systems of counter-strategies against present and possible future US sanctions are being planned and implemented by strong powers around the world – all directed (but maybe only sometimes coordinated) against the USA. These systems of counter-strategies will include, but not be limited to, the following:

 

Finance

Payment transfer streams will develop to avoid US banks – hurting the global position of the USA’s major “growth-industry”. It will be a chance (as well as a good excuse) for the EU, China, Japan, India and everybody else, to nationalistically promote THEIR banks in the international system, at the expense of US banks.

 Looking at the long-term trend, the US financial industry has become really the ONLY big growth industry which drives upwards the USA economy. No other sector in the US economy has the combination of size and growth, which finance has (weapons are a bit the same, but finance is unique in size) – so this will be very hard for the USA.

US banks hitherto have a central role in facilitating all global money transfers, and a lot of international money transfers between third-countries somehow technically go via the USA. This system architecture will now be stopped – not just by China, but also by the EU, and probably by India. 

Everybody outside the USA will be reluctant to let their money be touched by US financial institutions, or let their money touch US shores even for a milli-second. And of course, the EU and China know how to engineer legal and technical solutions for this.

The growth of US credit card systems will be impeded. Instead, cards from China, the EU (and India?) will take bigger shares of this profitable and fast growing world market. Russia was the first country on this trend, kicking out all US credit card companies, and inviting in the Chinese credit card system. The EU may well strengthen the role of EU credit cards, and create actions which “incidentally” (oops!?) will hurt US credit cards in EU markets. The finance center of London, UK will after Brexit be caught in this cross-fire between the EU and the USA – if the UK sides with the USA against EU counter-sanction initiatives, the EU may develop strong tools to draw UK credit-card business into EU-jurisdiction.

New global IT money transfer system regimes, which counteract US influence on SWIFT, will erode US political influence. The SWIFT system is based in Brussels, but under heavy US political influence. Russia has already built itself an alternative to that. The EU can no longer accept that the US might be able to hurt EU companies on their SWIFT transfers. The EU will therefore have to take actions either to liberate SWIFT from US control, or to create a parallel EU-system.

 Avoid Wall Street

Why should countries take up loans in the US, if they can have the same loans without risk of future sanctions from China or even the EU?

The IPO of the Saudi ARAMCO oil company has been stalled – unconfirmed information states that fear of US courts reaching out against Saudi assets after 11 September, is part of the reason. Already, the trend is that the biggest IPOs in the world move to Asia.

De-dollarization

The EU now will shift trade of energy from dollars to Euro – this trend will also diminish dollars in other international trade. Trillions of international dollars flowing around in trade may come back “home” to the USA – risking inflation and economic crisis.  Gold is according to unconfirmed reports being speedily bought up by governments, not only by Russia and China, but even Turkey, recently also hit by US sanctions.

Strategic supply

Airbus cannot deliver airplanes to Iran, because, among other things, vital parts are sourced in the USA. This will change. Strategic supply chains will morph to avoid US sub-suppliers, carriers (ships, airplanes, IT), technology, service partners etc. – fundamentally hurting the US global position. We are not speaking used-cars, here, we speak strategic business sectors. The EU and China may not state this anti-US sourcing publicly as an official policy, they will just pull the strings to do it VERY effectively in strategic sectors.

Also, US deliveries in other strategic sectors like food (grain and soy from US farmers) and US energy will be affected by counter-sanctions. China sheds US soybeans and pushes their price down – the EU (less dependent hereof) may then offer to pick-up cheap surplus soybeans from the USA as a bargaining card. The idea of larger US delivery of LNG to the EU probably will be mostly words, but the amounts of LNG from the USA to the EU may possibly increase marginally. The EU may even come to a cold calculation, that the EU in the gas sector might have a more maneuverable partner with Russia than with the USA. The EU has in several aspects a substantially advantageous size-relation towards Russia, and not towards the USA, and while Russia enjoys a good relationship with China, Russia will like to balance its relations too.

 Tourism and education

Tourism is one of the fastest growing industries in the world, and the USA sells its cultural influence to all tourists coming. University education is not only a strategic business to finance national research – Universities are also a cornerstone for the USA to influence future management generations around the world. Why not send tourists and students to other places than the USA? Chinese tourists and students are of significant importance to the USA, and China has plenty of other destinations to send tourists and students, other than to the USA.

Using the state to shield business

As a counter-sanction, the EU now moves central banks and state-owned companies into the fray in financing, and as business partners and intermediate partners, when dealing with Iran. US sanctions on EU state-owned entities can then amount to a US declaration of (economic) war, not only against EU private entities, but directly against EU states.

Buying other than US weapons

The EU recently is implementing a grand and ambitious strategy to increase its own weapons-industry – independent of the USA. To increase the volume strength of EU weapons-makers, the EU will need to minimize imports of US weapons. The EU will have to make their own, only importing as few items as possible from the USA. Saudi Arabia is by far one of the world’s biggest arms purchasers – and nearly all is bought form the USA. However, should the romance between the leaderships of Saudi Arabia and the USA cool down, Saudi Arabia would be well advised to diversify their weapons sources too. And Saudi Arabia even already has Eurofighters from the EU and embryonic arms-relations with Russia and to build on.

The collusion against the USA

US trade war unites the EU, China, India, and the rest of the world (even the UK) against US interests. With aggressive, unilateral trade-war, started by the US, all the rest of the world will now have even more motives to coordinate their counter-strategies to the US sanctions regime.

The EU may seem slow to react – and this may lure US politicians in their hubris to believe that the EU cannot or will not. But believe me, the EU will – because this has become a strategic must. The EU has seen the hand-writing of US sanctions on their wall – they will think this through, plan and make deep preparations to free EU sovereignty from US control. Just read between the lines of EU’s Commission President Jean-Claude Juncker’s recent State of the Union speech. When the EU rolls out their US counter-sanction measures, it will be big, comprehensive and VERY effective.

Negative changes for the USA will last

Once alternative systems to US banks, finance, the US dollars etc. have developed and matured, they will NOT go away. 
The USA is in its hubris about to destroy its global claim for economic hegemony – and that is a good thing.

  • Karsten Riise is former senior Vice President Chief Financial Officer (CFO) of Mercedes-Benz in Denmark andSweden C urrently he conducts research and management of major changes with Change News and Change Management.

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From Bad to Worse, I Myself Would Say

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Roey Tzezana, Rulers of the Future (Hebrew, Tel Aviv, 2017).

Dr. Roey Tzezana is an Israeli computer expert who works for Tel Aviv University among other places. His book was recommended to me by my son, Eldad van Creveld, who plays a key role in teaching computer networking here in Israel. Like so many other computer experts from the famous Ray Kurzweil down, Dr. Tzezana is trying to look into what a computer-dominated world might be like. His conclusions are not encouraging, to say the least.

As most of us have already realized, and as those who have not will discover soon enough, we are going through a truly revolutionary period. For the first time in history everything—and I mean, everything—that takes place anywhere can be recorded. Driving this development are millions upon millions of miniature sensors sufficiently small and sufficiently cheap to be mounted wherever they are wanted. On the streets. In cars and other vehicles. On doors and windows. Inside buildings. Inside individual rooms. In the sky, on board drones so small that they are hardly noticeable. Inside every kind of gadget, however innocuous. On the clothes we wear. Inside our bodies, should that be considered necessary or desirable and in case the legal hurdles are removed.

Once recorded, the information can easily be stored and kept forever. And edited, and altered, should those in charge feel inclined in that direction. With the aid of artificial intelligence capable of discovering patterns, it will also be analyzed and searched for whatever it may mean. Your health, your habits, your movements. The things you eat and drink and wear and carry with you. The things you see and hear and say and read and watch and do. The kind of relationship you have, or do not have, with anyone else. The things you take up and put down and lose and find (and do or do not return to their owner) and lend and borrow. And every financial transaction you make, of course.

Briefly, Goebbels’ claim that, in Nazi Germany, privacy only existed in people’s dreams looks as if it is about to become reality (some scientists believe that even dreams will end up by becoming transparent, but let’s not go into that here). To say nothing of any thoughts and emotions you may have. The question Dr. Tzezana raises is, qui bono? Who profits? It is at this point where leviathans, sharks and clouds come in.

Leviathans, obviously enough, are named after Thomas Hobbes’ famous 1651 book. Starting at least as far back as the ancient Egyptian Pharaohs, rulers have always done their utmost to obtain whatever information they could about their subjects. The more and better information they had, the more able they were to hold those subjects in check, increase and perpetuate their own power, prevent rebellion, etc. Thus one possible, in many case even likely, outcome of the enormous network of sensors, data links, computers and artificial intelligence now being constructed by every more or less “advanced” state would be a tyranny. One which would make even North Korea looks as harmless as a Fischer-Price Toys Chatter Telephone.

And that’s before the cost of any potential aftercare is taken into viagra order uk account. Though it is viagra no prescription humiliating health condition for a sufferer. In addition to being one of the Healthiest Organic Supplements that also yields visible results tadalafil overnight both as a potent anti-aging- and Weight Loss Product, this Acai Kapsule is also considered a Natural Aphrodisiac. This is not to say that beauty will provide happiness, make someone a kind person or maintain or repair a relationship. tadalafil sale Again quite obviously, the sharks stand for business titans who produce the necessary technology, and use it for increasing their own power and profits. They do not have the kind of legal power states have. But they can and do use the information at their disposal to try to identify, influence and manipulate the thoughts, hopes, feelings and wishes of each and every person who has ever used a cellphone or sat down in front of a computer screen. The real danger, says Dr. Tzezana, consists of the possibility, which is rather close at hand, that leviathans and sharks will learn to cooperate even more closely than they already do. Together they will erect a political-economic complex so intrusive, and so comprehensive, as to reduce the rest of us to a kind of servitude far worse than anything the Pharaohs could even have imagined.

In China something of the kind is being constructed even now. Meet the so-called Social Credit System. See, for the details, R. Botsman, “Chinas’ New Viral App Could be Straight Out of Black Mirror,” 21.10.2017, Wired, at http://www.wired.co.uk/article/chinese-government-social-credit-score-privacy-invasion.). Supposed to be completed in 2020, in principle it will resemble today’s credit rating system. Gathering all the above-mentioned kinds of data and then some, it will automatically rate every citizen on a scale ranging from 350 to 950 points. Are you neatly dressed? Your score goes up by so and so many fractions of a point. Did you obey your doctor and lose weight? Ditto. Did you cross a street without marching to the next pedestrian crossing first? Down it goes by another fraction. Did you raise your voice at a government official? Did you try to access a foreign-generated article on the situation in Tibet? The results will be used to determine whether you will or will not have access (and under what conditions) to any number of desirable things. Starting with credit and ending with health services, the right to enter certain educational facilities and work in certain fields, the right to travel, and a great many other things.

All these decisions, whose number will run into billions per day, will be made automatically. In charge of the computers that run the system will be the government, of course. Its officials will decide exactly how many points each piece of praiseworthy behavior (e.g. telling people that Xi Jinping is the greatest leader, as well as the nicest man, in history) or transgression will add to your score or cost you. From time to time, the rules will be changed so as to take account of changing circumstances. Some will no doubt be published so as to help people understand what is wanted of them. Many others will not be, leaving them in the dark as to what is happening to them and why.

At the moment China is the only country publicly known to be building such a system. But this will probably change. I do not mean just tin-pot dictatorships such as exist in many different parts of the world. But also highly developed Western countries such as Canada, or Britain—the latter, in my experience, has already in many ways been turned into a mixture of political correctness and police state—or the Netherlands, or Switzerland. And he US, of course.

Technologically speaking they, and a great many others, can easily do what China can. The only thing that stands in the way are laws concerning privacy, transparency, and respect for the individual. However, should terrorism turn into a more serious problem than it already is, surely such laws will be quickly and quite easily swept away.

So what to do? Enters, says Dr. Tzezana, something he calls DAO (Decentralized Autonomous Organization). Such an organization will use the same methods to collect just as much information as China’s Social Credit System will and process it in similar ways. Instead of keeping it secret and available only to the country’s rulers, though, the information in question, as well as the rules by which it is classified and used, will be available to any member of the Cloud. Somewhat like Uber and AirBnB, but without their centralized headquarters. Operating in such a way, it will provide members with such benefits as “peer to peer insurance, peer to peer conflict resolution systems, peer to peer document storage and peer to peer support.” All incomparably faster, cheaper, and in some ways more reliable than anything available today. That way, Dr. Tzezana hopes, sharks and leviathans will be thwarted and democracy preserved. The flipside? Everyone will be publicly rated by everyone else on everything all the time.

From bad to worse, I myself would say.

Drivel

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As I have noted before on this site, Israel’s best-known women’s magazine is Laisha, (literally, “For the Woman;” perhaps the best translation would be Woman’s Own.) Specializing in sob stories, fashion, household tips, and advice on improving one’ sex life, for almost as long as I can remember myself it has been widely seen as synonymous with a mild sort of mental deficiency.

But no longer. Emerging from the depths, as it were, the very same articles (assuming they deserve the name) now appear on YNet, Israel’s most important source of written daily news that is visited by hundreds of thousands each day. Nor is this an accident, since both the magazine and the website are under the same ownership. Judging by the authors’ names, many if not most of which are probably fictional, they are written almost exclusively by women for women. Between them they present a unique mixture of gossip, egocentrism, self-pity, and plain silliness.

The following examples (headlines only) were collected during just one week. Enjoy.

2.9.2018

“Think: Why you want to have multiple orgasms.”

“Couples: take a deep breath: The terrible high holidays are coming.”

“I promised myself I would fuck someone tonight.”

“Five men talk about their second marriages.”

“Just because I am a woman, they are always talking about how I look.”

“Tit-liberation: Women of all sizes give up their bras.”

“Danna Zarmon [Danna who?] exposes the chronic disease that ruined her Honeymoon.”

“This female celebs’ makeup artist, who spent five years living with a woman, now lives with a man.”

3.9.2018

“Using the holidays to save your romance.”

“As I got divorced, I found out that everyone is cheating.”

“During my period of parental leave, I turned from a princess into Cinderella.”
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“Why should you eat bitter chocolate and drink cherry juice before kissing?”

“The holidays are coming, the married one is with his wife, and I am lonely.”

4.9.2018

“Nothing like friendship between [female] models.”

“Don’t ask me how many men I slept with.”

5.9.2018

“Women, stop avoiding divorced men.”

6.9.2018

“Experts: This is how you keep your marriage intact during the holidays.”

7.9.2018

“I insisted that my partner and his [female] ex should get along.”

8.9.2018

“While in synagogue, don’t forget to feel pity for the matriarchs.”

“Holiday’s eve: Are you a host, or are you a guest: This is how a few easy steps can add to your glamor.”

“Amazing: This is how you can remove body hair with the aid of a spice everyone has at home.”

“Examine yourself: Wat do you know about sex”?

 

Amidst all this drivel, the editors’ contempt for their readers comes through in every word. Yet some of it is considered good enough to figure not once but repeatedly, day after day. More likely those who wrote it ran out of inspiration. Or else those in charge of the website refused to pay them for more of the same. Supposing it is representative of what today’s “emancipated” women care about, and the fact that Laisha has thousands of sisters all over the world suggests that it is, no wonder feminism, women’s lib, or whatever it is called is getting nowhere.

To be fair, though, men’s magazines, with their endless potpourri of cars, muscle, and tits, tits, tits, are hardly any better.

Autumn

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Here in Jerusalem, summers are hard to bear. Some 2,200 feet above sea level, the sunlight is harsh. The more so because it is reflected by the ubiquitous rocks and walls. Standing on Mount Scopus at mid-day and facing west towards the city below, one urgently needs sunglasses to prevent one’s eyes from being dazzled. At other times it is hard to keep one’s eyes open.

Autumn tends to be a welcome relief from that. And from the heat, of course. To be sure, there may still take place the occasional hamsin, an Arabic word that stands for days on which a hot, dry wind blows from the deserts to the east, filling the air with dust and sometimes making it hard to breath. Thank God, though, temperatures are falling. If, like me, you are fortunate enough to have a garden, using it during the evenings you may well want to put on some kind of light sweater.

Come autumn and people return to work or school, causing traffic to become much heavier and the ubiquitous traffic jams, much worse. However, autumn is also the season of the Jewish High Holidays. First comes the New Year, a two—in practice, since in Jewish law each day starts in the evening preceding it, two and a half—day festival of more or less incessant prayer, mutual visits, eating and drinking. And carousing because, by Jewish law, men are obliged to make their wives happy on feast days of this kind; the opposite, incidentally, does not apply. Either at home, or away from it in one of the countless hotels and suits-for-rent or beaches or parks or nature reservations.

“Head (Rosh) of the Year,” as it is called, is followed by ten days in which those who believe in those things repent of all the bad things they have done during the year that has just passed. Next comes Yom Kippur, the Day of Atonement. The one day on which all synagogues are absolutely certain to be overcrowded. And on which a great many people, and by no means only orthodox ones either, “torment their souls” as the Pentateuch puts it, by fasting. My ex-wife, bless her, used to say that the reason she fasted was in order to atone for my sins. Which always made me wonder whether she did not have any of her own.

Famously, all work comes to an end—the religious injunction against it is observed more strictly than on an ordinary Shabbat—broadcasting services fall silent, and both public and private traffic comes to a halt. The system has the advantage that the roads empty themselves. Not only does blessed silence prevail, but droves of children of non-orthodox families in non-orthodox neighborhoods emerge from their homes, take out their bicycles, and ride them wherever they like. Year in year out, I and many other people find their happiness a joy to watch. So much so that I sometimes think we should have not one Yom Kippur but two, or three, or four. And why not?

Four days later, at the time of the full moon, it is time for the Feast of Tabernacles which lasts an entire week. For orthodox people it is time spent living and eating in a more or less makeshift structure erected in a garden or on a balcony constructed especially for the purpose. For unorthodox ones like myself, to operate in low gear, so to speak. The entire season lasts almost a month during which all activity is more or less muted. Trying to get anything done, especially but not exclusively where the public services are involved, the response one is most likely to get is, “after the Holidays.”
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But this is the Middle East. Year in- year out, celebration is tinged with more than a hint of fear. And not only because, as I just said, these are the days when God is supposed to decide one’s fate for the coming year. But because of the rains which may or may not come. And because, to recall a World War-II guide issued by His Majesty’s Army for visiting British soldiers I once saw, “the first thing you’ll notice is how arid the country is.” As the book of Genesis testifies, throughout the centuries famine was never far away.

It was famine which drove the patriarch Jacob and his sons to migrate to Egypt, where they were later enslaved and from where it took God fully four centuries to liberate them. That is why people prayed for rain to fall—and why, as they wrap up Tabernacles, they continue to do so ever year.

Today Israel is world champion in the kind of technology needed to distribute, recycle and desalinate water. That is why actual famine is all but inconceivable. Drought, however, is doing bad things to Israeli agriculture whose allocated supply of water—in Israel, all water is allocated by the state—has been decreasing for years. And also to Israeli customers who are being made to pay through the nose. The possibility that one may have to stop watering one’s garden and cut down on one’s laundering is always in the air.

Above all, people listen to the news and shudder. Going down again, the level of water in the Sea of Galilee has reached the “upper red line.” It has reached “the lower red line.” It has reached “the black line” So shallow has the sea become that an “island” has appeared in it. The island is linking up with the shore, creating a “peninsula.” And the water is getting saltier.

Relief on one hand, fear on the other. What will the coming year bring?