Posted by: Dr Churchill | November 26, 2014

What Oil Has Got To Do With Anything ? Or With the Price of Rice in China for that Matter?

Being in China’s Tsinghua University and teaching Entrepreneurship for a week and Starting up great Innovative Tech Companies in the space of an intense long and sleepless weekend, has left me little time to ponder Geopolitics and Cybernetics.

But on the way home and after many discussions with Scholars and Politicos of whom there is no shortage at China’s premiere University — Tsinghua in Beijing — I’ve got an earful and experienced plenty on this supremely educational trip. And as usual I’d like to share the best fruits of our all too human knowledge as a way to improve the collective intelligence, of the global human brain that my readers and leaders represent.

So as all this wisdom comes not only from my own eyes and ears but also from the world’s most awesome Sinologists teaching, residing, and drinking tea while mentoring and advising me, at the Humanities and Philosophy departments of Tsinghua University — it is just and proper, to Thank all of them, and also Thank the many others who shall remain anonymous. Thank You to all of You, for making this work possible.

So, the cardinal question must be asked again: “What Oil Has Got To Do With Anything?”

And especially with China?

Let’s see:

Being in Beijing around the same time that President Obama got there and the Asia Pacific Summit got underway, is a veritable boon to the initiated in the intricacies of Sino-European post-colonial relations. An it’s good to remember the Colonial Powers all working together during the Opium Wars fought due to energy & trade imbalances, and manifested fully at the turn of the century Boxer rebellion. Because the Boxer war of 1900, was where the Colonial empires flattened the Qing Dynasty and China’s failure, opened the door to runaway ambitions that ushered in the Great World War of 1914. And that First World War, in turn brought about the doomsday of all the empires that initiated it in Europe and beyond. And back then in 1900, Americans were heavily involved in the Boxer Rebellion and subsequent Boxer War waged between China and the West.

Today, that point in time, the Boxer Rebellion, along with the earlier Opium wars is considered the official beginning of Modern Chinese History. And that is how China sees the World. Through the prism of this great conflict. And as luck would have it, both Germany and America figure in it greatly. Almost just as much then as they do now.

So what about Oil? What Gives?

And please tell me, what does opium, silk, textiles and tea leaves, have got to do with oil and gas?

Back in the mid 19th century and specifically around 1849 the First Opium War gave rise not only to Chinese nationalism but also to the end of the slow food Quing Dynasty, and the beginning of modern fast shipping with steam powered engines burning coal. And the second Opium war gave rise to even faster shipping for the opium trade, through fast hybrid steam ships with sails, powered with coal, coal sludge and later oil…

And all this is good because a bit more than a decade after the Boxer Rebellion ended, the First World War started. Followed by the Second World War, that was followed by the Korean War, and the Cold War, and here we stand today, fully one Hundred years after “World War One”. But we’ve learned a few things along the way, with new accounts coming in from the bloodiest drama in history. These accounts many of which orientate us to look at this conflict through non European eyes, help us navigate the intricacies of European and Colonial Empires’ politics. We see the Energy landscape, the nascent resource fights, and the political and diplomatic maneuverings that kicked off the war that ended the empires.

To a seasoned observer of World History and Foreign Relations, China is far more central to that major conflict than Sarajevo in Bosnia where the Archduke Ferdinand was assassinated… But we will let the facts bear me out on this hypothesis. Be mindful of this though, because today, there is still no consensus on the Great War’s [First World War] origins or even on the lessons imparted to us. And as to the Leaders of our Nations and Alliances, then and now — they are fairly insignificant as mere observers and reactors to the energy and trade imbalances of wealth and power. But we know better… One things is for certain: The war demolished five great colonial empires and opened the way for Nationalism and it’s adherents everywhere on earth. Chairman Mao always claimed to be grateful for the Colonial Opium wars because as he claimed — “He wouldn’t be where He is if it wasn’t for them.”

But while I was in China when the President of the United States arrived, I was strictly an observer at the state celebrations the Chinese State put on, for the benefit of their fellow Asian Pacific Leaders at the Summit, and on second thought, for the American President too — whom the Chinese regard strictly as an adversary.

And it all comes down to oil again. And Gas since fossil fuels go together, but we stick to oil for convenience. And because it still powers up the world’s economic, civilian, and war engines. Sadly now that we have all the technology to be able to harvest our energy from clean and renewable resources — we are still beholden to the old fossil fuels, and we are still waging wars and negotiating for peace based on our energy needs for fire. Like primitive cave dwellers stealing fire from each other — we are fighting for oil and gas deposits, supplies, and pipelines. That is why the next theatre of war is the South Pacific and specifically the South China Sea, simply because underneath the shallow ocean there, lies enough oil and gas to make Saudi Arabia and all the Emirates of the Arabian peninsula, blush and bemoan their clumsy fate, together.

And yet methinks that we are truly fvckin primitives, because this fight to steal each other’s fire, reminds me that a hundred years ago the First World War — The so called GREAT WAR, was fought over energy imbalances as well. It started primarily in Europe in a most undiplomatic Germanic flatfooted and primitive way, and it was still fought in large parts of the globe four years later, with bullets, and increasingly with swords, bayonets, and lances. It was a backwards type of war. Many war technologies evolved but the cavalry lancers as a matter of fact were the menace of the armies engaged in the battlefield, because they were riding fearless, they were particularly fearsome, and thus greatly feared by their adversaries on either side. The French lancers sporting huge horses and tall men with the longest spears of the First World War were a sight to behold and run away from. And the Chinese Lancers with the shortest spears in the world and no horses were

The glint of steel makes men go weak in the knees, and back then the price of oil was at 70 cents per barrel, because horses charging with proud lancers on their back, didn’t need that much oil to fire up their bellies to trot to the front. Yet today when crude oil, powers up all the beasts of war — we seem to need more and more of it. And still we should consider ourselves lucky to have today’s spot crude oil prices, on the decline because this might be a way to preserve the peace.

Prices of crude oil are now well below $77 a barrel, so we can celebrate. Rightfully so after the spike to $130 in 2008, not so long ago. And it costs me nearly 100 pounds less to fill up the tank of my car with high octane gasoline, than it did a couple of years ago, and that’s just groovy. Am a huge user of Public transport and bicycles, yet the old ragtop Bentley sits in the garage for half a year until I take her out for a long ride to the continent or to the wilds of Scotland. It’s a huge antique car with a mighty V8 and such whole man-thigh like piston cylinders, that to fill them up to go boom, in order to propel this hunk of steel, take a lot of oil…

So am happy to ride to the South of France, and yet my shipping friends, the resource hedgies, and the oilers in the City, are all complaining that they don’t make enough money now, to put shoes on children’s’ feet.

I am sympathetic, but You have to hand it to them, cause they are really rich, and still bitching. And as for me — am curious, so I have to ask why the price of crude oil has tumbled so far down in such a short time?

I look to collective wisdom to answer these questions and from where I sit, it makes lots of sense, but when you gather the published facts, you get no help with that search for clear meaning. As from our publicly available media, you can only see a very cloudy picture emerge.

So let’s keep on looking to connect the dots and clean up the image that emerges. US Secretary of State John Kerry went to Oman, and then to Vienna, and points in between, for stirring up support for another round of talks on the Iranian nuclear deal extended over this past weekend. And it was in Vienna where good-man John Kerry, concluded the three way talks. Talks that brought about a serious work-out through an extension to the “Concluding talks” towards a commonly accepted beneficial deal with Teheran. All sides agreed to more inspections and that they will work things quietly behind the scenes and reconvene sometime before next July, because there has been so much progress — that they lost track of their differences and are all singing Kumbaya together.

Still in these Viennese festivities, Russia recently emerged as the key part of a nuclear deal with Iran, and thus we saw Kerry waltzing under the chandeliers with Lavrov and the Mullahs’ representatives. This will be the make-or-break dance for Kerry and Lavrov, and by extension for the US administration’s foreign affairs efforts on the issue of Nuclear Proliferation. In effect, US now greets Russian Foreign Minister Sergei Lavrov as a partner here, and an enemy there in Ukraine, and a friend elsewhere, like in Syria etc… It’s big world out there and a bit schizophrenic, but somewhere beyond our purview this must make some sense.

I think that Obama went to Beijing last week for a single reason. Being a lame duck President — he wanted to take the last opportunity to taste some really good Peking duck with plum sauce. And that is all he accomplished, in a very formal sixteen course sit-down dinner with white tablecloth and gloved waiters. Ahh and maybe he came over for some after dinner ginger cakes, and wild mint cookies, with hot green tea too… and maybe for some off-the-cuff talks with Premiere Xi Jinping of China. But that didn’t go so well.

Talking to China is Good though, because while You talk, you cannot wage war. Same as when you eat the crispy Peking Duck you can’t complain. But while in the Chinese capital, the President of the US, also attended the meeting with other Asian leaders but he appeared to be pushing a really strange trade agreement. Sadly this is a daft trade agreement, whose primary purpose is to isolate China, by bringing the rest of the region into the neoliberal “Washington Consensus” envelope. Just like slapping your host in the face — this proposed trade deal is in keeping with the old Opium war traditions. A colonial power ambition that caused the Opium Wars, and the Boxer rebellion, that in turn caused the First World War, that caused the rise of Nationalism, and that brought the end of the Chinese Imperial Houses and installed Chairman Mao to power. Am sure the American specialists don’t know all that, but it would behoove them to take the long term view and study History through Chinese eyes and then at least President Obama could credibly discuss the Chinese reality in historically accurate Cybernetic terms, with his very astute and intelligent host, Mr Xi. It’s important to know that Mr Xi is a keen student and scholar of History and a Tsinghua University graduate.

Yet instead of respecting his hosts by knowing all this, President Barack Obama was foolishly trying to sneak past the hosts and speak about this daft trade deal imagined by trolls and ghosts of another era, living in sin together under some sub-basement of the White House and State Department. Luckily, Obama understood this knowledge trap intuitively, and therefore his heart wasn’t into pushing it but that’s another story…

Mind You, because of this faux pas, Washington will never get the overladen, overimposing Trans-Pacific Partnership off the ground. And the functionaries in Washington although “NOW” they know all this — they are still thinking its worth sticking with this dead horse — even if it only serves to unbalance Beijing’s bearings in the South China Sea.

But let’s look at how things really turned our in Beijing last week: A big item on Chinese Leader Mr Xi agenda, in the Pacific Economic Forum, was the launch of an Asians-only lending institution intended to rival the Asian Development Bank, the World Bank affiliate doing the West’s work in the East. The US being entirely opposed to the idea of “people helping themselves” advance towards Progress and Prosperity without American assistance and all that goes with it, Washington used all means possible to sink this ship.

Still when Obama got off the plane in Beijing, the Asian Infrastructure Investment Bank had $50 billion in capital and 20 members — more to come in both categories in the days and weeks after the meetings.

Further afield, the situation on the ground in Ukraine is getting really messy again. Deaths spike and as winter sets in the events of the yearlong conflict have left Ukraine’s economy near extinction. No Gas — No Heat — No Mercy. Here is where you have to be really sympathetic with the Ukrainian people. But again, you have not read any of this, because it does not fit with the triumphalist approved story and the talking points memo, but Ukraine’s heart barely beats.

Further east, we hear through the financial markets that the ruble’s decline brings Russia to the brink of another financial collapse. Nothing could be further from the Truth even though Bloomberg, CNN, and CNBC would have you convinced the end is near. sanctions or no sanctions Russia’s ruble is rumbling along thunderously well in all places east of Berlin.

Mr Xi, meantime, had a very productive encounter with President Vlad, the impaler of Ukraine. People in attendance tell us that both put in strong performances and struck gold. In short order, Russia will send enough natural gas eastward to meet much of China’s demand and in the long run could price out American supplies in other Pacific markets, which are key to the success of the current production boom out West.

This is a lot of dots to connect. As I see it, the running theme in all this is that there is constructive activity and then there is destructive activity as well. Readers may think this oversimplifies, the situation, but I am willing to listen, and change my views accordingly.

Let’s go back to early September. On the 5th, Germany brokered a broken cease-fire agreement between Ukraine’s government in Kiev and the rebels in the eastern Donbass region represented by Russian separatists and Russ Militias of regulars and irregulars under Moscow’s orders. Her it is important to watch the Germans playing both sides, because they stoked the Maidan rebellion and Ukraine’s flirting with Berlin, and at the same time pretended to support the Russian annexation of Crimea because of the Russian Gas pipelines bringing cheap energy to their homeland via Ukraine. The German “Peace building” through war is reminiscent of Kaiser, and Adolf Hitler’s ambitions to have a quick war of conquest of all of EUrope, and thus gain their Thousand Year Peace for the Third Reich or whatever number the Germans are on their Reich induced opium pipe dreams. And for that fantasy they started war after war. The knowledge today is that the Germans armed the hand that killed the beloved Peace advocate Franz Ferdinand Archduke of the Austro Hungarian Empire in order to launch the First World War that satisfied their ambitions. Same as it is always the Germans that start the bar brawls in all port cities around the world, so it was the Germans who started the Boxer War in China when in 1900 they arrested an unarmed youth walking past their legation in Beijing and executed him immediately because his clothing and general appearance looked to them like what a “Boxer” would wear. This otherwise “inexplicable” execution of a youth actually started the full scale Boxer War in 1900. Same as the “inexplicable” assassination of the Austro-Hungarian Archduke in Sarajevo we now know to have been a German Plot to remove the “Peacenik” from the throne of the empire in order to allow them to go to another war of conquest and disaster. That’s the German psyche at play in China’s history too.

And it is the same way the Germans figure prominently in Ukraine today — whistling Peace songs — while stoking the fires of war through both sides, all the while whistling Dixie, and gaining influence on an asthmatic Washington conservative GOP and on Obama’s White House, who to their credit, made it plain they wanted no part of this. Still the Germans, preferring to continue open hostilities in Ukraine they allowed the ceasefire they brokered to be blasted to smithereens with their own ammunition supplied to Kiev and Donbass alike. Naturally Donbass and Dumbass go hand in hand, and with this type of foreign affairs policy emanating from Berlin and the dark German psyche — strange things are guaranteed to happen.

So less than a week after the Minsk Protocol was signed, ostensibly between Ukraine and the Donbass Russian separatists, but in reality between Germany and Russia both interested in dividing Ukraine and going halfsies of the spoils of war — Washington smartened up and Secretary of State John Kerry, made a little-noted trip to Jeddah to see King Abdullah at his summer residence. When it was reported at all, this was put across as part of Kerry’s campaign to secure Arab support in the fight against the Islamic State. Knowing that the Germans are stoking both Assad and ISIL, Kerry tried to deflect attention from the German “Nest of All Evil Ideas” as H G Wells described our erstwhile allies [for the moment].

And if you have any doubt who started the First World War because am sure you know who started the Second One, don’t take my word for it but look at the best of German Historians. In the 1960s, the esteemed German historian Professor Fritz Fischer, revived the question of guilt, claiming that his country was responsible because it had embarked on a premeditated war of aggression. Fischer’s student Volker Berghahn has now written a firm restatement of Fischer’s thesis, which can be found in The Cambridge History of the First World War, a comprehensive collection of essays on all aspects of the conflict. This text is also available online at the Library on the web.

But preventing the Good Germans from starting the Third World War was not all there was to the visit of the Secretary of State John Kerry, to the desert Kingdom. The State Department visit had to do with Washington’s desire to fight ISIL, contain Iran, and also help weaken the Russian economy in order to loosen King Vlad’s stranglehold on Ukraine’s neck. To do all this, is a tall order but Kerry told the Saudis three little things to do in order to make everyone in Washington’s sphere of influence including the Chinese[?] happy. 1)Raise production of the oil wells 2)Cut its crude price; and 3)Manage the local Fundamentalist Wahhabis in order to stop them from supporting ISIL with money, weapons, fighters, and words. But above all just make oil really really cheap.

So please now keep in mind these pertinent numbers: The Saudis produce high quality crude oil for less than $25 per barrel, as the break-even point in the national budget. The Russians need $105 to break even. And the Canadian mooseheads need $180 in total costs and energy inputs, in the dismal Tar Sands of Alberta. They need oil at the price of $180 per barrel, to even approach the break even point. All the difference is subsidies and oil company development finance skimming profits. Creative accounting will only get you this far though, before the fates, declare that you’ve become bankrupt. If you don’t believe me — just ask the Greeks and their German friends loan sharking and lording it over them, like slave masters to their helots. Don’t get me started with the Übermensch again, but they start all these wars and I don’t like that.

But who is counting?

Shortly after Kerry’s visit, the Saudis began increasing production, sure enough — by more than 100,000 barrels daily during the rest of September, and with more increases apparently to come as winter sets in. Last week they dropped the price of Arab Light by 45 cents a barrel, Bloomberg News just reported. This has proven a market mover, sending prices to $77 a barrel at this moment.

Think about this. Winter is coming, Iran is embargoed, serious production outages are routine in Iraq, Nigeria, Venezuela, and Libya, other OPEC members are screaming for relief, Russia is exasperating for the falling prices and the fact that the Chinese are never paying full long term contract price for the fossil fuels they import but only daily spot prices; and that the Ukrainians are skimming oil and gas off the top of the Berlin bound pipelines — and yet the Saudis make back-to-back moves certain to push falling prices still lower, while praying to the Prophet for more deposits to be found under the desert sands before the Chinese start developing their own fields in the South China Sea.

You now start seeing the picture and if you do the math, and take into account Kerry’s unreported itinerary to help you along in your mental energetic exercises — you start seeing these moves in the commodities markets as signals for what’s coming down the pike: “There are very big hands pushing massive quantities of oil into the global supply right now” a great source wrote in an e-mail note the other day.

The Russians, meanwhile, are reported to be sending soldiers and artillery back across the Ukrainian border. This we read, but we read nothing as to why this may be so, assuming for argument’s sake that it is. We are invited to accept that there is no reason worth reporting. But the death toll keeps going up. The possibility that we are so ill-informed — is that these reported deployments are in reaction to moves kept out of sight. Given Washington’s disapproval of the German Russian friendship moves that brought about Minsk accord and its underhanded manipulations in the oil markets since it was signed, I label this a likelihood, at least, and maybe more like a certainty.

And given that Stalin and Hitler secretly agreed to split Poland in half seventy years ago — then maybe the Good Germans have agreed to split Ukraine in half today with the Good Russians and nobody is the wiser. Except that NSA intercepts all of that intelligence traffic and bugs the current Chancellor’s Blackberry, so Mr Kerry must have wind of that and he tries his best to deflate this second German Daft Agreement with Russia.

As to the Ukrainian economy, this is getting shafted with each passing day. The Ukrainian economy and it’s markets are sorted already, even before the International Monetary Fund gets its mitts on the place. A Royal Bank of Scotland analyst in Hong Kong, just published a “tour de l’horizon” and here are just a few of the highlights, or lowlights: With the Russian ruble cratering, Kiev recently had to remove a currency peg of 13 hryvnia to the dollar. It dropped 15 percent in the next five trading sessions. From a rate of 8 to 1 a year ago, it now cost 16 hryvnia to buy a dollar.
With the banking system in peril, a third of deposits had been withdrawn—before the currency collapsed, this is. “There is no way to repair this damage by doing some kind of recapitalization exercise that may still work in the eurozone,” the RBS man writes.
Efforts to stem the hryvnia’s fall have dangerously depleted foreign currency reserves. As of October, the central bank had $12.6 billion dollars in assets—taxi fare in the context.
Ukraine owes Russia $1.6 billion in gas bills by yearend—and then faces fees of $700 million a month for new supplies.
The Ukrainian automobile association, to burrow in slightly, just reported that new car registrations fell by 65 percent in October from the previous year, to 5,900 units—this in a nation of 46 million. The No. 1 producer, Saporisky Awtomobilebudiwny Sawod, turned out 1,007 vehicles. It has 21,000 employees on the payroll.
This kind of report leaves me nearly speechless — and our correspondents silent, of course. All that we have read of this past year, events taking place in the name of democracy and a better life for Ukrainians, comes to this. “The economy?” Hinterkoerner concludes. “What economy?”

Onward. “Going forward,” as the State Department’s chirpy spokespeople like to put it.

Kerry just finished up in Oman, where a round of talks on the Iran question were held just short of the Nov. 24 deadline for a deal. Russia’s role in these talks has suddenly grown potentially large. To break the impasse over Iran’s centrifuge count, Moscow offers to take most of Iran’s stockpile of unprocessed uranium and send back enriched fuel when Iran needs it to power the nuclear energy program it wants. This is a reprise of an idea first floated five years ago, and this time Tehran finds it acceptable, at least tentatively.

Put this in the larger context: With the prospect of ending three and a half decades of pointless hostility within reach, this is the moment to be battering Russia as near to a pulp as possible with sanctions, market interventions to its disadvantage, and who can tell what, on the military side in Ukraine. You start to think Washington simply cannot help itself, and gloats in it’s victory. But more on this in a minute.

And so on to Beijing. Nobody will put it this way, but President Obama arrived with a huge handicap and one failure already accomplished, with several others to come. First, it was a mistake to oppose the Beijing-sponsored Asian lending institution in the first place, and already it begins to cost the Americans dearly in friends and treasure. Second, is the TPP trade pact that is no further along from stillbirth as you may have noticed. Third, the climate pact Obama and Xi signed looks so far like an agreement for the sake of an agreement — that nobody disputes that it was staged as something of a Chinese gift, Obama could bring home in triumph. The only “successes” American media were able to report were a few market-opening measures of benefit to specific American corporations. Nothing visionary, fair to say. A junior trade negotiator could have gotten this done in no time at all.

But why all the fuss? Here is why: This is a point hardly lost on the Chinese. They all know that there is no Change vision, nor adaptation to Geopolitical shifting realities, on the American side. There is only resistance, obfuscation, and objection. On the other hand, President Xi has consistently urged a “new great power relationship” and He is absolutely right on this. Now if any of You can explain why this is not a perfectly logical thought in the face of 21st century realities, and in the face of German-Russian friendly bear-hugs and belligerence that will surely, end badly for the rest of us, — I’ll have to ask you politely to please put that opium pipe down.

Washington’s claim to be an unrivaled Pacific power by destiny, goes back to Teddy Roosevelt’s imperial cruise around the region after the US defeated the Spanish and massacred the Jefferson-reading Filipino democratic movement One Hundred years ago. We simply cannot surrender the turf, realities be damned.

President Xi, on the other hand, is all about engineering and current realities on the ground, and not a few of these realities have to do with building stronger ties with Russia. If Washington plays hard to get, President Xi turns to Putin and shakes hands with Vlad the oil man, on a historically huge, $400 billion gas deal earlier this year.

You can guess, how President Obama felt when the two announced during his visit that they have just reached another deal, this time for $325 billion.

The gas will arrive from Siberia by way of a not-yet-constructed pipeline. PetroChina will take a 10 percent share of a subsidiary of Rosneft, the Russian gas company. By 2020, China will source a quarter of its demand from Russia; the Russians, in turn, will by then sell more gas to China than they now send to Europe.

And the new Chinese airplane carrier group is steaming fast to the South China Sea to confront the American battle group cruising there.

Need to remind you that this new airplane carrier was sold to Beijing from Moscow along with technology to built three more like it that are now busily constructed in the best Chinese shipyards. If they learn to turn them on like so many copy cat ships of sound design, or like the Range Rover evoque copies called LandWind and selling for a fifth of the Range Rover’s price — then we are surely looking at the Sino Century coming soon to a theatre near you. And it arrives only a few years earlier than expected.

Listen to the sound of the world turning.

And wonder why your media does not pass it on to you and why Apple’s Itunes do not sport this on it’s library…

It always seems that more news is lost along this line of reasoning.

But when accounting for facts and logistics to pursue the truth, you cannot fail to see that Russia is also in numerous other energy deals with China, including one that doubles petroleum exports to the People’s Republic. Then there is the Silk Road Investment Fund, a $40 billion vehicle to finance development projects in the seven nations of Central Asia. Relations with Vietnam and Japan, horrible of late, now appear to be on the mend. So much for Washington’s role as protector of the region from the reawakening empire.

“Add this up,” writes Ken Courtis, a close observer of the international scene for decades, “and you have the outline of a number of important initiatives which will be key to China’s increased lead role in development through investment in other emerging market economies.”

Courtis had a curious exchange with Putin during some of the economic forum sessions in Beijing. He asked if Russia would provide North Korea security guarantees if it agreed to renounce nuclear weapons.

Putin replied in part: “Your question is too clever. This is not the moment to even raise that question, let alone answer it. Often, the problem in the world is not that small countries, who feel they are under siege, are unwilling to change. Rather, it is that the bigger countries are all piling on like bullies in the school yard – and they don’t know when to stop.”

I hope Kerry and Obama were listening at that moment. As Courtis heard it, “I think Putin was signaling to the West that there will be no more help from Russia with sanctions on North Korea, or anywhere else. One could also read: Iran, Syria, Venezuela, etc., into that line of reasoning.”

We can now start to connect the dots and thus see a clearer picture emerge, and identify the costs of a consistent pattern of destructive behavior on Washington’s part here. Here, there, and everywhere. Specific to the case, the Sino-Russian energy deals cannot possibly be taken as other than long-term response to the West’s renewal of Cold War hostilities toward Russia and its refusal to countenance China’s emergence. More narrowly, Putin wants an Iran deal to demonstrate Russia’s importance as a global player, but he is not far from being fed up enough to throw this to the dogs.

The obvious question is what we are watching as all these events unfold and then coalesce into a single reality. This peculiar moment seems to make this reality clear. Nostalgic for the period of primacy known as the American Century, the US cannot accept its passing. Logically enough, the task becomes essentially destructive of the world, as it is an erroneous effort [in the end] to destroy history itself.

The planet’s other major powers, for all their imperfections and, indeed, disgraces, understand that their time has come. Because now parity between West and non-West is upon us. This is the core reality, and is our task to not lose sight of it, because China’s and Russia’s domestic problems are rather like America’s. They are to be resolved by Chinese, Russians and Americans, a point we understand easily when it comes to the interference of others — but not the other way around, when the question is our interference elsewhere across the globe.

But is everything that bad? Maybe. But only for those who insist on holding on to the wrong end of the stick. This century’s winners and losers are not yet clearly marked. Yet, I have to preserve my optimism on this point, but with each passing event, each mistake, who is fated for which side becomes a little more evident.

I like the thought a Chinese scholar made at a dinner in Beijing the other night. He spoke of Ukraine, but the remark applies across the board: “From our perspective, we see all of this agitation as noise at the surface,” he said. Then he cited that scene from “Macbeth” at Dunsinane Castle, “Life’s but a walking shadow, a poor player that struts and frets his hour upon the stage, and then is heard no more. It is a tale told by an idiot, full of sound and fury, signifying nothing.” The Chinese — always attuned to the long view, are now saying: “Who is the idiot in this man’s rendering?”

And in keeping with the underlying theme of this examination of Cybernetics and Foreign Policy and War — we must ask the question that prompted the diplomat George Kennan to describe World War I as “the great seminal catastrophe” of the twentieth century, because it led to so many further catastrophes.

But for me the greatest Catastrophe was that the Boxer War was waged by all the Cosmopolitan powers banding together against the Chinese natives in their own land. And it was that peculiar anomaly that gave rise to all the catastrophes that followed. As in the Pacific where the American Filippino war of subjugation of the once proud people in 1900, truly closed the China gate to the Continental Europeans and thus provided the flap of the butterfly’s wings that set off the subsequent hurricanes of World War One. The Anglo-American Alliance was cemented in the battles of Beijing and Manila, and in my mind it wasn’t just the German plot that came to fruition on June 28th of 1914, when the Serbian nationalist Gavrilo Princip assassinated the Peace Loving Archduke Francis Ferdinand, heir to the Austro-Hungarian throne.

Yes it was the German Kaizer who told the Austrians to attack Serbia and who had previously armed the Austro-Humgarian army, and the Serbs combined. But today it is evident that it was the killing of the Chinese people’s ambitions for equality in their own country that gave us the cataclysm that opened the flood gates. Because now, One hundred years later, historians wondering how such a cataclysmic war came almost out of nowhere, understand the China Question in light of whetted appetites, and explore the failure of foolish governments to understand where their colonial ambitions and bottled-up actions of conquest could lead. And they understand the German finger pulling the trigger in Sarajevo, and their soldiers executing the unarmed boxer teenager inside their legation in Beijing that started the Big Fire of the First World War that ended with all of the seven empires mourning far too many millions of people dead and the loss of innocence and an imagined world of Peace, Progress, and Harmony.

Most of the empires themselves never recovered either and then Nattionalism came along and we reaped another Hundred Years of Continuous War, albeit war by other names.

Go Figure. Remember the Boxer Rebellion?

How does the Islamic Rebellion compare to that long ago Boxer Rebellion, in retrospect, now that we are shoving Democracy down their throats, and making them non humans in their own lands, through the force of the bayonets?

In my book, education is the only way to get people to understand and embrace Democracy, but that’s a tall order…

Still it’s worth reading the book…



Methinks, it’s time to draw the whole picture.

I leave You to it…



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