The Gold Standard | America vs. Eurasia

Price-keeping operations in the global stock markets continues, if not directly (hard to prove) but indirectly via orchestrated news flows – press conferences, summits, announcements, exaggerated coverage of decisions already foregone (Bundestag vote on EFSF). Nothing else is needed to convince ourselves that lessons have not been learnt. People are at their old games. They need a bigger shock to be shaken out of their bad habits. That is coming.

In the meantime, western media have begun their campaign against Russia now that Putin is going to be the President of the country in 2012. Just read the FT coverage since the day he was ‘nominated’ to contest.

In case you wonder why such vicious coverage of Russia takes place, two recent pieces by Stratfor provide the answer. One is ‘The Geopolitics of the United States, Part 1: The Inevitable Empire’ Some excerpts from it:

That leaves only the lands of northern Eurasia — Europe, the former Soviet Union and China — as candidates for an anti-American coalition of substance. Northern Eurasia holds even more arable land than North America, but it is split among three regions: the North European Plain, the Eurasian steppe and the Yellow River basin. Although the developed lands of the North European Plain and the Eurasian steppe are adjacent, they have no navigable waterways connecting them, and even within the North European Plain none of its rivers naturally interconnects…..

There is, however, the potential for unity. The Europeans and Russians have long engaged in canal-building to achieve greater economic linkages (although Russian canals linking the Volga to the sea all freeze in the winter). And aside from the tyranny of distance, there are very few geographic barriers separating the North European Plain from the Eurasian steppe from the Yellow River region, allowing one — theoretically — to travel from Bordeaux to the Yellow Sea unimpeded…..

Among these three northern Eurasian regions is the capital, labor and leadership required to forge a continental juggernaut. Unsurprisingly, Russian foreign policy for the better part of the past two centuries has been about dominating or allying with either China or major European powers to form precisely this sort of megapower…..

And so the final imperative of the dominant power of North America is to ensure that this never happens — to keep Eurasia divided among as many different (preferably mutually hostile) powers as possible…..

The United States’ repeated interventions in Eurasia have been designed to establish or preserve a balance of power or, to put it bluntly, to prevent any process on Eurasia from resulting in a singular dominating power. The United States participated in both world wars to prevent German domination, and then bolstered and occupied Western Europe during the Cold War to prevent complete Russian dominance. Similarly, the primary rationale for involvement in Korea and Vietnam was to limit Russian power…..

Ongoing efforts to hamstring Russia — Ukraine’s 2004-2005 Orange Revolution, for example — should also be viewed in this light. [The full article – a very long one – is worth a read]

The second piece titled, ‘Obama’s dilemma: U.S. Foreign Policy and Electoral Realities’ ties in neatly with the conclusions of the piece cited earlier (see extracts above):

Obama has to hold together a coalition that is inherently fragmented by many different understandings of what his presidency is about. This coalition has weakened substantially. Obama’s attention must be on holding it together. He cannot resurrect the foreign policy part of it at this point. He must bet on the fact that the coalition has nowhere else to go. What he must focus on is domestic policy crafted to hold his base and center together long enough to win the election.

The world, therefore, is facing at least 14 months with the United States being at best reactive and at worst non-responsive to events…..

….All of this creates opportunities for countries to build realities that may not be in the best interests of the United States in the long run. There is a period of at least 14 months for regional powers to act with confidence without being too concerned about the United States.

The rest of the world knows this, of course. The question is whether and how they take advantage of it. [Full piece here]

The solutions – purportedly being cooked up by Timothy Geithner for Europe – would involve a big loss for Germany as they would result in a Central Bank in Europe that resembles the Federal Reserve, that abandons its commitment to price stability and one that would consequently engineer a massively weak Euro. This hurts Germany and China which holds a lot of Euros in its foreign exchange reserves and also via loss of trade competitiveness. See the piece by Ambrose Evans-Pritchard for more details

So, now the contours of American foreign and economic policy are becoming clear. Aren’t they? However, the odds are long that they would succeed.


DISCLAIMER: This is an archived post from the Indian National Interest blogroll. Views expressed are those of the blogger's and do not represent The Takshashila Institution’s view.