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Tuesday, 21 June 2016

Pepe Escobar: Western elites spinning phantom narrative of Russian aggression to stave off economic collapse

Pepe Escobar

It's like clockwork. Oil price is on the rise again, as this column foresaw earlier this year. And the increasing possibility of Brexit is sending EU decision centers on a tailspin.

So it's time for US Think Tankland - as in CIA front Stratfor, among others - to renew their spin offensive, mixing "analyses" of imminent Russian economic collapse with calls for more NATO pressure over Russia's western borderlands.
A solid case can be made that Moscow does not need mountains of Western investment; credit can be created in Russia. Most of all, there is rather less productive investment money in the West than wild speculative funds; it's largely a matter of fiat money and credit, and Moscow does not need to go to the West for that.

As long as Russia uses investment capital to increase the production of goods, this will offset the increase in money supply. So in the end inflation will be negligible. Quite a few Russians must be puzzled at the Central Bank's Elvira Nabiullina, with her policy of raising interest rates to cut back the increase in investment; that could eventually lead to a strangled Russia. Not accidentally Nabiullina happens to be extremely praised by US Think Tankland and the City of London.

As to what credits would Russia use to pay for needed imported technology the obvious answer is to draw from energy exports - especially now with the oil price back on the way up. And here intervenes the temptation to redirect the export of oil and natural gas away from the EU to China and Asia - and let the EU grapple with its eternally inconsistent "energy policy", which consists mainly of blaming Gazprom.
It's a myth that a dearth of foreign investment today will delay large projects in Russia - including the energy front; China will step up infrastructure investment in Russia with many projects linked to the New Silk Roads and overall Eurasia integration, as even US Think Tankland admits.
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