Friday, 1 August 2014


## Global Ponzi meltdown/House of Cards ##

## Cut, baby, cut! ##

## Airline Death Spiral ##
As I noted on July 23, "As the world becomes increasingly unstable, the skies will become increasingly unfriendly to commercial aircraft." -- RF
Most of the 184 domestic airports operate at a loss every year. The China Airport Development Fund, 6 percent of whose revenues Chinese carriers contribute, subsidizes the losses. Last year 144 airports, including a few classified as regional, posted a combined loss of $1.97 billion.

## Fault lines/flashpoints/powder kegs/military/war drums ##

## Global unrest/mob rule/angry people/torches and pitchforks ##
A Greek court's decision to acquit local farmers who admitted shooting 28 Bangladeshi strawberry pickers when they dared to ask for months of back pay has sparked outrage in the country.

## Energy/resources ##

## Infrastructure scavenging ##
ZAMBIA Railways Limited is losing millions of Kwacha through theft of the company’s installations.

## Got food? ##

## Lifestyle Solutions ##

## Environment/health ##
Germany's Environment Agency said it wanted to make fracking practically impossible to head off the risk that the technique for extracting gas could contaminate groundwater with chemicals.

## Intelligence/propaganda/security/internet/cyberwar ##
USB devices such as keyboards, thumb-drives and mice can be used to hack into personal computers in a potential new class of attacks that evade all known security protections, a top computer researcher revealed on Thursday.

## Systemic breakdown/collapse/unsustainability ##
Cracks emerged in concrete girders. A drainage hole on the bridge deck plugged up. Rust showed above piers. Seven years after the collapse of its predecessor, the new Interstate 35W bridge has been showing its age.

## Japan ##
Japanese industrial output fell the most since the March 2011 earthquake, highlighting the widening impact to the economy of April’s sales-tax increase.

## China ##

## UK ##
Police are to start seizing drivers’ mobile phones after a crash in order to check whether they were texting or calling while at the wheel.
They are the age when those in their parents’ generation would have hoped or even expected to have a family home of their own. But increasing numbers of people in their 40s are choosing to abandon the property market altogether to become lodgers because of soaring property prices and rents.

## US ##
It’d be tempting to think that the days of subprime loans fueling the economy were a product of the era of the aged or departed Ace Greenberg, Alan Greenspan and Angelo Mozilo. Except when you break down the growth in GDP, it’s clear that car and light truck purchases played a major role. And subprime loans, in turn, are financing those transactions.

And finally...

Dmitry Orlov on Ukraine

Saving Face

29 July, 2014

The Americans are finding out the hard way that a fact-free zone is not a comfortable place to inhabit. The initial knee-jerk allegations, voiced by Obama, by the screechy UN representative Samantha Power, by John Kerry, Hillary Clinton, and any number of talking heads, were that the downing of flight MH17 was all Putin's fault. These were swiftly followed by a complete and utter lack of official evidence of any Russian involvement but lots of strange, unexplained coincidences pointing to Ukrainian and American involvement. These were, in turn, followed by an uncharacteristically frank admission from US intelligence that there is no proof of Russian involvement. The newly installed Ukrainian oligarch-turned-president Poroshenko (code-name “Piglet”) switched from claiming that he had proof of Russian complicity to being very very quiet. Incompetently concocted fake “evidence” of this and that continues to appear on social media sites, only to be swiftly disproved. Once disproved, the fake evidence vanishes, only to be replaced by more of the same. The latest fake is of Russian artillery bombardment from across the border. All of this has added up to quite an awkward situation for the Americans. Barefaced lying may be fun and profitable, but it does not provide a solid foundation for foreign policy. Nobody wants to go down in history for blowing up the world over some fake Youtube videos.

The list of questions that demand answers is quite extensive. Why did the Ukrainians suddenly choose to activate their Buk M1 air defense system, with several rocket batteries and a radar, in Donetsk region, on the day of the crash? What was the Ukrainian Sukhoi-25 fighter jet (attested by numerous eye-witnesses) doing trailing after the Boeing? Why did Ukrainian air traffic control in Dnepropetrovsk redirect the flight to fly at a lower altitude and over the war zone? What were all those foreigners doing in the air traffic control center in Dnepropetrovsk right after the crash, and what happened to the flight control records they confiscated? What was the experimental US spy satellite doing flying over that exact spot at that exact moment? By the way, was anything interesting happening that day at the American drone base in Kanatov, in Dnepropetrovsk region, which, incidentally, is right on the flight path of MH17? (We know that it's active; two of their drones have already been shot down by the rebels, one of which landed more or less intact, and the Russians are probably having fun tinkering with it.)

Some people are surmising that the crash was a failed false flag attack orchestrated by the Ukrainians with, at a minimum, American complicity. The idea, this version goes, was to pin the blame on the rebels and, by extension, on Russia, in order to escalate the conflict. This version of events may sound plausible to some people, because false flag operations are part of the standard American playbook. After all, there was that chemical attack in Syria which almost led to a US bombing campaign. The chemical attack was blamed on the Assad regime, but then it turned out to have been a false flag: it was made by the Syrian rebels, on Syrian rebels, with help from Saudi Arabia, in order to smear Assad and escalate the conflict. Russia was able to deescalate the conflict by persuading Assad to give up his chemical weapons stockpile. (It didn't take much convincing, because Assad no doubt realized that this stockpile was more of a liability than an asset.) The Americans were livid; they had been itching to bomb Syria. Had they done so, the too-evil-for-al Qaeda “Caliphate” known as ISIS, which recently spilled out of Syria and rolled right across northern Iraq, would probably be enthroned in Damascus by now as well.

But in the case of flight MH17, the false flag theory rests on an untenable assumption: that the Ukrainians, if tasked with shooting it down, would in fact succeed in shooting it down. All previous evidence illustrates that when Ukrainians want to shoot down a plane, they may succeed in shooting down  a nursery school, a maternity ward, an apartment building full of elderly Ukrainians, but never a plane. Conversely, if Ukrainians set out to destroy a maternity ward or a kindergarten (as they are known to sometimes do) odds are that they will hit a Boeing. They inherited a now rather obsolete Buk M1 air defense system from the USSR, which, in skilled hands, is quite capable of shooting down a Boeing flying at cruising altitude, but you'd be wrong to think that they have figured out how it works. They held exactly one training exercise using this system, in 2001, and succeeded in... shooting down a Russian civilian airliner! There were no training exercises in using this system until... it was used to shoot down MH17! It was used in Georgia during the war of 2008 over South Ossetia, where it did shoot down four Russian military aircraft, but there it was commanded by American mercenaries of Polish descent. Ukrainians excell at robbing, selling out, dismantling and destroying their own country; but achieving a specific, precise result as part of a highly coordinated mission? Not so much. Case in point: some Australian and Dutch troops wanted to go and maintain security at the crash site, but couldn't, because the Ukrainians chose the occasion of their arrival to attack some neighboring towns and villages. You'd think that they would treat the opportunity to get some NATO boots on the ground as a Godsend, and act accordingly, but such rational behavior would be, you know, un-Ukrainian. The proper thing for them to do is to go and strafe some nearby village, and get themselves ambushed and slaughtered to a man by an angry babushka with a Kalashnikov.

Once you discount the theory that the downing of MH17 was a highly orchestrated false flag operation, everything falls into place. Why did the Ukrainians deploy their Buk M1 batteries and radar in Donetsk region, even though there was no enemy for them to shoot at? Because they are idiots. Why was there a Ukrainian Sukhoi 25 jet fighter in the air there? Trailing behind passenger jets and using them as human shields is standard Ukrainian practice. Why did that fighter zoom up into the Boeing's flight corridor and pop up on air traffic control radar at the exact time the Boeing was shot down? That's a standard evasive maneuver: the pilot saw a missile being launched, and tried to get out of its way by aiming up. If he hadn't done that, then the story would have been that Ukrainians shot down their own jet fighter as part of a successful (by Ukrainian standards) exercise, held in the vicinity of an international passenger flight just to spice things up. Why did Dnepropetrovsk APC redirect the flight over the war zone and the Buk M1 batteries? Because the Ukrainians had recently issued an order that closed the airspace over Donetsk, well below the plane's cruising altitude and away from its flight path, but perhaps something was lost in translation to Ukraine's wonderfully precise official language, and so the APC redirected the flight right over the closed airspace and told it to fly right above the minimum altitude. Why did the Ukrainians launch the rocket? Well, that was probably something like what happened in the movie The Three Stooges in Outer Space. The stooges find themselves inside a rocket. Moe gets hungry and pushes a button that he thinks says “LUNCH” except that it says “LAUNCH.” Hilarity ensues.

If that is what happened, then that's really embarrassing, not just for the Ukrainians, for whom embarrassment has become something of a national sport, but for their self-appointed American minders. What's making this situation even more difficult is that western news teams, following in the wake of the investigative teams visiting the crash site, got a chance to look at, and report on, the carnage and devastation perpetrated by the Ukrainians against their own people. Worse yet, the Ukrainian government, so carefully slapped together out of US State Department-approved dregs of Ukrainian society, has in the meantime come unstuck. The coalition goverment failed after a spectacular fistfight on the floor of the Supreme Rada, with the two rabidly nationalist parties walking out (OK, I won't call them Nazi, but only today). Prime minister Yatsenyuk (who had been hand-picked for the job and nicknamed “Yats” by Victoria Nuland of the US State Department) has resigned. [Update: he changed his mind and decided to stay: or did his American handlers change his mind for him?] President Piglet is still there, but it's unclear what it is he is doing. In fact, it is becoming unclear whether there even is a Ukrainian government; of late, the officials in Donetsk have been receiving very strange, barely coherent missives from Kiev, obviously written in American English and clumsily translated, then signed and stamped by some Ukrainian monkey to make them look slightly more legit. If the Ukrainian translators run away too, then the American minders will be forced to resort to using Google Translate, making it the world's first experiment in governance through word salad.

The MH17 disaster and Eastern Ukraine are now front page news across the entire world. The circumstances of the crash are anything but clear, but it is clear that they are not what the Americans initially alleged. This they have already admitted. The Ukrainian government is in disarray bordering on nonexistence. The Ukrainian military is either kettled in traps of their own devising and suffering horrific losses, or blasting away at densely populated districts with heavy artillery and rocket fire. The Ukrainian economy is in freefall, with trade links to Russia severed and industry nearing standstill. The country is bankrupt and at the mercy of the IMF. If you feel that the several hundred lives lost aboard MH17 are a tragedy, then you should consider a larger number: 42 million. That's the population of Ukraine minus Crimea (which will be fine) and that's the number of lives at risk from civil war and economic collapse.

The best that the US can do in this situation is to bug out of Ukraine while continuing to babble incoherently. This shouldn't be hard; bugging out and babbling incoherently are two things that the Americans are clearly still very good at; just look at Afghanistan, Iraq and Libya.

Fact-Free Zone

29 July, 2014

The fog of war that has been hovering over eastern Ukraine has now spread to the shores of the Potomac, and from there has inundated ever pore of western body politic. The party line is that pro-Russian rebels in eastern Ukraine have shot down Malaysia Airlines flight MH-17, using a surface-to-air missile provided by Russia, with Russia's support and complicity. The response is to push for tougher sanctions against Russian companies and Mr. Putin's entourage. None of this is based on fact. To start with, it isn't known that MH-17 was brought down by a surface-to-air missile; it could have been an air-to-air missile, a bomb on board, a mechanical failure, or the same (or different) mysterious force that brought down MH-370 earlier this year. Mysteries abound, and yet western media knows it's Mr. Putin's fault.

Step through the looking glass over to Russia, and you hear a completely different story: the plane was shot down by the Ukrainians in order to frame the rebels and Russia in an attempt to pull NATO into the conflict. Here, we have numerous supporting “facts,” at varying levels of truthiness. But I have no way to independently verify any of them, and so instead I will organize what has been known into a pattern, and let you decide for yourself which story (if any) you should believe.

When trying to catch a criminal, a standard method is to look at means, motive and opportunity. Was the criminal physically capable of committing the act? Did the criminal have a good reason for committing it? Did the criminal get a chance to do it? One more criterion is often quite helpful: does the crime fit the perpetrator's known modus operandi? Let's give this method a try.


Did the rebels have the means to shoot down the plane? They have no military aviation and no functioning airport (the one near Donetsk is out of commission and occupied by Ukrainian troops). They have shoulder-fired missiles, which can take out helicopters and planes flying at low altitude, but are useless against airliners flying at cruising altitude. They also have a “Buk” air defense unit (one truck's worth of it) which they took from the Ukrainians as a trophy, but it's said to be non-operational. A rocket from this unit could have shot down MH-17, but only if it were integrated with a radar system, which the rebels did not have.

Did the Ukrainians have the means? They had five “Buk” units active in the area on that day, integrated with a radar system which was also active that day. (Deploying an air defense system against an enemy that does not have any aviation seems a bit strange.) According to a report from a Spanish air traffic controller who was working in Kiev (and has since been dismissed, along with other foreign ATCs) MH-17 was followed by two SU-25 jet fighters. According to a Russian expert on “Buk” systems, the damage to the fuselage visible on photographs of the crash site could not have been from a “Buk” surface-to-air missile, but could have been caused by an air-to-air missile fired by a SU-25.

Did the Russians have the means? Of course they did. Never underestimate the Russians.


The rebels had absolutely no reason to want to shoot down that plane. This leaves open the possibility that they shot it down by mistake, but that's not a motive, and if that is what happened, then this is not a crime but an accident, because a crime is an intentional act.

On the other hand, the Ukrainians had a really good motive for shooting it down. This part takes a little more explaining.

You see, the Ukrainians have been doing everything they can to pull Russia into the conflict, in order to then pull NATO into it as well, because their chance of victory while acting alone is nil. To this end, they have been shelling civilian targets relentlessly, causing many dead and wounded, in the hopes that Russian troops would pour across the border to defend them. This failed to happen; instead, the Ukrainians have succeeded in precipitating a refugee crisis that has produced something like half a million refugees seeking asylum in Russia. This has had an effect opposite of the intended. Whereas previously the rebels' recruitment activities were somewhat hampered by a wait-and-see attitude on the part of the population, now they have seen all they need to see and are ready to fight. Also, the Russian population inside Russia itself has found the stories of the refugees sufficiently compelling to open their wallets, so that now the rebels are drawing healthy salaries and have good kit and a steady stream of supplies. They are highly motivated to fight and to win, with a steady rah-rah of support coming from across the border in Russia, while the Ukrainian forces they face consist of underfed, untrained, badly armed recruits being goaded into battle by Right Sector thugs. Their recent battle plan was to directly attack the population centers in Donetsk and Lugansk while cutting the rebels off from the Russian border. One column managed to break through to the defunct Donetsk airport, where it has been kettled every since (it is currently trying to break out in the direction of Donetsk). The troops massed along the Russian border got kettled there and decimated, with quite a few Ukrainian soldiers walking across the border sans weapons seeking food, shelter and medical treatment.

So much for Ukrainian military strategy. But the other thing to note is that time is not on the Ukrainians' side. First, a bit of background. Ukraine has always been a rather lopsided country. There are the Russian provinces in the east, which had coal, industry, good farmland, and lots of trade with Russia proper. They used to be Russia proper until Lenin lumped them into Ukraine, in an effort to improve it. And then there is western Ukraine, which, with the possible exception of Kiev, could never earn its keep. In terms of economic and social development, it resembles an African nation. Since its independence, Ukraine had subsisted through trade with Russia and through transfer payments from (Russian-speaking) Ukrainian citizens working in Russia. Because of fighting in the east, trade with Russia has been disrupted. Ukraine has been cut off from Russian natural gas supplies due to nonpayment; as a result, more and more Ukrainian cities no longer supply hot water, and come winter, there will be no heat. The economy is in freefall. The Ukrainian government received some funds from the IMF, but these are being squandered on the failing military campaign. The association agreement which Ukraine signed with the EU remains a dead letter because Ukraine does not make anything that the EU wants, and Ukraine has no money with which to buy anything the EU makes. So much for Ukrainian economic strategy.

And so, from the Ukrainian government's perspective, shooting down an airliner and blaming it on Putin (which is something that western governments and media are only too happy to do) probably seemed like a good ploy.

What about Russia? Well, the Russian government's chief concern is with avoiding becoming drawn into the conflict. The basic Russian strategy is, as I put it a couple of months ago, to let Ukraine stew in its own juices until the meat falls off the bone, and this strategy is working just fine.

It is important to draw a difference between the Russian state (Putin, the Kremlin, etc.) and the Russian people. According to Russian law, any Russian-speaking person born on the territory of the USSR has an automatic right to a Russian citizenship, so the people of eastern Ukraine are by default Russian citizens. It is a fine line between providing support to your fellow-Russians across the border as a people and being drawn into an international conflict as a nation, and the Russian government has been rather careful to preserve this distinction. Thus, the Russian government was very highly motivated to prevent this incident.


For the rebels, the opportunity amounted to looking up and seeing a plane. If, at that moment, they made the split-second decision to shoot it down using one of the “Buk” rockets (provided they had one ready to go) without radar support they could have only fired that rocket in “pursuit mode,” where the rocket flies to where the plane is, not to where the plane will be, and it is rather uncertain whether the rocket would have caught up with the jet before running out of fuel.

On the other hand, the Ukrainians gave themselves the opportunity by having Dnepropetrovsk ATC redirect the flight over the conflict zone, where they deployed their “Buk” systems.

I have trouble imagining a scenario in which Russian air defense forces would have been presented with an opportunity to shoot down MH-17.


Although some criminals commit just one crime (and sometimes even get away with it), typically a life of crime follows a pattern. What is the pattern behind shooting down MH-17? It is to kill civilians for political gain. What has the Ukrainian government been doing, for quite some time now, in shelling apartment buildings, schools and hospitals in the east of the country? Killing civilians, of course. And why have they been doing it? For a political reason: to attempt to draw the Russian military into the conflict, in order to then appeal to NATO for help. This is part of a larger plan on the part of the US to use Ukraine as a wedge between Russia and the EU, to deprive the EU of Russian natural gas supplies and make it even more dependent on the US.


My effort here is to present you with a better framework for analyzing these events than you might find elsewhere, but I hope that you uncover your own “facts” (to the extent that facts can be said to exist on the internet) and draw your own conclusions.

But I would like to point out a few things.

First, I often encounter a certain attitude among Americans. They may absolutely hate the evil clowns in Washington who are ruining their lives, but when looking at the world, they suddenly decide that every other government is equally bad, that theirs is not so bad after all, and since the Ukrainians are suddenly our friends (or so says John Kerry) then they are not so bad either. Don't make such assumptions. Look for evidence. To me it indicates that your government is run by evil clowns; other governments—not so much.

Second, citizens of the European Union shouldn't think that it is only the dark-skinned people in faraway places like Afghanistan, Iraq, Libya, Syria and so on that get killed in the various wars instigated by the US. Continue outsourcing your foreign policy to the evil clowns of Washington (and the spineless jellies in Brussels) and you too will get killed.

Lastly, we already know who the criminals are in this case: they are the western politicians and journalists. Airliners fall out of the sky with some regularity. This is tragic, but not unexpected, and is not necessarily the result of a crime. The real crime is in exploiting this tragedy in order to smear and insult an entire people. Don't worry, the people in question are too wise to respond to such ridiculous provocations. But the reputations of western journalists who have been covering this tragic event have already gone up in smoke. All of western media is now about as good as Pravda was back in the Soviet days—good for wiping your ass with, that is. It's a sad day for anyone who cares about the truth but can only understand English.

[Update: I spoke too soon. Robert Parry has come out with an excellent write-up on the situation.]