“The idea that the US or Europe can restrain Russia by threats of removing it from the G8, by denying it access to the WTO etc. are ludicrous. The bankrupt US economy relies on the benevolence of strangers. Russia has billions of dollars invested in US bonds and other debt. If Europe tries to boycott Russian oil and gas, it will cripple itself, whilst Russia will sell its oil, gas and other primary products to more than enough other countries desperate for them. The Russian Stalinists have been drawing closer to the Chinese Stalinists over recent years. The current US response must give China more cause to draw closer still to Russia, for a defensive alliance, because China holds no illusions in the US's real intentions towards it. China, the new workshop of the world, is desperate for the kind of raw materials that Russia can supply, just as Russia is a large market for Chinese consumer goods. As the Chinese working class and middle class grow rapidly, the Chinese market itself will provide an alternative to the need for Western Markets. Moreover, if Russia holds a huge amount of US debt and equity, China owns a vast amount more. Long before any shooting war, they could threaten the US economy, and destroy it overnight, should they choose to do so.”
Its for that reason Paul Mason's argument in a recent blog post is wrong. He says,
“So the likely response of the west will be economic: the sudden end to toleration of of the dodgy Russian money that has flooded into its finance, football and energy systems.
The seizure of certain mansions in north London. The closure of bank accounts in Cyprus and the Caymans.
Then the ball is not in Russia’s court but China’s. China has played the role of sleeping partner in global diplomacy during its economic rise. Generally it has worked to limit and disrupt the west’s political and economic power.
If an economic proxy war breaks out between the EU, USA and Russia, and China backs the latter, then you can kiss globalisation goodbye.”
Paul Mason - Channel 4
In fact, in more recent comments he seems to have recognised that. In a recent tweet he comments,
“Rifkind finally nails it on #newsnight: City of London Russian interest dictating UK policy.”
In fact, China has already come out to support Russia's actions in Ukraine. Confirming the argument I put forward six years ago, Russia has just signed a long-term deal with China for the provision of gas, which means it will have no problem replacing European gas buyers. The EU knows all this. 30% of EU gas and oil comes from Russia, more in the case of the European hegemon, Germany. The EU also does large amounts of trade with Russia, selling it manufactured and luxury goods in exchange for this supply of energy.
There is no way the EU is going to simply march to the drum beat of US Imperialism. The trade between Russia and the US is by contrast tiny, which is why the US, which has already made clear its willingness to discard any EU interests in the matter, is more prepared to take a bellicose stance. The interests between US Imperialism and EU Imperialism clearly differ in this regard.
The Idealista point in relation to luxury property is particularly relevant to Britain. Vast amounts of Russian money has poured into London bank accounts, and into the British purpose made tax havens in the Isle of Man and Channel Islands, just as it did into Cyprus and elsewhere. It has poured into British football, which today is very big business. If that money withdrew it would have a significant effect. If football clubs could no longer pay out astronomical fees for players, the celebrity mystique around the game would begin to fade, the ability to sell lucrative TV deals around the globe would disappear with it, affecting the satellite TV companies as well.
But, more significant would be withdrawal of all this money from the many multi-million pound London property market. Already one Russian IT oligarch has threatened to withdraw, pointing out that there are more than 200 countries he could buy a luxury house in. One of the reasons the London property market has boomed, is because not only does it have lots of these luxury properties, but as with the London stock and bond markets, they are seen as a safe haven. Once you start imposing sanctions etc. that ship sails. If London is no longer seen as a safe haven, but a place where property can simply be confiscated, impounded etc. it will disappear to some other venue at the click of a sell button on a computer screen.
Britain cannot afford that. The London property market is in an even bigger bubble than the property market in the rest of Britain. Whilst property selling prices continue to drift lower in the rest of Britain, however, in London they continue to surge higher. For these multi-million pound properties the bubble is even bigger, and likely to burst before long anyway. Start threatening the property of rich people, of whatever nationality, with confiscation, and they will soon sell up and move elsewhere. If the London luxury property market bubble bursts, the London property market will be taken down with it, as the emperor is seen to have no clothes. Then instead of the steady fall in property prices taking place in the rest of Britain, it will turn into an avalanche of falling asking prices as well as selling prices.
That would destroy the government's whole financial strategy. Help to Buy is designed to prevent the property market collapsing, and keep prices inflated if possible. It isn't stopping selling prices from falling in most of Britain. Many people don't seem to qualify when push comes to shove, and that is possibly why the Government has had to resort to running TV adverts trying to get people to take it up. A collapse in property prices will mean that the fiction of UK banks balance sheets will be exposed. The banks will go bust, and the government's economic policy will be left in tatters.
So, the UK government had to let the Russians know that it had no intention of taking even economic action. Was it then an accident that instead of being safely tucked away in a briefcase, a document setting out just that fact, was left open at the relevant page, available to be photographed by the inevitable photo journalists that wait around for government meetings to get under way?
The seizure of certain mansions in north London. The closure of bank accounts in Cyprus and the Caymans.
Then the ball is not in Russia’s court but China’s. China has played the role of sleeping partner in global diplomacy during its economic rise. Generally it has worked to limit and disrupt the west’s political and economic power.
If an economic proxy war breaks out between the EU, USA and Russia, and China backs the latter, then you can kiss globalisation goodbye.”
Paul Mason - Channel 4
In fact, in more recent comments he seems to have recognised that. In a recent tweet he comments,
“Rifkind finally nails it on #newsnight: City of London Russian interest dictating UK policy.”
In fact, China has already come out to support Russia's actions in Ukraine. Confirming the argument I put forward six years ago, Russia has just signed a long-term deal with China for the provision of gas, which means it will have no problem replacing European gas buyers. The EU knows all this. 30% of EU gas and oil comes from Russia, more in the case of the European hegemon, Germany. The EU also does large amounts of trade with Russia, selling it manufactured and luxury goods in exchange for this supply of energy.
There is no way the EU is going to simply march to the drum beat of US Imperialism. The trade between Russia and the US is by contrast tiny, which is why the US, which has already made clear its willingness to discard any EU interests in the matter, is more prepared to take a bellicose stance. The interests between US Imperialism and EU Imperialism clearly differ in this regard.
The Idealista point in relation to luxury property is particularly relevant to Britain. Vast amounts of Russian money has poured into London bank accounts, and into the British purpose made tax havens in the Isle of Man and Channel Islands, just as it did into Cyprus and elsewhere. It has poured into British football, which today is very big business. If that money withdrew it would have a significant effect. If football clubs could no longer pay out astronomical fees for players, the celebrity mystique around the game would begin to fade, the ability to sell lucrative TV deals around the globe would disappear with it, affecting the satellite TV companies as well.
But, more significant would be withdrawal of all this money from the many multi-million pound London property market. Already one Russian IT oligarch has threatened to withdraw, pointing out that there are more than 200 countries he could buy a luxury house in. One of the reasons the London property market has boomed, is because not only does it have lots of these luxury properties, but as with the London stock and bond markets, they are seen as a safe haven. Once you start imposing sanctions etc. that ship sails. If London is no longer seen as a safe haven, but a place where property can simply be confiscated, impounded etc. it will disappear to some other venue at the click of a sell button on a computer screen.
Britain cannot afford that. The London property market is in an even bigger bubble than the property market in the rest of Britain. Whilst property selling prices continue to drift lower in the rest of Britain, however, in London they continue to surge higher. For these multi-million pound properties the bubble is even bigger, and likely to burst before long anyway. Start threatening the property of rich people, of whatever nationality, with confiscation, and they will soon sell up and move elsewhere. If the London luxury property market bubble bursts, the London property market will be taken down with it, as the emperor is seen to have no clothes. Then instead of the steady fall in property prices taking place in the rest of Britain, it will turn into an avalanche of falling asking prices as well as selling prices.
That would destroy the government's whole financial strategy. Help to Buy is designed to prevent the property market collapsing, and keep prices inflated if possible. It isn't stopping selling prices from falling in most of Britain. Many people don't seem to qualify when push comes to shove, and that is possibly why the Government has had to resort to running TV adverts trying to get people to take it up. A collapse in property prices will mean that the fiction of UK banks balance sheets will be exposed. The banks will go bust, and the government's economic policy will be left in tatters.
So, the UK government had to let the Russians know that it had no intention of taking even economic action. Was it then an accident that instead of being safely tucked away in a briefcase, a document setting out just that fact, was left open at the relevant page, available to be photographed by the inevitable photo journalists that wait around for government meetings to get under way?
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