Authored by Egon von Greyerz via GoldSwitzerland.com,

The financial system is terminally broken, toast, kaput!

Anyone who doesn’t see what it happening will soon lose a major part of their assets either through bank failure, currency debasement or the collapse of all bubble assets like stocks, property and bonds by 75-100%. Many bonds will become worthless.

Wealth preservation in physical gold is now absolutely critical. Obviously it must be stored outside a broken financial system. More later in this article.

The solidity of the banking system is based on confidence. With the fractal banking system, highly leveraged banks only have a fraction of the money available if all depositors ask for their money back. So when confidence evaporates, so do the balance sheets of the banks and depositors realise that the whole system is just a black hole.

And this is exactly what is about to happen. 

For anyone who believes that this is just a problem with a few smaller US banks and one big one (Credit Suisse), they must think again.

RE CREDIT SUISSE SEE ‘STOP PRESS’ AT THE END OF THE ARTICLE.

THE BANKS ARE FALLING LIKE DOMINOS, INCLUDING CREDIT SUISSE TONIGHT

Yes, Silicon Valley Bank (16th biggest US bank) is gone after an idiotic and irresponsible  policy to invest short term customer deposits in long term US Treasuries at the bottom of the interest rate cycle. Even worse, they then valued the bonds at maturity rather than market, to avoid taking a loss. Clearly a management that didn’t have a clue about risk. SVB’s demise is the second biggest failure of a US bank. 

Yes, Signature Bank (29th biggest) is gone due to a run on deposits. 

And yes, First Republic Bank had to be supported by US lenders and the Fed by a $30 billion loan due to a run on deposits. But this won’t stop the rot as depositors attack the next bank and the next one and the next one……….

And yes, the Swiss second largest bank Credit Suisse (CS) is terminally ill after a number of poor investments over the years combined with poor management that has come and gone virtually every year.. I wrote an important article about the coming demise of CS 2 years ago here: “ARCHEGOS & CREDIT SUISSE – TIP OF THE ICEBERG.”

The situation at CS is so dire that a solution needs to be found before Monday’s (March 20) opening. The bank cannot survive in its present form. [ZH: a ‘solution’ was found… for now]

A failure for Credit Suisse would not just rock the Swiss financial system but have severe global repercussions. A merger with UBS is one solution. But UBS had to be bailed out in 2008 and doesn’t want to be weakened again by Credit Suisse without state guarantees and support from the Swiss National Bank (SNB). The SNB injected CHF50 billion into CS last week but the share price still went to a new low.

No one should believe that a state subsidised takeover of Credit Suisse by UBS will solve the problem. No, it will just be rearranging the deck chairs on the titanic and making the problem bigger rather than smaller. So rather than a lifebuoy, UBS will have a massive lead weight to carry which will guarantee its demise as the banking system collapses. And the Swiss government will take on assets which will be unrealisable. 

Still, it is likely that by the end of the present weekend a deal will be announced with UBS being offered a deal they can’t refuse by taking over the good assets and the SNB/Government nurturing the bad assets of Credit Suisse in a rescue vehicle.

The SNB is of course in a mess itself, having lost $143 billion in 2022. The SNB balance sheet is bigger than Swiss GDP and consists of currency speculation and US tech stocks. This central bank is the world’s biggest hedge fund and the least successful. 

Just to put a balanced view on Switzerland. It has the best political system in the world with direct democracy. It also has low Federal debt and normally no budget deficits. It is also the safest country in the world.

SWISS BANKING SYSTEM TOO BIG TO SAVE

But the Swiss banking system is very unsound, just like the rest of the world’s. A central bank which is bigger than the country’s GDP is extremely unsound. And a banking system which is 5x Swiss GDP makes it too big to save. 

Although the Fed and ECB are much smaller in relation to their countries’ GDP than the SNB, these two central banks will soon discover that their assets of around $8 trillion each are grossly overvalued. 

With a global banking system on the verge of a systemic failure, Central Bankers and bankers have been working around the clock this weekend to temporarily avoid the inevitable collapse of the bankrupt financial system. 

BIGGEST MONEY PRINTING IN HISTORY COMING

As I pointed out above, the main Central Banks would also be bankrupt if they valued their assets honestly. But they have a wonderful source of money that they will tap to save the system. 

Yes, I am of course talking about money printing. 

We will in coming months and years see the most massive avalanche of money printing that has ever hit the world.

For anyone who believes that we are just seeing another bank run that will quickly evaporate, they will need to take a shower in ice cold Alpine water. 

What we are witnessing is not just a temporary drama that will be sorted out by “the all powerful and resourceful” central banks. 

THE DEATH OF MONEY

No, instead what we are seeing is the end phase of this financial era which started with the formation of the Fed in 1913 and in the next few years, or much sooner, will end with the death of money.

But the Death of Money doesn’t just mean that the dollar (and most currencies) will make their final move to ZERO, having already declined 98% since 1971. 

Currency debasement is not the cause but the effect of the banking Cabal taking control of the money for their own benefit. As Mayer Amschel Rothschild said in the late 1700s: “Let me issue and control a nation’s money and I care not who makes the laws”.

Sadly, as this Cassandra (me) has written about since the beginning of the century, the Death of Money is not just all currencies going to ZERO as they have throughout history. 

No, the Death of Money means a total and final collapse of this financial system. 

Cassandra was a priestess in Greek mythology who was given the gift of predicting major events accurately but also given the curse that no one would  believe her predictions. 

No depositor must believe that the FDIC (Federal Deposit Insurance Corp) in the US or similar vehicles in other countries will save their deposits. All these organisations are massively undercapitalised and in the end it will be the governments in all countries which step in. 

We know of course, that the government has no money. They just print whatever they need. That leaves ordinary people taking the final burden of all this money printing. 

But ordinary people will have no money either. Yes a few rich people will be taxed heavily to cover bank deficits and losses. Still, that will be a drop in the ocean. Instead ordinary people will be impoverished with little income, no government handouts, no pension and money which is worthless. 

The above is sadly the cycle that all economic eras go through. The issue this time is that the problem is global and of a magnitude never seen before in history. 

Regrettably a rotten and bankrupt financial system needs to go through a cleansing period which the world will now experience. There cannot be sound growth and sound values until the current corrupt and debt infested system implodes. Only then can the world grow soundly again. 

The transition will sadly be dramatic with a lot of suffering for most people. But there is no other way. We won’t just see poverty, famine but also many human tragedies. The risk of social unrest or civil war is very high plus the risk of a global war.

Central banks had of course hoped that their Digital Currencies (CBDC) would be ready to save them (but not the world) from the present debacle by totally controlling people’s spending. But in my view they will be to late. And since CBDCs are just another form of Fiat money, it would just exacerbate the problem with an even more severe outcome at the end. Still, it won’t prevent them from trying.

MARKET VALUE OF US BANKING ASSETS $2 TRILLION LOWER THAN BOOK VALUE

A paper issued by 4 US academics in finance, illustrates the $2 trillion black hole in the US banking system: 

“Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?”

March 13, 2023 

Erica Jiang, Gregor Matvos, Tomasz Piskorski, and Amit Seru 

CONCLUSION

“We provide a simple analysis of U.S. banks’ asset exposure to a recent rise in the interest rates with implications for financial stability. The U.S. banking system’s market value of assets is $2 trillion lower than suggested by their book value of assets. We show that these losses, combined with a large share of uninsured deposits at some U.S. banks can impair their stability. Even if only half of uninsured depositors decide to withdraw, almost 190 banks are at a potential risk of impairment to even insured depositors, with potentially $300 billion of insured deposits at risk. If uninsured deposit withdrawals cause even small fire sales, substantially more banks are at risk. Overall, these calculations suggest that recent declines in bank asset values significantly increased the fragility of the US banking system to uninsured depositors runs.” 

What is crucial to understand is that the $2 trillion “loss” is only due to higher interest rates. When the US economy comes under pressure, the loan books of the banks will deteriorate dramatically and bad debts increase exponentially. With total assets of US commercial banks at $23 trillion, I would be surprised if 50% is repaid or recoverable in the coming crisis. 

The above risks are just for the US financial system. The global system will be no better with the EU under massive pressure partly due to US led sanctions of Russia. Virtually every major economy in the world is in a dire position. 

Lets just look at the debt pyramid which I have discussed in many articles LINK

In 1971, when Nixon closed the gold window, global debt was $4 trillion. With gold backing no currency, this became a free for all to print unlimited amounts of money. And thus by 2000 debt had grown 25x to $100t. In 2006, when the Great Financial Crisis started, global debt was $120 trillion. By 2021 it had grown 75x from 1971 to $300 trillion. 

The red column shows global debt at $3 quadrillion sometime between 2025 and 2030. 

This assumes that the shadow banking system plus outstanding derivatives of currently probably around $2 quadrillion will need to be saved by central banks in a money printing bonanza. This will obviously lead to hyperinflation and thereafter to a depressionary implosion.

I know this sounds sensational but still a very likely scenario at the end of the biggest credit bubble in history. 

GOLD – CRITICAL WEALTH PRESERVATION 

I have been standing on a soapbox for over 20 years, warning the world about the coming financial crisis and the importance of physical gold for wealth preservation purposes. In 2002 we invested important funds into physical gold with the purpose of holding it for the foreseeable future.

Between 2002 and 2011 gold went from $300 to $1,900. Since then gold corrected and then went sideways as stocks and the asset markets surged backed by massive credit expansion. 

With gold currently around $1990, there is not much gain since 2011. Still since 2002 gold is up 7x. Due to the temporarily stronger dollar, gold’s gains measured in dollars are much smaller than in Euros, Pounds or Yen. But that will soon change. 

In the final section of the article “WILL NUCLEAR WAR, DEBT COLLAPSE OR ENERGY DEPLETION FINISH THE WORLD?”, I outlined the importance of owning physical gold to store it in a safe jurisdiction away from kleptocratic governments.

“2023 is likely to be the year of gold. Both fundamentally and technically gold looks like it will make major up moves this year.” 

And at the end of this article, I explain the importance of how and where gold should be held:“PREPARE FOR 10 YEARS OF GLOBAL DESTRUCTION.”

“So my own preference would be to own physical gold and silver that only I have direct control of and can withdraw or sell with very short notice. 

It is also important to deal with a company that can move your metals at very short notice if the security or geopolitical situation would necessitate it.”

In February 2019 I wrote about what I called the Gold Maginot Line which had held for 6 years below $1,350. This is typical for gold. Having gone from $250 in 1999 to $1,900 in 2011, it then spent 8 years in a correction. At the time I forecast that the Maginot Line would soon break which it did and swiftly moved to $2,000 by August 2020. We have now had another period of consolidation since then and the next move above $2,000 and towards $3,000 is imminent. 

Just to remind ourselves what happens to your money and gold during a hyperinflationary period, here is a photo from China’s hyperinflation in 1949 as people try to get their 40 grammes (just over one ounce) that they were allocated by the government. At some point in the next few years, there will be a panic in the West to buy gold at any price. 

So as I have been urging investors for over 20 years, please get your gold NOW while it is still available. 

STOP PRESS

Intense discussions are right now going on here in Switzerland between UBS, Credit Suisse, the regulator FINMA, the Swiss National Bank – SNB – and the Swiss Government. The Fed, the bank of England and the ECB are also involved. 

The latest rumour is that UBS will buy Credit Suisse for CHF900 million ($1 billion). The shares of CS closed at a market cap of CHF8 billion on Friday. The deal would clearly involve backing from the SNB and the Swiss government which would have to take on major liabilities. 

The December 2022 book value of CS was CHF42 billion, as with all banks massively overstated. 

The deal isn’t done at this point, 5.30pm Swiss time, but the whole banking world knows that without a deal, there will be global contagion starting tomorrow Monday the 20th. 

Even if a provisional deal will be done by Monday’s open, the financial system has now been permanently injured with an open wound which won’t heal. 

The problem will just move on to the next bank, and the next and the next….

Hold on to your seats but buy gold first.

The forced bail-in sale of Credit Suisse to UBS will lead to a staggering number of job cuts in the next few weeks or months, as there are significant overlaps at both banks resulting from the merger. Before the merger, Credit Suisse was already undergoing a restructuring process, laying off upwards of 9,000 employees. Now job losses could accelerate at the troubled bank, according to Bloomberg, citing people familiar with the situation. 

The two banks have a considerable workforce with approximately 125,000 employees, 30% of whom are located in Switzerland. The merger creates a lot of overlaps in certain departments, and the people estimate significant job cuts are looming. 

UBS Chairman Colm Kelleher wouldn’t share any details over the weekend about the job-cut number, but UBS published a statement Sunday about the need to reduce the bank’s annual cost base by more than $8 billion by 2027. 

“Let me be very specific on this: UBS intends to downsize Credit Suisse’s investment banking business and align it with our conservative risk culture,” Kelleher said at Sunday’s press conference. He warned about a bumpy road ahead.

Bloomberg said Credit Suisse employees were emailed a memo about the impacted roles and “will aim to continue to provide severance in line with market practice.” The memo stated that bonuses would remain unchanged and will be paid on Friday… which probably is when everyone quits right after the bonus wire transfer hits their bank account (which is neither at UBS nor Credit Suisse).

There will be no changes to payroll arrangements and bonuses will still be paid on March 24, the Credit Suisse said in an internal memo to staff: BBG

So everyone quits next Friday

— zerohedge (@zerohedge) March 20, 2023

“We know that many of you will have been following the intense media coverage over the past 48 hours on the future of Credit Suisse and appreciate the enormous uncertainty and stress that this has caused,” Credit Suisse Chairman Axel Lehmann and Chief Executive Officer Ulrich Koerner said in a separate memo.

The path moving forward for both banks appears to include reducing expenses and headcount. UBS will become even more dominant in Switzerland. And the good news is the takeover reduces systemic concerns (for now). 

Via Remix News,

The main issue facing Europe today is war, which puts Hungary in a difficult situation, as the effects of war are severe and immediate, Hungarian Prime Minister Viktor Orbán said at a meeting of the Organization of Turkic States summit in Ankara.

The prime minister stressed that, unfortunately, Europe was suffering from a “war psychosis,” with the continent drifting further into war day by day. Orbán thanked the leaders of the Turkish states for strengthening the voice of peace. Hungary — on account of its population’s Asian origins — is an honorary member of the Organization of Turkic States.

Orbán thanked Turkish President Recep Tayyip Erdoğan, who, he said, had so far been able to mediate successfully between the warring parties, and called on him to continue his efforts in the future.

“Only in this way can we have a chance for peace,” Orbán said. He also thanked the Turkish president for the fact that Hungary and Turkey could coordinate their work within NATO.

Hungary’s geographical proximity to the war has placed the issue of pursuing peace at the top of the agenda for Hungary, according to Orbán.

“Ukraine is a neighboring state, and the effects of the war are therefore severe and direct, with inflation skyrocketing and energy prices at an all-time high,” he said, adding that “many Hungarians have now died in the war because men from the Hungarian community in western Ukraine are also being conscripted into the army.”

“For Hungary, the most important thing is to save human lives, and that is why we are advocating a ceasefire as soon as possible and peace negotiations.”

At the same time, the prime minister expressed the view that what is happening in Europe is more than just war, because in fact, “the whole of Europe is being reshuffled in terms of power relations,” and this will also have repercussions for Turkey.

He added that Hungary is also seeing another threat:

“There are processes going on in the world economy that could lead to a new global balance.”

He said that the segmentation of the world economy is against Hungary’s interests, and Hungary sees its future not in segmentation, but in acting in the collective interest and improving interconnectivity.

“The Turk states can play a key role in this, because here we are European, Caucasian and Central Asian countries connected to each other on the basis of mutual respect, setting a good example for the whole world,” the prime minister said in his speech.

By Eric Peters, CIO of One River Asset Management

“What is our total exposure?” I had asked our COO as the Silicon Valley Bank run was intensifying, two Thursdays ago.

All our client money is held in our investment funds, and excess fund cash is in T-Bills for security, so I wasn’t asking about that. I was asking about cash that our firm had on deposit at a commercial bank. Like so many other small and medium sized businesses, that in aggregate make up the US economy, we turned to a local bank when we started the firm in Santa Barbara, California, 10 years ago this week.

The next day (Fri morning) I faced an important decision.

We had millions of dollars in cash on deposit at the bank. Two-thirds of it was scheduled to be swept out for payroll and other accounts payable on Monday. The remaining third was earmarked for payments a week later. If we immediately wired the money out of our bank, we would miss payroll and this would hurt our employees, at least some of whom would then miss their mortgage payments and other payables. But if we kept the money on deposit and the bank failed, it was a material problem.

If our bank had been SVB, I would have wired it out immediately.

But it was another regional name, and I figured that even if the government failed to agree on a weekend bailout, our bank would probably survive long enough on Monday for our payroll to go out. So, we sat tight with the payroll money and moved the remaining one-third into T-Bills. Our COO had already started the process of opening new accounts at a Tier-1 bank; one of the too-big-to-fail affairs that are now politely called SIBs (systemically important banks).

Our bank’s stock price collapsed on Monday and will almost certainly not survive this bank run in its present form.

But our payroll went out on time. Had it not, I would’ve lent money to our firm to pay our employees, and then waited an indeterminate period to get money back from the bank, less a haircut.

We got paid absolutely nothing to take all these risks. In fact, by moving our money to a SIB and then sweeping excess cash into T-Bills, we will get paid a lot of money on our cash. Rarely in life do you get paid more to take less risk. You do now.

Business owners take a lot of risk, endure sleepless nights. Our commercial banks are central to business. We want banks to operate flawlessly and be as boring as possible. But now our banks scare us. So, we will move to SIBs unless the government provides immediate blanket guarantees to all depositors. But even so, most of us will still now move, because we get paid nothing to stay.

And US banking will be forever changed. Power will concentrate further into SIBs. Credit creation will suffer profoundly, and economic dynamism with it.

After striking their historic peace deal which was mediated by China in Beijing over a week ago, Iran and Saudi Arabia continue to make strikes toward full normalization of ties, after being archenemies for decades – and before that their peoples having been rivals for centuries when it comes to the religious Shia-Sunni divide.

An Iranian official has announced Sunday that the King of Saudi Arabia has issued a formal invitation to Iranian President Ebrahim Raisi to visit Riyadh in an unprecedented move. Raisi is said to have “welcomed” the invite from King Salman. Now what remains is setting a date.

“In a letter to President Raisi… the King of Saudi Arabia welcomed the deal between the two brotherly countries, [and] invited him to Riyadh,” Mohammad Jamshidi, the Iranian president’s deputy chief of staff for political affairs, said on Twitter.

The Iranian Foreign Ministry also confirmed the upcoming meeting. Additionally FM Hossein Amirabdollahian said that “An agreement was reached two months ago for Iranian and Bahraini technical delegations to visit the embassies of the two countries.”

He added, “We hope that some obstacles between Iran and Bahrain will be removed and we will take basic steps to reopen the embassies.”

Such an official head of state visit hasn’t taken place in over 20 years, with the last Iranian president to visit the kingdom being President Mohammad Khatami in February 1998. That visit in the late 90’s was the first trip by an Iranian president to Saudi Arabia since the 1979 Iranian Islamic revolution.

Last week, Henry Kissinger was cited in The Washington Post as calling the Saudi-Iran diplomatic breakthrough “a substantial change in the strategic situation in the Middle East.” According to more of the well-known former Secretary of State’s commentary:

The Saudis, who have been among Washington’s closest allies in the Middle East for decades, “are now balancing their security by playing off the US against China,” he explained.

According to Kissinger, Riyadh’s actions are comparable to what he himself accomplished in the early 1970s when, as secretary of state in the Nixon administration, he helped achieve rapprochement with Beijing amid its tensions with Moscow.

This could also eventually usher in a new era of hoped-for regional stability. Not only has the regional rivalry, which intensified most during the decade of the proxy war in Syria which began in 2011, been set amid a centuries-long divide over correct interpretation of Islam (Shia Iran vs. Sunni Saudi Arabia), but it has also spilled over in places like Yemen, scene of another grinding proxy war which pit Shia rebels against a Saudi-backed government. 

The Saudis and Iranians also clash in supporting rival political factions inside Lebanon, with Tehran being the Shia paramilitary group Hezbollah’s biggest backer. For these reasons, accusations of supporting terrorism have been frequently hurled back-and-forth over the years. Iranian state media, for example, has long charged the Saudis with being a prime covert backer of the Islamic State (ISIS) in their drive to overthrow President Assad in Syria. 

Authored by The Jamestown Foundation via OilPrice.com,

• China, Kyrgyzstan and Uzbekistan have settled all technical issues related to the construction of the railway line.

• Once the railway line is completed, it will not only bring hundreds of millions in transit revenue to Kyrgyzstan but will also turn the country from landlocked to land-linked.

• The Railway will elevate Kyrgyzstan’s geopolitical importance in the region.

For many years, the successive leaders of Kyrgyzstan could not capitalize on their country’s strategic location along the shortest route connecting China to Central Asia and further onward to the Middle East and Europe. Now, hopes are cautiously mounting that this might be changing. Current Kyrgyzstani President Sadyr Japarov is determined to redefine his country’s role in regional and wider international relations, as evidenced by his signing of agreements with the likes of Uzbekistan and China, among others, regarding improved cooperation on infrastructure and transit development (Akipress.com, February 7, 2022; Newscentralasia.net, January 28). This renewed optimism is based on the announced plans that, by the end of 2023, Kyrgyzstan will begin the construction of its part of the strategic China–Kyrgyzstan–Uzbekistan railway line (The Diplomat, September 26, 2022). Although the details of the funding mechanism for this project remain unclear, Kyrgyzstani officials are confident that all matters will be gradually resolved.

When Japarov was elected president of Kyrgyzstan in January 2022, he identified nationalizing the Kumtor mine, one of the largest gold mines in the world; settling border disputes with neighboring Uzbekistan and Tajikistan; and completing the China–Kyrgyzstan–Uzbekistan railway as his top foreign policy priorities. So far, his record has been rather impressive on these fronts. Last year, the Kyrgyzstani government reached a formal settlement with Canadian mining company Centerra over the nationalization of Kumtor, which had been bogged down in corruption and environmental disputes for more than two decades. Full control of the mine and its gold export revenues will significantly increase the country’s economic and financial independence (President.kg, April 4, 2022).

In late January 2023, during Uzbekistani President Shavkat Mirziyoyev’s state visit to Bishkek, both leaders exchanged notifications on the completion of domestic procedures for the ratification of a historic border demarcation agreement between the two neighbors, whose relations have even grown to the level of comprehensive strategic partners since then. The Kyrgyzstani-Uzbekistani border deal could potentially give a strong push for Kyrgyzstan and Tajikistan to reach a similar compromise on their border dispute, despite the fact that the two fought at least two short, but extremely violent border wars in the Ferghana Valley in April 2021 and again in September 2022. These clashes resulted in the combined deaths of over 150 people on both sides. The fertile lands of the Ferghana Valley are shared by Kyrgyzstan, Tajikistan and Uzbekistan, and foreign experts have long regarded it as a potentially conflict-prone territory at the junction of these three states. Japarov has repeatedly stated that the treaty on the Kyrgyzstani-Uzbekistani border serves as an example for negotiating a similar agreement on the delimitation of Kyrgyzstan’s border with Tajikistan (Gazeta.uz, January 27).

It is believed that China, Kyrgyzstan and Uzbekistan have settled all technical issues related to the construction of the railway line, including considerations on the railway’s route inside Kyrgyzstani territory and the size of the railway track gauge (Eurasianet, September 15, 2022). This leaves only the funding mechanism to still be negotiated after the feasibility study by China is completed this summer. The fact that Chinese engineers have set up offices in Bishkek and are active on the ground attests to the fact that, this time, all parties seem committed to seeing this project through. The final feasibility study by the Design and Survey Institute of the China Railway Group is expected to be complete by June 1 (24.kg, January 22).

Once the railway line is completed, it will not only bring hundreds of millions in transit revenue to Kyrgyzstan but will also turn the country from landlocked to land-linked, connecting the East with the West. This connection will also completely redefine Bishkek’s geopolitical position not only in Central Asia but also throughout wider Eurasia.

Due to these circumstances, Bishkek could be looking beyond Central Asia. In 2023, Japarov is expected to travel to Iran and Pakistan. Both are Shanghai Cooperation Organization members that have been attempting to woo the Central Asian countries due to the potential linkage of regional transit corridors to Iranian and Pakistani seaports for trade with the wider world. Notably, both Tehran and Islamabad are supplying various military equipment and arms, including drones, to Tajikistan, currently Kyrgyzstan’s regional rival (24.kg, February 2; Ru.irna.ir, February 5).

During meetings in September 2022 between Kyrgyzstani and Iranian officials to boost trade and transport links, as a goodwill gesture, the Iranian authorities allocated a plot of land at the Port of Bandar Abbas for Kyrgyzstan. Iranian President Ibrahim Raisi also pledged to share with Bishkek his country’s scientific and technological achievements and expertise, including in the military sphere (Ru.irna.ir, September 15, 2022). The fact that Iran stayed neutral during the Kyrgyzstani-Tajikistani border clashes and did not openly support Tajikistan, which is linguistically close to Tehran, was noticed by Bishkek, which accused its neighbor of initiating the fighting. Iranian military officials gave their assurances to the Kyrgyzstani government that they consistently reiterate to Dushanbe that the Iranian Ababil-2 drones being supplied to Tajikistan are not to be used against Kyrgyzstan. They also reassured Bishkek that these drones are only equipped to carry out reconnaissance functions (24.kg, November 10, 2022).

Linking up the railway networks of Central Asia with Iran’s and Pakistan’s seaports has been a long-standing strategic goal of the Central Asian countries (Nikkei, March 18, 2021; Eurasianet, May 4, 2021). Currently, railway lines from Uzbekistan and Kazakhstan are connected to the Iranian Port of Bandar Abbas through Turkmenistan. The importance of these linkages has increased as the northern routes passing through Russia have become untenable due to Russia’s brutal war against Ukraine. Possible railway connections to Pakistani ports through Afghanistan are still on the drawing board, with Uzbekistan doing most of the heavy lifting (The Diplomat, July 26, 2022).

Overall, if the political situation in Kyrgyzstan remains stable with Japarov at the helm, beginning construction on the China–Kyrgyzstan–Uzbekistan railway line will mark yet another key milestone for the country in achieving its delineated foreign policy goals.

Germany said over the weekend that it is ready to arrest Russian President Vladimir Putin if he ever travels to its territory, following the Hague-based International Criminal Court issuing an arrest warrant last week related to alleged human rights abuses in Ukraine.

German Justice Minister Marco Bushman stipulated the Russian leader will be detained if he steps foot on Russian soil. “I expect that the International Criminal Court in The Hague will swiftly approach Interpol as well as the contracting states and ask them for enforcement,” Bushman told Germany’s Bild am Sonntag newspaper on Sunday.

This comes after German Chancellor Olaf Scholz welcomed the ICC ruling, stressing that “no one is above the law.”

The Friday ICC statement had said that Putin “is allegedly responsible for the war crime of unlawful deportation of population (children) and that of unlawful transfer of population (children) from occupied areas of Ukraine to the Russian Federation.”

“Today, 17 March 2023, Pre-Trial Chamber II of the International Criminal Court … issued arrest warrants against two individuals in connection with the situation in Ukraine: Mr. Vladimir Vladimirovich Putin and Ms. Maria Alekseevna Lvova-Belova,” the statement added, referencing Russia’s commissioner for children’s rights Maria Alekseyevna Lvova-Belova.

As we described earlier, the ICC warrant remains largely symbolic, given the ICC doesn’t have a police force or enforcement mechanism. Thus sovereign governments would have to take action on it (as in this case with Germany).

However, it does complicate Putin’s ability to travel to European or other capitals which cooperate with the ICC. This also means it could hinder peace efforts in the scenario Putin might choose to personally engage in negotiations or diplomacy in a European city.

The Kremlin has said the ICC warrant is “legally null and void” and that it doesn’t recognize the international court’s decisions. The US is also not a signatory to the ICC.

Authored by John Cody via Remix news,

After French President Emmanuel Macron pushed through pension reform without a vote in parliament, the backlash has been fierce, and there is now a good chance that a no-confidence vote this week could collapse his government. Even if he survives the vote, commentators say that Marine Le Pen has never been in a better position, with the conservative populist emerging as the “victor” in the fierce debate over pension reform.

Macron’s decision to turn to Article 49.3 of the French constitution, which allows him to bypass parliament and increase the retirement age from 62 to 64 via decree, had been labeled the “nuclear option” by the French press.

France🇫🇷 Macron is learning what it means to go against The People.

Resist🔥🔥🔥
pic.twitter.com/XMxeYeGI0H

— Dr. Anastasia Maria Loupis (@DrLoupis) March 16, 2023

However, within the article is a clause that a vote of no-confidence can be tabled within 24 hours after Article 49.3 is used, and if it succeeds, it would mean the end of Macron’s government.

Spontaneous riots have already erupted across the country, resulting in over 258 arrests in Paris alone, but the press and political analysts are warning that worse unrest is on the horizon.

Armored Paris, demonstrations banned. Macron is afraid. pic.twitter.com/ZYWdjlU76y

— RadioGenova (@RadioGenova) March 19, 2023

Hundreds of thousands have been driven onto the streets in recent weeks in defiance of Macron’s pension reform, and polling consistently shows approximately 75 percent of the French public rejects raising the retirement age.

These protests could help fuel the drive for a no-confidence vote, with Le Pen quickly announcing she would pursue a vote of no confidence immediately after Macron rammed through the pension reform. So far, Le Len’s National Rally and the left-wing France Unbowed have blocked each other when it came to attempts to remove French Prime Minister Elisabeth Borne, who remains a close ally of Macron.

🇫🇷 France one step away from civil war. Macron’s police beat women and the elderly. Ignored by BBC & ITV news…Why? pic.twitter.com/iv8FDtoxmU

— Frantruth (@frantruth) March 15, 2023

However, the Liberal MP Charles de Courson could introduce it and thus act as a bridge between the right and the left. The Liberals, acting as a neutral intermediary, could allow the right and the left to vote for their motion.  It has also been announced that the Liberties, Independents, Overseas and Territories (LIOT Group) is expected to table a no-confidence motion at 2:00 p.m. today as well.

Although the different factions of parliament have remained divided up until now, Macron’s dubious move to ram through pension reform without a democratic vote could finally unify the opposition.

The stakes are extremely high for Macron. He has labeled his move the “mother of all reforms” and wants to make the reform one of the crowning achievements of his rule. Regardless of whether he stays in power or not, the idea of “democracy” in France has become a farce, and tensions are only expected to mount in the coming weeks and perhaps coming years as well.

Le Pen says she will reverse the pension reform if she is elected president. Experts say her party stands to gain the most from Macron’s move, and she has succeeded in expanding her party’s electorate from the working-class base to the middle-class.

“It is precisely the employees who are angry about Macron’s reform,” said pollster Frédéric Dabi to Germany’s Welt.

Le Pen is also considered the best placed to capitalize among the various right-leaning and conservative parties in France.

“Le Pen is successfully continuing the process of normalization that it began years ago and continues to reap the rewards,” says right-wing extremism expert Jean-Yves Camus. “There are no more taboos when it comes to Marine Le Pen’s victory. We now have to consider this as a serious hypothesis.”

Authored by Vijay Prashad via thetricontiental.org,

On 24 February 2023, the Chinese Foreign Ministry released a twelve-point plan entitled ‘China’s Position on the Political Settlement of the Ukraine Crisis’.

This ‘peace plan’, as it has been called, is anchored in the concept of sovereignty, building upon the well-established principles of the United Nations Charter (1945) and the Ten Principles from the Bandung Conference of African and Asian states held in 1955. The plan was released two days after China’s senior diplomat Wang Yi visited Moscow, where he met with Russia’s President Vladimir Putin.

Russia’s interest in the plan was confirmed by Kremlin spokesperson Dmitry Peskov shortly after the visit: ‘Any attempt to produce a plan that would put the [Ukraine] conflict on a peace track deserves attention. We are considering the plan of our Chinese friends with great attention’.

Ukraine’s President Volodymyr Zelensky welcomed the plan hours after it was made public, saying that he would like to meet China’s President Xi Jinping as soon as possible to discuss a potential peace process. France’s President Emmanuel Macron echoed this sentiment, saying that he would visit Beijing in early April. There are many interesting aspects of this plan, notably a call to end all hostilities near nuclear power plants and a pledge by China to help fund the reconstruction of Ukraine. But perhaps the most interesting feature is that a peace plan did not come from any country in the West, but from Beijing.

When I read ‘China’s Position on the Political Settlement of the Ukraine Crisis’, I was reminded of ‘On the Pulse of Morning’, a poem published by Maya Angelou in 1993, the rubble of the Soviet Union before us, the terrible bombardment of Iraq by the United States still producing aftershocks, the tremors felt in Afghanistan and Bosnia. The title of this newsletter, ‘Birth Again the Dream of Global Peace and Mutual Respect’, sits at the heart of the poem. Angelou wrote alongside the rocks and the trees, those who outlive humans and watch us destroy the world. Two sections of the poem bear repeating:

Each of you, a bordered country,
Delicate and strangely made proud,
Yet thrusting perpetually under siege.
Your armed struggles for profit
Have left collars of waste upon
My shore, currents of debris upon my breast.
Yet today I call you to my riverside,
If you will study war no more. Come,
Clad in peace, and I will sing the songs
The Creator gave to me when I and the
Tree and the rock were one.
Before cynicism was a bloody sear across your
Brow and when you yet knew you still
Knew nothing.
The River sang and sings on.

…

History, despite its wrenching pain
Cannot be unlived, but if faced
With courage, need not be lived again.

History cannot be forgotten, but it need not be repeated. That is the message of Angelou’s poem and the message of the study we released last week, Eight Contradictions of the Imperialist ‘Rules-Based Order’.

In October 2022, Cuba’s Centre for International Policy Research (CIPI) held its 7th Conference on Strategic Studies, which studied the shifts taking place in international relations, with an emphasis on the declining power of the Western states and the emergence of a new confidence in the developing world. There is no doubt that the United States and its allies continue to exercise immense power over the world through military force and control over financial systems. But with the economic rise of several developing countries, with China at their head, a qualitative change can be felt on the world stage. An example of this trend is the ongoing dispute amongst the G20 countries, many of which have refused to line up against Moscow despite pressure by the United States and its European allies to firmly condemn Russia for the war in Ukraine. This change in the geopolitical atmosphere requires precise analysis based on the facts.

To that end, our latest dossier, Sovereignty, Dignity, and Regionalism in the New International Order (March 2023), produced in collaboration with CIPI, brings together some of the thinking about the emergence of a new global dispensation that will follow the period of US hegemony.

The text opens with a foreword by CIPI’s director, José R. Cabañas Rodríguez, who makes the point that the world is already at war, namely a war imposed on much of the world (including Cuba) by the United States and its allies through blockades and economic policies such as sanctions that strangle the possibilities for development. As Greece’s former Finance Minister Yanis Varoufakis said, coups these days ‘do not need tanks. They achieve the same result with banks’.

The US is attempting to maintain its position of ‘single master’ through an aggressive military and diplomatic push both in Ukraine and Taiwan, unconcerned about the great destabilisation this has inflicted upon the world. This approach was reflected in US Defence Secretary Lloyd Austin’s admission that ‘We want to see Russia weakened’ and in US House Foreign Affairs Committee Chairman Michael McCaul’s statement that ‘Ukraine today – it’s going to be Taiwan tomorrow’. It is a concern about this destabilisation and the declining fortunes of the West that has led most of the countries in the world to refuse to join efforts to isolate Russia.

As some of the larger developing countries, such as China, Brazil, India, Mexico, Indonesia, and South Africa, pivot away from reliance upon the United States and its Western allies, they have begun to discuss a new architecture for a new world order. What is quite clear is that most of these countries – despite great differences in the political traditions of their respective governments – now recognise that the United States ‘rules-based international order’ is no longer able to exercise the authority it once had. The actual movement of history shows that the world order is moving from one anchored by US hegemony to one that is far more regional in character. US policymakers, as part of their fearmongering, suggest that China wants to take over the world, along the grain of the ‘Thucydides Trap’ argument that when a new aspirant to hegemony appears on the scene, it tends to result in war between the emerging power and existing great power. However, this argument is not based on facts.

Rather than seek to generate additional poles of power – in the mould of the United States – and build a ‘multipolar’ world, developing countries are calling for a world order rooted in the UN Charter as well as strong regional trade and development systems. ‘This new internationalism can only be created – and a period of global Balkanisation avoided’, we write in our latest dossier, ‘by building upon a foundation of mutual respect and strength of regional trade systems, security organisations, and political formations’. Indicators of this new attitude are present in the discussions taking place in the Global South about the war in Ukraine and are reflected in the Chinese plan for peace.

Our dossier analyses at some length this moment of fragility for US power and its ‘rules-based international order’. We trace the revival of multilateralism and regionalism, which are key concepts of the emerging world order. The growth of regionalism is reflected in the creation of a host of vital regional bodies, from the Community of Latin American and Caribbean States (CELAC) to the Shanghai Cooperation Organisation (SCO), alongside increasing regional trade (with the BRICS bloc being a kind of ‘regionalism plus’ for our period). Meanwhile, the emphasis on returning to international institutions for global decision-making, as evidenced by the formation of the Group of Friends in Defence of the UN Charter, for example, illustrates the reinvigorated desire for multilateralism.

The United States remains a powerful country, but it has not come to terms with the immense changes taking place in the world order. It must temper its belief in its ‘manifest destiny’ and recognise that it is nothing more than another country amongst the 193 members states of the United Nations. The great powers – including the United States – will either find ways to accommodate and cooperate for the common good, or they will all collapse together.

At the start of the pandemic, the head of the World Health Organisation, Dr Tedros Adhanom Ghebreyesus, urged the countries of the world to be more collaborative and less confrontational, saying that ‘this is the time for solidarity, not stigma’ and repeating, in the years since, that nations must ‘work together across ideological divides to find common solutions to common problems’.

These wise words must be heeded.