The BRIC(K)S Are Broken

The bad news keeps coming. China is in deep economic trouble, while at the same time it indulges in saber-rattling against its smaller neighbors. Gordon C Chang, a long-term China Cassandra, suggests provocatively that “the regime that was supposed to own the century may not last a decade.”

Then there are problems in Brazil, with Dilma Roussef on the verge of being impeached. Brazil, once again, looks like the jibe by Charles deGaulle: “Brazil is the country of the future, and always will be”. Some think there is a methodical plan to overturn the Brazilian government, and I present this view without necessarily endorsing it.

Russia, fresh from its fairly successful military outings in Ukraine and Syria, is mired in a new crisis with the #PanamaPapers leak, and the suggestion that those close to Vladimir Putin are embroiled in the money-laundering and tax evasion schemes in offshore tax havens. Wikileaks claims that USAID funded #PanamaPapers story on Putin.

The reality is that Russia recently accomplished something that the US did not, and did not even seem to have the will for: the attrition of ISIS power in Syria. It is remarkable that this is not mentioned in the discourse on Putin.

Also, there is a school of thought that suggests that the motives of the West are not all that clean in this pursuit of offshore tax dodgers: The Economist (oddly enough) suggests that the US is the “largest tax haven in history” or that is getting there.

India, in the middle of all this, does look relatively unscathed, but one remains worried about the #Deepstate and its plans for the country. The Democrats have long been hostile to India (see a Wikileaks excerpt quoting arch-Atlanticist Brzezinski and the Hillary Clinton team, hat-tip to Arvind Kumar ). How much of the India-bashing (and Modi-bashing) is Hillary’s brainchild, and how much is Obama’s, we will never know. There is also the remarkable fact that there is no hint of Nehru Dynasty stashing of funds in the Panama Papers. I suspect the leaks are selective.

As far as South Africa is concerned, there is (not yet) any major story coming out from there, although Jacob Zuma is under a cloud based on the lavish fixing-up of his private home using state funds.

So I guess the mythology around the BRICs has to be rewritten. It was just the other day that everyone was forecasting that the BRICs would provide the growth engine of the future, but China has slowed dramatically, Russia is in the doldrums after the collapse of oil prices, and Brazil, at a time when it should be doing well, has gone seriously into reverse.

The BRICs are dead, long live the BRICs.

As someone said, what Goldman Sachs giveth, Goldman Sachs taketh away too (they were the ones who created the acronym). They closed their BRIC fund in October; apparently the new new thing is the TICKs (Taiwan, India, China, Korea).

The interesting question is whether all this is purely random, or whether there is some grand scheme behind it. As Sherlock Holmes reminds us, it is instructive to ask who benefits from a series of events, and thus who has the motive. Then, as he suggested, “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth”.

I could argue with some justification that the benefit of all these scenarios above is the West, or, specifically the #Deepstate, which comprises the military-industrial-media-religious elites, whose main motivation is their own survival. Strangely enough, though one would think the Republicans would be the obvious candidates to support #Deepstate, I have come to the conclusion that it is the Democrats who are hand-in-glove with it. Thus my unease with Hillary Clinton, who is the establishment candidate par excellence.

Besides, we have seen this movie before. The sudden slow-down in China (there is little doubt that it will have a hard landing, the only question is how hard) reminds me of what happened with Japan a couple of decades ago. Everybody in America was petrified by the thought of Japan taking over. The Japanese were buying movie studios, golf courses on Pebble Beach, and I think Rockefeller Center in New York, all of which were bad investments.

In due course, the Japanese economy tanked, and it hasn’t recovered for some twenty years. I suspected that the top moneymen in the West did something – I am not quite sure what – that trapped the Japanese. I have been waiting for something along the same lines to happen to China, and sure enough, it has. My suspicion is that all the explanations about ‘middle-income trap’ and ‘structural adjustment’ and so on are just bunkum, and that there is some deeper malaise. I have no idea what that is, though.

But the net result is that China’s trove of foreign currency reserves of $3 trillion began to bleed (by $500 billion to $1 trillion in 2015) precisely at the moment that it tried to build up the yuan as a reserve currency, and to create an alternative to the IMF/World Bank through its Asian Infrastructure Bank (AIIB) and the BRICS Bank. See what I mean about Goldman Sachs (which I use as a generic name for the big moneymen of the West).

Similarly, we have seen any number of forced regime changes, and that is the way Brazil seems to be headed. Mossadegh in Iran and Allende in Chile, for sure; but then there were those color revolutions and the Arab Spring, which ended up removing authoritarian rulers, but created utter chaos, genocide, and human suffering. The vacuum left by Hillary Clinton’s pursuit of Muammar Gaddafi (which, by pure coincidence, happened immediately after he proposed to drop the dollar and use gold as the basis for his trade) and vendettas against Saddam Hussain and Bashar Al-Assad created ISIS.

To go back a few years, the vacuum left in Cambodia by Kissinger’s war mongering against that neutral country forced the collapse of Norodom Sihanouk’s kingdom and the emergence of the Khmer Rouge.

Thus, the troubles of the BRICs today have analogs from years past. As Marx said, history repeats, as tragedy and farce. India had better be prepared for both tragedy and farce, because it could well be that Brazil is a trial run for what’s planned for India too: induced riots and regime change. We had a small preview of this in 1957 when the EMS government in Kerala was toppled by foreign intervention with the connivance of native compradors. Those native quisling sleeper cells merely have to be re-activated.