China CIPS v Western SWIFT System

Posted Feb 28, 2017 by Martin Armstrong

COMMENT: Marty; Some people are trying to claim that China in bypassing the Swift System, they are undermining the dollar. The latest absurd statement is that Japan will bypass the dollar and SWIFT System to transact using China’s CIPS system in inter-bank settlement. I really had to laugh at how ignorant this statement is for it would mean Japan will no longer sell anything in the USA. It seems that these people so desperate to kill the dollar clutch at anything and we just laugh in the trading rooms. I think you should address this statement for the naive people out there who are clueless as to real international trade.

RPD

REPLY: Yes, I agree, You are right. The average person out there may read these headlines that are written by people without a day of real world experience. They seem to confuse clearing and investment. Ever since China began to set up a competition to the Western financial institutions back in 2013, there have been countries in the East dealing with China who have begun to use the CIPS System. That makes perfect sense when you are dealing with China. However, that does not mean that CIPS can compete with the SWIFT System with regard to trade in the West. Japan joining CIPS is by no means to the exclusion of SWIFT.

The SWIFT (Society for Worldwide Interbank Financial Telecommunication) is an industry-owned limited liability cooperative society set up under Belgian law – not US Law. It is controlled by its member banks (including central banks) and other financial institutions. SWIFT’s business is to supply secure messaging services contributing to greater automation of financial transaction processes and to provide a forum for financial institutions to address issues of common concern in the area of financial communication services.

SWIFT was founded in 1973 by 239 banks from 15 countries. Since then, there has been a steady increase in the number of financial institutions and countries connected to SWIFT. By the end of 2002, more than 7,400 financial institutions from 198 countries were connected. There are three categories of SWIFT users: members (shareholders), sub-members (ie subsidiaries controlled by members) and participants. Members can benefit from all the services offered by SWIFT, whereas participants only have restricted access to a range of services that relates to their business.

SWIFT participants include securities brokers and dealers, investment management institutions, fund administrators, money brokers and various other institutions, mainly from within the securities business. By the end of 2002, SWIFT provided services to 2,203 members, 3,079 sub-members and 2,183 participants. The average daily value of payment messages on SWIFT is estimated to be above €6 trillion. National Bank of Belgium (NBB), which is the central bank of the country in which SWIFT’s headquarters are located, acts as lead overseer of SWIFT, supported by the G10 central banks. The NBB is responsible for the day-to-day oversight relationship with SWIFT – not the Federal Reserve.

Visa International operates through SWIFT and it is a private association owned by 21,000 financial institutions worldwide. It consists of six regional divisions: Asia-Pacific; Canada; Central & Eastern Europe, Middle East & Africa (CEMEA); European Union; Latin America & Caribbean; and United States. Membership is limited to deposit-taking financial institutions and to bank-owned organizations operating in the bank card sector, such as Carte Bleue in France and Servizi Interbancari in Italy. The Visa International Base II system clears transactions and facilitates settlement. Visa International supports approximately 180 transaction currencies, thus enabling the processing of international transactions – NOT exclusively dollars! Members can choose to receive their transaction reports in any of these currencies.

Twenty-six currencies can be used in the net settlement between Visa International and the participating members, the choice of currency being decided by each member involved in the settlement. The necessary foreign exchange operations are executed with two banks, one located in London (Barclays) and one in New York (Citibank).

The attempt by China to set up CIPS to compete with the SWIFT System is political and not purely economic. This idea that Japan and China will not participate in SWIFT is absolutely absurd. That would mean even credit cards would not be valid in the West.

Knee Jerk – Reaction – Temp Events

Posted Feb 25, 2017 by Martin Armstrong

QUESTION: Hello, could you explain the differences between “Knee Jerk v Spike v Temp v Reaction Events” ? They are all Timing indications I guess? regards.

ANSWER: When the computer is classifying something as a 

-Knee Jerk high or low, it means it is a one-time-unit event. 

-A Reaction High or Low has not penetrated the previous event and is at least a three-time-unit event. 

-A Temp High or Low is normally a brief trend greater than three-time-units.

Here is the Global Market Watch on gold. You can see it correctly forecast two Knee Jerk lows, which proved to be correct. It is the GMW which eliminates personal opinion and is based solely upon pattern recognition. This is neither technical nor cyclical based. This is something altogether unique and represents true Machine Learning Intelligence.

Collapse of the established government structures, and that will include Republicans

Democrats in Civil War Against Obama’s OFA?

Posted Feb 21, 2017 by Martin Armstrong

Of course the brainwashed Democrats send in emails saying Obama is not behind the shenanigans of civil unrest. They just prefer to blame everyone but themselves and live in their little bubble world. They are totally unaware that the Democrats are themselves experiencing an internal civil war and it is the state level Democrats that are starting to revolt against the Washington elite and that includes Obama’s covert machine behind creating civil unrest called Organizing for Action (OFA). I have reported that normally a President’s fund is shut down after they leave office. Here, Obama has taken a house in Washington, built a wall around it at taxpayer’s expense, and turned it into his bunker to obstruct anything that Trump tries to do. Obama’s OFA troops are especially trying to protect Obamacare, which he regards as his “legacy” even though it is falling apart.

There is brewing an internal civil war within the Democratic Party who are getting very angry at Obama and his OFA some have called “The Devil.” Stephen Handwerk, executive director of the Louisiana Democratic Party, wrote in a private email to fellow party leaders, “This is some GRADE A Bulls–t right here.” Indeed, Handwerk has come out and said that declaring yourself a Democrat in Louisiana is more difficult than coming out as gay. In a leaked email the Daily Beast has published, Handwerk added: “It also to me seems TONE DEAF—we have lost over 1,000 seats in the past 8 years … all because of this crap.”

The email was obtained and published by the Daily Beast, reported the thread of other Democrats at the state level. “Yes, it sure is,” Katie Mae Simpson, executive director for the Maine Democratic Party, replied. “OFA showed up in Maine, organized a press conference on saving [Obamacare], with one of our Dem legislative leaders speaking, all without ever mentioning that they were in state and organizing. They hired someone I know, which is somewhat helpful, but my god, they don’t have a very good alliance-building process.”

They continued: “[With] all due respect to President Obama, OFA was created as a shadow party because Obama operatives had no faith in state parties,” Nebraska Democratic Party Chair Jane Kleeb told Politico last week.”

I have reported that OFA has over 250 offices set up around the country circumventing the Democratic Party with over 30,000 operatives. This is the same OFA that accepted money from Soros who is trying to create a socialist revolution worldwide. I would remove any funds from any hedge fund that donated to Hillary since they are supporting socialism. The New York Post wrote: Obama’s “army of agitators — numbering more than 30,000 — who will fight his Republican successor at every turn of his historic presidency. And Obama will command them from a bunker less than two miles from the White House.”

There are many Democrats at the state level who are starting to see OFA as an organization independent of the Democratic Party itself, which in trying to undermine Trump, yet may in fact, undermine the Democratic Party itself. When we look at the data, the Democratic Party, which was the Party of Slavery to start with led by Andrew Jackson, crashed and bottomed during the Civil War as Abraham Lincoln became the first Republican President.

From that low during the 1860s, the Democratic Party transformed itself initially as a labor type of Party championing the silver miners. They adopted Marxism during the 1890s and reached a peak with Roosevelt during the Great Depression.

Look closely at this chart which takes the total seats of each party combined for the Senate & House as a percent of the total combined available seats. Take note that the Democrats have been in a bear market with lower and lower highs since that major high with FDR during the Great Depression. It was during the 1937 period that the Democrats held  76.8362% of the total seats in the Senate and House of Representatives. It appears that the Democratic Party may fall apart and splinter in 2023. Now Democrats will be writing in on this one. Keep in mind that the Republican elites like John McCain are opposed to Trump. Trump may have ran within the Republican Party, but he has been really a third party candidate with the Republican elite vehemently against him like John McCain. So government is going to change completely.

Obama is behind the effort to derail and block the Trump Administration on everything. However, Obama may be sowing the seeds of the destruction of the Democratic Party altogether. Those who think Obama is not behind this coup are blinded by their bias. To agree with this statement DOES NOT mean the Republicans are saints – just look at John McCain if you need reassurance. John McCain voted to tax the internet.

Obama is deliberately trying to create an uprising and is side-stepping the Democratic Party. Hedge Funds and Hollywood are assisting him. ABC is among the worst. The show the View openly states that not one person voted for Trump and all they do is bash Republicans. You are hard pressed to find a more bias show spouting out propaganda.

This is all being organized and directed through OFA – not the Democratic Party. The civil war brewing within the Democrats is pitting the State level against the Feds and particularly OFA. How this plays out will be extremely interesting. Nevertheless, this is part of the cycle where we see the collapse of the established government structures, and that will include Republicans. We cannot wait for people like John McCain to leave Washington. He is deeply entrenched in the swamp.

One must recognize that when you corrupt the news, the collapse of society is not far behind.

When Real News is Attacked by Government – The End is Near

Posted Feb 17, 2017 by Martin Armstrong

The Deutsche-Wirtschafts-Nachrichten (DWN) has been under attack by politicians in Europe for reporting the truth. DWN editor Michael Maier has sent a sharp protest to the President of the European Commission, Jean-Claude Juncker. The EU had accused DWN of spreading Russian propaganda with a fake. Anyone who disagrees to the politics of the EU is attacked. This assault upon real news is becoming really very bad. The USA is just off the charts in how the media is twisting everything possible and appears to be egging on World War III for any compromise Trump would reach with Putin is being characterized as pay-back for undermining Hillary.

The EU Commission has actually circulated a paper containing a clumsy counterfeit about a DWN article and other manipulations.Bloomberg and The Nation are also accused of operating propaganda for Russia. The goal is obviously the intimidation of critical media.

The mainstream media in the United States is on board 100% trying to undermine Trump. In Europe, the corrupt media is trying to support the EU and pretend Merkel is still popular.

One must recognize that when you corrupt the news, the collapse of society is not far behind.

First Sovereign Debt Crisis- economy peaked in 1835 with the stock market and declined for 7 years into 1842

When Sovereign Defaults Create a Depression

Posted Feb 17, 2017 by Martin Armstrong

The 1840 Presidential Election took place in the midst of a great depression that was set in motion by State Sovereign Defaults after Andrew Jackson shut down the Bank of the United States, which acted as the central bank. There, the incumbent Democrat, President Martin Van Buren suffered a devastating loss to the new unified Whig candidate William H. Harrison who won 234  electoral votes compared to Van Buren’s 60 votes. They were trying to create the image that the economy was recovering and called it the Harrisonian rally. This poster showed a vignette of the log cabin, the barrel of hard cider, and of William H. Harrison behind the plow.

Clearly, the United States presidential election of 1840 demonstrated how much economics plays into the result of an election. President Martin Van Buren did not create the depression. That was set in motion by Andrew Jackson who create the Panic of 1837. Van Buren fought for re-election against an economic depression and State Sovereign Defaults that wiped out the bond markets. The Whig Party unified for the first time behind war hero William Henry Harrison and came back to throw out the Democratic administration. Their slogan has remained famous “Tippecanoe and Tyler, too.”

This election was unique in that electors cast votes for four men who had been or would become President of the United States. President Martin Van Buren, President-elect William Henry Harrison, Vice-President-elect John Tyler, who would succeed Harrison upon his death, and then James K. Polk, who received one electoral vote for Vice President who also became President late on.

The economy peaked in 1835 with the stock market and declined for 7 years into 1842. Therefore, the 1840 elect of the Whigs did not reverse the trend. It was on September 10th, 1833 when President Andrew Jackson announced that the government would no longer use the Second Bank of the United States, the country’s national bank. He then used his executive power to remove all federal funds from the bank, in the final salvo of what is referred to as the “Bank War.” The market first crashed into 1934, then recovered with a slingshot into 1835, and then the depression was unleashed as the wildcat banks Jackson encouraged went bust and States then issued bonds trying to support the banks. Many states then defaulted on their bonds permanently and we can see that this was the first major sustain correction the United States had ever encountered.

Greece needs urgently a debt cut if the population should ever benefit from any EU dream

All Eyes on Greece

Posted Feb 15, 2017 by Martin Armstrong

Prime Minister Alexis Tsipras has completely failed the Greek people. He was elected to exit the EU but instead he has wiped out his country trying to stay in the Eurozone. Pensions have been attacked 11 times since the crisis began in 2010. The very day Greece asked the IMF for help was precisely on the day of our target – Pi from the 2007.15 high. Today, Greece is even worse than the United States during the Great Depression.

Greece is such a beautiful country and its people are among the most pleasant in Europe. Yet all because Merkel promised Greece would be made to repay, that promise has torn Europe apart. Her polls crashed as everyone began turning against her citing that Greece forgave the debts that Germany owe it after World War II to help Germany get back on its feet, but Merkel REFUSED to listen. To boost her international image of being a loan shark, she turning within a few weeks and opened the gates to Europe for the refugees to change her personal image.

Forcing the Greek people to pay to keep the Euro together, which benefited Germany at the expense of Greece, has run its course. Greece will have no choice but to default all because Merkel has continued to put her personal polls ahead of Europe.

The IMF has finally acknowledged that the previous credit programs have not led to the recovery of the Greek economy. In a new report, the IMF had shown above all that the depression in Greece even exceeded the Great US Depression of the 1930s. Greece has been pushed beyond all endurance and what the EU and Troika have done to Greece violates human rights.

Not even a single austerity measure has led to the stabilization of the Greek budget and the deflation that has been unleashed is a human tragedy all because Merkel DOES NOT UNDERSTAND THE GERMAN HYPERINFLATION. Consequently, Merkel has subjected Europe to devastating DEFLATION and the economic depression that inflicts upon the people of Europe. What Merkel has inflicted upon Greece will be the undoing of the Eurozone.

The IMF warns about Greece that “the tax burden is unevenly distributed … Therefore, the current structure of public finances is fundamentally inefficient and unfair, and ultimately socially unsustainable. The lower incomes and the unemployed have no access to adequate and targeted social services and other essential public services that they need, and are common in other countries in the euro area. “

It is becoming abundantly clear to all observers that Greece needs urgently a debt cut if the population should ever benefit from any EU dream. However, the euro ministers reject a debt cut before the Bundestagswahl 2017 once again concerned for Merkel’s reelection bid. In other words, they fear that any debt forgiveness will mean Merkel loses her election but without debt forgiveness the euro will crack.

The Greek people do not expect any improvement and have lost faith in government regardless of the political party. The IMF has pointed out that in only six years, Greece has had nine different finance ministers. The cradle of democracy seems to have been completely damaged in Greece and this is not looking good moving forward. This is one of the cornerstones of revolution that the Eu has imposed upon the Greek people who suffer for their politicians playing games with Goldman Sachs to get into the Euro at all costs. Those costs have devastated the Greek people.

Rome’s Flat Tax Created the Biggest Economic Boom in History

Posted Feb 9, 2017 by Martin Armstrong

In the earliest days of the Republic Rome’s taxes were quite modest, and were not direct, but were a property tax or a wealth tax on all forms of property, including land, houses, slaves, animals, money and personal effects. The basic rate was just 1% and sometimes it would occasionally rise to 3%. This was to fund the pay for the army during war. The tax would often be rebated to the people out of the spoils of war. It was levied directly upon individuals, which required the government to conduct a censuses. We have the Biblical account in Luke 2.1-5 where it reads that Caesar Augustus (27BC-14AD) decreed that the Roman Empire should be taxed and that everyone had to return to his own city to pay taxes. So Joseph and Mary returned to Bethlehem and there Jesus was born. In Egypt, we know that there was a 14 year cycle to the census from the time of Augustus. The inhabitants of Egypt were required to submit a declaration to local authorities containing the names, ages, and other identifying information of all co-inhabitants. Indeed, many declarations have survived on papyrus. There are a consistent run of documents showing every census between 33/34AD and 257/258AD, with evidence that this cycle extends back to 19/20AD at the very least.

Direct taxation was impossible in the Roman Empire so there was no income tax. Property taxes were more efficient and could be administered by census. Income taxes were not possible simply because there was not such mechanism at that point in time. Local communities would decide for themselves how to divide up the tax burden among their citizens.  There were the hated Tax Farmers who would pay the tax to the state for a region and then they had the right to collect taxes. States today have taken past-due taxes and sold them to modern Tax Farmers to collect. Britain did that selling the student loans for pennies and the Tax Farmers collect and chase students. The Romans would sell the right to collect taxes to the highest bidder and how they collected the tax was not really the concern of the state. They also had the responsibility of converting provincial taxes, which were often collected in-kind taking property be it grain or animals, and then they would convert those assets into coin to pay the state. The Tax Farmers had to provide sufficient revenues to repay their advance to the state plus enough to cover the opportunity cost of the funds, the transactions cost of converting collections into cash, and the remainder was their profit. In fact, tax farming was quite profitable and
was a major investment vehicle for wealthy citizens of Rome.

Augustus ended tax farming that had dominated the Republican days due to complaints from the provinces of exploitation. The provinces were becoming deeply indebted. Cicero tells us that Brutus saw no problem exploiting others for profit. Brutus was a Tax Farmer and bid for the governorship of Cyprus. It was during this time period that Brutus enriched himself by also skimming taxes and then lent money to Ariobarzanes I (96-63BC) of Cappadocia (modern day Turkey) at 40%, well above the legal lending rate, which was confirmed by Cicero’s documents on Brutus.

The Augustinian tax system was far less progressive than the Republic. The shift moved to a flat tax type of assessment which was based on wealth and population. Tax Farmers had limited times to collect taxes, so they tended to extort the rich for that was easier than converting pigs and chickens from the poor. The Augustinian tax systemgreatly reduced the “progressivity” that is indicative in an income tax today. The Augustus flat tax was thus indexed so to speak to growth in taxable capacity where communities were only liable for a fixed payment. Thus any increase in income accrued entirely to the people as a whole and did not have to be shared with Rome. Individuals knew in advance the exact amount of
their tax bill and that any income over and above that amount was entirely theirs. This tax system promoted economic growth rather than the explotive system of the Republic. Indeed, the civil war supported Julius Caesar because of the burden of taxes and the exploitation of Tax Farmers.

The flat tax of Augustus created the biggest economic boom in Roman history. Augustus once said “I found Rome a city of bricks and left it a city of marble.” Indeed, Augustus commissioned several large marble structures, some of which took 40 years to complete. There was evidence that massive marble blocks were constantly being moved through the city, causing congestion in the streets.  Marble-paved public spaces began to appear where marble was previously reserved for sacred temples and houses of the elite. The flat tax system really did create the economic boom as people turned to peace and business – Pax Romano.

The benefit of the Roman Empire was also free trade and freedom of religion until the late 3rd century AD.

Eastern Europe & World War III

Posted Feb 8, 2017 by Martin Armstrong

Europe could become the site of a new global war in the East as tensions build there against refugees and the economic decline fosters old wounds. The EU is deeply divided over the refugee issue and thus it is fueling its own demise and has failed to be a stabilizing force. After five days of demonstrations, Romania’s month-old government backed down and withdrew a decree that had decriminalized some corruption offenses. They were still acting like typical politicians and looking to line their pockets. After one month, the people have rising up saying “We can’t trust this new government.”

On the eastern border of the EU, only a few hundred kilometers from Berlin as well as Vienna, there is a growing danger that the world will stumble into a global war primarily from through the incompetence of the politicians in the EU as well as in the East. The EU is more concerned about punishing Britain and trying to hold on to overpaid political jobs that to address the real issues facing Europe.

While these seemingly regional disputes in the East are being ignored. The problem with NATO has been that most members have not paid into the support of NATO that they had agreed to. Then NATO leaders agreed back in 2016 to deploy military forces to the Baltic states and Eastern Poland for the first time and increase air and sea patrols to reassure new allies who use to be part of the Soviet bloc, that they would defend them following Russia’s seizure of Crimea from Ukraine. This has merely increased the confrontations with Russia on the one hand but the Eastern countries themselves are not really aligned. This also raises a most serious question: Exactly where does the power of NATO end and Russian power end? Effectively, where precisely is the border of influence?

This question cannot truly be answered. Following the collapse of the Soviet Union, the agreement emerged whereby Belarus, Ukraine and Georgia were to form the buffer for Russia. NATO’s influence on the borders between Poland, the Czech Republic and Slovakia, Hungary, Romania and Bulgaria were to come to an end. Russia directly borders Estonia and Latvia, while Lithuania shares a common border with Belarus. Thereby, a meeting between the West and Russia developed in the 1990s with in agreements between the EU and Moscow along with several treaties with the USA. Russia was to then enter the G7 making it now the G8.

In annexation of the Crimean peninsula by Russia in 2014 is seen as a trigger of the crisis and Russia is described as an aggressor. But Crimea was always Russian territory and it it was given to Ukraine to manage back in 1954. What if Spain wanted Puerto Rico back? It is not part of the United States. The predominant language in Crimea was Russian – not Ukrainian. Ukraine should have been split along the line of language and instead of funding military forces, offered the people to buy their property on either side who desired to move to the West or East. Instead, we have a cold war simply over territory and the people have no say.

Politicians have been carving up the world for a very long time. People mean nothing. They carved up the Ottoman Empire and created the chaos of the Middle East. This is what Trump has been against – nation building. How many lives have it cost when politicians are so concerned over territory rather than the people living in such territories?

From 2004 onwards, NATO has sought to expand its sphere of influence beyond the bounds of peace and go right at the throat of Russia. These activities were first conducted in Georgia. The President at that time was Mikhail Saakashvili from 2004 to 2013. He promoted an active pro-Western policy and was welcomed as a friend and partner of the West. At first, it was supposed to be about democracy, something the EU itself rejected in its new structure, and economic cooperation with the EU and the USA. It did not take long to create the impression in Georgia that NATO would also help the country in an engagement with Russia. Then in the summer of 2008, the conflict escalated. Russia invaded Georgia and occupied the provinces of Abkhazia and Ossetia. These were dominated by Russians originally. Most people have no idea but Joseph Stalin was from Georgia.

NATO did not come to the aid of Georgia. There were no sanctions imposed for occupying Georgia as there were for the occupation of the Crimea. Why? What was the difference when Georgia was actually being solicited by the West and Crimea was not? Was it simply that Crimea was an important military base for Russia all along?

Economic cooperation with the West was accepted by Moscow. The cold war had ended. Ronald Reagan worked hard to bring down the Berlin Wall. Why did Obama work so hard to reestablish the cold war? NATO has clearly raised hopes in Eastern Europe as they did in Georgia. Indeed, the Ukrainian crisis is in many ways a continuation of the events in Georgia. Since the “Orange Revolution” in 2004, Ukraine was seen as a knife to poke in the ribs of Russia. The pretend President Viktor Yanukovych was pro-Russia because he came from the East and spoke Russian. He could not even speak proper Ukrainian. But he and his sons sought to rule Ukraine like a Russian oligarch. Businesses had to pay protection money to even survive.

In November 2013, Yanukovych put a “freeze” on negotiations with the EU. As a result, the people began to rise up. The police were ruthless exploiting the people and were not there to protect the people but the State. Revolution began and since June 2014, Ukraine has sought a pro-Western course reaching treaties with the EU and with NATO. Indeed, once again, NATO gave the impression to Ukraine that it would implicitly defend it but Ukraine has not formally become a member of NATO.

The EU is no longer an economic community, but a political union that is closely linked to NATO. Most have overlooked the  Treaty of Lisbon (initially known as the Reform Treaty) which was an international agreement that amended the two previous treaties thereby creating the federalized constitutional basis of the European Union (EU) without ever putting that to a vote. The Treaty of Lisbon was signed by the EU member states on December 13th, 2007, and went into force on December 1st, 2009. This treaty has decisively altered the very core foundation of the EU transforming from 2009 onwards. This fact is always overlooked in the EU because few have read the text of the Treaty ofLisbon. Ever since, there have been closer ties between the EU which is now linked to NATO, which is why Trump says the USA should exit NATO and Le Pen is arguing the same in France. Additionally, Ukraine was given direct contracts with the EU with regard to a military alliance. This is a “soft” membership in NATO addition Ukraine but not really.

There is no way the US would give up its pacific military basis in Japan at Okinawa. Yet we impose sanction upon Russia for annexing its original territory pre-Ukraine where it maintain its Black Sea Fleet is stationed in the Crimea. The sanctions imposed upon Russia for Crimea are very hypocritical. From Russia’s perspective, the alternative would have been that Moscow’s Black Sea Fleet would be docked in a NATO country. That would present a circumstance that was totally unacceptable leaving the annexation of the Crimea a logical and obvious reaction that the USA would have done if the roles were reversed.

Ukrainian eastern region of the country remains a strategic concern. The IMF (International Monetary Fund) was willing to provide loans to Ukraine but demanding they engage Russia in the East. This demonstrated that the IMF was playing military politics – not economic. The fact that in the Eastern Ukraine is composed of Russian-speaking people, gives Moscow justification to protect its ethic citizens. This is why Ukraine should have simple been divided along the ethic lines and stop trying to poke Russia for the sake of military ambitions as was the case with Vietnam against China.

Ukraine assumes that NATO will intervene. This has not happened so far, but the danger remains that Russia could be forced into an invasion as was the case in Ukraine especially if the EU begins to break apart. Likewise, the border of Belarus against Russia also presents a potential power keg. Belarus is also now in conflict with Moscow. As in the case of Ukraine, Minsk and Moscow are also arguing about gas prices, oil supplies and disabilities in foreign trade. Additionally, Moscow imposed border controls, whereby a two-country agreement on open borders existed for twenty years. Belarus imposed a 5-day visas for citizens of 79 states, including all EU states and the US. This measure is seen in Moscow as the approach of Belarus to the West. Belarus has been courting the West with trade playing both sides of the world Russia v West.

Moreover, Belarus is now also breaking up, where border controls are apparently being carried out by Russia. We are witnessing the fragmentation of countries and governments all due to failing economic systems. We are looking at the Baltic countries opposing Russia. Estonia, Latvia and Lithuania are all full members of the EU and NATO. So where exactly does NATO end and Russian influence begins? This is becoming a very dangerous and grey area.

The new US Secretary of State Rex Tillerson may help and he was a wise choice on the part of Trump. NATO is the focus of attention right now. The military alliance is dominated by Washington yet this is actually contradictory to the Treaty ofLisbon. Donald Trump has questioned NATO as a whole, and the press do not fully explain what has evolved. Is the USA just paying the military bill for the EU yet the Treaty of Lisbon makes the NATO the national force of the EU?

The new US Secretary of State Rex Tillerson expressed it best: “Russia is dangerous, but predictable”. Tillerson does know Russia well and far better than any politician filling that role before. Tillerson could actually establish a dialogue with Russia to secure world peace. The machinations of Obama have merely ended dialogue and reestablished the cold war that took more than 30 years to thaw. Democrats are too preoccupied with trying to stop Trump and fueling protests to distract the press and the American people to the real risk of war they have created