Straws In The Wind: December Edition

Europe Deindustrialization, Serbia Colour Revolution, Milei True Colours, The Houthi David Hamstrings Goliath

The Last UK Blast Furnaces to Close

In the 1960s, the UK was the world’s fifth largest producer of steel. From 1970 to the turn of the century, the industry slowly declined. With the accelerated growth and upgrading of the Chinese economy from 2000 onwards, and the later take-off of Indian steel production, that decline accelerated. By 2016, the UK was the eighteenth largest producer in the world. Massive blast furnaces were closed and demolished, as with the one at Redcar below, and now the final works at Scunthorpe and Port Talbot are to be demolished and/or mothballed.

They will be replaced with much cheaper electric arc furnaces, that process scrap metal rather than produce metal from scratch; on a smaller scale than the massive blast furnaces. The blast furnaces were handicapped due to energy prices (electric arc furnaces can be scheduled to use cheaper off-peak electricity) about 50% higher than in Europe, a strong pound supported by North Sea oil and gas export revenues, and high business taxes. In 2017 the UK House of Commons produced a report, “UK Steel: Decades of decline” that documented the baneful last few decades of the industry. The loss of such core industrial capabilities takes down a whole cluster of related suppliers, together with removing relatively high-paid jobs and negates much of the opportunities for the industries that were previously supplied by the domestic steel industry. With large quantities of steel no longer available from domestic plants does it make more sense for the users of such steel to move to where it is available? In addition, the decades of development of the required skills will now be tossed to the wind; they will reside in China, India and other nations.

The large-scale production of high-quality steel is required for the production of armaments, so the UK Military Industrial Complex will now be dependent upon steel imports. With Germany throwing away its advantageous energy-supply relationship with Russia, its energy intensive industries such as steel production, are also all now at risk of decline. So, where will the steel come from? A China that has 50% of global production, with that production more than twice the amount of the next five producers combined? Or a US which enjoys much lower energy prices? As with the US, the UK MIC is finding out that deindustrialization and offshoring may bring fatter profits to capitalists, but certainly not greater security to the nation.

The whole of the European steel industry is at risk of closure and replacement with plants abroad.

The same for the chemical industry, a sector that Germany lead the world in and is central to munitions production.

Then add the accelerating implosion of the European car industry and the European industrial colossus begins to look much more like a rapidly deflating giant with its best years behind it.

The US may gain from the transfer of industrial plants, but its geopolitical right arm will be a shrivelled shadow of its former self. No wonder the West is unable to ramp up production of shells and equipment at the rate required for the Ukraine war, so much of the required plant, equipment and worker’ knowledge and skills have been thrown away; this sorry situation will only worsen as the years go by.

Chinese Trade Agreement and a Colour Revolution in Serbia

Once again, a country’s population voted the wrong way as judged by the West and the result is a Western-sponsored “Colour Revolution”. On December 17^th Serbia held parliamentary and local elections in which the party in power, the SNS Coalition, won 48% of the vote – twice that of its closest rival (which was supported by the West). Immediately, the EU and the US started to bloviate about unproven “irregularities” and foreign-funded NGOs and internet sites called for the people to fill the streets, to protest the unproven “irregularities”. The classic colour revolution MO, as detailed tongue in cheek below:

The Serbian government seems to have been warned in advance by the Russians and has kept things under control.  It is notable that US protestors doing exactly what the Serbian protestors are attempting to do were called a “threat to democracy”. The easiest way to stop colour revolutions would be to remove or greatly restrict all the foreign-funded NGOs and foreign-funded media and activists, as Russia has done, but for smaller nations such actions may invoke severe social, economic and political retribution from the West; as Georgia recently experienced when it tried to regulate foreign-funded NGOs.

In this way many nations are kept constantly in a state of readiness for a colour revolution, whilst the foreign-funded NGOs and media undermine the legitimacy of the ruling party. After the successful implementation of the stick, the EU has now accelerated the process of Georgia joining the EU as a carrot that will require widespread changes to Georgian society to facilitate EU dominance.

Serbia has been under the abuse of the West since the 1990s planned demolition of Yugoslavia into more easily dominated chunks, with Serbia as the last standout. It recently signed a trade agreement with China that includes greater access to Chinese military equipment. This is an absolute red line for the US, as making other nations dependent upon its MIC and integrating their senior officers into its NATO military as willing compradors is central to the way the US dominates its “allies”. The new agreement allows Serbia to remain independent from Western dominance, a thorn in the side in the Balkans which could link a Russia that has taken over Ukraine to a Bulgaria that still sits on the fence via Hungary. Such a linkage would be devastating to Western power in the Balkans, and isolate Romania. It would also invigorate the Serbian Republika Srpska within Bosnia-Herzegovina and push back the ongoing attempts to remove the province of Kosovo from Serbia. Hence the colour revolution, now needed more than ever as the Ukrainian army starts to give way under increasing Russian pressure.

Georgia and Serbia (and Belarus and Kazakhstan) represent countries located in geopolitically important geographies and are therefore a target of Us and Western regime change operations, irrespective of what their populations want.

Milei Shows His True Colours

The new president of Argentina has rapidly shed his libertarian clothes, as he backs off from getting rid of the Central Bank (which will now be headed by an ex JP Morgan banker!) and dollarization, quickly cools off his rhetoric against China, raises taxes – including import taxes (which he promised not to do), and carries out massive cuts to government expenditures that don’t benefit the oligarchs. The change of approach to China may have been forced by the Chinese cancellation of a US$6.5 billion Yuan swap line which is critical for an Argentina with minimal foreign exchange reserves, after the refusal to join BRICS and insulting rhetoric.

Milei also slashed the official rate of exchange by 50% to help all those oligarchs who had stashed their money in foreign currencies abroad through capital flight to get really good bargains back home. The result will be an exacerbation of domestic inflation to about 40% per month, which will destitute any remaining middle class while enriching the land owning, mining and financial oligarchs. A hyperinflationary crash, just as happened after the highly corrupt and oligarch-friendly Menem government of the 1990s, is now increasingly likely. A disaster that will be paid for by the working and middle classes, not the oligarchs.

For Argentina its plus ça change, plus c'est la même chose as the oligarchs once again crush the progressive forces and make out like bandits.

The Houthis Expose the Western Paper Tiger

One of the greatest harms for an Empire is to be shown to be a paper tiger by a much smaller opponent. That is exactly what the Houthis have achieved through their campaign of interdicting seaborne traffic in the Red Sea headed for Israel. The US wolf huffed and puffed but did not blow the Houthi house down.

The number of nations willing to join such US-lead coalitions is a marker of the decline in US international power and legitimacy. In addition, changes in technology have significantly rebalanced the relative positions of a huge naval power vis a vis small land forces with surface to surface missiles and drones. The same reason why the US will not attack an Iran with its massive arsenal of such missiles and the ability to cause chaos across the Middle East. Western power and influence in the region has fallen a long way since the invasion of Iraq.