Russia is a serious threat to the US, according to a new Pentagon report

• Ruby Mellen, Foreign Policy

• 14h
• 7,644

A Pentagon report warns of a rising military threat from Russia.REUTERS/Eduard Korniyenko

A Pentagon report released Wednesday warns of a rising military threat from Russia and says the Kremlin believes the United States is seeking regime change, an assertion that could color the already fraught relationship between the two powers.

The Defense Intelligence Agency’s 116-page  report , "Russia Military Power: Building a Military to Support Great Power Aspirations," sketches a picture of a Russia that sees itself in opposition to the United States and with a leadership that harbors a strong desire to make the country again the prominent power it was during the Cold War era.

"The Kremlin is convinced the United States is laying the groundwork for regime change in Russia," the report says. Moscow started worrying about Washington’s hand in regime change during the so-called Color Revolutions in Eastern Europe in the early 2000s. Russia also sees the United States as responsible for the Arab Spring revolutions of 2010 and 2011, and the ousting of former Ukrainian President Viktor Yanukovych in 2014.

The report comes at a time when the US government is torn on how to handle the rising threat from Russia. While President Donald Trump has sung the praises of Russian President Vladimir Putin, and while he is reportedly  preparing concessions  to make to Moscow before his first meeting with Putin, Congress has chosen a different and much tougher tack.

The Senate recently passed legislation that would slap new sanctions on the Kremlin and make it harder for the White House to roll back sanctions on its own.

Russian jets fly in formation during the International Army Games 2016, in Dubrovichi outside Ryazan, Russia, August 5, 2016.REUTERS/Maxim Shemetov

The intelligence community, judging by the report, sees less optimism for improved relations. "Moscow worries that US attempts to dictate a set of acceptable international norms threatens the foundations of Kremlin power by giving license for foreign meddling in Russia’s internal affairs," the report says.

The idea that Russia anticipates the United States will attempt to topple the Kremlin’s leadership tinges diplomatic relations between the two countries with suspicion.

Russia has long been wary of US involvement in regime change. Putin ran for president in 2012 in part because he was unhappy that then-President Dmitry Medvedev   teamed  up with the United States to effect regime change in Libya. Putin also blamed then-Secretary of State Hillary Clinton for instigating widespread protests in late 2011.

Similarly, Russia has alleged that the United States orchestrated the protests in Kiev in late 2013 that ultimately ousted the pro-Kremlin Yanukovych, who allegedly  asked  Russia to intervene in Crimea.

The Defense Intelligence Agency also notes a staggering increase in Russian defense spending that has reached a "post-Soviet record."

Though the 2016 defense budget was set to decline, a late bump brought the total amount to $61 billion, according to the report. That’s more than double the annual defense budget of $27 billion for 2006, though still just one-tenth of US defense spending.

The White House has a strange affinity for Moscow. Reuters

It remains unclear whether House Republican leadership will endorse the Senate-backed sanctions amendment, and the White House has already attempted to water it down.

Plenty of European governments have reacted furiously to the Senate move, which would unilaterally broaden economic sanctions on Moscow and could affect European companies doing business with Russia.

Despite the White House’s strange affinity for Moscow, US government institutions continue to take Russia seriously, belatedly giving credence to former presidential candidate Mitt Romney’s much-maligned claim that Russia is America’s main geopolitical threat.

Speaking to the Senate Intelligence Committee on Wednesday, Nicholas Burns, a former US ambassador to NATO and a former State Department official in the George W. Bush administration,  said the Obama and Trump administrations failed to appropriately respond to Russia’s meddling in the US presidential election.

"President Trump has taken no action whatsoever, and that’s irresponsible," Burns said. He added that President Barack Obama should have retaliated more "vigorously."

"Russia is our most dangerous adversary in the world today," Burns said.

Read the original article on Foreign Policy. "Real World. Real Time." Follow Foreign Policy on Facebook. Subscribe to Foreign Policy here. Copyright 2017. Follow Foreign Policy on Twitter.

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Tencent wanted to buy WhatsApp, but Mark Zuckerberg swooped in and stole the $19 billion deal while its CEO was having back surgery

• Alex Heath
 

• 17h
• 11,577
 

Facebook

Facebook shocked the world when it purchased WhatsApp for a jaw-dropped $19 billion in 2014.

WhatsApp was a fledgling rocketship with millions of users around the globe, and it was being courted by other tech companiesas a possible takeover target at the time.

One of those suitors was Chinese software giant Tencent, the maker of WeChat.

In a recent interview with Bloomberg Businessweek, Tencent CEO Ma Huateng revealed that his company was close to finalizing an acquisition of WhatsApp when he had back surgery. Because of his personal level of involvement in the deal, his surgery delayed the talks just long enough for Facebook's Mark Zuckerberg to swoop in:

"In early 2014, Tencent was interested in buying the messaging service WhatsApp. An acquisition would have shocked the world and given Tencent immediate global reach. But as they neared the final stages of an agreement, Ma, who took an interest in the deal, had to undergo back surgery, which delayed a visit to Silicon Valley to negotiate with founder Jan Koum. Mark Zuckerberg then swooped in and acquired WhatsApp for $19 billion, more than twice what Tencent had considered paying."

The rest, as they say, is history.

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Trump wants to start a trade war with the biggest countries in the world

• Bob Bryan
 

• Jun. 30, 2017, 7:06 AM
• 19,119
 

President Donald Trump at the White House. Chip Somodevilla/Getty Images

President Donald Trump is reportedly considering a move that would most likely ignite a major international trade conflict with some of the biggest economies in the world.

According to Jonathan Swan and Mike Allen of the news website Axios, Trump and top administration officials discussed imposing tariffs on major exporters of steel and other goods during a meeting Thursday at the White House.

The tax on imported goods could be about 20%, according to Axios, and may be expanded to goods like paper, semiconductors, aluminum, and large household appliances.

While the intent is to penalize China, a goal of Trump’s dating back to the campaign, officials informed Trump that the tariff would most likely affect other major allies of the US including Canada, Germany, Japan, Mexico, and the UK.

The plan is backed by what Axios described as the "America First" wing of the White House including chief strategist Steve Bannon, Commerce Secretary Wilbur Ross, trade adviser Peter Navarro, and senior policy adviser Stephen Miller.

During the meeting, according to Axios, Trump was told by "over 75%" of the people in attendance that the tariffs were a bad idea but remained in support of the idea because it would excite his die-hard supporters.

Most economists agree that tariffs of the type Trump is considering would set off a major trade war and have devastating economic consequences. There is also a good chance that the move would result in a US recession.

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Russia and China Continue to Stockpile Gold to Unload the US Dollar

sputniknews.com 
JUN 9, 2017

ORIGINAL SOURCE: Russian, Chinese Gold Reserves to Cut Global Economy's Addiction to Dollar by sputniknews.com on 6/9/17

Russia and China have been stock piling gold for years to have enough reserves to out do the U.S. The global financial markets will see a major devaluation of the American currency. "In the long-run, it cannot be guaranteed that the dollar will remain a global reserve currency" 

Please read the rest here; Russian, Chinese Gold Reserves to Cut Global Economy's Addiction to Dollar

Donald Trump is 'on the verge of initiating a trade war' over steel

• Pedro Nicolaci da Costa
 

• 9h
• 1,546

Pascal Parrot/Getty Images

Donald Trump is playing a dangerous game of chicken with international trade.

While he initially backed away from major protectionist campaign promises, including ripping up the North America Free Trade Agreement (NAFTA) and naming China a currency manipulator, Trump and his top economic officials have kept up the "America First" drumbeat, insisting the United States has gotten a raw deal from a global trading system it played an enormous role in shaping. 

The latest point of attrition is steel, which has long been the subject of targeted trade disputes between the United States and China. Yet Trump’s aggressive negotiating tone carries a great risk that international trust will evaporate, narrowing rather than improving the wiggle room for fresh agreements.

"Protection is pernicious since it restricts imports and usually this triggers more counter restrictions," Richard Baldwin, professor of international economics at the Graduate Institute, Geneva, told Business Insider.

In particular, Baldwin worries Trump’s evocation of national security concerns to justify the potential tariffs could have broader repercussions. Only 3% of US-made steel is used for military purposes.

"The National Defense clause however opens things up to basically unlimited protection and thus the Section 232 moves are potentially a new and dangerous development," he said. "This is not just more dumping duties of the type we’ve seen on steel for decades."

Caroline Freund, senior fellow at the Peterson Institute for International Economics (where I used to work), says she’s hopeful industry pressure and economic reality is forcing the Trump team to rethink its more draconian proposals, such as tearing up NAFTA.

"I think what they’re looking for is a voluntary export restraint agreement, where Canada and Germany and whoever say we volunteer not to export more, a self-enforced quota that’s agreed upon," she said. "The manufacturing industries are lobbying hard because steel is going to be even more expensive."

"The problem is they’ve antagonized other countries so much, especially after pulling out of the Paris [climate] Accord — you could have gotten there with a carrot rather than a stick, you had have a better chance at a deal," Freund added. 

Richard Haas, president of the Council on Foreign Relations, was clearly taking the Trump threat seriously.

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Potus on verge of initiating trade war with steel tariffs, a move that could threaten success of his presidency more than ill-advised tweets

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Canada hit 2 critical warning signs for a financial crisis

• Daniel Wong, Better Dwelling

• Jun. 28, 2017, 5:16 PM
• 14,016

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AP/Mark J. Terrill

Yet another international organization is warning about Canada’s major debt problems, mostly tied to a housing addiction.

The Bank for International Settlements (BIS), an international banking organization that serves as a bank for central banks, is flashing warning indicators for Canada.

The warning signs mean that debt has reached critical levels, and will likely result in a financial crisis.

Credit-to-GDP Gap Breaches Critical Level in Canada

The credit-to-GDP gap has reached a critical level in Canada. The BIS defines this as the “difference of the credit-to-GDP ratio from its trend.” That’s bankster for “it compares credit consumption to the output of the economy.” If the level is too high, the amount of private credit is “unjustified.” The lower the number, the more credit can be “safely” consumed. BIS considers anything above 2 to be a strong gap, and anything above 10 to be a critical warning. Breaching 10 results in a banking crisis in two-thirds of economies, within three years.

Currently Canada is sitting at 14.1, the only G7 country to breach this level. China and Hong Kong are the only other countries that are higher. China is currently at 24.6, and Hong Kong is at 30.3. To contrast Australia is at -0.5, Germany is at -4.3, and the US is at -7.7. So we’re pretty far off the mark. Also worth noting that the BIS has also flagged Canada for a property price gap above critical level. This could complicate the credit-to-GDP gap even further.

BIS

Debt Service Ratio Will Hit A Critical Level If Rates Rise To "Normal" In Canada

The debt service ratio (DSR) of three countries are throwing warning signs when interest rates return to normal. A DSR is a term economists use to determine the ratio of debt payments a country will be making, compared to the country’s export earnings. It covers principal and interest payments. If the level is too high, it makes it hard for an economy to grow. You know, since people are devoting a high amount of money to stuff they already bought.

BIS modeled a 250 basis point rise in interest rates, which would put Canada back to a“normal” level according to Canadian parliament. This modest increase would send three economies above the critical warning threshold – Hong Kong, China, and Canada. The DSR of those countries are modeled to be 11.1, 8.8, and 7.6. The organization claims that when this warning threshold is breached, two-thirds of countries face a banking crisis within two years.

Canada, China, and Hong Kong are the only economies that have issues with both their credit-to-GDP gap, and their debt-service-ratios if rates rise. China is actively trying to crackdown on high amounts of leverage, even at major financial institutions. Canada and Hong Kong, not so much. Two-thirds of countries experience a banking crisis, eh?

Read the original article on Better Dwelling. We’re building a different kind of news outlet – one that aims to stimulate discussion rather than direct it, but we need your help. Like this article? Share it with a friend. Hate it? Give us a tweet and tell us why. Like us on Facebook to be notified when the next post goes live. Copyright 2017. Follow Better Dwelling on Twitter.

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CONFIRMED: Britain is officially the worst performing major economy on earth right now

• Will Martin
 

• 6h
• 1,429

Photo by Andrew Parsons - Pool/Getty Images

LONDON — Britain's economy grew just 0.2% in the first quarter of 2017, according to the Office for National Statistics' third estimate of GDP growth at the start of 2017, released on Friday.

GDP had initially been estimated at 0.3% but was revised down in May, as more data became available for the first three months of the year. The 0.2% Q2 figure makes Britain the worst performing major economy on earth right now.

The third reading confirms the previous data released in May.

"Gross domestic product (GDP) and its components are little changed from the previous estimates published on 25 May 2017," the ONS said in a release accompanying the data.

"GDP growth for the first three months of 2017 remained unrevised at 0.2%," Darren Morgan, the ONS' head of GDP said.

"Growth was driven by business services and construction, partially offset by declines in some consumer-focused industries, such as retail sales and accommodation."

Here is the ONS' chart showing the quarter as part of a longer term trend:

ONS

Until the beginning of 2017, the UK economy fared better than all but the most optimistic of forecasters imagined in the immediate aftermath of the Brexit referendum, confounding predictions of an immediate recession, and virtually ignoring any uncertainty over the future.

However, as the falling pound has pushed up inflation in recent months, regular Brits have started to feel the pinch, spending less, and slowing the consumer boom that has fuelled the country's economic performance in the past handful of years.

Commenting on the numbers, Samuel Tombs, chief UK economist at Pantheon Macroeconomics wrote in an email:

"The national accounts demonstrate that net trade and investment are not compensating for the slowdown in growth in households’ spending, and therefore are a setback for the hawks on the MPC who seek an immediate increase in Bank Rate.

"The revised expenditure breakdown of GDP shows that net trade subtracted 0.8 percentage points from quarter-on-quarter GDP growth in Q1. Although this drag was smaller than the -1.4pp estimated for the second estimate of GDP, the data continue to show that sterling’s depreciation has been the less successful in Britain’s post-war history."

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