Putin to Declare War on U.S.

Islamic State (ISIS) Says Only a Matter of Time Before Europe Is Conquered

When I got into this fight in the wake of September 11, I would never have believed that such warnings had any real possibility of coming true, despite the unspeakable blood and carnage of that horrible attack. But seeing how the West has submitted and surrendered to these savages, I don’t think it can be avoided.

Europe has forfeited its future, and any attempts to oppose the islamization of Europe are met with scorn, derision, defamation and criminalization. In other words, sharia enforcement.

Does the Islamic State (ISIS) of Europe seem so impossible? Between the Islamic State and Turkey’s entry into NATO and then the EU, it’s game over.

The prescient historian, Bat Ye’or, in her book Europe, Globalization, and the Coming Universal Caliphate, predicted that Europe will not remain multicultural for long. She warned that Europe would be dominated by Islamic extremists and transformed into “Eurabia.” She was right, and she wrote that before the sweeping gains of the Islamic State.

Immigrants can enrich a nation. But there is a difference between immigrants and colonists. The former are eager to learn the ways of their adopted home, to integrate and perhaps assimilate — which does not require relinquishing their heritage or forgetting their roots. Colonists, by contrast, bring their culture with them and live under their own laws. Their loyalties lie elsewhere.

“ISIS Say Only a Matter of Time Before Europe Is Conquered; Plan ‘Largest Religious CleansingCampaign’ in History,” By Stoyan Zaimov , Christian Post Reporter, December 22, 2014

Smoke raises behind an Islamic State flag after Iraqi security forces and Shiite fighters took control of Saadiya in Diyala province from Islamist State militants, November 24, 2014. Iraqi forces said on Sunday they retook two towns north of Baghdad from Islamic State fighters, driving them from strongholds they had held for months and clearing a main road from the capital to Iran. There was no independent confirmation that the army, Shiite militia and Kurdish peshmerga forces had completely retaken Jalawla and Saadiya, about 115 km (70 miles) northeast of Baghdad. Many residents fled the violence long ago. At least 23 peshmerga and militia fighters were killed and dozens were wounded in Sunday’s fighting, medical and army sources said.

A spokesman for ISIS has claimed in an interview that it’s only a matter of time before the jihadists expand and conquer Europe. He also defended the terror group’s practices of mass enslavement and beheadings, and said that it plans to carry out “the largest religious cleansing campaign” in history, which will include the killing of hundreds of millions of people.

“No, we will conquer Europe one day. It is not a question of if we will conquer Europe, just a matter of when that will happen. But it is certain. … For us, there is no such thing as borders. There are only front lines,” the spokesman, identified only as a German ISIS fighter, told journalist Juergen Todenhoefer in an article for CNN.

“Our expansion will be perpetual. … And the Europeans need to know that when we come, it will not be in a nice way. It will be with our weapons. And those who do not convert to Islam or pay the Islamic tax will be killed.”

ISIS, or the Islamic State as the group is also known, has captured a number of cities across Iraq and Syria, and has become known for beheading prisoners on camera and enslaving religious minorities, including Christians.

Credit to Common Sense 

The devilish antics of Bavarian secret societies and the inter generational masonic mind programming

What’s behind the tradition, the pomp and circumstance?

Another Christmas under our belts and with that, another Queen’s address to her British subjects and to the peoples of world at large.

We see the royals constantly in the media, yet very rarely in public. Who are the Royal Family? Where do they come from? How, and why did they acquire the name “Windsor”?

Historian, researcher, author and prolific filmmaker, Christopher Everard, is offering some answers to these questions about a much-maligned, and often misunderstood Royal Family…

IT’S A HARD KNOCK LIFE: The Royal Family enjoy an exquisite day of champagne and presents at one of many royal digs.

THE QUEEN’S SPEECH – Deciphered

By Christopher Everard 

THE QUEEN’S SPEECH… Is usually recorded about four weeks before Christmas. Because the Queen is married to a German family, and her ancestor, Prince Albert of Saxe Coburg spoke German, wrote all letters of state in German and that her own nephew was a spy selling British secrets to the Germans, the Queen uses the Christmas Day broadcast to make us think she is wholly British and a Christian.

Her actual family come from Saxony and Bavaria – more of her ancestors are German than British.

Her Christmas Day speech usually includes references to British religious landmarks, such as this year when her speech stated “In the ruins of the old Coventry Cathedral is a sculpture of a man and a woman reaching out to embrace each other. The sculptor was inspired by the story of a woman who crossed Europe on foot after the war to find her husband. Casts of the same sculpture can be found in Belfast and Berlin, and it is simply called Reconciliation”.

(…) The Queen is not just the Queen of Britain, she is the queen of a vast empire called theCommonwealth.

Her name is not ‘Windsor’ – on 18th of July 1917, the Times newspaper carried a royal proclamation introducing the name “Windsor” and dropping “all German titles” held by the royal family at Buckingham Palace. Britain’s royal family were known as the Dukes, Kings and Queens of “Saxe-Coburg-Gotha”. In a time of brutal war with Germany, a more German family name would be hard to find.

By 1915, with the first world war almost a year old, the horrific sinking of the cruise-ship Lusitania by a German submarine – with the loss of almost 1,200 lives – a fresh wave of anti-German outrage emerged in Britain and in the USA. The consequences for Germans in Britain were grave – and so, being German, the queen’s grand-parents and great-grandparents created a fake name which they use to this day; ‘WINDSOR’.

Today, our present queen is the queen to peoples on all corners of planet earth – and she earns TAXES from far a field, such as sheep farm workers in Australia and tourism businesses in the manyCaribbean islands which the queen owns as part of the ‘commonwealth’.

Her close relatives control the thrones of Spain, Netherlands and her brother-in-law’s family controlled the intelligence/spy networks of the NAZI Third Reich. She is married to her own cousin, and he owns an enormous private estate in the Holstein-Schleisweg district on the border between northern Germany and Scandinavia. The queen hires and fires the head of the BBC and several other prominent jobs in Britain. Her family’s financial affairs are forbidden from public discussion and she can recall and dissolve parliament whenever she likes. Her cousin is DAVID CAMERON, and there are strong Germanic-Jewish ties to our ‘British’ royal family.

Where does her money come from? It comes in the form of TAXES which are earned from millions of people’s wage-packets. The Queen also earns millions each year from her private estate which is centred on the county of Lancaster.

THE DUCHY OF LANCASTER

In addition to the total monarchial control of the Inland Revenue, Royal Mint and Crown Estates, the British monarchy have their own personal land estates – these are properties which at no time can be claimed by the British People and are always, under rule of law, considered to be private estates. One such estate is the vast Duchy of Lancaster which consists of 46,200 acres (18,700 hectares) which includes hamlets, villages, towns, historic buildings, and farm land right across England and Wales.

As of fiscal year 2007, the Duchy of Lancaster is valued at £397 million, earning Queen Elizabeth an officially stated net profit of £11.9 million – or, put another way, she has a private income from this Duchy equivalent to nearly £33,000 per day. Income tax is paid voluntarily on all profits from the Duchy of Lancaster.

The duchy is not the property of ‘The Crown’ (which is a label used to perpetuate the pretence that British People own the property) but is instead the personal property of the monarch and has been since 1399, when the Dukedom of Lancaster, held by Henry of Bolingbroke merged with the crown on his appropriation of the throne (after the dispossession from Richard II). This area of Britain is populated by some of the poorest families in Europe, with disgusting living conditions. Elevators full of piss are a common sight, and vandalism and graffiti is, perhaps, a subconscious reaction to the immense inequality witnessed in this region.

I have written this article so that the next time a politician tells you that there will be ‘tough decisions’ to be made – which is political double-speak for cutting wages and wheeling in another slab of taxes which fire off yet another recession – you can refer to this article and confidently quote the immense amount of TAX which we all pay each year and how our tax money has created a vast fortune for the Royals…

THE ROYAL TRILLIONS…
Taxes on Customs & Excise are collected worldwide and funneled into Buckingham Palace – it is a matter of fact that revenues flow into the coffers from the USA and especially the ‘common wealth’ nations. BP shareholdings by the British royals and indeed the Dutch royals (who are closely related) are extensive – to say the least – and the crude oil extracted from the Americas by BP, which is then refined into consumer products, marine diesel and automobile fuels, accrues vast revenues for the royal family members in Europe…

First of all, exactly how much tax do British people pay every year? Taxation in the United Kingdom earned Her Majesty’s Revenue and Customs £660 billion pounds last year – that is the sum which is commonly quoted by MPs and newspapers. Much of that tax comes from the People – not Corporations – who are often able to shutdown their parent company after three years, and start trading under a slightly different name, thus avoiding capital gains tax in perpetuity. This, of course, makes a mockery of the unwritten law that the wealthier of people in society contribute tax revenue in order to help the disabled & elderly. Workers, however, on the P.A.Y.E system cannot take legal advantage of tax havens, and have the indignation of a large portion of their salary being taxed/stolen at source, with not a jot of thanks from the Inland Revenue – nor, more importantly, is there any explanation as to why they have been taxed and what exactly the tax will be spent on.

(…) Of course, the Queen would be horrified if the British public realised that her own brother-in-law through marriage was a senior NAZI who funded and helped stage-manage the murder, torture, rape, killing and bombing of many hundreds of thousands of British troops and their allies. Thequeen’s husband has close former Nazi relatives – and this fact was raised by Mohamed Al Fayed during his evidence at the inquest into the killing of his son Dodi and Princess Diana in 1997. Mr Al Fayed believes Prince Philip personally orchestrated their deaths and, while being questioned, demanded that the coroner Mr Justice Scott Baker investigate the “Prince’s Nazi past”.

The sinister Nazi connections come from three of the Duke of Edinburgh’s four sisters – Sophie, Cecile and Margarita. All had married German princes, three of whom became leading Nazis – and that means that they were financing the killing machine which bred a ‘master race’ .

Prince Philip, whose family name is Schleswig-Holstein-Sonderburg-Glücksburg, attended the funeral in Nazi Germany of his elder sister Cecile as a 16-year-old schoolboy in 1937. He was pictured flanked by other relatives who were dressed in NAZI and Brownshirt uniforms. This, then, is the queen’s immediate inter-married family – headed by two princes in particular – Philipp of Hesse and his brother Christoph, who were great-grandsons of Queen Victoria – they had been central architects of a plan which was designed to bomb and crush the national governments of all Europe’s nations, and bring the colonies of Portugal, Spain, Belgium, Austria, Hungary, Britain, Ireland, Scandinavia and Greece under one centralised super-government which is exactly what we have today – it is called the EUROPEAN UNION – and it is secretly controlled by Buckingham Palace.

The queen’s immediate relatives plotted and conducted bombing raids and reduced the areas of all Europe’s cities where poor people lived into rubble and wasteland. It was the queen’s relatives who waged war on the People – the POOR PEOPLE.

No wonder then, as this information seeps out onto the world wide web, that she announced in her Christmas broadcast “Reconciliation is the peaceful end to conflict, and we were reminded of this in August when countries on both sides of the first world war came together to remember in peace…”

The queen then said; “The ceramic poppies at the Tower of London drew millions, and the only possible reaction to seeing them and walking among them was silence. For every poppy a life; and a reminder of the grief of loved ones left behind”. In fact, those poppies displayed at the Tower of London were deliberately made to look like blood gushing from a window and pooling around the Tower which is where many royal members of the queen’s family had been murdered, or ordered the torture and execution of the innocent.

The queen’s speech is definitely an ‘olive branch’ being offered to authors like myself who have made films that expose the carnage and blood on royal hands. She said; “In 1914, many people thought the war would be over by Christmas, but sadly by then the trenches were dug and the future shape of the war in Europe was set. But, as we know, something remarkable did happen that Christmas, exactly a hundred years ago today. Without any instruction or command, the shooting stopped and German and British soldiers met in no man’s land. Photographs were taken and gifts exchanged. It was a Christmas truce. Truces are not a new idea. In the ancient world a truce was declared for the duration of the Olympic Games and wars and battles were put on hold…”. Well Ma’am, I am sorry to say this, but the only we can have any kind of truce is by way of equalising British society, handing back lands stolen from commonwealth aboriginal tribal people, and making sure that you STOP TAXING US.

The queen then attempted to ingratiate herself with the millions of brain dead TV addicts who sit through hours of meaningless televised SPORT – she said; “Sport has a wonderful way of bringing together people and nations, as we saw this year in Glasgow when over 70 countries took part in the Commonwealth Games. It is no accident that they are known as the Friendly Games. As well as promoting dialogue between nations, the Commonwealth Games pioneered the inclusion of para-sports within each day’s events. As with the Invictus Games that followed, the courage, determination and talent of the athletes captured our imagination as well as breaking down divisions…” The queen thinks that giving ‘circuses’ to the nations, just as the Roman Emperors did, that we would all forget about her family’s heinous war crimes. We don’t and will not.

Her Majesty then attempted to make some kind of apology for the thousands of families who were marred and bereaved through her civil warfare operation in Northern Ireland which lasted from the early 1960s through to the end of the 1990s; She said “The benefits of reconciliation were clear to see when I visited Belfast in June. While my tour of the set of Game Of Thrones may have gained most attention, my visit to the Crumlin Road Gaol will remain vividly in my mind”. It was, actually, this prison where agents, double agents and triple agents tortured, beat and were themselves incarcerated as the wicked civil warfare bloomed in Ireland – this war was about TAXATION and the need-for-greed which assimilates all royal family members – it is the wage packets of the Northern Irish people closest to her heart – not their feelings, or remorse for the people killed under orders of the ‘loyalists’ and the MI5 death squads in Ireland.

She even had the audacity to say; “What was once a prison during the Troubles is now a place of hope and fresh purpose; a reminder of what is possible when people reach out to one another, rather like the couple in the sculpture”. Of course, the real reason why there is now a truce in northern Ireland is that bombs were planted in the City of London which hit Buckingham Palace and all their stockbroker yes-men very hard indeed.

Perhaps the biggest insult was a total lack of recognition of the blatant VOTE RIGGING in the Scottish Referendum, which I predicted two months before it would take place, would result in an outcome in favour of Buckingham Palace – on this point, the queen said; “Of course, reconciliation takes different forms. In Scotland after the referendum many felt great disappointment, while others felt great relief; and bridging these differences will take time”.

(…) the Saxe-Coburg Gotha royal clan up-booted from Germany and took over control of the throne of Britain. The name Saxe-Coburg-Gotha came to the British Royal Family in 1840 with the marriage of Queen Victoria to Prince Albert, son of Ernst, Duke of Saxe-Coburg and Gotha. Members of this ‘British’ royal family had been involved in the BAVARIAN ILLUMINATI which had been stage-managed from behind the scenes by Adam Weishaupt, who on 18th November 1830 (aged 82) died in the queen’s family duchy of Saxe-Coburg-Gotha.

Of course, the Bavarian Illuminati was a Judaic and ‘illuminised’ form of freemasonry – it’s rituals were based on jewish magic and Chaldean pageantry. Adam Weishaupt was a closet jewish lawyer specialising in the law of the Vatican, and he received regular wages from the queen’s ancestor, Duke Ernest II of Saxe-Gotha-Altenburg (1745–1804). Weishaupt lived in a house on the Gotha Duchy writing a series of works on illuminism [ie; planning the New World Order], his books include gems such as A Complete History of the Persecutions of the Illuminati in Bavaria (1785), A Picture of Illuminism (1786), An Apology for the Illuminati (1786), and An Improved System of Illuminism (1787).

Considering the devilish antics of Bavarian secret societies and the inter-generational masonic mind-programming which has gone on amongst the royal family, one can see very well that they are far from being ‘good christians’…

Read the full post and see more of Christopher’s work here

See his full film archive at ChristopherEverard.com.

Credit to Christofer Everard

Global Elite Look to Finish Off Russia in 2015

Russia launches new SWIFT payment service

Ron Paul On The Real Meaning Of The 1914 Christmas Truce

One hundred years ago last week, on Christmas Eve, 1914, German and British soldiers emerged from the horrors of World War One trench warfare to greet each other, exchange food and gifts, and to wish each other a Merry Christmas. What we remember now as the “Christmas Truce” began with soldiers singing Christmas carols together from in the trenches. Eventually the two sides climbed out of the trenches and met in person. In the course of this two day truce, which lasted until December 26, 1914, the two sides also exchanged prisoners, buried their dead, and even played soccer with each other.  

How amazing to think that the celebration of the birth of the Prince of Peace could bring a brief pause in one of the most destructive wars in history. How sad that it was not to last.  

The Christmas Truce showed that given the choice, people do not want to be out fighting and killing each other. It is incredibly damaging to most participants in war to face the task of killing their fellow man. That is one reason we see today an epidemic of PTSD and suicides among US soldiers sent overseas on multiple deployments.  

The Christmas Truce in 1914 was joyous for the soldiers, but it was dangerous for the political leadership on both sides. Such fraternization with the “enemy” could not be tolerated by the war-makers. Never again was the Christmas Truce repeated on such a scale, as the governments of both sides explicitly prohibited any repeat of such a meeting. Those who had been greeting each other had to go back to killing each other on orders from those well out of harm’s way.

As much as governments would like to stamp out such humanization of the “enemy,” it is still the case today that soldiers on the ground will meet and share thoughts with those they are meant to be killing.Earlier this month, soldiers from opposing sides of the Ukraine civil war met in eastern Ukraine to facilitate the transfer of supplies and the rotation of troops. They shook hands and wished that the war would be over. One army battalion commander was quoted as saying at the meeting, “I think it's a war between brothers that nobody wants. The top brass should sort things out. And us? We are soldiers, we do what we're told.”

I am sure these same sentiments exist in many of the ongoing conflicts that are pushed by the governments involved -- and in many cases by third party governments seeking to benefit from the conflict.

The encouraging message we should take from the Christmas Truce of 100 years ago is that given the opportunity, most humans do not wish to kill each other. As Nazi leader Hermann Goring said during the Nuremberg war crimes trials, “naturally, the common people don't want war; neither in Russia nor in England nor in America, nor for that matter in Germany.” But, as he added, “the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.”  

This is where our efforts must be focused. To oppose all war propaganda perpetrated by governments against the will of the people.
 

Credit to Zero Hedge

The Clash Of Civilizations

Thomas Cole, “The Course of Empire: Destruction” (1836)
 

In the emerging world of ethnic conflict and civilizational clash, Western belief in the universality of Western culture suffers three problems: it is false; it is immoral; and it is dangerous.
– Samuel P. Huntington, “The Clash of Civilizations and the Remaking of World Order” (1996)

The West won the world not by the superiority of its ideas or values or religion … but rather by its superiority in applyingorganized violence. Westerners often forget this fact; non-Westerners never do.
– Samuel P. Huntington (1927 – 2008)

The argument now that the spread of pop culture and consumer goods around the world represents the triumph of Western civilization trivializes Western culture. The essence of Western civilization is the Magna Carta, not the Magna Mac. The fact that non-Westerners may bite into the latter has no implications for their accepting the former.
– Samuel P. Huntington (1927 – 2008)

 

Islam's borders are bloody and so are its innards. The fundamental problem for the West is not Islamic fundamentalism. It is Islam, a different civilization whose people are convinced of the superiority of their culture and are obsessed with the inferiority of their power. 
– Samuel P. Huntington (1927 – 2008)

Q:     What do you think of Western civilization?
A:     I think it would be a good idea. 
– Mahatma Gandhi (1869 – 1948)

Adrian Veidt:	It doesn't take a genius to see that the world has problems.
Edward Blake:	No, but it takes a room full of morons to think they're small enough for you to handle.

– “Watchmen” (2009)

Our civilization is flinging itself to pieces. Stand back from the centrifuge.
– Ray Bradbury, “Fahrenheit 451” (1953)

Upon learning of Cardinal Richelieu’s death, Pope Urban VIII is alleged to have said, “If there is a God, then Cardinal de Richelieu will have much to answer for. If not … well, he had a successful life.”
– Henry Kissinger, “Diplomacy” (1994)
 

Corrupt politicians make the remaining ten percent look bad.
– Henry Kissinger (b. 1923)

Poor old Germany. Too big for Europe, too small for the world. 
– Henry Kissinger (b. 1923)

The most fundamental problem of politics is not the control of wickedness but the limitation of righteousness. 
– Henry Kissinger, “A World Restored: Metternich, Castlereagh and the Problems of Peace, 1812-22” (1957)

Order should not have priority over freedom. But the affirmation of freedom should be elevated from a mood to a strategy. 
– Henry Kissinger, “World Order: Reflections on the Character of Nations and the Course of History” (2014)

A more immediate issue concerns North Korea, to which Bismarck’s nineteenth-century aphorism surely applies: “We live in a wondrous time, in which the strong is weak because of his scruples and the weak grows strong because of his audacity.” 
– Henry Kissinger, “World Order: Reflections on the Character of Nations and the Course of History” (2014)

In the end, peace can be achieved only by hegemony or bybalance of power.
– Henry Kissinger (b. 1923)

Isaac:	Has anybody read that Nazis are gonna march in New Jersey? Ya know? I read it in the newspaper. We should go down there, get some guys together, ya know, get some bricks and baseball bats, and really explain things to 'em.
Party Guest:	There was this devastating satirical piece on that on the op-ed page of the Times, just devastating.
Isaac:	Whoa, whoa. A satirical piece in the Times is one thing, but bricks and baseball bats really gets right to the point of it.
Party Guest:	Oh, but really biting satire is always better than physical force.
Isaac:	No, physical force is always better with Nazis.

– “Manhattan” (1979)

 

Lots of quotes this week, particularly from my two favorite war criminals – Sam Huntington and Henry Kissinger. Everyone has heard of Kissinger, fewer of Huntington, who may have been even more of a hawk and law-and-order fetishist than Kissinger but never sufficiently escaped the ivory towers of Harvard to make a difference in Washington. Like me, Kissinger bolted academia at his first real opportunity for a better gig and never looked back, which is probably why I always found him to be so personally engaging and fun to be around. Sam Huntington … not so much.

But Huntington’s “Clash of Civilizations” argument is not just provocative, curmudgeonly, and hawkish. It is, I think, demonstrably more useful in making sense of the world than any competing theory, which is the highest praise any academic work can receive. Supplement Huntington’s work with a healthy dose of Kissinger’s writings on “the character of nations” and you’ve got a cogent and predictive intellectual framework for understanding the Big Picture of international politics. It’s a lens for seeing the world differently – a lens constructed from history and, yes, game theory – and that’s what makes this a foundational topic for Epsilon Theory.

Huntington and Kissinger were both realists (in the Thucydides and Bismarck sense of the word), as opposed to liberals (in the John Stuart Mill and Woodrow Wilson sense of the word), which basically just means that they saw human political history as essentially cyclical and the human experience as essentially constant. Life is fundamentally “nasty, brutish, and short”, to quote Thomas Hobbes, and people band together in tribes, societies, and nation-states to do something about that. 

As such, we are constantly competing with other tribes, societies, and nation-states, and the patterns of that competition – patterns with names like “balance of power” and “empire” and “hegemony” – never really change across the centuries or from one continent to another. Sure, technology might provide some “progress” in creature comforts and quality of life (thank goodness for modern dentistry!), but basically technology just provides mechanisms for these political patterns to occur faster and with more devastating effect than before.

The central point of “Clash of Civilizations” is that it’s far more useful to think of the human world as divided into 9 great cultures (Huntington calls them civilizations, but I’ll use the words interchangeably here) rather than as 200 or so sovereign nations. Those cultures – Western, Orthodox (Russian), Islamic, African, Latin American, Sinic (Chinese), Hindu, Buddhist, and Japonic – are persistent and profoundly influential in ways that national borders and national institutions aren’t. Huntington argues that these 9 cultures are the most meaningful current expressions of the human animal’s inherent social imperatives, and that the logic of competition between these cultures explains and illuminates human history far better than competing notions, particularly those (like Marxism and liberalism) that assume an up-and-to-the-right direction to the arrow of history. 

Marxism and liberalism are inherently optimistic visions of human society. Things are always getting better … or they will be better just as soon as people wake up and recognize their enlightened self-interest … as ideas of proletariat empowerment (Marxism) or individual rights as instantiated by free markets and free elections (liberalism) inexorably spread throughout the world. For realists like Huntington and Kissinger, on the other hand, this is nonsense. Free markets and free elections are good things (as is proletariat empowerment, frankly), but these central concepts of liberalism only meanwhat we Westerners think they mean if they exist within the entire context of Western culture. 

To insert the practices and institutions of liberalism into the Sinic culture, for example, might look awfully pretty to the Western eye and fill us with righteous pride, but it’s just a veneer. It won’t stick. The West may very well want to impose the practices and institutions of free markets and free elections for its own self-interest, and China may want to adopt the practices and institutions of free markets (but not free elections) for its own self-interest, but the logic of self-interest is a VERY different thing than the triumphalist claim that the liberal ideas of Western free markets and free elections are “naturally” spreading throughout the world.

A brief aside here on the distinction between personal beliefs and useful models. I’m not saying that I believe that authoritarian regimes and jihadist despots have some sort of moral equivalence to liberal governments, or that human rights don’t matter, or any of the other tired bromides used to tar realists. On the contrary, I personally believe that everyone in the non-Western world would be better off … MUCH better off … if their governing regimes gave a damn about individual rights and liberties in the same way that ANY governing regime in the West does. I believe that the principles of liberalism are the best ideas on social organization that the human animal has ever devised, and I’d like to spread these ideals into every corner of the globe. And you know what? 

On a personal level, Sam Huntington and Henry Kissinger believed exactly the same thing. Kissinger fought in the Battle of the Bulge. He won the freakin’ Bronze Star for his work tracking down Gestapo agents in Hanover. Does that sound like a moral relativist? Huntington served in the Jimmy Carter administration, for god’s sake. Talk about personal sacrifices …

But what a realist recognizes is that our personal vision of how we would like the world to be is not an accurate representation of The World As It Is, and – as Huntington wrote – it’s false, immoral, and dangerous to pretend otherwise. The World As It Is today includes the birth of an Islamic Caliphate, effectively erasing Western colonialist borders from Iraq to Syria to Libya as it spews anti-modern carnage. The World As It Is today includes the violent sundering of Ukraine along Orthodox/Western cultural lines. The World As It Is today includes an insane Sinic theocracy in North Korea with nuclear weapons. The World As It Is today includes a Japonic culture that is, in a very real sense, dying. Is a realist happy about any of this? Is a realist satisfied to shrug his shoulders and retreat into some isolationist shell? No, of course not. 

But a realist does not assume that there are solutionsto these problems. Certainly a realist does not assume that there are universal principles like “free and fair elections” that can or should be applied as solutions to these problems. Some problems are intractable because they have been around for hundreds or thousands of years and are part and parcel of the Clash of Civilizations. 

They’re not going away no matter how hard some American President stomps his feet or how many drones he releases or how stern an op-ed piece is printed in the New York Times or how warm and fuzzy we feel when we see a picture of an Iraqi woman proudly displaying her finger freshly inked from voting.Yes, I know I’m an a-hole for criticizing the whole “purple revolution” thing. Doesn’t mean I’m wrong.

Kissinger wasn’t kidding when he said that there were two and exactly two solutions to international problems: 1) hegemony (i.e., empire) over the opposing Civilization, or 2) balance of power with the opposing Civilization. The problem, of course, is that Door #1 is awfully expensive. For example, if you’re not prepared to push Germany into recession and risk a lot of lives – and I mean a LOT of lives – by expanding the NATO umbrella over Ukraine, then there’s no way you’re going to reverse a basic balance of power reality like “Russia gets a warm water port on the Black Sea, no matter what the petty satraps in Kiev think about that”. Sorry, but that’s the “solution” if you’re not happy with Russia’s annexation of the Crimea and Eastern Ukraine, and I have yet to meet anyone who’s willing to pay that price.

Are there aspects of The World As It Is where you ARE prepared to pay the high price of empire to prevent a balance of power equilibrium? It’s a short list for me, but yes, there is a list, headed by the preservation of Israel and South Korea as (largely) Western outposts in the middle of non-Western cultures. Is nation-building in Afghanistan on the list? Don’t make me laugh.

I think the crucial issue here (as it is with so many things in life) is to call things by their proper name. We’ve mistaken the self-interested imposition and adoption of so many Western artifices – the borders between Syria and Iraq are a perfect example, but you can substitute “democracy in Afghanistan” if you like, or “capital markets in China” if you want something a bit more contentious – for the inevitable and righteous spread of Western ideals on their own merits. 

This is a problem for one simple reason: if you think Something happened because of Reason A (ideals spreading “naturally” and “inevitably” within an environment of growing global cooperation), but it really happened because of Reason B (practices imposed or adopted out of regime self-interest within an environment of constant global competition), then you will fail to anticipate or react appropriately when that Something changes.

And here’s the kicker: change is coming. The Clash of Civilizations is not going to get better in 2015. It’s going to get worse. Why? Because for the past five years we have had a US government that was willing to pay the high price of empire to extend its monetary policy hegemony over the entire world to save the infrastructure of modern Western civilization: the US banking system and its collateral assets. 

Five trillion dollars later, the Fed has now declared victory and is demobilizing the QE troops. Is it a lasting victory? I don’t know and it doesn’t really matter. It’s a useless question. In the immortal words of Bill Parcells, you are what your record says you are, and the Fed’s record looks pretty darn good. So they’re declaring victory and that’s how it will go down in the history books. The better question is: what now? What happens in the rest of the world now that the peace-keeping and price-raising and prosperity-bringing delivered by five trillion dollars in asset purchases … stops?

Part of the answer – a small part of the answer – is that other central banks with printing presses will try to take up some of the slack. The BOJ will continue to weaken the yen and monetize the government’s debt, and the ECB will do the same thing, although they will do less and will be forced to jump through bizarre hoops to preserve the pleasant fiction that they’re not monetizing government debt. 

I say that this is a small part of the answer to the question of “what now?” – even though if you listen to the prognosticators in financial media you would think that this is the entire answer – because monetary policy divergence, as important as it is, pales in comparison to political divergence. I don’t think it’s an accident that Ukraine starts ripping itself apart as the largest monetary experiment in the history of man starts to wind down. Or that ISIS starts to remap the entire Middle East. Or that North Korea attacks Sony. Or that the price of oil drops by half as OPEC faces its greatest existential threat. Did the Fed cause these events? Of course not. But they’re not unrelated. 

They’re all part of the fabric of global deleveraging. This is what happens when you have a global debt crisis and politicians respond to maintain the status quo by any means necessary – the political center does not hold. Whether you’re talking about the 1870’s or the 1930’s or today, it’s always the same story … domestic coalitions and sovereign nations and international alliances that were held together by mutual absolute gains in the good times are driven apart by relative gains and losses in the bad times, and those domestic coalitions and sovereign nations and international alliances that bridge two ancient civilizations are thrown into the centrifuge most of all.

The market flash points for 2015 are not limited to the obvious suspects, like Ukraine and ISIS. In fact, most of the obvious suspects are not terribly impactful on major markets, and some have the perverse effect of providing “good news” for markets the worse their situation becomes. 

For example, to the degree that Ukraine-related sanctions on Russia damage German growth rates, the market believes that this forces still greater ECB market accommodation and direct propping-up of financial asset prices in the Eurozone. The non-obvious suspects I’m looking at are countries that, like Ukraine, find themselves with one foot in one civilization and one foot in another but, unlike Ukraine, are much more central to global markets.

Those countries are Greece, Turkey, Iran, Egypt, and South Korea. I wrote about Greece two weeks ago, so won’t repeat all that here. Turkey, Iran, and Egypt are all the same basic story – ancient civilizations that had their day in the sun many centuries ago and are now being consumed by the Borg-like entity that is Islam. Persia, the most potent of the three cultures, is completely lost. Egypt is lost but hasn’t realized it yet, like a chicken running around with its head cut off. 

Turkey, the least of the three, has adopted enough Western antibodies to provide some resistance, but it’s just a matter of time before it becomes the Sick Man of Europe once again. South Korea … judging from how little it is discussed in the Western press it sometimes seems like no one cares about South Korea, and that’s a mistake. No country on earth is split between more civilizations, and no country is as sensitive AND vulnerable to the clashes that are coming down the pike.

So … am I terrified by the Clash of Civilizations? Am I getting out of the market and running for the hills? No. Not yet, anyway. So long as the market is dominated by the Narrative of Central Bank Omnipotence, any of these flash points that I’ve mentioned will inevitably be seen through the lens of monetary policy accommodation, making bad news in the real world good news for major stock markets, particularly here in the US. Global growth will get even more pathetic, of course, but that’s positive for major government bonds. Of all the flash points above I’m probably most concerned about Greece, but even then the concern is more for what Greece ultimately means for Italian politics than for what it means to Europe or major global markets directly.

What scares me about the Clash of Civilizations is that the three leaders of the three biggest civilizations – the US (Western), China (Sinic), and Russia (Orthodox) – will misplay their hands and take on another civilization directly or, worse, take on each other, and that will vaporize the Narrative of Central Bank Omnipotence in a nanosecond. The existential risk here for markets is not that China/Russia/Europe/America might “collapse”, whatever that means. No, the existential risk is that the great civilizations of the world will be “hollowed out” internally, so that the process of managing the ten thousand year old competition between civilizations devolves into an unstable game of pandering to domestic crowds rather than a stable equilibrium of balance of power. Don’t take my word for it. Take the word of America’s finest diplomat since Benjamin Franklin, writing in his final book and delivering his most important warning. 

Side by side with the limitless possibilities opened up by the new technologies, reflection about international order must include the internal dangers of societies driven by mass consensus, deprived of the context and foresight needed on terms compatible with their historical character. As diplomacy is transformed into gestures geared toward passions, the search for equilibrium risks giving way to a testing of limits. … 

Because information is so accessible and communication instantaneous, there is a diminution of focus on its significance, or even on the definition of what is significant. This dynamic may encourage policymakers to wait for an issue to arise rather than anticipate it, and to regard moments of decision as a series of isolated events rather than part of a historical continuum. When this happens, manipulation of information replaces reflection as the principal policy tool.
– Henry Kissinger, “World Order: Reflections on the Character of Nations and the Course of History” (2014)

I can’t over-emphasize how important I think this passage is, and I’ll be returning to it again in future Epsilon Theory notes. For now, though, I’ll just introduce two key game theoretic concepts at the core of Kissinger’s warning.

First, the proliferation of the most dangerous game of all – Chicken. When Kissinger writes about how “the search for equilibrium risks giving way to a testing of limits”, he’s talking about how ordinary diplomatic maneuvers can deteriorate into brinksmanship, the hallmark of the game of Chicken.I’ve written a little bit about this game in the context of the Fed-inspired “Taper Tantrum” in the summer of 2013, when Bernanke et al misread the market impact of a change in the acceleration of monetary easing, but that little episode will look like a gentle spring shower compared to the market storm that could result from a full-scale game of Chicken between, say, China and Japan over trade, exchange rates, and offshore oil and gas reserves in the South China Sea. 

Chicken is such a dangerous game because it has no equilibrium, no outcome where all parties prefer where they are to where they might be. This constant cycling of one unstable outcome to another typically ends in disaster because the least worst outcome for each player – the “move” that each player makes to respond strategically to the other player’s most recent limit-testing actions – doesn’t remain constant but gets progressively worse over time. The game of Chicken is a mutual spiral into oblivion, and once you start down this road it’s really hard to stop because stopping means admitting defeat.

Second, the dumbing-down of all political games into their most unstable form – the single-play game. When Kissinger writes about how political leaders come to see “moments of decision as a series of isolated events”, he’s talking about the elimination of repeated-play games and shrinking the shadow of the future. Most games seem really daunting at first glance. 

For example, the Prisoner’s Dilemma is famous for having a very stable equilibrium where everyone is worse off than they easily could have been with some very basic cooperation. But there’s a secret to solving the Prisoner’s Dilemma – play it lots of times with the same players.Cooperation and mutually advantageous equilibria are far easier to achieve within a repeated-play game because reputation matters. The shadow of the future looms large if you’re thinking not only about this iteration of the game and the moves ahead, but also about the next time you have to play the game, perhaps for larger stakes, and the next, and the next. 

Imagine if you sat down at a poker table, were dealt one hand, and were then informed that everyone would have to get up and find another table with new players, at which point only one hand would be dealt there, too. That’s a series of single-play games, and it’s just as unpleasant as it sounds, whether you’re playing poker or you’re playing politics.

It won’t surprise many regular readers of Epsilon Theory if I say that I think much of what Kissinger warns about – “societies driven by mass consensus”, “gestures geared towards passions”, “manipulation of information” – has now reached, if not its full fruition, then at least a new quantum level of advanced and ubiquitous practice. 

And not just in the US, but also Russia and China and everywhere in between. Twenty-three years after Sam Huntington first presented his “Clash of Civilizations” argument, the conditions for that realist confrontation to be terribly severe are finally met. 2014 wrote an unpleasant story of nascent international splintering and conflict. Unfortunately, I think it was just an introductory chapter in a much longer book.

Credit to Zero Hedge