Re: The Panama Gambit - A New War in Serbia?

Filed under: Historia, News, Politikos — Jacob Welsh @ 20:01

Social commentary may not be one of my strongest suits, but nothing says it has to stay that way. Thus, here's a recent correspondence (lightly edited) that I thought worth airing in the wider sphere ; perhaps for the next time I hear about fighting corruption.

This may be of interest to you. The author, Larry Johnson, is former CIA.

Some interesting points indeed. I must take exception though where he writes,

Panama remains a dysfunctional, corrupt country. Billions of dollars of narcotics proceeds wash through the Panamanian Free Trade Zone in Colon and Chinese influence is expanding.

I guess this is code speak for "not sufficiently under Washington's thumb" or some such, otherwise it seems to me quite a case of the pot calling the kettle black.

I mean, one country engages in public works boondoggles so its elites (and the contractors involved) can line their pockets from the public purse and foreign development loans, and is a noted tax haven for non-locals.

Another country incites and fuels armed conflicts abroad so its elites (and the contractors involved) can line their pockets from the public purse and trade deficits that have long favored its currency(ii) ; is a noted tax haven for non-locals ; and has an insatiable appetite for narcotics that evidently can't be met by the local production and thus fuels the international trade (and I wonder how much the CIA boys are skimming from that these days(iii)).

Which of these is the more functional, or the less corrupt ?

  1. Archived. The emblem on the blog is the current 50-star American flag under a stencil of the Punisher skull, a symbol that I'm learning has some mixed history of usage for seemingly opposing meanings, but generally signifying an "anything goes, I mean business and I take no prisoners" spirit in the tradition of the pirate skull-and-crossbones. [^]
  2. China and similars produce goods of value - perhaps not much value individually, but in large amounts - for sale to the US market and take (on balance) only dollars in return. This excess demand for the dollar strengthens it against other fiats, which at first glance should benefit anyone holding dollars. However, it mostly serves to empower the state through two mechanisms: the direct, as rather than holding straight cash, most of it is invested in interest-bearing Treasury notes ; and the indirect, as a stronger currency masks the inflationary effects of loose monetary policy i.e. low interest rates, which most benefits the state as it's the largest debtor. So while perhaps more elaborate, it's essentially the same thing as the foreign development loans racket. What happens when the creditors decide to start cashing in on those "investments" ? Who cares, it most likely won't happen before the next election cycle so we'll burn that bridge when we get to it. Or the children will. Or maybe Joe, but he'll sleep through it anyway. [^]
  3. I have no inside knowledge of such things but one hears rumors; and really, if you have the black jets that don't get searched, the "national security" cover for any and all secrets, a constant need for cash and a certain worldview, why *wouldn't* you help yourself to some of that sweet arbitrage from time to time. [^]


  1. Regarding your footnote ii: What effect do you see (present or future) from the US and EU freezing of Russian assets and kicking Russia off SWIFT? Are other countries in the non-West drawing the conclusion that the dollar is not as secure a refuge as they thought? I think they are, but don't know how far along the process is.

    Comment by Susan — 2022-12-15 @ 14:03

  2. High energy prices for the EU is the main effect I've heard of so far. As far as the second-order effects, I don't know what other non-West leaders are thinking, but the dollar may still be the "healthiest horse at the glue factory". The bullying tactics are nothing new; Panama for instance got put back on one or the other blacklist recently, despite several waves of self-destructive efforts toward complying with US demands. Now perhaps Russia is a bigger player than they've previously picked on. When did it get into SWIFT, anyway?

    Comment by Jacob Welsh — 2022-12-16 @ 21:11

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