New army chief General Sanders urges Britain to prepare for total war with Russia
Robert Stevens, WSWS, Jun 28 2022

Head of the British Army, General ‘Sir’ Patrick Sanders

New head of the British Army General ‘Sir’ Patrick Sanders gave a bloodcurdling speech Tuesday, insisting that the UK and its NATO allies must prepare to wage war against Russia. Sanders’s keynote address to the Royal United Services Institute’s annual Land Warfare Conference was broadcast live on Sky News. Also in attendance was Defence Secretary Ben Wallace, US Army Sec Christine Wormuth, Germany’s Army Chief of Staff Lt-Gen Alfons Mais, and Alexander Danylyuk, former secretary of the National Security and Defense Council of Ukraine. Sanders warned that Britain faced its “1937 moment,” referencing Field Marshal Montgomery, who wrote that year:

There is no need to continue doing a thing merely because it has been done in the Army for the last thirty or forty years. If this is the only reason for doing it, then it is high time we changed and did something else.

Sanders said:

For us, today, that ‘something else’ is mobilising the Army to meet the new threat we face: a clear and present danger that was realised on Feb 24, when Russia used force to seize territory from Ukraine, a friend of the UK. In all my years in uniform, I haven’t known such a clear threat to the principles of sovereignty and democracy, and the freedom to live without fear of violence, as the brutal aggression of President Putin and his expansionist ambitions.

This cynical outburst is made by a veteran of every crime carried out by British imperialism for over three decades. Sanders commanded operations in Northern Ireland, Kosovo, Bosnia, Iraq and Afghanistan. It was transparent justification for his demand to strengthen the armed forces to wage offensive wars. What would be required from now on was an “increased focus on readiness and combined arms training and a broader institutional renewal that creates the culture required to win if called upon. This process, given a name Operation Mobilise, will be the Army’s primary focus over the coming years.” In Orwellian doublespeak, Sanders said the UK must “mobilise to meet today’s threat,” meaning wage war in order to “prevent war in Europe.” This meant arming Ukraine to the teeth in NATO’s proxy war against Russia. Sanders boasted:

Defence has worked at a phenomenal pace to bring together a coalition of partners to provide materiel, intelligence and training to sustain Ukraine in its fight against the Russian invaders. This year alone we have supplied 9.5k anti-tank missiles, of which over 5k were NLAW. We have already provided UK-based training for 650 AFU soldiers, and in the coming months the British Army will deliver battle-winning skills to a further 10k. It’s just started. The Russian invasion has reminded us of the time-honoured maxim that if you want to avert conflict, you better be prepared to fight and, to make it crystal clear, this means focusing on winning the war, working with these allies, against this threat and in this location. And we will see the first orders issued in Madrid tomorrow. We will double down on combined arms manoeuvre, especially in the deep battle, and devise a new doctrine rooted in geography, integrated with NATO’s war plans and specific enough to drive focused, relevant investment and inspire the imagination of our people to fight and win if called upon.

War in Ukraine also reminds us of the utility of Land Power. It takes an army to hold and regain territory and defend the people who live there. It takes an Army to deter. And this army, the British Army, will play its part alongside our allies. In conjunction with our NATO allies and partners, we must meet strength with strength from the outset and be unequivocally prepared to fight for NATO territory. We would likely be outnumbered at the point of attack and fighting like hell. Stand-off air, maritime or cyber fires are unlikely to dominate on their own. Land will still be the decisive domain. Success will be determined by combined arms and multi-domain competence. And mass. Ukraine has also shown that engaging with our adversaries and training, assisting and reassuring our partners is high payoff activity. The British Army must be prepared to engage in warfare at its most violent. Looking at you all, I see the faces of friends from previous campaigns where we have shared hardship and laughter, failures and victories. We have shed blood together. We remember those we left behind. And it is this, our willingness to shed blood to protect our common values and each other’s territory, that will see us prevail.

Sanders references conflicts such as Iraq and Afghanistan that claimed over a million lives. This is nothing compared with the death toll that would result from the total war with Russia he now advocates and plans. Key sections of Sanders’s speech were warnings to the government that to mobilise for war means a ramping up of human resources and weaponry. Hinting unmistakably at the possible necessity of instituting a draft, he insisted:

As we face a new reality, a race to mobilise, we must be honest with ourselves about Future Soldiers timelines, capability gaps and risks, and now our own diminished stockpiles as a result of gifting in kind to the brave soldiers of the Armed Forces of Ukraine. We should not be afraid of necessary heresies. Defence is only as strong as its weakest domain, and technology does not eliminate the relevance of combat mass.

Sanders’s claim that his plan has been necessitated by Russia’s invasion of Ukraine is a transparent lie. His entire speech only puts flesh on that delivered at a RUSI conference in 2018 by General ‘Sir’ Nicholas Carter, the Chief of the Defence Staff until November last year, who proposed aping the Nazi invasion of Russia in 1941 carried out over a 2,900-km front, declaring:

We need to be able to deploy overland by road and by rail, and our strike concept seeks to project land capability over distances of up to some 2,000 km. For example, we are copying what the Germans did very well in 1940 when all of their prime movers in terms of their tanks and armoured vehicles had trailers, and by doing that it reduces your logistic tail.

Defence Secretary Wallace’s presence alongside Sanders was meant to reinforce his own demands this week for a 20% hike in military spending, to 2.5% of GDP. He told the conference:

It is now time to signal that the peace dividend is over, and investment needs to continue to grow.

At last week’s G7 summit in Germany, PM Boris Johnson stated that Britain’s commitment to spend 2%t of GDP on defence was “a floor, not a ceiling.” This is only what the Tories are prepared to say in public. Military conflict with Russia and China would require defence spending on a truly vast scale combined with a militarisation of society that demands the waging of class war against British workers and the destruction of fundamental democratic rights, as Sanders made clear. That is why striking railworkers have been denounced as “Putin’s stooges,” as the government prepares legislation to allow the use of agency workers as scabs and “minimum service” provisions that would effectively outlaw strikes in essential industries and services.

US, Israel and Gulf States discuss anti-Iran alliance as nuclear talks set to restart in Qatar
Jean Shaoul, WSWS, Jun 28 2022

Blinken at the Negev Summit

Top military leaders from the US, Israel, Saudi Arabia, Qatar, the UAE, Bahrain, Jordan and Egypt met in the Egyptian resort of Sharm el-Sheikh last March to discuss defence coordination against Iran. The WSJ reported the meeting. It was the first time Israel, which has no formal relations with either Saudi Arabia or Qatar, took part in such a meeting and signifies the ever-closer relations between Washington’s two key regional allies, Tel Aviv and Riyadh. The hitherto secret summit is part of Washington’s efforts to bolster its reactionary allies in the region, all of whom sit atop social and political power kegs. While Egypt and Jordan face threats from Sunni extremist groups linked to Al-Qaeda and Islamic State, the Gulf States with sizeable Shia minorities fear Iran’s growing political influence at home and in the region, including in Lebanon, Syria, Iraq, Yemen and Gaza. At the same time, the Biden administration is determined to counter China’s economic presence and political influence in the energy-rich Middle East as part of its broader preparations for war with Russia and China, with whom Tehran has forged increasingly close relations. The WSJ wrote:

At the high-level Sharm El-Sheikh talks, the participants reached agreement in principle on procedures for rapid notification when aerial threats are detected. Officials also discussed how decisions might be made on which nation’s forces would intercept aerial threats.

This would involve sharing intelligence, anti-aircraft and anti-drone capabilities, advanced radar deployment and both offensive and defensive cyberwarfare technology to be supplied by Washington and to a minor degree Tel Aviv. Saudi Arabia has already bought 22 US Patriot antimissile batteries and is about to acquire the THAAD antimissile system, which the UAE has already purchased and used to shoot down a missile fired at Abu Dhabi by Yemen’s Houthi rebels last January. The talks in Sharm el-Sheikh were preceded by a hastily-arranged meeting of Arab foreign ministers from Bahrain, UAE, Morocco and Egypt on Mar 28 at Sde Boker in Israel’s Negev desert, billed by Israeli officials as a “get to know you better” meeting. Israel’s Foreign Minister Yair Lapid had arranged the meeting after US Sec State Blinken confirmed his visit to Israel as part of a wider tour of the MENA at the end of March.

The meeting focused on Iran, with discussions on “a regional security architecture” against aerial and naval threats, a reference to Israel’s covert war on Iran, centering on aerial attacks on the facilities of Iran and its allies in Syria and the covert maritime war mostly in the Red Sea and eastern Mediterranean that has seen Israel carry out at least a dozen attacks on Iranian vessels between 2019 and 2021. It followed the visit by Israel’s PM Bennett to Sharm el-Sheikh, where he met the leaders of Egypt and the UAE. Israel’s Defence Minister Benny Gantz described the emerging arrangements as the “Middle East Air Defence Alliance.” He claimed the air defence initiative had already enabled “the successful interception of Iranian attempts to attack Israel and other countries” in the region. Israeli officials declined to provide details, saying:

It’s still a work in progress.

These talks took place in the run up to the announcement that Biden will visit the Middle East on Jul 13-16, where he will meet Lapid and President Herzog in Israel and PA President Mahmoud Abbas in Ramallah before going on to Jeddah for talks with Saudi Arabia, Kuwait, Oman, UAE, Bahrain, Qatar, Jordan, Egypt and Iraq. Biden’s visit is aimed at patching up relations with Saudi Crown Prince MbS, who was initially treated as a persona non grata because of his role in the murder of Jamal Khashoggi and other gross violations of human rights. Biden will discuss “national security” issues with MbS, along with climate change, increasing Saudi energy exports to ease global oil prices, Iran’s nuclear program and the war in Yemen.

The timing of the WSJ’s report of a meeting held three months ago suggests that factions in the US opposed to any deal with Iran are trying to scupper the talks, or at least bully Iran into making further concessions that will curb its influence in the region. Negotiations will restart this week, beginning with indirect talks between Tehran and Washington, on a US return to the JCPoA unilaterally abandoned by Trump in 2018. The Trump administration reimposed the sanctions lifted under the 2015 agreement and introduced even more draconian sanctions targeting Iran’s economy, including its key oil and gas exports and banking system. Biden hopes to use a revived agreement to bring about a thaw in US-Iranian relations and prize Iran away from the orbit of Russia and China, but this has not stopped his administration from carrying out numerous provocations against Iran, directly or indirectly via its regional attack dog Israel, including the imposition just two weeks ago of new sanctions aimed at hurting a network of Iranian petrochemical producers.

On Jun 25, EU foreign policy chief Josep Borell flew to Tehran to meet Iran’s foreign minister Hossein Amirabdollahian. The EU is anxious to restore the deal to access Iran’s oil. The two ministers announced their agreement to resume nuclear negotiations in “the coming days” in Qatar, which maintains ties with both Washington and Tehran. Qatar’s foreign minister had made several visits to Tehran since the talks in Vienna stalled in March, mainly over Iran’s demand that the US remove the IRGC from its list of Foreign Terrorist Organizations, a demand Tehran now says is not central to the talks. If successful, all sides would go back to Vienna for a ministerial meeting and final discussions. Borell’s visit follows that of Sergei Lavrov, who said that Moscow supported the revival of the deal. According to a report on Israeli website Ynet, several Israeli generals including the chief of Military Intelligence as well as Defence Minister Gantz support a return to the JCPoA, believing a bad deal preferable to no deal as it gives Israel time to prepare militarily.

Iran’s clergy-led bourgeois nationalist regime is desperate to escape the strictures of Washington’s ever-tighter economic blockade that has limited oil exports, reduced the value of its currency to one tenth of that at the time of the 2015 nuclear deal, and deepened the poverty of the Iranian masses. In the last months, there have been almost weekly anti-government protests over poverty, rents that have risen by more than a third, low and unpaid wages, the soaring cost of living as inflation reaches 40%, with food prices jumping by more than 82%, and high unemployment, Nearly 21% of all 15–24-year-olds were out of work in March according to official figures. As revenues collapsed, the government cut subsidies and ended the subsidised lower exchange rate used for the import of basic food staples in May, fueling sharp rises in the price of vegetable oil, eggs, chicken and dairy products. The budget deficit is believed to be about 50% of GDP, amid widespread corruption and mismanagement. While the government also announced higher monthly cash payments to most Iranians, this will not take effect till the autumn.

Further stoking mass outrage was the May 23 collapse of a high-rise building in Abadan that killed more than 30 people. Teachers have held protests demanding the release of 18 educators arrested during protests in recent months, while public sector workers have rallied to demand unpaid wages. They have been joined by truckers and bus drivers in Tehran and bazaar merchants in several cities. Bazaar strikes played a major role in the 1979 revolution against the monarchy. Pensioners have taken to the streets in more than a dozen cities over now worthless pensions, chanting “Death to Raisi” and “Death to the inefficient government.” The government has responded to the recent demonstrations with tightened security, the deployment of riot police to attack and teargas protesters, mass arrests and intimidation and accommodation with imperialist foes abroad.

Crypto turmoil intensifies as major fund defaults
Nick Beams, WSWS, Jun 29 2022

An advertisement for Bitcoin in Hong Kong, Feb 17 2022. (Photo: Kin Cheung/AP)

The turmoil in the crypto currency market has intensified with the announcement on Monday that the prominent crypto hedge fund, Three Arrows Capital, had defaulted on loans worth a total of $670m. The money is owed to the digital asset brokerage firm, Voyager Capital, which issued a notice saying Three Arrows had failed to repay a $350m loan in the stablecoin USDC as well as about $323m worth of bitcoin. Three Arrows’ troubles flow from the crisis in the crypto market that erupted last month, when the so-called stablecoins Terra and Luna collapsed, leading to losses of billions of dollars. Stablecoins were touted as providing stability for the crypto market because they were supposedly pegged to the US dollar. In May, however, they fell below dollar parity. Three Arrows had invested heavily in Luna, which fell to virtually zero.

As warnings of the impending Three Arrows default spread last week, attention was directed to Voyager Capital, with its shares falling by more than 60% last Wednesday. Following the confirmation of the default, Voyager issued a statement aimed at trying to contain fears of contagion throughout the crypto market. Overall market capitalisation has plummeted from $3t last November to around $900b, a loss of almost 70%. Voyager CEO Stephen Ehrlich said:

Ww are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can meet customer liquidity demands.

The contagion fear results from widespread borrowings by Three Arrows, one of the largest crypto asset hedge funds, from a range of companies to finance its investments across a number of digital assets. There are fears that Voyager may not be the only company facing large losses. Vijay Ayyar, a vice president at the crypto exchange Luno, told the business channel CNBC:

What’s to be seen is whether there are any large remaining players that had exposure to them, which could cause further contagion.

A recent article in the Financial Times noted:

The deflating bubble in digital assets has exposed a fragile system of credit and leverage in crypto akin to the credit crisis that enveloped the traditional sector in 2008.

The crypto market has been “sold” on the basis that it provided an alternative to the official financial system which afforded protection against inflation and currency movements. It was even touted as a form of “digital gold.” But its rise over the past decade has proven to be completely dependent on the flow of cheap money from the Fed and other central banks. Valuations were inflated by a series of complex arrangements and deals, what the FT called “financial gymnastics,” which left “huge towers of borrowing and theoretical value teetering on top of the same underlying assets.” This inverted pyramid could be sustained so long as crypto prices kept rising, but inflation and the aggressive lifting of interest rates by the Fed has led to a fall in asset prices across the board, prompting investors to withdraw their money. Some companies are unable to pay up.

Earlier this month Celsius Network, which operates as a kind of bank for crypto currencies, announced that “due to extreme market conditions” it was pausing all withdrawals and transfers between trading accounts to place it in a “better position to honour, over time, its withdrawal obligations.” Since that announcement its position appears to have worsened. The WSJ reported on Monday that Celsius had hired restructuring consultants from a major firm “to advise on a possible bankruptcy filing.” The WSJ has also reported that short sellers are “ramping up bets against Tether, the world’s largest stablecoin.” According to the article, the shorting has been undertaken by “traditional hedge funds” and involves trades worth “hundreds of millions” of dollars. Tether is the most widely traded stable coin in the world and is supposedly backed by cash, commercial paper, precious metals and government bonds as well as digital tokens. However, its foundations were shaken in the Terra collapse in May, when it broke dollar parity and briefly traded as low as 95 cents.

Since then, according to the WSJ, short sellers have claimed that most of tether’s commercial paper holdings are backed by debt-ridden Chinese property developers. The company has said “these rumours are completely false” and indicated that hedge funds were “looking to generate returns by creating arbitrage opportunities on the basis of these rumours.” Be that as it may, the hedge funds may well be operating according to the maxim of the 19th century German chancellor Otto von Bismarck, who said he never believed the truth of any assertion until it was officially denied. Whatever the position of individual operators in the crypto world, the plunge in market valuations is being driven by the shifts in the financial system as a whole. While the value of the main crypto currency, bitcoin, has stabilised at around $20k, down from near $70k last November, this may only be a temporary pause. Marion Laboure, a senior strategist at Deutsche Bank told the FT:

The risk of contagion in the crypto markets remains elevated. A tightening Fed will expose more crypto firms with excess credit risks by withdrawing liquidity and raising rates, which will depress the value of the coins on which many of these levered schemes depend.

It is not only the crypto market that is being impacted by the sea change in financial conditions. The tech-heavy and interest sensitive NASDAQ index is down more than 30% from its record highs, with the fall in the price of significant stocks down by much larger amounts. Shares in the television streaming service Netflix are down 75% from their 2021 highs. Shares in the crypto currency exchange operator Coinbase, whose public listing in April last year was accompanied by great fanfare with a market valuation of $47b, have plunged by 86%. Share in the cinema chain AMC, once touted as a so-called meme stock in early 2021, have dropped by 80 percent.

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