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If Argentina were in a high-stakes chess match, the country’s actions this week would be the equivalent of flipping over all the pieces on the board. – David Dayen, Fiscal Times, August 22, 2014 Argentina is playing hardball with the vulture funds, which have been trying to force it into an involuntary bankruptcy. The vultures are demanding what amounts to a 600% return on bonds bought for pennies on the dollar, defeating a 2005 settlement in which 92% of creditors agreed to accept a 70% haircut on their bonds. A US court has backed the vulture funds; but last week, Argentina sidestepped its jurisdiction by transferring the trustee for payment from Bank of New York Mellon to its own central bank. That play, if approved by the Argentine Congress, will allow the country to continue making payments under its 2005 settlement, avoiding default on the majority of its bonds. Argentina is already foreclosed from international capital markets, so it doesn’t have much to lose by thwarting the US court system. Similar bold moves by Ecuador and Iceland have left those countries in substantially better shape than Greece, which went along with the agendas of the international financiers.

While Puerto Rican leaders look for ways to address the island’s $72 billion debt, some say the solution may be simple: Don’t pay it. A small group of Puerto Rican lawmakers is pushing the idea that significant portions of Puerto Rico’s debt may in fact be unconstitutional. Manuel Natal, one of the legislators behind the effort, claims that up to 75 percent of what the island owes could be voided in court. “If debt was issued in violation of the constitution that debt is illegal and subsequently should not be paid,” said Natal. “It should be put aside, because in legal terms, it’s like it never happened.” This strategy, called “debt nullification,” has been used elsewhere in the U.S. to address fiscal crises. But in Puerto Rico's case, it all but promises a legal showdown with Wall Street hedge funds that own a significant portion of the island’s debt — investors that the government is now trying to bargain with. While Puerto Rico Governor Alejandro García Padilla has acknowledged that debt found to be unconstitutional should not be repaid, his administration has tried nearly every other option so far.

After the White House quickly dismissed talk of a federal bailout, Puerto Rico’s government, and its congressional representative Luis Pierlusi, have pushed a bill to allow the U.S. territory access to bankruptcy proceedings. That bill has stalled in the Congress. Meanwhile, talks with a group of hedge funds were suspended. The gridlock over Puerto Rico’s fiscal crisis has led many to wish the debt would simply disappear. Now, that might actually be possible.

Billionaire hedge fund managers have called on Puerto Rico to lay off teachers and close schools so that the island can pay them back the billions it owes. The hedge funds called for Puerto Rico to avoid financial default – and repay its debts – by collecting more taxes, selling $4bn worth of public buildings and drastically cutting public spending, particularly on education. The group of 34 hedge funds hired former International Monetary Fund (IMF) economists to come up with a solution to Puerto Rico’s debt crisis after the island’s governor declared its $72bn debt “unpayable” – paving the way for bankruptcy. The funds are “distressed debt” specialists, also known as vulture funds, and several have also sought to make money out of crises in Greece and Argentina, the collapse of Lehman Brothers and the near collapse of Co-op Bank in the UK.

The report, entitled For Puerto Rico, There is a Better Way, said Puerto Rico could save itself from default if it improves tax collection and drastically cuts back on public spending. It accused the island, where 56% of children live in poverty, of spending too much on education even though the government has already closed down almost 100 schools so far this year.

Imagine – Argentina – and the rest of Latin America – being urged by the EU, ultimate puppet of the US not to supply Russia with food stuff – vegetables, fruit, meat – after Argentina was ‘punished’ by a corrupt court in New York to pay 1.5 billion dollars to the fraudulent NML Capital et al vulture funds – out of its current agreed upon debt of US$29 billion – equivalent to Argentina’s total reserves. And yes, the hedge funds have to be paid 100%, when the remaining 93% of creditors agreed on a 20% reimbursement rate. – And, yes, Mr. Griesa, the bought NY judge, has blocked all of Argentina’s payments to the other creditors, unless his vulture clients are paid in full. So, Argentina is in forced default – having to pay now much higher interest rates on international money markets, if she is indeed still eligible for international credits. Unimaginable but true.

Under these circumstances, the boundless arrogance of Brussels expects Argentina to ascend to the US / EU sanctions on Russia to which Russia responded by banning all imports from the EU? – And is now seeking trading with South America? Not that Russia really needs food from South America – there is an enormous and willing Asia market open to them. Russia’s gesture is a helping hand to Argentina and South America to free themselves from the economic and political pressures constantly exerted on them by Washington. Argentina will laugh at such a ridiculously stupid request from the EU. Good for Russia – and good for Argentina, Brazil, Chile, Peru et al – to finally escape the claws of the predator empire of Washington and go the way of independence, namely towards a new area of economic sovereignty and world monetary system. Good for the BRICS (Brazil, Russia, India, China and South Africa), as they may finally come to a consensus among themselves and issue their own currency, backed by about one third of the world’s economic output and about half the world’s population.

If the BRICS are not yet ready with an alternative, dollar delinked currency to replace the western predatory money machine, Russia and China are. The two countries have forged a solid political and economic alliance during the past few years, have a combined GDP of US$ 21.1 trillion (China – US$ 19 trillion; Russia US$ 2.1 trillion – est. 2014), equal to about 27% of the world economic output – US$ 77.8 trillion (est. 2014). Russia has already announced that the ruble is backed 100% by gold – which is not a reference in itself, but enhances the solidity of their countries’ manufacturing and construction output. This compares with a US GDP of US$ 17 trillion, mostly based on the output of the war and security industrial complex, meaning a GDP of destruction – and on consumption, as well as hollow financial and legal services. While the BRICS are getting their act together, it is conceivable that Russia and China will issue shortly their own combined currency – the ‘Ruyuan’ or the ‘Yuanru’, delinked from the corrupt, predatory western monetary system; a new monetary alliance could also replace the dollar as reserve currency. Controlling more than a quarter of the world’s economic output and a majority chunk of the Asian market, a combined China-Russian currency would have an infinitely more solid backing than has the fiat dollar – as well as meanwhile also the fiat euro – to become a serious reserve currency. – It is only a question of time until much of the rest of the world will jump on the occasion and abandon the dollar.

Argentina's central bank head Juan Carlos Fabrega met with Chinese officials on Sunday to nut out the details of a currency swap that could relieve pressure on Buenos Aires. The deal is part of a US$11 billion Chinese loan secured by the Argentine government in July. The first billion dollar delivery of Chinese yuan is expected to be handed to Argentina by the end of the year, according to newspaper La Nacion. Argentina could use the yuan to buff up its international reserves, by Chinese goods or convert the cash to dollars. The Latin American nation's foreign currency reserves are currently sitting at a seven year low. Argentina is locked in a bitter dispute with a handful of U.S. investment funds, who have refused to accept a controversial bond swap offered by Beunos Aires following Argentina's 2002 default.

“During the meeting, the head of the People's Bank of China conveyed to Fabrega his country's support to Argentina in its dispute with bondholders in a New York Court,” Argentina's central bank stated, according to Reuters. Last Thursday, Argentina's senate passed a bill circumventing a U.S. court order for the country to pay the so-called vulture funds US1.3 billion, plus interest. The Argentine government has described the U.S ruling as “imperialist,” and accused the funds of speculation. On Tuesday, Argentina is set to push for a new international regulatory framework for the handling of sovereign debt disputes at the United Nations. The move has the backing of the G77 group, including China.

Here's the US's exceptionalist promotion of "democracy" in action; Washington has recognized a coup d'etat in Ukraine that regime-changed a - for all its glaring faults - democratically elected government. And here is Russian President Vladimir Putin, already last year, talking about how Russia and China decided to trade in roubles and yuan, and stressing how Russia needs to quit the "excessive monopoly" of the US dollar. He had to be aware the Empire would strike back. Now there's more; Russian presidential adviser Sergey Glazyev <a href='http://asianmedia.com/GAAN/www/delivery/ck.php?n=a9473bc7&cb=%n' target='_blank'><img src='http://asianmedia.com/GAAN/www/delivery/avw.php?zoneid=36&cb=%n&n=a9473bc7&ct0=%c' border='0' alt='' ></a> told RIA Novosti, "Russia will abandon the US dollar as a reserve currency if the United States initiates sanctions against the Russian Federation." So the Empire struck back by giving "a little help" to regime change in the Ukraine. And Moscow counter-punched by taking control of Crimea in less than a day without firing a shot - with or without crack Spetsnaz brigades (UK-based think tanks say they are; Putin says they are not).

Putin's assessment of what happened in Ukraine is factually correct; "an anti-constitutional takeover and armed seizure of power". It's open to endless, mostly nasty debate whether the Kremlin overreacted or not. Considering the record of outright demonization of both Russia and Putin going on for years - and now reaching fever pitch - the Kremlin's swift reaction was quite measured. Putin applied Sun Tzu to the letter, and now plays the US against the EU. He has made it clear Moscow does not need to "invade" Ukraine. The 1997 Ukraine-Russia partition treaty specifically allows Russian troops in Crimea. And Russia after all is an active proponent of state sovereignty; it's under this principle that Moscow refuses a Western "intervention" in Syria. What he left the door open for is - oh cosmic irony of ironies - an American invention/intervention (and that, predictably, was undetectable by Western corporate media); the UN's R2P - "responsibility to protect" - in case the Western-aligned fascists and neo-nazis in Ukraine threaten Russians or Russian-speaking civilians with armed conflict. Samantha Power should be proud of herself.

The "West" once again has learned you don't mess with Russian intelligence, which in a nutshell preempted in Crimea a replica of the coup in Kiev, largely precipitated by UNA-UNSO - a shady, ultra-rightwing, crack paramilitary NATO-linked force using Ukraine as base, as exposed by William Engdahl. And Crimea was an even murkier operation, because those neo-nazis from Western Ukraine were in tandem with Tatar jihadis (the House of Saud will be heavily tempted to finance them from now on). The Kremlin is factually correct when pointing out that the coup was essentially conducted by fascists and ultra-right "nationalists" - Western code for neo-nazis. Svoboda ("Freedom") party political council member Yury Noyevy even admitted openly that using EU integration as a pretext "is a means to break our ties with Russia." Western corporate media always conveniently forgets that Svoboda - as well as the Right Sector fascists - follow in the steps of Galician fascist/terrorist Stepan Bandera, a notorious asset of a basket of "Western" intel agencies. Now Svoboda has managed to insert no less than six bigwigs as part of the new regime in Kiev.

Since the economic crisis hit Europe, international investors have begun suing EU countries struggling under austerity and recession for a loss of expected profits, using international trade and investment agreements. Speculative investors are claiming more than 1.7 billion Euros in compensation from Greece, Spain and Cyprus in private international tribunals for the impact of measures implemented to deal with economic crises. This is the conclusion from a new report released by the Transnational Institute (TNI) and Corporate Europe Observatory (CEO). The report, ‘Profiting from Crisis – How corporations and lawyers are scavenging profits from Europe’s crisis countries’ (1), exposes a growing wave of corporate lawsuits against Europe’s struggling economies, which could lead to European taxpayers paying out millions of euros in a second major public bailout, this time to speculative investors. These lawsuits provide a warning of the potential high costs of the proposed trade deal between the US and the EU, which has just begun its fourth round of negotiations in Brussels.

Pia Eberhardt, trade campaigner with CEO and co-author of the report says: “Speculative investors are already using investment agreements to raid the cash-strapped public treasuries in Europe’s crisis countries. It would be political madness to grant corporations the same excessive rights in the even more far-reaching EU-US trade deal.”  The report examines a number of investor disputes launched against Spain, Greece and Cyprus in the wake of the European economic crisis. In most cases, the investors were not long-term investors, but rather invested as the crisis emerged and were therefore fully aware of the risks. They have used the investment agreements as a legal escape route to extract further wealth from crisis countries when their risky investment didn’t pay off.

For example, in Greece, Poštová Bank from Slovakia bought Greek debt after the bond value had already been downgraded and was then offered a very generous debt restructuring package, yet sought to extract an even better deal by suing Greece, using the bilateral investment treaty between Slovakia and Greece. In Cyprus, a Greek-listed private equity-style investor, Marfin Investment Group is seeking €823 million in compensation for their lost investments after Cyprus had to nationalise the Laiki Bank as part of an EU debt restructuring agreement. In Spain, 22 companies (at the time of writing), mainly private equity funds, have sued at international tribunals for cuts in subsidies for renewable energy. While the cuts in subsidies have been rightly criticised by environmentalists, only large foreign investors have the ability to sue.