The horizon is not so far as we can see, but as far as we can imagine

Category: Trump Era Page 1 of 15

Trump’s Negotiating Is Failing

If you want to call it negotiating. Iran refuses to even talk, unless America removes sanctions first. Putin will talk, but he clearly doesn’t intend to end the Ukraine war except on his terms, and certainly won’t agree to a ceasefire without massive concessions. China isn’t panicking over tariffs, but simply counter-tariffing. Europe’s getting uppity. Even midgets like Canada are standing up for themselves. Oh, and Ukraine still hasn’t signed that mineral “deal.”

Trump has said that if Iran doesn’t give up their nuclear program “there will be bombing like they’ve never seen.” He’s threatening Russia with secondary sanctions on oil, and he’s talking about tariffing everyone.

Apparently America doesn’t want any allies, or friends, and soon it won’t have any. This is batshit crazy, loop-de-loop nuts. The way to do this sort of thing is to single out one or two targets at most, and make everyone else think they’re safe, then move on. Trump’s acting like it’s 1991 or 1950, with the US at the top of the world, not like America’s in serious decline.

Oh it may seem like a response to America’s decline, an attempt to reshore industry, withdraw from Imperial over-reach and so on. Superficially it looks like that, but he’s just picking too many fights all once, his tariff threats are incoherent and unplanned, he’s defunding research and forcing brilliant scientists and engineers and scholars out of the US, has no industrial policy worth speaking of and is destroying America’s governing capacity with capricious cuts to the federal bureaucracy.

More to the point, he’s giving everyone else reason to route around America like it’s damage: to stop using the US dollar, to move to using local currencies for trade and to stop buying American goods and services, and yes, to stop selling to the US. The smart move, and it’s going to happen if he keeps this up, will be stop enforcing US intellectual property, end the DMCA clones and the prohibition on breaking digital locks, and to stop paying American internet giants their usurious fees.

The US isn’t agreement capable: you can’t trust them to keep their deals. This was true before Trump, but he’s super-charged them. Iran is right to say “well, we’ll talk after you keep the last deal we signed with you” and everyone else is coming to the same conclusion. If he won’t keep America’s deals, or even his own (the USMCA trade deal with Mexico and Canada is his) what’s the point of even talking? Just stop doing business with the US, period.

Smart policy isn’t to do this in one huge crash, because the US is very reliant on goods, resources and money from everyone else. You boil the frog, make things predictable and ease out of the problem. This isn’t Russia, which had China and India to backstop it when sanctions hit and which wasn’t massively in real trade deficit, making it up with non trade fees from its vassals and from countries which wanted to sell to it.

If you can’t sell to the US, why do business with it? What does it have that you can’t get from someone else? The obvious answer is food, oddly, but if even China is willing to put tariffs on both US and Canadian food, that dog won’t hunt.

It’s not that the US can’t do autarchy. It’s still a continental power, it’s still high tech, it still has plenty of scientists and engineers. But all that was true of Russia after the USSR collapsed, and the first decade and a half were ugly, and only got better because of Putin and the secret police taking charge—and they were able to do so thru a huge economic campaign to sell resources to the rest of the world.

And that’s where the US looks likely to wind up, after a period of chaos and deprivation: its’ behind in 80% of tech, it’s cost structure is too high, so it’ll have to sell food and natural gas: if anyone else is willing to buy. (The Euros may have no choice, everyone else does, because they aren’t blinded by insane fear and hatred of Russia.)

This sure is speed-running imperial decline. An accelerationist’s dream.

And if there’s a real war, what happens if Iran is able to sink an aircraft carrier? What happens when the US campaign against Yemen fails, as it will? What’s left of America if people aren’t scared of it? Nukes and complete pariah status and a massive nuclear proliferation scramble?

Likewise the whole sanctions regime bullshit is possible because almost everyone trades with the US and goes thru American and European banks. If they stop trading, they don’t need the banks and if European banks opt out, well, shit. So the fear of sanctions and the fear of military force goes way down.

Nothing to sell, no fear, and no one wanting to do business with the US, including buying its weapons.

This appears to be Trump’s endgame.

 

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Absolutely Massive Collapse In Travel From Canada To America Incoming

I have to admit, I didn’t think it would be this big:

Using forward booking data from a major GDS supplier, we’ve compared the total bookings held at this point last year with those recorded this week for the upcoming summer season. The decline is striking — bookings are down by over 70% in every month through to the end of September. This sharp drop suggests that travellers are holding off on making reservations, likely due to ongoing uncertainty surrounding the broader trade dispute.

Parts of Florida will be hammered by this. But I’m shocked: seventy percent plus! I hadn’t realized just how unified Canadians are in this.

I suspect it isn’t all the tariffs and Trump’s annexation threats: there’s been significant press of US border services snatching foreigners who are crossing legally but perhaps don’t have their paperwork all right and instead of just sending them back, abusing them and locking them up.

I certainly won’t be traveling to America, probably ever again: after all I’ve insulted Trump repeatedly and said that Israel is committing a genocide and customs officers often search social media. Nothing in America is worth the risk of wind up in some prison camp because I think Palestinians are human beings and shouldn’t be mass murdered.

So far I don’t see evidence of a big drop in European bookings, but if that happens, and there’s plenty of reason to believe in might, well… bad time to be in tourism in America and a good time to be in tourism in alternatives. I think Mexican and Canadian destinations are doing very well out of Canadian’s refusal to visit America.

America wants to be alone, and without allies, and soon it will be. Trump’s hilarious attempts to cozy up to Russia are ridiculous. Putin will do business with America, but he will never, ever trust the US, no matter who is President. Meanwhile America’s real allies are mostly deciding, quite rationally, that one can’t trust America and therefore America can’t be a useful ally.

This will lead to a variety of knock on effects, like diversification from the dollar and use of local currencies in trade, and the American standard of living will collapse by at least a third. Americans have been living way beyond their means, and Trump is bringing that to an end.

So sad.

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Trump Doesn’t Have A Master Plan

There are a lot of smart people who think Trump has a plan. For example, that he’s deliberately reducing America to a regional power to avoid full Imperial collapse. Or that he’s using tariffs to rebuild American industry.

No.

Trump isn’t the type, he doesn’t have a master plan. Trump is driven by the idea that other countries are taking advantage of America: by a sense of grievance. He wants good deals, by which he always means that the US gets more than it gives, and he’s willing to end a deal if he thinks it isn’t good.

Trump has virtues (not all virtues are moral virtues.) Yeah, he started rich, thanks to Daddy, but he shits into a gold toilet, got a lot of good looking women, and became the President of the United States. He has a weird sort of charisma and tons of energy, as long as what he’s doing gets him attention of the right kind.

But he’s not a deep thinker. He doesn’t know much about the political economy, and he doesn’t make and execute policy plans. His purge of the “deep state” is driven by grievance: they went after him during Biden’s reign, so he’s going after them.

His tariffs are driven by looking at trade balances and feeling they’re unfair: Europe has about a 235 billion trade surplus with America, for example. That, to Trump is unfair. (The balance of payments is about 40 to 60 billion, which is far less.) Canada has a trade surplus, so that’s Canada taking advantage of the US to Trump, never mind that the US actually sells more goods to Canada than vice-versa and the surplus is essentially all energy trade.

If his tariffs were part of a master plan to re-industrialize he wouldn’t have gutted Biden’s industrial policy, which was actually working, and he wouldn’t be waffling back and forth on them. He’d institute them. (The smartest way would be to set a goal, and increase the tariffs by 1% every month or two to give companies time to reshore.)

Likewise his attack on NATO is primarily driven by this sense of grievance: the US is paying much more than everyone else and other NATO nations haven’t met their promise of spending 2% of GDP. (Which is fair enough, they did say they would, and they haven’t.) In the case of Europe there’s something there: the Euros are terrified of Russia and if they think Russia is really a threat (I don’t) they should be willing to spend on their military.

There are certainly people in Trump’s administration or outside planners with influence who do have master plans related to tariffs, reindustrialization, and ending the America Empire, but Trump? No. He’s too undisciplined a thinker and trying to work thru him must be endlessly frustrating to them.

Trump is also self-defeating in his fickleness. It’s impossible to make a deal with him, because you can’t be sure he’ll stick to it. Take his pressure on Egypt (which has massive fiscal issues caused by the Houthi blockade and Ukrainian war, since they got much of their grain from Ukraine, and thus is in a bad position to resist pressure) to take Palestinian refugees. To make it worthwhile he needs to not just offer the stick (we’ll end subsidies) but also a carrot—increased subsidies.

But Sisi has to figure that Trump might cut those subsidies off in a few months or a year or too, after he’s got 700K Palestinians refugees in his territory.

Now, even without a plan, Trump may wind up reducing America to a regional power. I’d say he probably will as a result of what he’s doing. But that he’s deliberately doing as part of a master plan based on a sound understanding of global political economics?

Seems unlikely.

And that matters, because there are smart ways to do things, and stupid ones, and stumbling into the end of America as the global hegemon will have some fairly serious costs like a crash on American arms sales, countries likely refusing to enforce American copyright and patents, national ownership laws taking much of America’s overseas ownership of land and industry, and so on. Plus, if you want to reindustrialize, the clumsy attack on universities and research is exactly the wrong thing to do when China is ahead in 80% of fields. (To be clear, American research needs to be fixed, but you don’t do it by defunding it massively all at once: you slowly change how funding is done so that there aren’t mass layoffs of scientists who then leave the US or stop being scientists.)

Trump isn’t some great statesman who has looked carefully at America’s position and come up with a brilliant master plan, he’s a deeply flawed man whose primary skill is self-promotion and who is driven by a negative sum view of the world based on the idea that if he’s winning someone else has to be losing, a deep sense of grievance at the idea anyone is taking advantage of him (because he takes advantage of others all the time) and who needs attention, adulation and ass kissing.

Too many people are reading into Trump want they want to see, not seeing what is actually there—and not there.

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MAGA Are Fundamentally Morons

The simple fact is that Trump isn’t going to “make America great again”. He’s speed running collapse. The most telling bit is his attacks on America universities at the same time as China has taken the lead in eighty percent, or more, of technologies and appears to have the lead in science as well. He’s dismantling the few good things Biden did, like his industrial policy and his appointment of Lina Khan to attack monopolies and oligopolies.

The shuttering of the Consumer Financial Protection Bureau will massively hurt low and middle income earners. The postal service changes will lead to many rural Americans having no mail service. Trump’s budget requires massive cuts to Medicaid, which disproportionately helps Red State Republicans.

Trump isn’t making America Great Again: he’s speed running the decline of America. There was a way to withdraw from the American Empire and become semi-isolationist again which would have been good for both Americans and everyone else, but that’s not what Trump is doing.

Anyone delusional enough to think Trump is good for America or most Americans is a moron. It’s that simple.

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How To Do Tariffs Right (Trump The Moron Edition)

One of the ways that Trump reminds me of Bush Jr. is that you never want him to do anything you agree with, because he’ll fuck it up and discredit it. Trump’s tariffs are the platonic essence of fucking up a good idea.

Let’s run thru this:

Companies and individuals need predictability. Everyone has pointed this out, but it’s still true. You can’t lay on new production if you don’t know if the tariffs are here to stay or not.

It takes time to increase production so tariffs should come in like a lamb. Personally I’d have most tariffs increase by 1% every month or two, depending on how long a specific type of production takes to increase, until it reached my target. Companies can’t just spawn in new production, this isn’t a video game.

If you can’t produce it you shouldn’t tariff it unless you have hard currency issues. Mostly self-explanatory: tariffs are used to make domestic production economically viable. If you can never produce it tariffs don’t make sense unless you don’t have enough hard currency to import things you really need, usually capital machinery. This last part doesn’t apply to the US.

If domestic production has a better use, tariffs may be a bad idea. Right now the US is ramping up energy production to it can concentrate on AI. Putting tariffs on Canadian energy is thus stupid, since the US can’t build enough energy fast enough. Related: aluminum production is massively energy intensive. Tariffing Canadian aluminum means you need to use American energy for refining. Is that the best use of American energy right now? (I mean, a case could be made that AI is overhyped bullshit, but Trump isn’t saying that.)

Maybe you want to export goods to another country, and they’ll tariff you if you tariff them. Tariffs often need to be negotiated between countries. If everyone just tariffs everything, that’s the end of international trade. Generally the idea is “you specialize in X, we’ll specialize in Y and we’ll trade.” Comparative advantage is overstated and only works when there are no significant free capital flows, but it’s also true that no one can produce everything they need: not even China right now, or the US in 1950. So “tariffs on everything” is moronic.

Tariffs without industrial policy rarely work. If no one can afford to build up industry, or if the regulatory environment makes it hard, all the tariffs do is increase prices. Biden actually had pretty decent industrial support programs going and Trump is dismantling them. He should, instead, have left them in place while putting strategic tariffs in place to further support them.

Needless to say Trump is bad on all these issues, because he’s a tard.

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The End Of The American Brain Drain

This admission of abject surrender and powerlessness from Colombia University is something I appreciate. Some actual honesty:

America’s in the middle of another of spasmodic crackdown on the free speech like McCarythism or the Red Scare. In this case so that Israel can commit genocide because a controlling number of American elites are scared of Israel, in many cases most likely because Israel has proof they’re baby-fuckers. (Can you say “Epstein”?)

The slightly less depraved ones are just scared of AIPAC funding their opponents. Others genuinely love the idea of mass murder, and probably have screenshots of dead Palestinians and Israeli soldiers wearing Palestinian women’s underwear saved for times when their palms get sweaty and they started breathing fast.

But, let’s bring this back to the more usual themes of this blog. There’s another interesting news story: it seems there’s a bill proposed to ban all Chinese students from studying in America.

Sweeeeet.

You know one of the main reasons why the US took the tech lead so decisively before and after World War II? A massive influx of European scientists and intelligentista, many Jewish, but plenty not. The smartest people in the world disproportionately wanted to live in America.

This continued for generations: you’d be some other nation, you’d train up smart people, educate them, and the ungrateful fucks would go to the US to finish their education, then stay in America. Endlessly frustrating for everyone but America.

So, of course, current American elites, scratching under their armpits, hooting about foreigners, grunting out “Uhmerika, grate” have decided to add to their broad attack on research, brains, intelligence, universities, teachers and books by banning even more smart people coming from other countries.

They will glare at you and tell you it’s “so them Chinese fellers can’t learn our secrets.”

Weird thing, last survey I saw had the Chinese leading in 89% of tech fields, up from 80% and there are more top Chinese AI researchers working in America than American AI researchers.

So, if you go to America you can’t say “mass murder is bad”, and no one can protect you from the government’s thugs if you do, but, fortunately for some, soon you won’t be able to study in the US, so hey, it’ll be a moot point if you’re lucky enough to be Chinese.

American universities are only massively dependent on foreign students and Americans, scared of catastrophic, life long student loan debt increasingly don’t want to to go to university, so I’m sure this won’t hurt America at all. Who needs scientists, engineers, professors, intellectuals, and all them fancy folks who think they’re better than MAGA chuds? I hear some of them academic types say evil worlds like sexism and racism and nasty phrases like settler colonialism, CIS, justice, fairness, genocide and so on.

Yup. Ban ’em or make ’em terrified. Don’t give academics any freedom, they think bad thoughts about how killing brown people might be wrong or that women might be worth something when they aren’t cooking or spreading their legs. They might say “abortion isn’t always evil” or suggest that God isn’t real or something.

Anyway, I’m pleased to notice that America is 110% (as an American manager or coach would say) dedicated to driving itself into the dirt and ensuring China buries it there.

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Musk’s Empire Is Looking Even More Shaky

So, we’ve talked before about problems with Tesla. Musk’s competitors are, to put it simply, producing better cars which cost less, especially but not only, the Chinese like BYD. Meanwhile, Musk’s politics, like denying climate change and throwing a Nazi salute, while tying himself to Trump just as Trump is pissing off almost every country whose consumers buy Tesla vehicles, has made customers a lot less interested in buying Tesla. He’s trashing his own brand with the people who supported it most.

Musk’s riches are based primarily on Tesla, but he also has SpaceX, which currently has the lowest cost space lift and pretty much guaranteed business from the US government. But a large part of Musk’s SpaceX income comes from Starlink. It looks like SpaceX made about 13 billion in 2024, and of that Starlink provided 8.2 billion. However, in terms of profit, Starlink seems to have provided only about a third of SpaceX’s three billion profits.

That said, Starlink is still in the fairly early stages, with high capital costs, and the revenue numbers indicate it’s a big deal for SpaceX and Musk.

Then we see this:

But here’s the thing: There is an onrushing competitor to Starlink — a Chinese one, Qianfan. They’re far behind Starlink right now, but as they scale, they seem likely to wind up larger than Starlink, and the price for access may be $50 versus $120 for Starlink, though it’s unclear what the terminals themselves will cost.

Musk seems determined to lose Starlink customers, too. He accused oligarch and billionaire Carlos Slim of being tied to Mexican cartels, for example, and Slim immediately cancelled his deal with Starlink, and indicated he’d be pursuing the Chinese alternative.

So, in two to three years, it seems likely that Starlink will not be the only game in town, and the other game will be cheaper. At which point, all Elon Musk has is his political moat; some countries may make it illegal to choose Qianfan.

But… that political moat is looking very leaky outside of the United States since Musk has tied himself to Trump, and Trump has pissed off almost all of Europe, including serious American allies like Poland (see above), Canada, Mexico, and even Japan. China may look like the lesser evil — after all, they rarely tariff anyone unless the tariffs are retaliatory, and they aren’t threatening to annex any countries.

That means the only remaining moat Musk has is his space launch, which is genuinely cheaper. But a cursory search showed me eight Chinese private space-lift companies. They’re all behind SpaceX right now, but then, a few years ago, so were China’s EV manufacturers, and Chinese smarphone producers were behind Apple and Samsung.

Anyway, a company with 13 billion annual revenue isn’t why Musk is so rich. It’s mostly Tesla. Canada, for example, put a 100 percent tariff on Chinese electric vehicles. China has now counter-tariffed, hitting Canadian agriculture hard. It might not seem worth keeping those tariffs going. Europe is similar. No one likes Musk right now other than MAGA, and they prefer gas-guzzlers.

I can’t remember ever seeing someone as rich self-destruct the way Musk is. He’s mishandled Tesla for years, he’s lost his first-mover advantage, he’s destroying his brand value, and pissing off both consumers and governments in almost every country he sells cars or internet in.

So if you don’t like Musk, well, get ready to enjoy a rich harvest of schadenfreude.

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Understanding America’s Betrayal Of Ukraine

Let’s start with this: Ukraine is losing the war, and the longer it goes on the worse the peace deal will be. I absolutely agree with Trump that there needs to be a peace deal, and soon.

But the rhetoric coming out of the Trump administration and its proxies suggests that America owes Ukraine nothing, and that indeed, Ukraine owes America for all its support. This sounds reasonable, on the face of it, but only if you don’t know any history.

Let’s start with the 2014 Maidan protests which overthrew the Ukrainian government. They were a color revolution, heavily supported by the Americans and Europeans. Say what you will about Yanukovych, he was the elected President. There’s decent evidence that the sniper massacre was done by Maidan itself (see this academic study), and, post-coup, Ukraine was essentially run by Victoria Nuland.

The Maidan coup came in response to Yanukovych’s decision to accept Russia’s aid package instead of the West’s. This was the correct decision: Russia offered more money and aid with less strings, while the Western aid came with IMF restructuring. If you know anything about the IMF you know that their restructuring is always painful, and it doesn’t improve host nations economies. It does, however, increase inequality, and opens up the economy so foreigners can buy in.

Back in 2008 there was a brief Georgian/Russian war. Georgia had regions which were ethnically Russian, and they were de-facto independent, and recognized as such by Russia. When Georgia invaded South Ossetia, Russia counter-invaded. At the time, I wrote an article for FireDogLake predicting the next Russian war would be over Crimea and Sevastopol. Sevastopol is Russia’s main Black Sea port, and a Russian “hero city,” — much beloved. Ukraine leased it to Russia, and if Ukraine ever moved to kick the Russians out I predicted the Russians would go to war rather than comply.

Put simply, Sevastopol was and is a key Russia interest.

After the coup, Ukraine threatened to end the Russian lease. Russia invaded Crimea, and took it over. (Don’t cry too much, most Crimeans, except the Tatars, would much rather be Russian). Meanwhile, the East of Ukraine went into revolt, because they are mostly, actually Russian and had supported the ousted President. A small war was fought over that. The Russians intervened, routed the Ukrainians, and they set up a peace deal called the Minsk accord, which basically gave Donetsk and Luhansk semi-autonomy.

Notice that without the coup, which was backed by the US, there would have been no 2014 war between Ukraine and Russia, no loss of Crimea, or and no semi-independence for the far East of Ukraine.

The coup was anti-democratic, overthrowing a legitimately elected government which was accepting the best deal offered. (And folks, I’ve studied IMF deals. They are always bad. Always.)

Of course, having lost a war and territory, Ukraine now becomes very anti-Russia, at least in the West of the country. Understandable. Then there’s a HUGE military buildup. And, although Minsk was sold as the end of the matter, it was negotiated in bad faith by the West. This has been confirmed:

The West didn’t want peace, it wanted a chance to build up the Ukrainian military for the next round.

That next round came after Ukraine spent a lot of time shelling the hell out of Luhansk and Donetsk; this was a violation of the Minsk agreement. Then Ukraine and NATO started talking about Ukraine joining NATO, which Russia had made clear was a red line.

Now here’s the thing: Absent the US backed Maidan coup, there would be no Ukrainian war. It wouldn’t have happened. Additionally, absent the huge build up of the Ukranian military, again US- and EU-backed, there would have been no war, because Ukraine wouldn’t have risked it.

The US used Ukraine in a proxy war, after an anti-democratic coup. The West genuinely believed that sanctions would break Russia and allow Ukraine to win the war, and hoped that the loss would cause a break-up of Russia. Unfortunately for them, China needed Russia as an ally, and kept the Russian economy running, and it is Europe that was damaged by the sanctions, while Russia’s economy is, overall, booming.

Back near the start of the war, a peace offer was on the table, far more generous than anything Ukraine can expect now. Boris Johnson, Britain’s Prime Minister, with US support, told Zelensky not to take it — NATO would back him to the hilt, and Zelensky could win the war.

Fast forward: Ukraine is losing the war. On a map, Russian gains over the last year aren’t all that large, but the Ukrainian army is running out of manpower, and is being pushed past its line of prepared defenses. When the Ukrainian army breaks, and it will, the Russians will start making huge advances very quickly.

Now, Trump comes in, and acts as if America had nothing to do with all this and, further, acts like Ukraine has taken advantage of American generosity instead of Ukraine being an American proxy, which has been devastated after an American coup pushed it into a war with a much stronger country and America and the UK told Ukraine not to take a better peace deal.

Trump’s attempting to get Ukrainian minerals in “repayment” for America pushing Ukraine into a war it couldn’t win, and is not even offering security guarantees in exchange. I loathe Zelensky, but he’s right to reject this one-sided “deal.”

This is despicable. This is honorless. The very least Ukraine deserves from America is a sincere effort to cut, for Ukraine, the best peace deal they can get.

Now Zelensky is delusional. Threats to fight on and a refusal to negotiate are insane. Russia’s BATNA (best alternative to a negotiated agreement) is to just continue the war, win it, and impose an unconditional surrender. Think Japan and Germany at the end of World War II.

But American negotiation seems to be about making the best deal for America, not for Ukraine.

My suggestion would be that Zelensky ask the Chinese to host negotiations. Yes, they’re Russia’s ally, BUT they’ve always supported a peace deal, and more importantly, they’re the only nation which really does have leverage over Russia; without China, Russia cannot survive economically. And, unlike America, China has said it is willing to put peacekeepers in Ukraine. Russia is NOT going to target Chinese troops.

Further, if China promises to rebuild Ukraine, it will do so, and do so quickly and competently. The Chinese are the best in the world at building roads, railways, ports, power plants, and all other types of infrastructure.

Ukraine’s government was effectively controlled by the West, and pushed into a war it couldn’t win. They need to end their Western alliance, and cut the best deal they can get. That means, especially, not letting Trump negotiate, because he’s not negotiating for them, but for America.

It’s a bad hand, an awful one. But it’s the hand Ukraine has to play.

As for American claims that Ukraine used them, rather the other way around, they are without merit and beyond dishonorable.

Let’s give Kissinger the final word:

“It may be dangerous to be America’s enemy, but to be America’s friend is fatal.”

 

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