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No 1677 7th August 2026

Washington’s humiliation over its barbaric Middle East warmongering defeat at the hands of the Iranian mullahs and their dogged resistance (along with the savagely butchered but undefeated allies in Lebanon, Gaza and Yemen) underlines the colossal weakness and uncertainty of the imperialist/Zionist bullies as their disgusting system sinks ever deeper into incurable crisis collapse. But as Marxism has long warned there can be no end to war and ever more depraved genocidal destruction for as long as the monopoly capitalist system remains and its bourgeois ruling class stays on top. No Stop the War pacifism will do anything but mislead and disarm the working class. Fake-“left” still clings to “democracy” illusions failing to see the great Catastrophe and its revolutionary implications. Leninism vital

The Western world’s ever-widening slide into depraved torture, barbaric war and sadistic genocide, now treated as “normal”; into rampant irrational eco-devastation; and into the ever more life-threateningly grotesque poverty and inequality imposed by the indifferent corruption and callous profiteering of the hyper-rich, is now so glaring that pursuing “everyday life” becomes increasingly bizarre.

Why does the great majority of mankind not immediately declare war on this insane vicious class domination system dragging the world into armageddon, and put an end to it?

Only a failure to comprehend the existential Catastrophe facing mankind as the imperialist order plunges into its greatest ever paralysing crisis, and the cataclysmic world war the bourgeois ruling class must impose to escape it, (beyond anything ever seen before) can explain the seeming inertia and complacency among the mass population.

Far beyond any natural reluctance about upheaval and disruption to “ordinary life”, that hesitation comes from the gross media censorship of ever-fouler atrocities and depravity, imposed in the Middle East but elsewhere too (eg Sudan, Afghanistan, Haïti, Mozambique and on Russia by Ukraine’s nazis), as well as the relentless brainwashing nonsense and lies bucketed out by the bourgeoisie against communism and about its own utterly fraudulent “freedom and democracy” and “coming prosperity” (read, more philistine consumerism).

The whole “democracy” racket is more and more obviously a stitch-up across the world, with a slew of vote-fixed ultra-right wafer thin “victories” in Latin America against actual public hostility, the ever cruder dominance of big money interventions in the US (and notably the Zionist AIPAC) and the sly electoral coup manipulations in Europe such as the “new broom” nonsense of the New Labour prime ministerial changeover (on top of the anyway laughable 13% “landslide” two years back).

And all that still continues with in-your-face cynicism even as the world crisis collapse tears up all post-WW2 “United Nations” “new free world order” justice-and-democracy lies, and in the face of an economic crisis teaching ever more brutal concrete lessons about the onrushing slump and the poverty it imposes, not just from Brazil’s favelas to Nairobi’s slums but in the “First World” too.

All that is about to get much worse once the insane AI-fed investment bubble bursts as everyone knows it will, and as bourgeois tocsins and warning bells jangle non-stop (see below for fuller account) such as this:

The story of A.I. has been as much a financial story as a technological one, a question of how to structure the mind-boggling investments required to train and run the models. Few people doubt that this technology is going to change everything. What’s less clear is when the profits are going to start rolling in and how big they are going to be. “To me, it’s a math problem,” says Asad Ramzanali, the director of A.I. at a policy center at Vanderbilt University. “We are making trillions of dollars in investments on the back of tens of billions of dollars in revenues.”

The growing consensus is that these kinds of numbers add up to a bubble. The more salient question may be how big a bubble, and also what will happen if it bursts. One macroeconomic research firm, MacroStrategy Partnership, has estimated that the A.I. bubble is 17 times as large as the dot-com bubble and four times as large as the 2008 housing bubble. The housing crash may be especially instructive. It rippled across the entire economy like a contagion because the housing market had itself drawn investments from across the entire economy. This is even more true of the A.I. boom, which has been driving America’s growth across the spectrum — real estate companies, banks, even energy wholesalers have all been riding the A.I. wave.

The financial structure of the data center build-out makes it especially vulnerable to a crash. The deals themselves are built on enormously complicated debt and equity schemes that involve circular financing. The hyperscalers are investing heavily in the same companies they are counting on to buy their computing power. It’s what economists call an interlocking liability structure. If their customers struggle to monetize their products, they will be hit extra hard — and so will their investors, which include a lot of everyday Americans. And these are just the U.S. companies. The A.I. boom has been a global phenomenon; an A.I. collapse would be as well.

The flip side of the dream of making A.I. the future of everything is the nightmare of a financial crash. Oracle has become a barometer for the great A.I. build-out. It’s the most highly leveraged major hyperscaler, and its future profits are heavily dependent on a small number of customers.

Oracle, run by arch Zionist-supporting mega-billionaire Larry Ellinson and featured in this story, is not some exception despite topping the debt-laden list, and nor is the rest of the AI boom any different.

The great bank failures of 2008 (still reverberating despite the artificial QE credit “boom”) were already described as a potential “financial nuclear winter” far beyond the Great Depression which followed the 1929 Crash and Depression. What will this be – especially if (when) the dollar itself implodes?????

Already the nazi fascist reality of world imperialism’s (and most of all the topdog US Empire), attempt to ride out its incurable implosion by smiting everyone around it, – all ludicrously and Goebbels-lie fingered as “to blame for all the problems” – is becoming so glaring that even previous “left” sneers at Leninist “catastrophism” have become muted.

Most supposed quietude in the masses the "lefts" defeatistly blame for their own hopelessness, even now, is an illusion.

It reflects only a lack of all leadership to give voice to mass proletarian discontent, with careerist politicians from the “labour movement” instead reinforcing the status quo and propping up its threadbare lying bourgeois “democracy” philosophy.

The slew of fearful and craven petty bourgeois Labour and TUC opportunists and “lefts” of all flavours, variously line up behind the bourgeoisie one way or another, just as the did in past great crisis outbreaks in 1914 and 1939, scared witless at the implications of the great unfolding crisis.

What implications? That the great unravelling collapse and devastation is unstoppable – until capitalism is ended by class war and disciplined workers states are established.

Despite much pretence and lip-service about revolution and “overthrow” by many of the “lefts” they hate that prospect and therefore never really challenge the class domination of this rotten and disgusting 800-year-old collapsing system.

Yet among billions in the world there would be a ready audience for a clear Leninist lead.

Reality is that the supposedly cowed and compliant great masses DO want to declare war on imperialism and many are already doing so, in multiple albeit often confused and crude ways across the planet, all written off and increasingly suppressed by the minority ruling class as “terrorism”, “illegal insurgency” “jihadism”, “anarchy”, “riots”, and “disorder” and “jealousy of our way of life”(!!), or as “totalitarianism” if state organised like China, Cuba or North Korea etc (and seemingly Nicaragua once again).

And while some of those upheavals are subverted with manipulated MI6/CIA/Zionist etc counter-revolts and colour revolutions where it can be managed, that is far less frequently so than most defeatist “left” theories would have it, trying to avoid the revolutionary meaning of endless revolt from 9/11 onwards to mass anti-Western rebellions like the Arab Spring, by declaring them “just CIA plots”.

But a panicking US ruling class, and its bourgeois allies, understands this spontaneous ferment can only head towards the real solution for the world, communism, however much the rebels’ existing culture and leadership might be trapped or limited by petty bourgeois nationalist perspectives and historical cultural traditions (mostly religious).

Donald Trump’s recent warning of the “communist menace” in his speeches for the 250th anniversary of the USA’s founding, is no hyperbole despite his “brash style”; instead the fact it was highlighted decades after being declared “unworkable” and “finished” and barely mentioned, indicates just how close the “haunting spectre” is coming and how much the ruling class knows (fears) it will be unstoppable.

But mass rebellion needs conscious revolutionary leadership and clarity if it is to get somewhere and finally permanently change the world and that is the last thing the “left” is offering.

Least of all do they explain that only a profound and constantly developed grasp of the long material historical development of the capitalist order (and previous class domination too), can explain how a once dynamic entrepreneurial system dragging mankind forwards from backward primitivism and stagnating superstitious feudalism has now become its opposite, the great millstone around humanity’s neck already twice imposing unbelievable international destruction and horror in the early 20th century, on top of non-stop violent massacring colonialist domination before, and again after, WW2 and now hurtling into the greatest social economic and war Catastrophe ever seen.

The need of the erupting struggle and spontaneous upheavals for unifying leadership, possible only with genuine and deeply studied Marxist-Leninist revolutionary understanding and science constantly advanced through fought-out polemics, by a party built for the purpose, is not remotely comprehended let alone embraced and fought for even as world chaos makes it ever more urgent.

The “lefts” never get to first base really spelling out the critical questions, and more likely evading them through petty bourgeois class instinct and cowardice.

First among crucial issues is the crisis and the grasp that it is the core engine driving history and the events which comprise it.

Crisis is not some steadily worsening “difficulty” like bad weather making exploitation worse and worse (though it does) but a sudden (relative to history’s span) apocalyptic breakdown of the monopoly capitalist order, where the quantity of the accumulating contradictions becomes qualitatively transformed into total paralysed chaos and intractable societal breakdown (just look around) made even worse by the growing hatred and hostility it causes.

Secondly the dictatorship nature of the bourgeois imperialist class rule hidden behind the “freedom” bullshit, needs exposing.

Contrary to two centuries of reformist promises it cannot be “improved” or made less rough round the edges, except perhaps temporarily when the bosses and billionaires are obliged to retreat in the face of rising revolutionary class struggle.

Even that apparent “success” has only been in very specific circumstances in the middle of boom periods and benefiting only very limited portions of the world proletariat, bamboozled or bribed in the richest of countries (as after World War Two) when world capitalism was under pressure from victorious pro-communist revolutionary sentiment everywhere, boosted by the great Bolshevik Revolution of 1917 or again by the titanic sacrifices and victories of the USSR against the imperialist-plotted German Nazi onslaught and the subsequent tide of anti-imperialist anti-colonial and communist struggle it inspired.

Nor is revolution some kind of vigorous extension of reformism, with “democratic” and “peace” struggle supplemented by strikes and street action, as some “lefts” present things, suggesting step-by-step advances and wins for the working class can eventually (and almost imperceptibly) tip over into socialism (the core notions of post-war Stalinist revisionism).

Such progress will always be stopped, disrupted or broken up by counter-revolution, as repeatedly demonstrated in over a century of coups and violent interventions across the world, such as the infamous bloody torture and killing in the Augusto Pinochet coup in 1973 against the “first democratically elected” socialist government of Salvador Allende; in the 1965 overturn of the Sukarno national-liberation government in Indonesia, butchering at least one million communists or even remotely suspected fellow-travellers; in endless slaughter in Latin America; over and over again in Haïti; and in Africa against the Angolans, Mozambique, the Congo, in Uganda, Rwanda and many others since.

The new “democracy” in Egypt, “allowed” after decades of dictatorship was overturned in 2011, and its newly elected Mohamed Morsi government, was soon butchered by the 2013 massacring counter-overturn by General Sisi’s military in Egypt (which none of the “left” protested and some like the CPGB-ML even effectively celebrated). Subsequently all other “democratic” gains from the Arab Spring have been reversed as bourgeois press reports spell out:

For more than a decade, Tunisia had been held up as the Arab Spring’s lone democratic success.

While revolutions elsewhere descended into civil war, military rule or renewed authoritarianism,

(as if without human agency!!-ed)

Tunisia managed something few thought possible.

It wrote a new constitution and held competitive elections.

Political Islamists and secularists - despite profound ideological differences - shared power in an uneasy but functioning compromise.

The experiment was messy and parliament became notorious for shouting matches broadcast live on television.

Despite everything, Tunisia endured.

But things dramatically changed on the night of 25 July 2021.

Across Tunisia, thousands had already taken to the streets before sunset.

Demonstrators gathered not only in Tunis, but in Sousse, Sfax, Kairouan, Gafsa and other cities, denouncing a political class many believed had squandered the promise of the 2011 revolution.

Some protesters stormed local offices belonging to Ennahda, the country’s largest parliamentary party, which had not officially led the government since 2014.

Windows were smashed. Furniture was dragged into the streets. Police struggled to contain crowds whose frustration had been building for months.

At the time, Tunisia was living through one of the world’s worst Covid-19 outbreaks relative to its population.

The economic picture was equally bleak.

The revolution that had begun in 2011 with demands for dignity, jobs and accountability increasingly appeared unable to deliver any of them.

For many Tunisians, democracy itself seemed paralysed.

Looking back, former Prime Minister Hichem Mechichi said Tunisia’s democratic transition failed to convince ordinary citizens that political freedoms would improve their daily lives. (Obviously - because it is a fraud - ed).

[..]From Tunisia’s presidential palace on the Mediterranean shoreline, President Kais Saied watched the crisis deepen.

A constitutional law professor before entering politics, Saied had won the presidency in 2019 as an outsider, presenting himself as incorruptible and above Tunisia’s partisan battles.

[..]he increasingly portrayed parliament as the principal obstacle preventing Tunisia from escaping the crisis.

[..]As Saied’s speeches became more confrontational and his references to exceptional constitutional powers more frequent, constitutional scholars warned he appeared increasingly willing to bypass democratic institutions rather than reform them.

The crisis was compounded by one institutional failure that many now regard as pivotal: Tunisia had never established the Constitutional Court envisaged under the 2014 constitution.

[.]”The inability to establish the constitutional court became far more important following President Saied’s power grab,” (Mechichi) said.

“I can’t say that I predicted the power grab, but I certainly see the factors that led to the frustration that in the first case led to President Saied’s election, and then in the second case led to the lack of mobilisation against his power grab.”

[..]On 25 July, Tunisians gathered around their televisions to watch an extraordinary presidential address.

Standing alongside military commanders and senior security officials, Saied announced he was dismissing Mechichi, suspending parliament for 30 days and assuming executive authority with the assistance of a prime minister he would appoint himself.

Anyone contemplating violence, he warned, would face the armed forces “with bullets”.

Saied insisted his decisions were constitutional emergency measures rather than a seizure of power.

[..]sources said how eager Abu Dhabi was to see an end to Tunisia’s post-2011 political experiment, which it viewed as part of a broader Arab Spring project that had empowered Islamist movements and challenged the region’s existing power structures.

[..]They said that “alarm bells should have also started ringing” when Mohammed bin Zayed Al Nahyan, then crown prince of Abu Dhabi and now president of the UAE, spoke with Saied on at least three occasions in the month of July.

The sources said that Egyptian officials also held a flurry of calls with their Tunisian counterparts, with President Abdel Fattah el-Sisi fully supportive of the plan.

[..]Algeria, which has historically viewed Tunisia as falling within its strategic sphere of influence, was also directly involved in the developments, according to three of the sources, as well as Mechichi.

It’s unclear how many calls were made between Algiers and Tunis but official records show that Algerian President Diplomatique Tebboune spoke with Saied several times in July 2021, including on the day after the coup.

Two sources who served in Tunisia’s government until 2022 told MEE that Algeria’s military maintained close coordination with Tunisia’s armed forces during the period.

They said Algeria’s political and military leadership also found a close ally in Tunisia’s powerful Brigadier General Mohamed El Ghoul and other senior officials.

Former President Moncef Marzouki echoed this view saying the coup was the culmination of a counter-revolution against the democratic gains of 2011, and that Tunisia’s institutions had been systematically dismantled by external actors.

“Saied’s policy has been to align himself with authoritarian regimes in the region and in Tunisia’s neighbourhood,” he told MEE.

For Mechichi, the warning signs had existed long before that evening.

Reflecting on his time in office, he said Tunisia’s political class fundamentally underestimated Saied.

“We thought democracy could not go backwards,” he said.

It will always “go backwards” one way or another, with as much ruling class violence (and fascist intimidation) as needed, because “democracy” under capitalist rule is only ever a bamboozling cover-up for bourgeois dictatorship.

That can only be overcome by the proletariat’s own dictatorship, fought for by mass class war and imposed with maximum firm leadership backed by the working class, to suppress the bourgeoisie until the generations-long programme of building and educating socialist society and its planned production, can be carried through, bringing more and more of the masses into the process until eventually they are all fully rationally self-conscious and self-disciplined, participating in endless communal development of universal Leninist awareness of what objective reality makes necessary – which is real freedom.

Abandoning this lesson is a major consequence of the great revisionist retreat from revolutionary philosophy which began to emerge soon after Lenin’s death and which steadily increased in the Soviet camp’s bureaucratic leadership philosophy even as it was simultaneously pushing forwards the great achievements and staggering advances made by the properly fought-for workers state, including the enormous sacrifices for the historic defeat of Nazism and the huge scientific, social cultural and military developments of the subsequent four decades, often outpacing the West.

Revisionist brains puddled with the Stalinism’s notions of permanent peaceful coexistence with imperialism, as opposed to Lenin’s temporary tactical peace diplomacy, and consequent notions of class collaboration with imperialism, eventually reached the point of Mikhail Gorbachev’s counter-revolutionary capitulation to “democracy” and the “free market” and the disastrous liquidation of the Soviet workers state in 1991 (see EPSR Books Vol13 Gorbachevism and Vol 21 Unanswered Polemics against Stalinism), with the vacuum filled by the crudest of piratical oligarch capitalist exploitation, still continuing despite its worst gangster excesses being reined in by Putin’s halfway house bonapartism.

The disastrous effects of the great revisionist retreat – and the even worse Trotskyist attempts to criticise and correct its errors, producing only petty bourgeois hostility to everything the workers states did achieve – are apparent in the “lead” offered the working class in multiple current developments which come nowhere near making these fundamental points and therefore either distorting things or getting everything wrong.

So for example the disastrous and craven class collaboration underway with Washington by the left nationalist leadership in Venezuela under its stand-in leader Delcey Rodríguez, following the brutally violent and internationally illegal US abduction of the country’s president Nicolás Maduro in January and the strange lack of resistance seen during the raid, save by the immediate, mostly Cuban bodyguard, which heroically lost more than 30 of its men, shot dead by the US special forces.

Suspicions were raised then and subsequently about possible treachery or infiltration of the military, specifically because defenders were held back during the Maduro raid, and more generally in the light of past coups, and notably Chile’s Allende, where trust in the bourgeois state military and its “honour” proved fatal.

And the immediate kow-towing to Washington demands to cut off oil supplies to both Cuba and China – workers states – hardly induces any confidence the anti-imperialist determination of the Maduro stand-ins.

But revisionist groups like the CPGB-ML (Lalkar/Proletarian) have dismissed such speculations, trying to justify the cooperation seen then and even more subsequently between the Rodríguez administration and Washington as just “tactical” compromises, to “safeguard the regime” whilst allegedly preserving its achievements.

Unfolding events confirm that this is utter rot.

They dishonestly invoke Lenin to give the argument a specious justification, suggesting a parallel to the treaty forced on the war-exhausted Bolsheviks in 1918 at Brest-Litovsk by German imperialism, when most of the Ukraine had to be handed over to Berlin to avoid unwinnable immediate war. Although a huge defeat, the concession left the new Soviet state intact, to fight another day, as Lenin argued.

The glaring disparity is that the new Soviet state had established the dictatorship of the proletariat, which was dismantling and breaking up the old bourgeois state and which would continue its revolutionary struggle as soon as it recovered its strength (as it did).

Venezuela’s Chávismo leadership, for all its socialist ambitions, anti-Yankee sentiment and the building of working class and rural communes, militias and the “ground-up socialism” lauded by such groups the petty bourgeois fence-sitting RCG (FRFI), never came close to dismantling the bourgeois state or fully dispossessing the capitalist ruling class.

It neither established proletarian dictatorship rule nor even spelt out that it at least should be the central aim and target of the masses if that proved difficult.

As argued many times by the EPSR in (ignored) polemics with the Lalkar-ites particularly, that was always a major weakness, aiding the local and American bourgeoisies’ non-stop aim of subverting and undermining the “Bolivarian revolution” (which despite its ambition was therefore not a completed revolution) with repeated coup attempts, and provoked violent “demonstrations” causing dozens of fatalities in 2015 eg.

Of course US hatred and undermining would have continued non-stop anyway, as it does against the nearby Cuban workers state, but the Leninist perspectives and the unity and class inspiration produced by coherent and clear leadership far surpass all the “bottom up” “organic” developments so lauded by the RCG types, (unchallenged by the CPGB-ML) which far from being “real democracy” means no more than hostility to centralised leadership (and thereby to proletarian dictatorship).

Bourgeois press reported developments now suggest that far from holding the line for the poorest masses the Rodríguez compromises are becoming fully fledged capitulation, if not outright counter-revolutionary treachery – a small scale echo of the Gorbachevite liquidation:

Six months after United States forces ousted Venezuelan leader Nicolas Maduro, the balance of power in Latin America and the Caribbean has shifted in Washington’s favour. In Maduro’s place stands Delcy Rodriguez, his former vice president, now acting president and a far more manageable partner for Washington. Her rise has given the administration of US President Donald Trump a de facto ally in its effort to revive US dominance over the Western Hemisphere under what has become known as the “Donroe Doctrine”.

Rodriguez’s challenge is to satisfy Washington without losing control at home. To do so, her advisers are recasting a movement once rooted in the socialist politics of the Hugo Chavez-Nicolas Maduro era as something more pragmatic, transactional and suited to the new hemispheric order. The former “comrades” are now moving closer than ever to open alignment with Trumpism in Latin America.

Nowhere is the scale of Rodriguez’s shift clearer than in her approach to Israel. Under her government, Caracas has begun moving towards a state long treated as an enemy by the “21st-century socialists” who have ruled Venezuela for the past 27 years.

Throughout the Chavez-Maduro era, successive Venezuelan governments considered Israel a “genocidal” state and an “enemy of peace”, condemned almost every Israeli military action in the Middle East, and denounced its very existence. Chavez broke diplomatic relations with Israel in 2009 and deepened cooperation with the Islamic Republic of Iran, Israel’s principal regional rival, as well as with its regional non-state allies.

Rodriguez, however, has chosen to pursue her own agenda with Israel. Despite initially saying the US military intervention that removed Maduro had “Zionist overtones”, the acting president has since been paving the way to re-establish relations with Israeli Prime Minister Benjamin Netanyahu’s government.

In late February, her government took the surprising step of avoiding any direct condemnation of Washington or Tel Aviv over the US-Israeli attacks on Iran. Instead, the Venezuelan Ministry of Foreign Affairs issued a statement calling for “dialogue” and criticising Iran’s retaliation against countries in the region hosting US military assets. The statement distanced Caracas from Tehran and signalled that Rodriguez’s government would not automatically support Iran in its confrontation with the United States and its regional allies.

In April, the interim president made a direct overture to Venezuela’s Jewish community, a gesture clearly intended to signal her openness to rapprochement with Israel.

She sent the Venezuelan Jewish community and Venezuelan Chief Rabbi Isaac Cohen a warm Passover greeting on social media, praising the Jewish people and advocating for peace and intercultural and interreligious respect. A few days later, she addressed Rabbi Cohen and Jewish Venezuelans again in a televised speech, reassuring them that Venezuela held “no anti-Semitic positions”.

The devastating earthquakes that struck Venezuela in June gave the Rodriguez administration another opportunity to advance its rapprochement with Israel. After 17 years without diplomatic relations, Venezuela publicly thanked Israel for sending a disaster-response team. The interim president also personally praised the Israeli delegation’s expertise in search and rescue and infrastructure assessment. The mission led to the first known high-level contact between Israeli and Venezuelan officials in years, raising the possibility of the formal re-establishment of bilateral ties between the two countries.

These moves are part of a calculated strategy by Venezuela’s acting government to secure its hold on power. The pragmatism behind them is driven by several pressures.

First, Rodriguez’s plan involves demonstrating strong alignment with US foreign policy in Latin America and beyond in order to secure Trump’s support and remain in power. Alongside her efforts at rapprochement with Israel, the acting president has reached out to Trump’s regional allies, including President Javier Milei in Argentina and President Nayib Bukele in El Salvador. She has accepted US demands to open up Venezuela’s oil, mining and electricity sectors, and has permitted the deployment of US military forces to assist with the earthquake relief effort.

A second element of this strategy is to distance the current Venezuelan government from long-standing adversaries of Washington, such as Iran and its regional non-state allies, including Lebanon’s Hezbollah. Over the years, Venezuelan leaders, including the acting president, have been accused by Washington of involvement in networks of money laundering and “terrorist” activity linked to such groups.

Weeks after Maduro was ousted from power, US Secretary of State Marco Rubio warned of links between Maduro’s regime and the Lebanese organisation. In response, the Rodriguez administration has moved to extradite two alleged Hezbollah collaborators from Venezuela: Ali Zaki Hage Jalil to Panama and Alex Saab to the United States. Hage Jalil has been accused of “terrorism” by the Panamanian government, while Saab has been indicted in the US on money laundering and other charges.

Another driver of the Venezuelan government’s current approach to Israel is domestic politics. Maria Corina Machado, the leading opposition figure and Rodriguez’s main rival, has built a strong alliance with Israel over the years, especially with Prime Minister Netanyahu. If Rodriguez can win Netanyahu over at Machado’s expense, Machado could lose one of her most important sources of support, both internationally and in Washington, where pro-Israel lobbying networks hold significant influence. To this end, Rodriguez has adopted increasingly Israel-friendly positions while courting sectors of Venezuela’s Jewish community with strong ties to Israel.

The rapprochement between Venezuela and Israel is therefore part of a calculated strategy by the Venezuelan government to consolidate its power, weaken its main domestic opponent and reassure Washington that Caracas is distancing itself from actors Washington considers enemies, such as Iran and Hezbollah.

Trump’s “regional allies” of course are some of the most ragingly fascist-minded autocrats on the planet.

These “pragmatisms” are not going down well some other reports suggest. But the cited “new left activist” leaderships come nowhere near spelling out anything more than limited “protest” politics, and “left pressure” – without remotely giving a lead on the revolutionary perspectives needed or any wider view of the crisis. As for “not being allowed” to fight there are no conclusions at all:

Hundreds of Venezuelan activists took to the streets on Friday, July 24, to denounce the US and Israeli presence in the Caribbean nation.

The rally “against imperialism and Zionism” took place in Caracas’ Plaza Bolívar and was organized by the Anti-Imperialist Front, a newly-formed coalition of grassroots movements that reject Washington’s growing influence over Venezuelan affairs.

The demonstrators chose July 24, commemorating the 1783 birth of independence hero Simón Bolívar, to emphasize the importance of national independence and sovereignty.

“Popular movements from Caracas and Miranda State, armed with class conscience and anti-imperialism, are going to resist imperialism,” activist Miguel Mora told reporters. “No matter how powerful the US empire is in its technology, we will resist by any means necessary.”

Mora lamented that Venezuelans were “not allowed to fight” during the January 3 US military strikes and kidnapping of President Nicolás Maduro.

“Venezuelans are not cowards. We are going to fight and expel the invading gringo from our homeland!” he vowed.

Since the January incursion, the Acting Delcy Rodríguez government has fast-tracked diplomatic rapprochement with Washington. Rodríguez has pushed through multiple pro-business reforms that favor Western energy and mining corporations, while the Trump administration presently manages Caracas’ export revenues, particularly from oil sales, deposited in US-based Treasury Department accounts.

Following the June 24 double earthquake, the US military deployed hundreds of troops on the ground to run operations at the Simón Bolívar International Airport and La Guaira port. The Southern Command (SOUTHCOM) announced on Saturday that its team had departed Venezuela.

Organizer Orlando Vega urged Venezuelan authorities to “put their ear to the ground, because there is a lot of discontent among the Chavista bases.”

“We have to be very vigilant about the US and Zionist presence here,” he continued. “Trump and Netanyahu are war criminals. They cannot pretend to care about the Venezuelan people.”

Speakers roundly condemned the post-earthquake deployment of an Israeli military and diplomatic mission, while others present burned US and Israeli flags.

“We’re here to fight for the Palestinian people,” affirmed Hindu Anderi, coordinator of the International Platform in Solidarity with the Palestinian Cause. “For us, this [Israeli presence] is a setback.”

The Tel Aviv delegation featured multiple IDF officers, including Yossi Pinto and Roni Kaplan, who have taken part in military campaigns in Gaza and Lebanon. Acting President Rodríguez met with the Israeli team on multiple occasions, praising its members as “highly trained and professional” and thanking them for their on-the-ground work.

[..]Anderi emphasized the urgency of defending longstanding ties with the Palestinian cause and stressed that “Venezuela is being occupied.” “In Venezuela there is an occupation project, a blatant plunder of our natural resources,” she said.

The July 24 rally followed on the heels of several public statements from Venezuelan grassroots organizations denouncing the rapprochement with Tel Aviv and broader geopolitical realignment with Washington.

The Coordinadora Simón Bolívar, a historic collective from the working-class barrio 23 de Enero, called the Israeli presence a “silent invasion” and blasted the Trump administration’s “supreme cynicism” in claiming to be a “friend” to Venezuela after imposing a punishing economic blockade and kidnapping Maduro.

For its part, grassroots media outlet Tatuy Tv stated that Tel Aviv is the “enemy of humanity” and rejected “normalization” of Israeli genocide. The organization likewise warned against a growing US military footprint in the South American country that could be used to “project its destructive hegemony in the whole continent.”

Obviously bourgeois press reports will not give a full grasp of what understanding is being fought for within the country and whether any broader view of capitalism’s crisis is set-out.

But that should not stop those struggling for Leninist science from drawing attention what is necessary for working class understanding internationally, as cited last issue:

Flawed, weak, or incomplete anti-imperialism must be described as such for the international working-class to be able to proceed to conscious world socialist revolution through an increasing number of trial-and-error experiences. Such consciousness is the whole aim and the whole content of the struggle for Marxist-Leninist philosophy. (EPSR No 1044 16-05-00)

But that is far from the “solidarity” on offer from the fake-“lefts” over Venezuela and particularly in excusing the Rodríguez class-collaboration, however well meaning it is supposedly being done.

The most recent support statement from the Stalinist Lalkar/Proletarian over the country’s tragic and deadly earthquake simply underlines the complete absence of any revolutionary view at all, comprising the normal revisionist mixture of pious petty bourgeois moralising, social pacifism and reformist “demands”:

The CPGB-ML extends our deepest sympathy to the Venezuelan people affected by the earthquakes and our condolences to those who have lost friends and family in the tragic event.[...]

The best help Britain could give is not aid donations but an end to interference and sabotage

While the earthquakes were a natural disaster, the sanctions that have severely hampered every aspect of the Venezuelan economy – including construction, healthcare, and emergency response – are entirely man-made and avoidable.

Imperialism has sought to strangle the Bolivarian Revolution as it cannot tolerate a nation that uses its resources and labour for the benefit of the working masses, rather than to fuel the profit of monopoly corporations.

Britain has seized £2.4bn of Venezuela’s gold reserves, which were stored ‘for safe-keeping’ in the Bank of England’s vaults. The Venezuelan government started a legal challenge to recover its gold in order to raise funds to combat the Covid-19 pandemic, but it still sits locked in the vaults.

We call for the gold to be returned to the Venezuelan government so that it can be used in the recovery and reconstruction operations that will be needed in the wake of this tragedy.

And we call for Britain to recognise Interim President Delcy Rodriguez and the PSUV government as the legitimate representatives of the Venezuelan people, and to end its brutal economic warfare against the country. This means lifting the hundreds of sanctions that have been used as a way of starving the people, stifling Venezuela’s development and bringing the Bolivarian government to its knees.

British workers must resist our government’s repeated use of economic weapons against sovereign peoples. They are a form of vicious collective punishment whose purpose is to create maximum suffering and death in aid of western regime-change efforts.

Release Venezuela’s gold!

Drop the sanctions!

Victory to the Bolivarian people in their struggle for sovereignty and independence!

Whatever the working class is told it “must do”, it will not happen without the deepest grasp of the whole crisis unfolding throughout the world and of what needs to be done about it – in other words, by the building of the broadest and deepest revolutionary party, recruiting the thousands of advanced workers needed and developing their understanding in depth to inspire and lead the whole class.

But that is far from this CPGB-ML drivel, and its chauvinism saturated class-free notions about the “aid Britain could give”, presumably if “pushed enough” in traditional pacifist/reformist style or if posturing “calls” are made to return the stolen gold in the Bank of England’s vaults.

As for “recognising president Delcy Rodríguez”...the Lalkarites obsession with “national sovereignty” taken in the abstract is clearly now totally detached from reality, or to be more precise the class nature and balance of events, that it can be substituted for the struggle for workers states as an aim in itself.

National-liberation struggles are a major feature of the imperialist epoch, fighting to get out from under the reactionary domination of the major monopoly powers. And they are frequently fought and carried through without any specific links to socialism, (as for example the anti-British struggle in Ireland, in all its stages).

And certainly, contrary to the mechanical idealist sneering of the Trots that national-liberation struggles without an overt socialist or communist content are just “bourgeois” and therefore recognising them is just “Stalinist stageism” which allegedly is “selling out” the “real” struggle for socialism, they are firstly an historically valid development for still backward countries and secondly, mostly are highly significant anti-imperialist fights against the monopoly colonialist domination imposed by the major capitalist powers.

They can and do deliver blows against imperialism which form part of the overall world struggle – and the defeats they impose weaken imperialist confidence and domination and thereby strengthen anti-capitalism and ultimately the socialist cause.

Major examples, among many, would be the staggeringly heroic and successful South African fight against imperialist supported apartheid by the ANC/SACP, and the Irish national struggle in both its phases, first after WW1 and then the continuation of the fight, arms in hand, by the Sinn Féin/IRA, culminating in the forced withdrawal of the British from its continuing colonial domination in the north established by bayonet point in the vicious “Partition” of 1921.

The 1998 Good Friday Agreement (and its 2006 coda) ended the vicious suppression and humiliation of the Irish in the misnamed “Six Counties” and the old conditions are gone forever despite the exceedingly long drawn out “peace process” to complete Irish unification (still unrolling, though recent Sinn Féin moves in Dublin to press the issue indicate the last laps are being entered).

It has been deliberately allowed to drag on and on by British imperialism as part of the GFA settlement (tolerating endless sulking stalling provocations by the reactionary Orange colonists in the north) in order to cover up and obscure the nature of revolutionary nationalist victory won after three decades of bitter anti-imperialist war.

That is because, contrary to all the Trot groups’ defeatism, the Irish struggle inflicted a resounding defeat on Westminster whose ramifications are still being felt. One of the last and biggest props for “Great British” chauvinism, holding back working-class consciousness as Marx understood, has gone for good.

But significant as they are, blows by national struggles cannot be the end of the story. To treat a “fight for sovereignty” as sufficient in itself is to completely mislead workers about the crisis threatening everything (including sovereignties) and the much greater conflicts to come in necessarily bringing down the whole capitalist system.

Pure nationalist struggle can also stagnate and degenerate, or at least block further development of correct understanding as has happened in South Africa and in Ireland too over multiple questions, particularly in “condemning terrorism” – (see EPSR No1224 16-03-04) and in supporting the imperialist NATO run war against Russia using Kiev Nazi proxies, blinded by a narrow nationalism which ignores the much greater picture.

Nor is every fight for “self-determination” necessarily progressive at all. All “liberation” struggles can only be considered as relative issues, not absolute principle, and every one needs to be examined in its concrete context, which means in the light of the world balance of class forces, and the way those forces are shifting and changing.

The break up of the Yugoslavian communist federation is one obvious example where the “self-determination” for the Slovenian and Croat secessions were obvious imperialist stunts to help leverage apart the former workers state (obvious except to Trots and former Trots like the RCG, supporting the near fascist Croats and swallowing the imperialist pysops lies and demonisations).

But “support” for the slightly less distasteful Serb nationalism and its opportunist revisionist leadership needed to be highly circumspect too, amounting to no more than a call for defeat for imperialism’s non-stop belligerence against it and the eventual NATO war blitzing in 1998 (which was the opening shot for the slowly accelerating World War Three and its complex contradictions).

The Kosovo “self-determination” cause that underpinned the bombing of Belgrade and much Serb civilian infrastructure was even more of a CIA racket, recruiting the scummiest of Albanian drug mafia interests, which did not stop the whole Trot spectrum pitching in with their petty bourgeois idealist “principles” waving in the wind against the Serbs.

The Stalinists were not caught out by demands for Kosovo “sovereignty” but just as confusingly they pitched in for total support for the dire revisionism of the Milosevic side and its “sovereignty”.

Similar failure to see the broad Marxist perspective now informs their similar misplaced all-out support for Vladimir Putin’s Russia in the Ukraine war, which only helps keep the working class confused by imperialism’s absurd crisis scapegoating of Moscow (along with China etc) as the bogeyman and “cause of the war”.

As any halfway informed worker grasps, Russia reverted to capitalism in 1991 and remains so; treating it as if it were virtually equivalent to the Soviet Union, and demanding unconditional support is at best wishful thinking and in fact an evasion.

The Leninist line spelled out by the EPSR from the start has been to call for a defeat for the overwhelmingly greater imperialist power of US and European backed NATO and its deliberately provoked war, (started by the CIA/MI6 engineered 2014 Maidan nazi coup and the fascist suppression of the Donbass and Crimea immediately instigated).

That recognised that there could be no support for Putin’s capitalism, just as none for Milosevic or Saddam or multiple others, but that to pursue a revolutionary struggle against the Kremlin at this moment would only undermine the chance to strike a blow against imperialism’s forces.

That is not altered by the imperialist nature of Russia’s oligarch capitalists who are invested worldwide in the exploitation which the whole intertwined monopoly finance system carries out.

The Trots and reformists use this fact to wash their hands of the issue, pretending that the war is “just an inter-imperialist conflict” and therefore “not the working class’s business” (a lying evasion which misrepresents Lenin’s defeatism anyway, letting them stand alongside imperialism in practice condemning Russia).

In fact the disparity between Putin’s wannabee imperialist status and the dominance of modern concentrated US empire monopoly power is so great (unlike the rough parity of WW1) that a defeat for NATO is still the call to make, its impact far outweighing any temporary reinforcement for Putin’s nonsense.

But far from seeing the issue dialectically in the light of the world balance of class forces, the Lalkarites and others have had to devise a convoluted “definition” denying that Russia is imperialist at all in order to support it!! Not only is that based on a mechanistic reading of Lenin, it is simply wrong and plays into all kinds of imperialist skulduggery, including the US and European ultrarights’ pro-Moscow positions, as well as doing nothing to counter the stampeding of petty bourgeois popular opinion.

The same Leninist line applies to the Shia Islam Iranian regime, whose continued sacrificial resistance and indigestibility to US/Zionist blitzing and torture (on top of the still undefeated Palestinian Hamas stubbornness, the Hezbollah fightback in Lebanon and the Yemeni Houthis’ anti-Zionist anti-Saudi and anti-West determination) is already a major humiliation and setback to imperialism’s crisis rampaging and genocidally barbaric attempts to cow and suppress the whole Middle East and intimidate the whole world.

Whatever the immediate outcome in the Gulf (and perhaps an “agreed” settlement leaving Tehran controlling the Strait of Hormuz) it cannot bring any “stability” as the “multipolarity” anti-Marxist revisionists speculate.

The point needs re-emphasising that the great imperialist Catastrophe is unsolvable and the plunge to war unstoppable.

The EPSR has long analysed that the ultimate target for the Empire must be its greatest trade rivals, outcompeting it across the board. China is the obvious one and particularly because it remains a workers state (despite various Trot defeatist and anti-communist confusions about “restored capitalism” or “bureaucratic castes needing overthrow”) but just for that reason it might be a hard nut to crack. Beijing’s colossal success and seeming determination to build its Red Army strength makes it look an increasing mouthful (particularly if Iran is already too much).

That leaves the great imperialist blocs; Europe and Japanese dominated Asia, both of which have long been colossal commercial and industrial threats, and as the EPSR alone has drawn attention to, potentially building up to a major challenge, almost certainly built on clandestine developments.

And as various press reports make clear, that is just what is happening as US bullying has intensified (not least with measures like the NordStream sabotage, undermining German competitiveness behind the cover of war on Russia):

Germany’s prolonged energy crisis was caused by loss of Russian gas supply, Chancellor Friedrich Merz admits.

German industry has been hit particularly hard by soaring energy costs, which are now the third-highest in the world after those in the UK and Japan. Once Europe’s industrial powerhouse, Germany abandoned cheap Russian gas imports in 2022 while phasing out nuclear power in favor of renewables, driving up production costs and accelerating the decline of energy-intensive industries. Moscow has repeatedly said it remains ready to resume gas deliveries through the remaining string of the Nord Stream pipeline, but the offer has received no response from Berlin.

In an interview with ZDF on Sunday, Merz was responding to questions over unfulfilled campaign promises and low public trust in his government. The chancellor argued that Germany now faced “completely different” circumstances, citing the Ukraine conflict, the “challenge” posed by China, and the country’s “ongoing energy crisis due to the lack of Russian gas.”

Germany is facing renewed pressure from soaring fuel costs following the resumption of the US bombing campaign against Iran. Diesel prices jumped 6.7 euro cents within hours on Sunday to €2.30 per liter, adding €3.35 to the cost of filling a 50-liter tank, Bild reported on Sunday. “A trip to the gas station is once again a shock,” the outlet wrote.

Before Germany’s self-imposed Russian energy embargo, Russia supplied 55% of the country’s natural gas imports. Germany now sources its gas from Norway (44%), the Netherlands (24%) and Belgium (21%), with American liquefied natural gas (LNG) accounting for most of the remainder.

Despite the mounting pressure, the EU has ruled out returning to Russian gas. European Commission President Ursula von der Leyen said in March that the bloc would maintain its phaseout even in the event of physical shortages or the threat of power cuts.

Brussels has pledged to end all Russian gas imports by 2027. Russian LNG under long-term contracts, which currently accounts for around 14% of the bloc’s imports, will be banned from January 1, while pipeline gas imports will cease on September 30. Member states will also be required to verify the origin of gas before approving deliveries, with purchases under new short-term LNG contracts already prohibited.

Earlier, Merz told Der Spiegel that Germany’s era of prosperity was over and that maintaining the country’s current standard of living would require painful changes. He argued that Germans had yet to grasp the scale of the global shifts reshaping the country.

The German economy contracted in both 2023 and 2024, its first back-to-back annual decline in more than two decades, and is forecast to grow by just 0.5% this year. Corporate insolvencies also rose by more than 22% in each of those years, according to official data.

Manufacturing has been hit particularly hard, especially the automotive sector. BASF, Bosch, Volkswagen, and more than a dozen other German manufacturers have closed factories since 2022. In June, Volkswagen, the country’s largest automaker, announced four plant closures and up to 100,000 job cuts.

But the Germans are not sitting quietly:

Thirty German universities have stepped up their work in specialized materials science, shock wave physics, and nuclear and neutron physics, Russia’s SVR intelligence agency said in a statement on Monday. Practical experiments are being carried out on research reactors at six of these universities, named by the SVR as: Karlsruhe Institute of Technology: Ruhr University Bochum: Ludwig Maximilian University of Munich: RWTH Aachen University: Technical University of Berlin

At least one NATO government has expressed “concern about the active research and development work being carried out in Germany that has a nuclear weapons focus.” NATO experts also believe that Berlin is capable “of independently producing the necessary fissile material within one to three months and constructing a working nuclear explosive device within a year, without conducting full-scale tests,” the agency added.

The SVR also claimed that NATO officials have noticed “Germany’s meticulousness and close interagency coordination” in producing high-energy explosives and electronic detonation systems – all vital in the potential construction of nuclear weapons. Key national defense companies Rheinmetall AG, Diehl Stiftung GmbH, KNDS Group, and Umarex GmbH are all involved in this work.

Germany is a non-nuclear state under the Nuclear Non-Proliferation Treaty (NPT). However, Germany participates in NATO’s nuclear sharing program, and is believed to host around 20 American B61 tactical nuclear bombs at the Buechel Air Base in Rhineland-Palatinate. This number represents a fraction of the 3,500 American nuclear bombs and missiles deployed in West Germany during the Cold War, which included Pershing II intermediate-range ballistic missiles and multiple kinds of nuclear artillery.

The presence of American nuclear weapons on German soil was highly controversial. Millions protested the deployment of the Pershing II missiles in 1983. Nevertheless, the deployment was supported by Social Democrat Chancellor Helmut Schmidt and carried out under his successor, Helmut Kohl, a member of current Chancellor Friedrich Merz’ Christian Democrats.

One German research reactor – in Munich – was previously operated with highly enriched uranium, according to the International Atomic Energy Agency (IAEA). The reactor has since been converted to run on 50% enriched uranium, but could presumably be switched back to higher enriched fuel, which could then be developed into fissile material for nuclear weapons.

Merz (recently) announced that German forces would take part in nuclear exercises with France later this year, a historic first for the German military.

“We are embarking on a new, joint path regarding deterrence,” Merz said. “We are proceeding step by step, it may be that this will result in a new doctrine, but it is far too early to say that today,” he added. Speaking at the same press conference, French President Emmanuel Macron said that he sees Germany as playing a “vanguard role” in a joint nuclear deterrence program.

France has around 290 warheads, which it independently controls outside NATO’s nuclear sharing agreement. Earlier this year, Macron announced plans to increase the size of its nuclear arsenal, while inviting multiple European countries to sign nuclear technology-sharing pacts.

The SVR views Germany’s nuclear research drive as “particularly alarming given Germany’s rich militaristic past” and Merz’ plan to turn the German military into the “strongest conventional army” in Europe. “It’s possible that the fevered minds of officials in the German Chancellery are already conceiving of their own ‘nuclear umbrella’,” the agency speculated.

For the moment the European anti-Russia rationale (and long festering subsurface nazi-German vengefulness) persists but things can quickly move in other directions, as the US tariff belligerence continues, with demands to “hand over Greenland” etc.

And developments in Japan, also harbouring decades of resentment at its Second World War shaming, are just as unnerving, as the long pretence that its military forces are “just for self-defence” is increasingly abandoned:

Japan is undertaking an ambitious effort to build a centralized intelligence agency for the first time since World War II, and it is turning to partners in the West for help.

Japanese leaders have privately approached partners such as the United States, Australia and Germany in recent months for advice on technology, staffing and priorities, according to interviews with officials from Japan and elsewhere. The conversations have not been previously reported.

On Sunday, The New York Times reported that dozens of Russian spies have moved to Japan in recent years, as the country became a key focus of the Kremlin’s effort to buy weapon components, ship them to Russia and evade sanctions. Foreign officials have warned Japan about this effort, but the country has been slow to respond.

Japan’s intelligence system has long been fragmented, with defense officials, diplomats, the police and others collecting and analyzing information without sharing intelligence across departments. That has left the country especially vulnerable to espionage and foreign interference, experts say.

Creating a domestic intelligence agency is a pillar of Prime Minister Sanae Takaichi’s efforts to shed restrictions on defense and security imposed on Japan after the war, as Japan faces multiplying threats from China, Russia and North Korea.

Ms. Takaichi, a hawkish leader who has presented a vision of a “strong and prosperous” Japan, has already reversed bans on weapons exports and pushed forward with Japan’s biggest defense buildup in the postwar era.

Now she wants Japan to do more to protect state secrets and vital technologies and to guard against foreign influence operations — particularly those led by China.

China has in recent years created sites disguised as Japanese-language news channels to spread pro-Beijing disinformation, according to researchers at the Citizen Lab, a cybersecurity research group.

Japanese officials feel the country’s intelligence capabilities have “been frozen in time for decades,” said Andrew Shearer, Australia’s ambassador to Japan, who has offered informal advice to Ms. Takaichi’s government.

“It’s a big thing that the prime minister has chosen to make it a priority,” he said, “and that she is investing the political capital to get it done.”

Mr. Shearer, who was Australia’s director general of national intelligence from 2020 until last December, has been a particularly influential voice. [...]The New York Times has learned that in recent months:

Intelligence officials from the United States, Japan’s main security ally, have offered input on cyberdefense systems and methods of countering industrial espionage.

The Americans also have weighed in on ways to strengthen scrutiny of foreign investments and agents operating in Japan, the people said.

The head of Germany’s foreign intelligence service, known as the BND, recently visited Tokyo, in part to discuss Japan’s new agency and how to improve intelligence sharing between the two countries, according to two people briefed on the visit.

Australian officials have advised on technology as well as strategies for getting disparate ministries to operate as a team and share information.

Again the overt rationale of countering China and North Korea is not necessarily where things will go ultimately whatever initial Western cooperation there is (which also allows US surveillance of course):

Under Ms. Takaichi, Japan has pledged $10 billion to help Southeast Asian nations cope with soaring oil prices because of the Iran war. She has reversed longstanding limits on the sale of Japan-made weapons overseas and doubled down on shuttle diplomacy, dispatching 10 top officials abroad this week to make the case for Japan as the partner of choice in Asia.

“Japan will play an even more proactive role than ever before in building an international order based on freedom, openness, diversity, inclusiveness and the rule of law,” Ms. Takaichi told students and staff at Vietnam National University in Hanoi on Saturday.

Ms. Takaichi, a conservative lawmaker who last fall became the first woman to serve as Japan’s prime minister, is attempting to elevate her country’s profile at a time when China’s economic and military clout is rapidly rising.

She is also navigating the unpredictability of Mr. Trump, whose handling of the war in Iran has sown fears about American commitments in Asia. Japan depends on the United States, its main ally, for security. Unlike the leaders of Canada and some European countries, who have sought distance from Mr. Trump, Ms. Takaichi has made a point of cultivating warm ties with Mr. Trump.

To many Asian countries, Japan now represents “the stability and continuity that we used to expect from the United States,” said Huong Le Thu, deputy director for Asia at the International Crisis Group.

“Japan is stepping up to fill the leadership vacuum,” Ms. Le Thu said. “It wants to be relevant in soft power but also increasingly in hard power.”

While Ms. Takaichi rarely mentioned China by name, she seemed eager to tap into growing anxiety in Asia and Australia over Beijing’s increasingly aggressive military and economic policies. The Chinese government has put economic pressure on Japan since November, in retaliation for a comment Ms. Takaichi made before Parliament. She said that Japan could intervene militarily if China were to attack Taiwan.

Throughout the tour, Ms. Takaichi invoked her mentor, Shinzo Abe, Japan’s longest-serving prime minister. Mr. Abe, who was assassinated in 2022, shared her view that Japan should play a more assertive role in the world.

She was greeted warmly by Vietnam’s leader, To Lam, who described Mr. Abe and other Japanese politicians as “great friends of Vietnam.”

In Hanoi, she said her aim was to build on Mr. Abe’s notion of “a free and open Indo-Pacific,” a concept that is considered a way of countering China. She said like-minded countries needed to work more closely in areas like artificial intelligence, rare earths and building infrastructure, to avoid “excessive dependence on a single country for critical goods.”

Again the conventional analysis sees this in terms of anti-China, anti-Russia and anti-Korea rationales. And while these are undoubtedly major factors there is colossal potential for things to swing round, not least because Marxist understanding is that the deepest contradictions of the crisis (see economics box) are those between the major imperialist powers.

And the US is deeply fearful of the potential financial clout wielded by Tokyo through decades of accumulating trade surplus – nearly $1.5 trillion!! – as the extraordinary decision to bolster the value of the Yen recently made clear (after decades of the US telling Japan to drop its value because it gave the country “an unfair trade advantage stopping US exports” see eg EPSR No536 07-03-90):

Treasury Secretary Scott Bessent made $1 billion betting against the yen as the top investor for George Soros more than a decade ago. Now, he is using the might of the U.S. economy to prop up the Japanese currency.

But this time, Mr. Bessent is doing so to help ensure that Washington’s borrowing costs do not creep even higher and to support a faltering American ally in China’s backyard. The coordinated effort by the United States and Japan to stabilize the rapidly weakening yen late last week marked the second time in the last year that the Treasury secretary returned to his roots as a hedge fund manager to make a big currency bet. The move demonstrated the lengths that the Trump administration is prepared to take to shield the U.S. economy from the volatility of global markets at a moment of political peril.

The scale of the yen purchases was not disclosed. During a cabinet meeting on Friday, a photograph of Mr. Bessent’s note pad — which he has previously said he keeps visible for the media to peruse — showed purchases of between $5 billion and $10 billion worth of yen on his “to do” list.

The Treasury Department’s most recent currency report, published last month, said the yen was substantially undervalued and that excess volatility in the currency’s trading was “undesirable.”

Currency analysts said that the United States used its holdings of euros to buy yen, bolstering its value without shaking confidence in the dollar.

In announcing the intervention on Sunday, Mr. Bessent called to expand the Federal Reserve’s repurchase agreement facility for foreign and international monetary authorities, which was established by Congress in 2020. It currently allows central banks that hold U.S. Treasuries to borrow up to $60 billion to bolster their holdings of dollars.

The Federal Reserve facility was created to help preserve the smooth functioning of the U.S. bond market. The decision to directly support the yen, which fell to a 40-year low against the dollar in recent days, appeared to be designed with the bond market in mind.

Borrowing rates in the United States have risen in recent months and Japan, which is the largest holder of U.S. debt, would have had to sell Treasuries to support its currency. This could have pushed U.S. interest rates higher while the Trump administration is concerned that elevated mortgage and car loan rates will frustrate midterm election voters.

The perspective stretches far beyond merely “mid-term election” jitters. The real question is what happens when the whole US economy, and therefore the world economy finally implodes as its has been on the edge of doing for decades and most of all since the great Global Credit collapse of 2008, staying intact ever since only by such demented levels of further credit creation that some US stock analysts have simply declared their incredulity at the absence of a great plunge.

But all the signs scream out that it is coming despite desperate efforts to put a positive spin on things:

The American economy slowed in the second quarter of the year, expanding at an annual rate of 1.5 percent as the war with Iran upended prices, supply chains and energy markets.

Oil prices have receded from their peaks in the spring. But damage in the form of higher prices for gasoline and other petroleum-based products is still hitting households and businesses. Persistent inflation and uncertainty over the Federal Reserve’s plans to contain it pushed up bond yields this week.

It amounts to an uncertain moment for the U.S. economy, which continues to show signs of strength even as it is battered by persistent inflation and a destabilizing war in the Middle East and the potential for higher borrowing costs that could suck some of the juice out of its engine.

Growth over the past three months was lower than the 2.1 percent annual rate of growth in the first quarter. Growth in both personal income and consumer spending also slowed in June.

Still, the G.D.P. report showed that overall consumption remained relatively healthy and business investment, especially related to the artificial intelligence boom, continued to plow forward. An underlying “core” measure of growth, which captures the sum of consumer spending and gross private investment, increased 3.9 percent in the second quarter, compared with 1.7 percent in the first quarter.

“Underlying growth was strong,” said Eric Wallerstein, a former adviser at the Federal Reserve and the chief macro strategist at the Clocktower Group, an asset management and advisory firm. Still, he added, “real incomes and spending have been trending lower.”

Because G.D.P. is adjusted for inflation, rising costs dampened the growth reflected in the data released on Thursday. This was the first estimate for the second quarter by the U.S. Bureau of Economic Analysis. Revisions, conducted by civil servants at the agency, can be substantial, especially during periods of price volatility.

Data collected by Viresh Kanabar, a financial researcher, shows that business orders and expenditures are rising. Retail sales have also been strong for several months. But consumer purchases are also growing at a much softer pace when adjusted for inflation, Mr. Kanabar’s data shows. Over the past six months, he notes, “real” inflation-adjusted income has also fallen overall, and at a rate not seen since the height of the inflation spike in 2022.

G.D.P., in simplest terms, is an account of the exchange of goods and services in the economy. And G.D.P. growth is a fluctuating mix of four factors: business investment, government expenditures, net exports and household consumption, which typically constitutes about 70 percent of the U.S. economy.

But all this depends on the insane bet that Artificial Intelligence will win out. But the fundamental question continues – who will pay for the new products sufficiently to make enough profits to cover the investments, and especially since one of the major impacts is predicted to be the loss of millions of jobs, and many of those the better paid and middle-class intellectual brain work type???

There is an adage in the financial world: The stock market is not the economy.

Except that, right now, maybe it is.

Major stock indexes have set record after record in recent years, fueled by seemingly boundless appetite among investors for anything connected to artificial intelligence. The total value of the U.S. stock market has more than doubled over the past decade to over $75 trillion, roughly two and a half times the annual output of the entire U.S. economy, itself a record ratio.

Much of that value exists only on paper, bets on future profits that may or may not materialize in the years ahead. But the boom is supporting real economic activity today, pumping trillions of dollars of investment into semiconductor factories, data centers, power plants and transmission lines. And the wealth it is creating is helping to drive consumer spending, particularly among affluent Americans, whose appreciating stock portfolios make them more willing to shell out for luxury vacations, pricey electronics and meals at high-end restaurants.

That spending and investment have helped carry the U.S. economy through a tumultuous period of inflation, tariffs and geopolitical uncertainty. But it also creates a vulnerability: If investor confidence in A.I. falters, the economic activity built atop it could come crashing down. Bank of America’s monthly global fund-manager survey for July reported a bursting of the A.I. bubble as the key risk to financial markets. It’s also now the key risk to the economy.

“The thing that has been holding everything up is the A.I. story,” said Torsten Slok, the chief economist at Apollo Global Management.

A.I. related stocks account for roughly half of the rise in the S&P 500 this year, said Adam Turnquist, the chief technical strategist for LPL Financial, adding that growth in the economy is also increasingly dependent on A.I. infrastructure spending.

“It’s becoming one big A.I. trade,” he said.

Stock markets have wavered in recent weeks in a sign of investor worry over so much dependence on one sector’s ability to continue outperforming expectations. But this isn’t the first instance of investors’ flinching during the A.I. run-up. Several times over the past few years stock prices have dropped steeply in response to a piece of bad news, only to rebound within days. Even many analysts who believe an A.I. bubble is still inflating are reluctant to predict that this is the moment it pops.

Declines in stock prices, even drastic ones, don’t necessarily have much impact beyond the world of finance — hence the adage about the market not being the economy. On “Black Monday” in 1987, the Dow Jones industrial average fell more than 20 percent, still the record for a one-day decline. Yet broader measures like the unemployment rate and gross domestic product barely wobbled.

What could make this time different is the sheer scale of the stock market. Economic research has found that for every $100 investors gain in their stock portfolios, they spend about $3 more on goods and services, a phenomenon known as the wealth effect.

The wealth effect also operates in reverse: When stock prices fall, investors become less willing to spend. At its present valuation, a 30 percent decline in the stock market could lead to a nearly $700 billion pullback in consumer spending. That could be enough to set off a recession on its own, or at least come close.

“Times when the market seems like it’s highest are times when that wealth effect can have the biggest bite,” said Gabriel Chodorow-Reich, a Harvard economist who has studied the wealth effect.

The other distinguishing factor of the current market is how concentrated it is in a handful of companies. The Magnificent Seven group of companies of Meta, Alphabet, Amazon, Apple, Tesla, Nvidia and Microsoft account for roughly a quarter of the value of all publicly listed stocks in the United States.

Because so much real-world activity is also being driven by the A.I. boom, a stumble by one of the big A.I. companies could have much larger economic ripples.

“It would spill over to the rest of the economy,” said Roger Aliaga-Diaz, the chief economist for the Americas for Vanguard.

Mr. Aliaga-Diaz and other economists described one scenario for how that could happen. If companies find that their A.I. investments aren’t paying off as quickly as they hoped, they might pull back their spending, forcing the A.I. labs and their suppliers to trim their growth projections. Such a disappointment could incite a market sell-off, which would make it more difficult or more expensive for companies to raise the capital they need to fund the A.I. build out.

That, in turn, could lead companies to delay or cancel plans to build data centers, power plants and related infrastructure, giving way to layoffs in the construction industry. And at the same time, the drop in the market would push wealthy consumers to pare their spending, leading to wider job losses and, ultimately, a recession.

“The consumer spending growth is not nearly what A.I. growth is, but it is such a large portion of the economy,” said Kristina Hooper, the chief global strategist at Man Group. “And growth there is being driven by high-income consumers who are tied to the fortunes of the stock market, and A.I. being such a big part of that.”

A turn in those fortunes is not inevitable. Many of the biggest A.I. players have already raised vast sums of capital, which could allow them to keep spending even if new sources of cash dry up. And companies won’t necessarily stop using and paying for A.I. tools just because the market enthusiasm for them dims.

A bursting of the A.I. bubble could also free up cash for other investments that have struggled to attract capital in recent years. That is, at least in part, what happened in the 2000s, when the end of the dot-com boom led investors to redeploy cash to housing and other sectors. The economy did experience a recession in 2001, but it was brief and relatively mild.

One factor that helped insulate the economy in 2001, however, was that the Federal Reserve cut interest rates aggressively, which helped contain the crisis mostly to the tech sector. This time around, inflation has been elevated for five years, which might leave policymakers more reluctant to cut rates.

“Monetary policy has a huge role in determining whether a decline in investment demand in one sector spreads more broadly or not,” Mr. Chodorow-Reich said. “The fact that monetary policy is a little bit more constrained weighs in on that.”

It could be years before policymakers are forced to deal with such a scenario. Economists are notoriously bad at identifying bubbles, and even worse at predicting when they pop. Alan Greenspan, the former Fed chairman, warned of the risks of “irrational exuberance” in the markets in 1996. The dot-com bubble didn’t burst for over three more years.

“I am of the view that it is very hard to predict recessions or recession timing,” Mr. Chodorow-Reich said.

But he and many other economists think the risks of a market-induced recession are real and growing. That is partly because investors are betting on such spectacular growth from the A.I. companies that even a fairly mild disappointment — an earnings release that falls short of expectations, a project that takes longer to pay off than initially assumed — could lead them to re-evaluate their assumptions and produce a steep drop in the markets.

“If investors are told, well, actually, instead of five to seven years, it’s going to be 15 to 20 years to pay off, that’s a very big difference,” said Ryan Cummings, the chief of staff for the Stanford Institute for Economic Policy Research, who recently published an article warning about the risks of an A.I. bubble.

Meanwhile the insane plundering of the world’s eco-systems is also hammering the capitalist economy:

Ferocious heat waves, wildfires and freakish storms have pulverized Europe this summer. Now a series of droughts, magnified by climate change, have crippled some of the continent’s key waterways, bringing further economic pressure on a region struggling with stagnating growth and fierce global competition.

One center of the crisis is the “wide and winding Rhine” river, as Lord Byron put it, which stretches nearly 800 miles through six countries as it journeys from the Swiss Alps to the North Sea.

This vital economic artery conveys thousands of vessels and millions of tons of cargo a year that stoke trade and industry throughout the continent.

“It’s one of the most important heart chambers of the German economy,” said Carsten Brzeski, global head of macro research at ING, as well as a devoted rower.

This week, water levels hit their lowest point since 1880, when official measurements were first recorded, disrupting supply chains, raising shipping costs and possibly forcing companies to scale back on production.

The wave of extreme weather is also affecting the Danube, the second longest river in Europe, where record low water levels are exposing the previously hidden hulks of warships sunk during World War II.

That water crisis is forcing a scramble to keep electricity flowing in Hungary and Romania, which use water from the Danube to cool nuclear power reactors. Governments in both countries have appealed to households and businesses to reduce their power use.

The ripple effects of low water levels on the economy can be seen in Duisburg, Germany, where goods were being moved from bigger ships onto smaller ships, rail cars or trucks. Other boats have unloaded as much as two-thirds of their cargo so they can safely navigate the river, which at some points has a depth of little more than four feet of water.

“Now you see who is a good captain and who is a bad captain,” said Wilma van Ingen, part of a Dutch husband-and-wife team that brought the 564-foot push freighter, W. De Beijer Sr, up from Rotterdam carrying iron ore.

Her ship, which can normally carry 5,000 tons, has been reduced to carrying just 1,200 tons.

“We are working at our limit,” said Markus Bangen, the chief executive of Duisburg harbor, which processes some 100 million tons of cargo a year and handles more than 20,000 ships a year.

The Rhine shaped the geography of Germany’s industrial might as companies built their factories and trading routes along its shores. Titans of German manufacturing — BASF, Mercedes-Benz, Bayer and ThyssenKrupp — are along the route.

Nearly 300 million tons of cargo are carried by its waters each year. The Rhine connects the North Sea port of Rotterdam to three of Germany’s largest industrial clusters, linking oil refineries, steel and chemical factories, coal-fired power plants and more along the way.

It would require as many as 100 trucks or an entire freight train to transport the cargo from a single river barge, Mr. Brzeski of ING said. But even substitutions are complicated. “The railways are a disaster as well,” he added. And at the moment, construction work means one of the routes that runs along the river is not available.

A punishing drought in 2018 shuttered factories and ended up shaving 0.3 percent off Germany’s overall output at the time, according to analysts.

The experience, though, prompted industry and officials to be more nimble, said Jens Schwanen, the director of the Federal Association of German Inland Navigation, an industry group.

Instead, companies have adapted. They have gotten better planning for times when water levels run low. They have built more storage space in deep water ports, so goods can continue to be delivered even when waterways run dry. This has been a strategy of Siemens Energy, whose 300-ton turbines are so bulky they cannot be transported by rail or road.

There has also been a move to build ships that travel higher in the water, using different materials and wider designs.

Water levels have hit their lowest point since 1880, when official measurements were first recorded.

Big propellers, though more efficient, stop working in shallow water. So some new designs feature multiple smaller propellers or special encasements that protect propellers from riverbeds.

“It’s good to see that the measures are working,” said Mr. Bangen, the Duisburg harbor chief. “We’re in a better position than we were eight years ago.”

But the upgrades are slow. Of the nearly 8,000 cargo ships plying the Rhine, only about a dozen have been designed to handle low water levels.

And slower traffic, lighter loads and alternate routes cost more. Consumers in Germany whose petrol is shipped on the river are paying as much as 11 cents more per liter, according to the German cartel office.

After a month of low water, “industrial production in Germany declines by about 1 percent,” the Kiel Institute for the World Economy, found.

Shipping crises outside of Europe’s borders have also battered the region’s economies. The war in Iran and disruption of trade and energy deliveries through the Strait of Hormuz and Bab al-Mandab Strait have pushed up oil prices and fed inflation.

Concerns about rising prices caused by the conflict prompted the European Central Bank to raise interest rates in June.

At the same time, Europe is essentially fighting two trade wars: one with China, over a flood of cheap goods, and a second with the United States over a range of tariffs.

The contradictions of monopoly capitalism can only continue to intensify this plunge into ecological, economic and war destruction.

Only revolution to completely remove this ruling class, can stop it so that a socialist world of planned production and balanced community development can be built in harmony with nature.

Build Leninism and the fight for a scientific Marxist party.

Don Hoskins

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