The Cartels: Colonization, Capital, & Collapse (Part One)

Okay. So on February 22, five days ago, in Jalisco, Mexico, Mexican Mexican special forces guided by US intelligence targeted El Mencho. Everyone knows this already, obviously. The there's the most wanted man in the Western Hemisphere, the leader of the Jalisco New Generation Cartel, the CJNG, arguably the most powerful you can say the most powerful nonstate criminal organization on earth. And he's killed in a shootout.

And within hours, within hours, Mexico erupts. Roadblocks across like a dozen different states. Gas stations burning, vehicles burning on the highways. Guadalajara is shut down. A city of, like, 5,000,000 people, they're supposed to host the World Cup, and it becomes basically a ghost town.

There were 27, I think, seven National Guard soldiers were killed in retaliatory strikes by the cartels, and the cartel, was sending messages out to the civilian population to stay at home, stay inside. We don't care if you're innocent. We don't care if you have nothing to do with it. We'll kill you. And The United States sees all of this and says that's a great development for the world.

That's an interesting take. You know, when most people talk about the cartels, that for for obvious reasons, the question that they ask is, how do you stop them? How do you stop them? But you can't really even think about that. You can't even really seriously follow that, train of thought until you first ask who benefits from their existence.

Not who caused them, not who controls them, who benefits from them, who benefits from their existence. Because that question, if you're honest about following through on trying to stop them, if you're honest about following through about trying to stop them, figuring out who benefits from their existence takes you a very different place than where the general narrative wants you to go. Because look, the cartel's primary income source is The United States. American drug consumption, cocaine, meth, heroin, fentanyl, This generates somewhere between 30 to $50,000,000,000 a year. That's American money.

Understand. That's American money going to the cartels. That's not my number. That's the DEA's number. Now where does that money go?

Okay. Some of it is gonna stay in Mexico. Sure. Some of it stays in Mexico, but a very significant portion of it gets laundered, probably most of it. And it gets laundered where?

Through The United States financial system. Look at HSBC in 2012. The the Department of Justice, the American Department of Justice documented $881,000,000 in Sinaloa cartel money that was laundered through HSBC's American operations. Not alleged, documented. And the DOJ chose not to prosecute.

They just got fined. And the stated reason, prosecution would pose a great risk to the financial system. Okay? You understand, the US government decided that a bank was worth more than prosecuting documented cartel money laundering. The cartels that we hate so much.

We love the banks more than we hate the cartels. And this wasn't a one off. This is not a one off. This happens this is a this is systematic. Wojciev, now as Wells Fargo, processed $378,000,000,000 in transactions for Mexican currency exchange houses that are known to have ties to the cartels.

$378,000,000,000. No prosecution. No prosecution. Just a fine. And let's move on.

Nothing to see here. So the next time someone tells you that the cartels are a Mexican problem, okay, sort of. The cartels are sort of a Mexican problem. And what about the guns? What about their weapons?

We always hear about how deadly they are. They're deadly with guns. Where do they get those guns from? The the president of Mexico, Claudia Scheinbaum, has said repeatedly, repeatedly that the cartels are armed by The United States. The ATF's own data confirms that that's true, that the majority of the weapons that have been seized at Mexican crime scenes trace back to US manufacturers and US dealers, Crime scenes of cartel crimes.

The New York Times reported this year this year that 50 caliber ammunition manufactured by a company that also supplies the United States military, that ammunition is reaching the cartels through straw purchases in the civilian market. And then there was the the the ATF operation that they called Fast and Furious. This was not coordinated from the Mexican side. This is an American operation. They allowed known straw purchasers to buy weapons supposedly with the idea that they were gonna track them, but then somehow they lost the weapons.

And, of course, the weapons showed up at, cartel crime scenes. People murdered by the cartels with weapons that were literally and deliberately facilitated by the ATF in The US into criminal hands. Their explanation? Oops. You can call that incompetence.

You you can say incompetence once, maybe twice. But we're talking about a decades long pattern of weapons flowing south from America, and we're talking about cartel money flowing north into America. And The United States enforcement apparatus, whichever department you're talking about, consistently finding reasons not to close the channels of the of the weapons going down or the money coming up, as in almost in so many other cases where The United States where the outcomes of United States policies are are counter to the rhetoric that they use about what their policy goals are, the excuse is always incompetence. It's always incompetence. It's always oops.

That's an implausible excuse, at least to me. Especially when the alleged incompetence is never followed by institutional changes to improve to make sure that that incompetence doesn't happen again. It keeps happening over and over and over again. At some point a pattern cannot be honestly understood as a mistake, it has to be understood as a policy. When it's when it's a when it's a pattern, when it becomes systematic.

Look at the case of Garcia Luna, Mexico's secretary of public security under Calderon, president Calderon. This this man was the equivalent of FBI director and the homeland security secretary combined. This was the power that he had. This was the importance that he had, the authority that he had. He was The United States' most trusted partner in Mexico in terms of security.

His agencies received hundreds of millions of American dollars, US dollars. The US trained his units. They shared intelligence with him. And all the while, all the time that this was happening, he was simultaneously on the Sinaloa cartel payroll. Oops.

Another oops. And the DEA knew about this. The DEA knew about this. They had intelligence on his cartel connections all the way going back twenty years from the early two thousands. At least a decade at least a decade before anyone acted.

A decade during which he continued to receive American funding, receive American training, receive American intelligence, and he continued to funnel all of that to the Sinaloa cartel. Now you tell me, is that bureaucratic failure? Is that interagency communication breakdown? Is that incompetence? Like I said, I'll give you that excuse once, maybe twice, maximum three times.

But this is the same pattern that keeps appearing. And you can go back all the way to the Kerry Committee back in 1989 when American officials documented that they knew that Contra supply networks in Nicaragua were running cocaine into The United States. The countries that they were funding, that they were supporting, that's in the congressional record. That's not conspiracy. That's not conspiracy theory.

Conspiracy literature is in the congressional record. The same pattern appears in the CIA's documented awareness of the Guadalajara cartels safe houses during the nineteen eighties, including the the the house where DEA agent Kiki Camarena was killed, tortured and killed. You all watched Narcos. Right? And the same pattern appears in what was called Plan Colombia, where The United States spent billions and billions of dollars militarizing the Colombian state against FARC linked networks, FARC.

Well, Uribe's government maintained, maintained documented ties to right wing aligned paramilitary drug trafficking organizations. So the left leaning, the left wing linked drug trafficking networks got dismantled and the right aligned ones survived and evolved. Do you see a pattern? Is that incompetence? Drug enforcement was never the primary mission.

This is what you need to understand. Drug enforcement was not the primary mission. It was and it remains the justification for the infrastructure. And the infrastructure is used for something else. Understanding this is the key to understanding, not just the cartels not just the cartels, but US foreign policy in Latin America and ultimately US foreign policy globally.

If you understand what this is about, it's about useful disorder. The United States does not need to run the cartels in order to benefit from their existence. What they need and what they have historically needed is that no government in Latin America, so called Latin America, can ever achieve genuine sovereignty over its own security environment. Because a country that cannot control its own territory in terms of its security, a country that is perpetually managing a security crisis that's ongoing that can never be resolved, a country that is continuously dependent upon US assistance to even partially function, well, that government is never gonna make independent policy decisions, obviously. It's never gonna nationalize their resources.

Are you joking? It's not gonna be able to build alternative alliances. It's gonna do what it's told. Look at the Northern Triangle, so called Northern Triangle. That's Honduras, Guatemala, and El Salvador.

Right? The gang crisis that destroyed those countries, you're talking about MS thirteen and Barrio eighteen. Those gangs were formed largely by Central American immigrants in Los Angeles. And then they were exported back through mass deportation policies starting in the nineteen nineties, back to those three countries. The US built the gangs, then The US deported the gangs, and then they used the resulting chaos as leverage against those countries, telling them, you have to deal with migration.

You have to cooperate with us on security, or else the assistance that's the only thing that's standing between you and complete collapse will withdraw that. Okay. Look in Mexico. Again, back in Mexico, the Merida initiative. They transferred over $3,000,000,000 $3,000,000,000 to a government apparatus that was structurally compromised at the highest level as the the the Garcia Luna case proved.

You understand? The cartels that had US aligned political protection thrived, and the ones that didn't were the ones that get targeted. If you didn't if you weren't playing ball with the Americans, then you got targeted. And then the disorder is just managed, not eliminated. You can see you can see that the cartels serve The US strategy of managing disorder in at least at least four specific ways.

They prevent state consolidation. Understand, a Mexican state that achieves genuine territorial sovereignty is a state that can make independent decisions, independent strategic decisions and strategic choices, and alliances and so forth and strategic policy. A perpetual security crisis prevents that that sort of state consolidation, that sort of independence and sovereignty, politically and economically. Second, they provide leverage. The cartels provide leverage.

They can always say the Americans can always say, you have to deal with the cartels. This is an infinitely renewable demand because the cartels are never fully dealable with. And they're not dealable with, at least partly because The US financial system and the American weapons market keeps them continuously funded and continuously armed. So that demand never expires. It's a permanent instrument of political pressure that America can use against Mexico or any other Latin American country so called.

And then third, obviously, it justifies security dependency. The DEA presence, the the their vetted units, their training programs, their intelligence sharing, and so forth, all of this creates institutional penetration of Latin American security agencies, security apparatus, and intelligence apparatus in Latin America, so called so called Latin America. And this is all justified by the cartel crisis. You remove the crisis, then you remove the justification for that penetration. And, obviously, that penetration serves purposes far beyond drug enforcement, obviously.

Fourth, the cartels generate migration flows migration flows that can be domestically weaponized and used for diplomatic leverage. Like I said, the Northern Triangle situation is the clearest case. The cause of the migration is the leverage for demanding cooperation on the migration. Now I'm describing this as a US policy. I'm yeah.

As a US strategy. But I I should be a little more clear about that because I'm not talking about some, you know, CIA big boss moving cartel pieces on a chessboard in Langley or something. I'm describing a structure. Understand, this is a structure. It's just a a structure with a set of institutional incentives that consistently produce the same outcomes regardless of who's in charge.

You don't need a conspiracy. This is what people need to understand about all these conspiracy theories. You just need structures. You don't need masterminds. You don't need, you know, cabals.

You need structures with institutional incentives. So that's what we're talking about. But I should be more clear about something else too. Because describing it as a US strategy, the strategy of managed disorder, is also a bit imprecise. Because the question has to be asked.

So who is The US? When we talk about The US, well, everyone who watches Middle Nation, or if you've been watching Middle Nation for any length of time, then you know that we talk about the owners and controllers of global financialized capital, the OCGFC. This is who we're actually talking about. You know that we distinguish also two factions within the OCGFC because the this distinction is key. If you don't understand this distinction, you won't understand something very important.

This this you have to understand this distinction in order to understand everything that's happening right now. The first faction is what I call the a national OCGFC. The transnational financial and corporate interest, the corporate elite, whatever you wanna call it, the black rocks, the vanguards, the sovereign wealth funds, private equity networks, and so forth. These have no meaningful national loyalty to anybody. Their assets are global.

Their tax optimization is global. You understand? Their investment framework is global. So when Larry Fink, for example, Larry Fink at BlackRock, when he talks about transitioning their investment towards emerging markets, towards the global South and whatnot, this isn't an ideological position. He's talking about actual investment, you can say thesis of a firm that manages $10,000,000,000,000, over $10,000,000,000,000.

He's recognizing that the productive future of the global economy is in the global South, and therefore capital needs to get there ahead of the demographic and economic transition that's underway. They need to get in front of that. Then the second faction is what I call the nationalistic OCTFC. These are the ones whose interests are organized around the military industrial complex in America. The represented politically by the neocons, the neoconservatives.

This is like the foreign policy establishment in America, or even called the deep state. These actors genuinely believed and believe maybe in American unipolar dominance as a permanent condition in the world. They thought it's the end of history. That's that's this type. So them maintaining American hegemony was both instrumental to profit, but also there was an ideological bias involved or there is an ideological bias involved.

Okay. Now here's the thing that's important to understand, it's critical to understand about the relationship between these two factions of the OCGFC. The military industrial complex faction has become just one portfolio within the broader holdings of the a national OCGFC. Do you understand? At the scale of the a national OCGFC, the scale of transnational capital, Raytheon and Lockheed and Northrop gum Grumman, these are just asset classes.

They generate returns. But the a national OCGFC doesn't need America to win wars. They just need to generate returns. It need they just need the defense budget to be large. They need contracts to keep flowing to those companies regardless of any strategic outcome.

It doesn't matter what you do with the missiles. It doesn't matter what you accomplish. It's not tied to political outcomes anymore. You know? Afghanistan the invasion and occupation of Afghanistan was a $2,300,000,000,000 twenty year contract that generated returns throughout that entire time.

It wasn't a failure. The failure was only a failure if you measure it against the nationalistic and political rhetoric about winning and whatnot. But if you measure it against the portfolio objective of sustained defense expenditure, well, it's a success. It's a roaring success. This is why The US keeps fighting wars that it doesn't win.

They don't care about winning. The outcome is irrelevant to the investor. The spending is the point. Now which faction does Donald Trump belong to? Which which faction is Donald Trump loyal to?

Most people, especially on the left, assume that he is the instrument of the nationalistic OCGFC, that he's from that faction. You know, American nationalism, neocons, MAGA, make America great again, military industrial complex, and so forth. But it's always been my position that Donald Trump is a mascot of the a national OCGFC. He's a Khalidji president. I've said it many times.

And the evidence is sitting right in front of you. You see, you can't not see it. Jared Kushner, Trump's son-in-law, was a senior White House adviser in his last administration, and he was the de facto Middle East policy architect during Trump's first term. He left the White House in January 2021 and immediately launched Affinity Partners, a private equity firm. And within months of launching that, he had secured $2,000,000,000 from Saudi Arabia's public investment fund, the PIF.

Then he got hundreds of millions more money from Abu Dhabi, from Qatar, and from other sovereign wealth funds in The Gulf. He's collected over a 157,000,000 in management fees alone from foreign clients, including $87,000,000 from the Saudi government, the governor of Saudi Arabia, while generating, listen to this, while generating zero return on investment as of 2024. He has not made his investors any money whatsoever. The Saudi PIF officials actually objected to investing in Kushner's farm. They thought it was gonna be a bad deal.

They didn't see that it was gonna be profitable, and they were right. But they were looking at it commercially, which is not the way that Mohammed bin Salman was looking at it. And he personally overruled them and said, no. We're gonna make this investment because he's not looking at it as a commercial investment. He's looking at it as a strategic investment.

Bensaleman was not buying financial returns. He was buying a structural relationship at that time with the family of the incoming president of The United States. He was buying a permanent back channel that sits completely outside all formal diplomatic architecture. And Kushner is not an anomaly. You need to understand, he's not an an anomaly.

He's just the most visible example maybe in this whole network of GCC capital that's flowing into the Trump political ecosystem. And not just Trump, through campaign funding, through investment, through pledges, through the hundreds of billions of dollars in GCC investment and commitments to invest, pledges of investment that followed Trump's visit to The Gulf. You need to see what's going on. You need to see what this means. The GCC states have become the primary external patrons of the entire Trump political project.

Now ask yourself, what does the GCC want from this relationship? What are they buying? They're buying the management of America's transition from being a global hegemon to a regional actor. They're buying the orderly dismantling of the institutional infrastructure of American imperial primacy itself. They're buying their own management position at the table of this transition in the emerging multipolar order.

They're buying their position as the financial intermediary between East and West, between the old petrodollar system and whatever replaces it. And there are many options being developed now. In other words, Donald Trump's job, whether he knows it or not, Trump's job is to manage decline of American imperial hegemony. And Trump's genius, and it is a kind of genius, it is a kind of genius, is that he's able to sell that dismantling as the opposite of dismantling. He sells withdrawal as assertion, and he sells decline as victory, and he sells the transition to a new order as the restoration of the old order.

Past greatness, make America great again. This is the marketing campaign for a product that does the opposite of what it says on the tin. The post World War two global order is being dismantled, and I've said that many times. It's not necessarily being dismantled because anyone planned on that, but the people who are involved in the transition are certainly planning. They're certainly planning.

It's being dismantled because it's no longer viable. Very simple. There's no reason to have believed that that was supposed to last forever. The material foundations that it rested upon have eroded. It was built the post World War two order was built on four pillars.

US manufacturing dominance, dollar reserve currency hegemony, America's overwhelming military superiority, and most crucially, a demographic dividend that gave The United States and gave its allies a productive consuming population. A population that the rest of the world also needed access to. Now all four of those pillars are going or gone. Manufacturing is in China now. China is now the world's manufacturer, full stop.

That's irreversible. Dollar hegemony is declining. BRICS payment systems are being developed. Bilateral currency agreements are happening. The petro yuan is a thing.

Okay. They're not dominant yet, but the trajectory is clear. Every time that The United States weaponizes the dollar, every swift transaction or exclusion from swift, every unilateral sanction, all of this accelerates the development of infrastructure that will route the way around it for other countries so that you can't punish us. So we don't need your dollar. We don't need your SWIFT.

We don't need your financial systems. Because if you're gonna always use your financial systems to weaponize, you're always gonna weaponize your financial systems. We'll find other ways. We'll find all alternatives. Thank you very much.

And in terms of military superiority, okay, this is very dubious. Okay. It's still formidable. Sure. They have some raw destructive capacity, but they're increasingly unable to ever even translate that in any way whatsoever into any sort of political outcomes.

Afghanistan, Iraq, Syria, even even with Maduro. They can't act unilaterally anymore. And like I say, the most crucial thing is the demographics. This is the foundational reality that makes everything else inevitable, the the transition inevitable. Europe's fertility rate is approximately 1.5.

That's well below replacement. The United States, if you subtract immigration without immigration, it's 1.6, barely above Europe. South Korea is like below below one. It's about point seven. That's the lowest for any significant economy that has ever seen.

Now look at the other side. Nigeria is gonna be the third most populous country in the world by 2050. India already surpassed China in terms of their population, and their population has a median age of 28. The population of Sub Saharan Africa is gonna exceed China and Europe combined within thirty years. Indonesia, Pakistan, Bangladesh, Egypt, Ethiopia, the demographic weight is very clear.

The the the global economy is moving decisively and irreversibly towards the global South. Everyone can see this, and they're and they're responding to that. From the perspective of the a national OCGFC, this is just a reality to navigate. This is not some big problem. Where are the consumers for the next fifty years?

The global South. Where's the labor force for the next fifty years? The global South. So where does capital need to go? Where do they need to be positioned in order to capture returns in that fifty year horizon?

The global South. Now what replaces the unipolar American order that lasted for a blip of history? A multipolar world. A multipolar world, which is gonna be organized around regional hegemons. China in the East And Central Asia, India maybe in the South, in South Asia, Russia is managing Northern Europe and the Caucasus.

The GCC, Turkey and Egypt, managing the Middle East. These are the hedge funds of The Middle East and North Africa. And the GCC is the financial intermediary for the whole emerging order. In South America, probably Brazil is anchoring the Latin American block. And then you have a contracted United States, a receding United States that's managing what they can actually hold, trying to manage what they can actually hold, the Western Hemisphere roughly.

But it's on terms that they're not dictating. They have to negotiate terms. Understand, this isn't a future scenario I'm talking about. This is a present reality that's being managed into existence right now. Now let's bring it back to The Americas.

The historical relationship between The United States and so called Latin America, Central And South America was extractive in the direct sense. In the sense that we all understand. United Fruit Company, Standard Oil, copper in Chile. American corporations went in. I mean, is what we all know about the economic hitman.

They went in, they took the resources, and repatriated the profits. And The US state was the enforcement for American capital in Latin America, so called. Okay? But what's happening now is categorically different. The US is no longer primarily seeking to extract from Latin America for themself.

They're seeking to be the tollgate. You understand? The tollgate to manage the delivery of and the access to Latin American resources for others, like for China. Look at the Venezuelan operation. Trump, kidnaps Maduro, and then he immediately makes an oil deal with, with Maduro's own successor, his own vice president, Delsy Rodriguez.

He didn't install the democratic opposition, the the Machado or whoever. He doesn't take the Venezuelan oil. He takes the right to determine who gets Venezuelan oil and on what terms. That's very different from actually taking the oil. Venezuelan heavy crude requires specific refining capacity.

I've talked about that when I talked about Maduro's situation. What they took from there is going to Saudi owned refinery infrastructure in Texas, coincidentally. So in other words, Trump repositioned Venezuela within an energy architecture that benefits the Gulf, Gulf capital interests. Gulf capital interests that are embedded in his own family's financial structure, his own family's financial interest. This is not a hegemon that's extracting.

This is a tollgate operator charging for access. That's what they're doing. And they're doing the same thing simultaneously. Greenland, control of the Arctic shipping routes. Panama Canal, literally a tollgate.

Weaponizing Swift, that's using a financial tollgate. These are not the moves of a of a hegemon that intends to manufacture and intends to extract for them for themselves. They're moving to reposition themselves at choke points. This is what they're doing, and this shows weakness. But here's the profound problem when you use that tollgate model.

A tollgate operator who disrupts traffic too aggressively, eventually, the traffic is gonna find another route. Eventually, people are gonna go around your tollgate. You understand? This is what China understood with the this is why Belt and Road exists. Every port, every railway, every pipeline that China builds in Latin America is an alternative route around The United States Of America's tollgate.

And the nearshoring, you know, they were talking about nearshoring of manufacturing. The prospect of Mexico becoming a a genuine manufacturing hub for America, a genuine manufacturing hub for American companies. Adjacent production, would have created a deep structural integration between the two economies, the American economy, the Mexican economy. Okay. This is being dissolved right now by the same dynamics that The US has either generated or failed to prevent the cartel violence.

The violence of the cartels that's making Guadalajara into a ghost town after El Mencho's killing. The security costs are gonna be too high. Foreign direct investment is gonna how how do you justify that? How do you justify investing in a in a country that is, that you are also simultaneously you yourself by your policies are, setting it on fire? How does anyone, trust to invest there now?

American companies, I'm saying. The he put political pressure on Scheinbaum in Mexico to confront the cartels more aggressively. She did that, and that that you have exactly the violence that she predicted and exactly the kind of violence that makes Mexico inhospitable to American manufacturing investment that that supposedly you wanted. Okay. These are not coherent signals.

This is this is not coherent strategic policy. If we're talking about a state actor that is acting in state interests, these are the outputs of different factions within even within the government, treasury, commerce, DEA, defense department, and so forth. Domestic political constituencies and so on, the national and the a national. They're pursuing incompatible goals. But more precisely, these are the outputs of a state whose formal policy apparatus.

They say one thing, while the actual interests that are being served say another thing. So result is the near showing opportunity closes. Manufacturing is now gonna migrate to, I don't know, Vietnam to India. Mexico gets the violence, but they don't get the investment. And The United States Of America gets neither the supply chain security that they wanted nor the regional economic integration that they say they wanted, that they nominally sought.

Like I said, this is not the behavior of a hegemon. This is the behavior of a state that is retracting. And it's a state that it's the behavior of a state that has been captured by interests that do not care if that state succeeds. I've said it many times, what is being done to The United States right now to large, portions of the population in The United States is what The United States Of America did to the rest of the world.