Financial War: Russia & China vs U.S. & NATO

The financial war between Russia with China’s tacit backing on one side, and America and her NATO allies on the other has escalated rapidly. It appears that President Putin was thinking several steps ahead when he launched Russia’s attack on Ukraine.

We have seen sanctions fail. We have seen Russia achieve record export surpluses. We have seen the rouble become the strongest currency on the foreign exchanges.

We are seeing the west enter a new round of European monetary inflation to pay everyone’s energy bills. The euro, yen, and sterling are already collapsing — the dollar will be next. From Putin’s point of view, so far, so good.

Russia has progressed her power over Asian nations, including populous India and Iran. She has persuaded Middle Eastern oil and gas producers that their future lies with Asian markets, and not Europe. She is subsidising Asia’s industrial revolution with discounted energy. Thanks to the west’s sanctions, Russia is on its way to confirming Halford Mackinder’s predictions made over a century ago, that Russia is the true geopolitical centre of the world.

There is one piece in Putin’s jigsaw yet to be put in place: a new currency system to protect Russia and her allies from an approaching western monetary crisis. This article argues that under cover of the west’s geopolitical ineptitude, Putin is now assembling a new gold-backed multi-currency system by combining plans for a new Asian trade currency with his new Moscow World Standard for gold.

Currency developments under the radar

Unreported by western media, there are some interesting developments taking place in Asia over the future of currencies. Earlier this summer, it emerged that Sergei Glazyev, a senior Russian economist and Minister in charge of the Eurasian Economic Commission (EAEU), was leading a committee planning a new trade currency for the Eurasian Economic Union.

As put forward in Russian and EAEU media, the new currency is to be comprised of a mixture of national currencies and commodities. A weighting of some sort was suggested to reflect the relative importance of the currencies and commodities traded between them. At the same time, the new trade settlement currency was to be available to any other nation in the Shanghai Cooperation Organisation and the expanding BRICS membership. The ambition is for it to become an Asia-wide replacement for the dollar.

More specifically, the purpose is to do away with the dollar for trade settlements on cross-border transactions between participants. It is worth noting that any dollar transaction is reflected in US banks through the correspondent banking system, potentially giving the US authorities undesirable economic intelligence, and information on sanction-busting and other activities deemed illegal or undesirable by the US authorities. Furthermore, any transaction involving US dollars becomes a matter for the US legal system, giving US politicians the authority to intervene wherever the dollar is used.

As well as removing these disadvantages, through the inclusion of a basket of commodities there appears to be an acceptance that the new trade currency must be more stable in terms of its commodity purchasing power than exists with that of the dollar. But we can immediately detect flaws in the outline proposal. The mooted inclusion of national currencies in the basket is not only an unnecessary complication, but any nation joining it would presumably trigger a wholesale rebalancing of the currency’s composition.

Including national currencies is a preposterous suggestion, as is any suggestion that the commodity element should be weighted by trade volumes transacted between participating states. Instead, an unweighted average of energy, precious metals, and base metals makes more sense, but even that does not go far enough. The reasons are illustrated by the two charts in Figure 1.

The upper chart shows baskets of different categories of commodities indexed and priced in dollars. Between them, they represent a wide range of commodities and raw materials. These baskets are considerably less volatile than their individual components. For example, since April 2020 oil has risen from a distorted minus figure to a high of $130, whereas the energy basket has risen only 6.3 times, because other components have not risen nearly as much as crude oil and some components might be rising while others might be falling. Agriculture raw materials are comprised of cotton, timber, wool, rubber, and hides, not raw materials liable to undesirable seasonality. But the average of the four categories is considerably more stable than its components (the black line).

We are moving towards price stability. However, all commodities are priced in US dollars, which being undesirable, cannot be avoided. Pricing in gold, which is legal money, eventually resolves this problem because it can be fixed against participating currencies. The result of pricing the commodity categories in gold and the average of them is shown in the lower chart.

Since 1992, the average (the black line) has varied between 0.37 and 1.66, and is currently at 0.82, or 18% less than in January 1992. This is as stable as it gets, and even this low volatility would probably be less if the dollar wasn’t itself so volatile and the gold price manipulated by nay-saying western authorities. To further illustrate these points, Figure 2 shows the dollar’s volatility in terms of crude oil.

Before the abandonment of Bretton Woods in 1971, the price of oil hardly changed. Since then, measured by gold the dollar has lost 98% of its purchasing power. Furthermore, the chart shows that it is the dollar which is extremely volatile and not oil, because the price of oil in gold is relatively constant (down only 20% from 1950), while in dollars it is up 33.6 times with some wild price swings along the way. Critics of measuring prices in gold ignore the fact that legal money is gold and not paper currencies or bank credit: attempts by governments and their epigones to persuade us otherwise are propaganda only.

Therefore, Glazyev should drop currencies from the proposed basket entirely and strive to either price a basket of non-seasonal commodities in gold, or alternatively simply reference the new currency to gold in a daily fix. And as the charts above confirm, there is little point in using a basket of commodities priced in dollars or gold when it is far simpler for the EAEU nations and for anyone else wishing to participate in the new trade currency to use a trade currency directly tied to the gold price. It would amount to a new Asian version of a Bretton Woods arrangement and would need no further adjustment.

Attributing them to excessive credit, from recent statements by President Putin it is clear he has a better understanding of currencies and the west’s inflationary problems than western economists. Intellectually, he has long demonstrated an appreciation of the relationship between money, that is only gold, and currency and credit. His knowledge was further demonstrated by his insistence that the “unfriendlies” pay for energy in roubles, taking control of the media of energy exchange into Russia’s own hands and away from those of his enemies.

In short, Putin appears to understand that gold is money and that the rest is unreliable, weaponizable, credit. So, why does he not just command a new trade currency to be created, backed by gold?

Enter the new Moscow gold standard

Logic suggests that a gold-backed currency will be the outcome of Glazyev’s EAEU committee’s trade currency deliberations after all, because of a subsequent announcement from Moscow concerning a new Russian bullion market.

In accordance with western sanctions, the London Bullion Market refused to accept Russian mined and processed gold. It was then natural for Russia to propose a new gold market based in Moscow with its own standards. It is equally sensible for Moscow to set up a price fixing committee, replicating that of the LBMA. But instead of it being the basis for a far larger unallocated gold deposit account offering by Russian and other banks, it will be a predominantly physical market.

Based in Moscow, with a new market called the Moscow International Precious Metals Exchange, the Moscow Gold Standard will incorporate some of the LBMA’s features, such as good delivery lists with daily, or twice daily fixings. The new exchange is therefore being promoted as a logical replacement for the LBMA.

But could that be a cover, with the real objective being to provide a gold link to the new trade currency planned by Glazyev’s EAEU committee? Timing suggests that this may indeed be the case, but we will only know for sure as events unfold.

If it is to be backed by gold, the considerations behind setting up a new trade currency are fairly straightforward. There is the Chinese one kilo bar four-nines standard, which is widely owned, has already been adopted throughout Asia, and is traded even on Comex. Given that China is Russia’s long-term partner, that is likely to be the standard unit. The adoption of the Chinese standard in the new Moscow exchange is logical, simplifying the relationship with the Shanghai Gold Exchange, and streamlining fungibility between contracts, arbitrage, and delivery.

Geopolitics suggest that the simple proposition behind the establishment of a new Moscow exchange will fit in with a larger trans-Asia plan and is unlikely to move at the glacial pace of developments between Russia and China to which we have become accustomed. The gold question has become bound up in more rapid developments triggered by Russia’s belligerence over Ukraine, and the sanctions which quickly followed.

There can be little doubt that this must be leading to a seismic shift in gold policy for the Russian Chinese partnership. The Chinese in particular have demonstrated an unhurried patience that befits a nation with a sense of its long history and destiny. Putin is more of a one-man act. Approaching seventy years old, he cannot afford to be so patient and is showing a determination to secure a legacy in his lifetime as a great Russian leader. While China has made the initial running with respect to gold policy, Putin is now pushing the agenda more forcefully.

Before Russia’s invasion of Ukraine, the strategy was to let the west make all the geopolitical and financial mistakes. For Putin perhaps, the lesson of history was informed by Napoleon’s march to the gates of Moscow, his pyrrhic victory at Borodino, and his defeat by the Russian winter. Hitler made the same mistake with Operation Barbarossa. From Putin’s viewpoint, the lesson was clear — Russia’s enemies defeat themselves. It was repeated in Afghanistan, where the American-led NATO enemy was conquered by its own hubris without Putin having to lift so much as a finger. That is why Russia is Mackinder’s Pivot Area of the World Island. It cannot be attacked by navies, and supply line requirements for armies make Russia’s defeat well-nigh impossible

Following the Ukraine invasion, Putin’s financial strategy has become more aggressive, and is potentially at odds with China’s economic policy. Being cut off from western markets, Putin is now proactive, while China which exports goods to them probably remains more cautious. But China knows that western capitalism bears the seeds of its own destruction, which would mean the end of the dollar and the other major fiat currencies. An economic policy based on exports to capitalistic nations would be a passing phase.

China’s gold policy was aways an insurance policy against a dollar collapse, realising that she must not be blamed for the west’s financial destruction by announcing a gold standard for the yen in advance of it. It would be a nuclear equivalent in a financial war, only an action to be taken as a last resort.

Developments in Russia have changed that. It is clear to the Russians, and most likely the Chinese, that credit inflation is now pushing the dollar into a currency crisis in the next year or two. Preparations to protect the rouble and the yuan from the final collapse of the dollar, long taught in Marxist universities as inevitable, must assume a new urgency. It would be logical to start with a new trade settlement currency as a testbed for national currencies in Asia, and for it to be set up in such a way that it would permit member states to adopt gold standards for their own currencies as well.

Possession of bullion is key

The move away from western fiat currencies to gold backed Asian currencies requires significant gold bullion ownership at the least. The only members, associates, and dialog partners of the Shanghai Cooperation Organisation and the EAEU whose central banks have not increased their gold reserves since the Lehman failure when the credit expansion of dollars began in earnest, are minor states. Since then, between them they have added 4,645 tonnes to their reserves, while all the other central banks account for only 781 tonnes of additional gold reserves.

But central bank reserves are only part of the story, with nations running other, often secret national bullion accounts not included in reserves. The appendix to this article shows why and how China almost certainly accumulated an undeclared quantity of bullion, likely to be in the region of 25,000 tonnes by 2002 and probably more since.

Since 2002, when the Shanghai Gold Exchange opened and China’s citizens were permitted for the first time to own gold, gold delivered into public hands has totalled a further amount of over 20,000 tonnes. While the bulk of this is jewellery and some has been returned to the SGE as scrap for re-refining, it is clear that the authorities have encouraged Chinese citizens to retain gold for themselves, which traditionally has been real money in China.

According to Simon Hunt of Simon Hunt Strategic Services, as well as declared reserves of 2,301 tonnes Russia also holds gold bullion in its Gosfund (the State Fund of Russia) bringing its holdings up to 12,000 tonnes. This is significantly greater than the 8,133 tonnes declared by the US Treasury, over which there are widespread doubts concerning the veracity of its true quantity.

Obviously, the Asian partnership has a very different view of gold from the American hegemon. Furthermore, in recent months evidence has confirmed what gold bugs have claimed all along, that the Bank for International Settlements and major bullion operators such as JPMorgan Chase have indulged in a price suppression scheme to discourage gold ownership and to divert bullion demand into synthetic unallocated accounts.

The secrecy that surrounds reporting of gold reserves to the IMF raises further suspicions over the true position. Furthermore, there are leases and swaps between central banks, the BIS, and bullion dealers that lead to double counting and bullion recorded as being in possession of governments and their central banks but being held by other parties.

As long ago as 2002 when the gold price was about $300 per ounce, Frank Veneroso, who as a noted analyst spent considerable time and effort identifying central bank swaps and leases, concluded that anything between 10,000 and 15,000 tonnes of government and central bank gold reserves were out on lease or swapped — that is up to almost half the total official global gold reserves at that time. His entire speech is available on the Gold Antitrust Action Committee website, but this is the introduction to his reasoning:[i]

“Let’s begin with an explanation of gold banking and gold derivatives.

“It is a simple, simple idea. Central banks have bars of gold in a vault. It’s their own vault, it’s the Bank of England’s vault, it’s the New York Fed’s vault. It costs them money for insurance – it costs them money for storage— and gold doesn’t pay any interest. They earn interest on their bills of sovereigns, like US Treasury Bills. They would like to have a return as well on their barren gold, so they take the bars out of the vault and they lend them to a bullion bank. Now the bullion bank owes the central bank gold—physical gold—and pays interest on this loan of perhaps 1%. What do these bullion bankers do with this gold? Does it sit in their vault and cost them storage and insurance? No, they are not going to pay 1% for a gold loan from a central bank and then have a negative spread of 2% because of additional insurance and storage costs on their physical gold. They are intermediaries—they are in the business of making money on financial intermediation. So they take the physical gold and they sell it spot and get cash for it. They put that cash on deposit or purchase a Treasury Bill. Now they have a financial asset—not a real asset—on the asset side of their balance sheet that pays them interest—6% against that 1% interest cost on the gold loan to the central bank. What happened to that physical gold? Well, that physical gold was Central Bank bars, and it went to a refinery and that refinery refined it, upgraded it, and poured it into different kinds of bars like kilo bars that go to jewellery factories who then make jewellery out of it. That jewellery gets sold to individuals. That’s where those physical bars have wound up—adorning the women of the world…

“We have gotten, albeit crude, estimates of gold borrowings from the official sector from probably more than 1/3 of all the bullion banks. We went to bullion dealers, and we asked, “Are these guys major bullion bankers, medium bullion bankers, or small-scale bullion bankers?” We classified them accordingly and from that we have extrapolated a total amount of gold lending from our sample. That exercise has pointed to exactly the same conclusion as all of our other evidence and inference—i.e., something like 10,000 to 15,000 tonnes of borrowed gold.”

Veneroso’s findings were stunning. But two decades later, we have no idea of the current position. The market has changed substantially since 2002, and today it is thought that swaps and leases are often by book entry, rather than physical delivery of bullion into markets. But the implications are clear: if Russia or China cared to declare their true position and made a move towards backing their currencies with gold or linking them to gold credibly, it would be catastrophic for the dollar and western fiat currencies generally. It would amount to a massive bear squeeze on the west’s longstanding gold versus fiat policy. And remember, gold is money, and the rest is credit, as John Pierpont Morgan said in 1912 in evidence to Congress. He was not stating his opinion, but a legal fact.

In a financial crisis, the accumulated manipulation of bullion markets since the 1970s is at significant risk of becoming unwound. The imbalance in bullion holdings between the Russian Chinese camp and the west would generate the equivalent of a financial nuclear event. This is why it is so important to understand that instead of being a longstop insurance policy against the Marxist prediction of capitalism’s ultimate failure, it appears that the combination of planning for a new trade currency for Asian nations centred on members of the EAEU, coinciding with the introduction of a new Moscow-based bullion standard, is now pre-empting financial developments in the west. That being the case, a financial nuclear bomb is close to being triggered.


China’s gold policy

China actually took its first deliberate step towards eventual domination of the gold market as long ago as June 1983, when regulations on the control of gold and silver were passed by the State Council. The following Articles extracted from the English translation set out the objectives very clearly:

Article 1. These Regulations are formulated to strengthen control over gold and silver, to guarantee the State’s gold and silver requirements for its economic development and to outlaw gold and silver smuggling and speculation and profiteering activities.

Article 3. The State shall pursue a policy of unified control, monopoly purchase and distribution of gold and silver. The total income and expenditure of gold and silver of State organs, the armed forces, organizations, schools, State enterprises, institutions, and collective urban and rural economic organizations (hereinafter referred to as domestic units) shall be incorporated into the State plan for the receipt and expenditure of gold and silver.

Article 4. The People’s Bank of China shall be the State organ responsible for the control of gold and silver in the People’s Republic of China.

Article 5. All gold and silver held by domestic units, with the exception of raw materials, equipment, household utensils and mementos which the People’s Bank of China has permitted to be kept, must be sold to the People’s Bank of China. No gold and silver may be personally disposed of or kept without authorization.

Article 6. All gold and silver legally gained by individuals shall come under the protection of the State.

Article 8. All gold and silver purchases shall be transacted through the People’s Bank of China. No unit or individual shall purchase gold and silver unless authorised or entrusted to do so by the People’s Bank of China.

Article 12. All gold and silver sold by individuals must be sold to the People’s Bank of China.

Article 25. No restriction shall be imposed on the amount of gold and silver brought into the People’s Republic of China, but declaration and registration must be made to the Customs authorities of the People’s Republic of China upon entry.

Article 26. Inspection and clearance by the People’s Republic of China Customs of gold and silver taken or retaken abroad shall be made in accordance with the amount shown on the certificate issued by the People’s Bank of China or the original declaration and registration form made on entry. All gold and silver without a covering certificate or in excess of the amount declared and registered upon entry shall not be allowed to be taken out of the country.

These articles make it clear that only the People’s Bank was authorised to acquire or sell gold on behalf of the state, without limitation, and that citizens owning or buying gold were not permitted to do so and must sell any gold in their possession to the People’s Bank.

Additionally, China has deliberately developed her gold mine production regardless of cost, becoming the largest producer by far in the world.[ii] State-owned refineries process this gold along with doré imported from elsewhere. Virtually none of this gold leaves China, so that the gold owned today between the state and individuals continues to accumulate.

The regulations quoted above formalised the State’s monopoly over all gold and silver which is exercised through the Peoples Bank, and they allow the free importation of gold and silver but keep exports under very tight control. The intent behind the regulations is not to establish or permit the free trade of gold and silver, but to control these commodities in the interest of the state.

This being the case, the growth of Chinese gold imports recorded as deliveries to the public since 2002, when the Shanghai Gold Exchange was established and the public then permitted to buy gold, is only the more recent evidence of a deliberate act of policy embarked upon thirty-nine years ago. China had been accumulating gold for nineteen years before she allowed her own nationals to buy when private ownership was finally permitted. Furthermore, the bullion was freely available, because in seventeen of those years, gold was in a severe bear market fuelled by a combination of supply from central bank disposals, leasing, and increasing mine production, all of which I estimate totalled about 59,000 tonnes. The two largest buyers for all this gold for much of the time were private buyers in the Middle East and China’s government, with additional demand identified from India and Turkey. The breakdown from these sources and the likely demand are identified in the table below:

In another context, the cost of China’s 25,000 tonnes of gold equates to roughly 10% of her exports over the period, and the eighties and early nineties in particular also saw huge capital inflows when multinational corporations were building factories in China. However, the figure for China’s gold accumulation is at best informed speculation. But given the determination of the state to acquire gold expressed in the 1983 regulations and by its subsequent actions, it is clear China had deliberately accumulated a significant undeclared stockpile by 2002.

So far, China’s long-term plans for the acquisition of gold appear to have achieved some important objectives. To date, additional deliveries to the public through the SGE now total over 20,000 tonnes.

China’s motives

China’s motives for taking control of the gold bullion market have almost certainly evolved. The regulations of 1983 make sense as part of a forward-looking plan to ensure that some of the benefits of industrialisation would be accumulated as a risk-free national asset. This reasoning is similar to that of the Arab nations capitalising on the oil-price bonanza only ten years earlier, which led them to accumulate their hoard, mainly held in private as opposed to government hands, for the benefit of future generations. However, as time passed the world has changed substantially both economically and politically.

2002 was a significant year for China, when geopolitical considerations entered the picture. Not only did the People’s Bank establish the Shanghai Gold Exchange to facilitate deliveries to private investors, but this was the year the Shanghai Cooperation Organisation formally adopted its charter. This merger of security and economic interests with Russia has bound Russia and China together with a number of resource-rich Asian states into an economic bloc. When India, Iran, Mongolia, Afghanistan, and Pakistan join (as they now have or are already committed to do), the SCO will cover more than half the world’s population. And inevitably the SCO’s members are looking for an alternative trade settlement system to using the US dollar.

At some stage China with her SCO partner, Russia, might force the price of gold higher as part of their currency strategy. You can argue this from an economic point of view on the basis that possession of properly priced gold will give her a financial dominance over global trade at a time when we are trashing our fiat currencies, or more simply that there’s no point in owning an asset and suppressing its value for ever. From 2002 there evolved a geopolitical argument: both China and Russia having initially wanted to embrace American and Western European capitalism no longer sought to do so, seeing us as soft enemies instead. The Chinese public were then encouraged, even by public service advertising, to buy gold, helping to denude the west of her remaining bullion stocks and to provide market liquidity in China.

What is truly amazing is that the western economic and political establishment have dismissed the importance of gold and ignored all the warning signals. They do not seem to realise the power they have given China and Russia to create financial chaos as a consequence of gold price suppression. If they do so, which seems to be only a matter of time, then London’s fractional reserve system of unallocated gold accounts would simply collapse, leaving Shanghai as the only major physical market.

This is probably the final link in China’s long-standing gold strategy, and through it a planned domination of the global economy in partnership with Russia and the other SCO nations. But as noted above, recent events have brought this outcome forward.

[i] See https://www.gata.org/node/4249

[ii] Following covid, China’s production has declined from over 400 tonnes annually to closer to 300 tonnes.

Source: GSI Exchange

Executive Summary of Confidential RAND Corp Report Titled “Weakening Germany” • #controlledCrisis #Germany #war

Executive Summary

Weakening Germany, strengthening the U.S.

The present state of the U.S. economy does not suggest that it can function without the financial and material support from external sources. The quantitive easing policy, which the Fed has resorted to regularly in recent years, as well as the uncontrolled issue of cash during the 2020 and 2021 Covid lockdowns, have led to a sharp increase in the external debt and an increase in the dollar supply.

The continuing deterioration of the economic situation is highly likely to lead to a loss in the position of the Democratic Party in Congress and the Senate in the forthcoming elections to be held in November 2022. The impeachment of the President cannot be ruled out under these circumstances, which must be avoided at all costs.

There in an urgent need for resources to flow into the national economy, especially the banking system. Only European countries bound by EU and NATO commitments will be able to provide them without significant military and political costs for us.

The major obstacle to it is growing independence of Germany. Although it still is a country with limited sovereignty, for decades it has been consistently moving toward lifting these limitations and becoming a fully independent state. This movement is slow and cautious, but steady. Extrapolation shows that the ultimate goal can be reached only in several decades. However, if social and economic problems in the United States escalate, the pace could accelerate significantly.

An additional factor contributing to Germany’s economic independence is Brexit. With the withdrawal of the UK from the EU structures, we have lost a meaningful opportunity to influence the negotiation of crossgovernmental decisions.

It is fear of our negative response which by and large determines the relatively slow speed of those changes. If one day we abandon Europe, there will be a good chance for Germany and France to get to a full political consensus. Then, Italy and other Old Europe countries — primarily the former ECSC members — may join it on certain conditions. Britain, which is currently outside the European Union, will not be able to resist the pressure of the Franco-German duo alone. If implemented, this scenario will eventually turn Europe into not only an economic, but also a political competitor to the United States.

Besides, if the U.S. is for a certain period is engulfed by domestic problems, the Old Europe will be able to more effectively resist the influence of U.S.-oriented Eastern European countries.

Vulnerabilities in German and EU Economy

An increase in the flow of resources from Europe to U.S. can be expected if Germany begins to experience a controlled economic crisis. The pace of the economic developments in the EU depends almost without alternative on the state of the German economy. It is Germany that bears the brunt of the expenditure directed towards the poorer EU members.

The current German economic model is based on two pillars. These are unlimited access to cheap Russian energy resources and to cheap French electric power, thanks to the operation of nuclear plants. The importance of the first factor is considerably higher. Halting Russian supplies can well create a systemic crisis that would be devastating for the German economy and, indirectly, for the entire European Union.

The French energy sector could also soon being to experience heavy problems. The predictable stop of Russian-controlled nuclear supplies, combined with the unstable situation in the Sahel region, would make French energy sector critically dependent on Australian and Canadian fuel. In connection with the establishment of AUKUS, it creates new opportunities to exercise pressure. However this issue is beyond the scope of the present report.

A Controlled Crisis

Due to coalition constraints, the German leadership is not in full control of the situation in the country. Thanks to our precise actions, it has been possible to block the commissioning of the Nord Stream 2 pipeline, despite the opposition of lobbyists from the steel and chemical industries. However, the dramatic deterioration of the living standards may encourage leadership to reconsider its policy and return to the idea of European sovereignty and strategic autonomy.

The only feasible way to guarantee Germany’s rejection of Russian energy supplies is to involved both sides in the military conflict in Ukraine. Our further actions in this country will inevitably lead to a military response from Russia. Russians will obviously not be able to leave unanswered the massive Ukrainian army pressure on the unrecognized Donbas republics. That would make possible to declare Russia an aggressor and apply to it the entire package of sanctions prepared beforehand.

Putin may in turn decide to impose limited counter sanctions — primarily on Russian energy supplies to Europe. Thus, the damage to the EU countries will be quite comparable to the one to Russians, and in some countries — primarily in Germany — it will be higher.

The prerequisite for Germany to fall into this trap is the leading role of green parties and ideology in Europe. The German Greens are a strongly dogmatic, if not zealous, movement, which makes it quite easy to make them ignore economic arguments. In this respect, the German Greens somewhat exceed their counterparts in the rest of Europe. Personal features and the lack of professionalism of their leaders — primarily Annalena Baerbock and Robert Habeck — permit to presume that it is next to impossible for them to admit their own mistakes in a timely manners.

Thus, it will be enough to quickly form the media image of Putin’s aggressive war to turn the Greens into ardent and hardline supporters of sanctions, a ‘party of war’. It will enable the sanctions regime to be introduced without any obstacles. The lack of professionalism of the current leaders will not allow a setback in the future, even when the negative impact of the chose policy becomes obvious enough. The partners in the German governing coalition will simply have to follow their allies — at least until the load of economic problems outweighs the fear of provoking a government crisis.

However, even when the SPD and the FDP are ready to go against the Greens, the possibility for the next government to return relations with Russia to normal soon enough will be noticeable limited. Germany’s involvement in large supplies of weapons and military equipment to the Ukrainian army will inevitably generate a strong mistrust in Russia, which will make the negotiations process quite lengthy.

If war crimes and Russian aggression against Ukraine are confirmed, the German political leadership will not be able to overcome its EU partners’ veto on assistance to Ukraine and reinforced sanctions packages. This will ensure a sufficiently long gap in cooperation between Germany and Russia, which will make large German economic operators uncompetitive.

Expected Consequences

A reduction in Russian energy supplies — ideally, a complete halt of such supplies — would lead to disastrous outcomes for German industry. The need to divert significant amounts of Russian gas for winter heating of residential and public facilities will further exacerbate the shortages. Lockdowns in industrial enterprises will cause shortages of components and spare parts for manufacturing, a breakdown of logistics chais, and, eventually, a domino effect. A complete standstill at the largest chemical, metallurgical, and machine-building, plants is likely, while they have virtually no spare capacity to reduce energy consumption. It could lead to the shutting down of continuous-cycle enterprises, which could mean their destruction.

The cumulative losses of the German economy can be estimated only approximately. Even if the restriction of Russian supplies is limited to 2022, its consequence will last for several years, and the total losses could reach 200-300 billion euros. Not only will it deliver a devastating blow to the German economy, but the entire EU economy will inevitably collapse. We are talking not about a decline in economy growth pace, but about a sustained recession and a decline in GDP only in material production by 3-4% per year for the next 5-6 years. Such a fall will inevitably cause panic in the financial markets and may bring them to a collapse.

The euro will inevitably, and most likely irreversibly, fall below the dollar. A sharp fall of euro will consequently cause its global sale. It will become a toxic currency, and all countries in the world will rapidly reduce its share in their forex reserves. This gap will be primarily filled with dollar and yaun.

Another inevitable consequence of a prolonged economic recession will be a sharp drop in living standards and rising unemployment (up to 200,000-400,000 in Germany alone), which will entail the exodus of skilled labour and well-educated young people. There are literally no other destinations for such immigration other than the United States today. A somewhat smaller, but also quite significant flow of migrants can be expected from other EU countries.

The scenario under consideration will thus serve to strengthen the national financial conditions both indirectly and most directly. In the short term, it will reverse the trend of the looming economic recession and, in addition, consolidate American society by distracting it from immediate economic concerns. This, in turn, will reduce electoral risks.

In the medium terms (4-5 years), the cumulative benefits of capital flight, re-oriented logistical flows and reduced competition in major industries may amount to USD 7-9 trillion.

Unfortunately, China is also expected to benefit over the medium term from this emerging scenario. At the same time, Europe’s deep political dependence on the U.S. allows us to effectively neutralise possible attempts by individual European states to draw closer to China.

Responding to Questions in Comments, from Twitter, Proton Mail (working again) • Updates/New Titles: Literature/Recommended Reading Page (books, essays, source documents, etc.), Catalog of Posts Written & Sacred Destabilization Series • August 28, 2022



Twitter:

From Comments, I was asked for my Twitter handle: cyber_variant


Literature Page:

This blog has a Recommended Reading Page, the link is here:

Recommended Reading

Today into tonight I am adding 200+ new titles. They will be uploaded first, then categorized within a few days.

Also, the desktop version of this page (did) show inline embedded files of the book for download (that is, displayed the entire contents of the book in a display case, if you will). On the mobile view version of this page it has always just shown a thick bold red line of the title. I am underway with altering all the titles to the thick bold red lines, for it makes the page load much more expediently.

To download the title, by clicking the line item, the PDF will be downloaded to the device you are using.

As far as the catalog of titles, I own physical and/or digital copies of all of these titles. Titles that I have paid for.

Under the Digital Millennium Copyright Act (DMCA) I am lawfully allowed to make copies available to the public. Resale of the copies is a violation of the DMCA.

If any links are broken, please feel free to contact me and I can restore the media to the link. I can be reached at: e@calculusofdecay.com.

On Twitter I received a few messages in the past few days asking me to add the authors of the titles to the line item. This is a fair request and I will do this soon as well. Also, I was asked to add a small description of each book, this too is a great idea. Within the next few weeks I can work on this. I have this week off from work and I enjoy this blogging community and the subject matter therefore I believe this is a good idea.


Question on Posts by Eric( me):

This was asked in comments, by email and also a few Twitter people. I am putting a page together with a collection of strictly my posts.

Years ago when using WordPress to build and manage small websites for clients, it was relatively easy to segregate posts from the owner of the blog apart from reblogged/pingbacked/RSS feed items/etc into distinct columns on the homepage of the blog. WordPress has made some changes which – for instance – simply activating a “premium plugin” breaks the blog apart from the WordPress framework (the community) and it is bizarre.

One may notice, I have paid for the domain and WordPress services (the main reasons I did this was to have advertising removed- and to have storage space to upload files beyond the 6or8GB the free service allows for). Right now, I am keeping the theme as is and keeping part of the WordPress framework blogging community. Reblogging interesting stuff is my favorite part of this thing.


Sacred Destabilization Series:

Five posts were made and a sixth, an interlude. There are 22 additional parts coming. Possibly more. It’s a massive thing. The books/documents/etc I have uploaded thus far and others to come in the Recommended Reading Page were used as source material. Alongside nearly 400 web sources. Many people that gravitate towards the “conspiratorial inquiry” of this blog know much of the history (ie Bolshevik Revolution, Weimar Republic, “Weapons of Mass Destruction”, occult influences on the methods and rituals of the elite – ideological, philosophical, business and academic influence, etc) – the who/what/when/where of history is there nonetheless my objective is and always has been to understand the why and how. Parts that are coming focus on aforementioned necessary historical background, moreover, on what is happening right now and most importantly: my job is to present evidence of where this thing is going.

And I’ve gotten hold of a shit ton of evidence, of proof – beyond speculative posturing – proof. Therefore, informative pieces are coming in parts Eight thru Ten. Part Seven will be one last historical overview. The parts thus far:


One Last Item: Posts to Showcase Bloggers:

This is an idea I was given by a blogger who commented that as opposed to reblogging as often – to showcase blogs/their posts/etc as a post of my own is a good idea. I completely agree and will begin to do this beginning this week. I am going to reach out to bloggers and to those that wish to participate I will gather posts (chosen by the blogger, if they prefer), short bio (if they would like), etc ..it is a good way to build up the community. Yes. I know, the internet is a vastness of the infinite and what is the point? The point is that it is enjoyable. Simple!

In the meantime, I refer you good readers to:

Tactical Hermit:

This man has a great blog and he is a good friend I have been fortunate to have met thru this platform. He authors alot of content, including this fiction which is a great read:

Sacred Destabilization • Part Two: Resources

By: Eric • August 16, 2022



“The gullibility of the average citizen, his willingness to accept what is told him if it is said loudly enough and with sufficient force is well-known. Mass psychology and mob determination have been exploited down the age….But this negative receptivity can be easily turned to good ends as bad.”

–The Spiritual Hierarchy, Lucis Trust, 1982

What Motivates Them?

The battle is real and the enemy is the system. The word system carries a great weight and what we will do here is show the signs of what the system has accomplished and what the system is aiming for. Power; securing power comes from resources. Control over the resources gives the system power. Maintaining, enhancing and expanding the reach of the system comes with carte blanche authority over the resources.

We have reached a point I strongly feel is their endgame.

Because now…the resource….is YOU.


“Man must be either the Anvil or the Hammer—let each make his choice, and then complain not…

If you are the Hammer, strike your fill…

Otherwise the Anvil – and STAND YOU STILL.

-Theron Q DuMont – “Mastermind

Electricity Thefts Hit Record Levels In UK As Cost-Of-Living Crisis Worsens

The Closed Eye Society

Electricity Thefts Hit Record Levels In UK As Cost-Of-Living Crisis Worsens

Authored by Chris Summers via The Epoch Times,

A record number of people stole electricity in England and Wales last year, according to new figures released by the Home Office.

Police forces received 3,600 reports of “dishonest use of electricity” in the 12 months to March 2022, an increase of 13 percent on the previous year and the highest level since records began in 2013.

It comes after a protest website launched recently urging people not to pay their electricity bills from October.

The average annual UK gas and electricity bill rose from £1,400 in October 2021 to £2,000, after the government removed a price cap, which limited how much suppliers could charge customers.

Another hefty rise is expected in October 2022.

It was originally predicted average energy bills could reach £2,800 in the autumn but the latest forecast is £3,358.

Rishi Sunak Promises to Scrap…

View original post 337 more words

Promises, Promises: Wind Industry Insiders Moan About Mass Layoffs & Even Larger Losses

STOP THESE THINGS

In the absence of massive subsidies, there would be no wind or solar ‘industries’, so-called. So, it should come as no surprise that the jobs “created” in association with those industries are an easy come, easy go, kind of affair.

The promise of thousands of jobs building wind turbines and solar panels is a renewable energy rent-seeker mantra; there are – but only in China. China itself is building nuclear power plants and hundreds more coal-fired power plants, as if its economic livelihood depends on it.

Meanwhile, in those Western countries foolish enough to attempt to run on sunshine and breezes, those few jobs that did materialise are fast disappearing, and the promise of a pot of gold at the end of the RE rainbow appears to be equally empty, as the team from Jo Nova report.

Wind Industry insider laments 15 years waiting for the bright “future that never…

View original post 745 more words

Nationalized Project to Rehabilitate the Power Grid in America is Vital for Infrastructure and Real Labor Economy

There are phases to the ultimate implementation of a project of this scale that would call for the employment of millions, possibly more.

Phases:

Design: the design of a massive overhaul of our existing system is a major undertaking. There is much to consider. Within the design phase, the integration of improved components and other materials will be of high priority. The design phase will call for countless jobs. Men and women will both be involved, as both men and women are academically and professionally qualified for this undertaking.

Testing: before a nation-wide overhaul, there will be the need for testing the mechanisms that will be involved in this overhaul. This phase calls for jobs to be created.

Implementation: once the testing is successful, here comes the unprecedented largest infrastructure overhaul project, for the entire nation, the largest project our country has seen in decades. There will be the need for millions of jobs to be created here, as the technical aspects of such a project are wide in scope.

Maintenance: once the new, nationalized power system is officially up and running, the maintenance of the system will be a permanent fixture. This means that there will be qualified technicians (electricians, for instance) that will monitor the grid 24/7/365. Countless jobs…in urban, suburban and urban areas throughout America.

Enhancement: as improved technologies emerge, those that would directly enhance the operational aspects of the grid, these will need to be integrated into the existing infrastructure. Again, this doesn’t happen by snapping one’s fingers. Jobs will be created, as there will be the need for men and women to physically integrate (install) these new components.

This is the type of project that America needs to revitalize our needed infrastructure, as well as the REAL economy. Not the Wall Street financialization of fictitious asset bubbles.

The REAL ECONOMY. The employment of countless Americans will improve their financial well-being. And therefore – those Americans will have improved spending power and can seek local, family owned businesses to purchase the goods that they need for everyday living.

BRICS’ Influence Grows as Three New Members Join the New Development Bank

Paul Antonopoulos, independent geopolitical analyst

The New Development Bank (NDB) was created by Brazil, Russia, India, China and South Africa (BRICS) in 2015. The BRICS bank, as it is more commonly known, invests mainly in developing economies in areas such as transportation, water and sanitation, clean energy, digital infrastructure, social infrastructure and urban development. On September 2, NDB President Marcos Troyjo announced that the United Arab Emirates, Uruguay and Bangladesh were the first members of the bank’s expansion.

“New members will have in NDB a platform to foster their cooperation in infrastructure and sustainable development,” said NDB President Marcos Troyjo in a statement. “We will continue to expand the bank’s membership in a gradual and balanced manner.”

The UAE, Uruguay and Bangladesh will become fully fledged members once internal processes of the NDB is complete. However, the NDB’s ambitions do not end there, and according to Brazilian newspaper Estadão, a fourth partner, likely from Africa, should be announced by the end of the year. In fact, the Shanghai-based bank anticipates three to four new members per year, reaching up to 20 members in the coming years.

Although BRICS is obviously already represented in South America and South Asia by Brazil and India respectively, the accession of Uruguay and Bangladesh into the NDB allows the bank to act on a regional scale. It also opens the possibility for future membership in BRICS. With NDB members neighboring each other in South America and South Asia, the bank has the possibility to finance binational projects that promotes regional economic and transportation integration.

For his part, Emirati Minister of State for Financial Affairs, Obaid Humaid Al Tayer, said: “The United Arab Emirates membership in the New Development Bank represents a new step to enhance the role of the UAE economy on the global stage, especially in light of the great capabilities and expertise that the country possesses in supporting infrastructure projects and sustainable development. This monumental step would not have been achieved without the vision and direction of the UAE leadership, who believe in the importance of supporting development projects around the world, especially in emerging economies.”

The UAE has undergone a massive transformation in the past quarter of a century, turning desert wastelands into thriving economic hubs and progressing from reactionary Salafi ideology to one of tolerance and open-mindedness. As recently as the beginning of the Syrian War in 2011, the UAE was backing jihadist groups, but in a matter of only a few years reverted from this policy and became far more moderate and independent in their decision making and pursuit of partnerships.

Originally a major oil exporter, and still is, the UAE has now diversified its economy so that it is in line with the UN 2030 agenda to end poverty and hunger, protect human rights and gender equality, and protect the planet from degradation. The UAE has immense resources that can be directed towards projects that are in line with not only the UN’s vision, but also the NDB’s.

BRICS signed an agreement on Tuesday involving 28 projects in the fields of computer programming, technical services, culture, art, economy, commerce, logistics and transportation – with a total value of more than $2.1 billion. The UAE’s contribution to such projects will be fundamental in deciding whether the mega-rich Arab country should ascend into BRICS and not only the NDB.

The selection of the UAE, Uruguay and Bangladesh as the first three non-founding partners of the NDB indicates the intentions of BRICS – regional expansion with a focus on economic and transportation cooperation. This cooperation, as well as integration, is especially crucial as the world struggles to deal with the COVID-19 pandemic and the economic fallout. Because of this, the NDB will likely focus in the short to medium term on the rejuvenation of member countries following the pandemic, particularly in transitioning to a digital economy and green energy.

It was estimated that emerging economies needed about $2 trillion in infrastructure investments per year for the next 20 years to maintain growth rates, however, commercial banks have refused to meet the gap. Essentially, the NDB partly fills the gap that Western financial institutions refuse to do.

By positioning itself to take advantage of a unique opportunity to project a new vision for financing, the NDB is challenging the dominance of Western financial institutions and also progressing the prestige of BRICS in its endeavour to advance a multipolar world order. The accession of the UAE sees one of the Middle East’s most influential countries join the NDB, whilst Uruguay and Bangladesh open the path for regional integration under the context of BRICS, something that has not occurred since the group was established in 2006.

Source: InfoBrics

Science of Doom – the Earth’s Energy Budget Parts #1,2,3

Iran Opens Major Energy Port on Persian Gulf – Posted by INTERNATIONALIST 360° August 2, 2021

Source: https://syria360.wordpress.com/2021/08/02/iran-opens-major-energy-port-on-persian-gulf/

TEHRAN (FNA)- Iran’s Oil Ministry brought online a major port on the coasts of the Persian Gulf to expedite exports of petroleum products from the South Pars giant energy hub.

The Siraf Exports and Service Port was inaugurated upon an order by Iranian President Hassan Rouhani.

The port, located in the southwestern province of Bushehr, has two wharfs which will be dedicated to exports of liquefied petroleum gas (LPG) and sulfur. The products will be directly supplied from nearby refineries that run on natural gas pumped from the South Pars, the world’s largest gas reserve which is shared between Iran and Qatar in the Persian Gulf.

Pipelines linking five South Pars refineries to Siraf would allow exports of 5,000 cubic meters per hour of cold LPG from the port which is one of the deepest in the region.

Construction of the port began in 2014 by Khatam Headquarters, a major engineering energy company.

More than $350 million has been spent on the port, and the project will create 200 permanent jobs in the region.

As the port came on line, the end of development works at Phase 14 of South Pars with the rollout of few remaining installations was also announced.

Iran has spent $2.4 billion to fully develop Phase 14 over the past 11 years. That means that the country has built out all 28 phases of the giant gas field except for one where works stalled in 2018 because of pressure on foreign contractors.

In relevant remarks on Sunday, Iranian Oil Minister Bijan Zangeneh said that production from Phase 11, which is now being developed by a domestic contractor, will begin before March 2022.