Foreword: It is a huge privilege and joy for me to share with you the excellent analysis submitted to this blog by Peter Koenig to whom I am immensely grateful for his contribution. Sadly, economic topics are grossly under-covered by this blog and I hope to correct that in the future.
The Saker
——-
Brussels Demand on Argentina – Arrogance and Stupidity
by Peter Koenig
Imagine – Argentina – and the rest of Latin America – being urged by the EU, ultimate puppet of the naked emperor, Sir Obama, not to supply Russia with food stuff – vegetables, fruit, meat – after Argentina was ‘punished’ by a corrupt court in New York to pay 1.5 billion dollars to the fraudulent NML Capital et al vulture funds – out of its current agreed upon debt of US$29 billion – equivalent to Argentina’s total reserves. And yes, the hedge funds have to be paid 100%, when the remaining 93% of creditors agreed on a 20% reimbursement rate. – And, yes, Mr. Griesa, the bought NY judge, has blocked all of Argentina’s payments to the other creditors, unless his vulture clients are paid in full. So, Argentina is in forced default – having to pay now much higher interest rates on international money markets, if she is indeed still eligible for international credits.
Unimaginable but true.
Under these circumstances, the boundless arrogance of Brussels expects Argentina to ascend to the US / EU sanctions on Russia to which Russia responded by banning all imports from the EU? – And is now seeking trading with South America?
Not that Russia really needs food from South America – there is an enormous and willing Asia market open to them. Russia’s gesture is a helping hand to Argentina and South America to free themselves from the economic and political pressures constantly exerted on them by Washington.
Argentina will laugh at such a ridiculously stupid request from the EU.
Good for Russia – and good for Argentina, Brazil, Chile, Peru et al – to finally escape the claws of the predator empire of Washington and go the way of independence, namely towards a new area of economic sovereignty and world monetary system.
Good for the BRICS (Brazil, Russia, India, China and South Africa), as they may finally come to a consensus among themselves and issue their own currency, backed by about one third of the world’s economic output and about half the world’s population.
Of course, such a primitive move by the EU begs the questions – have the leaders (sic) of the EU, pushed by the unfathomably senseless mouthpiece of NATO, Fogh (of war) Rasmussen, lost their last shred of sense and sovereignty? – have they indeed degenerated to the level of brainless, spineless dummies? – Do they not realize that if they succeed helping Obama and his blood-thirsty NATO war machine engaging Russia in WWIII that their countries with the countless NATO bases will be the first targets of Russia’s defense? – I.e. – Europe being destroyed – again?
Don’t they realize that Russia, after having been the key liberator of Europe from the Nazi WWII fangs – at the cost of 25 million Russian lives – that Russia not only wants to save Europe from another humanitarian disaster, but would like to help them out of their Wall Street imposed economic disaster by trading with Europe? – That Russia and China would like to form an alliance with Europe – a peace alliance not war alliance à la NATO?
Can’t they – the EU, see the light after Mr. Xi Jinping, President of China traveled to Germany to offer Madame Merkel this spring a New Silk Road, linking Berlin with Shanghai? – An extraordinary potential for economic development throughout Asia, away from the decaying war driven economy of Washington, the Pentagon and the ultra-corrupt financial system dominated by Wall Street the FED and the BIS (Bank for International Settlement)?
Argentina and the other Latin American countries invited by Russia for trading food and other merchandise – most likely will see the light.
If the BRICS are not yet ready with an alternative, dollar delinked currency to replace the western predatory money machine, Russia and China are. The two countries have forged a solid political and economic alliance during the past few years, have a combined GDP of US$ 21.1 trillion (China – US$ 19 trillion; Russia US$ 2.1 trillion – est. 2014), equal to about 27% of the world economic output – US$ 77.8 trillion (est. 2014).
Russia has already announced that the ruble is backed 100% by gold – which is not a reference in itself, but enhances the solidity of their countries’ manufacturing and construction output. This compares with a US GDP of US$ 17 trillion, mostly based on the output of the war and security industrial complex, meaning a GDP of destruction – and on consumption, as well as hollow financial and legal services.
While the BRICS are getting their act together, it is conceivable that Russia and China will issue shortly their own combined currency – the ‘Ruyuan’ or the ‘Yuanru’, delinked from the corrupt, predatory western monetary system; a new monetary alliance could also replace the dollar as reserve currency. Controlling more than a quarter of the world’s economic output and a majority chunk of the Asian market, a combined China-Russian currency would have an infinitely more solid backing than has the fiat dollar – as well as meanwhile also the fiat euro – to become a serious reserve currency. – It is only a question of time until much of the rest of the world will jump on the occasion and abandon the dollar.
All it needs is one country that dares to take this first step – fearless of sanctions, as they are meaningless under a news monetary system.
Argentina would be well advised to switch its payments to the 93% of creditors with whom it reached debt settlement agreements between 2001 and 2010 from the rapacious US-dominated financial system to Russia and China by dollar – yuan and ruble swaps with the two respective central banks – see also http://www.informationclearinghouse.info/article39297.htm
Argentina could become the first country to free itself from the economic sledgehammer of the immoral United States – and at the same time enter into trade agreements with Russia and China. Already today 90% of Argentina’s foreign trade takes place outside of the realm of the US dollar.
The question that begs asking is – what will eventually Europe do, when it realizes that it is living on a house of cards that can crumble – and crumble it will – at any time? – What will happen to the Wall Street-FED-Troika (IMF, ECB, EC) lynched Euro, when the people who invented the dollar degenerate into mere brainless greed and war machines? – When they become incapable of thinking by themselves, of recognizing their sovereignty – the highest asset any organized society can claim for itself?
Will eventually the peoples of Europe stand up and get rid of their Washington imposed neoliberal fiefs, grasping the breath of fresh air coming from the East and seeking a healthy alliance, striving for peace and human rights?
It is never too late. Argentina could well become the cornerstone for a new era.
Peter Koenig is an economist and former World Bank staff. He worked extensively around the world in the fields of environment and water resources. He writes regularly for Global Research, ICH, the Voice of Russia, Ria Novosti and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe.
The Argentina did a very stupid thing and Russia did more stupid thing in June 1982.
Argentina refused Russian help in sinking British pirate ships task force for Malvinas Island. The Malvinas island thing in which coward English used Uno to sanction Argentina and usa supplied arms to England while stopping any aid to Argentina by third party thru UN sanctions . The English cowards got a new lease of life for dreaming of new empire thus time they would call this not British empire but anglo-american empire or one world government controlled by English scumbags.
Second cold war was the direct consequence of loss of Malvinas.
“It is a mystery to me why countries such as Russia and China participate in the dollar payments system, as the system is a means of US financial and political imperialism,” the former assistant treasury secretary Paul Craig Roberts said. “No country that operates within Washington’s payments system can have an independent policy.”
He added that “Once important countries cease to use the US dollar as a reserve currency and the means of settling international payments, Washington’s imperial power will decline.”
IN 2008 Russia and china had the opportunity to destroy IMF and world bank and the american -british system of looting the world ;but foolishly these two countries went on ,prompting from parasite england, recommended IMF and world bank to lead new economic system! How stupid of these countries and that is why they never go up in world because of their stupidity.
Therefore china and russia must prepare for war which is coming their way
Russia needs to discard being sloth and its naivety and foolishness and get ability to recognise who is the main enemy and who are just distractions put up by the main enemy. after that it must get prepared to destroy its main enemy-no pussyfooting around. It is matter of life and death for Russia.
17 August, 2014 19:48
The reason they didn’t they weren’t ready yet and it would have led to their own down fall. Today both countries are very different than 2008.
Posted ten hours ago at https://twitter.com/GBabeuf:
Straight from the Heart: I will be killing you with love – each of you!
A member of the self-defense forces speaks to Poroshenko and other oligarchs
(VIDEO [04:36] with English captioning)
Excerpts:
You forget who made you oligarchs, who worked day and night, who grew wheat, who pumped oil and gas, which you were selling in millions of gallons.
You are the scum, animals, who forgot about your people.
You organized revolutions and did not even think about the people…You scum, send 18 year old boys to their deaths threatening them by your guns…I promise we WILL get you…Get ready bitches, we are coming after you…
This article assumes that ‘graft,’ ‘greed’ and ‘corruption’ are alien concepts in Russia and China and an inherent aspect of ‘capitalism.’
Well, they are not.
Take your pick:
1) Corruption in Russia – Google search results
2) Corruption in China – Google search results
So, to escape from the clutches of the IMF run world, what is one supposed to do?
Where’s this land of truth and justice?
Until very recently the decline of the dollar and thus American Empire was a managed affair in which the Fed and US government had a say. The prospect of a sudden and complete removal of the dollar as a global reserve currency would be and will be catastrophic for the world.
The volume of dollars that is held outside of the US market is huge, inconceivably vast. The repatriation of even a small proportion of those dollars would result in the destruction of the US economy and the effect would be global – just as it was back in 2008.
It is easy to sit on the sidelines and cheer on a ‘winning’ team, just as people are doing in respect of the Donbass rebellion, but the effects of disruption in either case are huge.
We REALLY don’t want to see the abrupt end of dollar hegemony. Not only will the economic effects upon the people of the world be huge as a direct response but the US in its efforts to control and delay the decline will behave in MUCH, MUCH worse ways than they are now. What we are seeing in Ukraine is about dollar hegemony – yes there’s some other stuff too but if there was no risk to the dollar then Ukraine would have a different and legally elected governemnt and president who give, at he least, lip service to the idea of Ukraine as a unitary state comprised of equals.
Sadly Mr Koenig’s rant misses this important stuff in its click baiting vehemence. Given Mr Koenig’s credentials I’d welcome the opportunity to learn some ideas and answers from him rather than read a screed of provocative questions. For example, taking his final paragraph as an example: what in his estimate is the effect of his suggestion likely to be upon the economies of the EU and the US? What will be the effect of his suggestion upon GDP and personal incomes? What will be the effect upon the social fabrics of these two blocs of his breathless suggestion?
It has been blindingly obvious for the best part of a decade that the era of dollar hegemony was coming to an end. It was not hard to see the management of that process – we even saw overt examples of that management from time to time although most of the process was not clearly visible. Why does Mr Koenig think that the process has become speeded up and why does he think, as it seems, that the process should be speeded up even more.
I look forward to pieces somewhat more considered and fact based from Mr Koening and other economists because there’s something that most of us never think about: warfare is economics writ large. Warfare is all about the allocation of scare resources and that is the root definition of the study of economics.
“The volume of dollars that is held outside of the US market is huge, inconceivably vast. The repatriation of even a small proportion of those dollars would result in the destruction of the US economy and the effect would be global – just as it was back in 2008.”
The reason why “the volume of dollars … held outside of the US market is huge, inconceivably vast,” is BECAUSE countries want to trade in US dollars. They offer their goods for sale in US dollars BECAUSE they want to net save in US dollars. The day they don’t is the day that the US dollar is no longer the reserve currency; these countries will want to save in some other currency. On that day, nothing remarkable is going to happen. It will be no different than global trade in the 50s and 60s when the British Pound was the reserve currency.
And as a point of fact, no US dollars, except for physical cash that tourists take out up to 10Gs, can leave the US banking system. By law. The statement “The repatriation of even a small proportion of those dollars would result in the destruction of the US economy,” is complete malarkey. Absolute rubbish. Those US dollars that you think will need to be repatriated are in a foreign bank checking account at the Fed right now, or they are in treasury securities; therefore, in a foreign bank savings account at the Fed.
MRW
The NSA apparently, holds embarrassing, career-ending pictures and audio of every prominent Euro Leader in the most compromising poses imaginable.
Don’t forget that non elected ‘eurocrats’ (elites or so called)pretty don’t care about their people.The UE is in recession,deflation for 6 years now.To ‘save’ the Euro,which is a broke currency(the same currency for 28 different countries does not work and will never work).
They have no solution,everything is linked,dollar as broken as the euro,banks almost all bankrupted(it is just hidden since 2008 with desperate QE).Interest rates are at zero,there is no way out of this shit of quadrillions of debts and derivates with zero value),but war,hot war anywhere.
All insiders know that.
What the people of Europe need is to regain their total sovereignty,we have more and more new political parties who propose to get out of the EU and NATO.
It will be the main topic of the next presidential elections in France and other countries.
Check this one good videos:(french)
https://www.upr.fr/videos/conferences-en-ligne
or this one
http://www.debout-la-republique.fr/Sortons-de-l-euro.html
and of course
http://www.frontnational.com/2014/04/defile-du-1er-mai/
http://www.pourlafrance.fr/
On the left side
http://www.chevenement.fr/
http://www.jean-luc-melenchon.fr/arguments/six-ans-de-lutte-contre-le-grand-marche-transatlantique/
Of course as Hollande betrayed the socialist crowd,they are coming(2017) back with the CIA agent Sarkozy to ‘save’ the banksters/UE and NATO.
Let’s destroy the UE and disolve NATO.
So many people are critisizing Putin of so much politness and postponed actions toward the Empire. Not so many readers like to see that sudden pull out of the dollar would definitelly be a disaster for the all world if we want this or not. This dollar based financial system was intentionaly set up to enslave the world just for the benefits of few chosen one it is abviously so visible more and more around the world.
Regarding to Russia, China, Saudy Arabia and some another countries can pull out the carpet from under the dolar in 24 hours if they want, but they knew very well it will cause a financial earthquick. This procedure has to be done with the sensitivity and consideration / and Putin knows this very well /because if this will happen of corse the all world will blame who else like Putin.
Putin has many times invited the Empire to have a discussion and to change the direction for the more fair worldwide business. Of course the Empire want to have everything just for themselves, the all world, no matter what. This is nothing just a psychotic and typical parasitic aproach what they were practising for almost 500 years. They went so far, that they brake the simple rule “Live, and let the people live too” and now we have get to the point from where is no return, because so much harm was done. Humanity is waking up and starting to see what was hidden from us for the centuries. Yes, it look like we have no another choice just to choose the new financial system based on fairness for everyone around this earth and for the every single country with out any excuses. We are very close and we are not going to give up this chance no mater what, we deserve much better life what we had till now, more prosperious for everyone not just for the few.
Good article.
If we continue to insist on seeing the United States as the primary malevolent actor in the world today then we’re going to be stuck here forever.
The Anglo-Zionists are supported by a cast of Globalist Satraps including their dutiful Neoliberal Minions who look to London, NY, Washington and Hollywood elites for direction, guidance and inspiration.
Our problem is that the international system is supported by parasites whose very existence depends upon the hegemony of the US dollar. They are a class — not a nation or a religious group although they do have their religious affectations like the the mythologies of the Holocaust and Choseness.
Like all parasites, they create nothing by themselves but instead usurp the productive and creative progeny of humanity while forever placing their own names on the hard work of other people.
Target the parasites. The bullseye is there. Once you hit it the old system with implode just like the Death Star did in Star Wars.
In order for this to happen, there will have to be an alternative and the BRICS are working hard to make it happen. We are getting very close to something that was hitherto impossible.
Argentina is the perfect test case and provides the BRICS with an opportunity to work out the kinks in their new system. If I were Putin and I sincerely wanted to overturn the US dollar system (he recently claimed otherwise), I would immediately head to Beunos Aires and have a sit down with M. Kirchner. The Anglo-Zionists would prefer if Putin blew his 200 billion ‘stack’ on Ukraine but for less than a tenth of that he can shatter the foundations of Zion.
If it happens just once — one successful rescue of an important OECD economy — it’s game over for the gangsters.
But how will you get Kirchener and people like her abandon forever their shopping trips to Manhattan — I don’t know.
The questions starts with each of us as priviledged individuals — what are you willing to sacrifice to achieve sovereignty over yourself, your family and your community?
The future starts there.
I am not sure single currency for the two country is good idea, look at EU or even military alliances Look at NATO. There going to be a day of world peace, and no poverty, but before everyone is ready, all those alliance are leading to new problems.
Daniel Rich,
Graft, greed and corruption have always been with us, and certainly exist and existed in all of the old USSR countries, no? The real issue is how they can be controlled so that We The People are not hurt by them. But I think they exist as sort of the built-in foundation of Neoliberal Capitalism — resource extraction plus anything-else-that-isn’t-nailed-down, whereas even under the old Soviet system they were more a function of a) human nature plus b) an awkward and unwieldy system with no incentives to make it work better. Maybe I’m wrong about that, but it seems to me what happened in Ukraine after it became independent was the combination of the old graft, greed and corruption, with the new incentives to do it in an exponentially more rapacious fashion.
dusty,
I don’t see why the decline of the dollar and American, much less AZ Empire hegemony, would be catastrophic for the world. Au contraire, I think it would be a very good thing for the world and 99.99% of the inhabitants thereof. Sounds like you’re scared of it, but I doubt very many other people here share your views; in fact, I strongly suspect most of us welcome the end of the outrageous brutality, violence and subjugation caused by the currently-dominant Neoliberal financial system deviously foisted upon us by the City of London, Neocons, our military-spook establishment, the MSM, NATO (did I repeat myself?), the Eurobureaucrats and various other whores and hangers-on. Sorry you don’t like it but I’m wondering what exactly you fear, assuming you’re not tied to any of the above; for a common citizen anywhere, the end of this thoroughly disgusting “system” can only lead to improvement of… just about everything, frankly, and can’t happen soon enough. Every country should have its own currency, and its own state bank: who the hell needs London taking a cut of every transaction? Everyone on the planet will live better, except of course the violent, manipulative thieves running the show. The only real question is how much more stupidly and violently TPTB will react as they fall. Your concern is touching, though.
Nora,
Excellent rebuttal. That pretty much covers it all. We are indeed witnessing the end of some 300 years of colonialism deplored by the colonists. Great Nora, the subtle irony and quality hints couldn’t be better against such suspected trolls, both of them, but especially “dusty”.
@dusty 20:25
At this point in time I don’t think the planet can afford to use the “too big to fail” argument as it applies to the US dollar/ reserve currency global payment system. While it will shock the system no doubt, it is the only thing that will save the future world. Western civilization, led by the USA has evolved into what has been recently defined as “financial fascism”. It cannot be reformed from within, because the people who hold the levers of power are unreformable.It has devolved into an entity that can only exist by creating endless war, chaos, enviornmental rape etc. This is not a survivable long term strategy.
So I agree with the writer of the article. The worlds only hope at this point, is that with Russia and China leading the BRICS and other non aligned countries, they can somehow create enough counter-force, and quickly enough, to prevent the USA from plunging the the world into conflagration.
No one state should have the sole global reserve currency status. Look what has happened since the US got it. It abused of this status by accumulating an insurmontable debt backed only by it’s firepower and growing hegemony when It decided to decouple from Gold. When it will be recognize by all, that the US empire has no clothes anymore; then there will be a reset of all currencies (devaluation) and all currencies will have to be backed by gold eventually, to help keep there value with a sound management of the expansion of money within the trade balance between countries; like it was done before the Bretton Woods in 1944. This time, all countries should have an equal say for the deal implemented. They should end the fractional banking system, end the federal reserve system and the BIS. Also end the IMF and the World Bank system that help cause all the misery in the world and helped the US grow it’s hegemony over the rest of the world. I think that’s what Russia, China and the BRICS are all about. The US dollar isn’t relevant anymore, the fall of the Empire is nearing!
China and the currency thing.
China does not want the yuan/RMB the world’s new reserve currency.
China does not want the yuan/RMB the only trading currency.
China wants a basket of currencies used for International trade.
These are her policies and statements for several years.
China also never thought about replacing the US as the new #1 anything. They will be number one in size of economy, but the income of its citizens will be on average somewhere like 25% of American citizens’ incomes on average. The size of the economy is not what makes the US number one. It’s the will to use military and finance and banking to dominate everyone else.
China has no will or desire to become a Hegemon.
China loves the idea of working with alliances and bi-lateral arrangements in win-win deals. This is readily apparent if you look at its Free Trade arrangements with neighbor countries, its loans and infrastructure projects, its foreign investments, etc.
China and Russia are spearheading counter moves with the BRICS and individually with many nations who are opposed to US domination.
They tried for years to reform the World Bank and IMF from inside. The US would have none of it. They have tried in the UN. The US will have none of it. Even the Climate initiatives, China has led the way, gets the bad press, but the West , led by the US, does not keep its end of the climate reforms.
The game is stacked against developing nations like China and Russia. The developed nations (the West particularly) are not about to let China and Russia reform the world’s rules. The US intends to make all the rules again.
So, we will see how clever China and Russia can be to divide the other nations away from the US. They have made great progress and ironically Ukraine has been a catalyst. But the process is not yet under management. It sounds good, some of it in process looks good. But the US has a way of destroying competitors. Remember the ascendance of Japan and the Asian Tigers? Killed in their cribs. Japan and Taiwan are dead economies.
I know the two nations, China and Russia, do not want to make a military alliance. But the signal they should send is that China will be in the Mediterranean and Black Sea and Arctic alongside Russia, and Russia will be in the Yellow Sea and East China Sea and South China Sea alongside China.
That co-venture of sorts has to happen soon. American strategists have to understand there is China-Russia-India-Iran-Pakistan to deal with. It dwarfs NATO.
And working with BRICS and building the New Silk Road and Maritime Silk Road makes anything the US dreams up like TPP and TTIP puny by comparison.
How can it be a good idea for China and Russia to form a common currency? All sorts of independent monetary policy are necessary to the implementation of sovereignty. The loss of that sovereignty by Europe’s nations is part of what’s wrong w the EU. To be sure, it makes trade-payment simple, but this is not in any regard necessary.
The element missing from this article isthat in October the leaders of the EU change. The outgoing gang are desperateto earn their bribes before they go. That is what all this is about.
The post WW 1 Bankrupt German Nation, heavily indebted and economically constrained because of Colossal war penalties, was restore their Economy because of a New Monetary System.
In 1933, Germany had Hyperinflation and Unemployment, but by 1938 Germany was on the path of Prosperity, and there was and a construction boom, and Full Employment, and Germany even lacked enough workers to fill the available jobs, and this happened at a time when Europe was suffering from Great Depression.
Monetary Theories of that era say that Money issued should be back by Gold held in Central Bank, who works independently from Government, and that Bankers decide how much Money should be issued.
Germany outlawed the contemporary economic system of international banking by issuing its own Currency not only Monetary but also Financial ones, and Germany emphasized that the right of issuing money should lie in Government who can issued it for the Benefit of People, and not to Bankers.
There are Many People who think that Money is not something stored in Lockers but that it is Actual Wealth of the Productive work of the Citizens and that is purely Logical.
After the world war 1, The International Banking Dracula was ready to Exploit Germany by offering Germany Loans on Interest for their own interests.
Germany refused to accept such loans and issued Germany’s own Currency and Germany’s excellent and innovative Money System astounded the International Bankers.
Germany issued Debt-Free and Interest-Free Money, and the German Government Financed its entire Government without Gold, and without Debt.
Germany began its National Credit Program by Devising a Plan of Various Public Works Projects.
The projected cost of the various programs was fixed at one billion units of the National Currency and One billion Non-Inflationary bills of exchange, called Labour Treasury Certificates, were then issued against this cost.
Millions of People were put to Work on these projects, and the Workers were paid with the Treasury Certificates.
Workers spent those Certificate Units on other Goods and Services, thus creating more jobs for more People, and in this way the German People climbed out of the crushing Debt Imposed on them by the International Bankers.
Another great aspect of Germany’s Economic System was the Barter System, and German Foreign Trade increased enormously.
England was quite willing to Lend Money to buy raw materials but Germany insisted upon exchanging goods for goods.
Germany would enter into no obligations to pay for its imports than it was capable of fulfilling, because the German Government took the standpoint of the respectable merchant who keeps his orders in harmony with his power to pay.
The popularity of that system can free the World from the curse of Debt, and this is why Germany emerged as a new Economic Power whose influence spread rapidly across to other Countries.