They just follow Washington’s recommendations

by Sergei Glaziev

source: http://rusvesna.su/recent_opinions/1434823816

translated by “K” (thank a lot!!)

On the eve of the St Petersburg Economic Forum, the Bank of Russia made the business community happy with another reduction of the key rate by 1%. News Front asked economist Sergey Glazyev to comment on the decision.

Sergei Yurevich, what has this decision changed in the Russian economy?
Nothing.
Why has the press made such a fuss about it?
Because journalists who comment on economic matters, rarely understand what they are talking about. Few of them know what the key rate is…
It is the refinancing rate…
Refinancing of what? That is the main question. The rate is the benchmark for the Central Bank to provide short-term loans to commercial banks for repo transactions. These are transactions for the purchase of securities included in the Lombard list of the Central Bank with the obligation to repurchase at the same price plus the key rate. These loans are generally issued for a few days to a week. Banks need them to cover a liquidity deficit – a temporary shortage of cash to meet current obligations. These loans are not directed at the real sector of the economy where the production cycle lasts from several months to several years. The economy needs long affordable loans. Whereas the Central Bank provides short expensive money as the lender of last resort to cover short-term imbalances of supply and demand in the financial market.
Nevertheless, the whole credit system is based on the key rate.
Because that is how our banking sector is set up. Let’s start with the fact that it is a monopoly – three state-controlled banks account for more than 70% of its assets. However the state in no way manages these banks – it only rescues them time and again from crises, pumping them full of budget money and relieving their bosses of their responsibility for the efficacy of their work. Nobody gives them any kind of assignments and the senior management of these banks behaves as if these organizations belong to them. They set arbitrary interest rates and don’t concern themselves with solutions to the problems of economic development.

Indeed no-one even sets them such tasks. They exist for themselves, using unlimited access to that very system of refinancing. They take money from the Central Bank at the key rate, add their margin and offer it to borrowers. Because of their monopoly position, other banks are guided by them in their interest rate policy. This highlights the role of the key rate. The Central Bank prints money and throws it into circulation at the key rate. It thereby determines the minimum price in the money supply. After all it doesn’t cost them anything. And it can make the offer at any percentage rate. When it is necessary to stimulate business growth, the monetary authorities reduce this percentage rate.

There have been cases when the central banks of some countries offered loans at a negative interest rate – that is they rewarded commercial banks for their willingness to take money and bear the risks of its loan to businesses. Now the main issuers of international currencies, the US Federal Reserve, the European Central Bank and the Bank of England provide loans at a negative real interest rate, considered as the nominal rate minus inflation. With this they stimulate economic growth and reduce the risk of banks defaulting (bankruptcy) when they experience problems with the repayment of loans from their borrowers. When the economy is overheating – that is, it is operating at the limit of its capabilities and a further increase in business activities involves the risk of inflation – the monetary authorities raise the refinancing rate. With this they increase the efficiency requirement for loans.

And is our economy overheated?
It seems to me that the monetary authorities are overheated. I do not understand the logic of their behavior at all. One year ago they began a sustained increase in the key rate in a situation where the level of capacity utilization averaged around 60% – even less in manufacturing industries. Capacities stood idle due to the fact that businesses lacked working capital and loans for its replenishment could be taken only at a rate that exceeds the profitability of production – that is, at a loss, and on top of that with excessive collateral requirements. Raising the key rate only worsened the already difficult situation with the financial position of the manufacturing sector and was the main cause of the economic downturn. I and many other experts warned the monetary authorities repeatedly that the consequence of their policy of increasing the key rate would be a fall in output and an increase in inflation as the increase in loan costs will be passed on to the production costs and will raise prices.
This is obvious. Why did the monetary authorities not take your advice?
They don’t talk about it. The answer to your question can be found in the statement of the IMF in its address to our monetary authorities on the results of its mission in Moscow. The actions of the Central Bank in raising interest rates and allowing the ruble to float freely fully conform with the recommendations of the IMF. But the monetary authorities pay no attention to the consequences which we forecast. This is indeed strange, when you consider that raising interest rates and tightening credit conditions always reduces the money supply and there is nowhere where it doesn’t lead to a drop in production and investment.
You mean the stagflation which we are now experiencing – is the result of decisions taken by the monetary authorities?
And you thought it was the anti-Russian sanctions? If, after we were notified of them, the Central Bank has provided the manufacturing sector with an extension of credit, then we would have had a growth in production of import-substituting products after the introduction of our counter-sanctions against Western foodstuffs. But as loans for the increase of working capital to be used for the extension of production at domestic producers’ free production capacities could only be taken out at a high interest rate, they were forced to go the way of price increases.

We had a unique situation in world practice – a combination of devaluation of the national currency and a fall in the volume of production. Always and everywhere devaluation of the national currency automatically leads to the growth of domestic production, which becomes more price competitive with foreign imports and correspondingly displaces more costly imports and increases cheaper exports. It is this effect the President was referring to when at the Business Russia Congress he spoke about the additional opportunities that had arisen for domestic business in connection with the fall of the ruble. But few were able to take advantage of these opportunities. In conditions of low profitability it is only possible to fight off sharply increased interest rates for loans with a corresponding hike in prices – and that means at the expense of demand. Due to the insane inflation of the key rate and the deterioration of the credit conditions of manufacturing enterprises, instead of expanding production and import substitution as the government had encouraged them to, they were forced to follow a path of banal price increases and reduced production as a result of falling demand.

So in this way the monetary authorities did exactly the opposite of what the government leaders were talking about? Instead of stimulating import substitution they made it impossible and stimulated inflation?
That’s the way it turned out.
And what about targeting inflation?
That too. They announced the transition to a policy of targeting inflation and set as a reference point a decline of 5%. In reality, they achieved – as we warned – an increase by the same amount. And a slight decrease in the key rate won’t change anything. The average profitability of the manufacturing industry is three times lower than its new level. Our economy needs this latest decision of the Central Bank like a hole in the head. Money will still not enter the real sector and the refinancing of commercial banks at this rate will mostly be used for speculative purposes. The monetary authorities have driven the economy into a stagflationary trap and continue to hold it there.
Are they idiots? Or saboteurs?
No, they are just carrying out the recommendations of Washington’s financial institutions. What they call the policy of inflation targeting is really no such thing. They understand the policy of inflation targeting to mean the consolidation of all tools of monetary policy for the manipulation of the key rate in a financial system fully open to cross-border capital flows and free shaping of the exchange rate of the national currency.

If the word “targeting” is used in accordance with its meaning “goal-setting”, in accordance with the generally accepted approach to the management of systems, then the monetary powers should have monitored all the macroeconomic parameters, which are significant for the formation of inflation, such as the exchange rate, regulated tariffs and this same percentage rate and used these to reduce inflation. Moreover – not increase it but reduce it. They did the opposite and indeed got exactly the opposite of the intended result – inflation was not halved as they announced, rather it was doubled, as we had warned.

How do they explain this?
They don’t. Unless you consider of course the mantras based on the suggestion that “they did absolutely everything correctly” and that “the transition to inflation targeting implies that targeting the exchange rate of the ruble must be dropped.” But these are no more than incantations.
That is to say, there is no scientific basis to them?
There is a comparison of the monetary policies of European countries carried out on statistics from the last 100 years. The three researchers formulated the so-called impossible trinity (trilemma) that with free movement of capital it is not possible to simultaneously fix the exchange rate of the ruble and pursue an independent monetary policy. This empirical observation makes no claim of ultimate truth, which is what the IMF has made out of it.
Why?
What do you think are the objectives of the IMF?
Probably, ensuring macroeconomic stability..
Actually, the main goal of this organization, which is located in Washington, appears to be ensuring free cross-border movement of capital, which is postulated in this trilemma as a given. But if even back then the monetary authorities, with an absence of capital controls, did not manage to pursue an independent monetary policy and control the exchange rate of the national currency at the same time, then what can be said now, when the issue of global currencies is increasing exponentially. Even the slightest fluctuations in the flows of speculative capital circulating in the global market can overturn the monetary-financial system of a relatively large country. It can be proven that in modern conditions the free flow of capital makes both control of the national currency and the pursuit of an independent monetary policy impossible. The national financial and monetary market is completely dependent on foreign speculators and the conduct of an independent monetary policy is impossible.
This is also true for Russia?
Russia accounts for just 1% of the global money supply. Its financial market is relatively small. Therefore it is highly vulnerable to attacks from large international speculators. They actually manipulate it – the share of foreign speculators in the Russian financial market in the whole of the post-Soviet period ranged from 60% to 90%. It is they who are the main beneficiaries of the “free” floating exchange rate of the ruble. The profitability of speculative activity in the Russian currency market after the Central Bank let the ruble float freely last year was 30-50% per annum – and if you had access to insider information from the Bank of Russia or MICEX then it topped 100. Not surprisingly all the free money rushed into currency speculation, which along with the attack of foreign “investors” caused the collapse of the ruble.
It turns out that our monetary authorities were working for them?
While the profitability of the manufacturing industry fell to 3-5%, and investments crashed by 10%, speculators earned many billions through the destabilization of the ruble exchange rate without any risk indeed even on account of loans drawn on the Bank of Russia, which commercial banks put on the currency market. Raising the key rate could have no cooling effect for them because the profitability of the speculative operations was higher still. But for the real sector of the economy raising the key rate caused a sharp increase in the cost of credit, investments were stopped and output reduced.
Who profited the most from the free floating of the ruble?
Ask the MICEX management.
Kudrin?
Although he is, as far as I know the chairman of the Board of Directors of MICEX, I think that the managers of the organization didn’t ask him rather they acted in the interests of their partners in the major foreign banks. After all many of them are former employees of Deutsche Bank, Morgan Stanley and other major global speculators.
But is this not market manipulation?
Yes, in the US or the EU the actions of these managers, who caused the collapse of the ruble and then its rebound semi-volatility, would have been subject to the most stringent trials and would have ended with multi-billion dollar fines and criminal penalties. For us however these managers are high professionals.
In other words, our monetary authorities are working for foreign speculators? What about the Western sanctions?
Not just foreign ones. Here as well the income of speculators grew like mushrooms sprouting up after rain after the ruble was allowed to float freely. They have superior communication and authoritative leadership with access to confidential information from the regulator. Creating “currency swings” – this latter created a real gold mine for them… By the way Western sanctions only affect loans with a term of over a month. They don’t apply to short-term loans, which are what the speculators depend on. Indeed they need loans for literally one day, often – for one hour. So the entire Western financial system is still connected to our financial market, which is still dominated by foreign speculators – they account for 90% of transactions. Despite the sanctions, American financial funds are not exiting our market, they continue to push through trillions of dollars in excessive profits on the “free” floating of the ruble.
Who is paying for all of this?
The source of income for speculators is the destabilization of the monetary market. When the ruble falls, speculators convert part of the depreciating savings of enterprises and citizens into the national currency, when it climbs then into foreign currency. This is a simple redistribution from those who earned and saved money to speculators. In addition, by destabilizing the market they sabotage the investments and business plans of bona fide economic actors, who lose their bearings and are not able to continue as planned. Investments fall, production declines, the economy stops developing. This is why in every country monetary authorities conduct an uncompromising fight against speculators.
And we think they are doing useful work…
They can be useful, if you are talking about small market fluctuations around the point of equilibrium. But if you let them manipulate the market then they transform it into a turbulent operation with unpredictable fluctuations of the exchange rate and securities with galloping inflation, making development of the economy impossible. This is exactly what is happening in our market, which any major foreign player such as Morgan Stanley or Deutsch Bank can easily destabilize. The capabilities of each of them exceed the capacity of our entire financial market.
It follows then that we should protect our financial market from such imperialist sharks?
We don’t just need to protect it, but also to regulate it purposefully. We should welcome direct foreign investment, especially when it includes the transfer of modern technology to us, but we need to protect our market from speculative attacks. All successful developing countries have used such filters, using direct and indirect methods – from banking control instruments to the taxation of speculative transactions. If we want to manage our own development then this is indispensable.
What else needs to be done?
RAS experts have long proposed a set of measures to carry out a macroeconomic policy targeted to stimulate the growth of investments and production. It involves regaining control over the proper use of credit. Then it can be dramatically increased under conditions of the specific use of credit resources for modernization and growth of production. Then instead of the current stagflation – a combination of stagnation and inflation – we would get sustainable growth and a reduction in the production costs of domestic goods, accompanied by deflation. Details can be found on my website.
It’s that simple?
It is not simple at all. The launch of the proposed financial arrangements for investment growth and production involves a transition to a qualitatively more complex system of management of development of the economy, including strategic and indicative planning, a stringent system of accountability for the effective use of credit resources in the same state-owned banks, which together with the Central Bank should operate as a system of development institutions. And in order to access long-term, cheap credit resources private businesses must take responsibility for achieving the goals of development of production under which these resources are provided by the state.
And this isn’t a return to a planned economy?
If so, then Japan, China, India and Brazil all have planned economies. And even in Western Europe there was also a planned economy before the introduction of the Euro – money was printed by the national banks according to demand from the manufacturing enterprises, as confirmed by their business plans, the implementation of which was monitored by commercial banks. They took the risks of lending to their clients and refinanced with the national banks using promissory notes. It was this mechanism of monetary emission for the commitments of the manufacturing enterprises rather than the infamous Marshal Plan which ensured the recovery of the economies of Germany and France after the war.

But in order for it to work effectively the national banks of these countries were monitoring the creditworthiness of all businesses, the promissory notes of which were taken to secure the refinancing of commercial banks. These then monitored the efficiency of the use of the credits made available to them, including their intended purpose. The national government was responsible for the development of the economy, defining priorities, shaping indicative plans and implementing specific programs. That is what created the European aviation industry, nuclear energy and transport infrastructure. Only very naïve people who are very distant from the real economy can believe in the automaticity and optimality of the free market. It exists only in textbooks for students of the lowest courses.

Apparently for our monetary authorities it is necessary to organise a course of instruction for advanced students…
As long as they learn from the IMF they will probably never manage to progress to an advanced course. For the Washington consensus is characterized by market fundamentalism, which for many years has served as a condition for granting loans to underdeveloped African countries. They were given money on the condition that they do nothing except protect the property rights of foreign capital and to ensure its free entry, exit and circulation on the national market. And instead of they themselves planning their economic development, foreign corporations did this, building the economic structure according to their own needs and extracting excessive profits with the exploitation of their natural resources and cheap labor. And the monetary authorities regulated the key rate in the naïve belief that this could affect something.
So the Bank of Russia did the right thing when it lowered the key rate?
That’s not the point. The key rate is the benchmark for short-term credits to replenish liquidity. Along with the mechanism of current balancing of the financial market a system should be in place to target loans to support the growth and expansion of manufacturing enterprises with differentiated rates and terms and conditions of credit depending on the nature of the activities.

For example, loans to MIC companies with defense contracts should be refinanced at a zero rate, as they are fully secured by the budget. Loans to construction companies with mortgages should be refinanced at a rate of 1%, as they are secured by the savings and income of citizens. Credit rates for agro-industrial and processing industry companies should not exceed the average profitability of manufactured products, as in the opposite case they would either not be reimbursed or it would entail an increase in prices. And so on, but in all cases the commercial banks must monitor their borrowers in respect of the proper use of the loans granted according to the schemes of targeted refinancing. And you can let speculators take out loans at the key rate – the profitability of their operations taking into account the risks allow them to do this. In such a system the key rate would not be determined by the lower but by the higher value of the interest for the loan.

What stops us launching this mechanism for the financing of economic growth?
First of all the naïve faith of the monetary authorities in the recommendations of the IMF. It is engendered not only by lack of knowledge and competence but also by unwillingness to take responsibility, including for the proper use of the money issued. The main weak point of the proposed mechanism of targeted multi-channel financing is corruption. If it is not eradicated the specific loans will not result in growth of production but in currency speculation and capital flight. This, by the way, is what is happening now with the main flow of credits, allocated by the Central Bank under the existing scheme of refinancing of commercial banks at the key rate. So, it’s not that simple. But we just don’t have another option of financial support for economic growth today. Waiting until people accumulate money won’t work as they already owe the banks more than they can pay. Western banks no longer provide loans because of the sanctions. Of course you could hand over the development of our economy to eastern banks – for example the Chinese ones. But then they will plan the development of our economy for us, while the Central Bank plays with the key rate, naively believing that they are targeting inflation.

Cassander on July 14, 2015 · at 9:53 pm EST/EDT

Yvgeny Fyodorov on Russian Central Bank’s role in stifling Russian economy:

I hope NOD, Putin, August, Americans, CIA, Sberbank, RCB and others will be more understood now, together with the expressions used in the above emotional discussion about __NOTHING IMPORTANT__, decidedly not about Russian central bank.

Evgeny Fedorov June 26, 2015
https://z5h64q92x9.net/proxy_u/ru-en.en/poznavatelnoe.tv/fedorov_2015-06-26

-“(…)
Evgeny Fedorov: you are not affected. What are sanctions? Sanctions deprive us of money – the point of sanctions, to deprive us of money. And based on the fact that we are deprived in an economic machine tool “money”, which its not (this is a key point), then we would begin to freeze, that is, the body becomes free of blood. He has the muscles, heart, brain, feet, hands, and no blood, and therefore the brain, arms, legs, all immobilized.

Question: why Americans can take them from us blood? Simple question.

Answer: because we do not have. And this is the issue of sovereignty.

That is, the Americans beat because we are not sovereign. They hit in the place that we have not protected, because we are his Institute money is not created. Can we create it? Can. For this we need to execute commands Putin, to cut interest rates and launch the ruble in the economy. But there are American guards at the Central Bank who say, “absolutely not.

Artem Voitenko: Wait, we have a Central Bank, it loans. The longest loan it is a week. Is any economy cannot be developed with the longest loan in the term “week”.

Yevgeny Fyodorov: Artyom, the main thing here is this. The Central Bank, it is clear that he justifies this – week. But he just gives money to the economy. “Week” is no money.

Artem Voitenko: So no matter what interest rate, at least half, if the term “week” – nothing happens.

Evgeny Fedorov: If deeper, it’s called “quantitative easing policy”. Policy, there is a lot of points, but the main one is a bet. And besides: regulations, terms, and reserves. We somehow Basel-3, in America, in Europe, Basel-3 no. That is, it also created the Central Bank. That is, the Central Bank – guard, controlled from the outside, not giving the possibility of Russia just create your blood if it is rude to say, in the economy. His goal is that the blood was not created. That is, its task that was not working (what, adrenal glands blood create?) the adrenal glands in the public body. We therefore the blood received from the Americans through such tubes, which were called “foreign investments” and “loans”. They told us: “today We blood you will not”. Tubes blocked. Its is prohibited. So, the body is quietly dying – this is the essence of the sanctions.

That is, if you want to you sanction not affected, you need not embargo to do for this purpose (the embargo for others and you need to include the adrenal glands, right? Stupid. Here, for quite ordinary people say. You simple Russian citizen. You want to eat meat?

Artem Voitenko: Someone doesn’t eat. You want actually?

Evgeny Fedorov: Well. You want to eat? Want. You want to drive a normal car, just the car? Want. That is, if you have the money you will spend this money to buy food. The money is going into a business that produces food, dairy factories, farms, and so forth, and those with the money will start to spin, producing food. Right? Russia’s policy – you have no money to give. To reduce your pension to reduce your salary, even better to let you go. This year’s policy. Therefore, you do not give money, and the money you are not in the economy. Or, you want to buy a car and the money you don’t given, you didn’t buy the car. Not bought a car in Kaluga machine factories on manufacture of cars stopped, that we observe, because they have stopped buying cars.

You do not give money, so you decided to their problems, but at the same time launched an economic engine. And do the Americans together with the Central Bank, because used to give the Americans, and bare the Central Bank and the government. Now the Americans do not give, the Central Bank does not (harder than before), and the government also conducts budget sequestration – does not.

Artem Voitenko: and before the Central Bank did not give.

Yevgeny Fyodorov: But the Americans gave.

Artem Voitenko: And the Central Bank here do not and then.

Evgeny Fedorov: Not in this case – he can give. We also gave the Americans from the U.S. Federal reserve, the American Central Bank. That is, the American Central Bank served as the Russian Central Bank to maintain your standard of living. You know? Disabling this feature, and our, not allowing a run in this feature, you automatically freeze the economy. But freezing the economy – it affects everyone, but not much, but gradually. Because, today is your salary thirty thousand, twenty-seven tomorrow, the day after tomorrow twenty and you see, the year she was twenty, instead of thirty, plus inflation. Not in shock.

Artem Voitenko: Gently.

Yevgeny Fyodorov: As the business is clearly shocked, because he must be stupid to go for bankruptcy. And so for business it is a mechanism of manipulating business, especially large ones, to participate in the conspiracy. What we observe. That is, we now see that in Russia, formed a conspiracy against Putin on the basis of sanctions and big business that depends on Americans and we have another. And we see that this plot just starts officially with the TV sound. Not just there, quietly in the kitchen, and the sound from the TV. This means that the dynamics in August, he will be Mature enough to already-conceived proposals we now see. That is, will not just “early election”, and details are “who to choose”. We are with you on the election notice. The next day was at eight in the morning Breakfast Sberbank, which sounded dubious theses “on the last term.” That is, there has already begun a reversal of this thesis on early elections”. That is, in understanding initiators-Americans – early elections other. You know, right?
(…)”

58 Comments

Jim in NH on June 28, 2015 · at 4:24 am EST/EDT

Its well past time that this man is formally appointed to an official position and help take control of the national economy away from the servants of western capital who are headquartered in the privately owned central bank.

The economic policies he advocates in this excellent interview are a synthesis of the type of rational credit allocation policies that helped create most of the industrial economies of the world today, in contradistinction of the myth of “free enterprise”. From Cardinal Richelieu and the dirigists of France to Hamilton and Henry Carey in the US to the development policies of Korean Pres. Park Chung Hee, and many other examples in between, such policies helped develop national economies in the interest of the entire societies for the common weal, not the benefit of the rapacious speculative parasites that presently control our western financial systems, whose pawns in the RCB Dr. Glaziev has so cogently challenged in this interview.

I have never seen any article or comment on the Saker mention the work of Prof. Ha Joon Chang, a heterodox economist who opposes the “Washington Consensus” polices of the rulers of the AZ empire and IMF. His books go into detail to debunk those myths of free enterprise in very easy to understand terms, including showing how policies such as the above articulated policies advocated by Dr. Glaziev were used to build the real wealth of nations. Some examples are his book “23 Things They Don’t Tell You About Capitalism, “Kicking Away the Ladder”, and “Bad Samaritans.”

To see more on Prof. Chang, see here: http://hajoonchang.net/
- Penelope on June 28, 2015 · at 6:35 am EST/EDT
  
  Thank you Jim in NH. I will take a look at Prof Chang’s work. My econ knowledge is detailed in some areas, but has gaps in others, so perhaps he can help me.
  
  It is ironic that the Russian Czar was an enthusiast of the American System of Henry Carey, etc, but that both countries should have lost it so thoroughly– the Russians under communism, and the Americans under the neoliberal deluge of TINA (There Is No Alternative).
  I recommend to you:
  
  Modern Money Theory, a Primer on Macroeconomics for Sovereign Monetary Systems by L. Randall Wray 2d ed w/b out Sept, avail for pre-order now– or get the old edition. MMT is the system pushed by Michael Hudson & others.
  
  Another interesting source is Starikov’s free online book which unravels the specific ways in which IMF/Fed inhibit Russian (& other) economy, with specific reference to the constitution of Russia– written by the US. [pdf] Rouble Nationalization – the Way to Russia’s Freedom by Nikolay Starikov
  
  I believe that two attempts have already been made by Putin & company to either nationalize the ruble or the central bank, as Starikov suggests. Neither successful due to some combination of 5th column & ignorance, I guess. Why nationalization is necessary becomes obvious in reading Starikov.
  
  I’m hopeful that Glazyev’s present job is to prepare Russian society for another attempt.
  - T2015 on June 29, 2015 · at 7:33 am EST/EDT
    
    I already told you about thrice that you should stop promoting Starikov’s crazy bunch of lies. I also provided legal documents (the actual russian central bank law text) to prove it. Both Ruble and the central bank are federal property.
    
    So once again, stop showing so openly that you are a supporter of british imperial interests. Or to put it short, stop lying so brazenly.
    - Purple Library Guy on June 29, 2015 · at 7:12 pm EST/EDT
      
      You may be right, you may be wrong, but few will believe you unless you learn to calm down and back off the ad hominem.
    - Charles Fasola on July 04, 2015 · at 3:14 am EST/EDT
      
      You sir are absolutely wrong. The central bank is private not public. The ruble is not created directly by the sovereign, exactly as the dollar is not. It is not public money, it is debt. Money created almost out of thin air simply by keystrokes. For the majority of central banks over 90% of money in circulation is created as stated. The remainder, coins, by the sovereign’s Treasury.
  - Charles Fasola on July 04, 2015 · at 3:04 am EST/EDT
    
    MMT is NOT in any way concerned with the types of monetary reform measures which are necessary in order to take the power of money creation away from private banking, through the issuance of debt, and place it back into the hands of a truely governmental and public institution, an actual governmental Treasury Department. MMT is in reality a supporter of private banking control. They seem not to have issues with the fractional reserve debt issuance system currently controlled by, what is not a government agency, called the Federal Reserve; which is in no way Federal, but is certainly a private cabal. You obviously also fail to understand the fact that MMT is not descriptive of the realities of money creation. It is merely a prescriptive. They imply that the Federal Government spends money directly into the economy which it certainly does not. It borrows from private banks then spends. They imply money paid as taxes is simply destroyed; which it is not. It is a circular flow and is indeed needed and spent by government. They imply a currency has value because it is accepted as payment of taxes and fines to government institutions. It has value in reality because others accept it as payment for goods and services needed. If our money was actually created by a Treasury Department fully controlled by government the only backing necessary is by the full faith and credit of the issuing sovereign. “Sovereign”, a term you should learn the meaning of. Finally, Professor Hudson is not an MMT economist, but rather he supports the ideologies of the classical economists who believed government and public purpose should be financed through land tax and taxes upon unearned income. Never by taxing labor. Which MMT never states. I suggest you take time to understand the terms land tax and unearned income. Look otherwise, my friend, for direction. There are sources available that have a true understanding of monetary history and reforms that will remove from private, profit seeking, speculators the power of money creation.
    - blue on July 04, 2015 · at 3:38 am EST/EDT
      
      What you write is almost the opposite of my understanding by what I have read at sites such as http://neweconomicperspectives.org/ and writers such as Michael Hudson, Randy Wray, and Stephany Kelton, who do support MMT (see their writings at that site).
      
      Just the explanation of sector analysis by Kelton shows that money is created by government, not private banking. Steve Keen, although not strictly MMT, also talks about the difference between endogenous and exogeneous money, saying a mistake by neoclassical economists is not talking about endogenous money, or even banks.
      
      I can’t imagine where you are getting you information from.
    - blue on July 04, 2015 · at 3:56 am EST/EDT
      
      Perhaps
      http://cas.umkc.edu/economics/people/facultyPages/wray/papers/Working%20Papers/Fullwiler%20Kelton%20Wray%20MMT.pdf
      
      or https://soundcloud.com/guns-and-butter-1/modern-money-theory-and-private-banks-stephanie-kelton-and-michael-hudson-252
      
      will help clarify things. Only the government can create high powered money.
Wim Roffel on June 28, 2015 · at 9:46 am EST/EDT

There is something wrong with the present concept of “inflation” and the result is the illusionary phenomena of “stagflation”.

We saw it first after the 1973 and 1979 oil shocks. As oil cost more some prices in the Western world rose and this was registered as “inflation” and the Western central banks jumped to the conclusion that they had to raise the interest rates to fight this inflation. Note that their implicit logic is that – to compensate for the rising oil prices – the prices of all other products should fall.

Recently we see the same logic in Russia. Oil prices fall and as a consequence the ruble falls and the price of Russia’s imports in rubles rises. And this is then counted as inflation.

What we see in both cases is price rises caused by external influences that say nothing about the question whether the local economy is overheating. Overheating of the economy and bubles should be the focus of the central banks – not the arbitrary effects of outside influences.
steven starr on June 28, 2015 · at 2:17 pm EST/EDT

If the three Russian state-controlled banks are essentially taking orders from Washington controlled banks, then shouldn’t it be painfully obvious to most Russians that the executive officers of these banks need to be replaced? Or does such a perception require some level of political sophistication that most Russians do not have? Or perhaps it is more a matter of finding a legal mechanism to accomplish such a change in management?
- Penelope on June 29, 2015 · at 4:03 am EST/EDT
  
  Steven, Glazyev is talking about the structure of the system and also about corruption., and also about a deceitful Washington teaching called the Washington Consensus. It may not be a good starting point for you. .
  
  All except 3 central banks in the world belong to the IMF/Fed system, which means that BY TREATY none are controlled by their own governments– but are controlled by the system.
  
  To understand a big part of it at once there’s a good explanation in this article– even if you read only the first page you will get it:
  
  http://borisanisimov.blogspot.com/2010/10/nationalization-of-ruble.html
  
  Regards
  - T2015 on June 29, 2015 · at 7:38 am EST/EDT
    
    You are still repeating your stories about the imaginary “private” central banks. Repetition of nonsense doesn’t make it any more true.
    
    It’s the exact opposite, all of them belong to the respective state, fully and completely. And snake-oil sellers like you or some gullible do-gooders are sent out to disseminate and feed that (essentially nazi) propaganda.
    
    It is those states that are “controlled by the treaty” but certainly not banks. Again, the STATES are controlled by those treaties, it matters zilch if the bank is owned by the people or by martians.
    - Vineyard Moderator - K.K. on June 29, 2015 · at 8:07 am EST/EDT
      
      This argument about who owns the banks has gone on long enough. No more from anybody, please.
      - T2015 on June 29, 2015 · at 8:25 am EST/EDT
        
        Well then tell you-know-whom to stop repeating the known lies, despite being corrected over and over again.
        
        There is no argument here, just fact (see original law text linked below) vs. fantasy (see Penelope/Starikov).
        
        Vineyard Moderator - K.K. on June 29, 2015 · at 8:31 am EST/EDT
        
        You stop the “over and over again” and then she will stop as well. Obviously neither will convince the other, but you are turning to personal abuse. Enough. There’s enough repetitions of both views for others to make up their own minds.
blue on June 28, 2015 · at 2:25 pm EST/EDT

There are few things which remind me of economics theory as much as the occult such as astrology and alchemy, which is almost completely unintelligible and arbitrarily dogmatic.

I disagree with “The launch of the proposed financial arrangements for investment growth and production involves a transition to a qualitatively more complex system of management of development of the economy, including strategic and indicative planning,”. What is needed is less complexity and more simplification such that planning and control is more straightforward.

First, speculation is inherently creating and shifting money with no regard to tangible wealth and production — but money should represent the tangible (just as pounds at the grocery store should represent quantities of actual vegetables and meat). Speculation (as opposed to investment) should be eliminated — it’s no more than gambling at a casino.

Interest, if allowed to exist, should represent real risks, real potential for increase in production, and real opportunity costs.

Money supply — monetary policy — should be completely aligned with the need for liquidity to achieve near 100% utilization and employment.

Actions to warm or cool the economy should be fiscal and targeted at specific sectors and likely productive activities. This can be done by government spending at no interest or even return of principle — increased production and economic growth would offset this investment, and in those non-sovereign government entities which use taxes to finance operations increased tax base would provide the revenue. In sovereign governments which can create fiat money deficits merely represent the available money in the private sector which is involved n production, or perhaps foreign trade. If there is a deficit in regards to the foreign sector that’s the amount of money used for a return in real goods, but in terms of the real economy that means getting ‘stuff’ for money or debt. Note that the US has been getting scads of stuff for it’s fiat money and astronomical growth in debt. (Wouldn’t you love to have an unlimited credit line where you never had to pay anything back?).

We should stop looking at money and seeing it a causal influence on real production but see real production as a causal influence on money supply and distribution — and we need a new paradigm and system to do that, to replace the scam that the speculators have established.
- Vasco da Gama on June 28, 2015 · at 3:19 pm EST/EDT
  
  I think you are expressing the preference for simplicity as a principle or of control mechanisms, more than recognising that the proposed transition would necessarily imply more complexity, if nothing else, because credit creation only addresses speculators interests instead of overall economy’s. Nevermind balancing the latter strategically, assumingly calling for more economic ponderation terms, as Glaziev proposes.
  
  A planned economy is necessarily more complex to manage than a austrian school guided economy.
  - teranam on June 28, 2015 · at 5:25 pm EST/EDT
    
    yes, but it is quite possible especially in the computer age
    - Spiral on June 28, 2015 · at 6:16 pm EST/EDT
      
      Yes. I wonder if the basic premise of Ludwig von Mises (that of impossibility of computability, by a central planner, of all economic info at a given time in future), which was partially true in his time, is no longer true. In other words, does existence of parallel computation with zillions of processors, calls for a completely new approach to economics and its planning?
      
      Regards, Spiral
      - Purple Library Guy on June 29, 2015 · at 7:26 pm EST/EDT
        
        IMO the problem with central planning is not actually the “planning” part, it’s the “central”. And it’s a political more than a computational one.
        The computational problem is actually a problem for markets as well, they just assume it away. That is, free market theories assume that every actor has full information and is a supercomputer capable of perfect maximization. Since real economic actors aren’t like that, the computational issue with central planning is simply that it fails to solve a problem markets also fail to solve. In any case, I suspect the computational problem becomes much smaller when you accept the existence of an uncertain future, incomplete information and so forth and stop insisting that solutions must be perfect with an optimum result for every molecule. The computational problem for central planning of just “Doing a pretty dashed good job, starting with getting things better than markets do” is I suspect a much lower hurdle than the typical requirement of computing the entire system and optimizing every transaction.
        
        The political problem, however, is less tractable. The problem comes down to interests; if group A decides how things will go for group B, while group B has no power to affect the decision making, ultimately the decisions will be made for the interests of group A, not group B. Central planning (whether by billionaires who don’t admit it, or by Communist Party apparatchiks who do) will end up being done for the benefit of the central planners, not the central plannees. What’s needed is planning with participation, done by the same people it’s for.
        Computer technology is likely to end up more important in its ability to allow decentralization/distribution of planning than its ability to take a centralized plan and compute its economic complexities.
    - blue on June 28, 2015 · at 6:29 pm EST/EDT
      
      Given government is already sucking up virtually all information on people it should be trivial to keep track of business so flag would be raised if rubber baby buggy bumpers sales fell by 20% one month.
      
      But additionally, complex math can be used (far more than current economists use) to monitor and show trends. Look at what just one guy, Steve Keen, does in a few moments with his Minsky program, using 3rd order derivatives with numerous parameters, and such, graphing it in all sorts of ways.
      
      But this is not needed to change the system paradigm — that can be done by using different axioms and watching different measures — and reporting the stuff honestly. Sorry, but buying frozen ground turkey roll is not the equivalent of buying round steak for calculating inflation.
  - blue on June 28, 2015 · at 6:04 pm EST/EDT
    
    All the ‘guidance’ I’ve seen from the Austrian School is individuals in a so-called ‘free market’ which results in chaos and economic war lords — which gets very complex in particulars.
    
    As for complexity, there will always be complexity in that a huge number of people and transactions are involved, but the theory and principles can be greatly simplified in regulation and control, and certainly the terminology.
    
    For instance, have your monetary policy depend solely on liquidity needed for the amount of real wealth, utilization, and assumed productivity, and don’t try to deal with inflation by it: it should be reactive, not diagnostic or proactive, and simply reflect the tangible reality.
    Changing and adjusting the economy should be in realm of fiscal policy, which can increase the money supply through spending or grants, or reduce it through taxation, but both of these can or should be targeted.
    
    We have one word, but two different inflations, and they should not be confused. One is too much money for the available goods as a result of too much credit or fiat money being produced: imbalance between tangible and the abstract metric of money (also problems of unequal wealth distribution).
    The other results of real costs rising, perhaps from shortages, loss of efficiency, or actions of other nations — ‘external’ causes, which drive prices up.
    
    An interesting thing to look at regarding this are the idea of Stephen Wolfram about computational equivalence, and the emergence of ‘complexity’ from far simpler initial states and rules of a system. (see https://www.youtube.com/watch?v=_eC14GonZnU A New Kind of Science – Stephen Wolfram ) This sort of goes against Ashby’s law of requisite variety in control loops and systems, seemingly, but not if complex systems can be simplified. Also, basic cybernetic controls included self-regulation where simple servomechanisms make self-correcting actions without even looking at overall system goals by taking input from error conditions ( which is what the so-called ‘free market’ competition was supposed to do through competition, although it isn’t really free, and capitalists’ goals is to eliminate competition).
    
    For instance, we don’t have to deal with the morass of complexity involving derivatives, currency exchanges, and the rest of speculative activities if we just look at wealth distribution, sitting on money reducing liquidity, and economic slowdown due to lack of credit, and decide to tamp down the speculators, banksters, and interest in favor of the manufacturing sectors. (I don’t care how the chicken thief cooks my chickens, but about him stealing them to begin with).
    
    You have to have the right metrics and servo loops. If some industry needs a boost then the mechanisms can be about the same as for any other industry: government spending, interest free loans or grants, or getting money into the hands of customers. Maybe start a training project if skilled workers are short, or find a way to increase availability of needed materials, or open a path for more trade overseas. Set up a small group of people to find what the needs are when there’s a trouble area. This is needed only when there is a problem but otherwise let things work in the private sector. It’s like having a construction company: if they are doing business it isn’t a problem and is not complex for the goverment regardless of how involved some particular building they work on might be.
    
    The ‘plan’ is to keep the overall economy working and get into specifics only in problem areas where some special help is needed. If there are a plethora of problem areas then there is most likely something wrong with general policy or conditions.
    
    In the US the problem with homelessness is not that so many people need to have shelters and low cost housing built for them, but that unemployment and underemployment is way too high so that people can’t afford to buy or rent, and that speculators have taken many homes off the market by buying up real estate — it’s systemic, and is the result of the poverty, financialization, speculation, and lack of liquidity, which in turn is partly caused by outsourcing jobs and lower wages. It’s not a housing problem but a fascism or predator capitalism problem.
    
    This is not all that complicated compared with what we have now from the economists when we look at the right things in the right way.
MikeH on June 28, 2015 · at 3:21 pm EST/EDT

Financing at such low rates is a prescription for disaster as well. Look to the boom cycle to see the planting of the seeds of the bust.

The answer is to walk away from the western bank model.

Have the Kremlin take over emission of debt free money.
Allow interest rates to float free so an equilibrium between borrowers and savers can be found.
- blue on June 28, 2015 · at 6:35 pm EST/EDT
  
  One should not be able to borrow as cheaply to make a weird movie as to open a plumbing business in a place where there’s a 4 day wit to get a guy in to clear your soil pipe, because the risk is not the same (and neither is the size of the loan).
  Interest rate should be keyed to risk vs return estimates, same as a farmer wouldn’t spend the whole planting season plowing and planting for fiddle ferns instead of wheat in the middle of Iowa.
  - MikeH on June 28, 2015 · at 9:55 pm EST/EDT
    
    I think we are in agreement.
    
    The major point is to eliminate the debt based money and the power of the bankers. They add nothing and are rewarded overgenerously.
    
    Bill Still’s “Money Masters” is a great starting point to understand the corruption inherent in the “capitalist” system.
    
    https://m.youtube.com/watch?v=TwqUr7PSRO8
- T2015 on June 29, 2015 · at 7:41 am EST/EDT
  
  The “western bank model” is not the real problem, but simply the free reign of corrupt criminals within the system. All we actually need is a functioning justice system and laws to be actually followed.
  
  Floating interest rates are the instant death of every economy. The worst option ever in such a thoroughly controlled market. The interest rates are the last line of defense for any state.
Branko on June 28, 2015 · at 4:39 pm EST/EDT

This man tells it as it is.He is Putin advisor.Why does Putin not listen to him or Starikov.
Considering the situation in the west Russia could and would be one of the most prosperous countries in the world.Is there a concerted effort within to keep Russia down.
Is Russia actually a player in a game that would see NWO come to fruition with same old players cooling the shots as in Tribe and Rothschields.Why nobody ever asks these questions.
We the people in the west have no chance short of armed insurrection.We look to Russia and China to stand up to this plan and save the planet from eternal slavery.I realize that we are putting too much pressure on Russian people but they be fighting for their survival too.They have the means as a country.West is already subverted.
Starikovs book on nationalizing the bank is excellent.Why is Russia not entertaining the idea.
In the words of Nike “Just Do It”.It would benefit the people.It would make Russia the beacon of freedom that U.S. Was ment to be.
Now a tough question I hope one of your commenters or even you Saker can answer.
“Has Russia been infiltrated and subverted by the tribe like the west”.
If it has,the end goal is destruction of Christianity first and foremost.Just look back at 1917,or Stalin years.
All,point at the elephant in the room.
Christ save us all.
- Penelope on June 29, 2015 · at 4:14 am EST/EDT
  
  Branko, The difficulty is that the law governing the Russian Central Bank is written into the Russian constitution, compliments of the US. It’s my understanding that there have been two efforts to nationalize either the RCB or the ruble but they were defeated in the Duma.
  
  Maybe 5th col or maybe just more education is needed.
  
  Above I didn’t give the link to the free Starikov online book correctly, so here it is again:
  
  http://lit.md/files/nstarikov/rouble_nationalization-the_way_to_russia%27s_freedom.pdf
- T2015 on June 29, 2015 · at 7:47 am EST/EDT
  
  Don’t fall for cheap propaganda. He does have SOME good ideas, but is also selling lots of nonsense.
  
  Here’s some reality to counter “Penelope”, who’s been spamming everyone with Starikov’s propaganda since months:
  
  http://www.cbr.ru/eng/today/status_functions/law_cb_e.pdf
  
  “Article 2. The authorised capital and other property of the Bank of Russia shall
  be in federal ownership. In pursuance of its purposes and in accordance with the
  procedure established by this Federal Law, the Bank of Russia shall exercise its
  powers to own, use and manage its property, including the gold and currency
  (international) reserves of the Bank of Russia. This property may not be confiscated or
  encumbered with obligations without Bank of Russia consent unless the federal law
  stipulates otherwise.”
  
  So calm down.
  - eimar on July 04, 2015 · at 4:24 am EST/EDT
    
    @T2015 and Penelope:
    
    Just a quick question (and pardon my ignorance):
    
    Are the Bank of Russia (BoR) and the Russian Central Bank (RCB) not two different entities?
    
    If so, is it not possible you are both right – because you are speaking about different banks with different (if subtle) legal arrangements/structures/functions?
ternam13 on June 28, 2015 · at 5:23 pm EST/EDT

Sergei Glazev: Thanks, Saker, there is much to ponder but it is clear politically that opportunists at high levels are for some reason being allowed to exist without regulation. True, he does mention that they provide the function of providing short term carry over loans. But their existence : This is a political problem which deserves some exploration. Scott covered some of the major neo liberal players in one of his sit reps but not in great detail. Corruption was mentioned in the article briefly ( it is often those brief phrases that hold much more gravitas than the ins and outs of the economics). So what is it? Are these characters all inter-married or do they have clans at their back or minions of sub bureaucrats who are beholden to them? what? Maybe that Putin coaxed them to move their off shore accounts to Russia came with a price? Ok, that would make some sense. But then, the deal can not be open ended or forever.
- Penelope on June 29, 2015 · at 4:30 am EST/EDT
  
  Ternam 13, I don’t know if you are American, but imagine that you wanted to change the American system to get rid of the banksters. Or even that you wanted to appoint one man plus his team to investigate and prosecute just one banking scandal.
  
  How in the world could you accomplish it? There are almost no honest Congressmen. How would you get press coverage for your cause, since it’s all corporate media? All the big transnationals including those that own the media are tied together with interlocking directors. None of the big 6 media companies is going to let you tell the public about your campaign to prosecute the banksters for any crime.
  
  No judge gets as far as the Supreme Court or probably even the Appeals Court who isn’t part of the system. But if this should happen, then the gangsters would have recourse to their spy file on the judge– and if that doesn’t work, he or his family can be threatened.
  
  Do you see the problem? To make an important change from within a corrupt system is really difficult. We can & must do it anyway, of course.
  - Uncle Bob 1 on June 29, 2015 · at 8:05 pm EST/EDT
    
    The only thing that will change the US is an “American Spring”.And the only way for an American Spring is for an internal economic or social collapse on a massive scale.Or a huge military defeat that spurred those events.That’s why at present I don’t look for change happening in the US.The system is rigged for the elite to dominate all major politics.The MSM is totally owned or under the control of the elite.And as long as the police and military are paid on time (and that will always come first),they will keep power.
Peter J.Antonsen on June 28, 2015 · at 6:53 pm EST/EDT

Lovely article by Sergei Glaziev, followed by

Lovely discussion (meeting of the minds) of many highly competent commentators.

A clear point by point program for further freeing Russia’s economy from the imperialist/zionist moneylenders (bank owners and their 5th column in Russia) should be offered.

1. What is the way forward for Russia?

2. How can Greece survive and prosper?

3. etc.

Possibly The Saker can help form such a committee of experts.

The 3 parts of the revolutionary method.

1. Complain

2. Describe the illness

(the above article accomplished most the above 2 levels), and…

3. Suggest a CURE (the above article gave some hints).

For the Democratic Republics!

IMAGINE
RockyRacoon on June 28, 2015 · at 8:37 pm EST/EDT

Rocco Galati in court to challenge how Bank of Canada does business

Renowned Toronto lawyer brings unusual case to change the way Canada’s central bank operates.

Toronto lawyer Rocco Galati is representing a small group that contends the Bank of Canada is mandated to provide debt-free support for public projects undertaken by federal, provincial and city governments.

By: Les Whittington Ottawa Bureau reporter, Published on Mon Mar 23 2015

William Krehm, a 101-year-old Toronto native and former economic writer, asked lawyer Rocco Galati to launch the case on behalf of his Committee on Monetary and Economic Reform.

OTTAWA—Renowned Toronto lawyer Rocco Galati is pursuing a court case intended to do nothing less than force the Bank of Canada to reorient its activities on behalf of Canadians.

Galati, who led a successful challenge against an appointment to the Supreme Court of Canada, is representing a small Toronto group whose legal bid is attracting increasing attention from people in Canada and elsewhere who distrust global financial institutions.

The unusual case originated with William Krehm, a much-travelled 101-year-old Toronto native and former Trotskyite who was in Spain during the Spanish Civil War and once stood guard over Leon Trotsky’s corpse after the Russian revolutionary was assassinated in Mexico City.

Krehm, later an economic writer, asked Galati to launch the case on behalf of his Committee on Monetary and Economic Reform (COMER). Galati first filed the case in 2011 and after several legal rounds — including a court skirmish with federal government lawyers — is expected to return to Federal Court within days to move the challenge forward.

COMER contends the Bank of Canada, a publicly owned national financial institution created in the Great Depression, is mandated to provide debt-free support for public projects undertaken by federal, provincial and city governments. Not doing so has deprived Canadians of the benefits of larger infrastructure investments, COMER alleges.

Among other arguments in its court submission, the group alleges Canada ceded its sovereign ability to conduct independent monetary policy to the “secret” deliberations and control of private foreign bankers. This unconstitutional move, COMER argues, was a result of Ottawa’s decision to join several multinational financial organizations, particularly the Bank for International Settlements (BIS).

Headquartered in Switzerland, the BIS is an organization that brings together the central banks from 60 countries to co-operate in the promotion of international monetary and financial stability. Canada joined in 1970.

“It’s by far the most serious and important case I’ve ever done,” said Galati, who gained national prominence in a classic David versus Goliath case last year in which he moved to block Prime Minister Stephen Harper’s appointment of Justice Marc Nadon to Canada’s top bench.

Of the current case, Galati says, “It impacts the entire country in a profound way, right down to the bone of our economics and the history of the way we’ve maintained and lost, through illegal action, our independent monetary policy. It’s huge.”

The federal government tried to quash the case on the grounds it was frivolous and the alleged infringement of the plaintiffs’ constitutional rights was “too uncertain, speculative and hypothetical.”

And judges noted COMER’s contention that the Bank of Canada has a mandate to provide interest-free loans to governments in Canada hinges on the interpretation of a sentence in the bank’s enabling legislation saying it “may” provide such loans.

But the courts have said Galati can proceed with an amended statement of claim.

“We have no comments on a matter that is before the courts,” the Bank of Canada stated.

But on its website, the Bank of Canada explains why it doesn’t “print money to repay the national debt or to finance government programs.” Doing so, it says, “would reduce the value of our money, raise interest rates, and undermine the growth of the economy.”

Ann Emmett, a former teacher who now chairs COMER, said she “absolutely” believes foreign banks are controlling the Bank of Canada’s actions.

“I have to tell you that the lawsuit has sparked interest around the world,” Emmett added. “They are not going to be able to put the genie back in the bottle.”

The lawsuit also alleges the federal finance minister is depriving MPs of their right to properly vet government spending by inappropriately calculating available financial resources.

The original COMER case indicated an intention to make it a class action suit, with $1 in damages for each Canadian. But it’s unclear if that part of the claim will stand.
- Penelope on June 29, 2015 · at 4:48 am EST/EDT
  
  How tremendously interesting, Rocky Racoon. Perhaps you should e-mail your comment, or a few links to the story to a few economists, like Michael Hudson, or maybe Max Keiser of RT would want to interview one of the principals. Also William Engdahl wrote a book called “Gods of Money”, so certainly understands the issue. Also Ellen Brown; it’s right up her alley.
  
  The TTIP or whichever it is that has a section on services has a provision affecting banking services. Guess what it prohibits? Public Banking or State Banking or whatever you want to label the government’s creation of money!!
  - RockyRacoon on June 29, 2015 · at 7:02 am EST/EDT
    
    It’s front page news in one of the biggest dailies in Canada Toronto Ontario. Were not dead over here yet. Everyone from First Nations to Montreal Students are in the Street quite often. Biggest thing now is getting rid of Harper Government. I like Hudson, Engdahl and Brown and a few others myself. But really we HAVE a PUBLIC BANK we just have to FORCE the government through the courts to make sure they use it LIKE THEY USED TO! Either that or we are going to have to create them at the provincial level-That is a strategy I can go for right about now.
    Thanks,
    RR
    - T2015 on June 29, 2015 · at 7:52 am EST/EDT
      
      Maybe someone should educate you that your government is just a dog-and-pony show and that your country is really just a part of the British Commonwealth, subservient to the Queen as the supreme ruler.
      
      Here directly from the source:
      http://www.royal.gov.uk/MonarchAndCommonwealth/Canada/TheQueensroleinCanada.aspx
      
      “The Queen personifies the state and is the personal symbol of allegiance, unity and authority for all Canadians. Legislators, ministers, public services and members of the military and police all swear allegiance to The Queen. It is for this reason that all new Canadian citizens swear allegiance to The Queen of Canada. Elections are called and laws are promulgated in The Queen’s name.
      
      The Queen is represented in Canada on a day-to-day basis by a Governor General at the federal level and by a Lieutenant Governor in each of the ten provinces. The Governor General is appointed by The Queen upon the recommendation of the Prime Minister of Canada while the Lieutenant Governors are appointed by the Governor General upon the recommendation of the Prime Minister.
      
      By granting honours, Canada pays tribute to outstanding people. The Governor-General, representing The Queen as the fount of the Canadian honours system, presents a variety of orders, decorations and medals, headed by the Order of Canada. Each province also has a series of honours that are, as well, awarded to deserving citizens in the name of Her Majesty by her representative the Lieutenant Governor.
      
      The Queen and her eleven vice-regal representatives send anniversary messages to individuals celebrating notable birthdays and anniversaries.
      
      The Governor General and Lieutenant Governors also promote identity and unity in their jurisdictions, meeting Canadians from all walks of life at various ceremonies and events including New Year’s Levees. In promoting the central role of the Canadian Crown, they are key participants in significant ceremonies such as Canada Day, Victoria Day and Remembrance Day.
      
      Even though many duties have been delegated to her Canadian representatives, The Queen herself has a very personal involvement with Canada and Canadian in every region of the country. This involvement is based on a deeply held affection for and loyalty to a country that she first toured as Princess Elizabeth in 1951 and to which she has returned over twenty times since.
      
      One form of involvement is support for the work of Canadian charities and public organisations. The Queen’s patronages include the Canadian Cancer Society, the Canadian Nurses’ Association, the Canadian Red Cross Society, the Royal Canadian Humane Association, and Save the Children – Canada.
      
      The Queen retains a special relationship with The Canadian Armed Forces, acting as Colonel-in-Chief of various regiments: the Royal Regiment of Canadian Artillery; the King’s Own Calgary Regiment; Le Royal 22e Régiment; the Governor-General’s Foot Guards; the Governor-General’s Horse Guards; The Canadian Grenadier Guards; Le Régiment de la Chaudière; the Calgary Highlanders; The Royal New Brunswick Regiment; 48thHighlanders of Canada; The Argyll and Sutherland Highlanders of Canada; Canadian Forces Military Engineers Branch; the Air Reserve and the Canadian Armed Forces Legal Services Branch .”
      - Kat Kan on June 29, 2015 · at 8:26 am EST/EDT
        
        T2015, please don’t be irrelevant on purpose.
        
        Supreme ruler HAHAHAHA.
        
        Canada (like Australia and the UK itself) is a constitutional monarchy — which means there is a monarch, but their rights to rule are severely restricted by a constitution, and their role is ceremonial only. The Queen makes exactly zero decisions for Canada. She can’t even appoint a Governor General that wasn’t chosen by the Prime Minister. And the GG is just ceremonial, too.
        
        Canada is a Federal parliamentary democracy, and its affairs are conducted by an elected government.
        
        Being a member of the British Commonwealth is also irrelevant — that is a voluntary trade and cultural association of (mostly) former British colonies (but others may apply to join and some have done so).
        
        Stop dragging red herrings out of wikipedia when there’s serious discussion going on.
        
        T2015 on June 29, 2015 · at 8:35 am EST/EDT
        
        Sorry but you believe in an illusion. Just as recently as the 70ies, the Queenie dissolved both Canadian and Australian governments. Not bad for a ceremonial role, heh? And she IS indeed the supreme ruler, by any measure. Including commanding the army in case of war.
        
        Also the Commonwealth is by no means a “voluntary trade association” (LMAO for this whopper of a joke), but the actual empire – a private property of the royal family as given by “God” (Vatican). It’s more like a successor of the British-India company.
        
        Kat Kan on June 29, 2015 · at 8:57 am EST/EDT
        
        Go take your meds, T2015,and come back tomorrow after a good sleep.
        
        The dissolution of the governments was by the request of the Governors, who could have done it themselves (says so in the Constitution) but she’s the ceremonial head so they let her do it (takes some heat off them, though it didn’t take a lot off John Kerr).
        
        Little old 80+ year old Queen does not lead any armies. She is ceremonial head. Her much younger father didn’t lead any in WW2, either. The relevant appointed Defence officers do it under the political control of the elected Government.
        
        The Empire was never private property of the Royal Family to start with. The British-India company (East India you mean?) was a private business, ie belonged to the oligarchs of the day.
        
        Funniest is the “God (Vatican)” bit. Vatican? what Vatican? that is where the Pope lives. That is the seat of the Roman Catholic Church, which he is the head of.
        
        You left out one thing about the Queen – she is also Supreme Governor of the Church of England . The Anglican equivalent of Pope. Again a largely ceremonial role, but she gets to appoint the Archbishops (on Prime minister’s and Church’s recommendation). Henry VIII started the Church of England in 1536 by breaking away from Rome, and the monarch has been the head of it ever since. I really do not see the Catholic Pope giving them any rights or powers, or any empire.
        
        T2015 on June 29, 2015 · at 10:24 am EST/EDT
        
        Thanks for the insult, but I take no meds nor would I need them.
        
        Of course all of the empire is a company. Every single monarchy in there is decrared as a company and the monarch is a (separate for each) corporate sole in all of them. It’s all “private business” as you would like to define it.
        
        http://www.macleans.ca/politics/the-queen-of-canada-is-dead-long-live-the-british-queen/
        
        “Succession must pertain to the office of the Queen because of the Crown is a “corporation sole.” Corporations sole fuse an office and an office holder. The office and office holder are treated as synonymous in law. This means that, legally speaking, all references to the Queen, Her Majesty and the Crown in Canadian statutes and the constitution refer to the same thing. When the constitution speaks of the office of the Queen, then, it is referring to both the Sovereign and the Crown in the broadest sense.”
        
        In Canada she is titled “Defender of the Faith”, since they have no Church of England there.
        
        As for the rest, I’ll just conclude that you are a victim of imperial brainwashing. But you should take a look at actual legal definitions, which may turn out to be be very surprising for you.
        
        T2015 on June 29, 2015 · at 10:29 am EST/EDT
        
        More:
        
        “The Canadian Constitution Act (1867) places executive power in the Queen. However, in practice this power is exercised by the prime minister and his ministers. The governor general acts on the advice of the prime minister and the government, but has the right to advise, to encourage and to warn. As such, the governor general can offer valued counsel to the head of Government.
        
        One of the governor general’s most important responsibilities is to ensure that Canada always has a prime minister and a government in place that has the confidence of Parliament. In addition, the governor general holds certain reserve powers, which are exercised at his or her own discretion. The governor general also presides over the swearing-in of the prime minister, the chief justice of Canada and cabinet ministers. It is the governor general who summons, prorogues and dissolves Parliament, who delivers the Speech from the Throne, and who gives Royal Assent to acts of Parliament. The governor general signs official documents and regularly meets with the prime minister.”
        
        And agaoin from the above quote. Remember, this is legalese!
        
        ” Legislators, ministers, public services and members of the military and police all swear allegiance to The Queen. It is for this reason that all new Canadian citizens swear allegiance to The Queen of Canada. Elections are called and laws are promulgated in The Queen’s name.”
        
        T2015 on June 29, 2015 · at 11:27 am EST/EDT
        
        … and it was even in court, since some people declined to swear allegiance to the queen:
        
        http://news.nationalpost.com/news/canada/citizenship-oath-to-queen-is-a-symbolic-commitment-court-rules-in-dismissing-constitutional-challenge
        
        “Ontario Court of Appeal Justice Karen Weiler ruled Wednesday that the appellants’ claims were based “on their misconception” of the meaning of the oath to the Queen as an individual.
        
        “The oath to the Queen of Canada is an oath to our form of government, as symbolized by the Queen as the apex of our Canadian parliamentary system of constitutional monarchy,” Weiler wrote in her decision.
        
        Kelly McParland: Canada is not a smorgasboard where new arrivals choose the bits they like
        “Applying a purposive and progressive approach to the wording of the oath, with regard to its history in Canada and the evolution of our country, leads to the conclusion that the oath is a symbolic commitment to be governed as a democratic constitutional monarchy unless and until democratically changed.”
        
        If the reference to the Queen in the oath were eliminated, or made optional, wrote Weiler, such a remedy would only be a superficial cure for the complaint.
        
        “Because the Queen remains the head of our government, any oath that commits the would-be citizen to the principles of Canada’s government is implicitly an oath to the Queen.””
        
        T2015 on June 29, 2015 · at 10:32 am EST/EDT
        
        Vatican is the source of legal authority on this planet. All our countries are the successors of old kingdoms, which were defined and legalized purely through the act of the church, which acts as en “emissary of God” and “owns” all the Earth in God’s name.
        
        Again, that is the legal (not lawful!) side of things, not to be confused with everyday speech. Look for those terms in a dictionary of law. Bouvier’s dictionary is a good start.
        
        Kat Kan on June 29, 2015 · at 12:29 pm EST/EDT
        
        I’ll humour you one last time.
        
        What happened before there was a Vatican? (which is probably not when you think). And in places out of its reach eg South America?
        
        T2015 on June 29, 2015 · at 2:15 pm EST/EDT
        
        We’re not talking logic here, but legalese. I explained the current state of things above.
        
        There was no global framework before that, but this is simply what we have today. Imposed by force if you so wish.
        
        Here’s a bit from Magna Catra, just for entertainment. Remember, this is a legal document!
        
        “JOHN, by the grace of God King of England, Lord of Ireland, Duke of Normandy and Aquitaine, and Count of Anjou, to his archbishops, bishops, abbots, earls, barons, justices, foresters, sheriffs, stewards, servants, and to all his officials and loyal subjects, Greeting.
        
        KNOW THAT BEFORE GOD, for the health of our soul and those of our ancestors and heirs, to the honour of God, the exaltation of the holy Church, and the better ordering of our kingdom, at the advice of our reverend fathers Stephen, archbishop of Canterbury, primate of all England, and cardinal of the holy Roman Church, Henry archbishop of Dublin, William bishop of London, Peter bishop of Winchester, Jocelin bishop of Bath and Glastonbury, Hugh bishop of Lincoln, Walter bishop of Worcester, William bishop of Coventry, Benedict bishop of Rochester, Master Pandulf subdeacon and member of the papal household, Brother Aymeric master of the knighthood of the Temple in England, William Marshal earl of Pembroke, William earl of Salisbury, William earl of Warren, William earl of Arundel, Alan of Galloway constable of Scotland, Warin fitz Gerald, Peter fitz Herbert, Hubert de Burgh seneschal of Poitou, Hugh de Neville, Matthew fitz Herbert, Thomas Basset, Alan Basset, Philip Daubeny, Robert de Roppeley, John Marshal, John fitz Hugh, and other loyal subjects:
        
        + (1) FIRST, THAT WE HAVE GRANTED TO GOD, and by this present charter have confirmed for us and our heirs in perpetuity, that the English Church shall be free, and shall have its rights undiminished, and its liberties unimpaired. That we wish this so to be observed, appears from the fact that of our own free will, before the outbreak of the present dispute between us and our barons, we granted and confirmed by charter the freedom of the Church’s elections – a right reckoned to be of the greatest necessity and importance to it – and caused this to be confirmed by Pope Innocent III. This freedom we shall observe ourselves, and desire to be observed in good faith by our heirs in perpetuity.”
        
        – See more at: http://www.bl.uk/magna-carta/articles/magna-carta-english-translation#sthash.JXQx96GL.dpuf
      - Purple Library Guy on June 29, 2015 · at 7:38 pm EST/EDT
        
        Oh, give me a break. The queen doesn’t rule jack. All she does is sign bills before they become law. If she tried to not sign one there would be a massive crisis; it could precipitate the dissolution of the whole monarchy. And that’s in England. In Canada, her “representative”, the Governor General, is appointed by the prime minister. The queen can’t even tell the GG what to do, much less the armed forces. She has plenty of ceremonial roles related to the armed forces, but nothing real. There is no possible way any member of the Canadian armed forces would obey the queen instead of the actual government. Not that she’d ever try, because the queen isn’t insane.
        
        The queen has an impact largely in just one way: She allows the existence of the loyal opposition, making it harder for the government of the day to paint anyone opposing them as traitors because in theory everyone’s loyal to the Crown, rather than to the sitting government.
        
        This is looney tunes stuff.
        
        T2015 on June 30, 2015 · at 5:45 am EST/EDT
        
        She could care zilch about those matters, as long as she can collect your taxes for “her” land.
        
        Anonymous on July 01, 2015 · at 1:56 am EST/EDT
        
        The Queen has to curtsey to the Lord Mayor. That’s really all you need to know.
        
        mind and soul on July 02, 2015 · at 3:05 pm EST/EDT
        
        Glad I caught up with this thread belatedly. I find myself doubting T2015 in his arguments with Penelope and Starikov and concluding that I must delve into all of that more deeply. YET here, I must say that T2015’s arguments reinforce my earlier notes to myself that I would like to study his thinking and sources more carefully. Why? Partially because he is obviously prepared (right or wrong on Penelope he’s put in time working on these matters, but more, because I am confident that he is basically right on this Queen of England sh*t. And I don’t mean the fine print and the legalese. I mean the obvious Imperial leadership role, no matter how you wish to examine that, either from published laws or from “spiritual” (some would assert… I would rather call it anti-spiritual, anti-intellectual, anti-human) influence which can be more powerful than all the formal written authority put together.
        
        Consider, she and her consort Phillip demand a culling of the “human herd” (their satanically entitled view of the human race) down to 1 billion persons or less. And that influence surfaces in many,many ways all over the world, not just her commonwealth, a corrupted USA, the green movement, the global warming fraud, and most immediately, the Empire war on Russia and China who have said NO, from Copenhagen to Kyoto, to I believe and hope Paris (next “warming” conference if I am not mistaken.
        
        This NO is the reason the witch is pulling out all the stops, including blackmail threat of WW III nuclear exchange. She may be little, old and shriveled up, but blindness to these facts is a very, very serious error, anonymous.
blue on June 29, 2015 · at 12:11 am EST/EDT

http://fortruss.blogspot.com/2015/06/the-sunset-of-capitalist-system-will-be.html
The sunset of the capitalist system will be marked by a world war, just as its dawn (video)

June 28, 2015
Den TV
Translated by Kristina Rus
Andre Fursov is a historian and a specialist in shadow global elites

extract of translation of transcript…
[…]
” If we are talking about a stand off between the various zones of capitalism, periphery capitalism has no chances, because if you are a periphery capitalism, you are just as the center, but the center is wealthier and has already achieved. If you want to escape the historic trap of the capitalist system, you must present a different agenda. Someone might say, we have already tried to, and socialism has lost. No, socialism didn’t loose, a concrete political-economic power structure has lost, with a part of elite integrated into the Western system. And this should be a lesson. ”
[…]
Michel on July 11, 2015 · at 9:33 am EST/EDT

Absolutely startling to hear that the Bank of Russia is completely controlled by Washington. This means that the Russian Federation has no sovereignty at all. President and finance minister have to watch powerless, how Washington is calling the shots in their country !!! What game are we playing ?

I am more convinced every day, that the people have to oust power the way they did in Iceland.
Cassander on July 14, 2015 · at 9:53 pm EST/EDT

Yvgeny Fyodorov on Russian Central Bank’s role in stifling Russian economy:

I hope NOD, Putin, August, Americans, CIA, Sberbank, RCB and others will be more understood now, together with the expressions used in the above emotional discussion about __NOTHING IMPORTANT__, decidedly not about Russian central bank.

Evgeny Fedorov June 26, 2015
https://z5h64q92x9.net/proxy_u/ru-en.en/poznavatelnoe.tv/fedorov_2015-06-26

-“(…)
Evgeny Fedorov: you are not affected. What are sanctions? Sanctions deprive us of money – the point of sanctions, to deprive us of money. And based on the fact that we are deprived in an economic machine tool “money”, which its not (this is a key point), then we would begin to freeze, that is, the body becomes free of blood. He has the muscles, heart, brain, feet, hands, and no blood, and therefore the brain, arms, legs, all immobilized.

Question: why Americans can take them from us blood? Simple question.

Answer: because we do not have. And this is the issue of sovereignty.

That is, the Americans beat because we are not sovereign. They hit in the place that we have not protected, because we are his Institute money is not created. Can we create it? Can. For this we need to execute commands Putin, to cut interest rates and launch the ruble in the economy. But there are American guards at the Central Bank who say, “absolutely not.

Artem Voitenko: Wait, we have a Central Bank, it loans. The longest loan it is a week. Is any economy cannot be developed with the longest loan in the term “week”.

Yevgeny Fyodorov: Artyom, the main thing here is this. The Central Bank, it is clear that he justifies this – week. But he just gives money to the economy. “Week” is no money.

Artem Voitenko: So no matter what interest rate, at least half, if the term “week” – nothing happens.

Evgeny Fedorov: If deeper, it’s called “quantitative easing policy”. Policy, there is a lot of points, but the main one is a bet. And besides: regulations, terms, and reserves. We somehow Basel-3, in America, in Europe, Basel-3 no. That is, it also created the Central Bank. That is, the Central Bank – guard, controlled from the outside, not giving the possibility of Russia just create your blood if it is rude to say, in the economy. His goal is that the blood was not created. That is, its task that was not working (what, adrenal glands blood create?) the adrenal glands in the public body. We therefore the blood received from the Americans through such tubes, which were called “foreign investments” and “loans”. They told us: “today We blood you will not”. Tubes blocked. Its is prohibited. So, the body is quietly dying – this is the essence of the sanctions.

That is, if you want to you sanction not affected, you need not embargo to do for this purpose (the embargo for others and you need to include the adrenal glands, right? Stupid. Here, for quite ordinary people say. You simple Russian citizen. You want to eat meat?

Artem Voitenko: Someone doesn’t eat. You want actually?

Evgeny Fedorov: Well. You want to eat? Want. You want to drive a normal car, just the car? Want. That is, if you have the money you will spend this money to buy food. The money is going into a business that produces food, dairy factories, farms, and so forth, and those with the money will start to spin, producing food. Right? Russia’s policy – you have no money to give. To reduce your pension to reduce your salary, even better to let you go. This year’s policy. Therefore, you do not give money, and the money you are not in the economy. Or, you want to buy a car and the money you don’t given, you didn’t buy the car. Not bought a car in Kaluga machine factories on manufacture of cars stopped, that we observe, because they have stopped buying cars.

You do not give money, so you decided to their problems, but at the same time launched an economic engine. And do the Americans together with the Central Bank, because used to give the Americans, and bare the Central Bank and the government. Now the Americans do not give, the Central Bank does not (harder than before), and the government also conducts budget sequestration – does not.

Artem Voitenko: and before the Central Bank did not give.

Yevgeny Fyodorov: But the Americans gave.

Artem Voitenko: And the Central Bank here do not and then.

Evgeny Fedorov: Not in this case – he can give. We also gave the Americans from the U.S. Federal reserve, the American Central Bank. That is, the American Central Bank served as the Russian Central Bank to maintain your standard of living. You know? Disabling this feature, and our, not allowing a run in this feature, you automatically freeze the economy. But freezing the economy – it affects everyone, but not much, but gradually. Because, today is your salary thirty thousand, twenty-seven tomorrow, the day after tomorrow twenty and you see, the year she was twenty, instead of thirty, plus inflation. Not in shock.

Artem Voitenko: Gently.

Yevgeny Fyodorov: As the business is clearly shocked, because he must be stupid to go for bankruptcy. And so for business it is a mechanism of manipulating business, especially large ones, to participate in the conspiracy. What we observe. That is, we now see that in Russia, formed a conspiracy against Putin on the basis of sanctions and big business that depends on Americans and we have another. And we see that this plot just starts officially with the TV sound. Not just there, quietly in the kitchen, and the sound from the TV. This means that the dynamics in August, he will be Mature enough to already-conceived proposals we now see. That is, will not just “early election”, and details are “who to choose”. We are with you on the election notice. The next day was at eight in the morning Breakfast Sberbank, which sounded dubious theses “on the last term.” That is, there has already begun a reversal of this thesis on early elections”. That is, in understanding initiators-Americans – early elections other. You know, right?
(…)”