By Jorge Vilches for the Saker Blog
Russia is currently “defaulting” or — in the best of cases — on a very direct and firm path to an inevitable “default”.
Or at least this seems to be what the Western press and international rating agencies are pushing and rooting for, same as specialized academia, think-tanks, the political-financial-military establishment… and pretty much the whole Western Hemisphere including the US and Europe + South Korea, Japan, Australia and New Zealand. And it can reasonably be assumed that the above is most probably due to the fact that Western governments have officially and unequivocally dictated that it is not only “fair” but also wise to
(1) freeze and/or eventually “arrest” Russia´s reserve currency stockpiles held in international banking accounts
(2) force Russia to pay its international financial obligations from abundantly solvent banks within Russia
(3) declare that Russian payments in rubles instead of US dollars or euros or yens or GBP are not valid
(4) declare Russia to be “defaulting” on its obligations by not following the above mandates
(5) in case of doubt, Western governments remind us that Russia´s mandated “default” will necessarily be contested in UK Courts… which of course will always decide fully against Russia… undoubtedly and conveniently leaving aside whatever could be left of the once-traditional British “fair play” of yore.
And the West does not beat around the bush regarding this official policy with US Treasury Secretary Janet Yellen and US Federal Reserve Chairman Jerome Powell walking out of the recent G-20 meeting as soon as the mike was switched over to the Russian representative. The staged move was also well coordinated with multiple “unfriendly” finance ministers and central bank governors while others present virtually shut off their cameras immediately after the Russian official uttered his first word. And leaving no room for any doubt, White House Press Secretary Jen Saki tweeted in no uncertain terms that “We support her (Janet Yellen´s) steps, and it’s an indication of the fact that President Putin and Russia have become pariahs on the global stage”. By the way, with some notable exceptions, for the same “Ukranian reasons” many of the above have openly proposed to kick Russia out of the G-20 group ASAP.
So, to make a long story short, for all practical purposes Russia will necessarily “default” soon enough per the Western strategy of “we won’t let you pay but you must pay”… or thereabouts.
[ Ref #1 https://www.reuters.com/world/delegate-protests-over-russia-upstage-g20-meeting-2022-04-19/ ]
[ Ref #2 https://www.rt.com/news/554236-g20-summit-boycott-russia/%20%20- ]
Of course, Russia says that (a) the above is false argumentation for an “artificial default” of sorts tailored-made to unnecessarily hurt Russia yet again and (b) it´d be business as usual had the West not frozen Russia´s international banking accounts. Russia adds that the West´s blocking of payments is the real default at hand, leaving on record that the freeze on Russian funds and private companies and individual assets is simple “theft” per Russian Foreign Minister Sergei Lavrov´s view of the unprecedented dictats which no one could have foreseen from supposedly civilized and world-leading countries in the 21st. century. [ Ref # 3 https://interfax.com/newsroom/top-stories/75126/ ]
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In passing, all-important China thinks pretty much along the same Russian lines by leaving on record that “Arbitrary freezes of foreign exchange reserves of other countries constitute a violation of sovereignty and is tantamount to weaponizing economic interdependence”.The Chinese ambassador to the UN, Mr. Zhang Jun, made such remarks at a UN Security Council meeting on Ukraine thus clearly “blasting arbitrary seizures of countries’ assets” (sic).
[ Ref #4 https://www.rt.com/business/554226-china-west-freezing-assets-violation/ ]
So then, actually the real problem that still remains is to analyze the possible consequences of Russia´s 99.99% certain “default” and most specifically if it could possibly lead to yet another Western World self-shooting spree as has happened with other fully-backfiring sanctions temporarily “swept under the rug” so to speak. Accordingly, let´s ask two basic and always ever-important questions since time immemorial, i.e.,
Cui bono ? (who benefits ?) and cui nocere ? (who loses ?)
To find some answers, let´s take a closer look at some of the consequences of the West-mandated Russian “default”
- 1. Absent Russia
Russia currently exports many hundreds of key produce 101% essential for Western countries as we know them today. All hell will break lose the instant Russia trades less or stops trading altogether with – and getting funding from — the 20% of the Western world… while openly trading and funding itself with the remaining 80% without using the dollar/euro financial system but their new Bretton Woods III arrangement instead. As a matter of fact, the US has already banned Russian ships while other Western “unfriendlies” would follow.
[ Ref # 5 https://www.rt.com/russia/554281-us-bans-ships/ ] Meanwhile, Russia´s economic and financial plans
continue steady under Elvira Nabiullina´s very recent renewal as central bank governor for another 5 years.
- 2. Inflation
The knee-jerk reaction to the above will be further unmitigated money printing with readily visible impact on the Western world while middle-class incomes collapse behind the very thin productive veneer of Western consumer economies. Additionally, think supply-less price increases with Covid impact + Russia sanctions + China´s reaction regarding supply chain disruptions as addressed by the BIS General Manager, the Central Bank of central banks, Dr. Agustín Carstens [ Ref # 6 https://www.bis.org/speeches/sp220405.htm ]
Plus guru David Stockman´s perspective in ”having the US Federal Reserve decades-long experiment in egregious, inflationary money-pumping splattering ignominiously all over the Eccles Building” (sic)
[ Ref # 7 https://internationalman.com/articles/david-stockman-on-inflationary-hell-thats-about-to-break-loose/ ] …
- 3. Non-payment
Investors in Russian defaulted debt (think Western companies & banks) will not get paid a single cent on Russian debt instruments per sé… nor possibly neither from their Credit Default Swap (CDS) hedge they most probably bought for CYA “insurance” purposes. Furthermore, investors would need to make their claims also against the blocking banks thus definetly facing an utterly complex yet most probably unsuccessfull legal road with corresponding expenses. All the while Russia will no longer accept seizable / freezable dollars or euros for its much-needed produce … only rubles or gold bullion from the many Western “unfriendlies”…
[ Ref # 8 https://fortune.com/2022/04/21/russia-debt-credit-default-swap-ruble-payment-sanctions-ukraine/ ]
- 4. Bye bye SWIFT
Russia has already replaced the SWIFT payment messaging system by its own equivalent SPFS which apparently works just as smooth as 52 foreign organizations from 12 countries have joined.
[ Ref # 9 https://www.rt.com/business/554221-russia-payment-system-members-secret/ ]
- 5. IPR rights
Russia will take full advantage and make full use of patents, models, intellectual property rights, designs, etc. with no compensation per Presidential Decree No 299, 6 March 2022
[ Ref # 9 https://www.lexology.com/library/detail.aspx?g=39ef25c3-1bf0-4029-bac2-de0ac11965da ]
- 6. Property rights
The Western financial world has openly declared that property rights are no longer valid so, for example, dollar and euro and other bank accounts anywhere – or other assets — are vulnerable to freeze / seizure.
- 7. Ukraine claims
Tatiana Orlova — lead emerging markets economist at Oxfo9d Economics — points out that another problem for bondholders and creditors at large is that Ukraine may lay a claim to Russian assets in international courts (a.k.a. UK courts…) to pay for the rebuilding of the country.
[Ref#10 https://www.businessinsider.com/russia-debt-default-us-could-seize-assets-resolution-ukraine-sanctions-2022-4 ]
- 8. Corporate debt defaults
Tatiana Orlova has also warned about a probable “avalanche” of Russian corporate debt defaults given that the US is taking a hard line and banning American banks from processing payments. There were roughly $98 billion of Russian corporate foreign-currency bonds originally outstanding as the war began in February, according to JPMorgan while Western governments have already frozen at least 50% of the $600+ billion Russian stockpile of foreign reserves.
- 9. Massive migrations
Europe better react ´efficiently´ (?) to a sudden exposure of many millions of unprecedented & unexpected migrants for which it is not anywhere closely prepared for either politically or economically… if it could ever be.
- 10. Oil & gas & coal
Not having the “right” Russian grade fuels which EU refineries, power plants and equipment specifically need means seriously upending all manufacturing and production, food, heating, power availability, A/C, tourism, etc. etc. with freezing cold and severe scarcities in Europe for too long a period for even to consider finding valid alternatives, if any exist, in a coming logistical nightmare. Let alone achieving self-sufficiency with relatively climate-friendly fuels all year round. So Europe wants to angrily divorce Russia while conveniently forgetting the many offspring it has to feed. Some pundits are entertaining the idea of $500 dollar oil… meaning that Russia could export less fuels than today but – counter-intuitively — still collect much more.
- 11. Reserve currency blues
Obviously affecting not only the US dollar de-dollarization process but also the euro, the GBP and the yen.
The idea being that these reserve currencies – with Russia absent – will necessarily lead to implosion as their
underlying economies & finances will keep performing ever worse with no reasonable future in sight.
[ Ref. # 11 https://www.bloomberg.com/opinion/articles/2022-04-20/euro-weakness-may-lead-to-a-currency-
crisis-if-the-ecb-doesn-t-act-soon ] Case in point: “Israel Dumps The Dollar For China’s Renminbi”
[ Ref #12 https://quoththeraven.substack.com/p/king-dollars-demise-israel-dumps?s=w ]… same as Saudi Arabia.
- 12. US mission impossible
US finances rely on foreigners constantly lending the US huge amounts of ever-growing money non-stop. Full credit to David Goldman´s article per Ref. # 13 below. In sum, since 2008 alone, at negative effective rates the US has borrowed $18 trillion from foreigners… who now might not renew at least some of such loans. Furthermore, foreigners keep about $16 trillion in overseas bank deposits to finance international transactions. And while struggling with highly adverse conditions in the US economy, simultaneously the Federal Reserve also has to be perceived as un-winding a $9 Trillion dollar balance sheet. The US stock market now trades at nearly thirty times earnings with foreigners also having enormous exposure to it and real estate markets also. Please I encourage reading the full Goldman article at Ref # 13 https://americanmind.org/memo/fatal-dependency/
On the other hand, since the get-go Europe´s ECB has found itself constantly defying the laws of gravity. But Europeans have been doing this for decades – Target 2 et al shenanigans included — until they reach the end of the road where the proverbial can-kicking theater stops dead in its tracks with no further gimmicks left.
So, who wins and who loses ? As always, the answer is not perfectly clear-cut although some general guidelines can be inferred albeit depending upon how events unfold. Of course, Europe at large is a very clear loser that at this point in some respects should be considered a US Protectorate. Russia has started a whole new ball game with so far them losing 1 goal to 0 but with the great advantage that (a) this game has just started and (b) it´s played with Russia´s ball — so to speak — which they might take away if they ever wanted to… in which case the score would not matter.
So who wins ? The short answer is, despite enormous difficulties to overcome, in many important senses probably the new Russia-led Bretton Woods III economy & financial system, including China and the BRICS. So who loses ? Again, the short answer seems to be the Western economies & their financial systems at large, most particularly Europe. The post-Brexit UK may find some tricks to enable a temporary better outcome, but not for long as the Brits need a healthy European economy to survive while the Global Britannia project never left the Last Night of the Proms.
What´s probably 100% safe to assume is that Western strategists and its establishment elites — the Davos crowd included — have all acted and reacted to Ukraine events in a very childish & visceral manner and have not thought out the consequences of their respective decisions far enough and well enough. In other words, as cognitive psychology would have it, in traditional Anglian style Europe has unexplainably cut its nose off to spite its face. Go figure…
https://www.youtube.com/watch?v=ATFXcpUBfOA – Supposedly eight RF tanks getting smashed. Seems off to me…are these tanks the UAF ones that launched some kind of counter-offensive in the east against Russia itself perhaps or is it a UAF win?
I saw that report yesterday from a Russian source. Soon after it was withdrawn or claimed to be false.
Yes. Those are Ukrainian loses, but their propaganda tries to portray them as Russian ones.
Recently Ukrops have tried to attack Russian territory with 10 tanks, but Russians destroyed 8 of them and 2 remaining managed to escape.
its the Ukri Tanks being smashed, not the RF tanks,
ok – thanks!
1. UAF does not have drone directed precision artillery.
2. The RF does not advance columns unprotected in enemy territory.
3. There have been huge (40k long) RF convoys that have traversed Donbas without incident.
4. The tanks have cages built on them, a distinctive protective “feature” of AFU tanks. RF tanks do not have these.
This video joins the huge and ever-growing catalog of Ukrainian propaganda, which often displays AFU losses as RF losses.
My personal favorite: a video of AFU soldiers celebrating killing 4 RF tanks, standing next to a completely burned and rusted AFU tank with a freshly painted white Z on it.
‘ in case of doubt, Western governments remind us that Russia´s mandated “default” will necessarily be contested in UK Courts… which of course will always decide fully against Russia… undoubtedly and conveniently leaving aside whatever could be left of the once-traditional British “fair play” of yore.’
Let me make this clear: I, as a UK citizen (I refuse to call myself a subject just because of an accident of birth), have zero tolerance for any UK judge who takes any instruction whatsoever from the UK Government, from any US citizen whatsoever, in any way that might prejudice a fair and just outcome to a court case.
I fully mandate anyone in the world supportive of the Russian position on paying its international obligations to murder any UK judge who DOES stoop to such illegal, unprincipled, disgraceful and disgusting behaviour.
The UK judicial system is not fit for purpose if it takes instruction from the US Government and the Julian Assange case has proven that to be the case already.
As far as I, as a UK citizen am concerned, all the following are ‘legitimate targets of war’:
!. Every UK MP and member of the House of Lords who has supported Ukraine through warmongering, funding the organised crime syndicate called MI6 and promoting mass murder all over the world during the past 30 years.
2. Every Government official who pushes the US line uncritically for no better reason than that they are weak-willed, moral-free wastrels who just want the UK taxpayer to fund their ridiculously expensive house in Kent, Sussex, Surrey or Hampshire.
3. Every prostitute in the UK media who lies to order.
4. Every ‘member of the UK Armed Forces’ who lies to order to promote war in Ukraine.
5. Every single member of MI6, which is a de facto state-sponsored terrorist organisation.
Do not have any qualms about teaching the UK mafia what the consequences of mafia war are.
No-one in the UK will care whether they are dead or alive and the world will be a much, much better place if they were dead.
allright!
That about the only way to reign them in I guess. Find out where they live, work, play…and hurt them there.
Dead men and women tell no lies.
“rein them in”, I guess, to end their reign. Sorry for nitpicking, almost like an OCD.
thnx!
Wild times when that happens and Russia is supplying arms to the anti-state combatants in the UK. You might get to fire some AKs yet! Godspeed.
Whatever is left of the IRA could use some of those niffy weapons the UK is flooding Ukraine with. Also of what’s left of ETA and the Catalan movement in Spain. And let’s not forget the Corsican freedom movement in France. And maybe some Scots might also like some of them. Oh,such a multitude of choices to make. All hungry for weapons, and now Russia happens to have an overflow of them to give away.The coming years should be interesting times in Europe.
There is a franchise value to having many of the world’s contracts governed by the law of England and Wales, and this has brought a lot of business to the City of London. Blowing up the rules that apply to Russian contracts basically blows up the protections the rest of the world thought they were buying by signing up to the application of English law provisions in their countracts.
IOW, this is not a gun to be fired without some serious though to the knock-on consequences.
«IOW, this is not a gun to be fired without some serious though to the knock-on consequences.»
Oh they have been thought through quite well:
* With a single globalized system the USA elites are afraid that China will come to dominate get and with it the whole world.
* So the USA elites seem determined to split the global system in two parts, while the chinese part is still smaller than the USA one.
* The USA is telling the governments in between to choose instead of playing both side against each other. See the UK, that was trying to do just that.
* Confiscating the wealth of those who don’t choose to be USA protectorates makes it clear how necessary that choice is. The USA will refrain from confiscating only the wealth of the elites of protectorates.
Yet another bit of the USA constitution shredded: “The validity of the public debt of the United States, authorized by law […] shall not be questioned” in what V. Putin rightly called a default on USA (etc.) debt.
I am also a citizen of the UK. (I had no say in the matter.) and completely agree with you.
I am no expert but I believe that each bonds has a contract which will specify choice of law and venue. You could have a swiss court applying english law for example for one bond and not another. Next a “default” allows the creditor to seize collateral. If force majure applies then the collateral is frozen almost like a bankruptcy proceeding. The creditor (western banks and pension funds) get neither there payment nor the collateral. The credit default swaps is another whole layer of litigation and a super vulnerable underwriter.
It is my understanding (no link sorry) that the Fed Reserve was not consulted. This is State Dept, Treasury, and Whitehouse project.
The truth of the UK legal system has been exposed (like many other things) by Julian Assange.
Hello Jaggar,
Yeah, I get cha. I understand. They can get you pissed. But, the SMO is already BBQing them.
And listen ……….. the big meeting is on Tuesday. If the head of the UN doesn´t cruise out of Moscow with anything more than a complimentary t-shirt, it is going to explode.
A lot of fun stuff is coming so, relax. They got themselves and are already starting to burn in the fire they have set. The crew is already being popped in all of the wrong holes. Just leave em be, enjoy the show. Stock up on snacks. My take.
I wish well to you and yours.
Economists know nothing about geopolitics: The UKR war is the US’ defining triumph for this century: The US chokehold on germany+EU just became stronger than ever, e.g., merkel refused the F-35 but now germany announced it will earmark ~10 billion for buying… F-35s. This, together with the sales of ultra-expensive US LNG to the UE, is just the beginning.
The US will now force, if necessary manu militari, all non-eurasian producers of gas, oil, and raw materials to sell their stuff in dollars even more than before. To this end the USA will soon brutally subjugate the entirety of latin america and southern africa.
And fascistic euro-supremacism, now more than ever in full and unopposed control of the EU, will prey for Lebensraum in the mediterranean and northern africa (with US permission).
RUS&CN cannot (yet?) oppose the armies/navies of US&EU in either region. in other words the US is about to be flush with cash again…
The US’ business is business so the US only wants the cash here; the brinkmanship is only about keeping the EU hysterical/under pressure/fully subjugated, i.e., to keep the EU paying for ever more ruinously expensive US “protection”.
Come on, neither the US nor the rest of NATO, has the financial and material means, to lead multiple wars of conquest against all those countries, backed by Russia and China.
The US domination,actually doesn’t stem from real physical power, but from making people like you believe it.
Russia doesn’t need to flush the 7 seas with ships, their long-range missiles are threat enough, to any Western harbor, fleet and logistics.
Remember, what movements and collections of hardware, the US underwent, to attack Iran – without challenge?
No way, they would be able to overthrow all of Latin America, Arabia, Africa and SE Asia.
Assumed, they could achieve this, here comes the transformation of the US safety net, their isolated location.
How are they supposed to bring their loot to the homeland? It’s a long and slow way around the globe on ship and accidents on sea happen more often, than you think.
Easy my dear Watson. Financing!
US/Nato has unlimited access to the money printer. As Stoltenberg said, “we will out spend Russia”. Most people are for sale, and there you have it.
To Dunord: Just Brasil (out of South America) isn’t Pakistan, to be so easily conquered. Cheers
No, because the USA cant finance its wars without China
And recall, the USA hasnt won a war since Grenada (lol) and just lost two 20 year long low intensity wars against barefoot goatherders with antique AKs.
The idea that American can best a combined China//Russia–peer powers– +Iran in Africa and Latin America is laughable.
Short of nuclear war, American military hegemony is over if push comes to shove.
In fact the converse of what you say is true, in Ukraine the USA had committed historical seppukku. It has exposed itself precisely when its domestic social and political heath is nearing catastrophe. Democracies have an inherent disadvantage in historical moments like this–they are factional and unstable. Secessionist sentiment along the entire political spectrum is its highest in the USA since reconstruction according to polls. The USA cannot survive ANY tumble from its perch. A yellow vest like movement in America is nigh.
«And fascistic euro-supremacism, now more than ever in full and unopposed control of the EU, will prey for Lebensraum in the mediterranean and northern africa (with US permission).»
That would be very silly of them because the mediterranean and northern africa are becoming even hotter and drier and dozens of millions of people will have to move to lave them and move to other countries to survive. The refugee streams in the next decades will be much bigger than the current ones from Syria etc.; perhaps half of the population of Egypt and two thirds of that of Saudi Arabia will have to emigrate, for example.
The so-called West, NATOstan, is furiously trying to impose a WIN-LOSE imperial axiom on Russia, Germany, and especially China.
They have gone rabid on their central core ‘Values Rules’ because
China announced its BRI as a WIN-WIN model – a direct challenge to the core CUI-BONO – CUI-NOCERE of the City of London/WallStreet gambling casino, which thinks the House always wins.
This time the House looses, big time.
China’s Xi has really upended the casino and Russia’s Glazyev has outflanked them.
Accountants and economists running an Algorithm tank on fumes, are totally helpless.
“6. Property rights
The Western financial world has openly declared that property rights are no longer valid so, for example, dollar and euro and other bank accounts anywhere – or other assets — are vulnerable to freeze / seizure.”
so an individual or private entity owns a ship – non commercial / non strategic – say a yacht – no relation to Putin or the government – sails the boat for years in the Pacific far from line of contact with Russia or Ukraine and no business interest in Russia.
The yacht is confiscated merely because of ethnicity – the individual- but has no public profile.
how do you seize the asset and sell to any buyer without a valid chain of title ?
No Bankruptcy – ship 100% equity owned – except perhaps docking fees that mount / increase over say 36 months – and the fees unpaid are deemed to be a claim on the asset but the dock owner refuses payment from any party when proffered or a Letter of Credit is provided for claims from valid bank for open billing say up to $5 million and docking fees are $1,000/ per day until it can be cashed.
how do you avoid the facts to get a valid international title ?
On the basis of the available and observable evidence it seems reasonable to surmise that we are dealing with people who make up their own facts for their own convenient benefit. And, to coin a phrase, treat inconvenient facts ‘in the same casual manner.’
Maybe you and I get a quit claim deed signed by all Russians and all banks. We pay them $100 all together for the deed. We ask the impounding court to free our boat showing them our deed. I think we just bought the boat. Next we register it in a not west jurisdiction and rent it out as an air BnB.
Who dare raised those interest rates on borrowed money?
There is less to this than meets the eye. “Israel Dumps The Dollar For China’s Renminbi”, for instance – read the article and find that Israel has shifted about 2% of its reserves from the dollar to the renminbi, and still has way over half its reserves in dollars. The deceptive headling “Israel Dumps The Dollar For China’s Renminbi” strongly suggests that Israel got rid of ALL its dollars and replaced them with renminbi.
Just a slightly more subtle form of clickbait. “Look! Look!! Something VERY shiny!!!”
Oh, nothing to see after all.
You have seen what Ukraine looks like after only a few years of US influence. Europe after 77 years of US influence is worse.
These are countries where elections are like choosing between Coca-Cola, Fanta and Acquarius. Where tv station, radio station, web site and newspaper all say the same. And where you yourself had better be careful to say the same as well.
Looting countries assets did no stat with Russia this year nor Libya, Iraq and Venezuela recently.
In 1939, the BIS, Bank of International Settlements of Montague Norman, the Bank of England chief, directly transferred STG 5.6 million of Czechoslovakia’s assets to Hitler.
The BIS boss, set up to loot Germany with the Versailles WWI treaty, was Hjalmar Schacht, Hitler’s economy minister.
Today exactly this is going on with Russia, and anyone else in the cross-hairs, in full daylight.
https://www.smh.com.au/business/how-bankers-helped-the-nazis-20130801-2r1fd.html
If life was more sensible than it is, the primary backing of a currency would be what it can purchase. If X amount of rubbles will by Y amounts of Oil, along with everything else that is for sale, that should set the value of rubbles, not the idea of some asset sitting around somewhere, the theoretical backing. But as it happens currencies run on confidence. If Russia can overcome it even briefly, the contrived default will no longer have an effect.
The nightmare i keep thinking about is what happens when the Empire starts seizing Russian ships on the high seas? They will of course. They’ve already done this with Iranian and Venezuelan ships. Plus they’ll attach Russian ships with lawsuits in neutral ports.
How d0es Russia get through that without the global war the Empire seems determined to provoke?
Then it’s called “piracy” and Russia can sink any pirat ship, as it sees it necessary.
One can legitimately ponder if all of these sanctions were not deliberate by the Davos to bring a massive economic crisis that will result in general poverty, hunger and deaths in their vicious will for population reduction!
The core difference is that Washington and London believe without debt a economy whithers. They can not fathom a growing economy that is cash flow positive.
Western economies are based on debt. This is a pyramid scheme, which is why usury is illegal under Sharia Law, and why the Muslim faith (as well as socialism in any form) is the deadly enemy of capitalism (code word: “democracy”).
Usury was also forbidden by Christian religion in Middle Ages to Renaissanse, but for some reason that rule was at some point gradually ignored by Roman Empire, England around 16th century.
I clicked by accident “post” and I forgot to add that in Roman Empire acceptance for usury started much earlier. In 16th century it was only England, when they allowed practice of charging interest for loans.
Something very big happened in England in the 16th century. In fact it happened throughout much of Europe.
Now that the US and Europe have come to the only rational position that they ever could have reached and they’ve capitulated to buy in Rubles, Russia should now counter as follows:
Russia will continue to sell oil and gas in Rubles only upon release and transfer of all foreign reserves to Russia as well as removal of all SWIFT sanctions within 30 days. Any interim debt “default” due to the illegal US/European seizure of Russia’s foreign reserves will be deemed a nullity ab initio.
Another kind of analysis. But very interesting. I would like how interpret the Saker, Pepe Escobar and you this. We will leave western Europe to Russia, where my wife come, at the beginning of May. But this Videos shows
the traitors in Russia.
https://youtu.be/7Wgv8bhAjvs
It is a great oppurtunity for Russia to start product diversification from base minerals and energy. The cost of production for some prodcuts will go up exponentialy. By stimulating local production for semi finished goods which then can be finished and labelled in off ahore destination would provide cheap alternatives for all products that will become expensive.
Secondly, enpire of lies stand to loose far more than anyone else by collapse of dollar backed fossil energy. Frankly, solar and wind power has attained grid parity with fossil fuels. Any long term disruption in suply chain of fossil fuels will change the cost matrix of renewable energy forever. Russia needs to diverse into energy intensive products and miberal based products.
(1) freeze and/or eventually “arrest” Russia´s reserve currency stockpiles held in international banking accounts
I wonder, if the people in those goverments understand that the said “currency stockpiles” are essentially digits in a computer database. And that digits in a database don’t heat homes and don’t power industries.
(2) force Russia to pay its international financial obligations from abundantly solvent banks within Russia
Now, this would be very interesting to see happening. And how exactly those goverments are going to “force” Russia. Impose sanctions from hell? Oh, I’ve forgot – they already did that. Start a war with Russia? Well, the second most numerous and, arguably, the second best NATO trained military in continental Europe was decimated by one tenth of the russian ground forces within two months. The operative words here – “NATO trained”. Why the westerners believe that they’ll fare better than the ukrainians. Furthermore, with the Ukies, the russian dealt with the velvet gloves on. With the westerners – they won’t be that gentle.
(3) declare that Russian payments in rubles instead of US dollars or euros or yens or GBP are not valid
Sure, declare away. But the russians have learned their lesson and will want the rubles upfront. No rubles (gold) – no goodies.
(4) declare Russia to be “defaulting” on its obligations by not following the above mandates
And? So what? The russians have what the westerners want, not the other way around. If the westerners want russian oil and gas, they’ll play by russian rules. If they don’t want to play by russian’s rules – they’re more than free to find alternate source; pretty sure that the chinese and the indians wouldn’t mind bying that extra oil and natgas, especially given the fact that both nations have treaties with Russia to settle in their own curencies. The truth is that the West simply have nothing to offer that can’t be bought from China or India at half the price.
(5) in case of doubt, Western governments remind us that Russia´s mandated “default” will necessarily be contested in UK Courts… which of course will always decide fully against Russia… undoubtedly and conveniently leaving aside whatever could be left of the once-traditional British “fair play” of yore.
And, if I’m not mistaken, in the russian constitution is explicitly written that russian laws take precedence above all other laws in Russia. So the russian couldn’t care less if they lose in UK court; they’ll probably won’t bother to chalenge anything. The russians are done with the West; it’s time for the west to realize it.
The point of the UK courts is to give themselves the legal cover to go beyond “freezing” russian assets; the outright theft of them.
This is a poison pill for the UK, because the fairness of the legal system was the main reason to use it. If legal precedent can be fabricated from whole cloth in the UK courts, why not just use some banana Republic courts (e.g. EU) to get the same result anyway?
Well, the UK already stole those “assets”. And legal “cover” in UK means nothing to the russians – they don’t use case law system, like the UK (and US for that matter) does.
I have this feeling, that b4 this is halfway over, those stolen assets are gonna start trickling back to the coffers of their lawful owners…
Othewise – agreed on all the above. Clearly.
After this war is won Russia will need to focus on the new Cold/Hot War with NATO. I would suggest the forming of autonomous military forces in Syria and the Med region. It’s obvious by now that Turkey sealing the Black Sea straits to Russian naval ships. And with their closing their air space for Russian planes back and forth to Syria. That Russia can’t count on their resupply for Syria using those routes. Creating fully supplied autonomous bases in Syria will negate that issue. And suppling Syria with much more military equipment and training will enable them to defend against Turkish aggression. One excellent use for some of those weapons captured in Ukraine would be for those Kurdish forces inside Turkey. The Turks need an object lesson on keeping friendship with Russia. As opposed to becoming Russia’s enemy. Developing nice tourist sites on Syria’s beautiful coastline would also be a nice spot for Russian tourist Rubles instead of Turkey,another good object lesson.
And since Russia has now opened good relations with some countries in the Sahel and Central Africa. Creating an alliance with, and a base in ,Algeria would be an excellent move to position Russia in the Western Mediterranean. And secure those other African footholds better. Algeria is friendly to Russia,and has large energy resources that Russian energy companies could work with. And since Algeria has problems with NATO friendly Morocco they could use Russian military aid with that issue.Securing a large autonomous naval and military base there would help make sure that NATO doesn’t have a free hand in the Western Mediterranean and North and Central Africa.
This Cold/Hot War with NATO is not going to be won quickly. And every opportunity available will need to be taken to score wins against NATO. We can be certain they will be working themselves to score wins against Russia.
The analysis might be correct, but is missing one or two more in-depth level of insights. At the level of the very, very top leaders of the what-so-ever West the financial system – US$, EU€, GBP£, YEN¥ … – i.e. not at the way down below level of governments and other politicians, the de-dollarization (de-eurofization …, but NOT de-nazification) as well as getting rid of almost all national debts, and of course the urgently needed (please. read report https://en.wikipedia.org/wiki/The_Limits_to_Growth, Club of Rome, 1972) reduction of world population already has been planed since long time ago.
Typically all these “tasks” easily have been solved, at least for some 2- or 3000 years, using any war at hand, or even better some kind of war of extermination – et voilá, here we are at Ukraine.
Please (all dear readers) do me the favor and don’t tell anybody what’s going on, sit back, relax and enjoy “The decline and fall of the Roman Empire” (Edward Gibbon, 1776)
@Jorge Vilches
Everything what’s happening in the world is on purpose, so is the SMO in Ukraine, and so is the decline and fall of the (2nd) anglo-saxon empire – of course at the expense of the EUSSR, European Union of Socialist Shithole Republics, which deliberately has been established to that end in April, 1951 (read end of 1st paragraph https://en.wikipedia.org/wiki/European_Coal_and_Steel_Community) — Is there really (sic!) anybody out there crying for dying EUSSR? Answer: Game over – next round, please!
“Cui bono ? (who benefits ?) and cui nocere ? (who loses ?)”
You rely on the framing of non-practitioners which include many in “The United States of America” of which “NATO” is a component..
Practitioners tend to frame considerations thus:
How do we benefit whilst appearing to “lose” ?, since practitioners tend not to be constrained by immersion in linear binary thinking of win/lose as non-practitioners are, having been trained in the rubbing stick school of thermo-dynamics.
Jorge, you say this as though it is obvious:
(5) in case of doubt, Western governments remind us that Russia´s mandated “default” will necessarily be contested in UK Courts… which of course will always decide fully against Russia… undoubtedly and conveniently leaving aside whatever could be left of the once-traditional British “fair play” of yore.
WHY does England have jurisdiction over this matter?
It is not possible to obtain justice in the English courts. For example, just look into what happened to the overseas Lloyds names who were swindled into accepting English jurisdiction over the resolution of disputes (a good place to begin is with the piece by David McClintick in Time Europe February 21 2000).
Have a look at the oath sworn by ALL judges within the English courts:
Oaths
When judges are sworn in they take two oaths/affirmations. The first is the oath of allegiance and the second the judicial oath; these are collectively referred to as the judicial oath.
Oath of allegiance
“I, _________ , do swear by Almighty God that I will be faithful and bear true allegiance to Her Majesty Queen Elizabeth the Second, her heirs and successors, according to law.”
Judicial oath
“I, _________ , do swear by Almighty God that I will well and truly serve our Sovereign Lady Queen Elizabeth the Second in the office of ________ , and I will do right to all manner of people after the laws and usages of this realm, without fear or favour, affection or ill will.”
https://www.judiciary.uk/about-the-judiciary/the-judiciary-the-government-and-the-constitution/oaths/
English judges swear to obey Queen Elizabeth. If Queen Elizabeth says “Declare default!” then default is what you will get.
Why does Putin go along with such nonsense?
«the overseas Lloyds names who were swindled into accepting English jurisdiction over the resolution of disputes»
Given that Lloyds is based in England that seems fair to me. Anyhow Lloyds names have only themselves to blame for their misfortunes, because they decided in their superior wisdom to entrust their entire fortunes to managing agents who did not have conflict-of-interest restrictions. “If God made them sheep it was for them to be sheared” someone allegedly said about that. That’s just how the City (or Wall Street or HK or Chicago etc.) works.
The author completely misses the foundantional fact:
THE WEST HAS aleady DEFAULTED on THEIR CURRECIES. It is as simple as that.
With the currency default of the West vis-a-vis Russian (and Iran, and Cuba, and Venezuela, and Libya) any discussion of “debt default” is pointless.
At present, it is simply physically impossible for Russia to “pay back” debts in defaulted currencies. As such, Russia is offering the lenders – which themselves are in default – a compensation in other /tangible/ assets. Specifically in the Oil/Gas-backed Ruble. THAT IS NOT A DEFAULT. That is being exceptionally accomodating in fact.
The thing is, at this point IT DOES NOT MATTER WHAT THE “WEST” institutions DECLARE. What matters are the hard facts.
And those are “The West” has defaulted on its currencies and has abbrogated ALL international financial agreements. In other words, there is a NEW REALITY where any bussiness moving forward will be essentially back to barter trade concepts with an implicit value-value trade as far as “The West” is concerned. “Virtual” values like $ or € are abbrogated and retired from the international trade.
Yes, it is a mess. But this is the reality “The West” has brought upon themselves. Russia just adapted to it – as they are actually better-off with a simple barter trade model given their persistend current-account surpluses.
Please do not use capitals again. Any further will go to trash. Mod.
When they cut off Russia from the control system called SWIFT, they did not see they were actually killing the control system itself. That is how dumb, deaf and blind they are. So I figure just desserts.
I remember West has been warned multiple times before the mess began by Russia and laughed it off. I didn´t laugh, I saw this coming. Didn´t Wash “strategists” knew that Russia prepared their own banking payment system for years? Didn’t they know that Russia is connected with a border to China and its about 2bn peoples hungry for ressources? I knew. Pepe Escobar knew, and told the world in advance what’s going to happen, in multiple articles to be completely ignored by Western decision makers. Didn´t they knew one tiny little thing about their enemy, or global economy? Not at all? No, because they are “a bunch of ignorant punks” (MIT Professor Emeritus Ted Postol), as seen in multiple dumbass US high school/college movies that showed more truth than one could have believed. Now they know. They will get way more Great Reset than even 2nd generation Nazi K. Schwab would have ever imagined. Case closed. Time to die.
«West has been warned multiple times before the mess began by Russia and laughed it off. I didn´t laugh, I saw this coming. Didn´t Wash “strategists” knew that Russia prepared their own banking payment system for years?»
The Russian Federation, except for their cereal and fuel exports, is economically a small power, “a gnat on the butt of an elephant”, and anyhow if a (top-down) “color revolution” happens all those tokens of independence will be sold for really cheap to USA multinationals.
Scwab is Jewish and not WWII Nazi unless he lived with them like Soros. However, his views are no doubt Nazi.
More interesting question would be: what was the West objective when:
1. They pushed embargo on russian oil & gas
2. They seized Russian foreign currency asset
3. Tried to isolate Russia from trading partners
Answer: they tried to sink the Rubble, the Russian stock market and the russian economy. With one main objective to oust Putin..
(Secondary objective was to scapegoat Russia on global inflation and global ongoing economic/financial failure, in the continuation of the plandemic which had same dynamic.. in that context: western middle class is unsuspecting target)
How did the West performed?
Against Russia/Putin: Complete failure
(But to scapegoat Russia for global inflation: success)
The free and democratic governments of the EU have decided that non authrorized sites like this one and certainly Strategic Cuture Foundation (now 403’ed) are to be censored indirectly through fines levied upon Google etc.
Anyone know of another way on to Strategic Culture Foundation or at least the name of some of its contributors?
This is all beyond ridiculous now. Free speech is evaporating and nobody cares here in Europe. Guess nobody ever really did.
«Free speech is evaporating»
The tradition is that once a government has made the decision to go to war any remaining free speech is suspended for the duration to prevent the enemy from successfully attacking the will-to-fight of the population.
Which means that the “Washington Consensus” governments have made that decision and are working hard to find/create a “casus belli” with which they can send an expeditionary army to southern Ruthenia/western Ukraine from which beat back the Russian Federation army. The prize is huge: Belarus, Ukraine, Kazakhstan to become “protectorates”, and a “color revolution” in the Russian Federation, leading to a chain of bases on China’s northern and western borders.
https://www.pragueforum.cz/ukraine-crisis-in-czechia-whats-happening-now-april-13/
“A city representative for Semily, a town in the Liberec Region of the Czech Republic, has attracted major controversy by posting photos online of traditional Czech chlebíčky (open sandwiches) decorated with cheeses in a Z-shape […] local police are already looking into the matter. Kalvoda has been removed from his position on a local commission and local councilors are calling for his resignation.”
The difference between authoritarian and totalitarian media control is that in a merely authoritarian system only popular media get “normalized”, and unpopular media and individuals are ignored unless they become popular; in totalitarian systems all speech is controlled, even unpopular media and individuals, down to zig-zag shapes of cheese on sandwiches.
It is the Western banks which have defaulted because they cannot pay their creditors, namely Russia.
I am an American Citizen. I love my country. My definition of patriotism is this: “My country right kept right. My country wrong made right.”
The United States, the EU, the UK, and NATO picked up where the Germans left off in World War 2, treating Russia and Russians as sub-humans. Gaslighting them. Demonizing a whole country and a whole people. Bear baiting. Bullying them. Harassing them.
Somebody. Please. Tell me where this government is right about anything today? They certainly are not right in their minds, their hearts, or their very souls.
This is hate. This is. Pure evil.
You will have job (a house, a home, a family, a car, property of any kind, a bank account, a country, the truth, freedom of any kind, a free press, inalienable rights of any kind . . .) until somebody doesn’t like you, and then you will not. This is my government today.
This is every American Corporation today.
If the West can behave this way to a country, imagine what lies instore for the average individual.
This cannot stand.
“I have seen the enemy and they are us.”
“.. US finances rely on foreigners constantly lending the US huge amounts of ever-growing money non-stop.. ”
This is not correct, and is unfortunately an error of mainstream economics knowledge of monetary economy/system operations that afflicts the lives of the labour class masses everywhere in the world. Govs are currency issuers. Households are currency users. Their finances could not be more different, conceptually. ‘Left’ & ‘Right’ both make this mistake.
US Gov issues $s, free gratis. It has no meaningful ‘debt’, or need to borrow its own currency. (That which is disingenuously called Gov ‘debt’ is nothing more than money saved in a slightly different form direct with Gov. There is no technical need for Govs to offer such savings bonds – the profits they provide are just free money for the already rich, to no productive purpose whatever.)
The same applies to any Gov issuing its own fiat currency, including Russia, China & most others.
The ‘financial asset’, or ‘money’ denominated side of all the various sanctions are quite meaningless for Govs themselves, in terms of all domestic real resources available to them.
It is the ‘real resources’ that matter, not the IOUs (money), and if a country, like Russia, has a most useful surplus of essential commodities, eg. in food, energy & construction materials etc., & is able to trade some unneeded quantity for things it produces less of, well then, it is always the winner in any game of sanctions. As indeed, we see in the case of Russia & its many trade partners eschewing US/EU ‘sanctions’.
There may be some temporary disruptions, as trade logistics adjust, but who has the most useful balance & surplus of real resources always wins.
Sanctions can, of course, hit the wealth of private owners of assets sited abroad, or financial assets denominated in foreign currency. But so what? That’s of no concern to Gov or the needs of the nation. Indeed, in Russia’s case, impoverishing a bunch of oligarchs wedded to foreign financial interests, makes no difference to Gov’s domestic economic capacity, & may even reduce their undesirable political power to work against the interests of the country.
All strategic goods trade relationships are settled by Govs, whether private Corporations are the providers or not.
So, cut a long story short, the $, Yen, £ or Ruble balances are irrelevant. For its part, the US & Canada are well endowed with most all essential commodities for industrial societies, well into the future (notwithstanding climate/ecological problems everyone has).
The likely continuing & growing trade pacts of Russia, China & other BRICS, have between them a vast surfeit of ‘real resources’ capacity, so sanctions will likely only have lasting benefit to their citizens as supply directs more to domestic consumption.
It is Europe which is the weakest in terms of its own strategic resources, & is destined to see its own citizens’ living standards fall behind, in real terms, as the world now divides into two distinct, mutually isolated trade blocs. Of course, Europe’s capital owner class ruling elites, & their lackeys in mass media propaganda & public office, have no intention of sharing any of that pain – quite the opposite in fact.
But Europe significantly depends on imports, especially in energy, but also in other strategic/industrial needs to.
Your assessment is correct. This latest crisis continues to reveal real resource supremacy over the fictional “spreadsheet world” that has dominated public discourse during the neoliberal era.
Happy Orthodox Easter!!
Христос Воскресе!
Воистину Воскресе!
‘Fair play of yore’? What? No one has ever accused Albion of fair play before. Mercy, perhaps. But not fair play.