Dear friends,
It is a huge pleasure, and honor, for me to present you today with the Q&A between Mikhail Khazin and the Saker Community. For those who might have missed it, here it is (including a biography of Mr Khazin):
http://10.16.86.131/exclusive-mikhail-khazin-qa-with-saker-blog-readers/
This was truly a massive effort, not only on the part of Mr. Khazin to whom I am immensely grateful for taking the time to reply in detail to so many questions, but also on the part of a lot of volunteers from our community. In the words of the Russian Saker Team Leader, Marina,
I just wanted to say couple words about the project and our team.
I believe this was first truly communal project. It was done entirely by the fantastic members of our international Saker community. We received over 500 questions from our readership. A group of volunteers helped to sort them through, reformat and edit in a way that allowed us to keep as many original questions as possible while at a same time keep them short and manageable both by M. Khazin and the translators. The volunteer response was overwhelming and very professional.
As Russian I cannot overstate my gratitude to all these wonderful people around the world who time and time again demonstrate their compassion and solidarity with Russia. My Motherland once again goes through trying times and so does the rest of the world. We are in it together. We need to stay strong and united in the face of evil who has no nationality and no borders. To fight evil we need to erase borders in our hearts and extend hands to each other and especially to those of our brothers and sisters who are in most need of our love, compassion and support.
Thanks Saker for giving us the platform to do it,
Marina
I personally share exactly the same feelings of gratitude as Marina and want to join in her expression of thanks.
Furthermore, my thanks also go to you, members of our community and readers, because 500 questions is truly a fantastic proof of the vibrancy and involvement. I am sure that we must have beaten some kind of “interview record” with that kind of questions.
Finally, here are the names of those who did the really hard work:
Editing
Heather, Kristin, Michael, Paul, Patricia, Hugh, Joe
Translation
Yulia, Gideon, S, Marina
Considering the importance of this document, I have decided to try to make it as easy to access, copy and distribute as possible. First, I have made it available in 4 formats: ODT, PDF, HTML and DOCX. Second, I have uploaded it to both the Internet Archive and Mediafire. Here are the links:
Third, you will find below the text pasted in from the HTML file.
I hope that you will find this Q&A interesting and, if you do, please let us know because we are considering doing something similar with another well-known Russian personality. If you want this to happen you can do the following: circulate this Q&A and post it wherever you want (I licensed it as “public domain”), link to this post and post your comments and reactions in the comments section below. Please let Mr Khazin and all those volunteers who worked to make this Q&A in English possible know that you appreciate their dedication. After all, how often do you get to directly ask a question to a top level expert who truly knows not only Russia, but also all the “behind the scenes” Kremlin politics?
Kind regards to all,
The Saker
PS: if you repost this Q&A elsewhere, especially if you translate it (which I encourage you to do) please let me know!
*******Mikhail Khazin Q&A with the Saker Community*******
Central Bank, Banking
Questions
Pertaining to the Russian Central Bank. Who owns it and who controls it and who profits from it? Do foreign interests have a role to play within it and the bank’s ability to inject liquidity into the Russian economy? Can the Russian government instruct the Russian central bank in policy decisions? Can they create an alternative to western based financial institutions like SWIFT, Visa etc. to a system based on rubles?
How is Russia’s national money supply structured presently and Why is the Russian Central Bank still depending on accumulation of US dollars before issuing Ruble’s and if this policy will change in the future, how will that affect financing of the Russian national economy from domestic sources like from Sberbank instead of relying on foreign investment?
T1, Princeton NJ
Malcolm Donald
James, Canada
Vic, Northern Ireland
Roxz, Sweden
Colin McKay Australia
Answer
There is a law that states that the Central Bank is independent of the government. Theoretically, the Central Bank has the right to set its own monetary and money creation policy. However, there are two limitations. The first is the IMF policy. Since the Russian Federation signed an agreement with this organization, the Central Bank sees itself as the main instrument for the implementation of the agreement. Of course, it is largely determined by personalities – while the head of the Central Bank, Gerashchenko, was indeed a distinguished banker and statesman, the Central Bank’s policy was relatively independent of external sources; with Ignatiev and Nabiullina the situation has changed and the latter leaders try not to argue with the IMF.
The second limitation is the National Banking Council, which includes several representatives from the President Office, government and Parliament. A longstanding Russian Finance Minister, Alexei Kudrin, who is not only a personal friend of President Putin but is also close to the IMF Russian expert, played a key role on the Council until recently.
Today, the situation is gradually beginning to change. It is already clear that the old policy of the Central Bank (that reflects the vision of the IMF in its most orthodox form) does not produce the desired effect and there is a growing criticism in the country of the policy of the Central Bank and the government. However, so far, the leadership of the Central Bank is withstanding this public criticism and does not intend to change its policy. At the same time, the government keeps pressure on the Central Bank to achieve specific results for itself. In particular, the devaluation of the ruble in the last two months is largely due to the fact that the government has too optimistically promised economic growth, which is clearly not there. An attempt was made to stimulate it with the Central Bank agreeing to go against its core mandate, which requires ensuring stability of the national currency’
The Central Bank’s investment policy is similarly pulled by the opposing forces of IMF rules and the country’s economic needs. During Gerashchenko’s tenure, the Central Bank was actively increasing domestic capital (from late 1998 until 2003, the money stock M2 increased approximately 10-fold relative to GDP, from 4% to 40%, and about 15 times in absolute terms). The post-Gerashchenko Central Bank has been pursuing a strict policy of keeping the ruble from becoming an independent investment vehicle (in compliance with the principles of the Bretton Woods system, in which the dollar should be the only investment source). It has become clear today that there won’t be foreign investment in Russia at a significant scale and therefore it is necessary to stimulate the ruble investment process. However, the current leadership of the Central Bank refuses to take any steps in this direction. Thus there is a reason to believe that the management of the Central Bank will change in the medium term.
Gold, Gold currency
Questions
Distinguished Western economists have pointed out that for years naked gold short selling through manipulation of paper contracts have been used to prop up the United States Dollar and Western allied-currencies against the threat of greater depreciation versus gold. Can Russia and China break the West’s gold shorting scam?
Would this be an effective way for Russia to retaliate against the Western-Saudi economic warfare that is driving down the ruble and oil price?
In particular, is there any serious likelihood Russia and China could coordinate to take delivery of large quantities of physical gold at the newly opened Shanghai Gold Exchange in order to create an arbitrage between the fake, naked short created paper gold price on the COMEX London market and in Shanghai, resulting in the end of the COMEX as a serious vehicle for gold price discovery that the central bankers can manipulate? (In other words, breaking the West’s quasi-monopoly on ‘price discovery’ in the precious metals market, of which Russia and China are the world-leading producers).
For many years gold analysts like Dr. Jim Willie and ‘King World News’ have suggested Russia and China have been willing to tolerate the Western manipulation of gold because this has created a fantastic buying opportunity for Russia and China to stockpile the strategic metals at a huge discount. But with the COMEX price being below the Russian if not Chinese mining cost of production at what point do Moscow and Beijing defend their long term gold mining interests (e.g., Magadan miners in Russian Far East) and corporations from predatory undercutting?
Does the Moscow economic elite see the gold price as an Anglo-American weak spot, to hit back at the West for trying to drag down the ruble and the oil price?
What chances are there of the BRICS nations using a debt-free or gold-backed money system?
Will gold replace the USD as the world reserve asset and unit of settlement for international trade?
James, USA
Corto, Netherlands
Mcbuffalo, Arizona
NotRelevant, The Netherlands
James Bond, Australia
bob kay
Answer
It had been clear to many economists for a long time that the role of gold in the world will grow and, most likely, will return to its position as a single measure of value. In particular, we wrote about the current crisis back in 2004 in our book “The decline of the dollar Empire and the end of the ‘Pax Americana’.” There’s a whole Chapter devoted to the role of gold and its manipulation. However, Russian economic leaders close to the IMF ignored this position at the time. This only began to change in the last couple of years. China has been serious about gold for almost the entire last decade and is now actively preparing for a potential transition to a “gold standard,” at least in economic relations between the so-called “currency zones,” which, in our opinion, will emerge after the single world dollar system falls apart.
But Russia and China cannot stop these manipulations, because the price of paper gold is determined on the speculative dollar markets. They can’t provide “leverage” that would be comparable to that of major U.S. banks that have access to an unlimited issuing resource. The only thing they can do is increase the gap between the price of “paper” and “physical” gold by constantly buying the latter on the world markets. Of course, this increases the instability in the global gold market and creates potential losses for the main “gold dealers” who work with the Federal Reserve on leasing programs, but the degree of imbalances has not reached a critical value yet. It seems to me that the sharp rise in gold prices will start after the burst of the next “bubble” in the US stock market.
With regard to the potential price of gold, as I wrote back in the early 2000’s, it is determined by a “fork,” the lower limit of which is the gold price in 1980, when it had its local peak after the dollar was decoupled from gold (USA default) in August 1971, and the upper limit of which is the purchasing power of the dollar in the early twentieth century, when gold was actual money. Today this “fork” (in current dollars) is seen somewhere at the level of $ 4,500 – $ 15,000 per Troy ounce.
Industry
Questions
American industry is currently oriented chiefly towards weapons production. What danger do you see for Russian industrialization to take the same precipitous path?
It will be interesting to see if Russia can solve this modern riddle of the Sphinx: how to fold the economic surplus back into the economy, while the oligarchs are doing everything in their power to prevent such a thing. What safeguards Russia may have against the aggrandizement of power corporate entities, especially militarily oriented ones, as has been achieved in the USA?
Who are the groups participating in the discussions to promote the development of Russia industrially and culturally, is it the RAS, Valdai Club, think-tanks, etc? What are the main elements being considered for the proposal? Are foreigners somewhat allowed to participate at some point in the proposal?
Canada shares important features of Russia’s new economy such as growing dependence on resource extraction. Both countries are becoming petro-states, more or less rapidly. My question concerns the extent of de-industrialization in Russia. Is it fair to say that industrial development is now geared to servicing the extraction industries and to what extent is this a trend or not?
After the savage destruction of Novorossiya by the ATO an investment in the hundreds of millions, if not billions, will be required just to get the region back to where they were before they were attacked. On top of the money required for infrastructure, when separation occurs, Novorossiya will be billed, with some justification, their portion of the national debt. Where will the money come from? What role do you think Russia should play in the financing of the rebuild?
juliania New Mexico, USA
12 chair fan
from Patagonia
Da Ric Edmonton, Alberta, Canada
rrell Rankin Canada Winnipeg, Manitoba
Answer
The situation with industry in the US in the past couple of years has somewhat improved. There are two reasons: changing energy prices in the US (and here we must say good words for the Obama administration), and the rising cost of production in China. However, the main factor for long-term growth – private demand – is in decline. This suggests that growth in the US does not even have a medium-term prospect. The drop in private demand is the main impact of the economic crisis, which has continued since 2008. Nothing can be done here, because the main mechanism of its stimulation – the refinancing of private debt in an environment of a decline in the cost of credit – is no longer working. Recall that the discount rate of the US Federal Reserve, which was 19% at the beginning of the “Reaganomics” policy (the main tool of which was increasing lending to households), declined almost to zero by December 2008. It’s impossible to raise the rate now, because it will bring down the whole pyramid of debt around the world.
Today US households consume every year about $3 trillion more than they earn. The situation in the EU is not much better. This means that aggregate demand in the world will be sharply decreasing. In other words, continuing to keep the trading and financial infrastructure of a global system of division of labor won’t be cost-effective. The world will most likely return to regional systems of division of labor. Each such system will have to provide domestic production of basic consumer and investment goods. The territory of their self-sufficiency will be regional, with high enough inter-zonal trade barriers. In this scenario the WTO has no prospects.
An investment source for creating (or restoring) the relevant industry will be the issue of regional currencies (in our 2004 book these regional systems of division of labour are called “currency zones”). In this sense, Canada is very different from Russia. Russia, most likely, will be one of the leaders of the “Eurasian” currency zone and will actively participate in the development strategy of the division of labor and emissions in the zone. Canada will be a part of the “dollar” zone with its strategy prescribed by Washington. So if our description of the development strategy in the short-term is true, then Russia and the US will restore their industrial production. In the US, due to a significant fall in demand and the loss of many foreign markets, it will be much easier to do this. Canada, however, will remain a “resource extraction” economy.
In general, how the “currency zones” will be configured after a sharp reduction in the global aggregate demand is a very interesting question. In particular, I did not believe the independence referendum in Scotland would result in separation from the UK. However, if the elite of Britain decided to enter the dollar currency zone, then Scotland would almost certainly separate because it is obviously attracted to continental Europe. Canada can see the intrigue with the separation of Quebec revived and its subsequent accession to the renewed EU. But I repeat, all these issues will become relevant only after the sharp fall in aggregate demand.
It seems to me that Novorossiya (and Ukraine, like many other countries in Eastern Europe, after the configuration change of the European Union), will be restored using the ruble as the issuing resource. The ruble may remain the national currency of Russia or become, perhaps under a slightly different name, the Eurasian Economic Union currency, which theoretically can include (out of major countries) Turkey, Japan, and United Korea. The last two countries, which are highly oriented towards external markets, will have no other options for regional economic cooperation after the U.S. returns to a policy of isolationism, without which they will not be able to recover their economies.
The Russian expert institutions are divided into three large groups. The first comprises the fragments of the ex-Soviet system of the Academy of Sciences. They partly have lost their quality, but until recently were able to maintain a relative independence. It is this independence, especially in the economic sphere that has infuriated the liberal crowd, which tried to completely destroy the Academy of Sciences as an independent public and expert institute. It is possible to work effectively with some institutions within the group; in particular, some of its representatives were among the Russian participants at the recent XVIII Dartmouth Russian-American conference in Dayton.
The second group is created and funded, either directly or indirectly, by Western grants (the most famous in the economic sphere is the Higher School of Economics, in Russia known as the “Russian Economic School”). Organizations within this group represent the interests of the grantors, and their authority has lately fallen rapidly.
The third group comprises people who try to address the real problems with the money that they can find, bypassing the State. I, for example, am among these people. Among the members of this group are independent (from the international heavyweights) consulting companies and research institutes that were created by real producers, and so on. They have done quite a lot in recent years (in the early 2000s we, for example, created a theory that describes the current crisis), but their “weight” within the framework of the State is quite limited. These institutions or individuals can be very interesting from the point of view of purely informational and even non- monetary interaction. Their influence in Russia will grow strongly.
Ruble, Currency
Questions
In contrast to the US Dollar, how is the Russian Ruble supported by the Russian economy? and its flexibility in working together with the basket of other currencies forming the next world trade mechanism outside of the US Dollar.
There has been some talk about giving the Russian state the right to issue currency to fund public infrastructure development and to give low interest loans for business in the productive sectors. What are the chances of such a thing happening and in a timely manner in the near future?
Why don’t Russia revise contracts from countries that sanctioned Russia – so that all future transactions for Russian Gas & Oil have to be made in either Gold Bullion and/or Russian Ruble’s?
Christian Witting Mandal, Norway
Blue Northern Illinois, US
Catrafuse, Timisoara Romania
zerone Germany
André Montreal Canada
Ricardo Valdivia Chile
JH Québec
Julian, Melbourne
Answer
As I have written elsewhere, today’s economic leadership of Russia – the Government and the Central Bank – consider the ruble exclusively within the framework of the Bretton Woods system; as secondary to the US dollar. Accordingly, they hold the economy of Russia open to the world financial system, constrain investment opportunities for the ruble (by overstating the value of dollar-denominated loans) and rely on foreign investment.
In this situation, the stability of the ruble is determined by purely speculative factors of global markets: a price of crude oil, capital outflows, foreign investments, and a foreign capitalization of major Russian exporters. However, the situation can change if we establish a domestic ruble investment system, create development institutions that will provide cheap ruble credit to the real sector of the economy, change the tax system from pure raw materials (with high value-added tax) to industrial, and begin to stimulate small and medium businesses engaged in innovation and production.
While the ruble is seen as secondary to the US dollar, all the above-mentioned suggestions are highly controversial. As long as a main objective of any business in Russia is to increase its dollar capitalization, get a large dollar loan, place shares on the New York or London stock exchanges or sell something for export, the idea of selling oil for rubles will not be greeted with enthusiasm. First, it is necessary to create a ruble-denominated financial infrastructure, then build a business that is oriented on this infrastructure, and only then start a strict policy for its separation from the dollar system. This in any case will require a major change of personnel of the Russian political elite.
Oil
Questions
Will the oil-price war currently being waged seriously damage the Russian economy, or is the Russian economy sufficiently diverse to “weather the storm”? Do the falling price of oil AND the falling value of the Ruble effectively offset each other? Is Russia able and/or willing to take retaliatory measures and what might they be? Is the Russian oil industry dependent on Western technology for its operation?
Michael Schaefer Schwerin, Germany
teranam13 from N. California
Ric Edmonton, Alberta, Canada
Dick Lenning Canada
jc Southern California
Answer
The oil topic is always very complex. There is a huge number of factors, comprising the short-term (increasing the oil production from Libya and partial lifting of sanctions against Iran), medium-term (development of new, more expensive oilfields, and shale “revolution”, etc.) and long-term (change in economic structure and in energy technology). No concurrent view about this problem exists, so it is needless to talk about long-term trends, which, undoubtedly are present, but barely known. The short-term trends, including the recent downturn in prices, will cost the “organizers” quite a lot if they develop against medium- and long-term trends.
From the macroeconomic prognosis (it has been revised many times within the past 10 years, but the core components were set at the beginning of 2000s, that is why we trust it) the main macroeconomic trend of the next decade will be the division of the world into currency zones. Each zone will have its own price formation mechanism (as was the case in the 70-80s in “Western” and Soviet economic zones). Therefore the drop in oil prices prepares Russia’s economy for different day-to-day realities rather than merely damaging it.
I’d like to point out that Russia invested surplus profit from the sale of oil into assets in the West. Therefore the decrease in profits will rather bring problems to the US, in whose treasuries the oil money was being allocated. Our budget, even accounting for capital outflow, is in surplus. There are problems with investment resources, but they could be overcome if the economic policies are changed. Retaliatory measures are rather political. By the counter sanctions Russia shows that this is not the way to treat allies. And if they are not allies, then are they enemies? In other words, does the US push Russia into an anti-American union with China? Certainly, the union with China is a disputable matter, but if there is nobody to talk to in the European Union (where the situation can change, just look at Marine le Pen in France and Viktor Orbán in Hungary), if the political elites of the EU are subservient to Washington, and if the U.S. behaves inappropriately, then what are the options?
Sanctions have shown that the US these days is impossible to negotiate with. It means that the matter is not whether Russia can do without American technologies or not; in fact, it is about how it needs to proceed without them. If the economy were healthy, then while Russia would resolve all her current problems, the US would go forward, but amid sagging demand… The US will likely go backwards; this is a standard expectation amid long crises. Sure, the problems of Russia won’t be resolved on their own, it is necessary to update the economic policy. On the whole, sanctions do not constitute a critical matter for the time being. They even can be increased, but there is no guarantee that it will not precipitate a crisis in the US.
Sanctions
David Northern Californi
Tom Mysiewicz Reedsport, OR
Rhysaxiel Bordeaux, France
Paul from Tokyo
R-27 ER/ET Santiago, Chile
Question
What effect will sanctions have on the Russian economy over the next few years? Will they lead to better integration with the BRICS economies and other non-Western countries and how could this help Russia to deal with the sanctions regime? Will the sanctions ultimately provide the catalyst for the development of an alternative reserve currency?
Answer
I’ve already addressed part of this question so I’ll take the opportunity to refine what I’ve said before. Regarding the use of a different currency, this is already decided – There will be one, probably more than one. There is no other way to support investment, apart from by issuing regional currency and it should go without saying that ‘Whoever pays the piper calls the tune’ To put it another way, If and when regional these regional currency issuing centres appear it will quickly become clear who are ‘patriots’ and who are ‘collborators’. It’s all quite straightforward: If you export capital, the destination country will receive the investment. It will become clear quite quickly
It’s a completely different matter why the United States chops off the branch on which it is sitting (ie. stimulating the creation of alternative reserve currencies). The answer is similarly straightforward. They simply can’t conceive of their own collapse. However this belief is not simply a matter of idealistic ‘American Exceptionalism’ (We are the dominant, thus we shape history, not the otherway round), but it is also a belief held by the elite, as it forms a critical tool of social governance. Furthermore, if we admit that the official economic doctrine simply doesn’t acknowledge the crisis (To be more exact, it is impossible for the theory to recognise the crisis as the theory lacks the terms of reference to describe the cause) then the crisis actually becomes inevitable, if not inescapable: The economics are themselves founded on axioms which themselves are impelling the economy to catastrophe. There is nothing more to say here. ‘Those whom the gods want to destroy, they first make mad’
The BRICS, moreover is a pretty artificial phenomemon, dreamt up by Goldman Sachs, the famous investment bank for purely commercial reasons. (In fact to issue new securities onto the market). From our side the BRICS countries look like the leaders of regional economic zones (Brazil and South Africa in one (‘Southern’). Russia (‘Eurasian’), China with its own Chinese and India with its own national zone, given its huge population. It looks likely that the Indian zone will most closely follow the Eurasian Zone. In these zones co-oporation will increase as will the attempts of the United States to solve their internal problems by forcing other countries to pay their debts, using the institutions and frameworks set up under the Bretton Woods which established the dollar as the sole reserve currency. These efforts of the United States are only likely to speed up the process of regional integration.
Question
In the absence of exchange controls, has consideration been given to creating a split domestic-foreign ruble to support the currency and minimise the impact of sanctions and of commodity and currency speculators?
Answer
Russia has a whole collection of legislation to regulate its currently which are simply not ative at the moment because their activation would contradict the ideology which drives the financial elites. There is the mechanism of enforced conversion of foreign revenues (Set at zero percent at the moment). There are limits on declared FX positions and other FX regulations which are similarly not active. I am not at all sure that new legislation is required, those which exist are wholly sufficient should the will be therr to activate them.
I have a suspicion that the government and the Central Bank (and this refers a united ideological, commercial and political ‘team’ which are labelled by the media as ‘Liberals’, although the term potentially misleading), who promised the national political leadership economic growth although were unable to maintain it, have decided to resolve the situation by devaluation. However they simply don’t understand economics, rather they do not understand that devaluation will only benefit GDP in teo specific cases: Either there is a large amunt of idle capacity (like in 1998), or there is a large amount of freely available credit. At the moment there is neither. FX investments are not profitable and no one will invest. As for the ruble the central bank has simply refused to open up the credit market. This means that there can be no positive consequences from devaluation only negative ones. The most obvious will be a collapse in living standards amongst the normal population as the majority of consumer goods are imported. This brings us to the hypothesis that the governance of the central bank is in cahoots with Washington with the shared aim of subverting Putin. The hypothesis is already mainstream in the Russian Media.
Question
Is there enough political will and influence inside the Kremlin and the Russian Government to launch agricultural modernisation and improvement projects given that sanctions have been imposed on agricultural imports?
Answer
At the moment the Kremlin is making demands regarding the state-led modernisation of agriculture which contradict the Governments ideology. Naturally this leads to open sabotage. This is absolutely clear both in the investment environment (The government directly is responsible for the flow of investment but actually plays the opposite role at the moment) and in the implementation of the Russian payments system as just one example of many. If the kremlin has the political will to change the government then the situation will improve and with that, agriculture. If not the situation will continue to deteriorate.
Question
In your recent appearance on TV with Sergei Glazyev, you suggested that the use of sanctions by the US was a sign that the current system was breaking down. Can you elaborate on what you mean?
Answer
I have shown above that the current political situation in the United States will lead to the intensification of problems for the United States itseld, most obviously in the destruction of the dollar as the global currency. If you see that in order to sustain one of the ‘rules of the game’ that this can only be done at the expense of other rules then it is abundantly clear that the rules are no longer relevant and that they need to be changed.
Question
It appears that the economies of some countries that have followed the US lead in sanctions are being affected. Do you believe the US has promised to subsidize the losses of its allies? Why do you believe these countries have been willing to risk their economies?
Answer
No, the US will be giving money to no-one. Those countries that have acted against their own interests have done so as their elites have been effectively captured by the US. It’s no secret and in fact many write in the independent European media that it is impossible to make a career in politics with support from the US. The only ones therefore who can have a career are those frimly ‘on the hook’. Often the United States will create that hook themselves (Profitable contracts, grants, sometimes bribes and even blackmail). It’s not surprising that they control the entire extent of the EU, eavesdrop on all telephone call etc etc. It just needs the exposure of an affair, a few hundred euros of income hidden from the tax authorities or a recording of an indiscrete telephone call (maybe criticising the Gay Parade) – they would all be enough to, when exposed to the national press, to deprive an individual of his social status or a significant part of his income. Who would go against that?
There were a lot of scare stories in the 90s about the ‘Stasi’, who allegedly held records of every citizen of the German Democratic Republic. We now understand that, in comparison with the practices of the United States now that this period was actually an unexpected utopia of personal freedom. To give examples, The Stasi may have known who slept with whom, but it did not have recordings of discussions held during these intimate rendezvous. Ask yourself: Is it pleasant to think that there are people who can, without oversight, scrutinise recordings directly relating to your personal life? Furthermore are their many people on this earth who would not be vulnerable to blackmail in their personal life? And how many people are there really who would refuse to the the bidding of the United States knowing that such information is not only in their hands but ready to be used against them?
Question
What could be the response of Russia if the situation with the oil prices, sanctions, economic warfare and military pressure becomes critical? How will it mobilize its allies and how could it strengthen its economy and military, especially the air force and missile defense?
Answer
Well Russian has practically no allies, if we think of them in the sense like there were in 1939. Belarus, Kazakhstan and maybe a couple of other small countries. However there a lot of countries that understand that the United States is single handedly destroying the world order and with it global security (This is exactly what Putin said in his ‘Valdai’ speech in Sochi). There are also people in the United States who understand this. Morover the recent mid-term election results, a week ago, in the United States clearly showed that there are people, especially in the older generation, who without having a depe knowledge of the particulars feel that the current elites in the US are leading the world to catastrophe. We would simply hope that the world will not be led to catastrophe.
Trade
Vic, Northern Ireland
Song, Canada
Gagarin Thespaceman Cape Town, South Africa
Question: Eurasian Union
What do you foresee in terms of the evolution of the Eurasian Union, both in terms of internal economic/political dynamics and its relations with other states (and in particular the US/NATO/EU bloc)? Does it have the possibility to expand outside of the former Soviet Union? Are other regional cooperation organizations such as the CIS and CSTO still relevant?
Answer
As I have already said, according to our theory the world could split into several monetary zones – more or less independent systems of divisions of labor. The Eurasian Union is one such zone. In a long-term outlook it may include such prominent countries as Turkey, Japan and United Korea. The last two have no choice: the U.S. and the EU won’t purchase their produce, and they don’t want to be friends with China. So, the Eurasian Economic Union has a promising future, but it also means that we need to work hard to achieve positive results.
Questions: European Trade
In the past much has been made of a “Lisbon to Vladivostok” trade zone. What do the parameters of such a zone look like, and given the current hostility of the EU towards Russia, is there any realistic prospect of making it a reality in the near- to mid-term? What circumstances could make this more viable in the future?
Answer
I think there is no such prospect as of today. The situation in Ukraine has shown that the current EU leadership will not take Russia’s interests into consideration. Any attempt to discuss these interests causes a torrent of statements blaming Russia for “imperial politics”, “restoration of the USSR” and so on. We can argue about Germany and France being outright blackmailed by the Baltic states and Poland, the role of Washington etc., but the fact is that in its current configuration the EU and Russia cannot be “friends” (in the broad sense of the word). We can resume such discussions if a reconfiguration of the EU takes place and the Eastern European countries leave the EU.
Question: Payments/SWIFT
One of the purportedly heaviest weapons in the US/EU sanctions arsenal would be to cut Russia off from the SWIFT payments settlement system. Much has been made of efforts to create an internal system or to link with China’s system. What are the challenges facing Russia as it seeks to end its reliance on this particular Western system, and what is a realistic timeline for implementation?
Answer
This could have been implemented promptly, but the Central Bank has sabotaged all the efforts. As of today, nothing has been done, so we will have to return to this topic when the Central Bank has new leadership. The current leadership won’t do anything in this direction.
Geopolitics & Foreign Relations
Question: Russia and relations with BRICs/Emerging Markets
Russia has been very clear that in light of the West’s aggression that it would redouble its efforts to form an alternative geopolitical grouping, both among emerging markets generally and China specifically. Can you comment on:
Which countries (particularly among the BRICs) are likely to support Russia going forward?
China is probably the most critical relationship for Russia going forward – however given the often strained relationship between the two, many are skeptical of the ability to form a true partnership. Why is today different?
Russia has been actively seeking to expand its trade links with Emerging Markets generally and the BRIC nations specifically. Where do you see the best opportunities for Russia in terms of expanding trade links with these nations or even creating more formal/multinational trade structures? Along these lines, do other EM nations share Russia’s interest in potentially de-dollarizing global trade? Is there any chance Russia and/or others actually de-dollarize and, if so, what are the potential benefits and risks to Russia?
Emmanuel from Ames, Iowa. USA
Anand from India
NotSoFast from Luxembourg
Answer
I’ve already said something about it. All the questions above imply the preservation of the present Bretton Woods system and describe possible (or hardly possible, if not impossible) scenarios for developments in the world. However, according to our concept Russia and China won’t form a single alliance, they will be leaders of two different regional alliances – one is the more centralized (China) while the other more democratic. Today’s convergence between China and Russia is not due to the fact that they foresee their common future, but for the reason that they consider existing model unsustainable. The U.S. tries to describe the Russian and Chinese policies from the perspective of sustaining of the current order. This results in a fairly contradictory picture. Once seen from the right point of view, the picture becomes clear. By the way, according to this worldview the U.S. becomes a regional leader just like Russia and China or, let’s say, Brazil.
Question: Europe
Even if Russia turns towards Asia and the Emerging Markets, Europe will remain a critical part of Russian geopolitical strategy. In light of Europe’s current stance, is there anything Russia can do to improve relations (short of unacceptable concessions)? How does Russia manage around the virulently anti-Russian bloc led by Poland, the Baltics and (Western) Ukraine?
David Vienna, Austria
Corto Netherlands, Serb origin
123abc Germany
Answer
I’ve already explained that friendship between Russia and today’s European Union is impossible as long as the U.S. likes it, but this is just for a while, because as soon as safety considerations become the forefront concerns, the U.S. will most likely change its position. What happens to the current elites of the main anti-Russian countries seems to be interest to no one; they [elites] will have to go away, because they won’t be able to change their rhetoric, which will make it impossible for Russia to deal with them. For the time being Russia has nothing to talk about with the European Union for various reasons. The first one is rather obvious: trying to find a consensus whithin the framework of the European Union, the general position of this organization will always be strongly anti-Russian. The second one is that Brussels doesn’t have an independant position; it pursues the Washington’s policy. The third reason is that the current European Union has no future. We need to discuss this issue in detail.
If we place the current European Union on the USSR’s timescale, it can be compared with the period of 1989-1990. The problems are the same. Certain rules were adopted in the context of certain historical, financial and economic situation, and then later codified. Today economic and historic conditions have changed, but it’s nearly impossible to amend legislative policies. Each specific issue might be settled, although it’s unclear when, but there are tens of thousands of those issues and the time is extremely limited. The only chance to accomplish something is to abolish all them at once or, in other words, to dissolve the European Union. It can be assembled again, but the re-assembling will be done according to new regulations.
In particular, it can be said that Eastern Europe won’t be part of the “new”European Union. That’s for sure. It has no industry and thus presents no value. There was a political need to “tear them off” from the USSR/Russia and then feed them (to smooth the negative effect from renouncing socialism). Today’s youth doesn’t remember socialism, it means that it is okay to just dump those people and let them survive on their own. They are not of any interest. As we know from the European history of the nineteenth century, they will sink into extreme poverty.But, I repeat, those are their problems.
Coming back to the original question… It’s foolish to make arrangements with the European Union in such environment. That’s why it’s necessary to build our own system of labour division without taking into account the interests of the European Union. If Russia has decided to start building import substitutions, it is simply needs to introduce counter sanctions to a relevant commodity group, since the EU and the U.S., by pursuing sanctions policy, have burried all the norms of the World Trade Organization.
Question: Russia
Given the lack of popular support domestically for the liberal/Atlantacist agenda, how do they continue to retain a power bloc within Russian politics? On the other hand, how do the Eurasian Sovereigntists envision ensuring economic growth, with so many autarkist/state capitalist models having shown severe weakness in recent years? What factor are Great Russian nationalists likely to play going forward, in particular the more radical/national socialist types?
Kermit Heartsong San Francisco Bay Area, Author, Ukraine:
ZBig’s Grandchessboard & How The West Was Checkmated
Answer
First of all, these people (“liberals”) control a considerable part of Russia’s property; second, they are under the protection of the USA; and third, from the point of view of the political elite, they undertook important tasks such as making agreements with the world’s financial system, investments, and economic growth. Today it has become clear that there is no economic growth, there will be no investments, and the USA are not treating us as partners. It means that the “liberals” have lost the political support and will be forced out of the political arena. The main question is: how fast this process is going to be.
As for the USA, they have already realized that they did something wrong. The problem is that the Russian “liberal” team has emerged from the privatization that was a grand theft. Today in Russia the words “liberal” and a “thief” are synonyms. In this sense, for instance, a European court ruling on “Yukos” to exact $50 bln is a grave political mistake on the part of the West because everyone in Russia knows beyond doubt that “Yukos” was stolen. The people, who bought it, were fully aware that it was a stolen property and thus no one owes them anything. In other words, for the vast majority of the Russian public the court decision is the clear evidence that the only interest of the West in relation to Russia is to take away (to loot) the assets that belong to the people (the government). That is, the western elite, including its legal system, deliberately make decisions that favor “their own”, even though those people are professed thieves. This is a hard blow to the trust towards the USA and EU; the blow is even harder than the sanctions.
As far as the nationalists are concerned, there is a colossal difference among them. There are three large nationalist groups in Russia: Russian nationalists (in a way, they are similar to Ukrainian Galician nationalists, although, of course, they are more decent so far as methods and slogans are concerned); the national and religious nationalists (including Muslim nationalists in the ISIS style), and imperial nationalists (the ones who want to revive the great state and who don’t care about national differences among its citizens). The latter are divided into monarchists, communists and “neoliberal” capitalists who want to build a “true” capitalism that is independent of the west.
It is impossible to understand who will win considering the complex processes that are going on in the country. Some of them can form local alliances, but they all have different objectives. That means that a separate set of relationships need to be build with each of these groups. At the same time, there is no point in counting on liberals, in spite of their current power – they have no electoral potential, they will at most receive 3-5 % of votes. They had illusions that a new generation would grow up not remembering the privatization. But the new generation faced the situation when all the “upward paths of vertical growth” are chock-full of children of those liberals and of “siloviki” (national security) they have raised. This is why it is inevitable that new political powers in Russia will be anti-liberal, or anti-West. “Navalnys” have no chance – they defend wrong positions. The West, if they want to have relations with Russia, has to become aware of this situation and correct it. Right now they don’t want to do that, which means that there are no positive prospects.
How to prevent the coming war. Sergei Glazyev
The world media’s interpretation of that war as the Ukrainian authorities’ crusade against pro-Russian separatists for the sake of the country’s integrity is as superficial and senseless as the delusion that World War I resulted from the murder of an Austrian prince, and World War II, from the Nazis’ success in Germany’s parliamentary elections.
In the meantime, without understanding the underlying causes and driving forces that keep the armed conflict going it is impossible to bring it to a halt
Ideologically this war is Nazism-fuelled – the Kiev junta’s propaganda works hard to instill into the public mind a misanthropic view of its opponents. They are targets for beastly comparisons; they are denied the right to speak their mind, with beatings and arrests being the sole alternatives; it is allowed to burn them alive, and the Ukrainian military is ordered not to hesitate to take their lives.
http://www.anna-news.info/node/26096
This is very good interview and very very complex and requires reading carefully..
But a quick run though gave me the gist that most of the problems are because of the very same problems facing all nations. Greed! Everyone wants to amaze as much $$$ as they can and buy a mansion in Florida and move there. I seen this even with the Russians I met in the US. And this is as clear as I can be and remain civil.
I wish Putin the best of luck. He sure has some powerful enemies inside his own circle. All the other bricks are in the same boat. So are the Saudis… Its just too sad that no one cares about the future of humanity.
“The post-Gerashchenko Central Bank has been pursuing a strict policy of keeping the ruble from becoming an independent investment vehicle (in compliance with the principles of the Bretton Woods system, in which the dollar should be the only investment source).”
Bretton Woods agreement was based on a reserve-currency of the USDollar convertible into gold; i.e. gold-backed settlement of international trade balances. Thus, any Bretton Woods obligations expired when Nixon removed any gold-backed requirement.
It is as if Bretton Woods was an Anglo-American covert operation toward global dominance by that duo.
Colonialism/imperialism morphs according to its authors predilections.
A fiat reserve-currency is no accident. It was both brilliant and deliberate as well as even predictable, as its authors knew well the history of paper “money” issued by a sovereign state.
Anonymous Rick
Thanks for the interesting and erudite piece. It is nice to see a fact based article.
i did not see any information as to who Kazin is, although someone you mentioned that the materials include a bio.
That detracts ocnsiderably from the value of this ambitious project.
@Deena Stryker: i did not see any information as to who Kazin is
http://bit.ly/1yh0Rgl
it also has his bio here:
http://vineyardsaker.blogspot.com/2014/10/exclusive-mikhail-khazin-q-with-saker.html
So technically Russia is still a globalist country. As long as the central bank stays independent and plays against the interests of the people.
Is the public opinion being prepared for a complete Putin takeover though?
@Anonymous:Is the public opinion being prepared for a complete Putin takeover though?
The public opinion yes, in fact my guess is that most are even frustrated by what they see as a slow progress of what is called “sovereignisation” in Russia. But the oligarchy, the Russian big money, all the Comprador bourgeoisie is still very much on the fence, if not hostile. So the fight is still very much on, and in very difficult circumstances at that.
Cheers,
The Saker
An excellent well balanced presentation
~ ~ ~ ~
Declining Oil prices. Saudi’s role. Impact on Russia and ruble:
Today’s OPEC’s communiqué in Vienna sent oil prices tumbling below US$70. The ruble also declined. There is much whining from a certain sector, lower oil prices harm Russia but it is important to recognize that Russia has foreign reserves and a tiny debt ratio to GDP.
viewpoints contrary to the MSM anti-Russia spin:
Bloomberg- OPEC Policy Ensures U.S. Shale Crash, Russian Tycoon Says
[.]
Oil futures in New York plunged as much as 3.8 percent to $70.87 a barrel today, the lowest since August 2010.
At the moment, some U.S. producers are surviving because they managed to hedge the prices they get for their oil at about $90 a barrel, Fedun said. When those arrangements expire, life will become much more difficult, he said.[.]
In Russia, where Lukoil is the second-largest producer behind state-run OAO Rosneft (ROSN), the industry is much less exposed to oil’s slump, Fedun said. Companies are protected by lower costs and the slide in the ruble that lessens the impact of falling prices in local currency terms, he said.[.]
Post on impact of OPEC’s comunique at Zerohedge:
“There Will Be Blood”: Petrodollar Death Means A Liquidity And Oil-Exporting Crisis On Deck
How the Petro-Dollar Quietly Died, and Nobody Noticed
And yet, few would have believed that the Petrodollar did indeed quietly die, although ironically, without much input from either Russia or China, and paradoxically, mostly as a result of the actions of none other than the Fed itself, with its strong dollar policy, and to a lesser extent Saudi Arabia too, which by glutting the world with crude, first intended to crush Putin, and subsequently, to take out the US crude cost-curve, may have Plaxico’ed both itself, and its closest Petrodollar trading partner, the US of A.
As Reuters reports, for the first time in almost two decades, energy-exporting countries are set to pull their “petrodollars” out of world markets this year, citing a study by BNP Paribas (more details below). Basically,..{.]
GDP Growth
[.]
Remarkably, the impact of lower oil for Russia’s economic growth is not as severe as might be expected. Sustained oil at USD80/bbl would see growth slow by 1.8pp to 0.6%.[.]
= = = ==
Budgets are crafted with built-in contingencies, not on revenues tied to oil prices at the high end. We have witnessed oil price volatility; in less than 12 months, from the high range, USD$147/bbl down to $40/bbl
The Significance and Importance of this Interview cannot be overstated. There is much Actionable Material Information in this Interview. But most importantly, information to be acted upon as time is very very short.
My one criticism of this Interview is that the scenario being presented by Mr. Mikhail Khazin is a best case one: Empires like the USA do NOT go gently into the night of their Death Spiral.
The time left in the hourglass is very very short. The closer we are to the End, the louder and more crazier and unpredictable the USA will become.
Saker,
I am wondering if the arrest of Russian Oligarch Yevtushenkov (sp?) from Sistema back in Sept and the recent arrest of Oleg Shishov is a warning from Putin to the Oligarch that they are not untouchables.
That if they step out of line they will lose it all.
And these Russian Oligarchs are a small fish in the Western Oligarchs’ pond.
The west is basically teaching the Russian Oligarchs, that they should not trust the West, who promise is based on lies, and whose loyalties are to their own Oligarchs owing the Russian pie, not the Russian pie being shared among the Russian Oligarchs.
http://www.sott.net/article/289541-Fighting-corruption-in-Russia-Olympics-builder-charged-with-tax-evasion-and-embezzlement
Pot calling the kettle black?
http://www.bbc.com/news/blogs-eu-30225268
Greetings from Singapore:
If Khazin is right that the central bank follows the IMF criteria, Putin has two alternatives.
(1) Replace the people now.
(2) Wait until the central bank makes enough damage.
If he waits for (2) it means Putin has not yet enough power to do the change.
The damage could be serious enough to undermine Putin’s support.
OIL is today below USD 70.– and having a central bank which is not part of a consistent national approach to the crisis is suicidal.
[from Blue}
Here’s a thought, and a good summary:
http://www.informationclearinghouse.info/article40333.htm
“
Why We Need A new Soviet Union
By Finian Cunningham
November 27, 2014 “ICH” – Here’s a thought to perk up your morning coffee. Let’s bring back the Soviet Union.
Seriously, why not?
…
“
_Blue
I thank Mr Khazin for taking the time to answer our questions and I also thank the Russian team that made it possible. You gave me lots of new ideas.
Well, Putin must take control of the Bank of Russia. He could do that with the help of a Duma-majority. And then disconnect the Rouble from the dollar and Bretton-Woods. Quickly!
Saker,
There seems to be a mistake in the following sentence that makes it mean the opposite of what it intends:
It’s no secret and in fact many write in the independent European media that it is impossible to make a career in politics with support from the US.”
I think the intended meaning is “it is impossible to make a career in politics WITHOUT the support of the US”
@ Heather, Kristin, Michael, Paul, Patricia, Hugh, Joe
@ Yulia, Gideon, S, Marina
This is a really fantastic job done by the international Saker community. My heartfelt thanks for your (large) efforts in this (up-to-now unique) project. And if it was a surprise for you that Russia has so many friends then I’m very glad (for all of us) that you found this reward at the end of the rainbow. And we can only hope that the number of awakened people will be growing.
@ Mr. Mikhail Khazin
Very sincere thanks for your patience and your willingness to answer so many (and so interesting) questions emanating from all over the globe. Many of us are aware that Russia is – at this critical juncture in time – the main barrier to the AZ nightmare. And because of your comments I’m beginning to understand that Russia still has (quite) a long way to go to put her own house in order. And I would guess that the Central Bank problem probably is of immediate priority.
Regards
The analysis of M Khazin is right about the UE..but(eventhough I would love to see his collapse)this will NEVER happen.They will do whatever it takes(same for the Broken Euro)even go to war and destroy all of Europe,kill millions(for US intesrests)if necessary.These ‘elites’ will NEVER recognize their mistakes and betrayal.There is not a single difference now in the UE between the right and the left.Reason why we have so many coalition govs.And do not believe a single second that someone like Marine Le Pen(FN France) or Farage(Ukip),Podemos(Spain)or Syriza(Greece)will ever be allowed to power.
Ask Berlusconi(forced to leave for unelected EU Monti)and DSK(Sofitel case) what they think about the UE for the first and the IMF plots for the second.
Putin will be dead before any collapse of the EU.
Khazin is not rassuring me at all.
It seems that Putin and the Kremlin are not at all in control.
Or we will have a ‘coup’ against the Gov+Central bank leaded by Putin or..unfortunately it will be a ‘coup’ against Putin from the banksters/gov/liberals(more likely).
It is easier to eliminate one person than the opposite(bourgeoisie,liberals etc).
Saker and all,
To put the oil price wars in perspective:
In 2008, oil went from $145 to $30 and when Putin took over in 2000 they were at $15-$20 range.
Yes, in Dec 2008 oil dropped to $30.
Can Russia survive if oil dropped to $60?
Yes.
Lower than $60?
Yes, again.
Can the others?
If the source is to be trusted:—
International Business Times UK Edition [http://www.ibtimes.co.uk/igor-strelkov
-i-started-war-eastern-ukraine-1475982.html]
Igor Strelkov confesses that he substantially caused the warfare in
“eastern
Ukraine, without the intervention by him
and his group the commotion would have subsided and there would have been no
“antiterrorist operation” by the Kyivan
government, none of the “death squads”, and Ukraine would have been spared the deaths, casualties, destruction and deindustrialization, economic freefall.
“Former Russian separatist leader Igor ‘Strelkov’ Girkin has claimed “personal responsibility” for starting the deadly conflict in eastern Ukraine, in an interview with imperialist rightwing newspaper Zavtra.
Strelkov, who declared himself Minister of Defence of the self-proclaimed Donetsk People’s Republic said that he “was the one who pulled the trigger of war”. “If our unit had not crossed the border, everything would’ve come to an end, like in Kharkiv [Ukrainian city], like in Odessa,” he said, in a translation by the Moscow Times.
“There would have been several dozen killed, burned, detained. And that would have been the end of it. But the flywheel of the war, which is continuing to this day, was spun by our unit. We mixed up all the cards on the table.”
“In the interview, Strelkov claimed that at the beginning of the war, Ukrainian separatists and government were reluctant to fight. It was the country’s ultra-nationalist Right Sector, according to the former commander, that provoked the conflict.” If he blames the Right Sector, then he contradicts his earlier statement about him, pulling the trigger. No, it is his confession.
What a hero indeed!—“Yakyi spravdi bahatyr”, he created the dumbest war of the 21st century thus far, and now he would try to use this criminal war-instigation to create a political career for himself no doubt. He should instead, at the least, just crawl into some tiny miserable monastic cell and spend the rest of his life doing penance.
Just an obsevation
Mr.Khazin did not provide a reply to the most important question of all….
“Pertaining to the Russian Central Bank. Who owns it and who controls it and who profits from it?”
If the Russian central bank is the same model as in the rest of the world
ie. private owners issuing unbacked fiat as debt…for private profit or interests….nothing else really matters….Russia is not and can not be a sovereign entity.
A sovereign state issues its own currency interest free and puts it into circulation by buying goods and services that are produced as a result of the issuance of said currency. Or it could also lend it for productive efforts at low interest rates into the general economy.
A nation not in control of its own currency issuance is a slave. All other things are secondary to this and any efforts to obfuscate this is just dust thrown into the eyes.
That is the unfortunate reality.
Dear The Saker,
Thank you to you and all the teams efforts to produce the Q&A.
Thank you Mr Khazin for taking the time to answer the questions.It is important for those of us outside Russia to be able to communicate with someone who understands and knows what really is going on.
Rgds,
Veritas
One correction please.
The Britten Wood agreement was done simply notvfor American dollar but to give loan and benefits to the BAKRPUT ENGLAND. And it has always been that -an instrument to benefit englisgh parasite race.
Itvhas been foolishness of other nations to join in a system which benefits the mist vile paradite pest -that is England- in the world. Same gor Russian foolishness to join WTO so how much is that Wto protecting you, Mr. Putin? So much so thst you Mr. Putin betrayed Iran and Syria in not supplying paid for s300 sobthat you could please ypur Anglo enemies to approve Wto apllication?
Firstly,
Thanks to Mikhail Khazin for the time he spent answering very clearly all the questions.
Secondly,
Thanks to Marina, the team of translators, the editors and all who presented very excellent questions.
Thirdly,
Saker, your open salon of ideas and discussions at the Vineyard is a blessing. On Thanksgiving, I give thanks for you, your efforts and your world view that intelligence matters if the globe is to survive and humans have any chance of happiness.
My take from the Q&A is that Putin does not have the resources in line yet so he can clean house and move Russia forward internally.
He seems to have the sense that in his region, as M. Kazin states, Putin does have the tools and his nation behind him to influence international reconstruction of arrangements post-WWII.
With China at his side, the struggle is on to wrestle power from the Hegemon. Putin has led this with deeds and precise words in powerful speeches.
For the rest of the human race, we have no way to hedge bets. We are either with the Hegemon and chaos, debt and war, or we opt to join with values and laws, support a vision and plan, support the actions of clear-thinking leaders like Putin and Xi, and spread the word that the day of the Liberal Elites ruling us is over.
Serfdom versus the joy of humanity. That’s a choice that needs no hedging.
The elites offer slavery, death, chaos and debt. We see it in microcosm in Donbass. We see their handiwork in ISIS, the Taliban, AQ. We see them own 95% of the globe. We see their past century and what they intend for this century.
And the other night we saw the same Liberal elites who run the state of Missouri fail to protect the people and their property from chaos, fire and destruction in Ferguson. The politicians running the state are nihilistic zombies in a cult of elites who make middle America look like Lugansk under Poroshenko. It burnt for a reason.
It’s all one and the same, the Kiev junta, the Wall Street bankers, Brussels, NATO, EU, Congress, K Street, IMF, WB. Pandemic of greed, degenerates, fascists and baby killers.
Cross, crescent, star of david or skull and bones, the elites will wear anything, break oaths to anything. Their cult is world domination and destruction of any alternatives. Russia is the most powerful alternative because of nukes and its historical moral fiber of resistance to fascism.
It is the Ruling Elites’ actions they are to be judged by. And most people don’t want to live under any of them anywhere.
We can see, from the answers to our questions, that the battle will be very long, very treacherous and not what we think. I see no collapse of the Hegemon. It would rather burn down the globe like Ferguson than lose control of it.
There is a lot of misinformation and disinformation about the price of oil and oil producing nations like Russia.
[1] There is a break-even price of oil production.
For example the break-even price of Shale Oil production is around $70 USD per barrel produced. For Alberta’s Tar Sands Oil production, it is around $100 USD per barrel produced. Since Russian oil wells are already drilled and running, I suspect that Russian oil production has a much lower production break-even cost. Also, Shale Oil production in the USA is a Ponzi Scheme:
“One of the elements of shale drilling is that a well loses about 50 percent of its production capacity in the first year. This means that production drops dramatically. To maintain production levels, let alone to increase them, more drilling is essential,” an oil expert once said.
So, when oil price is below $70 USD per barrel, the Yankees are NOT going to drill new Shale Oil wells to replace those dying!
[2] There is an oil price used by various oil producing nations for their annual budgets.
For Russia, President Putin has stated that currently it is $96 USD per barrel. Meaning if oil prices are above that target figure, Russia get a bonus in terms of their budget going into a surplus. But if oil prices are lower than that target figure, which they are currently, Russia goes into deficit spending and increases its debt which BTW is small (Russia’s debr is ~15% of GDP) compared to the US and European nations (hovering around and over 100% of their respective GDPs).
Hope the above will clear up a lot of confusion and intended obfuscation on this very important matter.
A Good Thanksgiving to All
~ ~ ~ ~ ~ ~
Ah! those sanctions on Russia. But with a license from Export Control, (average of 60 days for approval) yes you can do business. But competitors from non-sanctioning countries are now a jump ahead of you:
From Reuters, every now and then, with a little truthy.
Europe feels sting in the tail of Russia sanctions(
Reuters) – At a technology fair in Moscow last month, European executives faced the new reality of doing business in Russia since the West imposed sanctions: the number of companies at the international showcase had shrunk by half from a year ago.
“The impact on business couldn’t be clearer. Fewer stands, fewer companies,” said Mark Bultinck, a sales executive for Belgian digital screen maker Barco, which had a booth at the annual expo for the audiovisual industry.
The impact of the sanctions was already clear to Barco.
The company lost Russia’s biggest shipbuilder as a client when the United States and the European Union blacklisted United Shipbuilding Corporation in July, meaning Barco could no longer sell screens to the company for its vessel training simulators.
[.]
In August, the month after sanctions were imposed, EU exports to Russia fell 19 percent to 7.9 billion euros ($9.91 billion) compared to July, a loss of almost 2 billion euros, according to the EU’s statistics office Eurostat.
Although the data is not adjusted for seasonal swings, exports were also down 18 percent compared to August 2013 at a time of year that is traditionally busy for exporters.
The drop partly reflects the food ban Moscow imposed on the European Union in August in response to the West’s sanctions. But it goes well beyond that. Total EU exports fell 12 percent in the first eight months of this year compared to a year ago.[.]
[. . . ] companies are at risk of losing contracts to competitors from China and elsewhere, according to Frank Schauff, chief executive office at the Association of European Businesses in Russia.
“Countries that have not imposed sanctions are able to jump in where the EU has left a gap,” said Schauff. “The economic position that the European Union has in Russia is at risk and it is very difficult to gain that back if it is lost.”
Beijing’s envoy to Berlin said in October that China would seize business opportunities in Russia.
= = = = = =
Related: In an Interview today with BBC World Service, the CEO at Iceland largest fish processing plant fears once USEU sanctions are lifted we cannot recapture the Russian market
= = = = =
Dumb and dumber.
Thanks to all for this excellent interview and translation !
One question..
Khazin: “In other words, continuing to keep the trading and financial infrastructure of a global system of division of labor won’t be cost-effective. The world will most likely return to regional systems of division of labor.”
This seems to be one of Khazin’s main insights. If this return to region systems of labor happens, obviously it would be huge, but I don’t understand how it could.
Can somebody who understands this please explain more?
How could it be, for example, that the cost of manufacturing iPhones in Asia would no longer be less than that in the US, such that manufacturing would return to the US? I just don’t see how that is possible, but maybe I’m missing something.
Anonymous RICK said, “Bretton Woods agreement was based on a reserve-currency of the USDollar convertible into gold; i.e. gold-backed settlement of international trade balances. Thus, any Bretton Woods obligations expired when Nixon removed any gold-backed requirement.
It is as if Bretton Woods was an Anglo-American covert operation toward global dominance by that duo.
Colonialism/imperialism morphs according to its authors predilections.”
Rick, “Morphing” is exactly what the Bretton Woods agreements have done. April 2009 G20 agreed to the FSB (Financial Stabilization Board) which obligates its members to “standards & codes” so vague that they can be intepreted to mean just about anything. Seems as if it’s meant to be a financial dictatorship acting directly on the central banks of the world.
If you are interested: http://www.globalresearch.ca/big-brother-in-basel-are-we-trading-financial-stability-for-national-sovereignty/14047 By Ellen Brown
Saker, thank you for this important “interview”. I’ve known forever that the US Fed is privately owned and is the basis of the banksters power over us.
Now I’m beginning to understand that there’s a sort of giant Fed called IMF/BIS/Financial Stabilization Board that is the means by which the central banks are themselves controlled. I’m having a lot of trouble conceptualizing why it’s not possible to overthrow this– not least because it’s so depressing.
The bits that Mr. Khazin disclosed about how Russia is controlled are helpful in filling in the picture.
Thank you. I think your choice of questions was great & I’m impressed that you have so many erudite readers.
Totally agree with Anonymous 22:46
The most important question: “Pertaining to the Russian Central Bank. Who owns it and who controls it and who profits from it?” has not been answered by Mr. Kkazin.
Not really that important.
Khazin said that
1) it is not state controlled
2) it works in the favor of the Fed
Anything other is unimportant detail.
I would like to say that I am thankful for this medium that gives the common man the ability to communicate with his brothers and sisters in this global community.
Thanks to Saker for providing this meeting ground to help us gain a more clear perspective as to what is happening in the Ukraine and Russia.
I would like to say that Larchmonter445s’ beautifally written post at 23:08 perfectly sums up my own feelings of revulsion toward this anglo-zionist cabal of death.
Thanks for all the intelligent and enlightening posts I have read on this site.
I wish you all good health and prosperity.
I have always sensed this conflict as Good versus Evil, and I see in many of the Western actions, jealousy, vindictiveness, impotence of doing good, of thinking about what is good. People in US have changed since Kennedy’s assassination, they have lost morality, they have become “adult Christians”. But much greater empires than US went down before! Imploding could be one way.
With respect to independence of Russias’ Central Bank to Government. Yes, it can retain its independence and still be a public entity serving the national interest of Russia. It must though be divorced from outside influence and systems be it IMF based or Breton Woods as they are just vectors for the International Finance Mafia to get a toe in and subvert nation states.
The contract or guide for the bank must be representative of serving the Russian people and nation, first and foremost. A nation and its laws are not sovereign without its money supply being so.
A very interesting and concise Q&A and a hearty thanks to the team for putting it together.
Surprise ending to this report on Uke economy. Scroll down a bit.
http://www.zerohedge.com/news/2014-11-27/panicking-ukrainians-face-soaring-prices-warn-inflation-war
DAVID CHU: I am entirely in agreement w you that time is short. Mr. Khazin cites the frustration of those who want to free Russia’s monetary system, but I don’t hear an awareness of peril.
Nikolay Starikov says that actions have to be taken– secession from IMF & subsidiary organizations; nationalization of the central bank; separation of internal & external currencies. This latter he explains is a major factor in China’s success.
http://borisanisimov.blogspot.com/2010/10/nationalization-of-ruble.html
Anonymous said, “A sovereign state issues its own currency interest free and puts it into circulation by buying goods and services that are produced as a result of the issuance of said currency. Or it could also lend it for productive efforts at low interest rates into the general economy.
A nation not in control of its own currency issuance is a slave.”
Exactly so, anonymous. Khazin & Putin & many others understand this, but IMF and related orgs have the monetary systems of almost all the nations tied in knots. There is a powerful faction in Russia which likes things as they are. They must be defeated before the way is open to nationalize the central bank, etc.
Unfortunately, the Central Banks are not part of the soveregn governmen systems or their respective Treasury like departments as these things exist in current reality. Central Banks are almost entirely private banking institutions. Unfortunately again, sovereigns do not create their currencies by spending directly into its economy. Almost all currencies are created by private banks through the issuance of debt. Almost all money is therefore created almost out of thin air by electronic deposit into the borrowers account. Money for the most part is debt. Those believing in monetary theories such as those espoused by the likes of the MMT crowd believe and demand that the sovereign issues money through direct spending on goods and services. I wish it were so. Presently those ideologies are a great prescription for but not a reality based description of money creation. It could very easily become reality but right now legislation exists which for the most part makes reality otherwise.
As for those who wish for a return to a gold, choke, standard. Watch what you wish for. Simply think for a moment who presently and historically controls, hoards, almost all of physical gold. Suffice it to say it is not you and me. Who controls the money supply controls most all. Take some time and take a look at the American Monetary Institute website. A group which is working for and towards real monetary reform.
Eva said…
“Totally agree with Anonymous 22:46
The most important question: “Pertaining to the Russian Central Bank. Who owns it and who controls it and who profits from it?” has not been answered by Mr. Kkazin.”
Eva, the answer was implicit in the general discussion of the fact that the gov doesn’t control the Cntral Bank. It was more pointedly referred to when he spoke of not being able to invest direly into Russian economy. For a better understanding of this I recommend Starikov’s online book, pp24-34 [pdf] Rouble Nationalization – the Way to Russia’s Freedom by Nikolay Starikov
This book is great cuz he doesn’t assume you already understand what he’s talking about. Regards.
Perhaps the Russian political leadership could mandate as critical to the national security and future of Russia that an intensive ongoing national education/dialogue effort be made in regard to the alteration of the Russian financial system into a nationally beneficent one.
This could be done as an exploration of possible reform models and approaches. Assuming that the discussion is unfettered, one might find the country coalescing around, building towards, a consensus package of real reforms.
Anonymous above, at 27 November, 2014 22:46, made some critical points: for example:
“Mr.Khazin did not provide a reply to the most important question of all….
“Pertaining to the Russian Central Bank. Who owns it and who controls it and who profits from it?””
This is the kind of discussion that has been missing from global mass media for generations. Imo to our very great disadvantage, and peril.
Ridiculous !
One man has answers to all of us.
I am not ignorant.
He’s wrong on so many issues, that I’m starting to believe he’s on purpose.
At the end of the day military will proof him he was so wrong.
I am impatient for the weekend, so that I can have the time to closely read this in its entirety.
I am once again in awe of the Saker and the Saker community; this is a huge achievement, and I am pleased that someone like Khazin recognizes the erudition of the contributors here and is willing to participate and communicate with us.
Perhaps one day VV will drop by and take questions:)
Penelope !
thanks for the reference about the book…I’ve ordered it !
Ann
Thanks to Mikhail Khazin for answering in depth so many questions, and to the Saker community for aligning our questions and presenting a very smooth rendition of his answers.
There were many fascinating points: first up, the role and problems involving the Central Bank was very clearly explained, and secondly, the regional aspect of a realignment after the Breton Woods scenario. I’m not an economist but I think I could follow the description of the forces in play.
As to who will ‘win’, it does seem to me that even if nothing else succeeds diplomatically, there is no future for a system that can’t sustain itself, so failure is an option for the ‘liberals’ who ignore what is of use to a nation’s people in favor of what the elite can pocket for themselves. It’s not really a question of who is stronger militarily, but of systemic breakdown.
I thought the description of the EU as being in the position Russia had been in vis-a-vis the US was extremely perceptive. It is very sad that those who refuse to learn from history are condemned (and are condemning others) to repeat it.
Amazing, valuable, and much appreciated work, Saker team!
Getting back to your solicitation of our opinions about deleting abusive comments – I would ask you to consider doing so to comments that blithely claim that a world leader is “going to be dead” soon. It’s at best unproductive and is actually insidious propaganda in its own right. Thank you for listening.
-A.P.
To Penelope, your particular comment at 28 November, 2014 00:29, where you said:
Now I’m beginning to understand that there’s a sort of giant Fed called IMF/BIS/Financial Stabilization Board that is the means by which the central banks are themselves controlled.
I think the answer lies in the Exchange Stabilization Fund (ESF) that we were getting links to last week in these threads. The key is to realize that after the second world war, the US held half the world’s wealth and productive capacity. From that huge resource it created all the institutions and forms we deal with today in our legacy world.
So the ESF is the force to understand, and to know that the US through this fund created IMF and BIS, as well as the United Nations, CIA and all the Gladios and black ops around the globe. Everything we see today as the “world” is actually a subsidiary of the US wealth from back then – probably in league with Britain to some extent that is not completely clear to me yet.
So here’s one of the links we were getting back then to ESF:
The ESF and Its History
There were a couple of sources, I downloaded everything and no longer have all the online links at hand – I think it’s worth reconstructing this however.
With regard to the Russian central bank and who owns it – I’ve started to read the Starikov book – I downloaded the pdf file. I’d love to pay Starikov for his work but I can’t find a frugal source for his book, and I suspect Nikolay would rather we read and understand his book, and support Russia’s upcoming struggle for sovereignty, than that he make a couple Rubles in royalties. I’ll do what I can to pay him back.
Meanwhile the whole book – which you heroically keep re-posting, and which spells out the ownership of the Central Bank, and parses the language of the controlling legislation in scrupulous and very readable detail – is available as a pdf read or download here:
[pdf] Rouble Nationalization – the Way to Russia’s Freedom by Nikolay Starikov
The questions and comments here in this Khazin thread – and many thanks to Mikhail and Saker and the whole team of course – show that many people realize that control and ownership of the nation’s money is the most fundamental proof of sovereignty. I think it’s crucial that we keep these discussions going, and keep these sources alive. The Starikov book, Mr Khazin’s statements, the material on ESF.
I would add also a small document that Dr. George posted in the comment thread from his own article yesterday – an appreciation of Putin and his maneuvers with the central bank over the years. I haven’t had a chance to study it yet, merely glanced at it – but I regard George Oprisko as a friend of this discussion and certainly of Russia and I don’t want this piece to get buried without a chance to look at it:
[pdf] Does Central Bank Independence Matter in Russia? – PONARS Policy Memo 349
Thanks.
To Anon at 28 November, 2014 00:16 – you touch on an important point. You said, in part:
The world will most likely return to regional systems of division of labor. – This seems to be one of Khazin’s main insights […] Can somebody who understands this please explain more? How could it be, for example, that the cost of manufacturing iPhones in Asia would no longer be less than that in the US, such that manufacturing would return to the US?
I’m not an expert but here’s what I think. When your national currency loses value, your exports increase because other countries pay less to buy your stuff.
Right now the US Dollar is way over-valued, because it serves a global function that gives it added value vastly beyond its own intrinsic value as the money we in the US use to do business with.
I think, but I’m not sure, that this kind of equation explains why we send our jobs overseas in a globalized world. If the dollar stops being the sole reserve currency, and loses a lot of its value, we’ll see a huge inflation domestically in the US, but our exports will be dirt cheap for the world to purchase. Which means we could afford to make stuff again. Of course, we the workers in the US will get shit wages – where $25 buys a loaf of bread for example – but at least we rebuild our manufacturing base.
That’s kind of how I see it, in a crude thumbnail sketch. You’re absolutely correct to nail this as a crucial insight of Khazin. It spells the death of the murderous globalization project, and the resurrection of regional economies (and the US of course will be a leader in its North American region). This is all hugely important to future realpolitik.
I hope others with more economic savvy will comment on this point.
Just found out that Russian oil production cost at least for Rosneft is . . . $4 USD per barrel produced!!!
http://rt.com/business/209579-opec-oil-supply-russia/
This Oil War waged by the Gulf Kingdoms and Oil Princes is going to kill the US and Canadian oil industry!!!!
Dear friends
Because for some time I am trying to figure out if Голодомор
was actually the “holocaust of Russians” I would like to ask whomever is familiar with soviet era statistics municipal rolls and population registers, how many raids to locate hidden food did OGPU during the period 1929-1933 in Kalinovka jewish Kolkhoz, or the “Kalinindorf jewish Kolkhoz”, or the “stalindorf jewish Kolkhoz”, – or the “Zhitomir jewish Kolkhoz”.
I would also like to Know if there are any statistics , of how many Jews died of starvation in Ukraine during Голодомор in general and in especially at the kolokhoz and how many of the total 1.8 million officially displaced by January 1, 1932 were Jews.
Please whoever Knows more sent me mail at axisradio@hotmail.com.
Spyridon Hadzaras
http://www.globalresearch.ca/the-players-in-the-gold-market-are-fearful-upholding-the-dollar-through-market-manipulation-of-gold-and-silver-prices/5416493
Another article saying US may be nearly out of gold.
When the dollar collapses they will try to rope us in to an alternate global system which will be waiting– probably SDRs. If no replacement system has been started before then the temptation to accept the SDR system will be strong.
PIPER: If you think he’s wrong on so many issues, go ahead and name one and why you think so. Join the discussion. It’s how we all learn.
Regards.
Together with Lavrov’s speech of a few days ago, the Khazin interview is very helpful in explaining how Russia sees the world. Instead of having a single reserve currency, the world evolves into different currency zones: Western Europe, Eurasian, Chinese, North-American, South American, maybe African.
Khazin believes the European Union will be re-assembled without the Eastern European countries. That’s more or less my take as well. I guess we’re going to see the eurozone emerge as a country in fact, if not in name.
What happens with the rest of the European Union matters little in comparison. The institution may very well continue to exist beyond its usefulness, as institutions have a tendency to do.
Britain may leave the EU; Poland and the Baltics may wish to play kindergarten games with Russia. In the end these are local politics which matter little to those outside those specific countries.
Dear The Saker,
Sorry to put this link and question on this post but I was so utterly, utterly shocked to read what Chocie boy is proposing
http://www.rt.com/news/209563-ukraine-foreigners-government-posts/
of letting foreigners take Govt. posts in Ukraine.
What is your view of this? Is it even legal? Have these people no self respect? – they obviously don’t care about their country or peopele.
The lawlesness is mind blowing – utter skullduggery.
Rgds,
Veritas
Heart felt thanks, esteemed Mikhail Khazin.
Off direct topic but very close to my heart:
From interview with Afghanistan soldier in Donetsk SLAVYANGRAD.org
Do you think peace is possible?”
“Listen, Ukraine and Russia—they are one and the same. You are being simply surrounded. Look: Central Asia, Libya, Syria, Iraq, Afghanistan—they are all Russian allies. Us, they almost finished; now they came for you. And they will not stop. The main objective—not us, not Ukraine, but you, the Russians. You, who spend your holidays by the sea, who work in posh offices—they will come for you too. You will go ever further away to other cities thinking that Russia is vast. One cannot calmly look on at what is happening here. Either you will be slaves, or you will rise up and have your say. One of your greats said: ‘The Russian language will save both itself and the world.’ I think that what is happening now—this is a trial from God. To see who has what it takes. Television and western values virtually expelled God from the soul. But not from everyone. There are still very many people who remember who they are and where they came from. The huge number of volunteers is proof of that. Many times attempts were made to take this land; now they try again. But they shall never take it. And we shall not bomb Kiev as they want us to do. This is our city, this is our country. The people who are sitting out there, they are waiting… They leap, they jump and watch for when we will come. And we shall come. Be patient just a little.”
It’s not necessary to be so doom/gloom about this IMF central bank. If you look at Ellen Brown’s view of this (http://ellenbrown.com/) it is that China and Russia make a show of conforming to the Western banking model, while avoiding the crucial component: the accumulation of debt to private banks.
Mr. Khazin’s comment about Eastern Europe, that it is now condemned to starvation and death in the absence of industry, because this would be the outcome in the 19th century seems just simplistic, fatalistic and really behind the times.
The conditions now seen in Latvia (demographic catastrophe) are the result of neoliberal policies imposed on a naive population after the demise of USSR. Same goes for the rest of Eastern Europe.
But the fact is that with today’s technological advances heavy industry or the sale of commodities are not needed to insure the survival or well-being of the people. F.ex in the coming decades 3d printing may replace much of industry.
All Russia or Eastern Europe need to do is to allow alternative economic systems, such as local, regional, cooperative currencies that are not based on debt and interest. See f.ex Bernard Lietaer (lietaer.com).
In the West many such systems are now being developed, using internet and mobile technology.
The Western economic model that demands ever more competition and infinite growth in order to pay mounting interest and debt which is actually unnecessary MUST now be scrapped.
So I was right the other day when I reminded Saker that good people can be controlled by evil people when you’ve built societies where having an affair with a mistress will cost you your livelihood and reputation. A free world will be based on people showing no opprobrium for “boys being boys” and men like that French leader of the IMF who was falsely accused by a hotel maid in New York City, need to get more votes from a healthy society that knows a setup when they see it. Feminism and political correctness cannot be allowed to get to the point where any politician can be blackmailed by something he ever said or did that wasn’t so pc.
Anyhow, am I to understand that Minsk Protocols happened because the Central Bank of Russia could have pulled the plug on the Russian people (ruble) anytime it wanted and threatened to do so?
I always thought that the US threatened to move militarily against Assad if the Donbas rebels moved any further.
Or that Poroshenko promised Putin that he would get a majority in the Rada and decentralize the country (the logical thing to do for the financial future of Ukraine).
So, reading this, it sounds like the Fed is different from the US government, but pretty much in agreement with the neocons about not wanting eastern Ukraine to go where it naturally wants to go and for peace to break out around the world. Why would the Fed be against peace?
And about the military situation, what is really happening? I’ve heard the commander of the Aidar BN say that WW3 would start if a Russian unit simply came across the border to complete their Einkesselung (surrounding). Since Aidar has threatened Poroshenko’s life, why would Poroshenko get angry if the above happened?
Could it be that Poroshenko is being kept in line by US control over Kolomoisky, who knows that Poroshenko wants friendship between Ukraine and Russia?
How is the status of right sector? Were many hurt in the airport battles recently or did they just take a superficial hit?
Are Javelins really coming to the battlefield soon?
Dear Saker
I read an article about Putin’s history and the situation in Russia at the time before he took over from Yeltsin. This article most probably in Russia Insider. And it struck me….
Do you know of any world leader who has ever managed to deceive the humanoid master deceivers when the deceivers are in full control of a nation and to do it in such a peaceful way? I cannot think of any. So yeah… Putin. All the more power to him.
Many thanks to the Saker and his team…excellent work!.
When I read the comments on this blog I am heartened by the degree of intelligence displayed.
everything I have studied shows,
Britain and America have always been control cultures,most of those who fought in WWI did not even have a vote!.
Poverty in Victorian England was far worse than is generally realised…but the elites did very well…..the wealth extracted from India,human slavery,the sugar trade
Just like America,the wealth and influence was concentrated in the hands of a few hundred families.
As life improved for the masses and the power of unions and political parties made social advances,people were persuaded that democracy was ‘good’,but for the elites it was not good at all….until globalization and inter-connectedness.
In the last 25 or so years, we have seen all the things built with our taxes,get sold off at fire sale prices,e.g. railways,gas companies,electricity,telephone,water suppliers,mail services,etc etc.
making it possible for the wealthy to buy a countries infrastructure on the cheap.
100 years of progress clawed back by the elites,and the people put into debt servitude.
Now we have a system so inter-connected,if one falls they are all threatened,think Lehman Brothers 2008 now any lie, falsification,or atrocity is acceptable,as long as the con game goes on long enough for the elites to asset strip everything they can before the next crash.
Mr Khazin covered what he could…who knows who the real owners of the central bank are?
only the actual owners!…the same goes for the Bank of England,the Federal Reserve and all other cb’s.
Ostensibly the banks are owned by shareholders,who are never identified,the old families will still be there,the Rockerfeller, Rothschilds(Rot schild),the Astor family,the Warburgs and many old and new families,unknown to the public,but usually known to each other.
These are the ones who actually own the world..they can pick up a phone and tell leaders what to do!….
They can buy sovereign bonds at auction through the open market operations conducted by the ‘Primary Dealers’…who then sell them to the Fed or BoE at a profit,usually 5%-6%,this plus the annual dividend of 6%…gives the elite another source of income, apart from rent extraction and company profits or directorships.
This system transfers wealth, via taxation,to the bond holders…from the worker… to the parasite.
The link which Penelope @ 02.19 provided,
http://borisanisimov.blogspot.co.uk/2010/10/nationalization-of-ruble.html
Indicates to me that the russian system is signifcantly different,that, plus their low flat tax rate,which could never support the global bond market.
It seems that in order to create rubles, dollars must be purchased, probably because the Soviets would never allow the west to steal from the people,i.e. no sovereign bond market.
A lot of their oil contracts will be priced in dollars so they can create rubles,however they have other means of credit creation for investment purposes.
Nothing new under the sun they say.
In ancient Greece they elected Tyrants to defeat problems when no agreement could be reached.
In ancient Rome they elected ‘Dictators’ for a set period to solve problems that the Consuls were unable to fix.
Georgy Zhukov would fix things,just like he fixed Lavrenty Beria,sometimes a hammer is needed!
cheers.
Bravo! Saker.
What in the Western model of economics and governance works for any nation anywhere?
The entire system is rigged to enable eternal control by the very, very few at the top. All wealth is siphoned to the top. All media is controlled at the top. (By “all” I mean 95-99% of the effective category). We see this in the recent exposure of “inequality”.
So, the result is evil. It is not an exceptional result. Throughout all civilizations in history, when the pyramid is the model of constructing society, and it becomes encrusted with ideology, the process results in an evil cult manifestation. The few at the top, be they bankers, military, priestly caste or megalomaniacal fascists, or some hybrid of all of that, the deviation from nature and harmony is profound.
With technological and social controls, today’s “very, very few” are deviant, satanic, psychopathic, and criminal. Women and children, the old, the infirmed and the poor are easy physical targets for the elite’s militaries and police. Property becomes targets or collateral damage sites. Vehicles are mere moving targets.
I have spent 14 years learning about China and studying its unique system. It has a long way to go because it came from serfdom, madness, errors of ideological excess and criminality.
But, you can’t fool or enslave hundreds of millions of well-educated, wealth-building citizens. The people are happy in China with the direction and efforts of its Central Government, a single party that openly states it has all power, but also says it must perform the way the people want or it does not and will not hold the power. This is ethical behavior.
I have only recently, in the last five or six months begun to study Russia and Putin. I know almost nothing relative to how things work, why things don’t improve, who is who, and when it all can be on the full, wide, correct path.
But I do sense that Putin and his group are ethical in their sense of responsibility. They act constrained by law. Just as China is building its Rule of Law, expanding its Constitution, while opening up its economy to private shareholders, Russia is wrestling from oligarchs and overseas stakeholders the revenue producing assets in behalf of the people, the state.
How it all works out, is very hard to predict. But we can see the path intended, and the actions matching the words of Putin and his people in and around government.
And we can see the deviation from the global norm by China and Russia and understand why the “evil elite” are hell-bent on destroying both sovereign nations, directly and indirectly.
And Elites are busy disrupting any nation that attempts to follow China and Russia by any means necessary. Watch the pressure on Brazil, India, South Korea, Hungary, New Zealand, and South Africa.
Already, we see the torture of Malaysia for its deviation bringing international charges against Western leadership. Two airplane disasters of such rarity, the statistical chance of such events boggles the mind.
Watch Thailand stay under military rule. Watch Indonesia (historically a free-fire zone for the U.S. against communists), watch Pakistan remain in ruins and instability, and watch Turkey kept under lunacy, demonic leadership, just as its looked ready to join SCO and Eurasian Economic Belt. Egypt is another lynchpin that is destined for endless chaos.
Events and ‘perpetual disruption’ will churn aspirational governments that approach the efforts of China and Russia. Nothing goes in a straight line in history, except bullets. The development of a new world of sovereign nations will have to saw off the top of the pyramid or create another geometric model to emulate. I’m fond of spheres.
Hey guys … this is REAL !
IT DISGUSTS ME as a born East-German, how far we have come here :-(
Wash-DC / NATO controlled German MSM.
Two Videos ( from many ) of a Children’s Propaganda Series aired by German State TV : SWR
…. talk about Goebbels reincarnated !
Der Putin-Erklärer ( The Putin Explainer )
http://swrmediathek.de/player.htm?show=0bfd3b10-74e7-11e4-a78e-0026b975f2e6
Ursula räumt auf ( Defense Minister Ursula von der Leyen gets ready to protect Germany )
http://swrmediathek.de/player.htm?show=f7eb4570-658e-11e4-89ea-0026b975f2e6
http://www.mmnews.de/index.php/politik/28489-ard-russland-hetze-jetzt-im-kinderfernsehen
English Translation here :
https://translate.google.com/translate?sl=de&tl=en&js=y&prev=_t&hl=en&ie…
Up to the 53 comment mark,there were some questions raised.
these links may help.
G.Edward Griffin is a well known film maker take a look at his film
‘The Creature from Jekyl Island’
https://www.youtube.com/watch?v=oyT_bD6F6wE
it explains the the creation of the ‘Federal Reserve System’.
Bill Still also made an excellent film ‘the Secret of oz’.
https://www.youtube.com/watch?v=swkq2E8mswI
Damon Vrable created a brilliant infographic,
…Renaisance 2.0 Financial Empire lessons 1-6
https://www.youtube.com/watch?v=96c2wXcNA7A
cheers.
@Spyridon Hadzaras
According to this author from 1987, the 1933 Holodomor is another elaborate Anglo-Saxon fabrication to demonize Russia. This material is very thorough.
http://www.rationalrevolution.net/special/library/tottlefraud.pdf
One major reason why the Rouble has been falling lately:
Most of the credit on which Russian business operates was issued by European banks (much lower interest rates than from the Bank of Russia). Total credit from abroad is about $700B.
Normally, when a credit term expires, instead of re-paying the principal, the borrower just rolls over the debt into a new term, i.e. re-finances, and continues paying just the interest.
Recent sanctions annouced by Washington and implemented by European banks have cut off the re-financing option (while the Bank of Russia is still not issuing affordable credit).
Now, as the loan terms are expiring, the borrowers in Russia have to find large quantities of Euro and Dollars to fully pay off their debt. They buy these dollars and euros on the FX exchange of the Bank of Russia (via intermediaries).
The sudden massive purchases of euros and dollars mean massive selling pressure on the rouble, which, by the law of supply and demand, pushes down the value of the rouble.
For the decent ordinary folks in Russia the weaker rouble translates into inflation and (more) economic hardship. As very few people understand the real reasons for this, they could be easily manipulated by mass media and social media to believe that the reason for the increasing poverty is that Putin is incompetent, corrupt or otherwise an economic liability for them. Readers of this blog know where this discontent is meant to lead.
One can also wonder if the courts couldn’t authorize companies to declare force majeure on these foreign debts, considering that the denial of re-financing is due to sanctions, which is an act of war against the people of Russia. But you know what happens to those to defy International Finance. Maybe PBoC will step in to fill the void?
At some point the selling pressure on the rouble must stop (i.e. everyone has paid off their debts, or defaulted on them), and the rouble will return to a natural equilibrium.
Ahead of the state visit to the Republic of Turkey, Vladimir Putin gave an interview to Anadolu Agency.
PRESIDENT OF RUSSIA VLADIMIR PUTIN: The upcoming state visit to Turkey and participation in the fifth session of the High-Level Russian-Turkish Cooperation Council are an important stage in advancing relations between our states. Due to the common efforts we took in recent years, our relations have been developing constructively on the basis of mutual confidence, good neighbourliness, equality and mutual respect of interests.
VLADIMIR PUTIN: Over the last decades, energy has been playing the role of a ‘locomotive’ in our trade and economic cooperation. In terms of volume, Turkey is the second largest buyer of Russian natural gas after Germany, which is delivered through the ‘Western corridor’ with transit through Ukraine, Moldova, Romania and Bulgaria, and through the Blue Stream gas pipeline. Last year, Russian gas supplies to Turkey reached 26.6 billion cubic meters, and this year, most likely, will probably exceed this amount.
VLADIMIR PUTIN: The situation in Syria remains source of serious concern. And we are fully aware of the burden imposed on Turkey by the on-going violent conflict ravaging your neighbours. What is more, the main risk of further aggravation of the situation both in this country and in neighbouring states stems from the activities of the so-called Islamic State and other radical groups that were once actively employed by some Western countries, which flirted with them and encouraged them.
We believe that the rise of terrorist groups in Syria and in the Middle East in general require consolidation of all robust forces of Syrian society – consolidation for the future of Syria as a sovereign, united, secular and democratic state where equal rights for all ethnic and confessional groups are guaranteed and everyone can enjoy peace and security.
We will continue to do everything necessary to help the Syrian people to overcome the tragic events and find peace and harmony as soon as practicably possible. This is the purpose of our contacts with the Syrian government, various opposition groups, our international and regional partners, including, of course, our Turkish colleagues.
http://eng.kremlin.ru/news/23307
Freescale Semiconductors vs. MH370 vs. Jacob Rothschild vs. human transplantable RFID chip patens: https://www.youtube.com/watch?v=-JzmK3-tIvQ#t=140
Even Reuters confirms the basic numbers: Loss of employees on Malaysia flight a blow, U.S. chipmaker says http://www.reuters.com/article/2014/03/09/us-malaysia-airlines-freescale-idUSBREA280T020140309
So, the first pint we need to understand is, that the West may indeed soon start to force _EVERYBODY_ to wear RFID chips as easly as in 2016.
In that context it sounds almost neglectible to raise the question, if MH370 was shot down, hijacked with the enigeers now in concentration camps and/or if it was used as false flag “MH17” in Donetsk.
Bad times ahead.
SAKER, I see your wonderful headline “Russian Cmdr Says US Will Control Entire Gulf of Mexico” got your article posted to Information Clearing House. Most excellent. It sure does make one think outside the box. Way to go!
Alien Tech said…@ 27 November, 2014 17:37
Greed! Everyone wants to amaze as much $$$”
You probably mean amass but however you spell it, your statement is wrong.
Here’s the BRICS for you:
http://sputniknews.com/military/20141127/1015247459.html
India won’t cancel the Rafale contract.
Stein said…
“Mr. Khazin’s comment about Eastern Europe, that it is now condemned to starvation and death in the absence of industry, because this would be the outcome in the 19th century seems just simplistic, fatalistic and really behind the times.
The conditions now seen in Latvia (demographic catastrophe) are the result of neoliberal policies imposed on a naive population after the demise of USSR. Same goes for the rest of Eastern Europe.”
Stein, I’m not sure it’s such an exaggeration. Latvia’s demographics (mass immigration to look for jobs) was to avoid ‘starvation’. Since Ukieland has only an EU association I think they are not to be permitted to go there for jobs. Those on pensions are already having to choose between food & medicine.
About falling standards of living generally: there have already been reports of a few deaths in Britain from starvation. The Latin-American RT carried a story about the return of child labor across Europe– not huge numbers though. It is my personal belief that the reduction in living standards is deliberate, in line with the Club of Rome’s idea that the richer countries can more easily be integrated (NWO) w the poorer ones if incomes are less divergent.
Finally, remember that just 20-25 years ago Russia’s life expectancy for males fell from 67 to 55 due to the tender mercies of being taken over by exactly the same voracious forces who are now going to strip Ukraine.
Joat:
Here’s one by Griffin that’s 13 min long and sums things up quite nicely:
“Legalized Plunder of the American People” – G. Edward Griffin
http://www.youtube.com/watch?v=_WrMWK-FJzU
It’s short enough to be quite infuriating.
quote “That is, the western elite, including its legal system, deliberately make decisions that favor “their own”, even though those people are professed thieves.” This is a hard blow to the trust towards the USA and EU; the blow is even harder than the sanctions.”
It is no secret the the west deliberately make decisions in favors of their own . Typical example was the court actions after the trouble in Jugoslavia that was designed to punish the
Serbs , but those rigged courts never thought of putting on trial the criminals in uniforms of NATO . With Russia would be the same story seen before . It has been going on for decades .According to Hollywwod the Russians and the Serbs are the bad people .
Russia needs desperately sone UKi criminals to be put on trial and give them exemplary
jail term . If also Yats the Yid or other criminals like the Timoshenko could be captured it would be a great way to send a message to the criminals of the west .
On another subject . Different eminent Russian speakers have spoken recently about the need in Russia not to rely on foreign investment in this time of sanctions . A Russia system is needed to finance new projects
Here is an idea ,
With so many minerals extracted in RUssia territory , the government should identify a number of
minerals , whose sale would only be used to finance new industrial projects .
It might be necessary to nationalize certain industries and pay off the owners if needed .
The minerals must have considerable reserves so that the financing operation could last for decades .
Morte al Nuovo Ordine
To New Insight,
“the 1933 Holodomor”,yes it happened! but…
And there is always the spin!
The British act of parliament of 1933 aka ‘trading with russia act'(short title),
prohibited buying everything that the Soviet Union depended upon for export revenue.
In the first 10 years of a world, movement that monarchist England
loathed!..
I have heartbreaking pictures that have been ignored by those who push propaganda relentlesly.
‘Act 1933 c. 53 Russian Goods (Import Prohibition) Act 1933’
If you look,you will see what the evil people who rule my birthplace are capable of!.
They will never go quietly into the night!
Caveat Emptor!
Stein said “All Russia or Eastern Europe need to do is to allow alternative economic systems, such as local, regional, cooperative currencies that are not based on debt and interest. See f.ex Bernard Lietaer (lietaer.com).
In the West many such systems are now being developed, using internet and mobile technology.”
Stein, I have a book called ‘What Then Must We Do?’ by Gar Alperovitz outlining methods to begin taking the economy back on the local level. There are instructions on the net for how to start an alternative currency, which has succeeded in quite a few places.
Maybe you all are right, but my own opinion is that the powers against which we struggle can trump all that unless we unseat them. If you think otherwise, explore it in more detail & tell us of your findings. Regards.
As I read Khazin, he says the CB:s interest rate is too high. The rubel is weak and needs a high rate in these difficult times to get the oligarchs to return their money, but Russian companies cannot afford to borrow rubels and invest at home. This conflict does not go away whoever controls the CB, but if the rubel can be propped up with other means, political means, a lower interest rate is possible.
Many independent CB:s in our time have primarily one goal, to fight inflation. Inflation is an increase of the general price level, including wages. It is interesting the Russian CB seems to allow high inflation in return for low unemployment. This relationship does not always work, but, from what I know, it works in Russia.
Mr Khazin also says the president needs to get control of the government. I read that as meaning the Kremlin needs to strengthen control of the Duma. This can work temporarily as in old Rome and Greece, but it is a dangerous proposal. Power must be shared between the people and the sovereign. There must be a balance.
I don’t believe in so called independent CB:s tied up by international agreements we know little about, but if the president or the government takes control of the CB and want to change its policy, the hard facts on the ground in the global world will still be there. The good thing is that money creation at the CB can be controlled, but all banks must also be strictly controlled with political means. This was done in many european countries after WW2 when the war debts had to be paid. Bankers stood with hats in hand and took orders from governments, who needed liquidity. Big companies investing at home had access to bank loans, but ordinary citizens and small companies had not.
Mr Khazin is an excellent economist and mathematician and I thank him for his contributions. I understand his concerns. What is the point of having an atlanticist influence in the government when Russia faces these great challenges? Russia needs to find its own way and that requires legal and financial innovations. In a time when the whole world suffers, perhaps Russia can give us all hope.