Let’s begin by what I personally consider bad news: either Putin really believes in liberal market economics or he has to say he does. He began his Q&A and ended it with a categorical expression of full support for the policies of the Central Bank and its Chairwoman, Nabiulina, and a no less categorical expression of support for the Government and its Prime Minister, Medvedev. Worse, Putin declared that he believes that market forces will by themselves correct the current disequilibria. At most, he agreed that certain decisions should have been taken earlier or more forcefully, but that’s it.
Some will love it. Lew Rockwell went as far as to say that he would hand Elvira Nabiulina the award of “Central Banker of the Year”. Not everybody agrees. For example, Victor Gerashchenko, a former Chairman of the Central Bank, declared that if he had been in the position of Nabiulina today he would have “asked for a gun to shoot himself”.
I have to admit that I personally am dismayed by Putin’s apparent beliefs in market economics. I say ‘apparent’ because there might be things going on which I am not aware of. For example, while Putin speaks of “market forces” China seems to get heavily involved in the Russian economic crisis. For those interested in these developments, please check the following sources:
First, check out the latest CrossTalk: Dumping the Dollar.
Then read Pepe Escobar’s Go West, Young Han.
Then check out this article in the English version of the People’s Daily.
Finally please read this article in Zero Hedge.
The Chinese friend who sent me the article in the People’s Daily made a particularly interesting comment. He wrote:
“Yin and yang politics? I cannot help but notice a strong pattern. China and Russia each engages each other’s enemies/allies with whom they have friction in order to bring them into the Eurasian fold. What do you think? Is this intentional? I had my doubts earlier in the year, but more and more this keeps happening“.
I think that he is spot-on here. It is very much in the Russian strategic interest to have China applying some “Yuan diplomacy” in the EU not only because China is a close ally, but mainly because China is “not the USA”. At this point in time, *anything* which can weaken the total control of the USA over its EU colonies is welcome. Any Yuan invested in the EU is one Dollar which is not.
This is just an example. Putin probably knows a lot of things which we don’t and he probably cannot say everything he thinks or plans. But my purely subjective impression is that Putin simply does not have the power needed to confront the Atlantic Integrationists head on. Mikhail Khazin, who knows a lot, recently even declared that there were Atlantic Integrationists in the “power ministries”. And since I am pretty sure that he was not referring to the Ministry of Defense that leaves either Internal Affairs or State Security. If true, that is not good. Either that, or Putin sincerely believes in liberal market-economics. I most definitely don’t believe in them at all.
There are, in my opinion, two major problems with Putin’s logic. First, Russia needs not less, but more regulation and more state control. At the very least, I really believe that the very institution of the Central Bank is a toxic one: it was created by the US-controlled Eltsin regime to subordinate Russian politics (and politicians) to the international banking cartels and we see that it works perfectly. Putin can send bombers to the Gulf of Mexico, but he is unable to remove Nabiulina, nevermind take control of the Central Bank. Nikolai Starikov has even said that there is a joke going around now saying “Putin, send the troops into the Central Bank!”. That is how disgusted many Russians have become with this supra-national institution which is accountable to nobody. But there is even worse.
The choice of a free-market non-regulated “solution” basically leaves Russia fully enmeshed into the AngloZionist controlled financial system. How can Russia free herself from the “Dollar yoke” while remaining fully part of the Dollar-dominated international system?!
I have to tell you that while I gratefully posted Peter Koenig’s excellent “Free Fall of the Ruble – A brilliant ploy of Russian economic Wizards? Who’s chess game” this was one of those instances when I post something I find very interesting but which I do not agree with. I just don’t get the sense that Putin is about to pull some clever judo-move on the western plutocrats. I most sincerely hope that I am wrong here, but that is my gut-feeling.
Generally, Putin was clearly defensive when asked questions about the Central Bank and the Government. Especially in contrast to the absolutely magnificent way he handled the questions about the Ukraine, even when asked by a very hostile Ukrainian journalist. Again, as I so often say this, I am not a mind-reader or a prophet. I cannot tell you what Putin thinks or what he will do. But I think that many years of studying the man give me a pretty decent gut feeling about him and that gut feeling tells me that while he has a clear and strong vision on international politics in general, and especially about the Ukraine, he lacks such a vision for economic problems.
For the Ukraine his position is crystal clear: “Crimea is ours forever, we will not let you crush the Donbass, we want a untied Ukraine in which the rights of all people and regions are respected and you will have to negotiate with the Novorussians who have a right of self determination” (which leaves open the possibility that while Russia might “prefer” a united Ukraine, the Novorussians have the right to decide otherwise). Clear, direct and, I would argue, perfectly reasonable. In contrast, in economic I get a sense of faith-based politics: “market forces will correct the current artificial situation and within 2 years the crisis will be over”. The problem with that is that the very same Putin ALSO says that the West is completely manipulating the markets and not allowing them to act. So what he is really saying is this: “the Empire does not have the means to artificially skew the markets for more than two years”. Oh really? I am not so sure of that at all. In my book the Empire has been skewing the markets for many years already (I would argue since 1971).
Bottom line, what I hear from Putin is “more of the same” and since I don’t like what I have seen so far, I can only add “only worse”.
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| Can this nightmare be averted? |
Still, the situation is not necessarily hopeless. While I think that Putin’s economic policies are wrong and while I believe that the Russian Central Bank is very much part of the problem and not the solution, this is not a black and white binary kind of choice: playing by the wrong rules or on the wrong field does not necessarily mean that you will lose, only that you have made the wrong initial choice. For one thing, you can make the argument that the Ruble is a much more credible currency then the Dollar. Second, I do agree that market forces are resisting the US distortion and that the integration of China and Russia will inevitably contribute to help the Russian economy. Third, the EU is already in recession and if that get’s worse, and it will, this will start pulling down many US banks who are heavily linked to the EU market. Fourth, in objective terms, Russia is sitting on a tangible fortune of natural resources and she has full access to the gigantic Chinese market. In these conditions, it is going to be awfully hard for the AngloZionists to “isolate” Russia. So, objectively, Putin is right about one thing: even if it does get worse before it gets better, it will inevitably get better.
So is Putin a genius chess player? That is not quite how I would put it. He definitely has a record of absolutely brilliant moves, but right now he is clearly struggling. I am like everybody else, I would like him to pull yet another brilliant “chess move” and stick it to the Empire but I don’t see how we could do that, at least not in this point in time.
What I saw today is a Putin clearly on the defensive who had to invest a lot of his personal capital of popularity and trust. He honestly admitted that things might get worse and that there is no quick fix to the current crisis. He did commit to a time frame of 2 years which is both very shot and very long. It is plenty enough time to lose his popularity and very little time to turn around such a huge country like Russia.
The most poignant moment of the entire 3 hours came when Putin explained what was at stake today. He said:
You know, at the Valdai [International Discussion] Club I gave an example of our most recognisable symbol. It is a bear protecting his taiga. You see, if we continue the analogy, sometimes I think that maybe it would be best if our bear just sat still. Maybe he should stop chasing pigs and boars around the taiga but start picking berries and eating honey. Maybe then he will be left alone. But no, he won’t be! Because someone will always try to chain him up. As soon as he’s chained they will tear out his teeth and claws. In this analogy, I am referring to the power of nuclear deterrence. As soon as – God forbid – it happens and they no longer need the bear, the taiga will be taken over (…) And then, when all the teeth and claws are torn out, the bear will be of no use at all. Perhaps they’ll stuff it and that’s all. So, it is not about Crimea but about us protecting our independence, our sovereignty and our right to exist. That is what we should all realize.
Amazing words which fully confirm one of the most important facts of the current situation: the AngloZionist Empire and Russia are at war, a war in which either the Russian Bear will be “stuffed and that’s all” or the AngloZionist Empire will crumble. This is an existential war for both sides, for the AngloZionist Empire and the Russian Civilizational Realm – one of them will defeat the other.
This is not the first time that Putin explains this, but this time I felt an urgency in his voice which I have not heard before. He was both warning the Russian people and asking for their support for him personally. My guess is that he will get it, I just don’t know for how long.
The Saker
As in chess in politics you never telegraph you next move.
Putin may say something in public, but I am sure that behind the scenes he is planing something else.
I really believe that the very institution of the Central Bank is a toxic one: it was created by the US-controlled Eltsin regime to subordinate Russian politics (and politicians) to the international banking cartels and we see that it works perfectly.
No proof of contention provided!
No indication, even, of the way in which the central bank is supposed to be subordinating Russian politics.
If you believe the central bank is sabotaging Russia, why not spell it out exactly how you think it is achieving this. The ruble crash is not proof of sabotage, it is proof only of the fact that Russia’s foreign currency earnings have just taking a beating — minus about $3 billion a week, due to the decline in the price of oil.
To compensate for that Russia needs to increase exports or reduce imports by a comparable amount. A currency devaluation is the solution. It provides the equivalent of a tariff wall. The effect will be higher import prices and, hence, reduced consumption of imports, but lower export prices and, hence, increased exports.
For Russians it means, in the short-run, a reduced standard of living, but it also means plenty of jobs, including new jobs resulting from import substitution and increased exports.
The long-term effect will be a stronger Russian economy and a higher standard of living. But only if Russia’s internal economy works freely, corruption is curbed and Russian entrepreneurs are free to create the mass of small and medium sized firms that provide the basis of a prosperous and free society.
Saker
Market forces?
Which market? The US dollar hegemony or the emerging Eurasian market?
As for Yin and Yang diplomacy, I have been pointing this out for several years now, mostly to a chorus of disbelief. Finally it is being recognised for the policy that it is; a strategic corner stone of the relationship
Hi Saker:
What do you think of this view of the Russian economic situation?
http://sjlendman.blogspot.ca/2014/12/putins-annual-marathon-press-conference.html
Someone wrote Steve Lendman about what happened to Malaysia under similar circumstances in 1998.
I share your fears but still feel Putin is a master player. Timing is of the essence. The timing is not yet right. The two year time is about right for making or breaking, winning or losing. Also Putin’s term will be ending about then. Maybe that’s when he’ll make his game changing move. Two years is a long time but short in epochal terms. I think Putin is seeing years ahead. His moves so far indicate that. The wrong move now could mean defeat. Better to let the opponent defeat itself.
“How can Russia free herself from the “Dollar yoke” while remaining fully part of the Dollar-dominated international system?!”
Because the dollar-denominated international system is about to shed itself of the dollar yoke.
“How can Russia free herself from the “Dollar yoke” while remaining fully part of the Dollar-dominated international system?!”
Because the dollar-denominated international system is about to shed itself of the dollar yoke.
What happened to the Ruble?
http://russeurope.hypotheses.org/3166
Jacques Sapir @russeurope
Les Banques Centrales de la Chine et de la Russie on activé mardi 16 un swap de 24 milliards de dollars (source russe) dans accord existant.
Very strange move:
Belarus to Switch to Dollar-Denominated Trade With Russia: Lukashenko.
http://sputniknews.com/business/20141218/1015992987.html
Obama: US Ready to Roll Back on Sanctions.
“We remain prepared to roll back sanctions should Russia take the necessary steps,” the president added, describing the steps as ending “occupation and attempted annexation” of Crimea, ceasing support of independence supporters in eastern Ukraine and implementing Minsk agreements.
http://sputniknews.com/us/20141218/1016010367.html
Forget about an end to the sanctions,because it would mean Crimea back.
Let’s imagine a ‘coup’,I’m not sure that the new ‘Putin’ would give Crimea back to the West.
It would mean that he is a traitor..
In such a volatile situation with the ruble going up and down, it is actually very wise of Putin to speak generally and not in specifics, especially in regard to anything to do with the Central Bank.
There are many instances in which politicians in the West have made unconsidered, off-the-cuff remarks which immediately led to huge currency fluctuations.
I would also suggest that Putin most probably knows who is involved in turning the screw on the currency, and knows that it is unwise to even hint that he knows.
Also, given the unstable condition of most economies, making particular statements when he knows that these economies will have an influence on Russia’s economy would seem to me to be unwise.
Off topic, but also very important for the US citizens
===================
BrasscheckTV Report
===================
Could the US ever sink into a tyranny
like ones seen in Germany, China and
the Soviet Union?
Video:
http://www.brasschecktv.com/page/24830.html
– Brasscheck TV
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Unfortunately, I haven’t yet had a chance to watch the entire news conference, but from what little I saw I have to say I am concerned.
Putin’s statement about “2 years in the worst case” reminded me of the serbian PM Vucic who made several similar statements over the years while the country continued to sink deeper into destitution. I know for a fact that the serbian PM is economically illiterate, but I did not expect Putin to be making such statements as well. It just feels wrong, something is not right.
Vic, NI
The RCB is IMF and BIS affiliated..that says it all.
Ask Sadam or Ghadaffi what they think about that?
Maybe already next Monday we see clearer because of coming weekend:
“Venus in the pincers”
http://astromundanediary.blogspot.de/2014/12/venus-in-pincers.html
Dear Saker, you write “either Putin really believes in liberal market economics or he has to say he does. He began with a categorical expression of full support for the policies of the Central Bank and its Chairwoman, Nabiulina, and a no less categorical expression of support for the Government and its Prime Minister, Medvedev.”
There is a fundamental rule to neverchange a team during a state crisis. It would only make matters worse. Once you are through the crisis you have time to analyze and make the appropriate changes. I think Putin knows this rule.
NewYorker
Saker please keep the faith. Putin is doing what some would call “throwing stones and hiding his hand”. If you read his speech/Q&A, he stated Russia has 2.4-2.5 trillion dollars in reserves. The US has no reserves. Don’t forget the two deals signed with China earlier this year amounting to over $600 billion, the new south stream to Turkey, deals just made with India, South American and other countries. Those deals are for trade in local currencies and not the dollar. Russia is not the only country whose currency is suffering. Take a look at Saudi Arabia, Greece, Canada they’re having problems too and I doubt their reserves are as high as Russia’s.
Russia had over 600 billion USD in reserves before the great recession of 2008 and 2009. At the beginning of this year, the RCB had reserves of around 500 billion USD. By now Russia is down to 415 billion USD. at least this is what the mainstream media are saying. No Russian source has really contradicted that.
The deals that Putin has made with various countries will be paying out in the long run. Not immediately. Russia’s immediate source of foreign revenue is the export of oil, natural gas, other mineral commodities, weapons and relatively few industrial products. Russian industry mainly serves her domestic market.
The problem now for Russia is the low price of oil, the spiteful Western sanctions are a very distant second.
The US terms of Russia’s surrender over Ukraine has been given to the public
The US demands that Russia meet all its obligations, including debts, while denying to Russia access to West-controlled markets of capital and refinancing; the US demands Russia’s complete “withdrawal” in Ukraine; Russia’s consent not to be left any more to “its own instincts,” and cessation of Russia’s own info efforts to win the hearts and minds; these conditions are not final; conditions over Crimea and other issues would then follow once Russia surrenders over Ukraine to the US and NATO.
http://vladimirsuchan.blogspot.be/2014/12/the-us-terms-of-russias-surrender-over.html?spref=fb
The Central Bank, worse than the “sanctions”.
http://russeurope.hypotheses.org/2507
Saker, thank you for so much high-level material, especially by the economists.
Earlier I posted this, which is a fact-based explanation of the ruble’s fall. Please take a look.
“Well, the biggest reason for the freefall of the ruble is the fact that the Central Bank of Russia just printed up about 625 billion rubles and gave it to their friends at Rosneft.
Rosneft is an absolutely massive oil company that is controlled by the Russian government. For months, Rosneft has been asking for a bailout (sound familiar?) to refinance loans that can no longer be rolled over with western banks because of economic sanctions.
And on Friday they got one.
In an attempt to quietly slip this massive injection of new money past everyone, Rosneft issued 625 billion rubles worth of new bonds just before the weekend and the Central Bank of Russia gobbled most of those new bonds up with freshly created money. Unfortunately for Rosneft and the Central Bank of Russia, the rest of the world took notice…
With the oil giant in a bind, the central bank ruled that it would accept Rosneft bonds held by commercial banks as collateral for loans.”
more at http://www.globalresearch.ca/a-full-blown-economic-crisis-has-erupted-in-russia/5420339
As sure as the night follows the day, the western economic system as we know it will cease to function within 2 years.
It’ll be lucky to last 2 months at the current rate of disintegration.
The cabal may have a few tricks left up their sleeve, but the big economic guns have been fired.
As US finance spirals down the sinkhole, the need for the RCB will follow closely behind.
Don’t write anyone off yet, there’s plenty more to come – and the wait will not be a long one.
I would not characterize Putin’s comments on Nabiullina as a “categorical expression of full support”. I thought his position on the RCB response exquisitely nuanced. In fact, the entire performance was outstanding; measured, nuanced, and above all, CALM. He did, in fact, chide gently while at the same time standing 100% behind the person who is in reality his General Officer on a front which is under extreme pressure. This is how loyalty is won. The Rockwell article is a very positive sign. Just remember we are dealing here with business and capital, and what capital desires above all is a calm, steady hand, both on the bridge and in the engine room. What Putin gave the markets today was a masterful performance. The ship, he said, is in very serious danger, but it is well found and you can trust the build and you can trust the officers, because I trust them. He may not have chosen Nabiullina (or Liberal, AZ style, Economics possibly either) but what is he going to do strip her of her command in the middle of a storm? Point fingers? Second guess? Chop heads? No way. His approach is exactly correct. I thought the whole thing was great really, the poetry, the bear metaphor… classic Vladimir Vladimirovich. Hell, he calmed me down… :-)
Best,
CA
Part 1:
here is a lot of confusion and ideological zeal when it comes to issues of free market economics that are associated with the liberal right and statism which is associated with the socialist or even communist left.
I would definitely describe myself as more to the statist leftist side of the spectrum. Having said that, in all my years of studying the relative macroeconomic performance of countries, I have come to the definitive conclusion that the most dangerous thing to do is to act in a dogmatic manner. Both leftists and liberals suffer from extreme afflictions of dogmatism. Since the collapse of the USSR the most obscene cases of economic fundamentalism is to be found with economic liberals who deem that event as the ultimate and final justification for liberal economic policies until the end of the universe.
The adoption of dogmatic free market economics in the early nineties by Russia (under the guidance of economists such as Jeffrey Sachs and Anders Alsund and with local support from Chubais etc) led to the most catastrophic collapse that a major country ever experienced. This fact on its own should have caused a worldwide rethinking of many of the received wisdoms of economic liberalism. Above all, Russia should never forget the lessons of the absolutely horrific nineties (in my humble opinion, the worst period in the long and so often brutal history of Russia)
The experience of Ukraine under liberalism has been if anything, worse. A lot worse. There have also been several other disasters when liberal dogma has been implemented. They are too numerous to mention here. We can also refer to the 2008 financial meltdown as yet more proof of the falsity of Friedmanite neoliberal economics. That crisis has left even countries of the privileged Western core in dire straits and remains wholly unresolved even after almost eight years have passed.
Many economic liberals, have been trying to explain away and rationalize the obvious collapse of their worldview, by claiming that it is not really liberal capitalism that is failing, but a corrupt and distorted caricature of it. In this type of arguing, they have a lot in common with old school stalinist communists. During the dying years of real existing socialism, supporters of that system when pressed about the apparent shortcomings encountered with communism, would go on and on about how communism was not being implemented in its pure and faithful form, that bourgeois elements were distorting the ideal functioning of the socialist paradise, that feudal elements still hampered the system etc etc.
Ok Saker, so why haven’t you posted, let alone reviewed, these 3 interviews? they make your case better than you do, and go farther.
top down, this list retraces current developments; bottom up, it’s chronological.
https://deepresource.wordpress.com/2014/12/17/paul-craig-roberts-discusses-ruble-collapse/
https://www.youtube.com/watch?v=VT085isnyB0&feature=share
(consider a more sophisticated version of this effect here, via financialization of the economy; first disclosed to us several years ago by Catherine Austin Fitts).
https://www.youtube.com/watch?v=5qLMG0KD3rI
parenthetically, i got these links from your comments section.
From my perspective, reading many alternative and mass media sources and comments, it looks like something big will happen after the new year. It is a big problem for the west that they continually underestimate Putin! I believe that he is ready very soon to make a surprise move to take down the USD in January. JMHO, Tom in Vero Beach, Florida, your neighbor, Saker
Anderson @ 19 December, 2014 01:40
TPP is a dead letter, the ME is out of control, and there’s a meter on degrading Russia.
do you imagine the opening to Cuba is a first gesture
of a retrenchment in the Monroe Doctrine? it would be smart, and the Empire could well accommodate degrees of LA socialism.
Since you referenced Pepe Escobar’s earlier post, Saker, here is his assessment of the press conference.
http://rt.com/op-edge/215675-putin-economic-sanctions-us-oil/
I’ve just watched almost all of it, and whilst I was listening through the relay of interpreters, I did not get the impression that Putin was being defensive.
I had the impression that he knows what will make the economy grow over the long term, while unforseen events may make that term shorter, and that Russia has the resources to wait out the turmoil caused by the attacks being mounted against it, so much so that he doesn’t even feel the need to point out what has been orchestrated, or that this crisis is so damaging to western manipulators that they may themselves be caught in its web.
Sort of reminds me of Br’er Rabbit and the Tar Baby, if you know that story. He let drop that oil could go way lower and it wouldn’t be a problem for Russia. And I didn’t hear any reporter’s question indicating any panic from constituents, so I’d say the hoped for run on the bank scenario isn’t gonna happen. Fireside chat stuff, I think, basically.
I don’t know Russian of course, but I was impressed that the Chinese reporter seemed very fluent, whilst the BBC chap had to ask his question in English.
The Cyprus question was an interesting one also; Putin seemed to enjoy saying that the policy there was an evenhanded one, with cordial relations on both sides.
Maybe Putin has patriots running his Central Bank. Once we in the west had Bill Black, so that’s not completely out of the question.
@BogdanLOk Saker, so why haven’t you posted, let alone reviewed, these 3 interviews?
Simple. Because I don’t consider Fedorov a credible source. He makes some good points and he is a nice person, but he is also a sensationalist and often over-the-top.
My 2cts.
The Saker
The ZeroHedge article and others still lauding BRICS have to recognize that Brazil is now moving decisively toward more dollar dominance.
http://www.globalresearch.ca/brazil-and-the-politics-of-neoliberalism-president-rousseff-declares-war-on-the-working-class/5419732
Hi Saker, thanks for the very interesting post Yes, maybe Putin, in long discussions with Medvedev and his co-horts, have come to some middle ground. And maybe Russia’s not strong enough, not enough money to pull away from the NWO completely yet. Maybe it would rock to boat too much…I mean obviously, those oligarchs within Russia, the ‘good’ oligarchs don’t want to rock the boat anymore….its already rocking and if the CRB was to be pulled down now, what would happen to Russian oligarch money ???
Saker, where yo say
‘f the most important facts of the current situation: the AngloZionist Empire and Russia are at war, a war in which either the Russian Bear will be “stuffed and that’s all” or the AngloZionist Empire will crumble. This is an existential war for both sides, for the AngloZionist Empire and the Russian Civilizational Realm – one of them will defeat the other.
Saker, there is a third possiblity. that is that the bear continues to growl and is backed into a corner, but the empire doesn’t have the strength to overcome him..this can go on for a long time, but the bear will get hungry…that’s sanctions. But bears can go a long time without food…all winter, every winter, so we just wait…can’t pick berries, but will be cornered for a while yet, until the dollar demises…that’s in Putin’s mind…so he’s just waiting and not rocking the Oligarchs in his boat, so they don’t jump out. I guess he feels that he needs them…Gazprom and etc…many, many Russian businesses.
By the way, the captcha has really changed…now you have to check mark the question “I’m not a robot”…
CanSpeccy, if you truly want to know why and how the central bank system is toxic to the sovereignty of Russia you must be willing to do a litte reading on your own.
Below I am giving you the link to Starikov’s online book. Copy the link to a temporary file, then click on it to open it. Pages 24-40 will answer most of your questions. Regards
[pdf] Rouble Nationalization – the Way to Russia’s Freedom by Nikolay Starikov
Vladimir Putin and Russia would lose political capital if he took the advice of ideologically motivated utopians and grabbed control of the Russian Central Bank. How do you think the Chinese and Germany would respond to Russia isolating itself from the IMF + BIS international monetary system?
The IMF + BIS are resetting the global settlement system from the USD reserve currency regime to an SDR basket of currency system which will reflect the respective fraction of world GDP in the allocation of local currencies or currency blocks in the SDR basket. There is 100 Trillion of USD assets horded as reserves world wide. These assets will get a deep devaluation as China, Russia, India, etc. are give more power in the IMF + BIS system. Of course the Anglo-Zionist elites will get a huge hair cut! Russia must remain steady, calm, and responsible as the world rides out the storm at the end of the USD world! This will gain enormous political capital for Vladimir Putin and Russia!
Pepe Escobar has a different take on Putins Q&A today.
http://www.sott.net/article/290317-Putins-annual-marathon-press-conference-What-he-isnt-telling-us
Juliana, Putin appointed Nabulina. I read that she was even a sort of protege of his. But any central bank of Russia which follows the rules set out by IMF MUST damage Russia. I am not able to summarize why; you really have to read either the Starikof book citation I gave or something else.
PS Bill Black was never the head of the Fed. He was formerly a bank regulator and a litigator against bank corruption regarding the S & L crisis. He is now author of “The Way To Rob a Bank Is To Own One”.
Lingua Banksta, or Banker talk:
Trust me. I am your friend.
from Rick, who observes Economics experts using mathematics to appear scientific.
Dear Saker
Thanks for the post. I absolutely agree with you. “Russia needs not less, but more regulation and more state control.” I already think that Putin has a plan for the development of the Russian economy. However, the proposed measures will be unsuccessful if they are deliberately sabotaged. It is therefore urgently necessary, to remove the “Atlantic Integrationists” from the decisive positions.
I was amazed to hear Putin’s open support for the work of the Central Bank and the Government. But maybe that was a last sign before the end. In football, you often hear that the leadership of an unsuccessful club says that they trust the coach and he is not up for discussion. This is usually a sure sign that his sacking was imminent. And in Germany it is said: If Mrs. Merkel passes a vote of confidence in one of the leading members of her party then that one is soon out of the game.
In any case, a change would have to happen quickly and surprisingly. Whether such a step will take place, only the future can show. In the end, only Putin knows what’s going on in the background. What is feasible and what is not.
There is a remarkable discussion on the imminent adoption of new rules at the IMF working together with the BIS to enforce SDRs as the new currency of a multipolar world, and the attempt of Russia to participate with a new proportional power in the directorate of the IMF.
Next January, the IMF will be meeting to discuss the BRICS proposal of changing the rules at the IMF and the adoption of SDRS
It very much seems that the two years period of adaptation spoken by Putin may have some relation with this issue.
http://philosophyofmetrics.com/2014/01/16/china-to-purchase-the-federal-reserve/
and other links there such as “SDRs and the New Bretton Woods.”
So whatever the bluff and real damage that USA may be playing with the threats and the fifth column working inside, the dynamics of reducing the power of USA is no longer to be averted.
Still, the problem is the imminent attack of the nazis on Novorossya. So, it is two years for the new international currency regime, and full blown war with Ukraine at any time soon.
Bob Kay said, “The IMF + BIS are resetting the global settlement system from the USD reserve currency regime to an SDR basket of currency system which will reflect the respective fraction of world GDP in the allocation of local currencies or currency blocks in the SDR basket”
Bob, the planned sequel to the dollar system is designed to keep the power in the hands of the same international banking gangsters. Why in the world wd you imagine that the gangsters who are part of the power elite behind all these wars wd suddenly become fair and democratic? Of course they aren’t going to design something that will enable state sovereignty. It’s taken them multi-generations and lots of wars to get this close to the New World Order of oligarchical world rule.
Part 2:
So, it is in the same manner that the apologists of liberal capitalism argue today. They see too much government interference everywhere, they blame a lot on corrupt politicians (but fail to confront the inherent reasons why corruption is so endemic) and they see central banking as the great Satan. They completely forget though that even when for example the USA did not have a central bank, there were still corrupt politicians, there were still oligarchs (back then they were called rober barons) and above all there were still periodic and catastrophic crises.
Why am I saying all this? I only want to illustrate the point that both types of economic fundamentalism will prove disastrous in the end. Especially for economies outside the venerable core of North Western Europe and North America.
Deng Xiaoping got it right in my opinion. I don’t care whether the cat is black or white, as long as it catches mice”
China of a few decades back was on par with India or Africa, one of the very poorest countries on the planet. Literally at the bottom of the pile. In a few decades, the Chinese have managed to achieve the most tremendous economic transformation the world has ever seen. Back in 1989 for example, the Chinese economy must have been around a fifth of the economy of the then USSR. By now, the Chinese economy must be around four times bigger in relation to all the fifteen States that used to make up the old USSR! To put it differently. The US was the number one industrial producer since 1872 when it overtook Great Britain. That lead was unbroken and gigantic for 138 years, when China took the lead.
The Chinese do not really care about proving one dogma to be better than the other. They care about what brings results. In certain sectors of the economy, the free competitive market works best. In other areas, state owned Enterprises work the best. In brief, when it comes to small scale production and local services, usually the free market is the way to go. When it comes to grand infrastructure and strategic industries, then state ownership is far more effective and efficient. In consumer and capital industries, you can have both private sector and SOES competing. Usually the state enterprises do better, but that is not very definitive. I will have to look into it again. As for the banking system, that is far better under national and centralised control. The various banking institutions, linked through a nationwide mechanism of covering losses when those inevitably occur in some cases, is the best way to keep an economy growing at a steady and rapid pace while at the same time avoiding the catastrophic and disruptive effects of the inevitable banking crises that we observe the whole time in capitalist economies where the banking system is in private hands and hence fragmented. The total centralization and nationalization of the banking system is by far the better option as found in the Chinese model instead the rather Western style one which Russia seems to want to emulate. As for Central banking. There is nothing wrong in principle with having a central bank. All this Ron Paul nonsense must stop. What is catastrophic however is for the Central Bank to be allegedly independent. This only means that the Central Bank is independent from the state but wholly dependent on international capital! This is something that Putin will have to deal with pretty soon. There is still time though. As for monetary policy per se, it is my firm belief that Russia should again follow the successful Chinese lead and introduce capital controls. At least for the next decade or so. Russia’s now ever tighter embrace with the Chinese dragon fills me with joy and hope! Russia must avoid the catastrophic decisions of the early nineties, preserve and enhance her sovereign trajectory as that has been expressed by Putin, and has a lot to gain and learn from the Chinese!
This is the way for Russia to save her independence, her people and for one more time to save the world entire.
Global Stagnation
“Wherever multiple currencies interact, like on planet Earth for example, changes in the exchange rate between them are the primary adjustment mechanism. Fixing, pegging or otherwise manipulating the exchange rate of different currencies does, in fact, preclude other adjustment mechanisms and causes imbalances to accumulate, often to the point that abrupt adjustment becomes unavoidable, economically disruptive and financially destructive, in other words, painful. “
The Russian Central Bank is letting the ruble free float, unlike China which pegs its Yuan to the USD. The world is ending the dirty float derivatives of the USD. China will back Russia with its USD horde! The IMF + BIS system is necessary for international trade settlement and Russia sells petroleum products and weapons systems on the world market.
The USA has received exorbitant privilege of settling its trade deficit with USD rather than goods and services. The Bretton Woods System established the USD as the world reserve currency, unit of account, and unit of transaction. This system created great imbalance over the ensuing seventy years and unfair privilege for the USA. The imbalance is now being resolved by economic and political storm, as the AZ Empire refuses to cooperate in establishing a more just international monetary settlement system. It will take the ENTIRE world to force the change from USD to SDR administered by the IMF + BIS. Vladimir Putin is serving Russia and the world well by protecting the Russian Central Bank international monetary role from populists and liberal elitists who try to destroy Russia by isolating it from influence in the New World Order. If he took control of the RCB it would destroy Vladimir Putin’s and Russia’s political and economic capital at home and abroad. Saker…beware of unintended consequences!
You may not like the reality, but it is probable Russia is part of the monetary transition narrative from the debt burdened USD System to a world SDR System managed by the IMF + BIS. It is my opinion that these supra-banking entities are a ‘priesthood’ interested in maintaining stability in global trade and the status quo of a master/slave relationship of economics which reflects the deep heritage of human nature evolved over millions of years of evolution. These institutions reflect the unfinished evolution of the human mind. I appreciate Saker’s mix of economics, politics, and religion. It enables further evolution of human spiritual development, which will in turn be reflected in the global institutions. The solution to the corruption of our world can be found…by looking in the mirror!
Anonymous @2:47. I’m sorry that I don’t have time to look up the proofs for you, but the link you supplied is pure fabrication. The only truthful item is that the SDR/vote allocations are going to be changed. Even how China came to buy the bldg is wrong. Sorry.
Putin looked great at the press conference and sounded great, as sharp as a tack. Saker, I am a big fan of your blog.
@ Penelope. Thanks for that link. The part you recommend is very illuminating. Finally starting to understand how a Central Bank actually works. To the detriment of the people.
Stavros said “Russia must avoid the catastrophic decisions of the early nineties,”
Stavros, the catastrophic decision of the 90s was made by the CBR. It was to keep the interest rate at 215%! (I think it’s p36 of the Stavros book)
It is not as a matter of ideology that Russia must free herself from the CBR-which-is-independent-of the-govt and answers only to the IMF.
I did not realize how much Russia was integrated into west. So it is not easy to get rid of the western financial control. It is not just about not using the US$ in trade..
Germany only paid off their debt in the late 80’s. Iraq is still paying off Kuwait.. Dictators bought to power in a coup supported by the US made bad choices and borrowed money and Argentina is still paying for it. Even the US still pays interest on their civil war debt. So debt is something which is entirely different and that dont ever go away no matter what. Not unless it is forgiven like Russia does with some countries.. eg CUBA.. but that debt owed to Russia can always be called.. And has great leverage.. We dont tend to look at it so seriously since what has our parents debt’s got to do with us.. Well we have to pay it back and like all crimes it is too painful to think about. If americans ever thought about it, the would all be out in the streets about it since they and their children will pay for it no matter what. Even if they think it does not affect them because they were not responsible.
I think Putin needs more time to change things, he cant just break off, not like China or India which are mostly closed economies and never went the Russia way of a western union. Look at Russians, they think the are part of the western world. And t be part of the western world you have to be western. Cant just get a divorce.. I think by middle of next year once Russian banks get integrated into the Chinese system, Russia will have more freedom. Putin is looking for time for this to happen. Other wise trade will stop and the economy will take a huge hit. The good of what Putin integrating Russia into the EU was advancement of Russia by a decade.. When Russians go to McDonald, it is not so simple as saying use local beef.. The bad that comes with it is that mcdonald is controlled by the US. Russia had mcdonalds before china or india because of it. And there are a lot of Russians who consider themselves western because they do western things.
How can anyone think of breaking off western control?? That would mean closing down mcdonalds.. maybe with time it is possible but you cant just do it.
Penelope said, “Bob, the planned sequel to the dollar system is designed to keep the power in the hands of the same international banking gangsters. Why in the world wd you imagine that the gangsters who are part of the power elite behind all these wars wd suddenly become fair and democratic? Of course they aren’t going to design something that will enable state sovereignty. It’s taken them multi-generations and lots of wars to get this close to the New World Order of oligarchical world rule.”
Do you think it is possible for state sovereignty to be enabled if there is a more equitable world monetary regime? The world has divided into a master/slave dynamic for millennia. The masters are the oligarchs who now control an inordinate fraction of the total wealth and production of humanity. This is inherently unstable! There must be a modicum of just division of the fruits of human time and energy for the system to continue, without collapse into a Mad Max Scenario.
The ‘priesthood’ elite of the IMF + BIS are not the same people or controlled by the master of the master/slave duality. There role is to ensure the balance of master/slave so the production and flow of energy continues without global stagnation and collapse. The oligarch’s and master elites will be bailed in in the reset, as the ‘priesthood’ will force it upon them as they can not survive collapse induced by their unfair accumulation of wealth and power.
I think the reset will be more fair than the USD system, as to democratic….that is a narrative to keep slaves happy in the false knowledge that they are free men who have the power to vote! Elites always control the levers of power, some are just from conscience, some are just to make the world work. Vladimir Putin may be one who has a conscience as well as being a realist who does what is takes to make the world work!
You have to study economic theory to understand what the CBR is doing and that is hard work and takes time and economists still have different opinions because of different goals.
As for the CBR, much depends on the risks of inflation. A high interest rate limits demand forcing prices to go down, but some companies must raise prices.I expect more inflation and the CBR is not mainly to blame.
Some economists are politicians, like Glaziev and Khazin. I like listening to them, but I think for myself.
Political decisions are as important as economic theory, which always recognizes political decisions as restrictions. I thank Rick for telling us what Schacht did in Germany.
The CBR raised the interest rate and helped the ruble. It secured foreign currency reserves to make sure companies can repay foreign loans.
After the fall of the USSR, russian companies did not know how to operate on a free market.I think Putin wants to let them learn and that is why he supports liberal economics. The USSR subsidized whole industries. Companies must learn to become efficient without waiting for help from Moscow. When he supports the CBR, he ensures internal stability.
The CBR needs to be reformed so it can provide cheap credits to companies, but that should only be done if some big companies stop making easy financial profits and start investing at home.
Small companies need credits to secure liquidity and investments. Companies pay an interest of 6-7 percent, not 17 percent. As I have written before, many different interest rates invite speculation, but perhaps there is an inventive way to help small companies grow.
I have studied Putin since he came to power. I think he has made an alliance with the western financial system to make possible the comeback of Russia. He has come a long way, but his country needs at least a decade to achieve full strength. This year the Empire tried to stop Russia from coming back, but Putin still plays nice. I can promise you the day Russia is truly independent, it will dump the western financial system. “The Moor has done his duty, the Moor can go”.
Penelope said, “Anonymous @2:47. I’m sorry that I don’t have time to look up the proofs for you, but the link you supplied is pure fabrication. The only truthful item is that the SDR/vote allocations are going to be changed. Even how China came to buy the bldg is wrong. Sorry. “
Not so fast…One assumes the rhetorical is understood
The vote allocations change is metaphorically China buying the Federal Reserve. The Federal Reserve Bank is the bank of the USD system. It will be replaced by a new SDR system whose backing bank will be the IMF + BIS which will reflect a more just world order. I doubt you will like it much better than the old one, as it will include the elites of China, Russia, India, etc. Yes..a global oligarchy will rule, but IMF + BIS will reset the system so the disorganized masses receive a fair share of world production. This is not from a sense of justice, but from the reality that the world system will collapse without maintenance of the structure and flow of energy in the master/slave dynamic which has powered the world for millennia.
G’day Mr. Saker
I’ve been lurking here since the Maidan protests at the beginning of the year and now I want to leave a post.
I’ve been following everything closely and I was getting a little worried a few days ago when the ruble was on the decline. And I can see you have been getting nervous and that makes me nervous. But now I’ve had time to look at everything I am confident that Putin has an ace up his sleeve.
I won’t go through all the details that lead me to this conclusion, but it looks like Putin has gone ‘scorched earth’ policy on the economy- conceding some ground to give him a more advantageous position later.
Unfortunately, this tactic harms people more than business and government, but only for the short term. But you Russians are a tough people, they will manage.
In a year or so I see Russia producing more local products, businesses and government turning away from the USD, closer relationships with the East and improving economies. And while that is happening, the EU and US will be floundering.
Lets hope Australia doesn’t sink with them, and I apologise for my governments comments and position.
Recent comments point to an IMF + BIS containment of the USA and Russia to SOS (save our system). If so, they are already using them and others to set up a greater container. For years I’ve had the feeling that the heart of darkness is not far from Transylvania and the castle of Dracula (which I once visited). Poetic injustice if not logical reason. The vampire of vampires sucking everyone’s blood. I don’t know how far but the BIS with its SDS can’t be far from Dracula’s home. Empires like the British and American ones are just usuries for the bloodletting. The names change but the game’s the same, just getting bigger.
As for me, I opt out of this madness as far as my fear allows. “I live in a different world, where the earth is strung with lovers’ pearls.” (Dylan)
One battle at a time. Is this really the time to challenge the world banking system?
I haven’t verified this timeline myself, but I’ve heard that after Jesus Christ threw the moneychangers out of the temple, a week later he was dead.
Saker I agree with everything you prescribe for Russia’s highest and best style of living, but I don’t think it can all be achieved today. The battle against the bankers may never happen in the lifetimes of anyone reading this now. It may be a hundred years away. It may never be attempted, and may never succeed. The love of money is a formidable power.
The world is moving to the Next World Order. The US dollar will not “collapse”, it will be one currency among others. The question arises, does the world actually need one single reserve currency? My thought is that it does not. All this had to be learned.
The central bank did nothing wrong, maybe late is all. A “matter of taste” as President Putin so eloquently described it. I agree with those here who are impressed by Putin’s nuanced command of the situation, and with those who don’t see the financial sky falling, at least not on Russia.
Churchill promised my parents’ generation only blood, sweat and tears, and his political capital went through the roof because of it. I don’t see Putin as having lost anything here. He asks for two years at most, and it’s the price to pay so the bear skin doesn’t end up nailed to a wall. Pretty small price.
Some people say Russia may experience 12% price inflation. Putin says pensions are being adjusted regularly. Here in the US the true figures from ShadowStats show at least 9% inflation, and pensions are in big trouble.
In two years the global oil industry will have equalized all the shocks of this event, easily within two years. If Putin under-promises and over-delivers, this too is a matter of taste, and to me one of his admirable traits.
I believe Putin is also saying that in two years Russia will be untouchable from any financial warfare conducted by the US. That’s how I receive his words.
In my humble opinion, the sheer facts of Russia’s situation right now – in budget surplus for cryin out loud – speak a million times louder than any of the words being used to describe her imagined failures.
Saker,
Putin is captain of a small ship that leaks a lot, sails are too small, bilge pump is on the fritz, and is dragging its anchor because the winch is jammed and he can’t lift it.
Russia has wonderful planes, rockets, artillery and some great IT software guys. And tons of natural resources to be exploited.
He can’t do what Russia is not capable of yet.
He must get help (as is) from China.
He cannot change the situation unless it gets mortally tragic. He never had the chance to get the Russian people off the vodka bottles, making babies and starting the hard work of working hard. It’s a long expedition to fix what’s wrong with Russia.
He did define fifth columnists clearly as working with the enemy outside.
He brought the people Crimea, and that will drain money for a few years (while the Tatars will make trouble until he can buy them all off or out).But Crimea will be a cash cow for decades with tourism and gas and oil and maritime industries.
This is why Stelkov and Novorossiya was wrong to go for rebellion. Russia could have saved the East much easier if there had been no militia uprising.
But that is water under the bridge.
He was great today. He had to calm the people so they bear down, take the pain, and focus on building agriculture and new innovative businesses that produces good products like the Yotaphone 2
http://www.engadget.com/products/yota/yotaphone/2/
Russia is a decade away from having a diversified economy. Meanwhile, Putin knows when, where and how to use his troops (Military and otherwise).
Everyone wants him to be Vladimir the Czar and fix everything 1-2-3.
Not going to happen.
He’s set on a long journey to build a 21st Century Russia, a 21st Century Eurasia, and healthy, powerful Russian peoples.
That’s what I saw and heard today.
He’s a man of many measures. Name me a leader in the last 60 years who could do these marathon pressers in the age of global TV.
Have faith in your faith.
Killing the Hegemon aint’ a movie. This is a fight for human values and individual sovereignty, not just national sovereignty.
Putin is great strategic thinker and executor too. The things which Saker doesn’t understand or reject are at very heart of any good strategy, especially the “more of the same”, never do forced steps, never do steps expected by your enemy and never fight your weaknesses- use them as baits instead and destroy your enemy with your strengthnesses. Who tries to be strong everywhere will be weak everywehere (Sun Tze) – like US military which is unable to take small town of Kobane for two months from ISIL. The never is really never in this case. Putin is Actor in this game, not Reactor. Current attack is desperate reaction of almost defeated enemy on Putin’s steps. BTW, it’s principally suicide attack – you can’t be prepared or somehow substantially diminish loses.
Russia’s one major weakness has always been her economy.It was true throughout Russian history.It was the reason the Russian Empire collapsed in WW1.It was a problem,though not fatal in WW2.It was what caused the USSR to disintegrate during the Cold War.Until that is overcome Russia will never be able to live up to her potential in the world.The Yeltsin years destroyed much of what there was of an economy in Russia.Leaving Putin to the “labors of Hercules” to rebuild it.The major problem seems to always be disunity.The top leadership either does’t know how to unify to reform the economy,or just doesn’t care to.The giant advances made during the 1930’s shows that with a unified policy it can be done.But all the other periods show without that unity it can’t be done.China for several hundred years suffered in the same way.But since the 1980’s they managed to find that unity in the top leadership and the results show.Russia’s leadership could learn a great deal from the Chinese strength of purpose.They should be working 24/7 to build an economy able to withstand any attack.And deliver to their people security in the economic field, if they are ever to become the truly great power they deserve to be.
Uncle Bob
Perhaps it is getting close to the time to pull out the money card that will scare the beejeezus out of the western central bankers and at the same time explode the Russian economy with vitality that will challenge any nation on this planet’s growth….government fiat Roubles…debt free money to keep the domestic economy whirring right along…Lincoln did it to pay for the Norht’s American civil war costs. American does it now as any further debt is just so much froth on the already unpayable amounts.The secret is getting the quantity correct and avoiding western banker assassins.
Saker, right, you will find much to bolster your view from the empirically verified economics of MMT & which can be used to boost Russia’s economy, standard of living, jobs, & infrastructure just like China uses MMT-lite
yet it could all be funded well WITHOUT RAISING TAXES using MMT like almost how China does it when Warren Mosler taught Chinese gov officials MMT in 1998 —
and
then their economic boom happened as they used their gov banks to create money
($1-2
TRILLION extra a year in loans in addition to their ‘deficit spending’)
to
fund hiring millions & increasing production from solar factories to bullet trains to moon space program to interstates bigger than the US to more powerplants, more cities, etc,reducing totheir unemployment rate down to 3% & still keeping inflation low & interest rates low also (since their central banks controls it)
a must read: ‘Seven Deadly Frauds of Economic Policy’ http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf by Bank CEO/economist & billionaire-bond trader Warren Mosler who explains bond
&
bank monetary operations from the insider’s view of how things really work that dispels myths of economics believed by most –
– from
http://MoslerEconomics.com/ -Daily Insightful & Most Accurate Verifiable Economics Analysis –he’s billions from being middle-class following his own MMT economics advice
It’s a myth that ‘deficit’ spending increases inflation as empirical evidence shows, NO relation to inflation from deficit spending/money printing because increased spending stimulates increased hiring & increased PRODUCTION INCREASES SUPPLY of goods to offset inflation when the spending is used on increasing production (not wars or Wall St. speculation)
Verifiable empirical data/evidence shows it -see charts
http://mythfighter.com/2010/04/06/more-thoughts-on-inflation
&
http://mikenormaneconomics.blogspot.com/2011/03/govt-spending-deficits-inflation-and.html
&
& http://hereticaldruthers.wordpress.com/2012/12/31/how-does-inflation-occur – 1970s inflation came mostly from the OPEC oil embargo & oil prices jacking up 400%.
Because oil was the 2nd largest source of electricity needed for production, it had widespread effect. Inflation in the 1980s decreased when natural gas production increases replaced oil for electricity generation in the US. allowing energy prices to relatively decrease.
I think this has been one of your most important posts Saker, it touches on so many issues, and cuts right to the core. The Banking elite control world finance, they control the levers of credit and credit creation, they designed the system hundreds of years ago, and over time this system has been perfected and applied broadly in a slow encroachment upon industrial society as a whole.
Excuse the analogy but Putin unfortunately is like a powerful Bear, with a long tethered chain around his ankle. His threats of physical prowess are contained by the Zionist banking powers who will suck the finance out of Russia and wilt her dry. If Putin decides to go ‘hardcore’ like Iran, Russia’s economy will stutter and fall to its knees, it will be shut out, and the echoes of the controlled media will resound the world over, that Russia under Putin is tyranny. Putin’s fault is not his own, he inherited a system within which he must work, however I am quite confident that he is a firm believer in the free market. I think to a certain extent he is fascinated by tallies and figures, “numbers for this are improving, numbers for that will grow 20 percent by 2016…”. He has a business mind, an entrepreneurial streak which I think can be both good and bad. A true free market if it existed is the ideal, I believe Putin holds in his mind an ideal, or a goal of attaining a true free market.
What constitutes a free market is to me fairly straightforward, a truly free global market is one where each country chooses to participate in the global market to the degree THEY choose to, no more and no less. The countries that are most wise at applying their business acumen will succeed as a matter of ‘best practices’, a phrase which Putin mentions time and again. The negative aspect appears when we consider that remarks such as, “..the GDP will grow by this much this year..” are completely contrived at their logical root, because the assumption that GDP as a number is indicative of success is a fallacy. Putin is using the theories and espousing the successes of society based on a faulty model. He has been taught in the ways of the west, and has been influenced by its ideological gravity, so his frame of reference informs his assumptions and creates the basis for future economic actions.
Cont’d
Would a truly free market work? Can the institutions of high finance and global trade be retrofitted from the very foundation and be used within a new frame of reference? I believe they can be, why that is would require pages and pages, but regardless I believe I share Putin’s objective aims, his seeking of integrity in business relations between ‘partners’. His optimism and desire to belong to the global community is natural for someone keen to work with others, it’s just that the whole backdrop is wrong. The game is rigged against him and his country, the rules are proving ‘bendy’, and thus there is no balance. What we see as defensiveness is coming from a man who feels unbalanced, like someone whose having the rug pulled out from beneath them. His strength lies in his knowledge of behind the scenes information, perhaps situations, or events, or future coalitions that may tip the balance this way or that, which may or may not allow Russia to begin to assert its own narrative into the fabric of the world economy. If he goes full ‘Iran’ over the situation the consequences for Russia, in her weakened state, will be irreparable. He knows this. He also knows that world growth will continue, and that the world will need what Russia has, and that if played right, by keeping Russia ‘open’ for business he can persuade various partners into alignments and business deals that would slowly remove the the chain from his countries ankle. If Russia imposes capital controls at this time there would be a contagion, insider money will flee by the truckload (more than it already is by tenfold), business’ will be shuttered, the other ‘open’ economies of the world will view Russia as an anachronism. Russia’s economy and its structure cannot survive being shut out completely, and the Zionists are trying to create the storyline which leads to this shutting out, while Putin desperately attempts to avoid it.
His difficulty is real, his intentions are honest in my opinion, his economic ideologies are being challenged now, while his attempts to keep Russia open to the world come under intense pressure. Putin wants more than anything for Russia to be a light, to host world events, to achieve greatness and accomplishments in a world at peace, but he’s forever challenged by the Money elite, the Masters of the Universe, who hate Russia, and who unfortunately are taking full advantage of Putin’s incomplete control. My suspicion is that there is a faction within Russia’s military and intelligence community that is anti-zionist, and who support Putin (the main reason he has not been assassinated), and that when push comes to shove the economic theory will be forced into the background, and the force of might will aim for correction. The bottom line is that if Russia is harmed too much she will strike back, consequences be damned, with cyber attacks of US markets, and government facilities, perhaps even with the use of assassination teams, and secret weapons for decapitating strikes. It’s a dangerous game we are in, and one side is playing to win with a single minded focus, while the other side oscillates between actions and faces closing windows and doors, and ostensibly fewer options.
Greetings now from France:
I’m learning with Putin. It is impossible to guess what Putin plans, without having the information Putin has at his disposal. We can only guess and this is not good enough. The positive side is, that the West may have the same problem, trying to guess Putin’s moves.
We are not in normal times and it is acceptable to follow your leader blindly, in the hope he is going to do what is right. We have a war, in this is acceptable in war times. It should work out, if people in Russia do the same and prioritize the national interest above their purse.
Rgds
Mario Medjeral
South of France.
To some extent it doesn’t matter what Putin or the central bank do. The international financial system is too fragile. The moves the US and the transnational financiers have been making for the past several years on how the system functions have re-enshrined fragile, tottering pyramids of leverage as the basis for profit. These massive casino bets, their paper valuations dwarfing the real economy like a Russian bear dwarfs a mouse, are even more vulnerable to any disruption than they were in 2007. The bets are bigger, the fraudulence more entrenched, and the social resilience to weather such storms already mostly used up.
So then as a geopolitical tactic, the US & Saudi Arabia introduce a major shock. Sure, it’s crashing the Russian economy. But it’s destabilizing the debt picture in the US and elsewhere, too. The drastically lowered price of oil hits the financial economy in at least two places: The debt-fuelled fracking industry, which cannot survive low prices and will now be unable to pay those debts, and the fact that oil itself, though a commodity that gets used, in the financial economy is treated like other commodities as a financial instrument. The drop in prices will be shrinking the value of lots of holdings, but will particularly be burning many in the futures market–and again, most bets in the market are leveraged with masses of debt. You can figure that there will be some who suddenly can’t pay for their huge losses.
If this triggers a new 2007 meltdown, or helps along various other forces that were already heading us towards one, the new one is likely to be bigger than the last. The results won’t do the Russian economy any good either, but it will certainly distract the imperialist countries from harassing Russia. And the benefits of switching away from the US$ will be all the clearer; the BRICs’ only hope will be moving as fast as possible to create an economic grouping somewhat separated from the imploding “West”.
@ Penelope
CanSpeccy:
“Below I am giving you the link to Starikov’s online book.”
But you gave no link!
Better, though, than being so condescending (“you must be willing to do a little reading on your own”) you could state for the benefit of all exactly what it is a about Russia’s Central Bank that is “toxic to the sovereignty of Russia.”
If you cannot specify the main points in a paragraph or two, one has to wonder how much you actually understand yourself.
Putin may be Putin’s biggest enemy. His nationalism is in conflict with his capitalist ideology.
I remain a Putin agnostic.
Penelope, I know that Bill Black was never head of the Fed, and I know that Putin appointed the head of the Central Bank. That’s one reason I give her the benefit of the doubt.
I used the example of Black as an example of a regulator who could and did bring the savings and loan crisis manipulators to account, something that has been lost to the US once regulations were turned to rubber stamps. I’m pretty sure Putin has learned this sad history, just as he has known for a long time what was happening to his own country.
Many, including you, are much wiser than me in these financial matters. But even the IMF is beginning to change its relationship to neoliberal austerity. These economists may not all be demons, even if they have been wedded to the lifestyle of the rich and famous. And if they do turn out to be demons, with the people solidly behind him, Putin will act.
He has, after all, been acting well all along. Saker has time and again recognized this. It’s a lot for one man to be left to do; Putin is in my prayers.
From the Chinese news article.
The Chinese Government is closely following the ruble situation in Russia and will help to prevent the collapse of ruble.
Good job China.
From the Chinese news article.
The Chinese Government is closely following the ruble situation in Russia and will help to prevent the collapse of ruble.
Good job China.
From the Chinese news article.
The Chinese Government is closely following the ruble situation in Russia and will help to prevent the collapse of ruble.
Good job China.
Best case scenario: he knows that most/many russians would be very uncomfortable with any move toward overt authoritarianism (state control) needed to control the situation. He also knows the US/EU/Jpn economy is on its deathbed with less than two years to total implosion.
Both points seem highly likely to me, but I also highly want them to be true, so maybe sentiment is effecting reason
Bogdan “Bogdan said…
Ok Saker, so why haven’t you posted, let alone reviewed, these 3 interviews? they make your case better than you do, and go farther.”
You know Bogdan…your name should be Bogged Down,. That is what I think of you and your smart ass comments to Saker. PCR comes to Saker’s site for info…and I didn’t read the other sites you asininely threw in our faces…but we read Saker, not all those others at this site…we go to the other sites to read their opinion.
Dear Penelope. I really like your input, but this comment to Juliana I don’t agree with:
“Juliana, Putin appointed Nabulina. I read that she was even a sort of protege of his.”
Penelope, have you ever asked Saker what he thinks of Starikov ? I certainly haven’t but I read in a piece..perhaps on this thread’s article, that Saker does not say that Putin appointed his protege…Saker implies that Nabulina is a crook and Putin knows that…
Just my 2cnts.
Saker, can you give some insight on this?
http://investcafe.ru/blogs/mbcy/posts/46245
Dear Stavros…thanks so much for your very interesting contributions to the discussions here.
I would like to say something to you that is a revelation that I had a couple of days ago. That all the worry about the governments being too strong, or the bankers being too strong will not solve our problems. What will solve our problems is to get the courts into our hands, not theirs. Right now the court system is in the hands of the governments in every country. The courts must not be “privatized” because this is another name for bankers and financiers ownership. What desperately needs to happen is that people own the courts. It is completely wrong to say the government is the people. Its not. But there should be another sector of society that is strictly people…such as the foundations, universities and businesses…why can’t lawyers set up a court system…a big one…that can try these criminals in govt and corps…the lawyers’ guild ???
Also prisons would have to be part of the “cultural sphere” not the govt or finance…
Only when this happens will we be able to get control of our planet again. Not before.
ann
Hi Larchmont 445 Thanks for your post…really enjoyed it !!!
[from Blue]
BTW — I tried to listen to this press conference. All I found was a couple of excerpts and the GB sized files from President of Russia web site which is slow as molasses downloading, and I doubt with English translation.
No, they don’t make it easy to find out what’s happeneing in Russia…
Angelo, thanks for your post…but I have to disagree. I think that your name says it all..Putin will never, in fact Russia will never stoop to the dregs of the last paragraph of your piece. That belongs to the West unfortunately…to England and USA.
And while I’m on the topic…Grieved says that Jesus was dead 1 week after throwing out the money changers…what a horrible thing to say, and by the way.
Jesus threw out the money changers twice in his short stay on this planet…at the beginning and the end.
And he did not throw out the doves…and I don’t mean that politically.
Bye for now,
Ann
@ My guess is that he will get it, I just don’t know for how long.
In 1914 the Tsar had the enthusiastic support of the Russian people who went to war for the lofty ideals of defending their Orthodox brothers. In two years time the same people were cursing the same Tsar for his “failure” to take them to victory and eventually murdered him, slandering his memory for decades to come. BTW, many Tsars have been murdered.
[from Blue]
OK, it is in English — good!
URL for download is http://eng.news.kremlin.ru/media/events/eng/video/low/41d524c4f90b06af28ba.mp4&OBT_fname=41d524c4f90b06af28ba.mov
I noticed a bit of a limp or something walking on stage and he is sitting — usually he stands — and is leaning some on the table, with some water nearby. He seems to either have a bit of a cold or be short of sleep. A little cough, and his eyes seem sensitive to the light. Has he been traveling and has jet lag, or just overworked?
He doesn’t seem to be having any fun at all, or making a speech he wants to make. It’s like he is making way through a scree field of loose, sharp rocks while watching for more of them falling from above.
‘Criticism of banks may be valid or maybe not. But let’s talk about our government (not as bad as the Europeans)… the government won’t leave people hanging in the wind. And of course we have to deal with all these vampires and giant hornets flying around too… ‘
Not a fun time for him at all.
__Blue