by Sergey Glazyev for Russia in Global Affairs
How to Lead a Coalition and Avoid a Global Conflict
Sergei Glaziev is an Advisor to the President of the Russian Federation, Full Member of the Russian Academy of Sciences.
Summary: The world needs a coalition of sound forces advocating stability – a global anti-war coalition with a positive plan for rearranging the international financial and economic architecture on the principles of mutual benefit, fairness, and respect for national sovereignty.
U.S. actions in Ukraine should be classified not only as hostile with regard to Russia, but also as targeting global destabilization. The U.S. is essentially provoking an international conflict to salvage its geopolitical, financial, and economic authority. The response must be systemic and comprehensive, aimed at exposing and ending U.S. political domination, and, most importantly, at undermining U.S. military-political power based on the printing of dollars as a global currency.
The world needs a coalition of sound forces advocating stability —in essence, a global anti-war coalition with a positive plan for rearranging the international financial and economic architecture on the principles of mutual benefit, fairness, and respect for national sovereignty.
CURBING THE ARBITRARINESS OF RESERVE CURRENCY ISSUERS
This coalition could be comprised of large independent states (BRICS); the developing world (most of Asia, Africa, and Latin America), which has been discriminated against in the current global financial and economic system; CIS countries interested in balanced development without conflicts; and those European nations not prepared to obey the disparaging U.S. diktat. The coalition should take measures to eliminate the fundamental causes of the global crisis, including:
- the uncontrolled issuance of global reserve currencies, which allows issuers to abuse their dominant position, thus increasing disproportions and destructive tendencies in the global financial and economic system;
- the inability of existing mechanisms regulating banking and financial institutions to ward off excessive risks and financial bubbles;
- an exhausted potential for growth within the prevailing technology-based economic system and lack of conditions for creating a new one, including insufficient investment for the broad use of basic technological solutions.
Conditions must be created to allow the national fiscal authorities to lend money for building an economy based on new technologies and carrying out economic modernization, and to encourage innovation and business activities in areas of potential growth. The issuers of reserve currencies must guarantee their stability by capping the national debt and payment and trade balance deficits. Also, they will have to use transparent mechanisms for issuing currencies and ensure free exchange for all assets trading in their countries.
Another important requirement issuers of global reserve currencies should meet is compliance with fair rules of competition and non-discriminatory access to financial markets. Other countries observing similar restrictions should be able to use their national currencies as an instrument of foreign trade and currency and financial exchanges, and allow their use as reserve currencies by partner countries. It would be advisable to group national currencies seeking the status of global or regional reserves into several categories depending on the issuers’ compliance with certain standards.
In addition to introducing rules for issuers of global reserve currencies, measures should be taken to strengthen control over capital flows to prevent speculative attacks that destabilize international and national currency and financial systems. Members of the coalition will need to forbid transactions with offshore jurisdictions and make refinancing inaccessible to banks and corporations created with offshore residents. The currencies of countries that fail to follow these rules should not be used in international settlements.
A major overhaul of international financial institutions is necessary to ensure control over the issuers of global reserve currencies. Participating countries must be represented fairly, on objective criteria, such as their share in global production, trade, and finances; their natural resources; and population. The same criteria should be applied to an emerging basket of currencies for new SDRs (Special Drawing Rights) that can be used as a yardstick for determining the value of national currencies, including reserve currencies. Initially, the basket could contain the currencies of those coalition members that agree to observe these rules.
Such ambitious reforms will require proper legal and institutional support. To this end, the coalition’s decisions should be given the status of international commitments; and UN institutions, relevant international organizations, and all countries interested in reforms should be broadly involved.
In order to encourage application of socially important achievements of a new technological mode globally, countries will have to devise an international strategic planning system of socio-economic development. It should provide long-term forecasts for scientific and technological development; define prospects for the global economy, regional associations and leading countries; look for ways to overcome disproportions, including development gaps between industrialized and emerging economies; and set development priorities and indicative targets for international organizations.
The U.S. and other G7 countries will most likely reject the above proposals for reforming the international currency and financial system without discussion out of fear that they could undermine their monopoly, which allows them to issue world currencies uncontrollably. While reaping enormous benefits from this system, leading Western countries limit access to their own assets, technologies, and labor by imposing more and more restrictions.
If the G7 refuses to “make room” in the governing agencies of international financial organizations for the anti-war coalition, the latter should master enough synergy to create alternative global regulators.
- The BRICS could serve as a prototype and take the following measures to maintain economic security:
- create a universal payment system for BRICS countries and issue a common payment card that would incorporate China’s UnionPay, Brazil’s ELO, India’s RuPay, and Russian payment systems;
- build an interbank information exchange system similar to SWIFT and which is independent from the United States and the European Union;
- establish its own rating agencies.
RUSSIA AS UNWILLING LEADER
Russia will have a leading role in building a coalition against the U.S. since it is most vulnerable and will not succeed in the ongoing confrontation without such an alliance. If Russia fails to show initiative, the anti-Russian bloc currently being created by the U.S. will absorb or neutralize Russia’s potential allies. The war against Russia the U.S. is inciting in Europe may benefit China, because the weakening of the U.S., the European Union, and Russia will make it easier for Beijing to achieve global leadership. Also, Brazil could give in to U.S. pressure and India may focus on solving its own domestic problems.
Russia has as much experience of leadership in world politics as the U.S. It has the necessary moral and cultural authority and sufficient military-technical capabilities. But Russian public opinion needs to overcome its inferiority complex, regain a sense of historical pride for the centuries of efforts to create a civilization that brought together numerous nations and cultures and which many times saved Europe and humanity from self-extermination. It needs to bring back an understanding of the historical role the Russian world played in creating a universal culture from Kievan Rus’, the spiritual heir to the Byzantine Empire, to the Russian Federation, the successor state of the Soviet Union and the Russian Empire. Eurasian integration processes should be presented as a global project to restore and develop the common space of nations from Lisbon to Vladivostok, and from St. Petersburg to Colombo, which for centuries lived and worked together.
A SOCIAL-CONSERVATIVE SYNTHESIS
A new world order could be based on a concept of social-conservative synthesis as an ideology that combines the values of world religions with the achievements of the welfare state and the scientific paradigm of sustainable development. This concept should be used as a positive program for building an anti-war coalition and establishing universally understandable principles for streamlining and harmonizing social, cultural, and economic relations worldwide.
International relations can be harmonized only on the basis of fundamental values shared by all major cultures and civilizations. These values include non-discrimination (equality) and mutual acceptance, a concept declared by all confessions without dividing people into “us” and “them.” These values can be expressed in notions of justice and responsibility, and in the legal forms of human rights and freedoms.
The fundamental value of an individual and equality of all people irrespective of their religious, ethnic, class, or other background must be recognized by all confessions. This stems, at least in monotheistic religions, from the perception of the unity of God and the fact that every faith offers its own path to salvation. This outlook can eliminate violent religious and ethnic conflicts and permit every individual to make a free choice. But there must be legal mechanisms in place to enable confessions to participate in public life and resolve social conflicts.
This approach will help neutralize one of the most destructive means of chaotic global warfare employed by the U.S.—the use of religious strife to incite religious and ethnic conflicts that develop into civil and regional wars.
The role of religion in molding international politics will provide the moral and ideological basis for preventing ethnic conflicts and resolving ethnic contradictions using national social policy instruments. Various religions can also be engaged in charting social policy, thus providing a moral framework for government decisions, restraining the attitude of permissiveness and laxity that dominates the minds of the ruling elites in developed countries, and bringing back an understanding of the authorities’ social responsibility to society. As the shaken values of the welfare state gain strong ideological support, political parties will have to acknowledge the importance of moral restrictions that protect the basic principles of human life.
The concept of social-conservative synthesis will lay the ideological groundwork for reforming international currency, financial, and economic relations on the principles of fairness, mutual respect for national sovereignty, and mutually advantageous exchanges. This will require certain restrictions on the freedom of market forces that constantly discriminate against most people and countries by limiting their access to wealth.
Liberal globalization has undermined the ability of countries to influence the distribution of national income and wealth. Transnational corporations uncontrollably move resources that were previously controlled by national governments. The latter have to trim back social security in order to keep their economies attractive to investors. State social investments, the recipients of which no longer have a national identity, have lost their potency. As the U.S.-centered oligarchy gets hold of an increasingly greater part of income generated by the global economy, the quality of life is dwindling in open economies and the gap in access to public wealth is widening. In order to overcome these destructive tendencies, it will be necessary to change the entire architecture of financial and economic relations and restrict the free movement of capital. This should be done in order to prevent transnationals from evading social responsibility, on the one hand, and to even out social policy costs shared by national states, on the other.
The former means eliminating offshore jurisdictions, which help evade tax obligations, and recognizing the nation states’ right to regulate transborder movement of capital. The latter would mean establishing minimal social criteria to ensure accelerated improvement of social security in relatively poor countries. This can be done by creating international mechanisms for balancing out living standards, which, in turn, will require proper funding.
Acting along the concept of a social-conservative synthesis, the anti-war coalition could move to reform the global social security system. A fee of 0.01 percent of currency exchange operations could provide funding for international mechanisms designed to even out living standards. This fee (of up to $15 trillion a year) could be charged under an international agreement and national tax legislation, and transferred to the authorized international organizations which include the Red Cross (prevention of and response to humanitarian catastrophes caused by natural disasters, wars, epidemics, etc.); the World Health Organization (prevention of epidemics, reduction of infantile mortality, vaccination, etc.); ILO (global monitoring of compliance with safety regulations and labor legislation, including wages not less than the subsistence level and a ban on the use of child and compulsory labor; labor migration); the World Bank (construction of social infrastructure facilities – water supply networks, roads, waste water disposal systems, etc.); UNIDO (transfer of technologies to developing countries); and UNESCO (support of international cooperation in science, education and culture, cultural heritage protection). Spending should be made according to the budgets approved by the UN General Assembly.
Another task to tackle is the creation of a global environmental protection system financed by polluters. This can be done by signing an international agreement establishing across-the-board fines for pollution and earmark them for environmental protection under national legislation and under the supervision of an authorized international organization. Part of this money should be committed to global environmental activities and monitoring. An alternative mechanism can be based on trade in pollution quotas under the Kyoto Protocol.
An important aspect is the creation of a global system for eliminating illiteracy and ensuring public access to information and modern education throughout the world. This will require standardizing minimum requirements for comprehensive primary and secondary education and subsidizing underdeveloped countries with revenue generated by the tax mentioned above. There must be a universally accessible system of higher education services provided by leading universities in major industrialized countries. The latter could assign admission quotas for foreign students selected through international contests and paid for from the same source. Simultaneously, the participating universities could set up a global system of free distance learning for all individuals with secondary education. UNESCO and the World Bank could commit themselves to creating and supporting the necessary information infrastructure, while drawing funds from the same source.
ANTI-CRISIS HARMONIZATION OF THE WORLD ORDER
The growing gap between rich and poor countries is threatening the development and the very existence of humanity. The gap is created and sustained by national institutions in the U.S. and allied countries that arrogate certain international economic exchange functions proceeding from their own interests. They have monopolized the right to issue the world’s currency and use the revenue for their own benefit, giving their banks and corporations unlimited access to loans. They have monopolized the right to establish technical standards, thus maintaining technological supremacy of their industry. They have imposed upon the world their own international trade rules that require all other countries to open up their markets and limit substantially their own ability to influence the competitiveness of their national economies. Finally, they have forced the majority of countries to open up their capital markets, thus ensuring the domination of their own financial tycoons, who keep multiplying their wealth by exercising a currency monopoly.
It is impossible to ensure a sustainable and successful socio-economic development without eliminating the monopoly on international economic exchange used for private or national interests. Global and national restrictions can be imposed to support sustainable development, harmonizing global public affairs, and eliminating discrimination in international economic relations.
In order to ward off a global financial catastrophe, urgent measures need to be taken to create both a new, safe, and efficient currency and a financial system based on the mutually advantageous exchange of national currencies. This new system would exclude the appropriation of global seniority in private or national interests.
To level out socio-economic development opportunities, emerging economies need free access to new technologies, conditioned on their promise not to use them for military purposes. Countries that agree to such restrictions and open up information about their defense budgets will be exempted from international export control constraints and receive assistance in acquiring new developmental technologies.
An international mechanism to prevent multinational companies from abusing their monopoly power on the market could ensure fair competition. The WTO could exercise anti-trust control under a special agreement binding for all member states. This would allow economic entities to demand elimination of monopoly power abuses by transnational corporations and seek compensation for losses from such abuses by imposing sanctions against the entities at fault. Apart from overstated or understated prices, quality falsifications, and other typical examples of unfair competition, the payment of wages below the ILO-defined minimum regional subsistence level should also be regarded as an abuse. In addition, there should be reasonable price regulation for the products and services of global and regional natural monopolies.
Because of unequal economic exchanges, countries should be allowed to retain the right to regulate their national economies in order to equalize socio-economic development levels. In addition to WTO mechanisms protecting domestic markets from unfair foreign competition, such equalizing measures could also be achieved by encouraging scientific and technological progress and providing state support to innovation and investment activities; establishing a state monopoly on the use of natural resources; introducing currency controls to limit capital flight and prevent speculative attacks on national currencies; retaining government control over strategic industries; and using other mechanisms to boost competitiveness.
Fair competition in the IT sector is essential. Access to the global information networks must be guaranteed to all people throughout the world as both information consumers and suppliers. This market can be kept open by using stringent antitrust restrictions that will not allow any one country or group of countries to become dominant.
To ensure that all parties to the global economic exchange observe international and national rules, there must be penalties for violators under an international agreement that would enforce court rulings regardless of their national jurisdiction. However, one should be able to appeal a ruling in an international court whose judgment will be binding on all states.
Binding rules and penalties for non-compliance (alongside penalties for breaking national laws) would give international agreements priority over national legislation. Countries that break this principle should be restricted from participating in international economic activities by excluding their national currencies from international settlements, imposing economic sanctions against residents, and limiting those operations on international markets.
In order to enforce all of these fundamental changes in international relations, a strong coalition will have to be created, capable of overcoming the resistance of the U.S. and G7 countries, which reap enormous benefits from their dominance on global markets and in international organizations. This coalition should be ready to use sanctions against the U.S. and other countries that refuse to recognize the priority of international obligations over national regulations. Rejecting the U.S. dollar in international settlements would be the most effective way to coerce the U.S. into being cooperative.
The anti-war coalition should offer a peaceful alternative to the arms race as a means of encouraging a new round of technological development. This alternative would lie in broad international cooperation geared towards solving global problems that require concentration of resources for creating cutting-edge technologies. For example, there is no ready-made solution to protect the planet from threats stemming from deep space. Developing such solutions will require technological breakthroughs that can be achieved by combining the efforts of leading countries and by sharing costs.
The paradigm of sustainable development rejects war as such. Instead of confrontation and rivalry, it is based on cooperation and collaboration as a means of concentrating resources in promising areas of scientific and technological research. Unlike the arms race provoked by geopolitics, it can provide a better scientific and organizational basis for managing a new technological mode. The latter will drive the development of healthcare, education, and culture, which can hardly be spurred by defense expenditures. These non-productive sectors and science will account for as much as a half of GDP in major industrialized countries in upcoming years. Therefore, a forward-looking solution would include shifting the focus of government attention from defense spending to humanitarian programs, primarily in medicine and bioscience. Since the state pays more than half of health, education, and science expenditures, such a shift would facilitate systematic management of socio-economic development and curb destructive trends.
* * *
A new election cycle will begin in the U.S. in 2017 that is likely to be underscored by anti-Russian rhetoric as the ideological basis for the world war Washington is trying to unleash in a bid to retain its power. By that time, the crisis in the American financial system may have resulted in budget spending cuts, devaluation of the dollar, and declining living standards.
Domestic problems and foreign policy crises will cause the U.S. government to ramp up its aggressive tactics, while at the same time weakening its positions. If Russia mobilizes its intellectual, economic, and military potential, it will have a chance to get through conflicts in 2015-2018 in view of the fact that the U.S. and its allies will still not be prepared for direct aggression.
Russia will face the most dangerous period in the early 2020s when industrialized countries and China are expected to begin their technological modernization and the U.S. and other Western countries will emerge from financial depression and make a technological leap forward. But Russia may dramatically fall behind technologically and economically in 2021-2025, which will impair its defense capabilities and spur internal social and ethnic conflicts in much the same way as what happened in the Soviet Union in the late 1980s. These conflicts will be fomented both from outside and inside, using social inequality, development gaps between regions, and economic problems. In order to avoid the worst possible scenario leading to the disintegration of the country, Russia will need to adopt a systemic domestic and foreign policy for strengthening national security, ensuring economic independence, improving international competitiveness, boosting economic development, mobilizing society, and upgrading the defense industry.
By 2017, when the U.S. starts threatening Russia openly and on all fronts, the Russian army should have modern and effective weapons, Russian society should be consolidated and confident of its strength, intellectuals should be in control of the new technological mode, the economy should be growing, and Russian diplomacy should succeed in building a broad-based anti-war coalition capable of pooling efforts in order to stop American aggression.
In general, I believe Sergey’s geopolitics are spot-on but his economics — supposedly his area of knowledge — is very weak and misguided.
The issuers of reserve currencies must guarantee their stability by capping the national debt. Uh, no. A currency issuer’s budget deficit is limited only by inflation.
He then calls for a reserve currency based on a “basket” of various currencies. Bad idea. The whole reserve currency issue is overblown.
Create a universal payment system for BRICS countries and issue a common payment card. I’m good with that so BRICS won’t be at the mercy of the Western financial system.
Various religions can also be engaged in charting social policy, thus providing a moral framework for government decisions, restraining the attitude of permissiveness. That seems to reflect Russia’s social conservatism, but is out of touch with the West. Lotsa luck getting the world to agree on social values.
Liberal globalization has undermined the ability of countries to influence the distribution of national income and wealth. Transnational corporations uncontrollably move resources that were previously controlled by national governments. The latter have to trim back social security in order to keep their economies attractive to investors. Amen !
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He talks about international laws to regulate trade, pollution, the internet, etc.. Lotsa luck with that.
Rejecting the U.S. dollar in international settlements would be the most effective way to coerce the U.S. into being cooperative. Uh no, because a weak dollar would boost American manufacturing and create jobs.
By 2017, when the U.S. starts threatening Russia openly and on all fronts, the Russian army should have modern and effective weapons. Unfortunately that is very true.
In general Sergey does not understand fiat money. There are advantages to your country’s currency being a reserve currency (control or influence over global financial systems) but there are also disadvantages. If the US dollar lost its reserve status that would improve the US trade balance and create US manufacturing jobs.
The Aussie dollar is not a reserve currency yet the Aussie economy is better than America’s. The Canadian dollar is not a reserve currency yet the Canadian economy is better than America’s. The Swiss Franc is not a reserve currency yet the Swiss economy is better than America’s. And so forth. Sergey needs to learn a whole lot more about economics.
Dear Saker, I believe we stand in very different political camps at different ends of the world, but we see the same world and we come to the same conclusions, because the problem itself is global.
The problem is the USD it is both the strength and weakness of this era of disaster. Russia is dumping its reserves, and Europe will be gas short, fracking is not only destructive but unproductive.
Perhaps this winter will give us a Europe buying Russian gas in roubles. China has de-Americanised its economy and is threatened by Japan’s rearmament, but is possibly the largest US debt holder and hence vulnerable. The US has undertaken to print another Trillion to revamp its nuclear arsenal.
There is a good chance this will all be over before Christmas (the chorus of 1914 visited again as actuality).
Russia produced Putin because of history, geography and economic position; as midwife for a new era.
Essentially nations will need to nationalise their banking system, clean out the corrupt, start investing in diverse production (as Russia is now) and take advantage of the new emerging technological revolution.
This also includes the USA.
This is the new multi-polar world taking shape, but as the end of the old world looms the Berlin Bunker mentality grows dangerously, so much calm is needed, and possibly concessions.
Europe has to be split away from the USD, if not the Middle East and Africa will suffer even more (I think Russia has blocked a direct confrontation), they want wars to prove their power and as they can’t achieve this in Europe they will go for Syria, Lebanon and if they can manage it Iran.
This is an era of national liberation, even for the USA which has to liberate itself from its overlords. Social rebuilding, economic innovation, and the pressure to create and control responsible governments that actually cater to the interests of their people — all the other details will need to work themselves out.
I pray that 2014 will be a merry Christmas and a gift of world peace. watch the USD, watch the gas deals, watch the fraking bubble, the gold future manipulations and especially watch for the sleeping giant to stir, China has the last word in this.
Dan Lynch I am general agreement with your statement at the top of the list.
The basketful of trading currencies is a stop gap, a tangible collection that substitute for a reserve currency during a transition, in the end electronic transfers that include all currencies will emerge.
The card system worth watching is UnionPay (China’s with world wide acceptance already). Russia needs to get Webmoney seriously out and about and linked to UnionPay and allowing for internet purchases to deal in micro-cash amounts (fractions of a Kopec).
The internet market has been restrained by greedy finances, we really need a world wide electronic micro-cash system and Russia already has it in place except most people cannot easily access it.
Lastly it is in our interests as people to clean up the planet, I agree that it does not require international laws for it requires governments that act in the interest of their people.
Ecumenism never worked. Otherwise, agree with his identification of problem and possible solution to the problem.
Lisbon to Tokyo?
If the Kremlin wants Japan to divorce the US for China, Russia can offer to share Sakhalin!
Japan and Russia remember the island’s history. Japan remembers who started the great Pacific war, who nuked them, and that the Rape of Nanking myth is maintained by the Chinese “Communist” hegemony to hide old guilt, and by the US to maintain enmity between ancient imperial China and ancient imperial Japan.
The Kremlin should check if the Nanjing Massacre really happened … or not.
This is an excellent piece by a seminal and well-rounded and comprehensive thinker who depicts the ONLY WAY FORWARD for the entire world. It holds out the path forward which everyone should study and publicize because it represents the only path forward for peaceful and equitable development of the third world and for survival of the human race.
That said, there are a few weaknesses and not strong enough emphases on certain point Glazyev’s makes in this great piece. First, I believe Glazyev underestimates the evergrowing dangerous and reckless outlook of the US ruling class and its global worldwide allies. He seems to understand the very dangerous and shaky nature of capitalism worldwide now and its horrendous impact on societies worldwide due to mandatory austerity measures. Although he is correct in predicting he America’s technological triumph at least in armaments, this military triumph will come at the cost of needed capital invested in a Green Manhattan Project which is necessary to save humankind both in America and worldwide from global warming.
This leads to another point Glazyev makes. I doubt the world will see any cooperation from America’s oil, auto, coal and miniing companies around the issue of global warming. The degradation of the environment coupled with the rise in global warming will begin to have very real and unknown impacts on the American people, especially on the West Coast where a good third of AMerica’s nation resides. This could have devastating consequences on Americans AND Silicon Valley if the impending water crisis in Silicon Valley is not addressed. What will happen is further outsourcing of American industry to other countries with cheap labor.
Although the US might go along superficially with detente because war on so many fronts is just no longer viable economically nor politically, the US will not stop at any costs in my opinion even if it means nuclear war. Thus we will see the US building now towards a first strike capacity, suicidal as this might be to the planet.
The only hope for the global anti-war coalition which the BRIC countries must lead lies from the very societies and peoples of the world who support the BRIC coalition. The anti-war movement must start AT THE BOTTOM including America and COALESCE AROUND THE WORLD.
Russia does not have the power to save humankind. But it does have the deep political background and experience gained over the decades to help jumpstart and rebirth a nuclear freeze and Jobs with Peace and conversion movement by help to create and set up international peace organizations worldwide. This is our only hope and prayer to curb the rabid and agressively reckless War regime of the United States. It’s from the US first and foremost that changes must take place to stop all these nonstop wars that are simultaneously robbing and plundering Americans as well.
Sergey is a brilliant geopolitical analyst but, as Dan Lynch points out, not really spot-on in his economic prescriptions. But I am not sure that I fully agree with Dan either. I’d sum up Sergey’s shortcomings as arising out of timidity and not being willing to step outside the international economic status quo. Motherhood statements on how every country should behave, and what else ought to be, are not going to change much – as Dan points out. However, I very much doubt “If the US dollar lost its reserve status, that would improve the US trade balance and create US manufacturing jobs” as Dan asserts. Sergey grasps the importance of reserve currency status, Dan doesn’t, IMHO. The one major reality of the post-war period has been the multi-pronged strength of the US based on and deriving out of the USD being the international reserve currency. The US has been able to prolong its hegemony even after losing its international competitiveness precisely by using the USD to garner tribute from the rest of the world, the tribute taking the form of the huge “investment” that the Chinese and others make in US treasury bonds. The rest of the world keeps supporting the USD and thus enables the US to finance its aggressive stance against the rest of the world.
The only way out of this very ironic situation that I know of is a massive and revolutionary turning away from capitalist globalization. What stands in the way of turning away? The class interests of the elite in almost every country. And that is why half-hearted measures of the kind being talked by Sergey are unlikely to deliver the goods. All of this is a very long and complicated topic for discussion, but I must stop here for it would be selfish on my part to gobble up more space. But I hope I have left some food for thought.
— BTW
There will be no White Knights and no Messiahs.
Americans have to get out of their armchairs along with their corresponding European, Asian and Russian counterparts to start building the peace movement and movements of social justice.
Naomi Klein said it best when she said we cannot address global warming until we get rid of capitalism. This holds true for
just about every problem on planet earth except peace. We do have the power to bring this vast financial empire down to its knees but not without a miraclous leap in consciousness on the part of people’s around the globe which not even their many Gods can create. Not yet that is. If the world’s people will rise up in one voice as they did last week, it’s because the pressures of global warming now will force them to. Not the dangers of Cold War and economic injustice.
Maurice Strong will like it
This is the beginning of Great Change!
@Dan Lynch @ 25 September, 2014 23:10
In general Sergey does not understand fiat money. There are advantages to your country’s currency being a reserve currency (control or influence over global financial systems) but there are also disadvantages. If the US dollar lost its reserve status that would improve the US trade balance and create US manufacturing jobs.
The Aussie dollar is not a reserve currency yet the Aussie economy is better than America’s. The Canadian dollar is not a reserve currency yet the Canadian economy is better than America’s. The Swiss Franc is not a reserve currency yet the Swiss economy is better than America’s. And so forth. Sergey needs to learn a whole lot more about economics.
. . . . .
Suggest you do not compare apples with horse chestnuts.
Eventually, All fiat currencies die. Governments can’t help the printing.
Disagree with your premise the lost of USD reserve status would improve trade balance and create manufacturing jobs.
Disagree that the Aussie, Canadian or Swiss economy better than the U.S. economy. It’s a deception. Have you overlooked the economies of scale?
I have a choice to buy Product X brand /10 lb packaging: in the U.S. priced @ $6.32 (incl. Tax.) Same product X 10lbs priced in Canada @ $13.63. Where do you think I’d like to buy it?
. . . . .
Dr. Paul Craig Roberts, former Assistant Secretary of Treasury, U.S.A
“”If the world loses confidence in the dollar, the cost of living in the US would rise sharply as the dollar drops in value. Economic hardship and poverty would worsen. Political instability would rise.
If the dollar lost substantial value, the dollar would lose its reserve currency status. Washington would not be able to issue new debt or new dollars in order to pay its bills.
Its wars and hundreds of overseas military bases could not be financed.
The withdrawal from unsustainable empire would begin. The rest of the world would see this as the silver lining in the collapse of the international monetary system brought on by the hubris and arrogance of Washington.””
~ ~ ~ ~ ~
Bring it on.
absolutely no good reason why international trade is conducted in USD. Theft pure and simple.
AM
This article is perfect! I’m sure Sergey is deeply versed in economy and knows all ins and outs geopolitics. I think looking for some weak spots in a short article is a waste of time and simply unfair. This particular piece is designed for a laymen and it is not meant to be a bulletproof academic dissertation. I also wholeheartedly agree with him that it is about time for the Russians to shake off some of the inferiority complex and take their rightful place on the world stage. Russian history, culture inventiveness and spirit are legendary and just because they don’t know how to design, package and wrap things up should not make them feel any less than any other culture/country in the world.
@Glazyev underestimates the evergrowing dangerous and reckless outlook of the US ruling class and its global worldwide allies.
Alas, it looks that few people can see the elephant in the room, and even these ones are dismissed as “conspiracy theorists”. But at the helm of the most powerful country are people who believe their religious duty and divine promise is to dominate the world and who threaten the whole world with their “Samson option”. Their “global allies” are in fact their accomplices, in most cases the same people. Unless you neutralize and curb their power to corrupt people, thing will go from bad to worse.
I think Russia should simply adopt the Original American Constitution. This is one of the best texts out there and there is no need to reinvent the wheel. They just should make sure that it can never be abused. Never!
@ Dan Lynch:
“In general Sergey does not understand fiat money. There are advantages to your country’s currency being a reserve currency (control or influence over global financial systems) but there are also disadvantages. If the US dollar lost its reserve status that would improve the US trade balance and create US manufacturing jobs.”
The current reserve currency (USD) is a fiat, but that does not make it equivalent to *any* fiat currency. Its reserve status is highly important for the US dominance and it looks like you (and many other people) are severely underestimating its role.
Given that most of the world trade is done in USD, all goverments and corporations in the world (except for the US) must keep reserves of USD to support national trade, similar to you needing to have a certain sum of money in your checking account to handle monthly bills. The more trade, the more money needs to be kept in these national checking accounts. Most governments also use a fraction of these reserves to buy US treasuries, thereby subsidizing US budget deficit. Until 2008, the world trade was growing at a steady and fast rate. Thus, the sums of USD in reserve accounts were growing too and the demand for USD was steady. Thus, the Fed could create a lot of USD for free without sparking inflation and run on the dollar and US financial system. This operation translates into ~$500-1000B annual profit for the US and its corporations. Since 2008, the world trade is flat, and thus this scheme is no longer working. Or, rather, the Fed keeps printing but now not to support the growing world trade, but simply to prop up the financial system (QE). If the profit that stems from this dollar printing business disappears, USD economy and political system will collapse with completely unforeseeable consequences. What is more, we are not that far from this scenario and this is likely what drives the US to launch attacks on Russia.
A
The USD is printed by the FED who is controlled mainly by 7-8 old banking families. So, it’s not really USA who profits in the end, even if they receive a big share of this Ponzi scheme. The USA has to be happy as long as they represent the mercenary armed forces of those bankers and also some taxation-base. This model existed for centuries and was just improved by the bankers.
Europe used mercenaries for centuries. Most of the wars were planned by the people who had the money to pay. The bankers of Venice, Florence then Hmaburg and Holland played huge roles. The Ottoman Empire was asking for gold ducats as tribute from the countries they controlled in Europe.
The biggest milestone in humanity evolution will be when a currency that represents an INTRINSIC VALUE OF ENERGY unit will be used across the world. It can be 1 Joule, 1 WattHour … It doesn’t really matter which one since the laws of physics allow precise conversion without bankers speculating on it. Of course the delivery of that energy needs to be reinforced, but any form of trade need to be reinforced after all. In this way, if I save some amount of ENERGY UNITS in my bank account I won’t fear inflation because that energy will always allow me to heat my house for the same number of hours or bake the same number of breads in the oven. Unlike fiat money, which today can buy you a house and maybe in 5 years will buy you just a piece of bread.
If Russia comes first with an implementation of this idea of ENERGY CURRENCY, they can really start a revolution for humanity. But … Central Bank of Russia is part of the BIS bank from Basel, which was created by the same families who created the FED (Federal Reserve). And Russia still expresses any deal in US dollars.
Excellent text..but this will NEVER happen.
They will kill Putin(or any other one after Putin)nuke RF and or even China if necessary.
Remember the DSK/IMF story it was all about that project(a small part of it only).He wanted(eventhough he is AZ,mainly ZZ)to introduce slowly a basket of currencies+ gold.When the plot happended at the NY Sofitel,he was on his way to meet Merkel the next day.He wanted to cancel the Greek debt(at least 80 pct of it).He wanted to change the Euro system which is broke…he finaly escaped jail,but then after they puted another AZ puppet at the IMF(Lagarde)..and things went back to normal.
The west will never allow this to happen,that would mean the end of the times for their oligarchs,banksters,ponzi scheme,the City of London,WS etc..
Keep on dreamin..
The working class, the triumph of which was predicted by Marx, no longer exists. Technology has trumped that vision, including technologies of capital formation and social control. We are headed straight towards a dystopia which Marx could not even have imagined.
In any case, Marxism is a dead end. It was doomed from the beginning by its basic premise – materialism.
Religious faith is able to resist, but truly lives only on a small scale.
In my own experience – and I am old – I have found that the only thing that works is prayer. Seriously. But prayer is not sitting and mumbling in a corner.
The first recorded history of fiat money can be found in the clay tablets from Sumer. The same ones that americans, at the order of their jewish masters, tried to destroy after invading Iraq. They can open the eyes of humanity to what really is behind the 3 main religions.
Anyway, first money were also clay tablets issued by the priesthood who guarded the temples were the grains were stored. They issued these based on the amount of grains various farmers deposited in the temple. With time, these priests realized they can cheat. The practice of asking for yield existed then in Sumer. The pharaos of Egypt also used something similar, if I’m not wrong.
When captive in Babylon, I think the jews heard about these old banking practices and became familiar on how to exploit a fiat money system. They were the ones who teached the ruling class of the Roman Empire about this from behind the scenes.
A currency that represent units of energy will stop reduce to zero the capacity of jewish bankers to speculate anymore on the back of silly goyims.
erhaps this winter will give us a Europe buying Russian gas in roubles.
—-
Greg,
Can you tell me how this will look? Has not Russia said time and time again they intend to honor existing contracts.
How do you convert payment to rubles in that environment ? Do these contracts expire or require renewal?
Anders Fogh Rasmussen departs in two weeks from the North Atlantic Treaty Organization (NATO), where he has been secretary-general since 2009, with a present from the General Court of the European Union Court of Justice. It’s a golden tongue depressor.
In a judgement issued in Luxembourg on Thursday, September 18, the court ruled that the European Union (EU) cannot lawfully introduce sanctions against states, corporations, state organizations, or individuals without stating reasons which can be substantiated in evidence to a standard of proof tested in court.
http://johnhelmer.net/?p=11398
@pavel:
“The working class, the triumph of which was predicted by Marx, no longer exists. Technology has trumped that vision, including technologies of capital formation and social control.”
Someone is making all the things you and I use and its mostly not robots (at least not yet). So working class is alive and well, a large fraction of it is just located outside of the West now.
A
Russia will have a leading role in building a coalition against the U.S. since it is most vulnerable and will not succeed in the ongoing confrontation without such an alliance. If Russia fails to show initiative, the anti-Russian bloc currently being created by the U.S. will absorb or neutralize Russia’s potential allies.
But Russian public opinion needs to overcome its inferiority complex, regain a sense of historical pride for the centuries of efforts to create a civilization that brought together numerous nations and cultures and which many times saved Europe and humanity from self-extermination.
This is what I have been talking about. To me Russians are as much racists as Americans and unlike Americans are overtly prejudicial. We can see that right here from some of the Russians. Americans will assimilate anyone and use them to their own benefit. Just to illustrate, there has been Indians in Russia since the 1600’s.. Some of them were assimilated and are now no different than Russians, In fact they ARE Russians. But that dont help anyone and is like the 35% or of so Americans who were Germans. They dont care about Germany anymore now. After all this time, there are less than 40,000 Indians in Russia.. Compared to like over 3 mil Indians in the US who are a powerful political block. These people have a strong connection of family and culture back to India even if they have become Americans now. There will be a lot of friction if the US targets India from these people as they would want closer interaction with India instead. Obama’s specifically targeted the Indian diaspora in his elections. Russia dont have such a population to pull in India or get Russia closer to India. If anything there are only forces to push them apart. In such an environment, I dont see how they can cooperate when there is nothing to hold them together other than the fear of a third party. It is like their trade which was like 10 bil in 2013.. Compared to the US which was over 100bil including all the funds those same Indians sent back home to their relatives. There will be very strong resistance to alienate and not tow the US line from these people who are the progressive middle class. Even if on almost every Issue the US and India are on opposite ends of the spectrum. The people dont care since their lives are better now than before. Its called adjusting to reality. Russians remind me of Israeli’s to an extent. They are so afraid of losing their identity that they lose perspective on what they really are. It is also why Russia lost the allure of inviting Europeans to migrate there and they all moved to the US even if life in the US was far more difficult and dangerous.
Glazyev wants to work through the paradigms the West imposed on ROW,trying to improve them.I don’t get it how he wants to fight the dire situation we find ourself in using the same concepts just regenerating them (I don’t enter here in the crux of his economic responses to the woes of western financial system).Who gives a guarantee to the weaker countries that this hegemon mechanism ,UN,World Bank,even international tribunal(!)will not be even more suffocating than the terrible one we are in today.He speaks on one hand for the sovereignty of countries but on the other hand he device a new system to coerce the unwilling,with measures that are not far of the system of sanctions the West so generously bestow on others.Who is to guarantee that his “human rights”excuse will not be used again to subdue a recalcitrant.I am a little bit worried that some in the Kremlin continue to think with a brain washed by centuries of Western imperial dominion.On one thing though I strong heartedly agree with him.Russia has to break the chains of self inflicted complex of inferiority and yes liberate itself from those who are still prisoner of western thinking!
BCH
GABLMK said…
…
When captive in Babylon, I think the jews heard about these old banking practices and became familiar on how to exploit a fiat money system. They were the ones who teached the ruling class of the Roman Empire about this from behind the scenes.
…
Let’s explore this further with a slight twist to find the “answer” to this equation.
The only way to do so requires a bit more math. Both the ancient Egyptians and the Romans were faced with the same “problem”, mathematically. They both lacked a zero within their numerical systems. But, the Babyloneans found a way to represent zero based upon the knowledge of advanced mathematics from the ancient Greeks. They held this secret very close to themselves foe the most part and only revealed enough to control the “numbers” in order to confuse and deceive those that relied upon them for trade, commerce, architecture, education, etc.
Eventually, most traces and/or connections to this was eliminated and/or concentrated. This is how the Egyptian, Greek and Roman empires fell. Since the Chinese knew of this, the ancient Silk Road needed to be severed to conceal the mass deceit as a “new” all powerful, all knowing monolithic god could be entrenched in the “hearts and minds” of those remnants of the fallen empires.
For this “new” god to take hold, there needed to be an anti-god and to assure it kept hold, 3 competing “religions” needed to be created and subsequently needed to be divided internally as well.
This is the basic premise of the trinity and axis systems. Take 1 “thing” and divide it into 2 equal parts. Then take those 2 parts and divided them into 3 parts. Then take those 3 parts and divide them each into 2 parts, and so on.
This allows for the “system” we find ourselves in, to replicate infinitely by a series of “black and white” interpretations that self replicate as necessary.
In other words, the Babylonean mathematics system, Base 60, is the perfect system to control complete societies by way of twisting and manipulating education, institutionalized fiat financing practices, and ideological subversion.
It really is as easy as 1, 2, 3…
DumpHarper!
This document offers a highly placed Russian’s quite broad sketch of a visionary program of attempted reform of the international order, especially financial.
Many interesting ideas were introduced, some I think very solid, some dubious; and of course there will be missing pieces of the puzzle. Perhaps the ideas presented will lead to a related ongoing vibrant discussion inside and outside of Russia.
One element that I would have appreciated reference to is the catastrophic‘ news and public affairs’ problem: Lying and censorship are age old, but the contemporary conjunction of the art and science of manipulating people with television, radio and print, and then throw in intelligence agency and political controls, and highly concentrated, media empire, monopolistic controls: very large numbers of people around the planet are being conned and left in the dark and bewildered.
The destruction of entire countries has been achieved with the indispensable help of western mass media dishonesty.
It’s hard for me to envision real high quality international progress without confronting head on the extreme dishonesty of western MSM, and having a lot more honesty and substance in mass media news and public affairs.
More particularly, Russia must find ways to counteract and reduce the influence of pernicious foreign or traitorous mass media inside Russia.
An example of a dubious conventionality in the article relates to the WHO. Before granting it further power, one might want to do something serious about the corrupt smells that it has long reeked of.
Considerations pertaining to personal liberty, decentralized power, and democratic processes were feeble or missing in the article.
A noteworthy adjunct to Glazyev’s article is P. C. Robert’s
http://www.paulcraigroberts.org/2014/09/25/will-russia-china-hold-fire-war-alternative-paul-craig-roberts/
Robert Snefjella, decades ago the Third World attempted to use the UN to establish a new world information order, where the truth might occasionally be spoken by the Western MSM in regard to non-Western states. The Western overlords screamed ‘Censorship’ and that was euthanised quick-smart. Since then the concentration of the Western MSM in fewer and fewer, often Judaic, hands has progressed, the propaganda has grown ever worse, and today it is quite beyond parody in its dishonesty, uniformity of opinion, suppression of inconvenient facts, and arrogant presumption that it represents ‘Truth’. Now that the Internet exists the Bosses are shitting themselves that the truth is seeping out, hence partly explaining their increased hysteria. They are definitely mad, bad and dangerous to listen to.
There seems to be enormous misunderstanding of monetary operations here.
First, as long as there are unused resources, unemployment; any capacity for expansion, “printing” money does not cause inflation. It allows businesses to increase production, debtors to pay off debt, and employment to rise as the money to bring resources back online is now available.
Second, the US does not “profit” directly from Reserves held at the Fed or on Treasuries held by foreign countries. To the contrary, the Fed is currently paying interest on both Reserve accounts and Treasury bonds. Those instruments are savings accounts to other countries, since most of them cannot spend dollars inside their own economies, they have to save them for use with other dollar-users. That *does* give a slight edge to dollar using companies internationally, but there are no direct benefits to the US government.
The biggest problem we have is our own congress misunderstanding both fiat and the role of an international currency, and so they resist allowing enough to be issued to meet demand, which is why the dollar is so strong. Anything in short supply tends to be very expensive, and the effect leads to starving the US’ domestic economy of operating capital.
It also makes wall street and it’s minions exceedingly rich–again not benefiting the US directly, but encouraging a very destructive parasitism in the financial industry.
I agree fully with offloading the trade currency, and would recommend not saddling *any* one nation with it, for roughly the same reason. The US cannot collect taxes from the rest of the world, which leaves open market operations the only method to control quantity. The international financial tax above is a marvelous idea, if some mechanism to prevent corruption is found. At this point, some global entity needs to be managing a trade currency, not individual nations. Having to issue that much debt to meet global trade demands means that the amount must *vastly* exceed any conceivable national production–it must be based on meeting global production needs instead.
Ok, now I’m angry:
“A fee of 0.01 percent of currency exchange operations could provide funding for international mechanisms designed to even out living standards. This fee (of up to $15 trillion a year) could be charged under an international agreement and national tax legislation, and transferred to the authorized international organizations which include the Red Cross (prevention of and response to humanitarian catastrophes caused by natural disasters, wars, epidemics, etc.); the World Health Organization (prevention of epidemics, reduction of infantile mortality, vaccination, etc.); ILO (global monitoring of compliance with safety regulations and labor legislation, including wages not less than the subsistence level and a ban on the use of child and compulsory labor; labor migration); the World Bank (construction of social infrastructure facilities – water supply networks, roads, waste water disposal systems, etc.); UNIDO (transfer of technologies to developing countries); and UNESCO (support of international cooperation in science, education and culture, cultural heritage protection). Spending should be made according to the budgets approved by the UN General Assembly.
Another task to tackle is the creation of a global environmental protection system financed by polluters. This can be done by signing an international agreement establishing across-the-board fines for pollution and earmark them for environmental protection under national legislation and under the supervision of an authorized international organization. Part of this money should be committed to global environmental activities and monitoring. An alternative mechanism can be based on trade in pollution quotas under the Kyoto Protocol.“
Ok, so give the global government to the UN, let a private for-profit company like Red Cross do the job etc. and finally supporting the CO2-scam.
I almost though I’m listening to Obama or Al gore. These are exactly the same goals like stated by the globalist bunch over and over and would be the exact opposite of what he proposes a bit further above.
Very, very fishy. Hegel is turning in his grave.
But what should we expect? Just look at the very first picture here on the left and try to find the cookie (hint: above the throne, in the Alexandrowsky room):
http://german.ruvr.ru/kremlin_rus/
A great piece. Glaziev lays out in plain, direct language exactly what needs to be done. Especially the reduction of the role of the dollar in international transactions. This is the best means available to the rest of the world to rein in the US Goliath.
How close is Glaziev to Putin and might this represent Putin’s thinking on these issues?
To Mr. McDonnell: Jesus Christ. Hundreds of Nanking massacre photographs show such things as mass slaughter, bodies of women with their abdomen slit open, or desecrated by leaving scrolls, sticks, or bottles in their vaginas. Gratuitous beheadings were endemic. This was no ordinary rape, it was systemic. Your denial and ignorance make me want to vomit. Please start by checking a center such as Nanjing Massacre or 1937 Nanking Massacre. Youtube is also full of period documentation, e.g. Japanese eyewitness testimony at Rape in Nanking Yamada Unit Soldier. Any proposal that starts by denying massacres is not just dead in the water, but rather a live hand-grenade. Jesus F. Christ.
The soft underbelly ?
Xinjiang unrest: China raises death toll to 50
“China blames incidents on Uighur extremists inspired and supported by overseas terror groups.”
I don’t care much for this piece. It gives too central role to religion.
The thrust is 100% correct. And the only way to deal with the coming environmental catastrophe is for such a cooperative multi-polar world to already be functioning. The framing is great: Anti-War Coalition!
In reply to:
“Greg,
Can you tell me how this will look? Has not Russia said time and time again they intend to honor existing contracts.
How do you convert payment to rubles in that environment ? Do these contracts expire or require renewal?”
There is an argument that the contracts have been broken by reverse pumping gas, and a number of EU countries have had their gas supplies reduced because of this.
Besides which the whole point of sanctions and counter sanctions is that contracts are broken at will so to speak (ie the French Warships for example, repatriation of funds is expected, but not I think mandatory — ie Turkey 1914, and unless Europe has paid in advance not relevant anyhow.
But I don;t see Russia doing that with so many cards in hand. The IMF loans through out Europe eat up US reserves, it is in Europe’s interest to break the USD monopoly in energy, whether it will or not is another question.
Russia is already dumping US reserves, which does not mean that Russia won’t accept USDs, the gas prices are calculated in USDs, but the contracts don’t necessarily specify the currency (remember Europe may actually have preferred this as to not drain USD reserves which it would not want to borrow just to stay warm, the devil is in the fine print.
Plus I was wrong saying roubles, rather it is the rouble devaluation makes the Gas much cheaper, if the USD is not a fixed price, but merely a calculating one. Russia accepting Euros would give it another source of local pull if it can manage to do it. The original US strategy was for Europe to break the gas contracts and fill the gap by magic and fraking (both equally ineffective).
I nonetheless apologise if I have been misleading, but I will bet that Russia is pressuring Europe to break the USD monopoly, old man winter is onside at least and now a lot of hapless Baltic states find themselves economically orphaned on Europe’s doorstep — something has got to give and I don’t think it will be Putin’s Russia.
Thanks GABLMK for exposing the truth.
Dig down on the humans history (Sumer & Egypt) and find out who are towing the lines of the puppets aka oligarchs, we currently have.
Well I am profoundly and completely impressed by Glazyev’s work. This is a revolutionary framework that nations of the world can adopt to raise their standard of living, defeat global imperialism in its many forms, and also work within a paradigm of sustainable development.
2014 was the year in which I started to see a future in this world, and because of Russia. But until now I had no idea that a vision of this scale could actually be advanced on the world stage.
Of course there are myriad details. None of that is the point. The point is the scale, and the scope. The scale is global. The scope addresses all of the urgent life-threatening scenarios this current world faces. And presents the simple assertion that in fact we can deal with all this. This is revolutionary, to my mind. Give it ten years, and see where we are. Remember it was 2014 when you started to believe in the future again.
One last point about currencies. I’ve often wondered lately how Russia was going to challenge the rule of the money-changers, and it becomes clear that it will not. The Glazyev vision embraces Special Drawing Rights, and the rule of bankers. People like James Rickards have been expecting the world to go to SDRs and away from the Dollar over the next ten years or perhaps sooner. This has been the plan of the bankers. Russia doesn’t threaten this plan in any way, the opposite in fact.
One battle at a time. Russia with the Glazyev vision – argued over and groomed with a fine-tooth comb, of course, by the nations of the world over time – can give us stability and a rising standard of living for working people globally, including in the US.
Reining in the corporations and making them subservient again to governments does not threaten the rule of the bankers (who own the corporations), merely their profits, which are at an unsustainable high right now anyway as an endgame, grab-it-all strategy for a collapsing world. Suddenly Russia shows us the possibility of a sustainable world, including for bankers.
To me all of this is very wonderful. Thank you Saker for publishing this. I hope Russia’s civil servants get a bonus this year, because they work damn hard :)
Excellent stuff, and the video to set the mood, just brilliant –
where’s american kulak?
According to the well informed (but sometimes inaccurate, nobody’s perfect…) M. K. Bhadrakumar, the west is beating retreat in Ukraine. An interesting read I think:
http://blogs.rediff.com/mkbhadrakumar/2014/09/24/west-beats-retreat-in-ukraine/
Looks to me the promotion of social capitalism. Could be an intermediate step to unite Russia and its allies. However social captilism can never work because capitalism is inherently anti-social. Its base is exploitation of labour, exploitation of the Earth, greed, and economic growth. So, in the end it will always fail.
Kind Regards, Ben
To greg
Your wrong. Back in june Gasprom renegotiate the contracts. All but one agreed to pay gasprom in their own currency or ruble
With the exception of that one holdout, Gasprom no longer accepts us dollars.
Erika
Dan said:
The Aussie dollar is not a reserve currency yet the Aussie economy is better than America’s. The Canadian dollar is not a reserve currency yet the Canadian economy is better than America’s. The Swiss Franc is not a reserve currency yet the Swiss economy is better than America’s. And so forth. Sergey needs to learn a whole lot more about economics.
***********
No economist here, but this formulation seems to restrict the reasons for a strong economy solely to the status of the currency.
I read so often that the US economy would fold if the dollar were not a reserve currency and especially absent petrodollars because (I think) of the constant flow of dollars and also fees of various sorts through the USA financial system.
There are so many other reasons for the strength of the economies named. Dan also stated that a weakened dollar would strengthen the US economy. Yet strong currencies do not seem to be weakening the Australian, Canadian, and Swiss economies. Anyhow, the horse is probably already out of the barn when it comes to bringing manufacturing jobs etc. back to the USA, regardless of the value of the currency.
Katherine
One of the biggest threats to Russia is the end of the Putin era. If not emerge another exceptional ruler like Putin (someone like, God forbid, Yeltsin), will be a BIG step backwards for the country. The USA has no limits to their greed and will not hesitate in a global war (remember the Cuba Crisis?), And, with atomic power involved in a third war, the final would be unpredictable …
Probably after two failed attempts in Georgia and Ukraine, the USA will try something more dangerous, probably using a 5th column or a European country.
I hope that Russia will survive, because the world would lose much without her beauty.
A hug to everyone.
Polo Kilo – São Paulo – Brazil.
I agree wholeheartedly with what was posted by Dan Lynch. In general almost all who hold higher positions in government do not understand money, fiat money or economics. The power of money creation must be removed from the hands of the criminal private banking cartels. Money must first and foremost be created and issued directly by sovereign nations. Institutions like the FED in the USA must be fully incorporated into the public sector. Today they are essentially the Bank of and for the private banks. It is not a true government institution. Only when this step is taken can sufficient funds be utilized to serve public purpose.
For one thing that can be argued on this program is the issue of climate change as man-made. Whether there is datae to support this which is not available to most climatologists and the UN report is well known to be a FAKE made to support domination by imposing policies of control on energy, and the megascam of carbon rights, so Kyoto is a non-starter until really serious studies open to assessment are caried out. Perhaps it is due time to put the UN to better use than the current manipulation by the AZs.
For one thing that can be argued on this program is the issue of climate change as man-made. Whether there is datae to support this which is not available to most climatologists and the UN report is well known to be a FAKE made to support domination by imposing policies of control on energy, and the megascam of carbon rights, so Kyoto is a non-starter until really serious studies open to assessment are caried out. Perhaps it is due time to put the UN to better use than the current manipulation by the AZs.
check out the latest cross talk, “Ukraine’s dead end” on RT
I have bulleted a part of Glaziev’s proposals, to make the organizations more visible. is he kidding?
*the Red Cross (prevention of and response to humanitarian catastrophes caused by natural disasters, wars, epidemics, etc.);
* the World Health Organization (prevention of epidemics, reduction of infantile mortality, vaccination, etc.);
* ILO (global monitoring of compliance with safety regulations and labor legislation, including wages not less than the subsistence level and a ban on the use of child and compulsory labor; labor migration);
* the World Bank (construction of social infrastructure facilities – water supply networks, roads, waste water disposal systems, etc.);
* UNIDO (transfer of technologies to developing countries); and
* UNESCO (support of international cooperation in science, education and culture, cultural heritage protection).
* Spending should be made according to the budgets approved by the UN General Assembly.
* The WTO could exercise anti-trust control under a special agreement binding for all member states
These are the largest oldest and most pervasive NGOs in the world, doing the bidding of the very system Glaziev proposes to get rid of, and many of their officials getting nicely rich in the process….and all experienced in dealing with corruption (ie working along with it).
The problem in the world is not because of whose money is the reserve currency. The problem is that loans of it are tied to conditions for mandatory actions (often tied to projects invented by some of the above list of NGOs) that the borrower cannot afford. All the way back to the Marshall Plan, the loans are designed to help the borrower buy the lender’s goods, NOT to get what he wanted for himself.
It’s like Visa forcing you to buy a $200 3-course meal with wine, when what you need for the price is a hamburger and a pair of shoes.
Hungary kicked out the IMF and seems to be doing ok with issuing condition-free bonds for its borrowing needs. “Condition-free” is how to escape slavery.
http://www.bloomberg.com/news/2013-02-12/hungary-registers-dollar-notes-after-21-month-eurobond-gap-1-.html
@ Greg Schofield
The basketful of trading currencies is a stop gap, a tangible collection that substitute for a reserve currency during a transition, in the end electronic transfers that include all currencies will emerge.
There’s no need, really, for national currencies at all. Gold used to be the standard unit of exchange, but gold is expensive to dig it up, refine, store and ship around the world. Instead we will use the Numero, a monetary unit based on the cardinal numbers: each unit unique, indestructible and uncounterfeitable.
Like gold the Numero, will automatically adjust international trade balances in the manner explained by Ricardo explained.
Katherine asked about reserve currencies with reference to Dan Lynch’s post.
I think that Dan was thinking of only a part of the story, probably Dan is American. ;)
Here’s the underlying foundation of why having a reserve currency used for the global purchase of a commodity good is advantageous for the issuer of the currency:
For ‘normal’ currencies, ones that are not traded in volume outside of the national territory an increase in money supply without a corresponding increase in the productivity of the economy is directly inflationary – the prices of everything in that economy will rise until all the money is ‘used up’ in one way or another. That means that each loaf of bread will cost a little more, each car sold costs a little bit more etc. etc.
If however one can print money and have it, on the whole, remain outside of the national economy then there is no inflationary effect due to the printing of that money.
OK, you say, but what’s the benefit of having all that money in the rest of the world but not in the national economy.
Well asked Katherine. ;)
Here’s the benefit (please note that I am over simplifying hugely here!) because other economies want to use the reserve currency they must buy that currency by exchanging some of their euros, roubles, yen etc. for the dollars that they intend to use. Thus the reserve currency economy now has a load of yes, roubles etc, that they can use to buy stuff from around the world and because this money is not part of the national economy there is no inflationary effect.
The threat to the US is not anything to do with manufacturing and the reference to it is what tips one off to the location of the bloke who suggested it. ;)
The threat comes from the repatriation of the dollars that have been exported when they are no longer being used to purchase global commodities, or when the former reserve currency holder wants to buy stuff from Europe, China, etc. but now can not do so by exporting dollars.
So, the result is lots of dollars going into the national economy and a huge hit of inflation. In order to control inflation dollars are not printed so imports can not be made and the US is absolutely dependent upon imports, they run a massive trade deficit with the rest of the world.
It IS true that a devalued currency makes exports relatively cheaper (as long as the manufacture is made with local inputs of labour and raw materials) but the problem is that the world does not really want US exports anyway – that’s why they run such a huge trade deficit with the world.
If a European, Asian or African person looks around their home or place of work they will not see much that is made in the US and that would not change much in the short or medium term from force of habit and because the US has spent decades exporting its manufacturing ability.
When thinking about this issue I’d suggest trying a way of seeing the issue that I was taught at university:
Think of money as a good (a thing, a product) that is bought and sold and thus has a price. The exchange rate between currency and another is its price and also its value. The more of that good there is then the lower its value per unit to buyers and thus its price (exchange rate) will fall. Thus we can also understand that if the money supply increases by 50% in a year then, all else being equal the value will fall by a corresponding amount and thus we will get inflation of 50%.
The US has been able to print money without having an equivalent pricing effect because they have made, in effect, two products: national dollars and exported dollars. However they are really the same thing, completely interchangeable and so if those exported dollars come home there will be a catastrophe.
For the US it is worth fighting a series of wars to keep those exported dollars from returning home because the alternative, for the US, is horrendous. Of course the effect upon the rest of the world is immaterial because we are not the ‘Exceptional People’
Erika, you are slightly wrong in your assertion about Gazprom having moved almost al their clients away from dollar payments. Don’t worry many news outlets made the same mistake. ;)
Gazprom Neft has moved most of its clients away from dollar terms with most clients now paying in Euros and Belarus buying oil in rubles.
Gazprom Neft is a subsidiary of Gazprom with 96% shareholding in the business and is responsible for about 10% of Russian oil and gas production.
Gazprom is primarily concerned with gas production and while they are accepting payments in currencies other than dollars it is not the primary focus of the business. According to Gazprom, because most gas supply contracts are long term, multi year agreements changing the terms of payment is not so easy.
How can the people who talk about freedom, democracy & integrity continue to live without conscience, honor & dignity – particularly in the US? How long will America continue to pursue the dream of the NWO?
The so-called US military is the mercenary wing of the NWO. It has little to do with ensuring the security of the United States. It’s all about establishing private central banks & commercial banks (owned by the usual financial rulers) issuing the private fiat currency (central bank notes) & credit as a loan at interest and it is about achieving world dominance for these financiers to loot & enslave humanity. What happened to Sovereign money? What happened to freedom?
In return for its mercenaries & services, and to keep the cost low the USA was rewarded with the world reserve currency status. The dollar is nearing the end of its life cycle. The US economy only survives because of the petrodollar. Why are most Americans okay in living off loot? Is it because as long as they are getting their share of the loot & living as consumers & having fun then who cares? It is better to be a beggar than live as a slave or crook.
The dollar is important to the NWO only to the extent it keeps the US strong enough to field mercenaries & mafia that can back up sanctions, fund terror groups, and invade if need be, to help establish the control of the large international banks and their financial owners. How did the people who speak of freedom decide to enslave the world & themselves?
Sergey Glazyev has come out with a very well-timed article with this one. I find this article as an way-forward statement of ‘objectives’ that vindicates my earlier comments in Saker’s blog (where I noted that global order has 5 pointers:
(1) Since industrial revolution around 1750, world order is led by 1% AngloZionist Plutocracy primarily based in 5-eyes, squeezing 99% peoples’ livelihood & happiness, plundering natural resources and ruining ecology. They CONTROL GLOBAL POLITICAL POWER & ECONOMY.
(2) Except 5-eyes countries, 1% AngloZionist Global Plutocracy rule other countries by placing their camp-followers of country-specific Oligarchs as Ruling Elites. OLIGARCHS MAINTAIN & ENHANCE WORLD-DOMINATION OF 1% PLUTOCRACY, & ALSO INCREASE THEIR WEALTH & LOCAL POWER.
(3) Post-WWII AngloZionist world order represented by core members of BILDERBERG GRP., WHO ELIMINATE ANYONE CHALLENGING THEIR POWER, & EXERCISE ‘DIVIDE & RULE’ POLICY GLOBALLY. They spend billions of Dollars to ignite clash among 99% peoples based on geographical boundary, religion, culture etc.
(4) 1% Global Plutocracy + Local Oligarchy holds on to power and influence through CONTROLLING THE CURRENCY FOR INTERNATIONAL TRADE & CONTROLLING THE MASS MEDIA (Pound in 19th century, Dollar in 20th century).
(5) Among the 99% there exist a group of peoples about 2% who are knowledgeable, hard-working but immoral. THIS BAND OF ‘MANAGERS’ ARE THE FOOT-SOLDIERS (5TH COLUMNISTS) OF OLIGARCHY TO CONTROL ECONOMIC-POLITICAL-SOCIAL ASPECTS OF LIFE, AND THEY CRAVE TO GET INTO ‘OLIGARCHY’.
We, the 97% common peoples of the earth, look forward to the new world where liberty-equality-fraternity will be truly achieved by banishing global plutocracy & local oligarchy. RUSSIA & CHINA MUST PLAY THE LEAD ROLE IN THIS JOURNEY, & THE LEADERSHIP OF THESE COUNTRIES MUST NOT BETRAY THE ‘NATURE’ AS AN ENTITY & ‘HUMANITY’ AS A PHILOSOPHY, FOR THERE IS NO OTHER INTEREST THAT IS ABOVE MOTHER EARTH, THERE IS NO CONCEPT THAT IS ABOVE HUMANITY.
MAY ALLMIGHTY EMPOWER PUTIN & HIS EQUAL MINDED PEOPLE, AND XI & HIS COMRADES IN THEIR QUEST FOR THE IDEAL WORLD WHICH THEY HAVE TO BUILD BY PULLING BIG COUNTRIES LIKE INDIA-IRAN-INDONESIA-BRAZIL-ARGENTINA & SMALL COUNTRIES TO THEIR SIDE TO SHARE THE DREAM!
Anonymous Indian
It is odd why Glazyev should be advocating for BRICS and developing nation’s movement away from the USD as a global reserve currency (long overdue), yet the Russians are themselves in a unique position to start the process in a decisive and major way…by demanding and insisting on payment for gas to Europe in Russian roubles. That will not only prop up the Russian currency, it will help prise Europe away from US hegemony. What is Glazyev and other Russian elites close to Putin doing about that? Time for talking is over and it is time to act. The full spectrum dominance psychopaths are ruthless, relentless and inhuman and one cannot underestimate their resolve to destroy Russia and China. They are an existential threat to both and to the rest of humanity.
I also recommend Paul Craig Roberts’ latest article,
http://www.paulcraigroberts.org/2014/09/25/will-russia-china-hold-fire-war-alternative-paul-craig-roberts
In it Roberts says that there are various strategies that Russia and China could adopt to bring down the Anglo-American Empire before the point of a nuclear war is reached, and he suggests that they are not taking such actions because they are infiltrated with a fifth column of Atlantic Integrationists and neo-liberal ecnomists serving Western interests.
Mr. Glaziev is passing an opinion, part of which contains opinions put forward at other times by others.
The President of the Russian Federation has many advisors.
Excellent comments and remarks by many. I would like to simply strike at the root. Lacking an honest money, there can be no honesty in any other activity or institution. They will be corrupted by the fraud money. These two items always go hand in hand, an it can be no other way.
Thank you for this article.
It is a road map for the salvation of humanity.
Thanks again.
Paul Craig
“If the dollar lost substantial value, the dollar would lose its reserve currency status. Washington would not be able to issue new debt or new dollars in order to pay its bills.
Its wars and hundreds of overseas military bases could not be financed.
The withdrawal from unsustainable empire would begin. The rest of the world would see this as the silver lining in the collapse of the international monetary system brought on by the hubris and arrogance of Washington.””
Has Washington Roberts ever heard of the London Corporation and Rome?
http://www.in5d.com/40-outrageous-facts-most-people-dont-know.html
Anonymous @ 26 September, 2014 16:53
” The full spectrum dominance psychopaths are ruthless, relentless and inhuman and one cannot underestimate their resolve to destroy Russia and China. They are an existential threat to both and to the rest of humanity.”
” Time for talking is over and it is time to act.”
You appear to believe that talking and acting are mutually exclusive, that talking is not a type of action, that talking and action cannot be achieved simultaneously and that talking and action cannot be co-ordinated.
You also appear to believe that acting has not been taking place, since “it is time to act”.
You also appear to believe that the opponents are restricted to those who wish to impose full spectrum dominance and that such can be achieved.
You appear to believe that the opponents are homogenous and will remain so, where as in any dymamic system the only constant is change, and hence neither homogeneity nor full spectrum dominance can be achieved.
You also appear to restrict the chacteristics of the opponents and through omission conciously or unconciously obfuscate their weaknesses, which should have been adequately illustrated by various examples, even to lay persons.
They are human as many can attest, and can be destroyed including physically, although doing so will not in itself metamorphise the opponents.
You also appear to conflate resolve and ability to act.
As to the existential threat I would suggest you underestimate it as some would posit that the opponents are an existential threat to the biosphere.
How does the NWO plan to control & dominate the world?
This video series about money, the monetary system and global control through the financial system explains it well. It provides good insight into our money creation process, various players & Machiavelli financiers’ global domination plan:
http://www.youtube.com/watch?v=lT4VXF1XJYk
How did the USA become an element of the NWO? This video series explains it well:
Revisiting American History – Financial Empire
https://www.youtube.com/watch?v=CkQN4EVBXuw
The situation of the US and UK as countries running large persistent trade deficits, is inseparable from the conditions under which certain other economies: China, Germany some oil exporters, run persistent trade surpluses.
In the case of China and Germany the trade surplus is part of large sum of surplus value being extracted from the workers of these countries. A trade surplus by them could only be eliminated if either they raised real wages or invested this surplus internally. Given that the Chinese already invest around half their GDP, that is an unlikely avenue.
The US trade deficit is at the moment a precondition for the German and Chinese economies being able to market their surplus product.
It is of course feasible in principle for the exporting countries to finance capital investment in say Africa to create a market for their surplus. Or they could substantially raise real wages at home. The Chinese are doing this, but there is little sign of the German government taking that course.
But the position of the Dollar as a reserve currency and the US trade deficit can not be solved independently of the problem of insufficient domestic demand in the exporting countries.
Glaziev’s article tries to sketch a new world order designed to further peaceful development of humanity – and considering Russia’s recent history I believe he means what he says (contrary to the grandiose AZ political lies).
I like Glaziev’s realistic approach: The dangerous early 2020’s most likely refer to Putin’s succession and to the coming of age of China’s military power – two highly dangerous variables.
How I understand this article: Humanity is on the verge of becoming a planetary population and we need a corresponding political system. This is a first sketch which (hopefully) represents the ideas of a global power. If we manage to survive and create a viable system there is no doubt it will be quite different from Glazievs projections – but this article is a first step into new territory and I respect the honesty as well as the realism that it shows.
Here’s to hope.
@Dan Lynch
The Aussie dollar is not a reserve currency yet the Aussie economy is better than America’s. The Canadian dollar is not a reserve currency yet the Canadian economy is better than America’s. The Swiss Franc is not a reserve currency yet the Swiss economy is better than America’s. And so forth. Sergey needs to learn a whole lot more about economics.
I expected MBA’s to start chiming in with their hard won and expensively aquired pseudoscientic ideas.
The purpose of a reserve currency is to steal the productive work of all people.
The whole reserve currency issue is overblown.
Really? Is that why the Empire has initiated a multi-front Fourth World War to protect the status of the USD?
Economics, at best, is a social science akin to history or philosophy. I won’t ask you to get your head around that idea because I know that after a lifetime of expensive brainwashing you are thoroughly committed to your confused interpretation of the social reality of upward redistribution of wealth — specifically to yourself and the people you work for.
In general Sergey does not understand fiat money. There are advantages to your country’s currency being a reserve currency (control or influence over global financial systems) but there are also disadvantages.
What the hell is the disadvantage of owning everything on earth after two or three generations of the USD fiat dominion?
I’m sorry mate but your education was worthless. Your problem with Glazev is his failure to respect Orthodoxy of the economic variety.
Overall Glazev’s various ideas (hits and misses) are demonstrative of his understanding that all things in the realm of human affairs are interrelated.
What differentiates Glazev from his Western counterparts is instead of trying to boil everything down to a meaningless and incomprehensible abstract formula, he understands perfectly that the only equation that matters is human. All ‘economic’ calculations must be made in respect of the effect it has on people.
The Russian economic strategy has two primary pillars as far as I can discern:
First, Russia wants to prevent a sudden collapse of the global system and ensure continued rapid development and modernization of the Russian economy.
Second, Russia is preparing for the eventual demise of USD hegemonic system.
When the bubble finally bursts, who do you think will be most prepared?
Glazev also understands that Left-brained Chinese civilization is not necessarily an ally for Russia in this process. As it stands now, China stands to inherit ownership of everything. So long as the USD remains reliable they will have every incentive to remain committed to their objective of becoming Rent Collecters to the world.
The setup is Orwellian. Oceania, Eurasia and Easrasia will fight it out to the bitter end. In all cases, Russia is a natural ally of Producers. China and the US are natural allies of Parasites. At some point it will be in Russia’s overwhelming interest to collapse the system. I don’t believe Glazev or Putin are prepared to go that far but they will be ready when the physics of unsustainability finally catch up with reality.
It will be then, as in most often the case in any long war, that peasants will eat like kings while the cities will starve.
Speaking of George Orwell, who has heard of Yevgeny Zamyatin? It seems as though many of Orwell’s ideas might have been taken from a Russian.
Now in respect of Orwell, the man was clearly a visionary but I’ve never believed in English Firsts. Even as they try to rename ‘ether’ after some guy named Higgs (also trying hard to exclude a brilliant Indian mathematician named Satyendra Nath Bose), it occurrs to me that probably there is not a person alive today who has ever really conceived of something for the very first time. The Cult of First is Greek, Jewish and Western in origin. The forgetting and rediscovering truly got underway with the post Socratics. It is a fairly unique characteristic of our civilization and good to remember anytime anyone claims to be a genius.
This from the Guardian:
It is a book in which one man, living in a totalitarian society a number of years in the future, gradually finds himself rebelling against the dehumanising forces of an omnipotent, omniscient dictator. Encouraged by a woman who seems to represent the political and sexual freedom of the pre-revolutionary era (and with whom he sleeps in an ancient house that is one of the few manifestations of a former world), he writes down his thoughts of rebellion – perhaps rather imprudently – as a 24-hour clock ticks in his grim, lonely flat. In the end, the system discovers both the man and the woman, and after a period of physical and mental trauma the protagonist discovers he loves the state that has oppressed him throughout, and betrays his fellow rebels. The story is intended as a warning against and a prediction of the natural conclusions of totalitarianism.
This is a description of George Orwell’s Nineteen Eighty-Four, which was first published 60 years ago on Monday. But it is also the plot of Yevgeny Zamyatin’s We, a Russian novel originally published in English in 1924.
http://www.theguardian.com/books/booksblog/2009/jun/08/george-orwell-1984-zamyatin-we
Anonymous, data is the plural of datum, and datae is something else entirely. Anthropogenic climate destabilisation by the emission of greenhouse gases is, as the US National Academy of Sciences declared, and all other such Academies concurred, ‘settled science’. Denying it is very risky for humanity, to say the least.
niman, the USA will be pouring billions, directly or through its Gulf despotic puppets, into the terror attacks in Xinjiang. Of that you can be utterly certain. And the filthy sewer of the Western MSM will blame China for this terrorism, while condemning the same type of terrorists when they are attacked by the West. And, of course, ignoring or denying the West and the Gulf despotism’s role as the creators, financers and sponsors of jihadist butchers everywhere.
A very contradictory piece where, according to the author, solutions should be found within the very “international” institutions the zionazis totally usurped – if not outright privatized – for their own ends, & simply & arrogantly bypass them when not in their interests. And that “global warming” really spices the whole thing up ‘til it stinks!
Too bad if the author really believes what he preaches is possible.
The bold steps to get rid of the dollar as reserve currency are necessary if we are to de-fang the military monster.
I do have reservations about a ‘New World Order”. Decentralized power is far less risky. The great good that a strong central, international cd do is so often dwarfed by the great evil also possible.
Let us stick to multi-polar sovereign govts.
I agree with Dan Lynch and his MMT perspective. Glazyev needs to start grokking the fact that Russia and the US are sovereign currency issuers. The US can self fund whatever cockamamie plans they have pretty much at will, where did the 13 trillion to prop up the banking system come from for example? Where is the collapse and hyperinflation? Russia needs to use it’s own currency in MMT fashion to internally build it’s defences against the west. Here is a good article on why the reserve currency issue is nonsense and a red herring:
http://mythfighter.com/2012/10/25/much-ado-about-nothing-the-end-of-the-dollar-as-reserve-currency/
“The study of money, above all over fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.”
– John K. Galbraith
This paper clearly explains that we are being intentionally and systematically misled about the nature of money and about the role of central banks and commercial banks in the monetary system. In reality, the central banks’ (e.g. Federal Reserve Bank) historical origin and role had more to do with the desire of private bankers to control and coordinate the process of private sector money creation. That most money is created in the private sector is something that central bankers like to gloss over and explain in a distorted and unnecessarily convoluted way. Central bankers do so by avoiding any mention of private money creation or credit creation, and by pretending instead that central banks have a monopoly to create money. Textbook authors distort the process of money creation, using the rhetoric of the inappropriate loanable funds model. Their account of the role and legal status of central banks is highly selective and biased. Alternative monetary systems are hardly ever seriously discussed. Central banks & so called governements serve the interests of the banking community.
The veil of deception over money: how central bankers and textbooks distort the nature of banking and central banking
http://www.paecon.net/PAEReview/issue63/Haring63.pdf
Another good MMT article showing why a basket of currencies is just another way of giving up national currency sovereignty. Very long but informative.
http://bilbo.economicoutlook.net/blog/?p=5785
“The study of money, above all over fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.”
– John K. Galbraith
This paper clearly explains that we are being intentionally and systematically misled about the nature of money and about the role of central banks and commercial banks in the monetary system. In reality, the central banks’ (e.g. Federal Reserve Bank) historical origin and role had more to do with the desire of private bankers to control and coordinate the process of private sector money creation. That most money is created in the private sector is something that central bankers like to gloss over and explain in a distorted and unnecessarily convoluted way. Central bankers do so by avoiding any mention of private money creation or credit creation, and by pretending instead that central banks have a monopoly to create money. Textbook authors distort the process of money creation.
The veil of deception over money: how central bankers and textbooks distort the nature of banking and central banking
http://www.paecon.net/PAEReview/issue63/Haring63.pdf
-hoops, in your post about creating money and how Russia can do the same as the US and create money to do as the US you are wrong.
You are, like many people, getting confused between an economy that creates its own currency (money) and those economies that, in addition to creating their own money are able to have that money used externally.
The US is able to fund its ‘adventures’ and its non-productive national economy because it keeps the money it creates, in the whole, outside of the national economy.
If Russia were to print money to pay for its adventures then the scheme would collapse due to inflation because its money is not much used outside of Russia.
For an explanation, in very simple terms, of this mechanism see my post above where I go through this.
The Russians, by promoting the idea of the use of a basket of currencies, seek to reduce or remove the option taken by the US. The US effectively get the rest of the world to pay for their adventures and to subsidise a non-productive economy. Rightly, Russia understands that this is unhealthy for the world as a whole.
Check out my notes above about how money can be seen as a ‘good’ and how thinking in these terms makes understanding what is going on much easier.
“A very contradictory piece where, according to the author, solutions should be found within the very “international” institutions the zionazis totally usurped – if not outright privatized – for their own ends, & simply & arrogantly bypass them when not in their interests. And that “global warming” really spices the whole thing up ‘til it stinks!”
I agree, very fishy indeed. I’m starting to wonder if this guy isn’t 5th column. Quite frankly, this article is a major disappointment, especially after all the other articles I read from him previously that were more or less bang on money.
What he writes here sounds all kind of nice until you get to the details, where the devil always hides.
Three things that stand out; 1) Religion and Politics should never-ever mix 2) You can’t rehabilitate a system by using the very same corrupt institutions of that same system you’re trying to reform 3) Global Warming is not only bogus, it’s an insidious tool of control created by the NWO, it was officially introduced back in 1992 at the Rio Earth’s Summit, which produced documents such as the now infamous Agenda 21. These are very same people this Sergey claims to be fighting against.
Things that make you go hmmm: interestingly enough, brushing throw the Summit’s agenda, I read that they created a number of Follow-Up Mechanisms [of implementation] one of which is named: “Commission on Sustainable Development,” I wonder if this is the same type of “sustainable development” Sergey keeps hammering on his article.
With advisors such as these no wonder why Mr. Putin’s been misfiring all over the place the way he’s done in the past four months or so. And Strelkov is absolutely right; the 5th columns must go.
PS: Long time reader – first post – Hello Saker and Guests.