The Gold Ruble-A Game-Changer

At the beginning of March, Putin announced that payments for all Russian gas exports will henceforth be done in rubles. Then, came the bombshell – the ruble will be linked to gold, at the rate of 5,000 rubles to 1 gram of gold!  At the time of the announcement, the ruble/USD exchange rate was 150 to the USD. Within a month, it fell to around 75- back to the level it was before the start of war. It is expected to strengthen even more in the days ahead. This announcement, backed by the fact that Russia is a super massive producer of a variety of needed resources ranging from energy to food to metals, etc, spelt the end of the dollar dominance regime that has existed since 1975. In addition, sales to “unfriendly countries”- meaning the West has to be paid in rubles, much to the annoyance of the Rockefeller Empire.

So, let us analyze the financial strengths and weaknesses of these two blocs. Accordingly, let´s ask two basic and always ever-important questions since time immemorial, i.e. Cui bono ?/who benefits? And cui nocere? /who loses? To find some answers, let´s take a closer look at some of the consequences of the West-mandated Russian “default”

Absent Russia

Russia currently exports many hundreds of key produce 101% essential for Western countries as we know them today. All hell will break lose the instant Russia trades less or stops trading altogether with the 20% of the Western world… while openly trading and funding itself with the remaining 80% without using the dollar/euro financial system but their new Bretton Woods III arrangement instead. As a matter of fact, the US has already banned Russian ships while other Western “unfriendlies” would follow.

Inflation

The knee-jerk reaction to the above will be further unmitigated money printing with readily visible impact on the Western world while middle-class incomes collapse behind the very thin productive veneer of Western consumer economies.

Non-Payment

Investors in Russian defaulted debt (think Western companies & banks) will not get paid a single cent on Russian debt instruments per sé… nor possibly neither from their Credit Default Swap (CDS) hedge that they most probably bought for CYA “insurance” purposes. Furthermore, investors would need to make their claims also against the blocking banks thus definitely facing an utterly complex yet most probably unsuccessfully legal road with corresponding expenses. All the while Russia will no longer accept sizable/freezable dollars or euros for its much-needed produce … only rubles or gold bullion from the many Western “unfriendlies”…

Bye-Bye SWIFT

Russia has already replaced the SWIFT payment messaging system by its own equivalent SPFS which apparently works just as smooth as 52 foreign organizations from 12 countries have joined.

IPR Rights

Russia will take full advantage and make full use of patents, models, intellectual property rights, designs, etc. with no compensation per Presidential Decree No 299, 6 March 2022.

Property Rights

The Western financial world has openly declared that property rights are no longer valid so, for example, dollar and euro and other bank accounts anywhere – or other assets — are vulnerable to freeze / seizure.

Ukraine Claims

 Another problem for bondholders and creditors at large is that Ukraine may lay a claim to Russian assets in international courts (a.k.a. UK courts…) to pay for the rebuilding of the country.

Corporate Debt Defaults

 a probable “avalanche” of Russian corporate debt defaults given that the US is taking a hard line and banning American banks from processing payments. There were roughly $98 billion of Russian corporate foreign-currency bonds originally outstanding as the war began in February, while Western governments have already frozen at least 50% of the $600+ billion Russian stockpile of foreign reserves.

Massive Migrations

Europe better react ´efficiently´ to a sudden exposure of many millions of unprecedented & unexpected migrants for which it is not anywhere closely prepared for either politically or economically… if it could ever be.

Oil & Gas & Coal

Not having the “right” Russian grade fuels which EU refineries, power plants and equipment specifically need means seriously upending all manufacturing and production, food, heating, power availability, A/C, tourism, etc. etc. with freezing cold and severe scarcities in Europe for too long a period for even to consider finding valid alternatives, if any exist, in a coming logistical nightmare; let alone achieving self-sufficiency with relatively climate-friendly fuels all year round. So Europe wants to angrily divorce Russia while conveniently forgetting the many offspring it has to feed. Some pundits are entertaining the idea of $200 dollar oil… meaning that Russia could export less fuels than today but – counter-intuitively — still collect much more.

Reserve Currency Blues

This obviously is affecting not only the US dollar de-dollarization process but also the euro, the GBP and the yen. The idea being that these reserve currencies – with Russia absent – will necessarily lead to implosion as their underlying economies & finances will keep performing ever worse with no reasonable future in sight.

US Mission Impossible

US finances rely on foreigners constantly lending the US huge amounts of ever-growing money non-stop. In sum, since 2008 alone, at negative effective rates the US has borrowed $18 trillion from foreigners… who now might not renew at least some of such loans. Furthermore, foreigners keep about $16 trillion in overseas bank deposits to finance international transactions. And while struggling with highly adverse conditions in the US economy, simultaneously the Federal Reserve also has to be perceived as un-winding a $9 Trillion dollar balance sheet. The US stock market now trades at nearly thirty times earnings with foreigners also having enormous exposure to it and real estate markets also.

On the other hand, since the get-go Europe´s ECB has found itself constantly defying the laws of gravity. But Europeans have been doing this for decades – shenanigans included — until they reach the end of the road where the proverbial can-kicking theater stops dead in its tracks with no further gimmicks left. Europe at large is a very clear loser that at this point in some respects should be considered a US Protectorate. Russia has started a whole new ball game.

So who wins? The short answer is, the new Russia-led Bretton Woods III economy & financial system, including China and the BRICS. . Not only that, Russia’s oil, gas and coal exports are  now earning DOUBLE what it earned before the war. Whereas before the war, the EU used to pay Russia nearly $12 billion per month for its purchases of Russian oil, gas and coal.. It is now earning $23 billion , for LOWER VOLUMES of sales of its oil and gas. This is ONLY from the EU. What about Russia’s exports to the rest of the world?

So who loses? Again, the short answer seems to be the Western economies & their financial systems at large, most particularly Europe.

From its planning stages, U.S. diplomatic strategists viewed the looming World War III as a war of economic systems. What side will countries choose: their own economic interest and social cohesion, or submission to local political leaders installed by U.S.

In the face of all this political meddling and media propaganda, how long will it take the rest of the world to realize that there’s a global war underway, with World War III on the horizon? The real problem is that by the time the world understands what is going on, the global fracture will already have enabled Russia, China and Eurasia to create a real New World Order that does not need NATO countries and which has lost trust and hope for mutual economic gains with them. The military battlefield will be littered with economic corpses. Dollar hegemony seems to be the position that has just ended last month very abruptly.  This gave America a free ride and it all ended  when the United States grabbed Russia’s reserves having grabbed Afghanistan’s foreign reserves and Venezuela’s foreign reserves and those of other countries.

And all of a sudden, this means that other countries can no longer safely hold their reserves by sending their money back, depositing them in US banks or buying US Treasury Securities, or having other US investments because they could simply be grabbed as happened to Russia. So, all of a sudden this last weeks, you’re seeing the world economy fracture into two parts, a dollarized part and other countries that do not follow the neoliberal policies that the United States insists that its allies follow. We’re seeing the birth of a new dual World economy.

And nobody expected that it would happen this quickly. Nobody expected that it would be the United States itself that ends de-dollarization. Well, as President Putin and Lavrov have said, the fighting in Ukraine isn’t really over Ukraine at all. It’s a fight over what shape the world will take and whether the world will be unipolar or, as it now appears, multipolar. 

So, the American war in Ukraine is really a war against Germany. Russia is not the enemy. Germany and Europe are the enemy and the United States made it very clear. This is a war to lock in our allies so they cannot trade with Russia. They cannot buy Russian oil. They must be dependent on American oil for which they will have to pay three or four times as much. They will have to be dependent on American liquefied natural gas for fertilizer. If they don’t buy American gas for fertilizer, and we don’t let them buy from Russia, then they cannot put fertilizer on the land and the crop yield will fall by about 50% without fertilizer.

And so, the effect of this war has been to lock the NATO countries into dependency on the United States because the great fear of the United States in the last few years is that as America is de-industrializing, these countries are looking to the part of the world that’s growing, China, Central Asia, Russia, South Asia. And the United States feared losing control of its satellites mainly in NATO, but also in South America. So, it sanctioned and blocked their ability to buy non-US energy. They’re blocking their ability to buy non-US food, blocking their ability to invest in or use their surplus to get prosperous by investing in China, Russia, or Eurasia. So, this is basically a war of America to lock in its allies. What is happening in Ukraine today is an echo of the agony of the US ruling elite – the Rockefeller network of power – which cannot accept that it will no longer be a world leader. This is becoming clear to everyone. What´s probably 100% safe to assume is that  the two families and their western strategists and its establishment elites have all acted and reacted to Ukraine events in a very childish manner and have not thought out the consequences of their respective decisions far enough and well enough. In other words, traditional Europe has cut its nose off to spite its face. Go figure.

This is America’s great power grab, and it realizes, when it can create a crisis and tell the Global South or poor countries your money or your life. This is how most of the great property grabs and conquests have been made throughout history. This is to say to the rest of the world, you know, we’ve got you completely, but you don’t have any choice, your money or your life. We’ve got you trapped.

 In a bout of Russo-phobic hysteria, the ruler of America and the West, David Rockefeller Jnr, played his last “trump ace” in the hybrid war against Russia. Having “frozen” Russian foreign exchange reserves in custody accounts of western central banks, financial regulators of the US, EU, and the UK undermined the status of the dollar, euro, and pound as global reserve currencies. This step sharply accelerated the ongoing dismantling of the dollar-based economic world order.

Currently, the US is fighting to maintain its dominance, but just as Britain previously, which provoked two world wars but was unable to keep its empire and its central position in the world due to the obsolescence of its colonial economic system, it is destined to fail. The British colonial economic system based on slave labor was overtaken by structurally more efficient economic systems of the US and the USSR. Both the US and the USSR were more efficient at managing human capital in vertically integrated systems, which split the world into their zones of influence. A transition to a new world economic order started after the disintegration of the USSR. This transition is now reaching its conclusion with the imminent disintegration of the dollar-based global economic system, which provided the foundation of the United States global dominance.

 Transition to the new world economic order will likely be accompanied by systematic refusal to honor obligations in dollars, euro, pound, and yen. In this respect, it will be no different from the example set by the countries issuing these currencies who thought it appropriate to steal foreign exchange reserves of Iraq, Iran, Venezuela, Afghanistan, and Russia to the tune of trillions of dollars. Since the US, Britain, EU, and Japan refused to honor their obligations and confiscated the wealth of other nations which was held in their currencies, why should other countries be obliged to pay them back and to service their loans?

In this hybrid war, economic warfare and informational/cognitive warfare are key theaters of conflict. On both of these fronts, the US and NATO countries have overwhelming superiority.

The foundation of Russian-Chinese strategic partnership is common sense, common interests, and the experience of cooperation over hundreds of years. The US ruling elite started a global hybrid war aimed at defending its hegemonic position in the world, targeting China as the key economic competitor and Russia as the key counter-balancing force. Initially, the US geopolitical efforts were aiming to create a conflict between Russia and China. However, sovereign interests of Russia and China logically led to their growing strategic partnership and cooperation, in order to address common threats emanating from Washington. The US tariff war with China and financial sanctions war with Russia validated these concerns and demonstrated the clear and present danger the two countries are facing. Common interests of survival and resistance are uniting China and Russia. The strategic partnership of Russia and the PRC, which is enhanced by the coupling of the One Belt One Road with the Eurasian Economic Union, will become the foundation of President  Putin’s project of the Greater Eurasian Partnership and the nucleus of the new world economic order.

The stunning spectacle of the EU committing slow motion hara-kiri is something for the ages. It is actually about the Empire of Lies-detonated demolition of the EU, complete with subsequent rerouting of some key Russian commodities exports to the US at the expense of the Europeans. That translates in practice into the Empire of Lies shaking down its wealthiest – Western – clients/puppets. Russia of course is too powerful militarily. The Empire badly needs some of its key exports – especially minerals. Mission Accomplished in this case amounts to nudging the EU into imposing more and more sanctions and willfully collapsing their national economies, allowing the US to scoop everything up.

It was quite enlightening to juxtapose the coming geoeconomic turbulence – the EU obsession in bypassing Russian gas and the onset of Rublegas – with the real reasons behind Operation Z in Ukraine, completely obscured by Western media psyops.

A former, retired US CIA agent had this to say by pointing out, “the whole Ukraine issue is over hypersonic missiles that can reach Moscow in less than four minutes. The US wants them there, in Poland, Romania, Baltic States, Sweden, and Finland. This is in direct violation of the agreements in 1991 that NATO will not expand in Eastern Europe. The US does not have hypersonic missiles now but should – in a year or two. This is an existential threat to Russia. So they had to go into the Ukraine to stop this.  Next will be Poland and Romania where launchers have been built in Romania and are being built in Poland.” NATO provocations are so extreme Russia had to place their nuclear missiles on standby alert. This is a gravely serious matter. But the US ignored it.

This war is going to have the effect of plunging millions into poverty, hunger and hopelessness. The use of food as a weapon is an age-old tactic, and a very effective one. Those with food can make those without food do things that go against their wishes. It’s a case of “follow my orders, or starve”!

The following article highlights the journey the globe is embarking on.