By John Griffing
Former President of the European Central Bank Wim Duisenberg, echoing self-professed "Father of Europe" Jean Monnet, several years ago said that "monetary union" must go hand in hand with "political union." Revealed in these remarks is an objective, an agenda shared by all the most prominent members of the western banking class.
The objective of Western financiers at this moment in history is not to "fix" the system, but to run the clock out in favor of "solutions" devised in dark, dusty rooms - solutions which will enslave the rest of the developed world, including Russia. Nuclear weapons are of no use when the homeless desperation of poverty and famine are the enemy.
Consider the facts: American and European debt is already at saturation point and finding new buyers will be difficult, especially since China and Russia oppose new Anglo-American-European Quantitative Easing (QE) schemes and own the table on which the house of cards that is Western civilization sits. And because debased American and European currencies mean a decline in the value of current foreign holdings of euro- and dollar-denominated debt, the incentive to shed such assets, not buy them, will be in play. What then can be the predictable result of QE at such a fragile time in global economic history? In short, chaos.
Why then, would western bankers pursue more inflation, more printing of worthless fiat dollars, in spite of the historical consequences (Bolvia, Weimar Germany) of these actions? Those at the helm are not insane. These are educated men and women. How can the masters of finance support something they know will end in disaster, unless disaster is in some sense the object?
This hypothesis, if correct, would further mean that these individuals had some sort of plan to attempt containment and direction of the resultant chaos toward a premeditated solution.
Like a disease invented for the intended cure, so do western bankers plan to reorder the global financial system according to their own designs.
It is perhaps appropriate then that current proponents of financial integration are the same individuals who over the last few decades advanced a movement to liberalize global capital markets with the object of increasing capital mobility to the point where sudden shifts in capital flows could have untold consequences, causing exchange rate volatility, disrupting world trade, and creating an artificial need for a common currency.
Under any global financial regime, Russia will be reduced to a "serf," forced to serve the financial plantation of a new monetary order made for western bankers, and controlled completely by western bankers. Unlike the fiat system, where multiple currencies float against a primary unit of exchange like the dollar, the discussions currently underway center on a single medium - one currency for a single, global marketplace. The vision of global "brotherhood" popularized in 19th Century academia will finally be a reality, only a lopsided version of this reality will dominate.
Some in Russia and China, among a long list of other trading nations, are openly advocating a coordinated destruction of the US Dollar as the world's reserve currency because they rightly see the problem with a unipolar financial system. But this is the wrong move if Russia seeks to counter American financial hegemony.
Conversely and counter-intuitively, if Russia and China dump the US Dollar as they seem intent on doing, a chain of events that will actually accelerate the coup d'etat envisioned by Western bankers will be set into motion. It is therefore essential that Russia and its associate states continue to support the Dollar, however bloated and excessively liquid it may become.
A collapse of the Dollar will not be without supply chain disruption, mass unemployment, trade wars, and general instability. Revolutions are likely, as US consumer spending presently propping up the budding consumer cultures of Russia and China will quickly dissipate - taking the rising Russian standard of living down the proverbial tubes. Oil wealth in Russia is no bulwark against global financial contagion.
The present reality must be acknowledged: The world economy currently cannot exist without the United States of America. Collectively, the United States buys 20 percent of all imports. Though this may sound insignificant, compare this figure to the EU, standing at 16 percent of all imports, or Japan at 5 percent of all imports. Emerging economies like China are net exporters, with some 60 percent of their GDP from exports; therefore, their total contribution to world economic growth is small. When trade is broken down by development category, the United States takes nearly half of developing nations' exports. But foreign dependency on the US economy extends far beyond mere trade connections. Foreign assets in the United States total $23 trillion, of which $4 trillion are securities. Foreign-owned companies in the United States now claim $3.1 trillion in annual receipts. Russia alone has 45 percent of its currency reserves in US Dollars.
Countries like the United Kingdom and Japan repatriate 20 percent of these revenues, making their American operations economically vital. Because of these interrelationships it can be deduced that a decline in US consumer spending would have dire consequences for many nations worldwide. The present financial crisis has proven this much. Just as economists were telling the world that growth was "decoupling" from the American business cycle, the US housing bubble burst, spurring mini-bailouts in many industrial countries, and even China. Indeed, a new International Monetary Fund (IMF) report demonstrates that the world economy is still very much intertwined with US consumer trends. G-7 recessions are still 60 percent correlated with US recessions, and the stock prices of industrial nations are still 70 percent correlated with the S&P 500. The world is hopelessly dependent on America.
How then, can Russia maintain financial independence, and still support the Dollar, which seemingly perpetuates the hopelessly disproportionate leverage of the American banking elite in relation to the rest of the world?
Russia must encourage the development of new consumer markets and incentivize higher levels of consumption in its sphere of influence, which will gradually reduce the dependency of many export-dependent economies on U.S. consumer spending. The new flat tax system installed by the Federation is a good first step in creating the conditions for a consumer class.
A nation without control of its money is a nation without any real power. How can a nation project power without the ability to guarantee the liquidity necessary to mobilize military elements? If the monetary system is globalized, the locus of power will also be globalized, portending an end to Russian leadership in every respect. Efforts to destroy the present financial system in order to realize the fantasies of detached intellectuals must be resisted at all costs. If prosperity and economic well-being are the object, monetary union should be opposed. Surrender of sovereignty is not easily undone.
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