This page has been archived and commenting is disabled.

On The Path To War

Tyler Durden's picture




 

Submitted by Chris Martenson of Peak Prosperity,

The US is clearly now pushing Russia towards war. But if you read the signs correctly, Russia has been preparing for exactly this outcome for many years.

Out of several reasons that US power brokers specifically -- but western power brokers more generally -- are deeply unhappy with Russia right now is that Russia is committing a cardinal sin: it is openly, brazenly calling for an end to dollar dominance and has moved aggressively with China to achieve that aim.

No oil-rich country that has tried to move away from the dollar in the past twenty years has managed to do so without being attacked by the US, suffering a regime change, or being ruined by sanctions. In some cases, all three.

Not only has Russia managed to secure a string of heavy-duty bilateral trade and currency swap agreements over the past year, but they've done so despite ever-increasing threats and responses from the US and its allies. And frighteningly, the equity markets in the West are completely ignoring the nested set of risks that accompany these moves and countermoves by two geopolitical heavyweights, which range from punishing trade wars (already underway), to electronic warfare, to an actual shooting war.  

Today's "Markets"Are Untethered From Reality

I put the word "markets" in quotes above because whatever it is that passes for an equity market these days, it bears little resemblance to that of times past.

The "markets" today are using the skimpiest of evidence to support their tendency to feast on fresh central bank liquidity by either levitating higher or failing to go down much on even the most horrendous of geopolitical, economic or environmental news.

As a prime example, in the pre-market on Friday, 8/7/14, beginning in the wee hours of the morning, the S&P futures ramped up 20 points off the lows by market open, and then poured on another 20 points in the cash market.

The reason given?  The possibility of calm in Ukraine:

Pre-market Dow reversal illustrates Ukraine sway over markets

Aug 8, 2014

 

In a sign of just how much stock market moves are being driven by geopolitical headlines from abroad, pre-market futures for the Dow flipped from sizable losses to modest gains after reports that Russia is moving to de-escalate the Ukraine crisis.

 

Increasingly, every tick of the tape on Wall Street is being driven by news flashes related to bad things happening overseas, including the Russian role in the 5-month-old crisis in Ukraine.

 

“We are in one of those moments where markets sway on war or no-war rumors,” says Gary Kaltbaum, president of Kaltbaum Capital Management.

 

The Dow, which is coming off a 75-point drop Thursday, knocking it down 4.5% from its July 16 record close, did an about face this morning, going from down 100 points in pre-market trading to up 42 points.

 

Wall Street is citing the following news reports for the rebound:

 

According to Bloomberg: “U.S. equity-index futures rebounded after RIA reported Russia is making efforts to de-escalate the Ukraine conflict. RIA cited Russian Security Council head Nikolai Patrushev.”

 

(“Russia will continue to make all efforts for a very fast de-escalation of tensions,” Nikolai Patrushev told RIA, a state-run Russian news agency.)

That is about as poor of an excuse for a major market reversal as any I have run across lately. They might as well have said that Cher is considering expanding her next tour by four cities as being the "reason". 

For starters, consider the source.  Was it Putin himself?  No. Instead, it was the very same guy that the EU had just added to their sanctions blacklist a few weeks ago:   

EU Blacklists Russia’s Federal Security Chief, Security Council Secretary

Jul 26, 2014

 

MOSCOW, July 26 (RIA Novosti) – The European Union has added key Russian officials to the blacklist, including Russian Federal Security Service chief Aleksander Bortnikov and Russian Security Council Secretary Nikolai Patrushev.

Did he say anything concrete, such as that meetings were going to be held and that constructive solutions were on the table that Russia might find agreeable?

No. All he parroted was the standard Russian talking point, which Putin himself has used many times, that Russia hopes for a rapid return of peace to Ukraine.

That's it...and so I have to ask: That's worth forty S&P points?

On the other side of the ledger, the one pointing to escalating tensions, we have a lot of very credible items that any sane person would easily think vastly outweigh a single talking-point sentence by a Security Council member.

For example, consider this:

Moscow’s food ban could cost EU $16bn, spark crisis in Europe

Aug 7, 2014

 

Russia’s ban on agricultural food imports could cost the European Union about $16 billion (12 billion euro) and drag the continent into the crisis, officials warn.

 

The Russian government signed a decree on Thursday which bans the import of beef, pork, poultry, meat, fish, fruits and vegetables, cheese, milk, and dairy products [for one year] from the EU, US, Australia, Canada, and Norway.

Now why would a country that's about to announce that it's going to seek a rapid return to peace in Ukraine on Friday, pass this particular and Draconian decree on Thursday? That just doesn't make sense. And of the two, if I get to choose between a year-long food ban and a single sentence by a Security Council member, I'm going to have to go with the idea that the food ban is telling us more about the actual state of things.

Such a ban will cause a lot of hardship in Russia. We can expect food price spikes for sure, and possibly even food shortages, too.  Therefore, it was not done lightly.

This food ban followed the cancelation of a Russian defense deal by Germany two days prior:

Germany Just Canceled a Defense Deal With Russia - Who’s Next?

Aug 6, 2014

 

As European countries try to balance their economic dependence on Russia with their desire to punish president Vladimir Putin for meddling in Ukraine, Germany has stepped ahead of the pack to poke the bear in the eye, canceling a €123 million ($165 million) defense deal with Moscow earlier this week.

 

In response, the Kremlin has said it will sue Rheinmetall, the German defense firm that was to supply parts for a military training facility for the Russian military. The deal, signed in 2012, was suspended by Berlin shortly after the annexation of Crimea in March; this week’s move permanently bars the delivery of the equipment. Last week the European Union banned all arms exports to Russia, but that only covers future deals.

The scuttled deal was simply for parts for a training facility, the sort of thing that might just as easily have been covered under normal import and export trade agreements. But since the facility was military in nature, it fell to the sanction sword.

And only a day prior to that, Putin called for an emergency meeting of the UN Security Council:

Russia Calls For Emergency UN Security Council Meeting As Troops Fortify On The Border

Aug 5, 2014

 

Russia called for an emergency meeting of the United Nations Security Council on Tuesday over what it called an urgent humanitarian situation in Ukraine, according to a report from the Russian news agency ITAR-TASS.

 

"We are convening an emergency meeting of the United Nations Security Council on the humanitarian situation in Ukraine," Russian Ambassador to the U.N. Vitaly Churkin was quoted as saying.

 

Earlier on Tuesday, the Russian Foreign Ministry said the U.N. and the International Committee of the Red Cross  expressed "readiness" to discuss its plan to deploy a "humanitarian mission" to Ukraine, which some consider to be a pretext for an invasion by Russian forces.

 

The White House has openly worried about what would be, for all intents and purposes, an invasion under the guise of a "peacekeeping" operation.

 

"We’ve seen a significant re-buildup of Russian forces along the border, potentially positioning Russia for a so-called humanitarian or peacekeeping intervention in Ukraine,"  deputy national security adviser Tony Blinken said last week.

Those quotes by US officials make it sound unreasonable for Russia to be considering a "so-called humanitarian intervention" into Ukraine.  And most in the West might agree with that assessment because the western press is virtually unanimous in its failure to cover the actual humanitarian crisis that is happening over there right now.

But other countries are not ignoring it. For instance, as reported by the Japanese press, we find that entire cities, packed with hundreds of thousands of civilians, are under constant bombardment by Kiev forces:

East Ukraine city dying under siege

Aug 5, 2014

 

ONETSK, Ukraine —

 

Residents say the eastern Ukrainian city of Luhansk is dying. The power grid was completely down Monday, the city government said, and fuel is running dry.

Store shelves are emptying fast, and those who haven’t managed to flee must drink untreated tap water. With little medicine left, doctors are sending patients home.

 

As Ukrainian government forces slowly tighten their ring around the city — one of two major pro-Russian rebel strongholds — traveling in and out has become a perilous undertaking.

 

In an impassioned statement released over the weekend, mayor Sergei Kravchenko described a situation that is becoming more unsustainable by the day.

 

“As a result of the blockade and ceaseless rocket attacks, the city is on the verge of a humanitarian catastrophe,” Kravchenko said. “Citizens are dying on the streets, in their courtyard and in their homes. Every new day brings only death and destruction.”

 

Luhansk, a city of more than 400,000 people at peacetime, now has seen its population dwindle as citizens flee violence and deprivation. Located about an hour’s drive from Russia, which Ukraine insists is supplying rebels with weapons and manpower, Luhansk is being fiercely fought over by all sides of the conflict.

What would the US, the UK, Germany or Japan do if several million of their native-tongued people living right along their border were under siege by a possibly illegitimate government force that had openly expressed its desire to kill as many of those people as it could?

I think we all know the answer to that: they'd already be in there with humanitarian and possibly also military support.  Heck, the US invaded an entire country 7,000 miles away under the pretext that Iraq might have WMD's that could someday, possibly, be used against American interests. And Iraq never once openly threatened the US.

But to top it all off, there was a second recent news item which was the most frightful bit of news that anybody in Europe could ever hope to hear. And if it happens, it will be an open act of war against Russia by Ukraine:

Ukraine Open to Halting Gas Flows in Russia Sanctions

Aug 8, 2014

 

Ukraine said it’s open to halting Russian gas supplies to Europe through the country as it plans sanctions on President Vladimir Putin’s government as part of its battle against pro-Russian separatists.

 

The list of possible sanctions includes a “complete or partial ban on the transit of all resources,” Prime Minister Arseniy Yatsenyuk told reporters in Kiev today in response to a question about halting gas flows.

 

Measures may also include a ban on Russian planes overflying Ukraine, he said, while defense-industry cooperation will be reduced. A draft law, which requires parliamentary approval, also proposes restrictions on ships entering Ukrainian waters.

Good grief!  If Ukraine halts the gas flows, Europe will be in big trouble and very quickly. I have to assume that EU ministers are reading the Ukraine leadership the riot act.

But this news is also a very strong sign of escalation, not de-escalation. And so the 'market' response to the statement by Russian Security Council Sec?retary Nikolai Patrushev is really grasping at straws. For my money the gap between the news events and the 'market' reaction is so huge that I have to wonder if there isn't a different explanation that makes more sense, such as a Plunge Protection Team intervention at a critical moment as US stock futures were headed over a cliff (which they seemed to be before the miracle reversal).

However, even if such interventions are occurring, they cannot change the tide. Something has been put in motion that cannot be easily undone, And Russia is furiously signing deals that are a far greater risk to the US than anything happening in some remote corner of eastern Europe.

In Part 2: The End of Dollar Dominance? we look at the reason that suddenly makes the US' reckless aggression towards Russia much more understandable: Russia is pivoting from West to East, and in the process, seeking to diminish the dollar's supreme regime as the world's reserve currency. When viewed through this lens, Russia's prodigious string of recent trade and energy deals with eastern nations suddenly looks very calculated, and the US' itchy nervousness in response makes more sense.

What are the implications if we are entering the Peak Dollar era? One we know for sure is: today's "markets" are vastly under-pricing, if not ignoring altogether, that risk.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 08/13/2014 - 17:35 | 5089254 lasvegaspersona
lasvegaspersona's picture

I think you have this wrong Chris, it is the euro that has been readying for the day the dollar dies.

Wed, 08/13/2014 - 17:42 | 5089287 Cattender
Cattender's picture

Great Article! i agree 100% we are in deep shit as Americans right now..

Wed, 08/13/2014 - 17:49 | 5089335 Latina Lover
Latina Lover's picture

Russians know their history.  Westerners, be they Germans, British, French etc are always trying to conquer Russia and steal their resources.  The USSA, being nothing more than another western bankster gangster state, is just following the script.

Wed, 08/13/2014 - 18:05 | 5089399 max2205
max2205's picture

It's not just geo PPT SUPPORT, ITS ANYTHNG

If someone farts the PPT buys a lot of Spx

It is sickening to real traders

The idiots making money could never make money in areal market.

LET IT RIDE?

Thu, 08/14/2014 - 03:11 | 5091080 AldousHuxley
AldousHuxley's picture

https://www.youtube.com/watch?v=yyeOKxJBnSo

 

Old 1949 soviet cartoon.....same ole same ole story. war for control of oil.

Wed, 08/13/2014 - 22:47 | 5090576 Jack Burton
Jack Burton's picture

Another of your many good posts Latina Lover. Russia in history is the nation the western powers most invades and tries to conquer. Russians know this, and they see it all happening again. What makes me sick is America claims to be attacking Russia in self defense, as if Russia was doing anything other than trying to be left alone. They have some small interests in Syria, but over all, they are acting in their borders. America is opposite, invading and attacking in dozens of nations at once.

Wed, 08/13/2014 - 23:02 | 5090627 Think for yourself
Think for yourself's picture

Psychopathic Manipulation 101: Blame the victim

Thu, 08/14/2014 - 03:13 | 5091084 AldousHuxley
AldousHuxley's picture

Prussian Empire....the other white colonialists.

 

Meanwhile, Chinese going about their business of building empire in the east

Wed, 08/13/2014 - 23:41 | 5090724 Latina Lover
Latina Lover's picture

Jack Burton, we no longer live in a democracy (the republic is long gone), instead in an empire. And like all Empires, we keep expanding until we hit our limits and then collapse.  For the average american, collapse will be initially painful, but will greatly benefit the average person in the long run. We can go back to being a nation of honest, decent hard working people, instead of a militarized police state.

Thu, 08/14/2014 - 01:22 | 5090932 August
August's picture

And until that time, Reverend Jeremiah Wright remains correct.

Thu, 08/14/2014 - 01:23 | 5090934 Government need...
Government needs you to pay taxes's picture

I haven't seen the analysis of what % of the empire's population was lost to death/disease/starvation before it completely collapsed back to happy farmers.  Over/under at 50% for the next 'bubble'?

Thu, 08/14/2014 - 02:14 | 5090991 Manthong
Manthong's picture

President on track to surpass Tiger on outings?

I remarked on this on many occasions..

F’n bammy is out to out-do Tiger.

Thank God he is the leader of the free world.. but not a leader of the rest.

Thu, 08/14/2014 - 06:01 | 5091259 29.5
29.5's picture

He's not golfing enough, considering how much shit he's helped fuck up.

Thu, 08/14/2014 - 05:10 | 5091227 Frankie Carbone
Frankie Carbone's picture

Under. I will say 45 million, which is 15% of the population. That will be comprised of the most mindless of citizens, who being totally unprepared will be like a deer in the headlights of a freight train fast approaching them  on the tracks. 

Half of them will be done within 30 days. 

Thu, 08/14/2014 - 02:57 | 5091060 Sambo
Sambo's picture

Cancer spreads before it eventually kills the host. All empires are nothing but cancer on this planet.

Thu, 08/14/2014 - 08:04 | 5091449 andrewp111
andrewp111's picture

The USA is just piddling around here. Covert intervention and skullduggery, but no serious invasion. Eventually, Russia will be invaded by real conquerors, and it will be ISIS that moves on Russia through Central Asia after they have taken the Middle East.

Thu, 08/14/2014 - 09:21 | 5091798 Grimaldus
Grimaldus's picture

You are seeing the march of the bloody progressive criminals who have hijacked the FEDGOV.

The bloody neo-stalinist criminals are gearing up for much more death. Screaming progressives try to sate their blood lust killing millions of defenseless babies, the millions dead from progressive eco-murderers bringing back malaria, and destroying quality of life for all poor people with the progressive war on cheap energy but it is not enough, no progressives must continue the bloody path they crave.

Big government progressives=big government death. Power kills, motherfuckers. Witness Hillary Clinton's intentional murder of the ambassador to Libya and other Americans just to cover failed policy of arming the enemies of the United States, the murdering fellow travelers of totalitarian islam. Hillary says "what difference does it make?" What a cold blooded murdering bitch and she wants more blood, you can be sure.

Hillary is pissed off the USA is not killing more in Syria. Bloodthirsty off the fucking charts man.

Check the pile of corpses big government leftists claim in just the last hundred years:

http://hawaii.edu/powerkills/20TH.HTM

And they want more. Coming soon, Bill Ayers will make good on his plan to kill 25 million Americans.

Grimaldus

 

Thu, 08/14/2014 - 03:44 | 5091137 viedoklis_lv
viedoklis_lv's picture

Leave your crocodile tears to some uneducated persons.

How many man, women, children (even babies) Russia send to die in Syberia?

Most of the children died in those train wagons - from starvation and/or cold.

That is one sick nation if it forgets those massive crimes or even celebrates them as glory.

 

 

Thu, 08/14/2014 - 05:15 | 5091230 Frankie Carbone
Frankie Carbone's picture

Does your comment then justify unfettered US aggression right up to the Russian border? I'm puzzled because you can't be that stupid, can you? 

On that note, and along your line of thinking, what about the millions killed here in the US under the great American Land Grab? Or does time heal all genocidal crimes in your mind? "It was 150 years ago so that doesn't matter anymore"?

Thu, 08/14/2014 - 06:03 | 5091237 fel.temp.reparatio
fel.temp.reparatio's picture

Old school Latvian bigotry aimed at the (former) Soviet Union. Move forward, if you're really "on the path - seeking truth and helping others", that is.

Thu, 08/14/2014 - 06:06 | 5091266 RafterManFMJ
RafterManFMJ's picture

I suppose the lesson learned is, never get into the cattle car?

Thu, 08/14/2014 - 06:31 | 5091284 Latina Lover
Latina Lover's picture

Relax viedoklis,

The USSA will happily fight against Russia to the last Ukrainian. Then we will start with the Polacks, Latvians etc since they are all surplus population.

Thu, 08/14/2014 - 07:11 | 5091316 tvdog
tvdog's picture

Meanwhile, Latvia gets 100% of its gas from Russia. Until Russia turns off the valve.

Thu, 08/14/2014 - 08:25 | 5091523 hairInTheSoup
hairInTheSoup's picture

& their territory, like china or india.

they never went to conqueer outside of their idea of their territory (the idea can be debated like tibet for example, the fact not : they never colonized outisde of what they think to be part of them)

you forgot spain in your list of colonisators/resources robber (inca/maya gold)

Thu, 08/14/2014 - 03:34 | 5091114 ebear
ebear's picture

Great Half-Article, don't you mean?

Or did you sign up for part 2?

Wed, 08/13/2014 - 17:44 | 5089291 Buckaroo Banzai
Buckaroo Banzai's picture

That was the plan, although the plan won't work until they consolidate the EU debt. It's going to be a race to see if the euro zone collapses before they can do just that.

The other problem is, there simply aren't enough euros in existence to absorb all the worlds existing dollar wealth.

Wed, 08/13/2014 - 18:03 | 5089385 Winston Churchill
Winston Churchill's picture

Thats phantom dollar wealth. It can disappear with a keystroke, just  how

it was created.

Its phyz that matters now, productive assets, and raw materials.

The tertiary wealth is an illusion.Promises of wealth,made to be broken.

Same as it ever was.

Wed, 08/13/2014 - 22:15 | 5090475 KnuckleDragger-X
KnuckleDragger-X's picture

Your assuming reality and they are busy sitting down with the mad hatter for tea.

Wed, 08/13/2014 - 18:08 | 5089414 Bossman1967
Bossman1967's picture

See the markets have heard wolf to man times plus its all fed money cause we are crashing and tjey are hiding untill someone out there starts the war the USSA wants

Wed, 08/13/2014 - 19:18 | 5089735 gonetogalt
gonetogalt's picture

Hey there, landscaping crew Bossman, how about using some spellcheck? You're too busy or self important to post a properly written opinion? Anyway, having nothing to say you could just STFU.

Wed, 08/13/2014 - 20:05 | 5089984 lasvegaspersona
lasvegaspersona's picture

The euro does not need 'to absorb dollar debt'.

when currencies fail the debt become worthless....simple really. It has happened many times before. Did the Pound need to absorb the Reichsmark debt in 1924? Nope, those holding the Reichsmark just lost wealth. The same will happen as the dollar hyperinflates. The Euro will simply become an international medium of exchange. the store of value will become gold. The new currencies will still be fiat but not structure on debt instruments like the Fed is currently.

Thu, 08/14/2014 - 01:37 | 5090952 Global Observer
Global Observer's picture

Quite so. In fact it is quite silly to "absorb" debt denominated in another currency, which is the equivalent of one agreeing to be liable for someone else's debt. Sure, US debt is actually Western debt (since the entire West received the benefits of US debt held by outsiders), but the whole point about trashing the US$ and replacing it with the Euro, if they can, is to repudiate the current Western debt in order to make new debt in Euro. So the Euro absorbing the US$ debt is counter productive.

Thu, 08/14/2014 - 03:10 | 5091078 joe90
joe90's picture

1. What trashes the USD (and any currency) is the purchase of bad debt by the federal reserve (central bank).  Issuing "good money" for bad debt dilutes the quality of the currency all round.  So it's already been trashed, failing currency would simply be price discovery.

2. The creditor made whole "receives the benefits" not the "entire West" who had to work hard to earn and save.

3.  If the trade between any two countries is balanced, it matters not a jot what currency they trade in, beads are fine, the piles at the end of the year are the same.

4.  What matters is what is used to pay for oil, and what those that sell it buy.  If I need to buy oil I need USD.  Anyone selling oil buys US Debt at the point of a gun this backs the USD.  Chris does not mention this (I don't think).  The crime is selling your oil for other than USD/backing your currency with your own oil (Russia, Venezuala, Lybia etc.)

Thu, 08/14/2014 - 05:19 | 5091233 Frankie Carbone
Frankie Carbone's picture

Issuing new money for good debt also dliutes the quality of the currency all around. Money should only be issued in proportion to economic growth, real growth, not debt. That's the theory. it's never happened in a fiat system which is why mankind has had so many of them. 

Wed, 08/13/2014 - 17:44 | 5089296 Sudden Debt
Sudden Debt's picture

Ha! The euro will be out before the dollar, you mark my words.
Who says Germany will still be in in the next 5 years?

Thu, 08/14/2014 - 00:44 | 5090837 Harbanger
Harbanger's picture

Since this is really a banker war I say the dollar wins the currency printing race and outlasts them all right up to the reset.

Wed, 08/13/2014 - 17:55 | 5089351 Spitzer
Spitzer's picture

King Euro

Down with the $eppo

Wed, 08/13/2014 - 17:35 | 5089255 Spitzer
Spitzer's picture

Sell your treasuries Putin.

Wed, 08/13/2014 - 17:39 | 5089275 Leonardo Fibonacci2
Leonardo Fibonacci2's picture

Hussein Obama runs the world po-po state NWO

Wed, 08/13/2014 - 17:42 | 5089290 nicoacademia
nicoacademia's picture

running the poorest nation in the world to be

Wed, 08/13/2014 - 18:58 | 5089649 Keyser
Keyser's picture

That has always been the plan... The US is the military arm of the NWO trifecta, London, Rome and Washington... 

Wed, 08/13/2014 - 20:07 | 5089998 Treason Season
Treason Season's picture

+ Tel Aviv

Thu, 08/14/2014 - 00:28 | 5090821 Gandulf
Gandulf's picture

The Pentagon enforces for the Banksters Cartel. The Cartel keeps the profits puts the costs on the US taxpayers tab. 

Bankrupt the nation, then buy it back for pennies on the dollar.

 

 

 

Wed, 08/13/2014 - 18:51 | 5089618 TheReplacement
TheReplacement's picture

That's okay.  Yellen isn't really stopping the printers - they are running out of paper.  Once fully shutdown they will just reload all the trays, top off the toner cartridges, and get ready for the next round.  Bring it on China.

It will be painful but then again, it could hurt a lot too.

Thu, 08/14/2014 - 00:40 | 5090834 Gandulf
Gandulf's picture

She only has to enter a random number then hold the zero key down for a while and press enter.  Things didn't bugger up until they let banksters have keyboards

Thu, 08/14/2014 - 01:30 | 5090945 Karaio
Karaio's picture

I liked the idea! 

Out of paper. 

Let's tattoo on the back of one billion Chinese they have $ 1, and it is worth gold! 

hehe.

Wed, 08/13/2014 - 22:05 | 5090430 Road Hazard
Road Hazard's picture

Quote from the Breitbart link, "China appears ready to dump its $1.3 trillion in U.S. Treasury bonds to drive U.S. interest rates up and strengthen the dollar."

Huh? I was always tought that if China dumped our treasury bonds, the USD would fall off a cliff?!

Thu, 08/14/2014 - 00:10 | 5090788 Gandulf
Gandulf's picture

The Chinese are supporting the USD because of assets held in USD. The US is still their main market. 

The Chinese have being selling bonds slowly for a couple of years now to maintain value of their holdings.

They are watching the sanctions on Russia very closely and it must be causing a strategic rethink..

If they feel threatened militarily they will create financial Havoc.

Thu, 08/14/2014 - 03:36 | 5091115 stacking12321
stacking12321's picture

i think what road hazard was asking (and i had the same question when i looked at the breitbart article), is:

why would china selling treasuries somehow strengthen the dollar?

it seems to me, that if china dumps their treasuries, then there's a sudden influx of dollars on the market, and it should drive the dollar down, not up.

unless i'm missing something?

 

Wed, 08/13/2014 - 17:57 | 5089362 eddiebe
eddiebe's picture

That would be a good move only if he bought gold with them. 

Wed, 08/13/2014 - 17:36 | 5089260 Keyser
Keyser's picture

Step into my parlor said Putin to the fly... 

Wed, 08/13/2014 - 17:37 | 5089262 lasvegaspersona
lasvegaspersona's picture

Russia has no power to end the dollar but then the dollars ultimate demise was sealed 8/15/71. The rest of the world needs a currency for world trade, thus the Euro was conceived. The dollar is killing itself with debt. Russia,I think, is just more crazinees coming from the hawks at the CFR.

Wed, 08/13/2014 - 17:49 | 5089325 SDShack
SDShack's picture

The Euro was conceived in debt. So the Euro will not be the new world reserve currency. The rise of the BRICs will insure the new world currency will be an amalgam of currencies. This totally fits the New World Order theme whereby the oligarchs give the illusion of inclusion, but it is really just another deception by the sociopathic elites to solidify a world vision of debt slavery. The New Feudal World order is coming.

Wed, 08/13/2014 - 17:56 | 5089359 Spitzer
Spitzer's picture

Horse shit

Gold is on line one of the ECB balance sheet.

The ECB is a net creditor

Wed, 08/13/2014 - 23:52 | 5090748 Gandulf
Gandulf's picture

The ECB is the net debt creator.   slight difference

Wed, 08/13/2014 - 18:02 | 5089388 Kirk2NCC1701
Kirk2NCC1701's picture

Yup, FEUDALISM 2.0

Beta testing going on now - even near you.

Official release will happen after the Big Reset. Plan accordingly, Sheeple.

Wed, 08/13/2014 - 18:33 | 5089527 lasvegaspersona
lasvegaspersona's picture

SDShack

The Euro was established with gold on it's balance marked to market.

You are correct that in 2000 it held mostly debt (ie US treasuries) but as the 10,800 tons of gold increased in value the debt was passed in value by the gold. At the present 65% of the asset value held by the ECB is gold. If the dollar fails it will be 100%. The Euro is not concerned about the decline of the dollar. That decline in fact is why it was created. 

The Euro also does not claim to be a store of value. If it were trying to assume the role of new reserve currency it would not have decreased rates to below zero. Can there be a clearer message in that act than:"do not use the Euro as a long term store of value!?"

These points are not the current popular meme of 'evil bankers are trying to take over the world'  but after 4.5 years I'm convinced that the view I hold (thanks to fofoa) is correct. 

I has been obvious for years that the dollar would fail. Remember the hyperinflation scare of the late 70s? Remember gold increasing 10 times it's price to over 800?

There was something that Volker could do back then and he did it. Now we will see the dollar fail.

When the dollar fails the world must have a medium of exchange for international trade...or else! The Euro is now ready. It is friendly to gold too. The world's major producers can see this. The structure of the Euro will mean that it does not become the new reserve...gold will.

Wed, 08/13/2014 - 19:04 | 5089688 HenryHall
HenryHall's picture

>> but as the 10,800 tons of gold increased in value the debt was passed in value by the gold. ...

>> At the present 65% of the asset value held by the ECB is gold.

 

How much of that gold is physically in the USA?

Because gold that is physically in the USA does not count for the simple reason that it is not physically in he USA!

Wed, 08/13/2014 - 20:11 | 5090010 Treason Season
Treason Season's picture

C'mon. don't spoil his little fofoa boy's dream,

Thu, 08/14/2014 - 00:06 | 5090778 lasvegaspersona
lasvegaspersona's picture

TS

I am always interested in good reasons why I'm wrong. It is after all real money from a lifetime of work I'm trying to protect. All I seem to get though are conspiracy slogans and sarcasm.

If you have a good idea just spit it out. If you  can prove anything I suggest is wrong you would be the most popular guy at fofoa's website. I'm serious. We have real oney at risk. We have had folks come there for years but when the conversation turns serious and real arguments must be made...well so far everyone has faded.

Thu, 08/14/2014 - 00:01 | 5090767 lasvegaspersona
lasvegaspersona's picture

HH

for the sake of the ECB I hope very little is in the USA...BUT THIS IS THE EUROPEAN Central Bank ...why should their gold be in the USA?

Thu, 08/14/2014 - 03:12 | 5091008 Tall Tom
Tall Tom's picture

Because the USA is where the Western European Nations stored their Gold for ease of Transactions.

 

Alex, I will take the WTC Collapse and Mossad for $1000 please.

 

Gold transactions were carried out in the basement of the World Trade Center...until...NOT SEPTEMBER 11, 2001, but at some time in July, 2001.

 

At that time the Ofiicials decided, for some inexplicable and "fortuitous" reason that all of the 1000's of Metric Tons of that Gold must be moved immediately from the Basement Vaults of the World Trade Center to the New York Federal Reserve Bank's underground vaults a few blocks up the street.

 

The last truck, carrying the Bank of Nova Scotia's Gold, was trapped in the tunnels during the Collapse of the WTC Towers on that fateful day of 9-11.

 

How "fortuitous", wasn't it, that the Officials had the feather up their ass, being that they were so bored, that they decided to move all of that Gold, placing it at risk of theft, perhaps for the fuck of it.

 

I mean..they did not know a thing, right?

 

The answer is, Alex..Why did they move the Fucking Gold?

 

See how you can use the trolls to expose inconvenient truth?

 

I just love the statist trolls as they provide this venue. I really appreciate the trolls. Seriously. I do.

 

 

Thu, 08/14/2014 - 03:56 | 5091155 Ghordius
Ghordius's picture

lasvegaspersona, indeed quite a lot of the gold of the various national banks that form the EuroSystem is in the US

though don't forget that what you see on the ECB's (currently shrinking) balance sheet - ECB's gold - is separate from the gold of the national banks

further, there is another trick that the ECB could, in a pinch, do: step all out of the EUR at the same time. This would happen in a very complex scenario, too complex to describe in a few comments. But again, the EUR is there to give options. Including this one, with brand-new currencies which would nevertheless be old currencies, with a history and a track record which would make market introduction way easier than real brand new ones

Yet to come back to your original assertions, I believe you are correct in your emphasis: the EUR is gold-neutral, it does not claim to be a store of value, it's not positioning itself as a global reserve currency, and it's main scope is to preserve trade flows in the case of monetary wars

Which we are having. The prime reason for the EUR is eurozone-internal. To prevent monetary wars among members, which are costly in terms of trade

To come back to the fundamental situation of the eurozone: it imports slightly less than what it exports. This is one of the two faces of monetary zones, the other being debt. And there, while it is quite ugly, it's still mostly among eurozoners, or offset with claims on external trade partners

The main question is... how far we are proceeding in trade wars. For which we have a different institution, the trade alliance called EU. As we can see in the last disgraceful round of trade war blows, a single small country could be brought to it's knees by targeted embargos, but when the others help out, the situation becomes different

The fundamental situation of the eurozone is that it does produce something to trade for what it does not have. While what it does not have is plentiful easy-to-use energy like oil and gas

Thu, 08/14/2014 - 04:12 | 5091172 ebear
ebear's picture

"This totally fits the New World Order theme whereby the oligarchs give the illusion of inclusion, but it is really just another deception by the sociopathic elites to solidify a world vision of debt slavery."

You're forgetting something, aren't you?   These people are sociopaths. Socipaths don't cooperate with one another, they stab each other in the back.  So, how do you build a global empire out of that?

Wed, 08/13/2014 - 17:50 | 5089336 Escrava Isaura
Escrava Isaura's picture

lasvegaspersona, you wrote: "Euro was conceived because dollar is killing itself with debt."

Lasvegas, world trade it's about to collapse.

 

Wed, 08/13/2014 - 18:35 | 5089546 lasvegaspersona
lasvegaspersona's picture

EI

if world trade collapses we are in real trouble. 7 billion people exist on this planet because world trade makes it possible.

I see the monetary system changing, not a collapse in trade.

Wed, 08/13/2014 - 18:51 | 5089610 Escrava Isaura
Escrava Isaura's picture

Lasvegas,

The first collapse will be because of inability to collect the debt. Let me show you an example: Oil

Enno Peters: I estimate (based on a discounted cash flow analysis) that a well that returns 50 k barrels of oil needs a minimum WTI price of about $120; about $82 WTI is needed for 80 k wells or better, and a well that returns 110 k barrels of oil in its first year is about even with $64 WTI. These are rough indications; I have seen a good analysis that estimates 10% higher required WTI prices for these levels of well performance. With current prices that would mean that 50 k wells are not profitable, while 80+ k wells clearly are.

http://peakoilbarrel.com/enno-peters-post/comment-page-1/#comments

Wed, 08/13/2014 - 19:43 | 5089885 lasvegaspersona
lasvegaspersona's picture

EI

I'm not clear on what you mean by 'the first collapse.'

I'm talking about a hyperinflationary collapse of the dollar. It would fail as a currency and for international tade to continue there has to be a medium of exchange. We (I follow fofoa but certainly do not speak for him so this is just my interpretation of freegold) see the Euro as a currency that was developed to be the medium of exchange when the dollar does fail.

The euro has other characteristics that make it unique and we think a model for other currencies to follow after the dollar collapse.

Thu, 08/14/2014 - 03:09 | 5091076 Sambo
Sambo's picture

7 billion shrinking to 3 billion is also part of the plan. Financial chaos coupled with a few WMDs will do it.

Wed, 08/13/2014 - 18:15 | 5089358 JuliaS
JuliaS's picture

Russia has no way of ending the dollar quickly - only through gradual erosion of Western trade alliances and reduction in dollar trade volume.

Places that would have an immediate effect on the petrodollar status - Saudi Arabia. Their commitment is monumental and the only threat to them currently is ISIS, which is perhaps the real reason we're putting boots back on the ground in Iraq.

2nd possibility - US bonds in Chinese and Japanese possession. China's boasting about purchase reductions, yet year after year their holdings grow. Their purchase of bonds is like US military budget, where "cuts" really mean "reduced increases" and only compared to intentions as oppose to past purchases (which is completely meaningless).

Japan - now that's a special case. Rolling towards hell fast in a leaded coffin. They may have to eliminate bonds just to stay afloat a bit longer. Though it's nowhere as simple in reality as sending paper back and expecting something in return. US bonds - you buy them and hold on forever. That's the real deal. They're more of a symbolic commitment to a trade alliance. A balancing weight, but not an actual redeemable product. They're like paper gold... only instead of shiny yellow, more of a dark brown.

US is acting like it has time, so then it is worried about gradual degradation of the dollar status - of Russia eroding volume. The war efforts are ramping up slowly. The media gets to earn their pay, spreading propaganda - getting the public into the right mindset.

Ukraine's the gateway. October-November likely timeframe. Then the main act can last a very long time.

More proxy wars are possible. Russian Southern border is also under pressure, though not widely publicized. The watched kettle theory dictates that while all eyes are focused on Ukraine, something completely different may happen elsewhere.

Cheney was predicting another major terrorist act before the end of the decade (weren't they all). False-flag is often the weapon of choice in this country. So what will it be?

Donetsk siege is to commence within a week. Things may get interesting... or they may not. The markets are certainly acting like we're still trading Enron. Insiders would've bailed if something was coming. No big motions yet. All is calm before the storm.

Wed, 08/13/2014 - 18:23 | 5089452 Kirk2NCC1701
Kirk2NCC1701's picture

If, after one humanitarian disaster after another being ignored by the EU and UN and a coming winter, several things happen one December morning:

> Gas gets shut off to Ukraine,
> Paratroopers land in Kiev, and take over all CCCI (Command, Control, Communications, Intelligence) points. IOW, gas and electricity goes off, and Kiev Puppet Regime gets removed by force, as does their Ministry of Defense and... Central Bank.
> An Interim Government (Junta 2.0) gets installed.
> Power and gas restored few days later.
> All hostilities in E.Ukraine cease. UN Blue Helmets invited to separatist border region.
> Gas flow restored to EU, conditional on non-aggression by EU and NATO.

Wed, 08/13/2014 - 21:09 | 5089656 JuliaS
JuliaS's picture

I don't see Russian puppets returning to the helm in Ukraine. The public sentiment may be shifting away from the current government, but towards no party in particular. Russia turns off gas? People (with a little outside help), may remove Yatsenyuk and Poroshenko, but in favor of which alternative? There's nothing on the radar.

Ukraine looks like a broken state where things can only get worse. Russians will be squeezed out. Most will seek asylum in Russia and then the country will be blocked off. Putin did not back the Eastern referendums, which means he has no interest in the industrial portion of Ukraine. Got to be honest, the country is bankrupt whether it is part of Russia or not. The value of Crimea is undisputed, and owning it as oppose to renting results in actual measurable savings. The rest of the country consumes more than it produces. In that sense it is part of the West already.

Ukraine is a convenient buffer zone for both, Russia and NATO. Perhaps they'll both run it into the ground, making it a no-man's land.

Plow Chernobyl, sprinkle around and presto! Permanent border. Well, they won't do that, but what's to come won't be any prettier for the Ukrainians. They're raped either way. Either starved, bled dry by the IMF, or ravaged by their own crooks under Russian blessing. They are as good as dead. Marginalized by this conflict. Polarized. Wounds inflicted will last decades, regardless of which side wins the conflict.

I don't think paratroopers will be dropped anywhere, except Crimea. There's no good land path leading there yet. Kiev expressed desire to retake it and the only way to secure it would be by air.

I have friends in surrounding region. Pro-Russian sentiment doesn't stop at Crimea's border. Saboteurs dismantled railroad tracks preventing tanks from getting in from North-West when the rerefendum was taking place. There are partisan resistance pockets spread out all around Crimea. Don't know how many remain currently, but getting to it will be hard for Kiev. They might try regardless. Not like they have any options, or any will of their own. They'll do what the West demands of them.

Wed, 08/13/2014 - 18:41 | 5089577 Jethro
Jethro's picture

I'm very curious to see what Russia/China does in the following months.  China pledged to follow Russia's lead not too long ago with regards to the US Dollar hegemony.  Shortly after that agreement, Russia dumped $125 Billion or so.  China hasn't yet followed suit (probably because they are married to US consumption).  However, with US consumption down, they will have less to lose by dumping Treasuries. China has to be careful that it doesn't kill it's own fragile economy.  It sort of reminds me of how the Bhutanese used to punish murderers.  They'd tie the murderer to the victim, and throw them both into the river.

Russia has less to lose.  Gazprom has a series of customers/vassal states in Europe now that will toe the party/Russian line. 

With the advent of the BRIC bank, a basket of currencies---like the IMF basket of currencies seems to be a logical conclusion.  That shit will be like cat-herding.  Good luck to whomever is assigned to finding what anything is worth in that scenario.  Russia seems to be taking the lead with convincing nations to leave the FRN.  Not like our foreign policy is inspiring much confidence anyways.  All Russia has to do is plant seeds of doubt in the value of our currency. That's it.  And, sadly, that's all it takes given our profligate currency debasement. 

 

Wed, 08/13/2014 - 19:16 | 5089722 JuliaS
JuliaS's picture

China acts like a double agent. On one hand it fights US influence, on the other hand, if a military conflict ends up pulling Russia's limited resources West, the forces will be spread thin. Who's to say they won't take a bite off the East? They need land as much as any other guy. They know it. Russia knows it, so it's building alliances as much to please and calm China as to counter-balance the US.

Nothing's easy.

China is somewhat successful at infiltrating other countries - conquering their resources economically without firing a shot. That is their preferred plan. Nobody knows what they'll be like in a time of war. In WW2 they were a passive participant, not offering much opposition to Westward marching Empire of Japan. Now they're a major world player - likely to pick a hand and deal it.

Will they be the next dominant world power? Unlikely. Despite the size, they're very fragile. They may implode on their own for all we know, or pass the torch to other developing nations, as they are already doing to some extent.

Bonds? Like I said - they're a nuclear option. Good only as a threat, but when applied may only result in mutual anihilation, that's why everyone keeps accumulating eachother's paper. No way back. No way out. They're only good at fixing exchange rates and balancing trade. They're not an actual commodity useful in practical sense.

Maybe the reason they're called "bonds" is that like glue, once you get your hands on them you're stuck permanently.

Wed, 08/13/2014 - 22:33 | 5090537 KnuckleDragger-X
KnuckleDragger-X's picture

Nobody trusts anyody and realpolitik rules the day. I basically agree with you and it's going to be interesting to see who pulls the trigger.

Wed, 08/13/2014 - 18:50 | 5089608 Phat Stax
Phat Stax's picture

The Russians have a long history of letting their people suffer for the ultimate goal.  They are "not used to much" and therefore are pretty tough people... it will take a lot for them to stand up to their leadership, especially now with Putin tee shirts flying off the shelves.  Watch what happens next.

Wed, 08/13/2014 - 19:57 | 5089942 lasvegaspersona
lasvegaspersona's picture

JuliaS

Fofoa has analyzed the world purchases of treasuries and it has been flat for almost a year. True there are rollovers but net increase, no.

For the dollar to survive there must be purchases of our debt by central banks that sell us stuff. If they just send those dollars back into the economy they inflate prices. If the world sees that inflation is happening we will get 1979 all over again. This time there is no way to do what Volker did then. We cannot let interest rates rise or that will kill the US governments ability to function as the cost of debt service will rise too high.

Central bankers understand this. When they see that the USA can no longer continue to borrow it will be over. They have been very supportive over the years, especially China until recently. Now we have no one. The real problem is US government spending. 40 billion a month is sent out to buy stuff in excess of what the government can afford. If it just prints this and it appears (to the world) to be structural, then the dollar is done.

Wed, 08/13/2014 - 17:39 | 5089273 Funny Money
Funny Money's picture

How many times can ZH lick Russia's balls in a day?

Wed, 08/13/2014 - 17:58 | 5089365 Spitzer
Spitzer's picture

Anything to end this Keynesian world order is welcome by me.

Thu, 08/14/2014 - 04:06 | 5091165 Ghordius
Ghordius's picture

No, "Funny Money" is tackling an interesting issue. Before Russia started it's own brand of propaganda and info-wars, news from Russia were very balanced, and ZH used their opinions and sources to highlight in stark contrast what "Western Mainstream Media" were saying

But then, at a certain point, the Kremlin tightened it's grip on it's media, and balance was thrown out of the window

ZH lagged a bit in it's reassessment of the situation, and there was a moment where it lost track, and this was visible in the editorial comments

I give great kudos to the Tylers for their quick recovery. I disagree on many things with them, but the last weeks' articles show me that they care for balance

imo we'll need all to reassess the fact that there is no unbiased newscasting at the moment. All sources are currently tainted

Wed, 08/13/2014 - 17:59 | 5089368 Kirk2NCC1701
Kirk2NCC1701's picture

As opposed to sucking circumcised penis? For decade after decade?

Wed, 08/13/2014 - 18:01 | 5089382 JuliaS
JuliaS's picture

I'd gladly lick Obama's balls if he had any.

Wed, 08/13/2014 - 20:39 | 5090120 db51
db51's picture

Since you're in the ball licking mood, I have a couple that could use a good licking about now.  

Wed, 08/13/2014 - 18:03 | 5089386 willismd
willismd's picture

No shit. It gets worse and worse. Probably a ruskie intelligence service front site.

Thu, 08/14/2014 - 00:39 | 5090833 joe6px
joe6px's picture

ZH or the readers, or anyone who is looking for a reasoned opinion for that matter.  Mainstream has signed on to the brinkmanship like north korean mammasans.  MY government has lied to me so many times that I cannot pay any attention to what they say.  I can only follow what they do, given the fragmented and half-truthed musings of anyone close enough to hear a rumor or crafted lie.  The dollar is dead.  Killed by a government so wrapped up in itself that even the real world and a massive war could not disrupt it's fixed gaze on the ring; one ring to rule them all.  (trite, yes.  accurate, yes).  Talk all you want, taunt those who see two sides and say Putin is actually more honest, or at least has a more honest pretense than OUR government.  OUR government started this whole shitshow!  Then tried to false flag a civilian airliner, Lusitania style, into a war!  Fuck's sake!  It is time for Sam Adams and his bunch to launch off of the riots in MS and kick Revolution V2 off.  If you lose the initiative, you lose the war.  To those who are so worried about the gov's oh so sophisticated weapons, look at the most recent wars.  Those assholes kicked the shit out of us, and they didn't even know where the enemy's family's lived.  Get to work!  IPB, preps, comms, community.  I'm sick of all the "we are outnumbered" shit.  They can't even get a cat out of a tree and write a parking ticket at the same time!

 

Wed, 08/13/2014 - 17:40 | 5089276 nicoacademia
nicoacademia's picture

how is this a surprise.

Wed, 08/13/2014 - 17:46 | 5089277 THE DORK OF CORK
THE DORK OF CORK's picture

Yee guys are missing the key piece in this

The UK.

The new Euro food surplus created will flow to the UK which has had the fastest growing population in Europe for 10 years (when the banking system scaled up again as people always follow the money)

The UK is in massive physical goods deficit.

It will be over 100 Billion Sterling this year.

Now it can buy stuff cheaper.

http://www.standard.co.uk/business/business-news/fruit-veg-feeds-eurotunnel-record-growth-8462569.html

Wed, 08/13/2014 - 17:46 | 5089308 Escrava Isaura
Escrava Isaura's picture

Cork,

Great point on UK.

However, massive euro surplus flowing through UK?

Wed, 08/13/2014 - 17:52 | 5089334 THE DORK OF CORK
THE DORK OF CORK's picture

Most of the UK goods deficit is from Europe and the Eurozone.

I think its about 85 million or so.

The days of the commonwealth agricultural imports is over.

Even Italy supplies more goods to the UK then the entire commonwealth.

UK Pop.

http://www.telegraph.co.uk/news/uknews/immigration/10927865/UK-has-had-fastest-growing-population-in-Europe-for-a-decade-official-figures.html

 Putin is following orders from very high up me thinks.

Wed, 08/13/2014 - 17:56 | 5089357 Escrava Isaura
Escrava Isaura's picture

Italy should not being doing that.

So why do you think Italy is doing that? More tax for the Italian government?

 

Wed, 08/13/2014 - 18:11 | 5089415 THE DORK OF CORK
THE DORK OF CORK's picture

Sorry 85 billion ~  or so  real goods trade deficit.

Italy is a minor player in this however

But for all Euro countries the UK (and France) they export for a very simple reason.

That is where the money is.

There is no settlement..........so euro trash must export their wealth to the people with the money.

It was always the way with the UK - they started with Ireland in the 1600s by turning it into a agri ranch for their industrial workers.

Now its people work in the "service" industry in the main which means they must be serviced with real goods.

The EU is a colony of the UK & France.

You can tell very quickly by the real good deficits showing up in their books as its always a question of real shit.

Wed, 08/13/2014 - 18:12 | 5089431 Escrava Isaura
Escrava Isaura's picture

Cork,

Why do you say; "There is no settlement"?

I don't understand your theory 'reason' here.

Wed, 08/13/2014 - 18:25 | 5089467 THE DORK OF CORK
THE DORK OF CORK's picture

jaysus Escrava I don't mean to insult you but..........

What are you doing inside zero hedge land ?

Not a day dream believer in the gold standard and stuff - but gold in the past was used to settle trade imbalances.

In the past - pre 1914 the UK imperial power ( all Imperial powers must be in deficit ) printed gold as it had control of both South African and Canadian mines. (most of the worlds production)

So it remained in deficit until gold became useless until the mobilization of Germany and France (the biggest above ground holders of that time)

 

Much like 1914 the goods produced by mercantile countries cannot be consumed as almost all energy goes into long distance (pointless for most) trade.

Wed, 08/13/2014 - 18:23 | 5089468 Escrava Isaura
Escrava Isaura's picture

Cork,

I love your posts. Don't ever stop it again!

You wrote: "The EU is a colony of the UK & France."

So why they didn't let these colonies keep their currency?

Wed, 08/13/2014 - 18:40 | 5089524 THE DORK OF CORK
THE DORK OF CORK's picture

CH Douglas speaking in 1942.
Exchange or Distribution
Question.—Is the correct object of the monetary system to facilitate the interchange of goods and
services?
Answer.—The modern productive system does not primarily involve interchange of goods and
services. The fundamental factor in production is power-driven machinery, and you cannot
exchange services between power-driven machinery. That is why it is incorrect to say that money
is, primarily, a medium of exchange. Money is primarily a demand system, so that the individual
can demand from the productive system those things which he does himself contribute to it.
The Object of Industry
Question.—Would Social Credit increase employment at first?
Answer.—Yes—although of course, it is not our objective to provide employment—I think that
for a short time probably there would be increased employment.
What certainly would happen quickly would be a complete difference of emphasis on what is
produced. Without going into technicalities, I want to stress this point. We are often told that it is
obviously absurd to say that the financial system does not distribute sufficient purchasing power
to buy the goods that are for sale. We never said it! What we do say is that, under the present
monetary system, in order to have sufficient purchasing power to distribute goods for
consumption, it is necessary to make a disproportionate amount of capital goods and goods for
export.
Sweden is held up as a wonderful example of how well the monetary system can work. Sweden
is producing about three times as much as she is actually consuming, but owing to vagaries of
exchange she is able to export the remaining two-thirds. She has to take three times as much
trouble as is really necessary in order to make the monetary system work.

Dork :Sweden at that time was supplying the bulk of Nazi iron ore.

Spanish trade surplus with the UK increasing

Sterling (millions)

Y2011 : -2,077

Y2012 : -3,119

Y2013 ; -3,555

Wed, 08/13/2014 - 18:42 | 5089580 Escrava Isaura
Escrava Isaura's picture

Cork,

Thanks. You know how to make things interesting and want to know more.

So, if wasn't for the Euro, the European colonies could not afford exports.... excess surpluses.

Wed, 08/13/2014 - 18:55 | 5089596 THE DORK OF CORK
THE DORK OF CORK's picture

They are forced to export so as to gain currency.

The last thing their physical economies need is to waste energy exporting - Spain has huge surplus agri production yet its people remain poor.

They are locked inside a supranational scarcity experiment.

Spanish people cannot afford to buy a bottle of wine yet it grows around them.

London is at the center of the oil / monetary matrix - their objective is to force feed Spain and the other euro countries cars so that they are forced to export for these same cars inputs.

Its in London interest to make people work for the machines rather then the machines working for them.

Wed, 08/13/2014 - 18:55 | 5089634 Escrava Isaura
Escrava Isaura's picture

And here lies the Crux of our demise!

Would see a French Revolution or American Civil War coming?

And what do you make of ISIS?

Wed, 08/13/2014 - 18:57 | 5089650 THE DORK OF CORK
THE DORK OF CORK's picture

Not enough information......

I have no understanding of the place so cannot comment on whats what locally.

Wed, 08/13/2014 - 18:59 | 5089664 Escrava Isaura
Escrava Isaura's picture

Anyway, appreciate, and always welcome your insights.

Thanks.

Wed, 08/13/2014 - 19:42 | 5089880 Kirk2NCC1701
Kirk2NCC1701's picture

Crowd-sourcing, are we?

Thu, 08/14/2014 - 01:38 | 5090956 basho
basho's picture

"The EU is a colony of the UK & France."

FRance?

bit of a stretch isn't it.

safer to say EU is a colony of ussa.

Thu, 08/14/2014 - 04:10 | 5091169 THE DORK OF CORK
THE DORK OF CORK's picture

Where do you think "American" ideas came from ?

Mars ?

Wed, 08/13/2014 - 17:41 | 5089282 El Vaquero
El Vaquero's picture

LOL, let Ukraine shut off the gas.  All that Russia has to do is survive.

Wed, 08/13/2014 - 17:41 | 5089284 Sudden Debt
Sudden Debt's picture

It all started when America installed a rocketshield in Turkey a decade ago and decided to point it to Russia while claiming it was to protect Europe against Iraqi attacks....

Wed, 08/13/2014 - 18:57 | 5089653 Escrava Isaura
Wed, 08/13/2014 - 17:41 | 5089286 Leonardo Fibonacci2
Leonardo Fibonacci2's picture

Thank you Russia for protecting Edward Snowden

Wed, 08/13/2014 - 17:46 | 5089307 Sudden Debt
Sudden Debt's picture

The last bastion of free speech...
Now that sounds pretty fucked up concidering...

Wed, 08/13/2014 - 18:50 | 5089607 BKbroiler
BKbroiler's picture

Yes, Russia is the "last bastion of free speech".  That's just retarded.

Wed, 08/13/2014 - 19:36 | 5089847 7.62x54r
7.62x54r's picture

And their base tax rate is 13%, and they still have banking privacy, making them the last bastion of Capitalism.

I'm living in Bizzarro-world.

Wed, 08/13/2014 - 17:49 | 5089319 Itchy and Scratchy
Itchy and Scratchy's picture

Send in the transgendered Navy Squeals!

Wed, 08/13/2014 - 17:54 | 5089347 Kirk2NCC1701
Kirk2NCC1701's picture

I repeat: When global trade in USDs falls to 49.9% (from its present level ~60%), the USD will lose its GRC status.

The BRICKS & Friends are working furiously to achieve that via Direct Currency Swaps that bypass the Dollar and the BIS, and the US (via the Fed, DOD and Big Oil) is doing its damndest to slow, derail or front-run this freight train.

Wed, 08/13/2014 - 19:33 | 5089827 emersonreturn
emersonreturn's picture

kirk,

 

while i agree with much of your comment...big oil stopped me.  XOM seems to be quite happy to skate above sanctions.  it is heavily involved with russian oil, i'd say, banking on it.  as well BP and shell.  i'm mildly surprised not to find total involved but up until now haven't found any joint ventures.  i'd say the jury is out on 'Big Oil' but suspect BO believe they may straddle the fence or float happily above.

Thu, 08/14/2014 - 04:43 | 5091208 ebear
ebear's picture

Big Oil ain't so big any more.

National oil co's are much larger.

Wed, 08/13/2014 - 17:55 | 5089350 Kirk2NCC1701
Kirk2NCC1701's picture

WW-Dollar begun it has. -Yoda.

Wed, 08/13/2014 - 17:59 | 5089369 themadelksta
themadelksta's picture

Tom Clancy Command Authority..... guy is good. Dead, but good. I'm waiting for us to get to the Bear and the Dragon. 

Wed, 08/13/2014 - 17:59 | 5089373 willismd
willismd's picture

I like zerohedge for the news, not the constant antiamerican drivel same ol BS pro ruskie ball licking.  Its obviously bull. Report the other side of the argument. 

 

 

Wed, 08/13/2014 - 18:28 | 5089503 vincenze
vincenze's picture

The other side is on vacation for a couple weeks more.

Wed, 08/13/2014 - 19:02 | 5089670 Latina Lover
Latina Lover's picture

Hey WillisMD, if you want to hear the other side,  it's easy.  Just turn on any TV station in the USSA and listen to the lies.  You probably read ZH because you want more than the mainstream moronic drivel that passes for 'news'.

 

Besides, has the mainstream liar media ever told you WHY we need to intervene in the Ukraine?   Are the Ukies affairs a matter of national security? Are you taxes too low, and your freedoms too many?

Wed, 08/13/2014 - 19:01 | 5089672 TheReplacement
TheReplacement's picture

Here you go.  In retaliation for loose yaun policy the Fed made with loose dollar policy.  Over the past however-many years China has been using their fresh baked goodies to buy tangible assets like real estate, metals, and guns.  The US has used its red hots to buy votes, fight wars, and imaginary assets like paper metals, derivatives, and stocks of companies that aren't even profitable.

To boil it down for you:  The US has already lostl; the team is exhausted, all the starters are hurt or dead, the coach passed out from one too many rounds, the fans are starting to not just boo but also throw batteries at their once vaunted heroes, and oh yeah, about 10% of them probably aren't even actual citizens that give a shit much less the vast majority who don't know, don't care, and hey, did you see the size of Kim's ass?.  One the plus side, there may not be any real winners.  Yay US.

Wed, 08/13/2014 - 19:03 | 5089682 RECISION
RECISION's picture

Why?

The Lame Stream Media (deep in the Corporates pockets) "reports" that all the time.

And yet... amazingly nobody is interested in, or buying that brand of B/S any more.

Btw, how does  ball-licking the Good'ol USA USA USA taste?

Wed, 08/13/2014 - 21:12 | 5090225 Bananamerican
Bananamerican's picture

"It tastes like..victory"

Wed, 08/13/2014 - 17:59 | 5089374 willismd
willismd's picture

I like zerohedge for the news, not the constant antiamerican drivel same ol BS pro ruskie ball licking.  Its obviously bull. Report the other side of the argument. 

 

 

Wed, 08/13/2014 - 19:12 | 5089696 TheReplacement
TheReplacement's picture

Here is attempt number dos:

"Regulars at the Vineyard Golf Club in Martha’s Vineyard were gobsmacked when President Obama unexpectedly strolled onto a nearby green and they were immediately frisked. “There was no warning he was coming,” sniffed a guest.

“There was security on the way in, but no word as to why they were there.” The member added, “While eating, overlooking the golf course, guests had to stand up and be wanded.” One asked if he could finish his hot soup first, and an Obama security man cracked, ominously, “So, you’re not cooperating?”

But Obama did “go around and shake everyone’s hand waiting on the course.” His vacation’s been called “tone-deaf” by some amid new military action in Iraq."

"So, you're not cooperating?" in an extraconstitutional search, against your wishes, without a warrant, with absolutely no cause for any suspicion at all?

When communist China is viewed as freer than the USA by American citizens, game over.

 

Edit:  Was in Philly about two weeks ago.  Went to see the sites.  It turns out that I was not free to see the Liberty Bell because I had a pocket knife in my pocket.  The world is absolutely upside down.

Wed, 08/13/2014 - 18:03 | 5089384 huggy_in_london
huggy_in_london's picture

Quite a good article.  Its a game of chess, but the americans think they are playing checkers.  The US leans on the EU to impose sanctions.  Sanctions don't hurt america, but they will be devistating for the EU.  Yeah food inthe UK will be cheaper (maybe they'll stop excluding it in the inflation numbers, as well, clearly its important if its going down .....), but the UK cannot buy what russia was buying.  And this by the way has a big impact in africa, where the UK import a lot of vegetables from.  Eventually the EU wil fold (maybe as winter comes and those gas lines develope "issues").

Wed, 08/13/2014 - 18:13 | 5089432 AdvancingTime
AdvancingTime's picture

The Russians are furious at what they see happening in Ukraine.  Don't hold your breath for Putin to back-off or back-down, he has put down his marker and is now playing both Obama and Kerry for fools in a contest that cost Russia little.

Ukraine is a failed country worth little but Putin wants a path or land link to Crimea. If he doesn't get Eastern Ukraine next week he will next month or next year at the latest. Putin holds all the cards and time is on his side. More on this subject in the article below.

 http://brucewilds.blogspot.com/2014/07/putin-holds-all-cards.html

 

Wed, 08/13/2014 - 19:23 | 5089764 TheReplacement
TheReplacement's picture

Yeah all this makes me wonder about Iraq.  ISIS explodes out of Syria and into Iraq just as things were heating up in Ukraine.  Now all of OUR attention is diverted to Iraq.  It would seem that Russia benefitted greatly from this turn of events:

Pressure greatly relieved on the Ukraine front.

Pressure greatly relieved against Russian ally Assad.  Is it plausible that the west will end up helping Assad against ISIS?

US fecklessness exposed as Iraqi airforce was left barren of promised fighter/bombers and the Kurds were not armed or supplied as promised.  Fortunately in the prior case, Russia was able to swoop in and save the day by quickly delivering ground attack aircraft.

US had to turn, in a very public way, on supposed ally Maliki.

If ISIS pushes too far will Iran invade, ala Vietnam in Cambodia, and push all the way through to link up Syria, Iraq, and Iran (not to mention Lebanon)?  That could maybe be a big deal for anyone who buys oil or lives in Israel.

I do think ISIS was started by the CIA but I can very much see how the things ISIS has done and is doing have not caused harm to Russia in any way and, in fact, benefits Russia at just about every turn.

It almost makes one wonder in Prince Bandar and Putin did come to an agreement before the Sochi Games.  There were no attacks and since then we have had ISIS fever.

Wed, 08/13/2014 - 21:10 | 5090219 Ventnor
Ventnor's picture

I hope you're right but if Lugansk and Donetsk fall, Putin and Russia will be in serious trouble.

Thu, 08/14/2014 - 04:55 | 5091215 ebear
ebear's picture

"Putin wants a path or land link to Crimea."

Cheaper to just build a bridge.


Wed, 08/13/2014 - 18:22 | 5089437 Thomas Aquinas
Thomas Aquinas's picture

The East v the West conflict is manufactured at the very highest levels. Why would the US be party to a global currency reset (as announced by IMF Head Christine Lagarde)

https://www.youtube.com/watch?v=CVsGzIYmquc

and still be prosecuting wars to defend the dollar? The master plan was understood by Myron Fagan:

 

"The idea was that those who direct the overall conspiracy could use the differences in those two so-called ideologies [marxism/fascism/socialism v. democracy/capitalism] to enable them [the Illuminati] to divide larger and larger portions of the human race into opposing camps so that they could be armed and then brainwashed into fighting and destroying each other."

Wed, 08/13/2014 - 18:16 | 5089442 Captain Obvious.
Captain Obvious.'s picture

The world is a very different place to what it was in 1960.

Nation states are as relevant as city states were.

Still feeling patriotic?

Thats nice, Muggins.

Wed, 08/13/2014 - 18:16 | 5089443 Irishcyclist
Irishcyclist's picture

In terms of the economic war between Russia and USA, USA has made Europe her mudguard.

Europe doesn't need to be brought in to the Russia/USA spat. But for some reason she has allowed herself to be used as the sanctions testing ground.

Wed, 08/13/2014 - 18:20 | 5089460 Perimetr
Perimetr's picture

Russia does not want war with the US, as it clearly understands that such a war would go nuclear in a heartbeat. 

The long-term environmental consequences of a US-Russian nuclear war will make Earth uninhabitable for humans and other large animal forms of life.  

I don't think our "leaders" understand this, they are not big on science.

Wed, 08/13/2014 - 18:28 | 5089510 q99x2
q99x2's picture

Its a gang war. If Putin was serious he'd go after the Rothschild family specifically. Russians are everywhere and the solution to his problem could be achieved easily. The whole thing with Ukraine may be a staged event.

Wed, 08/13/2014 - 18:43 | 5089583 Jethro
Jethro's picture

Beau Biden sure would be a convenient target with his position in the Ukranian gas company...

Wed, 08/13/2014 - 18:30 | 5089515 Thomas Aquinas
Thomas Aquinas's picture

Russia does want a war!!!!

"In the USSR and now in the 'former' Soviet Union, 'the Communist Party continues to decide the outcome. It maintains its monopoly of political power ... through a controlled "multi-Party system"' [in which all the participants, without any exception, are covert Communists masquerading under false, Western style 'non-Communist' labels, or overt Communists wearing their own labels. In the 'former' Soviet Union, the continuing Communist Party of the Soviet Union (CPSU) controls and supervises all the political 'fractions' splintered out of the CPSU itself."

ANATOLIY GOLITSYN
,
'The Perestroika Deception', page 127, Memorandum
of September-November 1990

The "new European Soviet": "During a late-February address in Brussels, former Soviet dissident Vladimir Bukovsky warned that the European Union -- referred to by former Soviet dictator Mikhail Gorbachev as the 'new European Soviet' -- represents a continuation of the totalitarian vision he had fought against in Russia.... The former Soviet president Mikhail S. Gorbachev put it more succinctly when he told the official Russian news agency, Ria Novosti, last week that 'It is all about influence and domination in Europe.'” (New York Times, 4-18-07)

https://www.youtube.com/watch?v=facg5prt6uM

Wed, 08/13/2014 - 19:24 | 5089777 Keyser
Keyser's picture

Putin and Russia were happily minding their own business, celebrating the success of the Sochi Olympics and Putin basking in the glow of the billions of Rubles he scammed off the deal, when the US, through proxy, overthrew the Ukraine government and installed a neo-nazi puppet government with the explicit purpose of fucking with Russia...  IMO, Putin has been more than patient in dealing with this situation which is right in his back yard... If Russia wanted war, they would have already occupied Ukraine... 

Wed, 08/13/2014 - 21:06 | 5090203 Ventnor
Ventnor's picture

The astonishihng thing about the Sochi Olympics was that Russia -- a country whose GDP per capita is on a par with Portugal's -- managed to win more gold medals and more overall medals than any other country.  If you add the medals won by Russians competing for Ukraine, Latvia, Kazakhstan, Belarus, etc., it's quite an impressive result.

Wed, 08/13/2014 - 23:52 | 5090749 falconflight
falconflight's picture

What's your point?  Cuba on a per capita basis routinely won medals as well.  A command and control economy can do just that.  Devote inordinate resources to Olympic competition.  

Thu, 08/14/2014 - 00:17 | 5090804 napper
napper's picture

The US (like Korea, Hungary, etc) has been smarter. Simply bribe the judges / referees of the competition, or feed the athletes with new / hard to detect stimulants, and Olympic gold medals come cheap, easy and fast.

Thu, 08/14/2014 - 04:43 | 5091206 Ocean22
Ocean22's picture

it aint over till the fat lady sings...

Thu, 08/14/2014 - 04:59 | 5091219 ebear
ebear's picture

or Pussy Riot releases a new video;)

Wed, 08/13/2014 - 22:32 | 5090533 doctor10
doctor10's picture

And this is all so different from the RepubliCrat Party in DC today?

Thu, 08/14/2014 - 04:52 | 5091213 Victor999
Victor999's picture

I guess the John Birch Society never really died after all....

Wed, 08/13/2014 - 18:42 | 5089574 Thomas Aquinas
Thomas Aquinas's picture

The Leninist strategists 'take particular heart from the fact that American and West European policymakers have no understanding of their strategy and its dialectic nor any means of countering it'.

ANATOLIY GOLITSYN,
'The Perestroika Deception', page 58, Memorandum of
4th January 1988.

'Western experts fail to perceive the strategic continuity behind [events]. They accumulate facts but are unable to see their strategic interaction and cannot build them into a strategic picture. They lack vision and insight, which is why they are floundering in the face of the onslaught which theyfail to understand'.
ANATOLIY GOLITSYN
,'The Perestroika Deception', page 38, Memorandum March 1989.

Wed, 08/13/2014 - 18:52 | 5089616 Thomas Aquinas
Thomas Aquinas's picture

The present Soviet leadership has developed history's most comprehensive and Machiavellian plan to destabilize the West and ultimately defeat it through systemic deception. The Soviets have learned that the American people have a very short attention span, are easily seduced by media-generated illusions, and find it difficult to detect camouflage and deception. They are presently creating the illusion of peace, the death of communism, the demilitarization of the Soviet bloc, and friendship while planning and perpetrating exactly the opposite.

As Gary Moes wrote recently in the CHALCEDON REPORT (P.O. Box 158, Vallecito, CA 95251): "About 30 years ago, a congress of all world communist parties agreed to resurrect a strategy which Lenin implemented with astonishing success in morally and physically disarming the internal and external opponents of his program. The strategy, conceived by his secret police, was disinformation the deliberately false portrayal of the true conditions and practices of the communist world in order to elicit desired reactions from the non-communist world. In periods of true weakness and crises within the communist world, the carefully crafted image was one of aggressive strength and expansion, and all communist practice was geared to create that image. In periods of actual strength and solidarity within the communist leadership, the system was portrayed as weak, struggling, transitional and (because of humbly admitted needs) open to co-operation with the Western family of nations.

"To dissipate the barriers posed by the military/industrial colossus in the West, the Soviet bloc had to be portrayed aspeace-loving and on a road toward convergence with the West ideologically in short, no longer a threat. Thus the massive and disarmament drives of recent years. To disarm the democracies, there had to be convincing proof that the democratic road was being taken. And to convince the world that the forces for democracy were real, there would have to be, for a time, resistance from on high, even feigned capitulation.

"This strategy has been detailed and comprehensive, almost beyond imagination, and the current swift events in the Eastern Bloc are the culmination of long years of careful planning and skillful manipulation. The extent of the deception and its detailed objectives have been known (though largely disregarded) for several years, thanks to revelations by a handful of key, knowledgeable insiders who have defected to the West, notably the former KGB officer Anatoliy Golitsyn and the former chief of the Romanian secret service Ion Pacepa. Both have written alarming exposes of the disinformation program; Golitsyn's NEW LIES FOR OLD (Dodd, Mead & Co., 1984) and Pacepa's RED HORIZONS (Regnery Gateway, 1988). A new book by Edward Jay Epstein, DECEPTION (Simon and Schuster, 1989), pulls together the revelations of these two experts and further analyzes the implications for the West of the communist disinformation strategy."

Wed, 08/13/2014 - 20:58 | 5090181 Ventnor
Ventnor's picture

I would urge you to de-couple the name of the great Dominican saint and philospher from your very idiosyncratic political views.  Not fair to him.

Thu, 08/14/2014 - 00:13 | 5090794 napper
napper's picture

thomas Aquinas

Perhaps you should spend some time reading up on the money flow (big money) from the banksters to the revolutionaries.

 

you've been a victim of disinformation.

 

the US propaganda apparatus has been getting worse and worse in terms of their skills of persuassion.

 

if you can't even spot the blatant lies and contradictions, then either you are a sucker or you are brain dead.

Do NOT follow this link or you will be banned from the site!