Economic Warfare 3, Counter Attacks

Economic Warfare 3, Counter Attacks

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In Economic Warfare 1 and 2 we learned how the Mega Banks can use highly leveraged speculations to drive prices, (especially in commodities which include currencies), up or down beyond true market fundamentals.

And we also saw how Washington can use these intentionally opaque and complex institutions to wage currency wars, which it did for the first time on a large scale against the Russian Ruble.

The first question would be can countries which are attacked use the same institutions to counterattack?

Jim Rickards the author of “Currency Wars” claims that he worked for the Pentagon in a top secret facility to “game plan” how currencies and other financial instruments might be used as weapons of war.

He came up with scenarios of how the Chinese might attack the US financial system. And there has been speculation that the Russians might also be able to attack the US financial system.

While this might be possible using Cyber Warfare, it is highly likely that by now the Pentagon has closed any vulnerabilities the system might have had, through the traditional channels of leveraged derivative speculations, used by the Mega Banks.

So outside of cyber-attacks there is not much room for counterattacks against the Washington- New York- London financial systems.

In the end all of these systems are designed of, by and for the Mega Banks, for their profits and there for can be used by Washington for aggression against whichever nation state it chooses to attack.

It is all a part of Empire’s financial system, based in its very own currency the US dollar, or its sister currency the Euro.

And while Putin may be an expert in Judo, (using the aggression of others against themselves) it is unlikely that he will get much counter-play on his adversaries home court, with their systems, their games, their rules.

This massive attack by Washington on the Russian Ruble, should be another wake up call for both Moscow, Beijing and other still independent nations as to how much work they have in front of them, if they truly intend to defend themselves in this new Cold War.

In defending themselves properly however, they just might be able to break the back of Western economic imperialism. And that would be by simply creating honest markets.

But there is much work in front of still independent nations. We know that the BRICS at least, have already begun with the easy parts. That is replacing internal revolving credit markets with their own systems independent of Visa, Master Card, American Express etc.

They have also set up alternative international financial institutions to rival the IMF and World Bank. And we know that the Chinese are seeking to make the RNB a readily convertible world reserve currency, to be used to settle international trades. And they are probably looking to back the RNB with gold.

But the RNB has not yet achieved this status. You will know when it has been achieved, because wherever you are you will be able to go to a nearby financial institution and buy RNB at market and in quantity, as easily as US dollars.

But then comes the most complex problem of all. If you are a business person in Nigeria and want to buy something from a business in India to the tune of millions of RNB, how do you do it.

Up until now the answer has been the SWIFT system, set up, of by and for Washington and its allies. And that is a system that they can cut you off from, as they did Iran at a moments notice.

And that could mean that at any time, (for international trading purposes) your new convertible RNB would be worthless.

That means a new Alternative SWIFT system needs to be created. While Russia claims to be near doing that, it is only for trade internal to that country, NOT for international trade.

In order to build such a system one would need to bring in a number of central banks, to guarantee RNB trades to and from their local banks.

And then individual financial institutions within countries would have to be on board, (to use the new system) so that buyers of goods could wire RMB to financial accounts pretty much everywhere, and that the recipients of such funds could pick them up in cash if they wish, quickly.

That is going to take a long time to build. And until it is fully up and functioning Washington can turn off international trade against anyone it chooses to as quickly as closing a faucet.

But if nothing else, this massive currency attack against Russia is a wake up call to all nations, (but particularly the BRICS) that they need to put alternative markets in place, (to the COMEX, CME, NYMEX etc.) that will discover pricing on commodities and currencies.

And given that these new markets would only exist to assure fair valuations of commodities, (based on supply and demand) they would exclude most leverage and of course naked shorting would be very illegal.

Here is an example. During the boom period peaking in 2007, oil hit almost $150/ barrel which included massive speculation. If such speculation was not allowed, perhaps the price would only have been $120/ barrel.

But as we approach a global recession today oil has fallen to $56/ barrel with massive speculation. Without speculation the price might be closer to $80.

The extra wide swings of oil, (due to speculation) adds great pain to many countries and peoples. During the upward spike, very high oil prices badly harmed poor countries who were energy poor.

An artificial trough in oil on the other hand, harms oil producing countries and can and is used for political gains against Russia, Venezuela, Iran and others.

While there will always be highs and lows in even honest markets, the fact that they will be limited both at their heights and depths by supply- demand, will also limit the pain that people will feel.

And honest markets will not be usable for currency wars.

But there is even a better side to them. That is they will de facto pressure the rigged, Mega Bank dollar based financial markets out of existence, or at least force them to become honest.

That is because if say the NYMEX quotes oil at $147/ barrel and you are a buyer, why would you buy on that market with jacked up prices from speculators, when you can buy oil on say a Shanghai exchange at $122/ barrel?

And if you are a buyer of oil and the COMEX quotes the price at $56/ Barrel, while you know the Shanghai exchange wants $80/ barrel, you will back up the truck and buy all you can from the COMEX, only to learn that, that exchange really doesn’t have much oil, that for the most part they were only selling fake paper derivatives, not oil all along.

So you will suck up whatever oil they have at the $56/ Barrel, and maybe sue them as well for non delivery of the rest, and then when the COMEX has no more oil left in stock, and no producer wants to give them any at that price when they can get $80 on the Shanghai exchange, the COMEX will have to either die or get honest.

By simply setting up honest exchanges, you will drive a knife through the heart of Empire’s corrupt financial system and break the back of the power of the Mega Banks.

And that will seriously weaken the financial system of Washington- New York and London in ways Elizabeth Warren could not have dreamed of.

And by limiting the power of the Mega Bank financial blood suckers, you will also be aiding the American people whose blood is one of their favorite feedings.

It seems like a win- win from here. But it is all going to take a lot of cooperation and a lot of work.

After this attack however on the Russian Ruble, one would think that the BRICS understand that they have no choice but to build such alternate financial systems, if the nations of the world are to remain independent of Empire’s control.

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2 COMMENTS

  1. good expose, however there the bottom-line is that there will never be such a thing as honest markets just as there is no such thing as an honest religion and
    Russia and China can only take what the new world oligarchy gives them if they get cocky they will go down ( this is the hard core lesson of the fall of Venezuela)

    • Thank you for you great comments. As all markets are run by human beings, I agree that it is unlikely that we will ever find one that is completely honest.

      But the financial markets of New York- London have had what amounts to a global monopoly since the days of British Imperialism and Adam Smith. And that has made these market extremely corrupt with distorted pricing of basic materials.

      Especially in the New Cold War environment, I expect that a new Shanghai based global commodity market will be much more honest, if only because it will be looking to win market share, but also to disassemble what has been the huge economic advantage of its Western adversary.

      Neither China nor Russia should be compared to Venezuela. All nations that work to keep their sovereignty are different. So far the model of what Venezuela has done with its oil economy. might be a text book example of how not to create a socialist model, by concentrating almost exclusively on sharing without seemingly a clue as to how to produce. That is not the problem in either China or Russia. Both have had great growth models, China for the past two decades and Russia over the past 14 years.

      I wouldn’t argue that the “New World Oligarchy” is perhaps more powerful today than it has ever been, but the oligarchs still do not have their global government. And there are reasons for that. They are not yet all powerful. We are going to have to wait and see what the Nations of the world, that still enjoy some independence will do over the next generation. I do not believe that the future is written in stone.

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