I’ve been following the monetary front of the Neocon War on the World—being fought kinetically as a proxy war of Ukraine against Russia, but with active participation of the American Empire. Lately, it appears that the Neocon dimwits who run the Zhou regime are beginning to sense that things are going even worse than they were afraid. But, like fanatics everywhere in all times, the only solution they can come up with is to double down—to push Ukraine into another doomed, even suicidal, “offensive”. For those who subscribe to The Duran, there’s a video interview with economist Jeffrey Sachs this morning, with the telling title: BRICS Rising As Neocons Destroy The West. Sachs describes the alternate reality inhabited by Neocons and many Western economists, who continue to cling to the hope that King Dollar will pull the West through. In fact, as Sachs points out, the dissolution of dollar hegemony is accelerating, with Brazil the latest major country to abandon the dollar.
Douglas Macgregor alludes to this situation this morning—not for the first time—in his lastest article:
Will voters compel a shift away from endless foreign wars in the upcoming election?
While that may not appear to fit in with the theme of a monetary war, in fact Macgregor is very much aware of that dynamic:
Once again, Americans must choose. Will Americans continue to support escalating proxy war in Ukraine, a byproduct of Washington’s pursuit of global hegemony? Or will Americans demand that Washington defend America’s borders, maintain a republic that upholds the rule of law, respect the cultures and traditions of nations different from us, and trade freely with all nations, even as it protects America’s economic prosperity, its commerce, and its citizens?
The American financial and economic system is at risk of failing catastrophically. And Ukraine is losing the fight with Russia. Unless Americans demand new directions in foreign policy now, as they did in 1968, they will surrender control over their lives and incomes to the Washington elite’s orgy of spending on a dangerous proxy war against Russia and the arbitrary exercise of state power against American citizens at home.
It’s difficult to be optimistic that Americans will reflect rationally on the current crisis and demand rational policies be followed. The alternative is that that reality will obtrude on our national life in such a way that our national cultural suicide will be interrupted for more pressing pastimes.
Macgregor links, above, to an article by Alasdair Macleod that goes into the “risk of failing catastrophically” that our economic system is faced with. The article is quite lengthy, but I’ve attempted to excerpt key ideas in a more readily digestible form. The basic idea behind Macleod’s article is that the American Empire and its vassal states in the collective West are playing with fire with the much rumored Ukrainian spring offensive. Putin, he argues, has been quite restrained in his response to the collective West’s patented backfiring sanctions. Putin has, instead, been content to watch the West deconstruct itself. However, the time may have come at which all the incentives are in favor of Putin taking a much more aggressive approach to monetary warfare:
A tale of two worlds Feb 1, 2023 Alasdair Macleod
In the war between the western alliance and the Asian axis, the media focus is on the Ukrainian battlefield. The real war is in currencies, with Russia capable of destroying the dollar.
Mark that well—Russia is capable of destroying the dollar. The ever cautious Putin, having prepared a defensive economic and monetary war to complement his Special Military Operation, may now be convinced that a real monetary and economic offensive is possible and advisable. Foreign Minister Sergey Lavrov has referred recently to the West’s hybrid war against Russia, and that suggests that Russia is contemplating an imminent development of its own approach.
So far, Putin’s actions have been relatively passive. But already, both Russia and China have accumulated enough gold to implement gold standards. It is now overwhelmingly in their interests to do so.
More on that below. The implementation of a gold standard—even a partial one—is likely to have economic effects equivalent at least to the use of tactical nukes.
With a new round of military action in Ukraine shortly to kick off, it will be in Putin’s interest to move from passivity to financial aggression. It will not take much for him to undermine the entire western fiat currency system — a danger barely recognised by a gung-ho NATO military complex.
America’s finance and currency-based hegemony has outlasted its benefits to the world order.
Macleod discusses the reports that they US has attempted overtures to Russia to negotiate and end to war. There are multiple problems with this, even if sincere. At this point there’s no going back to the status quo ante to war. Russia is winning and has no incentive to stop winning. Nor to give the American Empire some sort of easy out. Instead, all the incentives are for Russia to push strongly for the solution it was willing to achieve through diplomacy before the war began. That will include the end of NATO:
If ... NATO fails to win in Ukraine, ..., Germany must be prepared for a political accommodation with Russia.
... moves being initiated by the Americans puts Russia is in the stronger position. Peace talks initiated by the Americans would almost certainly require them to bend to Russian demands, ... Whether America is prepared to concede its control over Western Europe will become the central issue. The Russians are likely to insist on it. It would be the end of NATO, ...
Russia’s underlying economy is far healthier than we have been led to believe. And despite massive military spending commitments, last year Russia’s budget deficit was only 2.3% of GDP, compared with the US’s 5.4%. The economic consequences of war has benefited Russia through higher energy prices, while it has cost the western alliance in price inflation and higher interest rates.
... by shipping in tanks of various makes to the Ukrainians so that a new attack by proxy can be mounted on Russia, the western alliance is doubling down on its earlier mistakes.
The consequences for the alliance’s financial markets are potentially devastating. Kiss goodbye to transient inflation and interest rate moderation. Say hello to soaring bond yields, collapsing equity markets, bankrupt banking systems including the central banks themselves, and debt traps for both governments and overleveraged businesses. Fiat currencies will teeter on the precipice of collapse.
There’s little doubt that the euro is particularly vulnerable to the consequences of a new military escalation in Ukraine ...
Clearly, the western alliance’s financial system is already in deep trouble. The consequences of a resumption in Ukrainian hostilities are likely to destabilise it entirely. Unless the Russians are prepared to rescue the alliance from its own follies, the western alliance’s financial system is doomed.
Russia, China, and the members of the Shanghai Cooperation Council will probably be moving from their passive policy letting America and its partners simply hang themselves by their mistakes, to an active one of putting distance from their failure.
... nations in the SCO and BRICS grouping are selling dollars for gold, ... That accumulation is likely to accelerate as the price of gold in western fiat rises ...
Now, Macleod gets to what could be what’s alarming the Zhou regime of late. Recall that Mark Milley has been talking about a need for the US military to double its funding. With a collapsing role for King Dollar in the global economy, how can a doubling in military funding be justified to a public at home that will likely be in a state of shock, as OPEC+ drastically cuts production? Douglas Macgregor has warned that the time is coming when the US military will need to return home. As Macleod says, the US Government—including its war making powers, both kinetic and economic—has relied on foreigners accumulating dollars and reinvesting them in US treasury stock. What if …
The consequences for US Government funding are dire. For decades, the US Government has relied on foreigners accumulating dollars and reinvesting them in US Treasury stock.
We are already seeing dollar holdings and financial assets in foreign hands beginning to be sold down, which according to the US Treasury’s TIC figures have declined from a peak of $34 trillion to about $30 trillion currently.
At the St Petersburg International Forum last June attended by 81 official delegations, President Putin made it clear that dollars and euro reserves should be sold for fear of confiscation and due to their losing purchasing power. Not only has Putin primed foreign governments to dump their dollar and euro reserves, but NATO’s aggression over Ukraine is bound to drive up commodity and energy values in fiat currencies, and therefore the natural level of interest rates and bond yields. In short, by his response to NATO aggression, he has the power to destroy the alliance’s currency and financial systems. And given that Russia, China, and the entire SCO membership would benefit from a gold standard, there is every reason for him to take the nuclear option, not of the warhead variety, but the financial.
At the top I referred to signs that the Zhou regime may be slowly coming to the realization that they are engaged in the self destruction of the collective West—but can only double down.
Here’s Little Marco—and pay attention to the note of outright alarm, verging on hysteria, in his voice. Jeffery Sachs spoke of the end of dollar hegemony within ten years, but Little Marco is voicing the unthinkable Neocon nightmare: Within five years sanctions may no longer be possible. Little Marco refers to the nightmare of Brazil moving off the dollar standard, and someone has explained to him what development like this mean—and end to the free ride of the rest of the world funding the US military:
And yet the Neocons can only think of doubling down:
As fatigue grows and morale wanes in Ukraine, defeat is a real possibility
The author, Earle Mack, addresses Russia and China in these remarkable terms:
We need to send a message to the Russians and the Chinese that the civilized world will not back away from this existential challenge.
More war, more name calling.
This is the statement that stopped me in my tracks to self reflect.
"It’s difficult to be optimistic that Americans will reflect rationally on the current crisis and demand rational policies be followed."
My thoughts are around what evidence do I have that others around me understand this? Take my wife. Love her to death. She gets her information by watching ABC Nightly news and 60 minutes. No chance to get another perspective from Fox or similar.
What I mean by sharing this is if things aren't or can't be as bleak because there is no sensation or stimulus to it then it must not be true. Gas prices by me just crossed the $4.00+ lexicon. That doesn't bother my wife. Inflation / cost of goods increases.. doesn't bother her. Signs/signals we become aware (e.g. currencies etc.) of because of blog's like this or having a critical thought don't come easy for most Americans. We are slaves to what we're presented. Further, her Ukraine attitude e.g. "over there" and not on our doorstep, so why should I really care? Clueless as to the catastrophe that could result from growing financial and economic situations.
"Playing with fire" is not self-evident to most Americans I fear. Only pain and suffering will cause the American populous to rise to the occasion. How will this happen? Don't count on the government to be candid, truthful, or honest. Count out the MSM too.
This is gonna be brutal. Burnt bridges are in fact... burnt
Just remember. 10% goes to The Big Guy.