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The war in Ukraine marks the end of the American century By Mike Whitney

The Plebiscite World by The Plebiscite World
June 16, 2022
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Biden, Putin.

“The ferocity of the confrontation in Ukraine shows that we are talking about much more than the fate of the kyiv regime. The architecture of the entire world order is at stake.” (Sergei Naryshkin, Director of Foreign Intelligence)

Here is your thought for the day on “reserve currency”: Every US dollar is a check written on an account that is overdrawn by $30 trillion.

It’s true. The “full faith and credit” of the US Treasury is largely a myth maintained by an institutional framework that rests on a foundation of sand. In fact, the dollar is not worth the paper it is printed on; it is an IOU struggling in a sea of ​​red ink. The only thing keeping the dollar from vanishing into the ether is the trust of gullible people who continue to accept it as legal tender.

The US dollar was officially crowned the world’s reserve currency and was backed by the world’s largest gold reserves thanks to the Bretton Woods agreements. Instead of gold reserves, other countries have accumulated reserves of US dollars. Needing a place to store their dollars, countries began buying US Treasury securities, which they saw as a safe reserve of money. …

But why do people keep faith in the dollar when its flaws are known to all? After all, America’s $30 trillion national debt is no secret, nor is the additional $9 trillion piling up on the Fed’s balance sheet. This is a stealth debt that the American people are totally unaware of, but responsible for nonetheless.

To answer this question, we need to look at how the system actually works and how the dollar is supported by the many institutions that were created after World War II. These institutions provide an environment conducive to carrying out the longest and most egregious swindle in history, namely the exchange of high-value manufactured goods, raw materials and laborious labor for pieces of green paper with dead presidents on them. One can only marvel at the genius of the elites who concocted this scam and then imposed it wholesale on the masses without a cry of protest. Of course, the system comes with various enforcement mechanisms that quickly eliminate anyone who tries to break free from the dollar or create another system. (Saddam Hussein and Muammar Gaddafi come to mind.) But the fact is that – apart from the institutional framework and the ruthless extermination of opponents of the dollar – there is no reason for humanity to remain attached to a currency that is buried under a mountain of debt and whose real value is virtually unknown.

It has not always been so. There was a time when the dollar was the strongest currency in the world and deserved its place at the top of the rankings. After World War I, the United States was “the owner of the majority of the world’s gold.” This is why an international delegation “decided that the currencies of the world would no longer be tied to gold but could be pegged to the US dollar, ‘because the greenback was, itself, tied to gold.’ Here is the continuation of an Investopedia article:

“The arrangement became known as the Bretton Woods Agreement. It established the authority of central banks, which had to maintain fixed exchange rates between their currencies and the dollar. In return, the United States would buy back the American dollars in gold on demand…

The US dollar was officially crowned the world’s reserve currency and was backed by the world’s largest gold reserves thanks to the Bretton Woods agreements. Instead of gold reserves, other countries have accumulated reserves of US dollars. Needing a place to store their dollars, countries began buying US Treasury securities, which they saw as a safe reserve of money. …

The demand for Treasury securities, coupled with the deficit spending needed to fund the Vietnam War and domestic Great Society programs, caused the United States to flood the market with paper money. …

The demand for gold was such that President Richard Nixon was forced to step in and decouple the dollar from gold, leading to the floating exchange rates that exist today. Although there have been periods of stagflation, which is defined as high inflation and high unemployment, the US dollar has remained the reserve currency of the world.

But today the gold is gone and what remains is a steaming pile of debt. So how on earth has the dollar managed to preserve its status as the world’s preeminent currency?

Proponents of the dollar system will tell you that it has something to do with “the size and strength of the US economy and the dominance of US financial markets”. But that’s absurd.

The truth is, reserve currency status has nothing to do with “the size and strength” of America’s post-industrial, service-oriented, bubble-fueled, hole-in-the-wall economy, third world rats. It also has nothing to do with the so-called security of US Treasuries “which, after the dollar, is the biggest Ponzi scheme of all time.

The real reason the dollar has remained the world’s premier currency is central bank cartelization. Western central banks are a de facto monopoly run by a small cabal of low-level eaters who coordinate and collude on monetary policy to preserve their maniacal stranglehold on financial markets and the global economy. It’s a money mafia and, as George Carlin said, “You and I are not part of it.” You and I are not in the big club.” In summary: It is the relentless manipulation of interest rates, forecasts and quantitative easing (QE) that has kept the dollar high but undeserved.

But all of that is about to change, entirely because of Biden’s reckless foreign policy that forces key players in the global economy to create their own rival system. This is a real tragedy for the West, which has benefited from a century of uninterrupted extraction of wealth from the developing world. Today, due to the economic sanctions imposed on Russia, an entirely new order is emerging, in which the dollar will be replaced by national currencies (processed by an independent financial settlement system) in bilateral trade agreements, until later in the year Russia launches an exchange-listed, commodity-backed currency to be used by its trading partners in Asia and Africa. Washington’s theft of Russia’s foreign reserves in April gave a boost to the current process, which has been further accelerated by Russia’s banishment from foreign markets. In short, US economic sanctions and boycotts have expanded the non-dollar zone by orders of magnitude and forced the creation of a new monetary order.

Isn’t that stupid? For decades, the United States has operated a scam in which they exchange their packaging currency for things of real value (oil, manufactured goods and labor). But now, Biden’s troop has completely abandoned that system and divided the world into several camps.

But why ?

To punish Russia, right?

Yes that’s it.

But, if so, shouldn’t we try to find out whether the sanctions actually work or not before recklessly changing the system?

It is too late for that. The war against Russia has begun and the first results are already being felt. Just look at how we destroyed the Russian currency, the rouble. It’s shocking ! According to a CBS article:

“The Russian ruble is the best performing currency in the world this year”…

Two months after the value of the ruble fell to less than a US penny in the fastest and toughest economic sanctions in modern history, the Russian currency has staged a staggering recovery. The ruble has jumped 40% against the dollar since January. …

Normally, a country facing international sanctions and a major military conflict would see investors flee and capital flow out steadily, causing its currency to fall. …

The resilience of the ruble means that Russia is partly immune to the punitive economic penalties imposed by Western nations after its invasion of Ukraine…”2

Eh? You mean the attack on the ruble didn’t work after all?

It seems so. But that does not mean that the sanctions are a failure. Oh no. Just look at the effect they have had on Russian commodities. Export earnings are plummeting, right? Here’s more information from CBS:

“Commodity prices are currently very high, and even though the volume of Russian exports has fallen due to embargoes and sanctions, rising commodity prices are more than offsetting these declines,” said Tatiana Orlova, senior emerging markets economist at Oxford Economics. …

Russia earns nearly $20 billion a month from its energy exports. Since the end of March, many foreign buyers have complied with the requirement to pay for energy in rubles, which has driven up the value of the currency”[2].

You are laughing at me ? You mean the ruble is soaring and Putin is making more money than ever on commodities?

Yes, and it’s the same with Russia’s trade surplus. Take a look at this excerpt from an article by The Economist:

“Russia’s exports… have held up surprisingly well, including those destined for the West. The sanctions allow the continued uninterrupted sales of oil and gas to most of the world. And soaring energy prices have further boosted incomes. …

As a result, analysts expect Russia’s trade surplus to hit record highs in the coming months. The Institute of International Finance estimates that in 2022 the current account surplus, which includes trade and some financial flows, could reach $250 billion (15% of last year’s GDP), more than double the $120 billion recorded in 2021. Vistesen said it is disappointing that the sanctions have pushed up Russia’s trade surplus, and therefore helped fund the war. Ms Ribakova believes that the effectiveness of financial sanctions may have reached its limits. The decision to strengthen trade sanctions must come next. …

But these measures could take time to produce their effects. Even if the EU implements its proposal to ban Russian oil, the embargo would be implemented so slowly that EU oil imports from Russia would fall by only 19% this year, according to Liam Peach, from the consulting firm Capital Economics. The full impact of these sanctions would not be felt until early 2023, by which time Mr. Putin will have amassed billions to finance his war.

Let me sum up: Sanctions actually hurt the US and help Russia, so the experts think we should impose more sanctions? That’s it ?

Exactly. Now that we’ve shot each other in the foot, experts think it would be wise to shoot the other as well.

Am I the only one struck by the folly of this policy? Watch this excerpt from an RT article:

“Russia could earn a record $100 billion in gas sales to European countries in 2022 due to soaring energy prices,” French newspaper Les Echos reported this week, citing Citibank analysts. . …

Projected revenue from gas sales will be almost twice as high as last year, according to the newspaper. The analysis does not take into account profits from the sale of other Russian raw materials, such as oil, coal and other minerals.

Les Echos reports that, despite sanctions and warnings of a widespread embargo on Russian energy, the 27 EU countries continue to send around $200 million a day to Gazprom.

Revenues from gas and oil sales are therefore literally flooding Moscow’s coffers like never before. Meanwhile, energy prices in the EU and America have soared to 40-year highs.

Do you see how counterproductive this policy is?

The EU is sinking deeper into recession, supply lines have been severely disrupted, food shortages are regularly appearing, and gas and oil prices have spiked. By any objective criteria, the sanctions not only failed, but backfired spectacularly. Don’t Biden’s people see the damage they’re causing? Are they completely cut off from reality?

Imagine the Ukrainians using Biden’s New Artillery Battery (HIMARS) to bomb cities in Russia? And then ?

Then Putin takes off the gloves and immediately cuts off the flow of hydrocarbons to Europe. This is what will happen if Washington continues the escalation. You can be sure of that. If Russia’s “special military operation” suddenly turns into a war, the lights all over Europe will go out, houses will start freezing, factories will shut up, and the continent will slide headlong into a prolonged depression and painful.

Does anyone in Washington think about these things or are they all so drunk on their own press clippings that they have completely lost touch with reality?

Here’s more info from an RT article:

“Even as the collective West continues to insist – against all observable reality – that the conflict in Ukraine is going well for Kyiv, the mainstream media are growing increasingly uncomfortable with the situation on the front lines. economic. More and more observers are admitting that the embargoes imposed by the United States and its allies are not crushing the Russian economy, as originally expected, but rather their own. …

“Russia is winning the economic war,” Larry Elliott, the Guardian’s economics editor, said Thursday. “It has now been three months since the West launched its economic war against Russia, and it is not going as planned. On the contrary, things are even very bad,” he wrote. …

In an essay published on May 30, Guardian columnist Simon Jenkins also said the embargo had failed. …

As Jenkins points out, the sanctions have actually raised the price of Russian exports such as oil and grain – thus enriching Moscow instead of impoverishing it, while leaving Europeans short of gas and Africans short of food. »5.

Did you understand the part where it says “Russia wins the economic war”? What do you think this means in practical terms?

Does this mean that Washington’s failed attempt to maintain its global hegemony by “weakening” Russia is actually putting enormous pressure on the Transatlantic Alliance and NATO, which will trigger a recalibration of relations leading to a provocative rejection of the “rules-based system”?

Is that what that means? Will Europe separate from Washington and let America sink under its $30 trillion ocean of red ink?

Yes, that’s exactly what it means

Uncle Sam’s 30-year binge

Washington’s proxy war supporters have no idea how wrong they were or what damage they are inflicting on their own country. The Ukraine debacle is the culmination of 30 years of bloody interventions that have brought us to a tipping point where the nation’s fate is about to take a dramatic turn for the worse. As the dollar zone shrinks, living standards will plummet, unemployment will soar, and the economy will enter a fatal spiral.

Washington has vastly underestimated its vulnerability to a catastrophic geopolitical blowback that is poised to swiftly and excruciatingly end America’s new century.

A wise leader would do everything in his power to get us out of trouble. The war in Ukraine marks the end of the American century

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