Gold, a SWIFT alternative, and even blockchain technology are being utilized to free Russia from US hegemonic influence…and its working.
As the entire western mainstream media and “red scare” US congressmen push the fake news “Russia election meddling” narrative, there is only one “Russia story that matters“…
The World Gold Council has reported that the Central Bank of Russia has more than doubled the pace of its gold purchases, bringing its reserves to the highest level since Putin took power 17 years ago.
Russia’s desire to break away from the hegemony of the U.S. dollar and the dollar payment system is well-known. Over 60% of global reserves and 80% of global payments are in dollars. The U.S. is the only country with veto power at the International Monetary Fund, the global lender of last resort.
Perhaps Russia’s most aggressive weapon in its war on dollars is gold.The first line of defense is to acquire physical gold, which cannot be frozen out of the international payments system or hacked.
But Russia is pursuing other dollar alternatives besides gold.
For one, it’s been building nondollar payments systems with regional trading partners and China.
The U.S. uses its influence at SWIFT, the central nervous system of global money transfer message traffic, to cut off nations it considers to be threats.
From a financial perspective, this is like cutting off oxygen to a patient in the intensive care unit. Russia understands its vulnerability to U.S. domination and wants to reduce that vulnerability.
Russia is also part of a reported Chinese plan to install a new international monetary order that excludes U.S. dollars. Under that plan, China could buy Russian oil with yuan and Russia could then exchange that yuan for gold on the Shanghai exchange.
Now it appears Russia has another weapon in its anti-dollar arsenal.
Russia’s development bank, VEB, and several Russian state ministries are reportedly teaming up to develop blockchain technology. They want to create a fully encrypted, distributed, inexpensive payments system that does not rely on Western banks, SWIFT or the U.S. to move money around.
The ultimate loser here will be the dollar. That’s one more reason for investors to allocate part of their portfolios to assets such as gold.
The World Gold Council has reported that the Central Bank of Russia has more than doubled the pace of its gold purchases, bringing its reserves to the highest level since Putin took power 17 years ago.
Perhaps Russia’s most aggressive weapon in its war on dollars is gold. The first line of defense is to acquire physical gold, which cannot be frozen out of the international payments system or hacked.
With gold, you can always pay another country just by putting the gold on an airplane and shipping it to the counterparty. This is the 21st-century equivalent of how J.P. Morgan settled payments in gold by ship or railroad in the early 20th century.
Russia has now tripled its gold reserves from around 600 tonnes to 1,800 tonnes over the past 10 years and shows no signs of slowing down. Even when oil prices and Russian reserves were collapsing in 2015, Russia continued to acquire gold.
- Because Germany had committed genocide, it was impregnated with self-hatred and a rejection of its own identity. Germany turned to European construction and tried to define itself as European, in order not to call itself German.
- A gradual replacement of the non-Muslim population with a Muslim population is taking place. Forty percent of children under five and born in Germany today have foreign roots.
- The demographer Michael Paulwitz wrote a year ago that unless the current trends are reversed, Germans will become a minority in their own country, possibly in fifteen to twenty years.
Germany's federal elections were supposed to lead to the triumph of Angela Merkel. Their results were rather different from what was anticipated. Merkel's "victory" looks like a disaster: the Christian Democratic Alliance (CDU-CSU) won 33% of the vote -- 9% less than four years ago, its worst result since 1949. The Social Democratic Party (SPD), which governed the country with Merkel during the last four years, lost more than 5%, and fell from 25.7 % to 20% of the vote -- the worst result in its history.
Alternative for Germany (AfD), a conservative nationalist party born in 2013, obtained 12.6%, and will enter in the Bundestag for the first time. Die Linke, the Marxist left, received 9%. As neither the SPD nor Die Linke will participate in the next government, and as AfD is radically opposed to the policies pursued by Merkel, she has only two possible partners: the libertarian Free Democratic Party and The Greens: both of whose positions on most subjects seem incompatible.
Angela Merkel will remain Chancellor, but by default, and mostly because there was no other real choice: six months ago, two-thirds of the German population wanted her to be replaced. Only 8% wanted her to remain in her post. Martin Schultz, former President of the European Parliament, who was the SPD candidate, did not offer anything different and led a lackluster campaign.
If Merkel succeeds in forming a coalition, it will be a precarious and unstable assemblage that will keep Germany on the verge of paralysis and make the country the sick man of 21st century Europe.
Germany actually already is a sick country, and Angela Merkel is part of the sickness.
The median age in Germany is now 46.8. A gradual replacement of the non-Muslim population with a Muslim population is taking place. Forty percent of children under five, born in Germany, have foreign roots. Since 2005, the population of new arrivals has increased by 24%, while the native population has decreased by 5%.
Demographers say that unless the current trends are reversed, Germans will become a minority in their own country, possibly in fifteen to twenty years.
Most of the German press is permeated with political correctness. Newspapers and magazines support multiculturalism, and do not talk about the most urgent problems facing the country: anemic economic growth, population ageing, and Islamization. Many journalists, professors and writers say that German culture does not exist. When books criticizing Islam may become best sellers, their authors are immediately demonized. Deutschland schafft sich ab ("Germany Abolishes Itself") was an enormous success in 2010, but its author, Thilo Sarrazin, was immediately treated as a "racist" and pushed towards the margin of all political debates. Rolf Peter Sieferle, a former counselor of Angela Merkel, wrote several articles describing the self-destruction of Germany. "A society that can no longer make the difference between itself and the forces that dissolve it lives morally beyond its means," he said in 2015. Insulted and rejected by those with whom he used to work, he committed suicide in September 2016. A collection of his notes was published after his death, Finis Germaniae ("The End of Germany").
I’ve written a lot about US public pension funds lately. Many of them are underfunded and will never be able to pay workers the promised benefits - at least without dumping a huge and unwelcome bill on taxpayers.
And since taxpayers are generally voters, it’s not at all clear they will pay that bill.
Readers outside the US might have felt safe reading those stories. There go those Americans again… However, if you live outside the US, your country may be more like ours than you think.
This week the spotlight will be on Europe.
The Wall Street Journal recently did a rather bleak report on public pension funds in Europe. Quoting:
Europe’s population of pensioners, already the largest in the world, continues to grow. Looking at Europeans 65 or older who aren’t working, there are 42 for every 100 workers, and this will rise to 65 per 100 by 2060, the European Union’s data agency says. By comparison, the U.S. has 24 nonworking people 65 or over per 100 workers, says the Bureau of Labor Statistics, which doesn’t have a projection for 2060. (WSJ)
The WSJ continues:
Across Europe, the birthrate has fallen 40% since the 1960s to around 1.5 children per woman, according to the United Nations. In that time, life expectancies have risen to roughly 80 from 69.
In Poland birthrates are even lower, and here the demographic disconnect is compounded by emigration. Taking advantage of the EU’s freedom of movement, many Polish youth of working age flock to the West, especially London, in search of higher pay. A paper published by the country’s central bank forecasts that by 2030, a quarter of Polish women and a fifth of Polish men will be 70 or older.
I could go on on reviewing the retirement problems in other countries, but I hope you begin to see the big picture. This crisis isn’t purely a result of faulty politics - though that’s a big contributor.
It’s a problem that is far bigger than even the most disciplined, future-focused governments and businesses can easily handle.
Worse, generations of politicians have convinced the public that their entitlements are guaranteed. Many politicians actually believe it themselves. They’ve made promises they aren’t able to keep and are letting others arrange their lives based on the assumption that the impossible will happen. It won’t.
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