The world is today confronted with two nuclear threats of a proportion never previously seen in history. These threats are facing us at a time when the world economy is about to turn and decline precipitously not just for years but probably for decades.
The obvious nuclear threat is the war between the US and Russia which is currently playing out in Ukraine.
The other nuclear threat is the financial weapons of mass destruction in the form of debt and derivatives amounting to roughly $2.5 quadrillion.
If we are lucky, the geopolitical event can be avoided but I doubt that the explosion/implosion of the Western financial time-bomb can be stopped.
More about these risks later in the article.
In my estimation this is not a war between Russia and Ukraine but between the US and Russia. Russia found it unacceptable that the Minsk agreement of 2014 was not kept to. Instead, the bombing of the Donbas area continued. As Ukraine intensified the bombing, Russia invaded in Feb 2021.
I won’t go into the details here of who is at fault, etc, but what is clear is that the US NeoCons have a major interest for this war to escalate. For them Ukraine is just a pawn and the real enemy is Russia. Why would the US otherwise lead the initiative to sanction Russia and send weapons and money to Ukraine but send no peace keepers.
Let us just remind ourselves that ordinary people never want war. The American people don’t want war, nor do the Russians or Ukrainians. It is without fail always the leaders who want war. And in most countries, even in the so called democratic USA, the leaders have total power when it comes to starting a war.
Most of Europe is heavily dependent on Russian oil and gas. Still Europe is shooting itself in the foot by agreeing to the sanctions initiated by the US. The consequences are disastrous for Europe and especially Germany which was the economic engine of Europe. Germany is now finished as an economic power.
The global economic downturn started before the Ukrainian war but the situation has now severely deteriorated with the European economy weakening rapidly. Europe is still digging its own grave by sending more weapons and more money to Ukraine, much of which is being reported to end up in the wrong hands.
...derivatives have grown exponentially. Major amounts of debt are now created in the derivatives market rather then in the cash market. Also, the shadow banking system of hedge funds, insurance companies and other financial business, are also major issuers of derivatives. Many of these transactions are not in the BIS figures. Thus I believe it is realistic to assume that the derivatives market has grown at least in line with debt but probably a lot faster in the last 10+ years. So the gross figure is easily in excess of $2 quadrillion today.
No comments:
Post a Comment