The easiest way to get into this topic is through a 4:29 minute video interview of economist Richard Werner. Werner very lucidly explains what the Real War is about, and he explains that what the Russians are doing—with their distancing from the dollar—bears real similarities to US actions from 1971 onward. Basically, he says, in 1971 the dollar was linked to oil—by ensuring Saudi security in exchange for the Saudis demanding payment for oil in dollars. The reason this was done was because Germany and Japan were complaining about the dollar inflation under Johnson. The new arrangement allowed the US to export its inflation, and the rest of the world had to accept it. Attempts to evade this arrangement by oil producers were crushed by the use of overwhelming American military might.
I don’t often give myself a pat on the back like this, but way back when the US first went into Afghanistan and Iraq I maintained that the real reason for this was to control Central Asian energy, to wrest control away from a then weak Russia and to maintain control through a network of bases throughout the region. Putin appears to have been a bit slow in recognizing what was going on, but for quite a few years now has been fully cognizant. All of this is changing now—not simply because Russia has such enormous and strategic resources but, quite bluntly, because from a military standpoint Russia is able to stand up against US threats, at least in proximity to Russia’s own borders.
So, Richard Werner. Please note that Werner’s interview here come from March 26, 2022, and events have developed since then:
Next, we insert tweets that I’ll call ‘leading indicators’—indicators of what we can expect in the future, based on actions and statements from the last few days. The first thing to note is that Russia is proceeding at a very deliberate pace, but resolutely advancing its strategy.
Peskov is Putin’s spokesman:
Next, we see that, despite US pressure, there is a notable lack of unity and commitment to sanctions:
The “Little King” is Macron, of course, and McKinsey is his spokesman:
Next we see more countries breaking ranks. I believe Serbia can be added to this group:
My prediction: Threatening China and India like this will backfire bigly:
Col. Macgregor said yesterday that he believes the Europeans are slowly coming to realize what a bad position the US is placing them in:
And the result:
Now, I’ve found a very informative article by Ellen Brown, which I’ll excerpt in significant part. As you can probably guess from the title, I think she’s been paying attention to Richard Werner (this article is where I found the link to the Werner interview):
The Coming Global Financial Revolution
Russia Is Following the American Playbook
Brown begins by reprising the brief history of King Dollar as per Werner. She concludes this section:
The deal [dollar payment for oil] held firm until 2000, when Saddam Hussein broke it by selling Iraqi oil in euros. Libyan president Muammar Qaddafi followed suit. Both presidents wound up assassinated, and their countries were decimated in war with the United States. Canadian researcher Matthew Ehret observes:
We should not forget that the Sudan-Libya-Egypt alliance under the combined leadership of Mubarak, Qadhafi and Bashir, had moved to establish a new gold-backed financial system outside of the IMF/World Bank to fund large scale development in Africa. Had this program not been undermined by a NATO-led destruction of Libya, the carving up of Sudan and regime change in Egypt, then the world would have seen the emergence of a major regional block of African states shaping their own destinies outside of the rigged game of Anglo-American controlled finance for the first time in history.
Brown then proceeds to the rise of the Petroruble—the first challenge to King Dollar since 2000:
The first challenge by a major power to what became known as the petrodollar has come in 2022. In the month after the Ukraine conflict began, the U.S. and its European allies imposed heavy financial sanctions on Russia in response to the illegal military invasion. ...
The trust placed in the U.S. dollar as global reserve currency, backed by “the full faith and credit of the United States,” had finally been fully broken. Russian President Vladimir Putin said in a speech on March 16 that the U.S. and EU had defaulted on their obligations, and that freezing Russia’s reserves marks the end of the reliability of so-called first class assets. On March 23, Putin announced that Russia’s natural gas would be sold to “unfriendly countries” only in Russian rubles, rather than the euros or dollars currently used. …
Putin noted that more than half the global population remains “friendly” to Russia. Countries not voting to support the sanctions include two major powers – China and India – along with major oil producer Venezuela, Turkey, and other countries in the “Global South.” “Friendly” countries, said Putin, could now buy from Russia in various currencies.
...
Energy ministers from the G7 nations rejected Putin’s demand, claiming it violated gas contract terms requiring sale in euros or dollars. But on March 28, Kremlin spokesman Dmitry Peskov said Russia was “not engaged in charity” and won’t supply gas to Europe for free ... Sanctions themselves are a breach of the agreement to honor the currencies on global markets.
Bloomberg reports that on March 30, Vyacheslav Volodin, speaker of the lower Russian house of parliament, suggested in a Telegram post that Russia may expand the list of commodities for which it demands payment from the West in rubles (or gold) to include grain, oil, metals and more. Russia’s economy is much smaller than that of the U.S. and the European Union, but Russia is a major global supplier of key commodities – including not just oil, natural gas and grains, but timber, fertilizers, nickel, titanium, palladium, coal, nitrogen, and rare earth metals used in the production of computer chips, electric vehicles and airplanes.
...
U.K. professor of economics Richard Werner calls the Russian move a clever one – a replay of what the U.S. did in the 1970s. To get Russian commodities, “unfriendly” countries will have to buy rubles, driving up the value of the ruble on global exchanges just as the need for petrodollars propped up the U.S. dollar after 1974. ...
A Page Out of the “American System” Playbook
Russia is following the U.S. not just in hitching its national currency to sales of a critical commodity but in an earlier protocol – what 19th century American leaders called the “American System” of sovereign money and credit. Its three pillars were (a) federal subsidies for internal improvements and to nurture the nation’s fledgling industries, (b) tariffs to protect those industries, and (c) easy credit issued by a national bank.
Michael Hudson, a research professor of economics and author of “Super-Imperialism: The Economic Strategy of American Empire” …, notes that the sanctions are forcing Russia to do what it has been reluctant to do itself – cut reliance on imports and develop its own industries and infrastructure. The effect, he says, is equivalent to that of protective tariffs. In an article titled “The American Empire Self-destructs,” Hudson writes of the Russian sanctions (which actually date back to 2014):
Russia had remained too enthralled by free-market ideology to take steps to protect its own agriculture or industry. The United States provided the help that was needed by imposing domestic self-reliance on Russia (via sanctions). ...
Russia is discovering (or is on the verge of discovering) that it does not need U.S. dollars as backing for the ruble’s exchange rate. Its central bank can create the rubles needed to pay domestic wages and finance capital formation. The U.S. confiscations thus may finally lead Russia to end neoliberal monetary philosophy, as Sergei Glaziev has long been advocating in favor of MMT [Modern Monetary Theory]. …
What foreign countries have not done for themselves – replacing the IMF, World Bank and other arms of U.S. diplomacy – American politicians are forcing them to do. ...
Glazyev and the Eurasian Reset
Sergei Glazyev, …, is a former adviser to President Vladimir Putin and the Minister for Integration and Macroeconomics of the Eurasia Economic Commission, the regulatory body of the Eurasian Economic Union (EAEU). He has proposed using tools similar to those of the “American System,” including converting the Central Bank of Russia to a “national bank” issuing Russia’s own currency and credit for internal development. On February 25, Glazyev published an analysis of U.S. sanctions titled “Sanctions and Sovereignty,” in which he stated:
[T]he damage caused by US financial sanctions is inextricably linked to the monetary policy of the Bank of Russia …. Its essence boils down to a tight binding of the ruble issue to export earnings, and the ruble exchange rate to the dollar. In fact, an artificial shortage of money is being created in the economy, and the strict policy of the Central Bank leads to an increase in the cost of lending, which kills business activity and hinders the development of infrastructure in the country.
Glazyev said that if the central bank replaced the loans withdrawn by its Western partners with its own loans, Russian credit capacity would greatly increase, preventing a decline in economic activity without creating inflation.
Russia has agreed to sell oil to India in India’s own sovereign currency, the rupee; to China in yuan; and to Turkey in lira. These national currencies can then be spent on the goods and services sold by those countries. ...
But that sort of global barter system would break down just as local barter systems do, if one party to the trade did not want the goods or services of the other party. In that case, some intermediate reserve currency would be necessary to serve as a medium of exchange.
Glazyev and his counterparts are working on that.
So we see why Russia is proceeding at a deliberate pace. It’s strategy appears to be succeeding, but the goal is to put a new system in place without undue economic turmoil. The strength of the ruble suggests approval of this approach so far.
The Werner video is excellent and the Ellen Green essay is fantastic! I actually saw the Green column this AM and the first thing I thought is that I need to let Mark know about this; but then I thought no, he will see it and write about it - LOL. The essay is so dense with useful information it is difficult to process all of its ramifications.
To me, the essay and Werner's comments set an odd tenor as to the past and future of the U.S. On the one hand it seems past time that we repent for "our" sins given the human misery our empire and its leaders have inflicted on the rest of the world over the last 60 years, even unbeknownst to a lot of us. Part of that repentance, I would think, is to no longer tolerate politicians who have personally lied and profited from this damage, and to no longer tolerate the intelligence community and the military/industrial complex that has instigated so much of it.
On the other hand, there is a hopeful note. Even if we do indeed alienate every other government on earth (as our "elites" seem determined to do) and yet if that does not result in nuclear war or a military invasion of the U.S., we will be blessed to at least have the opportunity to reestablish a self-sustaining economy, not dependent on making people in other countries slaves or on transient, unstable political agreements with tyrannical leaders in other countries. When will we (will we ever?) learn to "live and let live" in freedom from tyranny, as our founders so fervently wanted us to do via our governing charter? Perhaps, just perhaps, we will also be able to reestablish a foothold for our unalienable human rights and our God-given freedoms. The prerequisite for all of this is for us to stop making money and power our God, both in our government and in our society as a whole.
How about this from billionaire Charles Koch.
https://popular.info/p/exclusive-koch-group-says-us-should?s=r