{"id":114805,"date":"2022-05-05T07:31:39","date_gmt":"2022-05-05T11:31:39","guid":{"rendered":"http:\/\/stateofthenation.co\/?p=114805"},"modified":"2022-05-05T07:32:18","modified_gmt":"2022-05-05T11:32:18","slug":"eu-corruptocrats-hellbent-on-destroying-the-global-economy-to-save-themselves","status":"publish","type":"post","link":"https:\/\/stateofthenation.co\/?p=114805","title":{"rendered":"

EU Corruptocrats Hellbent on Destroying the Global Economy to Save Themselves<\/b><\/h2>"},"content":{"rendered":"

The Great Currency Reset and
\nWhy Europe is Trapped<\/strong><\/h1>\n

\"\"<\/p>\n

By Tom Luongo
\nGold Goats ‘n Guns<\/a><\/p>\n

There\u2019s a lot of news flying around about the changes happening in global currency trading.<\/p>\n

From \u201cGas for Rubles\u201d to \u201cWhat the Hell is Going on With the Yen?\u201d there are a lot of questions and very few answers as to what it all means and whose on which side of the divide.<\/p>\n

The Fed just hiked 50 basis points for the first time since 2000 and will be running off its balance sheet forcing the Treasury to stop issuing new debt at stupid rates. The European Union unveiled a sixth sanctions package against Russia which calls for a complete embargo of all Russian oil.<\/p>\n

Further to this the EU is now aping what the Trump Administration tried to do to Iran in 2018,\u00a0sanctioning all services, including insurance, to all shippers<\/a>\u00a0of oil from doing any business with Russia and sanctioned Russian banks.<\/p>\n

The bloc is proposing to ban European vessels and companies from providing services \u2014 including insurance \u2014 linked to the transportation of Russian oil and products globally as part of its new sanctions package, according to officials and a draft document seen by Bloomberg.<\/p>\n

While member states are still wrangling over the terms, it\u2019s a potentially powerful tool because 95% of the world\u2019s tanker liability cover is arranged through a London-based insurance organization called the International Group of P&I Clubs that has to heed European law.<\/p><\/blockquote>\n

These sanctions, effectively politicizing every aspect of international business and trade, are ultimately nothing more than short-term annoyances for Russia or anyone else.<\/p>\n

It betrays a mindset that cares nothing for the downstream effects of these actions and, if anything, betray the desperation felt in Brussels today about its position in the global market.<\/p>\n

I\u2019ve spilled hundreds of column inches trying to explain to the world that it is the EU\u2019s totalitarian mindset based on their psychological imbalance and ideological need to be seen as the champions of humanity, that drives all of their decisions.<\/p>\n

The US is not so driven. We\u2019re far easier to understand. We like power but only so long as it nets us a profit.<\/p>\n

This sanctions package is\u00a0prima facie<\/em>\u00a0evidence of their insanity and what happens when, like a cornered animal, they are faced with an existential choice. The EU is built on a foundation of insulating its leadership from the vicissitudes of public opinion.<\/p>\n

Populism is a four-letter word in the Eurocrat\u2019s vocabulary.<\/p>\n

The consequences of this policy which was conceived of by the fart-sniffing buffoons at the World Economic Forum,\u00a0The Davos Crowd,<\/em>\u00a0are irrelevant to them in the short-term. Yes, Europeans will suffer tremendously high inflation because, if successful at taking a majority of Russian oil off the global markets, will only ensure that prices go ballistic.<\/p>\n

Do you think the same people who have a stated depopulation agenda who mandated a 12% effective Pfizer vaccine\u00a0and wasn\u2019t tested at all on pregnant women<\/a>\u00a0lest they be barred from partaking of European society care one whit about the people they govern?<\/p>\n

Of course not.<\/p>\n

I guess this is what they mean when they invoke \u201cEuropean values.\u201d<\/p>\n

So, keep that firmly in mind when you play through the following scenarios and what is really at stake for them and for us going forward. These are people who are only in power because they control the political process handed to them via a corrupt monetary system which institutionalizes the Cantillion effect of money printing to grant them unearned advantages in the market place.<\/p>\n

As I\u2019ve pointed out in previous articles, one of the strongest weapons Russia has in their arsenal is the world\u2019s need for the commodities they produce and their ability now, with the global financial system teetering on the brink of collapse, to set the terms of payment for them.<\/p>\n

Ronan Manly at Bullion Star<\/a>\u00a0recently wrote a great article which is, I believe, the foundational one for what\u2019s going on in Russia. \u00a0In it Manly goes over the steps being taken by the Russians to move away from a purely debt-based currency regime to a commodity-based one. This idea is promulgated by Sergei Glazyev, who is heading up the creation of a kind-of SDR for the Eurasian Economic Union (EAEU).<\/p>\n

These moves are staunchly opposed by the Bank of Russia. \u00a0I was asked by a Patron to elaborate on this dichotomy.<\/p>\n

It looks to me like Glazyev\u2019s plan for the new EAEU currency isn\u2019t to make the ruble exchangeable for gold, like the old gold-backed USD, but to value it against the price of gold and 19 or so other commodities, plus the member countries\u2019 currencies. The basket, including gold, will be a measure of value, a yardstick by which to compare the value of member currencies. The basket won\u2019t be traded, its global value will just be tracked.<\/p><\/blockquote>\n

Bank of Russia head Elvira Nabiullina is a dutiful IMF-trained midwit. \u00a0She heads an organization that is not explicitly under Kremlin control, much like the Fed here. That said, Putin has more authority over the central bank because of the power of the Russian President and the reality that the Russian State is strong enough to dictate terms to its oligarchs, rather than the reverse here in the West.<\/p>\n

But the Bank of Russia is still operationally run with IMF thinking.<\/p>\n

My reply:<\/p>\n

Yes, Nabiullina is a good IMF lackey. \u00a0At the same time [Nikolai] Patruchev is saying the opposite. \u00a0The Security Council is more powerful than the Bank of Russia. \u00a0So, listen to Nabiullina the same way I listen to {US Treasury Sec. Janet] Yellen, as a mouthpiece for foreign powers.<\/p><\/blockquote>\n

Meamwhile [Jerome] Powell and the members of the Russian Sec. Council are telling you what\u2019s going to happen\u2026. A two-tiered ruble is coming in Russia and The Fed is pushing for fiscal discipline on Capitol Hill. \u00a0The Bank of Russia is being set up to fail and be nationalized.<\/p><\/blockquote>\n

The EAEU will setup a commodity-backed SDR and Russia\u2019s domestic ruble will be convertible to gold, while the international RUB, say RBO (Ruble offshore) will circulate to allow people to pay for imports.<\/p><\/blockquote>\n

My point in this reply is that backing the ruble in gold for domestic purposes and the EAEU\u2019s commodity backed SDR are two separate issues. \u00a0One is Russian domestic policy, the other is a feature of a new pan-Asian trade and foreign policy.<\/p>\n

Conflating these issues I think is a mistake. \u00a0An easy mistake to make, mind you, but a mistake nonetheless.<\/p>\n

Do You Think You\u2019re Being Treated Unfairly?<\/h3>\n

So, with that in mind we can now look at the current goals of Russia as it pertains to its current situation: How to break EU support for the war in Ukraine. \u00a0That is, categorically, the most important issue for Russia going forward.<\/p>\n

By setting up Gazprombank as a kind of Russian Ex-Im Bank for dealing with assholes, Russia now has a vehicle to ensure that they get whatever they want for their exports.<\/p>\n

The 1st order effect is that the FX volatility cost is pushed onto the buyer of the export. \u00a0They now have to plan for how to get rubles and at whatever price is available to them. Without much of an international market for the ruble to date, that means Gazprombank going onto the Moscow exchange and buying rubles to sell to a German gas importer, for example.<\/p>\n

This is, right now, the main reason why the ruble is strengthening dramatically versus all \u2018unfriendly\u2019 currencies. The scheme to date has been so successful, in the face of a nascent US dollar bull market, only it and the Brazilian Real have risen versus the dollar in the past year:<\/p>\n

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