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Russia Plans War Against US Dollar

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Russia Plans War Against US Dollar

By Tyler Durden June 18, 2014

"ICH" - "ZH" - It has been a while since both Ukraine, and the ongoing Russian response to western sanctions (which set off the great Eurasian axis in motion, pushing China and Russia close together, and accelerating the "Holy Grail" gas deal between the two countries) have made headlines. It is still not clear just why the western media dropped Ukraine coverage like a hot potato, especially since the civil war in Ukraine's Donbas continues to rage and claim dozens of casualties on both sides. Perhaps the audience has simply gotten tired of hearing about mixed chess/checkers game between Putin vs Obama, and instead has reverted to reading the propaganda surrounding just as deadly events in the third war of Iraq in as many decades.

However, "out of sight" may be just what Russia's political elite wants. In fact, as VoR's Valentin Mândr??escu reports, while the great US spin and distraction machine is focused elsewhere, Russia is already preparing for the next steps. Which brings us to Putin advisor Sergey Glazyev, the same person who in early March was the first to suggest Russia dump US bonds and abandon the dollar in retaliation to US sanctions, a strategy which worked because even as the Kremlin has retained control over Crimea, western sanctions have magically halted (and not only that, but as the Russian central bank just reported, the country's 2014 current account surplus may be as high as $35 billion, up from $33 billion in 2013, and a far cry from some fabricated "$200+ billion" in Russian capital outflows which Mario Draghi was warning about recently). Glazyev was also the person instrumental in pushing the Kremlin to approach China and force the nat gas deal with Beijing which took place not necessarily at the most beneficial terms for Russia.

It is this same Glazyev who published an article in Russian Argumenty Nedeli, in which he outlined a plan for "undermining the economic strength of the US" in order to force Washington to stop the civil war in Ukraine. Glazyev believes that the only way of making the US give up its plans on starting a new cold war is to crash the dollar system.

As summarized by VoR, in his article, published by Argumenty Nedeli, Putin's economic aide and the mastermind behind the Eurasian Economic Union, argues that Washington is trying to provoke a Russian military intervention in Ukraine, using the junta in Kiev as bait. If fulfilled, the plan will give Washington a number of important benefits. Firstly, it will allow the US to introduce new sanctions against Russia, writing off Moscow's portfolio of US Treasury bills. More important is that a new wave of sanctions will create a situation in which Russian companies won't be able to service their debts to European banks.

According to Glazyev, the so-called "third phase" of sanctions against Russia will be a tremendous cost for the European Union. The total estimated losses will be higher than 1 trillion euros. Such losses will severely hurt the European economy, making the US the sole "safe haven" in the world. Harsh sanctions against Russia will also displace Gazprom from the European energy market, leaving it wide open for the much more expensive LNG from the US.

Co-opting European countries in a new arms race and military operations against Russia will increase American political influence in Europe and will help the US force the European Union to accept the American version of the Transatlantic Trade and Investment Partnership, a trade agreement that will basically transform the EU into a big economic colony of the US. Glazyev believes that igniting a new war in Europe will only bring benefits for America and only problems for the European Union. Washington has repeatedly used global and regional wars for the benefit of the American economy and now the White House is trying to use the civil war in Ukraine as a pretext to repeat the old trick.

Glazyev's set of countermeasures specifically targets the core strength of the US war machine, i.e. the Fed's printing press. Putin's advisor proposes the creation of a "broad anti-dollar alliance" of countries willing and able to drop the dollar from their international trade. Members of the alliance would also refrain from keeping the currency reserves in dollar-denominated instruments. Glazyev advocates treating positions in dollar-denominated instruments like holdings of junk securities and believes that regulators should require full collateralization of such holdings. An anti-dollar coalition would be the first step for the creation of an anti-war coalition that can help stop the US' aggression.

Unsurprisingly, Sergey Glazyev believes that the main role in the creation of such a political coalition is to be played by the European business community because America's attempts to ignite a war in Europe and a cold war against Russia are threatening the interests of big European business. Judging by the recent efforts to stop the sanctions against Russia, made by the German, French, Italian and Austrian business leaders, Putin's aide is right in his assessment. Somewhat surprisingly for Washington, the war for Ukraine may soon become the war for Europe's independence from the US and a war against the dollar.

Putin Advisor Proposes "Anti-Dollar Alliance" To Halt US Aggression
Abroad



 
*yawn*

Russia is scared of JEW NATO, they don't even protect their people in Donetsk

This Putin idiot can send warships to protect Syria against zionist Al Qaeda, he lets his people die

He is scared to attack even he has every reasons to do so: Zionist nazis Maidan separatists, Trade Union massacre, JEW NATO leaders invading Libya,Syria, Iraq, Goergia, Chechenia, Kosovo...
 
*yawn*

Russia is scared of JEW NATO, they don't even protect their people in Donetsk

This Putin idiot can send warships to protect Syria against zionist Al Qaeda, he lets his people die

He is scared to attack even he has every reasons to do so: Zionist nazis Maidan separatists, Trade Union massacre, JEW NATO leaders invading Libya,Syria, Iraq, Goergia, Chechenia, Kosovo...


The US actually wants Russia to invade Ukraine, but Russia is a lot smarter than they think.
 
The US actually wants Russia to invade Ukraine, but Russia is a lot smarter than they think.
I think that JEW USA would take this pretext to invade Syria too

But Russia can prevent the USA invasion say that they protect people from nazis in Donetsk & from zionist beheaders in Syria
 
That will be beyond the ability of Russia.
Russia Plans War Against US Dollar

By Tyler Durden June 18, 2014

"ICH" - "ZH" - It has been a while since both Ukraine, and the ongoing Russian response to western sanctions (which set off the great Eurasian axis in motion, pushing China and Russia close together, and accelerating the "Holy Grail" gas deal between the two countries) have made headlines. It is still not clear just why the western media dropped Ukraine coverage like a hot potato, especially since the civil war in Ukraine's Donbas continues to rage and claim dozens of casualties on both sides. Perhaps the audience has simply gotten tired of hearing about mixed chess/checkers game between Putin vs Obama, and instead has reverted to reading the propaganda surrounding just as deadly events in the third war of Iraq in as many decades.

However, "out of sight" may be just what Russia's political elite wants. In fact, as VoR's Valentin Mândr??escu reports, while the great US spin and distraction machine is focused elsewhere, Russia is already preparing for the next steps. Which brings us to Putin advisor Sergey Glazyev, the same person who in early March was the first to suggest Russia dump US bonds and abandon the dollar in retaliation to US sanctions, a strategy which worked because even as the Kremlin has retained control over Crimea, western sanctions have magically halted (and not only that, but as the Russian central bank just reported, the country's 2014 current account surplus may be as high as $35 billion, up from $33 billion in 2013, and a far cry from some fabricated "$200+ billion" in Russian capital outflows which Mario Draghi was warning about recently). Glazyev was also the person instrumental in pushing the Kremlin to approach China and force the nat gas deal with Beijing which took place not necessarily at the most beneficial terms for Russia.

It is this same Glazyev who published an article in Russian Argumenty Nedeli, in which he outlined a plan for "undermining the economic strength of the US" in order to force Washington to stop the civil war in Ukraine. Glazyev believes that the only way of making the US give up its plans on starting a new cold war is to crash the dollar system.

As summarized by VoR, in his article, published by Argumenty Nedeli, Putin's economic aide and the mastermind behind the Eurasian Economic Union, argues that Washington is trying to provoke a Russian military intervention in Ukraine, using the junta in Kiev as bait. If fulfilled, the plan will give Washington a number of important benefits. Firstly, it will allow the US to introduce new sanctions against Russia, writing off Moscow's portfolio of US Treasury bills. More important is that a new wave of sanctions will create a situation in which Russian companies won't be able to service their debts to European banks.

According to Glazyev, the so-called "third phase" of sanctions against Russia will be a tremendous cost for the European Union. The total estimated losses will be higher than 1 trillion euros. Such losses will severely hurt the European economy, making the US the sole "safe haven" in the world. Harsh sanctions against Russia will also displace Gazprom from the European energy market, leaving it wide open for the much more expensive LNG from the US.

Co-opting European countries in a new arms race and military operations against Russia will increase American political influence in Europe and will help the US force the European Union to accept the American version of the Transatlantic Trade and Investment Partnership, a trade agreement that will basically transform the EU into a big economic colony of the US. Glazyev believes that igniting a new war in Europe will only bring benefits for America and only problems for the European Union. Washington has repeatedly used global and regional wars for the benefit of the American economy and now the White House is trying to use the civil war in Ukraine as a pretext to repeat the old trick.

Glazyev's set of countermeasures specifically targets the core strength of the US war machine, i.e. the Fed's printing press. Putin's advisor proposes the creation of a "broad anti-dollar alliance" of countries willing and able to drop the dollar from their international trade. Members of the alliance would also refrain from keeping the currency reserves in dollar-denominated instruments. Glazyev advocates treating positions in dollar-denominated instruments like holdings of junk securities and believes that regulators should require full collateralization of such holdings. An anti-dollar coalition would be the first step for the creation of an anti-war coalition that can help stop the US' aggression.

Unsurprisingly, Sergey Glazyev believes that the main role in the creation of such a political coalition is to be played by the European business community because America's attempts to ignite a war in Europe and a cold war against Russia are threatening the interests of big European business. Judging by the recent efforts to stop the sanctions against Russia, made by the German, French, Italian and Austrian business leaders, Putin's aide is right in his assessment. Somewhat surprisingly for Washington, the war for Ukraine may soon become the war for Europe's independence from the US and a war against the dollar.

Putin Advisor Proposes "Anti-Dollar Alliance" To Halt US Aggression
Abroad
 
Russia Plans War Against US Dollar

By Tyler Durden June 18, 2014

"ICH" - "ZH" - It has been a while since both Ukraine, and the ongoing Russian response to western sanctions (which set off the great Eurasian axis in motion, pushing China and Russia close together, and accelerating the "Holy Grail" gas deal between the two countries) have made headlines. It is still not clear just why the western media dropped Ukraine coverage like a hot potato, especially since the civil war in Ukraine's Donbas continues to rage and claim dozens of casualties on both sides. Perhaps the audience has simply gotten tired of hearing about mixed chess/checkers game between Putin vs Obama, and instead has reverted to reading the propaganda surrounding just as deadly events in the third war of Iraq in as many decades.

However, "out of sight" may be just what Russia's political elite wants. In fact, as VoR's Valentin Mândr??escu reports, while the great US spin and distraction machine is focused elsewhere, Russia is already preparing for the next steps. Which brings us to Putin advisor Sergey Glazyev, the same person who in early March was the first to suggest Russia dump US bonds and abandon the dollar in retaliation to US sanctions, a strategy which worked because even as the Kremlin has retained control over Crimea, western sanctions have magically halted (and not only that, but as the Russian central bank just reported, the country's 2014 current account surplus may be as high as $35 billion, up from $33 billion in 2013, and a far cry from some fabricated "$200+ billion" in Russian capital outflows which Mario Draghi was warning about recently). Glazyev was also the person instrumental in pushing the Kremlin to approach China and force the nat gas deal with Beijing which took place not necessarily at the most beneficial terms for Russia.

It is this same Glazyev who published an article in Russian Argumenty Nedeli, in which he outlined a plan for "undermining the economic strength of the US" in order to force Washington to stop the civil war in Ukraine. Glazyev believes that the only way of making the US give up its plans on starting a new cold war is to crash the dollar system.

As summarized by VoR, in his article, published by Argumenty Nedeli, Putin's economic aide and the mastermind behind the Eurasian Economic Union, argues that Washington is trying to provoke a Russian military intervention in Ukraine, using the junta in Kiev as bait. If fulfilled, the plan will give Washington a number of important benefits. Firstly, it will allow the US to introduce new sanctions against Russia, writing off Moscow's portfolio of US Treasury bills. More important is that a new wave of sanctions will create a situation in which Russian companies won't be able to service their debts to European banks.

According to Glazyev, the so-called "third phase" of sanctions against Russia will be a tremendous cost for the European Union. The total estimated losses will be higher than 1 trillion euros. Such losses will severely hurt the European economy, making the US the sole "safe haven" in the world. Harsh sanctions against Russia will also displace Gazprom from the European energy market, leaving it wide open for the much more expensive LNG from the US.

Co-opting European countries in a new arms race and military operations against Russia will increase American political influence in Europe and will help the US force the European Union to accept the American version of the Transatlantic Trade and Investment Partnership, a trade agreement that will basically transform the EU into a big economic colony of the US. Glazyev believes that igniting a new war in Europe will only bring benefits for America and only problems for the European Union. Washington has repeatedly used global and regional wars for the benefit of the American economy and now the White House is trying to use the civil war in Ukraine as a pretext to repeat the old trick.

Glazyev's set of countermeasures specifically targets the core strength of the US war machine, i.e. the Fed's printing press. Putin's advisor proposes the creation of a "broad anti-dollar alliance" of countries willing and able to drop the dollar from their international trade. Members of the alliance would also refrain from keeping the currency reserves in dollar-denominated instruments. Glazyev advocates treating positions in dollar-denominated instruments like holdings of junk securities and believes that regulators should require full collateralization of such holdings. An anti-dollar coalition would be the first step for the creation of an anti-war coalition that can help stop the US' aggression.

Unsurprisingly, Sergey Glazyev believes that the main role in the creation of such a political coalition is to be played by the European business community because America's attempts to ignite a war in Europe and a cold war against Russia are threatening the interests of big European business. Judging by the recent efforts to stop the sanctions against Russia, made by the German, French, Italian and Austrian business leaders, Putin's aide is right in his assessment. Somewhat surprisingly for Washington, the war for Ukraine may soon become the war for Europe's independence from the US and a war against the dollar.

Putin Advisor Proposes "Anti-Dollar Alliance" To Halt US Aggression
Abroad

Zerohedge is great entertainment, as always. Russia has almost no importance to the US economy, so good luck in trying to derail the dollar.
 
Zerohedge is great entertainment, as always. Russia has almost no importance to the US economy, so good luck in trying to derail the dollar.

You are right! But it's not a joke if Russians try it together with BRICS, EU and Japan.
 
Why would the BRICS, EU, and Japan cooperate with Russia against the US?

It's not against US. The dominance of $ gave lots of advantages of US economy and international politics. When the world is in an economic turmoil everyone would wish to maximize or safeguard its own interests. It's a Tom & Jerry game...
 
It's not against US. The dominance of $ gave lots of advantages of US economy and international politics. When the world is in an economic turmoil everyone would wish to maximize or safeguard its own interests. It's a Tom & Jerry game...

If it's not against the US, what advantage does it have? Moving to a multi-lateral currency regime simply increases transaction costs.
 
It has nothing to do with transaction costs. There might be two reasons that I can understand:
1, When US sanctions Iran all major banks are forbidden to wire the oil $ in and out Iran. Japan, India and China are dependent on Iranian oil. Japan could make other arrangement but not India nor China. Iran has to ship oil to India and China without receiving $$. Bit by bit China has got a big $ bill to pay to Iran. If Iran would accept RMB as payment, the problem disappears. This might be one of the reasons that many countries start to use bilateral currencies instead of $.

2, Because $ is the Only trade money, lots of people or countries reserve their gains in $. But they can do nothing when Feds print more green papers to devalue $, and hence, the savings of others.
 
Why would the BRICS, EU, and Japan cooperate with Russia against the US?

Depends what you mean by cooperate. Just like other NATO countries are not jumping hoops over US command, the countries you mentioned will only cooperate with Russia if it suit their national interest. (Well, except Japan, which is a semi-colony of US and actually will jump hoops over US command)

While challenging dollar as international reserve currency will indeed benefit China, Russia and EU, countries like India and Brazil are less interested on the issue because their currency isn't likely to become the replacement. It doesn't mean they won't go along with it, but they are not going to focus too much on the issue either.
 
Depends what you mean by cooperate. Just like other NATO countries are not jumping hoops over US command, the countries you mentioned will only cooperate with Russia if it suit their national interest. (Well, except Japan, which is a semi-colony of US and actually will jump hoops over US command)

While challenging dollar as international reserve currency will indeed benefit China, Russia and EU, countries like India and Brazil are less interested on the issue because their currency isn't likely to become the replacement. It doesn't mean they won't go along with it, but they are not going to focus too much on the issue either.

What I don't understand is the bolded part. There can be only one real reserve currency, so how can challenging the dollar benefit China, Russia, and the EU simultaneously?

To be realistic, the dollar won't be displaced for at least a couple of decades. The Euro has so far failed to displace the dollar, and its declining economy and dysfunctional politics make a course-correction unlikely. Russia's economy isn't nearly large enough to challenge the dollar, and China's primitive capital markets and rigid capital controls, not to mention its export-boosting dollar peg, mean that this change will only happen some time into the future. Thirty years ago, China was barely a consideration, and now it's a giant. Who knows what the world will look like in 2050?
 
It has nothing to do with transaction costs. There might be two reasons that I can understand:
1, When US sanctions Iran all major banks are forbidden to wire the oil $ in and out Iran. Japan, India and China are dependent on Iranian oil. Japan could make other arrangement but not India nor China. Iran has to ship oil to India and China without receiving $$. Bit by bit China has got a big $ bill to pay to Iran. If Iran would accept RMB as payment, the problem disappears. This might be one of the reasons that many countries start to use bilateral currencies instead of $.

2, Because $ is the Only trade money, lots of people or countries reserve their gains in $. But they can do nothing when Feds print more green papers to devalue $, and hence, the savings of others.

This has nothing to do with the dollar or reserve currencies. Iran cannot move money because it has been disconnected from SWIFT as part of the sanctions program. That is why Iran has been using gold (the original reserve currency) to transact its trades--it doesn't depend on the banking system.
 
What I don't understand is the bolded part. There can be only one real reserve currency, so how can challenging the dollar benefit China, Russia, and the EU simultaneously?

To be realistic, the dollar won't be displaced for at least a couple of decades. The Euro has so far failed to displace the dollar, and its declining economy and dysfunctional politics make a course-correction unlikely. Russia's economy isn't nearly large enough to challenge the dollar, and China's primitive capital markets and rigid capital controls, not to mention its export-boosting dollar peg, mean that this change will only happen some time into the future. Thirty years ago, China was barely a consideration, and now it's a giant. Who knows what the world will look like in 2050?

It benefit Russia, EU and China because it removes a competitor's edge in world economy. Take quantitative easing for example, US isn't the only nation running such a program. Japan and EU are doing the same thing. However, due dollar's status as world trade medium, the excess amount of dollar get absorbed by many countries around the world. EU and Japan, on the other hand, saw negative growth due to their QE program. Effectively, USD's status makes other countries footing US' bill. Of course, the other countries are not happy about it.
 

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