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Wednesday, February 04, 2015

The money war

Money is the new war. That's the message of Alistair Crooke, in this interview.
We have a dollar-based financial system, and through instrumentalizing America's position as controller of all dollar transactions, the US has been able to bypass the old tools of diplomacy and the UN -- in order to further its aims.
But with Ukraine, we have entered a new era: We have a substantial, geostrategic conflict taking place, but it's effectively a geo-financial war between the US and Russia. We have the collapse in the oil prices; we have the currency wars; we have the contrived "shorting" -- selling short -- of the ruble.
Crooke says that a chief architect of these schemes was a fellow named David S. Cohen, of the Treasury Department. As Moon of Alabama notes, Cohen has moved on the CIA, where he is The New Number Two. That extraordinary piece of job-hopping tells you a lot about the world we are in.

The great worry is that Russian banks will be shut out of the SWIFT system, which is the way banks communicate with each other. That move would apply a meat cleaver chop to all financial relations between Russia and the west.

In the short and (perhaps) the medium term, a Money War will do enormous harm to Russia. But if we take a longer view, we can see that this conflict will end up destroying American power and prestige.

The BRICS countries (including Russia and China) are massive, and they are beginning to understand -- correctly -- that that they don't really need us.
Over time, there is likely to be a backlash against exercises of U.S. power, as countries which do not like them make themselves less dependent on an international financial system that is vulnerable to U.S. pressure.
Crooke made the same point, although he was far more blunt.
We have a geo-financial war, and what we are seeing as a consequence of this geo-financial war is that first of all, it has brought about a close alliance between Russia and China.

China understands that Russia constitutes the first domino; if Russia is to fall, China will be next. These two states are together moving to create a parallel financial system, disentangled from the Western financial system. It includes replicating SWIFT [Society for Worldwide Interbank Financial Telecommunication] and creating entities such as the Asian Development Bank.
The Asian Development Bank is meant to replace the IMF, our chief weapon for screwing over third world countries.

The engineered drop in oil prices is part of our Money War against Russia and Iran, and it is is having all sorts of unintended effects.
There is a huge move of capital out of emerging markets and out of Middle Eastern states whose currencies consequently have been adversely affected. For the first time, too, we see the end of the petro-dollar as a system for recirculating oil revenues to Wall Street.

For the first time, it has turned negative: It is sucking liquidity out from Wall Street, not putting it in. The fall in the price of oil has suddenly created huge financial turbulence, which is endangering the global financial system.
The US can't win the Money War, because our industrial base has eroded and our financial hegemony is founded on a shared hallucination. The only way to keep the world in a perpetual state of hallucination is to do what hypnotists do: Offer gentle suggestions in a soft, reassuring tone of voice. But if we are loud and shocking, everyone will snap out of the trance.

We have lost the ability to speak in a soft and reassuring manner. We have become bellicose, onerous and annoying. We are dispensable. We will be dispensed with.
I don't know what Alastair Crooke means by saying "America" has a position as "controller of all dollar transactions". It doesn't. Most lent dollars are lent by parties outside of the US and its jurisdiction.

Nice to see that the Wikipedia article on eurodollars - a term still used even though much of the money is in the Far East - references Nicholas Shaxson's book Treasure Islands.

As for David Cohen's job move, the KGB has for a very long time been deeply involved with Russian money held abroad. It's probably involved with a smaller proportion of it nowadays than a few decades ago, but there's much more of it in existence now. Yet that formidable organisation still hardly gets a mention in most analyses.

In 1987, Iran responded to US belligerence in the Gulf by triggering a global stockmarket crash. Russian financial action might well be able to crash the London economy right now.

I've said it before, but where the line gets drawn between pro-Israeli and anti-Israeli sides in 'Russian' mafia-KGB circles is of major importance to how the coming war will unfold.

For all the size and weight of the gun-toting community in the US, the US would stand up far worse than Russia to the home-front devastation brought by a major war.

Crooke is right that Turkey is in line for major destabilisation. We've had countries to the south of the Mediterranean (Algeria, Libya, Egypt), the east (Syria, Iraq) and the north (Greece, Spain, France) and the north of the Black Sea (Ukraine). From the viewpoint of the modern-day Basil Zaharoffs, Turkey is currently a gap - an opportunity.

Crooke should have mentioned the battle over credit cards in that country. A story from a year ago: Turkey launches offensive on credit cards". The message in that headline is misleading - it sounds to me as though western banks launched an offensive against Turkey.

An interesting question at the moment is whether the population of the west is having its attitude changed towards Saudi Arabia.

The model applied on the Arab peninsula wouldn't be colour revolution, Arab Spring (Egypt), Arab Spring with a bit of war (Libya), short local war (Georgia), or prolonged civil war (Syria). Terrain would preclude the Ukrainian model too. But turning the desert to glass. Yum yum. The princes ain't all going to do a Marcos or Persian Shah.

If some Russian money does get pulled out of London, some Saudi 'money on the run' might replace it. It wouldn't be the first time that the British regime-confused-with-a-country has run to the Saudi regime-confused-with-a-country with a begging bowl. But events will happen fast in the first few weeks of a major war. Who knows what might happen before or after or at the same time as something else?

There has even been talk of state bankruptcy in Switzerland! So I wouldn't advise anyone holding USD to exchange them for CHF.
Everyone has snapped out of the trance, except for the American public. The world knows that all the "color revolution" democracy movements are CIA backed coups. The world knows that the western banking system is crooked and built around looting the 99% and selling off public national assets leaving the majority of people destitute. The rest of the world knows that the "war on terror" is a self sustaining US generated enterprise to repress other developing governments, sow social disorder and feed the US legislative-banking-military-industrial complex. The rest of the world knows that the US is a declining world power and its economy is a hollow shell. And the US is demanding that the the rest of the world make a choice between going with the repressive dollar denominated economic system, or choosing a new cooperative monetary system built upon the new rising economies of the world which are destined to leave the US in the dust. What a choice!
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