Collapse Of Western Financial System Looms as Neocons Force Russian Hand

… A still apoplectic Pentagon will take time to absorb the new military facts on the Syrian ground – and skies. That will add to the utter desperation displayed by the ‘Masters of the Universe’ in the Washington/Wall Street axis – itching to break the China-Russia strategic partnership by all means necessary. Quite a feat when the Pentagon is still fighting World War II, with its weapons, ships and monster aircraft carriers displayed as sitting ducks against Russia’s new batch of missiles.

But then there’s also Putin’s second – silent – message to Washington, which didn’t even have to be delivered in person to Obama. US intel though may have a hint about it, as they closely follow Russian media.

It’s about Sergey Glazyev’s (presidential aide) plan for Russia’s immediate economic futurehere is a summary of the plan, in Russian. The plan was formally proposed to Russia’s Security Council. Here is a very good summary on how Russia’s Security Council works.

There are at least three absolutely key points in Glazyev’s plan. We may summarize them like this:

  1. If the emerging trend of freezing private assets of Russian legal entities and individuals continues, Russia should consider full or a partial moratorium on the servicing of loans and investment from the countries involved in the freezing.
  2. The amount of foreign currency assets of the Russian Federation located in the jurisdiction of NATO countries accounts to more than $1.2 trillion, including short-term debt of about $800 billion. Their freeze may be partially offset by retaliation against NATO assets in Russia, which amounts to $1.1 trillion, including over $400 billion long-term. So this threat would be neutralized if Russian monetary authorities organized a timely withdrawal of Russian short-term assets in the US and the EU.
  3. Glazyev is adamant that the Russian Central Bank continues to serve the interests of foreign capital – as in the financial powers in London and New York. He contends that the high interest rates practiced by the Russian Central Bank led Russian oligarchs to borrow more cheaply from the West, making the Russian economy dependent, a debt trap which the West used to slowly squeeze Russia. Then the rigged Western oil and ruble collapse increased the pressure as debt service in ruble cost and interest doubled.

So what Glazyev proposes, essentially, is that Moscow must gain total control of its Central Bank, preventing speculators to move their credit around for non-productive purposes; Moscow should also establish currency controls; and must create a central organization of technological research to replace the loss of Western technology, imitating the US methodology of rolling out from its centralized military research those technologies that can be commercialized for the consumer market.

The fact is Russia has lost access to Western credit and cannot roll over its debt with the creditors. So Russia will have to pay the principle and the interest as it comes due. That is a trillion dollars plus interest. Russia also cannot import anything from the West without paying double for it.  So arguably the country may be now in the very position it will be if Moscow opts for default. Thus, Russia would have nothing to lose by a default – as the damage is already done.

Essentially, once again, a Russian default on a $1 trillion-plus debt to private Western parties remains a possible scenario discussed at the highest level – assuming Washington will persist in its anti-Russia demonization campaign.

It’s clear the squeeze Russia is feeling has less to do with sanctions than the grip maintained by Western financial powers over the Russian Central Bank. The Russian Central Bank did create a debt trap by maintaining high interest rates in Russia while the West was lending at low interest rates.

Needless to add, such a default, if it ever happened, would collapse the entire Western financial system. …

http://www.zerohedge.com/news/2015-10-19/collapse-western-financial-system-looms-strategic-russian-default-possible

The US should take a clue from Glazyev.   We desperately need to get control of the federal reserve and its associated empire-obsessed aristocracy if we are to avoid national ruin.

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