NEW – February 19, 2023
Today I would like to discuss what more global tasks Russia is solving for itself than the fight against the new germs of Nazism. And why, by starting to solve these tasks earlier than others, it will be easier for us later, and many other countries will have a much harder time than we do now.
You’ve probably heard about what a pyramid scheme is. The first participants of the pyramid usually get a good profit, but the last ones who did not manage to pull out the money, as a rule, lose everything. For many people, this becomes literally a disaster, especially for those who foolishly invested an apartment and all their savings there. Some remain literally on the street, and someone else with a lot of loans and debts.
Most people don’t even realise that they participated in a pyramid scheme until they lose money. But there are also those who know that they are taking risks, but carefully monitoring the situation, they expect to jump out in time.
Today we will talk about the US dollar pyramid. I’m not going to write that the dollar will collapse tomorrow, because it won’t collapse tomorrow. The US economy still has some margin of safety, but the situation is only getting worse every day, and getting out of the dollar system, American assets, and generally out of the influence of the United States is not so quick.
The fact that the situation in the American economy is seriously deteriorating is indicated by the events of 2020, when the United States printed a record number of dollars and dispersed record inflation for many years. They have never printed so much, and they have not had such inflation for a long time. The US national debt relative to GDP recently exceeded World War II figures. Oil reserves have also been depleted to record lows, because this is how the Biden administration keeps gasoline prices down.
This year, Americans will have to print a few more trillions. And this will again lead to another round of inflation in the world. Everything will rise in price again, because we live in the dollar system. But at least the Americans used to print billions, and it was still tolerable for the rest of us. Now the situation in their economy has worsened and they have to print trillions. Hence the comparison with the pyramid.
Russia was one of the first countries to emerge from this pyramid. Back in 2018, we started reducing our assets in the US national debt. From $100 billion to less than $ 1 billion in December 2022, the structure of our national Welfare Fund also began to change in 2021. Initially, it looked like this: 45% dollar, 45% euro, 10% pound sterling. Then they began to add the yuan and reduce the share of the dollar. Later, the National Welfare Fund completely excluded the dollar and began to add gold instead. In 2023, it was decided to exclude the euro, replacing the yuan and gold.
Yes, the government did not manage to dump all assets in dollars and euros, so some of our reserves were frozen. But time was running out and it was necessary to literally run out of the burning house, grabbing one’s passport and the most valuable things. Perhaps such a rush was due to the result of the US election, when Biden did not come to power quite honestly, and dissatisfied Americans almost staged a revolution and civil war, storming the Capitol.
Biden then managed to quell the riots, but he did a lot of other stupid things as president and the risk of an uncontrolled collapse of the American economy remains to this day. And to get out of the influence of the United States, as I said, it takes a lot of time and effort. And in any case, it’s necessary to act quickly to save oneself.
The Chinese, for example, only recently caught on. China had about a trillion dollars in US securities. The Chinese started dumping them, but the problem is that such a large volume can not be dropped quickly, and try to find a fool who will buy these wrappers, but for such an amount.
Therefore, China has another 867 billion in US securities. Even if the Americans do not freeze this money, it is devalued by inflation. Or they can easily freeze them so that they can print the same amount for themselves – this is a way to print money without accelerating inflation. And to get an excuse to freeze this money, they will arrange some kind of provocation, blaming the Chinese for it. I thought about the balloons, but they probably still don’t look like an excuse to freeze almost a trillion dollars. And the Americans will come up with something more serious in the foreseeable future.
Since the United States has a budget deficit, and no one is eager to buy their debt notes, the Americans have to sacrifice even their allies in order to delay their end a little longer. So they are trying to ignite another big conflict in Europe, pushing some of their allies (Kiev) and others (Europe) to slaughter, forcing them to give up weapons and order new ones from the United States, thereby supporting the US economy. The Americans also forced the EU to buy more of their gas and at higher prices, again to delay their end.
Another US ally is Japan. Interesting fact: Japan is the largest holder of US government debt (more than a trillion dollars). And the more Americans print money, the more Japanese savings devalue. And the third place, by the way, belongs to another US ally – Britain. In Britain, among other things, there are mass strikes of workers, because the Americans have dragged the British into their adventures, which are too expensive for the British economy.
By sending weapons, the British authorities cannot really increase the salaries of workers, because a lot of money flows into a black hole – the same colour as the black jacket of one beggar traveling with outstretched hand in Western capitals. It is not without reason that three prime ministers have already been replaced in Britain in a short period of time. This is because Britain has driven itself into a political dead end. They can’t do anything with Russia either, and in AUKUS – the alliance against China no longer has resources, money and weapons left.
Other countries actively began to transfer payments from the dollar to national currencies. This is done by Russia, China, and India. It got to the point that Brazil and Argentina announced their decision to create their own currency, so as not to depend so much on payments in dollars. Saudi Arabia is discussing with China the transition to payments for oil in yuan. BRICS countries discuss their own currency.
But back to Russia. Seeing all the helplessness of Europe to resist the predatory behavior of the United States, we are in a hurry to transfer our trade to other countries, even though we have to make discounts on oil at the same time. But it’s better that way, because time is running out. After all, Europe is being sacrificed, and we could have been caught up with it if we hadn’t started to dramatically restructure trade to the East. And by the way, we are doing quite well, despite some costs and losses.
If you take China, for example, it is still very dependent on the markets for its products in the United States and Europe. Of course, the Chinese authorities are also trying to rebuild their trade, but it is a problem to find such large markets and we have to rely mainly on the domestic market, since there are more than a billion Chinese people and there is someone to sell their goods inside the country. But still, China will be shaken more than us.
But Washington’s allies will have the worst of it, because they lack the political will to dump US debt securities and do something in their national interests. Therefore, they will be hit more strongly.
What is particularly interesting to observe is the behaviour of politicians like Erdogan and others like him. The Turks did not want to join the European Union, where they stood in line for half a century and did not care about sanctions against Russia, without complying with them. All sorts of Georgians have somehow calmed down there, and Armenians have increased their exports to Russia as much as 2.5-fold, apparently also like the Turks, they sell prohibited goods. And how Lukashenko has changed – it’s unrecognisable.
These politicians and countries always keep their noses in the wind, so their behaviour speaks for itself. But if someone is still skeptical and even laughing at the information about the collapse of the United States and the dollar, then ask yourself a simple question: where did the British Empire go, over which “the sun never set”? Where did the Roman or Ottoman Empires go before that? And to go further, many did not believe in the collapse of the USSR until the last moment. And where is it today?
At the beginning of this article, I compared the United States to a pyramid scheme for a reason. The peculiarity of the pyramids is that many people involved in them do not believe until the collapse that all this will crash down, and this is where they get caught. Smart people understand everything and try to jump out in advance. Would Erdogan or Lukashenko behave like this if they didn’t know something?
The problem is that not all people in this world are smart or have enough political will to do something brave. The US’ flight from Afghanistan served as a signal to the smart ones, if those who did not hear it and did not see it, or decided not to do anything about it, then you will not envy them in a short time: does the US still have enough weapons to protect other allies if something starts somewhere else?
But this, as they say, is not our problem. Russia is much less dependent than other countries on the future state of affairs in the United States. In 2021, Russia’s share of trade with the United States was only 4%, and in 2022 it halved further to just 2%.
We also got rid of dollar-denominated assets, are rapidly rebuilding trade to the East, and are not in the same alliances with the United States. And those who did not manage to hide the money elsewhere, rebuild trade and change the ally will have a much worse time. They will find themselves at a broken trough. Maybe the Arabs also know something if they refuse Biden oil, plan to switch to the yuan, ask to join BRICS and look closely at our weapons?
Now, I think, the logic of the actions of the Russian authorities becomes clearer, which, although not perfect, but quickly enough break ties with the West, so as not to be under its rubble. In this regard, we are not the only ones who run from a sinking ship, grabbing the most valuable things. But we started doing it earlier than others, and some people are just beginning to figure out everything. Those who are particularly stubborn still don’t understand anything – they will suffer more than the rest.
Whisper of the Kremlin
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