The Growing Threat of War and the Critical State of the Global Financial System

Three developments are shaping the current world situation: an increase in social tensions, the intensification of international political conflicts and the increasingly undisguised preparation of the Western alliance for war against Iran.

The mainstream media try to miss no opportunity to tell the international public who will be friend and who will be foe in this coming war. Time and again, Iran’s allies Russia and China are depicted in the most negative light possible, while there is almost no mention of Israel’s and Saudi Arabia’s crimes in Yemen and against the Palestinians.

At the same time, the media are doing everything they can to conceal the most important reason behind the drive for the war – the critical state of the global financial system. Journalists are bending over backwards to convince the public that the global economy has completely recovered from the 2007/2008 crisis, that we are witnessing a global economic boom and that the dangers in the system are under control.

In fact, none of these claims are true. The simple reason is that they all ignore the historic importance of the cross-border manipulation by the central banks, which was necessary to save the system from collapse after it nearly broke down in 2007/2008, and which still keeps it alive today.

The global financial system would no longer exist without manipulation

This manipulation has set in motion a development that can be compared to the fate of a patient who survives a severe crisis only through an injection of addictive drugs and who would be killed by a subsequent withdrawal treatment because of his poor state of health. In other words, without money injections and low interest rates and without the purchase of government and corporate bonds by central banks, the global financial system, as we know it, would no longer exist.

The world’s leading central bankers are well aware of this. This is shown by their futile attempts to turn the wheel. Even the most timid announcements to contain the flood of money and significantly increase interest rates send such shock waves through the financial community that it is already clear: there can be no return to a normality in which no excess money is printed, interest rates are raised to a level that was once considered normal and no more bonds or shares are bought by the central banks.

So what will happen next? Will central banks simply continue the policy of the past ten years? After all, nobody can stop them from printing unlimited amounts of money and lowering interest rates – along the lines of the Swiss Central Bank – into negative territory…

In fact, nobody can stop them, but the consequences these measures would bring with them are foreseeable: A further increase in speculation, even greater volatility in the markets, an even stronger inflation of the bubbles, which are almost bursting already, the complete destruction of the classic banking business (lending against interest rates), the disintegration of traditional commercial banks and savings banks, the complete takeover of markets by investment banks and hedge funds, the collapse of pension systems – to name but a few of the expected consequences.

The biggest danger is the loss of confidence in the monetary system

Worse than any of these consequences is the creeping loss of confidence in the entire monetary system, which has not been tied to any real value since the decoupling of the US dollar from gold in 1971. It can be assumed that at some point it will affect the entire system, lead to a panic in the markets and cause the global financial card house to collapse.

How close we have already come to this point was shown by the dramatic price fluctuations of the US stock index Dow Jones in February of this year. It appears that this was a test run in which the US Federal Reserve, which is permanently on standby to prevent major price crashes, only intervened at the last second. These fluctuations were the strongest that the Dow Jones has experienced in its more than 100-year history.

This may have been a serious warning to the world’s financial elite. In any case, both the Skripal affair in Great Britain, the trade war instigated by the US against China and the recent hostile reaction towards Russia by most EU states are strong indications that the elites have decided to seriously consider an option that the German economist Ernst Winkler in 1952 described as “the best means put off the final catastrophe of the entire capitalist system over and over again” – the option of waging a war.


China Can Succeed With Petro-Yuan Where Gaddafi Failed

Muammar Gaddafi wanted to shatter the dominance of the greenback in the Middle East by introducing gold-backed dinar, but failed. China has a chance to finish what she started, one industry expert has told RT.

“Ideas related to oil trade in currencies other than the dollar arose more than once. Some of them were severely suppressed by the United States, one example is Muammar Gaddafi, who proposed the introduction of a regional currency gold dinar and trading oil in the Middle East in this currency,” Aleksandr Egorov, foreign exchange strategist at TeleTrade said.

However, this time, an attempt to oust the dollar could be successful. China has launched oil futures backed by yuan, and Beijing has what Gaddafi didn’t, according to the expert.

“Along with the Chinese role in the global economy and the growing interest in the renminbi, China is also protected by a nuclear shield. It can afford to try to shatter the monopoly in oil trade. This will give even more weight to the Chinese yuan. In addition, China’s economy is the world’s largest consumer of oil, and consequently, all world producers of raw materials will have to reckon with the strategy of the Chinese authorities,” Egorov said.

According to the analyst, the timing for the launch of the petro-yuan is perfect. Key oil producers Russia, Iran and Venezuela are under pressure from US sanctions, and it is a good moment for them to ditch the dollar in oil trade and substitute it with the yuan.

Mikhail Mashchenko, an analyst at social network for investors eToro, agrees.

“From the point of view of Russia’s geopolitics, it is certainly beneficial to reduce the role of the dollar in foreign trade. And it has been done, let’s recall the record growth of the country’s gold reserves. The other states that are constantly under the threat of new sanctions, like Iran and Venezuela, can profit, too. The contracts in RMB will allow to trade oil without US approval.”

Both analysts agree that it will take time before the petro-yuan can become a real threat to the dollar. China needs to win the support of the world’s largest oil producers Russia and Saudi Arabia, or the initiative is doomed, says Mashchenko. He added that the yuan is fully controlled by Beijing, which could also spook potential investors.

Why petro-yuan may become biggest game-changer of all time in capital markets

The historic launch of the long-awaited trading of Chinese crude futures this week has stirred up a heated debate among analysts as to whether the new commodity product will prosper or flop.

Some market analysts expressed doubts over the success of the petro-yuan, citing Beijing’s yearning for total control over trading as one of the key reasons for a potential bust. “The government has been eager to encourage liquidity and paper trading, but of course the issue with paper trading is speculative trading that the government wants to keep at bay,” Michal Meidan, an analyst at energy market consultancy Energy Aspects, told Bloomberg prior to the launch.

Meanwhile, the high costs of oil storage for delivery into the Shanghai Futures Exchange may scare potential investors away from the new contracts, according to industry analysts. “Storage plays a crucial role in linking cash and futures markets. Many speculators, such as proprietary traders and hedge funds, may be scared away,” said Jian Yang, a research director at the JP Morgan Center for Commodities in the University of Colorado Denver, as quoted by the agency.

However, China’s yuan-backed oil futures managed to make a strong debut on Monday with overnight trade volumes initially outstripping transactions of internationally recognized benchmark Brent. Some 62,500 contracts reportedly changed hands during the first session, as domestic and international oil investors joined the trading.

The impressive start gives deeper cause for optimism about the newcomer with some analysts qualifying oil futures denominated in China’s currency as a game-changer in the world of financial trading.

“This is the single biggest change in capital markets, maybe of all time,”

… said Hayden Briscoe, APAC head of fixed income at UBS Asset Management, as quoted by Reuters.

According to the analyst, the move to trade oil in yuan will diminish the role of the greenback in global financial markets. If market participants, including US corporations, opt to trade yuan-backed contracts, this could easily strengthen the Chinese currency and, at the same time, weaken the dollar.

“This helps cement the exchange’s viability and challenges the petro-dollar system, in which oil deals are executed in dollars. This would decrease demand for the greenback and boost US inflation,” Briscoe said.

With crude oil becoming a great chunk of modern international commerce, the potential impact of the new product on oil market dynamics and on global monetary and financial systems could be correspondingly great.

The Chinese government has been offering a win-win cooperation with the West. Now, it is tired of dealing with the constantly shifting positions of the British Empire. The critics, of course, will never ran out of issues including China being part of the Old Paradigm. But how can we exactly transition to a resource-based society if not by first laying down the groundwork which should make the current system irrelevant?

If we transition to the resource-based economy overnight, do we still have people working in the farm lands and power plants tomorrow? Or, do we need to establish the autonomous systems first which will make these tedious jobs obsolete?

Don’t we need to build the nuclear power plants first, so we can make available the free energy that the households and automated systems need to power on with?

Or, do we prefer the one-time dole out of the so-called prosperity programs like NESARA, which even Trump is not heard to even mention about?

Social designs like the Venus Project needs a peaceful transition from our existing hierarchical setup, and it is in fact the unavoidable consequence when the RIC Alliance has fully implemented its relevant technologies, e.g. transmutation of elements, hybrid nuclear fusion-fission power, and plasma technologies, without the constant interference of the West.

We judge best when we try to condemn just for the sake of condemning that which we don’t fully understand. It is absolutely wrong to analyze the actions of the leaderships in the East with the same mindset prevalent in the Western culture.

The East talk a lot less than their Western counterparts, but they do the necessary work diligently.

The desire for total dominance is never acceptable for the Orientals, and that is very visible in the attitude of the Chinese engineers facilitating the transfer of construction technology to the Africans, as shared in the last article.

Negative appreciation about what China is presently doing can only come from false pride.


From Covert Geopolitics.

US Sells Poland Patriot Anti-Missile System amid Continued Campaign Against Russia

The Pentagon and Poland Wednesday signed a $4.75 billion deal to sell the eastern European country the Patriot anti-missile system.

While Poland’s extreme right-wing government hailed the arms deal, the largest in the country’s history, it will undoubtedly further stoke tensions between the West and Moscow, which has viewed the deployment of such systems as part of a concerted effort by Washington and its allies to undermine Russia’s ability to defend itself against a nuclear attack.

“It is an extraordinary, historic moment; it is Poland’s introduction into a whole new world of state-of-the-art technology, modern weaponry, and defensive means,” Polish President Andrzej Duda said during the signing ceremony, which was held at an armaments factory before a column of Polish troops.

“It’s a lot of money, but we also know from our historical experience that security has no price,” said Duda, whose authoritarian regime will no doubt extract the money to pay for the missiles through redoubled attacks on the living standards of Polish workers.

The Polish arms deal has been inked in the midst of a coordinated international campaign led by London and Washington to indict Moscow for the poisoning of the ex-Russian spy Sergei Skripal and his daughter in the southern English city of Salisbury on March 4.

Russia has denied any involvement in the poisoning, which the British authorities have claimed was carried out with a nerve agent “of a type” (Novichok) that had once been manufactured in the Soviet Union and that it was “highly likely” that the attack was the work of Russia.

Without presenting any evidence to substantiate these accusations — much less any conceivable motive for Moscow to carry out such an action on the eve of the presidential election in Russia — the British Conservative government of Prime Minister Theresa May expelled 23 Russian diplomats.

London has refused Moscow’s requests to supply a sample of the alleged nerve agent used in the attack, as is required by international chemical weapons treaties. The Russian Foreign Ministry issued a statement Wednesday charging that the attitude of the May government shows that “UK authorities are not interested in finding out the motives and those responsible for the crime in Salisbury and suggests that the British intelligence services are involved in it.”

Washington joined this anti-Russian crusade, ordering the expulsion of 60 Russian diplomatic personnel and the closing of the Russian consulate in Seattle, while joining with London in pressuring other countries to follow suit. More than 20 other countries responded with expulsions. Most of these countries took only token actions, however, involving one or two Russian diplomats. Nine members of the EU took no action. The only expulsion of more than four diplomats in Europe came from the rabidly anti-Russian government of Ukraine, which ordered 13 Russian diplomats to leave the country.

Poland, which along with Germany, France and Canada was one of the countries expelling four Russians, has long served as a pillar of the military buildup by the US and NATO against Russia.

Since the coming to office of the Trump administration, Washington has openly promoted the forging of closer ties to Warsaw and other eastern European governments, reviving the so-called Intermarium project of the 1920s, in which the US sought an alliance with fascistic and right-wing regimes in the region directed against both the Soviet Union and the rise of Germany as a continental hegemon.

The turn toward Eastern Europe is in large part a response to mounting tensions between Washington and Germany, which is increasingly seeking its own great power interests, including through commercial and other ties with Russia. While Berlin joined with the UK, France and the US in signing a joint declaration blaming Russia for the Skripal poisoning, there exist sharp divisions within the German ruling establishment and Chancellor Angela Merkel’s grand coalition government over the issue.

“We must do everything possible to prevent a new Cold War with Russia,” Social Democrat Gernot Erler, the government coordinator for Russia, told the Passauer Neue Presse.

Other prominent Social Democrats went further. Former European Commissioner Guenter Verheugen questioned the objective basis for the sanctions. “The view that if in doubt, ‘Putin and the Russians are responsible for everything’, is one that poisons thought and must stop,” he told the Augsburger Allgemeine.

Such views reflect the concerns of major German corporate and financial interests, whose profits are tied up with the Russian market.

The German Committee on Eastern European Economic Relations, whose members include some 200 German companies, warned against “over-hasty conclusions” over the Skripal affair leading to a “spiral of escalation.”

Just one day after it expelled a handful of Russian diplomats, the German government on Tuesday announced final approval for the construction and operation of the Russia-led Nord Stream 2 gas pipeline, which will pipe Russian natural gas to Germany under the Baltic Sea. The project has been bitterly opposed by both Washington and its Eastern European allies.

It is no doubt such tensions that the US defense secretary, Gen. James Mattis, had in mind when he told reporters at the Pentagon that Russia was “trying to break the unity of the Western alliance.” Mattis claimed that it was “pretty obvious” that Russia was responsible for the attack on Skripal and charged Moscow with having “chosen to be a strategic competitor, even to the point of reckless activity.”

The sharp divisions that have emerged among the NATO powers notwithstanding, there are continuous signs that active preparations are underway for war with Russia.

Senior US military officers speaking at the Association of the United States Army’s Global Force Symposium on Monday issued warnings that the Pentagon must “dramatically increase the range of the service’s artillery and missile systems to counter a Russian threat that would leave ground forces without air support in the ‘first few weeks’ of a war in Europe,” the website military.com reported. The American military, the officers revealed, is working on a number of new weapons systems designed to counteract supe’ve got to push the maximum range of all systems under development for close, deep and strategic, and we have got to outgun the enemy,” Gen. Robert Brown, commanding general of United States Army Pacific Command, told an audience of military officers and defense contractors.

Meanwhile, the European Commission, the executive arm of the European Union, announced Wednesday that it has launched an initiative to create a “military Schengen zone,” allowing NATO military forces to freely cross European borders. The military project is being unveiled even as right-wing nationalist and anti-immigrant European politicians, including Germany’s new Interior Minister Horst Seehofer, are openly rejecting the original Schengen Agreement, in effect for over two decades, which allows border control free travel between the 26 European countries that signed on to it.

EU transport commissioner Violeta Bulc told reporters that the aim was to ensure “quick and seamless mobility across the continent. This is a matter of collective security.”

In addition to removing border controls, she said that investments would be made to assure that key corridors would be capable of handling tanks and heavy military vehicles. “We must be able to quickly deploy troops either within the EU or rapidly launch military operations abroad and to do so we need infrastructure that is fit for the purpose.”

Russian Deputy Defense Minister Col. Gen. Alexander Fomin responded to the announcement by stating that the real goal was to “fast-track to the maximum extent … deployment towards Russia’s borders.”

He also told the Russian Defense Ministry’s official newspaper that the US and NATO were creating arsenals of weapons ammunition and food supplies in various countries, including Poland, Romania, Hungary, Bulgaria, Slovakia, Lithuania, Latvia and Estonia, to prepare for war with Russia.